Q4 2020 Medipharm Labs Corp Earnings Call
Okay.
Good morning, ladies and gentlemen, welcome to net of foreign but fourth quarter 2020 conference call and webcast I would like to remind you that this call is being recorded on March 31st 2021, 830, a M eastern time.
Following the presentation, we will conduct a question and answer session to ask a question. During the session you will need to press star one on your telephone.
Anyone has any difficulties hearing the conference. Please press star followed by zero for operator assistance at any time.
I'd now like to turn the call over to Laura on the Pori, Vice President of Investor Relations and Communications. Please go ahead.
Okay.
Thank you operator, and good morning, everyone.
With me on the call today are Keith John President and interim Chief Executive Officer.
And Greg Hunter Chief Financial Officer.
Now before we begin please note the following caution regarding forward looking statements, which of meat on behalf of Betty from lots of all of its representatives on this call the <unk>.
<unk> made on this call will contain forward looking information that involves risks uncertainties, including those introduced by the COVID-19 pandemic.
Actual results could differ materially from the conclusion forecast or projection in the forward looking information.
Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in the forward looking information.
Additional information about the material factors that could cause actual results to differ materially from the conclusion forecast or projection in the forward looking information and the material factors or assumptions that were applied in drawing the conclusion or making a forecast or projection as reflected in the forward looking information are contained in the many firms labs filing with the Canadian.
The Rachel Securities regulator, which are available on SEDAR at SEDAR Dot com.
Now with that it is my pleasure to turn the call over to keep strong.
Thanks, Laura and good morning, everyone I'll begin the call with our outlook and then Greg will discuss Q4 results on our recently strengthened balance sheet.
Then I will close with some additional thoughts.
We are turning the page on a challenging year that create uncertainty for people organizations and regulators globally.
2020 presented certain difficulties of across the cannabis industry in Canada and abroad.
Betty Farm also demonstrated resiliency as we remain focused on our vision to become a leading global provider of pharmaceutical API and finished dose medical and wellness products.
We are confident that 2021 will be of stronger year for many farm for four reasons.
First the expected ramp of our key customer sales agreements of character out 2000 of 'twenty.
Second the recent expansion of our own labs branded product lines of distribution channels in Canada.
Third the company wide organizational changes made in Q4 that will allow for more efficient effective operations as we focus on returning to profitability.
And fourth the global momentum being gained in the pharmaceutical sectors entry into the candidates, including the U S.
This is our biggest opportunity.
Many farm is well positioned with highly specialized manufacturing capabilities, the GMP supply chain and expanded drug licensing to win new pharmaceutical supply contract.
Looking at our near term growth opportunities in more detail metaphor of labs now has over 30 customer agreements in eight different countries all in keeping with our focus on domestic wellness and international pharmaceutical markets.
Headline any of these agreements is our exclusive partnership announced in early Q4 with status of the European consumer health care and generics company.
I'm very proud of our team to say, we have recently started shipments the status of under this agreement.
This is the very beginning of a meaningful long term partnership and it will be a contributor to revenue this year and into the future.
US status of the right partner, Germany is the right market and the disagreement comes at the right time.
Germany is leading the market globally for medical cannabis.
More than 300 of 20000 candidates the prescriptions approved in Germany in 2020, the German market is set to be growing.
At around 30% annually.
About two thirds of medical cases health care insurance Reimburses German patients using cannabis. This is a more advanced than any other medical market.
As a reminder, one of our role is to provide a wide range portfolio of products and services as full turnkey finished dose supplier of all formats and delivery methods.
Fulfill this role we created a reliable supply chain to source qualify manufacturer label and deliver the very best medical cannabis to startup.
Manufacturing of extract products is taking place at the many farm labs GMP certified production facility in Australia when products arrive in Germany from labs ensures complete German lab testing labeling and final distribution.
That will lead the way in medical education, marketing and sales use of its extensive field force to.
To that end, it's already trained 28 representatives to assist the doctors in making informed decisions about prescribing candidates for chronic pain neurology and oncology.
Scatter has launched its initial offerings of GMP flower products and extract formulations with different THC and CBD concentrations will be available in the coming weeks.
The farm labs will supply all of these products.
With the commitment and power of Stat of behind this offering we are confident that this is going to be of great success.
As we said when we initially announced the deal both data and many farm intend on expanding sales of beyond Germany, two additional European countries over time.
As I noted this is one of 30 customer agreements in place around the world now, including New business in South America with can't from Peru, and accelerate Brazil demand signals. In these markets are positive, which is obviously important to the realization of growing volumes as the year progresses.
