Q1 2026 MediPharm Labs Corp Earnings Call

May 13, 2026

Operator: Thank you for standing by, and welcome to the MediPharm Labs conference call to discuss the company's 2026 Q1 results. Our speaker on today's call is Greg Hunter, Interim Chief Executive Officer and Chief Financial Officer. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After management's presentation, we will take questions from the analyst community on the telephone and then take written questions through the Q&A feature on the webcast. The information during this call should be considered together with the more detailed information, disclosure, financial data, and statements available on the company's website and on the SEDAR+ profile at sedarplus.ca.

Speaker #2: Our speaker on today's call is Greg Hunter, Interim CEO and Chief Financial Officer. As a reminder, all participants are in a listen-only mode, and the conference is being recorded.

Speaker #2: After management's presentation, we will take questions from the analyst community on the telephone and then take written questions through the Q&A feature on the webcast.

Speaker #2: The information during this call should be considered together with the more detailed information disclosure, the financial company's website, and on the Settler Plus profile at settlerplus.ca.

Speaker #2: As set out on the webcast slide, I would like to note that remarks during this earnings call may contain forward-looking information and forward-looking statements within the meaning of applicable security laws.

Operator: As set out on the webcast slide, I would like to note that remarks during this earnings call may contain forward-looking information and forward-looking statements within the meaning of applicable securities laws. This includes, without limitation, statements about MediPharm Labs and its current and future plans, expectations, intentions, financial results, operations, levels of activity, performance, goals or achievements, and other future events, trends, profitability, business growth or developments. All statements other than statements of historical fact are forward-looking statements. The statements made are based on the company's current expectations, estimates, and beliefs as of today's date.

Speaker #2: This includes, without limitation, statements about Medipharm Labs and its current and future plans, expectations, and tensions, financial results, operations, levels of activity, performance, goals or achievements, and other future events, trends, profitability, business growth or developments.

Operator 3: This includes, without limitation, statements about MediPharm Labs and its current and future plans, expectations, intentions, financial results, operations, levels of activity, performance, goals or achievements, and other future events, trends, profitability, business growth or developments. All statements other than statements of historical fact are forward-looking statements. The statements made are based on the company's current expectations, estimates, and beliefs as of today's date. The company's remarks may also contain references to certain non-IFRS financial measures, including adjusted EBITDA. These measures do not have any standardized meaning according to International Financial Reporting Standards or IFRS, and therefore, may not be comparable to similar measures presented by other companies. Please review the company's most recent disclosure materials filed on SEDAR+ for the risks associated with forward-looking information and the use of non-IFRS financial measures, including the section titled "Reconciliation of Non-IFRS Measures" in the company's most recent MD&A available on SEDAR+.

Speaker #2: All statements other than statements of historical fact are forward-looking statements. The statements made are based on the company's current expectations, estimates, and beliefs as of today's date.

Speaker #2: The company's remarks may also contain references to certain non-IFRS financial measures including adjusted EBITDA. These measures do not have any standardized meaning according to international financial reporting standards, or IFRS, and therefore may not be comparable to similar measures presented by other companies.

Operator: The company's remarks may also contain references to certain non-IFRS financial measures, including adjusted EBITDA. These measures do not have any standardized meaning according to International Financial Reporting Standards or IFRS, and therefore, may not be comparable to similar measures presented by other companies. Please review the company's most recent disclosure materials filed on SEDAR+ for the risks associated with forward-looking information and the use of non-IFRS financial measures, including the section titled Reconciliation of Non-IFRS Measures" in the company's most recent MD&A available on SEDAR+. Please note that all dollar amounts mentioned on today's call are in Canadian dollars unless otherwise noted. Now I would like to turn the call over to Mr. Greg Hunter. Please go ahead.

Speaker #2: Please review the company's most recent disclosure materials filed on Settler Plus for the risk associated with forward-looking information and the use of non-IFRS financial measures including the section titled Reconciliation of Non-IFRS Measures.

Speaker #2: In the company's most recent MD&A available on Settler Plus, please note that all dollar amounts mentioned on today's call are in Canadian dollars and less otherwise noted.

Operator 3: Please note that all dollar amounts mentioned on today's call are in Canadian dollars unless otherwise noted. Now I would like to turn the call over to Mr. Greg Hunter. Please go ahead.

Speaker #2: And now, I would like to turn the call over to Mr. Greg Hunter. Please go ahead. Thank you, Operator, and good morning, everyone. This morning, I'll briefly revisit Medipharm's core differentiators, outline how we're building on that foundation to drive growth in 2026, and then walk through our first quarter results, including the return to positive adjusted EBITDA.

Greg Hunter: Thank you, operator, and good morning, everyone. This morning, I'll briefly revisit MediPharm's core differentiators, outline how we're building on that foundation to drive growth in 2026, and then walk through our Q1 results, including the return to positive adjusted EBITDA. As we discussed in our Q4 call, MediPharm is not a single market or single product company. We operate across four distinct revenue channels supported by a regulatory and licensing platform that is both rare and difficult to replicate. From a regulatory standpoint, MediPharm holds a unique combination of licenses which takes years to obtain and millions of dollars to develop.

Speaker #2: As we discussed in our Q4 call, Medipharm is not a single market or single product company. We operate across four distinct revenue channels supported by a regulatory and licensing platform that is both rare and difficult to replicate.

Speaker #2: From a regulatory standpoint, MediPharm holds a unique combination of licenses, which takes years to obtain and millions of dollars to develop. Notable licenses include a Health Canada drug establishment license, EU GMP certification, and ANVISA GMP certification from Brazil, TGA compliance in Australia, and an FDA-inspected facility with prior shipments of pharmaceutical-grade APIs into the United States for research and clinical studies. We also maintain licenses and registrations that support natural health product development, should that pathway evolve in Canada.

Greg Hunter: Notable licenses include a Health Canada Drug Establishment License, EU GMP certification, Anvisa GMP certification from Brazil, TGA compliance in Australia, an FDA-inspected facility with prior shipments of pharmaceutical-grade APIs into the United States for research and clinical studies, and we maintain licenses and registrations that support natural health product development should that pathway evolve in Canada. These capabilities are operational enablers. They determine where we can participate, which formats we can offer, and the type of partners we can support. As a result, MediPharm is often selected because we are a trusted, compliant, and dependable partner, not because we are the lowest cost option. In regulated medical and pharmaceutical channels, that distinction matters, and it underpins both our commercial relationships and our long-term strategy. As regulatory standards continue to evolve globally, this platform increasingly differentiates MediPharm in regulated medical and pharmaceutical channels.

