Canopy Growth Reports Substantial Loss Reduction in Q3 Earnings

Canopy Growth CA1380351009

The Canadian cannabis producer Canopy Growth Corporation released its third-quarter fiscal 2026 financial results on February 6, showcasing a significant improvement in its bottom line. While overall revenue showed little movement, the company managed to nearly halve its net loss. Performance was robust in its domestic Canadian market, though international operations continued to face challenges.

Key Financial Highlights:

• Net loss was cut to CAD 62.6 million, a sharp reduction from the CAD 121.9 million loss reported in the same period last year.
• Canadian cannabis revenue increased by 15% in the medical segment and 8% in the recreational market.
• The company maintains a solid cash position of CAD 371 million.
• A completed debt restructuring has extended all maturity dates to 2031.

The core Canadian business provided the foundation for the quarter's improved metrics. Medical cannabis sales reached CAD 23 million, a 15% year-over-year increase driven by a growing base of insured patients and larger average order sizes. Recreational sales also totaled CAD 23 million, marking an 8% gain, with strong demand for the Claybourne pre-rolls and Gassers vaporizer devices.

Consolidated revenue remained flat at CAD 75 million. However, revenue from the cannabis segment alone grew by 4% to CAD 52 million.

The picture was less positive outside North America. International revenue declined by 31% year-over-year, primarily due to supply chain disruptions in Europe. On a sequential basis, there was a 22% improvement from the previous quarter, suggesting these logistical issues are gradually being resolved.

Improved Metrics and a Strengthened Balance Sheet

The company's adjusted EBITDA improved by 17% to negative CAD 3 million, representing the third consecutive quarter of progress. Free cash flow outflow also decreased, narrowing from CAD 28 million to CAD 19 million. Since March 2025, cost-cutting initiatives, including workforce reductions and lower external expenses, have generated annualized savings of CAD 29 million.

Canopy Growth's balance sheet appears strengthened. It held CAD 371 million in cash, resulting in a net cash position of CAD 146 million at the quarter's end. The recapitalization finalized in January successfully pushed out the maturity dates for all outstanding obligations to 2031.

Vaporizer Division Shows Mixed Results

The company's Storz & Bickel subsidiary, specializing in vaporizers, posted revenue of CAD 23 million. This represented a strong 45% sequential increase, fueled by seasonal sales strength and the successful launch of the new VEAZY vaporizer. The device became a top seller, reaching 20,000 units sold faster than any other product in the company's history. Compared to the same quarter last year, however, revenue for the division fell by 9%, reflecting ongoing consumer economic uncertainty.

Pending Acquisition to Bolster Market Position

The planned acquisition of MTL Cannabis is expected to be finalized in the current quarter. Company leadership anticipates the merger will enhance its global cannabis platform. This strategic move is aimed at further consolidating Canopy Growth's market share within the Canadian landscape.