Financial Data and Key Metrics Changes - Canopy Growth ended Q3 with CAD 371 million in cash and cash equivalents, and a net cash position of CAD 146 million, marking a strong financial foundation [4][10] - The company achieved its slimmest Adjusted EBITDA loss to date of CAD 3 million, reflecting improved cost discipline and execution [14] - Q3 cannabis net revenue was CAD 52 million, up 4% year-over-year, with Canadian medical cannabis revenue increasing 15% to CAD 23 million [11][12] Business Line Data and Key Metrics Changes - Canadian medical cannabis net revenue grew 15% year-over-year, marking the sixth consecutive quarter of growth, driven by high-quality patient experiences and engagement [6] - Canadian adult use cannabis revenue increased 8% year-over-year to CAD 23 million, supported by growth in pre-rolls and vapes [12] - Storz & Bickel net revenue grew 45% sequentially to CAD 23 million, driven by strong seasonal sales and the introduction of new products [13] Market Data and Key Metrics Changes - International cannabis sales increased 22% quarter-over-quarter, indicating stabilization and return to growth [12] - The company is focusing on improving execution and laying groundwork for growth in international markets, particularly in Europe [8] Company Strategy and Development Direction - Canopy Growth is focused on elevating the quality of its brands, strengthening product innovation, and improving cultivation efficiency [7][19] - The proposed acquisition of MTL Cannabis is expected to enhance the company's leadership in Canadian medical cannabis and provide high-quality flower supply [5][6] - The company aims to achieve positive Adjusted EBITDA during fiscal 2027, supported by cost-saving initiatives and growth in Canadian cannabis sales [10][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's progress, highlighting a stronger balance sheet and growing Canadian cannabis sales [9] - The focus is on unlocking additional value through elevated cultivation, innovative brands, and disciplined execution [9][19] - Management is actively addressing potential impacts from proposed changes to the Veterans Reimbursement Program while maintaining service quality [6][32] Other Important Information - The company completed a CAD 150 million recapitalization to improve liquidity and extend debt maturities to 2031, providing more flexibility for future financing [5][11] - The integration of MTL Cannabis is expected to contribute positively to net revenue, gross margin, and Adjusted EBITDA [16] Q&A Session Summary Question: Expectations for international business growth over the next 12-18 months - Management indicated that they are confident in improving international supply chain capabilities and expanding flower offerings in Europe [21][22] Question: Trends in gross margin expectations for cannabis - Management expects a blended gross margin in the mid- to high 30s, with the MTL acquisition anticipated to be accretive to gross margin [25][26] Question: Clarification on positive Adjusted EBITDA expectations - Management aims for positive Adjusted EBITDA during fiscal 2027, with efforts to achieve this as soon as possible [29] Question: Impact of debt maturities and equity issuance - Management expects reduced utilization of the ATM in the coming quarters due to improved balance sheet position [30] Question: Domestic medical business and veterans reimbursement proposal - Management is actively working to mitigate the impact of proposed reimbursement changes on veterans while maintaining service quality [32][34]

Financial Data and Key Metrics Changes - Canopy Growth ended Q3 with CAD 371 million in cash and cash equivalents, and a net cash position of CAD 146 million, marking a strong financial foundation [4][10] - The company achieved its slimmest Adjusted EBITDA loss to date of CAD 3 million, reflecting improved cost discipline and execution [14] - Free Cash Flow was an outflow of CAD 19 million in Q3, down from CAD 28 million in the same period last year, primarily due to reduced cash interest payments and working capital movements [14] Business Line Data and Key Metrics Changes - Canadian Medical cannabis net revenue grew 15% year-over-year to CAD 23 million, marking the sixth consecutive quarter of growth [6][11] - Canadian Adult Use cannabis revenue increased 8% year-over-year to CAD 23 million, driven by growth in pre-rolls and vapes [7][12] - International cannabis sales increased 22% quarter-over-quarter, indicating stabilization and return to growth [8][12] - Storz & Bickel net revenue grew 45% sequentially to CAD 23 million, driven by strong seasonal sales and the introduction of the new VEAZY vaporizer [8][12] Market Data and Key Metrics Changes - The Canadian adult use market is projected to grow at 4%-6% annually, with the total market size around CAD 5 billion [36] - The Canadian medical market is estimated to be between CAD 300 million and CAD 400 million, with veterans representing a significant portion of this market [36] Company Strategy and Development Direction - The company is focused on elevating the quality of its brands, strengthening product innovation, and improving the quality and cost of its flower [7][19] - Canopy Growth aims to unlock growth in Europe, enhance its presence in the Canadian medical cannabis market, and leverage MTL Cannabis's capabilities for operational improvements [5][19] - The acquisition of MTL Cannabis is expected to be accretive to net revenue, gross margin, and Adjusted EBITDA, with integration planning already underway [5][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve positive Adjusted EBITDA during fiscal 2027, supported by cost-saving initiatives and growth in the Canadian business [10][16] - The company is taking proactive measures to mitigate the financial impact of proposed changes to the Veterans Reimbursement Program while maintaining service quality [6][32] - Management highlighted the importance of operational execution, disciplined capital allocation, and achieving positive Adjusted EBITDA as key priorities for sustainable long-term success [16][19] Other Important Information - A $150 million recapitalization was completed post-quarter end, improving liquidity and extending debt maturities to 2031 [5][11] - The company is focused on maintaining sufficient cash for flexibility and potential strategic opportunities while planning for MTL integration costs of approximately CAD 40 million to CAD 50 million [40] Q&A Session Summary Question: Expectations for international business growth opportunities - Management indicated that they are confident in their ability to meet demand in Europe and are working on improving supply capabilities [21][22][24] Question: Gross margin expectations for legacy business and MTL - Management expects a blended gross margin in the mid- to high 30s, with the MTL acquisition anticipated to enhance gross margins [25][27] Question: Clarification on positive Adjusted EBITDA expectations - Management aims for positive Adjusted EBITDA during fiscal 2027, with efforts to achieve this as soon as possible [29] Question: Indebtedness maturities and equity issuance - Management expects reduced utilization of the ATM in the coming quarters due to improved balance sheet position [30] Question: Domestic medical business and veterans reimbursement proposal - Management is actively working to address the proposed reduction in reimbursement rates for veterans, emphasizing the importance of maintaining care quality [32][34] Question: Cash management and MTL integration costs - Management plans to maintain sufficient cash for flexibility and estimates integration costs for MTL to be between CAD 40 million and CAD 50 million [40]