We also continue to convert opportunities if the definitive deals that fit with our long term strategy.
As one example at the beginning of this month, we were chosen by Canada, Australia to provide both white label supply and contract manufacturing.
In Australia, we have commenced the registrations to launch over the counter CBD products over the counter legislation just passed in February and we believe represents a high growth opportunity for us, especially since manufacturers and suppliers of the CBD products must be GMP certified.
Growth in Asia Pacific markets will complement our global potential and make for further use of our production capacity in Australia.
In the Canadian market, our outlook has improved as we have diversified sales and are seeing increased revenue from finished formulated product. This is a result of strong progress made on of building our presence in core wellness and pharmaceutical markets.
Q4 provided objective evidence that this shift in focus is working to.
Compared to Q3 total revenues increased 22% on the strength of growth in finished formulated products, which grew 64% from the prior quarter.
Our business model and capabilities, we're always designed to serve global medical and wellness markets.
As part of our long term strategy, we're working to increase the breadth and depth of Finnish formulated products both of our own and those produced under white label agreements.
We are excited to make our first shipment of labs candidates pure CBD isolate to retailers in six provinces in Q4 of 2020.
This is only the beginning.
2000 of 'twenty, one will see us actively expand our Canadian <unk> business through the launch of additional labs branded products. While also benefiting from expected growth in consumer volumes for products, we produce under white label agreements.
This spring we have launched three new oils, CBD 100, Ultra Formula THC 30, plus formula and the most exciting our first third generation product CB and net time formula.
For those that may not be aware <unk> is a rare minor cannabinoid. Many farmers now just the second company in Canada currently offering a CDN product to consumers looking for its unique benefits.
It's no secret that Canada's retail channel has struggled over the past year for a variety of reasons, including the pandemic rollout of store friends were slower than originally predicted but theyre now approximately 1400 brick and mortar cannabis stores open across Canada double the number from just over a year ago. This provides the foundation.
We need to realize the benefits of having of both diverse product offering and broad distribution.
On the distribution front, we are very pleased to announce a supply agreement in early March 2021 of the province of Quebec, under which we will supply cutbacks growing medical and wellness market. This year, Quebec is the seventh province to of qualified Betty from labs products for medical and wellness consumers.
We're also able to better unlock the value of our GMP platform and expertise as a result of receiving our cannabis drug license in February.
This candidate drug license from Health, Canada allows us to manufacture and supply of pharmaceuticals prescription drugs that have been classified with the debt drug identification number.
This opens the door for us to supply cannabis based pharmaceutical drugs and Apis for clinical research trials aimed at abbreviated new drug applications and novel drug discovery.
The candidates struck license is one of the key steps required to commercialize <unk> products for companies in the traditional pharmaceutical distribution channel.
And the regulated business licenses like this as well as the license we received in December authorizing us to manufacture package and label natural health products in Canada serve as part of our structural competitive advantage is our moat.
Specialize the licenses also demonstrates the physicians patients and consumers that many of farm labs as a trustworthy source for medical and wellness products and our markets.
Taken together these developments support a more positive outlook for 2021.
Since Q1, and Q2 of last year included relatively healthy contributions from the spot bulk business that will not reoccur.
We will continue to look for progress on a quarter to quarter basis. We are confident that we will see a stronger back of 2000 of 'twenty, one as customer supply agreements and consumer sales of labs formulations began to ramp.
As you know we are <unk>.
Driving to build a great business for the very long term and the strategic headway made over the past year sets us on the right course for the future.
We're also concentrating on more than just revenue growth sustainability comes from profitability on that note in Q4, we made some companywide adjustments to our operations that will allow us to operate more efficiently and effectively in 2021.
I will now turn the call over to Greg. This is Gregg first earnings call, having joined as Chief Financial Officer of February Greg brings to the many farm over 20 years in health care and pharmaceutical experience with expertise in the senior finance operations and leadership, having worked with Greg over the past two months I can say with confidence that his disciplined approach will.
Allow us to execute on our plan and deliver profitable growth in the future.
Over to you Greg.
Thanks, Keith and good morning, everyone I'm excited to be part of the Matti Farm story and look forward to working with the management team to build a great company focused on profitable growth and the global pharmaceutical medical and wellness markets.
2020 was the uniquely challenging year to be in the cannabis marketplace and many farm was no exception.
