Canopy Growth Inc. (CGC), a constituent in the munKNEE Pure-Play Pot Stock Index, has reported extremely disappointing financial results for the third quarter fiscal 2022 ended December 31st, 2021, today despite impressive results from a couple of smaller divisions which were more than offset due to disappointing numbers in Canada.

Q3 Financial Highlights

(All figures are in Canadian dollars and compared to the previous quarter)

• Net Revenue: increased +7.3% to $141.0M
  • Other Revenue: increased +60.7% to $58.0M
  • Cannabis Revenue: decreased -12.9% to $83.0M
    • Business-to-Business Recreational: decreased -25.3% to $31.3M
    • Business-to-Consumer Recreational: decreased -13.2% to $14.5M
    • Canadian Medical: decreased -1.5%to $12.9M
    • International Medical: decreased -18.5% to $9.7M
• Gross Margin: increased to 13% from (52)%
• Adj. EBITDA (Loss): loss decreased -58.5% to $(67.4)M
• Net Income (Loss): loss increased +60.9% to $(115.5)M 
• Cash on Hand: decreased -28.6% to $1.4B

Management Commentary

Despite the dismal Q3 financial results Canopy management tried valiantly to put a positive spin on the company's performance by comparing the Q3 results with those of the same quarter a year ago instead of being front and center and comparing the results with those of the previous quarter to provide investors and potential investors with the true health of the company and a better understanding of the trend of its business as things stand currently.

• David Klein, Chief Executive Officer, said: "In the third quarter we actioned to win where it matters - driving record performance in our CPG business from both BioSteel and Storz & Bickel, while beginning to stabilize our Canadian business including maintaining the #1 position in premium flower. Our continued discipline and focus are expected to fortify Canopy’s competitive positioning in Canada as we ambitiously build our U.S. CPG, CBD, and THC strategies.”
• Judy Hong, Interim Chief Financial Officer, stated: "Throughout fiscal 2022, we continued to reduce our operating expenses and capital investments. With a renewed sense of urgency, we are focused on achieving profitability in Canada by taking additional steps to simplify our business and optimize our expenses, while making strategic investments in key growth areas.”

Stock Performance

As of last Friday Canopy's stock was down -10.1% YTD and now is down -86.1% from its 2021 high and just +18.2% above its 2021 low.