Q1 2025 Tilray Brands Inc Earnings Call
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Speaker Change: Thank you for joining today's conference call to discuss Tilbury Brands by the answer results for the first quarter ended August 31, 2024.
Speaker Change: All lines have been placed on mute to prove that any background noise.
Speaker Change: After the Speaker's remarks, there will be a question and an answer session for analysts and investment firms conducted via audio.
Speaker Change: I will now turn the call over to Miss Berrin Noorata.
Speaker Change: Till Ray Brandt.
Speaker Change: Chief Communications and Corporate Affairs Officer.
Berrin Noorata: Thank you, you may be
Berrin Noorata: Thank you, operator and good morning, everyone. By now you should have access to the earnings press release, which is available on the investor section with Tilray Brands website at Tilray.com and has been filed with SEC and the CSX.
Berrin Noorata: Please note that during today's call, we will be referring to various non-gap financial measures that can provide useful information for investors. However, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with Gap.
Berrin Noorata: The earnings press release contains a reconciliation of each non-gap financial measure to the most comparable measure prepared in accordance with Gap. In addition, we will be making numerous forward-looking statements during our remarks and in response to your questions. These statements are based on our current expectations and beliefs and involve known and unknown risks and uncertainties which may provide to the incorrect.
Berrin Noorata: Actual Results could differ materially from those described in those four dozen statements. The text in our earnings press release includes many of the risks and uncertainties associated with such four dozen statements.
Speaker Change: Today we will be hearing from key members of our senior leadership team, beginning with Irwin Simon, Chairman and Chief Executive Officer, who will provide opening remarks in commentary, followed by Carl Merton, Chief Financial Officer, who will review our first quarter financial results for the fifth clear 2025.
Speaker Change: Also joining us for the question and answer segments are Denise Paul to check, thanks for how to do officer and set of international, rare McNiel, President of Hillary Canada, and Ky Geomorph, President of Hillary beverages North America. And now I'd like to turn the call over to Hillary Brandt, Chairman and CEO, Irwin Simon.
Irwin Simon: Thank you, Berrin, and good morning, everyone, and thank you for joining us today.
Irwin Simon: In the last five years, Tilray Brands has evolved into a new company. We no longer are just a Canadian canvas L.P. Tilray Brands has grown tremendously, and we're setting a new precedent for the CPG industry. Not only have we set this stage for a new era of consumer habits, Tilray Brands has pushed forward, disrupting the global CPG industry, and revolutionizing consumer products.
Irwin Simon: Tore is at the forefront of innovation, pioneering and leading the convergence of beverages, cannabis, hemp, wellness and distribution industries on the global scale.
Irwin Simon: Our operations stand over 20 countries and 5 continents with 44 consumer connected lifestyle brains and 20 vertically integrated facilities that produce approximately 90% of our products in house ensuring the highest quality of our products.
Irwin Simon: So, Ray continues to lead with the number one cannabis business in Canada, leading medical cannabis business across Europe, the number one brand of hemp business in North America, and the fifth largest craft here business in the US.
Irwin Simon: Our success in building a new era of consumer products.
Irwin Simon: That resonates with today's Deserting Consumers and Cares through their ever-volving consumption habits and transformed away consumers each.
Irwin Simon: Green and N. Wine with cannabis and beverage products is a testament for commitment on delivering innovative products that meets the needs of the modern consumer and drive growth across industries.
Irwin Simon: Moving on to two one, we achieved our record first quarter net revenue results, while strengthening our operations increasing gross margin and increasing our gross profit.
Irwin Simon: We hit net revenue of $200 million, representing a 30% growth year. Our growth profit increased by 35% and growth margin increased by over 500 basis points compared to the prior year or quarter.
Irwin Simon: Our beverage business, including craft beer, steers, and our new non-out beers, and other non-alcoholic drinks, food, hundred and thirty-two percent in net revenue, you all year. We strengthen our leadership position.
Irwin Simon: As the fifth largest U.S. craft beer brewer with a 5% market share as a result of a craft acquisition from ABI.
Irwin Simon: We recently launched a new beverage division called Torel Turner, the Berrigist, focused on fueling e-markens across the US with innovative, battery and legal, temporary with Delta 9, EAC, brand-it and brand-it products.
Irwin Simon: This is an exciting new segment for us, and our network of distributors, which I'll give into a more detailed shortly.
Irwin Simon: We focus on cannabis business on strengthening our operations and increasing our margins, leading to a gross profit increase in by 22%.
Irwin Simon: We continue to lead the Miranda Hampton Food Ministry with a 52% Miranda Marketshare with Manitoba Harvest in the U.S. and the Canadian Marketshare of nearly 80%.
Irwin Simon: and our financial foundation remains strong, with a world-vust foul and cheap, ample cash reserves who do debt levels and flexibility to explore potential new acquisitions.
Irwin Simon: Our financial strength enables us to pursue new opportunities and capitalize on emerging trends in the market.
Irwin Simon: Let's now dive deeper into each of our business segments.
Irwin Simon: Starting with Tory beverages, today our beverage division leads with 19 iconic brands, 10 network manufacturing facilities and over 700 distributors, 20 blue pubs and restaurants, and leading sales and marketing teams across the US.
Irwin Simon: Art of every strategy is focused on growing our portfolio brands in selected states, regional markets, and ensuring product excellence and innovation, driving focused scale, expanding targeted distribution to increase our market penetration and consumer access.
Irwin Simon: In our beverage segment, we generate a $56 million of net revenue to 1.
Irwin Simon: Across our growing craft brands, Sweetwater is the number one volume boy and family in Georgia, multi outlet and convenience stores.
Irwin Simon: Mon Talk is the number one brand of family in New York, Metro. Having increased at a rate of sale of 240 basis points year or year until right is the number one craft supplier in the Pacific Northwest.
Irwin Simon: Thanks in part to the continued success of 10-Barrows Pubbier. Shocked off remains a leading priority, as we relaunch the brand's number one seasonal offering. Shocked off pretzel.
Irwin Simon: During Q1 and Q2, driving additional 5,000 distribution points in the last 45 days.
Irwin Simon: The Pacific Northwest, who overall shocked off distribution by 42% during the Q1.
Irwin Simon: Adding 1100 new placements for the brand.
Irwin Simon: in the Northeast Montage Flagship.
