Q4 2023 SNDL Inc Earnings Call
Good morning, and welcome to S. N dialysis at year end and fourth quarter 2023 financial results Conference call. This morning, I send you all issued a press release announcing the financial results for the year end and fourth quarter ended on December 31st 2023.
This press release is available on the company's website at S. N D L Dot com and filed on Edgar and SEDAR as well.
The webcast replay of the conference call will also be available on the S. N D L Dot com website.
San Diego has also posted a supplementary an investor presentation, along with a shareholder letter from Chief Executive Officer, Zach George on S. N D L Dot com website.
Presenting on this morning's call we have Socked, George Chief Executive Officer, Roberto Otero, Chief Financial Officer Tank Grinder, President Nick of retail and Tyler Robson President cannabis.
Before we start I would like to remind investors that certain matters discussed in today's conference call or answers that maybe given to questions could constitute forward looking statements.
Actual results could differ materially from those anticipated.
Factors that could affect results are detailed in the company's financial reports and other public filings that are made available on SEDAR and Edgar.
Additionally, all financial figures mentioned are in Canadian dollars unless otherwise indicated.
We'll now make prepared remarks, and then we'll move on to analyst questions.
I would now like to turn the call over to Zach George Please go ahead.
Good morning, everyone and thank you for joining us on our full year and fourth quarter 2023 earnings call.
Zachary Ryan George: 2023 was a transformational year for <unk> marked by several financial milestones, including record revenue and gross profit.
The year began with a remarkable year over year revenue growth of almost 1000% in Q1 of 2023.
Zachary Ryan George: Which was then followed by positive free cash flow generation of $18 million in the second half of the year.
2023, net revenue reached a record $909 million or 28% increase from the previous year, while gross profit surged to a record $190 million.
Up 36% from the prior year.
<unk> team has worked to build a scaled and diversified platform that we believe will be the basis for the creation of sustainable shareholder value.
Our operations include award, winning liquor and cannabis retail banners broad manufacturing capabilities and a uniquely positioned non consolidated exposure to U S. Cannabis operators with a fair value of more than half a billion dollars.
We are also in the process of monetizing a number of real estate and credit assets that will continue to feed and strengthen our industry leading balance sheet.
The acquisition of Valence in January of 2023 was a key tactical move for us in the L. A.
Enhancing our upstream capabilities in Canadian cannabis.
We now have manufacturing capabilities across all major product categories and continue to drive automation and labor efficiencies.
Exited exposure to high cost, one cultivation and leaned into procurement opportunities.
Integrating bounds as operation into our infrastructure has led to significant synergies, resulting in approximately $22 million in annualized cost savings.
These savings stem from better capacity utilization and various cost reduction initiatives, including the optimization of our cultivation footprint.
Our progress is reflected in the steady sequential improvement of our gross profit over the year.
We expect our cannabis operations segment to deliver additional operating efficiencies in 2024 and are excited by growth opportunities in b to B and international markets.
We've continued to build on the stable foundation of our liquor retail segment with a focus on margin enhancement.
We've achieved this the launch of our data program, the refinement of inventory management practices and growth in private label offerings.
These initiatives have been pivotal in optimizing our operations within this segment.
We also reached record results in revenue gross profit and cash flow within our cannabis retail segment.
Zachary Ryan George: The increase showcases the companys efforts and continued margin expansion initiatives and data program enhancements.
In 2023, we streamlined our investment portfolio by divesting from equity securities and certain credit exposures.
As of year end the company held a portfolio of cannabis related investments with a carrying value of $572 million, including $538 million to Sun stream.
Zachary Ryan George: S and deals joint venture Sunscreen Bancorp launched upstream USA group in the third quarter.
This new entity is designed to hold the post reorganized equity of Sky meant in parallel which include licenses in Florida, Michigan, Massachusetts and Texas.
It is structured to exclude voting our operational control.
Ablin F N B L to preserve its NASDAQ listing until further regulatory reform allows for the consolidation of these exposures.
The establishment of Sunshine USA group represents a compliant.
