Q4 2026 Canopy Growth Corp Earnings Call

June 15, 2026

Speaker #1: Agents, John, you may begin the conference call.

Operator: John, you may begin the conference call.

Speaker #2: Good morning, and thank you for joining us. On our call today, we have Canopy Growth's Chief Executive Officer, Luc Mongeau, and Chief Financial Officer, Tom Stewart.

John: Good morning. Thank you for joining us. On our call today, we have Canopy Growth Chief Executive Officer, Luc Mongeau, and Chief Financial Officer, Tom Stewart. Prior to the opening of financial markets today, Canopy Growth issued a news release announcing the financial results for its Q4 and fiscal year ended 31 March 2026. The news release and financial statements have been filed on EDGAR and SEDAR and will be available on the website under the Investors tab. Before we begin, I would like to remind you that our discussion during the call will include forward-looking statements that are based on management's current views and assumptions. This discussion is qualified in entirety by the cautionary note regarding forward-looking statements included at the end of the news release issued today.

John Vincic: Good morning. Thank you for joining us. On our call today, we have Canopy Growth Chief Executive Officer, Luc Mongeau, and Chief Financial Officer, Tom Stewart. Prior to the opening of financial markets today, Canopy Growth issued a news release announcing the financial results for its Q4 and fiscal year ended 31 March 2026. The news release and financial statements have been filed on EDGAR and SEDAR and will be available on the website under the Investors tab. Before we begin, I would like to remind you that our discussion during the call will include forward-looking statements that are based on management's current views and assumptions. This discussion is qualified in entirety by the cautionary note regarding forward-looking statements included at the end of the news release issued today.

Speaker #2: Prior to the opening of financial markets today, Canopy Growth issued a news release announcing the financial results for its fourth quarter and fiscal year ended March 31, 2026.

Speaker #2: The news release and financial statements have been filed on EDGAR and SEDAR and will be available on the website under the Investors tab. Before we begin, I would like to remind you that our discussion during the call will include forward-looking statements that are based on management's current views and assumptions, and that this discussion is qualified in its entirety by the cautionary note regarding forward-looking statements included at the end of the news release issued today.

Speaker #2: Please review today's earnings release and Canopy's reports filed with the SEC and SEDAR for various factors that could cause actual results to differ materially from projections.

John: Please review today's earnings release and Canopy's reports filed with the SEC and SEDAR for various factors that could cause actual results to differ materially from projections. In addition, reconciliations between any non-GAAP measures to their closest reported GAAP measures are included in our earnings release. Please note that all financial information is provided in penny and dollars unless otherwise stated. Following remarks by Luc and Tom, we will conduct a question and answer session, where we will take questions from analysts. With that, I would like to turn the call over to Luc.

John Vincic: Please review today's earnings release and Canopy's reports filed with the SEC and SEDAR for various factors that could cause actual results to differ materially from projections. In addition, reconciliations between any non-GAAP measures to their closest reported GAAP measures are included in our earnings release. Please note that all financial information is provided in penny and dollars unless otherwise stated. Following remarks by Luc and Tom, we will conduct a question and answer session, where we will take questions from analysts. With that, I would like to turn the call over to Luc.

Speaker #2: In addition, reconciliations between any non-GAAP measures to their closest reported GAAP measures are included in our earnings release. Please note that all financial information is provided in dollars and cents, unless otherwise stated.

Speaker #2: Following remarks by Luc and Tom, we will conduct a question-and-answer session, where we will take questions from analysts. With that, I would like to turn the call over to Luc.

Speaker #3: Thank you. Good morning, everyone, and thank you for joining us today. Fiscal 2026 was a defining year for Canopy Growth. We made the hard calls early, streamlining the business, sharpening our focus, and reallocating resources to where we see the greatest long-term opportunity.

Luc Mongeau: Thank you. Good morning, everyone. Thank you for joining us today. Fiscal 2026 was a defining year for Canopy Growth. We made the hard calls early, streamlining the business, sharpening our focus, and reallocating resources to where we see the greatest long-term opportunity. We also invested in people needed to execute at a higher level. These actions are now beginning to show up in the business. On that, I want to take this opportunity to thank our teams and say how proud I am of how they responded throughout the year. The focus, collaboration, and execution across the organization was critical to the progress we achieved. Our full-year performance reflected continued momentum, with net revenue increasing 20% in Canada adult-use cannabis and 18% in Canada medical, alongside operational execution across the platform.

Speaker #3: We also invested in people needed to execute at a higher level. These actions are now beginning to show up in the business. On that, I want to take this opportunity to thank our teams and say how proud I am of how they responded throughout the year.

Speaker #3: The focus, collaboration, and execution across the organization were critical to the progress we achieved. Our full-year performance reflected continued momentum, with net revenue increasing 20% in Canada Adult Use Cannabis and 18% in Canada Medical, alongside operational execution across the platform.

Speaker #3: Over the past year, we also optimized our structure and reset the cost base to a more sustainable level, removing significant expenses from the business. These changes drove stronger financial performance in fiscal 2026, and we expect the benefits to be even more meaningful in the current year.

Luc Mongeau: Over the past year, we also optimized our structure and reset the cost base to a more sustainable level, removing significant expenses from the business. These changes drove stronger financial performance in fiscal 2026, and we expect the benefits to be even more meaningful in the current year. In parallel, we recapitalized the business to strengthen our balance sheet, stabilize our cash balance, and extend debt maturities to 2031. This improved financial position expands our strategic flexibility while reducing risk and uncertainty. The defining milestone of the year was the acquisition of MTL Cannabis, establishing Canopy as a leading Canadian medical cannabis business by revenue. With increased scale, broader capabilities, and greater market reach, we are now operating for a significantly stronger position. While MTL has only been part of Canopy for 2 months, integration efforts have advanced quickly.

Speaker #3: In parallel, we recapitalized the business to strengthen our balance sheet, stabilize our cash balance, and extend debt maturities to 2031. This improved financial position expands our strategic flexibility while reducing risk and uncertainty.

Speaker #3: These defining milestones of the year were the acquisition of MTL Cannabis, establishing Canopy as a leading Canadian medical cannabis business by revenue. With increased scale, broader capabilities, and greater market reach, we are now operating from a significantly stronger position.

Speaker #3: While MTL has only been part of Canopy for two months, the integration efforts have advanced quickly. We are already executing on $6 million of our targeted $10 million of annualized cost synergies.

Luc Mongeau: We are already executing on CAD 6 million of our targeted CAD 10 million of annualized cost synergies. The benefits extend way beyond cost savings. We are leveraging Canopy's robust distribution platform to expand the reach of the MTL products, including the recently announced launch of MTL strains in Germany. Just as importantly, the MTL team brought a strong track record of producing best-in-class products and executing at high operational standards. These capabilities are now being embedded more broadly across the organization with team actively sharing best practices to improve productivity and execution across our cultivation network. As integration continues, we're also building more disciplined and repeatable processes across the organization, strengthening our framework for producing high-quality cannabis consistently and at scale. We have recently seen the results of these efforts in Europe, where we have delivered strong sequential growth in the past 2 quarters.