Speaker #2: These capabilities are operational enablers. They determine where we can participate, which formats we can offer, and the type of partners we can support. As a result, Medipharm is often selected because we are a trusted, compliant, and dependable partner, not because we are the lowest cost option.

Speaker #2: In regulated medical and pharmaceutical channels, that distinction matters, and it underpins both our commercial relationships and our long-term strategy. As regulatory standards continue to evolve globally, this platform increasingly differentiates MediPharm in regulated medical and pharmaceutical channels.

Greg Hunter: As regulatory standards continue to evolve globally, this platform increasingly differentiates MediPharm in regulated medical and pharmaceutical channels. That differentiation was reinforced by the recent US Schedule III announcement, which lowers barriers to clinical research and pharmaceutical development involving cannabis-derived products. We believe MediPharm is well-positioned to support these regulated pharmaceutical and research activities given our FDA-inspected facility, Health Canada Drug Establishment Licence, and experience supplying pharmaceutical-grade cannabinoids for research and clinical use.

Speaker #2: That differentiation was reinforced by the recent US Schedule III announcement, which lowers barriers to clinical research and pharmaceutical development involving cannabis-derived products. We believe Medipharm is well positioned to support these regulated pharmaceutical and research activities given our FDA inspected facility, health Canada drug establishment license, and experience supplying pharmaceutical grade cannabinoids for research and clinical use.

Greg Hunter: That differentiation was reinforced by the recent US Schedule III announcement, which lowers barriers to clinical research and pharmaceutical development involving cannabis-derived products. We believe MediPharm is well-positioned to support these regulated pharmaceutical and research activities given our FDA-inspected facility, Health Canada Drug Establishment Licence, and experience supplying pharmaceutical-grade cannabinoids for research and clinical use. Building on what makes MediPharm unique, I would like to take some time to expand on our strategy for growth, which is deliberate, diversified, and disciplined, spanning both organic execution and selective inorganic opportunities. Organically, our growth strategy is focused on maximizing the value of the platform we have spent years and millions of dollars to build. International medical remains a key growth engine. We continue to expand our Beacon and Wildlight branded products in Germany, which supports more stable demand and a stronger margin profile over time.

Greg Hunter: Building on what makes MediPharm unique, I would like to take some time to expand on our strategy for growth, which is deliberate, diversified, and disciplined, spanning both organic execution and selective inorganic opportunities. Organically, our growth strategy is focused on maximizing the value of the platform we have spent years and millions of dollars to build. International medical remains a key growth engine. We continue to expand our Beacon and Wildlight branded products in Germany, which supports more stable demand and a stronger margin profile over time.

Speaker #2: Building on what makes Medipharm unique, I would like to take some time to expand on our strategy for growth, which is deliberate, diversified, and disciplined, spanning both organic execution and selective inorganic opportunities.

Speaker #2: Organically, our growth strategy is focused on maximizing the value of the platform we have spent years and millions of dollars to build. International medical remains a key growth engine.

Speaker #2: We continue to expand our beacon and wildlife-branded products in Germany, which supports more stable demand and a stronger margin profile over time. At the same time, we remain active in white-label flower opportunities, only participating where margin thresholds and partner quality meet our standards.

Greg Hunter: At the same time, we remain active in white label flower opportunities, only participating where margin thresholds and partner quality meet our standards. We continue to invest in non-smokable and pharmaceutical-grade formats, including oils and inhalation technologies, which align with tightening regulatory expectations and patient demand while differentiating MediPharm from commodity suppliers. Australia remains a key market, and we are adapting to pricing and prescribing changes by protecting the premium Beacon positioning, in addition to launching products in the value segment under our Wildlight portfolio, allowing us to cover a broader portion of the market without diluting our core brand. We are pursuing targeted geographic expansion in regulated medical markets such as France, Brazil, New Zealand, and the UK, where we have had recent success and our licensing and pharma-grade credentials deliver a competitive advantage.

Speaker #2: We continue to invest in non-smokable and pharmaceutical grade formats, including oils and inhalation technologies, which align with tightening regulatory expectations and patient demand while differentiating Medipharm from commodity suppliers.

Speaker #2: Australia remains a key market, and we are adapting to pricing and prescribing changes by protecting the premium beacon positioning, in addition to launching products in the value segment under our wildlife portfolio.

Speaker #2: Allowing us to cover a broader portion of the market without diluting our core brand. We are pursuing targeted geographic expansion in regulated medical markets such as France, Brazil, New Zealand, and the UK, where we have had recent success, and our licensing and pharma-grade credentials deliver a competitive advantage.

Greg Hunter: We are pursuing targeted geographic expansion in regulated medical markets such as France, Brazil, New Zealand, and the UK, where we have had recent success and our licensing and pharma-grade credentials deliver a competitive advantage. In domestic medical, our growth strategy is centered on protecting and optimizing high-value, regulated patient base. We remain focused on continuity of care, service quality, and reliability, particularly for veteran patients, where trust and consistency matter most. Following the recent veteran reimbursement changes we discussed on the Q4 call, our approach is grounded in operational discipline, including cost control, procurement efficiency, and thoughtful product mix management while continuing to prioritize patient outcomes.

Speaker #2: In domestic medical, our growth strategy is centered on protecting and optimizing our high-value, regulated patient base. We remain focused on continuity of care, service quality, and reliability, particularly for veteran patients where trust and consistency matter most.

Greg Hunter: In domestic medical, our growth strategy is centered on protecting and optimizing high-value, regulated patient base. We remain focused on continuity of care, service quality, and reliability, particularly for veteran patients, where trust and consistency matter most. Following the recent veteran reimbursement changes we discussed on the Q4 call, our approach is grounded in operational discipline, including cost control, procurement efficiency, and thoughtful product mix management while continuing to prioritize patient outcomes. We are expanding third-party medical partnerships and platform listings, increasing access to MediPharm products beyond our own channels, and broadening SKU availability where it makes economic sense. Our clinic platform continues to provide capital-efficient patient access, supporting engagement, education, and retention.

