Canopy Growth Q4 Financial Results Were Dismal

By Lorimer Wilson of munKNEE.com

Friday, June 23, 2023 1:35 PM EDT

Canopy Growth Corporation (TSX: WEED) (Nasdaq: CGC) announced its financial results for the fourth quarter ended March 31, 2023 yesterday. All financial information below is reported in Canadian dollars unless otherwise indicated, and compared to the previous quarter.

Q4 Financial Highlights

Total Revenue: -13.5% to $87.5M
- Canadian: -23.4% to $35.7M
  - Recreational: -33.5% to $21.6M
  - Medical: Unchanged at $14.1M
- International: +51.7% to $8.8M
- Total Cannabis: -15.1% to $44.5M
  - Share of Total Revenue: down to 50.9% from 51.8%
- Other Consumer Products: -11.9% to $43.0M
  - BioSteel (beverages): +17.6% to $19.3M
  - Storz & Bickel (vaporizers): -23.3% to $15.5M
  - This Works: -34.9% to $5.4M
  - Other: -28.2% to $2.8M
- Consumer Products Share of Total Revenue: up to 49.1% from 48.2%
Net Income (Loss): Loss increased 142% to $(647.6)M
Adj. EBITDA: Loss increased by 9.3% to $(95.6)M

Management Commentary

David Klein, Chief Executive Officer, said:

“...Paired with continued progress in our Canopy USA strategy which enables a fast start, the Company is well positioned as it strives towards its goal of long-term North American cannabis leadership.’’

Judy Hong, Chief Financial Officer, said:

“Our actions...have streamlined the organization, reduced costs, and eliminated a significant portion of Canopy Growth’s debt...[and we] have several initiatives...underway to further reduce the operating cash burn in the businesses and improve our balance sheet, including facility divestitures that are anticipated to generate proceeds of up to $150 million in Fiscal 2024.”

Recent Stock Performance

The stock price:
- declined 40% during the 3-month period of Q4 (January, February, March),
- declined a further 67% between March 31st and yesterday, June 22nd and had
- declined another 10% as of mid-day, today, June 23rd, as a result of the release of the Q4 financial report.