Aurora Cannabis Q3 2026 Aurora Cannabis Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q3 2026 Aurora Cannabis Inc Earnings Call
Speaker #1: Greetings, and welcome to the Aurora Cannabis Inc. Q4 2026 results conference call. All participants will be in a listen-only mode, and a question-and-answer session will follow the formal presentation.
Operator: Greetings, and welcome to the Aurora Cannabis Inc. Q3 2026 results conference call. All participants will be in a listen-only mode, and a question-and-answer session will follow the formal presentation. This conference call is being recorded today, Wednesday, 4 February 2026. I would now like to turn the conference over to your host, Kevin Nyland, Director of Strategic Finance and Investor Relations. Please go ahead, sir.
Speaker #1: This conference call is being recorded today, Wednesday, February 4, 2026. I would now like to turn the conference over to your host, Kevin Niland, Director of Strategic Finance and Investor Relations, sir.
Speaker #1: Relations. Please go ahead,
Speaker #2: Hello, and thank you for joining us. With me is Miguel Martin, Executive Chairman and CEO, and Simona King, CFO. Earlier this morning, we filed our financials for the fiscal third quarter 2026 period ending December 31, 2025.
Kevin Niland: Hello, and thank you for joining us. With me is Miguel Martin, Executive Chairman and CEO, and Simona King, CFO. Earlier this morning, we filed our financials for the fiscal Q3 2026 period ending December 31, 2025, and issued a news release containing these results. This news release, along with our financial statements and MD&A available on our IR website as well as via SEDAR+ and EDGAR. We have also posted our investor presentation to our IR website for reference purposes. Our discussion today serves as a reminder that certain matters could constitute forward-looking statements that are subject to risks and uncertainties relating to our future, financial, or business performance. Actual results could differ materially from those anticipated in those forward-looking statements. Risk factors that may affect actual results are detailed in our Annual Information Form and other periodic filings and registration statements.
Speaker #2: Initiative news release continued these results. This news release, along with our financial statements and MD&A, is available on our IR website, as well as via Cedar Plus and Edgar. We have also posted our investor presentation to our IR website for reference purposes.
Speaker #2: Our discussion today serves as a reminder that certain matters could constitute forward-looking statements that are subject to risks and uncertainties relating to our future financial or business performance. Actual results could differ materially from those anticipated in those forward-looking statements.
Speaker #2: This fact is that may affect actual results are detailed in our annual information form and other periodic filings and registration statements. These documents may similarly be accessed via Cedar Plus and Edgar.
Kevin Niland: These documents may similarly be accessed via SEDAR+ and EDGAR. Following our prepared remarks, we'll conduct a question-and-answer session with our covering analysts. With that, I'll turn the call over to Miguel. Please go ahead.
Speaker #2: Following our prepared remarks, we'll conduct a question-and-answer session with our covering analysts. With that, I'll turn the call over to Miguel. Please go
Speaker #2: ahead. Thanks,
Miguel Martin: Thanks, Kevin. Our quarterly performance reflects our strong competitive position in the rapidly expanding global medical cannabis market and continued commitment to profitable and sustainable growth. This success is supported by our proven commercial execution and purposeful investments in science, technology, and talent. Additionally, our dedicated focus on improving patient access and strengthening physician engagements has contributed significantly to these results in fiscal Q3. Let's begin with a brief review of the quarter. First, net revenue increased 7%, driven by a record 12% growth in global medical cannabis revenue, including a 17% increase internationally. Notably, more than half of our total net revenue was generated outside of Canada. Second, adjusted gross margin rose 100 basis points to 62%, where we benefited from strong medical cannabis margins of 69%, which was the result of sustained growth in our higher-margin international markets.
Speaker #3: Kevin. Our quarterly performance reflects our strong competitive position, the rapidly expanding global medical cannabis market, and our continued commitment to profitable and sustainable growth.
Speaker #3: The success is supported by our proven commercial execution and purposeful investments in science, technology, and talent. Additionally, our dedicated focus on improving patient access and strengthening physician engagement has contributed significantly to these results, and fiscal Q3.
Speaker #3: Let's begin with a brief review of the quarter. First, net revenue increased 7%, driven by a record 12% growth in global medical cannabis revenue, including a 17% increase internationally.
Speaker #3: Notably, more than half of our total net revenue was generated outside of Canada. Second, adjusted gross margin rose 100 basis points to 62%, where we benefited from strong 69%, which was the result of medical cannabis margins of sustained growth in our higher margin international markets.
Speaker #3: Third, profitability held strong, with adjusted EBITDA of 18.5 million and adjusted net income of 7.2 million. And finally, we generated positive free cash flow of 15.5 million and maintained our strong balance sheet with over 150 million in cash and the absence of cannabis business-related debt.
Miguel Martin: Third, profitability held strong, with Adjusted EBITDA of CAD 18.5 million and Adjusted Net Income of CAD 7.2 million. Finally, we generated positive Free Cash Flow of CAD 15.5 million and maintained our strong balance sheet with over CAD 150 million in cash and the absence of cannabis business-related debt. Unlike most peers, we have focused on medical cannabis as the most promising industry segment for nearly a decade. We have therefore deployed considerable resources and investments, providing us with the following competitive advantages. We are one of Canada's largest global medical cannabis, cannabis companies. We are Canada's leading exporter of medical cannabis. Finally, we are a market leader in the three biggest nationally legal medical cannabis markets outside of Canada.
Speaker #3: Unlike most peers, we have focused on medical cannabis as the most promising industry segment for nearly a decade. We have therefore deployed considerable resources and investments providing us with the following competitive advantages: we are one of Canada's largest global medical cannabis companies, we are Canada's leading exporter of medical cannabis, and finally, we are a market leader in the three biggest nationally legal medical cannabis markets outside of Canada.
Speaker #3: Notably, about 90% of our annual manufacturing capacity is produced within AURORA's European and TGA GMP-certified facilities, and is subject to very standards are only increasing significantly limiting the number of market participants.
Miguel Martin: Notably, about 90% of our annual manufacturing capacity is produced within Aurora's European and TGA GMP-certified facilities and is subject to very stringent international standards. These standards are only increasing, significantly limiting the number of market participants. There is a limited number of cannabis companies, like Aurora, that have regulatory certifications for their manufacturing facilities that permit shipments directly to European and Australian markets. Aurora manufactures most of its own products and distributes them compliantly and profitably. This advantage helps to ensure consistency of supply around the world, critical to both prescribers and patients, and achieves lower manufacturing costs through higher yields, potency improvements, and other operational efficiencies. As this industry evolves, maintaining our momentum in global medical cannabis requires an even greater commitment. This entails dedicating our full attention to solidifying and growing our leadership position. Following a strategic review, we have identified the following actions.
Speaker #3: There is a limited number of cannabis companies like AURORA that have regulatory certifications for their manufacturing facilities that permit shipments directly to European and Australian markets.
Speaker #3: AURORA manufactures most of its own products and distributes them compliantly and profitably. This advantage helps to ensure consistency of supply around the world, critical to both prescribers and patients, and achieves lower manufacturing costs through higher yields, potency improvements, and other operational efficiencies.
Speaker #3: As this industry evolves, maintaining our momentum in global medical cannabis requires an even greater commitment. This entails dedicating our full attention to solidifying and growing our leadership position.
Speaker #3: Following a strategic review, we have identified the following actions: first, we will begin exiting select markets within the lower Canadian consumer cannabis segment, enabling us to further prioritize allocating products and resources to our higher margin global medical cannabis business.
Miguel Martin: First, we will begin exiting select markets within the lower Canadian consumer cannabis segment, enabling us to further prioritize allocating products and resources to our higher-margin global medical cannabis business. Since consumer cannabis carries higher sales and marketing expenses than medical, this will benefit adjusted SG&A and consolidated adjusted gross margins in the coming quarters. While we expect some one-time costs that will impact cash flow in fiscal Q4, once the initiative is complete, we anticipate higher adjusted EBITDA contributions thereafter. Second, in relation to our plant propagation business, we are divesting our lower-margin plant propagation operation by selling our controlling stake in Bevo to its other principal shareholders. Combined, these actions will allow us to allocate capital more effectively, deliver enhanced profitability, streamline our operations, and improve execution quality. On a related note, today, we filed a prospectus supplement establishing a new at-the-market equity program.
