In FY 2022, the gross margin was 37% as opposed to 12% in FY 2021. Non-cash restructuring costs in CA $124 million and inventory step-up charges from acquisitions of CA $12 million were excluded from the adjusted gross margin in FY 2022, which was impacted by a year-over-year decrease in net revenue and continued price compression in the Canadian recreational business, inventory write-offs and higher third-party shipping, distribution and warehousing costs across North America. The Canadian government has received payroll subsidies in the amount of CA $24 million in FY 2022, compared to CA $6 million in FY 2021, due to a COVID 19 relief program.
Net loss in FY 2022 was CA $320 million, which is a $1,350 million improvement compared to FY 2021, mainly due to non-cash fair value changes, lower operating expenses, including lower non-cash asset impairment and restructuring charges, partially offset by lower gross margins.
In FY 2022, the adjusted EBITDA loss was CA $415 million, a CA $75 million increase in Adjusted EBITDA loss compared to FY 2021, primarily driven by lower sales and a decline in gross margins, partially offset by the reduction in total SG&A expenses.
Free cash flow in FY 2022 was an outflow of CA $582 million, an 8% decrease in outflow compared to FY 2021. The free cash flow outflow decreases relative to FY 2021 due to lower S&GA expenses and reduction in capital expenditures, partially offset by higher cash interest payments.
In Q 4 FY 2022, the gross margin was 142%, compared to 7% in Q 4 FY 2021.
CA $579 million was the net loss in Q 4 FY 2022, which is a CA $38 million improvement compared to Q 4 FY 2021.
A CA $28 million increase in adjusted EBITDA loss compared to Q 4 in FY 2021 was primarily due to lower sales and a decline in gross margins, partially offset by the reduction in total SG&A expenses, which led to an increase in adjusted EBITDA loss in Q 4 FY 2022 million.
Free cash flow in Q 4 FY 2022 was a 2% increase in outflow compared to Q 4 FY 2021, an outflow of CA $127 million.
Cash and short-term investments were up to CA $1.4 billion at March 31, 2022, a decline of CA $0.9 billion from CA $2.3 billion at March 31, 2021, reflecting EBITDA losses, capital investments and the upfront payment made as consideration for the option to acquire Wana Brands upon federal permissibility of THC in the U.S.
Canopy Growth is building the industry's leading portfolio of premium brands across North America. We've taken concrete steps to advance this ambition by strengthening our positioning in Canada and further bolstering our U.S. THC ecosystem through the addition of two high-performing brands in Wana Brands and Jetty Extracts. David Klein, CEO, said in the fiscal year ahead, we will focus on growing our market share in key segments that will drive profitable growth and continue to scale our premium brands across North America.
Canopy Growth shares were trading 12.43% lower at $4.86 per share during Friday's pre-market session.
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