Q1 2024 Aurora Cannabis Inc Earnings Call
Greetings and welcome to the Aurora Cannabis, Inc. First quarter 'twenty 'twenty four results conference call.
All participants will be in a listen only mode and a question and answer session will follow the formal presentation.
This conference call is being recorded today Thursday August 10 2023.
I would now like to turn the conference over to your host and that's Krishnan, Vice President corporate development and strategy. Please go ahead.
Thank you Michelle.
We appreciate you all joining us this afternoon with me today are CEO , Miguel Martin and CFO Glenn.
After the market closed Aurora issued a news release announcing our fiscal 2024 first quarter financial results. This news release accompanying financial statements and MD&A are available on our IR website and can also be accessed via SEDAR and Edgar.
In addition, you will find the supplemental information deck on our IR website.
Listeners are reminded that certain matters discussed on today's conference call could constitute forward looking statements that are subject to certain risks and uncertainties related to our future financial or business performance actual results could differ materially from those anticipated in these forward looking statements.
The risks risk factors that may affect actual results are detailed in our annual information form and other periodic filings and registration statements.
These documents may similarly be accessed via SEDAR and Edgar.
Following prepared remarks by Magellan, Glenn we will conduct a question and answer session with our covering analysts.
We ask you to limit yourself to one question and one follow up before going back into queue.
With that I will turn it over the call to Miguel. Please go ahead.
Thank you Anne.
Where we're at today as a differentiated and diversified company with a leading global cannabis platform and a leading north American plant propagate or in cannabis, where medical first and a leader in that business across the world.
Plant propagation, we were one of the top companies operating critical infrastructure in the controlled environment agricultural industry.
We are very proud of the record quarter, we just delivered.
We generated the largest adjusted EBITDA, we've ever achieved in revenue and adjusted gross profit at the highest level of Aurora as reported in three years, but be assured we're not resting here, we're pushing harder than ever to bring our diversified operations to free cash flow generation.
Let me step back for a minute and look at the bigger picture with you.
Next month marks my third anniversary as CEO of Aurora.
During those three years, we've undertaken a very focused and purposeful transformation.
One we reset our operational footprint and cost structure, we are focused on leveraging our industry, leading science and cultivation expertise to produce some of the world's most innovative products and high potency cultivars.
These next generation cultivars are routinely producing 28% THC and higher potency with 43% greater yields and a 26% cost per gram reduction compared to our legacy cultivars and we expect to continue to improve in the future.
Two we reduced our SG&A expenses, while simultaneously augmenting, our CPG and pharma experience in both our leadership and our operating staff over the last three years quarterly SG&A has been taken down by 50%.
But we retain critical talent and invested in experienced and agile new recruits, we're very proud of our high performing team and collaborate and execute.
Three we rededicated ourselves to the market, we've always been leaders in medical cannabis, both in Canada and globally.
That's it and technology talent product selection and patient experience with over two times the medical market share of our nearest competitor in Canada and leadership positions in Germany, Poland, The UK and Australia, we succeed where others don't because of the high barriers to entry and our world class cultivation.
In manufacturing we've.
We've been leaders in Germany, since 2017, and one of only three companies with German production facilities, we continue to invest and support the European medical cannabis with an on the ground team in Germany, Poland, The U K and elsewhere.
Four we recognize the need to diversify our revenue and cash flow base beyond cannabis.
While the case for global cannabis is a very bullish one the timing of regulatory change can sometimes be difficult to pinpoint.
We found our first adjacency in the infrastructure like industry a plant propagation.
Over the long term plant propagation and cannabis as an every other agricultural industry will become an important part of the value chain.
But in the meantime, our controlling interest in vivo is expected to provide free cash flow growth and exposure to a critical infrastructure like asset class than most public market investors cannot get exposure to.
The tailwind for the controlled environment agricultural industry include home, showing the food supply supply chain uncertainty and reducing our foods carbon footprint. All of these are compelling long term value creation attributes, we expect to accrued or Aurora shareholders.