Speaker #3: Since consumer cannabis carries higher sales and marketing expenses than medical, this will benefit adjusted SG&A and consolidated adjusted gross margins in the coming quarters.
Speaker #3: While we expect some one-time costs that will impact cash flow in fiscal Q4, once the initiative is complete, we anticipate higher adjusted EBITDA contributions thereafter.
Speaker #3: Second, in relation to our plant propagation business, we are divesting our lower margin plant propagation operations by selling our controlling stake in VEVO to its other principal shareholders.
Speaker #3: Combined, these actions will allow us to allocate capital more effectively, deliver enhanced profitability, streamline our operations, and improve execution quality. On a related note, today we filed a prospectus supplement establishing a new at-the-market equity program.
Speaker #3: The ATM provides us the flexibility to issue and sell up to $100 million of common shares from time to time at our discretion.
Miguel Martin: The ATM provides us the flexibility to issue and sell up to $100 million of common shares from time to time at our discretion. The company intends to use proceeds raised under the ATM program, if any, for strategic and accretive purposes only, including for increased cultivation capacity and potential M&A. With that, let's now dive into our individual medical cannabis markets. Germany is the largest individual medical cannabis market in Europe and remains closely watched across the region due to its outsized influence on neighboring countries. More than half of EU member countries have already integrated medical cannabis into healthcare, including reimbursement, which leads towards greater international alignment on regulatory approaches. This provides an obvious advantage for compliant EU GMP-certified companies like Aurora. The German market is still growing and was the primary driver of our double-digit growth in international revenue.
Speaker #3: The company intends to use proceeds raised under the ATM program, if any, for strategic and accretive purposes only, including for increased cultivation capacity and potential M&A.
Speaker #3: With that, let's now dive into our individual medical cannabis markets. Germany is the largest individual medical cannabis market in Europe, and remains closely watched across the region due to its outsized influence on neighboring countries.
Speaker #3: More than half of EU member countries have already integrated medical cannabis into healthcare, including reimbursement, which leads toward greater international alignment on regulatory approaches.
Speaker #3: This provides an obvious advantage for compliant EU GMP-certified companies like growing and was the primary driver of our double-digit growth in international revenue. According to German regulatory data, imports reached 72 metric tons in 2024, and are estimated to have more than doubled in 2025.
Miguel Martin: According to German regulatory data, imports reached 72 metric tons in 2024 and are estimated to have more than doubled in 2025. Our successful commercial execution and strong reputation among wholesalers, distributors, and pharmacists have enabled us to continue to gain share in this rapidly growing market. We have consistently maintained a broad selection of core and premium products for the German market. However, more recently, we enhanced our offerings by introducing a new medical cannabis brand that prioritizes affordability and expands patient options without compromising quality standards. While increased competition in Germany has led to some price pressure, mainly affecting the value segment as new players enter and grow, our core and premium products, which represent most of our sales volume, have remained largely unaffected in terms of baseline pricing.
Speaker #3: Our successful commercial execution and strong reputation among wholesalers, distributors, and pharmacists have enabled us to continue to gain share in this rapidly growing market.
Speaker #3: We have consistently maintained a broad selection of core and premium products for the German market. However, more recently, we enhanced our offerings by introducing a new medical cannabis brand that prioritizes affordability and expands patient options standards.
Speaker #3: Competition in Germany has led to some price pressure, namely affecting the value segment, as new players enter and grow. While increased competition has impacted this segment, our core and premium products, which represent most of our sales volume, have remained largely unaffected in terms of baseline pricing.
Speaker #3: The German government is considering modifications to the current telehealth framework related to cannabis descheduling, but it is still unclear how developments will unfold. We want to ensure that reasonable access to high-quality medical cannabis for the general public is maintained, but should changes be implemented within telehealth, we will adapt just as we did in Poland.
Miguel Martin: The German government is considering modifications to the current telehealth framework related to cannabis descheduling, but it is still unclear how developments will unfold. We want to ensure that reasonable access to high-quality medical cannabis for the general public is maintained, but should changes be implemented within telehealth, we will adapt, just as we did in Poland. We are currently doubling production at our manufacturing site in Germany. Increasing scale will facilitate yield improvements and operational efficiencies, allowing this facility to mirror the performance of our Canadian sites based upon the same industry-leading genetics and product consistency. In addition to the planned operational improvements, our German site joins our Canadian facilities that were recently GMP-certified for another three years. This consistent supply of GMP-manufactured product is vital as we prepare for further growth in Germany and adjacent regulated markets.
Speaker #3: We are currently doubling production at our manufacturing site in Germany. Increasing scale will facilitate yield improvements and operational efficiencies, allowing this facility to mirror the performance of our Canadian sites, based upon the same industry-leading genetics and product consistency.
Speaker #3: In addition to the planned operational improvements, our German site joins our Canadian facilities that were recently GMP-certified for another three years. This consistent supply of GMP-manufactured product is vital as we prepare for further growth in Germany and adjacent regulated markets.
Miguel Martin: Australia remains our largest international medical cannabis market, where we currently hold the number 2 share in what could become a $1 billion opportunity, according to the Penington Institute. Notably, most sales in Australia, both for MedReleaf Australia, which we fully acquired 2 years ago, and for the market overall, are concentrated in value-priced products. This differs significantly from our other international medical cannabis markets, where our portfolio is anchored in core and premium offerings with stronger margins. We are actively working to shift our Australian sales mix towards the same world-class core and premium products we offer globally and expand patient access, including through additional distribution agreements. The Australian market is particularly attractive and positively impacting patient outcomes, as it offers one of the broadest product format ranges outside of North America, enabling us to fully leverage our diverse portfolio beyond flower and oils.
Speaker #3: Australia remains our largest international medical cannabis market, where we currently hold the number two share in what could become a $1 billion opportunity, according to the Pennington Institute.
Speaker #3: Notably, most sales in Australia both for MedRelief Australia which we fully acquired two years ago and for the market overall are concentrated products. This differs significantly from our other international medical cannabis markets, where our portfolio is anchored in core and premium offerings with stronger margins.
Speaker #3: We are actively working to shift our Australian sales mix towards the same world-class core and premium products we offer globally, and expand patient access, including through additional distribution agreements.
Speaker #3: The Australian market is particularly attractive and positively impacting patient outcomes. As it offers one of the broadest America, enabling us to fully product format ranges outside of North leverage our diverse portfolio beyond flower and oils.
Speaker #3: While we are confident in our ability to successfully elevate the product mix, we are working through some anticipated near-term pressure on both sales and gross profit during the transition.
Miguel Martin: While we are confident in our ability to successfully elevate the product mix, we are working through some anticipated near-term pressure on both sales and gross profit during the transition. In Poland, through continued collaboration and effective commercial execution, we gained market share and held the number one position in calendar year 2025. We are widely regarded as a key partner in advancing medical cannabis in the country and are benefiting from increased annual import limits, including in fiscal Q3, which further supports our continued growth potential. The market has certainly evolved, but we have successfully navigated the shift in prescriptions from telehealth platforms to clinics, while maintaining solid relationships with the regulatory authorities. In our view, we are well positioned to maintain this leadership position in Poland, thanks to our very skilled team engaging with all the key stakeholders and our broadening product portfolio of high-quality medical cannabis products.
Speaker #3: In Poland, through continued collaboration and effective commercial execution, we gained market share and held the number one position in calendar year 2025. We are widely regarded as a key partner in advancing medical cannabis in the country and are benefiting from increased annual import limits.
Speaker #3: Including in fiscal Q3, which further supports our continued growth potential. The market has certainly evolved, but we have successfully navigated the shift in prescriptions from telehealth platforms to clinics, while maintaining solid relationships with the regulatory authorities.
