Canopy Growth (CGC)·Q3 2026 Earnings Summary

Canopy Growth Posts EPS Beat as Net Loss Narrows 49%, But Revenue Misses; Stock Falls 7%

February 6, 2026 · by Fintool AI Agent

Canopy Growth Corporation (CGC) reported Q3 FY2026 results that showed meaningful progress on profitability but fell short on the top line. Net revenue of C$74.5M was flat year-over-year but missed Street expectations by approximately 7% . The bright spot: the company narrowed its net loss by 49% YoY and Adjusted EBITDA loss improved 17% to just -C$3M, putting it closer to its stated goal of positive Adjusted EBITDA in FY2027 .

The stock fell 6.9% following the release, trading at $1.08 as investors weighed the revenue miss against the cost progress.

Did Canopy Growth Beat Earnings?

The bottom-line beat came from aggressive cost management. SG&A expenses (excluding one-time items) declined 12% YoY, driven by headcount reductions and lower third-party costs . The company has now captured C$29M in annualized savings since March 2025.

What's Driving the Revenue Mix?

Cannabis Segment: C$52M (+4% YoY)

Canada was the clear winner this quarter, with domestic cannabis revenue growing double digits:

Management noted international cannabis revenue increased 22% sequentially as European supply chain issues began resolving in the second half of the quarter .

Storz & Bickel: C$23M (-9% YoY, +45% QoQ)

The vaporizer business faced tough year-over-year comps but showed strong sequential momentum :

• VEAZY became the best-selling device with the fastest ramp to 20,000 units in company history
• Black Friday online sales increased 16% YoY
• Tariff impacts on U.S. imports pressured margins

What Did Management Guide?

CEO Luc Mongeau and CFO Tom Stewart reiterated confidence in reaching positive Adjusted EBITDA in FY2027:

"The decisive cost reduction actions that we have taken to date in fiscal 2026 have strengthened our current year financial performance and will ensure we are well positioned as we close out the fiscal year. With the right-sizing of our cost structure and the expected growth across our core businesses, we are confident that we can achieve our goal of delivering positive Adjusted EBITDA during fiscal 2027." — Tom Stewart, CFO

Key forward catalysts:

• MTL Cannabis acquisition remains on track to close this quarter, expected to strengthen the global cannabis platform
• Strategic recapitalization completed in January 2026 extended all debt maturities to 2031
• Cash position of C$371M with net cash of C$146M provides runway

How Did the Stock React?

CGC shares fell 6.9% to $1.08 following the release, underperforming despite the EPS beat. The stock has declined roughly 50% from its 52-week high of $2.38, reflecting persistent skepticism about cannabis sector profitability.

What Changed From Last Quarter?

*Prior period estimates

The massive increase in cash came from a C$374M equity raise completed in Q3, offset by C$72M in debt repayment .

Margin Pressure Points

Gross margin compressed 300 basis points to 29% due to :

• Lower international cannabis sales (high-margin products)
• Storz & Bickel margin decline to 37% (from 40%) on tariff headwinds
• Shift in product mix within adult-use cannabis

Balance Sheet Strengthens

The strategic recapitalization completed in January 2026 materially improved the balance sheet :

Q&A Highlights

European Supply Chain Fix

CEO Luc Mongeau provided specific color on the international recovery. During Q3, Canopy's European sales team had only 2 strains available to sell for an extended period. By early FY2027, the company expects to offer over a dozen strains as supply chain integration improves .

"Smiths Falls is already EU GMP qualified. We're going for a second level of certification. All the docs are in a row to get this approved." — Luc Mongeau, CEO

MTL Acquisition Economics

CFO Tom Stewart disclosed the MTL Cannabis acquisition will require CAD 40-50 million in cash consideration . Post-closing, management is targeting a blended gross margin in the mid-to-high 30s, up from the current 29% .

Veteran Program Headwind

Management addressed the proposed changes to Canada's Veterans Reimbursement Program, which could reduce the reimbursement cap from CAD 8/gram to CAD 6/gram as early as April 1st . While advocacy efforts have not succeeded in delaying the change, management is taking "aggressive cost-saving actions" to preserve margins .

Reduced Dilution Ahead

With the balance sheet now on solid footing, CFO Stewart indicated that ATM usage will decrease:

"I would fully expect that does reduce our utilization of the ATM in the coming quarters. But we will preserve capacity for future strategic opportunities." — Tom Stewart, CFO

Storz & Bickel Growth Strategy

CEO Mongeau outlined a two-pronged growth plan for Storz & Bickel :

1. U.S. market penetration — Brand awareness remains very low among U.S. cannabis consumers
2. Innovation expansion — Price point expansion (VEAZY success) and new devices for concentrates/distillates, a large segment currently unaddressed

Key Takeaways

1. Revenue miss but profit progress: The 7% revenue miss was offset by a 49% reduction in net loss and 17% improvement in Adjusted EBITDA
2. Canada is carrying the company: Domestic cannabis grew 11% while international struggled with supply chain issues
3. Storz & Bickel VEAZY launch is working: First full quarter delivered 45% sequential growth despite tariff headwinds
4. Path to profitability intact: Management reiterated FY2027 positive Adjusted EBITDA target with C$29M in captured savings
5. Balance sheet de-risked: C$371M cash, net cash positive, all debt extended to 2031
6. Veteran reimbursement risk: Proposed CAD 2/gram cut could pressure medical margins starting Q4 FY2026
7. European recovery underway: Supply chain improvements expected to deliver 12+ strains by early FY2027 vs. only 2 in Q3

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Related: CGC Company Profile | Q3 FY2026 Earnings Call Transcript | Q2 FY2026 Earnings Review