Canopy Growth drives revenue with 94% increase in recreational cannabis sales in the first quarter of fiscal 2020

In Canada, the Company believes that macro events are increasingly relevant to its performance today and throughout the rest of the fiscal year. Having built an ambitious sales and operating structure, the company looks forward to the successful launch of new cannabis formats and an acceleration in store openings across the country. Today, both Ontario and Quebec – Canada's two most populous provinces – have a store for 595,000 and 495,000 people, respectively, against a saturation rate of, for example, Colorado of 10,000. The company applauds announcements from both provinces to license additional retailers. The company will continue to explore the adaptation of its strategy to market dynamics as the Canadian retail landscape unfolds, but remains confident of its Canadian plans today, the long-term potential of the Canadian market and Canopy's positioning to succeed as the market evolves. [19659009] In the US market, our team has actively developed a range of high quality CBD products and product marketing plans and secured the production resources needed to bring products to the US market by the end of this fiscal year. The company has developed a broad CBD product offering that includes skincare and cosmetics, topical creams, coatings, beverages, edible eateries, oils and softgels, and is still on track to unveil CBD products this fiscal year.

The company has been working since last January to identify and enter into a robust, scalable supply chain to market CBD products. In addition to the thousands of acres planted in the United States, the US team has already procured quantities of hemp biomass for processing. The company's supply chain will be expanded, starting with the next fiscal year, with business assets including extraction and production resources at the company's plant in Kirkwood, New York, as well as additional manufacturing facilities for the production of vape and beverage products, at select locations in the United States. The company has already started work on these facilities, although all locations have not yet been announced.

To establish a new CBD business in the United States, the company has made significant investments before earning a strong team, establishing offices in California and Colorado over the past two quarters, with additional offices arriving in Illinois and New York. Furthermore, significant headquarters resources, as reflected in Adjusted EBITDA losses attributed to the business operations below, were used for US and global expansion plans.

Canopy Growth sold 10,549 kilograms and kilograms equivalents in Q1 2020, up 13% compared to Q4 2019. In Q1 2020, the company generated gross revenue of $ 60.8 million from the sale of dry floral format products in the Canadian leisure market, which represents an 88% increase from dried flower sales in Q4 2019. Included in the sale of dried cannabis in Q1 2020 is sales of 1.4 million higher, pre-rolled cannabis products representing $ 9.7 million – or 16% – of our total recreational products cannabis revenue.

<p class = "canvas atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In Q1 2020, the company generated gross revenue in it the medical market totaled $ 23.6 million, of which $ 16.4 million or 70% of gross medical revenue was generated by oil sales Oil sales in the medical market include the sale of subsidiary C ³ & nbsp; as well as the company's traditional ready-made oils and softgels. & nbsp; Dried flower sales accounted for $ 7.2 million of gross medical revenue. & nbsp; "data-reactid =" 75 "> In Q1 2020, the company generated gross revenue in it the medical market totaled $ 23.6 million, of which $ 16.4 million or 70% of gross medical revenue was generated by oil sales. Oil sales in the medical market include the sale of the subsidiary C ³ as well as the company's traditional finished oils and softgels. Dried flower sales accounted for $ 7.2 million dollars in gross medical revenue.

During Q1 2020, we evaluated the shape, load, and estimated provincial and territorial inventory levels on hand against the recent demand and sales trends observed in the leisure market to ensure that we make adjustments to our supply chain based on purchasing preferences for leisure consumers. As a result of this evaluation, we believe that the risk of oversupply of certain oil and softgel formats may exist in certain markets, in part due to incomplete retail platforms in most provinces. Based on this assessment, we have estimated variable remuneration that may result from $ 8 million in gross revenues in return, which corresponds to estimated future returns of $ 6.4 million, net after tax, and the estimated rate of return has been reflected in net income.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Gross margin for first quarter 2020 (before fair value affects cost of sales) Overview (see non-IFRS measures) "data-reactid =" 77 "> Gross Margin for First Quarter 2020" before Impact of Fair Value in Sales Costs) Overview (See Measurements which is not IFRS)

Gross margin before impact on sales costs in Q1 2020 was $ 13.2 million, or 15% of net revenues.In comparison, in Q1 2019 gross margin before impact on fair value in sales costs was $ 11.1 million, or 43% of net revenues. The lower gross margin percentage in Q1 2020 was primarily due to the impact of operating expenses of $ 16.2 million related to plants that have not yet grown cannabis or manufactured cannabis-related products or had underutilized capacity that resulted i just rings related to the net realizable value of inventory. In addition, there was a shift in product mix in Q1 2020 away from advanced manufactured products with higher margins due to inventories outside.

