Q4 2016 Canopy Growth Corp Earnings Call
Jun 27, 2016 AM EDT
CGC.TO - Canopy Growth Corp
Q4 2016 Canopy Growth Corp Earnings Call
Jun 27, 2016 / 12:30PM GMT
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Corporate Participants
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* Bruce Linton
Canopy Growth Corporation - Chairman & CEO
* Tim Saunders
Canopy Growth Corporation - SVP & CFO
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Conference Call Participants
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* Neal Gilmer
Mackie Research Capital - Analyst
* Josh Gale
GMP Securities - Analsyt
* Daniel Pearlstein
Dundee Capital Markets - Analsyt
* Alan Brochstein
420 Investor - Analyst
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Presentation
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Operator [1]
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Good morning and welcome to Canopy Growth's fourth-quarter and fiscal year 2016 financial results conference call. Earlier this morning Canopy Growth issued a news release announcing its financial results for the fourth-quarter and fiscal year 2016 ending March 31, 2016. This news release is available on Canopy Growth's website and will be filed on SEDAR.
On this morning's call we have Bruce Linton, Canopy Growth's Chairman and Chief Executive Officer, and Tim Saunders, Canopy Growth's Chief Financial Officer. At this time all participants are in listen-only mode.
Certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the Company's annual information form and other public filings that are made available on SEDAR.
During this conference call Canopy Growth will refer to adjusted product contribution. Adjusted product contribution does not have any standardized meaning as prescribed by IFRS. Adjusted product contribution is defined in the press release issued earlier today as well as in this period's management's discussion and analysis document that will be filed on SEDAR.
Please note that all financial information is provided in Canadian dollars unless otherwise specified. Following prepared remarks by Mr. Linton and Mr. Saunders, the Company will conduct a question-and-answer session during which analysts will have the opportunity to ask questions.
(Operator Instructions)
I would now like to turn the meeting over to Bruce Linton. Bruce, please go ahead.
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [2]
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Great, thank you very much. Good morning all.
I may surprise you by saying I find this to be one of the more relaxing mornings of the quarter when I get to have you on a call only because it means we've kind of hit a finish line and we can pause for an hour or two and then go back to work pushing towards the next finish line. It means our Sunday Board meeting is over and we get to come in here.
So let me reflect a little bit on what's going on in the last three months as well as the last year. Tim will walk through the details. But our revenue numbers moved up to CAD12.7 million, about 1,700 kilograms of product or equivalent sold.
Patient count finished at the end of March with 11,000 and because we hadn't put our quarter out and can't keep updating everyone we also as of today are in excess of 16,000 patients on our active list. So it's nice to be able to refresh that number as I find often I am out now presenting a meeting with investors and I'm using data that was a December number.
It seems like historic information about having the farm fully licensed and we're no longer hauling marijuana plants up and down a highway when they are little and when they are big was something we achieved by the end of March and that makes a terrific difference for our business. It means that as we go forward the farm, 350,000 or 360,000 square feet, can be turned into a production engine and be very significant really to both our produced product for cannabis flower but also for oils and put -- and really begins to drive the cost per gram down. So that was a nice milestone and I think you'll see some positive results from that as we go through the balance of this calendar and fiscal year.
And we've only begun selling oils because the licensing process was something that kicked in and the oils response has been quite good. We're running that capacity, if you will, or the conversion facility a couple of shifts a day and really having to focus on making sure we continue to produce aggressively because the demand has been quite substantial.
We've done a reasonable job, I think, still on the ongoing media and keeping our brand moving up. And it's been, I won't say easier, but certainly the topic of marijuana may be overshadowed for a couple of hours by Brexit but then it's back on to the topic again.
So the Canopy sub brands of Bedrocan and Tweed continue to be picked up on every media story related to the medical and recreational. And that seems to be paying dividends because we're certainly seeing our call center have an ever-increasing opportunity to convert interest into clients.
The world is heating up. You saw an announcement with our activities with AusCann which is an Australian provider. We're seeing opportunities in other geographies which are federally legal. Canopy is not pursuing business touch the plant or direct investment in America.
That has been a question several times and we are not doing that simply because it's not federally legal. We use people like Deloitte as our auditors and they wouldn't take a very active and positive view of auditing something in a federally illegal market. So the places where we get to play are good ones, big ones and without conflict with the federal regulator.
