Here Are The Top 10 Takeaways From Canopy Growths Q3 Earnings Call

Earlier this week, Canopy Growth Corporation (WEED.TO) (CGC) reported higher-than-expected revenue numbers for the third quarter but missed on earnings. Although the company reported an $800+ million net loss in the third quarter, more than $400 million of it is related to impairment and restructuring charges as well as other non-cash expenses.

With that being said, the management team provided important guidance on a post earnings conference call and the market responded bullishly. Below, we have highlighted 10 key takeaways from the conference call and believe that our readers need to be aware of these developments.

1. The US is the world’s largest and the most important cannabis market and Canopy Growth is building out infrastructure to be positioned to capitalize on it
2. The management team does not oppose additional acquisitions by Acreage Holdings, which serves as Canopy Growth’s trojan horse for the US market
3. The company said that its profitability does not depend on the US market and that it would acquire all of Acreage Holdings once US federal law is changed
4. Despite having almost $1.6 billion of cash (as of December 31, 2020), the company is assessing various financing options
5. During the last year, Canopy Growth has seen a greater than 25% decrease in headcount
6. During the quarter, Canopy Growth had the 3 top beverages which had more than 34% market share
7. Based on the current run rate, Martha Stewart would rank in the top 3 CBD brands
8. Due to the closing of consumption lounges and a decreasing amount of celebratory events, the cannabis beverage vertical has been growing at rates that are lower than expected as demand for edibles is rising
9. The company expects a majority of cannabis revenue over the next 12 to 18 months to be from the sale of flower and pre-rolls as vaporizers start to generate additional traction
10. The extension of Germany’s lockdown measures, Canopy Growth expects international growth to be negatively impacted in the near term.

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Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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