Canopy Growth Corp., Canada’s largest cannabis company, saw revenues soar in the first quarter of legal recreational marijuana, beating analyst estimates and shrugging off concerns about a slow start to the new market. Net income was also up, even though the company continues to lose money from its marijuana operations.

The grower, based in Smiths Falls, Ont., reported $83-million in revenue, an increase of 256 per cent over the previous quarter, selling 10,102 kilograms of cannabis or its oil equivalent in the three months leading up to Dec. 31. After a surprise net loss of $330-million in the last quarter, the company shifted to profitability, posting a net income of $74.8-million or $0.22 a share, despite a loss from operations of $157-million. This change was “driven principally by fair-value changes on financial liabilities, more than offsetting the loss from operations,” the company said in third-quarter filings released late Thursday evening.

Early data suggests that recreational sales across the country have been sluggish, due to a combination of logistical problems, product shortages and the delayed rollout of retail stores. There are still no licensed bricks-and-mortar cannabis stores in Ontario, and fewer than 20 legal dispensaries in Quebec and British Columbia combined.

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Mark Rendell – Globe and Mail – February 15, 2019

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