Q1 2026 Tilray Brands Inc Earnings Call

All lines have been placed on mute to prevent any background noise.

After the Speakers' remarks, there will be a question and answer session for analysts conducted via audio.

I'll now turn the call over to MS Bear in Nevada, Tilbury brands Chief Corporate Officer. Thank you you may now begin.

Thank you operator, and good morning, everyone by now you should have access to the earnings press release, which is available on the investors section of the jewelry brands website at <unk> Dot Com and has been filed with the SEC and theater.

Please note that during today's call, we will be referring to various non-GAAP financial measures. They 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 GAAP.

The earnings press release contains a reconciliation of each non-GAAP financial measure to the most comparable measure prepared in accordance with GAAP. 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 prove to be incorrect.

Actual results could differ materially from those described in those forward looking statements.

The tax in our earnings press release includes many of the risks and uncertainties associated with such forward looking statements.

Today, we will be hearing from key members of our senior leadership team beginning Irwin Simon Chairman and Chief Executive Officer, who will provide opening remarks and commentary followed by Carl Merton Chief Financial Officer, who will review our financial results for the first quarter of fiscal year 2026, and now I'd like to turn the call over to <unk>.

Chairman and CEO Irwin Simon thank.

Thank you Darren and good morning, everyone and thank you for being here for our Q1 results.

Q1 of fiscal 2026 was a testament to the significant momentum <unk> built across our businesses over the years I'm proud to report that our strategic focus is continuing to strengthen our profitability our balance sheet and leveraging our global platform to drive.

Innovation in cannabis beverage and wellness and continued to deliver solid results for our shareholders I want to extend my sincere gratitude to our shareholders for their ongoing support and belief until Ray's vision.

It is encouraging to see our stock with great strength this quarter and return to full NASDAQ compliance, notably in the months of August and September killed.

<unk> traded well over 1 billion shares each month, highlighting the tremendous interest in our company and not a lot of companies have a 1 billion shares trading on a monthly basis we.

We sincerely thank our shareholders for their continued confidence in our strategy and their commitment to investing in our company.

<unk> and our long term vision and what drives US forward now go out there and buy some of our products.

Notably during the quarter, we achieved net income of one 5 million.

And earnings per share of zero, highlighting our commitment to sustainable growth.

Operational efficiency, we achieved revenue growth across all our business segments with the exception of the beverage segment, which we remained flat because of deliberate decisions to optimize our craft beer SKU portfolio under project for 'twenty overall.

Overall total revenue increased by 5% year over year to a Q1 record net revenue of $210 million fueled by double digit growth in our Canadian adult use and our international cannabis business, which delivered 12% and 10% growth respectively.

We also continue to strengthen our balance sheet by reducing our outstanding debt by $7 $7 million this quarter.

Bringing our net debt to EBITDA ratio.

Zero 0.7 times cash too and our cash equivalent to $265 million.

Our results are underpinned by our deep understanding of product innovation and evolving what consumers prefer this expertise allows us to shape innovative offerings and not only meet current demand, while we anticipate future needs keeping till right at the forefront of the cannabis beverage.

And wellness markets today till Ray owns and operates more than 40 unique brands in over 20 countries and we are the predominant global cannabis leader trusted by patients medical professionals and governments in over 20 countries and number one Canadian command cannabis producer by revenue.

Fourth largest craft beer producer in the United States and a market leader in branded hemp products across North America with our portfolio of high protein hemp snacks and better for you products holding nearly a 60% market share and now a leader in the new exciting hemp derived delta nine.

THC beverages across the U S.

We have built a diversified global platform that is a leader in every industry, which we compete let me briefly review each business.

Our cannabis business as I said grew 5% year over year to $65 million.

Globally. The cannabis industry continues to evolve until Ray has the cultivation of manufacturing agility at the right cost to compete and lead in any commercial markets around the world recent developments in the U S have strengthened our optimism around rescheduling of medical cannabis and we have seen in other countries as.

We've seen in other countries around the world, We believe rescheduled Lee would enhance our patient access and improve the quality of patient care promote scientific research and support responsible regulatory framework the medical cannabis industry in the U S. Currently estimated to be at least a $10 billion market.

Which would create a potential opportunity for til rated capture at least a 3% to 5% market share representing a significant $3 million to $500 million business opportunity. We've identified multiple pathways to participate in the U S medical cannabis industry positioning ourselves.

To take advantage of this substantial growth potential when it happens in Q1, our Canadian cannabis business delivered strong results kilroy reinforced its position as Canada's largest legal cannabis company by revenue with Q1 revenue up 4% year over year to 51 million.

In the adult use channel <unk> was the top five licensed producer we grow and Mark we grew in market share closing the gap to the number one LP and market share by 53 basis points. We held the number one position in key categories, such as pre rolls beverages oils chocolate edibles and by the end of the quarter.

We also reached the number one spot in flower, while maintaining our top 10 positions across all categories Congratulations to <unk> T.

We believe our extensive scale represents a significant competitive advantage within the Canadian market, where we manage approximately 5 million square feet of cultivation space and currently maintain 210 metric tons of cannabis in production with additional capacity readily available this position us to effectively meet.

Demand. Furthermore, kill rate is well prepared to supply both European and U S markets as regulatory framework develops these markets.

<unk> to expand in Canada, we also foresee substantial potential as regulatory reforms may lead to transform developments such as.

Expanding cannabis in health care unlocking new opportunities through proposed cannabis health products and broader insurance coverage, making medical cannabis more accessible to patients.

On premise consumption for THC beverages, which I believe is big a rollout of onsite consumption to drive responsible use and create a vibrant experimental cannabis bedroom beverage market.

And of course regulatory modernization, which we've been talking about updating the outdated policies that restrict competitive competitiveness and paving the way for innovation and growth in Canadian cannabis industry, turning to our international business, Our international cannabis revenue grew 10% year over year to <unk>.

$13 4 million and this is with not being able to obtain permits in Portugal to allow us to ship around the rest of the countries and we remain uniquely positioned to gain market share as a global consumer preferences and the regulations evolve.

In Germany, we continue to expand our commercial medical cannabis portfolio and are actively leveraging our til ray medical and Cc pharma distribution network across pharmacies throughout the country to drive further growth looking ahead, we expect to increase our medical cannabis distribution footprint by threefold.

In fiscal 2026 significantly enhancing our reach and impact within the German pharmaceutical market and we have that access through cc pharma and.

In Italy, our Italian subsidiary subsidiary <unk> Group received a first license from the Italian Ministry of health to distribute medical cannabis flower for therapeutic use we also partner with <unk>, a leading Italian pharmaceutical company to expand access to.

Medical cannabis extracts and provide targeted education through our national network of medical and scientific professionals.

We continued to expand our growing capabilities in both Portugal, and Germany, strengthening our EU GMP certified cultivation infrastructure and to meet evolving global demand. Currently we produce 21 metric tons of medical cannabis flower in Europe and have the capacity to significantly increase.

The amount as demand continues to grow.

Our expanded growing operations not only supports our leadership in established markets, but also positions us to rapidly respond to the regulatory environments open across Europe and way beyond.

European Cannabis reform continues to progress and we're seeing that and we're excited to witness important developments like the European Union Chemical project and Spain's recent approval of medical cannabis two <unk> is proud to already to be involved in medical cannabis research in Spain through our partnership with <unk>.

University of Madrid, supporting advancements in patient care and responsible regulatory regulations across Europe now onto our distribution our European medical distribution business Cc pharma continues to grow with revenue, increasing 9% year over year to $74 million.

This segment remains a significant driver of our European cannabis operations and our infrastructure provides a strategic advantage that enable us to capture increased market share as both the regulatory environment and industry landscape evolves across Europe, and as I said before we have access to over.

13000, drugstores within the German market.

We remain confident in our global expansion strategy with til Ray well positioned to drive international growth and leveraging emerging opportunities across Canada, cannabis beverage and our wellness business.

International beverage, which is a new business for us building on our international footprint, our infrastructure our growth strategy, we will be accelerating the expansion of our non alcoholic beverages portfolio across multiple international markets, We expect our brand hi, Bob liquid love.

Runner's high to gain traction with consumer opportunities, we built a dedicated team focused exclusively on servicing our international customers.

This specialized team will ensure that our portfolio of leading craft brands is tailored to the tastes and expectations of our global consumers. While also supporting our long term growth in high potential markets worldwide.

By leveraging our established distribution networks and Brown brand building expertise, we are well positioned to capture growth opportunities in this fast emerging category and delivering exciting new products to the international markets and the demand for them is high.

Notably we have already secured a distribution partner in the UK for highwall, ensuring rapid market entry and strong support for the brand in this key region.

Additionally, on the beer side.

We recognize the growing demand for American craft beers in the international market to further capitalize on this momentum we're actively exploring all opportunities to grow this business, including international manufacturing opportunities potential acquisitions to expand our reach and better serve our <unk>.

Global customers.

And our U S beverage business, we continue to make progress against our beer integration optimizing our strategy and our project for 'twenty.

We see long term potential for the beverage category based on the diversification of our offerings and the superior products. We produce we've improved operations leveraged acquired brands supporting positive performance, notably many of these brands still reacquired where previously in decline.

And are now showing promising results with healthier growth trends and improved overall performance as we move to regain sales.

Authorizations at retail that were loss this.

This turnaround underscores the success of our focused strategy and our commitment to revitalizing and growing our beverage beer portfolio.

