Canopy Growth (TSX:WEED) is dominating the Canadian cannabis sector in a big way.
The company released its financial results for the third quarter of the 2017 fiscal year on Tuesday (February 14), and said it raked in $9.8 million in revenue for the three months ended December 31, 2016. That’s a 180-percent increase from the previous year.
Canopy also says in the release that it had over 29,000 registered patients at the end of 2016, up 260 percent from the end of 2015.
Based on those figures, it’s easy to see why Canopy is the first billion-dollar marijuana company in Canada. It’s also easy to see why the company is having a hard time keeping up with demand.
As CTV News notes, about a third of Canopy’s customers are interested in “moderate to high levels of THC.” But according to CEO Bruce Linton, the company “really didn’t have that in the (October-December) quarter — almost ever.”
To fill that demand, Canopy has “been hurrying to meet demand” by expanding production and obtaining producers. The company started developing medical marijuana with 27 percent THC over a year and a half ago, but is still awaiting approval to begin production.
Linton also said, “[t]he successful late-quarter harvest of the Tweed Farms facility running at full capacity has begun to ease supply constraints while at the same time we have introduced a new diversity of product into our online store under the Tweed, Leafs By Snoop and DNA Genetics banners, driving strong sales this month.”
The company’s inventory was valued at $50.6 million at the end of the December, and included 8,375 kilograms of dry cannabis and 2,683 liters of cannabis oils.
All in all, Linton appeared positive about Canopy’s Q3 results, and said that the third quarter “provided new opportunities and challenges” for the company.
“A function of our growing patient base, the time required to move from a record harvest to sale, and an extensive phenotyping exercise to establish breeding stock and further elevate our product offering all resulted in constrained product available for sale during the quarter,” he continued.
Moving forward, the outlook for Canopy looks positive. In fact, on February 1 the company reported that it achieved $1 million in sales in one day for the first time ever.
Gareth Watson of Richardson GMP told BNN that Canopy will “continue to be a leader in consolidating players in the cannabis industry.”
“I think it’s going to be your typical industry starting off with a whole bunch of small players and eventually you’re going to consolidate into big players down the road,” he told the publication. “Canopy is probably going to be leading that.”
Canopy’s share price has also been on the move. Year-to-date, it’s up 32.39 percent at $12.10.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.