Canopy Growth Reports First Quarter Fiscal 2026 Financial Results; Cannabis Revenue Increased 24% Year-Over-Year

Executive Summary

• Canopy Growth reported Q1 FY2026 financial results showing a 9% year-over-year increase in consolidated net revenue to $72.1 million CAD, driven by strong growth in the Canada adult-use cannabis segment.
• The company achieved $17 million of its $20 million annualized savings target since March 1, 2025, with SG&A expenses down 21% year-over-year, though gross margins contracted significantly due to product mix shifts and lower sales in high-margin international markets.
• The company announced the appointment of Margaret Shan Atkins to its Board of Directors, effective August 6, 2025, and provided updates on supply chain improvements and new product launches.

Key Details

• Financial Performance (Q1 FY2026):
  • Net Revenue: $72.1 million CAD (up 9% from $66.2 million in Q1 FY2025).
  • Gross Margin: 25% (down from 35% in Q1 FY2025).
  • Net Loss from Continuing Operations: $(41.5) million CAD (vs. $(129.2) million in Q1 FY2025).
  • Adjusted EBITDA: $(7.9) million CAD loss (vs. $(5.3) million loss in Q1 FY2025).
  • Free Cash Flow: $(11.6) million CAD outflow (improved from $(55.7) million outflow in Q1 FY2025).
  • Cash Position: Cash and short-term investments increased to $144 million CAD at June 30, 2025, from $131 million CAD at March 31, 2025.
• Segment Performance:
  • Cannabis Segment: Net revenue of $57.0 million CAD (up 24% from $46.1 million).
    • Canada Adult-Use: Net revenue of $27.0 million CAD (up 43% from $18.9 million), driven by increased distribution and demand for infused pre-rolled joints (PRJs). Claybourne infused PRJ sales increased 58% sequentially.
    • Canada Medical: Net revenue of $21.2 million CAD (up 13% from $18.8 million).
    • International Markets: Net revenue of $8.8 million CAD (up 5% from $8.4 million), driven by increased flower shipments to Europe, offset by declines in Australia.
    • Cannabis Gross Margin: 24% (down from 33%), impacted by a shift to higher-cost manufactured products in Canada and lower sales in the high-margin Poland market.
  • Storz & Bickel Segment: Net revenue of $15.1 million CAD (down 25% from $20.1 million), attributed to lapping strong prior-year sales and consumer economic uncertainty.
    • Storz & Bickel Gross Margin: 29% (down from 39%).
• Operational Updates:
  • Cost Savings: Achieved $17 million of the planned $20 million annualized savings target since March 1, 2025.
  • Supply Chain: Improvements in international markets are expected to increase cannabis supply and margin consistency in Europe in the second half of FY2026.
  • Product Launch: A new Storz & Bickel vaporizer is expected to launch in the second half of calendar year 2025.
  • Margin Improvement Actions: Deployment of automation technology, increased PRJ production capacity, and pursuit of margin-accretive bulk cannabis sales in Canada and Europe.
• Governance:
  • Board Appointment: Margaret Shan Atkins appointed to the Board of Directors effective August 6, 2025. She brings experience from Bain & Company, a Fortune 15 public retailer, and current board roles at Darden Restaurants and SpartanNash.

Notable Quotes

• Luc Mongeau, CEO: "We delivered strong top line growth in the first quarter of fiscal 2026, led by momentum in our Canada adult-use cannabis business where we’re gaining share in high-demand categories, and steady performance across our global medical cannabis business. This reflects the early impact of our focused commercial strategy and a more disciplined execution. I’m confident we can continue to build on this momentum through the remainder of the year."
• Tom Stewart, Interim CFO: "Our financial discipline has already delivered meaningful operating expense reductions, and we see further opportunity to simplify and focus the business. Improving gross margin remains a key priority while maintaining topline performance in all areas of the business. These actions are critical to strengthening our financial position through the remainder of fiscal 2026 and ultimately achieving Adjusted EBITDA profitability."