Canopy Growth Reports 43% Adult-Use Cannabis Sales Increase Amid Cost Reductions

Canopy Growth Corporation reported a net loss of C$0.22 per share with revenues declining to C$88.75 million in the fourth quarter of 2025, highlighting ongoing financial challenges in the cannabis market. Despite this, the company showed a 24% year-over-year increase in cannabis revenue for Q1 FY2026, driven by a 43% surge in the Canadian adult-use segment and growth in the medical cannabis business. Operational cost reductions have been significant, with $17 million of a $20 million annualized savings target achieved and a 21% reduction in SG&A expenses, contributing to a 21% reduction in operating loss. However, gross margins compressed to 25% from 35% a year earlier, impacted by lower sales in the Storz & Bickel vaporizer brand and consumer shifts toward higher-cost manufactured cannabis products. Canopy Growth is also focusing on supply chain improvements in international markets, particularly Europe, and plans to launch a new vaporizer under the Storz & Bickel brand later in 2025 to boost sales. Analyst sentiment remains cautious with a consensus 'Hold' rating and price targets suggesting significant upside potential, reflecting mixed investor outlook amid ongoing profitability and margin recovery challenges.