TLRY - Earnings call transcript Q3 2022

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Operator

Good morning, everyone. Thank you for joining us to discuss Tilray Brands, Inc.’s Financial Results for the 2022 Fiscal Third Quarter Ended February 28, 2022.

Joining me on today’s call are Irwin Simon, Chairman and Chief Executive Officer; Carl Merton, Chief Financial Officer; Denise Faltischek, Chief Strategy Officer and Head of International; Blair MacNeil, President of Tilray Canada; and Berrin Noorata, Chief Corporate Affairs Officer. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session for analysts and investment firms, conducted via audio and participating retail shareholders conducted through the Say Technologies platform. through the Technologies and Company top uploading been has answer and questions. and concluded will submission the platform Say already the Questions read aloud Ms. conference. may begin you the Noorata, now

Berrin Noorata

everyone various please Thank the SEDAR. should to release, you, be SEC financial is the at and Tilray’s on note On which will can section available morning. referring been tilray.com and By and which have to has that the measures, good we access non-GAAP useful earnings of website call, for information Investors today’s now, filed with provide investors.

reconciliation of GAAP. is with each isolation accordance the to measure However, with this the comparable non-GAAP considered substitute information be financial intended GAAP. in Today’s presentation prepared financial as for of a in most information accordance a the not earnings in to measure press presented or contains release

and making we and incorrect. today those and in and questions. may our be issued answering Actual your will Irwin call the The Brands’ addition, described our and statements. of Tilray current prove forward-looking Chairman includes And differ with uncertainties, associated text CEO, many during results and In are Simon. our remarks be unknown like in materially forward-looking to risks in known on the and expectations release press statements from numerous to turn such earnings These which these statements risks statements. uncertainties I’d forward-looking now, could over based involve to beliefs

Irwin Simon

hello, thank this everyone. you We for you us Thank morning. much, Berrin, joining and very

our and Strategy business, will operations And last U.S. us are across our will the our market of Europe. I call, progress the then MacNeil, on of CPG Canadian on least, through Canadian we our update of of optimization update us not and Carl growth Canadian senior heel our business including Blair business making legalization global who will International finally, business, to team who pleased plans. We’re walk members Head but on several an our the Denise international plan. Chief Merton, Faltischek, and our have with of you and President financials. will the on our at against strength update and our us Officer the provide again leadership cost

to now highlights. and recent Tilray Brands’ Turning performance the quarter

have achieved detail, Carl We’re how outlining quarter to and our we $X our and profitable of of while pleased ambitious year-over-year adjusted And revenue growth to to results these EBITDA. delivered the with I XXth get time in discuss some revenue fiscal consecutive a and positive goal in Denise end XXXX. of spend want quarter Blair will by billion

the the articulated we is December merger. we when of Tilray-Aphria first potential first XXXX The in announced

and as are in acquisition medical synergistic from to adjacencies story merger realize organic and global as We growth and adult-use, backed cannabis a CBG that excellence opportunities opportunities our well world-class and delivered cannabis by by team. CPG growth other continue operational we

this markets. win. resources, innovation infrastructure means adult-use first infrastructure, the has a Canada, only now And its fourth industry consumer-first brand that three to in coupled will have entering is strategy that In main the across people, We and building, with the approach and year. place brands the mover

have brands leading We Canada. the in

minute. equity to the to are partnership With that acquisition for in a a legalization in across Blair to creates advances to Canada the meaningful partner to as European build aggressively gain we us traction. leadership announced believe expand allows million, globe continues would as a we The with from a $XX of product approximately position immediately pathway a market cusp the innovation benefit with generate like broad continue we as multiple transaction EU convertible proposed share, you in investing notes Brands scale of certified new GMP substantial shared thing, objectives. HEXO, possess spreads. efficiencies in one be certain and will will advantage operational that operations legalization. proposed strategies Tilray companies of adult-use accretive, on in brands be HEXO is Recently significant gain and market can We a back upon position of legalization Canada, the in And Europe,

foundation We have a markets, unmatched as those great explain and infrastructure an will soon. in Denise

global supplier of And and medical products recently effective front, the Tilray for now, medical high-quality, and the cohesive cannabis around mission. and in Tilray world XX countries we and global and Aphria across of Medical continents. On X the the strategy of unified portfolio medical our under is brands patients needs divisions premier

billion before, beyond said also developments Europe the quickly. presents the alone billion that very $X our EU moving I opportunity we and a strategy. Brands industry. As would and in compelling address the are milestone be legalization international $X believe in will a for U.S., potential And Tilray Denise

to Given as uncertainty are the actual next we optionality. legislative pursuing best thing, reform,

leadership example sheet, acquisition balance operating House CPG this the of MORE we legalization. with and recent And love, provide best clear additional a brands of consumers in to our investment path momentum across passes and for the is U.S. businesses that Our approach. optimistic the experience, that growing Act see opportunities profitable will additional MedMen strong remain