In addition to the positive macro tailwind, we see a path for vivo to double its revenue and cash flow over the next two to three years through the use of our underutilized cannabis facilities Aurora Sky, which is well suited for the Oregon business, our market segment ready for supply chain disruption Prefinished orchids in North America our main.
We source from overseas with the attendant cost and quality issues that brings.
But the capital required to build a highly controlled environment to grow orchids in North America as a barrier.
And for vivo many of their Oregon customers will be the same blue chip retailers that they are already serve for years, we expect our first sales of orchids before the end of this calendar year with calendar 2024, representing a step function change in <unk> revenue and EBITDA generation is the orchids business plan hits, a steady state and.
Now Aurora Sun with some growth capital, which will be fully funded from our committed bank facility. This one 6 million square foot greenhouse in southern Alberta will greatly expand the reach of BMO to the farmers and greenhouse operators of Alberta, and the American mid West.
And finally, our balance sheet.
Over three years, we have reduced our convertible debt from $531 million to approximately $63 million as of today, demonstrating their prudent fiscal management and focus on cash and cash flow are top priorities for the company.
Of course, I'm very proud of our team and our success to date.
I said earlier, we're just getting started on.
On the top line, we see a path to growing our business across all markets that we operate in.
Investment in innovation is vital to our success and we plan to introduce approximately 75, new products to the Canadian market in the coming three quarters with the best performing cultivars and extract products being introduced to our international channels.
We have the opportunity to earn profits in Canadian adult use through our upcoming product launches and with our continued drive to invest in efficient cultivation and manufacturing, we see opportunities for our Canadian adult use business to move to profitability.
Our Canadian medical business continues to benefit from our broad and attractive product assortment and the excellent patient experience we deliver with.
With disruption in the Canadian marketplace. We believe Aurora is number one position in the medical market leaves us well positioned to gather business from other medical Lps in Canada.
Our proven next generation cultivars. So that we are launching across Europe , and Australia are proving themselves to be popular with patients right.
Right now with the products, we have taken the market in the past three months, we have more demand than we have been able to supply in Europe and Australia.
An industry challenge by excess supply we are excited by this enviable position and with recent changes to our supply chain. We think we can handle this increasing demand.
And speaking of Europe , I should note that potentially positive regulatory changes we are seeing there Germany. In particular is a lot going on we have an excellent team on the ground in Europe , including one of the top regulatory advocates in the industry. We're very supportive of the direction. The government is moving in with the potential for de scheduling of cannabis within Arcata listing.
The near future the German medical market has the potential to expand in size significantly.
And of course, France, where our medical cannabis pilot program is expected to wrap up early next year and a full medical cannabis system is expected to be implemented we are pleased to be the sole flower supplier to the pilot trial and when the market unfolds, we expect to be a key player.
It should be clear that our regulatory expertise backed by our unwavering commitment to science breeding and genetic sets us apart and positions us to win in new medical and recreational markets when they open.
Below the revenue line the intersection of our cultivation science focus on operational expertise and efficient EOG E&P facilities continues to drive our cost per Gram and per unit cost lower and of course, we are committed to meeting our ongoing cost optimization targets, we talked last earnings call about a further four.
<unk> million dollars of annual savings, which is progressing nicely and we expect to see the impact of these reductions fully through the back half of this fiscal year.
I'm sure that our track record on top line execution and expense management should give everyone confidence that we will generate positive free cash flow in calendar 2024. It is truly an exciting time for Aurora, our shareholders and our employees and with that I would now like to turn the call over to Glenn for a detailed financial review.
Thank you Miguel and Hello, everyone.
For my remarks, as a reminder, last year Aurora changed its fiscal year end March 30, <unk> for the period ended June 32023 that we are reporting on Mark since first quarter of fiscal 2024.
