- Achieved annual net revenue growth of 191% to $226.3 million. Generated $140.5 million of gross revenue from new Canadian
recreational channel and $78.9
million in global medical sales.
- Fourth quarter revenue growth of 13% versus third quarter with
additional revenue being generated through value-added products,
extraction services, and clinic partners.
- Shipped 24,300 kilograms and kilogram equivalents during the
fiscal year, including 16,300 kilograms of dry flower and 8,000
kilogram equivalents of oil and softgels.
- Canadian cannabis harvested expected to increase to
approximately 34,000 kilograms in Q1 fiscal 2020, with further
licensed capacity still to come; additional capacity is expected to
increase finished inventory available for sale beginning in Q2
fiscal 2020.
- Expansion in Smiths Falls
bringing headquarters campus footprint to over 950,000 square feet
of value-add production and logistics space.
- $5 billion investment secured
from Constellation Brands being deployed to accelerate global
expansion, including the acquisition of medical cannabis device
manufacturer, Storz & Bickel. Subsequent to year end, the
Company acquired Germany-based C³
Cannabinoid Compound Company, Europe's largest cannabinoid-based
pharmaceutical company and UK-based beauty and wellness brand, This
Works Products Limited.
- Rapid expansion into United States CBD market following passage
of new Farm Bill; investments and partnerships related to
extraction, advanced manufacturing, and warehousing/logistics are
underway. Seeking to bring CBD products to market by the end of
fiscal 2020.
- Further solidified United
States strategy with shareholder approval of plan to acquire
leading multi-state operator Acreage Holdings, Inc. ("Acreage") a
deal which gives the Company a path to serve recreational and
medical markets upon federal permissibility, and licensing
structure to provide Acreage with brand and product IP to
accelerate their United States
market expansion.
- International licences covering over 35 million square feet of
production now in place across Africa, Europe, and Latin
America, with new certifications, sales and global
partnerships established to accelerate sales of medical and CBD
products internationally (See Linked Monday Press Release).
- At March 31, 2019, the Company's
cash, cash equivalents available, and marketable securities totaled
$4.5 billion.
SMITHS FALLS, Ontario,
June 21, 2019 /PRNewswire/ -- Canopy
Growth Corporation ("Canopy Growth" or the "Company") (TSX: WEED)
(NYSE: CGC) today announced its financial results for the fourth
quarter and fiscal year ended March 31,
2019. The audited Consolidated Financial Statements and
Management's Discussion and Analysis for the twelve months ended
March 31, 2019 will be filed on SEDAR
after financial markets close on Friday,
June 21, 2019 and will be available at www.sedar.com.
All financial information in this press release is reported in
Canadian dollars, unless otherwise indicated. This press release is
intended to be read in conjunction with the Company's Financial
Statements and Management Discussion & Analysis, which will be
available at www.canopygrowth.com and filed on SEDAR.
Fiscal year 2019 was a year of continued expansion across key
markets, including major steps towards completion of the Company's
build-out in Canada. Management
believes that the strategy of investing early in large-scale, high
quality Canadian production assets and significant value-add
infrastructure has been validated during the second half of fiscal
2019 as the majority of the Company's production platform became
licensed and operational, with further improvements in output
expected as full ramp-up of facilities is completed. In the
current quarter, Canopy Growth expects to harvest approximately
34,000 kilograms, with further licensed capacity, ramp-up and
efficiencies anticipated. The Company's strategy has resulted in,
to its knowledge, the largest market share in the Canadian cannabis
market.
"The fourth quarter wraps up a historic year with major steps
taken in Canada to build-out our
national platform while scaling all of our processes to bring
cannabis to market. The third quarter of the year benefitted from
months of advanced production while the fourth quarter relied more
on efficient throughput and a more automated platform," said
Bruce Linton, Chairman and Co-CEO of
Canopy Growth. "With more product formats coming to the Canadian
market later in the year, we are working hard to ensure that we are
ready to hit the ground running with products, formats and brands
that Canadians trust."
