Canopy Growth Corp (NASDAQ: CGC) announced its fourth-quarter earnings for 2025 on Thursday, revealing a significant decline in sales. The Canadian cannabis company reported revenues of CA$65 million (approximately $45.75 million), down from CA$72.8 million in the same period last year. This disappointing performance contributed to a steep 21% drop in the company’s stock price following the announcement.
The year-over-year decline in net revenue, which fell by 11%, was primarily attributed to reduced sales in international markets and declines in revenue from Storz & Bickel, a subsidiary specializing in vaporization devices. However, Canopy did see a slight increase in Canadian cannabis sales, which reached CA$40 million in the fourth quarter, marking a 4% rise driven by a surge in medical cannabis orders. This increase was tempered by a 3% decrease in adult-use cannabis sales, largely due to lower flower and pre-roll sales, although the company did witness growth in infused pre-rolls.
In terms of gross margins, Canopy Growth reported a consolidated gross margin of 16%, a drop of 500 basis points compared to the previous year. The adjusted gross margin also decreased, falling by 200 basis points to 19%. The company recorded an operating loss of CA$18 million in the fourth quarter, but this represented an 83% improvement from the same period the previous year, primarily due to reduced operating expenses.
The adjusted EBITDA loss was CA$9 million, reflecting a 39% year-over-year improvement, mainly driven by the benefits of a cost savings program.
International cannabis revenue totaled CA$8 million, a stark 35% decrease, significantly impacted by declines in Poland’s medical cannabis market due to regulatory changes, as well as decreased sales in Australia and a transition of Canopy’s U.S. CBD business to Canopy USA. Additionally, Storz & Bickel’s revenue was reported at $17 million, down 23%, driven by decreased consumer demand across all product lines.
Looking ahead, Canopy Growth has outlined its priorities for fiscal year 2026: – The company aims to consolidate its medical cannabis operations across Canada, Germany, Poland, and Australia, focusing on expanding EU-GMP-certified supply channels. – In the Canadian adult-use market, Canopy plans to concentrate on product types and regions that show the most growth potential, particularly in pre-rolls, vapes, and high-THC flower categories. – A new global operations team will oversee cannabis production outside of Canada, optimizing resource allocation and ensuring supply meets demand in key markets. – Storz & Bickel will focus on innovation, with plans to launch a new vaporizer later this year to attract consumers and improve profit margins. – Canopy intends to cut at least CA$20 million in annual costs over the next 12 to 18 months to further enhance profitability.
As of the publication date, Canopy Growth’s stock was trading at $1.34, down 21.78%. Investors are closely watching how the company addresses these challenges and its strategies for regaining market confidence.
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