Canopy Growth Reports 2024 Earnings

TDR’s three key takeaways from Canopy and CEO David Klein’s growth:

David Klein credits strategic changes for improving Canopy Growth’s financial metrics.
David Klein discusses the market opportunity for Canopy Growth in an interview with TDR.
International expansion in Australia marks a significant milestone for Canopy Growth, notes TDR.

Canopy Growth Corporation (TSX:WEED, NASDAQ: CGC), a Canadian multinational cannabis and consumer packaged goods company, announced its fiscal 2024 earnings yesterday. Fourth quarter fiscal 2024 net revenue increased 7% year-over-year to USD 72.8 million, an increase of 16% after excluding divested businesses. The company’s total cost of goods sold decreased by 45%, leading to a 27% improvement in gross margin. Notable areas of growth included Storz & Bickel, with revenue growth of 43%, and Canadian medical marijuana, which was up 16%. Operating loss from continuing operations was $229 million, representing a 72% improvement in adjusted EBITDA loss. The company does not have any significant debt obligations due until March 2026.

Canopy Growth’s fourth quarter and fiscal 2024 results demonstrate significant progress and strategic changes, reflecting strong financial performance and operational improvements. CEO David Klein emphasized in an exclusive interview with Trade to Black: “There’s been more evidence this quarter that it’s time to really get after Canopy.” Klein stated, “We have a balance sheet of $200 million in cash and no debt through 2026.”

The potential adoption of SAFE banking legislation could significantly improve Canopy’s U.S. operations. Klein noted, “I still think we will have safe banking…perhaps closer to the time when everyone wants to join.” Canopy is targeting profitable market share growth in fiscal 2025. “We only sell when we can provide a fair return to our investors,” Klein said, pointing to the emphasis on sustainable profitability.

Canopy Growth’s flower portfolio includes value and premium products. Improved flower quality is driving growth in international markets such as Germany and Australia. “We had to get it right,” Klein noted of their high-quality floral offerings. The United States represents a promising opportunity for cannabis-infused beverages. “We are very excited about the opportunity for KUSA to produce beverages in the U.S.,” Klein emphasized, pointing to concentrated markets as the key to profitability.

The Venty device and dry flower vaporization are driving consumer demand. Klein said, “The story of Stores and Bickel is really about innovation… it’s an amazing device because you can keep all the flavor in it.” With no significant debt obligations through 2026 and a significant cash balance, Canopy Growth is in a strong financial position. “I’m not really worried about debt in 2026.” – assured Klein, emphasizing the company’s strong financial position.

Anthony Varrell Co-host of the Trade to Black podcast added: “What stands out most to me is the international growth…growing in Australia at a record pace this quarter.” He also noticed a shift in consumers towards premium products and innovative devices: “I now use Venty exclusively for consumption purposes. I just don’t use all the other methods anymore.” Anthony further emphasized the strategic focus on high-margin products: “We have taken a very clear stance on profitable growth in Canada.” Canopy Growth has made significant progress in fiscal 2024, so we will continue to watch this story closely and share our observations with our readers. Want to stay up to date with everything related to psychedelia, cannabis, artificial intelligence and cryptocurrencies? Sign up for our Daily Baked in newsletter!