Arm's length expansion, ensuring that SDL does not engage in plant touching activities, while participating in a multistate cannabis platform.
The restructuring of Sky meant in parallel results and simplified capital structures, the elimination of certain material liabilities and improved competitive positioning.
The closing of these transactions will provide sun from USA group with the Optionality to access third party investors engaged in industry consolidation through mergers and acquisitions and gain critical consumer insights.
The structure of Sun stream USA group is being reviewed by NASDAQ to align with all U S compliance and governance standards.
While many Canadian operators make promotional statements regarding future U S dominance S. N D. L. A is the only Canadian license producer with cannabis enterprise exposure in the U S. At this scale.
We look forward to updating shareholders on these developments in the near future.
As mentioned in my shareholder letter, which can be found on our website.
As India, all maintains a debt free balance sheet with a market capitalization of around $530 million.
Well below our cash and credit investments valued at $767 million and without any consideration for our operating segments, which continued to show both revenue growth and margin improvement.
We believe that the company's recent market valuation does not reflect F&D else intrinsic value and that the valuation gap is so significant that investors purchasing shares today could potentially be acquiring substantial asset value at a low or even negative cost on an applied basis.
Zachary Ryan George: Considering the broader Canadian cannabis industry context, and the Cra's garnishment to combat an estimated $300 million in unpaid excise taxes S. N deals financial help places us in an enviable position with our debt free cash rich balance sheet with no tax arrears, we expect to benefit from the.
<unk> instability of peers, who will struggle to consistently deliver product to provincial boards and end markets on a profitable basis.
Our steadfast consumer centric approach and unwavering commitment to quality and regulated products remain the bedrock of our strategy.
Our demonstrated success with both mergers and acquisitions and organic growth has laid the foundation for our team to build momentum and strive for excellence in execution.
Looking ahead to 2024, we are well positioned for expansion Utah.
Utilizing the extensive scale of our platform to drive sustained value creation for our shareholders.
We are focused on realizing efficiencies and margin expansion across our segments with quality of consumer experience at the forefront of our endeavors.
Finally, I want to express my gratitude to the entire SDL team for their dedication in 2023.
The outstanding results, we achieved are a testament to your hard work and commitment to our vision.
To our investors. This is a team that wants to win we.
We have significant work ahead, but the undeniable improvement in our results is driving conviction and our ability to push harder as we aggressively pursue our performance goals and outcomes.
I will now pass the call to Alberto to provide more information on our financial results.
Thank you Todd.
I want to remind you all that amounts discussed today are denominated in Canadian dollars unless.
Alberto: Unless otherwise stated certain amounts referred to on this call are non-GAAP measures.
Since all of these measures please refer to let somebody else management discussion and analysis document.
Since joining us in D. L team in July I have some significant progress not just in terms of all the financials, but what our organization as a whole.
Our focus has been on the transit in the balance sheet, and hence in capital generation and driving profitable growth through.
There are several other strategic initiatives, some discipline financial and operational management, while improving our cost structure and sharpen and our capital allocation.
Not only how we redesign our operating governance and financial planning processes.
We have also realigned that final constructor and attracting key talent to drive body creation, while increasing the efficiency of our back office.
Alberto: It is exciting to see how this change without really having a positive impact in 2024.
Now, let's dive into our consolidated financial performance for Q3.
Our net revenue was $249 million or 3% growth from 240 million in the same quarter last year.
This includes a revenue elimination entry of $12 million.
For the third quarter of $1 Wednesday without this adjustment our net revenue growth in the fourth quarter would have been 8%.
I am, particularly proud to highlight our gross profit for the quarter, which sets a new record of 57 million or 23% of sales.
This compares to $44 million in Q4 towards the 22.
This significant improvement is a testament to our supply chain optimization efforts, including the strategic decision to close our olds, Alberta bankruptcy like small facility announced in October.
Yeah.
Alberto: <unk> cash and cash equivalent was negative 7 million compared to a negative 12 million in the fourth quarter of 'twenty to 'twenty, 2% to 42% improvement.
