- While the First Year and a Half Post-Legalization in Canada Was Plagued By Many Issues Including a Slow Retail Rollout and Overzealous M&A Spending, a Turnaround in the Canadian Cannabis Industry is Currently Underway
- Leading the Charge as the Sector’s Recovery Continues Are the Nation’s Largest Cannabis Licensed Producers (LPs) Canopy Growth, Aphria, Cronos Group and Aurora Cannabis
- With Each Company Under New Leadership, We Took a Look at the Four LPs’ Most Recent Quarterly Earnings Report to Get a Better Idea of the Progress Made This Year
Ontario, Canada’s largest province, is licensing dozens of new dispensaries each month, significantly increasing consumers’ access to cannabis products. Towards the end of this summer, the four largest Canadian licensed producers (LPs) reported their most recent quarterly earnings.
Below is our recap of the financial results and earnings conference calls of the “Big Four” Canadian LPs: Canopy Growth (TSX: WEED) (NYSE: CGC) (FRA: 11L1), Aphria (TSX: APHA) (NYSE: APHA) (FRA: 10E), Cronos Group (TSX: CRON) (NASDAQ: CRON) (FRA: 7CI) and Aurora Cannabis (TSX: ACB) (NYSE: ACB) (FRA: 21P).
* Unless otherwise noted, all figures below are in Canadian dollars (CAD).
Canopy Growth (TSX: WEED) (NYSE: CGC) (FRA: 11L1)
WEED Q1 2021 Earnings Highlights
- Reported Net Revenue of $110.4 million, up 2% over the previous quarter and 22% year over year.
- Net Revenue beat analyst expectations by $11.8 million.
- Adjusted EBITDA came in at negative $92.2 million.
- Posted a Net Loss of $108.5 million or $0.30 per share.
- Successfully introduced value flower to the Canadian market to help attract customers from the black market.
- Provided consumers with an introduction to Canopy brands, leading to upselling to premium flower and other higher-margin products.
- Introduced its new e-commerce site, ShopCanopy.com.
- The company’s hemp-derived CBD brands First & Free and Biosteel introduced topicals/creams and beverages to the U.S. market and currently has 25 CBD SKUs in the U.S.
- Beverage production quadrupled between June and August, and the company now owns a 74% cannabis beverage market share in Canada.
- Amended the terms of its deal to acquire Acreage Holdings (CSE: ACRG.U) (OTCQX: ACRGF) (FSE: 0VZ), resulting in 65 million fewer shares to be issued.
- Decreased its employee count by 18% since the start of 2020.
“We’re proud of our strong first-quarter performance, despite unprecedented volatility and uncertainty in the market and across the globe. We grew our revenue year-over-year and are seeing market share improvement, notably achieving number one market share in cannabis-infused beverages in the Canadian market. We are implementing a renewed corporate strategy with the appointment of a new leadership team, which will focus on delivering quality products to our consumers, positioning our business for continued growth. The proposed retooled Acreage announcement refocuses our entry for the evolving U.S. market, where we are seeing increased momentum.” – David Klein, Canopy Growth CEO
- Read/Listen to Canopy’s Q1 2021 Earnings Call Transcript
- View Canopy’s Q1 2021 Earnings Press Release
Learn more about Canopy Growth: Website | IR Website | Investor Deck | WEED Chart
Aphria (TSX: APHA) (NYSE: APHA) (FRA: 10E)
APHA Q4 2020 Earnings Highlights
- Reported Net Revenue of $152.2 million, up 5% quarter over quarter and 18% over the previous year.
- Adjusted EBITDA came in at $8.6 million, an increase of 49% from the prior quarter.
- Recorded its 5th consecutive quarter of positive adjusted EBITDA.
- Recreational market share in Canada rose by 307% during the full year.
- The company’s cash cost to produce a gram of dried cannabis was $0.88, down 5% quarter over quarter.
- Currently has six cannabis bands, ranging from value to ultra-premium.
- Reduced its excess dried flower inventory to $5.4 million and expects to deplete the remaining during the current quarter.
- Recorded a $64 million non-cash impairment charge due to writing off Argentina, Colombia, Jamaica and Lesotho operations.
- Plans to release new cannabis topicals, edibles and beverages in the coming months.
“At Aphria, we are setting ourselves apart from the rest of the cannabis industry. We have generated some of the strongest sales growth, we have one of the strongest balance sheets and cash positions, compelling consumer brands and a well-diversified global business. We are grateful for the dedication of our employees for whom our commitment to protect their safety is unwavering and remains a founding principle of our company. Our strong finish to fiscal year 2020 demonstrates that this was a transformative year for Aphria, as our net revenue increased 129% from fiscal year 2019. We continue to focus on capturing strong market share in Canada by executing upon our strategic plan and positioning Aphria as a leader in category innovation. With exciting new product categories and line extensions launching in the very near future, we believe our award-winning adult-use portfolio remains unmatched in the industry. By building on this foundation, we remain focused on the highest return opportunities for growth and long-term value creation.” – Irwin D. Simon, Aphria Chairman & CEO
- Read/Listen to Aphria’s Q4 and FY 2020 Earnings Call Transcript
- View Aphria’s Q4 and FY 2020 Earnings Press Release
Learn more about Aphria: Website | IR Website | Investor Deck | APHA Chart
Cronos Group (TSX: CRON) (NASDAQ: CRON) (FRA: 7CI)
CRON Q2 2020 Earnings Highlights
- Reported Net Revenue of $9.9 million, up 18% over the previous quarter and 29% over last year.