Speaker #3: And the benefit extends way beyond cost savings. We are leveraging Canopy's robust distribution platform to extend the reach of the MTL products, including the recently announced launch of MTL strains in Germany. Just as importantly, the MTL team brought a strong track record of producing best-in-class products and executing at high operational standards.

Speaker #3: These capabilities are now being embedded more broadly across the organization, with teams actively sharing best practices to improve productivity and execution across our cultivation network.

Speaker #3: As integration continues, we're also building more discipline and repeatable processes across the organization, strengthening our framework for producing high-quality cannabis consistently and at scale.

Speaker #3: We have recently seen the results of these efforts in Europe, where we have delivered strong sequential growth in the past two quarters. We believe strengthened capabilities will become increasingly important as the industry continues to evolve globally, particularly in the European market.

Luc Mongeau: We believe strengthened capabilities will become increasingly important as the industry continues to evolve globally, particularly in the European market. With that, let me turn to our financial results for the year. Net revenue increased 6% to CAD 285 million, driven by growth in our Canadian medical and adult-use businesses. Canadian medical delivered the most consistent performance, with an 18% increase in net revenue for the full year and positive year-over-year growth in all 4 quarters. These impressive results were driven by a larger product assortment and increased order size as we expand our base of insured customers. What is even more encouraging, as I mentioned earlier, is that we entered fiscal 2027 in an even stronger position after joining forces with MTL Cannabis to become the market leader in Canada. Our Canada adult-use business returned to growth in the year, with net revenue increasing by 20%.

Speaker #3: With that, let me turn to our financial results for the year. Net revenue increased 6% to $285 million, driven by growth in our Canadian medical and adult-use businesses.

Speaker #3: Canadian medical delivered the most consistent performance, with an 18% increase in net revenue for the full year and positive year-over-year growth in all four quarters.

Speaker #3: These impressive results were driven by a larger product assortment and increased order size as we expand our base of insured customers. But even more encouraging, as I mentioned earlier, is that we entered fiscal 2027 in an even stronger position after joining forces with MTL Cannabis to become the market leader in Canada.

Speaker #3: Our Canada Adult Use business returned to growth in the year, with net revenue increasing by 20%. That represents a significant turnaround in a category where Canopy had been stagnating.

Luc Mongeau: That represents a significant turnaround in a category where Canopy had been stagnating. The growth was driven by product innovation, focused on the fastest-growing adult use categories, including infused pre-rolls, vape, and THCA flower. We believe there is room for Canopy to significantly increase our share of the recreational market in Canada on the strength of our leading brands. The most recent market share data from May 2026 shows that Canopy has improved from a number 8 overall ranking to number 6. We have taken a consumer-led approach across our medical and adult-use portfolios, focusing our efforts behind the brands, products, and categories where we believe we can build enduring market leadership. In the international business, we have reset our European operations to better unlock the flower supply chain. That involves streamlining processes, strengthening execution, and making sure we got the right product into the market.

Speaker #3: The growth was driven by product innovation, and focus on the fastest-growing adult-use categories, including infused pre-rolls, vape, and THC flower. We believe there is room for Canopy to significantly increase our share of the recreational market in Canada on the strength of our leading brand.

Speaker #3: The most recent market share data from May 2026 shows that Canopy has improved from a number eight overall ranking to number six. We have taken a consumer-led approach across our medical and adult-use portfolios, focusing our efforts behind the brands, products, and categories where we believe we can build enduring market leadership.

Speaker #3: In international business, we have reset our European operations to better unlock the flower supply chain. That involves streamlining processes, strengthening execution, and making sure we have the right product in the market.

Speaker #3: These efforts have helped us overcome challenges we experienced early in the year. As a result, the international business had a very strong finish to the year, delivering 68% year-over-year net revenue growth in the fourth quarter.

Luc Mongeau: These efforts have helped us overcome challenges we experienced early in the year. As a result, the international business had a very strong finish to the year, delivering 68% year-over-year net revenue growth in Q4. That momentum has continued into Q1 of fiscal 2027, driven by a broader portfolio of products. Europe will remain an important area of focus for us this year. Storz & Bickel net revenue was down on the year due to challenges in its two largest markets, the US and Germany. The successful launch of the EZ vaporizer during the year helped boost sales in a new category focused on affordability and portability. Post Q end, the S&B team, inspired by new leadership, has been focused on cost optimization and a reset of our commercial approach in the US.

Speaker #3: That momentum has continued into the first quarter of fiscal 2027, driven by a broader portfolio of products. Europe will remain an important area of focus for us this year.

Speaker #3: Stores and Bicol net revenue was down on the year due to challenges in its two largest markets, the US and Germany. The successful launch of the VZ vaporizer during the year boosted sales in a new category focused on affordability and portability.

Speaker #3: Post quarter-end, the S&B team, inspired by new leadership, has been focused on cost optimization and a reset of our commercial approach in the US.

Speaker #3: Overall, we exit fiscal 2026 as a stronger and better-positioned organization, with improved scale, stronger financial flexibility, and a team that knows how to execute.

Luc Mongeau: Overall, we exit fiscal 2026 as a stronger, better-positioned organization with improved scale, stronger financial flexibility, and a team that knows how to execute. I believe these changes make us stronger and demonstrate how Canopy is becoming a different company. We're energized, we're encouraged, we're confident, and we're just getting started. Without a doubt, there is much work still to be done, and I'm very confident in the strategy we have in place to deliver meaningful growth. More on this in a few minutes. First, I will ask Tom to review our Q4 results.

Speaker #3: I believe these changes make us stronger and demonstrate how Canopy is becoming a different company. We’re energized, we’re encouraged, we’re confident, and we’re just getting started.

Speaker #3: Without a doubt, there is much work still to be done, and I'm very confident in the strategy we have in place to deliver meaningful growth.

Speaker #3: More on this in a few minutes. First, I will ask Tom to review our fourth-quarter results.

Speaker #2: Thank you, Luke, and good morning, everyone. We reported $71.2 million of net revenue in the fourth quarter of fiscal 2026, which was 10% higher than Q4 of the previous year.

Tom Stewart: Thank you, Luc, and good morning, everyone. We reported CAD 71.2 million of net revenue in Q4 of fiscal 2026, which was 10% higher than Q4 of the previous year. Growth in the quarter was driven by the cannabis segment, and in particular, Canada medical and international cannabis. Cannabis net revenue for Q4 was CAD 54.5 million, up 20% compared to a year ago. This growth was led by Canada medical cannabis, with revenue increasing 27% to CAD 25.3 million, marking another record quarter. Key drivers include continued expansion in insured patient registrations, as well as our medical team's ongoing focus on providing a best-in-class service experience to our medical consumers. In addition, in response to changes to Veterans Affairs Canada reimbursement, we moved quickly in fiscal 2027 to implement targeted actions designed to mitigate the impact on both veterans and the business.

Speaker #2: Growth in the quarter was driven by the cannabis segment, and in particular, Canada medical and international cannabis. Cannabis net revenue for the fourth quarter was $54.5 million, up 20% compared to a year ago.

Speaker #2: This growth was led by Canada medical cannabis, with revenue increasing 27% to $25.3 million, marking another record quarter. Key drivers include continued expansion in insured patient registrations, as well as our medical team's ongoing focus on providing best-in-class service to our medical consumers.