Canopy continues to invest in the final processing of our Canadian cultivation plants, our hemp-based CBD operations, and our advanced production capabilities in Smiths Falls, Ontario in preparation for the second phase of Canadian recreational cannabis. We expect our gross margins to improve in the coming quarters when all cultivation and processing is in use and approaching planned capacity.

Production costs for inventories expensed at cost of sales for Q1 2020 were $ 77.3 million compared to $ 14.8 million in Q1 2019. These costs were mainly composed of the cost of inventory sold during the period, distribution fees and operating expenses related to plant who have not yet grown cannabis, produced cannabis-related products, or had underutilized capacity. [19659232]

The increase in sales and marketing expenses in Q1 2020 was primarily due to increased staffing as we expanded our network of stores in Tweed and Tokyo Smoke-branded in Canada ; increased number of employees in our marketing and sales functions supporting our domestic and international markets; investments aimed at increasing brand awareness and educating consumers through various marketing campaigns. In addition, we are also investing ahead of revenue to prepare for marketing campaigns for the launch of the second phase of recreational cannabis consumer products in Canada, as well as CBD products in the US, both expected later this year.

The increase in research and development expenditure in Q1 2020 during the first quarter of 2019 was due to Canopy Growth's investment in new research and development efforts. Included in this are costs associated with hiring advanced scientists and engineers, in research and development in vape, plant genetics, applied technology and cannabis-based medical therapeutic clinical research. The new effort resulted in the company incurring higher compensation costs associated with the teams engaged in research and development activities, costs associated with advanced product and system development and testing, as well as costs associated with conducting external laboratory testing and clinical studies for CBD-based human and animal health products.

General and administrative expenses in Q1 2020 were higher than Q1 2019 due to an increase in costs related to improving our financial and information technology functions, higher public companies compliance and regulatory requirements and administrative costs associated with expanding our operations .

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Acquisition-related costs in Q1 2020 increased significantly over the first quarter of 2019 due to higher merger and acquisition activity during the current period, notably in entering into and implementing the Acr plan eagerly and closing the acquisitions of C ³ and This Works. "data -reactid = "90"> Acquisition-related costs in Q1 2020 increased significantly over Q1 2019 due to higher merger and acquisition activity during the current period, in particular entering into and implementing the Acreage Scheme and closing of acquisitions of C ³ and This Works.

The increase in share-based compensation costs is primarily due to the continued increase in the number of stock options granted to employees, which is primarily related to the increase in the number of employees of the company from approximately 1400 June 30, 2018 to approximately 3,850 as of June 30 2019. The number of outstanding stock options increased from 19.0 million on June 30, 2018 to 30.7 million on June 30, 2019. In addition, the grant date has increased the fair value of the stock options over the past year, which is primarily attributable to the company's higher share price.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " First Quarter Fiscal 2020 [19659217] Adjusted EBITDA Summary ( See Non-IFRS Measures) "data -reactid =" 92 "> First Quarter Fiscal 2020 Adjusted EBITDA Summary ( See Non-IFRS measures)

Adjusted EBITDA in Q1 2020 amounted to a loss of $ 92.0 million, reflecting continued loss in our core business in Canada and Europe as we scale as a new business serving a whole new sector, making investments ahead of revenues in many new markets around the world, making investments in R&D that we believe will generate future value when we build a portfolio of intellectual property that can be used to generate new profit streams in the future. The Company believes that these pre-income investments are necessary to position the Company to generate a significant and sustained increase in shareholder value over the long term.

Total other expenses, net, were $ 1.1 billion in Q1 2020, compared to $ 63 million in Q1 2019. The increase is mainly due to a $ 1.2 billion non-cash fee on extinguishing warrants by Constellation Brands ("Constellation") amending the Investor Rights Agreement between Canopy Growth and Constellation.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " First Quarter Fiscal 2020 balance sheet and cash flow summary "data-reactid =" 101 "> Q1 fiscal policy 2020 balance sheet and cash flow summary

