Canopy Growth reported a 36% drop in revenue from Canadian recreational cannabis sales compared with the same quarter a year ago.
Canopy Growth stock is plummeting after the marijuana company delivered financial results that fell short of expectations.
The Canadian cannabis company (ticker: CGC) posted a per-share loss of 1.46 Canadian dollars (US$1.15) for its fiscal fourth quarter, while analysts had expected a loss of 30 Canadian cents, according to FactSet. Net revenue for the three months ended in March was C$111.8 million, below analysts’ expectations of C$130 million.
“Achieving profitability is critical and we have undertaken additional initiatives to streamline and drive efficiencies for our global cannabis business,” said CEO David Klein on Friday.
The stock fell 12% to $4.89 on Friday. Canopy stock listed in Toronto (CA WEED) fell similarly to C$6.28.
Compared with last year, revenue from the Canadian recreational cannabis business declined 36% to C$38.9 million in the quarter while medical sales fell 4% to C$13.1 million. Canopy’s revenue from products such as BioSteel, which is a cannabis-based sports hydration drink, was down 3% to C$45.8 million versus the same quarter a year earlier. The company reported slowing marijuana sales in the fiscal third quarter as well.
“We think the cannabis market in Canada will continue to struggle,” said analyst Mike Hickey of Benchmark Research. At the same time, he said, “we don’t see a federal legalization path for [the company] in the U.S. in the near term, leaving limited operational options.” Hickey updated his rating on the stock to Sell from Hold Friday morning. While…