Canopy Growth Corporation announces its financial results for the first quarter ended June 30, 2023. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.
Highlights
- All business segments of the Company delivered sequential revenue growth in Q1 FY2024, compared to Q4 FY2023.
- Achieved cost reduction of $47 million in Q1 FY2024, bringing total cost reductions to $172 million since the beginning of FY2023.
- Consistent supply and strong demand for high-quality flower elevated the Tweed brand to the #8 rank within the total flower segment of the Canadian adult-use cannabis market in Q1 FY20241, moving up 19 places year-over-year.
- Canadian cannabis business continued its transformation to simplified, asset-light model in Q1 FY2024, building on the divestiture of national retail operations, closure of eight cultivation facilities to focus on two purpose-built cultivation sites and outsourcing of vape, beverage and edible production to independent, third-party Contract Manufacturing Organizations (“CMO”).
- The Company continues to focus on simplifying its businesses and reducing cash burn; currently reviewing strategic options for BioSteel Sports Nutrition Inc. (“BioSteel”), including a potential sale of the business, in order to remove the cash burden to Canopy Growth as quickly as possible.
- Entities that are expected to be acquired by Canopy USA, LLC (“CUSA”) continue to demonstrate momentum and Canopy Growth continues to work with regulators to advance its novel structure.
“Our performance in the first quarter of Fiscal 2024 validates the difficult but transformative changes we made over the last twelve months. Canopy Growth’s businesses demonstrated stability, consistency, and signs of positive momentum, while realizing a substantial reduction in expenses across the enterprise. Our asset-light approach is enabling the agile execution of business initiatives, allowing us to move faster and to be more responsive to consumers,” David Klein, Chief Executive Officer.
Canada Cannabis
- Adult-use business-to-business net revenue in Q1 FY2024 decreased 9% over the prior year period driven primarily by lower sales volumes across our premium and value-priced product categories, which for the value-priced category, is largely the result of a strategy shift to move away from low-margin value-priced products. This decrease was partially offset by increased sales of the Company’s mainstream brands, primarily resulting from improved product attributes. Adult-use business-to-business net revenue in Q1 FY2024 increased 12% sequentially compared to Q4 FY2023.
- Following the previously announced divestiture of the Company’s Canadian retail business in Q3 FY2023, the Adult-use business-to-consumer (retail) net revenue in Q1 FY2024 was nil.
- Medical net revenue in Q1 FY2024 increased 7% from Q1 FY2023 primarily attributable to an increase in the average size of medical orders placed and a larger assortment of cannabis product choices offered to our customers, partially offset by a lower number of medical orders.