Speaker #2: Following the recent veteran reimbursement changes, we discussed on the Q4 call that our approach is grounded in operational discipline, including cost control, procurement efficiency, and thoughtful product mix management, while continuing to prioritize patient outcomes.

Speaker #2: We are expanding third-party medical partnerships and platform listings, increasing access to Medipharm products beyond our own channels, and broadening SKU availability where it makes economic sense.

Greg Hunter: We are expanding third-party medical partnerships and platform listings, increasing access to MediPharm products beyond our own channels, and broadening SKU availability where it makes economic sense. Our clinic platform continues to provide capital-efficient patient access, supporting engagement, education, and retention.

Speaker #2: Our clinic platform continues to provide capital-efficient, patient-access supporting engagement, education, and retention. Overall, domestic medical continues to be a core channel where disciplined execution and patient loyalty are paramount.

Greg Hunter: Overall, domestic medical continues to be a core channel where disciplined execution and patient loyalty are paramount. In pharma and B2B, we continue to leverage our Drug Establishment Licence, clinical trial experience, and our expansive manufacturing capabilities to support long-term pharmaceutical optionality and capital-light contract manufacturing opportunities. In adult use and wellness, MediPharm's strategy remains intentionally focused, selective, and margin-driven. We continue to defend our number 2 leadership position in premium oils, where MediPharm has built brand recognition and product credibility even as the broader category contracts. Rather than chasing volume, we are prioritizing disciplined pricing, mix optimization, and cost efficiency, protecting contribution margins in a competitive environment. We are selectively innovating in adjacent non-smokable formats, including extracts, drops, and differentiated formulations where we can leverage existing capabilities without incremental capital intensity. Distribution efforts are focused on markets and listings that meet return thresholds while maintaining a capital-light sales model.

Speaker #2: In pharma and B2B, we continue to leverage our drug establishment license, clinical trial experience, and our expansive manufacturing capabilities to support long-term pharmaceutical optionality and capital-like contract manufacturing opportunities.

Speaker #2: In adult use and wellness, Medipharm's strategy remains intentionally focused selective and margin-driven. We continue to defend our number two leadership position in premium oils where Medipharm has built brand recognition and product credibility even as the broader category contracts.

Greg Hunter: We continue to defend our number 2 leadership position in premium oils, where MediPharm has built brand recognition and product credibility even as the broader category contracts. Rather than chasing volume, we are prioritizing disciplined pricing, mix optimization, and cost efficiency, protecting contribution margins in a competitive environment. We are selectively innovating in adjacent non-smokable formats, including extracts, drops, and differentiated formulations where we can leverage existing capabilities without incremental capital intensity. Distribution efforts are focused on markets and listings that meet return thresholds while maintaining a capital-light sales model.

Speaker #2: Rather than chasing volume, we are prioritizing disciplined pricing, mix optimization, and cost efficiency, protecting contribution margin in a competitive environment. We are selectively innovating in adjacent non-smokable formats, including extract, drops, and differentiated formulations, where we can leverage existing capabilities without incremental capital intensity.

Speaker #2: Distribution efforts are focused on markets and listings that meet return thresholds while maintaining a capital-like sales model. Adult use and wellness remains an important contributor that complements our broader portfolio when managed with discipline.

Greg Hunter: Adult use and wellness remains an important contributor that complements our broader portfolio when managed with discipline. Across all organic initiatives, the consistent theme is margin quality, regulatory alignment, and repeatability, not short-term volume. In addition to organic growth, we view selective M&A as a way to strengthen and accelerate our existing platform where there is clear strategic fit. Our approach is grounded in regulatory alignment, operational discipline, and long-term value creation. We focus on opportunities that reinforce MediPharm's position in regulated medical markets, leverage our formulation and manufacturing capabilities, and enhance earnings quality rather than simply add revenue. With our liquidity position and minimal debt, we have the flexibility to pursue transactions when the economics and integration profile are compelling without compromising financial discipline. Overall, M&A is viewed as a complementary tool to strengthen and accelerate our strategy as the industry continues to consolidate.

Speaker #2: Across all organic initiatives, the consistent theme is margin quality regulatory alignment and repeatability, not short-term volumes. In addition to organic growth, we view selective M&A as a way to strengthen and accelerate our existing platform where there is clear strategic fit.

Speaker #2: Our approach is grounded in regulatory alignment, operational discipline, and long-term value creation. We focus on opportunities that reinforce Medipharm's position in regulated medical markets, leverage our formulation and manufacturing capabilities, and enhance earnings quality rather than simply add revenue.

Speaker #2: With our liquidity position and minimal debt, we have the flexibility to pursue transactions when the economics and integration profile are compelling, without compromising financial discipline.

Greg Hunter: With our liquidity position and minimal debt, we have the flexibility to pursue transactions when the economics and integration profile are compelling without compromising financial discipline. Overall, M&A is viewed as a complementary tool to strengthen and accelerate our strategy as the industry continues to consolidate. Taken together, our organic and inorganic strategies are designed to build on MediPharm's differentiated platform, deepen our presence in regulated medical markets, and position the company to benefit as global markets continue to mature and consolidate. This balanced approach allows us to pursue growth while maintaining the discipline that has strengthened MediPharm over the past several years.

Speaker #2: Overall, M&A is viewed as a complementary tool to strengthen and accelerate our strategy as the industry continues to consolidate. Taken together, our organic and inorganic strategies are designed to build on Medipharm's differentiated platform, deepen our presence in regulated medical markets, and position the company to benefit as global markets continue to mature and consolidate.

Greg Hunter: Taken together, our organic and inorganic strategies are designed to build on MediPharm's differentiated platform, deepen our presence in regulated medical markets, and position the company to benefit as global markets continue to mature and consolidate. This balanced approach allows us to pursue growth while maintaining the discipline that has strengthened MediPharm over the past several years. Turning to commercial execution, Q1 2026 reflected measured progress across our core markets despite an operating environment where pricing, prescribing behavior, and reimbursement regimes continued to shift. International medical remained a key focus of commercial activity, with continued execution across Europe, Australia, and other regulated markets. Following our first shipment of medical cannabis oil to France in Q4 2025, we received a second purchase order in Q1 2026. As France transitions from a national pilot program to a permanent pharmaceutical-based medical cannabis framework, we believe MediPharm is well-positioned to participate.

