Canadian cannabis producer Canopy Growth (TSX:WEED)(NASDAQ:CGC) has been a company that’s long been plagued with underwhelming numbers and significant losses. Since 2022, the stock has crashed an incredible 94%. Unfortunately, hopes of a turnaround anytime soon are slim, as the company’s financials simply aren’t improving despite the business shutting down facilities and scaling down operations.
Last week, Canopy Growth posted its fourth-quarter earnings numbers, which again proved to be problematic. The net loss for the three-month period ending March 31 was $647.6 million, which was worse than the $588.7 million loss it reported a year earlier. Net revenue totaling $87.5 million also declined by 14%. And the company still had a negative gross margin. Impairment and restructuring charges also continue to be a staple of the company’s financials as Canopy Growth incurred charges totaling $405.1 million relating to those items.
On top of this all, the company has a new headache with its BioSteel segment as it has found issues with its financials and weaknesses in internal controls. Canopy Growth says it is “considering all legal options” due to overpayments it made to BioSteel shareholders due to the overstatements in revenue.
Canopy Growth’s stock spiraled after the release of the latest earnings numbers as things appear to only be getting worse for the business. While the company still promises more cost-cutting efforts, Canopy Growth still has a huge hole to pull itself out of and investors are better off not going on for the ride. Until the company can show a realistic path to profitability, this is a stock investors should avoid.