Fourth Quarter and
Fiscal 2019 Operational and Financial Summary
|
|
|
Q4
2019
|
Q4
2018
|
%
Change
|
FY
2019
|
FY
2018
|
%
Change
|
Net revenue
(millions)
|
$94.1
|
$22.8
|
313%
|
$226.3
|
$77.9
|
191%
|
Kilograms and
kilogram equivalents sold
|
$9,326
|
$2,528
|
269%
|
$24,320
|
$8,708
|
179%
|
|
|
|
|
|
|
|
Average Selling Price
per gram - Recreational
|
$7.28
|
-
|
NM
|
$7.20
|
-
|
NM
|
Average Selling Price
per gram - Canadian Medical
|
$8.17
|
$8.00
|
2%
|
$8.90
|
$8.34
|
7%
|
Average Selling Price
per gram - International Medical
|
$13.91
|
$13.35
|
4%
|
$13.57
|
$13.16
|
3%
|
Average Selling Price
per gram
|
$7.49
|
$8.43
|
-11%
|
$7.91
|
$8.24
|
-4%
|
Inventory &
Biological Assets (millions)
|
$341
|
$118
|
189%
|
$341
|
$118
|
189%
|
Kilograms harvested
(kilograms)
|
$14,469
|
$4,811
|
201%
|
$46,927
|
$22,513
|
108%
|
Cash, cash
equivalents and marketable securities (millions)
|
$4,515
|
$323
|
1298%
|
$4,515
|
$323
|
1298%
|
Fourth Quarter and
Fiscal 2019 Revenue Highlights
|
|
|
Q4
2019
|
Q4
2018
|
%
Change
|
FY
2019
|
FY
2018
|
%
Change
|
Canadian Recreational
Cannabis Gross Revenue - Business to Business
|
$57.2
|
-
|
NM
|
$117.4
|
-
|
NM
|
Canadian Recreational
Cannabis Gross Revenue - Business to Consumer
|
$11.7
|
-
|
NM
|
$23.1
|
-
|
NM
|
Canadian Recreational
Cannabis Revenue - Subtotal
|
$68.9
|
-
|
NM
|
$140.5
|
-
|
NM
|
Canadian Medical
Cannabis Gross Revenue
|
$11.6
|
$19.5
|
-41%
|
$68.8
|
$70.6
|
-3%
|
International Medical
Cannabis Gross Revenue
|
$1.8
|
$2.4
|
-25%
|
$10.1
|
$3.7
|
173%
|
Medical Revenue -
Subtotal
|
$13.4
|
$21.9
|
-39%
|
$78.9
|
$74.3
|
6%
|
Other
Revenue
|
$24.2
|
$0.9
|
2589%
|
$34.0
|
$3.6
|
844%
|
Total Gross
Revenue
|
$106.5
|
$22.8
|
367%
|
$253.4
|
$77.9
|
225%
|
Less Excise
Taxes
|
$12.4
|
-
|
NM
|
$27.1
|
-
|
NM
|
Net
Revenue
|
$94.1
|
$22.8
|
313%
|
$226.3
|
$77.9
|
191%
|
NM = Not
Meaningful
|
|
|
|
|
|
|
Fourth Quarter and
Fiscal 2019 Product Sales Highlights
|
|
Product Sales
(Kilograms & kilogram equivalents)
|
Q4
2019
|
Q4
2018
|
%
Change
|
FY
2019
|
FY
2018
|
%
Change
|
Canadian Recreational
Cannabis - Business to Business
|
$6,964
|
-
|
NM
|
$14,345
|
-
|
NM
|
Canadian Recreational
Cannabis - Business to Consumer
|
$999
|
-
|
NM
|
$1,905
|
-
|
NM
|
Canadian Medical
Cannabis
|
$1,233
|
$2,352
|
-48%
|
$7,324
|
$8,421
|
-13%
|
International Medical
Cannabis
|
$130
|
$176
|
-26%
|
$746
|
$287
|
160%
|
Total
|
$9,326
|
$2,528
|
269%
|
$24,320
|
$8,708
|
179%
|
NM = Not
Meaningful
|
|
|
|
|
|
|
Recreational Sales Overview
Gross recreational revenue in fiscal 2019 was $140.5 million, and accounted for 16,250 kilogram
and kilogram equivalents, or 67% of total cannabis sold in fiscal
2019. Q4 to Q3, gross recreational sales were largely similar with
$68.9 million in gross recreational
sales in Q4, down from $71.6 million
in gross recreational sales in Q3. As increased brick and mortar
stores come online in key provinces of Ontario, Alberta, and British
Columbia, the Company will use its increased capacity to
meet demand. Through the Company's investments in capacity and
automation across many of our processes, we approximately doubled
our harvest size from Q3 fiscal 2019 to Q4 fiscal 2019, and expect
to do so again from Q4 fiscal 2019 to Q1 fiscal 2020, positioning
us to ensure Canadian adult consumers have access to our trusted
brand portfolio.
Fiscal 2019 also welcomed our retail strategy, which included
securing licenses, rights to license, or permits to operate
cannabis retail stores in four provinces – including multi-year
licensing agreements in Ontario to
enable our partners to open additional retail stores. To date, we
have launched (directly or indirectly through licensing agreements)
23 cannabis retail stores in Newfoundland & Labrador, Manitoba, Saskatchewan, and Ontario under the Tweed and Tokyo Smoke
banners.
Medical Sales Overview
Total revenue generated from medical cannabis in fiscal 2019 was
$78.9 million, representing an
increase of 6% over fiscal 2018. Medical cannabis shipments were
8,070 kilogram and kilogram equivalents in fiscal 2019,
representing a decrease of 7%.
Canadian medical sales generated revenue of $68.8 million in fiscal 2019 as compared to
$70.6 million in fiscal 2018.
The Company's Canadian online medical store saw a period of
major transformation during the fiscal year, with established
brands Tweed, DNA Genetics, LBS and certain CraftGrow partners
largely transitioning to the recreational channel. This product
transition, along with product supply challenges which have since
been remedied, led to a decline in the medical channel in the
second half of fiscal 2019, with Canadian medical revenue
decreasing from $19.5 million in Q4
fiscal 2018 to $11.6 million in Q4
fiscal 2019. Following the re-brand of Spectrum Cannabis,
Canopy Health Innovations and C3 into a singular
medically-focused division Spectrum Therapeutics, along with
increasing finished goods inventory levels, and corresponding price
adjustments of select products, the Company believes that Canadian
medical sales under the Spectrum Therapeutics brand will be able to
return to previous levels of market-leading customer registrations
and sales.