Speaker #2: In addition, and in response to changes to Veterans Affairs Canada reimbursement, we moved quickly in fiscal 2027 to implement targeted actions designed to mitigate the impact on both veterans and the business.

Speaker #2: These initiatives included strategic pricing actions, refinements to the product mix, and patient retention efforts focused on maintaining accessibility and long-term engagement with our medical platform.

Tom Stewart: These initiatives included strategic pricing actions, refinements to the product mix, and patient retention efforts focused on maintaining accessibility and long-term engagement with our medical platform. International cannabis net revenue was CAD 8.6 million, up 68% compared to a year ago. The increase was largely driven by year-over-year growth in Poland and Germany, as our focus on supply chain improvements for the European business have delivered another quarter of growth for international cannabis. Cannabis gross margin in Q4 was CAD 3.7 million, or 7% of net revenue, which was below our typical gross margin range, primarily due to inventory-related charges of CAD 10.7 million as a result of the MTL acquisition. As part of integrating our two businesses, we conducted a comprehensive review of the combined inventory and product portfolio with a focus on simplifying our combined offerings and prioritizing our highest quality, best-performing products.

Speaker #2: International cannabis net revenue was $8.6 million, up 68% compared to a year ago. The increase was largely driven by year-over-year growth in Poland and Germany, as our focus on supply chain improvements for the European business has delivered another quarter of growth for international cannabis.

Speaker #2: Cannabis gross margin in Q4 was $3.7 million, or 7% of net revenue, which was below our typical gross margin range, primarily due to inventory-related charges of $10.7 million as a result of the MTL acquisition.

Speaker #2: As part of integrating our two businesses, we conducted a comprehensive review of the combined inventory and product portfolio, with a focus on simplifying our combined offerings and prioritizing our highest-quality, best-performing products.

Speaker #2: As a result, we made deliberate decisions to reduce redundant and overlapping inventory, to ensure our stock levers are well positioned for fiscal 2027. We also recognized costs associated with the flow-through of purchase accounting step-up on acquired inventory balances.

Tom Stewart: As a result, we made deliberate decisions to reduce redundant and overlapping inventory to ensure our stock levels are well-positioned for fiscal 2027. Also recognized costs associated with the flow-through of first accounting step-up on acquired inventory balances. Importantly, excluding the impact of these acquisition-related charges, adjusted gross margin for the cannabis segment was 26% in Q4 fiscal 2026, as compared to 12% in Q4 fiscal 2025. We are moving through a transition period as the two organizations integrate operations, align teams, share best practices, and optimize the product portfolio. As a result, we may see slower growth in H1 of fiscal 2027, including near-term pressure on our revenue as we continue to adjust our product offerings and make improvements at our cultivation facilities to position the business for long-term success.

Speaker #2: Importantly, excluding the impact of these acquisition-related charges, adjusted gross margin for the cannabis segment was 26% in Q4 fiscal 2026, as compared to 12% in Q4 fiscal 2025.

Speaker #2: We are moving through a transition period as two organizations integrate operations, align teams, share best practices, and optimize the product portfolio. As a result, we may see slower growth in the first half of fiscal 2027, including near-term pressure on our revenue as we continue to adjust our product offerings and make improvements at our cultivation facilities to position the business for long-term success.

Speaker #2: We would fully expect to see gross margin improvements in fiscal 2027 within the cannabis segment upon integrating the MTL business. At the same time, the $6 million of MTL transaction synergies we are executing will increasingly take effect.

Tom Stewart: We would fully expect to see gross margin improvements in fiscal 2027 within the cannabis segment on integrating the MTL business. At the same time, the CAD 6 million of MTL transaction synergies we are executing will increasingly take effect. To give more color on that figure, it includes items such as the elimination of MTL's public company costs, headcount reductions, and rationalization of redundant facilities. As part of our new footprint assessment, we made the decision to close our cultivation facility in Kelowna, BC, given our focus on scaling our cultivation capacity at our GMP-certified Kincardine facility and MTL facilities in Quebec. We expect to continue to execute against our projected cost synergies to reach our target of CAD 10 million of run rate savings within 18 months of the MTL transaction closing.

Speaker #2: To give more color on that figure, it includes items such as the elimination of MTL's public company costs, headcount reductions, and rationalization of redundant facilities.

Speaker #2: As part of our new footprint assessment, we made the decision to close our cultivation facility in Kelowna, BC, given our focus on scaling our cultivation capacity at our GMP-certified Concardin facility and MTL facilities in Quebec.

Speaker #2: We expect to continue to execute against our projected cost synergies to reach our target of $10 million in run-rate savings within 18 months of the MTL transaction closing.

Speaker #2: More broadly, the cost reductions we implemented at Canopy over the past year will become increasingly apparent in fiscal 2027. General and administrative operating expenses were down approximately $9.5 million in fiscal 2026, a 15% reduction, which was largely driven by the rationalization of approximately 130 positions across the organization prior to the acquisition of the MTL team.

Tom Stewart: More broadly, the cost reductions we implemented at Canopy over the past year will become increasingly apparent in fiscal 2027. General and administrative operating expenses were down approximately CAD nine and a half million in fiscal 2026, a 15% reduction, which was largely driven by the rationalization of approximately 130 positions across the organization prior to the acquisition of the MTL team. The adjusted EBITDA loss of CAD 6 million in Q4 fiscal 2026 represented a CAD 3 million year-over-year improvement, but was higher than the CAD 3 million loss in Q3 fiscal 2026. Absent the inventory charges in Q4, we would have shown sequential improvement and significantly closer to our adjusted EBITDA breakeven for the quarter. On that basis, and with our expectation of continued revenue growth and decreasing costs, we remain confident in achieving our target of reaching positive adjusted EBITDA during fiscal 2027. Turning to our financial position.

Speaker #2: The adjusted EBITDA loss of $6 million in Q4 fiscal 2026 represented a $3 million year-over-year improvement, but was higher than the $3 million loss in Q3 fiscal 2026.

Speaker #2: Absent the inventory charges in Q4, we would have shown sequential improvement and come significantly closer to our adjusted EBITDA break-even for this year. On that basis, and with our expectation of continued revenue growth and decreasing costs, we remain confident in achieving our target of reaching positive adjusted EBITDA during fiscal 2027.

Tom Stewart: On that basis, and with our expectation of continued revenue growth and decreasing costs, we remain confident in achieving our target of reaching positive adjusted EBITDA during fiscal 2027. Turning to our financial position.

Speaker #2: Turning to our financial position, as Luke mentioned, we significantly strengthened our balance sheet in fiscal 2026, having completed a strategic recapitalization transaction at the start of the fourth quarter.

Tom Stewart: As Luc mentioned, we significantly strengthened our balance sheet in fiscal 2026, having completed a strategic recapitalization transaction at the start of Q4. We ended the year with CAD 365 million of cash after completing the MTL acquisition. With total debt of CAD 234 million, our net cash position was CAD 131 million. As compared to the end of fiscal 2025, we have delivered an improvement of CAD 304 million, going from a net debt position of CAD 173 million to a net cash position of CAD 131 million. Importantly, as we move towards an accelerated growth stage, we have much greater financial capacity to support our growth and, where appropriate, inorganic opportunities.