<unk> reported a strong quarter in Q1 and medical our international business continued to grow nicely as demand for our products are outpacing supply.
Canadian medical delivered yet another solid quarter with meaningful revenue and gross profit.
Tumor our business was up year over year down only slightly sequentially. Despite the hopes and a popular glitches product and finally BMO.
Quarter to date, and our plant propagation business unit.
I'm also very happy to report that along with good traction on our top line, we delivered the highest adjusted gross profit we've had in three years.
We are on track to generate further cost efficiencies, we've discussed which will reduce cash outlay without impacting growth opportunities in our business. So abbey. It all up and we delivered our third consecutive quarter with positive adjusted EBITDA.
For us of $2 2 million.
So looking at our Q1 results in more depth.
Net revenue was $75 1 million compared to $51 million in the year ago period, we.
We saw growth across all business units, including record revenue at vivo, which we acquired in August of 2022.
Our global medical cannabis business generated $41 $6 million in revenue at a 61% adjusted gross margin.
More specifically international medical revenue was $16 $2 million up 40% from last year and Canadian medical cannabis was $25 4 million up 2% year over year and 5% sequentially.
The strong performance in our highest margin channel was due to several factors, including the positive market reaction in Europe to our new Canadian grown high potency cultivars driving our best quarter of European revenue ever with record quarters for us in Germany and Poland.
The continued growth of the Australian medical market.
We also had our best quarter ever in sales in that market more than offsetting the $1 million of Israel revenue from last quarter that did not repeat in Q1.
And of course, our focus on supporting and growing sales are insured patient groups in Canada.
Q1, adjusted gross margin for medical cannabis was 61% within our target range of 60% and above and consistent sequentially.
It was down from 67% a year ago.
Q1 revenue mix contained more volume to certain international bulk export markets have produced a slightly lower adjusted gross margin.
So as usual driven by our leadership in global medical markets are.
Our medical cannabis business represented about 75% of our Q1 cannabis revenue and 88% of adjusted cannabis gross profit and important distinction from our peers.
Consumer cannabis net revenue was $13 $2 million up 5% from a year ago as we continued to drive new and innovative products to all of our markets.
We were pleased with this performance, particularly given that we only had a partial quarter of sales in Q1, the popular large pack glitches prior to the health, Canada industry wide halt uncertain ingestible extract products.
That said, we have a strong product pipeline with compelling new innovations planned for launch in late Q2.
We expect to overcome the loss of large pack glitches revenue as we enter Q3.
Adjusted gross margin in the consumer channel was 27% compared to 26% from the prior year quarter with the difference driven mainly by higher efficiency cultivation and production.
And our plant propagation business vivo contributed $19 9 million in net revenue and 85% increase sequentially. This reflects the seasonal cadence of the business.
And it reflects our group performance in the quarter.
There was no revenue from vivo in the year ago comparative quarters, we've not yet completed the acquisition.
Planned propagation adjusted gross margins were 22% down sequentially from 36% as expected due to the mix in annual timing of vegetable and ornamental plant sales.
Adjusted SG&A was well controlled at approximately $29 $5 million, reflecting our commitment keeping SG&A at or below $30 million and as we've discussed previously as part of our push for another $40 million in annualized cost savings, we have already taken actions that will reduce SG&A further we'd expect.
Those savings to begin to show up in Q2.
Looking forward, we expect Q2 cannabis net revenue to be largely similar similar to fiscal Q1.
Geographically mix weighted slightly more towards the international medical equipment.
And for plant propagation, we expect to see reduced revenues and gross profit due to seasonality normally vivo earns about 25% to 35% of annual revenues in the second half of the calendar year, our fiscal Q2 and Q3.
That said as we accelerate People's business plan, we expect first sales of markets from the 800000 square foot Sky facility to occur in Q3 of this fiscal year.