Speaker #3: In our view, we are well-positioned to maintain this leadership position in Poland, thanks to our very skilled team engaging with all the key stakeholders, and our broadening product portfolio of high-quality medical cannabis products.
Speaker #3: We recently expanded our product portfolio with the launch of a third proprietary cultivar in Poland, following market success in Canada, Germany, and Australia. These new cultivars are grown and manufactured in our GMP-certified facilities, using premium hand-drying and curing techniques to ensure consistently high-quality standards.
Miguel Martin: We recently expanded our product portfolio with the launch of a third proprietary cultivar in Poland, following market success in Canada, Germany, and Australia. These new cultivars are grown and manufactured in our GMP-certified facilities, using premium hang drying and curing techniques to ensure consistently high-quality standards. In the UK, we primarily operate in the premium and super premium segments, where there is less competition, but an influx of value products in the market resulted in lower year-over-year sales during fiscal Q3. Our strategy is focused on expanding our distribution and clinic relationships through new partnerships, a critical step to onboarding and connecting with patients. Turning to Canada, we remain a strong leader in medical cannabis. Net revenue grew year-over-year during fiscal Q3 to a new record, and we gained market share, a key point of differentiation for us in a competitive market.
Speaker #3: In the UK, we primarily operate in the premium and super premium segments, where there is less competition. But an influx of value products in the market resulted in lower year-over-year sales during fiscal Q3.
Speaker #3: Our strategy is focused on expanding our distribution and clinic relationships through new partnerships, a critical step to onboarding and connecting with patients. Turning to Canada, we remain a strong leader in medical cannabis. Net revenue grew year-over-year during fiscal Q3 to a new record, and we gained market share—a key point that differentiates us in a competitive market.
Speaker #3: Our priorities are enhancing our online marketplace, product innovation, and assortment, and ensuring a high-quality patient experience is especially for our valued veteran patients. In summary, we are reallocating and directing our resources to focus primarily on the global medical cannabis market, where we excel and see runway for growth.
Miguel Martin: Our priorities are enhancing our online marketplace, product innovation, and assortment, and ensuring a high-quality patient experience, especially for our valued veteran patients. In summary, we are reallocating and directing our resources to focus primarily on the global medical cannabis market, where we excel and see runway for growth. This involves gradually scaling back our Canadian consumer cannabis operations and are selling our controlling interests in our plant propagation business. We believe this approach will improve our operational efficiency, unlock greater opportunities in both our existing markets and new countries, and drive sustainable revenue growth and profitability. Let me now turn the call over to Simona for a detailed financial review of fiscal Q3, followed by an outlook discussion.
Speaker #3: This involves gradually scaling back our Canadian consumer cannabis operations and our selling our controlling interests in our plant propagation business. We believe this approach will improve our operational efficiency, unlock greater opportunities in both our existing markets and new countries, and drive sustainable revenue growth and profitability.
Speaker #3: Let me now turn the call over to Simona for a detailed financial review of fiscal Q3, followed by an outlook discussion.
Speaker #2: Thank you, Miguel. We are encouraged by our fiscal Q3 results as reflected in our revenue growth, strong adjusted EBITDA, positive adjusted net income, and free cash flow.
Simona King: Thank you, Miguel. We are encouraged by our fiscal Q3 results, as reflected in our revenue growth, strong adjusted EBITDA, positive adjusted net income, and free cash flow. Time and again, we have demonstrated the soundness of a medical cannabis-first strategy and our consistent ability to deliver results aligned with our long-term objectives. Let's review fiscal Q3 2026, compared to the prior year quarter, and then discuss our outlook for the full year. First, net revenue of CAD 94.2 million represented 7% growth, supported by record contributions from our global medical cannabis and plant propagation segments. Second, consolidated adjusted gross margin rose 100 basis points to 62%, while adjusted gross profit reached CAD 55.6 million, a 6% increase. Global medical cannabis held its robust 69% adjusted gross margin.
Speaker #2: Time and again, we have demonstrated the soundness of a medical cannabis-first deliver results aligned with our strategy, and our consistent ability to review fiscal Q3 2026 compared to the prior year quarter and then discuss our outlook for the full year.
Speaker #2: First, net revenue of $94.2 million represented 7% growth, supported by record long-term objectives. contributions from our global medical Let's cannabis and plant propagation segments.
Speaker #2: Second, consolidated adjusted gross margin rose 100 basis points to 62%, while adjusted gross profit reached $55.6 million, a 6% increase. Global medical cannabis held its robust 69% adjusted gross margin.
Speaker #2: Third, adjusted EBITDA was strong at $18.5 million, combined with adjusted net income of $7.2 million. Fourth, we generated positive free cash flow of $15.5 million.
Simona King: Third, adjusted EBITDA was strong at CAD 18.5 million, combined with adjusted net income of CAD 7.2 million. Fourth, we generated positive free cash flow of CAD 15.5 million. And finally, we ended the quarter with CAD 154 million in cash, cash equivalents, and short-term investments, and no cannabis business debt. In medical cannabis, net revenue rose 12% to CAD 76.2 million, inclusive of 17% growth internationally. We benefited from increased distribution in Germany and new product offerings in Poland, which combined with continued strong contributions from Canadian medical. Medical cannabis comprised 81% of net revenue, compared to 77% in the prior year, and approximately 95% of adjusted gross profit.
Speaker #2: And finally, we entered the quarter with $154 million in cash, cash equivalents, and short-term investments, and no cannabis business debt. In medical cannabis, net revenue rose 12% to $76.2 million, inclusive of 17% growth internationally.
Speaker #2: We benefited from increased distribution in Germany and new product offerings in Poland, which, combined with continued strong contributions from Canadian medical, drove our performance. Medical cannabis comprised 81% of net revenue, compared to 77% in the prior year, and approximately 95% of adjusted gross profit.
Speaker #2: Adjusted gross margin for medical cannabis held strong at 69%, driven by high margin international markets that benefited from sustainable cost reductions, high-selling prices, and operational efficiencies including sourcing for Europe from Canada.
Simona King: Adjusted gross margin for medical cannabis held strong at 69%, driven by high-margin international markets that benefited from sustainable cost reductions, high selling prices, and operational efficiencies, including sourcing for Europe from Canada. Consumer cannabis net revenue was CAD 5.2 million, down 48% from CAD 9.9 million. The year-over-year change was the expected result of the company's strategic shift to focus on portfolio optimization and the allocation of cannabis flower to the highest margin business segments. Adjusted gross margins for consumer cannabis was 28%, compared to 26%, due to sales of higher-margin products. Bevo's plant propagation net revenue increased to CAD 11.3 million, up 27% from CAD 8.9 million in the prior year. Adjusted gross margin for plant propagation revenue fell to 16%, compared to 40%.
Speaker #2: Consumer cannabis net revenue was $5.2 million, down 48% from $9.9 million. The year-over-year change was the expected result of the company's strategic shift to focus on portfolio optimization and the allocation of cannabis flower, to the highest margin business segments.
Speaker #2: Adjusted gross margins for consumer cannabis was 28%, compared to 26% due to sales of higher margin products. Beevil's plant propagation net revenue increased to $11.3 million, up 27% from $8.9 million in the prior year.
Speaker #2: Adjusted gross margin for plant propagation revenue fell to 16% compared to 40%. The decrease was due to increased contract labor and utilities costs, as well as inventory write-offs of $1.1 million in the current quarter related to surplus plants.
Simona King: The decrease was due to increased contract labor and utilities costs, as well as inventory write-offs of CAD 1.1 million in the current quarter related to surplus plants. Consolidated adjusted SG&A increased 14.5% to CAD 35.8 million. The year-over-year change relates to higher professional fees, as well as additional headcount, and contract labor costs in Europe and Australia that are supporting these growing higher-margin markets. Adjusted EBITDA was CAD 18.5 million, compared to CAD 19.4 million in the prior year, with the decrease primarily related to lower adjusted gross profit in the plant propagation segment and an increase in adjusted SG&A. Adjusted net income held relatively consistent at CAD 7.2 million, compared to CAD 7.4 million in the prior year. Our balance sheet remains one of the strongest in the global cannabis industry, and our cannabis operations are completely debt-free.
