Company: CGC
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0000950170-25-015839
Chunk: 86

Company: Canopy Growth Corp
Filing Date: 2025-02-07
Form: 10-Q
Item: Item 1
Chunk 86
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Canada cannabis

Gross margin for our Canada cannabis segment was $34.2 million in the nine months ended December 31, 2024, or 30% of net revenue, as compared to $25.3 million in the nine months ended December 31, 2023, or 21% of net revenue. The year-over-year increase in the gross margin percentage was primarily attributable to: (i) the realized benefit of our cost savings program and strategic changes to our business that were initiated in the fourth quarter of fiscal 2023; (ii) a year-over-year decrease in write-downs of excess inventory; and (iii) strong Canadian medical cannabis sales. Offset by costs related to new product launches and increased price competition.

International markets cannabis

Gross margin for our international markets cannabis segment was $13.3 million in the nine months ended December 31, 2024, or 41% of net revenue, as compared to $10.4 million in the nine months ended December 31, 2023, or 35% of net revenue. The year-over-year increase in the gross margin percentage is primarily attributable to the shift in sales mix to higher-margin Poland as well as a lower cost structure relating to our overall international cannabis operations.

Storz & Bickel

Gross margin for our Storz & Bickel segment was $21.4 million in the nine months ended December 31, 2024, or 38% of net revenue, as compared to $21.1 million in the nine months ended December 31, 2023, or 43% of net revenue. The year-over-year decrease in the gross margin percentage is driven primarily by a shift in product mix as additional rebates were provided to clear out remaining stock of a previously planned discontinued product and increases in indirect costs.

50

This Works

Gross margin for our This Works segment was $nil in the nine months ended December 31, 2024, or 0% of net revenue, as compared to $10.5 million in the nine months ended December 31, 2023, or 50% of net revenue. The year-over-year decrease in the gross margin percentage is due to the completion of the divestiture of This Works (the “This Works Divestiture”) on December 18, 2023.

Operating Expenses

The following table presents operating expenses for the nine months ended December 31, 2024 and 2023: