The largest legal pot producer in the world, Canadian-based Canopy Growth Corp., reported its third quarter financial results that showed an impressive jump in revenue.
Canopy Growth reported that revenue for the quarter jumped 282% compared to the year ago period, which Chairman and co-CEO Bruce Linton attributed to the company’s decision to make early, “meaningful” investments that helped it take a stake in a big part of the Canadian market when Canada’s recreational marijuana law took effect.
It was last October that Canada began the legal sale of recreational marijuana in the country and this was the first quarter for Canopy Growth to include these sales.
“In Canada, we made significant investments on a theory of how things [in the cannabis market] would open up,” Linton said. “Now we’re doing the same thing on a global basis. It’s capital allocation against a not-entirely certain model.”
Speaking to MarketWatch, Linton said, “You do what can be done, by a group of people,” Linton said. “We are constantly scanning for new personnel — working against evolving priorities. There is never a week that goes by that we don’t.”
The company has said that it also grew its workforce by 285% to 2,700 workers from 700 employees last year.
In the fiscal third quarter, the company said that it sold 8,288 kilograms of pot into the recreational market and equivalents and 1,814 kilograms for medical purposes.
This is compared to the year-ago quarter when Canopy sold no recreational pot and 2,330 kilograms of medical pot. The company said it sold 204 kilograms of medical pot in Germany in the third quarter.
Not long ago Canopy Growth announced that it had received a license from New York state to process and produce hemp. The move will allow it to develop products that contain CBD.
The company intends to spend between $100 million and $150 million to help set up a Hemp Industrial Park in upstate New York.
Piper Jaffray has set a $60 price target on the stock with a “buy” rating. It was in January that CIBC also started coverage on the stock with an “out perform” rating.