Canopy Growth Tops Revenue Estimates But Warns of ‘Material Non-Cash Charge’

Canopy Growth Corp. (CGC – Get Report) posted better-than expected revenue for its fiscal fourth quarter after the market closed Thursday, but cautioned that its recently approved deal to acquire rights for U.S. based Acreage Holdings will lead to a charge that will have “a materially negative impact on net income in the first quarter of fiscal 2020.”

The Canadian based medical and recreational marijuana grower reported net revenue of CA$94.1 million ($71.4 million) vs. CA$22.8 million ($17.3 million) a year ago.

Analysts surveyed by FactSet had been expecting the company to report revenue of…

$67.7 million.

The company didn’t provide a quarterly result per share. It said it will file audited consolidated financial results with Canadian securities regulators after the market closes on Friday.

Canopy said the average selling price per gram during the quarter fell to CA$7.49 ($5.68) from CA$8.43 ($6.39) a year earlier.

The company said the material non-cash charge it anticipates taking will occur “upon approval of certain modifications of the investor rights agreement with Constellation Brands, as well as terms of existing warrants.”

Constellation Brands (STZ – Get Report) took a CA$5 billion ($4 billion) stake in Canopy last year, to help fund the company’s expansion in Canada, where marijuana use was legalized last year, and…

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