Canopy Growth Reports Fourth Quarter and Fiscal Year 2024 Financial Results; Q4 FY2024 Net Revenue increased 7% year-over-year, or 16% excluding divested businesses Storz & Bickel delivered its best Q4 revenue quarter, w

Canopy Growth Reports Fourth Quarter and Fiscal Year 2024 Financial Results; Q4 FY2024 Net Revenue increased 7% year-over-year, or 16% excluding divested businesses

Storz & Bickel delivered its best Q4 revenue quarter, with net revenue increasing 43% as compared to Q4 2023

Canada medical cannabis net revenue increased 16% in Q4 FY2024 and 10% in FY2024 year-over-year

Canada cannabis Cost of Goods Sold decreased by 54% in FY2024 versus FY2023

Following recent balance sheet actions, the Company has no material debt obligation due until March 20261

SMITHS FALLS, ON, May 30, 2024 /PRNewswire/ - Canopy Growth Corporation ( Canopy , Canopy Growth or the Company ) (TSX:WEED) (NASDAQ: CGC), a world-leading cannabis company dedicated to unleashing the power of cannabis, today announced its financial results for the fourth quarter and fiscal year ended March 31, 2024 and the filing of an annual report on Form 10-K, including the audited consolidated financial statements for the fiscal year ended March 31, 2024 and the unqualified report thereon of the Company's independent registered public accounting firm. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.

-Storz & Bickel net revenue in Q4 FY2024 increased 43% as compared to Q4 FY2023 driven by strong sales of the new Venty portable vaporizer.

-Canada cannabis net revenue in Q4 FY2024 increased 4% as compared to Q4 FY2023 led by a 16% increase in the Canada medical cannabis business.

-Total Cost of Goods Sold ( COGS ) decreased by 45% in FY2024 and Canada cannabis COGS decreased by 54% year-over-year, driven by the cost reduction actions.

-Consolidated Gross Margins increased to 27%, an improvement of 4,600 basis points year-over-year in FY2024, with Canada cannabis, International markets cannabis and Storz & Bickel all posting higher Gross Margins year-over-year.

-Operating loss from continuing operations of $229 MM in FY2024. Adjusted EBITDA loss was $59 MM in FY2024, representing an improvement of 72% year-over-year, driven primarily by revenue growth and successful cost reduction actions taken to date.

-Cash, cash equivalents, and short-term investments of $203 MM at March 31, 2024. Benefiting from balance sheet strengthening actions completed subsequent to the end of FY2024, the Company has 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. 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.''

David Klein, Chief Executive Officer

We have made remarkable progress and delivered dramatic reductions in expenses, cash burn, and debt over the past year. These efforts have significantly enhanced our financial stability and moved us toward achieving positive Consolidated Adjusted EBTIDA. With no material debt maturing until 2026, Canopy is equipped to capitalize on growth opportunities and enhance shareholder value.

Judy Hong, Chief Financial Officer

1 Considering debt-related transactions completed subsequent to the end of FY2024

Fourth Quarter FY2024 Financial Summary

FY2024 Financial Summary

Fourth Quarter FY2024 Financial Highlights

-Storz & Bickel net revenue in Q4 FY2024 increased 43% as compared to Q4 FY2023 to $22 MM driven by strong sales of the new Venty portable vaporizer. Storz & Bickel Gross Margins improved to 41% in Q4 FY2024 driven primarily by a positive shift in product mix.

-Canada medical cannabis delivered its 5th consecutive quarter of revenue growth in Q4 FY2024 with revenue increasing 16% as compared to Q4 FY2023 benefiting from customer mix and larger product assortment in the Spectrum Therapeutics online store. Canada cannabis segment revenue in Q4 FY2024 increased 4% as compared to Q4 FY2023 to $37 MM driven by growth in the Canadian medical cannabis business.

-International markets cannabis net revenue in Q4 FY2024 increased 32% as compared to Q4 FY2023 to $12 MM driven by growth in Germany and Poland as well as the timing of revenue from the US CBD business which is non-recurring. International markets cannabis Gross Margins improved by 5,000 bps to 54% in Q4 FY2024 driven primarily by change in geographic mix and impact from non-recurring revenue from the US CBD business.

-Consolidated Gross Margins in Q4 FY2024 improved to 21% due to cost reduction activities, as well as lower excess and obsolete inventory charges in Canada cannabis. Q4 FY2024 Canada Gross Margins, however, were negatively impacted by lower cultivation yields partly due to seasonality, and an associated reduction in manufacturing utilization, which are expected to improve in FY2025.

-Selling, general & administrative ( SG&A ) expenses in Q4 FY2024 declined 23% as compared to Q4 FY2023 primarily due to cost reduction programs undertaken to date.

-Cash outflow from operations improved 77% in Q4 FY2024 as compared to Q4 FY2023 driven by cost reduction programs and reduction in interest payments.

-Operating loss from continuing operations of $107 MM in Q4 FY2024, representing an improvement of 80% as compared to Q4 FY2023. Adjusted EBITDA loss was $15 MM in Q4 FY2024, representing a 63% improvement as compared to Q4 FY2023.