Through project for 'twenty, we've realized $25 million in annual savings moving closer.

So our goal of $33 million, we've continued to work closely with our distributors to concentrate on promoting strong brands in each of our markets in the quarter, we experienced growth across key brands and regions shocked op. The Companys third largest brand was among the fastest growing craft brand with notable increase.

And both dollar sales and market share driven in part by the successful launch of its variety pack, which has grown to be the number eight most popular new craft beer nationally.

<unk> continue to improve for shock with a 30 point dollar trend improvements as Tory acquired the brand in 2023.

In the southeast shocked topic shelved with a 49% jump in dollar sales Sweetwater day trip IPA stood out as one of the top new items in the region in northeast Montoc maintained its leading position in Metro New York and gained market share nationally with continued demand for its wave chaser IPA.

<unk> brewery led crop share gains in Colorado with its top avalanche seasonal and juice dropped and brand positioning double digit growth and last but not least red oak outperform regional craft beer brands propelled by Big Ballard Imperial IPA strong volumes and our velocity gains while 10 barrel public.

<unk> 18 packs dominated craft sales in Oregon, and 5% of all craft volumes.

We also expanded our.

Partnerships, including co brand craft beer with the Oregon Ducks perfect for colleagues football season, and a new partnership with <unk> for the launch of shock top twisted pretzel wheat beer you got to try it it's great. We're making beer fund again, and these partnerships and co branding opportunities offer significant.

Runway for us to widen our markets.

In spirits category, which has been tough we have introduced several world class innovation, including Mark <unk>, our new line of non alcohol spirits and cause a break in the the keyless space. We've also introduced mountain shop, a unique beverage plan, which it may take mushrooms available in.

Pouches, which is unique packaging format to enhance the shopper experience and capture the free spirit essence of the Rocky Mountains. Just in time for ski ski season, we also kicked off our fifth year partnership with the Denver Broncos with a new line of spirits, including limited editions Broncos Honey whiskey and <unk>.

Broncos Orange cream shuttle ready to drink cocktails.

And the non out category where crowd.

Without our non our beer brand Runner's high which we only launched in fiscal 2025 is now recognized as one of the top 15 brands and non out beer and ranks the fourth fastest growing non out beer and a hot category in the southeast selling across 4500 distribution points.

Following the success of our Hampshire arrive Delta nine THC beverages, we've expanded fizzy Jane and happy flower product line to include 10 milligram formats complementing the existing five milligrams offerings and the consumers want these products the innovative HD.

Nine category, leveraging our craft beer infrastructure and distribution networks, enabling us to deliver high quality products to consumers across 14 states, whether theyre new to the category are seeking enhanced experience. We have established partnership with retailers nationwide for HDD nine brands.

And now offer distribution two prominent wine liquor outlets such as total wine <unk> more ABC fine wine and spirits. In addition in Q1, we saw further growth in regional grocery chain grocery channels, including shop, right stew, Leonard's and Winn Dixie we continue.

On building on this positive trajectory as we move into Q2 and the rest of the year today, our beverage business operates more than 20 brands, including 15 American American craft beer brands across seven network manufacturing facilities, and 16 brew pubs were well diversified across craft beer.

Spirits non out and now HD nine and energy energy drinks, we know that there is plenty of opportunity for growth in the beverage category. We have the right leadership and we're pursuing the right growth strategy and I am tremendously excited about the future and the opportunities.

In the large beverage category.

Last but not least now turning to our wellness business, which is near and Dear to my heart, our wellness business had a strong quarter growing revenues to over $15 million, we continued to expand our wellness portfolio with many launches of new offerings new crackers.

New hemp portfolio, new other products that are available at whole foods and other retailers. We are now in over 17000 retailers across the U S. These offerings are also launched in Amazon and many other law online retailers I'm highly confident until raised outlook for the remainder of <unk>.

1026, and beyond with regulatory environments in our industry poised for meaningful evolution I fully expect positive change ahead and I'm certain in our ability to adapt swiftly and we will strategically our proven approach robust product portfolio and exceptional team.

<unk> us to seize every single opportunity, especially in wellness, where we see us with significant expansive opportunities and we're committed to unlocking new possibilities through continuous innovation portfolio expansion targeted investments, including the opportunities.

When strategic acquisitions happened, while we made considerable progress we recognize we have not yet reached our full potential and we're far from it and the wellness space and.

And that is the same with our cannabis business and our beverage business Theres lots of room and lots of white space for us with that I will now turn the call over to Karl for an in depth look at our financials Carl Thank.

Thank you Erin. Please note that we present, our financials in accordance with U S GAAP and in U S dollars.

Throat artist discussions, we will be referring to both GAAP and non-GAAP adjusted results and we encourage you to review the reconciliation contained within the press release of our reported results under GAAP with the corresponding non-GAAP measures.

Now looking at our results we are reporting a record first quarter net revenue.

Net income and a significantly improved adjusted free cash flow for the period.

Further we are reaffirming our 2026 guidance for adjusted EBITDA.

Net revenue for the first quarter was a record $210 million.

A 5% increase year over year.

This growth was driven primarily by increased cannabis sales in both Canada, and our international markets and increased revenue in our distribution segment.

Cannabis revenue increased 5% year over year to $64 $5 million driven.

Driven by 12% growth of adult use gross revenue and 10% growth in international candidates.

Higher excise taxes and declines in wholesale cannabis offset those double digit results.

We see material potential for the international segment and expect continued growth. Once we received several permits that are currently backlog in a few European countries.

Beverage revenue reached $55 $7 million, driven by innovation and impacted by continued SKU rationalization.

We advanced project for 'twenty and integrated acquired brands.

Although craft brands and spirits faced challenges new products contributed 2% to Q1 revenue supporting our belief in the beverage categories long term growth.

Wellness revenue increased 3% year over year to $15 2 million.

Because of our strategic focus on continued innovations with highball energy, our natural energy drink high.

High protein supersedes and better for you breakfast and snacking, including the launch of two new offerings for Manitoba harvest at whole foods.

Distribution revenue increased 9% year over year to $74 million in the quarter, primarily as a result of a stronger euro.

From a contribution perspective, 31% of net revenue was generated by our canvas business.

27% was generated by our beverage business.

7% was generated by our wellness business and.

And 35% was generated by our distribution business.

This compares to contributions of approximately 31% for cannabis, 28% for beverage, 7% for wellness and 34% for distribution in the last fiscal quarter.

As our international cannabis business continues to expand we expect to see higher contributions from our Canada segment over the remainder of the year.

Gross profit for the quarter was $57 5 million compared to $59 $7 million in the prior year period.

Gross margin was 27% as compared to 30% last year. This decline was driven by lower margins in our beverage and Canada businesses.

Looking at gross margin by segment.

<unk> gross margin was 36% compared to 40% last year as a result of a higher mix of sales in lower margin categories.

Such as infused pre rolls in Vegas, where we re entered some previously margin prohibitive CAGR orders.

We believe the decline this quarter is temporary and the actions we have taken to drive profitability and improve margins will be effective in the long term.

Beverage gross margin was 38% compared to 41% last year.

The decrease in gross margin is due to the inclusion of craft acquisition to sales, which have generally been lower margin.

While this gross margin was flat year over year at 32%.

Distribution, Mark gross margin was 11% compared to 12% last year based on changes in product mix.

Net income was $1 $5 million or zero cents per share compared to a net loss of $34 7 million.

Our negative 4% per share in the prior year period.

Adjusted net income improved to $3 9 million or zero cents per share compared to an adjusted net loss of $6 million or negative <unk> <unk> per share in the prior year improvements.

Improvements in both metrics were a function of reduced SG&A costs, including amortization.

Adjusted EBITDA for the quarter was $10 2 million.

Compared to $9 $3 million last year.

Cash flow used in operations improved significantly to negative $1 3 million for the quarter from negative $35 3 million last year, representing a positive change of almost $35 million.

We continued to strengthen our balance sheet this quarter in terms of debt and cash positions.

During the quarter, we raised $22 $5 million under our ATM program, primarily after our stock increased to over $1 per share.

Further we exchanged $5 million of our convertible notes for equity early in the quarter as we already discussed during our last earnings call.

During the quarter, we reduced our outstanding debt by $7 7 million.

Bringing our net debt position down to $3 9 million.

And our net debt to trailing 12 months adjusted EBITDA ratio to 0.07 times, all while ending the quarter with $265 million in cash plus another $1 million and digital assets.

These stronger debt and cash positions provide tillery with greater flexibility for strategic opportunities and.

And we intend to continue reducing our debt and further strengthen our balance sheet as the year progresses.

As already discussed our confidence in our business our strategy and our team has never been higher and we are pleased to reaffirm our 2026 guidance anticipating adjusted EBITDA between 62% and $72 million.

We can now open the line for Q&A.

Thank you if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

You May press star two if you'd like to remove your question from Macau.

Participants using speaker equipment, it may be necessary to pick up your handset before question Mr. Keys, we ask.

Each keep to one question and one follow up thank you.

Our first question comes from the line of Aaron Grey with Alliance Global Partners. Please proceed with your question.

Hi, good morning, and thank you very much for your questions here today.

First question for me I, just wanted to talk a little bit about international growth opportunities in the near term.

You offered some commentary in your prepared remarks I just wanted to make sure I was understanding them correctly. So first of all just further interesting in terms of where we stand today in terms of the impacts on some of the permit delays that you've been having and then some commentary you provided in terms of the growth specifically I think you were referring to.