Irwin Simon: Wade Chaser, IPA, continues to pose positive year-to-year volume distribution gains, adding a net of 139 off-premise accounts during Q1. Three of Sweetwater's top 12 packs queues, 420 paleo, OG IPA, and the Haiti IPA, all posted positive trends for Q1, trending a plus 7, a plus 24%, and a plus 17%, respectively.
Speaker Change: As you mentioned before, our ambition is far beyond our current reach. As we continue our focus to become a dominant leading beverage business by leveraging and our strengthening our portfolio of the love of local craft brands, recruiting new customers and activating more occasions through our new growth across these brands.
Speaker Change: Additionally, we are innovating across adjacent categories, including flavored, malt beverages, ready to drink cocktails, spirits, and also beyond alcohol, we will grow a non-alphaer category and expand further into water, energy, and other categories.
Speaker Change: are powerful calling sports partnerships across the country.
Speaker Change: will be leveraged to bring new LBA consumers and fans into different brand families.
Speaker Change: Expressive Shock Talk, separately, or MLS music events, and local community partnerships allow our brands to recruit and retain our core customers across different age groups.
Speaker Change: We have the manufacturing facilities, the distribution, the sales and marketing infrastructure to drive tremendous growth in the kill rate coverage business.
Speaker Change: In the non-alcoholic segment, Montauk, non-alcraft beer is now sold in 650 cans and new brand, runners high-brewing company has launched in the southeast with three brews, runners high-golden wheat, raspberry wheat, and dark chocolate with several expansion markets to follow.
Speaker Change: With over 700 beer distributors, no way is now a leading supplier in key regions across the U.S. With regional jewels in the Northeast, Pacific Northwest, Colorado, Texas, Michigan and the Southeast.
Speaker Change: With each beverage acquisition, we've made over the past few years, sweet water, re-flash, outplying, Montag-Cruly, the craft acquisition from ABI, and most recently, the acquisitions of a four-brain to most emporous.
Speaker Change: We are laser focused on operational efficiency, optimizing cost structure, and getting the margins of the choir brands up above 40% likes to meet water and other legacy businesses.
Speaker Change: We've identified additional growth opportunities in our beverage business.
Speaker Change: Tilray beverage is going after category diversification, and we've identified four categories we expected to generate $30 million in revenue by the end of fiscal 2025.
Speaker Change: These four categories include light loggers, 117 billion dollar categories.
Speaker Change: Labor Mall Fairwiches, a $4.7 billion category, sparkly water, a $12 billion category.
Speaker Change: and the non-alph who, up 445 million dollar category.
Speaker Change: Where a recent launch of Tilray Alternative Veterans, we are focused on fueling the U.S. with Hampton-Rive Delta-9 beverages.
Speaker Change: which is an estimated 2.8 billion market in the U.S.
Speaker Change: with the Guinness of Launcher, Hemp the Rivot of Delta 9, EAC, Brands and Products and Key Stakes, including Florida, Texas, Louisiana, Minnesota, North Carolina, South Carolina, Ohio, Georgia, Alabama, Oklahoma, and Tennessee. The distribution driven by our existing and robust and your distribution network.
Speaker Change: Our initial portfolio of HDD9 brings a clear, happy flower, urban blooms, 420 hops.
Speaker Change: and we expect to launch additional brands by the end of this calendar year. Happy Flowers currently available online through Drink Happy Flower.
Speaker Change: The growth of hemp derived Delta-9HC Greek business in the U.S. is remarkable and we are excited to see its potential for a beer distribution network or eager to jump into the business and how already had begun placing orders. We look forward to sharing more updates on this development soon.
Speaker Change: Turning to Tilray campus in Canada, Tilray continues to lead the Canadian market share by almost 170 gifts over the next competitor and have been consistently at the top of the industry for the past three years.
Speaker Change: From a regional perspective, Tore is number one across British Columbia, Alberta, Ontario and Quebec.
Speaker Change: The East Province is combined, including over 86% of the Canadian population, and we've also led it all other markets combined. In adult news, recreational cannabis, we focus on large improvements across our portfolio brands, and products resulting in the previous just across margins by 500 basis points in Q1 versus last year.
Speaker Change: The margin of growing partner with efficient utilization for doctrine that further cost savings and issues will allow us to grow our revenue, profitability, sustainability, well into the future.
Speaker Change: In Q1, 20% of our net sales revenue came from new innovation, our mainstream flower business continues to grow because of our strong genetics.
Speaker Change: A reticant brand moved up to the number of six musician brand in Canada as reported by High Fire Data.
Speaker Change: in Berrigis to a rate continues to dominate the beverage category with a 45% market share. And at the end of August with X&G, Molo, TAC, Berrigis, brands being number one and number two brands respectively.
Speaker Change: Taurace, 78 metric tons of biomass or approximately 25% of the implied Canadian market volume that you want.
Speaker Change: We continue to leverage the wholesale channel, where contribution margins are better, and supply is starting to balance. I'm an adult racquet ship, 16 million pre-roll columns, and over 2.1 million cans of beverages in Q1.
Speaker Change: Turning for International Business in T1, we continue to execute against our three basic initiatives. First, the acceleration of growth in Germany.
Speaker Change: In Germany, since the cannabis aqua into effect on April 1st, 2024, we've seen a 50% increase in medical flower sales, as well as a 22% increase in medical cannabis extracts.
Speaker Change: Where we already have a dominance share of the market and we believe that our current position in injury provides us with several unique competitive advantages to capture a significant share of the expected medical cannabis market, which is projected to be approximately $3 billion in the median third.
Speaker Change: We expect to continue our growth in this very important mark that through commercial excellence and increase supply. We will continue to leverage.
Speaker Change: The expertise and relationship of our C.C. from a till-rate from a distribution business and your meat, which supports our medical cannabis business to a network of 30,000 pharmacy and wholesalers.
Speaker Change: Second, the bifurcation and differentiation of consistent, alert and patient-led channels.
Speaker Change: As a marking leader in the position of the channel, we're turning our focus to accelerate air growth in the patient-led channel.
Speaker Change: One of our major initiatives in this regard is improving availability and the quality of our medical cannabis supply to meet needs of patients who led channels by creating a flexible and diversified supply chain focused on high quality flour and new innovation.
Speaker Change: At a three-hour ex-argument cultivation at Processing Facility, we received a very first commercial cannabis cultivation license and commercial distribution license issued in Germany under the new regulations.
Speaker Change: He's new licensed grant to relate the ability to cultivate, produce, and distribute, pre-waning, quality, medical cannabis. With the ability to increase our production by approximately five times.
