The most prized earnings report throughout the marijuana industry is now in the books. Following the closing bell on Thursday, June 20, Canopy Growth (NYSE:CGC), the largest marijuana stock in the world by market cap, lifted the hood on its fourth-quarter and full-year operating results.

While the headline figures honed in on the company's near-tripling in year-over-year net sales growth and the expected 34,000 kilos of harvested capacity for the first fiscal quarter of 2020 (the April 1 through June 30 quarter), there were plenty of details sprinkled throughout Canopy's quarterly report that proved far more noteworthy. Here are the 10 most important figures in Canopy Growth's fourth-quarter report. 

An up-close look at a flowering cannabis plant.

Image source: Getty Images.

1. Net sales rose by 13.4% on a sequential quarterly basis

Arguably one of the most pleasant surprises in Canopy Growth's quarterly results was the fact that the company's net sales (i.e., gross sales minus excise taxes) rose by a healthy 13.4% from the sequential third quarter. This is considerably higher than Wall Street was projecting, with the consensus figure having called for sequential growth of closer to 3% or 4%.

What's particularly noteworthy about this increase in sales is that it wasn't cannabis revenue that led to the increase. Gross recreational revenue actually declined from the sequential quarter (all figures in Canadian dollars) from CA$71.6 million to CA$68.9 million, while medical marijuana gross revenue dipped from CA$18.6 million to CA$13.4 million in the fourth quarter. As you'll see in a few points, it was ancillary revenue, not cannabis sales, that led to this sequential sales growth.

2. Recreational (84%) to medical (16%) sales ratio

Another figure that bears a lot of importance for Canopy Growth and its investors is just how much of its cannabis sales are coming from the adult-use market and the medical marijuana market. Generally speaking, the recreational market is much larger than the medical market in terms of consumers, but medical cannabis patients typically use pot products more frequently, buy more often, and are far more willing to purchase higher-margin derivative products (i.e., oils).

In the third quarter, there was a nearly 80%-20% split between recreational revenue and medical cannabis revenue for Canopy Growth. That pendulum swung even more noticeably toward the adult-use side of the equation in the fiscal fourth quarter, with 84% of the company's gross cannabis sales coming from the recreational market and just 16% from medical sales. This is somewhat to be expected as the ease of access to marijuana encourages medical patients to skip a doctor's visit and go straight to a dispensary for their product.

A tipped-over bottle containing dried cannabis flower lying atop a messy pile of cash.

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3. Average selling price per gram rose 2.2% from the sequential third quarter

Chalk this up as another surprise: The average selling price per gram of cannabis products (dried flower and derivatives, both domestic and international) actually rose by 2.2% from the sequential third quarter (CA$7.49 vs. CA$7.33). Until recently, the price per gram of cannabis products had fallen as a result of incorporating excise taxes paid to the Canadian federal government into the calculation.

However, simple supply-and-demand economics would suggest that this modest increase in the per-gram price of cannabis products isn't a surprise. In fact, the shortage of marijuana products throughout many Canadian provinces should push prices higher as long as demand exists. Even though pot stocks like Canopy Growth are underutilizing their capacity at the moment, Canopy is at least seeing a slightly higher average per gram price for the weed products it's selling.

4. International sales fell 33% from the sequential quarter

On the other hand, international sales have to be a continued major disappointment for marijuana stock investors far and wide. Although the long-term outlook for the overseas pot industry remains bright, Canopy managed just CA$1.8 million in international marijuana revenue, down from CA$2.7 million in the sequential third quarter and 25% less than CA$2.4 million in overseas sales the company logged in the fourth quarter of 2018.

Canopy Growth primarily blamed supply chain issues in Canada for bogging down its international sales in the most recent quarter. The key takeaway here looks to be that until Canadian domestic demand is satiated, overseas sales could disappoint.

An up-close look at flowering cannabis plants growing indoors.

Image source: Getty Images.

5. More than 4.7 million square feet of production space

Both Aurora Cannabis (NYSE:ACB) and Canopy Growth are in a league of their own when it comes to peak annual output. Aurora has 15 production facilities that should be cranking out an annual run rate of 625,000 kilos by the midpoint of 2020. Additional expansion could easily put Aurora on track for 700,000 kilos a year. Only Canopy Growth, with its 5.6 million square feet of devoted production space, can come close to rivaling Aurora Cannabis' commanding production potential.

