Canopy Growth Burns Cash Again in Q3

Canopy Growth Reports Third Quarter Fiscal Year 2024 Financial Results; Achieves Third Quarter of Sequential Revenue Growth across Canada Cannabis Businesses and a Record Quarter for Medical Sales

• Canada adult-use cannabis business-to-business net revenue up 9% year-over-year; Canada medical cannabis net revenue up 11% year-over-year
• Focused execution drove sustained margin improvement with second quarter of consolidated gross margins exceeding 30%
• Canopy USA strategy moving forward; special shareholder meeting scheduled for April 12, 2024

SMITHS FALLS, ON, Feb. 9, 2024 /PRNewswire/ – Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX: WEED) (Nasdaq: CGC) today announces its financial results for the third quarter ended December 31, 2023. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.

Highlights

• Achieved consolidated gross margins of 36% in Q3 FY2024, with Canada cannabis gross margins increasing to 28% in Q3 FY2024, up from (11)% in Q3 FY2023.
• Excluding the impact of the divestiture of the Canada national retail business in Q3 FY2023, Q3 FY2024 consolidated net revenue grew by 6% year-over-year. Delivered Q3 FY2024 consolidated net revenue of $79MM representing a decline of 7% year-over-year.
• Rest-of-World cannabis revenue in Q3 FY2024 increased 81% year-over-year, led by continued strong growth in Australia, return to growth in Europe driven by new products and improved sales execution, and lapping negative revenue impacts in non-core markets during the prior year.
• Storz & Bickel® net revenue in Q3 FY2024 increased 54% sequentially driven by strong sales of the new VENTY portable vaporizer, traditionally strong seasonal sales, including the most successful Black Friday sales event in the brand’s 20-year history.
• Free cash flow from continuing operations of $(34)MM in Q3 FY2024, representing a 57% improvement year-over-year.
• Cash and short-term investments balance of $186MM as at December 31, 2023. Reduced overall debt by $69MM during Q3 FY2024.
• Management reaffirms expectation to achieve positive Adjusted EBITDA in each business unit exiting FY2024.

This is the dawn of a new era at Canopy Growth. We’re singularly focused on cannabis and demonstrating growth across all of our business units. With our Canopy USA strategy now moving forward, we expect to be the first and only U.S. listed company offering shareholders a unique opportunity to gain exposure to the fastest growing cannabis market in the world.

David Klein, Chief Executive Officer

Original press release

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