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The quarterly dip was driven in part by increased expenses, some of which the company said were tied to preparations for Canada’s coming recreational marijuana market, which the federal government has aimed to legalize by July 2018.

Canopy’s operating expenses spiked in its second quarter, to approximately $29.9 million from $9.7 million for the same period last year. Sales and marketing costs for the quarter rose to $7.6 million from $2.8 million last year, with the company saying that the added costs “include staffing and resourcing the marketing and sales functions needed in the coming regulated recreational and international markets, costs associated with the Company’s medical outreach program, and the growing customer care center which interfaces directly with the Company’s expanding base of customers.”

Canopy’s reported that its number of registered medical marijuana customers shot up from more than 24,000 clients at the end of Sept. 2016, to over 63,000 at Sept. 30 of this year.

But the results also covered a period preceding Canopy’s big announcement on Oct. 30: that it would sell 9.9 per cent of itself to Constellation Brands Inc., a U.S.-based beverage company, for approximately $245 million. The deal, which closed on Nov. 2, also includes warrants that could let Constellation double its stake in Canopy for the same price.

“With our objective to win and retain significant future market share, and backed by the recent $245 million investment from Constellation, we remain focused on the expansion of our cultivation capacity, extraction platform and finished branded products programs,” said Linton in a release. “Our relationship with Constellation and the commitment to work together to develop and market regulated recreational cannabis-based beverages, when and where they are federally legal, is a critical step in our move up the value chain.”