Cannabis producer Canopy Growth Corp. on Friday reported a bigger loss for the fourth quarter, hit by non-cash charges of $743-million related to its recent restructuring actions and impairment of some assets.
The company’s U.S.-listed shares fell more than 13 per cent in premarket trading and dragged down other stocks in the industry between 2 per cent and 5 per cent.
Medical cannabis was the only bright spot, while Canopy’s revenue from recreational markets at home in Canada and internationally slumped in double-digit percentages.
The COVID-19 pandemic, which has upended financial markets, was expected to give cannabis companies a boost as customers were seen stockpiling pot brownies and other products to cope with lockdowns.
However, Canopy struggled as it had to temporarily shutter most of its retail stores in mid-March and it undertook a massive restructuring program that included divestitures and layoffs in its efforts to find a path to profitability.
Ontario-based Canopy Growth’s net loss attributable to the company widened to $1.3-billion, or $3.72 per share, in the quarter ended March 31, from $379.5-million, or $1.10 per share, a year ago.
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