While recovering modest sequential gains in quarterly revenue, Canopy Growth Corp. (TSX: WEED) (Nasdaq: GCG) is continuing to lose market share in Canadian cannabis.
On Wednesday, the firm published its earnings results for the three months ended Dec. 31, with recreational cannabis sales down 18 per cent to $47.8 million from $58.6 million.
Medical cannabis sales in Canada inched down to $12.9 million.
Total revenue from all cannabis segments, which include sales from its recently divested C³ Cannabinoid Compound Company, fell 15 per cent to $83 million from $95.3 million.
But sales were up for many of Canopy’s other divisions, which include vaporizer maker Storz & Bickel (up 13 per cent to $25.2 million) and sports drink company BioSteel (up 56 per cent to $17 million).
Overall, quarterly net revenue rose 7 per cent to $141 million, from $131.4 million. But that’s down 8 per cent from $152.5 million in the third quarter a year ago.
Canopy blamed its slipping traction in cannabis markets on “the continued insufficient supply of flower products with in-demand attributes,” as well as price compression and increased competition.
The company says it’s the top seller of premium flower in Canada with 10-per-cent market share.
Canopy reported a net loss of $115 million. Adjusted earnings before interest, tax, depreciation and amortization came in at a loss of $67 million.
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As of the end of the quarter, cash and short-term investments totalled $1.4 billion.
“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 number-one position in premium flower,” CEO David Klein said in a statement.
“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.”
Interim CFO Judy Hong noted that the company has reduced its operating expenses and capital investments throughout fiscal 2022.
In November, the firm shuttered its one-million-square-foot Niagara-on-the-Lake facility. And in December, it sold its German C³ pharmaceutical subsidiary for $180 million, nearly half of what it paid for the company two years ago.