Canopy Growth Corp.
CGC,
stock fell 5% Thursday after the cannabis company reported a wider-than-expected loss and announced plans to reduce headcount by 800 positions as part of an effort to cut costs.
Canopy Growth CEO David Klein said the changes were “difficult but necessary” to move toward profitability, as the company moves toward an “asset-light model.”
The cannabis company, which faces a challenging cannabis market in Canada, said its third-quarter revenue fell 28% from the year-ago period.
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Canopy Growth said its loss for the three months ended Dec. 31 increased to C$261.58 million, or 54 cents a share, from a loss of C$108.9 million, or 28 cents a share, in the year-ago quarter.
Net revenue dropped to C$101.2 million from C$141 million.
Analysts expected Canopy Growth to lose 21 cents a share on revenue of C$116.9 million, according to estimates compiled by FactSet.
Canopy Growth said it expects to save C$140 million to C$160 million over the next 12 months as a result of its job cuts.
The cost reduction measures also include exiting cannabis flower cultivation at its Smiths Falls, Ontario, facility; stopping the sourcing of cannabis flower from its Mirabel, Quebec, facility, and moving to third-party sourcing for cannabis beverages, edibles, vapes and extracts, the company said.
Canopy Growth stock fell 5% in premarket trades.
Canopy Growth continues effort to win Nasdaq listing for U.S. pot business
Canopy Growth said it continues to “progress” on its effort to establish its Canopy USA (CUSA) listing on the Nasdaq, as unveiled in October.
Canopy Growth said it was prepared to make changes to the structure of its interest in Canopy Growth USA in light of objections from Nasdaq.
It’s unclear whether the Nasdaq will allow the listing because Canopy USA would contain plant-touching business and would thus be off-limits under the current Schedule I classification for cannabis under federal law.
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