Canopy Growth (CGC) - Get Report shares traded in the U.S. were soaring in Monday after the Canadian cannabis company reported a narrower-than-expected fiscal second-quarter loss and revenue that topped forecasts.
The stock was rising 7.62% to $25.29 in premarket trading.
Canopy Growth, the world's largest pot producer, posted a loss in the period of 9 cents a Canadian share vs. analysts’ forecasts that called for a loss of 37 cents.
Net revenue in the second quarter was C$135.3 million, higher than analysts’ estimates of C$118.1 million and up 77% from a year earlier.
"We saw another quarter of improvement in our operating expense ratio while our marketing and R&D investments are being re-directed to drive sales," said Chief Financial Officer Mike Lee in a statement. "Importantly, our end-to-end review has identified cost savings opportunities in the range of $150-$200 million across cost of goods sold, general and administrative expenses, and inventory, and efforts are underway to quickly capture value.
"Leveraging ongoing improvements across our business, we are accelerating our path to profitability, notably in our largest market, Canada,” Lee added.
Canopy Growth and other pot stocks traded wildly last week after Joe Biden’s win in the U.S. presidential election was seen as favorable to the sector.
Biden and his camp have made decriminalizing marijuana on a federal level a focal point of the Democrat's presidential campaign, in contrast to President Donald Trump.
However, the possibility that a Republican-controlled Senate could delay federal legalization was seen as a headwind.
Voters in New Jersey and Arizona passed measures last week that legalized recreational marijuana for adults age 21 and older. New Jersey is the biggest state on the East Coast to legalize marijuana.