Speaker #2: This balanced approach allows us to pursue growth while maintaining the discipline that has strengthened Medipharm over the past several years. Turning to commercial execution, Q1, 2026 reflected measured progress across our core markets despite an operating environment where pricing, prescribing behavior, and reimbursement regimes continue to shift.

Greg Hunter: Turning to commercial execution, Q1 2026 reflected measured progress across our core markets despite an operating environment where pricing, prescribing behavior, and reimbursement regimes continued to shift. International medical remained a key focus of commercial activity, with continued execution across Europe, Australia, and other regulated markets. Following our first shipment of medical cannabis oil to France in Q4 2025, we received a second purchase order in Q1 2026. As France transitions from a national pilot program to a permanent pharmaceutical-based medical cannabis framework, we believe MediPharm is well-positioned to participate.

Speaker #2: International medical remained a key focus of commercial activity, with continued execution across Europe, Australia, and other regulated markets. Following our first shipment of medical cannabis oil to France in Q4 2025, we received a second purchase order in Q1 2026.

Speaker #2: As France transitions from a national pilot program to a permanent pharmaceutical-based medical cannabis framework, we believe Medipharm is well-positioned to participate. The French system restricts medical cannabis to non-combustible forms and requires pharmaceutical-grade manufacturing standards supported by extensive regulatory dossiers, areas that align well with Medipharm's capabilities.

Greg Hunter: The French system restricts medical cannabis to non-combustible forms and requires pharmaceutical-grade manufacturing standards supported by extensive regulatory dossiers, areas that align well with MediPharm's capabilities. During the quarter, we expanded into New Zealand, shipping our Beacon-branded product to a top-tier medical cannabis distributor. This allows us to leverage the Beacon brand, which has been established with patients in neighboring Australia for more than five years. In Australia, prescribing behavior continued to adjust following regulatory enforcement actions across the market. During the quarter, we focused on portfolio optimization, refreshing our premium Beacon offerings while preparing to launch Wildlight-branded flower in the value segment to better align with evolving patient demand. In Germany, we continued to deliver strong results with 14% sequential growth, supported by expanded availability of branded flower under the Beacon and Wildlight portfolios and ongoing engagement with established distribution partners.

Speaker #2: During the quarter, we expanded into New Zealand, shipping our Beacon-branded product to a top-tier medical cannabis distributor. This allows us to leverage the Beacon brand, which has been established with patients in neighboring Australia for more than five years.

Speaker #2: In Australia, prescribing behavior continued to adjust following regulatory enforcement actions across the market. During the quarter, we focused on portfolio optimization. Refreshing our premium beacon offerings while preparing to launch wildlife-branded flower in the value segment to better align with evolving patient demand.

Greg Hunter: During the quarter, we focused on portfolio optimization, refreshing our premium Beacon offerings while preparing to launch Wildlight-branded flower in the value segment to better align with evolving patient demand. In Germany, we continued to deliver strong results with 14% sequential growth, supported by expanded availability of branded flower under the Beacon and Wildlight portfolios and ongoing engagement with established distribution partners. The continued growth of MediPharm-branded products is intended to reduce exposure to spot price volatility and improve the sustainability of our economics over time.

Speaker #2: In Germany, we continued to deliver strong results with 14% sequential growth, supported by expanded availability of branded flower under the Beacon and Wildlife portfolios, and ongoing engagement with established distribution partners.

Speaker #2: The continued growth of Medipharm-branded products is intended to reduce exposure to spot price volatility and improve the sustainability of our economics over time. In Brazil, we received an additional customer purchase order during the quarter, with shipments expected to commence in Q2.

Greg Hunter: The continued growth of MediPharm-branded products is intended to reduce exposure to spot price volatility and improve the sustainability of our economics over time. In Brazil, we received an additional customer purchase order during the quarter, with shipments expected to commence in Q2. Non-smokable pharmaceutical-grade formats continue to advance consistent with our longer-term strategy. During the quarter, we progressed regulatory submissions related to our metered-dose inhaler platform, supporting potential future entry into additional regulated markets. These efforts reflect continued demand for precisely dosed, smoke-free formats in medical channels and reinforce MediPharm's differentiated positioning in regulated environments. Domestic medical execution remains stable with consistent patient engagement across our medical platforms. During Q1, the organization focused on preparing for the implementation of veteran reimbursement changes, executing cost and procurement initiatives while maintaining patient access and service standards.

Greg Hunter: In Brazil, we received an additional customer purchase order during the quarter, with shipments expected to commence in Q2. Non-smokable pharmaceutical-grade formats continue to advance consistent with our longer-term strategy. During the quarter, we progressed regulatory submissions related to our metered-dose inhaler platform, supporting potential future entry into additional regulated markets. These efforts reflect continued demand for precisely dosed, smoke-free formats in medical channels and reinforce MediPharm's differentiated positioning in regulated environments. Domestic medical execution remains stable with consistent patient engagement across our medical platforms.

Speaker #2: Non-smokable pharmaceutical-grade formats continue to advance, consistent with our longer-term strategy. During the quarter, we progressed regulatory submissions related to our meter dose inhaler platform, supporting potential future entry into additional regulated markets.

Speaker #2: These efforts reflect continued demand for precisely dosed, smoke-free formats in medical channels and reinforce Medipharm's differentiated positioning in regulated environments. Domestic medical execution remains stable, with consistent patient engagement across our medical platforms.

Speaker #2: During Q1, the organization focused on preparing for the implementation of veteran reimbursement changes, executing cost and procurement initiatives while maintaining patient access and service standards.

Greg Hunter: During Q1, the organization focused on preparing for the implementation of veteran reimbursement changes, executing cost and procurement initiatives while maintaining patient access and service standards. We also continued to expand third-party medical partnerships, increasing the breadth of MediPharm products available within established medical channels. Adult use and wellness remained intentionally disciplined. We continued to defend our position in premium oils, maintaining brand presence and share in a contracting category.

