Cannabis producer Canopy Growth slips after a disappointing earnings report (CGC)

Shares of the company declined as much as 7% on the news.
The company attributed the miss to increased investment on sales, marketing, and administrative costs.
Watch Canopy Growth trade live .

Canopy Growth is not flying high.

Shares of the Canadian cannabis company declined as much as 7% in early trading on Friday after the company released fourth-quarter that missed analyst expectations after the close of trading Thursday. The firm also released full-year fiscal 2019 earnings results.

Here's what the company reported for the fourth quarter, compared to what analysts surveyed by Bloomberg expected:

Adjusted loss per share: C$0.98 versus C$0.32 (expected)
Revenue: C$94.1 million versus C$92.2 million (expected)
Adjusted EBITDA loss: C$97.7 million versus C$63.8 million (expected)

The company attributes the large reported losses as "reflective of the investments made in fiscal 2019 sales and marketing, and general and administration costs."

"With more product formats coming to the Canadian market later in the year, we are working hard to ensure that we are ready to hit the ground running with products, formats and brands that Canadians trust," Bruce Linton, co-CEO of Canopy Growth, added in a press release.

Fiscal 2019 which includes the 12 months ended March 31 was a year of continued expansion across key markets, the company said. It's become one of the largest cannabis companies in the Canadian cannabis market, and has expanded beyond Canada's borders as well.

The company has ramped up spending on research and development of new products, both medical and recreational. Spend on general administration has also increased as the company looks to expand operations ahead of market expansion Canopy launched 23 cannabis retail stores this year, and shipped 24,300 kilograms of product.

The company also had increased compliance costs associated with meeting Health Canada regulatory requirements and public company costs from listing on the TSX and NYSE.

Part of Canopy's growth strategy has been to acquire other companies to increase its distribution, growing capacity and footprint. In April, Canopy announced that it was seeking to purchase Acreage, another Canadian cannabis cultivation company that holds a number of processing and dispensing operations in the US.

Canopy is counting on the US market and expects rapid expansion in the US CBD market it hopes to bring CBD products to market by the end of fiscal 2020. Wall Street thinks that the $1 billion market for CBD, a compound found in cannabis that does not get you high, could balloon to as much as $16 billion by 2025.

Shares of Canopy Growth were up 63% year-to-date through Thursday.