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Canadian Adult-Use Cannabis Revenue: Increased 30% year-over-year in Q2.

Canadian Medical Cannabis Revenue: Grew 17% year-over-year.

International Cannabis Revenue: Declined by $3 million due to supply constraints and process challenges.

Storz & Bickel Revenue: $16 million in Q2, up 5% sequentially but down 10% year-over-year.

SG&A Savings: Achieved over $21 million in annualized savings, surpassing the $20 million target.

Adjusted EBITDA Loss: Narrowed to $3 million from $6 million a year ago.

Free Cash Flow: Outflow of $19 million in Q2, improved from an outflow of $56 million in the same period last year.

Cash and Cash Equivalents: $298 million as of September 30, 2025, exceeding debt balances by $70 million.

Debt Prepayment: Prepaid USD 50 million on senior secured term loan, capturing USD 6.5 million in annualized interest savings.

Cannabis Gross Margin: 31% in Q2, up from 24% in Q1.

Storz & Bickel Gross Margin: Increased to 38% in Q2 from 32% in the prior year period.

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Release Date: November 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Net revenue in the Canadian adult-use cannabis business increased by 30% year-over-year, driven by demand for new products like infused pre-rolls and all-in-one vapes.

The Canadian medical cannabis business saw a 17% year-over-year growth in net revenue, marking consecutive quarters of growth.

The company achieved over $21 million in annualized SG&A savings, surpassing their $20 million target ahead of schedule.

Canopy Growth Corp (NASDAQ:CGC) has significantly deleveraged its balance sheet, with cash and cash equivalents exceeding debt balances by $70 million.

The launch of the new Veazy vaporizer by Storz & Bickel generated early sales momentum, contributing to sequential revenue growth.

International market performance was disappointing, with net revenues declining by $3 million due to supply constraints and internal process challenges.

European operations faced challenges with lower sales due to not meeting quality standards and internal process gaps.

Cannabis gross margin in Q2 was 31%, down year-over-year, although it improved sequentially.

International cannabis sales decreased by 39% from the prior year, driven by supply challenges.

The Canadian federal government's proposed changes to medical cannabis reimbursement for veterans could impact access and quality of care.

Q: Luc, you mentioned supply chain challenges impacting international markets. What changes are needed to reopen the pipeline, and will the solution be more costly than previous products in the German market? A: Luc Mongeau, CEO: We are retooling our route to market to satisfy European demand from our Canadian GMP facilities. We do not foresee increased costs for the flower supplied to Europe, and we expect stronger performance as we exit the fiscal year. This is about execution with existing assets, and we are closely managing the situation.

Q: Tom, the ATM was used aggressively in Q2. Can you discuss the decision to use it now and how we should think about future issuance? A: Thomas Stewart, CFO: We continuously evaluate our capital requirements and funding strategies. The ATM program provides optionality, but it wouldn't be appropriate to speculate on its future use. We are acting prudently with the proceeds.

Q: Regarding international supply, do you need to increase vertical integration to meet demand, or is there still opportunity to find quality third-party products? A: Luc Mongeau, CEO: Challenges arose from flower sourced in Portugal. We are now focusing on supplying from our Canadian GMP facilities, which have sufficient capacity. We are not ruling out third-party flower in the future but are currently retooling with our own grown flower.

Q: Can you provide updates on profitability and key levers for achieving positive EBITDA? A: Thomas Stewart, CFO: We are focused on cost savings and improving adjusted EBITDA performance. While it's too early to specify a timeline, this quarter was our strongest yet, and we are committed to achieving positive adjusted EBITDA.

Q: What are your capital allocation priorities now that you have reduced debt and are in a net cash position? A: Thomas Stewart, CFO: With $300 million in cash and no near-term debt obligations, we have flexibility for evaluating capital structure and investment opportunities. We aim to remain resilient and focus on stabilizing the company while exploring accretive options.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.