Sales from the $1 6 million square foot Aurora Sun facility to begin in the first half of our next fiscal year, but we are excited about the dependable yet rapidly growing contribution and diversification that the plant propagation platform brings to our company.
Now turning to cash flows and our balance sheet.
We are on track to meet our objective of positive free cash flow in calendar 2024, and in fact, we made a lot of progress in Q1, our operations used in that $11 2 million down 58% from the year ago period.
Having this improvement where our actions to close less efficient operations and to supply our end markets from a cost effective high quality Canadian EU GMP production facilities.
In Q1, we closed our Aurora Nordic facility, and our U S CBD business, and we decided to sell our European R&D facility.
These actions will positively impact cash flows and margins in the second half of our fiscal year by at least $16 million of annualized savings.
We've also taken a number of further cost reduction initiatives in operations and SG&A during Q1, and those annualized benefits of approximately $24 million should start to show up in Q2 and be fully realized in the second half of this fiscal year.
I should note that Q1 cash flows did include payments for several restructuring initiatives, including contract terminations and severance we do expect more of this in Q2, but it should become much later after that as we complete the restructuring actions we've already announced.
And of course, we've been diligently taking care of the convertible debt balance.
During Q1 and shortly afterward.
Purchased $83 $5 million of our convertible senior notes at an average to two 4% discount to par value.
Our aggregate cash consideration of approximately $62 million and the issuance of $28 9 million common shares.
Currently we have approximately $63 million of convertible debt remaining and we will have it all within the next seven months.
And that July 31st we're very pleased to have approximately $214 million of cash and cash equivalents, which is more than sufficient to fund operations until we reach positive free cash flow.
So to sum up over the last three years.
<unk> financial metrics has gotten better and better driven by a diversified global business delivering dependable revenue and strong gross profit with volatile. We've also strengthened our balance sheet rationalized our cost structure and.
And we believe we are ideally positioned to take advantage of growth opportunities across our business units. Thanks for your interest I'll now turn the call back to Miguel.
Thanks, Glenn we have now generated positive adjusted EBITDA for three consecutive quarters and set a company record for adjusted EBITDA. In Q1 looking ahead, while there may be some volatility between any three month period. We've demonstrated that we are well on the path to free cash flow over the long term, we've already differentiate ourselves from others in the queue.
Ms industry through our leadership in global medical cannabis, which includes higher potency cultivars strong gross margins and leading market share positions in Canada, Europe and Australia. This has been supported all along by our innovation and development of quality products for our loyal patient base and we've added a complementary growth channel.
<unk>, which will play a more impactful part in our overall business in the years ahead.
We view the synergies between these businesses is compelling. We then combine these topline opportunities with significant operating efficiencies that we are embedding within our organization through substantial cost reduction.
Our target of removing a further $40 million of costs during fiscal 2024 is ambitious but when considering how much we've already accomplished through our business transformation. It is entirely within our wheelhouse.
Our balance sheet also provides us with resources to be targeted and opportunistic in the midst of rapid industry rationalization in short we have the capital plan and staying power to create value for our shareholders as we build a world class company. Thank you for your time and interest in Aurora Operator, Please open the lines for questions.
Thank you ladies and gentlemen, we will now begin the question and answer session. If you have a question. Please press star one on your Touchtone phone.
Should you wish to remove yourself from the queue. Please press star two.
Ask that you limit yourself to one question and one follow up to give everyone a chance to ask.
One moment. Please for your first question.
Your first question comes from Vivien <unk> of Aurora cannabis. Please go ahead.
Hi, Good evening. This is robin holding on for Vivien Asia of TD Cowen and thank you for taking the question.
No.
I was hoping if you could possibly add some color to the growth that you're seeing in Australia.
And whether or not this market is accretive to your overall international medical cannabis segment gross margin.
Yeah listen it's a great question now first and foremost, let me say that the traditional syndicated data on market size market shares there.