Speaker #2: Consolidated adjusted SG&A increased 14.5% to $35.8 million. The year-over-year change relates to higher professional fees as well as additional headcount and contract labor costs in Europe and Australia, that are supporting these growing higher margin markets.
Speaker #2: Adjusted EBITDA was $18.5 million, compared to $19.4 million in the prior year, with a decrease primarily related to lower adjusted gross profit in the plant propagation segment and an increase in adjusted SG&A.
Speaker #2: Adjusted net income held relatively consistent at $7.2 million, compared to $7.4 million in the prior year. Our balance sheet remains one of the strongest in the global cannabis industry, and our cannabis operations are completely debt-free.
Speaker #2: Free cash flow was $15.5 million, compared to $27.4 million in the prior year quarter, reflecting a decrease in the working capital recovery of $9.2 million.
Simona King: Free cash flow was CAD 15.5 million, compared to CAD 27.4 million in the prior year quarter, reflecting a decrease in the working capital recovery of CAD 9.2 million. Let me now provide some thoughts on what we expect for our fiscal year 2026 outlook, which ends on March 31. Annual global medical cannabis net revenue is expected to increase year-over-year to between CAD 269 million and 281 million, driven primarily by 10% to 15% growth in the global medical cannabis segment.... Plant propagation revenue is expected to perform in line with traditional seasonal trends, as 65% to 75% of revenues are normally earned in the first half of a calendar year.
Speaker #2: Let me now provide some thoughts on what we expect for our fiscal year 2026 outlook, which ends on March 31. Annual global medical cannabis net revenue is expected to increase year-over-year to between $269 million and $281 million, driven primarily by 10% to 15% growth in the global medical cannabis segment.
Speaker #2: Plant propagation revenues expected to perform in line with traditional seasonal trends, a 65% to 75% of revenues are normally earned in the first half of a calendar year.
Speaker #2: Consolidated adjusted gross margins are expected to remain strong, as we have benefited from a favorable sales mix due to higher global medical cannabis revenue, along with operational efficiencies in our manufacturing sites.
Simona King: Consolidated Adjusted Gross Margins are expected to remain strong, as we have benefited from favorable sales mix due to higher global medical cannabis revenue, along with operational efficiencies in our manufacturing sites. Finally, annual consolidated Adjusted EBITDA is anticipated to increase year-over-year with an expected range of CAD 52 million to 57 million, representing 5% to 10% annual growth. This expected growth is driven primarily by net revenue increases and industry-leading margins in the global medical cannabis business. Thank you for your time. I'll now turn the call back to Miguel.
Speaker #2: And finally, annual consolidated adjusted EBITDA is anticipated to increase year-over-year, with an expected range of $52 million to $57 million, representing 5% to 10% annual growth.
Speaker #2: This expected growth is driven primarily by net revenue increases and industry-leading margins in the global medical cannabis business. Thank you for your time. I'll now turn the call back to Miguel.
Speaker #2: Thanks, Simona. Our primary objective is to grow our business by capitalizing on the rapidly evolving global medical cannabis opportunity. Which is projected to surpass $9 billion.
Miguel Martin: Thanks, Simona. Our primary objective is to grow our business by capitalizing on the rapidly evolving global medical cannabis opportunity, which is projected to surpass $9 billion, thereby maximizing shareholder returns. We have established a strong competitive position by first building deep regulatory and world-class genetic capabilities, supported by an extensive network of GMP manufacturing facilities, and then demonstrating consistent commercial execution excellence. This approach has enabled us to be a market leader with both healthcare providers and patients. Through our focused commitment to global medical cannabis, we will reinforce our market-leading presence in Canada, Europe, Australia, and New Zealand, and expand into additional markets as opportunities arise. We look forward to providing updates on our progress and strategic direction as we advance. Operator, we are now ready to take questions.
Speaker #2: Thereby maximizing shareholder returns. We have established a strong competitive position by first building deep regulatory and world-class genetic capabilities supported by an extensive network facilities and then demonstrating consistent commercial of GMP manufacturing execution excellence.
Speaker #2: This approach has enabled us to be a market leader with both healthcare providers and patients. Through our focused commitment to global medical cannabis, we will reinforce our market-leading presence in Canada, Europe, Australia, and New Zealand, and expand into additional markets as opportunities arise.
Speaker #2: We look forward to providing updates on our progress and strategic direction as we advance. AURORA, we are now ready to take
Speaker #1: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad.
Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would 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. One moment, please, while we poll for questions. Our first question comes from Kenrick Tai with Canaccord Genuity. Please proceed with your question.
Speaker #1: A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue.
Speaker #1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.
Speaker #1: Our first question comes from Tenrik Tai with Canaccord Genuity. Please proceed with your
Speaker #1: question. Thank you and good
Kenrick Tai: Thank you, and good morning. Congrats on the quarter. I just wanted to follow up on the select market exit in Canada. Now, if we looked at a number on the print, you're looking at roughly CAD 20 million in revenues, business on a go forward. Could you sort of speak to, you know, what the run rate would look like on a select, on the exit from those markets? And perhaps also whether there's a point in time whether you could or would essentially fully exit consumer cannabis in Canada.
Speaker #3: morning. Congrats on the quarter. I just wanted to follow up on the SELECT market exit in Canada. Now, if we look to the number on the print, you're looking at roughly a $20 million in revenues business on a go-forward.
Speaker #3: Could you sort of speak to what the run rate would look like on a SELECT on the exit from those markets? And perhaps also whether there's a point in time whether you could or would essentially fully exit consumer cannabis in
Speaker #3: Canada? Yeah, good morning and thank you for the
Miguel Martin: Yeah, good morning, and thank you for the question. You know, we're continuing to evaluate exactly what that looks like. I think what I can say, though, is that, you know, those decisions will be, you know, beneficial or accretive to our overall financial results. What we've seen is that the reallocation of our resources, particularly that, you know, finite, high-quality flower into the international market, will make a significant difference in our overall financials. And so, you know, it's a bit of a, an evolution for us. The other point I guess I'd make is this isn't anything new. You've seen us continue to prioritize global medical cannabis over the last couple of years and done it very sort of successfully as we've gone through, and so we'll continue to be a bit flexible. Now, your point about would we ever get out completely?
Speaker #2: question. We're continuing to evaluate exactly what that looks like. I think what we can say, though, is that those decisions will be beneficial or accretive to our overall financial results.
Speaker #2: What we've seen is that the reallocation of our resources, particularly that finite, high-quality flower, into the international in our overall financials. And market will make a significant difference so it's a bit of an evolution for us.
Speaker #2: The other part, I guess, I'd make is this isn't anything new. You've seen us continue to prioritize global medical cannabis over the last couple of years and done it very sort of successfully as we've gone through.
Speaker #2: And so we'll continue to be a bit flexible. Now, your point about would we ever get out completely, I think that's something we continue to evaluate.
Miguel Martin: I think that's, you know, something we continue to evaluate. We've been in, you know, rec cannabis or consumer cannabis in Canada since day one, and so we still have that touch point. But again, our focus is profitability and growth, and, you know, if that is a decision that looks like it's best suited to be exclusively on the medical cannabis side, it's something we would do.
Speaker #2: We've been in rec cannabis or consumer cannabis in Canada since day one. And so we still have that touchpoint. But again, our focus is profitability and growth.
Speaker #2: And if that is a decision that looks like it's best suited to be exclusively on the medical cannabis side, it's something we would—
Speaker #2: do.
Kenrick Tai: Great. Thank you, Miguel. And just a quick one with respect to Australia. This premiumization strategy or sort of moving up market in Australia. How disruptive is that shift to your presence in the market? And, you know, what are your expectations around timeline when we can sort of get a better handle on how this will, you know, play out and the benefits for that Australian business and what that Australian business will look like once you've sort of high-graded your portfolio in the market?
