MediPharm Labs (OTC:MEDIF) was not a bright star in the marijuana industry on Thursday. The cannabis-extraction specialist's stock took a nasty hit following the release of Q1 of fiscal 2020 results that morning.
MediPharm recorded some dramatic declines during the period. Revenue fell by nearly 50% on a year-over-year basis to 11.1 million Canadian dollars ($8.2 million). This represented a deeper sequential fall, as the Q4 2019 result was CA$32.4 million ($23.9 million).
The situation wasn't any happier on the bottom line. MediPharm posted a pre-tax net loss of just over CA$22 million ($16.2 million). That was far deeper than the year-ago shortfall of roughly CA$325,000 ($239,830) and the preceding quarter's CA$2.4 million ($1.8 million) loss.
Few analysts follow the stock, so it was not immediately clear what the general expectations were for the quarter.
MediPharm attributed its declines to a reduction in both the selling prices and volume of its bulk extracts. This, it said in the earnings release, was due to "continued muted demand in the Canadian bulk wholesale market." Although the company has been notching successes in foreign markets such as Australia lately, it's still heavily anchored in its native country.
The SARS-CoV-2 coronavirus also had a deleterious effect on the company's business. MediPharm said that delayed dispensary openings led to lower orders for its goods. Finally, a CA$12.8 million ($9.4 million) inventory writedown hurt the bottom line considerably.
The company did, however, sound an optimistic note on its prospects. "The Canadian market is still developing and MediPharm Labs will be the beneficiary as retail channels and available products expand," it wrote.
Investors seem to feel differently, though. MediPharm's shares cratered by almost 14.3% on Thursday, a far worse performance than that of the broader stock market.