2 Adjusted gross margin is a non-GAAP measure, and for Q4 FY2024 excludes $(0.3) million of restructuring cost reversals recorded in COGS (Q4 FY2023 - excludes $71.7 million of restructuring costs recorded in COGS). See Non-GAAP Measures and Schedule 4 for a reconciliation of net revenue to adjusted gross margin.

3 Adjusted EBITDA is a non-GAAP measure. See Non-GAAP Measures and Schedule 5 for a reconciliation of net loss from continuing operations to adjusted EBITDA.

4 Free cash flow is a non-GAAP measure. See Non-GAAP Measures and Schedule 6 for a reconciliation of net cash used in operating activities - continuing operations to free cash flow - continuing operations.

5 Adjusted gross margin is a non-GAAP measure, and for FY2024 excludes $(1.0) million of restructuring cost reversals recorded in cost of goods sold (FY2023 - excludes $81.8 million of restructuring costs recorded in COGS). See Non-GAAP Measures and Schedule 4 for a reconciliation of net revenue to adjusted gross margin.

FY2024 Financial Highlights

-Canada cannabis segment Gross Margins improved to 16% in FY2024 driven by lower excess and obsolete inventory charges and lower operating costs.

-SG&A expenses declined by 33% compared to FY2023 primarily driven by cost reductions actions executed in the first half of FY2024.

-When adjusted for the sale of the Canadian retail business divested in Q3 FY2023, Canada cannabis segment revenue increased by 2% year-over-year to $154 MM in FY2024 driven primarily by growth in Canada medical cannabis net revenue.

-Canada medical cannabis net revenue increased 10% year-over-year to $61 MM in FY2024 driven by customer mix and a larger assortment of products in the Spectrum Therapeautics online store.

-International markets cannabis FY2024 net revenue increased 6% year-over-year to $41 MM primarily attributable to growth in Australia. International markets cannabis Gross Margins in FY2024 improved to 40% primarily due to a positive shift in geographic mix.

6 Source: Insight Health Greenline ODV National Database

Fourth Quarter FY2024 Revenue Review7

The Q4 FY2024, Q4 FY2023, FY2024 and FY2023 financial results presented in this press release have been prepared in accordance with U.S. GAAP.

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 30, 2024.

A live audio webcast will be available at https://app.webinar.net/qa1JRpmzw04.

A replay will be accessible by webcast until 11:59 PM Eastern Time on August 28, 2024 at https://app.webinar.net/qa1JRpmzw04.

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; expected credit losses on financial assets and related charges; 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 for the fiscal year ended March 31, 2024 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 for the fiscal year ended March 31, 2024 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 and explained in the Company's Annual Report on Form 10-K filed for the fiscal year ended March 31, 2024 with the SEC.

Vice President, Communications

Director, Investor Relations

About Canopy Growth Corporation

Canopy Growth is a world leading cannabis company dedicated to unleashing the power of cannabis to improve lives.

Through an unwavering commitment to our consumers, Canopy Growth delivers innovative products with a focus on premium and mainstream cannabis brands including Doja, 7ACRES, Tweed, and Deep Space. Canopy Growth's CPG portfolio features gourmet wellness products by Martha Stewart CBD, and category defining vaporizer technology made in Germany by Storz & Bickel.

Canopy Growth has also established a comprehensive ecosystem to realize the opportunities presented by the U.S. THC market through its rights to Acreage Holdings, Inc., ( Acreage ) a vertically integrated multi-state cannabis operator with principal operations in densely populated

states across the Northeast, as well as Wana Brands, a leading cannabis edible brand in North America, and Jetty Extracts, a California-based producer of high- quality cannabis extracts and pioneer of clean vape technology.

Beyond its world-class products, Canopy Growth is leading the industry forward through a commitment to social equity, responsible use, and community reinvestment pioneering a future where cannabis is understood and welcomed for its potential to help achieve greater well-being and life enhancement.

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. To the extent any forward-looking statements in this news release constitutes financial outlooks within the meaning of applicable Canadian securities laws, the reader is cautioned that this information may not be appropriate for any other purpose and the reader should not place undue reliance on such financial outlooks. 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:

-laws and regulations and any amendments thereto applicable to our business and the impact thereof, including uncertainty regarding the application of U.S. state and federal law to hemp (including CBD) products and the scope of any regulations by the U.S. Food and Drug Administration, the U.S. Drug Enforcement Administration, the U.S. Federal Trade Commission, the U.S. Patent and Trademark Office, the U.S. Department of Agriculture (the USDA ) and any state equivalent regulatory agencies over hemp (including CBD) products;

-expectations regarding the amount or frequency of impairment losses, including as a result of the write-down of intangible assets, including goodwill;

-our ability to refinance debt as and when required on terms favorable to us and comply with covenants contained in our debt facilities and debt instruments;

