Canopy Growth Corporation (NASDAQ:CGC) (TSX:WEED) Q2 FY2023 net revenue was CA$118 million ($87.8 million), a 10% decrease compared to Q2 FY2022. The decrease is primarily attributable to increased competition in the Canadian adult-use cannabis market, the divestiture of C³ Cannabinoid Compound Company GmbH, and softer performance from This Works, offset by revenue growth at BioSteel.
Q2 2023 Financial Highlights
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Gross margin was 3% as compared to (54%) in Q2 FY2022.
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Net loss was CA$232 million, which is a CA$216 million increase in the net loss versus Q2 FY2022, driven primarily by non- cash fair value changes and an increase in asset impairment and restructuring costs, partially offset by improved margins.
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Adjusted EBITDA loss was CA$78 million, an CA$85 million improvement in adjusted EBITDA loss versus Q2 FY2022 due to the improvement in gross margin and reductions in G&A and R&D expenses.
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Cash and short-term investments amounted to CA$1,143 million at September 30, 2022, representing a decrease of CA$229 million from CA$1,372 million at March 31, 2022 reflecting primarily Adjusted EBITDA losses and interest costs.
Other Highlights
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Announced comprehensive plan to fast track entry into the U.S. cannabis market through the creation of a new U.S. domiciled holding company, Canopy USA, LLC, which is expected to accelerate growth and market expansion.
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In respect of the acquisition of Acreage Holdings, Inc. (OTCQX:ACRDF) (OTCQX:ACRHF), the 30-day HSR waiting period has expired.
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Delivered net revenue growth of 7% in Q2 FY2023 relative to Q1 FY2023, despite the continued impacts of macroeconomic headwinds and evolving Canadian cannabis market dynamics.
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Achieved 299% net revenue increase for BioSteel as compared to the prior year, driven by increased investment.
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Increased Canadian medical cannabis revenues by 8% versus Q2 FY2022 through continued focus on expansion of product offerings.
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Announced divestiture of Canadian retail operations, ensuring cost reduction program remains on track to deliver CA$70-CA$100 million in SG&A savings.
"We delivered solid sequential quarterly net revenue growth and improved margins, led by another record quarter for BioSteel, the stabilization of our Canadian cannabis business, and continued actions to reduce overall costs. We are pressing forward on our path to profitability in Canada and expect Canopy USA will meaningfully enhance our growth and profitability over time once it closes the announced acquisitions of Acreage, Jetty, and Wana," stated Judy Hong, CFO.
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