Just a positive free cash flow of $1 4 million in the quarter showcasing the effective cost management. Despite the usual increase in working capital associated with the holiday season.
This reflects our second concept.
Quarter of positive free cash flow.
Our operating income saw a loss of 85 million, which includes $29 million of restructuring costs and restructuring related asset write offs and also 29 million of goodwill impairments.
This is a 45% improvement over the 155 million loss reported in the fourth quarter of 2022.
Lastly, our adjusted EBITDA was a positive $3 5 million, 147% improvement from the loss reported in the last quarter of 2022.
This improvement is a clear indicator of our commitment to streamlining operations and enhancing our financial health.
Turning to our annual performance.
I'm pleased to report several record shipments in 2020.
Our net revenue reached an all time high of $909 million up 28% from $712 million in subsequently.
Gross profit for the year I'll set the new record of $190 million or 21% of ourselves.
The significant increase of 36% compared to the $140 million or 20% of sales were reported last year.
It is a testament to our input cost management and operational efficiency.
Pension costs and cash equivalents was negative $84 5 million in 2020% compared to a negative 279 million, 70% year over year improvement.
Alberto: Our highlights for the year was achieving positive free cash flow in the third and fourth quarters totaling $17 7 million.
This includes an impressive $16 3 million in the third quarter of $1 4 million in the fourth quarter as mentioned earlier, demonstrating our ability to generate costs.
Continuing to invest in growth.
Our operating income or net loss of 163 million for the year, which includes restructuring charges of $20 million and asset impairments of $55 million.
Streamlining our operations to enable future profitable growth.
Despite this we have seen a remarkable 53% improvement from the previous year's <unk> 348 million.
Finally, our adjusted EBITDA from continuing operations increased to $29 million in 2023, a significant improvement from a loss of 16 million in 2022.
I will lead times in time to provide more details on the Q4 and January 2020, as a result for the vehicle retail cannabis operations segments.
I would like to comment on the results for our kind of as we go.
Cannabis retail revenue equals operations of Novo read those stores for a period of March 31 December.
At December 31st 2022.
Alberto: In Q4, 2023 hour kind of as the weight those segment witnessed a 10% increase in net revenue, reaching $75 million compared to 68 million in the same quarter of the previous year.
On a same store sales increased by 2%.
Gross profit was $20 million or 27% of sales, making up 27% increase from the previous year.
Alberto: Our purpose there is data licensing program generated $4 2 million in Q4 'twenty to 'twenty three.
For the year end 2023, what our categories retail segment, we achieved a record net revenue of $290 million.
Making a significant 41% increase from the $206 million reported in 2022.
Equally noteworthy is the record gross profit from this segment, which with $74 million or 25% themselves in Washington D. C.
This represents a substantial 56% year over year increase from 47 million or 23% of sales in 'twenty or 'twenty two.
These figures highlight our successful margin expansion initiatives and operational efficiencies.
Additionally, our profitability is data licensing program generated $12 3 million in revenues.
193% from $4 2 million as one sequel Institute.
Finally, looking at our investments and equity positions in the year.
So on the pricing.
Until the end of 2023, the company has deployed capital into kind of as it relates to credit investments with carrying value of $572 million.
Including $530 million through the Samsung joint venture.
In 2023 of our investment portfolio generated a positive operating income of $12 million.
Significant improvement from the 91 million loss in the previous year.
Despite the minor decrease in interest and fee revenue to $14 million from 17 million, our equity accounted investees sort of multiple recovery contributed $6 8 million in profits compared to $43 million loss things once they're going to do.
The company financials health with a strong supported by 766 million and a restricted cash marketable securities and investments leading to a net book value of $1 2 billion.
Alberto: It is also important to highlight that we have not raised any costs for this year.
Alberto: Offerings since June 2021.
And today the company has no debt.
<unk> Board of directors approved extending the company's share repurchase program to November 2021 before the.
The company's share repurchase program continues to be available to lower the outstanding share float.
Management will continue to assess opportunities to utilize the program.