Speaker #2: We also continued to expand third-party medical partnerships, increasing the breadth of Medipharm products available with an established medical channels. Adult use and wellness remained intentionally disciplined.

Greg Hunter: We also continued to expand third-party medical partnerships, increasing the breadth of MediPharm products available within established medical channels. Adult use and wellness remained intentionally disciplined. We continued to defend our position in premium oils, maintaining brand presence and share in a contracting category. Overall, Q1 commercial execution reflected continued alignment between strategy and action, maintaining customer relationships, advancing priority markets, and positioning the business for improved performance as the year progresses. Turning to the P&L performance for Q1. Revenue was CAD 9.0 million compared to CAD 10.8 million in Q1 2025, reflecting typical Q1 seasonality and market adjustments in Australia, as discussed previously. International medical cannabis revenue was CAD 4.6 million, representing approximately 51% of total revenue for the quarter. Canadian medical cannabis revenue was CAD 3.0 million, remaining relatively stable year over year, reflecting the resilience of our medical patient base.

Speaker #2: We continued to defend our position in premium oils, maintaining brand presence and share in a contracting category. Overall, Q1 commercial execution reflected continued alignment between strategy and action, maintaining customer relationships, advancing priority markets, and positioning the business for improved performance as the year progresses.

Greg Hunter: Overall, Q1 commercial execution reflected continued alignment between strategy and action, maintaining customer relationships, advancing priority markets, and positioning the business for improved performance as the year progresses. Turning to the P&L performance for Q1. Revenue was CAD 9.0 million compared to CAD 10.8 million in Q1 2025, reflecting typical Q1 seasonality and market adjustments in Australia, as discussed previously. International medical cannabis revenue was CAD 4.6 million, representing approximately 51% of total revenue for the quarter. Canadian medical cannabis revenue was CAD 3.0 million, remaining relatively stable year over year, reflecting the resilience of our medical patient base.

Speaker #2: Turning to the P&L performance for the first quarter, revenue was $9.0 million, compared to $10.8 million in Q1, 2025, reflecting typical first-quarter seasonality and market adjustments in Australia as discussed previously.

Speaker #2: International medical cannabis revenue was $4.6 million, representing approximately 51% of total revenue for the quarter. Canadian medical cannabis revenue was $3.0 million, remaining relatively stable year over year, reflecting the resilience of our medical patient base.

Speaker #2: Canadian adult use and wellness revenue was $1.1 million, consistent with seasonal patterns and broader market trends. Gross profit was $3.3 million, or 37%, which remains among the higher gross margins the company has achieved.

Greg Hunter: Canadian adult use and wellness revenue was CAD 1.1 million, consistent with seasonal patterns and broader market trends. Gross profit was CAD 3.3 million, or 37%, which remains among the higher gross margins the company has achieved. Gross margin performance reflects disciplined product mix management, branded international sales, and continued cost control. We remain focused on optimizing mix and production efficiency, supported by differentiated pharmaceutical-grade formats such as our metered-dose inhaler platform. Total operating expenses, including G&A, marketing and selling, and R&D, were CAD 4.2 million, declining 14% year over year and 28% sequentially. During the quarter, we executed restructuring actions that are expected to deliver approximately CAD 1 million in annualized cost savings beginning in Q2.

Speaker #2: Gross margin performance reflects disciplined product mix management, branded international sales, and continued cost control. We remain focused on optimizing mix and production efficiency, supported by differentiated pharmaceutical-grade formats such as our meter dosed inhaler platform.

Speaker #2: Total operating expenses, including G&A, marketing and selling, and R&D, were $4.2 million, declining 14% year over year in 28% sequentially. During the quarter, we executed restructuring actions that are expected to deliver approximately $1 million in annualized cost savings beginning in Q2.

Speaker #2: Adjusted EBITDA was positive $0.1 million, reflecting improved margin quality and lower operating expenses, demonstrating the ability of the business to offset near-term revenue pressure through disciplined execution.

Greg Hunter: adjusted EBITDA was CAD +0.1 million, reflecting improved margin quality and lower operating expenses and demonstrating the ability of the business to offset near-term revenue pressure through disciplined execution. Net loss for the quarter was CAD 0.9 million compared to CAD 0.4 million in the prior year period. The prior year period benefited from CAD 0.75 million of break fee income related to a terminated asset sale. Despite lower revenue, the business generated positive adjusted EBITDA, underscoring the impact of deliberate actions taken on product mix, procurement, and operating costs. Before concluding, I want to briefly summarize the key takeaways for Q1. From a commercial standpoint, we executed key milestones across regulated international medical markets, including expanded product availability, new purchase orders, and first-time shipments in select geographies.

Speaker #2: Net loss for the quarter was 0.9 million, compared to 0.4 million in the prior year period. The prior year period benefited from 0.75 million of break fee income related to a terminated asset sale.

Speaker #2: Despite lower revenue, the business generated positive adjusted EBITDA, underscoring the impact of deliberate actions taken on product mix, procurement, and operating costs. Before concluding, I want to briefly summarize the key takeaways for the first quarter.

Speaker #2: From a commercial standpoint, we executed key milestones across regulated international medical markets, including expanded product availability, new purchase orders, and first-time shipments in select geographies.

Speaker #2: We delivered revenue of $9.0 million, reflecting typical first-quarter seasonality and ongoing market adjustments internationally. While international medical continued to represent a significant portion of our revenue mix.

Greg Hunter: We delivered revenue of CAD 9.0 million, reflecting typical Q1 seasonality and ongoing market adjustments internationally, while international medical continued to represent a significant portion of our revenue mix. We maintained a 37% gross margin among the higher levels achieved in recent quarters despite a challenging environment. This performance reflects disciplined product mix management, branded international sales, and continued focus on cost efficiency. We continue to make progress on profitability with adjusted EBITDA of CAD +0.1 million, demonstrating that margin quality and operating discipline can offset near-term revenue pressure. Finally, we exited the quarter with a strong balance sheet, including CAD 9.9 million in cash, virtually no debt, and being current on excise taxes, sales taxes, and trade payables.

