Canopy Growth shares fall 10% as cannabis company misses earnings expectations

Canopy Growth Corp. shares were down more than 10 per cent Thursday after the cannabis producer reported first quarter results that widely missed analysts' expectations.

Canopy reported Wednesday it lost $1.28 billion during the three months ended June 30, its fiscal first quarter of 2020, compared with a loss of $91 million in the first quarter of fiscal 2019.

The loss equalled $3.70 per share, compared with a loss of 40 cents per share in the prior year.

The Smith Falls, Ont.-based company said the increased loss is mainly due to a non-cash loss of $1.18 billion on the extinguishment of warrants held by alcohol giant Constellation Brands Inc., which invested $5 billion last November.

The company generated $90.5 million in net revenues, up from $25.9 million a year earlier, before recreational marijuana was legal in Canada.

Analysts had predicted the company would book a loss of 70 cents per share on $107.1 in revenue, according to financial data firm Refinitiv.

Canopy shares were down $4.45, or 10.45 per cent, at $38.12 in mid-morning trading on the Toronto Stock Exchange, the lowest level since January.

In July, the company's co-chief executive and board member Bruce Linton was pushed out a week after Constellation Brands it was "not pleased" with Canopy's recent year-end results.

Canopy appointed Mark Zekulin CEO and said he will work with the board to begin a search to find a new leader to guide the company in its next phase.