Speaker #3: Thank you, Miguel. And just a quick one with respect to Australia. The premiumization strategy or sort of moving up market in Australia, how disruptive is that shift to your presence in the market?
Speaker #3: And what are your handle on how this will play out and the expectations around timeline when we can sort of get a better benefits for that Australian business and what that Australian business will look like once you've sort of high-graded your portfolio in the market?
Speaker #2: Yeah, I don't think it will be of value for the question. I don't think it's disruptive at all. I mean, Australia really started out under a model they call the concession model, and a value model for those patients.
Miguel Martin: Yeah, I, I don't think it... Well, thank you for the question. I don't think it's disruptive at all. I mean, Australia really started out, you know, in, under a model they call a concession model and, and a value model for those patients. And as we talked about, it's quite a large and, and diverse market, and there is an expansion and an interest by both prescribing physicians and patients for a variety of products on the premium side. And as, as you well know, it's not just flower and oil. So we run globally a premium and core model, so it's, it's not disruptive for us at all, and it's very accretive in, in terms of margins. And so we know there's a lot of value flower, available in Australia, like other markets, whether it's Germany, Poland, the UK, or Canada.
Speaker #2: And as we talked about, it's quite a large and diverse market, and there is an expansion and an interest by both prescribing physicians and patients for a variety of products on the premium side.
Speaker #2: And as you well know, it's not just flower and oil. So we run globally a premium and core model. So it's not disruptive for us at all.
Speaker #2: And it's very accretive in terms of margins. And so we know there's a lot of value flower. Available in Australia, like other markets, whether it's Germany, Poland, the UK, or Canada, our sweet spot is the genetics production and delivery of core and premium.
Miguel Martin: You know, our sweet spot is the genetics, production, and delivery of core and premium medical cannabis products, and so, you know, sits right, right in the middle of all that. So I think it's consistent and not disruptive in any way.
Speaker #2: Medical cannabis products, and so it sits right in the middle of all that. So I think it's consistent and not disruptive in any way.
Speaker #3: Great. Thank you.
Kenrick Tai: Great. Thank you. I'll get back in queue.
Speaker #3: I'll get that. Thank you. You got
Miguel Martin: You got it. Thank you.
Speaker #2: it. Thank
Speaker #2: you. Our next question comes from Derek
Operator: Our next question comes from Derek Lessard with TD Cowen. Please proceed with your question.
Speaker #1: Lessard with TD Cohen. Please proceed with your question.
Speaker #4: Yeah, good morning, everybody. Probably past the acceptable timeframe, but happy New Year anyways. And a great start to it.
Derek J. Lessard: Yeah, good morning, everybody. Probably past the acceptable timeframe, but happy New Year, happy New Year anyways, and a great start to it.
Speaker #2: Happy New Year, Derek. And I think the snow makes that timing and that point relevant. But go ahead.
Miguel Martin: ... Happy New Year, Derek, and I think the snow makes that timing and that point relevant, but go ahead.
Speaker #2: ahead. Yeah, a couple of questions for
Derek J. Lessard: Yeah, a couple questions from me. Just maybe talk about the strategic decision to exit the plant propagation and sort of the timing around the expected close of the transaction.
Speaker #4: Just maybe talk about the strategic decision to exit the plant propagation, and sort of the timing around the expected close of the transaction.
Speaker #2: Sure. I mean, I think, again, focus in execution on global medical cannabis is what we've proven we're best at and where the most profitability is.
Miguel Martin: Sure. I mean, I think, you know, again, focus and execution on global medical cannabis is what we've proven, you know, we're best at and where the most profitability is. I think consistent with the announcement we made on the consumer business, you know, when we look at our resources and we look at the best use of our time and energy and focus, it really is in that area. And the investment in plant propagation, you know, while interesting for a period of time, you know, continued to evolve in a way that wasn't that. And so we saw a great opportunity in divesting that majority share to the shareholders that already exist there.
Speaker #2: I think, consistent with the announcement we made on the consumer business, when we look at our resources and we look at the best use of our time and energy and focus, it really is in that area.
Speaker #2: And the investment in plant propagation, while interesting for a period of time, continued to evolve in a way that wasn't that. And so, we saw a great opportunity in divesting that majority share to the shareholders that already exist there.
Miguel Martin: There are some economics that continue that allow us to participate, you know, in the success of that, including earn-outs in the facilities that we vended in. But when you look at, you know, investment and ROI of our time and resources, clearly with high growth markets, you know, such as Germany, Poland, and UK, it makes a, you know, absolute sense for us to put all of our time and effort there. And I think, you know, if you look at the last quarter and you look at the last couple of years, you know, when we focus on global medical cannabis, you know, the results have always been positive.
Speaker #2: There are some economics that continue, that allow us to participate in the success of that, including earnouts and the facilities that we've ended in.
Speaker #2: But when you look at investment and ROI of our time and resources, clearly, with high growth markets, such as Germany and Poland and UK, it makes an absolute sense for us to put all of our time and effort there.
Speaker #2: last quarter and you look at the last couple And I think if you look at the of years, when we focus on global medical cannabis, the results have always been positive.
Speaker #4: Absolutely makes sense, Miguel. And maybe just one for Simona. Appreciate the additional full guidance on the year. How should we think about the plant propagation contribution to EBITDA?
Derek J. Lessard: That still makes sense, Miguel. And maybe just one for Simona. Appreciate the additional full guidance on the year. How should we think about the plant propagation contribution to EBITDA, I guess, for the full year and maybe for Q4?
Speaker #4: I guess for the full year, and maybe for Q4.
Speaker #5: Yeah. And as we continue to finalize the closing conditions and implications to our financials, we will have a better sense of the pro forma in Q4.
Simona King: Yeah, and as we continue to finalize the closing conditions and implications to our financials, we will have a better sense of the pro forma in Q4. As a result of this divestiture, we will no longer be consolidating the financial results of the Bevo business, and will be treated as discontinued operations. So that will be the treatment going forward. And so I would say, Derek, the focus really should be on thinking through the implications to the global medical cannabis business and continuing to model and think about Q4 and the future, around the strength of that business. So really, it's focusing on the global medical side.
Speaker #5: As a result of this divestiture, we will no longer be consolidating the financial results of the BVO business, and it will be treated as discontinued operations.
Speaker #5: So that will be the treatment going forward. And so I would say the focus really should be on thinking through the implications to the global medical cannabis business and continuing to model and think about Q4 and the future around the strength of that business.
Speaker #5: So it really is focusing on the global medical side.
Speaker #4: Okay, and maybe one last one—I'll sneak one in, switching gears back to Global Medical. You pointed to Poland as one of the contributors to growth, which is great to see.
Derek J. Lessard: Okay. And maybe one last one, I'll sneak one in, switching gears back to global medical. You pointed to Poland as one of the contributors to growth, which is great to see. Just maybe talk about how you've been navigating the pressure there, or if anything has changed since last quarter. I think when you guys pointed to additional pressure, given the changes in the regs there related to restrictions around the online consultations.
Speaker #4: Just maybe talk about how you've been navigating the pressure there, or if anything has changed since last quarter. I think when you guys pointed to additional pressure given the changes in the regs there, related to restrictions around the online—
Speaker #1: Consultations .
Speaker #2: Yeah , I mean , I think great question . So these it's a regulatory evolving , albeit with a pretty specific , you know , underpinning .
Miguel Martin: Yeah, I mean, I think it's a great question. So, you know, these regulatory frameworks are evolving, albeit, you know, with a pretty specific, you know, scientific underpinning. We saw the change in Poland, as you mentioned, and what it required, you know, really was to lean back on a strong system. You know, product development, product registration, distribution, and specifically, you know, having a way to be able to connect the patients through clinics. And we were very quickly, you know, able to do that. I think really built on the background of the strength of the medications and the reputation that we had, having physicians and patients want to get those, you know, products. And, and so we navigated quickly. Obviously, our results reflect that.