Financial Data and Key Metrics Changes - Canopy Growth ended Q3 with CAD 371 million in cash and cash equivalents, and a net cash position of CAD 146 million, marking a strong financial foundation [4][10] - The company reported its slimmest Adjusted EBITDA loss to date of CAD 3 million, reflecting improved cost discipline and execution [14] - Q3 cannabis net revenue was CAD 52 million, up 4% year-over-year, with Canadian Medical Cannabis revenue increasing 15% to CAD 23 million [11][12] Business Line Data and Key Metrics Changes - Canadian Medical Cannabis saw a 15% year-over-year revenue growth, marking the sixth consecutive quarter of growth [6] - Canadian Adult Use Cannabis revenue increased 8% year-over-year to CAD 23 million, driven by growth in pre-rolls and vapes [7][12] - Storz & Bickel net revenue grew 45% sequentially to CAD 23 million, supported by strong seasonal sales [13] Market Data and Key Metrics Changes - International cannabis sales increased 22% quarter-over-quarter, indicating stabilization and return to growth [12] - The Canadian adult use market is projected to grow at 4%-6% annually, with a total market size close to CAD 5 billion [36] Company Strategy and Development Direction - The company is focused on elevating the quality of its brands, strengthening product innovation, and improving flower quality and cost [7][16] - Canopy Growth aims to unlock growth in Europe and enhance its presence in the Canadian medical cannabis market through the acquisition of MTL Cannabis [5][8] - The company is committed to achieving positive Adjusted EBITDA during fiscal 2027, supported by cost-saving initiatives and operational improvements [10][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenges and capitalize on growth opportunities, particularly in the Canadian and international markets [9][18] - The company is actively working to mitigate the financial impact of proposed changes to the Veterans Reimbursement Program while maintaining service quality [6][32] Other Important Information - A $150 million recapitalization was completed post-quarter end, improving liquidity and extending debt maturities to 2031 [5][11] - The company is focused on maintaining operational continuity and capturing synergies from the MTL acquisition [16] Q&A Session Summary Question: Expectations for international business growth over the next 12-18 months - Management indicated that they are confident in improving supply chain capabilities and expect to have a broader range of strains available in Europe by early fiscal 2027 [21][23] Question: Expectations for gross margin trends - Management anticipates a blended gross margin in the mid- to high 30s, particularly with the integration of MTL, which has historically higher margins [25][26] Question: Clarification on positive Adjusted EBITDA expectations - Management aims for positive Adjusted EBITDA during fiscal 2027, with efforts to achieve this as soon as possible [29] Question: Impact of veteran reimbursement changes on the medical business - Management is actively working to oppose the proposed reduction in reimbursement rates, emphasizing the importance of maintaining care quality for veterans [32][34] Question: Cash management and priorities for excess cash - Management plans to maintain sufficient cash flexibility for future opportunities, with expected integration costs for MTL around CAD 40 million to CAD 50 million [39][40]

Core Viewpoint - Canopy Growth Corporation (CGC) is expected to report its third-quarter fiscal 2026 results on February 6, with a projected revenue of $50.6 million and a loss per share of 3 cents, indicating a significant increase in losses compared to the previous year [1][2][9]. Financial Performance - In the last reported quarter, CGC posted a loss per share of 1 cent, which was 90.9% better than the Zacks Consensus Estimate [1]. - The Zacks Consensus Estimate for fiscal third-quarter revenues is $50.6 million, reflecting a decrease of 5.3% from the same quarter last year [2]. - The loss per share estimate for the fiscal third quarter has remained constant at 3 cents over the past 30 days [3]. Market Segments - Canopy's cannabis operations encompass both recreational and medical markets, with previous quarter results showing growth in cannabis revenues driven by adult-use and medical cannabis segments in Canada [4]. - Adult-use revenue growth in Canada may have been supported by strong consumer demand for infused pre-roll joints (PRJ) and the launch of All-In-One (AIO) vape products [5]. - Medical cannabis sales in Canada likely benefited from increased insured patient enrollments, larger average order sizes, and an expanded product portfolio under the Spectrum Therapeutics brand [5]. International Operations - International cannabis revenues are under pressure due to ongoing supply-chain and execution challenges in Europe, similar to trends from the previous quarter [6]. - The company has initiated a turnaround strategy focusing on operational oversight and transitioning back to internally produced Canadian GMP flower, which appears to be positively influencing performance [6]. Strategic Initiatives - During the quarter, CGC launched several strategic initiatives, including the Claybourne Gassers range of AIO vaporizers and expanded the Spectrum Therapeutics portfolio in Australia with new softgel capsule offerings [8]. - The company also entered into an agreement to acquire all issued and outstanding common shares of MTL Cannabis Corp., indicating a focus on portfolio optimization and market consolidation [10].