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.

Unknown Executive: 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.

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.

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

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

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

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 Nyland: Please go ahead, sir.

Kevin Nyland: Hello everyone, and thank you for joining us. On the line with me, I'm Miguel Martin, CEO, and Simona King, CFO.

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 CFO. This morning, we filed our 2020 for fiscal year and fourth quarter financials.

Miguel Martin: This morning, we filed our 2024 fiscal year of four quarter financials for the period ending March 31, 2024, and issued a news release containing both our annual and quarterly results. Our financial statements and DNA and its news release are available in our IR website. Can also access its seed surplus and anchor. In addition, you'll find a supplemental information deck on our IR website.

Speaker Change: 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 CDAR flow.

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

Miguel Martin: For today's conference call, listeners are reminded that certain matters constitute four-lifing statements that are subject to risks and uncertainty related to a future of financial or financial or business performance. Actual results could differ materially from those anticipated and those four-lifing statements. The risk factors that may affect actual results are detailed in our annual information form, another periodic following the registration statement. These may be accessed, or it may similarly be accessed via seed surplus on an anchor.

Speaker Change: For today's conference call.

Speaker Change: Certain matters constitute forward looking statements.

Speaker Change: Subject to risks and uncertainties related to our future financial or not.

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

Speaker Change: Hey did you know sports.

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

Speaker Change: These may be access.

Speaker Change: It can be accessed via SEDAR club.

Kevin Nyland: Following prepared remarks by Miguel and Simona, we'll conduct a question and answer session without covering them. With that, I'll turn the call over to Miguel. Please go ahead.

Speaker Change: Thank God all your prepared remarks about Nogales, NOLA well conduct a question and I was just asking we're not covering them, but I'll try to play Niccolo Miguel. Please go ahead.

Miguel Martin: Always prepare remarks by Miguel and Simona, looking up the question on succession with a covering on this.

Miguel Martin: Let's not play in the call of Miguel.

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

Miguel Martin: Thank you, Kevin. We are very pleased to report that 2024 was our strongest ever fiscal year. 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 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'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 as frontline positioning in the industry's highest.

Arjun: Arjun segment is the direct result of the competitive advantage, we build through our manufacturing network of indoor <unk> certified facilities.

Speaker Change: <unk> 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 percent 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% on a trail in 12-month basis. 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 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 are 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 gross 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 in surrogation groups supported by a continuous pipeline of exciting next generation cultivars is critical about holding and growing our market share. However, we are also encouraged to be seeing increased interest from unions and other entities that are considering adding medical cannabis as a benefit to their members.

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 to a broad and attractive product assortment positive sales mix and most importantly product innovation.

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: 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 an insured patient groups supported by continuous pipeline of exciting next generation cultivars is critical to both holding and growing our market share.

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: Along with more clinical trials being conducted by the traditional medical establishment. Both of these developments could expand the addressable usage market rather meaningfully. We're called at only about 1% of the Canadian adult population are 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 are the manufacturer, wholesaler, and sales organization, and others we are the manufacturer and partner with world-class wholesalers and sales organizations.

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 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.

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.

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

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.

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

Miguel Martin: But first, discuss Australia, where we experience significant sales growth. We've called it in February. We acquired the remaining 90% equity interest in Med Relief Australia, which holds the number 2 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 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, makes it challenging for new entrance.

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: Erica.

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.

Speaker Change: 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.

Speaker Change: The 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: While providing an advantage to companies like Aurora that are dedicated to quality and compliance and are able to meet those requirements. 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. Striping our dedication is supporting the continued growth and development of the Australian medical cannabis. 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.

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.

Aurora: 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.

Aurora: Being one of the select few Canadian Lps with EU, GMP and TGI GMP certified facilities we've.

Miguel Martin: With 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 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 cartridges. 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.

Rose 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.

Miguel Martin: In addition to adding your range of dried flour, the license also granted our approval to broaden our product offerings to include past deals or gummies, oils, and our newly launched resin cartridges. Following this landmark certification, we announced the expansion of Medellip Australia's portfolio, with the introduction of a new range of premium dried flour products and resin cartridges manufactured at our EUGMP and TGAGMP certified. The new dried flowers are 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 in-demand brands and our full spectrum, ensuring a comprehensive cannabinoid profile for a more effective and balanced experience.

