Full Year 2024 Aurora Cannabis Inc Earnings Call

Operator: Greetings and welcome to the Aurora Cannabis Inc. fourth quarter 2024 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 is being recorded today, Thursday, June 20, 2024. I would now like to turn the conference over to your host, Kevin Nyland, Director of Strategic Finance and Investor Relations.

Greetings and welcome to the Aurora Cannabis, Inc. Fourth quarter 2024 results conference call all participants will be in a listen only mode and a question and answer session will follow the formal presentation.

Operator: Greetings and welcome to the Aurora Cannabis Inc. 4th Quarter, 2024 results conference call. All participants will be in a listen-only mode, and a question-and-answer session will follow the formal presentation.

Operator: This conference is being recorded today, Thursday, June 20th, 2024.

Speaker Change: This conference is being recorded today Thursday June 20th 2024.

Kevin Niland: I would now like to turn the conference over to your host, Kevin Niland, Director of Strategic Finance and Investor Relations.

Speaker Change: I would now like to turn the conference over to your host Kevin Island Director of strategic Finance and Investor Relations. Please go ahead Sir.

Kevin Niland: Please go ahead, sir.

Kevin Niland: Hello everyone, and thank you for joining us. On the line with me are Miguel Martin, CEO, and Smona King, CFO. This morning, we filed our 2024 fiscal year and four quarter financials for the period ending March 31st, 2024. Initially, the news release containing both our annual and quality results. Our financial statements, MD&A, and its news release are available on our IR website and also accessed via CDRPLUS and ANCAR. In addition, you will find a supplemental information deck on our IR website.

Kevin Nyland: Hello, everyone, and thank you for joining us. On the line with me are Miguel Martin, CEO, and Simona King, CFO. This morning, we filed our 2024 fiscal year and four-quarter financials for the period ending March 31st, 2024, and issued a news release containing both our annual and quarterly results. Our financial statements, MD&A, and this news release are available on our IR website. You can also access it via CDAR Plus and NCAR.

Speaker Change: Hello, everyone and thank you for joining us on the line with me Army Gilmartin CEO monarch King CFO. This morning, we filed our 2020 for fiscal year and fourth quarter financials for the period ending March 31, 2024, and issued a news release containing both our annual and quarterly results.

Speaker Change: Our financial statements MD&A and the news release are available on our IR website, you can also access it SEDAR and Edgar.

Kevin Nyland: In addition, you will find a supplemental information deck on our IR website. For today's conference call, listeners are reminded that certain matters could constitute forward-looking statements that are subject to risks and uncertainties related to our future financial or business performance. Actual results could differ entirely from those anticipated in those forward-looking statements. The risk factors that may affect actual results are detailed in our annual information form and other periodic filing and registration statements. These may be accessed, or may similarly be accessed via CDOT flow, and Ann Edgar.

Speaker Change: In addition, you will find supplemental information deck on our IR website.

Kevin Niland: For today's conference call, listeners who are reminded of certain matters constitute four-lifing statements that are subject to risks and uncertainties related to a future of financial or business performance. Actual results could differ materially from those anticipated; no sport, nothing statements. The risk factors that may affect actual results are detailed in our Annual Information Form, another periodic file in the registration statement. These may be accessed or may similarly be accessed via CDRPLUS and ANCAR.

Today's conference call.

Certain matters constitute forward looking statements.

Speaker Change: Subject to risks and uncertainties related to our future financial.

Speaker Change: So we're basically performance actual results could differ materially.

Speaker Change: Got it.

Speaker Change: These statements.

Speaker Change: The risk factors that may affect actual results are detailed in our annual information form and other periodic filings and registration statements.

Speaker Change: These may be access are they similar.

Speaker Change: It can be accessed via SEDAR club.

Speaker Change: Thank God all of your prepared remarks about Nogales to NOLA.

Kevin Nyland: Following prepared remarks by Miguel and Simona, we'll conduct a question and answer session with our cover animals. With that, I'll turn the call over to Miguel. Please go ahead.

Kevin Niland: Followed prepared remarks by Miguel and Smona, looking up the question on succession with our covering audience.

Speaker Change: The question I was just asking we're not covering them with.

Kevin Niland: Let's not turn the call over to Miguel.

With that I'll try to play Niccolo Miguel Please go ahead.

Miguel Martin: Please go ahead. Thank you, Kevin. We are very pleased to report that 2024 was our strongest ever fiscal year.

Miguel Martin: Thank you, Kevin. We are very pleased to report that 2024 was our strongest ever fiscal year. I'll highlight some specific metrics related to our performance momentarily, but more generally, we believe our accomplishments can best be attributed to the following. First, our business model is centered on our medical cannabis leadership within nationally legal markets. Aurora's frontline positioning in the industry's highest margin segment is the direct result of the competitive advantage we built through a manufacturing network of indoor EU GMP certified facilities that serve the diverse needs of our patients across the world.

Speaker Change: Thank you Kevin we are very pleased to report that 2024 was our strongest ever fiscal year.

Miguel Martin: I will highlight some specific metrics related to our performance momentarily, but more generally, we believe our accomplishments can best be attributed to the following. First, our business model is centered on our medical cannabis leadership within nationally legal markets. Aurora's frontline positioning in the industry's highest margin segment is the direct result of the competitive advantage we built through a manufacturing network of indoor EUGMP certified facilities that serve the diverse needs of our patients across the world. Second, our financial discipline, which has been demonstrated primarily by increasing our adjusted gross margin, already among the highest in the industry, through sustainable cost reductions, consistently generating positive adjusted EBITDA, and bolstering our balance sheet by maintaining a healthy cash balance and substantially reducing debt.

Speaker Change: I'll highlight some specific metrics related to our performance momentarily, but more generally we believe our accomplishments can best be attributed to the following.

Miguel Martin: First our business model is centered on our medical cannabis leadership within nationally legal markets Aurora as frontline positioning in the industry's highest margin segment is the direct result of the competitive advantage, we build through our manufacturing network of indoor EU GMP certified facilities that Sir.

Speaker Change: Serve the diverse needs of our patients across the world.

Miguel Martin: Second, our financial discipline, which has been demonstrated primarily by increasing our adjusted gross margin, already among the highest in the industry, through sustainable cost reductions, consistently generating positive adjusted EBITDA, and bolstering our balance sheet by maintaining a healthy cash balance and substantially reducing debt. All of these factors support our goal of achieving positive pre-cash flow by the end of this calendar year. Turning now to some highlights for fiscal 2024. First, net revenue rose 21% on a trailing 12-month basis.

Speaker Change: Second our financial discipline, which has been demonstrated primarily by increasing our adjusted gross margin already among the highest in the industry through sustainable cost reductions consistently generating positive adjusted EBITDA and bolstering our balance sheet by maintaining a healthy cash balance and substantially reducing debt.

Miguel Martin: All of these factors support our goal of achieving positive pre-cash flow by the end of this calendar year.

Speaker Change: All of these factors support our goal of achieving positive free cash flow by the end of this calendar year.

Miguel Martin: Turning now to some highlights for Fiscal 2024. First, net revenue rose 21 percent on a trail in 12-month basis. Second, adjusted gross margin was 49 percent. Third, we had positive adjusted EBITDA in each of our four fiscal quarters, marking the first time in Aurora's history that we reported positive adjusted EBITDA on an annual basis. Fourth, we ended the year with a very sound balance sheet characterized by about $180 million in cash on hand, with plenty of firepower as needed. With this momentum, we're in a strong position as we had in the fiscal year 2025. Now let's look more deeply into Q4, beginning with our global medical cannabis business, which increased 20% compared to the year-ago quarter and delivered 68% of our total revenue and 90% of our adjusted growth profit.

Speaker Change: Turning now to some highlights for fiscal 2024 first net revenue rose, 21% on a 12 trailing 12 month basis.

Miguel Martin: Second, adjusted gross margin was 49%. Third, we had positive adjusted EBITDA in each of our four fiscal quarters, marking the first time in Aurora's history that we've reported positive adjusted EBITDA on an annual basis. Fourth, we ended the year with a very sound balance sheet characterized by about $180 million in cash on hand with plenty of firepower as needed.

Speaker Change: Adjusted gross margin was 49%.

Speaker Change: Third we had positive adjusted EBITDA in each of our four fiscal quarters, marking the first time in Aurora history that we reported positive adjusted EBITDA on an annual basis.

Speaker Change: Fourth we ended the year with a very sound balance sheet characterized by about $180 million in cash on hand, with plenty of firepower as needed.

Miguel Martin: With this momentum, we're in a strong position as we head into fiscal year 2025. Now, let's look more deeply into Q4, beginning with our global medical cannabis business, which increased 20% compared to the year-ago quarter and delivered 68% of our total revenue and 90% of our adjusted gross profit. In Canada, we grew revenue by nearly 10% due to higher sales to insurance-covered patients and upheld our number one position in medical cannabis while growing our market share. We attribute our growth to a broad and attractive product assortment, a positive sales mix, and, most importantly, product innovation.

Speaker Change: With this momentum we are in a strong position as we head into fiscal year 2025.

Speaker Change: Now, let's look more deeply into Q4, beginning with our global medical cannabis business, which increased 20% compared to the year ago quarter and delivered 68% of our total revenue and 90% of our adjusted gross profit.

Miguel Martin: In Canada, we grew revenue by nearly 10% due to higher sales to insurance cover patients, and upheld our number one position in medical cannabis while growing our market share. We attribute our growth to a broad and attractive product assortment, positive sales mix, and, most importantly, product innovation. The Canadian medical market is experiencing a lot of disruption over the past several years, which is all the more reason why our focus on serving and shared patient groups supported by a continuous pipeline of exciting next generation cultivars is critical to both holding and growing our market share. However, we're also encouraged to be seeing increased interest from unions and other entities that are considering adding medical cannabis as a benefit to their members, along with more clinical trials being conducted by the traditional medical establishment.

Speaker Change: In Canada, we grew revenue by nearly 10% due to higher sales to insurance covered patients and upheld our number one position in medical cannabis, while growing our market share.

Speaker Change: We attribute our growth through a broad and attractive product assortment positive sales mix and most importantly product innovation.