<p class =" canvas-atom canvas text Mb (1.0 em) Mb (0) – sm Mt (0.8m) – sm "type =" text "content =" As of June 30, 2019, the company's available and transferable securities amounted to $ 3.1 billion, representing a decrease of $ 1.4 billion from 31. March 2019. & nbsp; The primary use of cash during the quarter was the acquisition of C ³ and This Works ($ 430.9 million), the premium paid for the Acreage call option ($ 395.2 million) )) and capital expenditures on infrastructure ($ 211.8 million), with the balance related to ongoing debt service and financing of operational losses. "data-reactid =" 102 "> 3 On June 0, 2019, the Company's cash and cash equivalents totaled $ 3.1 billion, representing a decrease of $ 1.4 billion from March 31, 2019. The primary use of cash in the quarter was the acquisition of C ³ and This Works ($ 430.9 million), the premium paid for the call option Acreage ($ 395.2 million), and capital expenditures on infrastructure ($ 211.8 million), with the balance sheet relating to ongoing debt service and financing for operational losses.

The inventory on June 30, 2019 was $ 393.7 million (March 31, 2018 – $ 262.1 million), including $ 93.1 million in finished goods and $ 247.2 million in work. In addition, biological assets totaled $ 102.9 million, which together with inventory totaled $ 496.6 million.

<p class = "canvas atom canvas text Mb (1.0 em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = " Events which followed the first quarter of fiscal 2020 "data-reactid =" 104 "> Events after the first quarter of fiscal 2020

• On July 2, 2019, Mark Zekulin was named sole CEO, and Rade Kovacevic was named president of the company following the resignation of Bruce Linton as co-CEO of the company. A search has begun to identify Mr. Zekulin's replacement as the company's CEO.
• 9. On August 2019, the company announced that it had entered into an agreement to acquire all of the remaining unknown shares of Beckley Canopy Therapeutics ("BCT"), a global cannabinoid-based medical researcher. The closing of the transaction is subject to regulatory approval and certain other closing conditions.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The unaudited consolidated accounts and management discussion and analysis for the three months June 30, 2019 will be filed on SEDAR and will be available at www.sedar.com . The basis for financial reporting in Unaudited Consolidated Financial Statements and management's discussion and analysis is in thousands of Canadian dollars, unless otherwise stated. "data-reactid =" 108 "> The unaudited consolidated financial statements and management's discussion and analysis for the three months ended June 30, 2019 will be filed on SEDAR and will be available at www.sedar.com . The basis for financial reporting in unaudited consolidated consolidated financial statements and management's discussion and analysis is in the thousands of Canadian dollars, unless otherwise stated.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = " Non-IFRS Measures
Gross Margin Percentage, Before Fair Value Affects Sales Costs, a Non-IFRS Objective, & nbsp; is a central operating metric that has no standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. ; "data-reactid =" 109 "> Non-IFRS Measures
Gross Margin Percentage, Before Fair Value Impact of Cost of Sales, a Non-IFRS Measure, is a key operational metric that has no standardized significance prescribed by IFRS and may not be comparable to similar measures presented by other companies.

This measure is calculated as net income less inventory production costs charged to sales expense, divided by net income, and can be calculated from consolidated operating results presented in this press release.

Adjusted EBITDA, a non-IFRS measure, is a key operational metric that has no standardized significance prescribed by IFRS and may not be comparable to similar measures presented by other companies. Adjusted EBITDA is calculated as profit before interest, tax, depreciation and amortization, share-based compensation cost, changes in fair value and other non-cash items, and further adjusted to eliminate acquisition-related costs. The Company attributes adjusted EBITDA to its business and its overhead, strategic investments and business development, and non-operating or underutilized facilities. The adjusted EBITDA reconciliation is presented in this news release and explained in the management's discussion and analysis under "Adjusted EBITDA (non-IFRS target)", a copy of which will be filed on SEDAR.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Webcast and conference call information [19659329]Selskapet vil være vert for en konferansesamtale og lydwebcast med Mark Zekulin, administrerende direktør og Mike Lee, økonomidirektør klokken 08:30 Eastern Time 15. august 2019. " data-reactid = "112"> Informasjon om webcast og konferansesamtaler
Selskapet vil være vert for et konferansesamtale og lydwebcast med Mark Zekulin, administrerende direktør og Mike Lee, finansdirektør, klokken 08:30 Eastern Time den 15. august, 2019.

