Canopy Growth Q3 Loss Sharply Widens; To Cut 60% Jobs Across Businesses

(RTTNews) - Cannabis company Canopy Growth Corp. (CGC, WEED.TO) reported that its third-quarter net loss attributable to the company was C$261.58 million or C$0.54 per share, sharply wider than C$108.93 million or C$0.28 per share in the prior-year quarter.

On average, nine analysts polled by Thomson Reuters expected the company to report a loss of C$0.23 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue for the quarter declined 28 percent to C$113.35 million from C$155.02 million in the same quarter last year. Analysts expected revenues of C$116.88 million for the quarter.

Canopy Growth also announced that it is transitioning to an asset-light model in Canada by exiting cannabis flower cultivation in the Company's Smiths Falls, Ontario facility, ceasing the sourcing of cannabis flower from the Mirabel, Quebec facility, and moving to a third-party sourcing model for cannabis beverages, edibles, vapes, and extracts.

Further, as a result of the cost reduction initiatives undertaken in fiscal 2023, the Company intends to close its Hershey Drive facility in Smiths Falls, Ontario, in addition to reducing headcount across the business by approximately 60%, including 800 positions impacted by the changes announced today, of which 40% are impacted immediately.

The management expects these cost reduction initiatives will reduce annual Cost of Goods Sold and Selling, General & Administrative expenses by a combined $140 million to $160 million over the next 12 months, bringing the total cost reduction target to $240 million to $310 million inclusive of the reductions announced in April 2022.

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