Speaker Change: The Canadian medical market has experienced a lot of disruption over the past several years, which is all the more reason why our focus on serving insured patient groups supported by continuous pipeline of exciting next generation cultivars is critical to both holding and growing our market share.

Miguel Martin: The Canadian medical market has experienced a lot of disruption over the past several years, which is all the more reason why our focus on serving insured patient groups, supported by a continuous pipeline of exciting next-generation cultivars, is critical to both holding and growing our market share. However, we are also encouraged to see increased interest from unions and other entities that are considering adding medical cannabis as a benefit to their members, along with more clinical trials being conducted by the traditional medical establishment. Both of these developments could expand the addressable usage market rather meaningfully. Recall that only about 1% of the Canadian adult population are medical cannabis users. So there's plenty of upside opportunities.

Speaker Change: However, we are also encouraged to be seeing increased interest from unions in other entities that are considering adding medical cannabis as a benefit to their members along with more clinical trials being conducted by the traditional medical establishment.

Miguel Martin: Both of these developments could expand the addressable usage market rather meaningfully. We've called it only about 1% of the Canadian adult population, or medical cannabis patients, so there's plenty of upside opportunity. Excellence in Canada is also enabled us to learn and become adept at navigating other nationally legal cannabis markets with great flexibility, while making thoughtful investments based on opportunity size and overall economics. Whereas in some international markets, we have the manufacturer, wholesaler, and sales organization; and others we are the manufacturer, and partner with world-class wholesalers and sales organizations. Our leadership positioning across several countries in Europe and in Australia stems directly from what we've learned in over 10 years of medical cannabis experience in Canada, and we are able to leverage our world-class manufacturing in Canada to ship EUGMP products around the world.

Speaker Change: Both of these developments could expand the addressable usage market rather meaningfully.

Speaker Change: Recall that only about 1% of the Canadian adult population or medical cannabis patients. So there is plenty of upside opportunity.

Miguel Martin: Excellence in Canada has also enabled us to learn and become adept at navigating other national legal cannabis markets with great flexibility while making thoughtful investments based on opportunity size and overall economics. Whereas, in some international markets, we are the manufacturer, wholesaler, and sales organization. In others, we are the manufacturer and partner with world-class wholesalers and sales organizations. Our leadership position across several countries in Europe and in Australia stems directly from what we've learned from over 10 years of medical cannabis experience in Canada, and we are able to leverage our world-class manufacturing in Canada to ship EU GMP products around the world.

Speaker Change: Excellence in Canada has also enabled us to learn and become adept at navigating other nationally legal cannabis markets with great flexibility, while making thoughtful investments based on opportunity size and overall economics.

Speaker Change: Whereas in some international markets, we are the manufacturer wholesaler and sales organization and others. We are the manufacturer and partner with World class wholesalers and sales organizations.

Speaker Change: Our leadership positioning across several countries in Europe and in Australia stems directly from what we've learned in over 10 years of medical cannabis experience in Canada, and we are able to leverage our world class manufacturing in Canada to ship EU GMP products around the world.

Miguel Martin: International medical cannabis grew nearly 40% during Q4, as I will now explain. Let's first discuss Australia, where we experienced significant sales. Recall that in February, we acquired the remaining 90% equity interest in MedRelief Australia, which holds the number two position in the rapidly growing $400 million Australian market, the largest medical market in the world outside of North America.

Miguel Martin: International medical cannabis were nearly 40% during Q4, as I will now explain.

Speaker Change: A national medical cannabis grew nearly 40% during Q4 as I will now explain.

Miguel Martin: But first, this got to Australia, where we experienced significant sales growth. We're called it in February, we acquired the remaining 90% equity interest in Med Relief Australia, which holds the number two position in the rapidly growing $400 million Australian dollar market. The largest medical market in the world outside of North America. This transaction positions us to deliver increases to our profitability in Australia, through higher revenue contributions and higher growth margins. The Australian market is a clinician-led product distribution model that closely aligns with the operational success. The high regulatory standards of the Therapeutic Goods Administration, which is responsible for regulating the supply, manufacturing and advertising of therapeutic goods, makes it challenging for new entrants, while providing an advantage to companies like Aurora that are dedicated to quality and compliance and are able to meet those requirements.

Speaker Change: Let's first discuss Australia, where we experienced significant sales growth recall that in February we acquired the remaining 90% equity interest in Med relief, Australia, which holds the number two position in the rapidly growing $400 million Australian market, the largest medical market in the world outside of North.

Speaker Change: Erika.

Miguel Martin: This transaction positions us to deliver increases in our profitability in Australia through higher revenue contributions and higher gross margins. The Australian market is a clinician-led product distribution model that closely aligns with our operational success. The High Regulatory Standards of the Therapeutic Goods Administration, which is responsible for regulating the supply, manufacturing, and advertising of therapeutic goods, make it challenging for new entrants while providing an advantage to companies like Aurora that are dedicated to quality and compliance and are able to meet those requirements.

Erika: This transaction positions us to deliver increases to our profitability in Australia, there were higher revenue contributions and higher gross margins.

Speaker Change: The Australia market as a clinician led product distribution model that closely aligns with our operational success the.

Speaker Change: A high regulatory standards of the therapeutic goods administration, which is responsible for regulating the supply manufacturing and advertising a therapeutic goods makes it challenging for new entrants, while providing an advantage to companies like Aurora that are dedicated to quality and compliance and we're able to meet those requirements.

Miguel Martin: In March, we became one of the first Canadian licensed producers to receive good manufacturing practice certification from the TGA for our largest Canadian manufacturing facilities, River and Ridge, strengthening our dedication to supporting the continued growth and development of the Australian medical cannabis market, as one of the select few Canadian LPs with EU GMP and TGA GMP certified facilities. With close to 90% of its annual production coming from these facilities, Aurora is uniquely positioned to be able to pursue new growth opportunities in Australia, as well as other key global markets.

Miguel Martin: In March, we became one of the first Canadian licensed producers to receive Good Manufacturing Practice certification from the TGA for our largest Canadian manufacturing facilities, River and Ridge, strengthening our dedication to supporting the continued growth and development of the Australian medical cannabis. Market. Being one of the select few Canadian LPs with EUGMP and TGAGMP certified facilities, we close to 90% of our annual production coming from these facilities. Aurora is uniquely positioned to be able to pursue new growth opportunities in Australia, as well as other key global markets. In addition, the adding or range of dried flour, the license also granted us approval to broaden our product offerings to include pastils or gummies, oils, and our newly launched resin cartridges.

In March we became one of the first Canadian licensed producers to receive good manufacturing practice certification from the TGI for our largest Canadian manufacturing facilities River ridge strengthening our dedication to supporting the continued growth and development of the Australian medical cannabis market.

Speaker Change: Being one of the select few Canadian Lps with EU, GMP and TGI GMP certified facilities, we've close to 90% of our annual production coming from these facilities.

Speaker Change: <unk> is uniquely positioned to be able to pursue new growth opportunities in Australia as well as other key global markets.

Miguel Martin: In addition to adding to our range of dried flower, the license also granted us approval to broaden our product offer to include pastilles or gummies, oils, and our newly launched resin cartridge. Following this landmark certification, we announced the expansion of MedRelief Australia's portfolio with the introduction of a new range of premium dried flower products and resin cartridges manufactured at our EU GMP and TGA GMP certified facilities. The new dried flowers are proprietary cultivars grown exclusively by Aurora, while another previously existing proprietary cultivar has been relaunched under the Aurora brand.

Speaker Change: In addition to adding to a range of dried flower license also granted us approval to broaden our product offerings to include past deals, our gummies oils and our newly launched resin cartridges.

Miguel Martin: Following this landmark certification, we announced the expansion of the Medley Bustrialious Portfolio, with the introduction of a new range of premium dried flour products and resin cartridges manufactured at our EUGMP and TGAGMP certified facilities. The new dried flowers or proprietary cultivars grown exclusively by Aurora, while another previously existing proprietary cultivar has been relaunched under the Aurora brand. The new resin cartridge products are offered by our Aurora and IndyMed brands and our full spectrum, ensuring a comprehensive cannabinoid profile for a more effective and balanced experience. We are excited to be offering the expanded range of innovative and differentiated products that catered to the market demand for a range of options without compromising on quality.

Speaker Change: Following this landmark certification, we announced the expansion of medically Australia portfolio with the introduction of a new range of premium dried flower products and resin cartridges manufactured at our EU GMP, adding T G. A GMP certified facilities.

Speaker Change: The new drive flowers, our proprietary cultivars grown exclusively by Aurora, while another previously existing proprietary cultivar has been relaunched under the <unk> brand.

Miguel Martin: The new resin cartridge products are offered by our Aurora and Indomed brands and are full-spectrum, ensuring a comprehensive cannabinoid profile for a more effective and balanced experience. We are excited to be offering an expanded range of innovative and differentiated products that cater to the market demand for a range of options without compromising on quality. MedRelief Australia now focuses on three core brands.

Speaker Change: The new resin cartridge products are offered by our Aurora and <unk> brands and our full spectrum, ensuring a comprehensive cannabinoid profile for a more effective and balanced experience.

Speaker Change: We are excited to be offering an expanded range of innovative and differentiated products that cater to the market demand for a range of options without compromising on quality.

Speaker Change: <unk>, Australia, and our focus is on three core brands Kraft plan offering a hand crafted premium range of products Aurora for innovative and affordable options and in demand, providing our company funded concession range supporting access to individuals who may not be able to avail of this treatment through self.

Miguel Martin: Medley Bustrialious Portfolio focuses on three core brands: Craft Plan, offering a handcrafted, premium range of products; Aurora, for innovative and affordable options; and IndyMed, providing a company-funded concession range, supporting access to individuals who may not be able to avail of this treatment through self-paid channels.

Miguel Martin: Craft Plant, offering a handcrafted premium range of products, Aurora, for innovative and affordable options, and InDemand, providing a company-funded concession range, supporting access to individuals who may not be able to avail of this treatment through self-paid channels. Moving on now to New Zealand, we celebrate our first shipment of Aurora branded premium dried flowers during the first quarter of fiscal year 2025, representing a significant milestone in medical cannabis accessibility for the country.

Speaker Change: <unk> channels.