Speaker #2: saw the We change scientific Poland , as you and what it frameworks requires . You know , with a pretty specific , you are underpinning .
Speaker #2: We the saw change in scientific Poland , as you mentioned , and what it know , required . You really back lean on strong a know , system , you product development , product registration , distribution and specifically , you know , to be able to having a way connect to patients through clinics .
Speaker #2: And we were very quickly, that... I was able to do, I think, really built on the background of the— and the medications’ reputation that we had, we physicians, strength of patients want to get those. And so we navigated, having quickly.
Miguel Martin: That's why, you know, we're encouraged by what's happening, you know, in Germany with what may land there, that we'll be able to do a, you know, a similar execution. So, you know, these regs continue to evolve. You have to be agile, but I think having, you know, tremendous relationships with them, we have a very strong GR organization, a very strong regulatory team, and so we are able to work with the regulators, you know, as things evolve, and we think that's a strength of ours.
Speaker #2: our products . results Obviously , reflect That's we're why that . encouraged by what's happening in Germany with what may land there , that we'll be able to do a similar execution .
Speaker #2: know , these regs So , you evolve . You have to agile . But I think having tremendous relationships continue to we have a them , very GR strong strong regulatory organization , very team .
Derek J. Lessard: Yeah, great job, everybody, and congrats again on the quarter.
Speaker #2: And so we able to work with the regulators . And we as things ours a .
Miguel Martin: Thank you so much, Derek. We appreciate it.
Speaker #1: Yeah . Great everybody . be the
Operator: Okay, our next question comes from Bill Kirk with Roth Capital Partners. Please proceed with your question.
Speaker #1: quarter Thank you
Speaker #1: .
Speaker #2: so much it
Speaker #2: We
Speaker #2: . congrats Derrick .
William Joseph Kirk: Hey, thank you. Good morning, everybody. A point of clarity first. I have year-to-date global medical cannabis at CAD 211 million. The full year guide is CAD 269 to 281 million. Are those numbers comparable? Because even the high ends would imply quarter-over-quarter deceleration in Q4, and the low end would imply a big deceleration. So I guess the clarity point, am I looking at those numbers comparably?
Speaker #3: Next question, okay. This comes from Kirk with Bill Roth at Our Capital Partners. Please proceed with your question, Roth.
Speaker #4: Good morning Hey thank you . strength of everybody . First , year to date A . global clarity point of cannabis medical at 211 million .
Speaker #4: The full year guide is 269 to 281 . Are those numbers comparable ? the Because even high end would imply quarter over quarter deceleration in for Q low end would imply a big and the deceleration .
Simona King: Yeah, so let me jump in on that one. So the guidance that we provided is the full revenue for the company, which is inclusive of Bevo in there. And so with this announcement today around the divestiture of our stake in Bevo, that's what we will be working through is the pro forma impact of that in Q4. So again, it's continuing to focus on the, as we think about the implications for Q4, with those results being removed and shown as discontinued operations, it's really focusing on the medical cannabis global medical cannabis revenues and trending those out. So keeping in mind that the full guidance was reflective of total revenue.
Speaker #4: So I guess the point am I clarity looking at those numbers comparably ?
Speaker #5: Yeah . So let me let me jump in on that one . So the guidance that we provided is the full the full revenue for the company , which is of , inclusive of vivo in there .
Speaker #5: And so with this announcement today around the divestiture of our stake in vivo , that's what we be will working through is the performance impact in of that again , it's continuing to .
Speaker #5: focus the as Q4 we think about So the for Q4 , with those results being being removed and shown as discontinued operations . It's really on the focusing medical cannabis medical cannabis revenues and trending those out .
William Joseph Kirk: Okay, okay, because in the press release, it says annual global medical cannabis is expected to be 269-
Speaker #5: keeping in So , global reflective of total revenue was .
William Joseph Kirk: - to 281.
Simona King: Yeah
Speaker #4: Okay , okay . Because the in the press release it
Simona King: ... So yeah, yes, apologies. Yes.
William Joseph Kirk: Year-to-date, global medical cannabis is 211, right?
Speaker #4: global medical is cannabis expected to be 269 to 281 .
Simona King: Yes, just to clarify that, that is correct. Global medical cannabis, and so yes, we expect a strong quarter in Q4.
Speaker #5: apologies . Yes .
Speaker #4: cannabis medical is So Global mind that
Speaker #5: Just . Yeah . to clarify that , that is correct . Global medical Yes cannabis . And so yes , we expect a strong Q4 quarter in we .
William Joseph Kirk: Wouldn't that be implied CAD 58 million to 70 million in global medical cannabis? And I think you just did over 75. So, I think I'm looking at something wrong, 'cause that would imply a big deceleration in Q4 global medical cannabis from Q3 to Q2, Q1.
Speaker #4: that be Wouldn't implied ? think you 58 million to 70 million in global cannabis . And I medical over just did 75 . I think So I'm something looking at a big would imply deceleration in for wrong because that Q global medical cannabis three Q to Q , from one q .
Simona King: Yes, we do expect the ranges that we've provided in the expectations in the press release to be in line where we're projecting the full year to come in at.
Speaker #5: Yeah . Yes . We we do expect the ranges that in the provided in expectations in the release be in press line where we're projecting year to in the full come at .
William Joseph Kirk: Okay. And then the follow-up would be, why do you expect a deceleration in 4Q?
Speaker #4: Okay . And then the follow be . we've do you expect a deceleration in four Q .
Simona King: So, at this point, we're really focusing on the full year guidance, and the ranges that we provided, which we believe will be in line with where we're trending. You know, taking into account, there could be some headwinds in some of the markets. So again, highlighting that this is a record result for us, on a full year basis.
Speaker #5: point at this we're really So on the full focusing guidance ranges that we which provided , which believe will we be in line with trending .
Speaker #5: know , taking where account there could into be some headwinds the we're You So in some of highlighting that record again , this is a and the on us for a full .
William Joseph Kirk: Okay, thank you. Then one last one for me. The adjusted gross margin in the wholesale business, I think it was 35% in the quarter. It's been higher than the consumer cannabis segment for a while. Why would the wholesale gross margin be higher than the consumer segment gross margin?
Speaker #5: year
Speaker #4: Thank you . And then one me . Okay . The the adjusted last one for gross margin business in the wholesale think it was quarter .
Speaker #4: It's been higher than the cannabis consumer for segment for a while . I 35% in the Why would the wholesale higher than the be gross margin consumer Gross segment ?
Miguel Martin: Well, for a couple reasons. One is that that consumer business, not only for us, but for others, you know, is tight. And when you look at fully loaded, where you sort of end up in that market, you end up with those type of margins. I mean, I think you've seen it in the industry. It's not just us. The wholesale business is pretty good. I mean, it's obviously not as good as, you know, when you distribute it and sell it yourself, and so I think it's just indicative, you know, of what it is. The other aspect on the wholesale business is, you know, those products that we sell are not readily available, you know, all over the world because of some of the regulatory requirements.
Speaker #4: margin
Speaker #2: couple Well , for a One is that that consumer business , not only for us , others , know , but for is tight you .
Speaker #2: when you look at fully loaded And you sort of end , where up market , you end up with those type of margins .
Speaker #2: when you look at fully loaded And
Speaker #2: I mean , wholesale business is pretty good . I mean , it's obviously not as as , you know , distribute when you it and sell yourself .
Speaker #2: And so I think it's indicative , it you know , of just what it is . The other aspect on the wholesale business you is , those we sell products that not are available all over the world because of some of regulatory the it's requirements .
Speaker #2: And so I think it's indicative , it you know , of just what it is . The other aspect on the wholesale business you is , those we sell products that not are available all over the world because of some of regulatory the it's in that like I know , said , it's not it's not to what us on the on the consumer I , you side .
Miguel Martin: So I think it's inherent to what you're seeing in overall, and like I said, you know, it's not just us on the consumer side.
