Canopy Growth Corporation, Canada's largest medicinal marijuana producer, swung to a profit in its fiscal third quarter as revenue surged 180 per cent year-over-year.

Canopy (WEED.TO) earned $3.0 million in the quarter, or $0.02 per diluted share. A year earlier, Canopy posted a $3.3-million net loss, or $0.04 per share. 

Quarterly revenue hit $9.8 million in the three-month period ending Dec. 31, 2016 -- marking a 180 per cent surge over the year ago period.

Analysts surveyed by Thomson Reuters I/B/E/S, on average, expected a per share loss of three cents on $10.9 million in revenue.  

"The third quarter provided new opportunities and challenges for our business, with demand largely exceeding supply throughout the quarter," Canopy CEO Bruce Linton said in a press release on Tuesday. "A function of our growing patient base, the time required to move from a record harvest to sale, and an extensive phenotyping exercise to establish breeding stock and further elevate our product offering all resulted in constrained product available for sale during the quarter."

Gareth Watson, director of Investment Management Group at Richardson GMP, told BNN Tuesday that Canopy will continue to be a leader in consolidating players in the cannabis industry. 

“I think it’s going to be your typical industry starting off with a whole bunch of small players and eventually you’re going to consolidate into big players down the road," Watson said. "Canopy is probably going to be leading that." 

"I think [the cannabis sector] attracts attention because people can relate to it," he added. "And quite frankly, there’s demand for the product."

But Watson warned investors need a "high risk tolerance” if they want to add companies from the industry to their portfolio.