Medical cannabis is up three <unk> in fiscal year, 2006, and talked about leveraging cc pharma potential I just wanted to make sure I was understanding that correctly or were there. Some things that you are looking to leverage with TC farm bids that you are not historically, so just any additional commentary on that would be helpful. Thank you.

Great.

So a couple of your questions number one in.

In regards to the permits.

We spent a lot of time with the Portuguese government. We've spent a lot of time reports Google We're finally seeing permits.

Permits coming through.

And.

I feel good about that.

The next big issue that we run into is the quota in Germany, and just Germany opening up an increasing.

More imports into the German market, which we think ultimately that will happen, but it's not business going away. It just may shift from second quarter into third quarter.

As the new quotas move into place in 2026, so with that I feel we've made a lot of headway into the Portuguese permit situation and we've got more permits in the last two weeks and we probably got in the last.

Two months or so.

In regards to a couple of things the demand in Europe is there.

And with that it's the <unk>.

<unk> ability to grow.

And with the with the team and now we have moved some of the Canadian team.

Into international.

We look to grow in our facility today in Portugal is running about 50% we have the opportunity to double that.

At 40 metric tons, and that's something we're working on.

The other thing is to really increase our grow to probably six or eight metric tons in our German facility and also where the opportunity is in regards to.

Bringing product EU GMP product in from the Canadian market.

In regards to Germany, what I've said and what I was working through.

Cc pharma when we acquired it it was a big part.

Our license and it was it was something that there was an opportunity and what we're what we're seeing is some great expansion with Cc pharma Cc pharma delivered a 13000 drug stores today and that is regular medicines and the good thing is we're also seeing some.

Operator: Thank you. 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. We ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Aaron Gray with Alliance Global Partners. Please proceed with your question.

Q.

Good price increase and some good opportunities on the Cc pharma distribution business, but more importantly, as we integrate these businesses.

You may press *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 keys.

We ask you each. Keep to 1 question and 1, follow-up. Thank you.

It is on the sales side and the distribution side, we see Cc pharma.

Our first question comes from the line of Aaron Grey with Alliance Global Partners. Please proceed with your question.

[Analyst 1]: Hi, good morning, and thank you very much for the questions here today. First question for me, I just want to talk a little bit about international growth opportunities in the near term. You offered some commentary in your prepared remarks, so I just want to make sure I was understanding them correctly. First of all, just further understanding in terms of where we stand today in terms of the impacts on some of the permit delays that you've been having. Some commentary you provided in terms of the growth. Specifically, I think you were referring to medical cannabis business up 3X in fiscal year 2026 and talked about leveraging CC Pharma potentially. I just want to make sure I was understanding that correctly. Were there some things that you're looking to leverage with the CC Pharma business that you were not, you know, historically?

Being vertical integrated and distributing our medical cannabis.

To a lot more of these drug stores in the Germany market and Thats, a big opportunity for us.

Thanks, Matt that's helpful color there.

Question for me just in terms of rescheduling opportunities in the U S.

You offered some commentary.

Talking about seeing a number of different avenues that you guys are evaluating just curious could you provide some color there.

If things were to open up and canvas was rescheduled to schedule III do.

Do you feel like you already have the infrastructure within the existing business to be able to capture some opportunity organically or do you feel like some things that might need to be done vis vis acquisition for.

[Analyst 1]: Any additional commentary on that would be helpful. Thank you.

Irwin Simon: Great. A couple of your questions. Number one, in regards to permits, we spent a lot of time with the Portuguese government. We've spent a lot of time in Portugal. We're finally seeing permits coming through, and I feel good about that. The next big issue that we run into is the quota in Germany and just Germany opening up and increasing more imports into the German market, which we think ultimately will happen. It's not business going away. It just may shift from second quarter into third quarter as the new quotas move into place in 2026. I feel we've made a lot of headway into the Portuguese permit situation, and we got more permits in the last two weeks than we probably got in the last two months or so. In regards to a couple of things, the demand in Europe is there.

Hi. Good morning and thank you very much for your questions here today. Um, first question for me, I just want to talk a little bit about International growth opportunities in the near term. Um, you offered some commentary in your prepared remarks. I just want to make sure I was understanding them correctly. So uh, first of all, just uh, further understanding in terms of where we stand today, in terms of the impacts on some of the permit delays that you've been having and then some commentary you provided in, in terms of the growth specifically, I think you were referring to um medical cannabis business up 3x in fiscal year 2026 and talked about leveraging CC Pharma. Potentially just want to make sure I was understanding that correctly were there. Some things that you're looking to leverage with the CC Farm business that you are not, you know, historically, so just any additional commentary on that would be helpful. Thank you.

To capture on that opportunity I know theres a lot in flux in terms of how that can actually look and it's got a personnel, but just any commentary on that would be greatly appreciate it. Thank you.

Great. Um, so a couple of your questions, number 1, um, in regards to the permits

Melissa and as I've said before we have 5 million square feet. We have today over 200 plus million metric tonnes cannabis grow in Canada.

Uh, we spent a lot of time with the Portuguese government. We've spent a lot of time in Portugal; we're finally seeing, um, permits coming through.

We have a great Canadian medical infrastructure in Canada already servicing the Canadian market gaming market is 40 million people. So we service clinics up there we have a group of it infrastructure themselves to the Canadian market today.

Talking about Europe.

As we look to sell and objective is to sell close to $100 million of medical cannabis in Europe, which is all medical cannabis.

And there is plenty of research that we're doing over there for inside for sleep for for cancer for epilepsy, So taking that knowhow and transferred into the U S is something that is readily available and last but not least.

I I feel good about that where, you know, the next big issue that we run into is the quote in Germany and just Germany opening up and increasing you know more Imports into the German Market which we think ultimately that will happen. But you know it's not business going away, it just may shift from you know second quarter and the third quarter um as as the new quote is move into place in 2026. So with that I feel we've made a lot of Headway into the Portuguese, Perma situation and we got more permits in the last 2 weeks than we probably got in the last you know, 2 months or so.

Irwin Simon: With that, it's the availability and the growth. With the team, and now we have moved some of the Canadian team into international, we look to grow in our facility today in Portugal. It's running about 50%. We have the opportunity to double that at 40 metric tons, and that's something we're working on. The other thing is to really increase our growth to probably six or eight metric tons in our German facility. Also, the opportunity is in regards to bringing product, EU GMP product in from the Canadian market. In regards to Germany, what I've said and what I was working through, CC Pharma, when we acquired it, was a big part of our license, and it was something that there was an opportunity. What we're seeing is some great expansion with CC Pharma. CC Pharma delivers to 13,000 drug stores today, and that is regular medicines.

Um, in regard to a couple of things, the demand in Europe is there.

If there was an opportunity to partner with a pharma company or there was something opportunity for us to buy we'd be ready and willing to enable to do that as we have the balance sheet potentially.

We have the balance sheet to do that so whether it's taking our current infrastructure. Our current people our current knowhow our crude grow our current research.

Our current.

<unk> genetics for medicine.

We're partnering with a pharma company or.

We're buying something is something we are open and ready to do.

Okay, great. Thanks for that color their own I'll jump back into the queue.

To probably 6 or 8 metric tons in our German facility, and also where the opportunity is in regards to, you know, bringing product, eug MP product, in from the Canadian market.

Thank you.

Thank you. Our next question comes from the line of Bill Kirk with Roth Capital Partners. Please proceed with your question.

Hey, good morning, everyone.

On the balance sheet I see the $1 million and digital assets I guess, where those investments you made or was a crypto that came in from customer payments and then taking a step back on the topic, I guess, which coins tokens currencies do you prefer and what are your cash allocation plans to the strategy.

Irwin Simon: The good thing is we're also seeing some good price increase and some good opportunities on the CC Pharma distribution business. More importantly, as we integrate these businesses, whether it is on the sales side and the distribution side, we see CC Pharma being vertically integrated and distributing our medical cannabis to a lot more of these drug stores in the German market. That's a big opportunity for us.

In your cash generation and your equity issuance history.

So.

Um, in regards to Germany, what I've said and what I was working through, you know, CC Pharma when we acquired it, it was a big part, uh, our license and it, it was, it was something that there was an opportunity. And what we're what we're seeing is some great expansion, with CC's Department CC Pharma delivers, the 13,000 drugstores today, and that is regular medicines. And good thing is, we're also seeing some good price increases, some good opportunities on the CC Pharma distribution business. But more importantly, as we integrate these businesses,

That.

<unk> acquisition of <unk> that we acquired.

Three four months ago.

Whether it is on the sales side or the distribution side, we see CC Pharma.

And with that I'm going to let Lloyd breath right just take you through some of our strategies that we're looking at from Bitcoin today as we see relevance with our current investors are current users are also.

be in vertical integrated and distributing our medical cannabis.

To a lot more of these drugstores in the German market, and that's a big opportunity for us.

[Analyst 1]: Thanks, everyone. That's a helpful color there. Second question for me, just in terms of rescheduling opportunities in the U.S., you offered some commentary talking about seeing a number of different avenues that you guys are evaluating. Just curious, could you provide some color there? If things were to open up and cannabis was rescheduled to Schedule III, do you feel like you already have the infrastructure within the existing business to be able to capture some of the opportunity organically, or do you feel like some things might need to be done, you know, vis-à-vis acquisition to capture on that opportunity? I know there's a lot in flux in terms of how that could actually look in a Schedule III scenario, but just any commentary on that would be greatly appreciated. Thank you.