International medical sales generated revenue of $10.1 million in fiscal 2019, 173% growth over
the previous fiscal year, driven by German market growth, as well
as entry into the Polish and Czech markets. The Company believes
that European sales have been negatively impacted by supply
challenges from Canada, caused by
a focus on serving Canadian patients first, as well as the lengthy
export process in Canada. The
Company believes there is significant upside potential in
Europe, and with its Canadian
medical channel fully supplied and Danish production coming online
within the calendar year, believes it will see significant
increases in Canadian and Danish product availability in this
market. The Company has also begun sales in new markets, including
Australia.
The Company remains committed to investing in significant
clinical research, as well as leading programs to educate
healthcare practitioners on the potential benefits of medicinal
cannabis in Canada and abroad.
This outreach will continue increasing Spectrum Therapeutics brand
visibility and is estimated to result in increased patients, both
within Canada and internationally
as new markets come online.
Other Strategic Revenue
To begin diversifying the Company's business into higher margin
cannabis products and to complement intellectual property ("IP")
being developed internally for the expected high growth vape
category, Canopy Growth acquired medical devices company Storz
& Bickel in Q3. Sales of Storz & Bickel vaporizer devices,
along with revenue from other strategic sources including
extraction services, and clinic partners, resulted in $34 million in other revenue generated in fiscal
2019.
As Storz & Bickel continues to become further and fully
integrated within the Canopy Growth ecosystem, the Company
anticipates that sales and revenue generated will continue to
increase as we expand product availability within our internal and
partnered sales channels. Additionally, through this acquisition,
the Company gained invaluable access to Storz & Bickel's IP
portfolio which has greatly benefited our innovation teams as we
look forward to unveiling our own branded vape technology in fiscal
2020.
Gross Margin (before the IFRS fair value impacts in cost of
sales)1 Overview
Gross margin (before the IFRS fair value impacts in cost of
sales) for fiscal 2019 grew 35% to $51
million, driven by growth in our medical channel and the
launch of the Canadian recreational channel. The gross margin
percentage decreased during the year from 48% to 22%, largely
driven by the continued expansion work on several of our
large-scale greenhouse facilities throughout the year, resulting in
under-utilization impact in cost of sales. The impacts of
under-utilization continued into Q4, resulting in a gross margin
percentage of 16%, which is down from 34% in the corresponding
period from the prior year, and 22% in Q3. The impact in Q4 fiscal
was primarily attributed to $24
million of operating expenses for facilities not yet
cultivating, cultivating but not yet harvesting, or facilities that
had under-utilized capacity. Additionally, Q4 incurred some
non-recurring costs related to an unusual weather event and other
one-time activities. We expect these facilities to be fully
operational in the months ahead, resulting in a return to
normalized operating costs for our cultivation facilities.
As production ramp-up begins for the next generation of
recreational products, there will be costs related to the ramp-up
of advanced manufacturing that will impact reported gross margin
during the initial start-up phase, but management expects the
impact to be less material relative to the size and scale of the
revenue related to the new generation of products.
Inventory production costs expensed to cost of sales in fiscal
2019 were $175.4 million, as compared
to $40.2 million in fiscal 2018. The
impact of changes in the fair value of biological assets in fiscal
2019 was due in large part to the commencement of growing at the
Company's facility in Mirabel,
Quebec increased utilization at our facilities in
Aldergrove and Delta, British Columbia, and 27 new grow rooms
at the facility in Smiths Falls,
Ontario.
Operating Expense
Summary
|
|
|
Q4
2019
|
Q4
2018
|
%
Change
|
FY
2019
|
FY
2018
|
%
Change
|
Sales and Marketing
Expenses
|
$53.2
|
$14.8
|
259%
|
$154.4
|
$38.2
|
304%
|
General and
Administration Expenses
|
$65.6
|
$16.9
|
288%
|
$168.5
|
$43.8
|
285%
|
Research and
Development Expenses
|
$7.3
|
$0.5
|
1360%
|
$15.2
|
$1.5
|
913%
|
Acquisition-related
Expenses
|
$13.8
|
$0.9
|
1433%
|
$23.4
|
$3.4
|
588%
|
Share-based
Compensation Expenses
|
$93.1
|
$20.2
|
361%
|
$283.0
|
$49.1
|
476%
|
Depreciation and
Amortization Expenses
|
$9.9
|
$2.9
|
241%
|
$21.5
|
$12.9
|
67%
|
Total
|
$242.9
|
$56.2
|
332%
|
$666.0
|
$148.9
|
347%
|
Canopy Growth continues to make significant investments to scale
our business in Canada and
globally, including investments building our corporate
capabilities, developing our production infrastructure, investing
in the marketing and development of new value-added consumer
products for the Canadian recreational cannabis market as well as
the global CBD market. Work is underway to bring these new consumer
products to these markets towards the end of fiscal 2020.
