Canopy Growth Corporation, a world-leading cannabis company dedicated to unleashing the power of cannabis, today announced its financial results for the fourth quarter and fiscal year ended March 31, 2024 and the filing of an annual report on Form 10-K, including the audited consolidated financial statements for the fiscal year ended March 31, 2024 and the unqualified report thereon of the Company’s independent registered public accounting firm. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.
Highlights
- Storz & Bickel® net revenue in Q4 FY2024 increased 43% as compared to Q4 FY2023 driven by strong sales of the new Venty portable vaporizer.
- Canada cannabis net revenue in Q4 FY2024 increased 4% as compared to Q4 FY2023 led by a 16% increase in the Canada medical cannabis business.
- Total Cost of Goods Sold (“COGS”) decreased by 45% in FY2024 and Canada cannabis COGS decreased by 54% year-over-year, driven by the cost reduction actions.
- Consolidated Gross Margins increased to 27%, an improvement of 4,600 basis points year-over-year in FY2024, with Canada cannabis, International markets cannabis and Storz & Bickel all posting higher Gross Margins year-over-year.
- Operating loss from continuing operations of $229 MM in FY2024. Adjusted EBITDA loss was $59 MM in FY2024, representing an improvement of 72% year-over-year, driven primarily by revenue growth and successful cost reduction actions taken to date.
- Cash, cash equivalents, and short-term investments of $203 MM at March 31, 2024. Benefiting from balance sheet strengthening actions completed subsequent to the end of FY2024, the Company has no material debt due until March 2026.
“In Fiscal 2024 we fortified Canopy’s foundation for future growth. With a resolute focus on cannabis, we have momentum and are poised to seize the opportunity presented by continued regulatory developments in Germany and the United States. Entering FY2025, Canopy has growing businesses in all of the world’s most attractive cannabis markets, a leading portfolio of high-impact brands, and a rapidly developing U.S. ecosystem,” said David Klein, Chief Executive Officer.
“We have made remarkable progress and delivered dramatic reductions in expenses, cash burn, and debt over the past year. These efforts have significantly enhanced our financial stability and moved us toward achieving positive Consolidated Adjusted EBTIDA. With no material debt maturing until 2026, Canopy is equipped to capitalize on growth opportunities and enhance shareholder value,” said Judy Hong, Chief Financial Officer.
Fourth Quarter FY2024 Financial Highlights
- Storz & Bickel® net revenue in Q4 FY2024 increased 43% as compared to Q4 FY2023 to $22 MM driven by strong sales of the new Venty portable vaporizer. Storz & Bickel Gross Margins improved to 41% in Q4 FY2024 driven primarily by a positive shift in product mix.
- Canada medical cannabis delivered its 5th consecutive quarter of revenue growth in Q4 FY2024 with revenue increasing 16% as compared to Q4 FY2023 benefiting from customer mix and larger product assortment in the Spectrum Therapeutics online store. Canada cannabis segment revenue in Q4 FY2024 increased 4% as compared to Q4 FY2023 to $37 MM driven by growth in the Canadian medical cannabis business.
- International markets cannabis net revenue in Q4 FY2024 increased 32% as compared to Q4 FY2023 to $12 MM driven by growth in Germany and Poland as well as the timing of revenue from the US CBD business which is non-recurring. International markets cannabis Gross Margins improved by 5000 bps to 54% in Q4 FY2024 driven primarily by change in geographic mix and impact from non-recurring revenue from the US CBD business.
- Consolidated Gross Margins in Q4 FY2024 improved to 21% due to cost reduction activities, as well as lower excess and obsolete inventory charges in Canada cannabis. Q4 FY2024 Canada Gross Margins, however, were negatively impacted by lower cultivation yields partly due to seasonality, and an associated reduction in manufacturing utilization, which are expected to improve in FY2025.
- Selling, general & administrative (“SG&A”) expenses in Q4 FY2024 declined 23% as compared to Q4 FY2023 primarily due to cost reduction programs undertaken to date.
- Cash outflow from operations improved 77% in Q4 FY2024 as compared to Q4 FY2023 driven by cost reduction programs and reduction in interest payments.
- Operating loss from continuing operations of $107 MM in Q4 FY2024, representing an improvement of 80% as compared to Q4 FY2023. Adjusted EBITDA loss was $15 MM in Q4 FY2024, representing a 63% improvement as compared to Q4 FY2023.
- Canada cannabis segment Gross Margins improved to 16% in FY2024 driven by lower excess and obsolete inventory charges and lower operating costs.
- SG&A expenses declined by 33% compared to FY2023 primarily driven by cost reductions actions executed in the first half of FY2024.
- When adjusted for the sale of the Canadian retail business divested in Q3 FY2023, Canada cannabis segment revenue increased by 2% year-over-year to $154 MM in FY2024 driven primarily by growth in Canada medical cannabis net revenue.
- Canada medical cannabis net revenue increased 10% year-over-year to $61 MM in FY2024 driven by customer mix and a larger assortment of products in the Spectrum Therapeautics online store.
- International markets cannabis FY2024 net revenue increased 6% year-over-year to $41 MM primarily attributable to growth in Australia. International markets cannabis Gross Margins in FY2024 improved to 40% primarily due to a positive shift in geographic mix.
Business Highlights Focus on innovation and increased distribution is driving growth in the Canadian cannabis market
- Larger assortment of higher margin cannabis products on Spectrum Therapeutic online store is contributing to growth in Canada medical sales.
- In Q4 FY2024, the Company launched new SKUs including new Tweed Lemon Meringue Pie flower in large format 28g packs, and 7ACRES Jack Haze Pre-rolled Joints (“PRJ”) in a 0.5g x 14 large pack. Exclusive for medical cannabis customers in Canada, extended the Spectrum Reserve collection with Alien Breath and (GG#4 x Mendo Breath) PRJ in a 0.5g x 10 large pack.
- The Company added over 2,300 points of distribution (“PODs”) in the Canadian adult-use market in Q4 FY2024 including 915 PODs for Tweed flower, over 700 PODs for PRJ and over 650 PODs for Deep Space beverages.
Multiple drivers of growth in International Markets medical cannabis
- Benefiting from increasing supply of high-quality cannabis from Canada, the Company obtained the top 4 market share in the German medical cannabis market in FY20246.
- Proven Canadian flower strains including Tweed Kush Mintz and Tweed Tiger Cake, launched in Q3 FY2024, accounted for over 25% of net revenue in Q4 FY2024.
Continued demand for new Venty vaporizer driving strong growth in Storz & Bickel net revenue
- Significant growth in Storz & Bickel Q4 FY2024 net revenue driven in part by continuing strong demand for the new Venty portable vaporizer.
- Strong distributor and retailer load-in of all Storz & Bickel devices in Q4 FY2024 experienced in advance of 4/20 events and sales promotions.
About Canopy Growth Corporation
Canopy Growth is a world leading cannabis company dedicated to unleashing the power of cannabis to improve lives. Through an unwavering commitment to our consumers, Canopy Growth delivers innovative products with a focus on premium and mainstream cannabis brands including Doja, 7ACRES, Tweed, and Deep Space. Canopy Growth’s CPG portfolio features gourmet wellness products by Martha Stewart CBD, and category defining vaporizer technology made in Germany by Storz & Bickel. For more information visit www.canopygrowth.com.