Canopy Growth Corporation Reports Fourth Quarter and Fiscal year 2022 Financial Results Company Advances Premium Brand Driven Strategy, Laying a Foundation for Long-Term Sustainable Growth and Profitability

Canopy Growth Corporation Reports Fourth Quarter and Fiscal year 2022 Financial Results

Company Advances Premium Brand Driven Strategy, Laying a Foundation for Long-Term Sustainable Growth and Profitability

SMITHS FALLS, ON, May 27, 2022 /PRNewswire/ - Canopy Growth Corporation ("Canopy Growth" or the "Company") (TSX: WEED) (NASDAQ: CGC) today announces its financial results for the fourth quarter and fiscal year ended March 31, 2022. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.

"Canopy Growth is building the industry's leading portfolio of premium brands across North America. We've taken concrete steps to advance this ambition by strengthening our positioning in Canada, and further bolstering our U.S. THC ecosystem through the addition of two high performance brands in Wana Brands and Jetty Extracts. In the fiscal year ahead, we will remain focused on growing our market share in the key segments that will drive profitable growth and continuing to scale our premium brands across North America."

David Klein, Chief Executive Officer

"Achieving profitability is critical and we have undertaken additional initiatives to streamline and drive efficiencies for our global cannabis business. In FY2023, we are focused on executing our path to profitability in Canada, while we continue to invest in high potential opportunities - particularly in BioSteel, and further developing our U.S. THC ecosystem, which we believe remains significantly under-appreciated by the market."

Judy Hong, Chief Financial Officer

FY2023 Priorities & Outlook

With the foundation for long-term sustainable growth in place, Canopy Growth is committed to further advancing the Company's aspiration to become the leading premium cannabis branded company in North America.

In FY2023, Canopy will focus on:

Fourth Quarter Fiscal Year 2022 Financial Summary

Fiscal Year 2022 Financial Summary

2 Adjusted gross margin is a non-GAAP measure, and for Q4 FY2022 excludes $4.2 million related to the flow-through of inventory step-up associated with the acquisition of Supreme Cannabis and $119.1 million of restructuring costs recorded in cost of goods sold (Q4 FY2021 - excludes $nil related to the flow-through of inventory step-up and $10.3 million of restructuring costs recorded in cost of goods sold). See "Non-GAAP Measures".

3 Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures".

4 Free cash flow is a non-GAAP measure. See "Non-GAAP Measures".

5 Adjusted gross margin is a non-GAAP measure, and for FY2022 excludes $11.8 million related to the flow-through of inventory step-up associated with the acquisition of Supreme Cannabis and $123.7 million of restructuring costs recorded in cost of goods sold (FY2021 - excludes $1.5 million related to the flow-through of inventory step-up and $26.0 million of restructuring costs recorded in cost of goods sold). See "Non-GAAP Measures".

Fourth Quarter and Fiscal Year 2022 Financial Summary

Net revenue of $112 million in Q4 FY2022 declined 25% versus Q4 FY2021. Total global cannabis net revenue of $66 million in Q4 FY2022, represented a decline of 35% over Q4 FY2021. Other consumer products revenue of $46 million in Q4 FY2022, represented a decline of 3% over Q4 FY2021. Excluding the impact from acquired businesses and divestiture of C3, net revenue declined 26% and global cannabis net revenue declined 38% versus Q4 FY2021.

Net revenue of $520 million in FY2022 declined 5% versus FY2021. Total global cannabis net revenue of $337 million in FY2022, represented a decline of 11% over FY2021. Other consumer products revenue of $183 million in FY2022, represented an increase of 9% over FY2021. Excluding the impact from acquired businesses and divestiture of C3, net revenue declined 9% and global cannabis net revenue declined 19% versus FY2021.

Reported gross margin in Q4 FY2022 was (142%) as compared to 7% in Q4 FY2021. Excluding non-cash restructuring costs recorded in COGS of $119 million and inventory step-up charges from acquisitions of $4 million, adjusted gross margin was (32%). Comparatively gross margin in Q4 FY2021 was impacted by restructuring charges totaling $10 million. Gross margin in Q4 FY2022 was further impacted by lower production output and price compression in the Canadian recreational business as well as higher third-party shipping, distribution and warehousing costs across North America.

Reported gross margin in FY2022 was (37%) as compared to 12% in FY2021. Excluding non-cash restructuring costs recorded in cost of goods sold of $124 million and inventory step-up charges from acquisitions of $12 million, adjusted gross margin was approximately (11%). Gross margin in FY2022 was impacted by a year-over-year decrease in net revenue and continued price compression in the Canadian recreational business, inventory write-offs driven by lower than expected demand as well as higher third-party shipping, distribution and warehousing costs across North America. Gross margin in FY2022 benefited from payroll subsidies in the amount of $24 million received from the Canadian government, pursuant to a COVID-19 relief program, compared to $6 million in FY2021.