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

Speaker Change: Following this landmark certification, we announced the expansion of <unk>, 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 dried 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. Craft Plant, offering a handcrafted premium range of products. Aurora, for innovative and affordable options.

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.

Miguel Martin: We are excited to be offering the expanded range of innovative and differentiated products that cater to the market demand for a range of options without compromising on quality. Medellip Australia now focuses on three core brands: Craft Plan, offering a handcrafted premium range of products; Aurora, for innovative and affordable options; and In-Demand, providing a company-funded concession range, supporting access to individuals who may not be able to avail of this treatment through self-pay channels.

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 handcrafted 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: And InDemand, providing a company-funded concession range, supporting access to individuals who may not be able to avail themselves 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. 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 operators.

Speaker Change: Paid channels.

Miguel Martin: 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. 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.

Speaker Change: Moving on now to New Zealand, we celebrated 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.

Speaker Change: The initial product portfolio includes cultivars grown exclusively by us with each stream meticulously bread and cultivated to address a variety of patient needs.

Speaker Change: 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 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's already our largest European market and we are currently one of only three companies with a domestic cultivation facility, we hold the <unk>.

Miguel Martin: Let's now delve into our European operations. In Germany, we believe that the official passing of the cannabis act and these scheduling of cannabis has fueled the expansion of medical cannabis. The country's 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-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 cannabis. 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 ten 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: <unk> 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 physicians, 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. 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: The reclassification 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 all in all this change presents long overdue reform in favor of a more accessible medical cannabis market and.

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 patients. In Poland, our second largest European market, we are the number two cultivar and number two market position by volume.

Speaker Change: And to patients.

Speaker Change: 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: In 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 parted with Script Assessed, 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 and.

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 that guides 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%, 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. 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.

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 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 this business. We're called approximately 65% of plant propagation revenue is earned in the first half of the calendar year as orders are fulfilled.

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 the decrease in adjusted gross margin because of a less favorable product mix.

Miguel Martin: Finally, our investment in the controlled environment agricultural industry through Bevo resulted in strong revenue, down only slightly from the year-ago quarter due to the seasonality of this 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.

Speaker Change: 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 adjusted EBITDA growth.

Speaker Change: 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 Bebo'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 through the efforts and dedication of our team, who enable everything we do.

Speaker Change: 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 and highly regulated health care spaces is already proving to be an asset to Aurora as we pursue.

Miguel Martin: 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. Her wealth of knowledge in highly regulated health care spaces is already proving to be an asset to Aurora as we pursue our purpose of opening the world of cannabis.

Simona King: Our purpose of opening the world of cannabis and with that I would now like to turn the call over to Simona for a detailed financial overview.

Miguel Martin: Her wealth of knowledge in highly regulated health care 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 Simona 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.

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.

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

Speaker Change: See here as the newest member of our leadership team.

Simona King: 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.

Speaker Change: 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, 2024 was Aurora's strongest fiscal year ever. 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.

Speaker Change: 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.

Speaker Change: 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: 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. On profitability, consolidated adjusted growth margin was 49%. Resulting in adjusted growth profits of 33.3 million compared to 31 million in the year of gold period.

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.

Speaker Change: 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.

Speaker Change: On profitability consolidated adjusted gross margin was 49%, resulting in adjusted gross profit of $33 3 million compared to $31 million in the year ago period.

Simona King: 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.

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.

Speaker Change: This marked an increase from 59% in the year ago period for net revenues and 75% for adjusted gross profit.

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.

Simona King: 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: 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.

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 increase 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: Now go into our results 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 cultivar.

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.

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 in other European markets have positively reacted to our Canadian grown type <unk>.

Speaker Change: Alrighty cultivars.

Simona King: We continue to see strong performance in Germany given our leadership position and bright 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.

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.

Simona King: Note that following that position of Met Relief Australia and February, we have yet to record a full quarter of revenue from Met Relief 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 from medical cannabis was 66%, up from 60% in the year-ago period and the highest margin we have ever generated.

Speaker Change: Note that following the acquisition of <unk>, Australia and in February we have yet to record a full quarter of revenue from met relief Australia to their customers.

Speaker Change: We continue to sell to 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, 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.

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.

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

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

Speaker Change: And improved efficiency in our production operations with our shift to supplying the European markets from Canada.

Speaker Change: The impact of closing our Aurora Nordic production facility is now flowing through our financials.

