Financial Data and Key Metrics Changes - Canopy Growth reported a net revenue increase of 30% year-over-year in the Canadian adult-use cannabis business for Q2, driven by strong demand for Claybourne-infused pre-rolls and new all-in-one vapes [4][12] - The company's adjusted EBITDA loss narrowed to CAD 3 million compared to a loss of CAD 6 million a year ago, reflecting improved margins and lower SG&A expenses [11][16] - Cash and cash equivalents stood at CAD 298 million as of September 30, 2025, exceeding debt balances by CAD 70 million [11] Business Line Data and Key Metrics Changes - Canadian adult-use cannabis revenue increased by 30% year-over-year, while the Canadian medical cannabis business grew by 17% year-over-year [12][6] - International cannabis sales declined by 39% year-over-year due to supply challenges and quality issues [12][7] - Storz & Bickel segment net revenue was CAD 16 million, up 5% sequentially but down 10% year-over-year [14] Market Data and Key Metrics Changes - Distribution among Alberta independent retailers increased by 20% year-over-year, reflecting stronger relationships with retail partners [5] - Patient registrations in the Canadian medical cannabis segment grew by 20% year-over-year, indicating a robust demand for medical products [6] Company Strategy and Development Direction - The company is focused on improving supply chain execution in international markets, particularly in Europe, to stabilize operations and drive future profitability [7][18] - Canopy Growth aims to enhance cultivation standards and product quality to meet consumer expectations and expand its market presence [6][10] - The company is committed to maintaining a disciplined approach to cost management while pursuing growth opportunities in both domestic and international markets [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with international performance but remains committed to improving supply chain execution and product quality [7][10] - The company anticipates continued growth in the Canadian adult-use and medical cannabis markets, supported by a robust innovation pipeline [17][19] - Management is closely monitoring proposed changes to medical cannabis reimbursement for veterans, which could impact access and quality of care [9][17] Other Important Information - The SG&A savings program has delivered over CAD 21 million in annualized savings, exceeding initial targets [8][15] - The company has no significant debt maturities prior to September 2027, providing financial flexibility [11] Q&A Session Summary Question: What changes are needed to reopen the pipeline for international markets? - Management is retooling the supply chain to satisfy European demand from Canadian GMP facilities without increasing costs [22][23] Question: What is the strategy regarding the ATM usage in Q2? - The company is continuously evaluating capital requirements and funding strategies to ensure an optimal capital structure [26][27] Question: Are there plans to increase vertical integration for international supply? - Management is confident in their capacity to supply from Canadian facilities and is currently retooling the route to market [30] Question: What is the timeline for achieving positive EBITDA? - Management is focused on controlling costs and improving adjusted EBITDA performance but refrained from providing specific timelines [31][32] Question: How is the company addressing capacity needs for growth? - Management believes current facilities can meet demand with limited investment focused on improving yield and quality [35][37] Question: What are the capital allocation priorities given the strong cash position? - The company is evaluating potential investment opportunities while maintaining resilience and stability in operations [39]