Italy users and we see opportunities as I've said in previous.

<unk>.

As I've said in previous.

Meetings in previous.

Releases that we see opportunities.

Thanks to everyone, that was helpful. Caller, their second question for me, just in terms of rescheduling opportunities in the U.S. Um, you offered some commentary talking about seeing a number of different avenues that you guys are evaluating. Just curious, could you provide some color there? Um, you know, if things were to open up and cannabis was rescheduled to Schedule 3.

With bitcoin and purchasing our products and purchasing our beer products and we see opportunities with our current investors Lloyd hi, everyone. Good morning.

We actually are.

Invested in Big point, and we're also looking at.

Irwin Simon: As I said before, we have, you know, 5 million square feet. We have today over $200 million plus metric tons of cannabis grown in Canada. We have a great Canadian medical infrastructure in Canada already servicing the Canadian market. The Canadian market is 40 million people, so we service clinics up there. We have a group and an infrastructure that sells to the Canadian market today. Talking about Europe, you know, as we look to sell, and the objective is to sell close to $100 million of medical cannabis in Europe, which is all medical cannabis. There's plenty of research that we're doing over there for anxiety, for sleep, for cancer, for epilepsy. Taking that know-how and transferring it to the U.S. is something that's readily available.

do you feel like you already have the infrastructure within the existing business uh to be able to capture some of the opportunity organically? Or do you feel like some things might need to be done? You know, Visa V acquisition uh to capture on that opportunity. I know there's a lot in flux in terms of how that could actually look and it's scheduled 3 scenario but just any comments on, that would be greatly appreciated. Thank you.

Some other assets such as ethereum in Solana.

One other thing part of our strategy. That's core is enabling our web sites. So that we can actually accept bitcoin. So that's going to be part of our strategy to ship. Later. This year. Additionally, we are looking at some investment opportunities from a marketing perspective as well as.

Listen, as I said before, we have, you know, 5 million square feet. We have today over 200 million metric tons of cannabis grown in Canada.

Looking at token rising potentially some stock.

And with that I, just want to make sure our Elisa.

Um we have a great Canadian medical infrastructure in Canada. Already servicing the Canadian Market. Canadian Market is 40 million people, so we serve as clinics up there. We have a group of the infrastructure of the cells to the Canadian market today.

We're.

We see the opportunities we see the synergies with our products with our investors.

We're not becoming that crypto company out there, but we see tremendous synergies as we expand till right into many new markets with many opportunities from that and we're working with a lot of partners out there and making sure we have the right people that understand.

Um talking about Europe um you know, as we look to sell and objective is to sell clothes to 100 million dollars of medical cannabis in Europe, which is all medical cannabis. And there's plenty of research that we're doing over there for anxiety, for sleep for, for cancer, for epilepsy. So taking,

That know how.

Irwin Simon: Last but not least, if there was an opportunity to partner with a pharma company, or there was something opportunity for us to buy, we'd be ready and willing and able to do that as we have the balance sheet potentially, you know, as we have the balance sheet to do that. Whether it's taking our current infrastructure, our current people, our current know-how, our current growth, our current research, you know, our current genetics for medicine, or partnering with a pharma company, or buying something, it's something we're, you know, open and ready to do.

And how to do it.

And transferring to the U.S. is something that's readily available, and last but not least.

Yes.

Thank you and going back to to Germany, Europe I guess.

If there was an opportunity to partner with a pharma company.

When you're servicing those markets how much of the product has grown today in Portugal, how much is coming from your broken coast GMP facility in Canada, and how much that ends up being sold in Germany, and Europe is coming from a non GMP facility of yours in Canada, and then I guess the bigger.

Question, what are the risks that that Germany changes the way they treat product conversion our product coming from Portugal.

Or there was something opportunity for us to buy. We'd be ready and willing to enable to do that as we have the balance sheet, potentially, you know, as we have the balance sheet to do that. So whether it's taking our current infrastructure, our current people, our current know-how, our current growth, our current research, you know, our our current genetics for medicine,

Or partnering with a Pharma company.

[Analyst 1]: Okay, great. Thanks for that color there, Irwin. I'll jump back into the queue.

Or buying something, it's something where you know, open and ready to do.

So listen.

One of them the majority of our product today that is sold in Europe is coming from our facilities in Europe, Okay, and when product does come from Canada. It goes into Portugal. It then goes to an EU GMP certified facility. So everything sold there is EU GMP certified okay.

Irwin Simon: Thank you.

Okay, great. Thanks for that code there. I'll jump back into the queue.

Operator: Thank you. Our next question comes from the line of Bill Kirk with Roth Capital Partners. Please proceed with your question.

Thank you.

Blair MacNeil: Hey, good morning, everyone. On the balance sheet, I see the $1 million in digital assets. Were those investments you made, or was it crypto that came in from customer payments? Taking a step back on the topic, which coins, tokens, currencies do you prefer, and what are your cash allocation plans to the strategy, given your cash generation and your equity issuance history?

Thank you. Our next question comes from the line of Bill Kirk with Roth Capital Partners. Please proceed with your question.

With that again.

Theres lots of possibilities.

We do have a good size.

Jeremy facility that can grow cannabis, we're one of the few if.

And I'm not sure why in the EU that Germany would not allow European products to be shipped into the German marketplace. So that ultimately is something we're continuously talking to the German government about and if they did that there is not.

Hey, good morning everyone. Um, on the balance sheet, I see the $1 million in digital assets. I guess, were those investments you made, or was it crypto that came in from customer payments? And then, taking a step back on the topic, I guess, which coins, tokens, or currencies do you prefer? What are your cash allocation plans in relation to the strategy, given your cash generation and your equity issue and history?

Irwin Simon: That is acquisition of Bitcoin that we acquired three, four months ago. With that, I'm going to let Lloyd Brathwaite take you through some of our strategies that we're looking at from Bitcoin today as we see relevance with our current investors. Our current users are also, you know, Bitcoin users, and we see opportunities, as I've said in previous meetings and previous releases, that we see opportunities, you know, with Bitcoin in purchasing our products, in purchasing our beer products, and we see opportunities with our current investors. Lloyd?

So that acquisition of Bitcoin that we acquired 3 to 4 months ago.

Um,

<unk> role in German market today to be able to supply the market. So its something that it would be very difficult if the German authorities change the market does it change the way products come into Germany.

Thank you for that.

Okay.

Thank you. Our next question comes from the line of Robert Moskow with TD Cowen. Please proceed with your question.

Um, and with that, I'm going to let Lloyd breathe, right? Just take you through some of our strategies that we're looking at from Bitcoin today. As we see relevance with our current investors, our current users are also, you know, Bitcoin users. And we see opportunities, as I've said in previous.

Hi, Good morning, guys. This is victor on for Rob Moskow two questions for me. Please.

Can you give us state in the Union.

The Canadian adult use market.

Curious on your thoughts on market maturity and your pricing power in the context of the 5% growth you saw this quarter.

Lloyd Brathwaite: Hi, everyone. Good morning. We actually invested in Bitcoin, and we're also looking at some other assets such as Ethereum and Solana. One of the things, part of our strategy that's core, is enabling our websites so that we can actually accept Bitcoin. That is going to be part of our strategy later this year. Additionally, we're looking at some investment opportunities from a marketing perspective, as well as looking at tokenizing potentially some stock.

How much of that maybe it looks like volume versus price.

In purchasing our beer products. And we see opportunities with our current investors Lloyd. Hi everyone. Uh, good morning. So yeah. We we actually, um, invested in Bitcoin and we're also looking at

All right.

So and Blair.

Blurry around the line fuel.

Miller head of our Canadian market Blair do you want to jump in and take that and I can add to it.

Absolutely. Thanks, Edwin yes, so in the in the quarter, we saw overall market pricing down one 3% and volume was up six 5% for us our pricing was actually up 2% and our volume was ahead of the market.

Irwin Simon: With that, I just want to make sure, listen, we see the opportunities. We see the synergies with our products, with our investors, and we're not becoming that crypto company out there, but we see tremendous synergies as we expand Tilray into many new markets and many opportunities from that. We're working with a lot of partners out there and making sure we have the right people that understand crypto and how to do it.

Some other assets such as Ethereum and Solana. One of the things that is part of our strategy that's core is enabling our websites so that we can actually accept Bitcoin. So that's going to be part of our strategy later this year. Additionally, we're looking at some investment opportunities from a marketing perspective, as well as looking at tokenizing potentially some stock.

And, and, and you know, with that, I just want to make sure, listen, um, we're, we're...

It was a really strong order for us both on the pricing side and on the volume side.

As you saw we were the only LP in the top five to grow share in the quarter.

So very very strong results in terms of market maturity, what I would tell you is in the current regulatory environment, yes.

<unk> has slowed in terms of growth rate, but still very healthy growth rates in the market and I think what youll see is over the next few.

We we see the opportunities. We see the synergies with our products, with our investors. And we're we're not becoming that crypto company out there but we see tremendous synergies as we expand till right into you know, many new markets and many opportunities from that. And we're working with a lot of Partners out there and making sure we have the right people that understand crypto and how to do it.

