Canopy Growth’s Impact on the Cannabis Industry

Canopy Growth Corporation (CGC) is a company driven by its objective to demonstrate the potential of cannabis. It aims to show how cannabis can be a catalyst for positive change in the world. It seeks to establish itself as a world-class CPG company, leveraging “the power of cannabis to improve lives.”

During his tenure as CEO, CGC established a foundation for multi-market cannabis leadership. This was achieved through its transformation to an asset-light model in Canada. It also extended across a range of international markets, including Germany.

During his tenure as CEO, CGC laid the foundation for multi-market cannabis leadership by transforming into an asset-light model in Canada. It also extended across a range of international markets, including Germany.

On 16 August 2024 it was however reported that Klein will be retiring at the end of the company’s current fiscal year, ending 31 March 2025.

Origins

Bruce Linton and Chuck Rifici founded CGC in 2010 as MABH Ontario Inc. In 2013, the company rebranded as Tweed Marijuana Inc. (Tweed) after Canada’s then Conservative government announced plans to privatize the country’s medical marijuana industry.

Tweed became one of Canada’s first companies to receive a license to sell regulated marijuana on 27 January 2014. On January 27, 2014, Tweed became one of Canada’s first companies to receive a license to sell regulated marijuana. In April of the same year, Tweed listed on Alberta’s TSX Venture Exchange and made its first cannabis sales.

Around this time, the company removed Rifici from his position, prompting him to sue the company for wrongful termination.

By the end of 2014, Tweed had expanded its product range to 13 offerings, and by the close of 2015, the company had approximately 8k customers. Tweed later rebranded to Canopy Growth Corporation, keeping Tweed as one of its brands. Canopy’s medical cannabis business grew substantially, reaching 70k+ customers by 31 March 2018.

Stock listing

Shares of Canopy Growth Corporation are traded on the Toronto Stock Exchange under the ticker symbol “WEED.” They are also listed on the Nasdaq Global Select Market under the ticker “CGC.”

As of 30 June 2024, the company’s top institutional shareholders included Tidal Investments, LLC, which held the largest stake among institutional investors. Tidal owned 2.15 million shares, representing 2.45% of total holdings, which amounted to 9.51 million shares.

Morgan Stanley followed with 522.67 thousand shares, making up 0.59% of the total, or 2.31 million shares. Bank of America Corporation held 479.74 thousand shares, equating to 0.55% and a total of 2.12 million shares. Two Sigma Investments, LP owned 379.05 thousand shares, representing 0.43% of the total, or 1.68 million shares.

Ameriprise Financial, Inc. held 241.68 thousand shares, which accounted for 0.28%, or 1.07 million shares. Two Sigma Advisers, LP followed closely with 224.13 thousand shares (0.26%) and 990.64 thousand shares. Parallax Volatility Advisers, L.P. held 207.41 thousand shares, or 0.24%, totalling 916.74 thousand shares.

Royal Bank of Canada owned 174.27 thousand shares, representing 0.20% of the total. This amounted to 770.26 thousand shares.Meanwhile, Jane Street Group, LLC held 179.02 thousand shares (0.20%), totaling 791.27 thousand shares. Finally, Citadel Advisors LLC held 149.75 thousand shares, representing 0.17%, totalling 661.90 thousand shares.

Market capitalisation

Growth Canopy’s market capitalisation as of 4 October 2024 is valued at US$388.34 million, with revenue of US$287.1 million, and a net income of -US$746.29 million.

Canopy Growth reports 1st quarter fiscal year 2025 financial results

On 9 August 2024, Canopy Growth released its financial results for the first quarter ended June 30, 2024 (Q1 FY2025). All figures were reported in Canadian dollars unless stated otherwise.

The Company achieved a gross profit of $23 million in Q1 FY2025, reflecting a 67% increase compared to the same period in 2023. This was despite a decrease in consolidated net revenue.

The consolidated gross margin for the quarter was 35%, with the Canada cannabis segment recording a gross margin of 32%. Operating loss from continuing operations improved by 47%, reaching $29 million.

Furthermore, the Company’s consolidated Adjusted EBITDA loss narrowed to $5 million, a 77% improvement over Q1 FY2024, primarily due to cost reduction measures already implemented.

Storz & Bickel, a subsidiary of Canopy Growth, saw a 2% increase in net revenue.This was driven by over 100% sales growth in Germany. It compensated for a decline in sales in Australia due to regulatory changes in the non-medical vaporizer market.

Key financial metrics showed significant improvement, including a 31% reduction in the Cost of Goods Sold (COGS). There was also a 24% reduction in Selling, General & Administrative (SG&A) expenses compared to Q1 FY2024.

As of 30 June 2024, Canopy Growth reported a cash and short-term investments balance of $195 million, down from $203 million as of 31 March 2024.

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