Speaker Change: Moving on now to New Zealand, we celebrate our first shipment of Aurora branded premium drive flowers. During the first quarter of fiscal year 2025, representing a significant milestone in medical cannabis accessibility for the country.

Miguel Martin: Moving on now in New Zealand, we celebrate our first shipment of Aurora branded premium dried flowers during the first quarter of fiscal year 2025, representing a significant milestone in medical cannabis accessibility for the country. The initial product portfolio includes cultivars grown exclusively by us, with each strain meticulously bred and cultivated to address a variety of patient needs. We view New Zealand as an emerging market poised for growth where we can leverage symmetry with our leadership in Australia.

Miguel Martin: The initial product portfolio includes cultivars grown exclusively by us, with each strain meticulously bred and cultivated to address a variety of patient needs. We view New Zealand as an emerging market poised for growth where we can leverage symmetry with our leadership in Australia. Let's now delve into our European operations.

Speaker Change: Initial product portfolio includes cultivars grown exclusively by us with each stream meticulously bread and cultivated to address a variety of patient needs. We view New Zealand is an emerging market poised for growth, where we can leverage symmetry with our leadership in Australia.

Speaker Change: Let's now delve into our European operations.

Miguel Martin: Let's now delve into our European operations. In Germany, we believe that the official passing of the cannabis act and deschedule in your cannabis has fueled the expansion of medical cannabis. The country's already our largest European market, and we are currently one of three companies with a domestic cultivation facility. We hold a number two market share for flowers, the number one market share for self-payors, and then three of the top 10 cultivars by volume sales. With cannabis descheduling, more patients gain access to treatment, reinforcing our dedication to patient outreach and comprehensive access to quality medical cannabis.

Miguel Martin: In Germany, we believe that the official passing of the Cannabis Act and de-scheduling of cannabis have fueled the expansion of medical care. The country is already our largest European market, and we are currently one of only three companies with a domestic cultivation facility. We hold the number two market share for flowers, the number one market share for self-payers, and have three of the top 10 cultivars by volume sales. With cannabis de-scheduling, more patients gain access to treatment, reinforcing our dedication to patient outreach and comprehensive access to quality medical cannabis. The reclassification of cannabis as a non-narcotic should also inspire more patients to actively consult with their physicians.

Speaker Change: In Germany, we believe that the official passing of the cannabis Act and the scheduling of cannabis has fueled the expansion of medical cannabis. The country is already our largest European market and we are currently one of only three companies with a domestic cultivation facility.

Speaker Change: Hold the number two market share for flowers, the number one market share for Salt Payors and then three of the top 10 cultivars by volume sales.

Speaker Change: With candidates these scheduling more patients gain access to treatment reinforcing our dedication to patient outreach and comprehensive access to quality medical cannabis.

Miguel Martin: The reclassification of cannabis as a non-narcotic should also inspire more patients to actively consult with their positions, facilitate greater access, education, and awareness for medical cannabis. All in all, this change presents long overdue reform in favor of a more accessible medical cannabis market and commitment to patient. In Poland, our second largest European market, we are the number two cultivar and number two market position by volume. We grew sales during Q4, compared to the Uruguay period, and remain excited by the opportunities that this growing market presents. In the UK, patients are responding favorably to the launches of our next generation cultivars, which has led to a significant increase in sales in the final two quarters of the fiscal year.

Speaker Change: <unk> vacation of cannabis as a non narcotic should also inspire more patients to actively consult with their physicians facilitating greater access education and awareness for medical cannabis.

Miguel Martin: facilitating greater access, education, and awareness for medical cannabis. All in all, this change presents long-overdue reform in favor of a more accessible medical cannabis market and commitment to patient care. In Poland, our second largest European market, we are the number two cultivar and number two market position by volume.

Speaker Change: All in all this change presents long overdue reform in favor of a more accessible medical cannabis market and commitment to patients.

In Poland, our second largest European market, we are the number two cultivar and number two market position by volume. We grew sales during Q4 compared to the year ago period and remain excited by the opportunities this growing market presents.

Miguel Martin: We grew sales during Q4 compared to the Uruguay period and remain excited by the opportunities this growing market presents. In the UK, patients are responding favorably to the launches of our next generation cultivars, which has led to a significant increase in sales in the final two quarters of this fiscal year. We have also partnered with ScriptAssist, a cutting-edge prescription platform that now includes our extensive range of medical cannabis products from our portfolio.

Speaker Change: The U K patients are responding favorably to the launches of our next generation cultivars, which has led to a significant increase in sales in the final two quarters of this fiscal year.

Miguel Martin: We also partnered with Script Assist, a cutting-edge prescription platform that now includes our extensive range of medical cannabis products from our portfolio. In doing so, we can further improve the landscape in the UK by providing patients with access to premium, high-quality products along with valuable information that guide them through the medical cannabis journey. In Switzerland, where we first launched in Q2, we are becoming the trusted favorite for patients and are currently widening distribution channels in the country. In total, medical cannabis adjusted gross margin reached 66%. The highest level we have ever achieved as we benefited from sustainable cost reductions and improved efficiency in manufacturing operations.

Speaker Change: We also partnered with script assessed a cutting edge prescription platform that now includes our extensive range of medical cannabis products from our portfolio in.

Miguel Martin: In doing so, we can further improve the landscape in the UK by providing patients with access to premium, high-quality products, along with valuable information to guide them through their medical cannabis journey. In Switzerland, where we first launched in Q2, we are becoming a trusted favorite for patients and are currently widening distribution channels in the country. In total, the adjusted gross margin for medical cannabis reached 66 percent, the highest level we have ever achieved as we benefited from sustainable cost reductions and improved efficiency in manufacturing operations.

Speaker Change: In doing so we can further improve the landscape in the U K by providing patients with access to premium high quality products, along with valuable information to guide them through the medical cannabis journey.

Speaker Change: In Switzerland, where we first launched in Q2, we are becoming the trusted favorite for patients and our currently widening distribution channels in the country.

Speaker Change: In total medical cannabis adjusted gross margin reached 66%.

Speaker Change: The highest level, we have ever achieved as we benefited from sustainable cost reductions and improve efficiency in manufacturing operations. This is an increase from the comparable prior year quarter and substantially above our 60% target.

Miguel Martin: This is an increase from the comparable prior year quarter and substantially above our 60% target.

Miguel Martin: This is an increase from the comparable prior year quarter and substantially above our 60% target. Turning back to Canada, our focus on portfolio optimization and strategic allocation of product to higher-margin medical markets resulted in an expected revenue decline in the consumer cannabis business. This was coupled with a decrease in adjusted gross margin because of a less favorable product.

Speaker Change: Turning back to Canada, our focus on portfolio optimization and strategic allocation of product to a higher margin medical markets resulted in an expected revenue decline in the consumer cannabis business. This was coupled with a decrease in adjusted gross margin because of a less favorable product mix.

Miguel Martin: Turning back to Canada, our focus on portfolio optimization and strategic allocation of products to higher-margin medical markets resulted in an expected revenue decline in the consumer cannabis business. This was coupled with a decrease in adjusted gross margin because of a less favorable product mix. Finally, our investment in the controlled environment agricultural industry through BBOB resulted in strong revenue for Q4. That only slightly from the year ago quarter due to the seasonality of its business. We're called approximately 65-75% of plant propagation revenue is earned in the first half of the calendar year as orders are fulfilled.

Miguel Martin: Finally, our investment in the controlled environment agricultural industry through Bevo resulted in strong revenue, but only slightly from the year-ago quarter due to the seasonality of his business. Recall that approximately 65 to 75 percent of plant propagation revenue is earned in the first half of the calendar year as orders are fulfilled. The Bevo team is utilizing our former cannabis facilities to enter the profitable cultivated orchid market, and our current vegetable and plant propagation business already generates a steady, predictable financial performance, albeit on a seasonal cycle.

vivo: Finally, our investment in the controlled environment agriculture industry through vivo resulted in strong revenue for Q4 down only slightly from the year ago quarter due to the seasonality of this business recall that approximately 65% to 75% of plant propagation revenue is earned in the first half of the calendar year <unk>.

Speaker Change: Orders are fulfilled.

Miguel Martin: The BBOB team is utilizing our former cannabis facilities to answer the profitable cultivated orchid market. While our current vegetable and plant propagation business already generates a steady, predictable financial performance, albeit on a seasonal cadence. Over the next several years, we think our shareholders will benefit from the value creation coming from the segment. As we expect the acceleration of BBOB's business plan to drive revenue and adjust to the EBITDA growth.

The PMO team is utilizing our former cannabis facilities to enter the profitable cultivated orchid market.

Speaker Change: While our current vegetable and plant propagation business already generates a steady predictable financial performance, albeit on a seasonal cadence.

Miguel Martin: Over the next several years, we think our shareholders will benefit from the value creation coming from this segment as we expect the acceleration of Bevo's business plan to drive revenue and adjusted EBITDA growth. These achievements were made possible through the efforts and dedication of our team, who enable everything we do. On that note, let me now take this opportunity to introduce Simona King, our new CFO, who brings over 20 years of global finance experience at Fortune 500 pharmaceutical and biotech companies.

Speaker Change: Over the next several years, we think our shareholders will benefit from the value creation coming from this segment as we expect the acceleration of <unk> business plan to drive revenue and adjusted EBITDA growth.

Miguel Martin: These achievements were made possible to the opposite dedication of our team who enable everything we do.

Speaker Change: The achievements were made possible through the efforts and dedication of our team who enable everything we do.

Speaker Change: On that note, let me now take this opportunity to introduce Simona King our new CFO, who brings over 20 years of global finance experience at Fortune 500, pharmaceutical and biotech companies for wealth of knowledge.

Miguel Martin: On that note, let me now take this opportunity to introduce Simone King, our new CFO, who brings over 20 years of global finance experience at Fortune 500 pharmaceutical and biotech companies. Her wealth of knowledge in highly regulated healthcare spaces is already proving to be an asset to a lawyer. As we pursue our purpose of opening the world of cannabis.

Simona King: Knowledge and highly regulated healthcare spaces is already proving to be an asset to Aurora as we pursue our purpose of opening the world the cannabis.

