Canopy Growth Corporation and KPMG LLP have proposed a partial settlement of a securities class action for CAD $3,500,000, seeking final approval from the Ontario Superior Court of Justice. The agreement resolves claims against KPMG while the lawsuit continues against Canopy Growth and two former officers, David Klein and Judy Hong. Class Counsel requests fees equal to 30% of the settlement amount, plus expenses and taxes, to be deducted from the total. This development offers eligible investors a defined recovery path while preserving the broader litigation against the remaining defendants.

The proposed settlement includes Class Counsel’s fees, applicable taxes, and interest within the CAD $3,500,000 total. KPMG denies any liability or resulting damages but agreed to the settlement to avoid the cost, time, and uncertainty of trial. The class action has been certified against KPMG on consent for settlement purposes only. If approved, the Action would end against KPMG but continue against Canopy Growth, Klein, and Hong.

The class consists of persons who acquired Canopy Growth securities in the secondary market between June 1, 2021, and June 22, 2023, and held them until May 10, 2023, or June 22, 2023. Eligible class members are residents of Canada or those who acquired securities on a Canadian exchange or another exchange outside the United States. Excluded persons are not part of this class.

Class members who do nothing remain in the class action and become eligible for benefits if the settlement is approved, but they forfeit the right to sue any defendant independently. Those wishing to object to the settlement or Class Counsel fees must submit a form by November 25, 2026, at 11:59 p.m. ET. To exclude themselves from the class action entirely, members must opt out by September 21, 2026, at 11:59 p.m. ET, via email to CanopyGrowth@KND.law . Opting out removes individuals from the lawsuit against all defendants, requiring them to pursue independent actions at their own expense.

The Settlement Approval Hearing will take place on December 10, 2026, at the Courthouse at Osgoode Hall, 130 Queen St. W., Toronto, ON. The Court will determine if the partial settlement is fair, reasonable, and in the best interests of the Class. Class Counsel, KND Complex Litigation, has worked under a contingency-fee agreement and paid all out-of-pocket expenses. They request that legal fees and disbursements be deducted from the Settlement Amount. The net amount will be distributed later, once the action concludes against other defendants, pursuant to a plan to be proposed to the Court.

What the Numbers Show

The proposed settlement allocates 30% of the gross CAD $3,500,000 to Class Counsel fees, leaving approximately CAD $2,450,000 for distribution to class members before taxes and expenses. This structure reflects standard contingency arrangements where counsel bears upfront litigation costs. The partial nature of the settlement means Canopy Growth and its officers face continued exposure, potentially affecting future capital allocation or insurance costs. Investors must weigh the immediate, albeit reduced, recovery against the uncertainty of pursuing individual claims after opting out.

Canopy Growth reported a 6% increase in net revenue to $285 million for the fiscal year ended March 31, 2026, driven by an 18% rise in Canadian medical cannabis and a 20% increase in Canadian adult-use cannabis. The company strengthened its balance sheet during the year, moving from a net debt position of $173 million to a net cash position of $131 million. Management expressed confidence in achieving positive adjusted EBITDA during fiscal 2027, supported by continued revenue growth and decreasing costs.

Financial Performance

For the fourth quarter of fiscal 2026, net revenue was $71.2 million, a 10% increase compared to the same period in the previous year. Cannabis net revenue reached $54.5 million, up 20% year-over-year, led by a 27% increase in Canada Medical Cannabis revenue to $25.3 million. International Cannabis net revenue grew 68% to $8.6 million, driven by growth in Poland and Germany.

The company reported an adjusted EBITDA loss of $6 million in Q4 fiscal 2026, representing a $3 million year-over-year improvement. General and administrative operating expenses decreased by approximately $9.5 million, or 15%, in fiscal 2026, driven by the rationalization of approximately 130 positions.

Strategic Acquisition and Synergies

The acquisition of MTL Cannabis positioned Canopy Growth as a leader in the Canadian medical cannabis market. Integration efforts have advanced rapidly, with $6 million of targeted annualized cost synergies already achieved. The company targets $10 million in run-rate savings within 18 months of the transaction closing. Synergy initiatives include the elimination of MTL's public company costs, headcount reductions, and the rationalization of redundant facilities, including the closure of a cultivation facility in Kelowna, BC.

Operational Outlook

Management anticipates slower growth in the first half of fiscal 2027 due to the integration of MTL operations and adjustments to product offerings. However, gross margin improvements are expected within the cannabis segment as the integration progresses. The company remains focused on expanding markets in Europe and leveraging its strengthened platform and product portfolio to drive long-term shareholder value.