Supply in the bulk concentrate and distillate market in 2020 resulted in sales volume reductions and pricing corrections, leading to a decline in both revenues and profitability.
In the back half of 2020, many farm made a number of changes to respond to the corrections in the bulk supply market with.
We shifted our focus to the production of fit formulated finished products for the medical and wellness markets and adjusted our cost structure to be more in line with the new landscape in.
In Q4, we reduced head count and our Canadian operations by a further 16% to deliver annual savings of approximately $3 6 million.
In addition to head count reductions, we made other operational changes to reduce costs, including renegotiation of certain contracts and elimination of nonessential services, we are leaving no stone unturned.
As a management team, we are committed to growing our topline and adjusting our cost structure to return <unk> to profitability.
Turning to the P&L performance for the fourth quarter.
The fourth quarter revenues grew 22% sequentially from $4 9 million in Q3 to $6 1 million. In Q4. This was driven by of 64% sequential growth in our finished formulated products portfolio and was partially offset by a 36% sequential decline in our bulk supply business.
Yeah.
Gross profit for the quarter was impacted by a number of nonrecurring items for a total of approximately $18 million.
As a result gross profit was negative $24 7 million the.
Non recurring items included a $10 7 million inventory write down $5 9 million accelerated depreciation on equipment no longer in use and the $1 7 million write down of deposits on capital equipment no longer required.
Adjusted for these nonrecurring items gross profit was negative $6 8 million.
The negative $6 8 million gross profit was the result of lower sales volumes reduced selling prices and higher input costs as a result of some older inventory on hand.
General and administrative expenses in the quarter increased from $4 4 million in Q3 to $5 2 million largely driven by restructuring costs and accelerated depreciation for assets no longer in use.
Excluding non recurring restructuring charges and accelerated depreciation general and administrative expense declined 8% sequentially to approximately $4 million.
R&D expenses increased 0.6 million largely driven by accelerated depreciation and restructuring as mentioned earlier.
Other operating income included $1 $8 million of income from the Canadian emergency wage subsidy, which was offset by a 2 million dollar fixed asset impairment charge.
Adjusted EBITDA for the fourth quarter was negative $8 8 million driven by a negative gross margins as I mentioned earlier.
While we have made strong progress to date on the topline and operationally as the management team we are not satisfied with these results.
As Keith discussed earlier, we are enhancing revenues with a growing and diversified pharmaceutical medical and wellness portfolio of customers and expanding distribution and international reach in addition, we're focused on adjusting our cost structure as required to deliver profitability.
Moving to a few notable items on the balance sheet.
Inventory declined to $22 1 million, which reflects the $10 $7 million write down I discussed earlier true.
And other receivables remained consistent at $29 6 million largely driven by two customers totaling just over $19 million as disclosed in our financials. We are confident in recovering approximately $8 5 million from our previously disclosed legal proceedings and plan to collect the remainder from the other customer.
Adjusting for these two customers trade and other receivables is $8 6 million, which is more in line with our revenue performance.
Finally, our cash balance at year end was $19 9 million and was further enhanced by our Q1 2021 bought deal that I will discuss shortly.
Our cash balance at the end of the fourth quarter reflects the repayment of our revolving loan of $5 3 million and of $3 3 million payment of our convertible debenture the balance of the convertible debenture stood at approximately $3 9 million at the end of March.
As previously disclosed in March of this year, we completed a bought deal financing, which raised $33 $4 million in gross proceeds from the sale of $57 5 million units at a price of 58 cents per share.
This included $7 5 million units from the exercise of the underwriters over allotment option.
Each unit consist of one common share and one share purchase warrants.
Each warrant is exercisable to acquire one common share and an exercise price of 70 cents per share for a period of 24 months.
The bought deal strengthened our balance sheet. So we can continue to execute our strategy to be a global leader in pharmaceutical medical and wellness markets with that I'll turn it back to Keith.
Thanks, Greg.
Attracting of senior finance leader with Greg hands on experience is a key part of building a great company.
So too is having and invested and effective board of directors.
On the governance file our board made one very welcome addition in January with the appointment of warrant ever at the founding CEO of Asia Pacific operations. There are very few industry executives, who have as much direct knowledge of the international canvas market as more and we are very pleased that he is now contributing to corporate governance.
With warrants appointment our board consists of eight members of whom five are independent.
One of the current key task for our board is the appointment of a permanent Chief Executive Officer.
We have initiated a broad international search for the perfect candidate.
As we select the right person the board and I have the utmost confidence the senior management team will keep our company moving forward to achieve our goal.
