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Canopy Growth (CGC)

Canopy Growth is a world-leading diversified cannabis and cannabinoid-based consumer product company, driven by a passion to improve lives, end prohibition, and strengthen communities by unleashing the full potential of cannabis. Leveraging consumer insights and innovation,the Company offers product varieties in high quality dried flower, oil, softgel capsule, infused beverage, edible, and topical formats, as well as vaporizer devices by Canopy Growth and industry-leader Storz & Bickel. Its global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using its colour-coded classification system and is a market leader in both Canada and Germany. Through its award-winning Tweed and Tokyo Smoke banners, the Company reach its adult-use consumers and hasbuilt a loyal following by focusing on top quality products and meaningful customer relationships. Canopy Growth has entered into the health and wellness consumer space in key markets including Canada, the United States, and Europe through BioSteel sports nutrition, and This Works skin and sleep solutions; and has introduced additional federally-permissible CBD products to the United States through its First & Free and Martha Stewart CBD brands. Canopy Growth has an established partnership with Fortune 500 alcohol leader Constellation Brands.

Company profile

Ticker
CGC
Exchange
CEO
Bruce Linton
Employees
Incorporated
Location
Fiscal year end
SEC CIK
Subsidiaries
10006215 Manitoba Ltd. • 10007705 Manitoba Ltd. • 10252832 Canada Inc. • 10663824 Canada Inc. • 11065220 Canada Inc. • 11128752 Canada Inc. • 11239490 Canada Inc. • 11318152 Canada Inc. • 1135024 B.C. Ltd • 1208640 B.C. Ltd. ...

CGC stock data

Analyst ratings and price targets

Last 3 months

Calendar

8 Aug 22
26 Sep 22
31 Mar 23
Quarter (USD) Jun 22 Mar 22 Dec 21 Sep 21
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Annual (USD) Mar 22 Mar 21 Mar 20 Mar 19
Revenue
Cost of revenue
Operating income
Operating margin
Net income
Net profit margin
Cash on hand
Change in cash
Diluted EPS
Cash burn rate (est.) Burn method: Change in cash Burn method: Operating income Burn method: FCF (opex + capex)
Last Q Avg 4Q Last Q Avg 4Q Last Q Avg 4Q
Cash on hand (at last report) 769.5M 769.5M 769.5M 769.5M 769.5M 769.5M
Cash burn (monthly) 2.17M (no burn) 694.6M 253.02M 46.84M 43.38M
Cash used (since last report) 6.29M n/a 2.01B 733.07M 135.71M 125.68M
Cash remaining 763.21M n/a -1.24B 36.42M 633.79M 643.81M
Runway (months of cash) 351.7 n/a -1.8 0.1 13.5 14.8

Beta Read what these cash burn values mean

Date Owner Security Transaction Code Indirect 10b5-1 $Price #Shares $Value #Remaining
10 Aug 22 Christelle Gedeon Stock Option Common Shares Grant Acquire A No No 3.7 131,081 485K 131,081
10 Aug 22 Christelle Gedeon Stock Option Common Shares Grant Acquire A No No 3.7 262,162 970K 262,162
30 Jun 22 David Angelo Lazzarato COMMON SHARES Payment of exercise Dispose F No No 3.71 3,722 13.81K 27,138
30 Jun 22 Theresa Yanofsky COMMON SHARES Payment of exercise Dispose F No No 3.71 3,707 13.75K 32,565
10.3% owned by funds/institutions
13F holders Current Prev Q Change
Total holders 358 375 -4.5%
Opened positions 52 51 +2.0%
Closed positions 69 82 -15.9%
Increased positions 71 84 -15.5%
Reduced positions 101 92 +9.8%
13F shares Current Prev Q Change
Total value 287.46M 672.77M -57.3%
Total shares 49.45M 59.36M -16.7%
Total puts 11.77M 6.11M +92.5%
Total calls 8.36M 9.73M -14.1%
Total put/call ratio 1.4 0.6 +124.0%
Largest owners Shares Value Change
Vanguard 8.1M $23.09M +2.8%
Etf Managers 7.86M $27.5M +7.2%
Millennium Management 3.15M $8.98M NEW
MS Morgan Stanley 2.84M $8.09M +47.9%
BAC Bank Of America 2.06M $5.87M +25.2%
Two Sigma Investments 1.86M $5.31M -45.5%
BMO Bank of Montreal 1.72M $4.95M +35.0%
D. E. Shaw & Co. 1.2M $3.41M -70.6%
AMP Ameriprise Financial 1.2M $3.4M +17.7%
Two Sigma Advisers 1.16M $3.3M -45.1%
Largest transactions Shares Bought/sold Change
Millennium Management 3.15M +3.15M NEW
D. E. Shaw & Co. 1.2M -2.88M -70.6%
Contrarius Investment Management 0 -2.08M EXIT
Susquehanna International 333.51K -1.95M -85.4%
Two Sigma Investments 1.86M -1.56M -45.5%
DeepCurrents Investment 1.13M +1.13M NEW
Two Sigma Advisers 1.16M -950.1K -45.1%
MS Morgan Stanley 2.84M +919.87K +47.9%
RY Royal Bank Of Canada 215.81K -915.81K -80.9%
NA National Bank of Canada 98.56K -837.67K -89.5%