Speaker #2: We ended the year with $365 million of cash after completing the MTL acquisition. With total debt of $234 million, our net cash position was $131 million.

Speaker #2: As compared to the end of fiscal 2025, we have delivered an improvement of $304 million, going from a net debt position of $173 million to a net cash position of $131 million.

Speaker #2: Importantly, as we move towards an accelerated growth stage, we have much greater financial capacity to support our growth and, where appropriate, inorganic opportunities. I want to note that while we did not have any sales under the ATM program during the fourth quarter, we would continue to look to use the program opportunistically during fiscal 2027 in support of strategic priorities and initiatives, if and when they arise.

Tom Stewart: I want to note that while we did not have any sales under the ATM program during Q4, we would continue to look to use the program opportunistically during fiscal 2027 to support strategic priorities and initiatives if and when they arise. In closing, I would like to acknowledge the continued positive momentum in the US regulatory landscape. We are proud to see the framework we pioneered for Canopy USA becoming increasingly relevant, with our US peers leveraging this structure to benefit from the positive momentum in the US market. Luc will now close with a brief discussion of our priorities for the coming year.

Speaker #2: In closing, I would like to acknowledge the continued positive momentum in the U.S. regulatory landscape. We are proud to see the framework we pioneered for Canopy USA become increasingly relevant, with our U.S.

Speaker #2: Peers are leveraging this structure to benefit from the positive momentum in the U.S. market. Luke will now close with a brief discussion of our priorities for the coming year.

Speaker #1: Thank you very much, Tom. We enter fiscal 2027 with confidence. Since becoming CEO, we have prioritized capital allocation toward higher-return opportunities, robust cost management, and executing with excellence.

Luc Mongeau: Thank you very much, Tom. We enter fiscal 2027 with confidence. Since becoming CEO, we have prioritized capital allocation toward higher return opportunities, robust cost management, and executing with excellence. This disciplined approach positions us well to achieve profitability and create long-term shareholder value. Markets outside of Canada, including the US, present both immediate and long-term growth opportunities. In Europe, our strengthened cannabis platform and expanded portfolio of products have helped us build momentum. Our operations in Germany provide important advantages in supplying European markets efficiently and reliably, and we are targeting expansion into the UK during this fiscal year. In Canada medical, we plan to leverage Canopy's leadership position and nationwide network of clinics to continue supporting patient growth.

Speaker #1: This disciplined approach positions us well to achieve profitability and create long-term shareholder value. Markets outside of Canada, including the U.S., present both immediate and long-term growth opportunities.

Speaker #1: In Europe, our strengthened cannabis platform and expanded portfolio of products have helped us build momentum. Our operations in Germany provide important advantages in supplying European markets efficiently and reliably, and we are targeting expansion into the UK during this fiscal year.

Speaker #1: In Canada Medical, we plan to leverage Canopy's leadership position and nationwide network of clinics to continue supporting patient growth. We remain committed to supporting our veteran community by delivering compelling value relative to other medical cannabis providers, while continuing to uphold the quality, consistency, and reliability that patients expect from our portfolio.

Luc Mongeau: We remain committed to supporting our veteran community by delivering compelling value relative to other medical cannabis providers, while continuing to uphold the quality, consistency, and reliability patients expect from our portfolio. For the Canada adult-use market, the improved quality of our flower, combined with continuing product innovation, will be the levers that enable us to grow our brands and our business. Early fiscal 2027 trends remain encouraging, including continued market share momentum across key product categories. As of five weeks into fiscal 2027, we hold top three market positions across a number of key categories on a trailing 13-week basis, including number two in premium flower, number two in Infused Pre-Rolls, up from number four on a trailing 13-week basis, and number three in oils and soft gels.

Speaker #1: For the Canada Adult Use market, the improved quality of our flower, combined with continued product innovation, will be the lever that enables us to grow our brands and our business.

Speaker #1: Early fiscal 2027 trends remain encouraging, including continued market share momentum across key product categories. As of five weeks into fiscal 2027, we hold top-three market positions across a number of key categories on a trailing 13-week basis, including number two in premium flower, number two in infused pre-rolls—up from number four on a trailing 13-week basis—and number three in oils and subgels.

Speaker #1: Storz & Bickel is executing on a refreshed strategic plan focused on strengthening sales and marketing efforts in the U.S., and improving operational efficiency throughout the supply chain.

Luc Mongeau: Storz & Bickel is executing on a refreshed strategic plan focused on strengthening sales and marketing efforts in the US and improving operational efficiency throughout the supply chain. To conclude, we strengthened our platform, improved execution, expanded our scale, and positioned the business for its next phase of growth. We enter fiscal 2027 with momentum and a clear focus on accelerating our growth. I'm energized by the momentum building across Canopy. Operator, we'll now take questions.

Speaker #1: To conclude, we've strengthened our platform, improved execution, expanded our scale, and positioned the business for its next phase of growth. We enter fiscal 2027 with momentum and a clear focus on accelerating our growth. I'm energized by the momentum building across Canopy.

Speaker #1: Operator, we'll now take questions.

Speaker #3: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star, followed by the one, on your touchtone phone.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the 1 on your touch-tone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys. We do ask that you limit yourself to 2 questions. For any additional questions, you may press star 1 again. First question comes from Ken Ricktai with Canaccord Genuity. Please go ahead.

Speaker #3: You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by two.

Speaker #3: If you are using a speakerphone, please lift the handset before pressing any keys. We do ask that you limit yourself to two questions. For any additional questions, you may press star one again.

Speaker #3: The first question comes from Ken McTye with Canaccord Genuity. Please go ahead.

Speaker #4: Thank you. Good morning. Tom, I heard your comments with respect to mitigating the impact on your medical business and on veterans from the change in reimbursement.

Ken Ricktai: Thank you. Good morning. Tom, I heard your comments with respect to mitigating the impact on your medical business and on veterans from the change in reimbursement. I wonder whether you could help us just better handicap the potential impact or trajectory of your Canadian business, given how material that headwind is in-year and some recent competitive commentary with respect to that headwind. A couple of points, Kenner. Thanks for the question. Part of our mitigation plan includes ongoing optimization of our pricing and reimbursement practices to ensure that we're really collecting for the cost of serving kind of the high-quality service that we provide to our veterans. Ultimately, when you think about our medical portfolio in and of itself, it's skewed more towards 2.0 products, oil, soft gels, more so than flower.

Kenric Tyghe: Thank you. Good morning. Tom, I heard your comments with respect to mitigating the impact on your medical business and on veterans from the change in reimbursement. I wonder whether you could help us just better handicap the potential impact or trajectory of your Canadian business, given how material that headwind is in-year and some recent competitive commentary with respect to that headwind.

Speaker #4: But I wonder whether you could help us better handicap the potential impact or trajectory of your Canadian business, given how material that headwind is in-year and some recent competitor commentary with respect to that headwind.

Speaker #1: Yeah, so a couple of points, Eric, and thanks for the question. Part of our mitigation plan includes ongoing optimization of our pricing and reimbursement practices.

Tom Stewart: A couple of points, Kenner. Thanks for the question. Part of our mitigation plan includes ongoing optimization of our pricing and reimbursement practices to ensure that we're really collecting for the cost of serving kind of the high-quality service that we provide to our veterans. Ultimately, when you think about our medical portfolio in and of itself, it's skewed more towards 2.0 products, oil, soft gels, more so than flower.