In closing, we entered 2021 with excellent momentum as we execute on our vision to be of global pharmaceutical producer serving multiple customers across multiple jurisdictions with innovative products. We delivered positive developments that will drive short and long term growth potential including ramping up on new customer.
Contract.
Expanding our product offering globally, our expanded distribution network in Canada, and the commercialization of our Australian facility.
Most importantly, we are perfectly positioned with specialized licenses and pharmaceutical quality manufacturing capabilities to seize on the significant opportunities in front of us with large pharmaceutical companies now moving to take their position in the cannabis market.
I'd like to think of the Merry farm labs team for putting it on the hard work necessary to get us to the stage and all of the long term shareholders for your ongoing support.
Thanks also to all of you for listening in today.
Now operator could you. Please open the lines for questions from our callers.
Great. Thank you as a reminder, if he would like to ask a question Jerry Miss time simply press Star followed by the number one on your Touchtone phone to withdraw your question press the pound or hash sign please standby, while we compile the Q&A roster.
And your first question here comes from the line of Scott Fortune from Roth Capital. Please go ahead. Your line is now open.
Hey, Good morning. This is Mick stepping in for Scott just a couple of questions. Here you mentioned that you completed your first shipments the startup post Q4 could you kind of quantify that shipment or provide any color kind of on the near term expected cadence of additional shipments there.
Hey, good morning. Thanks for joining this is a this is Keith yeah. We're really excited that we did get product into Germany and in this quarter and the program is launched.
We're not going to give quantities at this time just as the program is still underdevelopment and we're still you know of reaching patients.
There will be a regular cadence of delivery route we want of obviously provide them with the best product on an ongoing basis. So we expect that cadence to keep going.
But again it is a little bit early with them within the launch. So we're really looking forward to getting through the first couple of weeks and then we'll be able to and then we'll be able to talk a lot more about the eight skus that we've launched into Germany, and and the cadence and some of the volume and some of that work will show up on our.
In our Q1 kind of disclosure so more to come there, but really exciting just open the regulatory pathway, which is sometimes the most difficult piece of it.
Got it and then if I could just touch on the cash position of real quick you guys mentioned, the b, you're at about $20 million on the quarter and in the new raised another $33 4 million.
Could you just touch on how you guys are looking at future capital allocation and the potential M&A environment here kind of moving forward.
Yeah for sure I appreciate the.
The question on that I'm going to pass it over to Greg just to touch on kind of all of our current cash balance and our cash balance at the end of the quarter, Yeah, Hi, Good morning, and thanks for the question. So yeah. As you said, we're roughly $20 million at the end of the quarter and then what the bought deal raised just over $33 million on.
On the gross.
Gross basis, you know I can share with you as of yesterday's cash balance and in the bank were in excess of $40 million of cash on hand at this point.
We're comfortable with our liquidity position at this point and we'll continue to monitor and manage accordingly.
You know as we've said before and I said today, you know we have put in some cost constraints across the entire organization for Capex.
Capex head count and Opex to ensure we continue to preserve cash so that we can execute on our on our strategy to expand internationally into the pharmaceutical medical and wellness market. So again, we're comfortable with where we are and I'll hand, it back the keys to mention on the M&A question that you had yesterday.
It's kind of you know him.
As Greg mentioned no no major capex on the horizon for us as far as we've got a fully built out platform. Both in Canada, and Australia that are are revved up and ready to go as we expand so.
No major capex, there and we did and the supplementary perspective.
Talking about some of the great projects that we are going to be spending this capital on the a lot of its around further registration and licensing of our pharmaceutical products on the on the M&A front.
As I said, we do have some great platforms in Canada, and Australia that meets the old conserve the world at this point for both of you know international medical in the future pharmaceutical contract I think if we as we turned on.
You know, we're always open out of the business to look at different opportunities I think it would be more on the category of something that would be asset light around their product license in new jurisdictions that would help with the logistics and flow of goods in those jurisdictions.
Sections.
Got it appreciate the color guys.
Your next question comes from the line of Aaron Grey from a G. P Alliance Global partners. Please go ahead of your line is now open.
Good morning. This is Andrew bond on the line for Eric Great. Thank you for taking our questions.
Maybe just digging a little deeper into the next first question could you provide us some more detail on some of the specifics steps status is taking to prepare for sales in Germany, and maybe some color on how quickly you believe sales could ramp there. Thanks.
Yeah sure good morning, Andrew Thanks for asking the question Yeah as you mentioned.