Speaker Change: A pre-RX can now fully utilize and maximize its growing capacity while also expanding its genetics to a total 31 approved strains from the previously approved tree strains.
Speaker Change: We've already completed our first harvest under new cultivation license to expect to commercialize these products in Q2.
Speaker Change: We've also begun to supply our international markets with EU, GMP, certified medical cannabis products from our Canadian facilities, with medical cannabis from a free-a-diamond launching in Poland and broken coast and reticand launching in Australia.
Speaker Change: We expect a launch of additional cultivation from broken codes and a free assignment in the coming months.
Speaker Change: And finally, we'll continue to identify and enter new markets with a potential to generate material revenue and profit opportunities.
Speaker Change: We expect European opportunities could represent a potential $45 billion medical market over the long term, and with their presence in Europe, it allows two ways to grow a global grant portfolio with base of over 700 million people in Europe, which is twice the population U.S.
Speaker Change: Finally, let's discuss our till-ray wellness business. Both of us on improving people's lives through the power of him.
Speaker Change: Tory Wellness is represented mainly by Manitoba Harvest, our leading hemp brand with over 53% market share in branded hemp products.
Speaker Change: The wellness is also comprised of happy flower beverages and high-ball energy drinks.
Speaker Change: In Q1, to a well-nosed delivery 11% net revenue growth compared to the prior year, driven by strong core business sales.
Speaker Change: Couple with hand innovation and expansion into wellness beverages. A strong focus on cost help the business include margins delivery, a 300 basis point increase in low-smart due to 32%.
Speaker Change: As Tory Brands has transformed, expanded, and completed numerous acquisitions.
Speaker Change: To get where we are today.
Speaker Change: Our mission has evolved to be a leading freedom and lifestyle company with the house of brands and innovation of products.
Speaker Change: that inspired joy, wellness, and create memorable experience.
Speaker Change: With that, I'll now turn the call of the curl, the scuff of the mental results in greater detail. Carl.
Carl Merton: Thank you, Irwin. As we remind her, our financial results are presented in accordance with US staff and in US dollars.
Carl Merton: Let's now review our according to performance for the three months ended August 31, 2024. In Q1, net revenue was $200 million. A 13% growth rate compared to the previous year quarter, net revenue of $177 million. As early stated, our Q1 net revenue was a record amount. In constant currency, net revenue grew to $200 million.
Carl Merton: By Sagan, Robert Kowtz, a whole mess revenue increased 132% to 56 million.
Carl Merton: Cannabis net revenue was in line with expectations at 61.2 million as a result of our strong focus on margins and strategic growth in key markets, which I will discuss in a moment.
Carl Merton: From a segment perspective, 28% of our net revenue is generated by our Beverage Alcohol Business, 31% is generated by our cannabis business, 34% by our distribution business, and 7% by our wellness business. This compares to 13% in Beverage Alcohol, 44% in cannabis, 39% in distribution, and 8% in wellness in the prior year quarter.
Carl Merton: A year over year variance is due to a class-ever gap division which occurs in Q2 of last year.
Carl Merton: Close-profit increased by 35 percent to 59.7 million compared to 44.2 million in the fire year quarter.
Carl Merton: For those margins increase to 30% and over 500 basis point increase from the prior year period.
Carl Merton: A gestant grows profit increased 21% to 59.9 million from 49.3 million in the prior year. Will a gestant grows margin increased by 200 basis points to 30%. Primarily reflecting our focus on improving our utilization at our beverage alcohol facilities and favorable sales next.
Carl Merton: Net loss improved by 38% to 34.7 million compared to a net loss of 55.9 million in the prior year quarter.
Carl Merton: On a pro-share basis, it's mounted to a net loss of four cents per share, which was a 16% improvement compared to a net loss of 10 cents per share in the prior year corner.
Carl Merton: A just with net loss with 6.1 million, compared to an adjusted net loss of 27.1 million in the prior year before.
Carl Merton: That's 78% improvement year over year.
Carl Merton: With a Justin Metlaw's Procure Communion at negative 1 cent Procure, a significant beat compared to expectations of negative 5 sets.
Carl Merton: I just to give us all was 9.3 million compared to 10.7 million in the prior year quarter. We are now approaching six consecutive years of generating positive adjusted even though.
Carl Merton: The decrease of ingesting even though from the prior year quarter is primarily related to building infrastructure and an increase in investment in marketing and promotions that tell rate that it is.
Carl Merton: Cashflow used in operations with $35.3 million compared to $15.8 million in the prior year quarter.
Carl Merton: I adjusted free cash flow was negative 39.5 million compared to negative 6.3 million in the prior year quarter. As a result, I'm going to increase demand on our working capital in our beverage operations.
Carl Merton: As we move from this payment terms under the co-manufacturing agreements to our own payment terms after integrating production.
Carl Merton: 20 now to our four business segments.
Carl Merton: Everaged alcohol net revenue is 56 million, up 130% from 24.2 million dollars in the prior year. The positive Delta leads due to contributions from the craft brands, which were purchased during Q2 of last year, and new innovations across a brand portfolio.
Carl Merton: You are expanding footprint. We now hone and operate 20 blue pubs slash restaurants in the US that are in close proximity to the production of a craft branch.
Carl Merton: In the quarter, these operations contributed $11 million of revenue and we expect them to be a key part of our strategy going forward, allowing us to increase brand visibility and gain an intimate understanding of our key consumers.
Carl Merton: Robert Jobs of all rose profit, increased to 22.9 million compared to $12.9 million and a Jessica rose profit was 23.1 million compared to 13.5 million. While Robert Jobs of all rose margin was 41% compared to 53%.
Speaker Change: And in Jessica Rose, Margin, what's 41% from 56% from the prior year quarter?
Speaker Change: Due to the seasonality of our beverage business, our third quarter ended February 29, 2024, is our most comparable period reflecting the newly acquired graph brands to which we improved adjusted gross margin by over 300 basis points.
Speaker Change: and the results of our efforts in integrating and optimizing our facilities, as well as a favorable plot of things.
Speaker Change: Are you mentioning it, Irwin?
Speaker Change: The new craft brands were initially subject to co-manufacturing events, inhibiting our ability to optimize production and control costs in a manner of sufficient to increase our growth profit and margin. Effective May 31, all the co-manufacturing events, except for production of shock pump and the production of the brands were in-house.
