Amid Restructuring, Canopy Takes $2.5 Billion Net Loss, But Sees Path To Profitability
June 27, 2023Ontario-based cannabis producer Canopy Growth saw sales decline 21% to C$403 million ($306m) in its fiscal year through March, with adjusted EBITDA registering a loss of C$350 million ($266m). The company’s total net loss for the year came to C$3.3 billion ($2.5b), driven by a C$1.9 billion ($1.4b) increase in asset impairment and restructuring costs as well as C$1.2 billion ($912m) in non-cash fair value changes.
But Canopy has been in the midst of a series of actions realigning and right-sizing its business, including the divestiture of its retail operations, closing several cultivation locations, and changing its vape sourcing, as well as corporate restructuring. Those actions are expected to drive an overall cost reduction of C$240-C$310 million by the end of the next fiscal year, and they’ve already reduced Canopy’s debt position by approximately C$500 million. One bright spot in the marketplace currently is the company’s Tweed brand, which saw a resurgence in popularity and has risen to the No.-9 ranking in the Canadian adult-use market. In the most recent quarter, Canopy Growth’s net revenue was down 14% to C$87.5 million, and adjusted EBITDA showed a loss of C$95.6 million.
“Fiscal 2023 was a transformational year for Canopy Growth as we began to implement a comprehensive strategy to accelerate our path to profitability, and position our business to realize the tremendous opportunities ahead,” said CEO David Klein. “Our actions are already yielding results and we expect to realize significant benefits from our cost reduction program in Fiscal 2024. 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.”—Danny Sullivan
Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning. You will also receive the Cannabis edition as part of your subscription.Tagged : cannabis, Canopy Growth