Alberto: To the extent, we believe it isn't the best interest of our shareholders.
For the three months ended December 31st one is on the Street the company did not purchase common shares.
Insulation.
Our results this year represent another solid step towards executing on our business our strategy, our culture of financial rigor and continuous improvement on the hard work and dedication of our employees.
Looking ahead, we're committed to continue on our path of fiscal responsibility and our strategic growth.
Our goals are clear to deliver value to our shareholders.
And innovation on growth opportunities and to strengthen our market position.
I will now pause to talk the tank to provide an update on our liquor retail results.
Thank you Alberto and thank you all for joining today.
Our liquor retail segment remains a steady revenue driver providing opportunities for increased margins in SMB outs regulated products business.
Margin expansion remains a crucial focus as consumer patch and the shift in like a retail.
This ensures ongoing growth for our liquor banners, while consistently delivering exceptional customer experiences.
Looking at full year revenue for 2023 liquor retail contributed $579 million to our Kimball let him revenue.
This represents a growth of 25% year over year from $462 million.
Revenue comparisons for liquor retail in 2022 include operations from March 31st two at December 31, 2022, following the acquisition of Alcan.
In Q4, 2023 revenue remained steady at 159 million.
Table from Q4, 2022, and increasing 5% from $152 million in the preceding quarter.
Yeah.
As of December 31st 2023, our store count remained stable, but 170 total stores comprised of 12 wind and beyond 'twenty like a depot and 138 Ace liquor discounter locations.
The impact of widening beyond banner and new market as highlighted by the success of our Cologne on Delaware location.
She has seen a 20% increase in revenue year over year.
Additionally, the Delaware location has seen its margin increased 17% from the year prior.
We look forward to opening a new one and beyond location in Agri, Alberta in early Q2 2024 building on the success of this banner.
Gross profit for 2023 amounted 237 million, representing approximately 24% of sales up 29% from the prior.
Yeah.
For the fourth quarter gross profit increased to $38 million or 24% of sales from $37 million in Q4 2022.
And up 3% from Q3 2023.
These increases are driven by seasonality procurement productivity and a continued focus on expanding and enhancing our private label offerings.
Alberto: A key driver in total margin expansion.
Private label sales increased by approximately 28% in 2023 now.
Resenting, 11% of total sales across all banners and increase of 2% from the prior.
In Q4 2023 gross profit for our private label increased 19% from Q4 2022.
And 20% sequentially.
As a key growth tactic, we are continually developing our private label program to boost margins, while maintaining the diverse selection our customers know and love.
Look into additional growth opportunities, we have officially launched proprietary data agreements for our electric retail segment and revenues will be reported in the first quarter of 2024.
Leveraging insights from our cannabis retail segment, we are now able to capitalize on our customer insights to improve vendor relations and the end to end customer experience, creating a credit.
Revenue and margin growth and he shares with no associated cost of sales.
We continue to focus on expanding our reach and accessibility.
Specifically to digital and E Commerce avenues.
Piloting new advertising opportunities, we aim to broaden our digital reach while reducing our environmental footprint move.
Moving away from traditional print methods is expected to deliver significant cost savings, while creating new opportunities to engage our consumer base.
Our achievements in 2023 underscore our sharp focus on fundamentals and margin expansion.
Positioning our business to adapt to changing market conditions.
This sets the stage for sustained top line growth throughout 2024.
Thank you and I will now pass the call over to Tyler Robson to cover our cannabis operations segment.
Thank you Tim reflecting on my first full calendar year with NGL I'm incredibly proud of the team's achievements and confident in our strategic direction moving forward.
2023 wasn't building gear.
You had to dismantle the house and fortify our foundation to support the future vessel.
We reorganized our facility footprint streamline our product portfolio optimizing our processes with a sharp focus on quality.
We changed the fundamentals of our business aiming for near term profitability for our cannabis operation segment.
Set the stage for a strong 2024, and we have already seen preliminary indicators of our future success.
Net revenue for 2023 was 87 million.
Gross represents a 96% increase from the ear products supported.
