When a company reveals a $1.7-billion annual net loss — as Canopy Growth did on Tuesday — then asserts “very high degree of confidence” it will turn a profit in another year, you could be forgiven some doubt.

On the other hand, the Smiths Falls enterprise is capable of delivering surprising story lines. To date these have come in two separate acts.

First, from the moment Canada legalized recreational marijuana on Oct. 17, 2018, Canopy Growth moved with stunning speed to build a global enterprise that on Tuesday reported net revenues of $547 million for the fiscal year that ended March 31. The second act, still underway, features the company crunching itself into a self-sustaining business.

“There’s been a massive restructuring across the entire business,” said David Klein, Canopy Growth’s CEO since January 2020. “A  lot of work is underway, but a lot of work is behind us.”

Klein is a former executive with the U.S. alcohol giant Constellation Brands, which in the fall of 2018 invested $5 billion in Canopy Growth. The U.S. firm was keen to diversify into a new and faster-growing industry.

But by last March 31, Canopy Growth’s cash balance had shrunk to $2.3 billion, reflecting the firm’s frenetic investments in production facilities, corporate acquisitions, physical stores and people, much of the activity organized by company founder Bruce Linton.

Enter Klein and chief financial officer Mike Lee, another Constellation alumnus, with the mandate of narrowing Canopy Growth’s focus on profitable product lines.

Last December they shuttered company operations in St. John’s, Fredericton, Edmonton, Bowmanville, Ont., and Saskatchewan, part of a restructuring that cost $400 million in the third fiscal quarter.

It’s been a delicate balancing act. Canopy Growth is set this month to close a $435-million deal to buy Supreme Cannabis of Toronto for access to that company’s popular 7ACRES cannabis brand (among others) along with a highly efficient greenhouse operation. Klein said that, when the deal closes, it will ensure Canopy Growth’s status as the No. 1 provider of recreational marijuana in Canada.

However, the former Constellation executives made clear Tuesday that their main preoccupation in coming months would be the United States, where they are hopeful Congress will soon legalize the sale of marijuana federally.

Although most states allow the sale of either medical or recreational marijuana, foreign-based firms such as Canopy Growth since late 2018 have been limited to product lines that contain CBD (cannabidiol, the calming ingredient in marijuana). Sales of products with THC, the psychoactive component of marijuana, are illegal.

Canopy Growth has spent heavily to prepare for full legalization in the U.S., notably through its investment in Acreage Holdings. But in the meantime it has developed a wide range of products — sports drinks, skincare products, gummies, among others — blended with CBD. Often these are developed and tested in Canada before being offered south of the border.

The CBD products are boosting Canopy Growth’s top line. The main brand names — Storz & Bickel (vaporizers), BioSteel (sports drinks) and This Works (skincare) — accounted for nearly one-third of Canopy Growth’s net revenues in both its most recent quarter and for the year as a whole.

Revenue growth for these consumer products topped 65 per cent in the fourth quarter compared to 27 per cent for the rest of the company’s net revenues.

Even with this kind of improvement, Canopy Growth still registered a $233-million loss on fourth-quarter operations. While that was down considerably from the $991 million operating loss posted in the same period a year earlier, it showed how much momentum the company required to reach break-even.

“This is going to be the year of growth across Canada and the U.S.,” Klein declared at one point during his Tuesday conference call with financial analysts.

Investors weren’t so sure. The company’s shares closed at US$24.28 on New York’s Nasdaq exchange, down seven per cent on the day, while Canadian investors, seemingly a more sanguine lot, bid down the value of the firm’s shares three per cent on the TSX to C$29.33.