Total SG&A ("SG&A") expenses in Q4 FY2022 declined by 21% versus Q4 FY2021, driven by year-over-year reductions in General & Administrative ("G&A") and Research and Development ("R&D") expenses. G&A expenses declined 38% year-over-year primarily due to reductions in staffing, professional fees, executive compensation and employee bonus, and continued cost reductions, partially offset by lower payroll subsidies received from the Canadian government pursuant to a COVID-19 relief program, relative to the prior year. R&D expenses declined 45% year-over-year principally due to a more disciplined approach to R&D investments and the closure of certain R&D facilities in the prior year. Sales & Marketing ("S&M") expenses were flat year-over-year.

Total SG&A expenses in FY2022 declined by 18% versus FY2021, driven by year-over-year reductions in G&A and R&D expenses, partially offset by an increase in S&M expenses. G&A expenses declined 46% year-over-year primarily due to reductions in staffing, professional fees, executive compensation and employee bonus, and continued cost reductions. R&D expenses declined 44% year-over-year principally due to a more disciplined approach to R&D investments and the closure of certain R&D facilities in the prior year. S&M expenses increased 23% year-over-year primarily due to a return to more normal advertising and promotional spending in fiscal 2022. S&M expenses was further driven by higher sponsorship fees associated with BioSteel and increased sales and marketing costs associated with the acquisitions of Supreme Cannabis and Ace Valley.

Net Loss in Q4 FY2022 was $579 million, which is a $38 million improvement versus Q4 FY2021, driven primarily by non-cash fair value changes, partially offset by higher non-cash asset impairment and restructuring charges.

Net Loss in FY2022 was $320 million, which is a $1,350 million improvement versus FY2021, driven primarily by non-cash fair value changes, lower operating expenses, including lower non-cash asset impairment and restructuring charges, partially offset by lower gross margins.

Adjusted EBITDA loss in Q4 FY2022 was $122 million, a $28 million increase in Adjusted EBITDA loss versus Q4 FY2021 primarily driven by lower sales and a decline in gross margins, partially offset by the reduction in our total SG&A expenses.

Adjusted EBITDA loss in FY2022 was $415 million, a $75 million increase in Adjusted EBITDA loss versus FY2021, driven primarily driven by lower sales and a decline in gross margins, partially offset by the reduction in our total SG&A expenses.

Free Cash Flow in Q4 FY2022 was an outflow of $127 million, a 2% increase in outflow versus Q4 FY2021. Relative to Q4 FY2021, the Free Cash Flow outflow increase reflects higher interest paid partially offset by lower capital expenditures.

Free Cash Flow in FY2022 was an outflow of $582 million, an 8% decrease in outflow versus FY2021. Relative to FY2021, the Free Cash Flow outflow decrease is due to lower S&GA expenses and reduction in capital expenditures, partially offset by higher cash interest payments.

Cash and Short-term investments amounted to $1.4 billion at March 31, 2022, representing a decrease of $0.9 billion from $2.3 billion at March 31, 2021 reflecting EBITDA losses, capital investments and the upfront payment made as consideration for the option to acquire Wana Brands upon federal permissibility of THC in the U.S.

7 IRI data for the 4 weeks ended April 17, 2022

8 Until such time as the Company elects to exercise its rights to acquire Jetty, the Company will have no direct or indirect economic or voting interests in Jetty, the Company will not directly or indirectly control Jetty, and the Company, on the one hand, and Jetty, on the other hand, will continue to operate independently of one another.

9 Based on March 2022 BDSA data for dollars sold for all product categories

10 Based on year-to-date BDSA data for dollars sold of rosin cartridges through March 2022

11 Until such time as the Company exercises its rights to acquire each Wana Entity, the Company will have no economic or voting interests in Wana, the Company will not control Wana, and the Company and Wana will continue to operate independently of one another.

Driving brand awareness through omni channel activations

Fourth Quarter and Fiscal Year 2022 Revenue Review

12 For Q4 FY2022, amount is net of excise taxes of $13.2 million and other revenue adjustments of $3.3 million (Q4 FY2021 - $17.5 million and $3.1 million, respectively). For FY2022, amount is net of excise taxes of $56.7 million and other revenue adjustments of $7.3 million (FY2021 - $54.9 million and $14.0 million, respectively).

13 For Q4 FY2022, amount is net of excise taxes of $1.2 million (Q4 FY2021 - $1.4 million). For FY2022, amount is net of excise taxes of $5.2 million (FY2021 - $5.6 million).

