Canopy Growth Corporation reported a first-quarter fiscal 2027 net revenue of $81.2 million (CA$81.2M), representing a 13% year-over-year increase and surpassing the consensus estimate of $58.52 million (CA$82.03M). The company posted a basic and diluted loss per share of $(0.03) (US$0.02), significantly beating the analyst consensus estimate of a $(0.10) (US$0.04) loss. This performance marks a substantial improvement from the $(0.24) loss per share recorded in Q1 FY2026, driven by broad-based revenue growth across all business segments and disciplined cost management.

Financial Highlights

The company’s consolidated financial results for the three months ended June 30, 2026, reflect improved operational efficiency and margin expansion. While free cash outflow increased to $(25.7M) from $(11.6M) in the prior year period due to working capital timing, the adjusted EBITDA loss narrowed by 59% to $(3.2M). The net loss decreased 68% to $(14.6M), highlighting the impact of revenue growth against controlled expenses.

Segment Performance

Revenue growth was led by the cannabis division, which saw a 14% increase in net revenue to $65.1M. Canada medical cannabis was the strongest performer, rising 22% to $25.8M, driven by an increase in insured customers and the integration of MTL Cannabis Corp. This growth was partially offset by the Canadian government’s reduction in the Veterans Affairs Canada (VAC) reimbursement rate for medical cannabis.

Canada adult-use cannabis revenues jumped 10% to $29.7M, primarily attributable to increased flower sales following the MTL Cannabis acquisition. International markets cannabis revenue grew 10% to $9.6M, led by strength in Europe, specifically Poland. Storz & Bickel sales increased 6% to $16.1M, benefiting from prior-year portfolio expansion and sales in non-core markets.

Margins and Profitability Outlook

Consolidated gross margin improved to 27% from 25% in the prior year. On an adjusted basis, gross margin expanded to 31%, excluding inventory step-up charges of $2.6 million related to the MTL Cannabis acquisition. Storz & Bickel’s gross margin surged to 48% from 29%, aided by cost rationalization and the recovery of certain U.S. tariffs.

Tom Stewart, Chief Financial Officer, stated that the combination of top-line growth and cost management is enabling steady progress on key profitability measures. He noted that the MTL Cannabis integration is driving increased supply of high-quality flower and meaningful synergies, with further improvements anticipated in the second half of fiscal 2027 as the integration completes.

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.