Canopy Sees Q2 Revenue Fall 36% Following BioSteel Bankruptcy

Canopy Growth (TSX: WEED) is now describing itself as an “asset-light” company following the release of its Q2 2024 financial results, which outline further asset sales conducted this year, while the company calls for further cost reductions before the end of the fiscal year.

“Canopy Growth has successfully transformed into an asset-light, cannabis-focused company with a stronger balance sheet. These actions have resulted in a Company that looks and operates fundamentally different than before, a Canopy Growth that is purpose-built for the markets and geographies of greatest opportunity,” commented CEO David Klein.

The commentary comes as the company reports a substantial decline in revenue on a quarter over quarter as well as year over year basis. Revenue came in at just $69.6 million, a 36% drop from the first quarter, and a 21% fall on a year over year basis. Gross margin however improved from 5% last quarter to 34% in the current quarter.

The massive fall from grace in terms of revenue generation is a result of the bankruptcy of the firms BioSteel division, which last quarter accounted for $32.5 million in revenue.

The firms Canadian cannabis unit saw revenues climb marginally from $38.6 million last quarter to $39.0 million in the current quarter, while revenues fell across the ROW Cannabis, Storz & Bickel, and other segments.

Overall, the company saw its net loss widen to $148.2 million, while reporting adjusted EBITDA of negative 11.9% million, and free cash flow of negative $67.1 million.

READ: Constellation Brands Lets Canopy Growth Warrants Expire Unexercised

Canopy’s cash balance meanwhile fell to $240.4 million, down from $533.3 million in the quarter prior, following the settlement of over $200 million in long term debt. Total current assets decreased from $883.2 million to $493.7 million, while total current liabilities fell from $451.2 million to $196.3 million.

The company meanwhile is estimating that it will see total cost reductions of $270 to $300 million by the end of the fiscal year, since the start of FY2023. The current cost reduction figure during that time frame sits at $226 million.

Canopy Growth last traded at $0.73 on the TSX.


Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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