Shares of Canopy Growth (NASDAQ:CGC) climbed 7.8% on Monday, following the release of the marijuana producer's better-than-expected fiscal 2021 first-quarter results.
Despite the coronavirus-related challenges that have weighed on recreational cannabis sales in its core Canadian market, Canopy's revenue rose 22% year over year to $110.4 million Canadian ($82.7 million). The gains were fueled in part by higher medical marijuana sales, which more than offset a decline in adult-use sales.
Better still, cost reductions are helping to reduce Canopy's cash burn. The cannabis company generated a net loss of CA$0.30 per share, a significant improvement from the CA$0.54 per-share loss it posted in the prior-year quarter, and far better than the CA$0.35 loss analysts had expected.
"Following our previously announced restructuring actions, we have substantially reduced our expense and cash burn in this quarter in addition to reducing headcount by over 18% since the beginning of this calendar year," CFO Mike Lee said in a press release. "Our marketing and R&D investments are being reallocated to programs with high-return potential in order to drive sales."
Canopy's cannabis-infused beverages are off to a strong start with a No. 1 market share in Canada. Canopy is also gearing up for a push into the U.S. market with a focus on cannabidiol (CBD) products. Recent partnerships with National Football League star Patrick Mahomes and popular media personality Martha Stewart should help to drive Canopy's growth in the year ahead.