Shares of Canadian cannabis producer Canopy Growth (TSX:WEED, NASDAQ:CGC were up nearly 2% in pre-market trading after the company reported a surprise quarterly profit on rising demand and ongoing cost cutting measures.
People across North America have turned to cannabis for relaxation and entertainment during the isolation caused by COVID-19, lifting sales of marijuana producers.
The sector has also attracted capital and renewed investor interest in recent months due to a wave of state-level legalization and potential federal cannabis reform in the U.S.
In a bid to turn profitable by this fiscal year, Canopy has also continued making deals in the Canadian market. Earlier in 2021, the Smiths Falls, Ontario-based company bought rival Supreme Cannabis in a deal that gives it ownership of four of the top 10 cannabis brands in the country.
The company's adjusted gross margin expanded by 14% in the quarter ended June 30 to 21%.
Canopy Growth’s adjusted core loss narrowed to $63.6 million from $92.2 million a year earlier. Revenue rose 23% to $136.2 million in the quarter.
Canopy Growth’s stock is down nearly 30% year-to-date at $24 per share.