Speaker #1: To ensure that we’re really collective for the cost of serving kind of the high-quality service that we provide to our veterans. Ultimately, when you think about our medical portfolio in and of itself, it’s skewed more towards 2.0 products.

Speaker #1: So, oil, softgels more so than flower. So I think you're not going to see the straight—while there would be a top-line effect, it's not going to be as drastic as you might see in the broader competitive set.

Tom Stewart: I think, you're not going to see While there would be a top-line effect, it's not going to be as drastic as you might see in our competitive set. My kind of actions are also looking to mitigate the impact on adjusted EBITDA, not just net revenue. While we would expect to see net revenue come down versus sequentially, we're doing everything we can to mitigate the impact on EBITDA and gross margin. Looking to kind of optimize cost structures where we can and really make sure we're priced competitively without interrupting the high quality of service that we provide to the veteran customers.

Speaker #1: My kind of actions are also looking to mitigate the impact on adjusted EBITDA, not just net revenue. So, while we would expect to see net revenue come down versus sequentially, we're doing everything we can to mitigate the impact on EBITDA and gross margin.

Speaker #1: So, looking to kind of optimize cost structures where we can and really make sure we're priced competitively without interrupting the high quality of service that we provide to our veteran customers.

Speaker #4: Great, thanks for that, Colleton. And if I could just pivot then to international markets briefly. Obviously, international is increasingly in focus, specifically Germany. We're also aware, though, that it’s an increasingly competitive market.

Ken Ricktai: Great. Thanks for that color, Colin. If I could just pivot to international markets briefly. Obviously, international increasingly in focus, specifically Germany. We're also aware, though, that is an increasingly competitive market. When you look to, when we think about your marketing spend in the year to support growth and market share gains, fiscal 2026, you had a mid-single-digit increase in sales and marketing. How should we think of the evolution of that line item? I realize there are offsets on the G&A side, just trying to handicap the potential spend to drive share and growth in Germany through 2027.

Kenric Tyghe: Great. Thanks for that color, Colin. If I could just pivot to international markets briefly. Obviously, international increasingly in focus, specifically Germany. We're also aware, though, that is an increasingly competitive market. When you look to, when we think about your marketing spend in the year to support growth and market share gains, fiscal 2026, you had a mid-single-digit increase in sales and marketing. How should we think of the evolution of that line item? I realize there are offsets on the G&A side, just trying to handicap the potential spend to drive share and growth in Germany through 2027.

Speaker #4: So, when you look to—and when we think about—your marketing spend in-year to support growth and market share gains, I saw you, I think, in fiscal '26, you had a mid-single-digit increase in sales and marketing.

Speaker #4: How should we think about the evolution of that line item? I realize there are offsets on the G&A side, but I'm just trying to handicap the potential spend to drive share and growth in Germany through '27.

Speaker #1: Yeah, I would say, on the sales and marketing piece within SG&A, a lot of that spend is tied more to Canada than to Germany.

Tom Stewart: Yeah. I would say on the sales and marketing piece and then SG&A, Kenner, a lot of that spend is tied more to Canada than in Germany. I think where we see the biggest unlock in Germany would be in getting some of the MTL flower in. Luc, I don't know if you want to

Speaker #1: I think where we see the biggest unlock in Germany would be in getting some of the MTL flower in. Luke, I don't know if you want to.

Speaker #5: Yeah, absolutely. We still see tremendous growth potential in Europe. We're challenged in fiscal 2026. We're driven by supply chain issues where we weren't able to consistently supply flower.

Luc Mongeau: Yeah, absolutely. We still see tremendous potential growth potential in Europe. Our challenge in fiscal 2026 were driven by supply chain issues, where we weren't able to consistently supply flower. We're in a much better place now, as demonstrated in the last two quarters, where we've seen sequential growth. You have to remember that the market, the European market as a whole, still have a lot of potential for growth. Penetration is still extremely low, and we're very encouraged by our progress in the last two quarters.

Speaker #5: And we're in a much better place now, as demonstrated in the last two quarters where we've seen sequential growth. And I have to remember that the market, the European market as a whole, still has a lot of potential for growth. Penetration is still extremely low.

Speaker #5: And we're very encouraged by our progress in the last two quarters.

Speaker #4: Great. Thank you, Olga. Thank you.

Ken Ricktai: Great. Thank you. I'll give back in queue.

Kenric Tyghe: Great. Thank you. I'll give back in queue.

Speaker #3: Thank you. The next question comes from Aaron Gray with Alliance Global Partners. Please go ahead.

Operator: Thank you. The next question comes from Aaron Grey with Alliance Global Partners. Please go ahead.

Speaker #6: Hi. Thank you for the questions here. So first one for me, just on the MTL acquisition. You gave hard numbers in terms of cost synergies: six, expected to be 10 when complete.

Aaron Grey: First one for me, just on the MTL acquisition. You gave hard numbers in terms of cost synergy, six, expect it to be 10 when complete. Maybe on some top-line synergies, you alluded to maybe some sharing best practices, flower quality. Maybe can you go into more detail in terms of some of the benefits that maybe might have been better than you expected in terms of central top-line synergies from the MTL, and then how we can think about that flowing through to the P&L for Canopy Growth as you start to get some of those best practices that you're learning? Thank you.

Speaker #6: But maybe on some top-line synergies—you alluded to maybe some sharing of best practices, flower quality. So, maybe can you go into more detail in terms of some of the benefits that might have been better than you expected in terms of potential top-line synergies from the MTL? And then, how we can think about that flowing through to the P&L for Canopy Growth as you start to get some of those best practices that you're learning?

Speaker #6: Thank you.

Luc Mongeau: Yes. Thank you for the question. It's a bit early to tell there. What we're seeing, one of the key reasons behind the acquisition of MTL, was their greater ability to grow great flower consistently and at scale. The work I started a couple of months ago, where we're really bringing the teams together to unlock the full potential of our growth facilities. What we're seeing behind the scene is extremely encouraging right now. You can imagine that this great flower will really accelerate our growth in both the Canadian rec market and as importantly, across the European market. We're really confident, we're pleased with the results that have been done behind the scenes so far, and we will start seeing the benefits of this in the quarters to come.

Speaker #5: Yes, thank you for the question. It's a bit early to tell there, but what we're seeing—one of the key reasons behind the acquisition of MTL was their greater ability to grow great flower consistently and at scale.

Speaker #5: And the work I started a couple of months ago, where we're really bringing the teams together to unlock the full potential of our growth facilities.

Speaker #5: What we're seeing behind the scenes is extremely encouraging right now. And you can imagine that this great flower will really accelerate our growth in both the Canadian rec market and, as importantly, across the European market.

Speaker #5: So we're really confident. We're pleased with the results that have been done behind the scenes so far, and we will start seeing the benefits of this in the quarters to come.

Speaker #4: Okay, great. Thanks for that. Second question from me—so I understand that Canada International seems to be the priority today, but a lot of things are starting to move now here in the U.S.

