Canopy Growth Reports Second Quarter Fiscal 2022 Financial Results

Published: November 8, 2021

Canopy Growth Reports Second Quarter Fiscal 2022 Financial Results

Canopy Growth Corporation announces its financial results for the second quarter fiscal 2022 ended September 30, 2021. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.


  • Announced plan to acquire the #1 edibles company in North AmericaWana Brands, upon U.S. THC permissibility further strengthening U.S. ecosystem. 

  • Delivered a robust innovative new product pipeline with over 40+ new SKUs launching globally during Q2 FY2022.

  • Launched whisl, an innovative CBD vape designed for mood management, through an exclusive partnership with Circle K in the U.S. 

  • Net revenue declined by 3% in Q2 FY2022 versus Q2 FY2021. Maintained market leadership position in premium flower category and increased market share in vapes and edibles during Q2 FY2022 across tracked Canadian recreational cannabis market.

  • Pushing out positive Adjusted EBITDA target due to Canada supply challenges and a delayed revenue ramp in the U.S.; taking a number of actions to improve Canadian performance and remain optimistic about the mid-to long-term outlook.

“In new industries where the potential is immense, progress is rarely a straight line. With a focused strategy, a foundation for growth, and our burgeoning U.S. ecosystem, Canopy is uniquely positioned to win as the industry matures,” says David Klein, Chief Executive Officer, Canopy Growth Corporation

“Achieving profitability remains a top priority. We are focused on increasing market share in Canada, premiumizing our product mix and delivering on our cost savings commitment,” commented Mike Lee, Chief Financial Officer, Canopy Growth Corporation

Second Quarter Fiscal 2022 Financial Summary

(in millions of Canadian
\dollars, unaudited)

Net Revenue

Gross margin



gross margin


Net loss



Free cash









vs. Q2 FY2021


(7,300) bps

(7,100) bps






Adjusted gross margin is a non-GAAP measure, and for Q2 fiscal 2022 excludes $3.1 million related to the flow-through of inventory step-up associated with the acquisition of Supreme Cannabis (Q2 FY2021 – excludes $0.3 million related to the flow-through of inventory step-up associated with fiscal 2020 business combinations). See “Non-GAAP Measures”.


Adjusted EBITDA is a non-GAAP measure. See “Non-GAAP Measures”.


Free cash flow is a non-GAAP measure. See “Non-GAAP Measures”.  

Second Quarter Fiscal 2022 Financial Summary


Net revenue of $131 million in Q2 FY2022 was a decline of 3% versus Q2 FY2021. Total net cannabis revenue of $95 million in Q2 FY2022, represented an increase of 1% over Q2 FY2021. Excluding the impact from acquired businesses, net revenue declined 13% and cannabis revenue declined 14% versus Q2 FY2021.

Gross margin:

Reported gross margin in Q2 FY2022 was (54%) as compared to 19% in Q2 FY2021. Excluding non-cash charges related to inventory write-downs and inventory step-up charges from acquisitions, as well as certain other non-recurring items including Canadian government payroll subsidies pursuant to a COVID-19 relief program, gross margin would have been approximately 12%.  Inventory write-downs in Q2 FY22 amounted to $87 million and primarily relate to excess Canadian cannabis inventory resulting from lower sales relative to forecast as well as declines in expected near-term demand. Gross margin in Q2 FY2022 was further impacted by lower production output and price compression in the Canadian recreational business as well as higher third-party shipping, distribution and warehousing costs across North America.

Operating expenses:

Total SG&A (“SG&A”) expenses in Q2 FY2022 declined by 15% versus Q2 FY2021, driven by year-over-year reductions in General & Administrative (“G&A”) and Research and Development (“R&D”) expenses partially offset by an increase in Sales & Marketing (“S&M”) expenses. G&A expenses declined 49% year-over-year primarily due to reductions in staffing and professional fees and benefit from payroll subsidies received from the Canadian government in Q2 FY2022, pursuant to a COVID-19 relief program. R&D expenses declined 38% year-over-year principally due to project timing. S&M expenses increased 49% year-over-year primarily due a return to more normal advertising and promotions spending in Q2 FY2022, compared to the prior year, higher sponsorship fees associated with BioSteel’s partnership deals and increased advertising expenses associated with new product launches.

Net Earnings:

Net Earnings in Q2 FY2022 amounted to a loss of $16 million, which is an $80 million improvement versus Q2 FY2021, driven primarily by Other Income totaling $196 million during Q2 FY2022 mostly attributable to non-cash fair value changes of $233 million.

Adjusted EBITDA:

Adjusted EBITDA loss in Q2 FY2022 was $163 million, a $77 million wider loss versus Q2 FY2021 driven by lower sales, a decline in gross margins, partially offset by the reduction in our total selling, general and administrative expense. Adjusted EBITDA loss in Q2 FY2022, excluding non-cash inventory write-downs would have been a loss of $76 million.

Free Cash Flow:

Free Cash Flow in Q2 FY2022 was an outflow of $101 million, a 47% decrease in outflow vs Q2 FY2021. Relative to Q2 FY2021, the Free Cash Flow outflow reduction reflects the decrease in cash used for operating activities and the lower purchases of property, plant and equipment.

Cash Position:

Cash and Short-term Investments amounted to $2.0 billion at September 30, 2021, representing a decrease of $0.3 billion from $2.3 billion at March 31, 2021 reflecting EBITDA losses and capital investments.

About Canopy Growth Corporation
Canopy Growth is a world-leading diversified cannabis and cannabinoid-based consumer product company, driven by a passion to improve lives, end prohibition, and strengthen communities by unleashing the full potential of cannabis. Leveraging consumer insights and innovation, we offer product varieties in high quality dried flower, oil, softgel capsule, infused beverage, edible, and topical formats, as well as vaporizer devices by Canopy Growth and industry-leader Storz & Bickel. Our global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using its colour-coded classification system and is a market leader in both Canada and Germany.

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