Canopy Growth Corporation (TSX: WEED) (NASDAQ: CGC) announced its financial results for the fourth quarter and fiscal year 2021 ending March 31, 2021. Canopy Growth’s revenue increased 38% to $148 million. The net losses for the quarter were $617 million, an improvement over 2020’s net losses of $710 million. The company blamed the bloated net losses on non-cash fair value changes of $292 million and impairment and restructuring charges of $75 million primarily related to changes to its Canadian operations that were announced on December 9, 2020.
For the full year, net revenue increased 37% to $546 million over the prior year driven by double-digit growth across Canadian cannabis, international cannabis and other consumer products businesses. Total net cannabis revenue of $379 million in the fiscal year 2021, represented an increase of 28% over the prior year.
The reported fiscal year 2021 net loss of $1.7 billion, a $283 million wider loss than fiscal year 2020, was driven primarily by the year-over-year change in other income (expense), net, the reduction in the income tax recovery, and expected credit losses on financial assets and related charges, and partially offset by the year-over-year improvement in gross margin and reductions in selling, general and administrative expenses, share-based compensation expense, and asset impairment and restructuring charges.
“During Fiscal 2021, Canopy Growth transformed into a CPG-modelled organization, reinforcing a foundation for sustained growth and long-term success. By leveraging consumer insights and innovation to deliver best-in-class products, Canopy Growth is positioned to achieve our goal of unleashing the power of cannabis to improve lives,” said David Klein, CEO, Canopy Growth. “We are starting to see strong momentum across all of our key businesses and remain firmly focused on capitalizing on U.S. opportunities in Fiscal 2022.”
“We made tremendous progress improving our supply chain and right-sizing our manufacturing footprint, bringing supply and demand into balance,” added Mike Lee, CFO. “Our cost savings program is on track to deliver $150 – $200 million of savings within the next 18 months, and we remain committed to our path to profitability by the end of Fiscal 2022 while continuing to invest in an organization that is focused on insights, innovation and gaining momentum in the U.S. market.”
While the losses are staggering, the cash and short-term investments of $2.3 billion on March 31, 2021 give the company a cushion. This was an increase of $0.3 billion from $1.98 billion on March 31, 2020, and reflects net proceeds from a $930 million ( US$750 million ) senior secured term loan announced on March 18, 2021, partially offset by EBITDA losses and capital investments.
Canopy said in a statement that the implementation of supply chain optimization was well underway with network optimization and complexity reduction initiatives expected to realize its previously stated cost savings of $150 million to $200 million by the end of the first half of FY 2023. It also said that the tight-sizing of our Canadian production footprint has improved cannabis supply and demand with the equivalent kilograms of cannabis sold in Q4 2021 exceeding kilograms harvested by over 40%. Overall Inventory levels declined sequentially in Q4 2021 even as finished inventory increased in support of various new product launches.