Cannabis stocks surged last Friday on reports that President Donald Trump plans to ease federal marijuana restrictions. Tilray Brands shares soared 44% while Canopy Growth (TSX:WEED) jumped over 50% as investors anticipated the reclassification of cannabis from Schedule I to Schedule III under the Controlled Substances Act.
The move would reduce oversight to levels comparable to common prescription painkillers. Moreover, rescheduling could eliminate the Section 280E tax burden that prevents cannabis companies from deducting ordinary business expenses.
Canopy Growth and peers will also have access to traditional banking in the U.S., which will reduce borrowing costs and boost profit margins.
Valued at a market cap of $787 million, the Canada-based marijuana giant has lost 50% of its value in 2025. Despite the recent uptick, Canopy Growth stock is down 99% from all-time highs.
Is Canopy Growth stock a good buy right now?
In the fiscal second quarter (Q2) of 2026 (ended in September), Canopy Growth narrowed its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) loss to $3 million from $6 million in the year-ago period. The cannabis producer managed to eliminate the going-concern warnings that had previously clouded its future.
The Canadian marijuana grower reported revenue of $51 million in fiscal Q2, an increase of 12% year over year. The top-line growth was driven by a 30% increase in the adult-use segment, where Claybourne infused pre-rolls, and new Tweed All-In-One vapes gained traction among consumers.
Storz & Bickel contributed 5% sequential revenue growth to $16 million, as the newly launched VEAZY vaporizer generated early momentum heading into the critical holiday selling season.
The medical cannabis business continued its steady climb with 17% revenue growth as insured patient registrations jumped 20% year over year.
Canopy’s international business segment disappointed investors as revenue fell by $3 million compared to last year. The cannabis company emphasized that European operations faced supply constraints and quality issues with Portuguese flower that failed to meet standards.
Canopy Growth transformed its BC Georgia facility into an exclusive medical cultivation site. This facility will produce craft cannabis for Spectrum patients, with all products now hand-trimmed to ensure quality consistency.
Management exceeded cost-saving targets as the company reduced annualized operating expenses by $21 million, above its goal of $20 million, which indicates a focus on efficiency.
Canopy Growth ended Q2 with almost $300 million in cash and $226 million in long-term debt. However, there are no significant debt maturities until September 2027.
The company prepaid $50 million on a senior secured term loan in Q2, which reduces its interest expenses by $6.5 million annually. Its free cash outflow also decreased from $56 million to $19 million over the last 12 months.
What is the Canopy Growth stock price target?
CEO Luc Mongeau implemented daily management oversight to stabilize operations. The company also expects international performance to stabilize at second-quarter levels through fiscal year-end before returning to growth.
Analysts tracking WEED stock forecast revenue to increase from $281.6 million in fiscal 2026 to $377 million in fiscal 2030. It is also forecast to end 2030 with a free cash flow of $17 million, compared to an outflow of $50 million this year.
Canopy Growth stock will continue to soar if cannabis is decriminalized in the United States. However, it will still need to improve its profit margins and compete with incumbents to gain market share south of the border.
Given consensus price targets, WEED stock trades at a 46% discount in December 2025.
