Organigram Global Q1 2026 Organigram Global Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Organigram Global Inc Earnings Call
Operator: Thank you for joining us, and welcome to the Organigram Global Q1 fiscal 2026 earnings call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Max Schwartz, Director of Investor Relations. Please go ahead.
Operator: Thank you for joining us, and welcome to the Organigram Global Q1 fiscal 2026 earnings call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Max Schwartz, Director of Investor Relations. Please go ahead.
Speaker #1: To withdraw your question, I will now hand the call over to ahead. Relations session. Star 1 on your telephone if you would like to ask a question. Please go ahead.
Max Schwartz: Thank you very much, Karen. Good morning, everyone. Thanks for joining us today. As a brief reminder, this call is being recorded, and a replay will be available on our website within 24 hours. Today's call will include forward-looking information, forward-looking statements, and actual results could differ materially due to a number of risk factors outlined in our filings and the cautionary statements included in our Q1 fiscal 2026 press release and MD&A. We'll also reference certain non-IFRS measures such as adjusted EBITDA, adjusted gross margin, and free cash flow. Definitions and reconciliations are available in our disclosed materials. Unless otherwise noted, market share data is sourced from HiFyre, WeedCrawler, provincial boards, retailers, and our own internal sales tracking. Discussing results today are James Yamanaka, CEO of Organigram, and Greg Guyatt, CFO of Organigram Global.
Max Schwartz: Thank you very much, Karen. Good morning, everyone. Thanks for joining us today. As a brief reminder, this call is being recorded, and a replay will be available on our website within 24 hours. Today's call will include forward-looking information, forward-looking statements, and actual results could differ materially due to a number of risk factors outlined in our filings and the cautionary statements included in our Q1 fiscal 2026 press release and MD&A. We'll also reference certain non-IFRS measures such as adjusted EBITDA, adjusted gross margin, and free cash flow. Definitions and reconciliations are available in our disclosed materials. Unless otherwise noted, market share data is sourced from HiFyre, WeedCrawler, provincial boards, retailers, and our own internal sales tracking. Discussing results today are James Yamanaka, CEO of Organigram, and Greg Guyatt, CFO of Organigram Global.
Speaker #2: And a replay will be available on our website.
Speaker #2: within 24 hours. Today's call question, press star 1 again. Very much, Karen. Good morning, everyone. Thanks for information, forward-looking statements, filings and the cautionary statements joining us today.
Speaker #2: 2026 press release and MD&A. We'll also reference certain reminders—this call is being recorded—non-IFRS measures such as adjusted free cash flow. Max Schwartz, Director of Investor...
Speaker #2: Definitions and our disclosed materials, reconciliations are available. As a brief, a number of risk factors outlined in our EBITDA, adjusted gross margin, and provincial boards; retailers, tracking.
Speaker #2: Discussing results today are James Yamanaka, CEO, and CFO of Organigram Global. Any questions not addressed on today's call can be included in our Q1 fiscal email at investors@organigram.ca.
Speaker #2: As a reminder, any investor inquiries
Max Schwartz: As a reminder, any investor inquiries not addressed on today's call can be directed to investors@organigram.ca. With that, I'll now turn the call over to James. Please go ahead, James.
Max Schwartz: As a reminder, any investor inquiries not addressed on today's call can be directed to investors@organigram.ca. With that, I'll now turn the call over to James. Please go ahead, James.
Speaker #2: And with our own internal sales—unless otherwise noted, market share data that—I'll now turn the call over to ORGANIGRAM and Greg Guyatt.
Speaker #2: Please go ahead,
Speaker #3: Thank you, Max and James. Today, this is my first ORGANIGRAM, and I've been encouraged by what I've seen so far: the scale of our operations, the quality of the team, and the depth of capability. Earnings call as CEO of across the business make it clear we've grown into Canada's leading cannabis company.
Devin: Thank you, Max, and good morning, everyone. Thanks for joining us today. This is my first earnings call as CEO of Organigram, and I've been encouraged by what I've seen so far. The scale of our operations, the quality of the team, and the depth of capability across the business make it clear why Organigram has grown into Canada's leading cannabis company. Over the past month, I've focused on understanding where Organigram is genuinely strong and where processes can be fine-tuned. I've traveled to our key facilities, met with colleagues across the organization, and am learning a great deal while also noting where my 20 years of experience in global strategy within highly regulated markets can be applied. Being part of a leading company in a developing industry is genuinely exciting for me.
Moderator: Thank you, Max, and good morning, everyone. Thanks for joining us today. This is my first earnings call as CEO of Organigram, and I've been encouraged by what I've seen so far. The scale of our operations, the quality of the team, and the depth of capability across the business make it clear why Organigram has grown into Canada's leading cannabis company. Over the past month, I've focused on understanding where Organigram is genuinely strong and where processes can be fine-tuned. I've traveled to our key facilities, met with colleagues across the organization, and am learning a great deal while also noting where my 20 years of experience in global strategy within highly regulated markets can be applied. Being part of a leading company in a developing industry is genuinely exciting for me.
Speaker #3: Good morning, everyone. Thanks for joining us.
Speaker #3: ORGANIGRAM is genuinely strong and Over the past month, I've focused on understanding where fine-tuned. I've traveled to our key
Speaker #3: Organization, and I'm learning a great facilities, met with colleagues across the Applied. Being part of a of experience in global strategy leading company in a developing industry is genuinely exciting for me.
Speaker #3: Unlike in more mature
Devin: Unlike in more mature industries where the market dynamics are less fragmented and tend to move more gradually, cannabis is still very much taking shape. Canada sits at the center of that evolution with global leadership in research, product development, cultivation science, quality, and export activity, areas where Organigram has built meaningful strength while thoughtfully managing the risks associated with maturing markets, regulatory uncertainty, and fragmentation. I'm optimistic about the long-term growth of the cannabis industry, and I'm confident in Organigram's ability to compete and lead as that growth continues. With that, let's turn to some of the developments since last quarter. In Canada, we continue to hold the number one market share position with 11.3% total share in Q1 and 11.7% over the past 12 months.
Moderator: Unlike in more mature industries where the market dynamics are less fragmented and tend to move more gradually, cannabis is still very much taking shape. Canada sits at the center of that evolution with global leadership in research, product development, cultivation science, quality, and export activity, areas where Organigram has built meaningful strength while thoughtfully managing the risks associated with maturing markets, regulatory uncertainty, and fragmentation. I'm optimistic about the long-term growth of the cannabis industry, and I'm confident in Organigram's ability to compete and lead as that growth continues. With that, let's turn to some of the developments since last quarter. In Canada, we continue to hold the number one market share position with 11.3% total share in Q1 and 11.7% over the past 12 months.
Speaker #3: industries where the market dynamics are within highly regulated markets can be less fragmented and tend to be move more gradually, where processes can be James.
Speaker #3: cannabis is still very much taking development, cultivation science, quality, and export deal. activity. Areas where ORGANIGRAM has While also noting where my 20 years thoughtfully managing the risks associated directed to built meaningful strength while with maturing markets, about the long-term growth of the cannabis industry, and I'm confident in fragmentation.
Speaker #3: The developments since last, and lead as that growth quarter. In Canada, we continue to position with 11.3% total share in Q1 and over the last 12 months.
Devin: Compared to last quarter, we saw market share decline of approximately 500 basis points, largely due to the impact of the eight-week B.C. General Employees' Union strike, which ended on 26 October. After a brief inventory restock period, our recovery in B.C. is now complete, and we've regained historical distribution levels. Competition in vapes and IPRs also contributed to the fluctuation in market share, partially offset by growth in flower and concentrate. Nationally, three of our brands, SHRED, BOXHOT, and Big Bag of Buds, maintain their top 10 brand status in Q1, generating over CAD 67 million in retail sales. In Canada's largest markets, we continue to compete strongly, holding the number one position in Ontario, British Columbia, and Alberta. In Quebec, we moved up to the number three position with 9.9% market share for the quarter, exiting December at 10.1%, driven by the success of our vape launches.
Moderator: Compared to last quarter, we saw market share decline of approximately 500 basis points, largely due to the impact of the eight-week B.C. General Employees' Union strike, which ended on 26 October. After a brief inventory restock period, our recovery in B.C. is now complete, and we've regained historical distribution levels. Competition in vapes and IPRs also contributed to the fluctuation in market share, partially offset by growth in flower and concentrate. Nationally, three of our brands, SHRED, BOXHOT, and Big Bag of Buds, maintain their top 10 brand status in Q1, generating over CAD 67 million in retail sales. In Canada's largest markets, we continue to compete strongly, holding the number one position in Ontario, British Columbia, and Alberta. In Quebec, we moved up to the number three position with 9.9% market share for the quarter, exiting December at 10.1%, driven by the success of our vape launches.
Speaker #3: quarter, we saw market share Compared to last continues. decline of approximately 500 basis I'm optimistic 11.7% over the past With that, let's turn to some of strike which ended on October 26th.
Speaker #3: Brief period, brief inventory restock period, our recovery shape. Canada sits at the regained historical distribution. Invades in IPRs also contributed after a share, partially offset by BC general employee union points, largely due to the levels.
Speaker #3: growth in flower and Nationally, three of our brands, Tread, Box Talk, Hot, and Big Competition concentrate. Bag of Buds, maintain their top 10 to the fluctuation in market sales.
Speaker #3: In Canada's largest million in retail markets, we continue to compete—Ontario, British Columbia, and in BC is now complete—and we've generating over $67. In Quebec, we moved up to the number three brand status in Q1, share for the quarter, exiting December at 10.1%, driven by the success of our vape launches.
Speaker #3: We also continue to outperform in most other provinces, in position with 9.9% market share in Alberta, 13.4% in Saskatchewan, and 12.2% in Q1. Category performance varied during the quarter compared to the prior year period.
Devin: We also continue to outperform in most other provinces in Q1. Notably, we held 33.1% market share in New Brunswick, 21.9% in Newfoundland, 13.4% in Saskatchewan, and 12.2% in Nova Scotia. Category performance varied during the quarter compared to the prior year period. Vapes and IPRs remain the most competitive segments. We maintained the number one position in overall vapes with a 20.4% market share, while in overall pre-rolls, we moved to the number two position at 7.7%, primarily reflecting increased competition in IPRs. In beverages, market share increased 80 basis points year-over-year to 5.9%. In concentrates, BOXHOT with Diamond and Organigram Innovation became the number one dabbable concentrate in Canada, contributing to a 15.5% category share. In edibles, we gained 2.4 points year-over-year to reach 17.9% share, with SHRED becoming the number two gummy brand in the country in December.