-the impacts of the Company's strategy to accelerate entry into the U.S. cannabis market through the creation of Canopy USA, LLC ( Canopy USA ), including the costs and benefits associated with the amendments made to the Canopy USA structure to facilitate the deconsolidation of the financial results of Canopy USA within the Company's financial statements;

-expectations for Canopy USA to capitalize on the opportunity for growth in the United States cannabis sector and the anticipated benefits of such strategy;

-the timing and outcome of the floating share arrangement, whereby, subject to the terms and conditions of a Floating Share Arrangement Agreement (the Floating Share Arrangement Agreement ), Canopy USA is expected to acquire all of the issued and outstanding Class D subordinate voting shares (the Floating Shares ) of Acreage by way of a court-approved plan on arrangement under the Business Corporations Act (British Columbia) (the Floating Share Arrangement ) in exchange for 0.045 of a Company common share for each Floating Share held, the anticipated benefits of the Floating Share Arrangement, the anticipated timing of the acquisition of the Class E subordinate voting shares (the Fixed Shares ) of Acreage and the Floating Shares by Canopy USA, the satisfaction or waiver of the closing conditions set out in the Floating Share Arrangement Agreement and the arrangement agreement dated April 18, 2019, as amended on May 15, 2019, September 23, 2020 and November 17, 2020 (the Existing Acreage Arrangement Agreement ), including receipt of all regulatory approvals, and the anticipated timing and occurrence of the exercise of the option to acquire the Fixed Shares (the Acreage Option ) and closing of such transaction;

-the Amended Acreage Arrangement (as defined below) and the Floating Share Arrangement , including the occurrence or waiver (at the Company's discretion) of the occurrence or waiver (at the Company's discretion) of changes in U.S. federal law to permit the general cultivation, distribution, and possession of marijuana, or to remove the regulation of such activities from the federal laws of the United States (the Triggering Event ), and the satisfaction or waiver of the conditions to closing the acquisition of Acreage;

-expectations regarding the option purchased by an affiliate of the Company for C$38.0 million (US$28.5 million) (the Option Premium ) to purchase certain of Acreage's debt, including the ability to, and timing of, the exercise of such option;

-the transactions contemplated by the our agreement to acquire Wana , including the occurrence or waiver (at Canopy USA's discretion) of the Triggering Event;

-the issuance of additional common shares of the Company (each whole share, a Canopy Share or a Share ) to satisfy the payments to eligible participants to the existing tax receivable bonus plans of High Street Capital Partners, LLC, a subsidiary of Acreage, to satisfy any deferred and/or option exercise payments to the shareholders of Wana and Jetty and the issuance of additional non-voting Shares issuable to Canopy Growth from Canopy USA in consideration thereof;

-the acquisition of additional Class A shares of Canopy USA in connection with the investment in Canopy USA by the Huneeus 2017 Irrevocable Trust (the Trust ) in the aggregate amount of up to US$20 million (the Trust Transaction ), including any warrants of Canopy USA issued to the Trust in accordance with the share purchase agreement entered into by the Trust and Canopy USA;

-expectations regarding the laws and regulations and any amendments thereto relating to the hemp industry in the U.S., including the promulgation of regulations for the hemp industry by the USDA and relevant state regulatory authorities;

-expectations regarding the potential success of, and the costs and benefits associated with, our acquisitions, joint ventures, strategic alliances, equity investments and dispositions;

-the grant, renewal and impact of any license or supplemental license to conduct activities with cannabis or any amendments thereof;

-our international activities and joint venture interests, including required regulatory approvals and licensing, anticipated costs and timing, and expected impact;

-our ability to successfully create and launch brands and further create, launch and scale cannabis-based products and hemp-derived consumer products in jurisdictions where such products are legal and that we currently operate in;

-the benefits, viability, safety, efficacy, dosing and social acceptance of cannabis, including CBD and other cannabinoids;

-our ability to maintain effective internal control over financial reporting;

-our ability to continue as a going concern;

-expectations regarding the use of proceeds of equity financings;

-the legalization of the use of cannabis for medical or adult-use in jurisdictions outside of Canada, the related timing and impact thereof and our intentions to participate in such markets, if and when such use is legalized;

-our ability to execute on our strategy and the anticipated benefits of such strategy;

-the ongoing impact of the legalization of additional cannabis product types and forms for adult-use in Canada, including federal, provincial, territorial and municipal regulations pertaining thereto, the related timing and impact thereof and our intentions to participate in such markets;

-the ongoing impact of developing provincial, territorial and municipal regulations pertaining to the sale and distribution of cannabis, the related timing and impact thereof, as well as the restrictions on federally regulated cannabis producers participating in certain retail markets and our intentions to participate in such markets to the extent permissible;

-the timing and nature of legislative changes in the U.S. regarding the regulation of cannabis including tetrahydrocannabinol ;

-the future performance of our business and operations;

-our competitive advantages and business strategies;

-the competitive conditions of the industry;

-the expected growth in the number of customers using our products;

-our ability or plans to identify, develop, commercialize or expand our technology and research and development initiatives in cannabinoids, or the success thereof;

-expectations regarding revenues, expenses and anticipated cash needs;