CANOPY GROWTH REPORTS THIRD QUARTER FISCAL 2020
FINANCIAL RESULTS
Generated $124 million Net Revenue, up from $76 million in Q2 2020
Excluding portfolio restructuring charges in Q2 2020, Net Revenue up 13%
Achieved Gross Margin of 34%
Total Operating Expenses down 14% versus the prior quarter
Adjusted EBITDA loss decreases to $92 million

February 14, 2020

SMITHS FALLS, ON—Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX:WEED,NYSE:CGC) today announced its financial results for the third quarter ended December 31, 2019. All
financial information in this press release is reported in millions of Canadian dollars, unless otherwise
indicated.

Third Quarter Fiscal 2020 Financial Summary

Gross revenue1
Reported% change vs. Q2 2020% change vs. Q3 2019$135.615%
39%

Net revenue$123.862%
49%

Gross margin2
34%
NM
800 bps

Adjusted
EBITDA3
Free cash flow4$(91.7)$(359.6)
41%
16%
-23%
-20%

1 Excludes the impact of other revenue adjustments in Q2 2020, which represent the Company's determination of returns andpricing adjustments.
2 Gross margin is before fair value impacts in cost of sale, and is a non-IFRS measure. See "Non-IFRS Measures" below.
3 Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures" below.
4 Free cash flow is defined as operating cash flow less capital expenditures, and is a non-IFRS measure. See "Non-IFRS Measures"
below.

Third Quarter Fiscal 2020 Corporate Financial Highlights•

Revenues: Reported Net Revenues increased 62% over Q2 2020, or 13% excluding the impact
of portfolio restructuring charges. Gross Recreational B2B revenue increased 8% over priorquarter due, in part, to over 140 stores becoming active in the quarter and higher sales ofpremium dried flower and pre-roll joints. Our acquired businesses including Storz & Bickel andThis Works also performed well, contributing to organic growth this quarter.

•

Gross margin: Gross margin before fair value impacts was 34%. Gross margin performance inquarter benefited from lower period costs due to higher facility utilization•

Operating expenses: Total operating expenses decreased 14% versus Q2 2020 primarily due toa $20 million reduction in G&A expenses and over $31 million lower stock-based compensation
versus the prior quarter•

Adjusted EBITDA: Adjusted EBITDA loss of $92 million, a $64 million narrower loss versus Q22020 driven by higher sales, improved gross margins and lower operating expenses•

Cash Position: Gross cash balance was $2.3 billion, down from $2.7 billion in Q2 2020, reflecting
the EBITDA loss, capital investments and M&A

Third Quarter Fiscal 2020 Business & Operational Highlights•

Maintained leading market share in retail, at an estimated 22%, of the Canadian recreation
market as we saw a strong demand for both premium and value priced dried flower and prerolled joints•

Continued market share gains and increase in the number of patients, to over 76,700, in the
Canadian medical cannabis market•

Named David Klein as new Chief Executive Officer•

Completed first shipments of cannabis-infused edible chocolates and JUJU Power 510 batteries in
December 2019•

Storz & Bickel expanded product line with launch of Crafty+ vaporizer in November 2019•

Announced initial line of First & Free Hemp-derived CBD products and began sales online throughwww.firstandfree.com, one quarter ahead of Q4 2020 target"In Q3 we executed across Canada, in our international markets and in our strategic acquisitions to drive
revenue growth,“ said David Klein, CEO. "We have a lot of work to do. We are eager to capitalize on theopportunity to create an unassailable position through a tight focus on the consumer and on criticalmarkets.""We delivered significant gross improvement in the third quarter driven by stronger revenues and higher
capacity utilization. Actions taken earlier this year are expected to meaningfully reduce stock-based
compensation in FY21, and we have started to implement tighter cost controls across the organization,”
said Mike Lee, EVP & CFO. "We plan to take further steps to reduce our costs and right-size our businessto ensure that we can generate a healthy margin profile and cash generation in the coming years.”Third Quarter Fiscal 2020 Financial and Operational Review
Q3
2020
Canadian recreational cannabis- Business to business1- Business to consumer
Canadian medical cannabis
Canadian cannabis
International medical cannabis
Cannabis gross revenue excluding
other revenue adjustments
Other revenue
Gross revenue excluding
other revenue adjustments
Other revenue adjustments2
Excise taxes3
Net revenue