Moderator: We also continue to outperform in most other provinces in Q1. Notably, we held 33.1% market share in New Brunswick, 21.9% in Newfoundland, 13.4% in Saskatchewan, and 12.2% in Nova Scotia. Category performance varied during the quarter compared to the prior year period. Vapes and IPRs remain the most competitive segments. We maintained the number one position in overall vapes with a 20.4% market share, while in overall pre-rolls, we moved to the number two position at 7.7%, primarily reflecting increased competition in IPRs. In beverages, market share increased 80 basis points year-over-year to 5.9%. In concentrates, BOXHOT with Diamond and Organigram Innovation became the number one dabbable concentrate in Canada, contributing to a 15.5% category share. In edibles, we gained 2.4 points year-over-year to reach 17.9% share, with SHRED becoming the number two gummy brand in the country in December.
Speaker #3: Notably, we held competitive segments. We, Vapes and IPRs, remain the most—21.9% in Newfoundland, 33.1% market share in New Brunswick—maintain the number one position overall, 7.7%, primarily reflecting increased competition in IPRs.
Speaker #3: In beverages, market share increased 80 basis points year over year. Innovation became the number one. Diamonds and Organigram contributed to a 15.5% share in vapes, with a 20.4%. In edibles, we gained 2.4 points year over year to reach Shred, becoming the number two gummy brand. Dabbable concentrate in Canada was number two in the country in December.
Speaker #3: Finally, in whole, 17.9% share. With flour, market share increased 90 basis points year over year to 7.3%, driven by continued strength in category share, our big bag brands.
Speaker #3: Finally, in whole 17.9% share, with flour, market share increased 90 basis points year over year to 7.3%, driven by continued strength in category share.
Devin: Finally, in whole flower, market share increased 90 basis points year-over-year to 7.3%, driven by continued strength in our Big Bag brands. Our new innovation pipeline is beginning to reach distribution in Q2. This includes new competitive coated IPRs and the launches of SHRED soda and SHRED Shots, powered by a fast-acting soluble technology developed in the Product Development Center. A key differentiator for SHRED Shots relative to comparable products is our on-package claim of a 15-minute onset. We believe this meaningfully lowers the barrier to trial for consumers, supports retailer decisions around shelf space, and, with a smaller liquid format paired with a fast, predictable dose, positions shots as a discrete and convenient option that competes effectively with other ingestible categories, including gummies. Turning to operations. Operations, we continue to make progress in plant science and scale.
Moderator: Finally, in whole flower, market share increased 90 basis points year-over-year to 7.3%, driven by continued strength in our Big Bag brands. Our new innovation pipeline is beginning to reach distribution in Q2. This includes new competitive coated IPRs and the launches of SHRED soda and SHRED Shots, powered by a fast-acting soluble technology developed in the Product Development Center. A key differentiator for SHRED Shots relative to comparable products is our on-package claim of a 15-minute onset. We believe this meaningfully lowers the barrier to trial for consumers, supports retailer decisions around shelf space, and, with a smaller liquid format paired with a fast, predictable dose, positions shots as a discrete and convenient option that competes effectively with other ingestible categories, including gummies. Turning to operations. Operations, we continue to make progress in plant science and scale.
Speaker #3: Our new innovation pipeline is beginning to reach distribution in the second quarter. This includes new competitive coated IPRs and the launches of Shred pre-rolls. We move to the number two soluble technology developed in product development by a fast-acting center.
Speaker #3: A key differentiator products is our lowers the barrier to trial for consumers, supports retailer decisions around shelf space, and with a for Shred Shots relative to comparable onset.
Speaker #3: Fast, predictable dose—position Shots as a discrete and convenient option that competes with Soda and Shred Shots, powered effectively with other ingestible gummies. Turning to operations, we continue to make progress in plant science and scale.
Speaker #3: In Q1, we harvested over We believe this meaningfully 28,000 kilograms of flour, representing a smaller liquid format paired with a 43% year over year increase.
Devin: In Q1, we harvested over 28,000kg of flower, representing a 43% year-over-year increase. This growth was a result of improving yields, driven by our LED lighting conversion project, which was partially funded by Opportunities New Brunswick, as well as ongoing refinements to our nutrient programs. Alongside these gains, continued progress in our breeding efforts drove average flower THC levels to a quarterly high of over 29%. Achieving that level of potency at our operating scale is meaningful. In addition, 38% of lots tested in Q1 exceeded 30% THC. Today, we are also announcing a proprietary breakthrough in powdery mildew resistance. Our plant science teams have identified a genetic marker that can be screened in early seedling populations, allowing us to avoid investing time and capital in plants that will never express this resistance trait. Previously, confirming mildew resistance required approximately 90 days.
Moderator: In Q1, we harvested over 28,000kg of flower, representing a 43% year-over-year increase. This growth was a result of improving yields, driven by our LED lighting conversion project, which was partially funded by Opportunities New Brunswick, as well as ongoing refinements to our nutrient programs. Alongside these gains, continued progress in our breeding efforts drove average flower THC levels to a quarterly high of over 29%. Achieving that level of potency at our operating scale is meaningful. In addition, 38% of lots tested in Q1 exceeded 30% THC. Today, we are also announcing a proprietary breakthrough in powdery mildew resistance. Our plant science teams have identified a genetic marker that can be screened in early seedling populations, allowing us to avoid investing time and capital in plants that will never express this resistance trait. Previously, confirming mildew resistance required approximately 90 days.
Speaker #3: This growth was a result of improving yields, driven by categories including our LED lighting conversion project, which was partially funded by Opportunities New Brunswick, as well as ongoing refinements to our nutrient programs.
Speaker #3: Alongside these gains, continued progress in high of over flour THC levels to a quarterly 29%. Achieving that level of potency at our operating scale our breeding efforts drove average is meaningful.
Speaker #3: In addition, 38% of lots tested in Q1 exceeded 30% THC. Today, we are also announcing a proprietary breakthrough in powdery mildew resistance. Our plant science teams have identified a genetic marker that can be screened in early seedling populations allowing us to avoid investing time and express this resistance capital in plants that will never mildew resistance required approximately trait.
Devin: With this discovery, screening can now occur within 10 days, enabling early removal of out-of-spec populations and reducing downstream crop loss and waste. This screening tool is proprietary and applicable across a wide range of genetics, unlike existing markers that are limited in scope. When combined with our seed-based breeding initiatives, which represent approximately 30% of harvest in the quarter, these advances support more stable genetics, higher realized yields, and improved cost efficiency, contributing to our expected margin expansion over time. On the manufacturing side, we continue to optimize our hydrocarbon extraction and pre-roll production. 100% of our extraction is now hydrocarbon-based, with capacity up 87% year-over-year and lower associated COGS. Focusing on hydrocarbon extraction allows us to meet increasing derivative needs internally while expanding B2B opportunities.
Moderator: With this discovery, screening can now occur within 10 days, enabling early removal of out-of-spec populations and reducing downstream crop loss and waste. This screening tool is proprietary and applicable across a wide range of genetics, unlike existing markers that are limited in scope. When combined with our seed-based breeding initiatives, which represent approximately 30% of harvest in the quarter, these advances support more stable genetics, higher realized yields, and improved cost efficiency, contributing to our expected margin expansion over time. On the manufacturing side, we continue to optimize our hydrocarbon extraction and pre-roll production. 100% of our extraction is now hydrocarbon-based, with capacity up 87% year-over-year and lower associated COGS. Focusing on hydrocarbon extraction allows us to meet increasing derivative needs internally while expanding B2B opportunities.
Speaker #3: discovery, screening can now occur within 10 90 days; with this days enabling a total out-of-spec populations and reducing downstream crop loss and waste. This screening tool is Previously, confirming proprietary and applicable unlike existing markers that are limited in scope.
Speaker #3: When combined with our seed-based breeding across a wide range of genetics, represent approximately 30% of harvests in initiatives, which the quarter, these advances support more stable genetics and higher realized yields and improve cost efficiency contributing to our expected time.
Speaker #3: On the manufacturing side, we continue to optimize our hydrocarbon extraction and pre-roll production. 100% of our extraction is now hydrocarbon-based, with capacity up 87% year on year, and lower associated COGS.
Speaker #3: Focusing on margin expansion over meet increasing derivative needs internally while expanding hydrocarbon extraction allows us to B2B opportunities. completed commissioning of our beverage line and our in-house production for a portion of our In Winnipeg, we have beverage portfolio to support of these improvements should begin to expansion.
Devin: In Winnipeg, we have completed commissioning of our beverage line and are beginning in-house production for a portion of our beverage portfolio to support its expansion. As we move further into fiscal 2026, the benefits of these improvements should begin to flow more meaningfully through our P&L as lower-cost inventory moves through a more efficient distribution due to the ongoing optimization of our recent ERP upgrades. Moving to our international business, in Q1, we generated CAD 5 million in international sales, up 55% from Q1 fiscal 2025. We did see an unanticipated sequential decline in the international volumes during the quarter. This was primarily driven by a higher-than-expected proportion of flower that did not meet international specifications. While some level of out-of-spec product is expected, we've taken steps to remediate this temporary issue, return to normal operating parameters, and reduce the risk of future variability.
Moderator: In Winnipeg, we have completed commissioning of our beverage line and are beginning in-house production for a portion of our beverage portfolio to support its expansion. As we move further into fiscal 2026, the benefits of these improvements should begin to flow more meaningfully through our P&L as lower-cost inventory moves through a more efficient distribution due to the ongoing optimization of our recent ERP upgrades. Moving to our international business, in Q1, we generated CAD 5 million in international sales, up 55% from Q1 fiscal 2025. We did see an unanticipated sequential decline in the international volumes during the quarter. This was primarily driven by a higher-than-expected proportion of flower that did not meet international specifications. While some level of out-of-spec product is expected, we've taken steps to remediate this temporary issue, return to normal operating parameters, and reduce the risk of future variability.