Additionally, the Company continues to invest in the development
and expansion of medical cannabis operations in jurisdictions
outside of Canada including
Colombia, Spain, Germany, Denmark, Lesotho, South
Africa and Australia. In
addition, we are investing in the research and development of
cannabis-based medical therapies, including in required clinical
trials, in advance of potential future commercialization. We
believe it is necessary to make these investments, many of them
made pre-revenue, to position the company for long-term
success.
Sales and marketing increased from $38.2
million in fiscal 2018 to $154.4
million in fiscal 2019, reflecting investments in
brand-building, consumer marketing, and promotional campaigns
focused on our Tweed, Tokyo Smoke, Spectrum Therapeutics, active
partner brands, as well as the development of cannabis and CBD
consumer products and brands expected to be launched towards the
end of fiscal 2020. In addition, staffing costs increased in
marketing and sales functions, our customer care centre, cannabis
retail and education programs, and our medical outreach
program.
General and administrative expenses in fiscal 2019 were
$168.5 million, reflecting our
ongoing investments in building commercial capacity, governance and
public company compliance costs associated with TSX and NYSE
listings, legal and professional services in expanding operations,
enhancing our information technology capabilities, scaling efforts
ahead of market expansion, compliance costs associated with meeting
Health Canada regulatory requirements, and employee compensation
costs associated with the above.
Research and development expenses incurred in fiscal 2019 were
$15.2 million. This is primarily
attributable to our R&D team conducting research into a variety
of innovation and intellectual property opportunities, as we
prepare for new format introductions in fiscal 2020.
Acquisition-related expenses were $23.4
million in fiscal 2019, with Canopy Growth closing on
several transactions in the year including the acquisition of HIKU
Brands Company Ltd., ebbu, Inc., Storz & Bickel GmbH & Co.
KG, and Canopy Health Innovations Inc. Acquisitions announced
subsequent to fiscal 2019 – including This Works Products Limited,
Canamo y Fibras Naturales, S.L. ("Cafina"), and the future
acquisition of Acreage – incurred related expenses throughout
fiscal 2019 as well.
Share-based compensation, a non-cash expense, was $182.8 million in fiscal 2019, up from
$29.6 million in fiscal 2018 with
$74.7 million accounted for in Q4,
representing an increase from $11.9
million in Q4 fiscal 2018. The increase is primarily
due to increased number of employees granted stock options as
headcount increased to 3,200 employees from 1,000 year-over-year
and accounting for the increase in fair value of stock options
granted considering the 80% increase in the Company's share price
that occurred over fiscal 2019.
Balance Sheet Highlights
At March 31, 2019, the Company's
cash and cash equivalents available and marketable securities
totaled $4.5 billion, representing an
increase of $4.2 billion from
March 31, 2018. The increase is
principally due to the investment of approximately $5 billion dollars by Constellation Brands, Inc.
("Constellation Brands") on November 1,
2018 and the issuance of convertible senior notes with an
aggregate principal amount of $600
million. This increase was partially offset by $644 million invested in the expansion of our
cannabis production, distribution, and physical retail store
assets, $380 million invested in the
acquisition of subsidiaries, and investments made in operations
including those related to strengthening corporate capabilities,
developing and executing recreational cannabis brand-related
campaigns, developing and preparing to launch value-added cannabis
products in fiscal 2020 and conducting research and development
into cannabis-based medical therapies.
Inventory at March 31, 2019
amounted to $262.1 million
(March 31, 2018 - $101.6 million), including $38 million in finished goods and $165.5 million of work-in-progress. In addition,
biological assets amounted to $79
million, which together with inventory totaled $341.1 million. The Company has scaled
production and increased automation capacity and expects to achieve
a Q1 fiscal 2020 harvest of approximately 34,000 kilograms which is
expected to be available for sale in all channels starting in Q2
fiscal 2020.
Fourth Quarter and Fiscal Year 2019 Adjusted EBITDA
summary2
Adjusted EBITDA amounted to a loss of $257.0 million in fiscal 2019, as compared to a
loss of $36.1 million in fiscal 2018.
The year-over-year loss is largely reflective of the investments
made in fiscal 2019 sales and marketing, and general and
administration costs as described above.
Depreciation and amortization, a non-cash expense, increased
$4.9 million from Q3 fiscal 2019, due
to the depreciation expense recorded on assets put into operation
during Q4 fiscal 2019. These assets largely related to production
and warehouse equipment.
Other expense, net, increased $368.3
million from Q3 2019, primarily related to non-cash fair
value changes on our senior convertible notes which have been
recorded through the statement of operations. These fair value
changes are due to the increase in Canopy Growth's stock price from
December 31, 2018 to March 31, 2019.
Events Subsequent to Fiscal Year 2019
- In April, Canopy Growth and Acreage announced that they entered
into an agreement granting Canopy Growth the right to acquire 100%
of Acreage's shares, once the production and sale of cannabis
becomes federally permissible in the
United States. On June 19,
Acreage and Canopy Growth shareholders voted to approve the
agreement. Initial implementation of the transaction is
subject to approval by the Supreme Court of British Columbia and satisfaction of certain
other closing conditions. Canopy Growth and Acreage expect the
transaction to be implemented on or about June 27, 2019. Upon approval of certain
modifications to the investor rights agreement with Constellation
Brands, as well as terms of existing warrants, Canopy Growth will
record a material, non-cash charge during the first quarter of
fiscal year 2020. We expect this non-cash charge to have a
materially negative impact on net income in the first quarter of
fiscal 2020.
