Canopy Growth Corp T.WEED

WEED Smaller Quarterly loss, Reiterates Going Concern Doubt

[davgro]

2023-08-09 05:41:30 PM ET (Reuters) 

Aug 9 (Reuters) - Canadian pot producer Canopy Growth on Wednesday reported a smaller first-quarter adjusted core loss aided by cost cuts, and said it still has "substantial doubt" in its ability to continue as a going concern.
 

The legal cannabis industry in Canada is struggling to cope with the illegal marijuana industry, hampering growth amid delays in regulatory backing from both the U.S. and Canada.

Canopy had first raised the going concern doubts in June.
 

The company has taken several initiatives to turn profitable, including job cuts, exits from some international markets, store closures and divestiture of its retail business across Canada.
 

The Smiths Fall, Ontario-based company had C$533.3 million in cash and cash equivalents as of June 30, compared with C$677 million at the end of March.
 

Its total debt was $1.05 billion at the end of the reported quarter.
 

The cannabis firm's quarterly net revenue grew 3% to $108.7 million, aided by expansion in its BioSteel segment, which makes sports nutrition products.
 

It is also facing an investigation from the U.S. Securities and Exchange Commission over the reporting of revenue from BioSteel.
 

Canopy had launched an internal review in June for BioSteel and let go of several members of the segment's leadership team following completion of the assessment.
 

The company's adjusted core loss narrowed to C$57.8 million for the three months ended June 30, compared with a loss of C$79 million a year earlier.

[HighTime20]

Going Concern    The condensed interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.    As reflected in the condensed interim consolidated financial statements, the

[yp01048]

Correct me if I am wrong, but this was as of June 30th. July 14 they issued a whole slew of notes etc to deal with the debt. Judy just said on th call that they have paid off all the principal notes of whatever due in July. Also, the remaining 70 million or so would be used to pay off debt from the facility sales. Also, seems like BioSteel will be sold so I imagine some of that money will be

[quinlash]

Companies report their numbers every 3 months but can only report on changes that occured with that reporting period.  Anything that occured outside of the period will be captured on the next QTR report.  This is why you don't see sales figures show up on recent acquistions as anything within apx 1 month of a report is something that very likely will be captured in the next period.

[yp01048]

Yes I understand that. But the going concern as highlighted below is still a very much a going concern, but it has been sort of "rectified" since June 30th. And of course that is being seen negatively as of right now.  But the numbers did improve, however they did say that Q2 will be lower due to seasonality of some of the numbers reported this quarter etc. im interested to

[goldman777]

YES - good eye, mute point I`m thinking. Joe retailer will likely miss this but the professional traders will not.

[quinlash]

We may see Constellation Brands step in and pony up with additional backing.  This may or may not be in conjuntion with a new CEO being announced.  Impossible to say for sure but I just don't see Constellation Brands walking away from the Cannabis Sector considering how Bullish Tilray is getting on it with their recent investment in the 8 Breweries they just picked up from Bud

[yp01048]

Sorry, where are you seeing an acquisition. I read the release and can surmise that BioSteel will be sold, and CUSA is making an acquisition?

[quinlash]

It's the 6th bullet point in the Press Release issued on the Forum by Stockhouse.  Here is the bullet point but I would suggest reading over the entire thing. - Entities that are expected to be acquired by Canopy USA, LLC ("CUSA") continue to demonstrate momentum and Canopy Growth continues to work with regulators to advance its novel structure.

[yp01048]

I think this is referring to Wana, Jetty and Acreage and not a new "entity" I can see how it can look like that, but I don't think CUSA is making any new purchases. 

[Ventura2020]

I Agree Until such time as CUSA elects to exercise its rights to acquire Mountain High Products, LLC, Wana Wellness, LLC and The Cima Group, LLC (collectively, "Wana"), CUSA will have no direct or indirect economic or voting interests in Wana, CUSA will not directly or indirectly control Wana, and CUSA, on the one hand, and Wana, on the other hand, will continue to

[quinlash]

In all fairness you could be right on that.  If they are going ahead with a new acquistion it will likely come to light in the next couple of weeks anyway so we'll see.