Canopy Growth’s February Milestones: Earnings and Financial Restructuring in Focus

Canopy Growth CA1380351009

Investors in Canopy Growth Corporation are set for a pivotal week as the cannabis company approaches two significant February events. The immediate focus is on the upcoming release of its third-quarter fiscal 2026 results, scheduled for this Thursday. Concurrently, the market is assessing the recent completion of a strategic recapitalization plan, a series of financial maneuvers designed to bolster the company's balance sheet and extend its debt maturity runway.

The financial report, covering the period ending December 31, 2025, will be scrutinized for two key trends. Analysts, according to data from MarketBeat, are anticipating a loss per share of approximately -$0.03 on revenue of about $70.96 million. The primary question is whether the positive sales momentum reported in the Canadian market during the previous quarter carried through to the holiday period.

Context comes from the Q2 results announced in November. For that quarter, the company reported a loss per share of -$0.01, notably better than the -$0.11 forecast cited by public.com. Canopy Growth highlighted substantial progress in its home market, with recreational sales growing 30% year-over-year (37% year-to-date) and medical revenue increasing 17% (15% year-to-date). Cash and cash equivalents stood at $298 million as of September 30, 2025.

Management, including CEO Luc Mongeau and CFO Tom Stewart, will provide further details on an earnings call scheduled for 10:00 a.m. ET on Thursday.

A Strategic Financial Overhaul

Parallel to the earnings preparation, Canopy Growth has finalized a comprehensive recapitalization initiative. The company announced the completion of these transactions on January 8. The central objective was to enhance liquidity and push out near-term debt obligations.

The cornerstone of this effort is a new $150 million term loan, led by JGB Management and other lenders. Proceeds were used to retire approximately $101 million in senior secured debt that was originally due in September 2027. The new loan carries an interest rate of Term SOFR (with a 3.25% floor) plus 6.25%, which the company states represents a lower cash interest cost than its previous arrangement.

A critical outcome of this restructuring is that all outstanding debt obligations are now deferred until at least January 2031.

Convertible Debt Exchange and Cash Position

In a related move, the company executed an exchange offer for its convertible notes. Approximately C$96.4 million in notes due in May 2029 were exchanged for a package valued at roughly C$80 million. This new package consists of:

• C$55 million in new convertible notes maturing in July 2031
• C$10.5 million in cash
• 9,493,670 common shares
• 12,731,481 warrants to purchase common shares

The newly issued convertible notes carry an annual coupon of 7.50% and are convertible into common shares at a price of C$1.83 per share.

Following the completion of all these transactions, Canopy Growth anticipates its pro forma cash balance will be approximately C$425 million.

Additional Strategic Development

Beyond the financial restructuring and quarterly report, another strategic element remains in progress. In mid-December, Canopy Growth entered into an agreement to acquire MTL Cannabis Corp. This transaction is pending the receipt of necessary shareholder and regulatory approvals.