Miguel Martin: Her wealth of knowledge in highly regulated healthcare spaces is already proving to be an asset to Aurora as we pursue our purpose of opening the world to cannabis. And with that, I would now like to turn the call over to Simona for a detailed financial overview.

Simona King: With that, I would now like to turn the call over to Simone for a detailed financial overview. Thank you, Miguel, and good morning, everyone. I'm very excited to be here as the newest member of Aurora's leadership team. Since joining in February, I have been focused on determining how I can best leverage my deep knowledge and experience in the pharmaceutical and biotech industries to contribute to the company's next phase of growth. I also look forward to sharing the company's progress with our analysts and investors over the coming quarters. Thanks to our outstanding people, 2024 was Aurora's strongest fiscal year ever.

Simona King: I would now like to turn the call over to Simona for a detailed financial overview.

Simona King: Thank you, Miguel, and good morning, everyone. I'm very excited to be here as the newest member of Aurora's leadership team. Since joining in February, I have been focused on determining how I can best leverage my deep knowledge and experience in the pharmaceutical and biotech industries to contribute to the company's next phase of growth. I also look forward to sharing the company's progress with our analysts and investors over the coming quarter. Thanks to our outstanding people, 2024 was Aurora's strongest fiscal year ever.

Speaker Change: Thank you Miguel and good morning, everyone I'm Barry B.

Simona King: See here as the newest member of our leadership team since joining in February have been focused on determining how I can best leverage my deep knowledge and experience in the pharmaceutical and biotech industries to contribute to the company's next phase of growth.

Simona King: I also look forward to sharing the company's progress with our analysts and investors over the coming quarters.

Simona King: Thanks to our outstanding people 2020 for a bunch of our strongest fiscal year.

Simona King: As we look towards the new fiscal year, we intend to build on our prior accomplishments by further strengthening our business through sound execution of our medical cannabis strategy and delivering sustainable improvements to our financial performance. Let's now review our results for the fourth quarter, which ended on March 31st, before providing some commentary on our expectations for the first quarter of fiscal year 2025, which ends on June 30th. In the fourth quarter of fiscal year 2024, we delivered revenue growth of 5% over the prior year period to $67.4 million.

Simona King: As we look towards the new fiscal year, we intend to build on our prior accomplishments by further strengthening our business to a sound execution of our medical cannabis strategy and delivering sustainable improvements to our financial performance.

Simona King: As we look towards the new fiscal year, we intend to build on our prior accomplishments by further strengthening our business through sound execution of our medical cannabis strategy and delivering sustainable improvements to our financial performance. Let's now review our results for the fourth quarter, which ends on March 31, before providing some commentary on our expectations for the first quarter of fiscal year 2025, which ends on June 30. In the fourth quarter of fiscal year 2024, we delivered revenue growth of 5% over the prior year period to 67.4 million. This growth notably included a 20% increase in sales from our high margin global medical cannabis segment, resulting in net revenue of 45.6 million.

Speaker Change: Let's now review our results for the fourth quarter, which ended on March 31st before providing some commentary on our expectations for the first quarter of fiscal year 2025, which ends on June 30, yet.

Speaker Change: In the first quarter of fiscal year 2024, we delivered revenue growth of 5% over the prior European hedge to $67 4 million.

Simona King: This growth notably included a 20% increase in sales from our high-margin global medical cannabis segment, resulting in net revenue of $45.6 million. On Profitability, the consolidated adjusted growth margin was 49%, resulting in adjusted growth profit of $33.3 million, compared to $31 million in the year-ago period. Driven by our focus and leadership in global medical markets, medical cannabis represented 68% of total net revenue for the fourth quarter and 90% of total adjusted gross profit.

This growth, notably included a 20% increase in sales from our high margin Global Medical Canada segment, resulting in net revenue of $45 6 million.

Simona King: On profitability, consolidated adjusted growth margin was 49%. Resulting in adjusted growth profits of 33.3 million compared to 31 million in the year-ago period. Driven by our focus on leadership and global medical markets, medical cannabis represented 68% of total net revenue for the fourth quarter and 90% of total adjusted growth profit. This marked an increase from 59% in the year-ago period for net revenue and 75% for adjusted growth profits. Adjusted EBITDA was 1.9 million for the quarter, which marked our sixth consecutive quarter of positive adjusted EBITDA and a record of 12.8 million for the fiscal year.

Speaker Change: Profitability consolidated adjusted gross margin was 49%, resulting in adjusted gross profit of $38 3 million compared to $31 million in the year ago period.

Speaker Change: Driven by our focus on leadership in global medical markets Medical cannabis represented 68% of total net revenue for the fourth quarter and 90% of total adjusted gross profit. This marked an increase from 59% in the year ago period for net revenues and 75%.

Simona King: This marked an increase from 59% in the year-ago period for net revenue and 75% for adjusted gross profit. Adjusted EBITDA was $1.9 million for the quarter, which marked our sixth consecutive quarter of positive adjusted EBITDA and a record of $12.8 million for the fiscal year. Let's now go into our results by segment.

Speaker Change: <unk> gross profit.

Speaker Change: Adjusted EBITDA was $1 9 million for the quarter, which marked our sixth consecutive quarter of positive adjusted EBITDA.

Speaker Change: And our record of $12 8 million for the fiscal year.

Simona King: Let's now go into our results by segment. Medical cannabis met revenue rose by 20% to 45.6 million, which consisted of nearly 10% growth in Canadian medical cannabis and nearly 40% growth in international medical cannabis. The increase in Canadian medical was due to increase sales to insurance cover patients and increased basket sizes. The increase in international medical cannabis was due to higher sales in Australia, driven by significant overall growth in that market. In addition to stronger sales from increased market share in Poland and the UK, as customers and those and other European markets have positively reacted to our Canadian grown high quality culture.

Speaker Change: Let's now go into our retails by segment.

Simona King: Medical cannabis net revenue rose by 20% to $45.6 million, which consisted of nearly 10% growth in Canadian medical cannabis and nearly 40% growth in international medical cannabis. The increase in Canadian medical cannabis was due to increased sales to insurance-covered patients and increased basket sizes. The increase in international medical cannabis was due to higher sales in Australia, driven by significant overall growth in that market, in addition to stronger sales from increased market share in Poland and the UK, as customers in those and other European markets have positively reacted to our Canadian grown high quality cultivars.

Speaker Change: Medical cannabis net revenue rose by 20% to $45 6 million, which consisted of nearly 10% growth in Canadian medical cannabis and nearly 40% growth in international medical cannabis.

Speaker Change: The increase in Canadian medical was due to increased sales to insurance covered patients and increased basket sizes. The.

Speaker Change: The increase in international medical cannabis was due to higher sales in Australia, driven by significant overall growth in that market. In addition to stronger sales from increased market share in Poland and the UK as customers in dose and other European markets have positively reacted to our Canadian grown type <unk>.

Speaker Change: Cultivars.

Simona King: We continue to see strong performance in Germany given our leadership position and drive flower and look forward to continuing market growth as more patients gain access to medical cannabis following recent regulatory changes that took effect on April 1st. Note that following that position of Med Release Australia and February, we have yet to record a full quarter of revenue from Med Release Australia to their customers. As we continue to sell to the existing inventory in the market, we expect to see the full benefit of this incremental revenue following the first quarter of fiscal year 2025. Adjustment growth margin for medical cannabis was 66%, up from 60% in the year-ago period and the highest margin we have ever generated.

Simona King: We continue to see strong performance in Germany, given our leadership position in dried flower, and look forward to continuing market growth as more patients gain access to medical cannabis following recent regulatory changes that took effect on April 1st. Note that following the acquisition of MedRelief Australia in February, we have yet to record a full quarter of revenue from MedRelief Australia for their customers as we continue to sell through the existing inventory in the market.

Speaker Change: We continue to see strong performance in Germany, given our leadership position in dried flower and look forward to continuing market growth as more patients gain access to medical cannabis. Following recent regulatory changes that took effect on April 1st.

Speaker Change: Note that following the acquisition of Magnum East Australia in February we have yet to record a full quarter of revenue from that relief Australia to their customers.

Speaker Change: We continue to sell the existing inventory in the market.

Simona King: We expect to see the full benefit of this incremental revenue following the first quarter of fiscal year 2025. Adjusted growth margin for medical cannabis was 66%, up from 60% in the year-ago period, and the highest margin we have ever generated. This was the result of several factors, including sustainable cost reduction.

Speaker Change: We expect to see the full benefit of this incremental revenue following the first quarter of fiscal year 2025.

Speaker Change: Adjusted gross margin for medical cannabis was 66% up from 60% in the year ago period, and the highest margin we have ever generated.

Simona King: This was the result of several factors, including sustainable cost reductions, higher selling prices in Australia, which is positively impacting our international business, and improved efficiency in our production operations with our shift to supplying the European markets from Canada, as the impact of closing our Aurora Nordic production facility is now flowing through our financials. While the expected experience quarterly variability in our adjusted growth margin, based on the seasonality and changes to geographic sales mix, we project that a consistent margin of 60% or greater is likely to be achievable.

Speaker Change: This was the result of several factors, including sustainable cost reductions.

Simona King: Higher selling prices in Australia, which is positively impacting our international business. And, improved efficiency in our production operations with our shift to supplying the European markets from Canada, as the impact of closing our Aurora Nordic production facility is now flowing through our financials. While we expect to experience quarterly variability in our adjusted gross margin, based on seasonality and changes to geographic sales mix, we project that a consistent margin of 60% or greater is likely to be achievable.

Speaker Change: Higher selling prices in Australia, which is positively impacting our international business.

And improved efficiency in our production operations with our shift to supplying the European markets from Canada, and the impact of closing our Aurora Nordic production facility is now flowing through our financials.

Speaker Change: While we expect to experience quarterly variability in our adjusted gross margin based on the seasonality and changes to geographic sales mix, we project that a consistent margin of 60% or greater is likely to be achievable.