Q2
2020

%
ChangeQ3
2019%
Change

$53.5
$15.2
$14.8
$83.5
$18.7

$49.4
$13.1
$14.1
$76.6
$18.1

8%
16%
5%
9%
3%

$60.1
$11.5
$15.9
$87.5
$2.7

-11%
32%
-7%
-5%
593%

$102.2
$33.4

$94.7
$23.6

8%
42%

$90.2
$7.5

13%
345%

$135.6$$11.8$123.8$118.3
$32.7
$9.0
$76.6

15%
-100%
31%
62%

$97.7
$$14.7
$83.0

39%
NM
-20%
49%

1 Excludes the impact of other revenue adjustments.
2 Other revenue adjustments represent the Company's determination of returns and pricing adjustments.
3 Excise taxes is presented net of the impact from other revenue adjustments.

Canadian Cannabis• Recreational B2B sales increased 8% over Q2 2020, due to over 140 stores becoming active inthe quarter and higher sales of premium dried flower and pre-roll joints• Recreational B2C sales increased 16% over prior quarter, due in part to an 11% increase in samestore sales• Medical sales increased 5% over the prior quarter primarily attributable to the broadening of ourbrand and product offerings, including the availability of products from additional CraftGrow
partners, as well as an increase in number of customers to over 76,700.
International Cannabis• C3 revenue increased 5% over Q2 2020
• Germany cannabis sales higher than expected due to opportunistic sales into the German market
to fill a supply gap that resulted from a regulatory enforced sales halt of cannabis products
offered by another vendor
Strategic Acquisitions• Storz & Bickel vaporizer revenue increased 46% over Q2 2020 due to solid organic growth andseasonal sales• This Works revenue increased 42% over prior quarter due to strong organic growthThird Quarter Fiscal 2020 Cannabis Product Revenue Highlights
Q3
2020
Canadian recreational - Business to businessDry cannabis
Cannabis oil and softgels excluding
other revenue adjustments
Other revenue adjustments1

Q2
2020

%
ChangeQ3
2019%
Change

$55.8

$47.4

18%

$39.3

42%

$3.0

$2.0

50%

$20.8

-86%

$(5.3)$53.5$(32.7)
$16.7

-84%
220%

$$60.1

NM
-11%

$13.5
$1.7
$15.2

$11.6
$1.5
$13.1

16%
13%
16%

$10.9
$0.6
$11.5

24%
183%
32%

$5.3
$9.5
$14.8

$5.5
$8.6
$14.1

-4%
10%
5%

$8.1
$7.8
$15.9

-35%
22%
-7%

$3.9
$14.8
$18.7

$4.1
$14.0
$18.1

-5%
6%
3%

$2.7
$$2.7

44%
NM
593%

Canadian recreational - Business to consumer
Dry cannabis
Cannabis oil and softgels
Canadian medical
Dry cannabis
Cannabis oil and softgels
International medical
Dry cannabis
Cannabis oil and softgels

1 Other revenue adjustments represent the Company's determination of returns and pricing adjustments.

Third Quarter Fiscal 2020 Adjusted EBITDA

Adjusted EBITDA1
Attributed as follows:- Operations and corporate overhead- Strategic investments and businessdevelopment- Non-operating or under-utilized facilities

Q3
2020$(91.7)Q2%
2020
Change$(155.7)
41%

Q3
%
2019
Change$(74.8)-23%$(44.4)$(109.0)59%$(52.8)16%$(39.1)$(8.2)$(36.2)$(10.5)-8%22%$(8.9)$(13.1)-339%
37%

1 Adjusted EBITDA is a non-IFRS measure. See "Non-IFRS Measures" below.

Non-IFRS Measures
Gross margin percentage, before fair value impacts in cost of sales, a non-IFRS measure, is a key
operational metric that does not have any standardized meaning prescribed by IFRS and may not becomparable to similar measures presented by other companies. This measure is calculated as net
revenue less inventory production costs expensed to cost of sales, divided by net revenue, and may becomputed from the consolidated statements of operations presented within this news release.

