Canopy Growth Corp (TSX:WEED)(NYSE:CGC) released its quarterly results on Wednesday as the company closed out its fiscal year. Sales of $22.8 million were up 56% from last year, but the company’s expenses outpaced revenue growth as Canopy Growth posted a net loss of $54 million, which is more than four times the $12 million loss that it recorded last year.
Operating expenses more than doubled from last year and the company also incurred other expenses totaling more than $10 million.
For the full fiscal year, Canopy Growth sold 8,708 kilograms, for an increase of 70% from last year and it harvested 22,513 kg, which is more than double last year’s total of 10,837 kg.
The average selling price was $8.24, which is 11% higher than the $7.40 it averaged a year ago. This might raise alarm bells for investors given that even at a higher selling price Canopy Growth was nowhere near profitable, and actually moved further away from breakeven.
At this point it seems unlikely that amid all the growth that’s likely to happen once pot sales commence that Canopy Growth will be able to turn a profit. With many moving parts there will be a lot of costs incurred to ensure that everything goes smoothly, and that’s not going to make it any easier to stay out of the red.
The stock was down more than 10% on the poor results and it has dropped significantly from the high it reached last week when it was trading at over $48, for a decline of more than 20% since then.
