Canopy Growth Corporation Reports 1st Quarter Fiscal Year 2023 Financial Results.

SMITHS FALLS, ON: Canopy Growth Corporation ("Canopy Growth" or the "Company") (TSX: WEED) (NASDAQ: CGC) today announces its financial results for the first quarter ended June 30, 2022. All financial information in this press release is reported in Canadian dollars, unless otherwise indicated.

Highlights

Q1 FY2023 net revenue was flat compared to Q4 FY20221.

Company maintained #1 share of combined premium flower and pre-rolled joint ("PRJ") segment in Q1 FY20232.

Increased share of the combined mainstream flower and PRJ segment by 35 bps to 4.0% in Q1 FY2023.

International medical cannabis net revenue approximately doubled versus Q1 FY2022 driven primarily by strong sales in Israel and Australia.

Record BioSteel revenues in Q1 FY2023 increased 169% versus Q1 FY2022. Secured retail agreement with Walmart Stores covering 2,200 stores in 39 states. Entered partnership to become the Official Hydration Partner of the NHL and NHLPA.

Cost reduction program on track with operating expenses3 in Q1 FY2023 decreasing by 13% versus Q1 FY2022.

Through advancements in our North American brand led strategy we delivered a record quarter from BioSteel and maintained #1 share in the premium flower and pre-rolled joint segment, while driving growth of our premium Doja and mainstream Tweed brands. As our U.S. THC ecosystem continues to strengthen with Acreage operating in the recreational cannabis market in New Jersey, along with the expansion of Wana across North America, we remain focused on delivering a robust pipeline of innovation aligned to what consumers are looking for - premium, infused, and ready to enjoy.

David Klein, Chief Executive Officer

"The cost saving program announced earlier in the quarter combined with sound expense discipline contributed to a meaningful decline in operating expenses during the quarter. We expect cost savings to ramp in the second half of the year, enabling us to execute on our path to profitability even as we continue to invest in strategic growth initiatives including in BioSteel and our U.S. THC ecosystem."

Judy Hong, Chief Financial Officer

First Quarter Fiscal 2023 Financial Summary

(in millions of Canadian

dollars, unaudited)

Net Revenue

Gross margin

percentage

Adjusted

gross margin

percentage4

Net loss5

Adjusted

EBITDA6

Free cash

flow7

Reported

$110.1

(1 %)

2 %

$(2,087.6)

$(74.8)

$(142.8)

vs. Q1 FY2022

(19 %)

(2,100) bps

(1,900) bps

(635 %)

(18 %)

23 %

1

On an organic basis, excluding C3.

2

Unless otherwise indicated, market share data disclosed in this press release is calculated using the Company's internal proprietary market share tool that utilizes point of sales data supplied by third-party data providers, government agencies and our own retail store operations across the country.

3

Non-GAAP measure. Excludes Asset Impairment and Restructuring costs, and Acquisition-Related costs.

4

Adjusted gross margin is a non-GAAP measure, and for Q1 FY2023 excludes $4.0 million of restructuring costs recorded in cost of goods sold (Q1 FY2022 - excludes $1.4 million related to the flow-through of inventory step-up associated with the acquisition of Supreme Cannabis and $nil of restructuring costs recorded in cost of goods sold). See "Non-GAAP Measures".

5

Net loss includes a non-cash goodwill impairment of $1,725 million related to our cannabis operations reporting unit. This impairment represents the full goodwill balance associated with the cannabis operations reporting unit and was triggered as a result of the decrease in the Company's market capitalization in Q1 FY2023.

6

Adjusted EBITDA is a non-GAAP measure. See "Non-GAAP Measures".

7

Free cash flow is a non-GAAP measure. See "Non-GAAP Measures".

Revenues:

Net revenue of $110 million in Q1 FY2023 declined 19% versus Q1 FY2022. Total global cannabis net revenue of $66 million in Q1 FY2023 represented a decline of 29% over Q1 FY2022 driven in part by a decline in value flower sales in the Canadian recreational cannabis market due to a deliberate business transition to focus on higher margin, premium and mainstream products. Other consumer products revenue of...