Simona King: Consumer cannabis net revenue was $10.2 million, down from $14.5 million a year ago. The decline was the expected result of our decision to prioritize the supply of our GMP manufacturer products to our high-margin international business, rather than the consumer business, which offers lower margins. Adjusted growth margin for consumer cannabis was 16% compared to 25% in the prior year period due to sales of lower margin products compared to last year. And plant propagation, that revenue was $10.4 million, down slightly from $10.8 million in the year-ago period due to the timing of revenue and seasonality. You will recall that Bevo delivered higher revenue in the late winter and spring months, which should result in about 65% to 75% of revenue and up to 80% of EBITDA in the first half of a calendar year, which equates to our fiscal fourth quarter and first quarter periods.

Speaker Change: Consumer cannabis net revenue was $10 2 million down from $14 5 million a year ago.

Simona King: Consumer cannabis net revenue was $10.2 million, down from $14.5 million a year ago. The decline was the expected result of our decision to prioritize the supply of our GMP manufactured products to our high-margin international business, rather than the consumer business, which offers lower margins. Adjusted gross margin for consumer cannabis was 16% compared to 25% in the prior year period due to sales of lower-margin products compared to last year. And plant propagation net revenue was $10.4 million, down slightly from $10.8 million in the year-ago period due to the timing of revenue and seasonality.

Speaker Change: The decline was the expected result of our decision to prioritize the supply of our GMP manufactured products to our high margin international business, rather than the consumer business, which offers lower margins.

Speaker Change: Adjusted gross margin for consumer cannabis was 16% compared to 25% in the prior year period due to sales of lower margin products compared to last year.

Speaker Change: Plant propagation net revenue was $10 4 million down slightly from $10 8 million in the year ago period, due to the timing of revenue and seasonality.

Simona King: You will recall that Bevo delivers higher revenue in the late winter and spring months, which should result in about 65 to 75 percent of revenue and up to 80 percent of EBITDA in the first half of a calendar year, which equates to our fiscal fourth quarter and first quarter period. Plant propagation adjusted gross margin was 25%, down from 36% in the year-ago period due to the timing of higher-margin product revenue.

Speaker Change: We'll recall that vivo delivered higher revenue in the late winter and spring months, which should result in about 65% to 75% of revenue and up to 80% of EBITDA in the first half of a calendar year, which equates to our fiscal fourth quarter and first quarter periods.

Simona King: Plant propagation adjusted growth margin was 25% down from 36% in the year of low period due to timing of higher margin product revenue.

Speaker Change: Plant propagation adjusted gross margin was 25% down from 36% in the year ago period, due to timing of higher margin product revenue.

Simona King: Our consolidated adjusted SG&A rose to $31.6 million, up from $27.4 million last year due to the incremental SG&A following the acquisition and full ownership of MedRelief Australia. Now, moving to our balance sheet, which remains one of the strongest in the global cannabis industry. We held approximately $100 million in cash and cash equivalents as of March 31, after having fully repaid our remaining $7.3 million of convertible senior notes with cash. This last repayment marked the conclusion of nearly $540 million in debt repayments over the last three years, which has saved Aurora significant ongoing cash interest payments.

Simona King: Our consolidated adjusted SGNA rose to $31.6 million, up from $27.4 million last year due to the incremental SGNA following the acquisition and full ownership of MedReleaf Australia. Now moving to our balance sheet, which remains one of the strongest in the global cannabis industry. We held approximately 100 million in cash and cash equivalents as of March 31, after having fully repaid our remaining 7.3 million of convertible senior notes with cash. The last repayment marked the conclusion of nearly 540 million in debt repayments over the last three years, which has saved the rawa significant ongoing cash interest payments.

Speaker Change: Our consolidated adjusted SG&A Rose to $31 6 million up from $27 4 million last year due to the incremental SG&A following the acquisition and full ownership of met relief Australia.

Speaker Change: Now moving to our balance sheet, which remains one of the strongest in the global cannabis industry.

Speaker Change: We held approximately $100 million in cash and cash equivalents as of March 31st after having fully repaid our remaining $7 3 million of convertible senior notes with cash.

Speaker Change: This last repayment marked the conclusion of nearly $540 million in debt repayments over the last three years, which has saved Aurora significant ongoing cash interest payments.

Simona King: Our cannabis operations are now completely debt-free, while our Bevo business holds $57.3 million in debt. In terms of our cash flow, we made significant progress during the fourth quarter towards our goal of positive free cash flow by the end of calendar year 2024. Cash used in operating activities fell by $0.7 million to $21.1 million, but excluding changes in non-cash working capital and discontinued operations, cash used actually improved by $3.1 million to $10.5 million, from $13.6 million during the year-ago period.

Simona King: Our cannabis operations are now completely debt free, while our Bevo business holds 57.3 million in debt. In terms of our cash flow, we made significant progress during the fourth quarter towards our goal of positive free cash flow by end of calendar year 2024. Cash use an operating activity spells by 0.7 million to 21.1 million, but excluding changes in on cash working capital and discontinued operations, cash use actually improved by 3.1 million to 10.5 million from 13.6 million during the year ago period.

Speaker Change: Our cannabis operations are now completely debt free while our vivo business holds $57 3 million in debt.

Speaker Change: In terms of our cash flow, we made significant progress during the fourth quarter towards our goal of positive free cash flow by end of calendar year 2024.

Cash used in operating activities fell by <unk> 7 million to $21 1 million, but excluding changes in noncash working capital in discontinued operations cash used actually improved by $3 1 million to $10 5 million from $13 6 million during the year ago period.

Speaker Change: This was due to both increased revenue and improved contribution margin.

Simona King: This was due to both increased revenue and an improved contribution margin. Finally, as we are already nearing the end of our next fiscal quarter on June 30th, we wanted to provide our outlook for this three-month period. Consolidated net revenue for the first quarter fiscal year 2025 is positioned to deliver an increase in the mid to high teens from the fourth quarter fiscal year 2024. The cannabis segment should see increases to net revenue driven by growth in high-margin international medical cannabis revenue.

Speaker Change: Finally.

Speaker Change: We are already nearing the end of our next fiscal quarter on June 30th we wanted to provide our outlook for this three month period.

Speaker Change: Consolidated net revenue for the first quarter fiscal year 2025.

Speaker Change: <unk> to deliver an increase in the mid to high teens from the fourth quarter of fiscal year 2024.

Speaker Change: The cannabis segment should see increases to net revenue driven by growth in high margin International medical cannabis revenue.

Simona King: The recent regulatory reforms in Germany are expected to increase the size of the market, combined with continued strength in our key European markets, as well as incremental revenue from the acquisition of MedRelief Australia. Our plant propagation segment typically experiences a seasonally higher quarter as it completes its peak spring floral sales period.

Speaker Change: Our recent regulatory reforms in Germany are expected to increase the size of the market.

Speaker Change: Bind with continued strength in our key European markets as well as incremental revenue from the acquisition of <unk> relief Australia.

Speaker Change: Our plant propagation segment typically experiences a seasonally higher quarter as it completes its peak spring floral sales period.

Speaker Change: Consolidated adjusted gross margin for each individual segment are typically similar on quarter over quarter basis with the higher mix contribution from plant propagation expect that in Q1 fiscal year 2025.

Simona King: Consolidated adjusted growth margin for each individual segment is typically similar quarter over quarter, with the higher mixed contribution from plant propagation expected in Q1 fiscal year 2025. However, positive adjusted EBITDA should be higher compared to the fourth quarter as a result of revenue growth combined with comparable consolidated margins. And finally, we see our target of positive free cash flow by the end of calendar year 2024 as being achievable because of the following.

Speaker Change: Positive adjusted EBITDA should be higher compared to the fourth quarter as a result of revenue growth combined with comparable consolidated margin.

Speaker Change: And operating cash flow is expected to improve compared to the fourth quarter.

Speaker Change: And finally, we see our target of positive free cash flow by end of calendar year 2024, as being achievable because of the following.

Simona King: First, we expect to see continued increases in global medical cannabis, building on the growth we are expecting in the first quarter of fiscal year 2025, driven by the full recognition of revenue in Australia, as well as further growth in our key European markets. Second, operating expenditure and growth margins are positioned to be in line with previously stated targets, leading to continued strong positive adjusted EBITDA. And finally, disciplined working capital management and maintenance capital expenditures of approximately $2 million per quarter.

Speaker Change: First we expect to see continued.

<unk> increases in global medical cannabis building on the growth, where we are expecting in the first quarter of fiscal year 2025.

Speaker Change: Given by the full recognition of revenue in Australia as well as further growth in our key European markets.

Speaker Change: Second.

Speaker Change: Operating expenditure and gross margins are positioned to be in line with previously stated targets leading to continued strong positive adjusted EBITDA.

Speaker Change: And finally disciplined working capital management and maintenance capital expenditures of approximately $2 million per quarter.

Speaker Change: To conclude our team's strategic focus combined with our operational nice operational excellence have strengthened our financial condition over this past year.

Simona King: To conclude, our team's strategic focus combined with our operational excellence has strengthened our financial condition over this past year. As we look ahead, we are pleased with our leadership position in the high-margin global medical cannabis segment, which we believe will enable us to generate dependable revenue and EBITDA growth over the long term while, in the near term, achieving our goal of positive free cash flow. Thank you for your time. I'll now turn the call back to Miguel.

As we look ahead, we are pleased with our leadership positioning in the high margin Global medical cannabis segment, which we believe will enable us to generate dependable revenue and EBITDA growth over the long term while in the near term actualize, our goal of positive free cash flow.

Thank you for your time I'll now turn the call back to Nogales.

Nogales: Thanks Simona.

Miguel Martin: Thanks, Simona. We've certainly proven ourselves to be strong and resilient despite the challenges we have faced, and at the same time, we've been successful in attracting fresh talent to our organization, including new leadership and board members with pharmaceutical and CPG experience. We've also made substantial progress in right-sizing this business over the past four years. This reset has made us leaner and more agile and has enabled us to focus squarely on the most attractive segment of our industry, medical cannabis.

Nogales: Certainly proven ourselves to be strong and resilient. Despite the challenges we have faced and at the same time, we have been successful in attracting fresh talent to our organization, including new leadership and board members with pharmaceutical and CPG experience.

Speaker Change: <unk> also made substantial progress in right sizing this business over the past four years. This reset has made us leaner and more agile and has enabled us to focus squarely on the most attractive segment of our industry medical cannabis.