Adjusted EBITDA, a non-IFRS measure, is a key operational metric that does not have any standardized
meaning prescribed by IFRS and may not be comparable to similar measures presented by othercompanies. Adjusted EBITDA is calculated as earnings before interest, tax, depreciation and amortization,
share-based compensation expense, fair value changes and other non-cash items, and further adjusted toremove acquisition-related costs. The Company attributes Adjusted EBITDA to its operations andcorporate overhead, strategic investments and business developments, and non-operating or underutilized facilities. The Adjusted EBITDA reconciliation is presented within this news release and explainedin Management's Discussion & Analysis under "Adjusted EBITDA (Non-IFRS Measure)", a copy of which
will be filed on SEDAR.
Free Cash Flow, a non-IFRS measure, is a key operational metric that does not have any standardized
meaning prescribed by IFRS and may not be comparable to similar measures presented by othercompanies. This measure is calculated as net cash provided by (used in) operating activities lesspurchases and deposits of property, plant and equipment.

Transition to U.S. GAAP ReportingAs part of our U.S. financial reporting requirements, Canopy Growth confirmed that, as of September 30,
2019, it no longer met the criteria for qualification as a foreign private issuer because (1) more than 50%of the outstanding voting securities are held by residents of the United States, and (2) the majority of
Canopy Growth’s directors are United States citizens.
Therefore, as of April 1, 2020 Canopy Growth will be considered a United States domestic issuer and alarge accelerated filer. As a result of this change, as of April 1, 2020, Canopy Growth will be required toprepare its consolidated financial statements, including the Company's March 31, 2020 audited annual
consolidated financial statements, in conformity with United States generally accounting principles, withsuch change being applied retrospectively. The extent of the impact of this change in accounting
framework has not yet been quantified. Canopy Growth will also be required to provide an auditor
attestation report under Section 404(b) of the Sarbanes-Oxley Act.
This press release is intended to be read in conjunction with the Company’s Unaudited Condensed Interim
Consolidated Financial Statements ("Financial Statements) and Management Discussion & Analysis("MD&A) for the three and nine months ended December 31, 2019, which will be filed on SEDAR(www.sedar.com) and will be available at www.canopygrowth.com. The basis of financial reporting in the
Financial Statements and MD&A is in thousands of Canadian dollars, unless otherwise indicated.

Webcast and Conference Call Information
The Company will host a conference call and audio webcast with David Klein, CEO and Mike Lee, CFO at
10:00 AM Eastern Time on February 14, 2020.
Webcast Information

A live audio webcast will be available at:https://event.on24.com/wcc/r/2171215/8311836AC24F7988B042B4BB0FA5622A

Replay Information

A replay of the call will be accessible by webcast, until 11:59 PM ET on May 14, 2020, at
https://event.on24.com/wcc/r/2171215/8311836AC24F7988B042B4BB0FA5622A

Contact:
Kyna BoyceMedia Relations
media@canopygrowth.com
613-485-2480
Judy HongVice President, Investor Relations (USA)Judy.hong@canopygrowth.com
Tyler Burns
Vice President, Investor Relations (Canada)
Tyler.burns@canopygrowth.com
855-558-9333 ext. 122