You would see say in Canada on the medical business does not exist and Australia. So the numbers I'm going to give you our directional and for that so let me talk about market size. So let me talk about where we said and then I'll, let Glenn sort of take the secondary question you had on margins, we believe that today.
The Australian business is about the same size as the Canadian medical business, which is about $400 million of annual manufacturer revenue now there are a couple of different ways to look at that we are a partner.
And that business called <unk>, Australia, and they have a great sales organization led by.
A wonderful gentleman, who is an ex pharmacists, we see the Australia market growing very quickly.
At this juncture don't have a lot of the more common formats that you might see say pre rolls.
Other forms of extraction in other markets, but we're really excited about that market and the growth and it has been from a revenue standpoint, a growth market from us now from a margin standpoint, I'll, let Glen and giving you. Some more details since we are not fully integrated there as we might be in other markets. The margins for us are a little bit lower say, then there would be in Germany.
Or Poland or other European markets Glenn.
Yes.
Exactly right and they go and so the way I look at it is.
It may be as we blend tomorrow, Australia and revenue and our international sales that the percentage gross margin comes down but this is absolutely all incremental gross margin dollars for us. So it's an important part I think of.
The growth that we're seeing across the globe in medical cannabis.
I guess the only other point I'll make is it is once again a market that requires an EU GMP certification, which is really becoming a point of differentiation.
Not only having high quality products, but also being able to hold up to that standard and we have a pretty significant amount of EOG M. P production at a real high quality in our Canadian facilities, which gives us a lot of synergies and efficiencies to be able to utilize those facilities to shift to say, Germany. Poland. Then obviously, Australia is we're talking about.
Okay.
Thank you. The next question comes from Michael Lavery Piper Sandler. Please go ahead.
Thank you and good evening.
Excuse me Michael.
Just was curious you.
<unk>.
In your medical cannabis discussion you mentioned the momentum for further improving margins over the course of the year maybe.
Maybe could you give a sense of the magnitude of that and is that separate from the cost savings you've identified.
Just in terms of mix improvement.
And some other things or is that partly driven or maybe even very much driven by the $40 million of savings you've identified.
Yeah, Michael it's actually would be incremental to that and so the majority of the improvement will be the transition of servicing the European.
Market from the Canadian facilities, and so previously those markets were being serviced by our Nordic facility.
And the margins are.
Pretty significantly.
Higher as we service that product from Canada, Glenn I mean, do you want to give some sort of I mean, I know you have a.
Points on timing and scale you want to cover that piece of it.
Yeah, absolutely Michael it's a great question Theres a lot going on there so as we bring the cultivation back to Canada.
We're very efficient producers here in Canada, but we're also launching a number of the newer cultivars theres some that launched last quarter and we've got some more coming up.
Maybe I'll have some of the stats in there in terms of efficiency and cost efficiency, He's really drive the margin for us getting those much higher yield than the legacy cultivars.
It's helped us on the margin side.
And then when you know so that's also true for Australia, where we're seeing some of the newer cultivars really starting to take up there.
And we've also made some other changes within maybe source some of the floor.
Flower and how we allocate the bar between our channel that should drive those international margins up over the course of the year. So.
In terms of magnitude.
I guess, we're going we're going to have to see how that plays out in terms of timing because right now we've still got a little bit in order product.
Pushing through in Q2s, but I expect by the time you get to Q3 and Q4, we'll see the full impact of sourcing from Canada, which is going to be at least 10 points of margin.
Perhaps better.
Okay, that's really helpful.
Just a follow up on vivo.
I know you didn't own the business put up but I would have to imagine your due diligence what is giving you.
It's a sense of what its year ago revenues would've been can you give us a sense of just how it compared even if it was from the prior owners.
This quarter.
Yes.
We actually in our press release, we had.
Propagation revenue up I think it was 12, 14% that was versus the year ago period, when they owned it.
Just kind of an apples to apples comparison.
