Staff
It’s time for your Daily Hit of cannabis financial news for February 9, 2022.
On the Site
Canopy Growth
Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) announced its financial results for the third quarter fiscal 2022 ended December 31, 2021 as revenue dropped from last year as Canadian cannabis sales fell. Canopy reported net revenue of $141 million for the third quarter of fiscal 2022, which was a decline of 8% versus the same time period in 2021. Canopy said that total global cannabis net revenue of $83 million in the quarter declined 20% over the third quarter in 2021. On a positive note, net revenue increased 7% sequentially. Canopy also delivered a net loss of $115 million, which is a $714 million improvement versus last year. The company said this was “driven primarily by lapping material non-cash asset impairment and restructuring charges in Q3 FY2021 and Other Income totaling $34 million during Q3 FY2022 mostly attributable to non-cash fair value changes of $59 million.”
Clever Leaves
Clever Leaves Holdings Inc. (NASDAQ: CLVR) announced a big cash burn, rising net losses, and a new CEO. The global cannabis company released its preliminary unaudited financial results for the fourth quarter and full-year ended December 31, 2021, along with its 2022 outlook. In the fourth quarter, Clever Leaves said its revenue is expected to increase 25% to approximately $4.2 million compared to $3.3 million. However, the net loss is expected to range between approximately $17.1 million and $17.5 million compared to $0.9 million. The company also said it has burned through its cash levels of $79.5 million bringing it down to $37 million at the end of 2021.
Klutch
Ohio-based Klutch Cannabis looks to have raised $10 million as the producer is keen on securing licenses. According to Pitchbook, the company raised $10.9 million as of February 1, 2022. It is said to be convertible debt financing from undisclosed investors and the funding will be converted to Series C, D, and E. It could be money that is anticipating Klutch winning some dispensary licenses. Klutch currently possesses cultivation and processing licenses but the company wasn’t able to secure a dispensary license during the original process in 2018. Klutch did not respond to a request for confirmation of the capital raise.
In Other News
Hexo
On January 19, 2022, Hexo said that it would reduce SG&A expenses by 30 per cent by Fiscal Year End 2023. As part of that initiative, the company cut 180 positions, resulting in annual savings of approximately $15 million on an annualized basis. Half of these positions are related to the previously announced closure of the Stellarton facility. The remaining reductions are related to reducing back-office positions where there is significant overlap as a result of recent acquisitions and simplifying HEXO’s operating model to drive clearer accountability. The plan is expected to generate incremental cash flow of approximately $37.5 million in fiscal 2022 and an additional anticipated and approximate $135 million in fiscal 2023 for a total of $175 million over the two years, from a combination of cost reductions and anticipated organic revenue growth.