About Canopy Growth Corporation
Canopy Growth (TSX:WEED, NYSE:CGC) is a world-leading diversified cannabis, hemp and cannabis device company, offering distinct brands and curated cannabis varieties indried, oil and Softgel capsule forms, as well as medical devices through the Company’s subsidiary, Storz & Bickel GMbH & Co. KG. From product and process innovation tomarket execution, Canopy Growth is driven by a passion for leadership and a commitment to building a world-class cannabis company one product, site and country at a time.
The Company has operations in over a dozen countries across five continents.
The Company’s medical division, Spectrum Therapeutics is proudly dedicated to educating healthcare practitioners, conducting robust clinical research, and furthering the
public’s understanding of cannabis, and has devoted millions of dollars toward cutting edge, commercializable research and IP development. Spectrum Therapeutics sells a rangeof full-spectrum products using its colour-coded classification Spectrum system as well as single cannabinoid Dronabinol under the brand Bionorica Ethics.
The Company operates retail stores across Canada under its award-winning Tweed and Tokyo Smoke banners. Tweed is a globally recognized cannabis brand which has built alarge and loyal following by focusing on quality products and meaningful customer relationships.
From our historic public listing on the Toronto Stock Exchange and New York Stock Exchange to our continued international expansion, pride in advancing shareholder value
through leadership is engrained in all we do at Canopy Growth. Canopy Growth has established partnerships with leading sector names including cannabis icons Snoop Dogg andSeth Rogen, breeding legends DNA Genetics and Green House Seeds, and Fortune 500 alcohol leader Constellation Brands, to name but a few. Canopy Growth operates elevenlicensed cannabis production sites with over 5.2 million square feet of production capacity, including over one million square feet of GMP certified production space. For more
information visit www.canopygrowth.com
Notice Regarding Forward Looking Statements
This news release contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking
information” within the meaning of applicable Canadian securities legislation. Often, but not always, forward-looking statements and information can be identified by the use ofwords such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words andphrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements or information
involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Canopy Growth or its subsidiaries to bematerially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release.
Examples of such statements include statements with respect to the Company’s expectations with respect to future harvests, the Company’s expectation for additional finishedinventory available for sale in future quarters, bringing CBD products to market by the end of fiscal 2020, the accelerated market expansion for Acreage, the anticipated benefitsof the rebranding of Spectrum Therapeutics on the Company’s market share, the potential opportunity for cannabis products in Europe and the anticipated Increase in Canadianand Danish product availability, the anticipated increased sales from Storz & Bickel, the expectation that facilities will be fully operational in the months ahead, the launch of new
CBD consumer products and brands in fiscal 2020, the timing for implementation of the transaction with Acreage. Risks, uncertainties and other factors involved with forwardlooking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking
information, including changes in laws, regulations and guidelines; compliance with laws; international laws; operational, regulatory and other risks; execution of businessstrategy; management of growth; difficulty to forecast; reliance on licences; risks inherent in an agricultural business; contracts with provincial and territorial governments;
constraints on marketing products; risks inherent in acquisitions and investments; expansion into foreign jurisdictions; governmental regulations; cannabis is a controlled
substance in the United States; Farm Bill risks; assumptions as to the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary regulatory andcourt approvals for the transaction with Acreage; and such risks contained in the Company’s management information circular of the Company dated May 17, 2019 and in theannual information form dated June 24, 2019 and filed with Canadian securities regulators and available on the Company’s issuer profile on SEDAR at www.sedar.com. Readers
are cautioned that the foregoing list of factors is not exhaustive. Although the Company believes that the assumptions and factors used in preparing the forward-looking
information or forward-looking statements in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given thatsuch events will occur in the disclosed time frames or at all. The forward-looking information and forward-looking statements included in this news release are made as of thedate of this news release and the Company does not undertake an obligation to publicly update such forward-looking information or forward-looking information to reflect new
information, subsequent events or otherwise unless required by applicable securities laws.