The audited Consolidated Financial Statements and Management's
Discussion and Analysis for the twelve months ended March 31, 2019 will be filed on SEDAR after
financial markets close on Friday, June 21,
2019, and will be available at www.sedar.com. The basis
of financial reporting in the Audited Condensed Consolidated
Financial Statements and Management's Discussion and Analysis is in
thousands of Canadian dollars, unless otherwise indicated.
Note 1: Gross margin (before the IFRS fair value
impacts in cost of sales) is a key operational metric that
does not have any standardized meaning prescribed by IFRS and may
not be comparable to similar measures presented by other
companies. This measure is calculated as net revenue less
inventory production costs expensed to cost of sales and may be
computed from the consolidated statements of operations presented
within this news release.
Note 2: Adjusted EBITDA is a non-IFRS financial
measure that does not have any standardized meaning prescribed by
IFRS and may not be comparable to similar measures presented by
other companies. The Adjusted EBITDA reconciliation is presented
within this news release and explained in Management's Discussion
& Analysis under "Adjusted EBITDA (Non-IFRS Measure)", a copy
of which will be filed on SEDAR after financial markets close on
Friday, June 21, 2019.
Webcast Information
A live audio webcast will be available at:
https://event.on24.com/wcc/r/1971998/A4F8AB6B82EDF157155CC39603685130
Calling Information
Toll Free Dial-In Number: 1-888-231-8191
International Dial-In Number: (647) 427-7450
Conference ID: 4338214
Replay Information
A replay of the call will be accessible by telephone until
11:59 PM ET on September 21, 2019.
Toll Free Dial-in Number: 1-855-859-2056
Replay Password: 4338214
About Canopy Growth Corporation
Canopy Growth (TSX:WEED, NYSE:CGC) is a world-leading
diversified cannabis, hemp and cannabis device company, offering
distinct brands and curated cannabis varieties in dried, oil and
Softgel capsule forms, as well as medical devices through the
Company's subsidiary, Storz & Bickel GMbH & Co. KG. From
product and process innovation to market execution, Canopy Growth
is driven by a passion for leadership and a commitment to building
a world-class cannabis company one product, site and country at a
time. The Company has operations in over a dozen countries across
five continents.
The Company's medical division, Spectrum Therapeutics is proudly
dedicated to educating healthcare practitioners, conducting robust
clinical research, and furthering the public's understanding of
cannabis, and has devoted millions of dollars toward cutting edge,
commercializable research and IP development. Spectrum Therapeutics
sells a range of full-spectrum products using its colour-coded
classification Spectrum system as well as single cannabinoid
Dronabinol under the brand Bionorica Ethics.
The Company operates retail stores across Canada under its award-winning Tweed and Tokyo
Smoke banners. Tweed is a globally recognized cannabis brand which
has built a large and loyal following by focusing on quality
products and meaningful customer relationships.
From our historic public listing on the Toronto Stock Exchange
and New York Stock Exchange to our continued international
expansion, pride in advancing shareholder value through leadership
is engrained in all we do at Canopy Growth. Canopy Growth has
established partnerships with leading sector names including
cannabis icons Snoop Dogg and Seth
Rogen, breeding legends DNA Genetics and Green House Seeds,
and Fortune 500 alcohol leader Constellation Brands, to name but a
few. Canopy Growth operates eleven licensed cannabis production
sites with over 4.7 million square feet of production capacity,
including over one million square feet of GMP certified production
space. For more information visit www.canopygrowth.com.
Notice Regarding Forward Looking Statements
This news
release contains "forward-looking statements" within the meaning of
the United States Private Securities Litigation Reform Act of 1995
and "forward-looking information" within the meaning of applicable
Canadian securities legislation. Often, but not always,
forward-looking statements and information can be identified by the
use of words such as "plans", "expects" or "does not expect", "is
expected", "estimates", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements or information involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of Canopy Growth or its
subsidiaries to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements or information contained in this news
release. Examples of such statements include statements with
respect to the Company's expectations with respect to the Q1 fiscal
2020 harvest, the Company's expectation for additional finished
inventory available for sale in Q2 fiscal 2020, bringing CBD
products to market by the end of fiscal 2020, the accelerated
market expansion for Acreage, the anticipated benefits of the
rebranding of Spectrum Therapeutics on the Company's market share,
the potential opportunity for cannabis products in Europe and the anticipated Increase in
Canadian and Danish product availability, the anticipated increased
sales from Storz & Bickel, the expectation that facilities will
be fully operational in the months ahead, the launch of new CBD
consumer products and brands in fiscal 2020, the timing for
implementation of the transaction with Acreage. Risks,
uncertainties and other factors involved with forward-looking
information could cause actual events, results, performance,
prospects and opportunities to differ materially from those
expressed or implied by such forward-looking information, including
changes in laws, regulations and guidelines; compliance with laws;
international laws; operational, regulatory and other risks;
execution of business strategy; management of growth; difficulty to
forecast; reliance on licences; risks inherent in an agricultural
business; contracts with provincial and territorial governments;
constraints on marketing products; risks inherent in acquisitions
and investments; expansion into foreign jurisdictions; governmental
regulations; cannabis is a controlled substance in the United States; Farm Bill risks;
assumptions as to the ability of the parties to receive, in a
timely manner and on satisfactory terms, the necessary regulatory
and court approvals for the transaction with Acreage; and such
risks contained in the Company's management information circular of
the Company dated May 17, 2019 and in
the annual information form dated June 27,
2018 and filed with Canadian securities regulators and
available on the Company's issuer profile on SEDAR
at www.sedar.com. Readers are cautioned that the foregoing
list of factors is not exhaustive. Although the Company believes
that the assumptions and factors used in preparing the
forward-looking information or forward-looking statements in this
news release are reasonable, undue reliance should not be placed on
such information and no assurance can be given that such events
will occur in the disclosed time frames or at all. The
forward-looking information and forward-looking statements included
in this news release are made as of the date of this news release
and the Company does not undertake an obligation to publicly update
such forward-looking information or forward-looking information to
reflect new information, subsequent events or otherwise unless
required by applicable securities laws.
