Cannabis venture capital firm Canopy Rivers Inc. (OTC: CNPOF) reported its fourth quarter and fiscal year results for the period ending March 31, 2020. Revenue was flat at $2.5 million for the quarter in 2020, while the net losses ballooned to $30 million from 2019’s net income of $3.5 million.

For the full fiscal year, Canopy Rivers reported an operating income of $11.9 million versus 2019’s operating income of $4.8 million. The net loss for the year was $40 million versus last year’s net income of $3.9 million. The basic earnings per share were ($0.22) versus $0.03 for 2019.

“The global economic uncertainty brought on by COVID-19 capped off a volatile and challenging year for the cannabis sector. Despite these challenges, I am pleased with what our team achieved last year. However, we were not immune to this volatility, and following a strategic and operational review of our business, we recently announced a number of changes aimed at strengthening our financial discipline and positioning Canopy Rivers for sustained success moving forward,” said Narbé Alexandrian, President, and CEO of Canopy Rivers. “Reflecting on the past year, there were several significant achievements that make me optimistic for fiscal year 2021. First, our portfolio companies reached new milestones, including the licensing of PharmHouse, the expansion of TerrAscend’s U.S. operations, and ZeaKal’s successful trials of its PhotoSeed technology. Second, our graduation to the TSX and the launch of our Strategic Advisory Board signalled our company’s continued maturation. Finally, we made four new investments, including two in ag-tech, which we believe is a critical component of the value chain that is poised to disrupt the cannabis sector.”

Operating expenses were $3.5 million for the quarter, of which $1.2 million (or approximately 36% of the total) related to share-based compensation, a non-cash expense. Following the compensation boost,  the company announced a series of organizational changes focused on generating net positive cash flows from operations. This included layoffs, a cut in directors’ compensation, marketing expenses, and general corporate expenses.

“While headwinds persist, we remain positive as we evaluate new opportunities that we believe will ultimately create value for our shareholders and help build the cannabis industry of tomorrow,” added Alexandrian.

The company’s share of loss from equity method investees was $3.2 million for the quarter. This included equity interests in Canapar Corp.,  Herbert, High Beauty, Inc., LeafLink Services, PharmHouse, and Radicle. Canopy Rivers said it expects these investees to continue to generate net losses in the near term due to the early-stage nature of these businesses as they continue to ramp-up operationally.

Canopy Rivers also recognized impairment charges of $11.2 million for the quarter The charges were attributed to economic and regulatory uncertainty caused by COVID-19, a slowdown in retail distribution in both Canada and the United States, and a slower-than-expected ramp-up of commercial activities for certain entities.

The company also said it took a hit from the decline of share price for its investment in TerrAscend and James E Wagner Cultivation Corporation, the latter of which recently filed for protection under the Companies’ Creditors Arrangement Act.

“Looking back on FY 2020, it is clear that cannabis companies encountered challenging conditions in the capital markets over those 12 months, and the impact of this shows in our financial results for the fiscal year,” said Eddie Lucarelli, CFO of Canopy Rivers. “However, we believe that this is more of a function of the slower-than-expected pace of development of the cannabis economy, rather than its long-term potential, which we continue to believe is significant. Based on our available cash resources and deep sector insights, we believe we are well-positioned to capitalize on the current market conditions and strengthen our portfolio of cannabis disruptors.”