<p class = "lerret-atom lerret- tekst Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Webcast Informasjon
En live lydwebcast vil være tilgjengelig på:
https:/ /event.on24.com/wcc/r/2051231/A14492AD4B016E74A761B5AF588F79D4
"data-reactid =" 113 "> Webcast Informas jon
En live audio webcast vil være tilgjengelig på:
https://event.on24.com/wcc/r/2051231/A14492AD4B016E74A761B5AF588F79D4

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Ringeinformasjon
Tollfri oppringingsnummer : 1-888-231-8191
International Dial-In Number: (647) 427-7450
Conference ID: 5299923" data-reactid ="114">Calling Information
Toll Free Dial-In Number: 1-888-231-8191
International Dial-In Number: (647) 427-7450
Conference ID: 5299923

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Replay Information&nbsp;
A replay of the call will be accessible by telephone until 11:59 PM ET on September 15, 2019 .
Toll Free Dial-in Number: 1-855-859-2056
Replay Password: 5299923
" data-reactid="115">Replay Information 
A replay of the call will be accessible by telephone until 11:59 PM ET on September 15, 2019 .
Toll Free Dial-in Number: 1-855-859-2056
Replay Password: 5299923

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="About Canopy Growth Corporation
Canopy Growth (TSX:WEED, NYSE:CGC) is a world-leading diversified cannabis, hemp and cannabis device company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms, as well as medical devices through the Company&#39;s subsidiary, Storz &amp; Bickel GMbH &amp; Co. KG. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. The Company has operations in over a dozen countries across five continents." data-reactid="116">About Canopy Growth Corporation
Canopy Growth (TSX:WEED, NYSE:CGC) is a world-leading diversified cannabis, hemp and cannabis device company, offering distinct brands and curated cannabis varieties in dried, oil and Softgel capsule forms, as well as medical devices through the Company&#39;s subsidiary, Storz & Bickel GMbH & Co. KG. From product and process innovation to market execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time. The Company has operations in over a dozen countries across five continents.

The Company&#39;s medical division, Spectrum Therapeutics is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the public&#39;s understanding of cannabis, and has devoted millions of dollars tow ard cutting edge, commercializable research and IP development. Spectrum Therapeutics sells a range of full-spectrum products using its colour-coded classification Spectrum system as well as single cannabinoid Dronabinol under the brand Bionorica Ethics.

The Company operates retail stores across Canada under its award-winning Tweed and Tokyo Smoke banners. Tweed is a globally recognized cannabis brand which has built a large and loyal following by focusing on quality products and meaningful customer relationships.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="From our historic public listing on the Toronto Stock Exchange and New York Stock Exchange to our continued international expansion, pride in advancing shareholder value through leadership is engrained in all we do at Canopy Growth. Canopy Growth has established partnerships with leading sector names including cannabis icons Snoop Dogg and Seth Rogen , breeding legends DNA Genetics and Green House Seeds, and Fortune 500 alcohol leader Constellation Brands, to name but a few. Canopy Growth operates eleven licensed cannabis production sites with over 5.2 million square feet of production capacity, including over one million square feet of GMP certified production space. For more information visit www.canopygrowth.com" data-reactid="119">From our historic public listing on the Toronto Stock Exchange and New York Stock Exchange to our continued international expansion, pride in advancing shareholder value through leadership is engrained in all we do at Canopy Growth. Canopy Growth has established partnerships with leading sector names including cannabis icons Snoop Dogg and Seth Rogen , breeding legends DNA Genetics and Green House Seeds, and Fortune 500 alcohol leader Constellation Brands, to name but a few. Canopy Growth operates eleven licensed cannabis production sites with over 5.2 million square feet of production capacity, including over one million square feet of GMP certified production space. For more information visit www.canopygrowth.com

