Canopy Growth CEO expects to hit $1B in revenue for fiscal year 2020
Workers produce medical marijuana at Canopy Growth Corporation's Tweed facility in Smiths Falls, Ont., on Monday, Feb. 12, 2018. (THE CANADIAN PRESS/Sean Kilpatrick)
TORONTO -- Canopy Growth Corp.'s co-chief executive Bruce Linton is expecting a "growth quarter" ahead and foresees the cannabis company will generate $1 billion in revenue during its next financial year.
The Smiths Falls, Ont.-based licensed producer has ramped up the pace of its packaging and shipping processes and anticipates sales growth to accelerate by the final quarter of the calendar year as the number of legal retailers grows and edibles hit the market, he said on Tuesday.
"The final two quarters of our year, I expect to be very strong. But we expect the growth to keep going... just because more stores, and then better products," Linton told reporters.
His bullish comments on the sidelines of the GMP Securities cannabis industry conference in Toronto come one day after shares of licensed producer Aphria Inc. slipped by as much as 15 per cent after its quarterly revenues and earnings fell short of estimates.
Aphria in its latest quarter sold fewer kilograms of cannabis than the previous quarter as it faced supply shortages and packaging and distribution challenges.
The Leamington, Ont.-based company also saw non-medical marijuana revenue in the quarter fall 34.9 per cent from the previous quarter, which only encompassed a month-and-a-half of adult-use sales.
Aphria said it working hard to expand its growing capacity and streamline its packaging processes, and is embarking on a 90 day plan. The company reiterated its goal of generating $1 billion of annualized revenue by the end of calendar year 2020.
Still, Aphria's earnings miss weighed on the sector overall, including Cannaroyalty Corp. and Organigram Holdings Inc., which each lost more than 10 per cent. Canopy's shares slipped by 3.39 per cent in Toronto.
Linton on Tuesday took an optimistic tone and told reporters at the GMP Securities Conference that Canopy has increased the number of units it can package and ship, from 300,000 units in October to 1.3 million in March.
"We can package, shipΓÇª But we always have issues. As soon as you get rid of one block point, it rushes to another," he said.
He anticipates the cannabis producer will generate more than $1 billion in revenue globally during its financial year, which started on April 1.
However, he isn't expecting Canopy to reach profitability at that level of revenue, as it is investing in clinical trials and other initiatives to position itself for the long term.
"I want to have all the medical claims that create a long future for a value company," he said.
Meanwhile on Tuesday, the licensed producer and its venture capital arm announced two acquisitions.
Canopy Rivers said it acquired an 18.4 per cent stake in cosmetics company High Beauty Inc. for US$2.5 million.
As well, Canopy announced an all-cash acquisition of Spain-based cannabis licensed producer Canamo y Fibras Naturales, S.L. , also known as Cafina. The acquisition and subsequent planned expansion in Spain is aimed at servicing demand across Europe for medical cannabis and products with CBD, Canopy said.