That is as well well off to the races on this launch.
Alright already 28 people working in the field of Joe's out of representatives of that working in the field.
Look at some of the other field forces of other competition I think that this would be probably.
One of the biggest if not the biggest and then this is status. So they already enjoy quite a great a market share of some of their other products. So the relationships with physicians and pharmacists are something that you know they're already familiar with and are ready to do so some of the kind of final final mile around sales and distribution.
It is something that the Rd extra of that.
Alright.
Great. That's great color. Thank you and then maybe just switching gears to gross margins can you help.
Some detail on how to think about the evolution of gross margins over the next couple of quarters and do you feel comfortable with your current inventory position today could you provide some color on how you expect status of sales in Germany to have an impact there on those.
Yeah for sure of it.
Really comfortable with where we're at obviously with inventory on our ability to move the inventory that we have I.
I think the Mar.
As you see today are not reflective of the margins of the business going forward as we kind of take care of some of.
The higher expense of inventory and some of the other activities that we're we've shifted focus but I'm going to hand, it over to Greg to provide a little bit more detailed color on that.
Yeah. Thanks, Keith So yeah as we said you know adjusted gross margin for those discrete items in the quarter still negative $6 8 million for the reasons I discussed, but you know as we go forward, we do see a path back to profitability both on a gross margin perspective, and overall EBITDA profitability.
On a couple of a couple of areas where that profitability will come back from this one with some improved automation and process efficiencies as we implement within our manufacturing environment.
Two is as Keith touched on there obviously you know what's still on our gross margin of some of the higher input costs with with the biomass that we had acquired previously so we expect that to improve as we go forward and then with international sales expansion and pharmaceutical expansion.
We expect to get higher up the value chain on margins. There. So we see of pass back the profitability from from those key areas.
Thanks, Greg.
Finally on.
[noise] data and the margins there would be reflective of the rest of the pharmaceutical and international business day that Greg mentioned, so we work with that on the on a daily basis.
And you know we are really they are experts in the field as far as candidates go. So we provide them with a turnkey solution. So we expect to see a great partnership there both in what we provide them on the economics that we get out of that partnership.
Okay.
Great. That's great color. Thank you guys I'll pass it along.
Your next question comes from the line of Adam back on from Scotiabank. Please go ahead of your line is now open.
Good morning, and thanks for taking my questions. So my first one is for key and you know I appreciate the update on scatter and I know you can't give a lot of color there.
But you know you talked about commercializing products in the next couple of weeks here.
You know from from the info you've gotten from the sales team. The 20th guys are on the field right now how is the reception of these product spend versus competitors in the market and has there been any early indication of demand for those products.
Yeah, I think that in the morning.
It's a great great feedback. So you know we sent off of our first deliveries on some of the like.
Two of the four of the eight Skus in February of already replenishing those the kind of give you an idea of how quickly that they're selling through I think the.
A couple of different areas based on our market analysis and working with out of there was some gaps in the German market and.
If you look at some of the day that comes out from the patient reimbursement you can see kind of a high THC and balance of oil are some gaps and we've done a great job of filling the gap as the partnership. So early reception has really good already working on replenishing those and I think that that that will keep going.
The the great thing about Germany, and because of the majority of patients do have coverage, we do get the more in depth of reporting. So I know the for example, the Canadian domestic sales reported is a bit tough because you don't see the ultra regular customer on some of the media analyst analytics, where the high bar analytics, but the great thing about working on the phone.
Suitable where all of us.
Well developed on on.
Insights on on what patients are are choosing for their medical choice. So we'll continue the longer that you know on the coming months as we see some of the months data released and happy to kind of share that with the with everyone. As we as we find out more information.
Okay, great. So maybe just the secondary question on the pharma space on the back of that so there's been a few interesting developments you know within cannabinoid based pharma over the past couple of months.
Are you able to give some high level comments on what you're seeing in terms of contract negotiations in the market right now and whether you've seen an uptick in demand for first part of your more medical of focused products.
Yeah, definitely and I think it is.
You know no secret to anyone that the pharmaceutical market is taking their position in in Canada.
And you know I think Manny farm is one of the go to partners or pharmaceutical companies just based on the other partners that we already have as far as commercial supplier and with that and some of the licensing that.
Of that we have now like.
The spoke about not only the in GMP certified but we have the GMP batch of up five license.
License from Health, Canada now.
We disclosed in our in our supplementary disclosure after a bought deal we are.
Investing significantly in expanding some of that license that allows us to enter that traditional pharmaceutical market. So the.