Simona King: 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. 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.

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.

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

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.

Simona King: 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. 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.

Adjusted gross margin for consumer cannabis was 16% compared to 25% in the prior year period did your sales of lower margin products compared to last year.

Speaker Change: 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: You'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.

Speaker Change: 80% of EBITDA in the first half of a calendar year, which equates to our fiscal fourth quarter and first quarter periods.

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 31st 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.

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.

Speaker Change: Our Canada 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.

Speaker Change: Cash used in operating activities fell by <unk> 7 million to $21 1 million, but.

Speaker Change: <unk> 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.

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

Speaker Change: 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.

Speaker Change: Consolidated net revenue for the first quarter fiscal year 2025, it is positioned 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: 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 Mad relief Australia.

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

Simona King: Consolidated adjusted growth margin for each individual segment is typically similar on a quarter-over-quarter basis with a 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 margin. 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: 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.

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

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 continue.

<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.

Speaker Change: That's 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 expenditure.

Speaker Change: Proximately 2 million per quarter.

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.

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

Speaker Change: 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 actualized, our goal of positive free cash flow.

Speaker Change: Thank you for your time I'll now turn the call back to Macau.

Macau: Thanks, Simona, we've certainly proven ourselves to be strong and resilient. Despite the challenges we have faced 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.

Miguel Martin: Thanks, Simona. We've certainly proven ourselves to be strong and resilient despite the challenges we have faced. 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. 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.

Macau: 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 as 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.

Macau: 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.

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

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. Thank you. Our first question comes from the line of Matt Bottomley with Canaccord Genuity. Please proceed with your question.

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.

Speaker Change: You May press star two 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 keys.

Speaker Change: We ask that you each keep to one question and invite you to re queue for additional questions. Thank you.

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

Matt Bottomley: 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.

Matt Bottomley: Good morning, everyone. I guess my question then.

Matt Bottomley: Can keep it maybe more general too.

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 or 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 more willing or able to prescribe cannabis now and if theres anything.

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.

Matt Bottomley: 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.

Miguel Martin: As you know and others know, syndicated data 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. 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 it's LP to wholesale, but there's no way to return it.

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

Speaker Change: As you know and others know syndicated data typically that we see in other industries is not available what we do see is that the regulatory agencies.

Speaker Change: As you know certain.

Speaker Change: Our 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.

Speaker Change: In Germany.

Speaker Change: Particularly you can also see manufacturer shipments by the governments that go in now none of the licensed producers can be the pharmacist. So you know it's L. P to wholesale but theres not theres no way to return it so.

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: There's no you don't have to sort of net out returns like maybe you're doing Canadian consumer.

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

Speaker Change: 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, you know, pharmacies and those shipments. So it's, you know, it's representative of that panel.

Manufacturer shipments to wholesale.

Speaker Change: Wholesale pharmacy on a quarterly basis and it's a panel.

Speaker Change: In Australia that only represents probably 20% or 22% of the pharmacies and those shipments. So it's you know it's.

Speaker Change: 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.

Speaker Change: And through electronic means.

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

Speaker Change: Call It telemedicine.

Speaker Change: We've 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 going to see that market double, triple, or whatnot. But I think it's too early to get there. We're definitely going to see an increase because of the access, increased access, and prescriptions of patients. But, you know, it's going to probably take a quarter for that data set to sort of catch up and see what the shipments are.

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

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

Miguel Martin: Beyond that, if you look at the other countries, there are not as many 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. I don't know. Matt, did that answer your question?

Beyond that if you look at the other countries there are not.

Speaker Change: As sort of predictable or transparent.

Speaker Change: Shipments with the possible exception of the U K you see something in the U K quarterly similar to what you see in Germany, I don't know, Matt does that answer your question.

Matt Bottomley: No, no, that's great. I appreciate that. I know it's something that, you know, from, you know, 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. So, I appreciate it. And I just wanted to ask one more quick question, more of a housekeeping one.

Matt Bottomley: No no that's great I appreciate that.

Matt Bottomley: Thing that.

Speaker Change: 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: I apologize that this was kind of 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 EBITDA contribution, everything on a sequential basis was largely flat, except BEVO 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: 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: Downtick in the adjusted EBITDA in absolute dollars.

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

Speaker Change: Yes, Mario I'll grab that I'm happy to be one go ahead.