Speaker Change: We have short talks production, expected to be integrated into our production facility in Q2.
Speaker Change: As we integrate production in-house, we are able to better optimize production utilization in our facilities, decreasing unabsolved overhead, as well as achieving purpose-free synergies now that we are purchasing the wrong green needs.
Speaker Change: Gross cannabis revenue of 81.2 million was comprised of 57.2 million in Canadian adult use revenue, 12.2 million in international cannabis revenue, 6.3 million in Canadian medical cannabis revenue, and 5.5 million is also a cannabis revenue.
Speaker Change: Next Canada's revenue, which includes 20 million in exercise taxes, weight 61.2 million, representing a 13% decrease from the year of the period.
Speaker Change: who led you from Canadian Medical Cannabis, whose 2% of the spike in category being impacted by competition from the adult youth market.
Speaker Change: Well, revenue from Canadian adult use decreased 20% which are the result of our increased focus on preserving gross market and maintaining a higher average selling price in categories that have experienced a high degree of price conversion.
Speaker Change: International cannabis revenue decreased by 14%, which is largely driven by variability on the timing in countries other than German, of receiving import and export permits, resulted in fluctuations on a poorly-teases.
Speaker Change: As Irwin said already, in the five months in the legalization courses, the five months before legalization, our flower revenues in Germany are at 50% and our extract sales are up 22%.
Speaker Change: As I mentioned, cannabis net revenue was in line with expectations at $61.2 million, but down $9.1 million versus the prior year.
Speaker Change: As we focus on our goal of improving cannabis growth margins, we are intentionally less focused on share and revenue in certain categories, particularly those categories facing the most price compression, including infused pre-roll and vape [inaudible]
Speaker Change: Despite the decline in net revenue and share in those categories, we increased cannabis growth profit by $4.4 million, and increased adjusted cannabis growth margin by over 500 basis points from the prior year period.
Speaker Change: The cannabis growth profit was 24.2 million and cannabis growth margin was 40%.
Speaker Change: I just had cannabis growth profit was 24.2 million compared to 24.3 million in the private of the quarter. It grows margin increases driven by our international cannabis business and in Canada, our continued focus on maintaining a higher average selling price and selling a favorable product mix to improve the justive growth margins by 500 basis points.
Speaker Change: Distribution net revenue derived predominantly through two-ray farmer was 68.1 million compared to 69.2 million in the prior year for them.
Speaker Change: The decrease in net revenue in attributed to the effects of foreign exchange. On a comprehensive basis, revenue from distribution increased to $70.4 million for the three months ended August 31st, 2024, compared to revenue of $69.2 million for the prior disappearing.
Speaker Change: The distribution grows profit increased to $7.9 million compared to $7.7 million in the prior year period. Well, distribution grows margin increased to 12% from 11% in the prior year quarter to the prior year.
Speaker Change: Well, this net revenue grew 11% to 14.8 million from 13.3 million in the prior year quarter.
Speaker Change: The increase was driven by our strategic focus on continued innovations and strong organic growth within our branded hemp business related to higher consumption.
Speaker Change: Well, Ms. Gross prophet was 4.7 million up from 3.8 million in the prior year quarter.
Speaker Change: and gross margin rose to 32 percent compared to 29 percent, who result from decreased input costs.
Speaker Change: and continued operational training.
Speaker Change: Our cash and marketable securities balance, as of October 31st, was $280.1 million up from $260.5 million at year end. This change was the result of our temporary increase in revenue capital savings, offset by the funds raised from our ATF.
Speaker Change: Since its initiation, we have raised $94.5 million on our ATM, between 10 to use for strategic and creative acquisitions, including capital expenditures for acquired businesses.
Speaker Change: That we now conclude our prepared remarks, you know, to the lines or questions from our cover now, unless operator, what's the first question?
Speaker Change: Thank you, as a reminder, if you'd like to join the question, too.
Speaker Change: It's star one on your telephone keypad.
Speaker Change: Our first question comes in line of call.
Speaker Change: Garzvala with Jeffrey's Please.
Speaker Change: for the week or question. Hey guys, good morning. I can't get a bit about the Canadian vote you smart get and just how ball user trending.
Speaker Change: And this is our last comment that I'm going to call you in the business.
Speaker Change: I'm going to use this one, I think.
Speaker Change: Yeah, how all these are trending in Canada.
Speaker Change: So I'll blurs on the phone, I'll let you jump in a second. I think the big thing that you see in Canada, how we've included margins there tremendously.
Speaker Change: You know, with Canada now.
Speaker Change: You know, being legal for five years, there's a lot of L.E.s that had come and gone, and with us having five million square feet in Canada.
Speaker Change: and being one of those largest and being the number one. There's a lot of volume, but the volume we're going to be the laughter.
Speaker Change: is proper low volume and there's sales that we'll give up for. You know, in the period we introduced a lot of new products, a lot of new innovation and what we've done with our facilities in regards to our yields in regards to, you know, some of the products that we're doing today and, you know, the amount of pre-rolls we sell over 80 million pre-rolls a year, you know, we sell, you know, over 350 metric tons of, you know, flower year. So volume is absolutely dependent, but it's profitable volume. Blair, you want to add anything to it?
Speaker Change: Yeah, thanks Irwin, and a good question. In the industry overall, I would say dollar volume is, you know, is Irwin just talked about compressed by some of the growth in those categories, but dollar volume, you know, is up four and a half to five percent overall. If you look at the KG ships or, you know, the volume overall, the category is growing at nine to ten percent.
Speaker Change: Simon.
Speaker Change: So, you know we're still seeing healthy amounts of consumers coming into the categories we're seeing healthy amounts of growth in the business.
Speaker Change: I think what you're seeing is the awesome price to impression.
Speaker Change: What we've made on choices that you heard in the results from Irwin and Carl is to not play as aggressively in those distillate and distillate infused categories, which are margin challenge. So overall, I would say the business is very healthy on the overall industry from a volume standpoint and a dollar volume standpoint still growing at about five percent of the dollar size.
Speaker Change: and then on the Tilray side we're being very joyful and how we balance our margin and our volume.
Speaker Change: I think the big important thing is realize a couple things. Number one, you still play a flat excise tax in Canada, Carl say, we pay it with $20 million in excise tax in the quarter. We pay close to $150 million for a full year. There's definitely some price compression, but we're not going to play in areas where it's just all about price and that's the big focus. The other thing is our teams have done a great job in taking costs out and getting the yields on our growth, getting the yields on our products and educating consumers. They're going to have to pay a little more for the quality of products to get it.