_______________________________________________________________________________________________________________________________________________CANOPY GROWTH CORPORATIONCONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONUNAUDITED
December 31,(Expressed in CDN $000's)
2019
AssetsCurrent assets
Cash and cash equivalents
Marketable securities
Amounts receivable
Biological assets
Inventory
Prepaid expenses and other current assets$

Investments in equity method investees
Other financial assets
Property, plant and equipment
Intangible assets
Goodwill
Other long-term assets

Liabilities
Current liabilities
Accounts payable and accrued liabilities
Current portion of long-term debt
Other current liabilities

1,561,664
705,921108,82259,107
622,575
114,637
3,172,726

March 31,2019$

123,077
351,952
1,725,333
567,185
2,068,696
37,0732,480,830
2,034,133
106,974
78,975
262,105
107,123
5,070,140
112,385
363,427
1,096,340
519,556
1,544,055
25,902$

8,046,042$

8,731,805$

225,181
21,652
171,476
418,309$226,533
103,716
81,414
411,663

Long-term debt
Deferred tax liability
Share repurchase credit liability
Other long-term liabilities

536,10765,7331,301,322
194,737

842,259
96,031
140,404

2,516,208

1,490,357

Shareholders' equity
Share capital
Other reserves
Accumulated other comprehensive income
Deficit

6,359,643
2,768,725(45,904 )(3,826,095 )6,026,618
1,673,472
28,630(777,087 )Equity attributable to Canopy Growth Corporation

5,256,369

6,951,633

273,465

289,815

5,529,834

7,241,448

Non-controlling interests
Total equity$

8,046,042$

8,731,805

CANOPY GROWTH CORPORATIONCONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONSFOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2019 AND 2018
UNAUDITED
Three months ended(Expressed in CDN $000's except share amounts)

December 31,
2019

Nine months ended

December 31,
2018(Restated - seenote 2(d))

December 31,
2019

December 31,
2018(Restated - see note 2(d))

Revenue
Excise taxes$135,546
11,782$97,703
14,655$324,558
33,699$146,946
14,655

Net revenue

123,764

83,048290,859

132,291

Inventory production costs expensed
to cost of sales

81,95361,329241,456

90,358Gross margin before the undernoted

41,811

21,71949,40341,933

Fair value changes in biologicalassets included in inventory soldand other charges
Unrealized gain on changes in fairvalue of biological assets

60,54628,105

175,765

105,989(78,964)(22,267)(300,303)(90,500)

Gross margin

60,22915,881

173,941

26,444

Sales and marketing
Research and development
General and administration
Acquisition-related costs
Share-based compensation expense
Share-based compensation expense
related to acquisition milestones
Depreciation and amortization

62,104
20,79567,385
3,256
56,76348,324
5,264
46,0884,520
40,062

171,814
41,191
217,517
19,000217,611

107,199
7,964
102,777
9,606
108,159

4,916
16,53023,8495,015

24,311
42,95381,674
11,640Operating expenses

231,749

173,122734,397

429,019

Loss from operations(171,520)(157,241)(560,456)(402,575)

Loss on extinguishment of warrants
Other income (expense), net
Total other income (expense), net

24,90324,903

233,142
233,142(1,176,350)(51,759)(1,228,109)

54,44554,445(Loss) income before income taxes(146,617)

75,901(1,788,565)(348,130)

22,451(1,041)

8,611

1,398

$(124,166)$74,860$(1,779,954)$(346,732)$(120,969)(3,197)$(124,166)$67,582
7,278$74,860$(1,778,208)(1,746)$(1,779,954)$(349,831)
3,099$(346,732)$(0.35)$0.22$(5.13)$(1.45)348,530,622

303,281,549

346,877,660

241,806,351$(0.35)$(0.38)$(5.13)$(1.45)348,530,622

315,974,639

346,877,660

242,044,821

Income tax recovery (expense)
Net (loss) income
Net (loss) income attributable to:Canopy Growth Corporation
Non-controlling interests(Loss) earnings per share, basic
Net (loss) income per share, basic:
Weighted average number ofoutstanding common shares:
Loss per share, diluted
Net loss per share, diluted:
Weighted average number ofoutstanding common shares,
diluted:CANOPY GROWTH CORPORATIONCONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE NINE MONTHS ENDED DECEMBER 31, 2019 AND 2018
UNAUDITED(Expressed in CDN $000's)