|
CANOPY GROWTH
CORPORATION
|
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
(Expressed in CDN
$000's)
|
|
March
31,
2019
|
|
March 31,
2018
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,480,830
|
$
|
322,560
|
Marketable
securities
|
|
2,034,133
|
|
-
|
Amounts
receivable
|
|
106,974
|
|
21,425
|
Biological
assets
|
|
78,975
|
|
16,348
|
Inventory
|
|
262,105
|
|
101,607
|
Prepaid expenses and
other current assets
|
|
107,123
|
|
19,837
|
|
|
5,070,140
|
|
481,777
|
|
|
|
|
|
Investments in equity
method investees
|
|
112,385
|
|
63,106
|
Other financial
assets
|
|
363,427
|
|
163,463
|
Property, plant and
equipment
|
|
1,096,340
|
|
303,682
|
Intangible
assets
|
|
519,556
|
|
101,526
|
Goodwill
|
|
1,544,055
|
|
314,923
|
Other long-term
assets
|
|
25,902
|
|
8,340
|
|
|
|
|
|
|
$
|
8,731,805
|
$
|
1,436,817
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
226,533
|
$
|
89,571
|
Current portion of
long-term debt
|
|
103,716
|
|
1,557
|
Other current
liabilities
|
|
81,414
|
|
900
|
|
|
411,663
|
|
92,028
|
|
|
|
|
|
Long-term
debt
|
|
842,259
|
|
6,865
|
Deferred tax
liability
|
|
96,031
|
|
33,536
|
Other long-term
liabilities
|
|
140,404
|
|
61,150
|
|
|
|
|
|
|
|
1,490,357
|
|
193,579
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Share
capital
|
|
6,026,618
|
|
1,076,838
|
Other
reserves
|
|
1,673,472
|
|
127,418
|
Accumulated other
comprehensive income
|
|
28,630
|
|
46,166
|
Deficit
|
|
(777,087)
|
|
(91,649)
|
|
|
|
|
|
Equity attributable
to Canopy Growth Corporation
|
|
6,951,633
|
|
1,158,773
|
|
|
|
|
|
Non-controlling
interests
|
|
289,815
|
|
84,465
|
|
|
|
|
|
Total
equity
|
|
7,241,448
|
|
1,243,238
|
|
|
|
|
|
|
$
|
8,731,805
|
$
|
1,436,817
|
|
CANOPY GROWTH
CORPORATION
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
FOR THE THREE AND
TWELVE MONTHS ENDED MARCH 31, 2019 AND 2018
|
|
|
Three months
ended
|
|
|
Twelve months
ended
|
(Expressed in CDN
$000's except share amounts)
|
March
31,
2019
|
|
March 31,
2018
|
|
|
March
31,
2019
|
|
March 31,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
106,485
|
$
|
22,806
|
|
$
|
253,431
|
$
|
77,948
|
Excise
taxes
|
|
12,435
|
|
-
|
|
|
27,090
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net
revenue
|
|
94,050
|
|
22,806
|
|
|
226,341
|
|
77,948
|
|
|
|
|
|
|
|
|
|
|
Inventory production
costs expensed to cost of sales
|
|
79,076
|
|
15,140
|
|
|
175,425
|
|
40,213
|
|
|
|
|
|
|
|
|
|
|
Gross margin before
the undernoted
|
|
14,974
|
|
7,666
|
|
|
50,916
|
|
37,735
|
|
|
|
|
|
|
|
|
|
|
Fair value changes in
biological assets included in inventory sold and other inventory
charges
|
|
23,547
|
|
20,025
|
|
|
129,536
|
|
67,861
|
Unrealized gain on
changes in fair value of biological assets
|
|
(77,050)
|
|
(17,500)
|
|
|
(167,550)
|
|
(96,721)
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
68,477
|
|
5,141
|
|
|
88,930
|
|
66,595
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
53,184
|
|
14,751
|
|
|
154,392
|
|
38,203
|
Research and
development
|
|
7,274
|
|
539
|
|
|
15,238
|
|
1,453
|
General and
administration
|
|
65,657
|
|
16,883
|
|
|
168,434
|
|
43,819
|
Acquisition-related
costs
|
|
13,788
|
|
915
|
|
|
23,394
|
|
3,406
|
Share-based
compensation expense
|
|
74,678
|
|
11,923
|
|
|
182,837
|
|
29,631
|
Share-based
compensation expense related to acquisition milestones
|
|
18,490
|
|
8,247
|
|
|
100,164
|
|
19,475
|
Depreciation and
amortization
|
|
9,870
|
|
2,915
|
|
|
21,510
|
|
12,889
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
242,941
|
|
56,173
|
|
|
665,969