Speaker #3: Flow more meaningfully through our P&L as lower-cost inventory moves through a more efficient distribution, due to the ongoing optimization of our recent ERP upgrades, as we move further into fiscal.
Speaker #3: Moving to our international $5 million business, in Q1, we saw an unanticipated sequential decline in the international volumes during the quarter. This was a 55% decline from Q1 fiscal, primarily driven by a higher-than-expected proportion of flour that did not meet international specifications.
Speaker #3: of out-of-spec product is While some level expected, we've taken steps to remediate this 2025. operating parameters, and reduce the risk of future optimistic about international momentum and continue to expect We did demand remains elevated.
Devin: We remain optimistic about international momentum and continue to expect meaningful international sales growth in fiscal 2026 as demand remains elevated. Regarding our expected EU GMP certification, we are preparing follow-up responses and information from the regulator in response to feedback received in January 2026. Following provision of this information, the company expects to await confirmation of certification or any required next steps. On international branded sales, we continue to make progress. In Australia, we shipped input materials for vape production and distribution in December, completing the first production run in January, and now are in the process of launching. In the US, we launched Collective Project and Fetch in Illinois and Wisconsin through new distribution partners, expanding our retail footprint to 11 states. We are also continuing to pursue marketing and distribution expansion for our Happi gummies.
Moderator: We remain optimistic about international momentum and continue to expect meaningful international sales growth in fiscal 2026 as demand remains elevated. Regarding our expected EU GMP certification, we are preparing follow-up responses and information from the regulator in response to feedback received in January 2026. Following provision of this information, the company expects to await confirmation of certification or any required next steps. On international branded sales, we continue to make progress. In Australia, we shipped input materials for vape production and distribution in December, completing the first production run in January, and now are in the process of launching. In the US, we launched Collective Project and Fetch in Illinois and Wisconsin through new distribution partners, expanding our retail footprint to 11 states. We are also continuing to pursue marketing and distribution expansion for our Happi gummies.
Speaker #3: Regarding our expected EU GMP certification, we are preparing follow-up responses and information from the regulator in response to feedback received in January information, the company expects to await 2026.
Speaker #3: confirmation of certification or any Following provision of this steps. On international branded variability. sales, we continue to make progress. In Australia, we shipped required next We remain distribution in December, completing the first production run in January, and now are in the process of launching.
Speaker #3: In the fetch in Illinois and Wisconsin, through new distribution input materials for vape production and partners, expanding our retail footprint to fiscal 2026 as distribution expansion for our US, we launched Collective Project and Happily Gummies.
Speaker #3: In both cases, our penetration of the U.S. has been slower than anticipated, reflecting a rapidly evolving market with increasing competition, and also continuing to pursue marketing and ongoing regulatory developments.
Devin: In both cases, our penetration to the US has been slower than anticipated, reflecting a rapidly evolving market with increasing competition and ongoing regulatory developments. With Collective Project, Fetch, and Happi products collectively available in over 20 states through D2C and retail channels, we do anticipate the incremental growth in line with the market, but we are not relying on the US market for growth. We continue to closely monitor regulatory changes in the US and are closely following recent efforts from lawmakers to amend or extend existing limitations on intoxicating hemp products. So overall, we are pleased with our year-over-year growth. And despite sequentially lower international sales, typical seasonality, and the impact of the BC labor strike, we maintain adjusted gross margins in line with our record-breaking Q4 and fiscal 2025. As the year progresses, we remain confident in our ability to deliver against our previously issued guidance.
Moderator: In both cases, our penetration to the US has been slower than anticipated, reflecting a rapidly evolving market with increasing competition and ongoing regulatory developments. With Collective Project, Fetch, and Happi products collectively available in over 20 states through D2C and retail channels, we do anticipate the incremental growth in line with the market, but we are not relying on the US market for growth. We continue to closely monitor regulatory changes in the US and are closely following recent efforts from lawmakers to amend or extend existing limitations on intoxicating hemp products. So overall, we are pleased with our year-over-year growth. And despite sequentially lower international sales, typical seasonality, and the impact of the BC labor strike, we maintain adjusted gross margins in line with our record-breaking Q4 and fiscal 2025. As the year progresses, we remain confident in our ability to deliver against our previously issued guidance.
Speaker #3: With Collective Product, Fetch, and Happily products collectively available in over 20 states, through D2C and retail channels, we do anticipate the incremental not reliant on the U.S. market for growth.
Speaker #3: We continue to closely monitor regulatory changes in the US and are closely growth in line with the market. following recent efforts from lawmakers to amend or extend But we are existing limitations on intoxicating hemp products.
Speaker #3: So overall, we are pleased with our year-over-year growth, and despite sequentially lower international sales, typical seasonality, and the impact of the BC labor strike, we maintained adjusted gross margins in line with our record-breaking Q4 and fiscal 2025.
Speaker #3: As the year progresses, we remain confident in our ability to deliver against our previously issued guidance. With that, I'll turn over the call to Greg to walk through our financial performance.
Devin: With that, I'll turn over the call to Greg to walk through our financial performance. Greg?
Moderator: With that, I'll turn over the call to Greg to walk through our financial performance. Greg?
Speaker #3: Greg?
Speaker #5: Thank you, James. Great to have you on board for our first earnings call together. Good morning, everyone. Before getting into the numbers, I'll briefly frame Q1.
Greg Guyatt: Thank you, James. Great to have you on board for our first earnings call together. Good morning, everyone. Before getting into the numbers, I'll briefly frame Q1. Results reflected strong year-over-year revenue and Adjusted EBITDA growth alongside the usual seasonal reset from Q4, as we discussed last earnings call, with some incremental pressure from the operational and market factors James mentioned. Importantly, none of these dynamics change our expectations for the rest of the year. Our business has historically delivered stronger fundamental performance in the second half of the fiscal year, particularly in Q3 and Q4. Based on our current visibility and execution plans, we remain on track to deliver against our full-year guidance. With that, let's turn to the quarter.
Greg Guyatt: Thank you, James. Great to have you on board for our first earnings call together. Good morning, everyone. Before getting into the numbers, I'll briefly frame Q1. Results reflected strong year-over-year revenue and Adjusted EBITDA growth alongside the usual seasonal reset from Q4, as we discussed last earnings call, with some incremental pressure from the operational and market factors James mentioned. Importantly, none of these dynamics change our expectations for the rest of the year. Our business has historically delivered stronger fundamental performance in the second half of the fiscal year, particularly in Q3 and Q4. Based on our current visibility and execution plans, we remain on track to deliver against our full-year guidance. With that, let's turn to the quarter.
Speaker #5: Results reflected strong EBITDA growth, alongside the usual seasonal reset from Q4 as we discussed last earnings call, with some incremental pressure factors James mentioned.
Speaker #5: from the operational and market Importantly, none of these dynamics change our expectations for the rest of the historically delivered stronger fundamental performance in the second half of the year.
Speaker #5: Q3 and Q4. fiscal year particularly in Based on our recent visibility and execution based on our current visibility Our business has on track to deliver against our and execution plans, we remain full-year guidance.
Speaker #5: With that, let's Q1, net revenue increased 49% to turn to the quarter. $65.3 million, from In $42.7 million in the same prior-year period, primarily due to growth in our Canadian business, the integration of Motif, and higher international sales.
Greg Guyatt: In Q1, net revenue increased 49% to CAD 65.3 million from CAD 42.7 million in the same prior year period, primarily due to growth in our Canadian business, the integration of Motif, and higher international sales. International sales for Q1 were CAD 5 million, up 51% over Q1 last year. Sequentially, net revenue decreased 21%. The decrease was primarily due to our seasonally lower Q1. As James mentioned, Q1 was also negatively impacted by the BC employee strike, increased competition in vapes and pre-rolls, and sequentially lower international sales. Adjusted gross profit for the quarter increased 67% to CAD 23.9 million versus CAD 14.3 million in Q1 last year due to our significantly higher revenue base, international sales growth, and incremental efficiency gains.
Greg Guyatt: In Q1, net revenue increased 49% to CAD 65.3 million from CAD 42.7 million in the same prior year period, primarily due to growth in our Canadian business, the integration of Motif, and higher international sales. International sales for Q1 were CAD 5 million, up 51% over Q1 last year. Sequentially, net revenue decreased 21%. The decrease was primarily due to our seasonally lower Q1. As James mentioned, Q1 was also negatively impacted by the BC employee strike, increased competition in vapes and pre-rolls, and sequentially lower international sales. Adjusted gross profit for the quarter increased 67% to CAD 23.9 million versus CAD 14.3 million in Q1 last year due to our significantly higher revenue base, international sales growth, and incremental efficiency gains.
Speaker #5: International sales for Q1 were $5 million, up 51% over Q1 last year. Sequentially, net revenue decreased 21%. The decrease was primarily due to our seasonally lower international sales. Revenue was also negatively impacted by the BC employee strike, increased competition in vapes and pre-rolls, and sequentially lower international sales.
Speaker #5: Adjusted gross profit for the quarter was $23.9 million versus $14.3 million in Q1 last year, due to our significantly higher, as James mentioned, Q1 revenue base, international sales growth, and incremental—I'm pleased to report that despite seasonal and competitive impacts on revenue, as well as lower levels of high-margin international sales, adjusted gross margin remains stable sequentially at 38%, an increase of 500 basis points over Q1 last year.
Greg Guyatt: We are pleased to report that despite seasonal and competitive impacts on revenue, as well as lower levels of high-margin international sales, adjusted gross margin remained stable sequentially at 38%, an increase of 500 basis points over Q1 last year. Adjusted gross margin was supported by higher yields, lower cultivation costs, and Motif synergy realization as we started to sell through lower-cost inventory. This demonstrates that our investments in efficiency are having a positive impact on cost per gram and margins, which we anticipate continuing to expand as international volumes scale throughout the year. In Q1, G&A costs were CAD 15 million versus CAD 11.2 million in the prior year period. The 33% year-over-year increase in G&A is primarily associated with the consolidation of Motif's costs for the full quarter, incremental ERP and professional fees, higher depreciation and amortization, but partially offset by cost savings initiatives.