Supported by provincial support revenue, increasing by 102% and wholesale revenue by 391%.
Net revenue for the fourth quarter of 2023 was $26 million up 112% some $12 million in Q4, 2022 and 24% sequentially.
This revenue increase highlights the impact of our strategic initiatives, including the acquisitions of balances animals and improving the sales performance across our portfolio.
Q4, 2023, we saw an improvement in gross profit to negative $1 million from negative <unk> 9 million in the same quarter of the previous year, marking an 88% improvement.
This significant enhancement in gross profit primarily resulted in the decision to close all Alberta facility and move away from high cost cultivation.
We still have room for improvement, while we have established substantial competitive advantages over the past year.
We have better aligned our operations to manage the fluctuating market addressing inventory and cost challenges that have stalled our gross margin growth in previous years.
We have rationalized our portfolio and shifted over our cultivation efforts to better meet consumer demand.
Emphasizing the quality potency and consistency.
S N D. L has adopted a fewer bigger better effects.
Resulting in the reduction of our total SKU count from $3 27 to 125 sharpening our focus on key consumer categories.
Our improvements in innovation are apparent in record depletion rates and increase the acceptance of new Skus by this provincial board.
We have cleared a path to win in the key categories flower and pre roll through improved hardware increased potency.
And to ensure consistent and exacting quality standards.
After the quarter end, we revoked our cultivation license from the old facility.
Following the transition of all cultivation activities at the moment Brexit in October 2022.
The significantly reduced overhead costs, coupled with the improvements in computation yield position us to further capitalize on revenue and margin growth in the coming quarters.
Alberto: After a tactical and transformative year, we are seeing our expected results and a strengthened path forward for our cannabis operations thing.
We remain diligent on quality.
Financial Prudence and process innovation to continue to deliver long term value for both our shareholders and Atkinson.
Thank you and I'll now pass the call back to Zach for closing remarks.
Zach: We are proud of our milestones this year and remain focused on sustained profitability.
We are determined to continue this upward trajectory and the team is committed to driving shareholder value and excellent all aspects of our operations.
Thank you for your attention. This morning, we look forward to providing additional material updates on our initiatives and presenting our Q1 2024 results in the next 45 days.
Speaker Change: I will now pass the call back for analyst questions.
Thank you.
Thank you we will now begin the analyst question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
Acknowledging your request if youre using a speakerphone please pick up your handset before pressing any key.
To withdraw your question. Please press Star then two.
Our first question comes from Rodrigo Gomez with ATB capital markets. Please go ahead.
Hi, good morning, and thank you for taking my questions.
Frederico Yokota Choucair Gomes: Exactly in your shareholder letter you mean.
And how I'm tracking your valuation is and you said that's either the management team is going to close the valuation gap or market forces will so could you just expand a little bit on that in terms of the alternatives you have or are evaluating to try to close that gap and also why even more aggressive.
Buybacks this quarter. Thank you.
Good morning, Brett. Thanks for the question, so just taking that in reverse order.
Due to earnings cadence and strategic activity, we've actually been in a blackout for quite a while now.
Blackout gets lifted into the end of March here. So we do have the option to.
Repurchase shares at these at these levels.
In terms of the reference to closing the valuation gap.
We're focused on fundamentals first and foremost and as we've been speaking for.
The last two years about our journey to sustainable free cash flow, we do believe that that's the key to it.
Frederico Yokota Choucair Gomes: Bringing in.
Incremental investors getting institutions to take a look at our business model and.
And ultimately.
Result in much higher implied values and what we're seeing today in terms of other alternatives I think that that's so.
Somewhat self explanatory there.
We'll host of options you have got a multi segment business model.
You have a debt free entity that is cash rich and so there are a number of opportunities.
Frederico Yokota Choucair Gomes: For a variety of different transactions that could be looked at in order to unlock value.
Speaker Change: Thank you.
I guess my second question is on the competitive environment in Canada, specifically on your cannabis operations.
There are obviously had been reports about the TRA cracking down on delayed site taxes I'm. Just curious are you seeing any meaningful improvements.
