Following the latest set of earnings from Canopy Growth Corp., the company’s chief executive officer expects its cannabis operations will become profitable by the end of the fiscal year, as it works to reduce assets and eliminate debt. 

On Wednesday, Canopy Growth reported a net loss of nearly $42 million in the first quarter, marking an improvement from a net loss a year earlier of around $2.1 billion. The company said it reduced costs by $47 million during the latest quarter. 

Canopy Growth also reported $121.1 million in revenue during the quarter, up from $118.7 a year earlier. The company based in Smiths Falls, Ont., said the increase in revenue was due to the performance of its BioSteel supplement business as well as growth in the Canadian medical cannabis market, and its Stroz & Bickel brand.

David Klein, CEO of Canopy Growth, said in an interview with BNN Bloomberg Thursday that the company has been focussing on an “asset-light model” and on restructuring, which he says will bring the business toward profitability. 

“We believe that as a result of our asset-light strategy, we come out of this fiscal year with our cannabis businesses being profitable, and that clearly eliminates any sort of future cash drag from our operations of our business,” he said. 

Efforts around restructuring have yielded some success, according to Klein, who said the company has begun to see improvements on profitability as “every single one of our business units grew sequentially quarter-over-quarter.” 

“As it relates to our balance sheet we've reduced our debt by over $1 billion dollars. We continue to dispose of non-core assets. We said we would sell $150 million worth of non-core assets, which we would apply to our debt (and) we've already executed on $80 plus million of that,” Klein said. 

However, Klein noted that “there’s a lot of work to be done.” 

In a note to clients Thursday, Tamy Chen, an analyst at BMO Capital Markets, said the company faces challenges and will have to raise money.

“The risk with the stock is that our model still requires the company to raise $200 million in (fiscal year) 2025 to continue operations. Failure to do so would result in a cease of its going concern status,” she said. 

Chen also noted that the BioSteel business continues to be a “material drag” on Canopy’s total losses, despite its “substantial topline sales results.” 

With files from the Canadian Press.