Speaker #2: We maintained a 37% gross margin among the higher levels achieved in recent quarters, despite a challenging environment. This performance reflects disciplined product mix management, branded international sales, and continued focus on cost efficiency.

Speaker #2: We continue to make progress on profitability, with positive adjusted EBITDA of 0.1 million, demonstrating that margin quality and operating discipline can offset near-term revenue pressure.

Speaker #2: Finally, we exited the quarter with a strong balance sheet, including $9.9 million in cash, virtually no debt, and being current on excise taxes, sales taxes, and trade payables.

Speaker #2: With this balance sheet strength and continued operating discipline, we remain well positioned to fund the business, manage near-term headwinds, and selectively evaluate opportunities that enhance our platform and long-term earnings.

Greg Hunter: With this balance sheet strength and continued operating discipline, we remain well-positioned to fund the business, manage near-term headwinds, and selectively evaluate opportunities that enhance our platform and long-term earnings. Taken together, our Q1 results reflect a business executing with discipline, protecting margin and liquidity, and continuing to build resilience as we progress through 2026. In closing, Q1 showed the type of company we are building, disciplined on cost, focused on regulated medical markets, and careful with our balance sheet. Despite lower revenue, we protected margins, generated positive adjusted EBITDA, and continued to advance the international markets central to our strategy. For shareholders, the key milestone in 2026 included international medical expansion, resilience in domestic medical following reimbursement changes, sustained gross margins, and disciplined capital use, measures we believe will demonstrate the conversion of regulatory advantage into durable earnings.

Speaker #2: Taken together, our Q1 results reflect a business executing with discipline, protecting margin and liquidity, and continuing to build resilience as we progress through 2026.

Speaker #2: In closing, Q1 showed the type of company we are building. Disciplined on cost, focused on regulated medical markets, and careful with our balance sheet.

Speaker #2: Despite lower revenue, we protected margins, generated positive adjusted EBITDA, and continued to advance the international market's central to our strategy. For shareholders, the key milestone in 2026 included international medical expansion, resilience in domestic medical following reimbursement changes, sustained gross margins, and disciplined capital use.

Greg Hunter: For shareholders, the key milestone in 2026 included international medical expansion, resilience in domestic medical following reimbursement changes, sustained gross margins, and disciplined capital use, measures we believe will demonstrate the conversion of regulatory advantage into durable earnings. I would like to thank our employees for their continued focus and execution and our shareholders for their ongoing support. Operator, we'll now open the line for questions.

Speaker #2: Measures we believe will demonstrate the conversion of regulatory advantage into durable earnings. I would like to thank our employees for their continued focus and execution, and our shareholders for their ongoing support.

Greg Hunter: I would like to thank our employees for their continued focus and execution and our shareholders for their ongoing support. Operator, we'll now open the line for questions.

Speaker #2: Operator will now open the lines for questions.

Speaker #1: At this time, I would like to remind everyone that in order to ask a question, please press star, then the number one on your telephone keypad.

Operator 3: At this time, I would like to remind everyone, in order to ask a question, press star then 1 on your telephone keypad. We will take questions from the analyst community on the telephone and then take written questions through the Q&A feature on the webcast. Your first question from the webcast. You announced that manufacturing is underway in Q2 for newly secured purchase agreements in France and Brazil. Realistically, when do you anticipate clearing final local import authorizations so that these agreements begin translating into recognized top-line revenue? Are we looking at a late Q3 or a Q4 event?

Operator: At this time, I would like to remind everyone, in order to ask a question, press star then 1 on your telephone keypad. We will take questions from the analyst community on the telephone and then take written questions through the Q&A feature on the webcast. Your first question from the webcast. You announced that manufacturing is underway in Q2 for newly secured purchase agreements in France and Brazil. Realistically, when do you anticipate clearing final local import authorizations so that these agreements begin translating into recognized top-line revenue? Are we looking at a late Q3 or a Q4 event?

Speaker #1: We will take questions from the analyst community on the telephone, and then take written questions through the Q&A feature on the webcast. Your first question from the webcast.

Speaker #1: You announced that manufacturing is underway in Q2 for a newly secured purchase agreements in France and Brazil. Realistically, when do you anticipate clearing final local import authorizations so that these agreements begin translating into recognized top-line revenue?

Speaker #1: Are we looking at a late Q3 or a Q4 event?

Speaker #2: Yeah, great. Thanks for the question. Maybe let me start a little bit broader. With France, and then I can drill down from there. So France is a large longer-term medical market, one of the larger ones in Europe that's heavily skewed towards non-combustible formats, particularly oils, which aligns well with Medifarm's strong capabilities.

Greg Hunter: Yeah, great. Thanks for the question. Maybe let me start a little bit broader with France, and then I can drill down from there. France is a large longer-term medical market, one of the larger ones in Europe that's heavily skewed towards non-combustible formats, particularly oils, which aligns well with MediPharm's strong capabilities. France was initially launched as a government-run pilot program and is looking to transition into a more permanent program in 2026, which we view as accelerating patient access. Participation in the French market requires extensive regulatory dossiers that can take years to develop.

Speaker #2: France was initially launched as a government-run pilot program and is looking to transition into a more permanent program in 2026, which we view as accelerating patient access.

Speaker #2: And so participation in the French market requires extensive regulatory dossiers that can take years to develop. And so we are working with an established partner in France to assemble that dossier, which we expect to submit in the second quarter of 2026.

Greg Hunter: We are working with an established partner in France to assemble that dossier, which we expect to submit in Q2 2026 and are optimistic about receiving authorization on that later in the year. You know, we made our first commercial shipments of medical cannabis oil in France in Q4 2025, as we talked about on the last call. As I said in the prepared remarks, you know, we've received a second purchase order here in Q1, we expect to start shipping against that in Q2 and expect additional shipments over time in 2026 as the market continues to develop.

Speaker #2: And our optimistic about receiving authorization on that later in the year. We made our first commercial shipments of medical cannabis oil in France in the fourth quarter of '25, as we talked about on the last call.

Greg Hunter: You know, we made our first commercial shipments of medical cannabis oil in France in Q4 2025, as we talked about on the last call. As I said in the prepared remarks, you know, we've received a second purchase order here in Q1, we expect to start shipping against that in Q2 and expect additional shipments over time in 2026 as the market continues to develop.