|
|
148,876
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(174,464)
|
|
(51,032)
|
|
|
(577,039)
|
|
(82,281)
|
|
|
|
|
|
|
|
|
|
|
Share of loss on
equity investments
|
|
(1,731)
|
|
(1,303)
|
|
|
(10,752)
|
|
(1,473)
|
Other (expense)
income, net
|
|
(133,451)
|
|
(10,068)
|
|
|
(69,985)
|
|
31,213
|
Total other
(expense) income, net
|
|
(135,182)
|
|
(11,371)
|
|
|
(80,737)
|
|
29,740
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(309,646)
|
|
(62,403)
|
|
|
(657,776)
|
|
(52,541)
|
|
|
|
|
|
|
|
|
|
|
Income tax (expense)
recovery
|
|
(13,716)
|
|
8,042
|
|
|
(12,318)
|
|
(1,593)
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(323,362)
|
$
|
(54,361)
|
|
$
|
(670,094)
|
$
|
(54,134)
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to:
|
|
|
|
|
|
|
|
|
|
Canopy Growth
Corporation
|
$
|
(335,607)
|
$
|
(61,544)
|
|
$
|
(685,438)
|
$
|
(70,353)
|
Non-controlling
interests
|
|
12,245
|
|
7,183
|
|
|
15,344
|
|
16,219
|
|
$
|
(323,362)
|
$
|
(54,361)
|
|
$
|
(670,094)
|
$
|
(54,134)
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share, basic and diluted
|
|
|
|
|
|
|
|
|
|
Net loss per
share:
|
$
|
(0.98)
|
$
|
(0.31)
|
|
$
|
(2.57)
|
$
|
(0.40)
|
Weighted average
number of outstanding common shares:
|
|
343,877,591
|
|
196,571,715
|
|
|
266,997,406
|
|
177,301,767
|
|
CANOPY GROWTH
CORPORATION
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE THREE AND
TWELVE MONTHS ENDED MARCH 31, 2019 AND 2018
|
|
|
Three months
ended
|
|
|
Twelve months
ended
|
(Expressed in CDN
$000's)
|
|
March
31,
2019
|
|
March 31,
2018
|
|
|
March
31,
2019
|
|
March 31,
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net inflow (outflow)
of cash related to the following activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(323,362)
|
$
|
(54,361)
|
|
$
|
(670,094)
|
$
|
(54,134)
|
Adjustments
for:
|
|
|
|
|
|
|
|
|
|
Depreciation of
property, plant and equipment
|
|
14,359
|
|
2,365
|
|
|
30,062
|
|
8,725
|
Amortization of
intangible assets
|
|
8,987
|
|
2,586
|
|
|
16,856
|
|
11,761
|
Share of loss on
equity investments
|
|
1,731
|
|
1,303
|
|
|
10,752
|
|
1,473
|
Fair value changes in
biological assets included in inventory sold and other
charges
|
|
23,547
|
|
20,025
|
|
|
129,536
|
|
67,861
|
Unrealized gain on
changes in fair value of biological assets
|
|
(77,050)
|
|
(17,500)
|
|
|
(167,550)
|
|
(96,721)
|
Share-based
compensation
|
|
93,096
|
|
20,928
|
|
|
287,782
|
|
51,177
|
Other
assets
|
|
(2,451)
|
|
79
|
|
|
(19,359)
|
|
(1,853)
|
Other
liabilities
|
|
54,345
|
|
-
|
|
|
54,345
|
|
-
|
Other income and
expense
|
|
120,262
|
|
2,925
|
|
|
75,786
|
|
(37,494)
|
Income tax (recovery)
expense
|
|
13,716
|
|
(8,042)
|
|
|
12,318
|
|
1,593
|
Non-cash foreign
currency
|
|
(20,170)
|
|
(201)
|
|
|
(18,776)
|
|
(201)
|
Changes in non-cash
operating working capital items
|
|
(132,621)
|
|
(7,018)
|
|
|
(262,168)
|
|
(33,693)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
(225,611)
|
|
(36,911)
|
|
|
(520,510)
|
|
(81,506)
|
|
|
|
|
|
|
|
|
|
|
Investing
|
|
|
|
|
|
|
|
|
|
Purchases and
deposits of property, plant and equipment
|
|
(149,220)
|
|
(89,930)
|
|
|
(644,456)
|
|
(176,037)
|
Purchases of
intangible assets
|
|
1,850
|
|
(1,099)
|
|
|
(38,290)
|
|
(2,132)
|
Proceeds on disposals
of property and equipment
|
|
-
|
|
-
|
|
|
-
|
|
75
|
Purchases of
marketable securities
|
|
(1,227,565)
|
|
-
|
|
|
(2,029,812)
|
|
(118)
|
Proceeds on assets
classified as held for sale
|
|
-
|
|
-
|
|
|
-
|
|
7,000
|
Investments in equity
method investees
|
|
(9,695)
|
|
-
|
|