Miguel Martin: The medical cannabis sector continues to grow rapidly, and Aurora is well positioned to benefit from these positive changes. We are excited to see patient access increase globally and are encouraged by the evolving regulatory environments in key international markets. For these reasons, we are confident in our future and our ability to achieve positive free cash flow by the end of this calendar year. Operator, please open the lines for questions.

Speaker Change: Medical cannabis sector continues to grow rapidly and Aurora is well positioned to benefit from these positive changes. We are excited to see patient access increased globally and are encouraged by the evolving regulatory environments in key international markets for these reasons, we are confident in our future and our ability.

Speaker Change: To achieve positive free cash flow by the end of this calendar year and without operator, please open the lines for questions.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. We ask that you each keep to one question and invite you to recur for additional questions. Our first question comes from the line of Matt Bottomley with Canaccord Genuity. Please proceed with your question.

Speaker Change: Before pressing the star keys, we ask that you each keep to one question and invite you to re queue for additional questions. Thank you.

Speaker Change: Our first question comes from the line of Matt Bottomley with Canaccord Genuity. Please proceed with your question.

Matt Bottomley: Yeah, good morning, everyone. I guess for my question, then, you know, we can keep it maybe more general to, you know, any markets where this is specific, but I'm just curious, on the international front, what you can see that's actually trackable right now and the visibility you have of potentially an increased cadence on revenues. I know there's typically some variability there, but I'm most interested in Germany and some of the narrative around doctors maybe being more willing or able to prescribe cannabis now, and if there's anything that's tangible that can be seen.

Speaker Change: Good morning, everyone. I guess my question then we can keep it maybe more general to.

Speaker Change: Any markets, where there's a specific but I'm just curious on the international front. What you can see that's actually trackable right now and the visibility you have of potentially increased cadence on revenues I know, there's typically some variability there, but I'm most interested in Germany, and some of the narrative around doctors, maybe more willing or able to prescribe cannabis now and if theres anything.

Matt Bottomley: So it doesn't really necessarily just have to be Germany, but any commentary on international markets and what you can see with respect to traction being gained that might be tangible in your results in, you know, several quarters from now.

Speaker Change: That's been tangible that can be seen so it doesn't really necessarily just have to be Germany, but any commentary on on international markets and what you can see with respect to traction being gained that might be tangible in your results and you know several quarters from that.

Miguel Martin: Sure, Matt. Well, good morning, and thanks for the question. So, as you know and others know, syndicated data typically that we see in other industries is not available. What we do see is that regulatory agencies have certain reporting mechanisms, and I'll go into the ones that we know. You start with the tonnage or the licenses through the permitting process that come through, and you can typically see that 90 days in arrears.

Speaker Change: Sure, Matt well good morning, and thanks for the question so.

Speaker Change: As you know and others know syndicated data.

Speaker Change: Typically that we see in other industries is not available what we do see is that the regulatory agencies.

Speaker Change: You know certain.

Speaker Change: Reporting mechanisms and I'll go into the ones that we know.

Speaker Change: You start with the tonnage or the licenses that through the permitting process that come through and you can typically see that 90 days in arrears then.

Miguel Martin: Then, in Germany, particularly, you can also see manufacturer shipments by the governments that go in. Now, none of the licensed producers can be pharmacists. So, you know, it's LP to wholesale, but there's no way to return it.

Speaker Change: In Germany.

Speaker Change: Particularly you can also see manufacturer shipments.

Speaker Change: By the governments that go in now none of the licensed producers can be the pharmacists.

Speaker Change: So you know it's L P to wholesale but theres not theres no way to return. It. So there's no you don't have to sort of net out returns like maybe you're doing Canadian consumer.

Miguel Martin: So you don't have to sort of net out returns like maybe you do in Canadian Consumer. And we get that quarterly in Germany. It's a little more opaque in Poland, but we usually get something about every six months.

Speaker Change: And we get that quarterly in Germany is a little more opaque in Poland.

Speaker Change: We usually get something about every six months and then for Australia. The PGA the regulatory agency there provides market shares.

Miguel Martin: And then for Australia, the TGA, the regulatory agency there, provides market shares of manufacturer shipments to wholesale, not wholesale to pharmacy, on a quarterly basis. And it's a panel in Australia that only represents probably 20 to 22% of the pharmacies and those shipments. So it's representative of that panel.

Speaker Change: Manufacturer shipments to wholesale.

Speaker Change: Non wholesale to pharmacy.

Speaker Change: On a quarterly basis and it's a panel.

Speaker Change: In Australia that only represents probably $20 to 22% of the pharmacies and those shipments. So it's you know it's representative of that panel now specifically for Germany.

Miguel Martin: Now, specifically for Germany, we've seen the most sort of tangible or, you know, effect of the regulatory changes has been the ease with which patients can get prescriptions. And through, you know, electronic means, and even through vehicles that don't even have to be in Germany, you know, call it telemedicine, we've seen this rapid increase in the number of patients getting prescriptions. Now, the net effect on volume, I think we have to wait a little bit.

Speaker Change: We've seen the most sort of tangible or aspect of the regulatory changes has been the ease in which patients can get prescriptions and through electronic means.

Speaker Change: Even through vehicles that don't even have to be in Germany.

Speaker Change: Call It telemedicine.

Speaker Change: <unk> seen this rapid increase in the number of patients getting prescriptions now the net effect on on volume I think we have to wait a little bit I know that theres been a.

Miguel Martin: I know that there's been, you know, a lot of conjecture about, you know, are you gonna see that market double, triple, or whatnot. I think it's too early to get there. We're definitely gonna see an increase because of the increased access and prescriptions of patients. But, you know, it's gonna probably take a quarter for that data set to sort of catch up and see what the shipments are. Beyond that, if you look at the other countries, there are not as predictable or transparent shipments. With the possible exception of the UK, you see something in the UK quarterly similar to what you see in Germany. I don't know, Matt. Did that answer your question?

Speaker Change: A lot of conjecture about are you going to see that market double or triple or whatnot. I think it's early to got there we're definitely going to see an increase because of the access increased access and prescriptions are patients.

Speaker Change: But now.

Speaker Change: It's going to probably take a quarter for that that data set to sort of catch up and see what the shipments are.

Speaker Change: Beyond that if you look at the other countries there are not as sort of predictable or transparent.

Shipments with the possible exception of the U K you see something in the U K quarterly similar to what you see in Germany.

Speaker Change: Does that answer your question no no.

Matt Bottomley: No, no, that's great. I appreciate that. I know it's something that, you know, from a lot of US operators; there's a lot of data that you can subscribe to out there. So I'm just curious as international TV becomes more relevant now, just to sort of keep an eye on those things. I appreciate it. And I just wanted to ask one more quick question, more of a housekeeping one. I apologize that this was kind of already in the prepared remarks.

Speaker Change: That's great I appreciate that I know, it's something that.

Speaker Change: From a lot of U S operators, there's a lot of data that you can subscribe to out there. So I'm just curious as international.

Speaker Change: Becomes irrelevant now just to sort of keep an eye on those things I. Appreciate I appreciate it and I just wanted to ask one more quick one more of a housekeeping.

Matt Bottomley: But if you look at the difference from the profitability, and I understand the comments on the cash flow, but from your adjusted EBITDA contribution, everything on a sequential basis was largely flat, except that it was slightly up. So can you just maybe give me a little more color on what the drivers were for the slight sequential downtick in the adjusted EBITDA in absolute dollars?

Speaker Change: I apologize if this was kind of in the in the prepared remarks already but if you look at the difference from the profitability and I understand the comments on the cash flow, but from your adjusted EBIT contribution everything on a sequential basis was largely flat, except Berber with slightly up. So can you just maybe give me a little more color on what the drivers was for the slight sequential.

Speaker Change: <unk> downtick in the adjusted EBITDA in absolute dollars.

Simona King: Yeah, Simone, you want to grab that? I mean, I'm happy to be one. Go ahead. Yeah.

Speaker Change: Yeah, So Marty I'll grab that.

Speaker Change: Go ahead.

Speaker Change: Yeah, let me do that.

Simona King: Yeah, let me do that. So, Matt, to give a little bit more perspective and context on the adjusted EBITDA for Q4, a couple factors have come into play and contributed to that, and we view this as a temporary situation. So, as you may recall, the acquisition of MedRelief Australia occurred in February, so we had a partial quarter this fourth quarter in Australia. As a result of that, we've seen an incremental SG&A following this acquisition as we now fully own the company, and we also saw revenue, incremental revenue from customers.

Marty: So so yeah, Matt to give a little bit more perspective, and context on that adjusted EBITDA for Q4.

Marty: Couple of factors have come into play and contributed to that.

Marty: And we view this as a temporary situation.

Marty: As you May recall, the acquisition of Med relief, Australia occurred in February So we had a partial quarter, that's fourth quarter off Australia. So as a result of that we've seen a incremental SG&A. Following this acquisition as we now fully owned the company.

Speaker Change: And we also saw revenue incremental revenue from customers. However, we have not been able to fully recognize that incremental revenue to customers as we're working through our inventory. That's currently in the channel and we actually expect to see that full benefit come through after after Q1 fiscal year 2020.

Simona King: However, we have not been able to fully recognize that incremental revenue to customers as we're working through our inventory that's currently in the channel, and we actually expect to see that full benefit come through after Q1 fiscal year 2025. And then, on top of that, due to the timing of gross profit from our planned propagation business, as you know.

Speaker Change: Hi.

Speaker Change: And then on top of that due to the timing of.

Speaker Change: Gross profit from our plant propagation business as you know that.

Speaker Change: Okay.

Matt Bottomley: Okay, I got it. Appreciate all that, everyone.

Speaker Change: Okay got it I appreciate all that everyone.

Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you. Our next question comes from the line of Frederico Gomez with a TV capital markets. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Frederico Gomes with ATB Capital Markets. Please proceed with your question.

Eric Livshits: Hi, good morning. This is Eric Livshitsen on behalf of Frederico Gomes, and thank you for taking my question. So just on that front, on the SG&A front, obviously, it ticked higher this quarter due to those integration costs related to medical relief. I'm just wondering if you could provide just some more insight into the nature of these costs and when you would expect SG&A to normalize. Thank you.

