Canopy Growth Shares Plunge On CA$1.33B Q4 Loss

Cannabis producer Canopy Growth Corp. WEED CGC disclosed Friday a fourth-quarter net loss of CA$1.3 billion ($946.4 million). 

That's up from the loss of CA$347.5 million Canopy posted for the same quarter a year ago.

The Smiths Falls, Ontario-based company reported net revenue of CA$399 million for the quarter, up 76% year-over-year and down 13% quarter-over-quarter. 

Here's a breakdown of what the earnings report revealed:

  • A negative gross margin of 8% for the full year and 85% for the quarter — including one-time restructuring and separate charges — and adjusted gross margins of 26% and 42%, respectively
  • Impairment and restructuring charges of CA$743 million 
  • 17% increase in SG&A expenses during the fourth quarter, compared to the previous period
  • Adjusted EBITDA loss of CA$102 million in the fourth quarter and a loss of CA$442 million for fiscal 2020
  • Gross cash flow decreased by approximately 13% sequentially, to CA$2 billion in the fourth quarter
  • Recreational business-to-business sales fell by 31% sequentially
  • Business-to-consumer sales decreased by 14% during the same period
  • Medical cannabis sales hovered at CA$14.9 million over the past six months

"I am excited to implement our strategy reset and organization redesign over the course of fiscal 2021," CEO David Klein said in a statement. "We have a renewed strategic focus and a clear change agenda that is already underway."

Despite the global health crisis, the company expanded its product portfolio by launching new cannabis-infused beverages, vape and CBD products in both Canada and the U.S., Klein said. 

The company's new approach to the business includes building a presence in select priority markets within the cannabis space and focusing on consumer insights, analytics and product development.

In March, the company inked a CA$80.5-million loan financing arrangement with TerrAscend Corp.'s TER TRSSF subsidiary oriented toward the Canadian market.

Canopy made operational changes in April. It laid off around 85 full-time employees; quit its operations in South Africa and Lesotho; closed an indoor facility in Yorkton, Saskatchewan; and canceled its farming activities in Springfield, New York.

Canopy Growth shares were down 20.25% at $17.33 at the time of publication Friday. 

Courtesy photo.

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