Speaker Change: You got it useful and then any maybe just update on where we are on price compression and maybe you have the balance of supply.
Speaker Change: So, you know, let me just come back and say to this year, the interesting thing is you could back a look over the last three years, we probably in Canada lost well over $200 million on price compression. And, you know, making excuses, that number drops to your bottom line. If you come back and you look at ultimately excise tax being cut and it was half, there's an extra, you know, $50, $70 million. So, I think we're seeing price compression stabilized.
Speaker Change: in regards to inventories.
Speaker Change: You know, with our world today in our youth.
Speaker Change: and us openly balancing in right, right sizing of the civils.
Speaker Change: I think we're in a state a great place today and we got to what are in the police act.
Speaker Change: and the market continues to change dramatically.
Speaker Change: in regards to policy.
Speaker Change: And that is a big thing today, it's amazing, you know, we'll be looking for 3% plus potencies today.
Speaker Change: Great, thanks guys.
Speaker Change: And last time just when we had here, you know, five years now that cannabis is real cannabis.
Speaker Change: Actually, it's five years while October 18th or something like that coming up to the University. The consumer now is educated and we've had to build these brands from scratch. So, these brands, you know, were brands that have been built from scratch, could supply us over a 200-plus million-dollar brand in retail.
Speaker Change: And the consumer there is education today about quality, policy, genetics.
Speaker Change: and where the product comes from, and that's something till raised on an incredible job in making sure that we put great products out there. And listen, we still have a lot of restrictions in the packaging, how we advertise the products, how we communicate to you, you know, our consumers.
Speaker Change: Thank you. Our next question comes in the line of error.
Speaker Change: Gray with a line to global partners.
Speaker Change: Please proceed with us.
Speaker Change: Question 15.
Speaker Change: Hi, good morning, and thanks for the question. So first, I just want to talk a high level one in terms of how you're thinking about, you know, investing in the business and also driving possible growth. You laid out a number of initiatives, you know, throughout the business. So I wanted to talk about how you're thinking about that and then even a growth throughout the year down a bit in the first quarter. So how best to think about the levers and the cadence of even on what we should be thinking about for the rest of the year. Thank you. Thank you.
Speaker Change: So, number one, we can back, and this probably is one of our lowest quarters in the year of their seasonality, which I don't think everybody looks at. There's also acquisitions like in this quarter, there's nothing on the most important acquisition that we've closed in early September . And in regards to rolling out new products, there's timing on that. In regards to our Delta 9 products and our, you know, in our beverage division. In regards to our non-alcohol, in regards to our liquid love, in regards to some of our other new products. So,
Speaker Change: Again, there is seasonality and there's timing on a lot of new products.
Speaker Change: and Regal of the Distribution of White Space.
Speaker Change: The other big thing that's not in here is a lot of cost that we're still taking into this business with the integration of the ABI grants.
Speaker Change: A lot of costs are coming out in regards to Canadian business.
Speaker Change: Okay, thanks, Irwin. That's helpful color. A second question for me, just on the hemp garage THC beverages. You laid out a number of states in your prepared remarks. You have previously said two states. I just wanted to clarify those states in your prepared remarks. Are there those where you'll be distributing at brick and mortar or just DTC? And then secondly, just on hemp derived beverages. How best to think about, you know, the ramping, you know, with brick and mortar and the impact of bills that have been introduced and the broader farm bill, which looks like it might be delayed another year and how that's impacting broader distribution. Thank you.
Speaker Change: So in regards to the outline, it's basically going to be working more.
Speaker Change: We've got what you've received that first order.
Speaker Change: i
Speaker Change: Okay, great, thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question comes from line of Matt, bottomly, with Cannocard Genieff.
Speaker Change: and Irwin Noorata, please proceed with your question.
Matt bottomly: Good morning, everyone. I appreciate a lot of the commentary on sort of individual markets in Europe and how things are progressing on the regulatory front and even with respect to some demand. But I'm just curious, you know, without getting into, you know, too specific, you know, to the nitty gritty of any numbers or anything. But if you look at your international contribution, both exports boots on the ground, you know, it's been run rating at close to about 50 million for a little while now. And I'm just wondering if any of these changes on the regulatory front are expected to have a meaningful impact on that contribution by the end of your fiscal year. Thank you very much.
Speaker Change: So, all of the decent companies here for a second, but I got to tell you, you heard what I said, you know, in Germany, since the changes in regulations, a flower business was up almost 50%. And in regards to...
Speaker Change: Supply, and that's been some of our biggest constraints here, some supply, we supply from our community and operations.
Speaker Change: We supply from our Portugal and some of the changes that we now have in Germany, where we can sell, you know, at our German facility, where we only could sell it, you know, through the German government. So there's a lot of pieces in place. The list of these only 20 different countries that allow Canada's medical cannabis in Europe.
Speaker Change: And I think there is some tremendous opportunity to see the size of the categories and billions.
Speaker Change: The man is there, Denise, you want to add to what I said? Yeah, sure, thanks for it. And I do thank you for the question. I just want to challenge like the one part about it's going 50 million for a few years now because actually if you look back over the progression, we actually have seen pretty significant growth zero over year. If you look basically from the point of time of the tour acquisition up until a lot of reported numbers from last year, we're expecting very, very significant growth in this year's market. But as we look to our fiscal year 25, as Owen mentioned, we had 50% growth in our flower business, 22% in our extract business, where we already have a sizable market share. We do have some as early mentioned in the previous.
Speaker Change: Question, you have been trying with important export permits for seeding and certain countries where we should directly distribute our own warehouses and therefore, our service and market through the sort of distributed. So there will be some one thing that's worth really important to look at the business on a year basis, not necessarily on a quarter basis, yet a full picture.
Speaker Change: I just wanted to sort of more of a general question, but just given some of the growth headwinds in the domestic Canadian market obviously there's been a lot of attention paid and you know, I guess I've done a lot of good strategic initiatives whether it's international or beverage alcohol, but I'll the wellness side of things. I'm just curious if there's any sort of M&A opportunities you think within there or do you think this is more of a sort of organic growth story from the exposure you guys already have?
Speaker Change: All in regards to wellness, I think listen.
Speaker Change: There's a lot of medical in Canada that's coming over and they're going into the red, you know, going into
Speaker Change: Recreation on buying it there, bye.
