A cushy earnings report... Canadian pot giant Canopy Growth revealed that sales were 37% higher in its latest fiscal year. Canopy is finally selling more pot than it harvests, and still holds the #1 spot in Canada's “flower” market (flower = weed). The buzz kill: Canopy lost $1.7B, but says it's still on track to turn a profit next year. Despite strong growth across categories, earnings missed expectations and the stock fell 7% yesterday.
Looking beyond the flower... Canopy's goal of "unleashing the power of cannabis to improve lives" goes beyond leafy greens. Canopy has been leaning into "beyond the flower" products. Think: CBD wellness gummies and THC iced tea. It's even selling CBD pet snacks with Martha Stewart (for when your Schnauzer is stressed after work). "Beyond the flower" is thriving: Canopy's "Other" category saw the fastest growth last quarter.
Legalization is still a big "if"... Despite being one of the biggest weed companies, Canopy's yearly sales were just $450M — less than 1% of Bud-maker AB InBev's annual sales. To really grow, Canopy and other cannabis cos need marijuana to be federally legalized in the US — it's still as illegal as LSD at the federal level. While cannabis companies try to hash it out with the US government, "beyond the flower" products like CBD edibles and drinks will be key to growth. The CBD market is expected to grow to $13.4B by 2028, from $3.5B today.