Canopy Growth Corporation

Good morning, my name is Joanna, and I will be your conference operator today. I would like to welcome you to Canopy Growth's second quarter fiscal 2026 financial results conference call. Currently, all participants are in a listen-only mode. I will now turn the call over to Taylor Burns, Director, Investor Relations. Taylor, you may begin the conference call.

Good morning, and thank you for joining us. On our call today, we have Canopy Growth's Chief Executive Officer, Luke Mongeau, and Chief Financial Officer, Tom Stewart. Before financial markets opened today, Canopy Growth issued a news release announcing the financial results for our second quarter fiscal 2026 ended September 30th, 2025. The news release and financial statements have been filed on EDGAR and CDAR that will be available on our website under the investors tab. Before we begin, I would like to remind you that our discussion during the call will include forward-looking statements that are based on management's current views and assumptions and that this discussion is qualified in its entirety by the cautionary note regarding forward-looking statements included at the end of the news release issued today. Please review today's earnings release and Canopy's reports filed with the SEC and CDAR for various factors that could cause actual results to differ materially from projections. In addition, reconciliations between any non-GAAP measures to their closest reported GAAP measures are included in our earnings release. Please note that all financial information is provided in Kenyan dollars unless otherwise stated. Following remarks by Luke and Tom, we will conduct a question and answer session where we will take questions from analysts. With that, I'll turn the call over to Luke.

Good morning, everyone, and thank you for joining us today. It's great to be with you again to share the continued progress we're making in building a competitive, profitable, and trusted leader in the global cannabis market. The second quarter was one of our strongest to date, reflecting real, measurable progress driven by our continued disciplined focus on fundamentals. Q2 highlights, including continued momentum in our Canadian adult-use cannabis business, consistent growth in our Canadian medical cannabis business, and a stronger and significantly healthier balance sheet. Together, these actions give me confidence in our ability to sustain progress and deliver results for quarters to come. Turning to our Canadian adult-use cannabis business, Net revenue increased 30% year-over-year in Q2, driven by demand for our Claiborne-infused pre-rolls and our new all-in-one vapes from Tweed and Seven Acres. Stronger relationships with Canadian boards, large accounts, and independent retailers drove continued distribution gains, including a 20% year-over-year distribution increase amongst Alberta-independent retailers. We also improve our service levels with higher on-time, higher in full fill rates across key accounts, reinforcing our reliability with retail partners. For the six-month period ending September 30, 2025, revenue is up 37% compared to the same period last year. This growth reflects the renewed momentum of our adult-use cannabis business following the actions taken earlier this year to tighten our product portfolio, streamline execution with boards and retailers, and refine our sales model. Looking ahead, we're building on this momentum with additional Claiborne innovation, new genetics, across our core flower portfolio and PRJ brands and plans to reach a broader group of consumers later this year. We're also elevating our cultivation standards, including manual and refined post-harvest processes to deliver superior flower, ensuring consumers experience the very best of what Canopy has to offer. In our Canadian medical cannabis business, net revenue grew 17% year over year, marking another consecutive quarter of growth. We're staying true to our medical strategy, offering the right products, at the right price, consistently in stock, and for the right patient segments. During the quarter, our BC Doja site became an exclusive medical cultivation facility, producing craft and small batch cannabis dedicated to Spectrum patients. Doja is also exclusively end bucking and hand trimming all product, which is a deliberate investment to drive quality and consistency in the Spectrum patient experience. We're also seeing continued growth among insured patients with registration up 20% year over year and almost tripling since 2021. This continued growth speak to the reliability and care within our medical business. Looking ahead, delivering a superior patient experience remains central to how we will continue growing this business despite proposed government changes to medical reimbursement. In international markets, frankly, I'm disappointed with our performance during the quarter, where net revenues declined $3 million. Performance in Europe was primarily the result of supply constraint and internal process challenges. Lower stores from sales in Europe did not meet required quality standards, and internal process gaps limited our ability to deliver supply to Germany from our Canadian GMP facilities. I want to be clear. GMP growth is fully committed to the European market. We have already mobilized a dedicated effort to improve supply chain execution, which includes daily management, oversight of logistics, product roadmaps, and licensing. We expect operations to stabilize and begin improving as we exit the fiscal year, with international markets remaining a key part of our path to profitability. At Storrs & Beckel, the launch of the new EZ Vaporizer was received with great enthusiasm by consumers globally and generated early sales momentum, helping contribute to sequential quarter-over-quarter revenue growth. While Divisi only contributed to three weeks of performance during the quarter, we're seeing positive signals into Q3, and together with holiday seasonality, expect continued growth through a remainder of the year. Looking ahead, I'm encouraged by the momentum at Storz & Bickel. The team's commitment to precision engineering, medical grade quality, and design excellence continues to set the brand apart, and that's what will drive performance in the long run. On operating expenses, our SG&E savings program, launched earlier this fiscal, has delivered over $21 million and annualized savings, surpassing our $20 million target ahead of schedule. As we build a culture of fiscal responsibility, the team continues to identify additional savings opportunities while delivering top-line growth. On profitability, we made strong progress this quarter with margin expansion and disciplined cost management that's moving us closer to positive adjusted EBITDA. We're also taking further steps to meaningfully lower our cost of goods sold through steamlining processes, smart investment to deliver improved yield and quality, as well as tighter supplier management. Before I close, I'd like to touch on the Canadian federal government's recent proposal to reduce reimbursement for veterans who use prescribed medical cannabis. These proposed changes have the potential to seriously impact access and quality of the care and services that veterans have come to rely on. As one of Canada's leading medical cannabis providers, we believe consistency and fairness in access to care is critical. We're continuing to assess the proposed changes and are engaging across the country to ensure the needs of patients remain front and center. In closing, Q2 demonstrated continued progress across our core businesses, including positive momentum in our Canadian medical and adult use businesses, an expanded product lineup at stores and beckons, and a clear action plan on the way to improve execution in our international markets to drive future success. As we further sharpen our focus on quality, patient and consumer experiences, and disciplined execution, I'm confident we have the right strategy, focus, and team to become a trusted global provider of elevated cannabis experiences. Thank you. I will now turn the call over to Tom to walk through the financial results in more detail. Thank you, Luke, and good morning, everyone.