Financial report summary

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Risks
  • We and certain of our subsidiaries have limited operating history and therefore we are subject to many of the risks common to early-stage enterprises.
  • We may not be able to successfully manage our growth.
  • We may not be able to achieve or maintain profitability and may continue to incur losses in the future.
  • We have been and may in the future be required to write down intangible assets, including goodwill, due to impairment, which could have a material adverse effect on our results of operations or financial position.
  • There is limited long-term data with respect to the efficacy, side effects and safety of our products, and future clinical research studies on the effects of cannabis, U.S. hemp, cannabinoids and cannabis-based products may lead to conclusions that dispute or conflict with our understanding and belief regarding their benefits, viability, safety, efficacy, dosing and social acceptance.
  • Required clinical trials of cannabis-based medical products and treatments are novel terrain with very limited or non-existent clinical trial history; we face a significant risk that any trials will not result in commercially viable products and treatments.
  • The controversy surrounding vaporizers and vaporizer products may materially and adversely affect the market for vaporizer products and expose us to litigation and additional regulation.
  • Future research may lead to findings that vaporizers, electronic cigarettes and related products are not safe for their intended use.
  • We are subject to risks and uncertainty regarding our U.S. hemp operations.
  • There is continuing uncertainty regarding the FDA’s potential position on CBG and other cannabinoids.
  • We are subject to risks and uncertainty regarding future product development.
  • We operate in highly regulated industries where the regulatory environments are rapidly developing and we may not always succeed in complying fully with applicable regulatory requirements in all jurisdictions where we carry on business.
  • We and our joint ventures and strategic investments are reliant on required licenses, authorizations, approvals and permits for our ability to grow, process, store and sell cannabis, U.S. hemp and cannabinoids which are subject to ongoing compliance, reporting and renewal requirements and we may also be required to obtain additional licenses, authorizations, approvals and permits in connection with our business.
  • Changes in the laws, regulations and guidelines governing cannabis and U.S. hemp may adversely impact our business.
  • We are subject to certain restrictions of the TSX and Nasdaq, which may constrain our ability to expand our business internationally.
  • We are constrained by law in our ability to market and advertise our products.
  • We could be adversely affected by violations of the Corruption of Foreign Public Officials Act (Canada), the U.S. Foreign Corrupt Practices Act and other similar anti-bribery laws.
  • Cannabis is a controlled substance in the United States and therefore subject to the Controlled Substances Act.
  • We are subject to a number of federal, state, and foreign environmental and safety laws and regulations that may expose us to significant costs and liabilities.
  • Our employees or investors could face detention, denial of entry or lifetime bans from United States for their business associations with us.
  • Anti-money laundering and other banking laws and regulations can limit our ability to access financing and hamper our growth.
  • Controlled substance and other legislation and treaties may restrict or limit our ability to research, manufacture and develop a commercial market for our products outside of the jurisdictions in which we currently operate and our expansion into such jurisdictions is subject to risks.
  • Investments and joint ventures outside of Canada and the United States are subject to the risks normally associated with any conduct of business in foreign countries, including varying degrees of political, legal, regulatory and economic risk.
  • Our use of joint ventures may expose us to risks associated with jointly owned investments.
  • There can be no assurance that our current and future acquisitions, strategic alliances, investments or expansions of scope of existing relationships will have a beneficial impact on our business, financial condition and results of operations.
  • We are subject to risks relating to our current and future operations in emerging markets.
  • We have been and may in the future be required to write down inventory due to downward pressure on market prices, which could have a material adverse effect on our results of operations or financial position.
  • We may not be able to supply the provincial purchasers in various provinces and territories of Canada with our products in the quantities or prices anticipated, or at all.
  • The effect of the legalization of recreational cannabis in Canada on the medical cannabis market in Canada is still uncertain, and it may have a significant negative effect upon our medical cannabis business if our existing or future medical-use patients decide to purchase products available in the recreational market instead of purchasing our medical-use products.
  • The recreational cannabis market in Canada has in the past been and may in the future become oversupplied following the implementation of the Cannabis Act and the related legalization of cannabis for recreational use.
  • We may be unsuccessful in competing in the legal recreational cannabis market in Canada.
  • The Canadian excise duty framework may affect profitability.
  • Our business may be impacted as a result of increased rates of inflation.
  • We are subject to liability arising from any fraudulent or illegal activity by our employees, contractors and consultants.
  • Our cannabis cultivation and U.S. hemp operations are subject to risks inherent in the agricultural business.
  • Our cannabis cultivation operations are vulnerable to rising energy costs and dependent upon key inputs.
  • We, or the cannabis and U.S. hemp industries more generally, may receive unfavorable publicity or become subject to negative consumer perception.
  • We may not successfully execute our business strategy.
  • The markets that we operate in are increasingly competitive, and we may compete for market share with other companies, both domestically and internationally, that may have longer operating histories and more financial resources, manufacturing and marketing experience than us.
  • We face competition from the illegal cannabis market.
  • We may be unable to protect our inventions, trade secrets, and other intellectual property from discovery or unauthorized use.
  • Our intellectual property rights may be invalid or unenforceable under applicable laws, and we may be unable to have issued or registered, and unable to enforce, our intellectual property rights.
  • We may be subject to allegations that we are in violation of third-party intellectual property rights, and we may be found to infringe third-party intellectual property rights, possibly without the ability to obtain licenses necessary to use such third-party intellectual property rights.
  • We may not be able to secure adequate or reliable sources of funding required to operate our business.
  • We could have difficulty integrating the operations of businesses that we have acquired and will acquire.
  • Our production facilities are integral to our operations and any adverse changes or developments affecting our facilities may impact our business, financial condition and results of operations.
  • We may not be successful in maintaining the consumer brand recognition and loyalty of our products.
  • The majority of our assets are the capital stock of our material subsidiaries; therefore our investors are subject to the risks attributable to our material subsidiaries which generate substantially all of our revenues.
  • We may experience breaches of security at our facilities or fraudulent or unpermitted data access or other cyber-security breaches, which may cause our customers to lose confidence in our security or data protection measures and may expose us to risks related to breaches of applicable privacy and data security laws, regulations and requirements.
  • We are and may become subject to a variety of privacy and data security laws and contractual obligations, which could increase compliance costs and our failure to comply with them could subject us to potentially significant fines or penalties and otherwise harm our business.
  • We are and may become subject to, or prosecute, litigation in the ordinary course of our manufacturing, marketing, distribution and sale of our products.
  • We may be subject to product liability claims.
  • The inability of our customers or suppliers to meet their financial or contractual obligations to us may result in disruption to our supply chain and operations and could result in financial losses.
  • We may be unable to attract and retain customers.
  • We rely on third-party distributors to distribute our products, and those distributors may not perform their obligations.
  • We are vulnerable to third-party transportation risks.
  • We rely on third-party testing and analytical methods which are validated but still being standardized.
  • We may decide, or be required, to divest or restructure certain of our interests.
  • Fluctuations in wholesale and retail prices could result in earnings volatility.
  • We are subject to the risk of defects or impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions.
  • We are exposed to counterparty risks and liquidity risks that may impact our ability to obtain loans and other credit facilities on favorable terms.
  • We may hedge or enter into forward sales, which involves inherent risks.
  • We must rely on local counsel and consultants with respect to laws and regulations in countries outside of Canada.
  • The market price for our common shares may be volatile and subject to fluctuation in response to numerous factors, many of which are beyond our control.
  • The financial reporting obligations of being a public company and maintaining a dual listing on the TSX and on Nasdaq requires significant company resources and management attention.
  • It is not anticipated that any dividend will be paid to holders of our common shares for the foreseeable future.
  • Investors in the United States may have difficulty bringing actions and enforcing judgments against us and others based on securities law civil liability provisions.
  • If we are a passive foreign investment company for U.S. federal income tax purposes in any year, certain adverse tax rules could apply to U.S. Holders of our common shares.
  • Future sales or issuances of securities could adversely affect the prevailing market price of our securities.
  • If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline.
  • The CBI Group, our single largest shareholder, has the ability to exercise significant influence over us.
  • We may not realize the benefits of our strategic partnership with the CBI Group, which could have an adverse effect on our business, financial condition and results of operations.
  • Any common shares issued pursuant to the exercise of the CBG Warrants or the Canopy Notes held by the CBI Group will dilute shareholders.
  • The CBI Group’s significant interest in us may impact the liquidity of our common shares.
  • The change of control provisions in certain of our existing or future contractual arrangements may be triggered upon the exercise of the CBG Warrants in part or in full.
  • Conflicts of interest may arise between us and our directors and officers, including as a result of the continuing involvement of certain of our directors with the CBI Group and its affiliates.
  • Future sales of our common shares by the CBI Group could cause the market price for our common shares to fall.
  • We are dependent on our senior management.
  • We will seek to maintain adequate insurance coverage in respect of the risks we face; however, insurance premiums for such insurance may not continue to be commercially justifiable and there may be coverage limitations and other exclusions which may not be sufficient to cover our potential liabilities.
  • Tax and accounting requirements may change or be interpreted in ways that are unforeseen to us and we may face difficulty or be unable to implement and/or comply with any such changes or interpretations.
Management Discussion
  • Total restructuring, asset impairments and related costs of $496.6 million were recognized in fiscal 2022, comprised of property, plant and equipment and intangible asset impairment charges, asset abandonment costs, inventory write-downs and other charges, contractual and other settlement costs, employee-related costs and other restructuring costs, and share-based compensation expense totaling $429.8 million associated with:
  • Impairment charges totaling $66.8 million were recognized in relation to impairment losses identified during our annual impairment testing process, and consisted of (i) goodwill impairment losses totaling $40.7 million, of which $22.3 million relates to our KeyLeaf Life Sciences (“KeyLeaf”) reporting unit and $18.4 million relates to our This Works reporting unit; and (ii) impairment charges of $26.1 million related to certain of our acquired brands and operating licenses.

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