CGC · Canopy Growth Corporation

Canopy Growth's Item 4.02 disclosure reveals a significant accounting error involving share-settled warrants issued starting in FY2024. Due to the company's Canadian dollar functional currency, these USD-denominated exercise price warrants required liability classification under applicable standards, with fair value measurement and changes recognized in operations each period. The Audit Committee concluded on May 15, 2026, that audited FY2024 and FY2025 financials in respective 10-Ks, plus unaudited quarterly statements across nine periods from September 30, 2023, to December 31, 2025, are unreliable. Independent auditor reports in those 10-Ks are also impacted. The company will address this via restatement in its upcoming FY2026 10-K due June 15, 2026, avoiding separate amendments. Critically, adjustments are purely non-cash, preserving core metrics like revenue, margins, operating results, cash flows, Adjusted EBITDA, total assets, liquidity, covenant compliance, and business narrative. However, a material weakness in internal controls is anticipated, signaling potential gaps in accounting application that investors should monitor for remediation plans. Item 7.01 furnishes a press release echoing these details, announcing delayed FY2026 results release and an investor webcast on June 15, plus a voluntary management cease trade order to restrict insider trading until resolution, with bi-weekly updates required.