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1. Company Snapshot

1.a. Company Description

Canopy Growth Corporation, together with its subsidiaries, engages in the production, distribution, and sale of cannabis and hemp-based products for recreational and medical purposes primarily in Canada, the United States, and Germany.It operates through two segments, Global Cannabis and Other Consumer Products.The company's products include dried cannabis flower, extracts and concentrates, beverages, gummies, and vapes.


It offers its products under the Tweed, 7ACRES, 7ACRES Craft Collective, DOJA, Ace Valley, Quatreau, Deep Space, First + Free, Surity Pro, Spectrum Therapeutics, Vert, Tokyo Smoke, Twd, Martha Stewart CBD, DNA Genetics, BioSteel, Storz & Bickel, This Works, HiWay, Simple Stash, Whisl, and Truverra brands.The company was formerly known as Tweed Marijuana Inc.and changed its name to Canopy Growth Corporation in September 2015.


Canopy Growth Corporation was incorporated in 2009 and is headquartered in Smiths Falls, Canada.

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1.b. Last Insights on WEED

Negative drivers behind Canopy Growth Corporation's recent performance include mixed Q3 results and outlook, with adult use remaining challenging and operational costs still needing to fall further to achieve positive consolidated EBITDA. The company's weak guidance and slowing growth in the cannabis sector, as well as increased competition, have also contributed to its struggles. Additionally, Canopy Growth's high operational costs and declining revenue have raised concerns among investors, leading to a price target reduction by BofA to C$2 from C$5.

1.c. Company Highlights

2. Canopy Growth's Q3 Fiscal 2026: A Step Closer to Profitability

Canopy Growth reported a significant improvement in its financial performance in Q3 Fiscal 2026, with a net cash position of $146 million and cash and cash equivalents of $371 million. The company's adjusted EBITDA loss narrowed to its slimmest level to date, driven by cost discipline and improving execution across its Canadian medical and adult-use channels. Revenue growth was evident in both segments, with the Canadian medical channel growing 15% year-over-year and the Canadian adult-use channel increasing 8% year-over-year. The company's EPS came in at -$0.24869, missing estimates of -$0.03. The revenue growth and cost savings initiatives are expected to continue driving improvement in the company's financial performance.

Publication Date: Feb -22

📋 Highlights
  • Cash Position Strengthened:: Canopy Growth ended Q3 with $371 million in cash and a net cash position of $146 million, bolstered by a post-quarter USD 150 million recapitalization extending debt maturities to 2031.
  • Adjusted EBITDA Improvement:: Achieved the slimmest adjusted EBITDA loss to date, driven by 15% YoY growth in Canadian medical revenue and 8% YoY growth in Canadian adult-use revenue.
  • International Momentum:: International cannabis revenue rose 22% sequentially in Q3, with a focus on stabilizing operations and laying groundwork for European expansion.
  • MTL Acquisition Strategy:: Targeting a $40–50 million outlay to acquire MTL Cannabis, aiming to become Canada’s #1 player via synergies and leveraging MTL’s historical gross margins (mid- to high-30s).
  • Veteran Market Impact Mitigation:: Despite opposing a proposed veteran cannabis price cut (from $8 to $6/gram), the medical segment grows at 50%, leveraging scale and MTL merger to preserve margins.

Segment Performance

The Canadian medical channel continued to demonstrate strong growth, driven by patient acquisition and service excellence. The adult-use channel also showed momentum, with revenue growth driven by innovation and expanding distribution. International cannabis revenue grew 22% sequentially, driven by improved execution and stabilization of the business. The proposed acquisition of MTL Cannabis is expected to further strengthen the company's position in the Canadian market and provide opportunities for growth in Europe.

Outlook and Valuation

Canopy Growth expects continued strength in its adult-use channel, driven by innovation and expanding distribution. The company is also focused on unlocking growth in Europe, where it is investing in cultivation, quality, and efficiency. With a current cash balance of $425 million post-recapitalization, the company is well-positioned to pursue strategic opportunities. Analysts estimate revenue growth of 11.4% next year. The stock trades at a P/S Ratio of 1.07 and an EV/EBITDA of -0.81, indicating that the market is pricing in significant growth prospects. The company's ROE is -52.88%, and ROIC is -6.94%, highlighting the need for continued improvement in profitability.

Challenges Ahead

The proposed reduction in the cap for veterans from $8 per gram to $6 per gram poses a headwind for the company's medical business, which accounts for almost 2/3 of the Canadian medical market. Canopy Growth is taking actions to preserve its adjusted EBITDA performance, including leveraging synergies with MTL Cannabis to maintain margin integrity. As Thomas Stewart noted, "With MTL's historical margin performance... we're targeting in the near term... a blended gross margin of, say, mid- to high 30s."

3. NewsRoom

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Canopy Growth posts mixed Q3 results, narrower loss amid ongoing cost cuts

Feb -06

Source: proactiveinvestors.com

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2026 Asset Growth: Why Federal Compliance Is the New Metric

Jan -19

Source: globenewswire.com

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The "New Vice" Economy: 5 Stocks Profiting from the Shift to Clean Fuel

Dec -24

Source: globenewswire.com

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Canopy Growth to acquire MTL Cannabis, expanding Québec presence

Dec -16

Source: proactiveinvestors.com

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Canopy Growth Launches Claybourne Gassers Liquid Diamonds All-In-One Vapes in Canada, Expanding Footprint in High-Growth Vape Segment

Dec -04

Source:

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Leading Food Tech Platform MenuSano Launches Rapid Customization Program for Brands Navigating Regulatory and Clean Label Demands

Dec -01

Source:

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Canopy Growth Corporation (CGC) Sets Sights on Australia Cannabis Market with Expanded Portfolio

Nov -25

Source:

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Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Nov -23

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.16%)

6. Segments

Canada Cannabis

Expected Growth: 7%

Strong demand for recreational cannabis, increasing market share in Canada, strategic partnerships, and expansion into new markets such as edibles and vapes drive Canopy Growth Corporation's 7% growth. Additionally, the company's focus on research and development, cost savings initiatives, and a strong balance sheet contribute to its growth momentum.

