CANOPY GROWTH Q1 2021 EARNINGS PRESENTATION !"#"$%&'(%)*&+(+(
DISCLAIMERS AND CAUTIONARY STATEMENTS This presentation contains “forward-looking statements” and “forward-looking information” within the meaning of applicable U.S. and Canadian securities laws (collectively, “ forward-looking statements ”), which involve certain known and unknown risks and uncertainties. Forward-looking statements predict or describe our future operations, business plans, business and investment strategies and the performance of our investments. These forward-looking statements are generally identified by their use of such terms and phrases as “intend,” “goal,” “strategy,” “estimate,” “expect,” “project,” “projections,” “forecasts,” “plans,” “seeks,” “anticipates,” “potential,” “proposed,” “will,” “should,” “could,” “would,” “may,” “likely,” “designed to,” “foreseeable future,” “believe,” “scheduled” and other similar expressions. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive risks, financial results, results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. A discussion of some of the material factors applicable to Canopy Growth Corporation (“ Canopy ”) can be found under the section entitled “Risk Factors” in Canopy’s Annual Report on Form 10-K for the year ended March 31, 2020, filed with the Securities and Exchange Commission and with applicable Canadian securities regulators, as such factors may be further updated from time to time in its periodic filings with the Securities and Exchange Commission and with applicable Canadian securities regulators, which can be accessed at www.sec.gov/edgar and www.sedar.com, respectively. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this presentation and in the filings. Any forward-looking statement included in this presentation is made as of the date of this presentation and, except as required by law, Canopy disclaims any obligation to update or revise any forward- looking statement. Readers are cautioned not to put undue reliance on any forward-looking statement. Forward-looking statements contained in this presentation are expressly qualified by this cautionary statement. 2
NON-GAAP MEASURES Adjusted EBITDA is a non-U.S. GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Adjusted EBITDA is calculated as the reported net loss, adjusted to exclude income tax recovery (expense), other income (expense), net, and loss on equity method investments, share-based compensation expense, depreciation and amortization expense, asset impairment and restructuring costs, and charges related to the flow-through of inventory step-up on business combinations, and further adjusted to remove acquisition-related costs. The Adjusted EBITDA reconciliation is presented within the earnings press release of Canopy dated August 10, 2020 and explained in Canopy’s Quarterly Report on Form 10-Q for the three months ended June 30, 2020, filed with the Securities and Exchange Commission and with applicable Canadian securities regulators, which can be accessed at www.sec.gov/edgar and www.sedar.com, respectively. Adjusted Gross Margin and Adjusted Gross Margin Percentage are non-GAAP measures used by management that are not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Adjusted Gross Margin is calculated as gross margin excluding charges related to the flow-through of inventory step-up associated with business combinations. Adjusted Gross Margin Percentage is calculated as Adjusted Gross Margin divided by Net Revenue. The Adjusted Gross Margin reconciliation is presented within the earnings press release of Canopy dated August 10, 2020 available on Canopy’s EDGAR and SEDAR pages which can be accessed at www.sec.gov/edgar and www.sedar.com, respectively. Free Cash Flow or FCF is a non-GAAP measure used by management that is not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. This measure is calculated as net cash provided by (used in) operating activities less purchases and deposits of property, plant and equipment. The Free Cash Flow reconciliation is presented within the earnings press release of Canopy dated August 10, 2020 and explained in the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2020, filed with the Securities and Exchange Commission and with applicable Canadian securities regulators, which can be accessed at www.sec.gov/edgar and www.sedar.com, respectively. 3
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AGENDA v Q1 2021 Key Takeaways v Progress Against Our Key Strategic Priorities v Q1 2021 Financial Results v Q&A 5
Q1 2021 KEY TAKEAWAYS Advancing against our key strategic priorities Our consumer-centric approach is bringing to life a portfolio of differentiated products • We are strengthening our performance in Canada and accelerating growth in the US • We are improving our execution and increasing agility • Q1 2021 results showed resilient performance against a volatile backdrop Net revenue grew 22% versus Q1 2020 • Adjusted EBITDA loss narrowed to $92mm versus both Q1 2020 and Q4 2020 • Balancing our cost discipline while investing for growth Reduced headcount by more than 18% since December 2019 • SG&A expense ratio declined versus Q1 2020 and Q4 2020 • Free Cash Flow improved by more than 50% compared to Q1 2020 • 6
PROGRESSING ON OUR STRATEGIC PRIORITIES CONSUMER-CENTRIC WIN IN OUR CORE MARKETS DRIVE QUALITY EXECUTION • New organizational design and Value-flower share improving post Improving execution and nimbleness • • operating model driving quicker nationwide price reset of Twd. in Canada decision-making Implementing programs to strengthen ShopCanopy.com launched in the US • • Supply attainment up from 56% to • market positioning of mainstream and A robust pipeline of innovations in • 87% in Q1 2021; over 90% in recent premium flower, and vape products the US market, including preparation weeks Differentiated 2.0 products expanded for the much-anticipated Martha • • More than doubled our beverage in the marketplace; #1 share in Stewart launch production in July and expected to beverages in Canadian Recreational BioSteel RTD beverages expanding • nearly double again in August to Flower quality improvement programs distribution with key retailers • ensure consistent supply levels underway; enhanced moisture content Maintained #1 market share in • • End-to-end review of supply chain of flower products Germany flower segment ; #2 already identifying several near-term market share in Canada medical opportunities 7
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Q1 2021 FINANCIAL RESULTS 10
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