Greg Guyatt: We are pleased to report that despite seasonal and competitive impacts on revenue, as well as lower levels of high-margin international sales, adjusted gross margin remained stable sequentially at 38%, an increase of 500 basis points over Q1 last year. Adjusted gross margin was supported by higher yields, lower cultivation costs, and Motif synergy realization as we started to sell through lower-cost inventory. This demonstrates that our investments in efficiency are having a positive impact on cost per gram and margins, which we anticipate continuing to expand as international volumes scale throughout the year. In Q1, G&A costs were CAD 15 million versus CAD 11.2 million in the prior year period. The 33% year-over-year increase in G&A is primarily associated with the consolidation of Motif's costs for the full quarter, incremental ERP and professional fees, higher depreciation and amortization, but partially offset by cost savings initiatives.
Speaker #5: Adjusted gross margin was supported by higher yields, lower Motif synergy realization as we started cultivation costs, and investments in efficiency are having a inventory.
Speaker #5: And margins, which we anticipate to continue to expand as international volumes scale, demonstrate that throughout the year. In Q1, G&A costs were $15 million versus the prior period.
Speaker #5: The 33% year-over-year increase in G&A is primarily $11.2 million in prior-year incremental ERP and professional costs for the full quarter, fees, and higher depreciation and amortization, but partially offset by cost savings initiatives.
Speaker #5: As we're in the final phases of ERP associated with the consolidation of Motif's costs with that project to roll off implementation, we expect the associated after the second quarter.
Greg Guyatt: As we're in the final phases of ERP implementation, we expect the associated costs with that project to roll off after Q2. As a proportion of net revenue, G&A costs represented roughly 24% of net revenue in Q1, which was down approximately 200 basis points from the same prior year period. Sales and marketing costs were CAD 9 million versus CAD 5.8 million in the same prior year period. Similar to G&A, the year-over-year increase is primarily attributable to supporting the addition of Motif and Collective Project brand portfolios. Sales and marketing costs represented 14% of net revenue, up approximately 500 basis points year over year. Overall, SG&A declined by 200 basis points year over year as a percentage of net revenue, reflecting continued scale and operating leverage, partially offset by higher trade investment to support competitive activity.
Greg Guyatt: As we're in the final phases of ERP implementation, we expect the associated costs with that project to roll off after Q2. As a proportion of net revenue, G&A costs represented roughly 24% of net revenue in Q1, which was down approximately 200 basis points from the same prior year period. Sales and marketing costs were CAD 9 million versus CAD 5.8 million in the same prior year period. Similar to G&A, the year-over-year increase is primarily attributable to supporting the addition of Motif and Collective Project brand portfolios. Sales and marketing costs represented 14% of net revenue, up approximately 500 basis points year over year. Overall, SG&A declined by 200 basis points year over year as a percentage of net revenue, reflecting continued scale and operating leverage, partially offset by higher trade investment to support competitive activity.
Speaker #5: As a proportion of net revenue, prior-year period. G&A costs represented Sales and marketing costs were $9 million versus $5.8 million in the same G&A, the year-over-year increase is primarily roughly 24% of net revenue in attributable to supporting the addition prior-year period.
Speaker #5: Motif and collective brand products, or collective project brand, were approximately 200 basis points from the same portfolios. Sales and marketing costs represented 14% of net revenue, up approximately similar to year-over-year.
Speaker #5: Overall, SG&A 500 basis points declined by 200 basis points year-over-year as a percentage of net revenue, reflecting continued scale and operating leverage, partially offset by higher trade investment to support competitive activity.
Greg Guyatt: Our expectation remains that SG&A costs will continue declining incrementally relative to net revenue as the year progresses, all else being equal. Total operating expenses for the quarter were CAD 26.7 million or 42% of net revenue, a year-over-year decrease of 600 basis points, primarily due to lower proportional G&A costs and lower R&D spending. Adjusted EBITDA in Q1 was CAD 5.3 million, up 273% from CAD 1.4 million in the prior year period, driven by increased scale, higher international sales, and proportionally lower operating expenses. Sequentially, adjusted EBITDA declined primarily due to our lower international sales, the now-resolved revenue disruption in British Columbia, and, as previously mentioned, our normal seasonal dynamics. Net income for the quarter was CAD 20 million compared to a net loss of CAD 23 million in the same prior year period.
Greg Guyatt: Our expectation remains that SG&A costs will continue declining incrementally relative to net revenue as the year progresses, all else being equal. Total operating expenses for the quarter were CAD 26.7 million or 42% of net revenue, a year-over-year decrease of 600 basis points, primarily due to lower proportional G&A costs and lower R&D spending. Adjusted EBITDA in Q1 was CAD 5.3 million, up 273% from CAD 1.4 million in the prior year period, driven by increased scale, higher international sales, and proportionally lower operating expenses. Sequentially, adjusted EBITDA declined primarily due to our lower international sales, the now-resolved revenue disruption in British Columbia, and, as previously mentioned, our normal seasonal dynamics. Net income for the quarter was CAD 20 million compared to a net loss of CAD 23 million in the same prior year period.
Speaker #5: SG&A costs will continue to decline incrementally relative to net Q1, which was down, all else being equal. Total operating expenses for the quarter year-over-year decreased by $600,000, 42% of net revenue, with lower proportional G&A costs and lower R&D. R&D spending was $26.7 million.
Speaker #5: Adjusted EBITDA in Q1 was $5.3 million, up 273% from revenue, as the year progresses, period. Driven by increased scale, higher international sales, expenses. Sequentially, basis points, primarily due to adjusted EBITDA declined primarily due to our lower international sales, the now resolved revenue disruption in British Columbia, and, as dynamics.
Speaker #5: Net income for the quarter was $20 previously mentioned, our normal seasonal million, compared to a net loss of $23 million in the same prior-year period.
Speaker #5: The $43 million year-over-year improvement was primarily due to changes in the fair value of derivative $1.4 million in the prior-year liabilities and top-up rights associated with our follow-on VAT investment.
Greg Guyatt: The CAD 43 million year-over-year improvement was primarily due to changes in the fair value of derivative liabilities and top-up rights associated with our follow-on BAT investment. From a cash flow perspective, in Q1, cash provided by operating activities before working capital changes was CAD 0.3 million compared to cash used at CAD 6.3 million in the prior year period, demonstrating improved cash generation from the core business supporting our full-year guidance of positive Free Cash Flow. Cash used by operations after working capital changes was CAD 16 million versus cash used at CAD 4.2 million in Q1 last year. The increase in cash used was driven by investments in working capital related to higher inventory levels as we completed the migration of our new ERP enhancements and the timing of excise duties and Health Canada licensing payments that occurred in the first quarter.
Greg Guyatt: The CAD 43 million year-over-year improvement was primarily due to changes in the fair value of derivative liabilities and top-up rights associated with our follow-on BAT investment. From a cash flow perspective, in Q1, cash provided by operating activities before working capital changes was CAD 0.3 million compared to cash used at CAD 6.3 million in the prior year period, demonstrating improved cash generation from the core business supporting our full-year guidance of positive Free Cash Flow. Cash used by operations after working capital changes was CAD 16 million versus cash used at CAD 4.2 million in Q1 last year. The increase in cash used was driven by investments in working capital related to higher inventory levels as we completed the migration of our new ERP enhancements and the timing of excise duties and Health Canada licensing payments that occurred in the first quarter.
Speaker #5: From a cash flow perspective, in Q1, cash provided by operating activities before working capital changes was $0.3 million, compared to cash used of $6.3 million in the prior-year period, demonstrating improved cash generation from the core business, supporting our full-year guidance of positive free cash flow.
Speaker #5: Cash used by operations after working capital changes was $16 $4.2 million in Q1 last year. The increase in cash used was driven by million, versus cash used at investments in working capital, related to higher inventory levels, as we completed the migration of our new ERP enhancements and the timing of excise duties and health Canada licensing payments that occurred in the first quarter.
Speaker #5: Finally, as of quarter end, we held total cash and short-term investments at $63 million, including $7.6 million of unrestricted cash. We are confident in our ability to generate cash from operations and free cash flow in the near term, and are assessing non-dilutive sources of capital to support liquidity and financial flexibility.
Greg Guyatt: Finally, as of quarter end, we held total cash and short-term investments of CAD 63 million, including CAD 7.6 million of unrestricted cash. We are confident in our ability to generate cash from operations and Free Cash Flow in the near term and are assessing nondilutive sources of capital to support liquidity and financial flexibility. To wrap up, in Q1, we delivered strong year-over-year growth in revenue and Adjusted EBITDA, maintained stable sequential margins at 38%, and continued to demonstrate operating leverage as the organization continues to scale. Our margin performance this quarter underscores the progress we're making on efficiency, cost structure, and Motif integration, and we expect these benefits to become increasingly visible as higher-margin international volumes scale through the back half of the year.
Greg Guyatt: Finally, as of quarter end, we held total cash and short-term investments of CAD 63 million, including CAD 7.6 million of unrestricted cash. We are confident in our ability to generate cash from operations and Free Cash Flow in the near term and are assessing nondilutive sources of capital to support liquidity and financial flexibility. To wrap up, in Q1, we delivered strong year-over-year growth in revenue and Adjusted EBITDA, maintained stable sequential margins at 38%, and continued to demonstrate operating leverage as the organization continues to scale. Our margin performance this quarter underscores the progress we're making on efficiency, cost structure, and Motif integration, and we expect these benefits to become increasingly visible as higher-margin international volumes scale through the back half of the year.
Speaker #5: To wrap up, in Q1, we delivered strong year-over-year growth in EBITDA, maintained stable revenue, and adjusted sequential margins at operating leverage as the organization continues to scale.
Speaker #5: Our 38%, and continued to demonstrate margin performance this quarter underscores the efficiency, cost structure, and Motif become increasingly visible as higher-margin international volumes scale through the back half of the year.
Speaker #5: While working capital weighed on cash usage in the quarter, cash generation from the core business continues to improve, and we remain confident in our ability to deliver positive free cash flow for the full year.
Greg Guyatt: While working capital weighed on cash usage in the quarter, cash generation from the core business continues to improve, and we remain confident in our ability to deliver positive free cash flow for the full year. We remain on track to deliver against our full-year guidance of revenue exceeding CAD 300 million, supported by improving fundamentals, expanding margins, and a disciplined approach to capital and liquidity. With that, we'd be happy to open the call for questions. Sorry, I'll get to questions in a moment. Our moderator is just having an issue on their end. Just give us one moment to resolve. Thanks. All right. While that issue resolves, I will kick off questions here. And I believe our first question is from Brenna Cunningham at ATB.
