Cannabis-producer Canopy Growth posts even bigger loss

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Expansion plans are on hold due as surplus supply but tepid demand, and a slow rollout of stores, have taken its toll

Bengaluru — On Thursday, Canopy Growth reported a wider-than-expected quarterly loss on soaring expenses and said it will not make any large investments to expand in Canada amid surplus supply and tepid demand for weed and weed products.The decision to hold expansion plans follows a wave of enthusiastic spending by marijuana companies to scale up production, expand in new markets and on research after Canada’s legalisation of recreational cannabis in 2018.

Canada’s recent legalisation of derivative products, dubbed Cannabis 2.0, has also failed to generate much hype and estimates for growth have become more cautious. Canopy also took a restructuring charge of C$32.7m in the second quarter to account for returns, return provisions and price cuts for its softgel and oil products.

Sundial Growers ran into problems earlier in August when tonnes of weed were returned by a buyer because of quality issues. In fact, Tilray’s CEO said on Tuesday that the company regularly inspects crops before buying them.

 

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