Q1 FY2027
Filed Aug 7, 2026Canopy Growth Reports First Quarter Fiscal Year 2027 Financial Results; Delivers 13% Net Revenue Growth with Contributions from All Businesses
Consolidated net revenue grew 13%, every reported business grew, adjusted gross margin improved to 31%, and adjusted EBITDA loss narrowed 59%. Offsetting these gains, cannabis gross margin declined to 22%, the VAC reimbursement-rate reduction pressured medical cannabis, and free cash outflow increased to $25.7M from $11.6M.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Consolidated net revenueGAAP | $81.2M | – | increased by 13% |
| Cannabis net revenueGAAP | $65.1M | – | an increase of 14% |
| Storz & Bickel net revenueGAAP | $16.1M | – | a 6% increase |
| Consolidated gross marginGAAP | 27% | – | – |
| Consolidated adjusted gross marginnon-GAAP | 31% | – | – |
| Cannabis gross marginGAAP | 22% | – | – |
| Cannabis adjusted gross marginnon-GAAP | 26% | – | – |
| Storz & Bickel gross marginGAAP | 48% | – | – |
| Inventory step-up charges related to the acquisition of MTL Cannabisother | $2.6 million | – | – |
| Selling, general and administrative expensesGAAP | 6% higher than in Q1 FY2026 | – | 6% higher |
| Net lossGAAP | 68% lower compared to Q1 FY2026 | – | 68% lower |
| Adjusted EBITDA lossnon-GAAP | $3.2M | – | an improvement of $4.7M or 59% |
| Free cash outflownon-GAAP | $25.7M | – | increased from $11.6M in Q1 FY2026 to $25.7M in Q1 FY2027 |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Canada medical cannabisGrowth in the number of insured customers and the acquisition of MTL Cannabis, partially offset by the Canadian government's reduction in the Veterans Affairs Canada reimbursement rate for medical cannabis. | $25.8M | – | an increase of 22% |
| Canada adult-use cannabisIncreased flower sales driven by the acquisition of MTL Cannabis, partially offset by declines in opportunistic bulk sales. | $29.7M | – | an increase of 10% |
| International markets cannabisStrength in Europe, specifically in Poland. | $9.6M | – | increased 10% |
| Storz & BickelPrior-year product portfolio expansion and increasing sales across non-core markets. | $16.1M | – | a 6% increase |
What drove it
- Consolidated net revenue increased by 13%, with reported growth in Canada medical cannabis, Canada adult-use cannabis, international markets cannabis, and Storz & Bickel.
- The acquisition of MTL Cannabis contributed to Canada medical cannabis growth, adult-use flower sales, increased supply of high-quality flower, expanded revenue opportunities, and anticipated synergies.
- Adjusted EBITDA loss improved primarily because of revenue growth across both segments and continued cost savings.
- Storz & Bickel gross margin increased due to a cost-rationalization exercise implemented at the end of fiscal 2026 and recovery of certain U.S. tariffs in the period.
Concerns
- The Canadian government's reduction in the VAC reimbursement rate partially offset Canada medical cannabis growth and cannabis adjusted gross-margin improvement.
- Cannabis gross margin was 22% in Q1 FY2027, compared to 24% in Q1 FY2026.
- Selling, general and administrative expenses were 6% higher than in Q1 FY2026, driven by the addition of MTL Cannabis operations.
- Free cash outflow increased to $25.7M from $11.6M, primarily due to the timing of changes in working capital items.
- The Q1 FY2027 adjusted gross margin excluded $2.6 million of inventory step-up charges related to the acquisition of MTL Cannabis.
What to watch
- Completion of the MTL Cannabis integration and the realization of anticipated synergies.
- Management anticipates further improvements in financial results, especially in the second half of fiscal 2027, as the integration is completed.
- The impact of the VAC reimbursement-rate reduction on medical cannabis revenue and cannabis margins.
- Working-capital movements and their effect on free cash outflow.
- Sustained growth in Europe, specifically Poland, and sales across Storz & Bickel non-core markets.
