Canopy Growth Corporation (NASDAQ:CGC) Q3 2024 Earnings Call Transcript

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Matt Bottomley : Good morning, everyone. I just wanted to get a little more commentary, if you can provide your overall outlook on sort of your Canadian domestic operations, clearly, we’ve seen a bit of softness to end the year, at least at the retail levels in Canada, and the overall medical opportunity seems to be flat to declining. So I know you saw some decent year-over-year growth this year for extend the quarter. But I’m just curious if you can give a 12-month outlook as to how notable if at all the domestic operations will be as a growth driver for the company?

David Klein: I think we believe that with the gross margins, we’re now delivering, our area of focus now is on how to drive growth, right. And so for us, I think it just continuing to build on what we’ve done to date in terms of the strains we have in the market, in terms of some NPD that we have on the verge of bringing into the market. In particular, as I said in my script building on some of the momentum we’ve had in pre-rolls, leading into soft gels a little bit and then coming back into the vapes space more aggressively than we’ve been in the past. We also think that there’s a lot of distribution opportunity for our brands across the marketplace. So I think that it’s more around the lines of having good margin products that are resonating with consumers and executing in all aspects of our go-to-market strategy. That’s how we see ourselves continuing to grow in Canada, in particular, addressing the adult-use sector.

Judy Hong: And on the medical side, I’d say the market has been declining, but we’ve been growing and gaining market share in the medical market. So from that respect, we think that there’s continued opportunity to grow our medical business, a lot of the growth is actually coming from increased basket sizes. So we actually are seeing patients order more products on our platform. And I think that’s a function of an increased product assortment that we have now in our spectrum store. And so we would continue to see that driving new portion in our medical platform.

Matt Bottomley : Got it. Thanks. And then just one more for me, now switching just on to the international side of things. So there’s been a lot of constructive commentary with respect to the outlook in certain markets in the EU, I know Australia has been mentioned and someone referenced the deal that was mentioned yesterday, even one of the U.S., MSOs has been pretty constructive on the international side of things. So just considering that on a trailing 12-month basis, there’s been a lot of focus on sort of the balance sheet and there’s been some asset dispositions, do you think there’s an ability or need to deploy any capital into some of these markets in advance of regular changes? Or do you think the, the runway is long enough, so that might not be a primary focus for Canopy in the near term?

David Klein : Yes, Matt, I would say that given our experience of kind of being the first one into markets, I think we’ll be very careful with any capital that would get deployed into international markets. What we will however do is really lean into the areas where we are operating and operating well like Australia, like Germany, like Poland, like Czech Republic, by bringing really strong product offerings to market with a very focused team. But I think we would will remain asset light most likely in the international markets and make sure we can we can grow in Canada and focus on the U.S.

Matt Bottomley : Okay, thanks. Good luck, guys.

Operator: Thank you. There are no further questions. I will now turn the call back over to David Klein for closing comments.

David Klein : Thanks for attending today’s conference call. Appreciate the questions. Ramp up as we started, we’re singularly focused on cannabis. Our businesses are growing and demonstrating healthy margins and Canopy USA is moving forward. We’re proud of where we are as well as where we’re going and I feel confident that Canopy offers a real unique option for exposure to the growth of the world’s cannabis markets. Our Investor Relation team will be available to answer additional questions. Everyone have a fantastic day.

Operator: This concludes, Canopy Growth’s this third quarter fiscal 2024 financial results conference call. A replay of this conference call will be available until May 9, 2024 and can be accessed following the instructions provided in the company’s press release issued earlier today. Thank you for attending today’s call.

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