Aaron Grey: Okay, great. Thanks for that. Second question for me. Can I understand Canada international seems to be the priority today, but a lot of things are starting to move now here in the US. You had phase I rescheduling with FDA and state medical, anticipation for phase II whole plant rescheduling to come potentially later this summer. As we think about Canopy Growth, historically, you've been one of the more aggressive in terms of looking to capitalize on those US opportunities. Now in 2026, FY 2027, how do we think about your view in terms of what it will take for you to want to reengage in terms of getting aggressive in the US market, if there's any types of key things, such as being able to maintain uplisting and consolidate adult use or otherwise?

Speaker #4: You had Phase 1 rescheduling with the FDA and state medical anticipation for Phase 2. Whole plant rescheduling could potentially come later this summer. As we think about Canopy Growth, historically, you've been one of the more aggressive companies in terms of looking to capitalize on those U.S. opportunities.

Speaker #4: So now, in 2026 and fiscal year 2027, how do we think about your view in terms of what it will take for you to want to re-engage— in terms of getting aggressive in the U.S. market—if there are any types of key things, such as being able to maintain uplift and consolidate adult use?

Speaker #4: Or otherwise. And then, what do you think are the best opportunities in the US market today, having historically done both MSOs and brands? Thanks.

Aaron Grey: What do you think are the best opportunities in the US market today, having historically done both MSOs and brands? Thanks.

Speaker #5: Yeah, we've been pretty consistent there. We're near-term focused on priorities in Canada and international, where we can realize value creation almost instantly. So our focus there is not changing.

Luc Mongeau: Yeah. We've been pretty consistent there. Our near-term focus and priorities are Canada international, where we can realize value creation like instantly. Our focus there is not changing. That being said, we're very encouraged by the regulatory changes that are happening across the US. We know what's happened recently is focus on medical cannabis. Our investment in US has been more in mixed use, call it recreational. We're not seeing any immediate benefits there. That being said, under strategy, the Canopy strategy has been to lay out investment across the US to ensure that as the regulatory changes happen in the market, that we will benefit from there. We're very happy with our investment in Jetty Extracts brand in California, our affiliation with the Claybourne infused pre-roll brand. We've got a sizable investment in TerrAscend.

Speaker #5: That being said, we're very encouraged by the regulatory changes that are happening across the U.S. What we've seen recently is a focus on medical cannabis.

Speaker #5: Our investment in the U.S. has been more in mixed use—call it recreational—so we're not seeing any immediate benefits there. But that being said, on the strategy, the Canopy strategy has been to lay out investment across the U.S. to ensure that as the market—when the regulatory changes happen in the market—we will benefit from there.

Speaker #5: So, we're very happy with our investment in the Jetty brand in California. We're affiliated with the Claybourne-infused pre-roll brand. We've got a sizable investment in TerrAscend.

Luc Mongeau: We're well-positioned to take advantage of the markets as regulatory changes come to us.

Speaker #5: So we're well positioned to take advantage of the markets as regulatory changes continue to happen.

Luc Mongeau: We're well-positioned to take advantage of the markets as regulatory changes come to us.

Speaker #4: Okay, great. Appreciate the color there. I'll go ahead and jump back in the queue.

Aaron Grey: Okay, great. Appreciate the color there. I'll go and jump back in the queue.

Speaker #3: Thank you. The next question comes from Bill Kirk with Roth Capital Partners. Please go ahead.

Operator: Thank you. The next question comes from Bill Kirk with Roth Capital Partners. Please go ahead.

Bill Kirk: I'd like to keep going on Aaron's question there. When we think about the US, why isn't now the time to get more aggressive in the US? I understand the Canadian and international opportunities might be more immediate, but what else would you need to see in the US to start getting more aggressive? If you could you remind us maybe some of the run rate metrics for the assets you do have exposure to in the past? I think you've given trailing 12-month revenue and a rough EBITDA kind of range for the US assets. Could you update us on those?

Speaker #6: I'd like to keep going on Aaron's question there. When we think about the US, why isn't now the time to get more aggressive in the US?

Speaker #6: I understand the Canadian and international opportunities might be more immediate, but what else would you need to see in the U.S. to start getting more aggressive?

Speaker #6: And then, if you could, could you remind us of some of the run-rate metrics for the assets you do have exposure to? In the past, I think you've given trailing 12-month revenue and a rough EBITDA kind of range for the U.S. assets.

Speaker #6: Could you update us on those?

Speaker #7: Yeah, Bill, this is Tom. So I guess, building on kind of what would change again, the Canopy USA business is not skewed as much as the medical side.

Tom Stewart: Yeah, Bill, this is Tom. I guess building on kind of what would change. Again, the Canopy USA business is not skewed as much to the medical side as kind of some of the US MSOs. For us, until there's full kind of uplisting potential for fully plant-touching businesses, there's not as much in the way of benefits to us as you might see with peers. I would say in terms of the run rates, we do disclose in the 10-K, Bill, some of our financial information. I would direct you to those disclosures. Again, that would be kind of cumulative across all of our assets. As we think through to building on what Luc said, that includes retail operations. That would include brand revenues for the Wana assets, as well as the Jetty business in California and certain states.

Speaker #7: It's kind of similar to some of the US MSOs. So for us, until there's full, kind of, uplisting potential for fully plant-touching businesses, there's not as much in the way of benefits.

Speaker #7: To us, as you might see with peers, I would say in terms of the run rates, we do disclose, and in the 10-K, Bill, some of our financial information.

Speaker #7: So I would direct you to those disclosures. But again, that would be kind of cumulative across all of our assets. So, as we think through to building on what Luke said, that includes retail operations, that would include kind of brand revenues for the One assets, as well as the Jetty business in California and in certain states.

Speaker #7: So really, that's the one last thing for us. Yeah.

Tom Stewart: Really the unlock for us.

Bill Kirk: Okay. Thank you.

Tom Stewart: Yeah.

Speaker #6: Go ahead, the unlock.

Bill Kirk: Go ahead. The unlock?

Speaker #7: No, I was going to say, really the unlock for us is that until we're at a point where US plant-touching businesses, irrespective of medical versus non-medical, can list and further regulations open up, we're really kind of in the same boat as we were before.

Tom Stewart: No, I was going to say that really the unlock for us is until we're at a point where we can, US plant-touching businesses, irrespective of medical versus non-medical, can list and further regulations open up, we're really kind of in the same boat as we were before.

Speaker #6: Okay, thank you. In the cash flow statement, there was a cash outflow for—I think it said deconsolidating or to subsidiaries. What was that in the period?

Bill Kirk: Okay. Thank you. In the cash flow statement, there was a cash outflow for, I think it said deconsolidating or two subsidiaries. What was that in the period? What was that deconsolidating cash outflow?

Speaker #6: What was that deconsolidating cash outflow?

Speaker #7: That might have been related to a prior year bill. I'd have to go back and look at it. Separately, we can follow up in a separate session if you'd like.

Tom Stewart: That might have been related to prior year, Bill. I'd have to go back and look at it. Certainly, we can follow up in a separate session if you'd like.

Speaker #6: Okay. Okay, thank you, Tom.

Bill Kirk: Okay. Thank you, Tom.

Speaker #7: No problem.

Tom Stewart: No worries. Bye.

Speaker #3: Thank you. The next question comes from Brenna Cunnington with ATP Coremark. Please go ahead.

Operator: Thank you. The next question comes from Brenna Cunnington with ATB Capital Markets. Please go ahead.

Speaker #8: Hey, y'all. Thanks for taking our questions. Just looking at the balance sheet, we do have the cash balance here with $365 million exiting the quarter.

Brenna Cunnington: Hey, y'all. Thanks for taking our questions. Just looking at the balance sheet, we do have quite the cash balance here with CAD 365 million exiting the quarter. From what I recall, some of this will be used with transitional costs related to the integration of MTL. I do understand that the cash reserves won't be at this level indefinitely, and I'm all for squirreling away resources for a rainy day. It does seem like we have a decent amount of excess cash on-hand here above and beyond what's needed for near to medium-term operations. Could you just walk us through some of your strategic goals for putting this excess cash to work? You mentioned potentially expanding into the UK. We know maybe the US is a potential for investment on the horizon. Could you just provide more details and color on that?

Speaker #8: From what I recall, some of this will be used for transitional costs related to the integration of MTL. And so, I do understand that the cash reserves won't be at this level indefinitely.

Speaker #8: And I'm all for squirreling away resources for a rainy day, but it does seem like we have a decent amount of excess cash on hand here, above and beyond what's needed for near- to medium-term operations.

Speaker #8: So, could you just walk us through some of your strategic goals for putting this excess cash to work? You mentioned potentially expanding into the UK, and we know maybe the US is a potential for investment on the horizon.

Speaker #8: Could you just provide more details and color on that?

Speaker #5: Yes, I'll start, and I'll ask Tom to jump in. So our priority remains clear: it's to achieve positive EBITDA and generate positive cash flows.

Luc Mongeau: Yes. I'll start, and then I'll ask Tom to jump in. Our priority remains clear. It's to achieve positive EBITDA and generate positive cash flows. On this, we're focusing our efforts in accelerating growth in Canadian rec and across Europe as well. What's really good, with all the hard work that we did during fiscal 2026, we're at a place where the balance sheet is way more solid than it was a year ago, and we're positioned to better take advantage of strategic opportunities that will present themselves to us. Tom, anything to add?

Speaker #5: On this, we're focusing our efforts on accelerating growth in Canadian REC and across Europe as well. What's really good is that with all the hard work we did during fiscal 2026, we're at a place where the balance sheet is way more solid than it was a year ago, and we're positioned to better take advantage of strategic opportunities that will present themselves to us.

Speaker #5: Tom, anything to add?

Speaker #7: No, I think that's right. I mean, you're right, Brenna. We're not looking to squirrel away cash indefinitely, but we want to be able to be well-positioned to capitalize on opportunities if and when they arise.

Tom Stewart: No, I think that's right. I mean, you're right, Brenna. We're not looking to squirrel away cash indefinitely, but we want to be able to be well-positioned to capitalize on opportunities if and when they arise.

Speaker #8: Okay, understood. And then just looking internationally, we have heard commentary from various LT peers regarding the standards for Germany flour getting stricter, specifically with respect to the flour that's moving through Portugal to be EU GMP certified.

Brenna Cunnington: Okay. Understood. Just looking internationally, we have heard commentary from various LP peers regarding the standards for Germany flower getting stricter, specifically with respect to the flower that's moving through Portugal to be EU GMP-certified. Could you just provide us with more color on what you're seeing on this front? Is there potentially an opportunity to gain EU GMP certification at some point in the future?

Speaker #8: Could you just provide us with more color on what you're seeing on this front, and is there potentially an opportunity to gain EU GMP certification at some point in the future?

Speaker #5: Yes, we're seeing very similar things. I think we're extremely well positioned to function in that type of environment. We've been functioning under EU GMP regulation codes for many years now.

Luc Mongeau: Yes. We're seeing very similar things. I think we're extremely well-positioned to function in that type of environment. We've been functioning under EU GMP regulation codes for many years now. We have resources, capabilities in the ground in Germany to allow us to bring the right products to market. I was over in Europe last week and come back very confident and energized by the quality of the work our teams are doing across Germany and Poland. We're very bullish on these two markets and expanding and newly opening markets across Europe. We look forward to improving our performance in fiscal 2027 across-

Speaker #5: We have resources and capabilities on the ground in Germany to allow us to bring the right products to market. I was over in Europe last week and came back very confident and energized by the quality of the work our teams are doing across Germany and Poland. We're very bullish on these two markets, and on expanding and newly opening markets across Europe.

Speaker #5: So we look forward to improving our performance in fiscal 2027 across Europe.

Speaker #8: Okay, thank you for the color. I'll jump back in with you.

Brenna Cunnington: Okay. Thank you for the color. I'll jump back in the queue.

Tom Stewart: Operator, for Bill Kirk's question, Bill, that related to the deconsolidation of Canopy USA in the prior fiscal year. That was a one-time event for which didn't recur this year.

Speaker #7: Operator, for Bill Kirk's question: Bill, that related to the deconsolidation of Canopy USA in the prior fiscal year. So that was a one-time event, which didn't recur this year.

Tom Stewart: Operator, for Bill Kirk's question, Bill, that related to the deconsolidation of Canopy USA in the prior fiscal year. That was a one-time event for which didn't recur this year.

Speaker #3: Thank you. The next question comes from Pablo Zuenic from Zuenic and Associates. Please go ahead.

Operator: Thank you. The next question comes from Pablo Zuanic from Zuanic & Associates. Please go ahead.

Speaker #6: Hey, everyone. Just to follow up on the medical side of things regarding the impact on veterans—we are now in the middle of June.

Pablo Zuanic: Everyone, look, just to follow up on the medical side of things, regarding the impact on veterans, we are now in the middle of June. Can you give some color in terms of how are veteran users of medical cannabis reacting? Are they cutting back on sales, or are they absorbing the effect of the reduced quota? Can you maybe expand also in terms of how much are you absorbing? It's not clear from the comments you made before. More color in that regard would help. To be clear, you are guiding for full-year sales growth in 2027, but that's for international and rec. Domestic medical, you are guiding for the decline, right? If you can just confirm that. Thank you.

Speaker #6: Can you give some color in terms of how veteran users of medical cannabis are reacting? Are they cutting back on sales, or are they absorbing the effect of the reduced quota?

Speaker #6: Can you maybe expand also in terms of how much you are absorbing? It's not clear from the comments you made before. More color in that regard would help.

Speaker #6: And to be clear, you are guiding for full-year sales growth in ’27, but that’s for international and REC. Domestic medical, you are guiding for a decline, right?

Speaker #6: So if you can just confirm that, thank you.

Speaker #7: Yeah, so a few different parts to that, Pablo. For us, we're continuing to go after new veterans to sign up new customers. We still see that as a very attractive and profitable market.

Tom Stewart: A few different parts within that, Pablo. For us, we're continuing to go after new veterans to sign up new customers. We still see that as a very attractive and profitable market for our business. I would say, through the first few weeks of fiscal 2027, we are seeing positive momentum year over year, we're likely not going to maintain the same level of growth that we saw throughout fiscal 2026. We are doing everything we can to kind of maintain a flat medical business year over year in terms of EBITDA margin. Overall, it will be a headwind for us on the Canadian side. The overall growth that we're talking about, you're right, it is including a bigger uplift from the international business as well as growth in Storz & Bickel that will drive us up.