Greg Guyatt: While working capital weighed on cash usage in the quarter, cash generation from the core business continues to improve, and we remain confident in our ability to deliver positive free cash flow for the full year. We remain on track to deliver against our full-year guidance of revenue exceeding CAD 300 million, supported by improving fundamentals, expanding margins, and a disciplined approach to capital and liquidity. With that, we'd be happy to open the call for questions. Sorry, I'll get to questions in a moment. Our moderator is just having an issue on their end. Just give us one moment to resolve. Thanks.All right. While that issue resolves, I will kick off questions here. And I believe our first question is from Brenna Cunningham at ATB.
Speaker #5: We remain on progress we're making on track to deliver against our full-year million, supported by improving fundamentals, expanding margins, and a disciplined approach to guidance of revenue exceeding $300 be happy to open the call for capital and liquidity.
Speaker #5: With that, we'd questions.
Speaker #6: Sorry, I will get to questions in a moment. Our moderator is just having an issue on their end. Just give us one moment to resolve it.
Speaker #6: Thanks. All right. While that issue resolves, I will kick off questions here, and I believe our first question is from Brenna Cunningham at—
Max Schwartz: We are experiencing technical difficulties and have placed the call on hold. Please stay on the line. The event will resume.
Max Schwartz: We are experiencing technical difficulties and have placed the call on hold. Please stay on the line. The event will resume.
Speaker #7: difficulties and have placed the call on
Speaker #7: We are experiencing technical difficulties and have placed the call on hold. Please stay on the line. The ATV will resume.
Speaker #8: Hi there, everybody. This is Devin from Q4. I'm going to sub in for Kara right now. She's just having some technical issues, so I'm going to go ahead with the Q&A.
Devin: Hi there, everybody. This is Devin from Q4. I'm going to sub in for Karen right now. She's just having some technical difficulties. So going ahead with the Q&A, we have Aaron Grey currently on stage. Your line is open. Please go ahead. Aaron, if you're muted locally, just please unmute yourself. You're still on stage.
Moderator: Hi there, everybody. This is Devin from Q4. I'm going to sub in for Karen right now. She's just having some technical difficulties. So going ahead with the Q&A, we have Aaron Grey currently on stage. Your line is open. Please go ahead. Aaron, if you're muted locally, just please unmute yourself. You're still on stage.
Speaker #8: We’re experiencing difficulties; your line is open. Please go ahead. We have Aaron Gray currently on stage. Aaron, if you're muted locally, just please unmute yourself. You're still on stage.
Aaron Grey: Hi. Can you guys hear me okay?
Aaron Grey: Hi. Can you guys hear me okay?
Speaker #8: There we go.
Devin: There we go. Yep, we can hear you.
Moderator: There we go. Yep, we can hear you.
Speaker #8: Yep, we can hear you. Okay?
Speaker #9: Okay. Perfect. All right. Fantastic. Thanks so much for the questions here. James, welcome aboard—great to have you back in the industry now.
Aaron Grey: Okay. Perfect. All right. Fantastic. Thanks so much for the questions here. James, welcome aboard. Great to have you back in the industry now. So I guess first question for me is, now that you've kind of started to get your feet. I know it's still early days, but it sounds like you've been touring a lot of facilities and getting a better feel for the business. It would be great to kind of hear in terms of where are you seeing some of the lower-hanging near-term opportunities versus some of the initiatives that might be more long-term in nature, and how we should think about maybe how you're level-setting prioritization of those initiatives. Thanks.
Aaron Grey: Okay. Perfect. All right. Fantastic. Thanks so much for the questions here. James, welcome aboard. Great to have you back in the industry now. So I guess first question for me is, now that you've kind of started to get your feet. I know it's still early days, but it sounds like you've been touring a lot of facilities and getting a better feel for the business. It would be great to kind of hear in terms of where are you seeing some of the lower-hanging near-term opportunities versus some of the initiatives that might be more long-term in nature, and how we should think about maybe how you're level-setting prioritization of those initiatives. Thanks.
Speaker #9: So I guess first question for me—hi—is, you know, now that you've kind of started to get your feet—I know it's still early days, but it sounds like you've been throwing a lot of, can you guys hear me, facilities and getting a better feel for the business. It would be great to kind of hear, in terms of, you know, where are you seeing some of the lower-hanging near-term opportunities versus some of the initiatives that might be more long-term in nature, and how we—initiatives.
Speaker #9: setting, you know, prioritization of those Thanks. Sure. First of all, thank you. it's great to be in here and, and like you said, it's been about a role.
James Yamanaka: Sure. First of all, thank you. It's great to be in here. And like you said, it's been about a month since I've actually gotten into the role. And what I have been doing is visiting a lot of the facilities, meeting with the people. And the observation to me is it's a very strong company, good people, good capabilities, and a strong ability to grow into the future. In terms of the priorities, overall, look, I don't think it's a massive change after my first month. It'll always be focused on consumers, on the innovation, and on international expansion in the future to grow the business.
James Yamanaka: Sure. First of all, thank you. It's great to be in here. And like you said, it's been about a month since I've actually gotten into the role. And what I have been doing is visiting a lot of the facilities, meeting with the people. And the observation to me is it's a very strong company, good people, good capabilities, and a strong ability to grow into the future. In terms of the priorities, overall, look, I don't think it's a massive change after my first month. It'll always be focused on consumers, on the innovation, and on international expansion in the future to grow the business.
Speaker #9: And what I have been doing is looking—is visiting a lot of the facilities, meeting with the people, and the observation to me is it's a, you month since I've, actually gotten into the know, a very strong company, good people, good capabilities.
Speaker #9: and a strong ability to grow into the—should think about maybe how your level—future. In terms of the priorities, overall, look, I—I don't think it's a massive change after my first month.
Speaker #9: It'll always be focused on consumers, on the innovation, and on, international expansion in the future to grow the business. In that, I think we need to focus on in the short term, it really is about terms of the short-term priorities and the things operational execution, making sure that we really have a focus on executing with precision, focusing on the cost base, improving the margins, and make sure we, deliver to the markets.
James Yamanaka: In terms of the short-term priorities and the things that I think we need to focus on in the short term, it really is about operational execution, making sure that we really have a focus on executing with precision, focusing on the cost base, improving the margins to make sure we deliver to the markets. In the longer term, I think one of the reasons I was brought into the role was that over 20 years of international experience I've had, in fact, my entire career has been international markets. It's really looking at what are those future opportunities, balancing off sort of the risk, not overextending ourselves, but making sure we take advantage of the growth opportunities in the future. To sum it up, the fundamentals don't change.
James Yamanaka: In terms of the short-term priorities and the things that I think we need to focus on in the short term, it really is about operational execution, making sure that we really have a focus on executing with precision, focusing on the cost base, improving the margins to make sure we deliver to the markets. In the longer term, I think one of the reasons I was brought into the role was that over 20 years of international experience I've had, in fact, my entire career has been international markets. It's really looking at what are those future opportunities, balancing off sort of the risk, not overextending ourselves, but making sure we take advantage of the growth opportunities in the future. To sum it up, the fundamentals don't change.
Speaker #9: One of the reasons I was brought into the role was that, you know, over 20 years of international experience. I've, the longer term, I think one of markets.
Speaker #9: And it's really looking at what are those future been, international opportunities, balancing off sort of the risk, not overextending ourselves, but making sure we take advantage of the growth opportunities in the future.
Speaker #9: But to sum it, you know, in fact, my entire career has— the fundamentals don't change. The biggest focus is about execution and making sure we deliver on the numbers and improve our margins over time.
James Yamanaka: The biggest focus is about execution and making sure we deliver on the numbers and improve our margins over time, and also focusing on the cost base. Longer term, it's about well, mid to longer term, it's about expanding into those international markets prudently and making sure that we are able to grow the business sustainably.
James Yamanaka: The biggest focus is about execution and making sure we deliver on the numbers and improve our margins over time, and also focusing on the cost base. Longer term, it's about well, mid to longer term, it's about expanding into those international markets prudently and making sure that we are able to grow the business sustainably.
Speaker #9: And also, focusing on the cost base. In the short term, it's about expanding. Longer term, it's about, well, mid to longer term, prudently and making sure that we are able to grow the business sustainably.
Speaker #8: Okay, great. Appreciate that, caller. Thank you. Second question for me. Just—
Aaron Grey: Okay. Great. Appreciate that, Caller. Thank you. Second question for me, just in.
Aaron Grey: Okay. Great. Appreciate that, Caller. Thank you. Second question for me, just in.
Speaker #9: Mm-hmm.
Devin: Our next question comes from the line of Kenric Tyghe with Canaccord Genuity. Your line is open. Please go ahead.
Moderator: Our next question comes from the line of Kenric Tyghe with Canaccord Genuity. Your line is open. Please go ahead.
Speaker #8: from the line of Kendrick King in. Our next question comes with Cancord Gen-Genuity. Your line is open. Please go ahead.
Speaker #10: Thank you. Good morning, and James, congrats on the appointment. Just with respect to international volumes, thank—
Kenric Tyghe: Thank you. Good morning. And James, congrats on the appointment. Just with respect to international volumes.
Kenric Tyghe: Thank you. Good morning. And James, congrats on the appointment. Just with respect to international volumes.
Speaker #8: Thank you.
Aaron Grey: Thank you.
Aaron Grey: Thank you.
Kenric Tyghe: Thank you. With respect to international volumes, could you provide some insight on perhaps a little more color around what happened, and second to that, also on any indications of what was left on the table on the back of those flower issues? Essentially, what actions have you taken to address, and perhaps what did it cost in the quarter?
Kenric Tyghe: Thank you. With respect to international volumes, could you provide some insight on perhaps a little more color around what happened, and second to that, also on any indications of what was left on the table on the back of those flower issues? Essentially, what actions have you taken to address, and perhaps what did it cost in the quarter?
Speaker #10: Can you provide some insight on, you know, the pastoral color around what, yeah, with respect to international volumes, could happen in second to that? Also, on any indications of what flower issues?
Speaker #10: You know, essentially, what actions have you taken to address and perhaps was left on the table on the back of those what did it, cost in the
Speaker #10: quarter?
