By Ketki Saxena
Investing.com – Canopy Growth Corp (TSX:WEED) posted its third quarter earnings earlier today, posting a widening net loss, and declining revenues year over year.
Net loss amounted to $266.7 million or 54 cents per diluted share for the quarter ended Dec. 31, compared with a net loss of $115.5 million or 28 cents per diluted share in the same quarter a year earlier.
Net revenue totalled $101.2 million, down from $141.0 million a year earlier.
But the disappointing results are not the only factor that made Canopy the worst performer on the TSX today (With shares down nearly 16% in late afternoon trading) and amongst one of the most heavily traded/sold stocks today.
The company also announced a round of mass layoffs - cutting 800 positions or roughly 35% of its workforce - in yet another cost cutting measure as it seeks to achieve profitability.
The company expects to take a pre-tax charge of between $425 million to $525 million related to the job cuts.
Canopy also announced that will also stop growing cannabis at two facilities in Ontario and Quebec.The company will also exit production in certain product lines, including vapes, beverages, and edibles, for which it will seek third parties. The company will also outsource its research and development department to Quebec based EXKA Inc, instead of developing future in house strains.
Canopy will continue to focus on higher margin categories like flower. Canopy also plans to reorganize some of its departments, and close its hallmark headquarters at 1 Hershey drive, a former Hershey’s factory, in Smith Falls near Ottawa.
Canopy said it will wind down operations at 1 Hershey Dr., a site in Smiths Falls, just south of Ottawa, where chocolate company Hershey once had a factory.company close its hallmark 1 Hershey facility a
“Canopy must reach profitability to achieve our ambition of long-term North American cannabis market leadership,” said David Klein, Canopy's chief executive officer, in a statement. “We are transforming our Canadian business to an asset-light model and significantly reducing the overall size of our organization. These changes are difficult but necessary to drive our business to profitability and growth."