Speaker Change: Hi, Good morning. This is Eric Richardson for Frederico Gomez and thank you for taking my question.

Eric Richardson: So just on that Brian on the SG&A front, you know obviously it ticked higher this quarter.

Eric Richardson: Due to those integration costs related to the lease.

Eric Richardson: I was just wondering if you could provide just some more insight into the nature of these costs and when you would expect SG&A to normalize. Thank you.

Speaker Change: Yeah, I mean, I'll start and then some others can pick it up I think.

Miguel Martin: Yeah, I mean, I'll start, and then Simona can pick it up. I think, you know, the guidance that we've given in the past did not include running MedRelief Australia, which is, you know, quite a significant piece of business. So you do have some integration costs, but you are going to have ongoing SG&A costs running that, you know, substantial business. And so we do expect our SG&A to go up. I think from an integration standpoint, you know, you'd see us work through, you know, integration costs, call it probably by the end of the summer. But beyond that, we will have a bit of a higher SG&A line than we've had in the past because we're now running that business over there, and there's SG&A costs connected to it.

Speaker Change: The guidance that we've given in the past did not include running bad really Australia.

Speaker Change: Which is a quite a significant piece of business.

Speaker Change: You do have some integration costs, but you are going to have ongoing.

Speaker Change: SG&A costs were running that substantial business and so we do expect our SG&A to go up I think from an integration standpoint.

Speaker Change: <unk> worked through.

Speaker Change: <unk> integration costs.

Speaker Change: All I would probably by the end of the summer, but beyond that we will have a bit of a higher SG&A line that we've had in the past because we're now running that business over there and theres SG&A costs connected to it.

Speaker Change: Okay.

Simona King: So, yeah, maybe I can add a little bit more, Miguel. So, I know in the past we talked about an adjusted SG&A baseline around $30 million per quarter impact, and that did not include incremental SG&A coming from any future acquisitions. So, as we've seen with MedRelief Australia, we have taken on partial costs for Q4, and that's reflected in our financials. And as we continue with the follow-on quarters, we do expect that to go up slightly.

Speaker Change: So, yes, maybe may add a little bit more Miguel so I know in the past we talked about it adjusted SG&A baseline around the $30 million per quarter impact.

Speaker Change #100: Did not include incremental SG&A coming from any future acquisitions. So as we've seen with med relief, Australia, we have taken on partial costs for Q4 and Thats reflected in our financials.

Speaker Change #100: And as we continue with the follow on quarters, we do expect that to go up slightly.

Simona King: And we continue to manage our SG&A and general expenses very, very carefully. So, this is really a reflection of taking on additional business, which we see, of course, as we will take on the full benefit of that revenue to customers in the follow-on quarters, post, you know, after we work through our inventory, that will definitely have an impact on our EBITDA throughout the quarter.

Speaker Change #100: And we continue to manage our SG&A and general expenses very very carefully.

Speaker Change #100: So this is really a reflection of taking on additional business, which we see of course as well.

Speaker Change #100: We will take on the full benefit of that revenue to customers and to follow on corn terrorists post after we have worked through our inventory.

Speaker Change #100: That will definitely have an impact to our EBITDA throughout the quarters.

Eric Livshits: Great, thank you. I'll hop back in.

Speaker Change #101: Great. Thank you I'll hop back in the queue.

Speaker Change #102: Thank you.

Operator: Thank you. Our next question comes from the line of John Zamparo with CIBC. Please proceed with your question.

Speaker Change #103: Thank you. Our next question comes from the line of Johnson <unk> with CIBC. Please proceed with your question.

John Zamparo: Thank you. Good morning.

Speaker Change #104: Thank you good morning, I wanted to follow up on Australia, and just wanted to better understand your.

John Zamparo: I wanted to follow up on Australia and just want to better understand the start to that market with MedRelief Australia. The contribution from that deal in the quarter, I think, was just under $3 million. That seems to apply around $20 million annually. I understand that's a pretty small sample size, but it's also meaningfully below the 23 results. So, is there anything you can call out about that? And do you still expect that business to contribute to what it did previously?

Speaker Change #105: <unk> start to that market with Med relief Australia.

Johnson: The contribution in the quarter from that deal I think it was just under $3 million that seem supplier and $20 billion annually I understand that that's a pretty small sample size, but it's also meaningfully below that 23 results. So is there anything you can call out on on that and do you still expect that business to contribute what it did previously.

Miguel Martin: Yeah, John, I mean, we do expect it to contribute. I guess a couple of things.

John: Yes, John I mean, we do expect it to contribute meaningfully I guess a couple of things. So previously when we were the manufacturer we sold to our customer which was Mad relief, Australia and they.

Miguel Martin: So, previously, when we were the manufacturer, we sold to our customer, which was MedRelief Australia, and they, you know, there was revenue recognition at that point. In the transition of the quarter, we recognize revenue when it's sold to the pharmacy. So, it's a consignment model there with the wholesale partners. So, there's a timing point in that quarter where you're not seeing full revenue recognition for that business. So we expect the quarter that we're in, that we're seeing now, where we have almost complete revenue recognition in future quarters to be significantly stronger, not only from a timing standpoint, but also because that market is growing.

John: There is revenue recognition at that point in the transition of the quarter, we recognize revenue when it's sold to the pharmacy. So it's a consignment model there with our wholesale partners. So there's a timing point in that quarter, where youre not seeing full revenue recognition of that business.

John: So we expect the quarter that we're in that we're seeing now where we are almost complete revenue recognition in the future quarters being significantly stronger not only from a timing standpoint.

John: But also because that market is growing so right now medically, but Australia is the number two you know based on that sample size of that I spoke about earlier the number two manufacturer. We're launching products right. Now are one of the few in that market with a gummy that they call. It at past deal and with the vape cartridge. So we're very bullish on.

Miguel Martin: So right now, Medrelip Australia is number two, based on that sample size that I spoke about earlier, the number two manufacturer. We're launching products right now; we're one of the few in that market with a gummy, they call it a Pastille, and with a vape cartridge. So we're very bullish on that market, but you've got a bit of a timing point in the quarter we just reported because of the consignment and the revenue recognition, but also, you've got a growing market. Simone, anything you want to add about...

Speaker Change #108: That market, but <unk> got a bit of a timing point in the quarter. We just reported because of the consignment in the revenue recognition, but also you've got a growing market. So not anything you want to add about that.

Speaker Change #109: Well I think you covered it about Macau.

Simona King: I think you covered it well, Miguel.

John Zamparo: All right, great. John, anything else on that that I can add? Nope, that's helpful, thanks.

Speaker Change #109: Right right.

Speaker Change #109: Yeah.

John: John anything else at all now that I can add.

John Zamparo: Nope, that's helpful. Thank you.

John: No that's helpful. Thank you.

John: Thank you.

Speaker Change #110: Thank you as a reminder, if you'd like to join the question queue. Please press star one on your telephone keypad.

Operator: Thank you. As a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. Our next question comes from the line of Pablo Zuanic with Zuanic & Associates. Please proceed with your question.

Speaker Change #111: Our next question comes from the line of Pablo <unk> with <unk> Associates. Please proceed with your question. Thank.

Pablo Zuanic: Thank you. Good morning, everyone. Miguel, please let me just stay with Germany.

Speaker Change #112: Thank you good morning, everyone. Let me go let me just stay with Germany.

Pablo Zuanic: I understand the shade you gave in terms of the lack of data, but, you know, back in April at the Benzinga conference, some operators there were talking about, you know, sales doubling for them, right, in terms of shipments to pharmacies. So, you know, you are vertically integrated in Germany, you have local manufacture and also import from Canada. You have your own wholesale distribution, and then, of course, you also have your own sales organization, right?

Speaker Change #113: I understand the quarter would you gave in terms of the lack of data, but like in April I've been saying they've been single gone for some operators there.

Speaker Change #113: We're talking about sales doubling for them right in terms of shipments to pharmacies.

Speaker Change #114: You are vertically integrated in Germany, you have local manufacturer also input from Canada.

Speaker Change #115: Do you have your own wholesale distribution and then of course.

Speaker Change #115: You also have your sales organization right. So you probably have good visibility in terms of what you are sending to a pharmacy.

Pablo Zuanic: So you probably have good visibility in terms of what you're sending to the pharmacy market. So at least if you can quantify or give some color, now that we're in the middle of June, in terms of whether, you know, have you seen volumes double or triple or pretty flat? That's the first question.

Speaker Change #116: Our market. So at least if you can quantify or give some color on the other way in the middle of June.

Speaker Change #116: So whether you know how you assume volumes doubled or tripled.

Speaker Change #116: Flat that's the first question on the second part, which is really related to that.

Pablo Zuanic: And the second part, which is really related to that, is to talk about any issues from a demand or supply perspective. And what I mean by that, on the supply side, are there bottlenecks, right? We are hearing that pharmacies cannot cope with a large number of scripts.

Speaker Change #117: Let's talk about you know.

Speaker Change #118: Any any issues from a demand or supply perspective on what do you mean by that on the supply side are there any bottlenecks right. We are hearing that the pharmacy is cannot cope with a large number of scripts so talk about any supply side bottlenecks.

Pablo Zuanic: So talk about any supply side bottlenecks. And on the demand side, help me, you know, reconcile the ratios that we look at in the U.S. versus Germany, right? In the U.S., Pennsylvania, Florida, you know, 3.5 to 4% of the population is in the medical program. In Germany, you know, the numbers are not exact, but we calculate, you know, 0.3%, right? So sometimes we say, well, the market could grow 10 times. But the reality is that it's very different for a doctor, even in Germany with a change in the narcotic law, to write an Rx prescription versus what we call in the U.S. a recommendation. Right? So from a demand perspective, just help us understand what the real comparison is. If we do 0.3% in Germany versus 3.5% in the U.S., is that the right comparison when we try to assess demand?

Miguel Martin: Thank you.

Speaker Change #118: And on the demand side.

Speaker Change #118: Show me reconcile durations are we looking in the U S versus Germany, right and in the U S Pennsylvania.

Speaker Change #119: Florida, 3.5% to 4% of population is in the medical program in Germany, and a number sort of exact but we calculate cedar 0.3% right. So sometimes we say well the market could go 10 times.

