Canopy Growth Corp. (NYSE: CGC; TSX: WEED) is a Canada-based holding company that produces, distributes, and sells a variety of cannabis and hemp-based products for medical and recreational use. Its products include dried flower, oil, soft-gel capsules, edibles, vapes, beverages, and a broad range of cannabis accessories.

Canopy Growth faces competition from a large number of U.S. and primarily Canada-based cannabis companies, including Cronos Group Inc. (NASDAQ: CRON; TSX: CRON.TO), Aurora Cannabis Inc. (NYSE: ACB; TSX: ACB.TO), and OrganiGram Holdings Inc. (NASDAQ: OGI; TSX: OGI.TO).

Canopy Growth’s Financials

Canopy Growth prepares its financial statements in accordance with the U.S. 澳洲幸运5官方开奖结果体彩网:gene🎉rally accepted accounting principle🧔s (GAAP). The financial data presented below are in Canadian dollars in accordance with the company's financial statements.

Canopy Growth manageme💮nt has focused on a strategy of absorbing financial losses in the short term in order to dramatically expand its operations and sales in♏ the emerging recreational and medical cannabis markets in the U.S., Canada, and globally.

In February 2024, the company released its financial results for Q3 2024 for the period ended Dec. 31, 2023. The company reported a net loss of $216.8 million for the quarter. It was an improvement from a net loss of $259.5 million in Q3 2023.

However, net revenue, which is revenue after excise taxes and what the company uses as a metric, fell 7.5% 澳洲幸运5官方开奖结果体彩网:year-over-year (YOY) to $78.5 million in Q3 2024. Canopy Growth's 澳洲幸运5官方开奖结果体彩网:gross profit, which it refers to as gross margin and which it uses as a profitability metric for its business segments, grew by 439% YOY to $28.2 million. The growth was due to a large decrease in cost of goods sold.

Canopy Growth’s Business Segments

Canopy Growth conducts its operations through four reportable segments: Canada Cannabis, Rest-of-World Cannabis, Storz & Bickel, and This Works.

Canada Cannabis

The Canada Cannabis segment is involved in the production, distribution, and sale of a variety of cannabis, hemp, and cannabis-related products in Canada.

The Canada Cannabis segment generated a gross margin of $11.1 million in Q3 FY 2024, a significant improvement from the $5.3 million gross loss in Q3 2023. This segment accounted for 39.4% of total 澳洲幸运5官方开奖结果体彩网:gross margins. Revenue for the segment fell 16.3% YOY to $39 million. The segment accounted for 49.7% of Canopy Growth's net revenue for the quarter.

Rest-of-World Cannabis

The Rest-of-World Cannabis segment is involved in the production, distribution, and sale of cannabis and hemp products internationally. This includes medical markets in Europe and Australia.

This segment generated a gross margin of $4.2 million in Q3 2024, up from a loss of $2.2 million compared to the year-ago quarter. The segment accounted for 14.9% of the total gross margin during the quarter. Revenue rose by 80% YOY to $10.5 million. The segment accounted for 13.4% of companywide net revenue.

Storz & Bickel

This segment is the production, distribution, and sale of vaporizers and accessories.

This segment generated a gross margin of $9.4 million in Q3 2024; an increase of 2.9% from Q3 2023. The segment accounted for 33.5% of total gross margins. Revenue for the segment decreased by 8.7% to $18.5 million. This segment accounted for 23.5% of total net revenue.

This Works

The This Works segment is involved in the production, distribution, and sale of beauty, skincare, wellness, and sleep products, some of which are infused with hemp-derived CBD isolate. This segment was sold on Dec. 18, 2023, and going forward will no longer be part of the company.

The segment reported a gross margin of $4.2 million for Q3 2024, which was an increase of 5.5% from Q3 2023. The segment accounted for 15.1% of total gross margins. Revenue for the segment fell slightly by 1.5% to $8.2 million. This segment accounted for 10.4% of total net revenues.

Other

Canopy Growth does report "other" as an additional line item for revenue and gross margin, though it does not count it as a reportable business segment. This part of the business is involved in non-cannabis extraction activities and other ancillary activities. This segment reported revenue of $2.3 million for the quarter, which accounted for 3% of total revenue. It, however, reported a gross loss of $781,000.

Canopy Growth's Recent Developments

In February 2024, the company announced the release of five new pre-roll products across the company's adult-use cannabis portfolio. The products are from the brands 7ACRES and Hiway.

In December 2023, the company announced the completion of its 澳洲幸运5官方开奖结果体彩网:divestiture of its This Works business segment. The skincare and wellness brand was sold to Inspirit Capital in a deal valued at $15.9 million (Candian). The goal of the sale was to focus Canopy Growth's strategy on being a simplified, asset-light, cannabis-focused business.

The Bottom Line

With the continued legalization of cannabis around the globe, companies have many opportunities to enter the market and offer their products. As the industry is still fairly new, there is a large opportunity for growth. Canadian-based Canopy Growth offers a variety of products in the cannabis market and though it has continued to operate at a net loss due to focusing on growth, it has seen improvements in its gross margins.