|
(36,896)
|
|
(26,179)
|
Investments in other
financial assets
|
|
(17,266)
|
|
(2,062)
|
|
|
(91,337)
|
|
(22,439)
|
Net cash outflow on
acquisition of NCI
|
|
(4,716)
|
|
-
|
|
|
(6,712)
|
|
-
|
Net cash outflow on
acquisition of subsidiaries
|
|
(36,010)
|
|
(153)
|
|
|
(380,482)
|
|
(3,753)
|
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(1,442,622)
|
|
(93,244)
|
|
|
(3,227,985)
|
|
(223,583)
|
|
|
|
|
|
|
|
|
|
|
Financing
|
|
|
|
|
|
|
|
|
|
Payment of share
issue costs
|
|
(3,029)
|
|
(8,663)
|
|
|
(21,646)
|
|
(10,008)
|
Proceeds from
issuance of common shares and warrants
|
|
-
|
|
200,680
|
|
|
5,072,500
|
|
470,670
|
Proceeds from
issuance of shares by Canopy Rivers
|
|
63,758
|
|
19,763
|
|
|
154,976
|
|
54,876
|
Proceeds from
exercise of stock options
|
|
19,429
|
|
3,509
|
|
|
48,159
|
|
11,053
|
Proceeds from
exercise of warrants
|
|
106
|
|
89
|
|
|
18,790
|
|
770
|
Issuance of long-term
debt
|
|
-
|
|
-
|
|
|
600,000
|
|
-
|
Payment of long-term
debt issue costs
|
|
-
|
|
-
|
|
|
(16,380)
|
|
-
|
Payment of interest
on long-term debt
|
|
(11,793)
|
|
-
|
|
|
(14,521)
|
|
-
|
Repayment of
long-term debt
|
|
(1,181)
|
|
(371)
|
|
|
(4,680)
|
|
(1,512)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided
by financing activities
|
|
67,290
|
|
215,007
|
|
|
5,837,198
|
|
525,849
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(34,097)
|
|
-
|
|
|
69,567
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net cash
inflow
|
|
(1,635,040)
|
|
84,852
|
|
|
2,158,270
|
|
220,760
|
Cash and cash
equivalents, beginning of period
|
|
4,115,870
|
|
237,708
|
|
|
322,560
|
|
101,800
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
$
|
2,480,830
|
$
|
322,560
|
|
$
|
2,480,830
|
$
|
322,560
|
Adjusted
EBITDA1 Non-IFRS Measure
|
|
Three months
ended
|
|
|
Year
ended
|
(In
CDN$000's)
|
|
March 31,
2019
|
|
March 31,
2018
|
|
|
March 31,
2019
|
|
March 31,
2018
|
|
|
|
|
(Restated)
|
|
|
|
|
(Restated)
|
Adjusted
EBITDA1 Reconciliation
|
|
|
|
|
|
|
|
|
|
Loss from
operations - as reported
|
$
|
(174,464)
|
$
|
(51,032)
|
|
$
|
(577,039)
|
$
|
(82,281)
|
|
|
|
|
|
|
|
|
|
|
IFRS fair value
accounting related to biological assets and
inventory
|
|
|
|
|
|
|
|
|
|
Fair value changes in
biological assets included in inventory sold and other
charges
|
|
23,547
|
|
20,025
|
|
|
129,536
|
|
67,861
|
Unrealized gain on
changes in fair value of biological assets
|
|
(77,050)
|
|
(17,500)
|
|
|
(167,550)
|
|
(96,721)
|
|
|
(53,503)
|
|
2,525
|
|
|
(38,014)
|
|
(28,860)
|
Share-based
compensation expense (per statement of cash flows)
|
|
93,096
|
|
20,928
|
|
|
287,782
|
|
51,177
|
Acquisition-related
costs
|
|
13,788
|
|
915
|
|
|
23,394
|
|
3,406
|
Depreciation and
amortization (per statement of cash flows)
|
|
23,346
|
|
4,951
|
|
|
46,918
|
|
20,486
|
|
|
130,230
|
|
26,794
|
|
|
358,094
|
|
75,069
|
Adjusted
EBITDA
|
$
|
(97,737)
|
$
|
(21,713)
|
|
$
|
(256,959)
|
$
|
(36,072)
|
|
1Adjusted
EBITDA is earnings before interest, tax, depreciation and
amortization, share-based compensation expense, fair value changes
and other non-cash items, and further adjusted to remove
acquisition-related costs.
|
Media Contacts:
Caitlin O'Hara,
Media Relations,
Caitlin.Ohara@canopygrowth.com,
613-291-3239;
Investor Relations,
Tyler Burns,
Tyler.Burns@canopygrowth.com,
855-558-9333 ext. 122
View original
content:http://www.prnewswire.com/news-releases/canopy-growth-corporation-reports-fourth-quarter-and-fiscal-2019-results-with-annual-sales-of-226-3m-300872539.html
SOURCE Canopy Growth Corporation