Canopy Growth Corp Reports Q1 FY2026 Financial Results

SMITHS FALLS – Canopy Growth Corp. released its financial results for the first quarter of fiscal year 2026, ending June 30, 2025, showcasing a 9% increase in net revenue to $72.1 million compared to $66.2 million in the same period last year. The growth was primarily fueled by a robust 43% spike in Canadian adult-use Cannabis net revenue, which reached $27 million, driven by strong demand for flower and infused pre-rolls, including their Claybourne brand.

The company reported its financials across two key segments: Cannabis, encompassing global production and sales of Cannabis products, and Storz & Bickel, focused on vaporizers and accessories. The Cannabis segment saw a 24% year-over-year revenue increase to $57 million, with Canadian medical Cannabis net revenue rising 13% to $21.2 million, supported by a growing base of insured customers and expanded product offerings on the Spectrum online store. International Cannabis markets contributed $8.8 million, up 4%, with growth in European flower shipments offset by declines in Australia’s medical Cannabis business.
However, the Storz & Bickel segment experienced a 25% revenue decline to $15.1 million, attributed to strong prior-year sales comparisons and economic uncertainty impacting consumer demand. This, combined with lower sales in high-margin markets like Poland and a shift toward costlier manufactured products in Canada, led to a consolidated gross margin drop to 25% from 35% in Q1 FY2025. Cannabis-specific gross margins fell to 24% from 33%.

Canopy Growth made substantial progress in cost management, achieving $17 million of its $20 million annualized savings target since March 1, 2025, with a 21% year-over-year decrease in selling, general, and administrative (SG&A) expenses. Operating loss from continuing operations improved by 21% to $23 million, while free cash flow outflow decreased 79% to $12 million, bolstered by reduced SG&A expenses and optimized working capital. Cash and short-term investments rose to $144 million from $131 million at the end of March 2025. However, the adjusted EBITDA loss widened to $8 million from $5 million, reflecting lower gross margins.

CEO Luc Mongeau emphasized the company’s focus on sustaining momentum in Canada’s adult-use market, where Canopy Growth holds the #2 market share in Alberta’s infused pre-roll category, #3 in Ontario, and #3 nationally. The company is prioritizing retail distribution and high-demand product segments to drive growth through FY2026. Interim CFO Tom Stewart highlighted ongoing efforts to improve gross margins through automation, increased production capacity for pre-rolled joints, and bulk Cannabis sales in Canada and Europe.

On the strategic front, Canopy Growth announced the appointment of Margaret Shan Atkins to its board of directors, effective August 6, 2025. Atkins, a former Bain & Co partner and C-suite executive at a Fortune 15 retailer, brings extensive expertise in retail strategy, finance, and governance, with prior board roles at Aurora Cannabis and other public companies.

Looking ahead, the company anticipates supply chain enhancements to boost Cannabis supply and margins in European markets during the second half of FY2026. Storz & Bickel plans to launch a new vaporizer in late 2025, aiming to recapture consumer interest amid competitive pressures.

Canopy Growth’s Q1 FY2026 results reflect a mixed performance, with strong topline growth in Canadian Cannabis markets tempered by margin pressures and challenges in the vaporizer segment. The company’s cost-cutting measures and strategic focus on high-demand formats position it to navigate a competitive industry, but achieving consistent profitability remains a critical hurdle. As Canopy Growth refines its operations and expands its global footprint, the ability to balance revenue growth with margin recovery will be key to long-term success in the Cannabis sector.