William Joseph Kirk: Thank you. Appreciate it.
Miguel Martin: You got it. Thank you, Bill.
Operator: Our next question comes from Brennan Cunnington with ATB Capital Markets. Please proceed with your question.
Speaker #4: Thank you .
Speaker #4: .
Speaker #2: Bill Thank you . inherent ?
Speaker #2: Bill, thank you. Inherent, just—
Brennan Cunnington: Hey, good morning, and congrats on the results this quarter. Just looking at the ATM, so you mentioned, so the funds for this could go to M&A, and so we're just kind of wondering, like, are there any potential assets that you might be interested? Is it potentially, like, cultivation capacity, expansion opportunities, or any other top goals for the funds raised from this?
Speaker #3: ATB with Cunnington. Please proceed with your question.
Speaker #3: Markets . And
Speaker #6: the congrats on quarter results this
Speaker #6: Just
Speaker #6: ATM . So you mentioned so the this could go funds for so to kind of wondering like we're just And looking at Is potentially like cultivation capacity interested .
Miguel Martin: Yeah, and thanks for the question and the comment. You know, with over CAD 150 million in cash, and then you add this, it really allows us to be opportunistic. Clearly, as you've seen from our announcement, you know, our focus and really what we excel at is around that global medical cannabis point, and there are many sort of aspects to it. Clearly, cultivation, you know, of GMP flower and products for the international market are always an area of interest for us. Beyond, you know, and the M&A point, we've invested over CAD 40 million internally in significant, you know, capacity and quality upgrades in our existing facilities, which has helped us receive that GMP certification for another three years at three of them.
Speaker #6: expansion or top for the funds goals from this any ?
Speaker #2: Yeah . And the . You question . know , And comment the with
Speaker #2: 150 million in cash and then you have this it really thanks for the opportunistic . allows us to be . Clearly , as you've seen from our announcement , our you know , and really what over around that global medical cannabis point .
Speaker #2: And there are many sort of aspects to it. Cultivation of GMP flower, clearly, and products for market are always an area of interest for us.
Speaker #2: you know , and the M&A point , invested over Beyond , $40 million internally in significant capacity quality upgrades existing in our facilities , which international us has helped receive that GMP raised certification for another three years and at three of them .
Miguel Martin: So cultivation, as you mentioned, always of interest to us, but there are other aspects to global medical cannabis, you know, that potential, you know, have the potential as well, whether, you know, that's on the distribution side or the clinic side or other aspects. So it's really to be opportunistic, and we intend, you know, to use that clearly not for operations, but for accretive, you know, aspects, including M&A. And so, you know, I, I would say it would be consistent with what we're focusing on, but the exact, you know, you know, aspects of it and, and what it might be, you know, we're not in a position to say yet, but we'll obviously update folks as that becomes, you know, more specific.
Speaker #2: So mentioned , always of the interest to us , but there are other global medical cannabis that potential , you know , have the potential as you cultivation , distribution side or as well , the side or other aspects .
Speaker #2: So it's really to opportunistic , be and we use that clearly not intend for to operations , but for aspects , including M&A .
Speaker #2: creative so And I would say it be consistent would with what focusing we're But on . exact , aspects to you the know , you know , aspects of it and what know , we're not in a it but we'll obviously position to update folks that say yet , becomes , more specific .
Brennan Cunnington: Okay, perfect. Fair enough. And then just looking at the exit from a lot of the consumer cannabis in Canada, what type of SG&A savings might we see from this?
Speaker #6: Okay . Perfect . Fair enough . And then
Speaker #6: exit just from a lot of the consumer in Canada , what cannabis type of SG&A savings might might we see from this
Miguel Martin: Yeah, I mean, we're continuing to value that. I mean, I would say, you know, you'll see some of that reporting as you see the full year and then into Q4. We definitely think it's gonna be a benefit, though the other aspect, you know, beyond the SG&A savings is taking those inputs, as you heard from the previous question, and putting them into higher margin markets. So, you know, the differential between the margins of, say, you know, our consumer business and international markets is significant, and you've seen where the overall margin landed. So I think, you know, more to follow on what it is. You heard from Simona's comments about the benefits that we believe financially that will provide us, and we look forward to sharing that with you once those sort of work their way through.
Speaker #6: ? Yeah , I mean ,
Speaker #2: we're continuing to evaluate that . I mean , I would say , know , some of that reporting you see the as you'll see year and then Q4 , we definitely think into it's going to be a benefit , The other though .
Speaker #2: aspect beyond the SG&A savings is you taking those inputs , as you heard from the previous question and put them into higher margin markets .
Speaker #2: So the differential of , say margins our consumer and business , you know , markets is significant , and you've seen where the overall landed .
Speaker #2: So the differential of , say margins our consumer and business , you know , markets is significant , and you've seen where the overall margin So I think more to follow on on you from Simona's what it is comments about the benefits that we believe financially that will us .
Brennan Cunnington: Perfect. And then if I could just sneak in one little last one. So-
Speaker #2: look forward provide to sharing that with you once , And we once those sort of work their through way .
Miguel Martin: Sure.
Brennan Cunnington: On the international markets, just out of curiosity, are there any other international markets that you may be looking at?
Speaker #6: then if I could Perfect . And just sneak in one little last one . So on the international markets , just out of curiosity , are there any other international markets that you may be looking at ?
Miguel Martin: I mean, we look at all of them as they come online. You know, we're in 12 countries today. We've got a regulatory team and a product registration process that, you know, has allowed us to enter every market that's come online. You know, typically, we like to have markets that, you know, have a sort of thorough regulatory profile, which we're starting to see, you know, in Europe. So the latest new markets, you know, that are bringing medical cannabis on, places like Switzerland, Austria, France, and some others, you know, we are working to bring our products into those markets. But we're very excited about, you know, potential developments, you know, in other new countries such as, say, Ukraine, and Turkey.
Speaker #2: we look at all I mean , as they online . You know , come we're in 12 countries today . We've of them regulatory team product registration process that and a allowed enter every market has that's come online .
Speaker #2: You know , typically to have markets that have a we like science thorough regulatory sort of profile , starting to , you know , in Europe .
Speaker #2: You know , typically to have markets that have a we like science thorough regulatory sort of profile , starting to , you know , in see So the latest markets bringing medical that are places Switzerland which we're cannabis on like And some others , you know , we are , France .
Speaker #2: bring our working to products markets . But we're very excited about potential developments . You know , such as , countries say , Ukraine and Turkey .
Miguel Martin: And again, we've been very successful because of our stringent regulatory requirements and EU GMP products to be able to enter them as they come online. So we continue to see global growth. I know there's a lot of interest in the US, but, you know, we've seen the growth in medical cannabis regulations and overall systems throughout Europe and, and in parts, other parts of the world. And so we'll be there, you know, as they come online, and I think we've demonstrated, you know, that we can be successful, not only launching, but also sustaining our business in those markets.
Speaker #2: we've been And very successful because of our stringent regulatory requirements again , and GMP products to be able to enter them as they come online .
Speaker #2: So we continue to see global growth . there's a lot of interest in the US you seen the I know medical we've know , cannabis growth in regulations and overall systems Europe throughout and in parts of parts of the world .
Speaker #2: And so we'll be there as they come, whether we've online. You demonstrated, it can be not only launching, but also a successful business in those, you know, new markets, sustaining our...
Brennan Cunnington: Understood. Thank you so much for the color. I'll jump back in the queue.
Miguel Martin: Thank you very much.
Operator: As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Pablo Zuanic with Zuanic & Associates. Please proceed with your question.
Speaker #6: Understood, Color. I'll—thank you so much. Queue.
Speaker #2: Thank you very much .
Speaker #3: As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question is from Pablo Zuanic with Zanuck and Associates.
Pablo Ernesto Zuanic: Thank you, and good morning, everyone. Miguel, I also want to discuss supply chain, but just first, one question on the US. In your opinion, if we get rescheduling, as it's been announced, would that allow you to enter the US market? Are we thinking it- we're gonna have a federal legalization of medical cannabis? Will Aurora be able to participate given its expertise, or the rescheduling doesn't necessarily mean federally legalizing medical cannabis? What's your opinion on that?