Two questions I expect to get at the end, one, today CBC was captivated by the fact that Canada Post may be locked out or go on strike or some combination thereof. We have already had put in place and have operated on our last days of shipment where we do not use Canada Post as an exception to our normal practice so that we're prepared in the event that occurs.
So hopefully that allows everyone who is a patient and an investor to feel comfortable that the medicine is going out the door and the money's coming in. And Tim will speak to the balance of the details.
There will be some topic or discussion around our cost per gram in the quarter. We made intentional investments in something called phenotyping. Phenotyping means dedicating rooms to picking the very best plants as they finish.
And the reason you would do that in a really focused way is when you're building out a breeding program the final step is that. And so we've had some capital investment over the last quarter and a half so that we can have what I think will probably be a leading breeding facility in the world. And that leads to an expectation for plants that are quite suitable for medicine and for rec.
Finally, before I hand it off to Tim, I would encourage you as you read through the statements and the numbers take pause and think about the political framework we're looking at. We now know who the chair is of the committee. We know their timeline for reporting back to Mr. Blair is November. And I think so much of what is about the end of the quarter and the end of the fiscal is about what's happening for next spring and the following spring and the opportunity to be dominant and to lead the market share.
So Tim, please do walk-through and cover some of our results and investments.
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Tim Saunders, Canopy Growth Corporation - SVP & CFO [3]
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Thank you, Bruce. So good morning everyone.
Before I begin I just want to remind everyone that the financial amounts in our statements are expressed in thousands of dollars. That's a change that we introduced in the third quarter. I also want to say that the consolidated financial statements audited by Deloitte and the MD&A were filed on SEDAR this morning and if not posted on our website will be on our website shortly.
So revenues in the fiscal year ended March 31, 2016 were CAD12.7 million, representing a greater than 430% increase over the 15-month period ended March 31, 2015. I would just remind everybody that last year we changed the year-end to March 31 which resulted in an extra quarter in that fiscal period.
Total products sold in the 2016 fiscal year was approximately 1,700 kilograms and kilogram equivalents at an average price per gram of CAD7.34 and that's up from 324 kilograms at an average price of CAD7.17 during the prior fiscal year. Kilogram equivalents refers to oils where 10 milliliters is equal to 1 gram of dried cannabis.
Next I will briefly discuss the IFRS gross margin in the year ended March 31. Gross margin over this period inclusive of the IFRS non-cash gain on biological assets was CAD19 million or 150% of sales. Gross margin was CAD2.8 million or 119% sales in the fiscal period last year.
Earlier this year we introduced a supplementary non-GAAP measure used by Canopy called adjusted product contribution. As a reminder, the adjusted product contribution adjusts the reported gross margin under IFRS to remove the fair value measurements required by IFRS and instead measures the weighted average cost of grams produced against the grams sold in the period.
On this basis the adjusted product contribution was CAD8.1 million, or 64% of sales in the fiscal year ended March 31,2016. Details of this reconciliation can be found in the schedule to the press release and in the MD&A under adjusted product contribution non-GAAP measure.
As to the weighted average cost per gram, Bruce has mentioned this or talked about this a second ago, it was up in Q4 to CAD2.69 per gram, up from CAD2.29 in the prior quarter. The principal reasons were to the timing of the Tweed Farms harvest which followed the license approval on March 31 so that the harvest itself happened just after the week after year-end where over 11,600 plants were harvested.
The other impact that Bruce also talked about this it was a business decision to temporarily repurpose two of the grow rooms in Tweed to research phenotype selection of plants instead of [the few] to grow product for sale. So these two items are either timing or temporary differences.
Now turning for a moment to operating expenses, sales and marketing expenses in the year ended March 31 totaled CAD5.7 million as compared to CAD2.7 million last year. The sales and marketing expenses remain focused on medical outreach programs, patient acquisition and retention and branding and included expansion of the customer call center capability to handle the growth of the patients over the last year and also going forward.
G&A expenses in the 2016 fiscal year totaled CAD8.2 million. This compares to G&A last year of CAD4.9 million. Overall the increase in G&A reflects the Company's growth from the prior year including building commercial capacity and capability.
R&D expenses in the 12-month period ended March 31 totaled approximately CAD720,000 compared to R&D of CAD260,000 last year. Stock-based compensation and depreciation and amortization, both non-cash expenses, were CAD3.5 million and CAD2.3 million respectively for this fiscal year. Last year stock-based compensation and amortization were CAD2.6 million and CAD650,000 respectively. The stock-based compensation in fiscal 2016 includes the effects of accounting for the options carryover for the Bedrocan acquisition.