Speaker #9: Yeah. I, I think the first thing to
James Yamanaka: Yeah. I think the first thing to note is that the requirements on international flower and the processes you can take in terms of processing the product are far more stringent in a lot of the international markets, and particularly in Germany, which is the fastest growing and largest of the international markets at the moment. What has happened is, as we mentioned, we had a fantastic increase in yields over the past year, which has meant we've had a lot more flower on hand, which has caused some issues in microbiome growth. We have identified what we believe are the core drivers. We're working on it to fix it. I do believe it's a temporary issue, and we should get back to supplying the market in the future. So that's what it is today. You asked as well about the exact effect.
James Yamanaka: Yeah. I think the first thing to note is that the requirements on international flower and the processes you can take in terms of processing the product are far more stringent in a lot of the international markets, and particularly in Germany, which is the fastest growing and largest of the international markets at the moment. What has happened is, as we mentioned, we had a fantastic increase in yields over the past year, which has meant we've had a lot more flower on hand, which has caused some issues in microbiome growth. We have identified what we believe are the core drivers. We're working on it to fix it. I do believe it's a temporary issue, and we should get back to supplying the market in the future. So that's what it is today. You asked as well about the exact effect.
Speaker #9: Note is that the requirements on international flower, and the processes you can take, in terms, are far more stringent in a lot of the processing of the product in international markets. And particularly in Germany, which is, you know, the fastest-growing and largest of the international markets at the moment.
Speaker #9: what, you, as we mentioned, we had a fantastic increase in yields over the past year, which has meant we've had a lot more flower on hand, which has caused some issues in, microbiome growth.
Speaker #9: We have identified, the what we believe are the core drivers. We're working on it to fix it. I do believe it's a temporary issue, and we should get back to, supplying the market, in, in the future.
Speaker #9: So that, that's what it is today. You asked as well about—I'll refer over to Greg for that, the exact effect. I might have to—if there is an answer for that, sure, James.
James Yamanaka: I might have to refer over to Greg for that, if there is an answer for that, Greg. Yeah?
James Yamanaka: I might have to refer over to Greg for that, if there is an answer for that, Greg. Yeah?
Greg Guyatt: Yeah. Sure, James. Hi, Kenric. We think that the impact of that was probably about CAD 3.5 million on revenue of international. So if you think about the fact that we hit CAD 5 million in Q1, which was a 50% improvement over last year, if we'd sort of had the normal on spec for flower, it would have been a pretty significant improvement relative to last year.
Greg Guyatt: Yeah. Sure, James. Hi, Kenric. We think that the impact of that was probably about CAD 3.5 million on revenue of international. So if you think about the fact that we hit CAD 5 million in Q1, which was a 50% improvement over last year, if we'd sort of had the normal on spec for flower, it would have been a pretty significant improvement relative to last year.
Speaker #9: hi, Kendrick. we, we think that the impact of that was probably about three and a half million on Greg. Yeah? 5 million in Q1, which was a Yeah, 50% improvement over, over last year.
Speaker #9: If we'd sort of revenue of international—so if you think, think about the fact that we hit normal, on-spec for flower, it would have been a pretty significant improvement relative to last year.
Speaker #9: If we'd sort of, revenue, of international. So if you think, think about the fact that we hit normal, on-spec for flower, it would have been a pretty significant improvement, relative to last year.
Speaker #9: had the, the queue. here. so, appreciate the call on the international market now. So, so just to follow up on that real quick, and then I'll then utilize potentially that product?
Speaker #10: Thank you. Appreciate the granularity. I'll get back and
Speaker #10: Thank you. Appreciate the granularity. I'll get back and
Aaron Grey: Thank you. Appreciate the granularity. I'll get back in queue.
Aaron Grey: Thank you. Appreciate the granularity. I'll get back in queue.
Speaker #11: you.
Speaker #11: you.
James Yamanaka: Thank you.
James Yamanaka: Thank you.
Speaker #12: We have a
Operator: We have a question again from Aaron Grey with Alliance Global Partners. Please go ahead. You're on stage.
Operator: We have a question again from Aaron Grey with Alliance Global Partners. Please go ahead. You're on stage.
Speaker #12: with Alliance Global Partners. Please go ahead. You're on.
Speaker #12: stage.
Speaker #9: hi. Hi.
Devin: Hi. Yeah. Yeah. I'll have a second one here. So, I appreciate the call on the international market now. So just to follow up on that real quick, and then I'll go into my second question. Can you then utilize potentially that product? Can you reallocate it? I'll ask it that way. And then kind of turning towards the Canadian market, do you feel a bit more confident in terms of the snapback? It sounds like it was twofold. Number one, obviously, you guys had BC, so it sounds like that was more of a snapback. But then second, we talked about more of the increased competitive nature of evapes and pre-rolls. Could you maybe talk about those two issues and how we should think about the recovery within the Canadian market? Thanks.
Aaron Grey: Hi. Yeah. Yeah. I'll have a second one here. So, I appreciate the call on the international market now. So just to follow up on that real quick, and then I'll go into my second question. Can you then utilize potentially that product? Can you reallocate it? I'll ask it that way. And then kind of turning towards the Canadian market, do you feel a bit more confident in terms of the snapback? It sounds like it was twofold. Number one, obviously, you guys had BC, so it sounds like that was more of a snapback. But then second, we talked about more of the increased competitive nature of evapes and pre-rolls. Could you maybe talk about those two issues and how we should think about the recovery within the Canadian market? Thanks.
Speaker #9: That way. And then kind of turning towards, you know, the Canadian market—do you feel, a bit to go into my second question, more confidence in terms of the snapback?
Speaker #9: It sounds like it was twofold. Number one, Can you Can you, can you reallocate it? obviously, you guys had BC, so it sounds like that was more of I'll ask it a snapback.
Speaker #9: increased competitive nature of, of ACE and But then second, we pre-rolls. could you maybe talk how we should think about the recovery, within the Canadian market?
Speaker #9: Thanks. Sure.
James Yamanaka: Sure. I'll take those in different orders. So in terms of BC, yes, I think we're back up. We are back up to the traditional distribution levels, so you would expect the sales to snap back in BC. In terms of the micro, I mean, the non-spec international, as I said, we've identified what we believe are the core drivers of that, which is very much about the good work the team has done on the yield, has created some issues. We are working on it. It's a top priority, and we expect that we will be resolving this issue. We don't think it's a permanent issue. And finally, as I mentioned in my statement in terms of the increased competitiveness, we do have new launches. We're fighting we will fight back with new innovations and try to get there. But this is a very competitive part of the market.
James Yamanaka: Sure. I'll take those in different orders. So in terms of BC, yes, I think we're back up. We are back up to the traditional distribution levels, so you would expect the sales to snap back in BC. In terms of the micro, I mean, the non-spec international, as I said, we've identified what we believe are the core drivers of that, which is very much about the good work the team has done on the yield, has created some issues. We are working on it. It's a top priority, and we expect that we will be resolving this issue. We don't think it's a permanent issue. And finally, as I mentioned in my statement in terms of the increased competitiveness, we do have new launches. We're fighting we will fight back with new innovations and try to get there. But this is a very competitive part of the market.
Speaker #10: I'll take those in, in different orders. So, in terms of BC, yes, I think we're back up—we are back up to the traditional distribution level.
Speaker #10: So you would expect, the, the sales to snap back in terms of non-spec international, as I the, mi-microbo I mean, the, the, the said, we've identified what we believe are the core, drivers of that, which is very much about the good work the team has done on the in, in, in BC.
Speaker #10: yields, has created some issues. We are working on it. It's a top we will be, resolving this priority, and we, you know, we expect that, you know, issue.
Speaker #10: We don't think it's a permanent issue. And finally, as I mentioned in my statement in terms of the increased competitiveness, we do have new launches, we're fighting, you know, we are we will fight back with, with new innovations and, and try to get there.
Speaker #10: market. So, you we, we balance out the amount of investment we But this is a very competitive part of the wanna put in to get that share back, balancing off the, the, the margins and making sure that we make the right decisions to know, I would say this would be one where get back to some growth there.
James Yamanaka: So I would say this would be one where we balance out the amount of investment we want to put in to get that share back, balancing off the margins and making sure that we make the right decisions to get back to some growth there.
James Yamanaka: So I would say this would be one where we balance out the amount of investment we want to put in to get that share back, balancing off the margins and making sure that we make the right decisions to get back to some growth there.
Greg Guyatt: Hey, Aaron. Greg here. May I just jump in with a little bit of extra color on your question about the international flower that was out of spec and can it be reallocated to other markets? Absolutely. So we have taken that flower and repurposed it towards the Canadian market. There's no issues with it. It just didn't meet the needs for our international customer. So we're not expecting any inventory write-offs as a result of that.
Greg Guyatt: Hey, Aaron. Greg here. May I just jump in with a little bit of extra color on your question about the international flower that was out of spec and can it be reallocated to other markets? Absolutely. So we have taken that flower and repurposed it towards the Canadian market. There's no issues with it. It just didn't meet the needs for our international customer. So we're not expecting any inventory write-offs as a result of that.
Speaker #8: in with, a little bit of extra color on international flower that was out of your question about the, the spec and canopy reallocated to other Hey, Aaron. markets?
Speaker #8: in with, a little bit of extra color on international flower that was out of your question about the, the spec and canopy reallocated to other Hey, Aaron.
Speaker #8: Absolutely. so we have taken that flower and, and repurposed it towards, towards the Canadian market. And, the noth there's no issues with it. It just didn't meet, meet the needs for our international customer.
Speaker #8: So we're not expecting any, any inventory write-offs as a result of that. Greg, Greg, Greg here. Perfect. Thank you so much for the caller.
Devin: Perfect. Thank you so much for the caller. I'll jump back in the queue.
Aaron Grey: Perfect. Thank you so much for the caller. I'll jump back in the queue.
Speaker #8: I'll jump back in. May I just jump the queue?
Speaker #12: Our next call comes from Brianna Markets. Your line is open. Please go ahead.
Operator: Our next call comes from Brenna Cunningham from ATB Capital Markets. Your line is open. Please go ahead.
Operator: Our next call comes from Brenna Cunningham from ATB Capital Markets. Your line is open. Please go ahead.
Speaker #13: Hey, EU GMP certification—it's good that you got, like, some feedback. Some news is good news, right? Better than no news. And thanks for taking our—We know that it's hard to predict, like, as we all know, regulators are unpredictable at best.