Speaker #2: And as I said in the prepared remarks, we've received a second purchase order here in Q1, and we expect to start shipping against that in Q2.

Speaker #2: And expect additional shipments over time in 2026, as the market continues to develop.

Speaker #1: This is the next question. The veteran affairs Canada prize cutting reimbursement from $8.50 per gram down to $6 per gram goes into effect this quarter, Q2.

Operator 3: This is the next question. The Veterans Affairs Canada price cup-cutting reimbursement from CAD 8.50 per gram down to CAD 6 per gram goes into effect this quarter, Q2. Your Canadian medical cannabis revenue was flat at CAD 3 million this quarter. What percentage of that domestic medical revenue is tied directly to Veterans Affairs patients, and what specific steps are being taken to insulate Canadian gross margins from this margin compression?

Operator: This is the next question. The Veterans Affairs Canada price cup-cutting reimbursement from CAD 8.50 per gram down to CAD 6 per gram goes into effect this quarter, Q2. Your Canadian medical cannabis revenue was flat at CAD 3 million this quarter. What percentage of that domestic medical revenue is tied directly to Veterans Affairs patients, and what specific steps are being taken to insulate Canadian gross margins from this margin compression?

Speaker #1: Your Canadian medical cannabis revenue was flat at $3 million this quarter. What percentage of that domestic medical revenue is tied directly to veteran affairs patients?

Speaker #1: And what specific steps are being taken to insulate Canadian gross margins from this margin compression?

Speaker #2: Yeah, thanks for the question. So again, maybe if I start broader. So as many of you are aware, veteran affairs Canada announced changes to medical cannabis reimbursement as part of the 2025 federal budget, impacting the Canadian direct-to-patient medical channel only.

Greg Hunter: Thanks, thanks for the question. Again, maybe if I start broader. As many of you are aware, Veterans Affairs Canada announced changes to medical cannabis reimbursement as part of the 2025 federal budget, impacting the Canadian direct-to-patient medical channel only. Effective 1 April, these changes did come into play with a decrease from about CAD 8.50 a gram to CAD 6 per gram, which obviously is a near-term headwind, not just for MediPharm, but for the industry as a whole. As I said in my prepared remarks, we've made a number of changes. We anticipated this change coming and prepared, implementing mitigation efforts.

Speaker #2: And so effective April 1, these changes did come into play, with a decrease from about $8.50 a gram to $6 per gram, which obviously is a near-term headwind, not just for Medifarm, but for the industry as a whole.

Speaker #2: And so as I said in my prepared remarks, we've made a number of changes. We anticipated this change coming and prepared. Implementing mitigation efforts when I talked about in the prepared remarks with implementing a restructuring program in Q1 that will save $1 million on an annualized basis starting in Q2.

Greg Hunter: You know, one, I talked about in the prepared remarks with implementing a restructuring program in Q1 that will save CAD 1 million on an annualized basis starting in Q2. We've done a number of procurement initiatives as well. As I said, focusing on product mix to optimize the product mix. You know, one thing we're very focused on protecting is the service to our veteran patient base, which is critical to us. You know, it's near-term headwinds. I think, you know, the other thing which isn't unique to MediPharm, but has been echoed across the industry, these changes just don't reflect the cost structure of medical cannabis to supply to this critical patient base.

Speaker #2: We've done a number of procurement initiatives as well. And as I said, focusing on product mix to optimize the product mix. One thing we're very focused on protecting is the service to our veteran patient base, which is critical to us.

Speaker #2: And so it's near-term headwinds. And I think the other thing, which isn't unique to Medifarm, but has been echoed across the industry, these changes just don't reflect the cost structure of medical cannabis to supply to this critical patient base.

Speaker #2: So although we're doing what we need to to protect service, I think in the long term, these potential changes could impact longer-term quality for non-medical or for medical alternatives for our patients.

Greg Hunter: You know, although we're doing what we need to to protect service, I think in the long term, you know, these potential changes could impact longer-term quality for non-medical or for medical alternatives for our patients.

Speaker #1: Your next question comes from the line of Aaron Gray with Alliance Global Partners. Your line is open.

Operator 3: Your next question comes from the line of Aaron Gray with Alliance Global Partners. Your line is open.

Operator: Your next question comes from the line of Aaron Gray with Alliance Global Partners. Your line is open.

Speaker #3: Hi, thank you for the questions here. I guess, first and foremost, for a long time, obviously, we've talked about MediPharm Labs and the potential pharma-medical opportunity.

Aaron Gray: Hi. Thank you for the questions here. I guess, you know, first and foremost, you know, for a long time, obviously, we've talked about MediPharm Labs and the potential, you know, pharma medical opportunities. When we think about the US and, you know, phase I, call it rescheduling, you know, it includes FDA approved and state medical products and operations, which seems to really align best with your guys' thesis and long-term story. I know you talked about it a bit in the prepared remarks.

Aaron Grey: Hi. Thank you for the questions here. I guess, you know, first and foremost, you know, for a long time, obviously, we've talked about MediPharm Labs and the potential, you know, pharma medical opportunities. When we think about the US and, you know, phase I, call it rescheduling, you know, it includes FDA approved and state medical products and operations, which seems to really align best with your guys' thesis and long-term story. I know you talked about it a bit in the prepared remarks.

Speaker #3: So when we think about the US and phase one, call it rescheduling, it includes FDA, approved, and state medical products and operations, which seems to really align best with your guy's thesis and long-term story.

Speaker #3: So, I know you talked about it a bit in the prepared remarks. Maybe tell us more—is this the big catalyst for you to be able to now execute on the strategy vis-à-vis APIs and research in the US?

Aaron Gray: Maybe, you know, tell us more, you know, is this the big catalyst for you to be able to now execute on the strategy vis-à-vis APIs and research in the US, and how should we think about, you know, the sequence of that and conversations that you're having and how we should expect to see announcements or impacts on the P&L in the potential near to medium term? Thanks.

Aaron Grey: Maybe, you know, tell us more, you know, is this the big catalyst for you to be able to now execute on the strategy vis-à-vis APIs and research in the US, and how should we think about, you know, the sequence of that and conversations that you're having and how we should expect to see announcements or impacts on the P&L in the potential near to medium term? Thanks.