As a result of the above in this fiscal year we recorded a net loss of CAD3.5 million or CAD0.05 per basic and diluted share. This compares to a net loss of CAD9.3 million or CAD0.29 per basic and diluted share last year.
Turning our attention to the balance and sheet cash flows at March 31, the Company concluded with cash and cash equivalents of CAD15.4 million representing a decrease of CAD9 million from last year, end of last year. That decrease is attributable to CAD12.4 million applied to operations over the course of the year and investments in facility enhancements totaling CAD13.1 million for Tweed Farms and Tweed in Smiths Falls and CAD2.1 million was used to repay a loan in December also connected to the Bedrocan acquisition. This was partially offset by the net proceeds from financings including the bought deal common share offering in the third quarter of 2016 and the exercise of warrants and options during the year totaling together CAD20.6 million.
So as we mentioned about the investments at Tweed Farms, this included the buildout of the facility including the building for processing and storing inventory which is connected to the license that we received on March 31. All those improvements are now complete and the improvements at our Tweed facility here at Smiths Falls was required in part for the production of cannabis oil extracts and refinements to other production processes. The recent bought deal for CAD11.5 million was closed in April after fiscal 2016.
As to the assets on our balance sheet, the ones that receive attention, of course, are the biological assets being the plants. They were at CAD5.3 million, up from CAD2.9 million in Q3 and about CAD2 million last year.
The inventory was valued at CAD22.2 million and I would remind everybody this is under IFRS accounting. And this is up from CAD4.4 million at the end of last year but slightly lower than where we were at the end of Q3. Management believes that the inventory level at year-end is certainly required to meet the anticipated market demand over the next number of quarters.
Next I will briefly just cover the financial results for Q4. Revenues in the three-month period ended March 31 were CAD5 million as compared to CAD3.5 million in Q3. That's up 45% and compares to CAD1.2 million in the corresponding quarter last year.
Total products sold in the fourth quarter was approximately 700 kilos and kilogram equivalents at an average price per gram of CAD7.16. And in comparison during the prior-year period the Company sold 167 kilos at an average price of CAD7.24. The lower price per gram is due in part to the higher proportion of Bedrocan sales after the True Compassionate Pricing of CAD5 per gram was introduced in January 2016.
The gross margin in the quarter inclusive of the IFRS gain was CAD2.7 million or 53% of sales and the gross margin was CAD2.4 million or 149% last year. The adjusted product contribution, which I referred to earlier as the non-GAAP measure, was CAD3.2 million or 63% of sales in Q4. And again the details of that reconciliation are the scheduled to the press release.
Now turning for a moment to operating expenses, sales and marketing for the quarter were CAD2.4 million as compared to CAD1.4 million same quarter last year. Sorry, CAD1.4 million in Q3 and about CAD700,000 in the same quarter last year. G&A in the quarter ended totaled CAD2.6 million compared to CAD2 million in Q3 and CAD1.5 million in the same quarter last year. The R&D details consistent on a quarter basis about CAD280,000 relative to the prior quarter and up from last year when it was CAD107,000.
Skipping over to stock-based and the other non-cash expenses just getting to the net loss in the quarter was CAD5.1 million or CAD0.05 per basic and diluted share as compares to CAD3.3 million or CAD0.04 per basic and diluted share in Q3 and a loss of CAD400,000 or CAD0.01 loss per basic and diluted share same quarter last year. So this concludes my review of the financials for the fourth quarter and fiscal year ended March 31. And I will now turn it back to Bruce.
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [4]
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Thanks, Tim. We'll open for questions in one second, just there may be a question related to this.
Our announcement for the uplist to the TSX from the V is something we're processing and we're hopeful we'll be able to work to conclude that uplist sometime in the next 30 days but we have up to 90 days to do that. So with that I will open it to questions.
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Questions and Answers
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Operator [1]
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(Operator Instructions) Neal Gilmer, Mackie Research.
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Neal Gilmer, Mackie Research Capital - Analyst [2]
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Yes, good morning Bruce and Tim. Maybe I would just sort of would appreciate your comments on how you've seen sort of your oil side of your business evolving since you received your license on the Tweed side back in I guess late February and obviously Bedrocan more recently. Are you seeing sort of significant demand for that product?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [3]
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Yes, so to frame it what we chose to do with the pricing on oils is the view of the Company or my view is that when you change the state of a product from a dried cannabis to an oil you really haven't changed anything other than state. So the way we price our oils essentially is we include the conversion cost, the incremental bought-in cost and a small incremental price boost but not a material one. And when we bring other products to market that format the oils into something that could be more specific and medicinal by format or formulation or recreational by inclusion with say soda that's where we'll push the price up.
