Canopy Growth CEO says company primed for profitability despite losses
Canopy Growth Corp.’s CEO urged investors to stay on board Friday after the cannabis company reported a $324.8 million net loss in its second quarter on Thursday.
The loss is compared with a $305.8 million net loss in the same quarter last year, and includes a $148.2 million dollar loss from continuing operations, down from a $196.5 million second-quarter loss last year.
As shares were down almost three per cent in midday trading, CEO David Klein pointed to changes the cannabis company has made to set itself up for future success.
“We've made a significant transformation in the company, significantly narrowing our EBITDA loss,” Klein told BNN Bloomberg in a television interview on Friday morning.
“While we've done that, we've been able to, in the Canadian market for example, grow our revenue for a third consecutive quarter, so we've done a lot to get this business positioned to perform in the markets in which we operate.”
The cannabis company, headquartered in Smiths Falls, Ont. with operations worldwide, said in a Thursday press release that it’s successfully shifted to an “asset-light, cannabis-focused” company that looks and operates “fundamentally different than before.”
In September of last year, the company announced the divestiture of its retail operations in Canada, selling more than two dozen stores to other cannabis companies.
Klein said that though the company has exited the retail space, its base recreational and medical businesses have continued to improve over the last three quarters.
BALANCE SHEET CONFIDENCE
Klein said that despite the losses, Canopy Growth’s recent restructuring has given the company a robust balance sheet.
“We've paid down a billion dollars worth of our debt over the past 12 months or so, so we're very confident in our balance sheet,” he said, noting that their next maturity isn’t until the end of 2025.
Klein said that the company has repositioned itself to take advantage of what he estimates is a $50 billion North American cannabis market, adding that this may be a “generational opportunity” for investors.
“We believe that we're in the early innings of accessing that $50 billion dollars and resetting our business such that we now have the foundation in order to be profitable going forward,” he said.
“That's why we're here, and by the way, that's why our investors should be here as well.”
With files from the Canadian Press