December 31,
2019

December 31,
2018

Net inflow (outflow) of cash related to the following activities:
Operating
Net loss
Adjustments for:
Depreciation of property, plant and equipment
Amortization of intangible assets
Share of loss on equity investments
Fair value changes in biological assets included ininventory sold and other charges
Unrealized gain on changes in fair value of biologicalassetsShare-based compensation
Other assets
Loss on extinguishment of warrants
Other income and expense
Income tax recovery
Non-cash foreign currency
Changes in non-cash operating working capital items$(1,779,954 )$(346,732 )

57,926
26,6806,668

15,703
7,869
9,021

175,765

105,989(300,303 )
241,922
1,176,350
93,162(8,611 )(3,945 )(233,918 )(90,500 )194,686(16,908 )(44,476 )(1,398 )1,394(129,547 )(548,258 )(294,899 )(610,858 )(7,800 )1,324,682(4,719 )(46,647 )(395,190 )(511,080 )(29,837 )(495,236 )(40,140 )(802,247 )(27,201 )(74,071 )(1,996 )(344,472 )-(281,449 )(1,785,363 )(245 )
1,062
39,149446
10,268(13,738 )(9,331 )(112,705 )(18,617 )5,072,500
91,21828,73018,684600,000(16,380 )(2,728 )(3,499 )Net cash (used) provided by financing activities(85,094 )5,769,908

Effect of exchange rate changes on cash and cash equivalents(4,365 )103,664(919,166 )2,480,830

3,793,310
322,560

Net cash used in operating activities
InvestingPurchases and deposits of property, plantand equipment
Purchases of intangible assets
Redemption (purchase) of marketable securities, net
Investments in equity method investees
Investments in other financial assets
Premium paid for Acreage Call Option
Net cash outflow on acquisition of non-controlling interests
Net cash outflow on acquisition of subsidiaries
Payment of acquisition related liabilities
Net cash used in investing activities
Financing
Payment of share issue costs
Proceeds from issuance of common shares and warrants
Proceeds from issuance of shares by Canopy Rivers
Proceeds from exercise of stock options
Proceeds from exercise of warrants
Issuance of long-term debt
Payment of long-term debt issue costs
Payment of interest on long-term debt
Repayment of lease obligations
Repayment of long-term debt

Net cash (outflow) inflow
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period$

1,561,664$

4,115,870

Adjusted EBITDA1 Non-IFRS Measure

Three months ended
December 31,
December 31,
2019
2018

(In CDN$000's)
Adjusted EBITDA1 Reconciliation
Loss from operations - as reported$

IFRS fair value accounting related to biological assets and inventory
Fair value changes in biological assets included
in inventory sold and other charges
Unrealized gain on changes in fair value of
biological assets
Share-based compensation expense (per statements of cash flows)
Acquisition-related costs
Depreciation and amortization (per statements of cash flows)
Adjusted EBITDA$$IFRS fair value accounting related to biological assets and inventory
Fair value changes in biological assets included
in inventory sold and other charges
Unrealized gain on changes in fair value of
biological assets
Share-based compensation expense (per statements of cash flows)
Depreciation and amortization (per statements of cash flows)
Adjusted EBITDA$(157,241 )

60,54628,105(78,964 )(18,418 )
61,6793,256
33,342
98,277(91,661 )(22,267 )5,838
64,1794,520
7,890
76,589(74,814 )$Nine months ended
December 31,
December 31,
2019
2018

(In CDN$000's)
Adjusted EBITDA1 Reconciliation
Loss from operations - as reported(171,520 )$(560,456 )$(402,575 )

175,765

105,989(300,303 )(124,538 )
241,922
19,00084,606345,528(339,466 )(90,500 )15,489194,686
9,606
23,572
227,864(159,222 )$Adjusted EBITDA is earnings before interest, tax, depreciation and amortization, share-based compensation expense, fair valuechanges and other non-cash items, and further adjusted to remove acquisition-related costs.
1