Speaker Change: You know, medical is something that we're focused on, and we see tremendous use for the product, whether it's anxiety, sleep, pain, epilepsy, so there's a big medical opportunity for us.
Speaker Change: Is there acquisitions for us in that area? That is an area that we are focused on in regards to the medical part of the other business. But I think the whole thing is, again, is our research that we're focused on medical, which is a big commitment for us. And being, you know, the number one medical, you know, producer in Europe , there's a lot more learning there and there's a lot of work with the universities and research that we're sharing back and forth. But as a matter of fact, we're in Europe next week with our Canadian teams and our European teams working on multiple things there. So yes, medical is a big part of our growth and medical is something that's very, very important to us in the community market.
Speaker Change: Thank you. Our next question comes in line of Bill Kirk with Ross M.K.M. Please proceed with your questions.
Speaker Change: ussia
Speaker Change: Good morning. I don't think I heard the fiscal 25 revenue guidance which had been $950 million to a billion. Is that still the expectation for the year? And then if I recall, that guidance had included some M&A, some expectation for some M&A, was the recent acquisition of the brands from most encores the M&A that was contemplated in that guidance? Or is there still more implied? [inaudible]
Speaker Change: So, that was the guidance for the year. There is some memory in there. We have not updated our guidance to include the Muslims' acquisition.
Speaker Change: Okay, so the range is still 950 million to 1 billion.
Speaker Change: is back home.
Speaker Change: Okay, and then on the international side, I understand that it's up over a few years. It has been in that like 11 million to 14 million on a per quarter basis for a little while despite new positive developments. So what's off setting the new positive developments on a more narrow timeframe?
Speaker Change: So, thank you for the question. The international business, basically, if you remember, we used to get actually, there's been some in and out, I think in terms of the business. So it's not exactly an apple to apples. If you recall a couple of years ago, it's actually a very big part of our revenue number. And if you, you might remember that it's been about a year and a half ago, to go, we just continue to our business in Israel. Just given the state of the market there, given the influx of product. So, thank you very much for the question. Thank you very much.
Speaker Change: The price compression, we just didn't feel that it would take time for the market for us to continue to. So we just continue to do so, which were quite sizable.
Speaker Change: However, in replacing that, we've sought out additional new countries. We've entered Poland, we've entered the UK, Italy and Portugal. We've also identified a bunch of other countries which we will be entering with the stay tuned for that in future quarters. This business, as you know, early mentioned before the Canadian business is just a few years old, the business in Europe is even more underdeveloped and immature at this point. [inaudible]
Speaker Change: And so, in essence, it really is just starting to grow and take off now. And so, I think it's still early innings for this business. We are very bullish about it going forward, and as I mentioned, we look to invest, we've already invested and we will continue to invest. I just think, again, you guys are back, you know, there's been some currency effect in Europe that affected us in the look at it. But, and Denise mentioned as we look at this from the top of the building, Europe's a very profitable price.
Speaker Change: And I think that's what's very important is as we focus on profitability. The other thing is, you know, Germany being the biggest market there and we were restricted with our facility in Germany that we only could sell to the German government at a loss. That has changed. So, you know, we were losing money in regards to a tender that was, you know, awarded five years ago and we've been able to renegotiate that tender and renegotiate the terms of that. The second thing is, as each country legalizes, [inaudible]
Speaker Change: and we're not being with states here, we're dealing with different countries, with different regulatory. So they'll be in out for European market.
Speaker Change: Absolutely, it's been difficult. And there's markets that we've abandoned. You know, we are not selling into these or any market. We choose to be one of the biggest markets of ourselves.
Speaker Change: So, you know, what I can reassure you is there's tremendous opportunities in the growth. We only really sell flower and tinctures is not like we're selling pretty rolls and we're selling multiple different products here. We're selling, you know, we're selling over a hundred different products, but it's basically flower and tinctures and that's it. So we look for Europe to be a big opportunity. We are the largest rower of cannabis in Europe today. [inaudible]
Speaker Change: We have the infrastructure on the ground, take a little time, but what's important to us is to process the ability there. The other thing is, we're reportedly integrated with our CC, pharmacy, you know, CC, our tow rate farm with air, in regards to distributing through the broad source.
Speaker Change: So, yes, you know, it is not growing as fast, but it is a very thoughtful business for us.
Speaker Change: Those details are great, thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question comes from the line of Michael Lavory with Piper Sam, please pursue your...
Speaker Change: Question.
Michael Lavory: Thank you, Good Morning. I just wanted to come back to the Delta 9 beverages. It's been tough in the cannabis space at least really building brands that kind of parallel to how they've developed in other categories.
Michael Lavory: And so this is an intriguing case to see how it plays out, but I guess with that in mind, you have four brands, I think you mentioned, you've got teed up, and more come, why so many, and how do you plan to develop those and set them up for sustainable growth?
Michael Lavory: So number one, the brands are developed.
Michael Lavory: and...
Speaker Change: You know, again, we've had happy flower out there for a long time, this TVD-420 is one of our brands that are known, you know, two or three of our other brands.
Speaker Change: You know, absolutely unique is to them. So, again, with a five different products out there.
Speaker Change: It gives us differentiations and products.
Speaker Change: It allows us to have multiple products out there.
Speaker Change: and...
Speaker Change: We have so far everything we have shown retailers.
Speaker Change: Distributors, they like and you know we got quite a few orders. So yes.
Speaker Change: 420 is a brand that's well known out there. Happy flower has been out there. We have to build some of our other brands out there and we've done that before. As we can know with new products in regards to runners high, which is our non-out here and our montage non-out here. Our liquid love is our water brand that's coming out there. Our Delta 9, our new brand. Listen, the big thing is out there. We've got products. We've developed these flavors. We've developed these products. We've got 700 distributors out there and these distributors want it. Now we only can sell it in the States as legal.
Speaker Change: And we got a field salespeople out there on the street that will make sure we get this product in the hands, the last but not least, which is important, how do we mark it back to the consumer? And that's what's important for us to make sure we get the message across the consumer. There's some really good products that we're coming up with.
Speaker Change: Okay.
Speaker Change: I'm sorry, I'm going to...
Speaker Change: No, I just stopped, sorry. Oh, yeah, no, so that's helpful. And then just on some of the, you touched on some of the integration of beer production and how you've got more flexibility now. How significant can that be and how quickly could it come in terms of just would we be right to think that you could consolidate some facilities or how do we just think about what to expect in the next several quarters for how that impacts your numbers? [inaudible]
Speaker Change: So, no good question there. Listen, we're in a category today where the craft beer and the street is declining, you know, three percent. But there's a hundred billion dollars with the beer sold over there. So it's not like a small category.