All that to frame that the demand has been very strong and that part of what we're focused on is there was an announcement where increasing the capital assets that we have related to oil so that we can produce what I would call on an industrial scale versus a commercial scale, and that that will be a play before the year is out. And Bedrocan's license for oils is something that we're working through and pushing their ability to sell as well as sell their oils in the Tweed store.
So yes, demand great, process working well. Probably the single constraint in our business right now is the capital assets in place to convert the oils.
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Neal Gilmer, Mackie Research Capital - Analyst [4]
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Okay, fair enough. And you stated that that industrial scale would be in place by the end of the year. So is it fair to say that you may consider moving some of the inventory that you have in the dried product through the oil processing capabilities should you see the demand sort of be greater on that side of your business?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [5]
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Yes, and I'll highlight and Tim can give you the exact figures but the inventory is approximately the same at the end of Q4 as it was at the end of Q3. So we're not building inventory and our patient count is going up.
As we get more of the assets in place to convert there is, we think, a demand that will be very substantial for us. So a lot of the change of state will occur and it kind of feels like we're on plan for the inventory necessary to do that.
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Neal Gilmer, Mackie Research Capital - Analyst [6]
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Great, thanks. You made a couple of comments in your prepared remarks with respect to your sort of weighted average cost per gram. Can you give us an idea sort of what sort of rate we can expect that to decline?
You commented on a couple of items that affected it in the past year but obviously going forward it's coming down. What sort of rate of improvement can we expect?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [7]
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So I don't want to give you guidance to a number but here are the factors you'll want to put in your model. Tweed Farms could not produce in more than about 10%, maybe 15% of the total facility, and actually do it without the full license before because of the logistics of shipping. That impediment is now gone and that's a greenhouse.
And I state greenhouse, there is greenhouses, there is solariums and there is indoor grow. So the greenhouse we plan to have a substantial I'll call it summer harvest and intend to have full production in the whole place for the fall. So that will drive your cost per gram down assuming those harvests come through because it is as low a cost per gram as you can get.
Our internal Smiths Falls facilities are done, are principally done with the effort for phenotyping. So those will all be back on for full commercial production. So I think between the timing and the inclusion we expect that the cost per gram creeps down into the sort of leading the sector area.
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Neal Gilmer, Mackie Research Capital - Analyst [8]
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All right. Thanks for that color. Maybe I'll just leave one last question and then I will pass the line.
Bruce, I would be interested in your prospective. You commented on what international markets you're looking at if not the US given that it's federally illegal there.
There's an article that I was reading last week talking about the US moving it from Schedule I to a Schedule II drug potentially this summer. Would that change your view on potential opportunities in the US if that were to go through?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [9]
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Yes, there's constant I'll call it third level media that are coming up with dates and times and people who will do it. We're watching it very carefully.
And you can imagine that we're poised to participate and bring a lot of the scale functionality we have in the brands. And there are certain markets that are more appealing to us than others and they are not currently open markets. But when California is contemplating what they are contemplating and Nevada is coming around, those are the ones we'd love to play in but just not going there until it's something we can get a Deloitte audit for and keep our books clean.
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Neal Gilmer, Mackie Research Capital - Analyst [10]
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Great, thanks for your time.
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Operator [11]
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Martin Landry, GMP Securities.
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Josh Gale, GMP Securities - Analsyt [12]
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Good morning Bruce and Tim. It's actually Josh on for Martin. Just a question on your registered patient count.
I was just wondering if you could remind us how that's defined? Or maybe asked another way, how many of these 16,000 patients have ordered in the last three months?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [13]
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Yes, so the way it's defined is in order to become a patient you need a physician's permission by the form of the medical documentation. Those are the number of people who have registered. Most of those registrations are anywhere from three to six months, so they are recurring.
I don't have at my fingertips the precise number but the reason people register and continue on is because they are active patients. So assume all or a vast, vast majority have ordered in that time period.
Where we're focused now, a lot of our effort is to manage the continuance of each patient. And so we have a detailed logging method that looks at where do the patients come from, how frequently do they order, then how long until they renew if they renew prior to the expiry or post how we manage in the system.