Speaker #7: For our business, I would say through the first few weeks of fiscal 2027, we are seeing positive momentum year over year, but we're likely not going to maintain the same level of growth that we saw throughout fiscal 2026.

Speaker #7: So we are doing everything we can to kind of maintain a flat medical business year over year in terms of EBITDA margin. But overall, it will be a headwind for us on the Canadian side.

Speaker #7: And the overall growth that we're talking about—you're right—it is including a bigger uplift from the international business, as well as growth in stores and Bickle.

Speaker #7: That will drive us up. So, again, the veteran changes present quite the headwind to us, as well as any other medical player in Canada.

Tom Stewart: Again, the veteran changes presents quite the headwind to us as well as any other medical player in Canada. We're doing everything we can to limit the impact on EBITDA, it is going to be challenging just to get back to call it flat year over year on the Canadian medical side.

Speaker #7: We're doing everything we can to limit the impact on EBITDA, but it is going to be challenging just to get back to, call it, flat year-over-year on the Canadian medical side.

Speaker #5: Yeah, for me, to this, I mean, the business—the Canadian medical business—is the core of who Canopy is, and we're positioning a company based on trust, on excellence, a company that is focused on bettering life through cannabis.

Luc Mongeau: If I may add to this Canadian medical business is the core of who Canopy is, we're positioning a company based on trust, on excellence, a company that is focused on bettering life through cannabis. As a result, that medical business is really the core of who we are. We love it. We're putting tremendous effort to make sure that through these changes, the quality of the service, the products, the supplies we provide to veterans and other insured patients and non-insured patients remains of the highest integrity. Yes, we're seeing veterans adapting, adjusting how they purchase, they're extremely loyal to the quality of service and products we've been providing. We provide some of the best service, fastest delivery, consistency of in-store products of any competitors in Canada.

Speaker #5: And so, as a result, that medical business is really the core of who we are. We love it. We're putting tremendous effort into making sure that, through these changes, the quality of the service, the products, the supplies we provide to veterans, other insured patients, and non-insured patients remains of the highest integrity.

Speaker #5: Yes, we're seeing veterans adapting, adjusting how they purchase, but extremely loyal to the quality of service and products we've been providing. We provide some of the best service, fastest delivery, consistency of installed products, of any competitors in Canada, and you can see these consumers, these patients, being extremely loyal to our platform.

Luc Mongeau: You can see these consumers, these patients, being extremely loyal to our platform, and we continue to strive to provide the best service in the industry.

Speaker #5: And we continue to strive to provide the best service in the industry.

Speaker #6: Thank you. That's good color. And then, just a follow-up: in terms of REC sales in Canada, obviously you've done very well with IPRs.

Pablo Zuanic: Thank you. That's good color. Just a follow-up in terms of rec sales in Canada. Obviously, you've done very well with IPR. Now the Hifyre data shows very good growth in vape. Can you talk about any gaps or areas where you're still under-indexed, where you see room to expand the portfolio, whether it's flower or different segments within the added formats? Thank you.

Speaker #6: Now, the Hifyre data shows very good growth in vape. Can you talk about any gaps or areas where you're still under-indexed, where you see room to expand the portfolio, whether it's flower or different segments within the other formats?

Speaker #6: Thank you.

Speaker #5: Yeah, yeah, absolutely. And thank you for the congrats on the progress. So now, latest data shows us as number six. I won't be shy to say that our long-term aspiration is to be a top three player.

Luc Mongeau: Absolutely, thank you for the congrats on the progress. Latest data shows us as number 6. I won't be shy to say that our long-term aspiration is to be a top-3 player. We believe we can get there. It's not going to be easy. It's going to take time. Think of the big categories out there. Let's start products. We'll talk about regions later. In the Canadian market, where the growth is, where the volume is, it's flower, it's pre-rolled, infused or not, and it's vape. We have opportunities across these three large segments. In flower, we've been saying it, the acquisition of MTL was driven in one large part by their talent, their ability to grow consistently great flower at scale in an efficient manner. Now we're partnering, we're together with some really great growers.

Speaker #5: We believe we can get there. It's not going to be easy. It's going to take time. But think of the big categories out there.

Speaker #5: Let's start with products. We'll talk about regions later. So, in the Canadian market, where the growth is, where the volume is, it's flower, it's pre-rolls—infused or not—and it's vapes.

Speaker #5: We have opportunities across these three large segments. In flour, we've been saying it, the acquisition of MTL was driven in one part in one large part by their talent, their ability to grow consistently, great flour at scale in an efficient manner.

Speaker #5: And now we're partnering—we're together with some really great growers. So look out in the quarters to come for the quality of our flower to keep improving.

Luc Mongeau: Look out in the quarters to come for the quality of our flower to keep improving. As a result, we know share will follow. In PRJ, we're doing really well. The Claybourne with infused pre-rolls is really driving our growth there. We still have a lot of opportunities in regular pre-rolls driven by our brands, whether it's MTL brands, premium pre-rolls, or it's Tweed with mainstream pre-rolls. We still have a lot of opportunities there. Finally, we launched all-in-one vape during fiscal 2026. We're very encouraged by the results. Again, there, we're only scratching the surface. We're almost absent of the 510 category, which is still very large. As you can see, there's tons of runway. There's significant runway for us to grow Canadian rec there.

Speaker #5: And as a result, we know share will follow. In PRJs, we're doing really well. The Claybourne with infused pre-rolls is really driving our growth there.

Speaker #5: But we still have a lot of opportunities in regular pre-rolls driven by our brands—whether it's MTL brands with premium pre-rolls, or it's Tweed with mainstream pre-rolls.

Speaker #5: We still have a lot of opportunities there. And finally, we launched All-in-One Vape during fiscal '26. We're very encouraged by the results, but again, there we're only scratching the surface.

Speaker #5: We're almost absent from the 510 category, which is still very large. So as you can see, there's tons of runway—there's significant runway for us to grow Canadian REC there.

Speaker #5: And we're confident that, with our brands, combined with our capabilities and the reset of our supply chain, we will be able to win in fiscal 2027.

Luc Mongeau: We're confident that with our brands, combined with our capabilities and the reset of our supply chain, that we will be able to win in fiscal 2027 and for the years to come.

Speaker #5: In 40 years to come.

Speaker #6: That's great. Thank you.

Pablo Zuanic: That's great. Thank you.

Speaker #1: Thank you, ladies and gentlemen. As a reminder, if you have any questions, please press star one now. We have no further questions. This concludes Canopy Growth's fourth quarter fiscal 2026 financial results conference call.

Operator: Thank you. Ladies and gentlemen, as a reminder, if you have any questions, please press star one now. We have no further questions. This concludes Canopy Growth's Q4 fiscal 2026 financial results conference call. A replay of this conference call will be available until 13 September 2026, and can be accessed following the instructions provided in the company's press release issued earlier today. Canopy Growth's investor relations team will be available to answer additional questions. Thank you for attending today's call.

Speaker #1: A replay of this conference call will be available until September 13, 2026, and can be accessed by following the instructions provided in the company's press release issued earlier today.

Q4 2026 Canopy Growth Corp Earnings Call

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