Speaker #3: And how should we think about the sequences of that and conversations that you're having? And how we should expect to see announcements or impacts on the P&L in the potential near to medium term?

Speaker #3: Thanks.

Speaker #2: Yeah, thanks for the question. Yeah, so as most people are aware in April, the US rescheduled medical cannabis to schedule three under federal law, although adult use cannabis still remains schedule one.

Greg Hunter: Yeah. Thanks for the question. Yeah. As most people are aware, in April, the US rescheduled medical cannabis to Schedule III under federal law, although adult use cannabis still remains Schedule I. Schedule III primarily impacts the medical and pharmaceutical ecosystem, including the recognition of cannabis as accepted medical use, and it expands access to clinical research and pharmaceutical drug development. As we've talked about in Q4 and Q1 and other calls is, you know, MediPharm is well positioned for this with our FDA-inspected facility, our Drug Establishment Licence, and we have a long history of supplying pharmaceutical-grade cannabinoids for clinical research into the US. We believe this strongly supports our longer-term pharmaceutical optionality. That's why I say it's longer term.

Speaker #2: So Schedule Three primarily impacts the medical and pharmaceutical ecosystem, including the recognition of cannabis as accepted medical use. And it expands access to clinical research and pharmaceutical drug development.

Speaker #2: And so as we've talked about in Q4 and Q1 and other calls, Medifarm is well positioned for this with our FDA-inspected facility, our drug-establishment license, and we have a long history of supplying pharmaceutical-grade cannabinoids for clinical research into the US.

Speaker #2: So we believe this strongly supports our longer-term pharmaceutical optionality. And so that's why I say it's longer term. This isn't a short-term, immediate impact to the P&L in the next quarter.

Greg Hunter: This isn't a short-term immediate impact to the P&L in the next quarter. This is longer term on research potential. You know, one of the big things, too, where a lot of people are focused is the Schedule III does provide tax relief, but that doesn't impact MediPharm as we don't operate in the US. That is not for MediPharm. You know, separately, what I'd comment on too is the US has also launched a Medicare-linked pilot program, cannabinoid research and data generation, which again reinforces the shift towards evidence-based pharmaceutical evaluation and longer-term opportunities, which I think align very nicely with MediPharm and the organization and suite of licenses that we've built over the last number of years.

Speaker #2: This is longer term on research potential. One of the big things too where a lot of people are focused is the schedule three does provide tax relief, but that doesn't impact Medifarm as we don't operate in the US.

Speaker #2: So that is not for Medifarm. Separately, what I'd comment on too is the US has also launched a Medicare-linked pilot program with cannabinoid research and data generation, which again, reinforces the shift towards evidence-based pharmaceutical evaluation and longer-term opportunities, which I think align very nicely with Medifarm and the organization and suite of licenses that we've built over the last number of years.

Speaker #3: Okay, I appreciate that color. And I understand it might take a while for the P&L impact, but I guess just with the news change, are you getting more inbound calls in terms of at least partnerships?

Aaron Gray: Okay. I appreciate that color, and I understand it might take a while for the P&L impact. I guess just with the news change, are you, are you getting more inbound calls, you know, in terms of at least, you know, partnerships that we might see? Do you guys feel like, you know, the licenses, and facilities that you have do provide, you know, an edge that aren't out there, and you're one of the few partners, that larger, you know, research universities or clinics are gonna have to go to for this? I guess maybe are there more near-term things we can look out for, to show that this thesis is coming to fruition, even if some of the P&L impacts might be more long term?

Aaron Grey: Okay. I appreciate that color, and I understand it might take a while for the P&L impact. I guess just with the news change, are you, are you getting more inbound calls, you know, in terms of at least, you know, partnerships that we might see? Do you guys feel like, you know, the licenses, and facilities that you have do provide, you know, an edge that aren't out there, and you're one of the few partners, that larger, you know, research universities or clinics are gonna have to go to for this? I guess maybe are there more near-term things we can look out for, to show that this thesis is coming to fruition, even if some of the P&L impacts might be more long term?

Speaker #3: So we might see do you guys feel like the licenses and facilities that you have do provide an edge that aren't out there and you're one of the few partners that larger research universities or clinics are going to have to go to for this?

Speaker #3: I guess, maybe, are there more near-term things we can look out for to show that this thesis is coming to fruition, even if some of the P&L impacts might be more long-term?

Speaker #2: Yeah, yeah, I mean, so certainly there are we do get more inbound calls and there's more outbound calls as we reach out to potential partners to make them aware of Medifarm's capabilities.

Greg Hunter: We do get more inbound calls and there's more outbound calls as we reach out to potential partners to make them aware of MediPharm's capabilities. I mean, some of the recent inbounds that we have had are from research universities looking at our capabilities to provide API. You know, as recently in the last month, we've had inbound from universities looking for our capabilities. It's a combination of both. As I said, I think some of these are gonna be longer term initiatives.

Speaker #2: I mean, some of the recent inbounds that we have had are from research universities looking at our capabilities to provide API. As recently as in the last month, we've had inbound from universities looking for our capabilities.

Speaker #2: So it's a combination of both, but as I said, I think some of these are going to be longer-term initiatives.

Speaker #3: Okay, all right, great. Thanks, I'll drop back in the queue.

Aaron Gray: Okay. All right. Great. Thanks. I'll jump back in the queue.

Aaron Grey: Okay. All right. Great. Thanks. I'll jump back in the queue.

Speaker #1: I'd now like to turn the call over to Greg Hunter for a closing remarks.

Operator 3: I'd now like to turn the call over to Greg Hunter for closing remarks.

Operator: I'd now like to turn the call over to Greg Hunter for closing remarks.

Speaker #4: Great, well, thanks, everybody, for joining our call. And look forward to discussing our Q2 results. In August. And with that, have a great day, everybody.

Greg Hunter: Well, thanks everybody for joining our call. Look forward to discussing our Q2 results in August. With that, have a great day, everybody.

Speaker #1: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Operator 2: Ladies and gentlemen, that concludes today's call. Thank you for joining. You may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call. Thank you for joining. You may now disconnect.

Operator 1: Please wait. The conference will begin shortly.