Blair MacNeil: Thank you. Going back to Germany, Europe, when you're servicing those markets, how much of the product is grown today in Portugal? How much is coming from your Broken Coast GMP facility in Canada? How much that ends up being sold in Germany and Europe is coming from a non-GMP facility of yours in Canada? The bigger question is, what are the risks that Germany changes the way they treat product conversion or product coming from Portugal?

Quarters is that and Irwin kind of referenced this is that you will see the regulatory environment improve and I think youll see growth continuing to go.

Thank you, and going back to Germany, Europe, I guess.

Overall household penetration on cannabis in Canada still at a very low number so we see tremendous runway for growth in Canada within the regulatory framework.

Okay.

And it looks like I think almost.

Ill jump just jump on that for a second.

Canadian market was the first.

You know, when you're servicing those markets, how how much of the product is grown today in Portugal? How much is coming from your broken Coast GMP facility in Canada? And how much that ends up in in being sold in Germany and Europe is coming from a non-gmp facility of yours in Canada. And then the the I guess the bigger question, what are the risks that that Germany changes the way they treat products conversion or product coming from Portugal?

Irwin Simon: Number one, the majority of our product today that is sold in Europe is coming from our facilities in Europe, okay? When product does come from Canada, it goes into Portugal. It then goes to an EU GMP-certified facility. Everything sold there is EU GMP certified, okay? With that, again, there's lots of possibilities. We do have a good size, you know, a German facility that can grow cannabis. We're one of the few. I'm not sure why in the EU that Germany would not allow European products to be shipped into the German marketplace. That ultimately is something we're continuously talking to the German government about. If they did that, there's not enough growth in the German market today to be able to supply the market. It's something that it'd be very difficult if the German authorities changed the market, changed the way products come into Germany.

And as we go into our six year.

With that again from a regulatory standpoint, and what are we still sit with we're still sit with the high excise tax we're still sitting with watch lots of regulation, we have been through price compression. We've been through Covid, we have been through an illicit market. We've been through over 800 Lps that are out there.

So listen, I number 1, the majority of our product today that is sold in Europe is coming from our facilities in Europe, okay? And when product does come from Canada, it goes into Portugal; it then goes to an EU GMP-certified facility. So everything sold is EU GMP certified. Okay?

A lot of them gone away a lot of growth facilities and.

We've gone through educating the Canadian consumer on the benefits of cannabis.

And the legality of cannabis without an actuality being able to advertise.

And we have built our good supply today Blair Witch is at retail about a $250 million brand.

And from that but that's what we built over the last five six years, we have over 5 million square feet of grow we have the largest growth facility in Canada with 237 metric tons and maybe even more so the Canadian market has been a great pivotal point for us.

With that again, you know there's lots of possibilities. Um we do have a good-sized, you know, German facility that can grow cannabis. We're 1 of the few if um and I'm not sure why in the EU that Germany would not allow European products to be shipped into, you know, the German Marketplace. So, you know, that ultimately is something, we're continuously talking to the German, you know, government about. And if they did that, there's no

Not enough growth in the German market today to be able to supply the market. So it's something that would be very difficult. If the German authorities changed the market, it would change the way products come into Germany.

Now what we're hoping for is an excise tax there is some concessions, we're hoping that the Canadian provincial governments allow us to sell our drinks into.

Blair MacNeil: Thank you for that.

Irwin Simon: Okay.

Thank you for that.

Okay.

Operator: Thank you. Our next question comes from the line of Robert Mosco with TD Cowen. Please proceed with your question.

Thank you. Our next question comes from the line of Robert Moscow with TD Callum. Please proceed with your question.

Into other retail outlets like restaurants that need help or independent retailers or liquor stores.

[Analyst 2]: Hi, good morning, guys. This is Victor on for Rob Mosco. Two questions for me, please. First, can you give us a state of the union for the Canadian adult-use cannabis market? Curious on your thoughts on market maturity and your pricing power in the context of the 5% growth you saw this quarter. How much does that maybe look like volume versus price?

We're looking for changes in regards to where medical cannabis sold were sold directly through drug stores and that would change a lot for our Canadian market. So we look now for some big opportunities coming into the Canadian market and Meanwhile, Blair and his team have really put us in a good space there to really.

Hi, good morning guys. This is Victor long for Rob Moscow, uh, 2 questions for me. Please first, uh, can you give us a state in the Union? Uh for the Canadian adult use Market curious in your thoughts on Market maturity and your present power in the context of the 5% growth, you saw this quarter. Uh, how much is that maybe was like volume versus price?

Irwin Simon: Blair, you're on the line. Blair MacNeil, our Head of our Canadian Market. Blair, do you want to jump in and take that and I can add to it?

Move beyond and a good growth.

In regards to our products.

Blair MacNeil: Yeah, absolutely. Thanks, Irwin. Yeah, in the quarter, we saw overall market pricing down 1.3% and volume was up 6.5%. For us, our pricing was actually up 2% and our volume was ahead of the market. It was a really strong quarter for us, both on the pricing side and on the volume side. As you saw, we were the only LP in the top five to grow share in the quarter. Very, very strong results. In terms of market maturity, what I would tell you is in the current regulatory environment, volume has slowed in terms of growth rate, but still very healthy growth rates in the market. I think what you'll see over the next few quarters is that, and Irwin kind of referenced this, you will see the regulatory environment improve, and I think you'll see growth continue to go.

Got it thanks for the color and then my second question is so.

So, and Blair, Blair, you're on the line. Feel, um, blur, McNeil are ahead of our Canadian market. Blur, do you want to jump in and take that? I can add to it.

Beverage gross margin was about 70 bps letter than kind of we expected can you remind us of your plan on improving profitability.

Yeah, absolutely. Thanks, everyone. So, in the quarter, we saw overall market pricing down 1.3%, and volume was up 6.5%.

And that is and also where are you on that path that for 2000.

And what still needs to be done.

So.

As you saw we've taken $25 million of cost out I mean, there is more to go we've gone through and I think SKU rationalization.

$20 million of SKU rationalization, and there's more to go.

We've closed three facilities, so far so it come back in.

Acquisitions, we've acquired close to 12, we closed 12 brands.

We have close we had 10 facilities. We've had 18 group hubs and also we have over 900 plus distributors out there so bringing this all together under one management one infrastructure.

Blair MacNeil: Overall, household penetration on cannabis in Canada is still at a very low number. We see tremendous runway for growth in Canada within the regulatory framework.

And we're seeing progress, but theres a lot of wood to chop there yet to get those margins to where we need to do and whether it's the procurement of cans of procurement of tops.

Irwin Simon: I think, and I'll just jump on that for a second. You know, the Canadian market was the first. As we go into our sixth year with that, again, from a regulatory standpoint, what are we still sitting with? We're still sitting with a high excise tax. We're still sitting with lots of regulation. We've been through price compression. We've been through COVID. We've been through an illicit market. We've been through over 1,800 LPs that are out there. A lot of them gone away. A lot of growth facilities. We've gone through educating the Canadian consumer on the benefits of cannabis and the legality of cannabis without, in actuality, being able to advertise. We have built our good supply today, Blair, which is at retail, about a $250 million brand. From that, that's what we've built over the last five, six years.

For us, our pricing was actually up 2% and our volume was ahead of the market. So it was a really strong quarter for us both on the pricing side and on the volume side. Uh, as you saw, we were the only LP in the top 5, the gross share in its order. So very, very strong results. In terms of Market maturity. What I would tell you is in the current regulatory environment. Yes, you know, volume has slowed in terms of growth rate, but still very healthy. Growth rates in the market. And I think, what you'll see is over the next, uh, few, you know, quarters is that, uh, an Irwin kind of reference. This is that you will see the regulatory environment improve and I think you'll see growth continue to go. Um, overall household penetration on cannabis in Canada, still at a very low number. So, we see tremendous runway for growth in Canada within the regulatory framework.

And one of the biggest thing, which you heard me mentioned in my remarks, there are a lot of these brands as we were buying them and decisions were made by.

I'll just jump on that for a second. You know, the Canadian market was the first, and, you know, as we go into our sixth year.

By the previous owners.

We were be listed in a lot of retailers out there. So with that you saw major declines in these businesses and we missed the windows.

Getting these products in the stores now these windows.

We have opened up and getting these products now we're realistic in these retailers is something that we've been doing and that's why we're there.

Its shock top whether it's red hook, whether it's some of our other brands you are seeing the growth there and thats whats going to happen.

To get our gross margins up here and listen let's face it the beer category is not one of these categories out there right now.

Um, with that again from a regulatory standpoint and what are we still sitting with, we're still sitting with the high excise tax for still sitting with lots of regulations. We we've been through price compression, we've been through, Co we've been through an illicit market. We've been through over 1800 LPS that are out there a lot of them gone away, a lot of growth facilities and we've gone through educating the Canadian consumer on the benefits of cannabis, and the legality of cannabis. Without in actuality being able to advertise

And we've built our good supply today, Blair, which is at retail about a $250 million brand?

And we're fighting through it both on growth side innovation side, and I've said it from the beginning how do I make beer funded yet.

Irwin Simon: We have over 5 million square feet of growth. We have the largest growth facility in Canada with 237 metric tons and maybe even more. The Canadian market has been a great pivotal point for us. Now what we're hoping for is on excise tax, there's some concessions. We're hoping that the Canadian provincial governments allow us to sell our drinks into other retail outlets like restaurants that need help, independent retailers, or liquor stores. We're looking for changes in regards to where medical cannabis is sold, where it's sold directly in through drug stores. That would change a lot for our Canadian market. We look now for some big opportunities coming into the Canadian market. Blair and his team have really put us in a good space there to really move beyond and a good growth in regards to our products.

