Canopy Growth’s loss widened at the end of last year as costs soared, but not as badly as Wall Street had projected.

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Shares rallied as much as 13 percent.

Ticker Security Last Change Change % CGC CANOPY GROWTH CORP 16.36 -0.04 -0.24%

The Smith Falls, Canada-based cannabis producer lost 124.2 million Canadian dollars ($93.8 million), or 35 cents a share, in the three months through December -- its fiscal third quarter -- as revenue rose 49 percent year-over-year to C$123.76 million ($93.5 million). Analysts surveyed by Refinitiv had projected a loss of as much as 49 cents a share.

AURORA CANNABIS POSTS $985M LOSS AS REVENUE TUMBLES

Operating costs, including marketing, research and development, rose 34 percent to C$231.7 million. Canopy shipped its first cannabis-infused chocolates during the period, and reported strong demand for both premium and lower-priced pre-rolled joints.

"We executed across Canada, in our international markets and in our strategic acquisitions to drive revenue growth," CEO David Klein said in a statement. "We have a lot of work to do."

Canopy has imposed tighter spending controls companywide, Chief Financial Officer Mike Lee said, and "we plan to take further steps to reduce our costs and right-size our business to ensure that we can generate a healthy margin profile."

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Canopy shares were down 7.4 percent year-to-date through Thursday, lagging the S&P 500's 4.4 percent gain.