Canopy Growth reports C$81.4M revenue as quarterly loss widens

Revenue rose 22 per cent as Canopy Growth Corporation TSEWEED NASDAQCGC reported second-quarter results on Friday, but charges on U.S. assets widened its net loss. Net revenue reached C$81.4 million for the quarter ended Sept. 30, while the net loss increased to C$40.7 million.

The Nov. 6 release attributed C$35.8 million of fair-value charges to Canopy USA-related assets. Quarterly free cash outflow narrowed to C$15.5 million from C$19.2 million a year earlier, as lower operating cash use outweighed increased capital spending.

Canopy is an Ontario-based cannabis producer with Canadian medical and recreational operations, an international medical business and a vaporizer division.

The company reported an adjusted EBITDA loss of C$2.9 million for the September quarter and said positive adjusted EBITDA was within reach during fiscal 2027. That target excludes interest, taxes, depreciation and amortization, among other adjustments, so achieving it would not establish cash-flow breakeven.

Shares closed at C$0.95 in Toronto at 4 p.m. EST on Nov. 5, according to TSEWEED. That price predates Friday's results and provides no measure of the market's response.

International Sales Grow As Margins Narrow

International cannabis revenue rose 141 per cent to C$12.3 million in the September quarter, driven primarily by Germany and Poland. Canadian medical revenue increased 18 per cent to C$25.8 million, supported by insured customers and the MTL Cannabis acquisition.

Canadian recreational revenue rose 17 per cent to C$28.1 million in the quarter, also helped by the acquisition. Storz & Bickel vaporizer revenue declined 4 per cent to C$15.1 million as customer spending weakened in some regions.

The higher sales did not preserve consolidated gross margin, which fell to 29 per cent from 33 per cent in the September quarter. Canopy attributed lower adjusted cannabis margins primarily to reduced Veterans Affairs Canada medical cannabis reimbursement rates.

“Our disciplined approach continues to show improvements in adjusted EBITDA compared to Q2 FY2026, placing us within reach of reporting positive adjusted EBITDA during fiscal 2027,” Canopy chief financial officer Tom Stewart said in the release.

International demand also supported Cronos Group Inc. TSECRON NASDAQCRON, which reported third-quarter sales of US$63.5 million on Nov. 5. Its release cited cannabis flower demand in Israel and Germany among the growth drivers.

Read more: Cronos Group reports US$63.5M sales as international demand grows

Cash Reserves Sit Alongside Debt Obligations

Canopy's Sept. 30 financial statements showed cash and equivalents of C$247.3 million, alongside C$72.5 million in short-term investments. Current debt was C$43.1 million, with another C$202.7 million classified as long-term.

The September-quarter net loss compared with C$5 million a year earlier. Operating loss also widened, to C$23 million from C$16.9 million, showing that the deterioration extended beyond the fair-value charges.

Canopy's free cash outflow includes capital spending at production facilities to improve cultivation consistency and output. The lower quarterly outflow reflects cash use after that investment, while the company's current and long-term debt balances represent additional obligations alongside the funding needed to continue operating its businesses.

For comparison, Trulieve Cannabis Corp. NYSETRLV reported US$74 million of third-quarter operating cash flow on Nov. 5, alongside US$230 million in revenue. Operating cash flow and Canopy's free cash flow measure differ because the latter also deducts capital expenditure.

Read more: Trulieve reports US$230M revenue and US$74M operating cash flow

Canopy's next scheduled event is its Nov. 6 results webcast at 10 a.m. EST, when management will discuss the September-quarter performance.