Simona King: Yeah, let me do that. So, yeah, Matt, to give a little bit more perspective and context on the adjusted EBITDA for Q4, a couple of 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.

Speaker Change: Yeah, let me do that.

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

Speaker Change: A couple of factors have come into play and contributed to that.

Speaker Change: And we view this as a temporary situation. So 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 own.

Speaker Change: 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 noted.

Speaker Change: Five.

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.

Okay got it I appreciate all that everyone.

Speaker Change: Thank you.

Speaker Change: Yes.

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

Speaker Change: Thank you. Our next question comes from the line of Frederico Gomez with a TV 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: Yeah.

Speaker Change: Hi, Good morning, this is Eric Richardson.

Speaker Change: Other equals donuts and thank you for taking my question.

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

Speaker Change: This quarter.

Speaker Change: Due to those integration costs related to medical leave.

Speaker Change: 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.

Miguel Martin: Yeah, I mean, I'll start, and then Simona can pick it up. I think the guidance that we've given in the past did not include running MedRelief Australia, which is quite a significant piece of business. So you do have some integration costs, but you are gonna have ongoing SG&A costs running that substantial business. And so we do expect our SG&A to go up. I think from an integration standpoint, you'll see us work through 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: Yeah, I mean, I'll start and then some others can pick it up I think.

Speaker Change: The guidance that we've given in the past did not include running that 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: G&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'd, 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: 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 acquisition. 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.

Miguel Martin: So, yes, maybe may add a little bit more Miguel so I know in the past we've talked about it adjusted SG&A baseline around the $30 million per quarter impact and that did not include the incremental SG&A coming from any future acquisitions. So as we've seen with med relief Australia.

Miguel Martin: 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.

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.

Miguel Martin: And we continue to manage our SG&A and general expenses very very carefully.

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

Miguel Martin: So this is really a reflection of taking on additional business, which we see of course as.

Miguel Martin: We will take on the full benefit of that revenue to customers in the follow on corn terrorists post after we work through our inventory that will definitely have an impact to our EBITDA throughout the quarters.

Great. Thank you I'll hop back in the queue.

Speaker Change: Thank you.

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

Speaker Change #100: Thank you. Our next question comes from the line of Johnson <unk> with CIBC. Please proceed with your question.

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 in the quarter from that deal, I think, was just under $3M. That seems to apply around $20M annually. I understand that's a pretty small sample size, but it's also meaningfully below the 23 results. Is there anything you can call out on that, and do you still expect that business to contribute to what it did previously?

Speaker Change #101: Thank you good morning, I wanted to follow up on Australia, and just wanted to better understand your.

Speaker Change #102: The start to that market with Med relief Australia.

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

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

John: Yeah, 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 Med Relief Australia, and they, you know, there was revenue recognition at that point. In the transition of the quarter, we recognized revenue when it was 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, you know, we expect the quarter that we're in 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.

Speaker Change #105: There is revenue recognition at that point in the transition of the quarter. We recognize revenue when it is sold to the pharmacy. So it's 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.

Speaker Change #105: So we expect the quarter that we're in that we're seeing now where we have almost complete revenue recognition in the future quarters being significantly stronger not only from a timing standpoint.

Speaker Change #105: But also because that market is growing so right now medically, but Australia is the number two based on that sample size of that I spoke about earlier the number two manufacturer, we're launching products right now and 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?

Speaker Change #106: That market, but you've 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 <unk>.

Got that.

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

Speaker Change #107: Well I think you covered it about Macau.

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

Speaker Change #108: Alright, great.

Speaker Change #108: Yeah.

Speaker Change #109: John anything else on that.

John: I can add.

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

Speaker Change #110: No that's helpful. Thank you.

Speaker Change #110: Got it thank you.

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

Speaker Change #112: 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 #113: Thank you and 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, of course, you also have your own sales organization, right?

Speaker Change #114: I understand the quarter do you gave.

Speaker Change #115: So the lack of data, but you know like in April had been saying they've been single gone for some operators there.

Speaker Change #116: We're talking about sales doubling for them right in terms of shipments to pharmacies.

Speaker Change #117: So you are vertically integrated in Germany, you have local manufacturer also input from Canada.

Speaker Change #117: Do you have your own wholesale distribution and then of course.

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

Pablo Zuanic: So you probably have good visibility in terms of what you're sending to the pharmacy market. So at least can you 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 #119: Our market. So at least if you can quantify or give some color on the other way in the middle of June.

