Canopy Growth Q4 Earnings Call Highlights

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Canopy Growth (NASDAQ:CGC) reported higher fiscal fourth-quarter revenue and said it entered fiscal 2027 with a stronger balance sheet following a year of restructuring, cost cuts and the acquisition of MTL Cannabis.

On the company’s earnings call, Chief Executive Officer Luc Mongeau described fiscal 2026 as “a defining year” for Canopy Growth, saying the company streamlined its operations, reset its cost base and reallocated resources toward areas it sees as offering stronger long-term returns.

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“These actions are now beginning to show up in the business,” Mongeau said. He cited full-year net revenue growth of 20% in Canada adult-use cannabis and 18% in Canada medical cannabis, along with what he called improved execution across the company’s platform.

Fourth-quarter revenue rises 10%

Chief Financial Officer Tom Stewart said Canopy reported net revenue of CAD 71.2 million in the fourth quarter of fiscal 2026, up 10% from the same quarter a year earlier. Cannabis net revenue was CAD 54.5 million, an increase of 20% year over year.

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The company’s Canada medical cannabis business delivered CAD 25.3 million in fourth-quarter revenue, up 27% from a year earlier and marking what Stewart called another record quarter. He said the growth was driven by continued expansion in insured patient registrations and efforts to improve the service experience for medical consumers.

International cannabis revenue was CAD 8.6 million in the quarter, up 68% year over year. Stewart said the increase was largely driven by growth in Poland and Germany, where supply chain improvements helped deliver another quarter of growth.

For the full fiscal year, Mongeau said total net revenue increased 6% to CAD 285 million, driven by growth in the Canadian medical and adult-use businesses. He said Canada medical posted positive year-over-year growth in all four quarters, supported by a larger product assortment and increased order sizes as Canopy expanded its insured customer base.

MTL Cannabis integration begins

Mongeau called Canopy’s acquisition of MTL Cannabis the “defining milestone” of the year, saying the transaction established Canopy as the leading Canadian medical cannabis business by revenue. MTL had been part of Canopy for two months at the time of the call.

The company is already executing on CAD 6 million of a targeted CAD 10 million in annualized cost synergies, Mongeau said. Stewart said the savings include the elimination of MTL public company costs, headcount reductions and the rationalization of redundant facilities. Canopy expects to reach its CAD 10 million run-rate savings target within 18 months of the transaction closing.

Stewart said Canopy has decided to close its cultivation facility in Kelowna, British Columbia, as it focuses on scaling cultivation capacity at its GMP-certified Kincardine facility and MTL’s facilities in Quebec.

Mongeau said the benefits of the MTL deal extend beyond cost savings, noting that Canopy is using its distribution platform to expand the reach of MTL products, including a recently announced launch of MTL strains in Germany. He also said MTL’s cultivation capabilities are being shared more broadly across Canopy’s network.

Margins affected by acquisition-related inventory charges

Canopy’s cannabis gross margin in the fourth quarter was CAD 3.7 million, or 7% of net revenue. Stewart said the margin was below the company’s typical range primarily because of CAD 10.7 million in inventory-related charges tied to the MTL acquisition.

As part of the integration, Canopy conducted a review of the combined inventory and product portfolio and chose to reduce redundant and overlapping inventory, Stewart said. The company also recognized costs associated with the accounting step-up on acquired inventory balances.

Excluding acquisition-related charges, Stewart said adjusted gross margin for the cannabis segment was 26% in the fourth quarter, compared with 12% in the prior-year period.

The company reported an adjusted EBITDA loss of CAD 6 million in the fourth quarter, a CAD 3 million improvement from the prior year but higher than the CAD 3 million loss in the third quarter. Stewart said that absent the inventory charges, Canopy would have shown sequential improvement and moved “significantly closer” to adjusted EBITDA breakeven.

Stewart said Canopy remains confident in reaching positive adjusted EBITDA during fiscal 2027, citing expectations for continued revenue growth and lower costs.

Balance sheet strengthens after recapitalization

Canopy ended fiscal 2026 with CAD 365 million in cash after completing the MTL acquisition. Stewart said total debt stood at CAD 234 million, resulting in a net cash position of CAD 131 million.

Compared with the end of fiscal 2025, Stewart said Canopy improved its financial position by CAD 304 million, moving from net debt of CAD 173 million to net cash of CAD 131 million. He said the company now has greater financial capacity to support growth and potential inorganic opportunities.

Stewart also said Canopy did not make sales under its at-the-market program during the fourth quarter, but may use the program opportunistically in fiscal 2027 to support strategic priorities if they arise.

Fiscal 2027 priorities include Canada, Europe and profitability

Looking ahead, Mongeau said Canopy is focused on capital allocation toward higher-return opportunities, cost management and execution. He said the company’s priorities include accelerating growth in Canadian recreational cannabis and Europe while pursuing positive EBITDA and positive cash flow.

In Canada adult-use cannabis, Mongeau said Canopy returned to growth in fiscal 2026 as net revenue increased 20%. He said growth was driven by innovation in categories such as infused pre-rolls, vape and THC flower. He added that May 2026 market share data showed Canopy had improved from the No. 8 overall ranking to No. 6.

Mongeau said the company’s longer-term aspiration is to become a top-three player in Canadian recreational cannabis. He pointed to opportunities in flower, pre-rolls, infused pre-rolls and vape, including the 510 vape category, where he said Canopy is “almost absent.”

In Europe, Mongeau said Canopy had reset operations to improve the flower supply chain, after earlier challenges in fiscal 2026. He said the company delivered strong sequential growth in the last two quarters and expects Europe to remain an important focus. Canopy is targeting expansion into the U.K. during fiscal 2027.

Storz Bickel revenue declined for the year due to challenges in the U.S. and Germany, Mongeau said. He noted that the launch of the VEAZY vaporizer helped sales in a new category focused on affordability and portability. The company is now focused on cost optimization and a refreshed commercial approach in the U.S.

During the question-and-answer portion of the call, analysts asked about changes to Veterans Affairs Canada reimbursement, U.S. regulatory developments and Canopy’s cash balance. Stewart said reimbursement changes are expected to be a headwind for the Canadian medical business, but Canopy is taking pricing, product mix and retention actions intended to mitigate the effect on revenue, margin and adjusted EBITDA.

On the U.S., Mongeau said Canopy’s near-term focus remains Canada and international markets, where he said the company can create value more immediately. Still, he said Canopy is encouraged by U.S. regulatory changes and believes its investments, including Jetty, its affiliation with the Claybourne infused pre-roll brand and its investment in TerrAscend, position it to benefit as regulations evolve.

About Canopy Growth (NASDAQ:CGC)

Canopy Growth Corporation is a leading Canadian cannabis company engaged in the production, distribution and sale of both medical and recreational cannabis products. Headquartered in Smiths Falls, Ontario, the company cultivates a diversified portfolio of offerings that includes dried flower, pre-rolled joints, oils, softgel capsules and edibles. Canopy Growth also markets derivative products such as beverages and wellness formulations under a range of brands, aiming to serve both patient and adult-use markets.

The company operates through multiple subsidiaries, including Tweed Inc, Spectrum Therapeutics and Tokyo Smoke, each targeting distinct consumer segments.

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