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Canopy Growth is set to report its results for the December quarter on Valentine’s Day. MKM Partners analyst Bill Kirk says he expects no holiday love for the report.

Due before the market opens on Friday, the report is, “fraught with risk,” according to Kirk. He wrote in a note Monday that he doesn’t expect the results, for the Canadian marijuana company’s fiscal third quarter, to show much additional revenue from Cannabis 2.0 products such as vapes, edibles, and beverages.

Investors had hoped that the new products, which were finally made legal for sale in Canada in mid-December, could attract a larger audience than traditional pot.

Pot sellers had hoped to begin selling vapes and beverages last year, but Canopy’s launches of both products were pushed into 2020. Although Cannabis 2.0 products may not have contributed to revenue, Kirk expects the results will show lots of new costs associated with ramping up their production.

He also points out that Ontario, one of Canada’s most populous provinces, is still lagging behind smaller provinces in terms of stores opened. A lack of retail outlets has hampered sales. Canopy has said stores could open as rapidly as 40 a month, starting in January, but the province hasn’t achieved that pace, or committed to do so, Kirk said.

Kirk expects Canopy’s results to fall short of investors’ expectations for both revenue and adjusted earnings before interest, taxes, depreciation, and amortization. The consensus view on Wall Street is that the company will have revenue of 105 million Canadian dollars (US$78.8 million) and adjusted Ebitda of negative C$113 million.

Friday will mark a month since David Klein, a former senior executive at Constellation Brands, which owns 38% of Canopy, took over as chief executive officer. Kirk says that with new management, and the challenges pot growers are facing, Canopy is likely to reassess its cost structure, a process that could be followed by things like layoff announcements, facility closures, and goodwill impairments.

Fellow pot growers Tilray (TLRY) and Aurora Cannabis (ACB) have already taken similar steps.

“While necessary, it also serves as confirmation that profit levels and growth continue to be disappointing,” he wrote. “As currently structured, we don’t think Canopy can be a profitable company.”

Kirk maintained a Neutral rating on the stock, noting that as Constellation Brands exerts more control over its Canopy investment, efficiency could improve. Still, Canopy’s inventory levels and production capacity represent risks for the stock if more demand doesn’t materialize, or is delayed. He doesn’t think the company will become profitable until fiscal 2022.

“The path to brand differentiation is long and unpredictable, but Canopy should benefit from greater R&D focus than peers, especially as ‘recreation 2.0’ begins in Canada.

Canopy stock (ticker: CGC) was down 1.7% to US$19.29 Monday morning, while the ETFMG Alternative Harvest ETF (MJ)—a proxy for the pot trade—was down 1%. The S&P 500 index was up 0.3%.

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