Competition here this year and I guess from a supply and demand standpoint, do you think that the Canadian market is looking better at this point or steel.
Oversupplied. Thank you.
It's a great question I would say that we can safely stay say that Canada remains very well supplied certainly recent actions and the garnishment.
Effects that we're seeing in the early stages are going to have an impact on product availability and the number of licenses ultimately that are that are out there in Canada, but it's still really early days, you've seen you've seen a few companies disclose events or move into restructurings as a result of.
Excess liabilities, but we believe there's quite a large iceberg underneath the water. So the concentration of these.
These excise arrears.
Are unclear at this time, so we expect a greater impact.
But this is this is an important part of.
So we're balanced being brought back to the Canadian industry, and it's certainly going to take some time, but that process is absolutely underway.
Thank you very much I'll hop back in the queue. Thanks.
The next question comes from you on Kang with Canaccord Genuity. Please go ahead.
Hi, good morning.
Calling on behalf of Matt Pardon me. Thank you for the question.
Yes.
Mark.
About the adjusted EBITDA margin this quarter came in about one 4%.
Sure.
Speaker Change: About five and a hospice trends could you comment on the drivers behind that.
That slide okay. Thank you.
Yes. Thank you gentlemen, thank you for your question.
The driver was actually obtained some validation in our Sun stream investments.
Related to an increased contribution from from our company.
We have to remember we're valuing these.
So extreme investment.
Particularly right now four pounds came in from the basis of the future cash flow generation. So any short term changes to investments or collections have short term impacts in those valuations Bud.
The underlying.
Cash flow expectations, what we have from these businesses in the future remains steady.
So I will say is purely the way our accounting works.
But that's the main private it's actually an $8 million.
We recorded in the fourth quarter.
Thank you so much and if I could just ask a follow up on I think you guys already touched upon this drinks.
But how have you guys taken the recent regulatory changes that have been proposed.
This environment.
You know the recommendations coming out of the committee in terms of adjusting the excise tax structure.
Oh, sorry, and the elimination of provincial stance, along with you know we're hearing some news about potential retailer and licensed producer partnerships.
Sure.
Amanda I'm still I guess my question is how do you guys have been taking this news has this kind of impact that engineers expectations going forward.
Thank you. It's a great question there were a number of questions in there.
Look in terms of excise reform I would we would reiterate the view that this is going to take quite a bit of time no. One is coming to save us as participants in this industry and so we don't actually expect exercise reform to impact the fundamentals of the Canadian operators in the near term that's probably a.
Multi year path.
There are there is room for optimism, we are seeing common sense reform.
Across a number of provinces and the federal government, so whether thats.
Some some loosening of rules around marketing.
A clearer path and understanding of the allowable relationships between retail license holders and Lps.
Increase in license caps.
Changes to allow more product formats. There were a number of initiatives that are going to drive efficiencies and improvement and ultimately improve the consumer experience better that are undeniable positives.
But we expect a pretty slow pace of change.
Some of the larger items such as exercise reform.
Got it thanks, so much I'll jump back into queue.
The next question comes from Pablo.
That's it.
Please go ahead.
Pablo: Good morning, everyone.
Got it.
The Sun stream portfolio maybe.
Maybe I missed it in the presentation, but I think the fair value, which is 551 million I don't know if you can comment about the outstanding principal on its five credits how much of that is partly than men.
You can remind us what is the rest I think in the past you've given some color on that but it'd be nice to know.
Principle, you know how much is being hit with ice.
And how much you still are outstanding if you can give some color over there. Thank you.
Yeah. Thank you Pablo and good morning, good to hear from you. So we haven't given delineation on individual credits Youre correct that of the five we have three performing credits in the portfolio to.
Two are in the process of being amortize because those those capital structures need to be solidified in the restructuring itself and the fact that we are right in the midst of review with NASDAQ and we're going to we're going to hold off on commenting on the scale in individual valuation of those.
Those <unk> credits that we expect to occur in the near term and when we do when we do move forward and the NASDAQ review is completed we expect to give significantly more transparency on the state of play with those entities the structure and the the initial valuation.