Frederico Gomes: Hey. Good morning. Thanks for taking our questions. So just regarding the pending EU-GMP certification, it's good that you got some feedback. Some news is better than no news, right? We know that it's hard to predict. As we all know, regulators are unpredictable at best. But what type of timeline might we see for this coming through?
Frederico Gomes: Hey. Good morning. Thanks for taking our questions. So just regarding the pending EU-GMP certification, it's good that you got some feedback. Some news is better than no news, right? We know that it's hard to predict. As we all know, regulators are unpredictable at best. But what type of timeline might we see for this coming through?
Speaker #13: so just regarding the pending
Speaker #13: But questions.
Speaker #13: But questions. through? Yeah.
James Yamanaka: Yeah. Where we are in the process right now, we've received some feedback back from the regulators in January where they had some additional questions. We're working closely with them to resolve those issues and to answer those questions. In terms of timelines, we're working toward the fastest we possibly can in conjunction with them. But like you said, these are regulators. So all we can do, we are doing our best to get it done as quickly as possible. But I can't give you a hard timeline at the moment. But we are working on the specific concerns they had and not concerns, but questions they had and clarifications they asked for. And we're working with them to try to get it as quickly as possible.
James Yamanaka: Yeah. Where we are in the process right now, we've received some feedback back from the regulators in January where they had some additional questions. We're working closely with them to resolve those issues and to answer those questions. In terms of timelines, we're working toward the fastest we possibly can in conjunction with them. But like you said, these are regulators. So all we can do, we are doing our best to get it done as quickly as possible. But I can't give you a hard timeline at the moment. But we are working on the specific concerns they had and not concerns, but questions they had and clarifications they asked for. And we're working with them to try to get it as quickly as possible.
Speaker #10: I mean, where we are in the process right now, we've
Speaker #10: I mean, where we are in the process right now, we've
Speaker #10: with them to resolve those issues and questions. for this coming to, to answer those We're working closely what type of timeline might we see questions.
Speaker #10: in terms of timelines, we're working in conjunction with them. But like you said, in January, where they had hit some additional these are regulators Cunnington from ATB Capital doing our best to get it done as quickly as possible.
Speaker #10: But I can't give you a, a so, you know, all we can do, we are hard timeline at the moment. But, we are working on toward the fastest we possibly can clarifications they asked for.
Speaker #10: the specific concerns they had and not And we will, you know, we're working with them to try to get it as quickly as concerns, but questions they had and
Speaker #10: possible.
Speaker #13: Okay. Thank you so much. I'll
Frederico Gomes: Okay. Thank you so much. I'll jump back in the queue.
Frederico Gomes: Okay. Thank you so much. I'll jump back in the queue.
Speaker #10: Mm-hmm.
Speaker #12: Our next question
Operator: Our next question comes from the line of Pablo Zuanic from Zuanic & Associates. Your line is open. Please go ahead.
Operator: Our next question comes from the line of Pablo Zuanic from Zuanic & Associates. Your line is open. Please go ahead.
Speaker #12: comes from the line of Pablo Your line is open. Please go Mm-hmm.
Speaker #12: Zwanek from Zwanek and Associates.
Speaker #11: Thank you. And good jump back in the queue. morning, everyone. can I ask you a question regarding route to market in
Speaker #11: Thank you. And good jump back in the queue. morning, everyone. can I ask you a question regarding route to market in obviously, with Sanity Group, in which you have an
Pablo Zuanic: Thank you. Good morning, everyone. Can I ask you a question regarding route to market in Europe? I understand you work, obviously, with Sanity Group, in which you have an investment. BAT also has an investment in them. You also work with other distributors. I'm just trying to understand, going forward, as you enter other markets, do you go direct? Do you go through Sanity? If you can just expand in terms of how you think about that. Thank you.
Pablo Zuanic: Thank you. Good morning, everyone. Can I ask you a question regarding route to market in Europe? I understand you work, obviously, with Sanity Group, in which you have an investment. BAT also has an investment in them. You also work with other distributors. I'm just trying to understand, going forward, as you enter other markets, do you go direct? Do you go through Sanity? If you can just expand in terms of how you think about that. Thank you.
Speaker #11: them. But you also work with other distributors. So I'm just trying to understand, Europe? going forward, as you enter other I understand your work, markets, do you go direct?
Speaker #11: Sanity? If you can just expand in Do you go through
Speaker #11: you.
Speaker #10: Okay. do. I, I think, you know, the answer is, is I'll start off with that, and maybe I'll hand
James Yamanaka: Okay. I'll start off with that, and maybe I'll hand over to Greg, who obviously has more time in the business than I do. I think the answer is that it will be a mix. Some of it, obviously, we sell to Sanity Group, which we do have an investment in. But as opportunities arise, there will be other models in different markets. So sometimes it'll be direct sales. Sometimes it'll be to Sanity. And it'll just depend on what the regulations require and what the best option, the most cost-effective way, and sustainable way, depending on the market it is. So I don't have a direct answer that would be consistent across all of them. Greg, do you have any comment on that?
James Yamanaka: Okay. I'll start off with that, and maybe I'll hand over to Greg, who obviously has more time in the business than I do. I think the answer is that it will be a mix. Some of it, obviously, we sell to Sanity Group, which we do have an investment in. But as opportunities arise, there will be other models in different markets. So sometimes it'll be direct sales. Sometimes it'll be to Sanity. And it'll just depend on what the regulations require and what the best option, the most cost-effective way, and sustainable way, depending on the market it is. So I don't have a direct answer that would be consistent across all of them. Greg, do you have any comment on that?
Speaker #10: over to Greg, who, you know, obviously, has ahead. more, time in the business than I
Speaker #10: that it will you know, it will be a mix. Some of it, obviously, we sell to models in different markets. So sometimes it'll be direct sales.
Speaker #10: Sometimes it'll be to, Sanity Group, which we do have an investment opportunities arise, there will be other to Sanity. and it'll just depend on what the, you in.
Speaker #10: know, what the regulations require and what the best option, the most
Speaker #10: way depending on the market it is. So I
Speaker #10: Answer: That would be consistent across all of them. Greg, do you have any comment on investment? BAT also has an investment in—don't have a direct...
Greg Guyatt: Yeah. I mean, thanks, Pablo. I mean, we ship direct to Germany, obviously, through our partner, Sanity. We also ship directly to the UK at the moment. I think as far as other markets in Europe, such as look at the likes of Czechia, Poland, and some of the others that are opening up, we have the ability to ship there directly. But we've got a great relationship with Sanity Group, so we're always in discussions about what the best way for us to go to market is. But at the moment, we ship direct to whichever markets we're competing in.
Greg Guyatt: Yeah. I mean, thanks, Pablo. I mean, we ship direct to Germany, obviously, through our partner, Sanity. We also ship directly to the UK at the moment. I think as far as other markets in Europe, such as look at the likes of Czechia, Poland, and some of the others that are opening up, we have the ability to ship there directly. But we've got a great relationship with Sanity Group, so we're always in discussions about what the best way for us to go to market is. But at the moment, we ship direct to whichever markets we're competing in.
Speaker #8: Pablo. I mean, we, we ship direct But as, you know, to Germany, Yeah. obviously. through our partner, Sanity. We also ship, ship directly to the UK, at the moment.
Speaker #8: as other markets in Europe, such I think as far as, you know, look at the likes of
Speaker #8: ability to ship there directly. But we're also, you know, we've got a great relationship co-cost-effective way, and sustainable with Sanity Group. So we're always in discussions about at the moment, we ship what the best way for us to go to market is.
Speaker #8: But direct to whichever markets we're, we're I mean, thanks, competing in.
Speaker #11: Great, thank you. And then just a quick follow-up regarding the US. I know it's a hard environment that will evolve there, but to predict how the regulatory—you are one of the few Canadian LPs that's in the US market indirectly, right, through the two brands that you mentioned.
Pablo Zuanic: Good. Thank you. And then just a quick follow-up regarding the US. I know it's hard to predict how the regulatory environment will evolve there, but you are one of the few Canadian LPs that's actually operating in the US market indirectly, right, through the two brands that you mentioned. In my opinion, the US market would consolidate very quickly. So how do you get ahead of that? I mean, can you make investments? Can you set up guardrails to do that and preserve your Nasdaq listing? Just trying to understand again, how do you think about accelerating M&A in the US market, and how do you protect your Nasdaq listing as you do that? Thank you.
Pablo Zuanic: Good. Thank you. And then just a quick follow-up regarding the US. I know it's hard to predict how the regulatory environment will evolve there, but you are one of the few Canadian LPs that's actually operating in the US market indirectly, right, through the two brands that you mentioned. In my opinion, the US market would consolidate very quickly. So how do you get ahead of that? I mean, can you make investments? Can you set up guardrails to do that and preserve your Nasdaq listing? Just trying to understand again, how do you think about accelerating M&A in the US market, and how do you protect your Nasdaq listing as you do that? Thank you.
Speaker #11: In my opinion, actually operating in Canada and in the U.S., the U.S. market could consolidate very quickly. So how do you get ahead of that?
Speaker #11: I mean, can you make investments? Can you set up guardrails to do that and preserve your Nasdaq listing? Just trying about accelerating con M&A in the US market and how do you to understand, again, how do you think that?
Speaker #11: you. Thank
James Yamanaka: Well, I think, first of all, the Nasdaq listing does not allow us to do full investment in the US across all of the categories because of the state-by-state nature and the lack of federal regulation around it. So that would be a constraint on what we could invest in the US as a start. In terms of the current regulations, first of all, remember that the US is actually a relatively immaterial part of our business today. I think it's less than 1% of our revenues. And it's not crucial to the growth plans for Organigram. In terms of the regulatory situation, your guess is as good as ours. Under the current legislation, which is meant to go into effect in November, we're speaking with lawmakers as are other parties. And we're hoping that we find a good resolution to this.
James Yamanaka: Well, I think, first of all, the Nasdaq listing does not allow us to do full investment in the US across all of the categories because of the state-by-state nature and the lack of federal regulation around it. So that would be a constraint on what we could invest in the US as a start. In terms of the current regulations, first of all, remember that the US is actually a relatively immaterial part of our business today. I think it's less than 1% of our revenues. And it's not crucial to the growth plans for Organigram. In terms of the regulatory situation, your guess is as good as ours. Under the current legislation, which is meant to go into effect in November, we're speaking with lawmakers as are other parties. And we're hoping that we find a good resolution to this.
