Aphria reported a net loss of 361 million Canadian dollars (US$287.7 million), or C$1.14 a share for the quarter, which ended Feb. 28. Analysts had expected a net loss of 5 Canadian cents a share. The net loss included about C$264.8 million related to unrealized losses on convertible debentures, C$26.3 million in share-based compensation, and C$12 million in transaction costs. Excluding those figures, the adjusted net loss was 15 Canadian cents a share.

The company reported sales of C$153.6 million for the quarter, down 4.3% from the fiscal second quarter; analysts had expected sales of C$161.3 million, according to FactSet. Aphria’s drug distribution segment accounted for C$87 million of sales. Net cannabis revenue of C$51.7 million was down from C$67.9 million in the fiscal second quarter.

Aphria’s December acquisition of SweetWater Brewing Company in the U.S. helped boost its net beverage alcohol revenue to C$14.8 million from about C$881,000 in the prior quarter.

One reason for the lower numbers was falling pot prices. The average per gram retail selling price of medical cannabis, before excise tax, fell to C$6.69 from C$6.96 in the prior quarter. In the recreational category, the average selling price per gram was down to C$3.82 from C$4.29. The company pointed to consumer trends and price compression in the market. It also cited the pandemic for a dip in demand during the quarter.

The company plans to close a merger with Tilray (TLRY) in the coming months. The combined firm will take the Tilray name, but Aphria CEO Irwin Simon will hold on to his role at the post-merger Tilray.

“We remain excited with the opportunities created for both Aphria shareholders and Tilray stockholders in completing our proposed business combination with Tilray, and believe that together, we will create one of the strongest global cannabis and consumer packaged goods companies in the world,” Simon said in the earnings release.

Write to Connor Smith at connor.smith@barrons.com