And Thats something were trying to do.

Along the way make money with it too.

Got it thanks guys.

Yes.

Okay.

Thank you ladies and gentlemen, our final question comes from the line of Federico Gums with ATB capital markets. Please proceed with your question.

Um, and from that that's what we built over the last. You know, 5 6 years we have over 5 million square feet of growth. We have the largest growth facility in Canada with 237 metric tons and maybe even more. So you know, the Canadian Market has been a great pivotal point for us now what we're hoping for

Hi, Good morning, Thanks for taking my questions first question, just thinking about the issues in Portugal.

On excise tax, there are some concessions we're hoping that the Canadian provincial governments will allow us to sell our drinks.

I'm curious how do you see that in terms of management of future risk in terms of your international strategy, whether you are taking steps to diversify your supply chain Darren how would you go about doing that.

So number one.

We got a $1 million and ask square foot facility in Portugal, we're not picking up and moving it okay.

<unk>.

$100 million of built and it's a state of the art facility. So I'm in Portugal, I got to stay there. So I've got to figure out how to work within those consignments and I must tell you I've had some great meetings with two ministers in Portugal at.

Into other retail outlets like restaurants that need help or, you know, independent retailers or liquor stores. We're, we're looking for changes in regards to where medical cannabis sold were sold directly in through drugstores and that would change a lot, you know, for our Canadian markets. So uh we look now for some big opportunities coming to the Canadian market and manual Blair and his team have really put us in a good space there to really move Beyond and a good growth um in regards to our products.

[Analyst 2]: Got it. Thanks for the color. My second question is, beverage gross margin was about 50 bps lighter than we expected. Can you remind us of your plan on improving profitability in that segment? Where are you on that path, that 420 path, and what still needs to be done?

At the highest levels and they're very open in Portugal.

The new government in Portugal, and there wont business, they don't want us leaving.

Irwin Simon: As you saw, we've taken $25 million of profit out, and there's more to go. We've gone through, and I think SKU rationalization, you know, $20 million of SKU rationalization, and there's more to go. We've closed three facilities so far. Come back, in acquisitions, we have acquired close to 12, and we closed 12 brands. We had closed, we had 10 facilities. We've had 18 brew pubs. Also, we have over 900 plus distributors out there. Bringing this all together under one management, one infrastructure, we're seeing progress, but there's a lot of wood to chop there yet to get those margins to where we need to do.

Got it. Thanks for the caller. And then uh, my second question is so beverage, gross margin was about 50 bucks lighter than kind of. We expected, can you remind us of your plan on improving profitability? Uh, and that segment and also where are you on that path? That 420, you know, path and what still needs to be done?

They want to build upon our business there and they've been very very supportive of working with us and since my meetings.

With our people, we've seen lots of changes and begin getting our permits so I.

I feel good on the other hand listen we do have a facility in Germany nowhere near what we have in Portugal.

So as you saw we've taken 25 million dollars of cost out, I mean there's more to go, we've gone through and I think uh SKU rationalization um you know 20s of of SKU rationalization and there's more to go.

We do have the ability to ship from Canada.

And where we would ship it directly into the U K directly into other markets to insurers you GMP. So we have options with first and foremost we are far from giving up on the Portuguese market.

Um, we've closed three facilities so far. So you come back, you know, in Acquisitions. We have acquired close to twelve and we closed twelve brands.

Okay.

Thanks for that and the other question here just on Germany.

Could you could you talk about the proposed.

Irwin Simon: Whether it's the procurement of cans, the procurement of hops, one of the biggest things, which you heard me mention in my remarks, a lot of these brands, as we were buying them and decisions were made by the previous owners, we were delisted in a lot of retailers out there. With that, you saw major declines in these businesses, and we missed the windows of getting these products in the stores. Now these windows have opened up, and getting these products now relisted in these retailers is something that we've been doing. That's why, whether it's ChocTop, whether it's Red Hook, whether it's some of our other brands, you're seeing the growth there. That's what's going to happen to get our gross margins up here. Listen, let's all face it, the beer category is not one of the easiest categories out there right now.

Change there in legislation in terms of prescriptions and how the market works.

How do you think that could impact that market.

Whether you think that draft.

Going there may be approved they are not as is or do you expect changes to that dropped in terms of timing as well when do you think the market there could change in terms of.

That legislation thank you.

Listen we're supportive of change.

We, you know, have closed. We had 10 facilities, we've had 18 brew pubs, and also we have over 900 plus distributors out there. So bringing this all together under, you know, one management, one infrastructure. Um, and you know, we're seeing progress, but there's a lot of wood to chop there yet to get those margins to where we need to do. And whether it's the procurement of cans, the procurement of hops, um, and one of the biggest things, which you heard me mention, you know, in my remarks, you know, a lot of these brands, as we were buying them, decisions were made um, by the previous owners, we were be listed in a lot of retailers out there. So with that, you saw major declines in these businesses and we missed the windows.

But again.

Don't want to speculate until they know what the change is okay and I think so far.

Up, getting these products in the stores. Now, these windows.

Have opened up.

Good news is what we're seeing is a continuous demand.

And online prescription has not been one of the biggest.

Drivers here so.

If there is change IC patients will find other ways to grow their purchase cannabis and it's interesting.

And getting these products now relisted in these retailers is something that we've been doing. And that's why, you know, whether it's Shock Top, whether it's Red Hook, whether it's some of our other brands, you're seeing the growth there. And that's what's going to happen, you know, to get our gross margins up here. And listen, let's...

Irwin Simon: We're fighting through it, both on the growth side, innovation side. I've said it from the beginning, how do I make beer fun again? That's something we're trying to do. Along the way, make money with it too.

<unk>, because Germany has a strong independent drug chains out there theres no.

Cvs is theres no Walgreens.

Individuals are allowed to own like six drug stores are all independent so like I said there is multiple.

All faces of the beer category are not one of the easiest categories out there right now, and, you know, we're fighting through it. Both on the growth side and innovation side, I've said it from the beginning: How do I make beer fun again? Um, and that's something we're trying to do.

Along the way, make money with the 2.

[Analyst 2]: Got it. Thanks, guys.

New stores out there, it's not online so I see even if it did change that you can't buy it online there's still the retail outlets to go to out there and I would like to see some of the change there is lots of changes as we continuously talk about that didn't happen and we with our lobby groups are out there working with the German government.

Operator: Thank you. Ladies and gentlemen, our final question comes from the line of Federico Gomes with ATB Capital Markets. Please proceed with your question.

Got it. Thanks guys.

Thank you, ladies and gentlemen. Our final question comes from the line of Federico Gomez with ATB Capital Markets. Please proceed with your question.

[Analyst 2]: Hi, good morning. Thanks for taking my questions. First question, just thinking about the issues in Portugal. I'm curious, how do you see that in terms of managing future risk in terms of your international strategy, whether you're taking steps to diversify your supply chain there and how would you go about doing that? Thanks.

And what's the right thing for the patients because this year is important to the.

The difference in medical cannabis is like medicine.

If you didn't give patients access to get medicine as a problem can you couldnt get your medicine and didn't have access locations that sick or dependent on thats. An issue. So this is being sold as medicine and medical standpoint, not from a recreational if you don't get your candidates from a recreational standpoint that may not be as an issue.

Steps to diversify your supply chain. And how would you go about doing that? Thanks.

Irwin Simon: Number one, you know, we got a million and a half square foot facility in Portugal. We're not picking up and moving it, okay? I mean, over $200 million is built in. It's a state-of-the-art facility. I'm in Portugal. I got to stay there. I got to figure out how to work within those confinements. I must tell you, I've had some great meetings with two ministers in Portugal, at the highest levels, and they are very open. There's a new government in Portugal, and they want business. They don't want us leaving. They want to build upon our business there, and they've been very, very supportive of working with us. Since my meetings with our people, we've seen lots of changes and been getting our permits. I feel good. On the other hand, we do have a facility in Germany, nowhere near what we have in Portugal.

But youre not getting your medicine and the government has to take that.

Into view when they are deciding what theyre going to do here.

Thank you very much.

Great.

Let me let me just say this year I know a lot of hype joined now Unfortunately, not us there was a technical problem.

With our provider.

And those that were online.

Did not here by comments, sorry about that guys you missed missed some great comments and Carl's comments okay.

If you want to hear me again say it you can go online and listen and I encourage you to do that because there's some really good information.

Irwin Simon: We do have the ability to ship from Canada, and we would ship it directly into the UK and directly into other markets to ensure GMP. We have options. First and foremost, we are far from giving up on the Portuguese market.

So number 1, you know, we got a million and a half square foot facility in Portugal. We're not picking up and moving it. Okay. I mean over a couple hundred million dollars is built and it's a state-of-the-art facility. So, I'm in Portugal. I got to stay there. So I got to figure out how to work within those confinements, and I must tell you, I've had some great meetings with 2 ministers, in Portugal, uh, at the highest levels and they are very open in Portuguese, you know, there's a new government in Portugal and they're want business. They don't want us leaving, um, they want to build upon our business there and, and they've been very, very supportive of working with us. And, since my meetings, um, with our people, we've seen lots of changes and been getting our permits. So I I, I feel good on the other hand, listen, um, we do have a facility in Germany. Nowhere near what we have in Portugal.