They were running at about 40 million Bucks when we bought them. They are up about probably in the high <unk> now and that might help you a little bit when you think of how the next couple of quarters. As you model. The next couple of quarters out, where we think usually kind of that 25% to 35% of the annual revenue shows up over the next two quarters.
Run rate right now is probably in the $45 million to $50 million range.
Okay, great. Thanks, so much.
Thank you Michael.
Thank you. The next question comes from Federico gowns.
<unk> capital markets. Please go ahead.
Hi, This is Eric Lipschitz and for our partner Eagle Gomez. Thank you for taking my question. So over the past several quarters, you've guided for adjusted SG&A to remain below $30 million.
Which you've obviously, Matt so just to confirm is this still be targeting moving forward and kind of how you're just thinking about SG&A spend from here. Thank you.
So let me I'll talk that topline and then I'll, let Glenn give you maybe some of the modeling questions, which is probably.
Eric when you are looking for when we look at the SG&A. There's obviously baseline what's interesting about the SG&A is that when we see these efficiencies around cultivars.
In some cases being two acts the yields per square meter you don't see a big jump up in SG&A, So youre able to grow the.
Topline and as Glenn mentioned improve your margins with that over at overall SG&A line we.
That number being below 30%, we still think is about right, we're making significant investments in R&D science innovation and we're servicing broader markets. We just brought on Switzerland, and Austria based on that same SG&A footprint. So you are seeing a bit of growth in the topline with that same numbers. So we do see some efficiency there.
But Glenn you want to.
Maybe go further on that for Eric.
Yeah, absolutely I mean, that's part of the strategy here is to get that SG&A down too.
A level that we think is stable and supportive of the growth of the business and then all right. So that we can get that scale and that leverage off of that SG&A basis. There is always a little bit of SG&A and that's driven by the revenue volume.
Their sales commissions or what have you, but for the most part a lot of our S. T E I kind of call it a little bit fixed if you will.
Given that we have investments in gaming U S listed public company et cetera, et cetera. So we've still got a few million bucks more to take out of it where you know our objective of keeping it below $30 million as we outlined some of these cost savings over the next year, we'll reduce that and keep them take it down further below $30 million.
And we should as I say, we should be seeing those showing up over the next couple of quarters those statements.
Great. Thank you.
Thank you Eric.
Thank you. The next question comes from Matt Bottomley of Canaccord Genuity. Please go ahead.
Hi, This is Jan King on for not bother me. Thanks for that question.
So I wanted to kind of focus back to Australia for my question lately, there's been a lot of media reports, indicating got degrees already in country have been trying to legalize cannabis for recreational purposes.
I guess I just wanted to get your latest thoughts on how you are viewing.
Fueling those headlines coming out of the country right now and is there any further room for growth in terms of entering the recreational market in partnership with Mega Lee for any other avenues in the future.
Yeah. It's a great question. So let me let me take it in sort of three parts. The first part is yes.
We.
And that's pretty extensively and government relations and we believe we have a really good relationship with the T. G. A which is the regulatory authority there plus elected officials. What we're hearing is on recreational even though there's been some headlines about the Green party. It's a ways off so it's not really actionable right now circa.
<unk>, what we see in Australia as similar to what we see in Canada and other markets is that it's the same regulatory agencies and validation. So the manufacturing the packaging the labeling the marketing always very similar so as we've always said excellence in medical is clearly significant.
Advantage at a time in which <unk> is moving forward now lastly, the medical market, we still see upside for the overall size of the medical market in Australia. There is many very common formats that are not available in Australia extracts edibles pre rolls that without.
A massive impact on that patient base secondly, there is a very interesting.
In Australia, that's very punitive about operating a motor vehicle with any presence of candidates or cannabinoids in your system that they are working on right now and I know it seems like a niche a little law, but if that were to change and we think theres a good chance. It will that would really open up a larger patient base and then we're also seeing an expansion in the.
