The cannabis producer Canopy Growth is getting whacked after missing big on revenue
- Canopy Growth reported second-quarter revenue that missed even the lowest estimate by a wide margin.
- Shares fell more than 7% early Wednesday.
- The cannabis producer received a $4 billion investment from the beverage maker Constellation Brands earlier this year, sparking the so-called "green rush" into the sector.
- Watch Canopy Growth trade live.
Canopy Growth was under pressure early Wednesday, down more than 8%, after reporting revenue that missed even the lowest estimate by a wide margin.
The cannabis producer said second-quarter revenue totaled 23.3 million Canadian dollars, missing the Bloomberg consensus of C$59.1 million. The consensus consisted of three estimates, ranging from C$33.7 milion to C$83.6 million.
Canopy lost C$1.52 per share and showed an adjusted EBITDA loss of C$57.7 million, worse than the C$23.7 million loss that was expected.
The company sold 2,197 kilograms and kilogram equivalents, up 9% versus a year ago, while its average selling price of $9.87 represented a 24% increase.
"With extensive investments over the past year, including most notably in the second quarter, in branding and retail development, our entrance into the retail cannabis market has been a success with our SKU assortment obtaining over 30% listings market share in multi-store physical retail store networks nationwide," chairman and co-CEO Bruce Linton said in the press release.
"With substantial product inventories on hand, new product formats coming to market as planned, a captive sales force driving increased demand through physical retail stores and increasing internal and channel efficiencies, we believe based on market conditions today that we will attain significant and sustainable market share of the Canadian recreational market."
In August, Constellation Brands, the maker of Corona beer and Svedka vodka, announced a $4 billion investment in Canopy Growth, sparking a so-called "green rush" into the sector, and causing companies across the industry to see their valuations more than double over a matter of weeks.
The industry reamained in the headlines this fall as Canada became the second country to legalize marijuana for recreational use, and Michigan joined nine other US states and Washington, DC, in legalizing the drug for anyone over the age of 21.
Shares were up 63% this year through Tuesday.
