Canopy Growth Corp., (TSX:WEED) Canada’s largest cannabis producer, posted a net loss of $1.3 billion in its first quarter as higher expenses offset revenue growth.
Canopy reported that it lost $1.28 billion during the three months ended June 30, its fiscal first quarter of 2020, compared with a loss of $91 million in the first quarter of fiscal 2019. The loss equaled $3.70 per share, compared with a loss of 40 cents per share a year earlier. A rise in revenue was offset by a 215% increase in operating expenses to $229.2 million.
The Smith Falls, Ontario based company said the increased loss is mainly due to a non-cash loss of $1.18 million on the retirement of warrants held by alcohol giant Constellation Brands Inc., which invested $5 billion last November.
It also saw a significant decrease in quarter-over-quarter gross margins, or the spread between sale price and costs, as the company has been focused on investing in rapid expansion. Gross margin before fair value impacts in cost of sales in the quarter was $13.2 million, or 15% of net revenue. In the same quarter of 2019, that metric amounted to $11.1 million, or 43% of net revenue.
Both Canopy Growth's loss and revenue were worse than analysts had expected.
