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Canopy Growth Trims Losses Significantly as It Prepares for Financial Boost From Rescheduling

Canopy Growth saw revenues decline in its last full fiscal year and posted another multi-million dollar loss, but its leaders are looking to international expansion and US rescheduling to improve margins in the coming months.

Yesterday, the Canadian cannabis giant released its Q4 and FY 2024 results, reporting an 11% decline in overall revenues for the full year.

For the final quarter of the fiscal year, however, Canopy’s total revenues grew by 7% (16% including divested businesses) to $72.8m.

This quarterly growth was attributed to growth in its vaping brand, Storz & Bickel, which saw revenues increase by 43%, alongside a 16% increase in medical cannabis sales in Canada.

Meanwhile, the company managed to significantly improve its margins, seeing its net losses fall from over $3.3bn in 2022 to $675.8m this year, while adjusted EBITDA fell 72% to $58.9m.

As of March 31, 2024, Canopy had cash and equivalents of $203m, with ‘no material debt due until March 2026.

“In Fiscal 2024 we fortified Canopy’s foundation for future growth. With a resolute focus on cannabis, we have momentum and are poised to seize the opportunity presented by continued regulatory developments in Germany and the United States,” Canopy’s CEO David Klein said.

“Entering FY2025, Canopy has growing businesses in all of the world’s most attractive cannabis markets, a leading portfolio of high-impact brands, and a rapidly developing U.S. ecosystem.”

In its results, Canopy noted the string of acquisitions it is in the process of completing in the US under its Canopy USA subsidiary, including Mountain High Products, Wana Wellness, LLC and The Cima Group (collectively Wana) and Lemurian. These acquisitions are expected to close in the first half of this fiscal year.

In a subsequent investor call, Klein suggested that the federal rescheduling of cannabis in the US was likely to bring significant tax savings to these entities.

These new entities, alongside Acreage Holdings which Canopy already owns, are set to provide significant growth for the company over the coming year, according to its CEO.

According to Klein, Acreage Holdings, which posted a $69m loss last year, could see its financial woes all but solves due to the tax savings expected from rescheduling, while the other three companies are also set to ‘provide an immediate and meaningful improvement to the cash flow of all state legal cannabis businesses’.

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