Speaker Change: So there is tremendous opportunities in the craft beer business, okay?
Speaker Change: And with that, we think we can work there and take share with innovation, you know, with some of the new products that we've launched. We think we can back and look at whether it's the non-out.
Speaker Change: industry that's growing tremendously. With Delta 9, the other thing is we're going back to each of our brands today. We have 19 brands out there, and we're looking at these brands where they should be sold regionally, and what should be a national brand. Shot top definitely and we should be a national brand. But if you take Montauk, you take viewpoint.
Speaker Change: and take sweet water.
Speaker Change: and youth focus and sort it in the Northeast.
Speaker Change: New York, New Jersey, Connecticut, Pennsylvania, and maybe Florida. That's over a hundred million people that we can market a brand suit. We don't need to be in every single state out there, and shift 10, 20,000 cases there, spend money on it, where we're not going to get the lift.
Speaker Change: If you come back and look at the notes.
Speaker Change: Streetwater.
Speaker Change: Sweetwater, you know.
Speaker Change: Rural at two and a half three million case friends, but it went into certain states, whether it's Ohio or Illinois, it didn't make sense in those states, California. So what we're going to do is take these brands, focus on...
Speaker Change: 3, 4, 5 states.
Speaker Change: What are money behind them? Work with the distributors, educate the consumers about them, and then take our national brands like a shotgun. And the other thing that we're going to look at is here, if we have a pumpkin beer, we'll have pumpkin beer, you know, and similar flavors for montage for blue point, we're not going to have all these multiple different formulas out there with a lot of complexity. So we're looking at how we take our kale off our brands. We're looking at how to take complexity at our business. [inaudible]
Speaker Change: We're going to do some few rationalizations.
Speaker Change: And with this, you know, it will optimize and wait size of footprint.
Speaker Change: and the buying tower today with over 15 million cases of beer that were buying.
Speaker Change: and if we have to consolidate some of our facilities, which we're right now looking at.
Speaker Change: We open the league well.
Speaker Change: But we really feel, you know, within a matter of since 2020.
Speaker Change: You know we're now the fifth largest craft brewer out there with a five percent share of there.
Speaker Change: and we think we can get this category growing again through our innovation, through our distribution. And I got to say, I'm working with distributors out there. They all want to see growth. They all want to see new innovation. They want to see products and the same with the retailers. The retailers are looking at this way too many brands, way too many products. How do we ultimately get this category growing and it takes up too much space and storage?
Speaker Change: Okay, thanks so much.
Speaker Change: Thank you. Our next question comes in the line of Pablo's Onex with his Onex in his associates. Please.
Speaker Change: and I'd like to see you with your question.
Pablo Onex: Thank you, Irwin, can you give us an update in terms of how you are thinking about U.S. Plantaching assets. We were seeing other companies that have ring-sense structures, you know, kind of USA, S&DL with sunscreen, OGI has talked about that also. I mean, there's been more consolidation and we tend to point that I won't be much left to buy. So, how do you handicap that and how do you think about doing something similar?
Pablo Onex: in the current context of regulation.
Irwin Simon: So, I set back in listen. The good news is the two President for candidates are in favor of legalization.
Irwin Simon: And I think in regards to rescheduling, there's the December, the recommendations are going to come up on that. So, Pablo, I think something will happen.
Irwin Simon: I think we've urged to reschedule and something will happen in regards to federal legalization, whether it's medical cannabis, you know, that will be legalized and ultimately leave it up to the state for everything else.
Irwin Simon: If you come back and look at what we can do, you know, remember, we've gone in once Canada was legalized.
Irwin Simon: Five years ago, they tell me it's six years ago, but I think it's still five. It was 2018. So I guess that is six years ago. If you come back and look at it, we built our Canadian business to a 300 plus million dollar business from scratch.
Irwin Simon: We don't grow in the socials, we grow brands, we grow political integration, and today I've been one of the largest growers up there with almost five millions for a piece. We know how to grow cannabis.
Irwin Simon: We know we have the genetic vapes, we know how to make pre-rolls, how to make kinkshures, we know how to make drinks, we'll sell this here close to 9 million cans of cannabis with few drinks. So we have the DNA, we have the know-how, we're one of the largest medical cannabis companies in Canada and in Europe . So with that...
Speaker Change: We're ready to do it on our own in the U.S. depending upon what the guidelines and the parameters are.
Speaker Change: And on the other hand, with our balance sheet, where it is today, we have the ability to go out and acquire a great strategic partner that can help us, but that makes sense. The other thing in the US today, you know, we have 18 beer brands. And with some of these, the Delta 9. So, again, I think, you know, with cannabis going to legalize, and that's my opinion, I have nothing else, you know, any other insight.
Speaker Change: The world is ready to jump into which way we can jump in there and be ready for it.
Speaker Change: Thank you. One last one, maybe for Denise, you know, just going back to the discussion in Germany.
Speaker Change: Maybe using some Michael Porter stands here but...
Speaker Change: You know, maybe remind us of your competitive advantage there, your competitive assets, your assets strengths, you know, what are the values to entry? You just want to hear, you know, there's all these licensing porters that are able to bring products. We saw a big jump apparently in the import in the second and third quarter.
Speaker Change: And then they are able to go to doctors, promoters, products and sell them to the consumers, right? So, I don't know if I want to see more fragmentation as opposed to consolidation in Germany, but I'm sure you have assets on the ground that give you an advantage. But I'm just trying to understand how the German market plays out in terms of fragmentation versus consolidation, just in portals versus local producers, and what you are at, and why should we assume that you are better positioned than others, if you can just mention that. And as part of that, a quick reminder, if you produce, if you jump production in Germany by five times, I suppose every place is Portugal or Canada, that's the mean that you end up with higher cost structure. Thank you.
Speaker Change: Thanks, Pablo. And thank you for the question. I think also I just want to also bring that to the previous question I was asked because I think is I just remember I'm not stating the fact that if you look at our year over year growth between FY 24 and FY 23 in terms of the European market, we grew that market 34% but I just wanted to actually finish off that last question which I didn't do the last time.
Speaker Change: mentioned our free or our accessibility with our ability and our new, our new issue, license, yet the ability to produce.