That both Carl and I deliver today and I apologize on the carrier they'll hear from us on.

Definitely disappointed I know youre her music. So we had a lot more to say than the music.

But pleased it has been recorded it is online and you'll get every bit of it and for some reason there is an issue let them know and we'll make sure you get it and I'm really sorry about that in regards to the analyst questions. I think you heard most of those so you'll be able to get those the analysts that were here.

Um we do have the ability to ship from Canada and you know where we would ship it directly into the UK and directly into other markets to ensure Zu gmpp. So we have options but first and foremost, we are far from giving up on the Portuguese Market.

[Analyst 2]: Thanks for that. In the other question here, just on Germany, could you talk about the proposed change there in legislation in terms of prescriptions and how the market works? How do you think that could impact that market? Do you think that draft that's going there may be approved or not as is, or do you expect changes to that draft? In terms of time as well, when do you think the market there could change in terms of the legislation? Thank you.

We're able to here Karl in our remarks, so I apologize profusely for that.

With that thank you very much for your time today.

I hope some of it wasn't wasted, but not hearing our comments, but now you'll have to go online and listen to it.

Thanks for that. And and other question here, just on Germany. Um, could you could you talk about the proposed, uh, change their in legislation, in terms of prescriptions and how the market Works? Uh, how do you think that could impact that market? And you know, whether you think that draft that's, uh, that's going there maybe approved or not as is, or you expect changes to that draft and terms of time as well. When do you think you know the the market there could change in terms of uh the legislation thank you.

Irwin Simon: Listen, we're supportive of change, but again, you know, I don't want to go out there and speculate until I know what the change is, okay? I think so far, the good news is what we're seeing is a continuous demand, and online prescription has not been one of the biggest drivers here. If there is change, I think patients will find other ways to go out there and purchase cannabis. You know, it's interesting because Germany has strong independent drug chains out there. There's no CVSs. There's no Walgreens. Individuals are allowed to own like six drug stores. They're all independent. Like I said, there are multiple stores out there. It's not online. I see, even if it did change, that you can't buy it online, there's still the retail outlets to go to out there.

It's only Q1 in 2026.

Yes, and we're supportive of change.

One of our smaller quarters, there was a lot to do and as you can see we have a lot of good things in place and Trust me.

There has been times like you look at the sort of so what the heck are we doing here. When you look at your stock price you look at different things, but this team in over five years really have brought a lot together here.

But again, you know I don't want to go out there and speculate until I know what the change is. Okay? And I think so far the good news is what we're seeing is a continuous demand.

In rebuilding our Canadian cannabis business basically from scratch build.

Building facilities building brands building products building different strange genetics.

New innovation in some of the new innovation, that's coming out of there.

The infrastructure and sales and marketing team and again.

Going through price compression going through Covid.

Going going through.

The illicit market is one of your biggest competitors out there and I really want to commend the Canadian team and what they've been able to do it.

Um, and online prescription is not been 1 of the biggest, you know, drivers here. So if there is change I think patients will find other ways to go out there and purchase cannabis. And, you know, it's interesting because Germany has a strong independent drug change out there. There's no, you know, CVS's, there's no Walgreens, you know, individuals are a lot of own like, 6 drug stores are all independent, so like I said, there is multiple stores out there, it's not online. So I see, even if it did change it,

Irwin Simon: I would like to see some of the changes. There are lots of changes that we continuously talked about that didn't happen. We, with our lobby groups, are out there working with the German government on what's the right thing for the patients. This here is important too. The difference in medical cannabis is like medicine. If you didn't give patients access to get medicine, that's a problem. If you couldn't get your medicine and didn't have access, a patient that's sick or dependent on it, that's an issue. This is being sold as medicine from a medical standpoint, not from a recreational. If you don't get your cannabis from a recreational standpoint, that may not be as an issue. You're not getting your medicine, and the government has to take that into view when they're deciding what they're going to do here.

In regards to our international cannabis business.

Same thing.

It has come together basically with the acquisition of <unk>.

And it is really a business that I see tremendous opportunities and we now are getting requests.

You can't buy it online. There are still the retail outlets to go to out there, and I would like to see some of the changes. There are lots of changes that have been continuously talked about that didn't happen, and we, with our lobby groups, are out there working with the German government on what's the right thing for the patients because this, this here is important too.

The difference in medical cannabis is like medicine.

In different countries, whether India Middle East and places like that in regards to medical cannabis and the opportunities there and there's a lot of countries and there are a lot of difference.

Countries out there that are realizing the benefits of that and also realizing the benefits of medical cannabis versus medicines in the tops of drugs are not out there today and what what what the benefits will be so I see big opportunities for us today.

If you didn't give patients access to get medicine. That's a problem. If you couldn't get your medicine and didn't have assess a patient's at sick or dependent on, that's an issue. So this is being sold as medicine medical standpoint, not from a recreational, if you don't get your cannabis from a recreational standpoint that may not be as an issue but you're not getting your medicine and the the government has to take that, you know, into view when they're deciding what they're going to do here.

[Analyst 2]: Thank you very much.

Thank you very much.

Irwin Simon: Great. Let me just say this here. I know a lot have joined now. Unfortunately, not us. There was a technical problem with our provider, and those that were online did not hear my comments. Sorry about that, guys. You missed some great comments in Carl's comments, okay? If you want to hear me again say it, you can go online and listen. I encourage you to do that because there's some really good information that both Carl and I delivered today. I apologize. The carrier, they'll hear from us. Definitely disappointed. I know you heard music, so we had a lot more to say than the music. Please, it has been recorded. It is online, and you'll get every bit of it. If for some reason there's an issue, let Berrin know, and we'll make sure you get it. I'm really sorry about that.

Raj. This order has joined US as head of Europe and is bringing the teams together and we've done a lot with our Canadian teams to integrate these businesses to get synergies and savings and to get a lot of the knowhow because one of the things.

Great. Um, let me just say this here. I know a lot of you have joined now. Unfortunately, not us. There was a technical problem.

Uh, with our provider.

And those that were online.

Cannabis is agriculture, it's growing it's yields which is the size of the flower its the potency and that is something.

Thats important out there and this is not an industry.

Its an industry thats for us around the illicit market for many many years, but it's not an industry. That's been around from a legalized market is not in industries that have been around from a growth from our research and development. That's all coming together and countries are realizing the opportunities and what they're doing.

Not allowing their citizens and patients to be able to buy these products dosing of realizing those those tax dollars, but they are missing and if tax dollars are being sold through an illicit market in regards to rescheduling.

Irwin Simon: In regards to the analyst questions, I think you heard most of those, so you'll be able to get those. The analysts that were here were able to hear Carl and our remarks. I apologize profusely for that. Thank you very much for your time today. I hope some of it wasn't wasted by not hearing our comments, but now you'll have to go online and listen to it. It's only Q1 in 2026, one of our smaller quarters. There's a lot to do, and as you can see, we have a lot of good things in place. Trust me, there have been times like you look at and sort of say, you know, what the heck are we doing here? When you look at your stock price, you look at different things.

President Trump, which has different tweets. So there's different comments I think realizes that something has to happen herein rescheduling.

Remarked, so I apologize profusely for that.

Last week with his tweet or two weeks ago in regards to CBD in regards to senior citizens and I can't tell you how many people tell me and using CBD and THC products in.

Um, with that, thank you very much for your time today. Um, I hope some of it wasn't wasted but not hearing our comments but now you'll have to go online and listen to it. Um, it's only q1 in 2026.

In regards to pain and anxiety in that and the benefits for what we're seeing today on our Delta nine products and being sold in limited states and the demand for it.

Um, you know, one of our smaller quarters, there's a lot to do. And as you can see,

Again, what Blair has seen in the Canadian market with building, a 40 plus million dollar business and today, just being sold within <unk>.

Irwin Simon: This team, in over five years, really have brought a lot together here in rebuilding a Canadian cannabis business basically from scratch, building facilities, building brands, building products, building different strains, genetics, new innovation, and some of the new innovation that's coming out of there, building infrastructure and sales and marketing team. Again, going through price compression, going through COVID, going through the illicit market as one of your biggest competitors out there. I really want to commend the Canadian team and what they've been able to do. In regards to our international cannabis business, same thing. It has come together basically with the acquisition of Tilray, and it is really a business that I see tremendous opportunities. We now are getting requests in different countries, whether India, Middle East, and places like that, in regards to medical cannabis and the opportunities there.

Canada stores and and again at prices that are not the cheapest prices out there. So we see tremendous opportunity in the beverage business in regards to our beverage business.

We have a lot of good things in place, and trust me, there have been times when you look at it and sort of say, you know, what the heck are we doing here? When you look at your stock price, you look at different things. But this team, in over five years, has really brought a lot together here in rebuilding a Canadian cannabis business basically from scratch.

Thank you.

It's work we got to do.

And again, we got into it in 2020 with the acquisition of Sweetwater.

Building facilities, building brands, building products, building different strains genetics, and new innovations. Some of the new innovations that are coming out of there include building infrastructure and sales and marketing teams.

Wired Montoc acquired other brands the businesses from Abi and then the business motions, we got some great brands.

Bringing it all together, there's a lot of work, bringing facilities together getting cost of getting the margin. So getting the right facilities and that is something that <unk> is doing and the team is doing out of Atlanta to bring all this together and as I said before not easy.

