Canopy Growth Corp. reported mixed third-quarter results on Wednesday as the company's revenue continued to decline amid a hyper-competitive Canadian cannabis market while reporting a steeper-than-expected loss. The Smiths Falls, Ont.-based company said cheaper pot prices led to a 20 per cent annual decline in its cannabis business to $83 million despite ongoing efforts to address quality and other consumer issues.

"In the third quarter we actioned to win where it matters - driving record performance in our CPG business from both BioSteel and Storz & Bickel, while beginning to stabilize our Canadian business including maintaining the number one position in premium flower,” said David Klein, chief executive officer at Canopy, in a statement.

“Our continued discipline and focus are expected to fortify Canopy's competitive positioning in Canada as we ambitiously build our U.S. CPG, CBD, and THC strategies."

Canopy said its revenue fell by eight per cent to $141 million in its fiscal third quarter while posting an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $67.4 million. Analysts polled by Bloomberg expected Canopy to post $137 million in revenue while booking a $65 million adjusted EBITDA loss.

Also weighing on Canopy's results was a stark decrease in the company's gross margins, which fell to seven per cent from 16 per cent a year earlier as a result of price compression in the Canadian cannabis market and higher supply chain costs.

Canopy's cash position - which has eroded since its main backer Constellation Brands Inc. invested $5 billion in the company in 2018  - further declined by $900 million to $1.4 billion. The cash burn was attributed to the company's EBITDA losses, capital investments, and the upfront option payment to acquire Wana Brands. Canopy also wrote off $36.4 million in asset impairment and restructuring costs in the quarter.

The company did see some revenue gains in the quarter from its BioSteel sports drink and Storz & Bickel accessory business. Those brands helped sales from Canopy's consumer products business rise 19 per cent to $58 million.