So we're increasingly getting to be a bit like a discussion you might have with a wireless operator in terms of average order size per patient and duration of patient. But 16,000 is actively registered and it appears two years ago people actively registered and didn't buy because they were possibly converting or not from the MMAR. These are people who are actually customers and patients.
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Josh Gale, GMP Securities - Analsyt [14]
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Right, because the growth rate seems quite fantastic there.
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [15]
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And the tough part is you have to get the systems in place to scale it. So it was actually a lot harder adding 1,000 patients in a month a year ago than it is to think about doing it in a week now.
And when anybody gets in need of a tune-up upstairs in the call center we always offer that we're going to have the way back Wednesday when we're going to let them use the same systems as we had a year and a half ago which really were kind of pen and paper. So it is possible to grow once you get the systems in place.
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Josh Gale, GMP Securities - Analsyt [16]
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Okay great. Thanks for that color, Bruce.
You've also come out in the past stating that Canopy could become cash flow positive with let's say 10,000 to 11,000 patients and then you've subsequently said that you're not necessarily in a rush to become cash flow positive. You are really trying to steal that market share.
How can we think of you becoming cash flow positive? Are we close at 11,000 patients or 16,000 patients, excuse me? Is that a level that's you can become cash flow positive?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [17]
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Yes, we could be cash flow positive today if we wanted to slow down on some of the things that we're doing to make sure that we had the market share that we want for medical and the first day of rec. And the goal we have when recreational access occurs, I want you to walk into whatever point of distribution occurs whether it's LCBO or dispensary or wherever the government wants to put it, see the branded products from Tweed on the shelf and we'd like to see 40% of the people who make the buying decision that they pick us.
And so what we're trying to do now is make sure that we have terrific coverage and strength in medical but that we're really tooling up the rec. So I think as we've mapped out our budget for fiscal 2017 one of the bonus criteria, so we have two bonus criteria for every person in management and operations which is market share and the proxy for that is total patient count and earnings per share. So if people are going to see their bonus, which they all like, in this fiscal year both of those will be hit but not intending to be a big trade earnings per share but a really big market share.
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Josh Gale, GMP Securities - Analsyt [18]
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Okay great. Thanks, Bruce.
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Operator [19]
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(Operator Instructions) Daniel Pearlstein, Dundee Capital Markets.
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Daniel Pearlstein, Dundee Capital Markets - Analsyt [20]
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Hey, good morning, guys. Thanks for taking my call.
So first one, you had alluded to Tweed Farms and the farm it seems like it will be a big part of the platform from a near-term operational perspective and even long term as well. But can you elaborate on how it's expected to maybe start driving the bus in the near term for a volume and cost perspective?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [21]
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Yes, so there's a crop which is in play right now which is down there which is a large but not full building crop. The crop which we put in starting kind of this month, call it July through August, will occupy the entire building and be harvested in October through November. And that one begins to become a material portion of the inventory at that time or the product for oils.
So its cost per gram is driven down in that there are no HVAC units. There are no even the water is rain recapture of available. And so that cost per gram on the largest plants that grow over the season, which are the fall harvest plants, we would expect to become a substantial factor in the whole denominator of what our total number of grams are and a like contributor to the cost.
In Smiths Falls because as you add patients you have demand we are always squeezing the efficiency per room which has been increasing in double digits even over the last year. And that's just a function of as you grow your hundredth grow cycle and keep going through them you can get better genetics, better fertigation and so that's still improving.
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Daniel Pearlstein, Dundee Capital Markets - Analsyt [22]
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Okay, great, thanks. And can you comment on I guess a little bit more on the phenotyping? Are there any particular strains or cannabinoids concentrations that are more desirable given the way you see the market is going?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [23]
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Yes, we're looking at two markets. So the phenotyping consideration, some of it goes towards CBD and medical-specific products. And a big part of it, which is why we have some of the inputs from the guys at DNA Genetics, is about under rec you want to be able to produce something that could when win a Cannabis Cup and you want to be able to produce something that if the market really liked the Pink Kush you start having the thought process on how you got there.
I throw that out as a fictitious positioning. But what you really want is high-quality as well as unique and distinguishable genetics. And that's a process that by starting now I think our breeding and evolution will be putting us in good shape 12 and 18 months out.