Going through price compression going through Co. Um, going going through, you know, the illicit Market as 1 of your biggest competitors out there and I really want to come in the Canadian team and what they've been able to do in regards to our International cannabis business. Um, same thing, um, it has come together basically with the acquisition of till Ray.

Business today with changes happening, but we will be in the beverage business not just the beer business.

Um, and it is, you know, really a business that I see tremendous opportunities in, and we now are getting requests.

And with that there is a lot of interesting products. We're working on in regards to our spirits business. The team is working with our distributor R&D.

Irwin Simon: There are a lot of countries, and there are a lot of different countries out there that are realizing the benefits of that and also realizing the benefits of medical cannabis versus medicines and the costs of drugs and that out there today and what the benefits will be. I see big opportunities for us today. Rajnish Ori has joined us as now Head of Europe and is bringing the teams together. We've done a lot with our Canadian teams to integrate these businesses to get synergies and savings and to get a lot of the know-how because one of the things, cannabis is agriculture. It's growing, it's yields, it's the size of the flower, it's the potency. That is something that's important out there.

And we've really put a plan in place with R&D C.

To be in our major markets, yes suburban categories, a tougher category today than it was but breckenridge Bourbon is a great tasting product out there and there is great demand in certain markets at the same time, our vodka has great demand and our gin and some of our new products that we've come out with a really.

Really good products and some of the first time, our innovation and last but not least you hear me talk about our wellness business.

Gerry and team have done on wellness, where we acquired this there was a negative EBITDA of about $5 $6 million in words turned around to today and somebody that's been part of the wellness category since 1990, $2 93, and see the growth and that's all we talked about the wellness wellness and food in regards to.

Irwin Simon: This is not an industry that's, it's an industry that's been around the illicit market for many, many years, but it's not an industry that's been around from a legalized market. It's not an industry that's been around from a growth, from a research and development that's all coming together. Countries are realizing the opportunities and what they're doing, not allowing their citizens and patients to be able to buy these products. The other thing they're realizing is there's tax dollars that they're missing, and if tax dollars are being sold through an illicit market. In regards to rescheduling, President Trump, with his different tweets and his different comments, I think realizes that something has to happen here in rescheduling.

You know, in different countries, whether India Middle East and places like that in regards to medical cannabis and the opportunities there and there's a lot of countries and there are a lot of different you know countries out there that are realizing the benefits of that and also realizing the benefits of medical cannabis versus medicines and costs of drugs and that out there today and what what what the benefits will be. So I see big opportunities for us today. Um you know, Raj just ordered has joined us as no head of Europe and is bringing the teams together and we've done a lot with our Canadian teams to integrate these businesses to get synergies and savings and to get a lot of the knowhow because 1 of the things. Cannabis is agriculture. It's growing, it's yields. It's the size of the flower. It's the potency, and that is something that's important out there, and this is not an industry.

The Trump administration are taking colorings that a food today higher protein protein protein protein and some of the highest protein is in hemp foods businesses. Our plant that's growth. So we're in a lot of different categories, where in a lot of unique places you look at our balance sheet in regards to our debt to equity.

That's it's it's an industry that's been around the illicit market for many, many years but it's not an industry that's been around from a legalized Market. It's not an industry that have been around from a growth from a research and development, that's all coming together and countries are realizing the opportunities and what they're doing.

You know, not allowing their citizens and patients.

Great place, we ended the quarter with $260 million of cash.

To be able to buy these products. The other thing they’re realizing is there are tax dollars.

So there's a lot of good things happening but.

There's a lot of work to do I.

that they're missing, and if tax dollars are being sold through an illicit market.

I really want to thank our team.

That really makes this happen and rolls up our sleeves, even though there's 2500 employees around the world here.

Irwin Simon: Last week with his tweet or two weeks ago in regards to CBD, in regards to the senior citizens, and I can't tell you how many people tell me and use these CBD and THC products in regards to pain and anxiety and that and the benefits for it. What we're seeing today on our Delta 9 products and being sold in limited states and the demand for it, again, what Blair has seen in the Canadian market with building a $40 million plus business and today just being sold within cannabis stores and, again, at prices that are not the cheapest prices out there. We see tremendous opportunity in the beverage business. In regards to our beverage business, it's work, it's work we got to do.

Not a lot for a lot and we got to get done so with that I want to thank everybody for listening. Please go back and re listen to our comments.

There is a lot of good comments that came out of today. Thank you to our shareholders for your support and go third vote as we have our AGM coming up with that have a great Thursday and look forward to speaking to you in the new year with our Q2 results. Thank you.

Yeah.

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

In regards to rescheduling um president Trump with his different tweets and his different comments. I think realizes that something has to happen here in rescheduling. Um last week what is tweet or 2 weeks ago in regards to CBD you know, in regards to senior citizens and I can't tell you how many people tell me and using CBD and THC products, you know, in regards to pain and anxiety and that and the benefits for it. What we're seeing today on our Delta, 9 products, and being sold in limited states in the demand for it. Um, again, what Blair has seen in the Canadian Market with building, you know, a 40 plus Million Dollar business and today just being sold within, you know, Cannabis stores and and and again at prices that are not the cheapest prices out there. So we see tremendous opportunity in the beverage business in regards to our beverage business,

Irwin Simon: We got into it in 2020 with the acquisition of SweetWater, acquired Montauk, acquired other brands, and the businesses from Anheuser-Busch Companies LLC, and then the businesses of Molson Coors Beverage Company. We got some great brands, but bringing it all together is a lot of work. Bringing the facilities together, getting the cost out, getting the margins out, getting the right facilities. That is something that, you know, Tilray Brands Inc. is doing and the team is doing out of Atlanta to bring all this together. As I said before, not an easy business today with changes happening, but we will be in the beverage business, not just the beer business. With that, there's a lot of interesting products we're working on.

It's work. You know it it's work. We got to do.

And again, we got into it in 2020 with the acquisition of Sweetwater. You know, we acquired Montauk, acquired other brands, and the businesses from ABI, and then the business.

Emotions. We’ve got some great brands, but bringing it all together is a lot of work—bringing the facilities together, getting the cost through, getting the margins out, and getting the right facilities. And that is something that, you know, Tilray is doing, and the team is doing out of Atlanta to bring all this together. As I said before, it’s not easy.

Your business.

Irwin Simon: In regards to our spirits business, the team is working with our distributor, RNDC, and we've really put a plan in place with RNDC to be in our major markets. Yes, the bourbon category is a tougher category today than it was, but Breckenridge Bourbon is a great tasting product out there, and there's great demand in certain markets. At the same time, our vodka has great demand, and our gin and some of our new products that we've come out with are really, really good products, and some of the first-timer innovation. Last but not least, you hear me talk about our wellness business, what Jared and team have done on wellness. Where we acquired this, it was a negative EBITDA about $5 million, $6 million, and where it's turned around to today. Somebody that's been part of the wellness category since 1992, 1993, and see the growth.

And with that, there's a lot of interesting products we're working on in regards to our Spirits business.

The team is working with our distributor, RNDC.

And we've really put a plan in place with RNDc to be in our major markets. Yes, the bourbon category is a tougher category today than it was. But Breckenridge bourbon is a great-tasting product out there, and there's great demand.

Irwin Simon: It's all we talk about is wellness, wellness, and food. In regards to, you know, the Trump administration and taking colorings out of food today, higher protein, protein, protein, protein, and some of the highest protein is in hemp foods because it's a plant that's grown. We're in a lot of different categories. We're in a lot of unique places. You look at our balance sheet in regards to our debt to equity, it's in a great place. We ended the quarter with $260 million in cash. There's a lot of good things happening, but there's a lot of work to do. I really want to thank our team that really makes this happen and rolls up our sleeves. Even though there's 2,500 employees around the world here, not a lot for a lot we got to get done. With that, I want to thank everybody for listening.

In certain markets, at the same time, our vodka has great demand and our gin and some of our new products that we've come out with are really, really good products. And some of the first time our Innovation, and last but not least, you hear me talk about our Wellness business. What Jared and the team have done on Wellness, where we acquired this, it was a negative EBITDA of about $56 million. And we're turning it around to today. And as somebody that's been part of the wellness category since 1992-93, I see the growth, and it's all we talk about: wellness and food in regards to, you know, the Trump Administration and taking colorings out of food today, higher protein, protein, protein, and some of the highest protein is in hemp foods because it's a plant that's grown.

So, we're in a lot of different categories. We're in a lot of unique places.

You look at our balance sheet in regards to our debt to equity. It's in a great place. We ended the quarter with 260 million dollars of cash. Um so there's a lot of good things happening but there's a lot of work to do. I really want to thank our team?

Irwin Simon: Please go back and re-listen to our comments. There's a lot of good comments that come out of today. Thank you to our shareholders for your support, and get out there and vote as we have our AGM coming up. With that, have a great Thursday and look forward to speaking to you in the new year with our Q2 results. Thank you.

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

That really makes this happen and rolls up our sleeves, even though there are 2,500 employees around the world here. Um, not a lot for a lot we got to get done. So with that, I want to thank everybody for listening. Please go back and re-listen to our comments; there's a lot of good comments that were made today. Thank you to our shareholders for your support, and get out there and vote as we have our AGM coming up. With that, have a great Thursday, and I look forward to speaking to you in the new year with our Q2 results. Thank you.

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