Speaker #3: Please your question comes proceed with
Speaker #3: .
Speaker #7: Thank you and good
Speaker #7: everyone . morning , I discuss chain , supply but just first , one question on the US also want to if we opinion , in your get rescheduling as it's been announced , would allow you to US market ?
Speaker #7: Are we thinking we're going to have a enter the of medical cannabis legalization ? Will Aurora be able to participate given its expertise or other rescheduling doesn't necessarily mean federally legalizing medical cannabis .
Miguel Martin: You know, it's early days, Pablo, and good morning. You know, first and foremost, what the Trump administration announced is very consistent with what we've said, you know, is important. Medical cannabis first, you know, a regulatory, strong regulatory approach, and we think that lines up beautifully for a company like Aurora, you know, that operates in you know, regulated markets all around the world. You know, as it's been laid out, and we haven't seen any of the final details of what a Schedule One to Schedule Three would look like, it does not allow a Canadian company traded on the NASDAQ to directly go into that market. It does expand research. It does, you know, start to open the door for some variety of different things, but, you know, we'll have to see what the details look like.
Speaker #7: What's your opinion on that ?
Speaker #2: , you know , it's early days , Pablo , and good You know , foremost , first and what Trump the morning . administration announced is very consistent with what we've said .
Speaker #2: , you know , it's early days , Pablo , and good You know , foremost , first and what Trump the morning . administration announced is very consistent with what we've said
Speaker #2: Cannabis first. You know, a regulatory, regulatory strong approach. And we think that lines up beautifully for a company like Aurora.
Speaker #2: You know that operates in regular , you regulated markets the all around You know , world . as it's been laid out and we haven't seen any of the final details of what a one and schedule schedule would look like .
Speaker #2: It does three not allow Canadian company a Nasdaq traded on the to directly that market . go into It does expand research . does start to that door for some variety of different things , but , you know , we'll have to see It like what the .
Miguel Martin: But, you know, it is a step in the right direction, and we're very encouraged by that. But again, it was a very strong medical message. You know, that photo op in the White House with doctors and, you know, folks from the medical community really reinforces what we've always believed, you know, which is this will be a medical-first opportunity, which is why we think Aurora is so well-positioned when we get there.
Speaker #2: But , you know , it is details look a step in the right direction . And we're very encouraged by that . But again , it was a very strong medical message .
Speaker #2: You know , that op photo white House with doctors know , and and , you in the folks from the medical community reinforces what we've really always believed , you know , which this will be a medical first opportunity , why we think Aurora is which is so well positioned when we get there .
Pablo Ernesto Zuanic: Thank you. Look, regarding supply chain, it's a bit of a two-part question in terms of understanding what you have right now and then how you're thinking about acquisitions. In terms of what you have right now, you know, for example, you said in the call that most of the products that you sell are owned products, grown in your facilities, but does that mean 51%, 90%? If you can give some color in terms of how much you're buying from third parties, that would help. A reminder of what you have in terms of your current facilities, and looking back, you know, lessons from the Aurora Sky facility. So that part of the question in terms of what you have now. In terms of buying cultivation capacity, are we talking about indoor versus greenhouse?
Speaker #7: You, Luke. And thank you. Regarding supply chain, it's a question in terms of understanding what you have right now, and then how you're thinking about acquisitions in terms of what you have right now.
Speaker #7: You know , for example , you said in the call that most of the products that you sell are own or products grown in your facilities , but does that mean 51% , 19% ?
Speaker #7: If you can give some terms of how much your parties, that buying from third help color in us reminded of what you have in terms of your current facilities.
Speaker #7: And looking back , you know , lessons from the Sky Aurora facility . So that that part of have in terms of buying now capacity , are we talking about indoor versus greenhouse ?
Pablo Ernesto Zuanic: Are we talking about small, little craft growers? Are we talking about just Canadian or maybe other countries? Any color in that sense would help. Thank you.
Speaker #7: Are we talking little craft about growers ? Are we talking about just Canadian or maybe other countries . Any color in that sense would help .
Miguel Martin: Sure. So the majority, you know, I'm not gonna give you a number, but it's closer to 100 than it is to 50, of the products that we sell internationally, we produce, distribute, and sell ourselves. A really important dynamic for everybody to understand is the GMP flower dynamic. That standard is getting more challenging. It is difficult, and once you get that certification, which you need to have, say, for Germany, the fastest-growing market in Europe, you have it for three years. So we've got, you know, three of our largest facilities just received that certification, which is very exciting. And so GMP, you know, premium flower, those prices continue to be solid and in some cases go up and is our focus.
Speaker #7: Thank you
Speaker #2: Sure... so, the majority—I'm not going to give you a number, but it's closer to 100 than it is to 50—of the products are to sell internationally.
Speaker #2: We produce , distribute and sell ourselves really a important dynamic for everybody to understand is the GMP flower dynamic . That standard is getting more challenging .
Speaker #2: It is difficult. And once you get that certification, which you need to have, say for Germany—the growing market in Europe—you have it for three years, at least in the fastest case.
Speaker #2: So we've got , you know , three of our largest facilities just received that which is very exciting . certification , And so GMP premium flower , those prices be continue to solid and in some cases go up .
Miguel Martin: In terms of, you know, facilities and potential acquisition, we have the benefit of having one of the largest genetic facilities in the world, a facility called Aurora Coast off the West Coast, Canada. Those genetics that are created there, that we use ourselves and also sell to others, have been successful both in indoor, which is our primary method of current growing, as well with greenhouses, which many of our, you know, customers use those genetics. So both work, and we, you know, you can get GMP certification in both. We obviously have a long history in indoor, but that doesn't mean, you know, that we are, you know, bound to it.
Speaker #2: And is our focus . In terms of facilities and potential acquisition . We have the benefit of having one of the largest genetic facilities in the world , facility called Aurora coast , off the West Canada .
Speaker #2: Those coast of genetics that we there ourselves and created also sell to others , have been use successful both that are in indoor , which is our primary method of current growing as well , with greenhouses , which many of our customers use .
Speaker #2: Those genetics . So both work we , you know , you can get GMP certification in both . We obviously have a long history indoor , but that doesn't mean , you know in we are bound to it .
Miguel Martin: I will say Canada continues to be, you know, the best place to grow high-quality, premium GMP flower in the world, and we're proud of that, and, you know, we continue to see great opportunities to ship it. So it's a big competitive advantage for us to be able to grow that much flower, be one of Canada's, if not the largest, one of the largest exporters of GMP flower, and that's a core part of why we've been successful and will be successful going forward.
Speaker #2: I will say Canada continues to be the best place to grow high-quality GMP premium flower in the world, and we're proud of that.
Speaker #2: And we continue to see great opportunities to ship it . So it's a big competitive advantage for us to be able to grow that much flower , be one of Canada's , if not the largest , one of the exporters largest of GMP flower .
Pablo Ernesto Zuanic: Thank you.
Speaker #2: And that's a core part of been why we've successful . And will be successful going . Thank you . You're very welcome .
Miguel Martin: You're very welcome.
Operator: We have reached the end of our question and answer session. There are no more further questions at this time. I would now like to turn the floor back over to Miguel Martin for closing comments.
Speaker #3: reached the end of our question We have and answer session . There more further questions at are no this time . I would now like to turn the floor back over to Miguel Martin for closing comments .
Miguel Martin: Thank you very much. We're very excited about this quarter, and more importantly, very excited about the future of Aurora Cannabis, and we're thrilled to share some color with you here today. We'll continue to update you. We hope everyone is safe and well. All the best.
Speaker #2: Thank you very much . We're very excited about this quarter and more very excited about the importantly , future of Aurora cannabis . we're And thrilled to share some color with you here today .
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Speaker #2: We'll continue to update you . We hope everyone is safe and well . All the best .