Speaker Change: So, for capacity, which basically allows us to do shy times what we were able to reduce under the temps.
Speaker Change: In addition, we expanded that license. Under the tender, we are permitted to produce three strains. Today, we now are able to do 31 cultivars. And I'm proud to say that actually what just landed at Nerminster is a bunch of cultivars from our medium facilities where we look at cultivars that perform best in market in Canada. And we've shipped those cultivars over to both Portugal and Africa Rx in order to provide ourselves with the maximum flexibility, both in support by changing, as well as the availability of products to patients. Having that facility as well as our Portugal facility, as well as we've opened up.
Speaker Change: The ability to deliver product from Canada, we have the probably what I would get, would I be classified as the most flexible supply chain of any cannabis company in Europe, where we see many of, and you mentioned about whether there's a segmentation consolidation, and as you know, there's a few larger players in the community in the German market.
Speaker Change: But there's, and then there's a proliferation of a lot of smaller, smaller companies that are, that are coming online and starting in the kitchen, the German market. I do think at some point there will be consolidation just because if you have a lot of players in a market, you will start to see consolidation of those players. But going back to our unique position, we have the most exciting, we have a great cost structure, given the work that we've done in order to make sure that we always keep our costs to produce very low and we're very efficient. In addition, we have a terrific
Speaker Change: First-class commercial team located in New York and with booths on the ground in Germany. We have a sales team that is very well positioned in terms of their knowledge, their reputation with doctors, their reputation with government officials, and the fact of the matter being one of the first in Germany has given us a reputation of being trusted and having the expertise. So as doctors want to learn more and more about medical cannabis and might have been in regulation, we are one of the first that they seek out in order to get that information because they want to know how to prescribe and they want to know how to continue in the market.
Speaker Change: Thank you.
Speaker Change: Thank you. Our final question comes from line of Robert Moscow with TD Cohen. Please receive with your question.
Speaker Change: Hi, thanks. I just wanted to ask about the quarterly results in beverage. I didn't hear whether you said that those the sales were in line or a little below expectations. I think
Speaker Change: How did beverage do versus you thought the tracking data shows the brands are down a bit? Do they just need like, is it a matter of timing before your new marketing efforts and your consolidation efforts take hold before the retail sales get a little bit better?
Speaker Change: So Robert, thank you. We don't give guidance out there that we need to business but we have definitely internal guidance and internal budgets.
Speaker Change: and the average business.
Speaker Change: was off the gate and a lot of that is just timing and summoning products.
Speaker Change: And a lot of it is, you know, the product you're ready is when the stringer is ultimately taken.
Speaker Change: and that was the biggest thing. The other thing which you've heard me talk about earlier is right-size E.
Speaker Change: The business here, and going to our Sturacinization, going to a brand-new optimization, and going to our distribution-white space. Also, there's time in the regards to, you know, customers taking the products and, you know, products for Halloween products, you know, of pumpkin products and some of the different things like that. So just a tiny standpoint. Bye-bye.
Speaker Change: The idea of one was integration of some of the EBI grants back into our facility since the place.
Speaker Change: So it's just from a tiny standpoint.
Speaker Change: It's a tiny standpoint if you look at our quote and look at our numbers here, our SGNA was way off in regards to our various businesses, but as we build out the infrastructure and build out people and take over the ABI business.
Speaker Change: and do some of the spending we expect to get the benefits in that over the year. So with that, we are excited to what we see that's happening out there.
Speaker Change: We think we're well-positioned with our brands, with their products, with their innovation. Our customers are given a split feedback. We have a lot of high hopes for Delta 9. We have a lot of high hopes for our non-alph.
Speaker Change: We have a lot of hope for liquid love. We love a lot of hope for some of the new innovation that's coming out on this week, Water, Montag, and Ken Barrel, and which, again, which is not really in our numbers.
Speaker Change: With the acquisition that we just acquired the four grants from most of the courts and getting our hands around them and seeing the growth opportunities with that. So with that, it's just early timing in regards to our every business. But there's a real, real, real good plan in place here, Robert.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Thank you, ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Simon
Irwin Simon: I'm in front of Final Comment.
Irwin Simon: Thank you very much, everybody, and thank you for joining us today.
Irwin Simon: You know, I've been incredibly proud and excited of what we've been able to put together over the last five plus years.
Irwin Simon: And you heard our guidance out there is $950 million of size, and that's coming from a start-up basically at $50 million.
Irwin Simon: Today, you know, we have a report called Rans. We have 27, 27 hundred people that work with them as company today. We have 20 facilities. We sell it over 20 countries, 6 different continents. And again, we are dealing in categories where regulation is important. There is no one company out there that does what we do as diversified as us.
Irwin Simon: So, it's not easy and there's a lot of noise and a lot of news every day coming up like cannabis, as we sit here and wait, there's a lot of changes that got to happen. But again...
Irwin Simon: You know, the cannabis industry in the US is over 40 plus billion dollars in total size. So there's a big, big, big market out there. You know, you look at the total feeling of the street out there and the size, just to the crafting the street. There's a big business out there.
Irwin Simon: The look of the well-missed and intriguing, some of the stuff that we're doing with Hampton at 311% in the quarter
Irwin Simon: So we're well positioned.
Irwin Simon: If you come back and look at our balance sheet, and that's something I think that's heard a lot of other companies over there in the campus industry. We really have managed our balance sheet, many surpassed situations, many's paying down debt. You know, in the last quarter we paid down over 300 million dollars of our convertible debt.
Irwin Simon: So, you know, we're focus on this and pulling all this together.
Speaker Change: We're only happy with our soccer performance, no, but I don't think it reflects of what this country has done over the last five years.
Speaker Change: and how we hit together some great brands.
Speaker Change: Great people, a great strategy, and how we're diversified out there, and you know, we're a global company in the CTG industry. So, you know, I feel there's exciting times ahead.
Speaker Change: You have great friends, you have a really committed teeth.
Speaker Change: We have a tight, tight strategy out there. We have great partners.
Speaker Change: With our distributors, our retailers, our consumers who were marking too, and last but not least, you know, our aim is to please our shareholders and reward our shareholders.
Speaker Change: With that, thank you very much and enjoy your day, go med school Yankees, and you go to city field, you'll find our beer, you'll go to San Diego, you'll find our beer, so we want stadiums that are in the playoffs that are selling our beer, so with that, be safe out there and thank you for joining us.