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Notice Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Canopy Growth or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release. Examples of such statements include statements with respect to the Company&#39;s expectations with respect to the Q1 fiscal 2020 harvest, the Company&#39;s expectation for additional finished inventory available for sale in Q2 fiscal 2020, bringing CBD products to market by the end of fiscal 2020, the accelerated market expansion for Acreage, the anticipated benefits of the rebranding of Spectrum Therapeutics on the Company&#39;s market share, the potential opportunity for cannabis products in Europe and the anticipated Increase in Canadian and Danish product availability, the anticipated increased sales from Storz &amp; Bickel, the expectation that facilities will be fully operational in the months ahead, the launch of new CBD consumer products and brands in fiscal 2020, the timing for implementation of the transaction with Acreage. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including changes in laws, regulations and guidelines; compliance with laws; international laws; operational, regulatory and other risks; execution of business strategy; management of growth; difficulty to forecast; reliance on licences; risks inherent in an agricultural business; contracts with provincial and territorial governments; constraints on marketing products; risks inherent in acquisitions and investments; expansion into foreign jurisdictions; governmental regulations; cannabis is a controlled substance in the United States ; Farm Bill risks; assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory and court approvals for the transaction with Acreage; and such risks contained in the Company&#39;s management information circular of the Company dated May 17, 2019 and in the annual information form dated June 27, 2018 and filed with Canadian securities regulators and available on the Company&#39;s issuer profile on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list of factors is not exhaustive. Although the Company believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward-looking information and forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information or forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.
" data-reactid="120">Notice Regarding Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrase s or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements or information involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Canopy Growth or its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release. Examples of such statements include statements with respect to the Company&#39;s expectations with respect to the Q1 fiscal 2020 harvest, the Company&#39;s expectation for additional finished inventory available for sale in Q2 fiscal 2020, bringing CBD products to market by the end of fiscal 2020, the accelerated market expansion for Acreage, the anticipated benefits of the rebranding of Spectrum Therapeutics on the Company&#39;s market share, the potential opportunity for cannabis products in Europe and the anticipated Increase in Canadian and Danish product availability, the anticipated increased sales from Storz & Bickel, the expectation that facilities will be fully operational in the months ahead, the launch of new CBD consumer products and brands in fiscal 2020, the timing for implementation of the transaction with Acreage. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information, including changes in laws, regulations and guidelines; compliance with laws; international laws; operational, regulatory and other risks; execution of business strategy; management of growth; difficulty to forecast; reliance on licences; risks inherent in an agricultural business; contracts with provincial and territorial governments; constraints on marketing products; risks inherent in acquisitions and investments; expansion into foreign jurisdictions; governmental regulations; cannabis is a controlled substance in the United States ; Farm Bill risks; assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory and court approvals for the transaction with Acreage; and such risks contained in the Company&#39;s management information circular of the Company dated May 17, 2019 and in the annual information form dated June 27, 2018 and filed with Canadian securities regulators and available on the Company&#39;s issuer profile on SEDAR at www.sedar.com. Readers are cautioned that the foregoing list of factors is not exhaustive. Although the Company believes that the assumptions and factors used in preparing the forward-looking information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward-looking information and forward-looking statements included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information or forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities laws.

CANOPY GROWTH CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
UNAUDITED		June 30,		March 31,
(Expressed in CDN $000's)		2019		2019
Assets
Current assets
Cash and cash equivalents	$	1,816,632	$	2,480,830
Marketable securities		1,324,255		2,034,133
Amounts receivable		102,766		106,974
Biological assets		102,908		78,975
Inventory		393,738		262,105
Prepaid expenses and other current assets		124,042		107,123
		3,864,341		5,070,140
Investments in equity method investees		113,321		112,385
Other financial assets [19659370]746,691		363,427
Property, plant and equipment		1,429,285		1,096,340 [19659411]Intangible assets		528,607		519,556
Goodwill		1,931,915		1,544,055
Other long-term assets		31,391		25,902
	$	8,645,551	$	8,731,805
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	256,819	$	226,533
Current portion of long-term debt		18,288		103,716
Other current liabilities		97,647		81,414
		372,754		411,663
Long-term debt		787,508		842,259
Deferred tax liability		104,118		96,031
Share repurchase credit liability		1,274,972		–
Other long-term liabilities		212,989		140,404
		2,752, 341		1,490,357
Shareholders' equity
Share capital		6,074,786[19659393]6,026,618
Other reserves		2,902,704		1,673,472
Accumulated other comprehensive income		(34,057)		28,630
Deficit		(3,334,686)		(777,087)
Equity attributable to Canopy Growth Corporation		5,608,747		6,951,633
Non-controlling interests		284,463		289,815
Total equity		5,893,210		7,241,448
	$	8,645,551	$	8,731,805

 

