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Canopy Growth Swings to Profit; Revenue Higher, Costs Decline

Cannabis provider Canopy Growth says it is 'continuing to drive cost savings and operational efficiencies across the company.'

Canopy Growth  (CGC) - Get Canopy Growth Corporation Report swung to a first-quarter profit as the cannabis company reported higher sales and lower operating costs.

Shares of the Smith Falls, Ontario, company at last check were up 0.6% at $19.25. 

For the quarter ended June 30 Canopy Growth posted profit of C$0.84 (US$0.67) compared with a loss of C$0.30 in the year-earlier quarter. 

The operating loss widened to C$187.7 million from C$172.4 million. 

In the latest period, the company posted other income of C$580.7 million, which it ascribed largely to "noncash fair-value changes of C$601 million." The other income figure was C$48.2 million in the year-earlier period.

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Revenue rose 23% from a year earlier to C$136.2 million from C$110.4 million, driven by double-digit growth across Canadian cannabis and other consumer products, offset partly by a decline in international cannabis. 

Canopy Growth said it remains focused on the release of a draft of the Cannabis Administration and Opportunity Act, which would recognize legalization of cannabis by the states.

"While we're encouraged by regulatory advancement in the U.S., Canopy [continues] to scale our business on both sides of the border," Chief Executive David Klein said in a statement.

Selling, general and administrative expense fell to $112.6 million in the latest quarter from $135.4 million a year earlier.

In June, Canopy Growth posted a narrower fourth-quarter loss as demand for its cannabis products extended over the final months of the pandemic boost and cost cuts boosted its bottom line.