BioSteel

Expected Growth: 3%

BioSteel's 3x growth is driven by increasing demand for natural, healthy beverages, expanding distribution channels, and strategic partnerships. Canopy Growth's established brand reputation and investment in marketing campaigns also contribute to growth. Additionally, the sports drink market's shift towards low-sugar, high-performance products aligns with BioSteel's product offerings, further fueling growth.

Storz & Bickel

Expected Growth: 4%

Storz & Bickel's 4x growth is driven by increasing demand for premium vaporizers, strategic partnerships, and expansion into new markets. Canopy Growth's investment has enabled Storz & Bickel to enhance its product offerings, improve manufacturing efficiency, and strengthen its global distribution network, further solidifying its market leadership position.

Rest-of-world Cannabis

Expected Growth: 6%

The 6% growth of Rest-of-world Cannabis from Canopy Growth Corporation is driven by increasing legalization, rising demand for recreational and medicinal cannabis, and strategic expansion into new markets. Additionally, growing awareness of cannabis' therapeutic benefits, increasing online sales, and partnerships with major retailers are contributing to this growth.

This Works

Expected Growth: 2%

Canopy Growth Corporation's 2% growth is driven by increasing demand for cannabis products, particularly in the Canadian recreational market. Strong brand recognition, strategic partnerships, and expanding distribution channels also contribute to growth. Additionally, the company's focus on innovation, R&D, and cost savings initiatives support its growth momentum.

Other

Expected Growth: 1%

Canopy Growth Corporation's 'Other' segment growth is driven by increasing demand for cannabis-infused beverages, expansion into new markets, and strategic partnerships. Additionally, the company's focus on product innovation, particularly in the edibles and vapes categories, contributes to its growth. Furthermore, the acquisition of Mettrum Health Corp. and the launch of new retail stores also support the segment's growth.

7. Detailed Products

Dried Flowers

High-quality, lab-tested cannabis flowers for recreational and medical use

Oils and Softgels

Cannabis-infused oils and softgels for precise dosing and easy consumption

Vapes and Concentrates

Portable and discreet cannabis vapes and concentrates for on-the-go use

Edibles and Beverages

Cannabis-infused food and drink products for a unique consumption experience

Topicals and Creams

Cannabis-infused topical creams and balms for localized pain relief and skin care

CBD Products

Non-psychoactive CBD products for wellness and self-care

Medical Cannabis

Prescription cannabis products for medical patients

8. Canopy Growth Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Canopy Growth Corporation is medium due to the presence of alternative products and services in the cannabis industry. While the company has a strong brand presence, customers may switch to alternative products or services if they are not satisfied with Canopy's offerings.

Bargaining Power Of Customers

The bargaining power of customers for Canopy Growth Corporation is low due to the company's strong brand presence and limited switching costs. Customers are likely to remain loyal to the company's products and services.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Canopy Growth Corporation is medium due to the presence of multiple suppliers in the cannabis industry. While the company has some bargaining power, suppliers may still have some leverage in negotiations.

Threat Of New Entrants

The threat of new entrants for Canopy Growth Corporation is high due to the growing demand for cannabis products and the relatively low barriers to entry in the industry. New entrants may pose a significant threat to the company's market share.

Intensity Of Rivalry

The intensity of rivalry for Canopy Growth Corporation is high due to the presence of multiple competitors in the cannabis industry. The company faces intense competition from other established players, which may lead to pricing pressures and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.28%
Debt Cost 9.67%
Equity Weight 36.72%
Equity Cost 13.13%
WACC 10.94%
Leverage 172.31%

11. Quality Control: Canopy Growth Corporation passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Supernus Pharmaceuticals

A-Score: 5.9/10

Value: 9.1

Growth: 6.0

Quality: 5.9

Yield: 0.0

Momentum: 8.5

Volatility: 5.7

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Aytu BioPharma

A-Score: 4.8/10

Value: 9.4

Growth: 4.7

Quality: 4.2

Yield: 0.0

Momentum: 9.0

Volatility: 1.3

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Amphastar Pharmaceuticals

A-Score: 4.6/10

Value: 6.7

Growth: 8.9

Quality: 6.3

Yield: 0.0

Momentum: 1.0

Volatility: 4.7

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Sundial

A-Score: 4.2/10

Value: 8.5

Growth: 6.8

Quality: 3.6

Yield: 0.0

Momentum: 4.5

Volatility: 1.7

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PetIQ

A-Score: 3.7/10

Value: 3.7

Growth: 7.7

Quality: 3.1

Yield: 0.0

Momentum: 6.0

Volatility: 1.7

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Canopy Growth

A-Score: 3.0/10

Value: 9.0

Growth: 4.1

Quality: 3.5

Yield: 0.0

Momentum: 1.0

Volatility: 0.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.64$

Current Price

1.64$

Potential

-0.00%

Expected Cash-Flows