CANOPY GROWTH CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2019 AND 2018
UNAUDITED		June 30,		June 30,
(Expressed in CDN $000's except share amounts)		2019		2018
Revenue	$	103,391	$	25,916 [19659359]Excise taxes		12,909		–
Net revenue		90,482		25,916
Inventory production costs expensed to cost of sales		77,313		14,832
Gross margin before the undernoted		13,169		11,084
Fair value changes in biological assets included in inventory sold and other inventory charges		46,130		26,388
Unrealized gain on changes in fair value of biological assets		(139,019)		(57,289)
Gross margin		106,058		41,985
Sales and marketing		45,096		17,266
Research and development		8,474		756
General and administration		62,271		19,588
Acquisition-related costs		13,182		1,884
Share-based compensation expense		77,081		23,072
Share-based compensation expense relate d to acquisition milestones		10,281		7,095
Dep reciation and amortization		12,779		3,030
Operating expenses		229,164		72,691
Loss from operations		(123,106)		(30,706)
Loss on extinguishment of warrants		(1,176,350)		–
Other income (expense), net		32,621		(62,995)
Total other (expense) income, net		(1,143,729)		(62,995)
Loss before income taxes		(1,266,835)		(93,701)
Income tax (expense) recovery		(14,333)		2,723
Net loss	$	(1,281,168)	$	(90,978)
Net loss attributable to:
Canopy Growth Corporation	$	(1,283,055)	$	(80,277)
Non-controlling interests		1,887[19659447](10,701)
	$	(1,281,168)	$	(90,978)
Net loss per share, basic and diluted
Net loss per share:	$	(3.70)	$	(0.40)
Weighted average number of outstanding common shares:		346,779,156		200,160,740

 

CANOPY GROWTH CORPORATION
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JUNE 30, 2019 AND 2018
UNAUDITED		June 30,		June 30,
(Expressed in CDN $000's)		2019		2018
Net inflow (outflow) of cash related to the following activities:
Operating
Net loss	$	(1,281,168)	$	(90,978)
Adjustments for:
Depreciation of property, plant and equipment		16,226		3,661
Amortization of intang ible assets		7,16 5		2,632
Share of loss on equity investments		1,833		2,569
Fair value changes in biological assets included in inventory sold and other charges		46,130		26,388
Unrealized gain on changes in fair value of biological assets		(139,019)		(57,289)
Share-based compensation		87,362		30,951
Other assets		–		(3,120)
Loss on extinguishment of warrants		1,176,350		–
Other income and expense		(21,400)		58,152
Income tax expense		14,333		(2,951)
Non-cash foreign currency		2,834		834
Changes in non-cash operating working capital items		(68,936)		(38,490)
Net cash used in operating activities		(158,290)		(67,641)
Investing
Purchases and deposits of property, plant and eq uipment		(211,824)		(153,654)
Purchases of intangible assets		(1,768)		(2,815)
Redemption (purchase) of marketable securities		687,818		(1,212)
Investments in equity method investees		(2,824)		(3,500)
Investments in other financial assets		(29,414)		(21,759)
Premium paid for Acreage Call Option		(395,190)		–
Net cash outflow on acquisition of subsidiaries		(430,948)		(41)
Change in acquisition related liabilities		(21,447)		–
Net cash used in investing activities		(405,597)		(182,981)
Financing
Payment of share issue costs		(74)		(301)
Proceeds from issuance of shares by Canopy Rivers		86		787
Proceeds from exercise of stock op tions		16,077[19659371]1,758
Proceeds from exercise of warrants		427		133
Issuance of long-term debt		–		600,000
Payment of long-term debt issue costs		–		(16,045)
Repayment of long-term debt		(98,207)		(374)
Net cash (used) provided by financing activities		(81,691)		585,958
Effect of exchange rate changes on cash and cash equivalents		(18,620)		–
Net cash (outflow) inflow		(664,198)		335,336
Cash and cash equivalents, beginning of period		2,480,830		322,560
Cash and cash equivalents, end of period	$	1,816,632	$	657,896

 

Adjusted EBITDA1Non-IFRS Measure		Three months ended
(In CDN$000's)		June 30, 2019		June 30, 2018 [19659698]Adjusted EBITDA1Reconciliation
Loss from operations – as reported	$	(123,106)	$	(30,706)
IFRS fair value accounting related to biological assets and inventory
Fair value changes in biological assets included in inventory sold and other charges		46,130		26,388
Unrealized gain on changes in fair value of biological assets		(139,019)		(57,289)
		(92,889)		(30,901)
Share-based compensation expense		87,362		30,951
Acquisition-related costs		13,182		1,884
Depre ciation and amortization (per statements of cash flows)		23,391		6,293
		123,935		39,128
Adjusted EBITDA	$	(92,060)	$	(22,479)

1Adjusted EBITDA is earnings before interest, tax, depreciation and amortization, sh are-based compensation expense, fair value changes and other non-cash items, and further adjusted to remove acquisition-related costs.

 

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SOURCE Canopy Growth Corporation

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