- Posted Adjusted EBITDA of negative $27 million.
- Commenced sales of the company’s Peace Naturals brand in Israel, with flower available now and oils and pre-rolls coming soon.
- Cronos Israel now has cultivation, processing and R&D facilities in operation, employing more than 100 people.
- Hired a former Altria Group (NYSE: MO) (FRA: PHM7) executive to head up its American operations and position its U.S.-based Lord Jones CBD brand to roll out new product formats, including larger package sizes.
- Announced its research initiative with Ginkgo is on pace to produce fermented cannabinoids at a commercial scale by late 2021.
“In the second quarter of 2020, we continued our progress despite unprecedented shifts in our industry and the global economy. We officially entered the Israeli medical cannabis market, with Cronos Israel commencing the sale of PEACE NATURALS™ branded dried flower products to medical patients. During these extraordinary times, it is very encouraging to see that we are making progress against our strategy across our global footprint.” – Mike Gorenstein, Co-Founder & Executive Chairman of Cronos Group
Learn more about Cronos Group: Website | IR Website | Investor Deck | CRON Chart
Aurora Cannabis (TSX: ACB) (NYSE: ACB) (FRA: 21P)
ACB Q4 2020 Earnings Highlights
- Reported Net Revenue of $72 million, down 5% over the prior quarter and down 4.5% year over year.
- Posted Adjusted EBITDA of negative $34.6 million, an improvement of $15.8 million from the previous quarter.
- Appointed former Reliva CBD CEO, Miguel Martin, as the company’s new CEO.
- Reported that the company’s cash cost per gram of cannabis produced decreased by 27%.
- Announced that the company cannabis sold increased by 36%, but flower pricing decreased 30% due to value brand accounting for 62% of its cannabis sales.
- Produced 44,000 kg of cannabis during the quarter, up 33% from the previous quarter and expects to produce 35,000 kg per quarter moving forward.
- The company reduced its R&D costs to $64.6 million from $100 million in the prior quarter and is targeting a quarterly SG&A expense run-rate of $40-$45 million, which it stated is necessary to achieve positive EBITDA in Q2 2021.
- The company’s cash balance at the end of the quarter was $162 million, down from $230 million at the end of the previous quarter after paying down $53.3 million in debt during the quarter.
- The company cancelled its partnership with UFC and paid a $30 million termination fee, but claimed it saved $150 million in costs associated with the deal.
- Continued refocusing its cannabis portfolio away from value brands and towards premium brands.
“As reported in our September 8, 2020 business update, our Q4 demonstrated progress in the rationalization of SG&A and cash burn along with continued leadership in both Canadian and international medical. However, Aurora has slipped from its top position in Canadian consumer, a market that continues to support material growth and opportunity. My focus is, therefore, to re-position the Canadian consumer business immediately. We look to expand beyond the value flower segment, leverage our capabilities in science and product innovation and put our effort on a finite number of emerging growth formats. This entails prioritizing our San Rafael, Aurora and Whistler premium brands in flower, pre-rolls and vapor, which will be shortly followed by strategic marketing and innovation efforts in concentrates and edibles.” – Miguel Martin, CEO of Aurora Cannabis
- Read/Listen to Aurora’s Q4 2020 Earnings Call Transcript
- View Aurora’s Q4 2020 Earnings Press Release
Learn more about Aurora Cannabis: Website | IR Website | Investor Deck | ACB Chart

Source: Shutterstock *Each company calculates adjusted EBITDA differently. Please refer to each company’s earnings press releases for additional details.
Conclusion
The Canadian cannabis industry still has a ways to go on its road to recovery. Aurora Cannabis, in particular, is undergoing an extensive business transformation in an attempt to salvage the mess left by Terry Booth and his outlandish M&A spending. A similar story can be said for Canopy Growth in the post-Bruce Linton era.
As of now, all four LPs have replaced their original CEOs and implemented much more fiscally responsible strategies. As a result, certain partnerships are being cancelled, production facilities closed, employees laid off and spending slashed. As expected, these moves have caused revenues to dip, but if all goes to plan, it should only be a temporary issue.
New leadership believes these changes are necessary to right-size their company’s operations and drive profitability, but the results are still being determined. The rising retail store count in Ontario should ultimately drive revenues for all four companies and right-sized operations will hopefully put them on the path to profitability.
Charts Source: Barchart
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Disclosure: The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.
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