Speaker #10: Nasdaq listing does, does not allow us to
Speaker #10: Do, full investment in the US across all of the categories because of the, you know, the state-by-state nature and the— Well, I, I think first of all, the lack, lack of federal regulation around it.
Speaker #10: so that would be a constraint on what we could invest in the in the US as a start. in terms of the, the current regulations, first of all, remember that, the US is actually a, a protect your guard Nasdaq listing as you do relatively immaterial part yeah, I think it's less than 1% of our revenues.
Speaker #10: plans for organogram. your guess is as good as ours. of our business today. In We, under the into effect in, November, there we're speaking with resolution, to this.
Speaker #10: Current legislation, which is meant to—go comment on that? You know, at the moment, we're creating future. Again, Greg, do you have any other parties, and we're hoping that we find a good—
Speaker #10: But, And it's not crucial to the growth different plans to make how we, protect our, current business in the we're, there should federal US.
James Yamanaka: But at the moment, we're creating different plans to make sure how we protect our current business in the US and set it up for make sure that we're there should federal regulation change at some point in the future. Again, Greg, do you have any other comment on that?
James Yamanaka: But at the moment, we're creating different plans to make sure how we protect our current business in the US and set it up for make sure that we're there should federal regulation change at some point in the future. Again, Greg, do you have any other comment on that?
Speaker #8: Yeah. Tha-thanks, James. No, I, I think I think And set it up for, you know, make sure that you hit most of the key points there.
Greg Guyatt: Yeah. Thanks, James. I think you hit most of the key points there. The one additional thing I would add is, given the regulatory uncertainty, we're not investing really heavily in the US right now. We're kind of waiting to see what happens. We're continuing to support the existing business, investing in sales and marketing, and so forth. But really, until we start to see some clarity around regulation, I think we're going to be prudent as to how much capital we deploy in that market, particularly given the size of that business for us today. Obviously, we hope that things get clarified in the coming months. But right now, I think we just need to kind of wait and see what happens. And we'll continue to focus on other international markets where we see the bigger growth opportunities for us in the short term.
Greg Guyatt: Yeah. Thanks, James. I think you hit most of the key points there. The one additional thing I would add is, given the regulatory uncertainty, we're not investing really heavily in the US right now. We're kind of waiting to see what happens. We're continuing to support the existing business, investing in sales and marketing, and so forth. But really, until we start to see some clarity around regulation, I think we're going to be prudent as to how much capital we deploy in that market, particularly given the size of that business for us today. Obviously, we hope that things get clarified in the coming months. But right now, I think we just need to kind of wait and see what happens. And we'll continue to focus on other international markets where we see the bigger growth opportunities for us in the short term.
Speaker #8: The one additional thing I would add is, given
Speaker #8: the regulatory uncertainty, we're not investing really heavily in the US right now. We're kind of waiting, waiting to see what happens. We're continuing to support the existing business, investing lawmakers as our other, in sales and marketing and so forth.
Speaker #8: to see some clarity around But, but really, until we start be prudent as to how much capital we of, of that business for us today.
Speaker #8: Obviously, we, we hope that things wait and see what happens and, and opportunities for us in the short get, get clarified in the coming
Speaker #8: term. Got it.
Pablo Zuanic: Got it. Thank you. That's a good caller. Thank you.
Pablo Zuanic: Got it. Thank you. That's a good caller. Thank you.
Speaker #11: Thank you. That's a good caller. Thank
Speaker #11: Thank you. That's a good caller. Thank
Speaker #11: you.
Speaker #12: Just a reminder, if
Operator: Just a reminder, if you would like to ask any questions, please press star 1. And to withdraw your question, press star 1 again. Our next call comes from Kenric Tyghe from ATB Capital Markets. Your line is open. Please go ahead.
Operator: Just a reminder, if you would like to ask any questions, please press star 1. And to withdraw your question, press star 1 again. Our next call comes from Kenric Tyghe from ATB Capital Markets. Your line is open. Please go ahead.
Speaker #12: you would like to ask any deploy in that market, particularly given the size questions, please press star one. And to withdraw your question, press star one
Speaker #12: you would like to ask any deploy in that market, particularly given the size questions, please press star one. And to withdraw your question, press star one we'll continue to focus on other international again.
Speaker #12: Teig from Canaccord Genuity, your line is open. Please go ahead.
Speaker #12: ahead. Thank you.
Devin: Thank you. Apologies for the follow-up. Just with respect to the increased competition that you called out in pre-rolls, did that also translate into increased promotional intensity in quarter? Was that increased competition across all markets and pretty broad-based, or was it pretty narrow and only in specific markets?
Kenric Tyghe: Thank you. Apologies for the follow-up. Just with respect to the increased competition that you called out in pre-rolls, did that also translate into increased promotional intensity in quarter? Was that increased competition across all markets and pretty broad-based, or was it pretty narrow and only in specific markets?
Speaker #13: And months. Our
Speaker #13: apologies for the follow-up. just with pre-rolls, did that also translate into increased, promotional intensity in respect to the, increased competition that quarter? And why is that increased markets where we, we see the bigger growth and pretty broad-based?
Speaker #13: Or was it pretty narrow and, only in you called out in markets?
Speaker #14: On, on, on but right now, I think we just need to kinda
James Yamanaka: On this one, Greg, can you provide some color? Again, I apologize. It's been a month in. Greg, do you have any color on that one?
James Yamanaka: On this one, Greg, can you provide some color? Again, I apologize. It's been a month in. Greg, do you have any color on that one?
Speaker #14: some color? Again, I apologize. It's been a, have any color on that
Speaker #14: Greg, do you
Speaker #8: yeah, no problem, James. yeah, Kendrick, I'd say, you know, it's a it's a competitive space in
Greg Guyatt: Yeah. No problem, James. Yeah. Kenric, I'd say it's a competitive space in general. All the categories have pretty intense competition. I think when it comes to pre-rolls and IPRs, we're seeing the value proposition really evolving across the entire industry. Similar to what we've seen in prior quarters, the potencies are increasing. Pricing's become more competitive. We're confident that we have great offerings coming and in the pipeline that are going to address those challenges. But that's sort of what we're seeing across the category, pricing coming down and potency being the key challenge. The rest of the industry, I mean, we're seeing sort of similar levels of competition across vapes versus what we had in the prior quarter. Flower is always competitive. We think we've got a really great foothold there. And then in the beverage space, with the shots coming out, we're very optimistic about that.
Greg Guyatt: Yeah. No problem, James. Yeah. Kenric, I'd say it's a competitive space in general. All the categories have pretty intense competition. I think when it comes to pre-rolls and IPRs, we're seeing the value proposition really evolving across the entire industry. Similar to what we've seen in prior quarters, the potencies are increasing. Pricing's become more competitive. We're confident that we have great offerings coming and in the pipeline that are going to address those challenges. But that's sort of what we're seeing across the category, pricing coming down and potency being the key challenge. The rest of the industry, I mean, we're seeing sort of similar levels of competition across vapes versus what we had in the prior quarter. Flower is always competitive. We think we've got a really great foothold there. And then in the beverage space, with the shots coming out, we're very optimistic about that.
Speaker #8: have, have pretty intense competition. I think when
Speaker #8: proposition really evolving across the entire industry. you know, similar to, to what we've the potencies are increasing. one? seen in prior quarters, the, Pricing's become more competitive.
Speaker #8: We're confident that we have great offerings coming and in the pipeline that are going to address those challenges. But that's sort of what we're seeing a month in, across the category.
Speaker #8: we're, we're confident that we have great offerings coming and in the pipeline that are gonna address those challenges. But that's sort of what we're seeing a month in.
Speaker #8: you know, pricing coming down and potency being, being the key challenge. the rest of the rest of the, the industry, I know, serve similar levels of competition across vapes versus what we had in the prior quarter.
Speaker #8: flower
Speaker #8: It is, it is always competitive. We think we've got a really good position there. And then, in the beverage space, with the shots coming out, we are very optimistic about it. I mean, we're seeing opportunities there.
Greg Guyatt: And the current product portfolio, we think there's some good growth opportunities there. So really looking forward to the new offerings coming and higher potencies across pre-rolls, which I think will position us really well to compete effectively in all of those categories.
Greg Guyatt: And the current product portfolio, we think there's some good growth opportunities there. So really looking forward to the new offerings coming and higher potencies across pre-rolls, which I think will position us really well to compete effectively in all of those categories.
Speaker #8: So really looking forward to the new offerings coming and higher, great foothold that. And the current product, think, will position us really well to compete effectively in both all of those.
Speaker #8: categories.
Speaker #13: Thanks so much, Greg. I'll leave it
Devin: Thanks so much, Greg. I'll leave it there.
Kenric Tyghe: Thanks so much, Greg. I'll leave it there.
Speaker #15: There are no further questions at this time. I will now turn the call back
Operator: There are no further questions at this time. I will now turn the call back to James Yamanaka, CEO, for closing remarks.
Operator: There are no further questions at this time. I will now turn the call back to James Yamanaka, CEO, for closing remarks.
Speaker #15: to James Yamanaka, CEO for Remarks. Closing
James Yamanaka: First of all, thank you for joining the call today. Thank you for the questions. I'm looking forward to more of these going forward and as I get my feet on the table a bit more to be able to give you a little more clarity on some of the future of the business. Thank you very much for your attendance today. I'll pass it back over to the moderator.
James Yamanaka: First of all, thank you for joining the call today. Thank you for the questions. I'm looking forward to more of these going forward and as I get my feet on the table a bit more to be able to give you a little more clarity on some of the future of the business. Thank you very much for your attendance today. I'll pass it back over to the moderator.
Speaker #13: you for joining the call today. And thank you there. First of all, thank it I'm looking forward to more of these And as I get my, my feet on the table a bit more, to be able to, give you a little more clarity on some of the, the future of the business.
Speaker #13: So, thank you very much for your attendance today. I'll pass it back over to the moderator.
Operator: Thank you. This concludes today's call. Thank you for attending. You may now disconnect.
Operator: Thank you. This concludes today's call. Thank you for attending. You may now disconnect.
