The Cann Group Ltd (ASX: CAN) share price is falling during morning trade. This follows the cannabis company's announcement of a revised revenue guidance for FY21.
At the time of writing, Cann shares are exchanging hands for 43 cents, down 2.27%.
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What's dragging the Cann share price down?
Investors are selling off Cann shares today after digesting the company's update.
In today's release, Cann advised that a number of delays have affected its revenue guidance for FY21.
In particular, third-party manufacturing and starting material supplier issues have pushed back its shipping schedule. This means that customers will receive Cann products at a later date than originally expected, resulting in deferred revenue receipts.
The company also noted that its international regulatory submissions to enter new markets has been extended. This relates to both local and overseas market clearances. However, Cann is working hard to have its order and fulfilment cycle more streamlined, especially to Germany.
As a result, Cann is forecasting revenue to fall between $4 million and $5 million for FY21. This compares to its earlier revised guidance projections of $8 million to $10 million on 15 February. The remaining balance of the latter revenue assumption is expected to roll into FY22.
At the end of April, the group dispatched more than 20,000 bottles of cannabis extract to its German customer and partner, iuvo Therapeutics. Those products have since been GMP-released for sale, with the company stating that initial sales look promising.
Furthermore, its United Kingdom market is tracking along nicely, with a pipeline of orders scheduled in FY22.
Words from the CEO
Cann group CEO Peter Crock touched on the company's performance, saying:
We have continued to make really important headway this year, and while timelines have been frustratingly drawn out, in some part due to COVID, the achievements we have made in securing regulatory pathways, and the foundations we have set for supply to Australian patients and export markets stands us in good stead.
We have also strengthened our future revenue base with the recent acquisition of Satipharm and access to an important differentiated technology platform. Further, we have demonstrated an ability to deliver sizable orders to our customers, as shown by our delivery to iuvo last month.
Cann shares have been on a steady decline over the past 12 months, shrinking in value by more than 60%.