Speaker Change #120: But the reality is it's very different for the Doctor, even in Germany, where the change in the law to write the Rx prescription versus what we call in the U S. A recommendation right. So from a demand perspective, just to help us understand what is the real comparison suitably, 3%, Germany versus three five in the U S.

Speaker Change #121: The right comparison, when we take those as they want to think I know, there's a lot there. Thanks.

Miguel Martin: It's okay. We don't see doubling. And, you know, we probably have one of the largest sales organizations. We have, you know, GR resources on the ground. We talk to the government. We see all the same syndicated data.

Speaker Change #120: Okay.

Speaker Change #122: We don't see doubling.

Speaker Change #123: And we probably have one of the largest sales organizations we have.

Speaker Change #124: G R O.

Speaker Change #124: Resources on the ground and we talked to the government, we see all the same syndicated data.

Miguel Martin: So a doubling of a business the size of Germany right out of the gate, you know, within six months of descheduling, I think is unrealistic. That being said, a market that size growing 20 to 30 percent, you know, call it annually, at a minimum, is significant because, you know, one of the things that you talked about with the U.S., you talked about Canada. One of the things about medical cannabis is that the business is really broken up amongst probably six to seven LPs doing 80, 90% of the business.

Speaker Change #124: So a doubling of our business the size of Germany right out of the gate you know within six months of the scheduling I think is is unrealistic that being said you know a market that size growing 20% to 30%.

Speaker Change #124: Wow.

Speaker Change #124: Call it annually at a minimum is significant because one.

Speaker Change #125: One of the things that you talked about the U S. You talked about Canada.

Speaker Change #125: One of the things about medical cannabis is that business is really broken up amongst probably at that six to seven <unk>.

Speaker Change #125: <unk> do 80%, 90% of the business so like in Canada, and the rack business, you've got to do you've got to get to about 30 40 countries companies.

Miguel Martin: So like in Canada in the recreation business, you've got to do, you know, you've got to get to about 30, 40, you know, companies to get to 60% of the business. So it's a concentrated benefit. So Pablo, the first point I would say is it's early to understand what the impact of descheduling will be, that, you know, it's not double, but it could be 20 to 30%, you know, every three to six months will no longer be, in a little bit.

Pablo: Got to 60% of the business. So it's a concentrated benefit so pablo the first point I would say is it's early to understand what's the impact that these scheduling but.

Speaker Change #125: It's not double but it could be 20% to 30% every three to six months, we'll know more.

Miguel Martin: On supply and demand, one of the most important things that is happening in Germany that is allowed is that you're allowed to ship cannabis, as you are other pharmaceutical products, through the mail. And so the historical delivery of that product through a brick and mortar pharmacy, as opposed to some of these very large, you know, pharmacies that ship through the mail, is allowing supply to get there. And the government, through its work with the INCB, has plenty of access to cannabis.

Speaker Change #127: And a little bit on supply and demand one of the most important things that is happening in Germany that is allowed as you're allowed to ship candidates as you or other pharmaceutical products through the mail and so the historical delivery of that product through a brick and mortar pharmacy as opposed to some of these very.

Speaker Change #125: Large.

Speaker Change #128: Pharmacies are shipped through the mail is allowing supply to get there and the government through their work with the IMC B has plenty of access to cannabis now.

Miguel Martin: Now, one of the things that is a significant limiter, not only in Germany but all around the world, is the incredible, you know, precision that that product has to have. So what do I mean by that? First, it has to be EU GMP. That's a very difficult standard from a manufacturing, you know, process, and it limits the number of people that can produce the product for Germany. Secondly, they test it. Not your own testing, not, you know, the lab of your choice. It has to be within 10 percent on the THC and on the CBD.

Speaker Change #129: Now one of the things that.

Speaker Change #130: There is a significant limit or not only in Germany, but all around the world is the incredible.

Speaker Change #130: Precision that that product has to have so what do I mean by that first is it has to be <unk>. That's a very difficult standard from our manufacturing process and it limits. The number of people that can produce product for Germany. Secondly, they tested not your own testing not the lab of your choice.

Speaker Change #130: Has to be within 10%.

Speaker Change #130: On the THC and on the CBD, that's easier with a higher potency product, but with a balanced product is very difficult. So that makes it challenging packaging permitting and in order to bring a new product into Germany takes anywhere between eight to 12 months. So those are all limiters and Thats why a company like Aurora.

Miguel Martin: That's easier with a higher potency product, but with a balanced product, it's very difficult. So that makes it challenging. Packaging, permitting, and bringing a new product into Germany takes anywhere between eight to 12 months. So those are all limiters, and that's why a company like Aurora that has a history with this does well. Now, in comparison to the U.S., I don't think you can make that comparison, and you brought up one of the primary points of distinction.

Speaker Change #130: It has a history with this.

Speaker Change #131: It does well now comparison to the U R. I don't think you can make that comparison and you brought up one of the primary points of distinction in the U S. As an example.

Miguel Martin: In the U.S., as an example, you can go get your medical card, and you can walk into a dispensary and buy as much as you want of whatever you want because there's no limit. In Germany, it is a relationship, as it is with other medical products, between a prescribing physician who's prescribing a specific product at a specific dosage and then the patient. So, you know, if Canada is 1% of the adult population is in the medical system, and we expect that to grow.

Speaker Change #132: Go get your medical card and you can walk into a.

Speaker Change #132: And there was a dispensary and buy as much as you want of whatever you want.

There is no limit in Germany. It is a relationship as it is with other medical products between a prescribing physician prescribing of specific product added specific dosage and then the patient is getting our fulfilled out of pharmacy.

Speaker Change #132: If Canada is 1% of the adult population.

Speaker Change #132: As in the medical system, and we expect that to grow Germany at a point to 0.3 of the numbers that you quoted will continue to grow but its not apples to apples in the U S that being said being in a traditional pharmaceutical model does allow for a steadier cadence and very importantly.

Miguel Martin: You know, Germany at a.2 or.3 of the numbers that you quoted will continue to grow, but it's not apples to apples in the US. That being said, being in a traditional pharmaceutical model does allow for a steadier pace and, very importantly, allows for good margins because the flow of the economics starts with the wholesale price. So you don't see the massive compression in either the self-payer or the insured market that you see in other markets.

Speaker Change #132: Allows for good margins because the flow of the economics start with the wholesale price. So you don't see this massive compression in either the self pay or the insured market that you see in other markets and so is it a little bit slower, yes is it a bit more traditional yes, both which we like.

Miguel Martin: And so is it a little bit slower? Yes. Is it a bit more traditional? Yes, both of which we like, but also, you know, like other pharmaceutical products, steadier by a margin.

Speaker Change #133: But also you know.

Speaker Change #133: Like other pharmaceutical products steady or from a margin standpoint. Thank.

Pablo Zuanic: Thank you, that's great, Color. Can I just do a quick follow-up? I mean, when you look at the rescheduling process in the U.S., you know, how could Aurora benefit or participate in that market if we see rescheduling, or you don't really see it if it's not legalized at the federal level? No, I mean, we, so...

Speaker Change #133: Thank you that's great color and then just a quick follow up I mean, when you look at the scheduling process in the U S.

Speaker Change #134: Hopefully I would order a benefit or participate in the market, we see rescheduling or you don't really see it if it's not legalized at the federal level.

Miguel Martin: No, I mean us. Aurora is the largest Canadian medical company by far. You know we have a 31 share of that overall business. We've been at it 10 years.

Speaker Change #134: No.

So Aurora is the largest Canadian medical company by far.

Speaker Change #135: 31 share of that overall business, we've been out of 10 years, we interact with regulatory agencies all around the world and as we mentioned we have some of the largest EOG M. P. Pharma grade production facilities. We also have one of the largest genetic facilities on Vancouver Island in cannabis in the world. So we've long held.

Miguel Martin: We interact with regulatory agencies all around the world, and as we mentioned, we have some of the largest EU GMP pharma grade production facilities. We also have one of the largest genetic facilities on Vancouver Island for cannabis in the world. So we've long held the position, and I think we've been proven right that the U.S. will be medical first. We also believe that the FDA will regulate cannabis like they regulate almost everything between toothpaste and tobacco, and in that, it will be a science-based process.

Speaker Change #135: The position and I think we've been proven right.

Speaker Change #135: The U S will be medical first we also believe that the FDA will regulated cannabis like they regulate almost everything between toothpaste in tobacco and that it will be a science based process.

Miguel Martin: Aurora being one of the largest in North America and one of the largest in the world will clearly have significant advantages in order to navigate that system, and just because we don't hold an entity today in the U.S. has no bearing upon that, and everything that we do in Germany, Poland, the Czech Republic, and Australia with those very strict and organized regulatory regimes will benefit us in the U.S. with the FDA. So we're very confident that when the U.S. legalizes marijuana, we'll be in a great position.

Speaker Change #135: Aurora being one of the largest in North America, and one of the largest in the world will clearly have significant advantages in order to navigate that system and just because we don't hold an entity today in the U S has no bearing upon that and everything that we do in Germany, Poland, Czech Republic and Australia.

Speaker Change #136: Those very strict and organize regulatory regimes will benefit us in the U S with the FDA. So we're very confident that when the US legalize is will be in a great position.

Speaker Change #137: Thank you.

Speaker Change #137: Welcome.

Simona King: Thank you.

Miguel Martin: Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Martin for any final comments.

Speaker Change #138: Thank you, ladies and gentlemen that concludes our question and answer session I'll turn the floor back to Mr. Martin for any final comments.

Miguel Martin: Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Martin for any final comments.

Miguel Martin: Hello, guys. I just want to thank everyone for being on the call. We are very excited about the future for Aurora and medical cannabis. And we look forward to communicating with that as we go forward. All the best, and we appreciate it. Thank you.

Miguel Martin: Well, I just want to thank everyone for being on the call. We are very excited about the future for Aurora and medical cannabis. And we look forward to communicating with you as we go forward. All the best.

Miguel Martin: I just wanted to thank everyone for being on the call. We are very excited about the future for Aurora and medical cannabis.

Miguel Martin: And we look forward to communicating without as we go forward all the best and we appreciate it. Thank you.

Operator: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change #139: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.

Operator: This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.