Canopy Growth — Q1 FY2027 Earnings Summary

Financial Performance

• Consolidated net revenue reached $81.2M in Q1 FY2027, a 13% increase year-over-year compared to $72.1M in Q1 FY2026.
• Cannabis segment net revenue was $65.1M, up 14% year-over-year.
• Storz & Bickel net revenue was $16.1M, up 6% year-over-year.
• Consolidated gross margin was 27% in Q1 FY2027, compared to 25% in Q1 FY2026.
• Adjusted gross margin improved to 31% in Q1 FY2027 from 25% in Q1 FY2026, excluding $2.6M in inventory step-up charges related to the MTL Cannabis acquisition.
• Cannabis segment gross margin was 22% (vs. 24% prior year), while adjusted gross margin for the segment was 26% (vs. 24% prior year).
• Storz & Bickel gross margin was 48% in Q1 FY2027, up from 29% in Q1 FY2026.
• Net loss narrowed by 68% year-over-year to $14.6M from $44.9M.
• Adjusted EBITDA loss was $3.2M, a 59% improvement (narrowing of $4.7M) compared to a $7.9M loss in Q1 FY2026.
• Selling, general, and administrative expenses increased 6% year-over-year, driven by MTL Cannabis integration costs offset by headcount reductions.
• Free cash outflow increased to $25.7M in Q1 FY2027 from $11.6M in Q1 FY2026, primarily due to timing of working capital changes.
• Cash and cash equivalents stood at $336.6M as of June 30, 2026, down from $364.7M at March 31, 2026.
• Total liabilities were $415.3M as of June 30, 2026, compared to $421.1M at March 31, 2026.
• Long-term debt was $211.4M as of June 30, 2026, down from $217.1M at March 31, 2026.

Guidance and Future Outlook

• Management anticipates further improvements in financial results, particularly in the second half of fiscal 2027, as the MTL Cannabis integration is completed.
• The company expects the integration of MTL Cannabis to lead to increased supply of high-quality flower, expanded revenue opportunities, and the realization of meaningful synergies.
• Strategy focuses on elevating cultivation to produce a consistent and increasing supply of high-quality flower to support growing demand in Canada and internationally.

Business Segments and Product Lines

• Canada Medical Cannabis: Revenue increased 22% to $25.8M, driven by growth in insured customers and the MTL Cannabis acquisition, partially offset by a reduction in the Veterans Affairs Canada reimbursement rate.
• Canada Adult-Use Cannabis: Revenue increased 10% to $29.7M, primarily due to increased flower sales from the MTL Cannabis acquisition, partially offset by declines in opportunistic bulk sales.
• International Markets Cannabis: Revenue increased 10% to $9.6M, driven by strength in Europe, specifically Poland.
• Storz & Bickel: Revenue grew 6% to $16.1M, attributed to prior-year product portfolio expansion and increasing sales across non-core markets.
• Product Launches: Spectrum Therapeutics introduced new 30 and 90-pack formats for softgels with enhanced dosing options.
• Brand Expansion: The Tweed brand was relaunched in the German medical cannabis market utilizing MTL Cannabis genetics.
• Claybourne: Expanded Frosted Flyers infused pre-roll lineup in Canada with three new 8-pack variety formats and a bundle pack.
• Market Ranking: Canopy Growth improved its adult-use market ranking to #6 overall in Canada, holding top 2 positions in premium flower, infused pre-rolls, and oils & softgels.

Market and Competitive Landscape

• The company is Canada's leading provider of medical cannabis services through Spectrum Therapeutics, Abba Medix, Apollo, and Canada House Clinics.
• Apollo Cannabis Clinics were named Best Medical Cannabis Clinic in the 2025 Toronto Star Readers' Choice Awards.
• The company holds an unconsolidated, non-controlling interest in Canopy USA, LLC, providing exposure to the U.S. THC market.

Risks and Challenges

• The reduction in the Veterans Affairs Canada reimbursement rate for medical cannabis negatively impacted revenue.
• Declines in opportunistic bulk sales offset growth in Canada adult-use cannabis.
• Free cash outflow increased significantly due to timing of changes in working capital items.
• Forward-looking statements highlight risks including regulatory changes in the U.S. and Canada, potential asset impairments, debt refinancing challenges, and integration risks associated with acquisitions like MTL Cannabis and Jetty.
• The company noted a material weakness in internal control over financial reporting that requires remediation.

Management Commentary and Tone

• CEO Luc Mongeau stated that renewed focus and strong momentum established over the past year continued into fiscal 2027, with solid execution across the organization.
• CFO Tom Stewart highlighted that top-line growth and disciplined cost management are enabling progress on profitability measures like gross margin and adjusted EBITDA.
• Management expressed confidence in the integration of MTL Cannabis leading to synergies and further financial improvements in the second half of fiscal 2027.
• The tone reflects a strategic shift toward a focused, consumer-centric cannabis company grounded in quality, innovation, and disciplined execution.

Other Key Points

• Canopy Growth unveiled a refreshed corporate identity featuring a new brandmark with a canopy arch and cannabis plant to reflect its evolution into a modern cannabis company.
• The company acquired MTL Cannabis Corp., which is driving growth in medical and adult-use flower segments and contributing to margin improvements.
• The press release includes detailed non-GAAP reconciliations for Adjusted EBITDA, Free Cash Flow, and Adjusted Gross Margin.
• A conference call and audio webcast were scheduled for August 7, 2026, with CEO Luc Mongeau and CFO Tom Stewart.