Canopy Growth's Q3 2025: Contradictions in Asset-Light Strategy, Constellation's Role, and U.S. CBD Transition

These are the key contradictions discussed in Canopy Growth Corporation's latest 2025 Q3 earnings call, specifically including: Asset-Light Strategy and International Strategy, Constellation Brands' Involvement and Distribution Capabilities, and U.S. CBD Business Strategy:



Financial Performance and Market Momentum:
- Canopy Growth reported consolidated net revenue of CAD75 million in Q3, a 5% decrease year-over-year but up 8% excluding the impact of divested businesses, with adjusted EBITDA loss narrowing to CAD3 million, an improvement of 61% compared to the previous year.
- The decrease in revenue was due to the impact of divested businesses, while the improvement in adjusted EBITDA was driven by cost efficiencies and strong performance in medical cannabis and Storz & Bickel.

Medical Cannabis Growth:
- In Canada, Canopy's medical cannabis business reported year-over-year revenue growth of 16%, marking another record quarter, while international medical cannabis revenue in Europe grew by more than 70%.
- The growth in medical cannabis was driven by expanding product assortment, gaining more insured patients, and securing additional supply for Germany.

Adult Use Market Recovery:
- Canopy's adult use business in Canada showed a 15% quarter-over-quarter increase, despite a 10% year-over-year decline.
- The improvement was driven by the launch of the Claybourne brand, the return of Wana Gummies, and increased bulk flower sales.

Storz & Bickel's Strong Performance:
- Storz & Bickel reported Q3 revenue of CAD22 million, up 19% year-over-year, driven by robust direct-to-consumer sales and growth in Germany.
- The growth was due to strong holiday sales and increased online demand, as well as efforts to expand the product portfolio.

International Expansion and Partnerships:
- Canopy's international cannabis net revenue grew by 14% year-over-year, with Poland specifically seeing outsized growth.
- This growth was supported by strategic supply agreements, leveraging GMP certified facilities, and capitalizing on regulatory changes that promote market growth.