14 For Q4 FY2022, amount reflects other revenue adjustments of $1.0 million (Q4 FY2021 - $0.3 million). For FY2022, amount reflects other revenue adjustments of $4.3 million (FY2021 - $0.7 million).

15 For Q4 FY2022, amount reflects other revenue adjustments of $3.9 million (Q4 FY2021 - $4.2 million). For FY2022, amount reflects other revenue adjustments of $9.9 million (FY2021 - $9.2 million).

International Cannabis

Other Consumer Products

BioSteel sales in Q4 FY2022 decreased 1% over Q4 FY2021 in part due to shipment timing.

The Q4 FY2022, FY2022, Q4 FY2021 and FY2021 financial results presented in this press release have been prepared in accordance with U.S. GAAP.

16 Excludes the impact of other revenue adjustments.

17 Other revenue adjustments represent the Company's determination of returns and pricing adjustments, and relate to the Canadian recreational business to business channel.

18 Includes the impact of other revenue adjustments, which represent the Company's determination of returns and other pricing adjustments.

Webcast and Conference Call Information

The Company will host a conference call and audio webcast with David Klein, CEO and Judy Hong, CFO at 10:00 AM Eastern Time on May 27, 2022.

A live audio webcast will be available at:

A replay will be accessible by webcast until 11:59 PM ET on August 25, 2022 at:

Adjusted EBITDA is a non-GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Adjusted EBITDA is calculated as the reported net income (loss), adjusted to exclude income tax recovery (expense); other income (expense), net; loss on equity method investments; share-based compensation expense; depreciation and amortization expense; asset impairment and restructuring costs; restructuring costs recorded in cost of goods sold; and charges related to the flow-through of inventory step-up on business combinations, and further adjusted to remove acquisition-related costs. Asset impairments related to periodic changes to the Company's supply chain processes are not excluded from Adjusted EBITDA given their occurrence through the normal course of core operational activities. The Adjusted EBITDA reconciliation is presented within this news release and explained in the Company's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission ("SEC").

Free Cash Flow is a non- GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. This measure is calculated as net cash provided by (used in) operating activities less purchases of and deposits on property, plant and equipment. The Free Cash Flow reconciliation is presented within this news release and explained in the Company's Annual Report on Form 10-K to be filed with the SEC.

Adjusted Gross Margin and Adjusted Gross Margin Percentage are non-GAAP measures used by management that are not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Adjusted Gross Margin is calculated as gross margin excluding restructuring and other charges recorded in cost of goods sold, and charges related to the flow-through of inventory step-up on business combinations. Adjusted Gross Margin Percentage is calculated as Adjusted Gross Margin divided by net revenue. The Adjusted Gross Margin and Adjusted Gross Margin Percentage reconciliation is presented within this news release.

Director, Communications

Director, Investor Relations

About Canopy Growth Corporation

Canopy Growth (TSX:WEED,NASDAQ:CGC ) is a world-leading diversified cannabis and cannabinoid-based consumer product company, driven by a passion to improve lives, end prohibition, and strengthen communities by unleashing the full potential of cannabis. Leveraging consumer insights and innovation, we offer product varieties in high quality dried flower, oil, softgel capsule, infused beverage, edible, and topical formats, as well as vaporizer devices by Canopy Growth and industry-leader Storz & Bickel. Our global medical brand, Spectrum Therapeutics, sells a range of full-spectrum products using its colour-coded classification system and is a market leader in both Canada and Germany. Through our award-winning Tweed and Tokyo Smoke banners, we reach our adult-use consumers and have built a loyal following by focusing on top quality products and meaningful customer relationships. Canopy Growth has entered into the health and wellness consumer space in

key markets including Canada, the United States, and Europe through BioSteel sports nutrition, and This Works skin and sleep solutions; and has introduced additional federally-permissible CBD products to the United States through our First & Free and Martha Stewart CBD brands. Canopy Growth has an established partnership with Fortune 500 alcohol leader Constellation Brands. For more information visit www.canopygrowth.com.

Notice Regarding Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of applicable securities laws, which involve certain known and unknown risks and uncertainties. Forward-looking statements predict or describe our future operations, business plans, business and investment strategies and the performance of our investments. These forward-looking statements are generally identified by their use of such terms and phrases as "intend," "goal," "strategy," "estimate," "expect," "project," "projections," "forecasts," "plans," "seeks," "anticipates," "potential," "proposed," "will," "should," "could," "would," "may," "likely," "designed to," "foreseeable future," "believe," "scheduled" and other similar expressions. Our actual results or outcomes may differ materially from those anticipated. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Forward-looking statements include, but are not limited to, statements with respect to:

Certain of the forward-looking statements contained herein concerning the industries in which we conduct our business are based on estimates prepared by us using data from publicly available governmental sources, market research, industry analysis and on assumptions based on data and knowledge of these industries, which we believe to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise. The industries in which we conduct our business involve risks and uncertainties that are subject to change based on various factors, which are described further below.