Thank you and then in terms of you know it.
It sounds to me you would say the new company Youre sitting up.
Pablo: Hum.
The only thing pending.
The issue or is there any type of litigation is still going on I mean, the trade press.
Pablo: Comments on the module, especially around <unk>.
<unk> and I think even in parallel but just some color would be helpful. There is it all done and completed.
Well you know theyre not sure what is there anything else spending thank you.
Yes in terms of outstanding matters. The key issue for us to close is this final hurdle with the NASDAQ.
There are as you point to there are lingering litigation issues.
Involved in these restructurings frustrated.
Frustrated stakeholders pursuing different outcomes and taken action against various stakeholders.
Sometimes legacy stakeholders and sometimes.
Existing creditors, which would include our Sunshine group. So those are ongoing.
And we're not going into into too much detail about current litigation.
But we don't believe it does you're going to hold up our timeline.
Any further.
Understood and then if I can I just add one more.
I mean, obviously, Florida, we're all waiting for April 1st right to see what happens here Supreme Court there there could be a scramble for expansion capital investments.
Tara to some extent a part a little hamstrung.
Striving for the time being until this whole deal closes or can you help them in any way to expand even if they were to make sense.
Oh.
I would not describe either.
<unk> or parallel as being hamstrung.
The existing management teams are aggressively working to rightsize their business there has been significant.
Improvement in their cost structures over the last two years.
They have they are very much living in reality and the improvement in those and the performance of those businesses.
Has been material.
Again, we're we don't have those positions consolidated and so we're excited about being able to provide detailed supplemental information as we complete these restructurings.
Okay. Thank you Luca if you don't mind I mean, I don't think there's much more people in the queue, but another coupled with more.
So regarding the other three crazy it's on sunscreen.
You can see much there, but when the JV since June one.
Yeah.
Why don't you sit up to what you were saying you have all these very attractive assets in Florida, Michigan and other places you become an attractive partner to a number of people right. So so I know it took me a hypothetical but the three other credits even though they maybe maybe performing they could still become part of the ecosystem right I'm, saying, you're leaving it obviously means that.
Work to make sense that you will negotiate that can you make any general comments on that or does that just out of the question.
No. It's an astute observation there are a number of opportunities for further consolidation in the U S. We have been approached by a.
A handful of parties that are very interested in gaining greater efficiencies and scale and.
Consolidating the U S landscape now those parties.
May be a part of the existing credit book, but there is also a number that are outside of that group as well. So there are a number of broader discussions.
They can have from time to time.
If something material were to arise it would certainly be disclosed.
Until then we're really focused internally on improving performance.
Within our platform, but do expect at the margin that.
Consolidation and M&A opportunities will arise over the next 12 to 24 months.
And I'm very last one I mean, obviously with a lot of focus on the U S. But this Friday, we may have some good positive news from Germany was the right decision.
When people ask me, how about Canadian companies and exposure there. It does all the chilled ready to go at Aurora and others of course.
Quarter leaf continues to make inroads there what can we say about this in detail in terms of their current position in front of European opportunities or the plans that you may have thank you that's all.
I'm Gonna have Tyler just comment on the current state of play in international and related opportunities.
Yes happy to.
Look we've been spending a lot of time.
Are you, adding international markets, obviously, Germany is one of the biggest populist countries over there there's a ton of opportunity. So we're anxiously awaiting the final news for medical versus what that landscape looks like.
We will be heading to <unk> not only meet a few individuals but get a better lay of the land.
But youll kind of see its focus on a few months over there like Germany. So we'll get it done.
Not for now, but you'll definitely see some.
Opportunities are some.
Foresight into that market once legislation all rolled up.
Understood. Thank you very helpful. Thank you.
This concludes the question and answer session I would like to turn the conference back over to Zach George for any closing remarks. Please go ahead.
Thank you to everyone for joining us. This morning, we look forward on updating you on our progress in the near future have a great day.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
[music].
[music].
Yeah.