There are a lot of people that are looking at it I think you know of quick a quick scan you could kind of see some of the major pharmaceutical companies are either pattern of different formulations are having on bolt on trial and they'll be looking for supply of API and I think many of our movie you know one of the few handful of companies that can provide them that book.
The pharmaceutical solution.
Okay, Great. So just one last question you touched on Australia there.
If we think about the current contract base and I understand you can't give guidance, but if we think about the ramp in those contracts is it going to be sometime in early till end of 'twenty, one or can you give us an idea of when you expect to see more meaningful revenue contribution from the Australian business.
Yeah I think on.
The great facility because of the Australia program has been made within the kind of pharmaceutical regime. It gives us a lot of flexibility for international projects. So for example, the the oil that status of selling now is produce formulated and fill in our Australia facility.
So I think kind of as I mentioned.
And the first question was.
Was that the hardest part the open up the regulatory pathway. So now that we deliver from you know Australia into other countries. It really allows us to continue to do that and well see that ramp up I mean, we.
We still are at the mercy of.
Regulate the regulatory bodies around the import and export so it's hard to say definitively when well see the tactful. He turned on but I think we're expecting gradual growth and you know a lot of that kind of in the back half of 2021 is relying on kind of our next set of permits the next set of.
The big shipments.
Okay, great. Thanks.
Okay.
Once again, if there are any further questions. Please press star followed by the number one on your touch on found.
Next question here comes from the line of David Quebec on from ATV Capital markets. Please go ahead of your line is kind of open.
Hi, guys. Good morning, this is actually of Frederico chiming in for Dave.
So obviously you know a big part of your strategy is focused on international markets are low.
Just wondering if you could provide any color around your view of the U S market right now on any specific opportunities youre looking into the market.
Sorry, I just lost the at the last bit of that question can you just kind of get.
Yeah, any any specific opportunities you are looking into the U S. Maybe.
Oh, Yeah, no great and that's a great question. We are of looking at it very closely I think we've seen some.
One of the headway there even as recent as of last night with new legislation in the state of New York a round of the utilization. So we're really excited to look at that as an opportunity I think.
Look at.
Being a pharmaceutical company in the pharmaceutical supplier, we're entering traditional pharmaceutical channel and a lot of them don't have many border restrictions that you would see it of recreational cannabis. So on recreational candidates EBIT moving product from state. The state is you know of illegal and a lot of cases as you Register of farm of Prana.
It or of pharma active ingredient you really can have free movement.
For example, if you look at Canadian.
Canadian pharmaceutical manufacturing.
The percent of the exports.
From that sector in Canada actually make their way to the U S. So as we're able to get into that manufacturing.
The community of the pharmaceuticals, it really varies endless opportunity for us to take advantage.
You have patients that are looking to candidates of the choice for therapeutic option.
Thanks, that's helpful. And then just shifting gears a little bit about.
How about you don't have a strong presence in the oils and the base or in Canada, but do you have any plans to answer your segments like the edible chocolates gummies, even the beverages or is that something that sort of looking into the the short to midterm.
No we keep an eye obviously on the on the adult use market here on Canada or our line of products are primarily related to the wellness sector. So a lot of of what we're selling to adult use consumers.
Consumers in Canada as the wellness product is the same thing that we'd be selling internationally on the medical products, where the only medical things.
So you know where consumer decides to I get the therapeutic benefit by going to the Avenue store, rather than going to a position, we're able to fulfill that need them.
We're really encouraged by the ramp up of some of the CPG.
Products, such as drinks and edible.
R. L rule, there is really providing active ingredient on on the walls market. So some of our long term customers.
Are very active in those in there and the enjoy of great shelf space and grateful through so what we do the support there to provide them from the active ingredient, but as far as.
Having an edible behind her a drink.
In our GMP facilities, it's not something that we're looking at.
Okay. Thanks, that's helpful I'll hop back in the queue. Thanks.
And once again, ladies and gentlemen, if there are any final questions. Please press star followed by the number one on your touch on zone.
Yeah.
And I'm not showing any further questions that are populating at this time, so I'll turn the call back over to Keith <unk> for any closing comments.
Awesome. Thank you as there are no further questions I'll close by saying, we look forward the wholesale.
Our first quarter conference call and keeping you abreast of all of the progress in between thanks for listening everyone and have a great day.
And ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
None of them.
[music].
Okay.
[music].
The.
[music].
Okay.
[music].
Yeah.
[music].