The forward-looking statements contained herein are based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including: (i) management's perceptions of historical trends, current conditions and expected future developments; (ii) our ability to generate cash flow from operations; (iii) general economic, financial market, regulatory and political conditions in which we operate; (iv) the production and manufacturing capabilities and output from our facilities and our joint ventures, strategic alliances and equity investments; (v) consumer interest in our products; (vi) competition; (vii) anticipated and unanticipated costs; (viii) government regulation of our activities and products including but not limited to the areas of taxation and environmental protection; (ix) the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses; (x) our ability to obtain qualified staff, equipment and services in a timely and cost-efficient manner; (xi) our ability to conduct operations in a safe, efficient and effective manner; (xii) our ability to realize anticipated benefits, synergies or generate revenue, profits or value from our recent acquisitions into our existing operations; (xiii) our ability to continue to operate in light of the COVID-19 pandemic and the impact of the pandemic on demand for, and sales of, our products and our distribution channels; and (xiv) other considerations that management believes to be appropriate in the circumstances. While our management considers these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the forward-looking statements in this press release and other reports we file with, or furnish to, the Securities and Exchange Commission (the "SEC") and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf. Such factors include, without limitation, changes in

laws, regulations and guidelines and our compliance with such laws, regulations and guidelines; the risk that the COVID-19 pandemic may disrupt our operations and those of our suppliers and distribution channels and negatively impact the demand for and use of our products; consumer demand for cannabis and U.S. hemp products; our limited operating history; inflation risks; the risks and uncertainty regarding future product development; our reliance on licenses issued by and contractual arrangements with various federal, state and provincial governmental authorities; the risk that cost savings and any other synergies from the CBI Group Investments may not be fully realized or may take longer to realize than expected; the implementation and effectiveness of key personnel changes; the risks that our Restructuring Actions will not result in the expected cost savings, efficiencies and other benefits or will result in greater than anticipated turnover in personnel; risks associated with jointly owned investments; risks relating to our current and future operations in emerging markets; future levels of revenues and the impact of increasing levels of competition; risks related to the protection and enforcement of our intellectual property rights; our ability to manage disruptions in credit markets or changes to our credit ratings; future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses; the success or timing of completion of ongoing or anticipated capital or maintenance projects; risks related to the integration of acquired businesses; the timing and manner of the legalization of cannabis in the United States; business strategies, growth opportunities and expected investment; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan (either within the expected timeframe or at all); counterparty risks and liquidity risks that may impact our ability to obtain loans and other credit facilities on favorable terms; the potential effects of judicial, regulatory or other proceedings, or threatened litigation or proceedings, on our business, financial condition, results of operations and cash flows; risks related to stock exchange restrictions; risks associated with divestment and restructuring; volatility in and/or degradation of general economic, market, industry or business conditions; our exposure to risks related to an agricultural business, including wholesale price volatility and variable product quality; third-party transportation risks; compliance with applicable environmental, economic, health and safety, energy and other policies and regulations and in particular health concerns with respect to vaping and the use of cannabis and U.S. hemp products in vaping devices; the anticipated effects of actions of third parties such as competitors, activist investors or federal, state, provincial, territorial or local regulatory authorities, self-regulatory organizations, plaintiffs in litigation or persons threatening litigation; changes in regulatory requirements in relation to our business and products; and the factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended March 31, 2022. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements.

Forward-looking statements are provided for the purposes of assisting the reader in understanding our financial performance, financial position and cash flows as of and for periods ended on certain dates and to present information about management's current expectations and plans relating to the future, and the reader is cautioned that the forward-looking statements may not be appropriate for any other purpose. While we believe that the assumptions and expectations reflected in the forward-looking statements are reasonable based on information currently available to management, there is no assurance that such assumptions and expectations will prove to have been correct. Forward-looking statements are made as of the date they are made and are based on the beliefs, estimates, expectations and opinions of management on that date. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such forward-looking statements, except as required by law. The forward-looking statements contained in this press release and other reports we file with, or furnish to, the SEC and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf are expressly qualified in their entirety by these cautionary statements.

Adjusted Gross Margin1 Reconciliation (Non-GAAP Measure)

Adjusted EBITDA1 Reconciliation (Non-GAAP Measure)

Free Cash Flow Reconciliation1 (Non-GAAP Measure)

Segmented Gross Margin Reconciliation

Segmented Adjusted Gross Margin1 Reconciliation (Non-GAAP Measure)