The big question, entering this earnings report, is just how much of its 5.6 million square feet would be licensed. With more than 4.3 million square feet licensed as of its third-quarter results, we learned that Canopy has now upped its licensed capacity to north of 4.7 million square feet. While many of its peers have struggled to gain licensing approval for their core projects, Canopy Growth looks poised to gobble up market share in its home market of Canada.

6. Ancillary revenue soared to CA$24.2 million

As promised earlier, the star of Canopy Growth's report wasn't marijuana growth, because organic sales actually declined from the sequential quarter, but rather the CA$24.2 million in "other" revenue that the company reported, up from just CA$7.5 million in the sequential third quarter.

According to the company's earnings press release, this ancillary revenue derives from its acquisition of vaporizer company Storz & Bickel during the fiscal third quarter. Sales of these vaporizer products, along with extraction services, and clinic partnerships, resulted in a significant surge in non-direct cannabis revenue in the fiscal fourth quarter. In other words, it was acquisition-based growth, not organic growth, leading Canopy's sales higher in Q4 2019.

A one hundred dollar bill burning from the center outwards.

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7. CA$174.5 million operating loss, including fair-value adjustments

The operating loss figure that everyone, including yours truly, was looking for, actually came in worse than pretty much anyone had expected. For the fiscal fourth quarter, Canopy lost CA$174.5 million on an operating basis, which includes CA$242.9 million in operating expenses. Sales and marketing expenses, along with general and administrative costs, combined to total almost CA$119 million by themselves.

But here's the thing: This CA$174.5 million operating loss also includes a pretty sizable gain from fair-value adjustments on biological assets. Remove that one-time benefit, and Canopy's fourth quarter looks a whole lot uglier with an operating loss closer to CA$225 million. Yuck!

All told, Canopy's net loss in Q4 hit CA$323.4 million, pushing its full-year net loss to a ghastly CA$670.1 million.

8. Approximately CA$4.5 billion in cash, cash equivalents, and marketable securities

Although Canopy Growth is losing money hand over fist as it expands its domestic and international infrastructure, one thing the company does have working in its favor is the roughly CA$4.5 billion in cash, cash equivalents, and marketable securities it ended the fiscal year with. This was down almost CA$400 million from the sequential third quarter.

A majority of the capital Canopy is working with was derived from the CA$5 billion equity investment from Constellation Brands that upped its stake in the company to 37%. Having ample capital on hand should allow Canopy to execute on its long-term plans without batting an eye.

A person holding a magnifying glass over a company's balance sheet.

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9. CA$1.54 billion in goodwill, down 15% from the sequential quarter

Even though it's a completely under-the-radar figure, the number that impressed me most in Canopy's fourth-quarter operating results was its CA$1.54 billion in goodwill. That's because this figure is down 15% from the sequential third quarter, where it reported CA$1.82 billion in goodwill.

Goodwill is nothing more than the premium an acquiring company pays above and beyond tangible assets. Since Canopy has been an active buyer in the pot space, we'd expect it to have paid some sort of premium to make deals happen. The question becomes whether the company can recoup this premium over time, or if it'll be forced to take an unsightly writedown. The fact that goodwill shrunk by almost CA$280 million from the sequential third quarter is very encouraging and reduces the likelihood that Canopy will write down a significant portion of its goodwill anytime soon.

10. Share-based compensation expenses soared to CA$74.7 million

Lastly, it's worth taking note that Canopy's share-based compensation expenses have continued to soar. In the most recent quarter, the company recorded CA$74.7 million in share-based compensation, primarily due to an increase in the number of people it employs. This compares to CA$40.1 million in share-based compensation in the sequential quarter and just CA$11.9 million in the year-ago quarter.

Typically, share-based compensation is a figure most (including myself) would gloss over. But it's becoming a significant component of total expenses each quarter -- not to mention that ongoing share-based compensation will continue to increase the company's outstanding share count, which can work against earnings per share, if and when Canopy Growth ever turns a profit.

Although there were plenty of numbers to like in this report, including the reduction in goodwill, ample cash balance, and growth in licensed production space, Canopy Growth still has a lot to prove to Wall Street.