Medical cannabis: the driving force behind Canopy Growth's recovery

Canadian cannabis producer Canopy Growth announced a significant improvement in its financial results for the fourth quarter of fiscal year 2026, driven by strong growth in both the medical cannabis sector and its international operations. These results suggest that the restructuring efforts the company has been undertaking for several years may finally be starting to pay off.

For the quarter ended March 31, 2026, Canopy Growth generated net revenue of 71.2 million Canadian dollars (43 million euros), an increase of 10% compared to the same period last year. The company’s medical divisions posted the strongest performance, with revenue from medical cannabis in Canada reaching 25.3 million Canadian dollars (15 million euros), a 27% increase year-over-year. International cannabis revenue climbed to 8.6 million Canadian dollars (5.3 million euros), a 68% increase compared to the previous year.

According to the company, growth in Canada was driven by an increasing number of patients and an expanded portfolio of products available through its medical channel. Medical cannabis sales remain particularly attractive to producers, as they generally offer higher margins than the adult-use cannabis market.

“We have modernized our approach to innovation, and our corporate structure has been optimized around a clear strategy,” said CEO Luc Mongeau.

Expansion in Europe and on international markets

The strong rebound in international revenue reflects renewed momentum in foreign markets for medical cannabis, particularly in Europe. After facing supply chain challenges early in the fiscal year, Canopy Growth reported that it had improved its operational execution and was better able to meet international demand.

The company views Europe as a major long-term opportunity, as access to medical cannabis continues to expand.

“During fiscal year 2026, we realigned our business, laid a solid foundation, and made targeted investments—including the acquisition of MTL Cannabis—that will drive the next phase of growth,” said Mr. Mongeau.

The company also expanded its medical product offerings in Australia during the year by launching new high-THC strains and other products under its Spectrum Therapeutics brand.

The acquisition of MTL Cannabis strengthens its leadership

Theacquisition of MTL Cannabis was a major milestone for Canopy Growth during fiscal year 2026.

Following this transaction, Canopy Growth became Canada’s leading medical cannabis company in terms of revenue. This acquisition is expected to play a central role in future growth, while integration efforts will continue throughout the first half of fiscal year 2027.

The company also launched several new products and brands over the past year, including Spectrum Reserve, a premium line of medical cannabis, and DeeLish, a recreational brand focused on flowers and pre-rolled joints.

Financial discipline improves the outlook

Beyond revenue growth, Canopy Growth highlighted major improvements in its balance sheet. The company ended fiscal year 2026 with net cash of 131.3 million Canadian dollars, marking a dramatic turnaround from the net debt it had reported a year earlier.

Tom Stewart, chief financial officer, attributed this improvement in performance to cost-cutting measures and a stronger financial structure.

“The significant strengthening of our balance sheet during fiscal year 2026 reduces risks while increasing our strategic flexibility,” said Mr. Stewart.

Although the company continued to report losses, they were significantly lower than in fiscal year 2025. Free cash outflow also improved significantly, falling from 176.6 million Canadian dollars to 69.1 million Canadian dollars over the course of the year.

Looking ahead, Canopy Growth expects continued revenue growth in fiscal year 2027, driven by the integration of MTL Cannabis, improved cultivation efficiency, and continued cost control. The company has set a goal of achieving positive adjusted EBITDA during the current fiscal year, a milestone that would mark another step forward in its efforts to return to sustainable profitability.