Balance sheet and cash flow
- Free cash outflow increased from $11.6M in Q1 FY2026 to $25.7M in Q1 FY2027, reflecting increased cash used in operating activities, primarily due to the timing of changes in working capital items.
Analysis
Canopy Growth reported $81.2M of consolidated net revenue in Q1 FY2027, up 13% compared with Q1 FY2026. Revenue increased across each reported business, including 22% growth in Canada medical cannabis, 10% growth in Canada adult-use cannabis, 10% growth in international markets cannabis, and 6% growth at Storz & Bickel. The cannabis business generated $65.1M of net revenue, while Storz & Bickel generated $16.1M.
The MTL Cannabis acquisition was a central growth driver in Canada medical cannabis and adult-use flower sales. Medical growth also reflected an increase in insured customers, while international markets benefited from strength in Europe, specifically Poland. Adult-use results were partially offset by lower opportunistic bulk sales. Storz & Bickel growth reflected prior-year product portfolio expansion and increasing sales across non-core markets.
Profitability improved on an adjusted basis, with consolidated adjusted gross margin increasing to 31% from 25% and adjusted EBITDA loss narrowing to $3.2M, an improvement of $4.7M or 59%. Consolidated gross margin increased to 27% from 25%. However, cannabis gross margin declined to 22% from 24%, while the cannabis adjusted gross margin rose to 26% from 24%. The adjusted result excludes $2.6 million of inventory step-up charges related to MTL Cannabis that were not present in the prior-year period. Storz & Bickel gross margin improved to 48% from 29%, supported by cost rationalization and recovery of certain U.S. tariffs.
Cost discipline helped offset the addition of MTL Cannabis operations, although selling, general and administrative expenses were 6% higher than in Q1 FY2026. The VAC reimbursement-rate reduction remained a specific pressure on medical cannabis revenue and cannabis margins. The company also remained cash consumptive, with free cash outflow increasing from $11.6M to $25.7M because of increased cash used in operating activities, primarily driven by the timing of working-capital changes.
No formal forward financial guidance was provided in the filing text. Management stated that it anticipates further improvement in financial results, especially in the second half of fiscal 2027, as MTL Cannabis integration is completed. The main reported execution markers are completion of that integration, synergy realization, cultivation supply expansion, the impact of VAC reimbursement changes, and the development of free cash outflow.
Management, verbatim
The renewed focus and strong momentum we established over the past year have continued into fiscal 2027. In the first quarter, we achieved net revenue growth in every business through solid execution across the organization. We have clear strategies to deliver further growth in each of our end markets. At the heart of our cannabis strategy is our company-wide push to elevate cultivation and produce a consistent and increasing supply of high-quality flower that will support growing demand both in Canada and internationally.
Luc Mongeau, Chief Executive Officer
The combination of top-line growth and disciplined cost management is enabling us to make steady progress on key profitability measures including gross margin and adjusted EBITDA. As expected, the integration of MTL Cannabis is leading to increased supply of high-quality flower, expanded revenue opportunities and the realization of meaningful synergies. We anticipate further improvements in our financial results, especially in the second half of fiscal 2027, as the integration is completed.
Tom Stewart, Chief Financial Officer
Not in the filing
stated, not guessed- Formal forward revenue, gross-margin, operating-expense, tax-rate, EPS, adjusted EBITDA, or free-cash-flow guidance was not provided.
- Previous outlook was not provided.
- Actual GAAP net loss amount was not provided.
- GAAP and non-GAAP EPS were not provided.
- Operating income or loss was not provided.
- Actual selling, general and administrative expense amount was not provided.
- Operating cash flow amount was not provided.
- Cash, cash equivalents, debt, and other balance-sheet liquidity figures were not provided.
- Share repurchases, dividends, and other capital-return figures were not provided.
- Prior-quarter comparisons were not provided for the reported metrics.
- Prior-year dollar amounts for consolidated revenue, cannabis revenue, Storz & Bickel revenue, and adjusted EBITDA loss were not provided.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.