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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 Q1 Fiscal '26 Earnings: A Mixed Bag

Canopy Growth reported a top-line performance that exceeded expectations, with cannabis net revenue growing 24% year-over-year, driven by a 43% increase in Canada adult-use net revenue. However, the company's adjusted EBITDA loss was higher than the prior year, primarily due to challenged gross margin performance in both the cannabis and Storz & Bickel segments. The cannabis gross margin came in at 24%, down from the prior year, resulting from higher production costs and softer sales in the high-margin Polish market. The company's EPS came in at -$0.22051, missing estimates of -$0.11.

Publication Date: Aug -23

📋 Highlights

Segment Performance

The Canada adult-use segment drove the top-line growth, with net revenue increasing 43% year-over-year, driven by a more targeted product portfolio and strengthened shelf presence. The Canada medical segment also performed well, with net revenue growing 13% year-over-year, marking three consecutive quarters of growth. International net revenues returned to growth, with Germany delivering triple-digit growth.

Margin Pressures and Cost Reduction Initiatives

The company's gross margin performance was a major concern, with cannabis gross margin down from the prior year. However, management has taken decisive actions to improve margins, including taking price on select cannabis products, implementing new automation and pre-roll capacity, and pursuing margin-accretive bulk cannabis sales. The company has already delivered $17 million in annualized savings against its original $20 million target.

Valuation and Outlook

With a P/S Ratio of 1.3 and an EV/EBITDA of -1.36, the market is pricing in significant growth expectations. However, the company's ROE and ROIC are negative, indicating that the company is still struggling to generate returns on its investments. As the company continues to execute on its cost reduction initiatives and improve its margin performance, investors may want to keep a close eye on the company's progress. The company's guidance for exiting the year with a margin in the low to mid-30s is a positive sign, but the path to getting there will be closely watched.

European Market Opportunities

The company is prioritizing supply to the most profitable markets in Europe, particularly in Germany and Poland, where it is setting up the right infrastructure and team to drive growth. With a Managing Director for Europe recently hired, the company is developing a strategy to win across Europe, which could potentially drive growth in the region.

3. NewsRoom

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Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Nov -10

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Analysts Have Lowered Expectations For Canopy Growth Corporation (TSE:WEED) After Its Latest Results

Nov -10

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Canopy Growth Corp (CGC) Q2 2026 Earnings Call Highlights: Strong Domestic Growth Amid ...

Nov -08

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Canopy Growth Corporation (CGC) Reports Q2 Loss, Misses Revenue Estimates

Nov -07

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Canopy Growth Reports Second Quarter Fiscal 2026 Financial Results; Company Continues to Strengthen Financial Performance with Improving Adjusted EBITDA, Disciplined Cost Management, and a Stronger Balance Sheet

Nov -07

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Canopy Growth Corporation (CGC) Suffers a Larger Drop Than the General Market: Key Insights

Oct -30

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Canopy Growth Corporation (CGC) Outpaces Stock Market Gains: What You Should Know

Oct -24

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Canopy Growth to Report Second Quarter Fiscal 2026 Financial Results on November 7, 2025

Oct -24

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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: 5.3/10

Value: 2.6

Growth: 6.0

Quality: 7.6

Yield: 0.0

Momentum: 9.0

Volatility: 6.7

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Amphastar Pharmaceuticals

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Value: 7.1

Growth: 8.8

Quality: 8.0

Yield: 0.0

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Volatility: 4.7

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Sundial

A-Score: 4.6/10

Value: 8.1

Growth: 6.8

Quality: 3.7

Yield: 0.0

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Volatility: 2.3

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PetIQ

A-Score: 3.5/10

Value: 3.6

Growth: 7.8

Quality: 3.1

Yield: 0.0

Momentum: 5.0

Volatility: 1.7

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Aytu BioPharma

A-Score: 3.4/10

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Growth: 4.8

Quality: 4.4

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

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Canopy Growth

A-Score: 2.9/10

Value: 8.8

Growth: 4.1

Quality: 3.2

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

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

1.69$

Current Price

1.69$

Potential

-0.00%

Expected Cash-Flows