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Daniel Pearlstein, Dundee Capital Markets - Analsyt [24]
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Okay, cool. And last one, can you comment a little bit more on the M&A environment? How if any applicants start to cross the line a little bit more we see in a couple in the last few months or if there's any other kind of private producers, can you comment a little bit more on that kind of environment?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [25]
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I would say that so we saw a couple of LPs, one in PEI, come through in the last while. Every day that goes by and someone is a not-yet-approved applicant is another day where those parties tend to be a little bit more hungry and a little more eager to join a team. And so about a quarter ago we announced that XIB has been assisting us.
The prospect flow that's coming through them is it's very robust. And so we're just I think now in a situation if we do anything we can be kind of, I'll call it, say very that conscious because there's quite a lot of opportunities.
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Daniel Pearlstein, Dundee Capital Markets - Analsyt [26]
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Okay, that sounds great. Thanks very much. That's it for me.
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Operator [27]
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Alan Brochstein, 420 Investor.
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Alan Brochstein, 420 Investor - Analyst [28]
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Hey, Bruce. Congratulations. I want to first of all congratulate you for the TSX listing that's ahead and follow up on that with do you plan to get a US listing? I know that was your priority to get the TSX listing first.
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [29]
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Yes, so TSX just to color it a little bit, if we had chosen to pursue and push the uplisting and have it effective today, the downside of that is that the Q1 is governed by the TSX versus the TSX Venture. So not a big motivation to get it done in June, but good thing for July.
Alan being in the US always asks me this question. And I think if we were going to do a listing we really should be thinking whether it's NASDAQ or the other NSE. That wouldn't be a bad idea but it's not something actively in the works now.
But I believe we would qualify and it's almost a point of showing the difference between the Canadian and the US opportunity by listing there I think would signal to US investors what's occurring in Canada. So I'm attracted to it but I haven't started working on it. I'm going to let Tim finish the quarter and the year on the TSX and then maybe we will get them to turn to that.
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Alan Brochstein, 420 Investor - Analyst [30]
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That sounds good. Then on the inventory that's obviously been one of the concerns over the last few quarters and if I'm reading it right your inventory is pretty flat this quarter and even better, obviously your sales volumes are increasing. So what is your outlook on the inventory in terms of converting it to oil, is that going as expected and do you anticipate any sort of write-downs in the future?
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [31]
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So in reverse, we don't expect any write-downs. Tim, you can chime in if you wish, but we I think I looking at a conversion process that's going well.
We do need a bigger capacity to convert more and once it's in the oil state it's very stable and has a high demand. I was asked about inventories I think last call and my comment was simply that I think under a liberal government having too much marijuana probably won't be a problem and it appears that's coming to be true. But Tim do you want to speak to I know we spent lots of time with Deloitte on inventory.
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Tim Saunders, Canopy Growth Corporation - SVP & CFO [32]
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You are right it is flattish compared to the prior quarter. And no, we don't anticipate any kind of write-down. And just as we reminded everybody in my comments these values are also IFRS-based, which includes is really relative to the ultimate selling price of the product itself but no, no write-down is expected.
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Alan Brochstein, 420 Investor - Analyst [33]
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Okay. That's all I have. Thanks a lot.
Actually I have one more thing Bruce. Health Canada is very slow to release data. You just told us earlier that your 16,000 do you have an estimate for what you think the total patient count is? It sounds like you're about 30% market share now.
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [34]
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I will go back to your first point. So we fill in our report the 15th of every month and we send it in. And then some number of months later we get the aggregation of the summation of that.
I don't want to put where we are. But the rate at which the patients are coming on I would say that it feels like we're holding market share, maybe eking up a little bit. But it is a -- it feels like a rapid growth environment for more patients, not just us taking more patients.
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Alan Brochstein, 420 Investor - Analyst [35]
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Got it. That sounds great. Thanks a lot, Bruce.
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Operator [36]
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We have no other questions in queue at this time. I will turn the call back to Mr. Linton for any closing remarks.
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Bruce Linton, Canopy Growth Corporation - Chairman & CEO [37]
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Thank you, everybody, for your time this morning. It's nice to have finished a good year and be working away on this quarter and look forward to a call two times from now where we get to talk a little sooner because we'll be ideally uplisted and we'll hopefully continue to have some good attention followed in the market.
So thank you and feel free to book a tour and come and see the greenhouse. I think it will give you a good perspective on what's next. Thank you.
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Operator [38]
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This concludes today's conference. You may now disconnect.
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