(Bloomberg) — Canopy Growth Corp. reported a negative gross margin for its most recent quarter, showing just how far the cannabis company has to go to reach profitability.
The big hit came from writing down C$87 million ($69.8 million) worth of cannabis inventory after demand was less than expected in Canada, Canopy’s biggest market. That resulted in gross margin of negative 54% for its fiscal second quarter, the company reported Friday .
The company wracked up a loss of C$163 million in adjusted earnings before interest, depreciation and amortization. Analysts expected a loss of C$50.2 million, according to estimates compiled by Bloomberg. After the setback for the quarter, which ended Sept. 30, Canopy pushed out its goal to hit positive adjusted Ebitda, without giving an exact timeline.
Canada’s marijuana market has been disrupted by delays in distributing Covid-19 vaccines, which has slowed the reopening of the economy.
The shares was down 2.7% before the start of regular trading in New York. The stock had declined 46% this year through Thursday.
On a positive note, Canopy’s Martha Stewart CBD line in the US remains one of the fastest growing brands in the industry, the company said.
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