What happened

Canopy Growth Corporation (CGC 1.73%), one of the largest cannabis companies in Canada, saw its stock plummet 18.7% this week, according to data from S&P Global Intelligence. The stock closed last Friday at $2.62 per share then fell to $2.16 on Wednesday.

But the share price improved a bit on Thursday, hitting $2.46 after it was reported that U.S. Senate Democrats planned to introduce legislation to decriminalize marijuana at the federal level. While the news is good for all cannabis stocks, any decriminalization faces long odds of passing in an evenly divided Senate. Canopy Growth stock now has a 52-week low of $2.13 and a 52-week high of $20.73. 

So what

The stock is down more than 74% this year, so another bad week was hardly a surprise for investors. The overall cannabis market has been hit hard -- the AdvisorShares Pure Cannabis ETF is down more than 57% this year -- but Canopy Growth's problems go even deeper.

The company had a disappointing fiscal 2022 fourth-quarter report. It said revenue for the quarter, which ended March 31, was 111.8 million Canadian dollars ($85.78 million), down 25% over the previous year's quarter; yearly revenue was CA$520  million ($399 million), down 5% compared to 2021. Canopy Growth also lost CA$122 million ($93.6 million) in adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) in the quarter, down 30% year over year. For the year, it lost CA$415.4 million ($318.74 million) in adjusted EBITDA, down 22% over 2021. The one positive was that the company cut its net income losses, posting a net loss of CA$579 million ($444.2 million) in the quarter, an improvement of CA$38 million ($29.2 million) over the same period last year. Canopy also said it lost CA$320 million ($245.5 million) for the year, compared to a net income loss of CA$1,670 million ($1,281 million) in fiscal 2021.

Now what

Canopy Growth may still have further to fall. The company still has a large debt load: As of March 31, it reported it had CA$1.5 billion ($1.2 billion) in long-term debt. Its recent stock sale diluted its value to shareholders. It has lost market share to competitors, and its profit margins have eroded. Investors will likely wait until they see the company making a profit, or at least getting closer to making a profit, to get excited again about the stock.