Top cannabis company Canopy Growth faced a market slide Thursday as stocks plunged 17 percent after it reported less than expected earnings stemming from lost sales in the CBD oil products segment.

The Canadian marijuana company lost C$26.9 million ($20.3 million) on returned cannabis oil products from retailers in Canada, according to the latest news

The U.S.-traded shares of Canopy Growth fell 14.38 percent in late afternoon trading on Thursday. Overall the Canopy shares are down more than 40 percent this year. 

The details showed Canopy Growth posted a loss of C$374.6 million ($282.9), or $1.08 a share during the second quarter. In the above quarter, the wrong estimation of demand for oil cost the company C$32.7 million ($24.7 million) in revenue, pulling down the second-quarter sales to C$76.5 million, ($57.7million) excluding excise taxes.

Canopy faced a significant loss from $32.7 million worth product returns due to oil price changes in the CBD oil and soft-gel capsule products. The net revenue slid 15 percent to $76.6 million in the quarter.

However, Canopy Growth Chief Executive Mark Zekulin sought to defend the rocky quarter: “Certainly there was some bad, but there was some good too. There is one bad thing drawing down all the numbers.” 

Zekulin pointed to the positives such as the company’s 25 percent market share, rising Canadian medical sales by 8 percent and an uptick in same-store sales.

One analyst said the fall in sales can be an offshoot of quality issues as well as flawed demand planning. CBD oil is mainly bought for treating pain and inflammation. 

“Possible product-quality issues aside, such write-downs do not inspire confidence about demand planning at Canopy as it moves into derivatives, especially as we think the company is too optimistic about possible sell-through for beverages,” wrote Jefferies analyst Owen Bennett in a note to clients. 

Cannabis Industry executives in the organized sector had been bemoaning the pressure of competition upped by the illicit grey market and a dearth of retail stores to sell legal weed.

It was a bad day for Marijuana stocks Thursday as shares of many players including market leaders Tilray and Cronos Group fell in the red ahead, per stock market news.  Cannabis Leaves Moto Perpetuo Farm owner, Dave Hoyle, says he feed the pigs marijuana byproduct. These are what’s left behind after the parts that can be used for processing have been harvested. Photo: 7raysmarketing / Pixabay

Aurora Cannabis results 

Meanwhile, noted cannabis player Aurora Cannabis announced fiscal 2020 first-quarter results of the period that ended Sept.30 and showed its cannabis sales fell from the previous quarter.

Aurora recorded a gross profit of 53.7 million while reporting overall net sales of 75.245 million Canadian dollars. But the company's adjusted EBITDA loss expanded to 39.7 million.

Aurora announced it would delay the construction of two facilities and save $C190 million ($144 million) over the next several quarters and align production capacity with expected demand.