Model and so I don't want to predict what a $400 million annual run rate will go too, but we do see a lot of upside in Australia, and we also see it as a consolidated pizza business again, the syndicated data is not perfectly accurate, but it does appear that the top three companies and Australia of which med relief is one <unk>.
Present in over half of the total business. So it's lot bit dissimilar than other markets, where you see a lot of you.
We don't see a lot of concentration.
Thank you. The next question comes from John <unk> of CIBC. Please go ahead.
Thanks. Good evening. My question is also on Australia, So I'm, hoping that we could go a bit deeper on mission and if we rewind a couple of years.
Israel is considered a really attractive market and multiple lp's race towards it it became saturated and domestic producers took share as well.
So I wonder if you could talk about how sustainable the growth is in Australia, and what factors would make this different is there anything keeping those top three providers.
At the top are there any barriers to entry that you can speak to any any other color would be helpful.
Sure John It's a great question. So if you go back in time on Israel.
First and foremost do you have a significant difference in the size of the population and therefore, the patient base. So the potential size of the pie in Australia is going to be bigger than what you have in Israel Secondly in Israel.
Regulatory process was.
Very fluid and he saw the starts and stops.
As that agency.
Was looking to really determine what we're going to be the important criteria that testing criteria and today they use a standard called <unk>.
That is quite a challenge and so when you couple that with a also a bit of a regulatory challenge in the number of pharmacies and retail outlets, while they've grown still sort of creating an overall process, Australia feels different and I don't want to predict because things are so dynamic, but I would say Australia.
Yeah.
Is sort of different in three ways first is the scope $400 million of annual revenue is bigger than Israel ever was and it also appears to be growing secondly, the T. G. A has established.
Pretty common standards and they mirror in almost every case EOG M. P. So that creates a bit of a different situation and third is at least today imported flower has the vast majority of the business as opposed to locally grown flower. So.
We've been a strong component of what's happening in Israel.
And we're obviously a big player in Australia.
I mean, I feel more bullish on what's happening in Australia, but things can change and I think the most important thing for us has been our ability to adapt and be successful in all of these markets and so we have a leadership position in Germany, and Poland and Czech Republic.
We're going to Switzerland, and Austria, and so I think there's a lot of commonality to being successful and when one door closes. It appears in the other one is going to open.
And you have to be able to take advantage of it and right now Australia is a great market for high quality flower, particularly which is why I think you see the market concentration.
That's really helpful. Thanks, and if I can follow up with one other one other I'm curious to get your view on the court ruling yesterday on the chewable extraction and health Canada's position.
I mean, it was a it was an interesting ruling I mean basically the question was sort of two fold. One was would the stay be lifted on a particular product and secondly was there an opportunity on the process and I guess, let me let me start by saying, it's very easy to be critical of health Canada.
You know about the current Canada situation in Canada, we're not one of those companies that are critical.
We look around the world with the progress that Canada has made and the size of the market and the predictability of the process. We're appreciative of it. So that's been kicked back that decision is being kicked back to health, Canada see if there are opportunities in that listing process that was not litigation that we brought our question. We brought so I think it's obvious.
In a better position to a different company that being said, we look forward to working with health, Canada. We also participate in industry groups.
This overall progress moves forward and obviously the 10 milligram limit.
And the designation of that.
Extract ingestible extract we think is an important one.
To allow licensed producers in order to participate in that market, because it's clearly a big market.
Great I appreciate the color. Thank you very much John Thank you.
Thank you there are no further questions I will turn the call back to Macau Martin for closing remarks.
Well listen we are obviously thrilled with this quarter and really proud of all the hard work I want to thank all of our team members at Aurora, they've done an unbelievable job across all of our four businesses you've seen the results. We really do appreciate your support and your interest in our business in this industry, it's exciting times and we're pleased to have the.
A quarter, we did and we look forward to talking to all of you in the future. Thanks, so much and have a great evening.
Ladies and gentlemen, this does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect your lines.
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