So whether you know how you assume volumes doubled or tripled.

Speaker Change #120: 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, you know, 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 #121: Let's talk about you know.

Any any issues from a demand or supply perspective on what do you mean by that on the supply side are there 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. From a demand perspective, just help us understand what the real comparison is. If we do 0.3% 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 #122: And on the demand side.

Show me reconcile duration. So we're looking in the U S versus Germany, right and in the U S Pennsylvania.

Speaker Change #122: Florida, 3.5% to 4% of population is in the medical program in Germany, and numbers and what exact but we calculate cedar 0.3% right. So sometimes we say well the market could go 10 times.

Speaker Change #122: 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 five in the U S.

Speaker Change #122: The right comparison, when we take the system I think 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 #122:

Speaker Change #123: 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 #125: Resources on the ground, 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, at best, six to seven LPs doing 80, 90% of the business.

Speaker Change #125: 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 #125: Wow.

Speaker Change #125: Call it annually at a minimum is significant because one.

Speaker Change #126: One of the things that you talked about the U S. You talked about Canada.

Speaker Change #127: One of the things about medical cannabis is that business is really broken up amongst probably at that six to seven <unk>.

Speaker Change #127: <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.

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.

Miguel Martin: But, you know, it's not double, but it could be 20 to 30% every three to six months. We'll know more in a little bit. On supply and demand, one of the most important things that are 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 pharmacies that ship through the mail is allowing supply to get there.

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

Pablo: 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 cannabis 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.

Pablo: These very large.

Pablo: Pharmacies are shipped through the mail is allowing supply to get there and the government through their work with the Incb has plenty of access to cannabis now one of the things.

Miguel Martin: And the government, through their work with the INCB, has plenty of access to cannabis. 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 an EU GMP.

Speaker Change #129: Got it.

Speaker Change #129: Is it a significant limit or not only in Germany, but all around the world is the incredible.

Precision that that product has to have so what do I mean by that first is it has to be EU GMP, 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 test it not your own testing not the lab of your choice.

Miguel Martin: 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, has to be within 10 percent on the THC and on the CBDs. 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 8 to 12 months.

Speaker Change #129: It has to be within 10%.

Speaker Change #129: 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 that's why a company like Aurora that is.

Miguel Martin: So those are all limiters, and that's why a company like Aurora that has a history with this, you know, does well. Now, in comparison, you know, 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 #129: A history with this.

Speaker Change #130: 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 So, you know, if Canada's 1% of the adult population is on the medical system, and we expect that to grow.

Speaker Change #130: You can go get your medical card and you can walk into a.

Speaker Change #131: And there was a dispensary and buy as much as you want whatever you want because there is no limit in Germany. It is it relationship as it is with other medical products between a prescribing physician prescribing of specific product added specific dosage and then the patient is gathering are fulfilled.

Speaker Change #131: Out of pharmacy.

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

As in the medical system, and we expect that to grow Germany at a 0.2 or three 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 U.S. 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 this massive compression in either the self-payer or the insured 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 on the margins.

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.

Speaker Change #132: But also you know.

Speaker Change #132: Like other pharmaceutical products steadier 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 #132: 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 #133: Hopefully those roto benefited or participate in the market, we see rescheduling or you don't really see it if it sounds legalized at the federal level. Thanks.

Miguel Martin: No, I mean, we, 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.

No I mean, we so Aurora is the largest Canadian medical company by far we Havent 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 <unk> pharma.

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 #133: <unk> production facilities. We also have one of the largest genetic facilities on Vancouver Island in cannabis in the world. So we've long held the position and I think we've been proven right.

Speaker Change #133: U S will be medical first we also believe that the FDA will regulated cannabis like they regulate almost everything between toothpaste and tobacco and in 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, you know, 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 #133: Laura 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 with though.

Speaker Change #134: <unk> very strict and organize regulatory regimes will benefit us in the U S with the FDA. So we're very confident that when the U S. Legalize will be in a great position.

Speaker Change #133: Okay.

Speaker Change #135: Youre welcome.

Simona King: Thank you.

Operator: 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.

Unknown Executive: Ladies and gentlemen, that concludes our question-and-answer session.

Speaker Change #136: 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: 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 out 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 on 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 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.

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

Speaker Change #137: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.