Canopy Growth Corp on Friday reported a bigger-than-expected quarterly loss as its recreational cannabis business lost market share due to delayed product launches.
The company also withdrew its target of becoming EBITDA positive by the end of fiscal 2022 due to uncertainties related to the coronavirus crisis, sending its U.S.-listed shares down over 20 per cent and dragging down other weed stocks.
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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.
But delays in Canopy’s launch of ‘2.0 products’, which include the highly sought brownies, beverages and vapes, hit the company’s recreational revenue in the fourth quarter and pulled down overall revenue by 13 per cent compared with the third quarter.
Added to that, the company had to temporarily shut most of its retail stores in March and is in the middle of a restructuring program that has included divestitures and layoffs in hopes of becoming profitable.