Canopy Growth Corporation (NASDAQ:CGC) Q3 2023 Earnings Call Transcript

Judy Hong: Yeah. So just in terms of the gross margin suppliers steel Matt, so in Q3, we think roughly about a 5 million impact as relates to some of the inventory situation and that has impacted the negative gross margins of BioSteel. And to be clear, this is really related to the inventory bill that we had previously built. And, I think in when you go back a year ago, we talked a lot about the lumpiness, again, in terms of the sales and distribution loading is happening slower than we had anticipated, particularly in the US market. So this is really a result of that historical inventory build that we had in the BioSteel. And if you kind of look at Q2 BioSteel margins or year-to-date, gross margins for BioSteel, that’s probably more reflective of the margin profile on today’s faces.

And to David’s point, as we bring production and house with the Verona facility acquisition and all the other initiatives to drive gross margin improvement and as sales scale up we expect BioSteel gross margins to mirror sort of that industry standard margins for a beverage company.

Operator: Ladies and gentlemen, unfortunately, that is all the time we have today for questions. So I will turn the conference back to David Klein, for any closing remarks.

David Klein: Yeah, thanks again for joining us today. The changes we announced today well difficult they’re necessary not only for us to reach profitability, but to sustain our business over the long term. We continue to believe Canopy has significant opportunity ahead both in Canada and the United States. And today’s actions coupled with our strategy for US entry will ensure we’re able to realize this. Investor Relations we’ll be available to answer any questions that you have over the rest of the day. And again, thanks for joining us and have a good day everyone.

Operator: Ladies and gentlemen, this concludes Canopy Growth third quarter fiscal 2023 financial results conference call. A replay of this conference call will be available until May, 8th 2023, and can be accessed following the instructions provided in the company’s press release is issued earlier today. Thank you all for attending today’s call and enjoy the rest of your day. You may now disconnect your lines.