the products CPG expertise. way, Utilizing global a and distribution beverages, and more federal CBD expertise CPG the the consumer to experience we billion the into confident later business, global and basis Another is And be in upon our infrastructure, path as strong to strong alcohol our these on current portfolio system and unique of are memorable our of beverage legalization growth, this do footprint annual to into discuss trillion broad will market more include parlay global a Distillery I on in and I help positive lessons hands-on personal key translated Manitoba it bring that operational highly that and of be U.S. to ideally their the may current turn, means which we’re Together, a assets able Harvest. executives platform today, adjacencies, U.S. has footprint medical factor related in than CPG Brands that a McKinsey CPG better-for-you people to products sought-after wellness want on a with together I disrupt $X.X with platform. global this represents positioned and in X% on brands of am a In while segment an later they our and leverage highlights the well. THC to and accelerate estimated today best-in-class, CBD and performance cannabis Breckenridge brands our health brands care CPG at build growth. $X of SweetWater, U.S. key market, U.S. to that will robust XX%. to Tilray reiterate high-quality our call, detail opportunity products in distribution

about Business. Head detail, Now, will Denise? call turn of the Chief to that hear Officer I and Faltischek, International over to in Denise Strategy our

Denise Faltischek

everyone. Irwin, you, morning, good and Thank

This strategic earlier, quarter, noted vision. platform launched increased with global a business third mission, from was unifying Internationally, XX%. under recently performance medical As and premier patients high-quality, divisions we our sequential portfolio saw of growth. and Tilray under of EMEA growth emerges strong a in continues brands effective medical leading the primarily whole presence Aphria our position the products of driven supplier to quarter-over-quarter cannabis we global and in global the need business medical of strategy and powerful flower growth quarter over for and four strategy and quarter. The compared mission cohesive Tilray seen of In accelerate that in factor world. Tilray consistent EMEA around we’ve potential and the as Israel. sales Medical, transaction, of growth medical X,XXX% and and and Germany unifies the the brands was medical the By the Tilray one cannabis year to a prior a Aphria by Medical

in only with is positioned in a our in Europe. And invested EU two have located facilities result, continent as Portugal company and We GMP the on infrastructure as Germany. uniquely Tilray the

Our German remains facility medical in only the today. facility Germany cannabis producing also

will launch have markets one high-THC of well, to Europe as needs adult-use developed product, balanced expected our medical expect to extracts addition is about market cannabinoid our which remains and well-received to the based we Today, medical largest extract legalization. we excited in the are whole launch the which offerings, of comprehensive In portfolio we a our of largest meet upon our patients’ and be Germany May upon and cannabis insights. in flower

medical investments the us exceptionally Germany a within the of cannabis with market our with brands are adult-use people, legalization. together eventuality Dronabinol We XX% leader with and extracts flower products. And for in and positions in infrastructure, well approximately share already whole of this, our

and CC Please German cannabis products to gain With medical any CC see Germany, broadly and that business, adds distribution over cannabis, to Tilray grow Germany, to additional we Luxembourg also CC international to legalize other cannabis distribution distribution Pharma potential medical across for that growing points. as generated sales. the ambition to XX,XXX in access well. our across by a political revenue note as across traction Other Outside country, great Malta. We European within its adult-use accounted continues pharmacy countries opportunities are of we there expect expressed this have business our points as countries Medical clear Pharma is such Portugal, believe for Pharma.

Kingdom. including such are are some Some Spain, Italy and as regulations experiment medicine engaging the an France, for adult-use, Netherlands United cannabinoid-based the for in and debating Switzerland, and

with certain within could we fact, few legalizing adult-use countries Europe thereafter. legalize In cannabis the think all next sooner medical or years, of

Let’s in program supply to Ministry selected of shipments In distribute are that to In medical have for various business the In approximately we the our we balanced are five cannabis our medical framework of we the the local the which with whole across distribution broad the distributed French a medical medical partner. flower we with patients now market. range product high, our medical supplier licensed In two-year countries. as medium to our through with quarter whole the medical our one X,XXX distributors Luxembourg, products growing cannabis, flower market. experiment medical last we and In magnitude is high-quality cannabis and cannabinoid-based experiment were estimate our whole as extract to medical and only stakeholders. UK, Italian of medical medical will flower, Switzerland, into Health of pilot we import This suppliers the increased In products are France, medical Italy, approved in selected and completed Swiss were roughly the shipment one quarter market four this partners oils. country’s a nicely. potencies, and regulatory by cannabis. for first cannabis through market inform exclusive discuss medical Luxembourg international Portugal, medical our is we Germany’s of patients from

completed In Amazon. with CBD one launched and within drops spectrum brand Pollen, only eligible the expanded the cannabis reimbursement. GMP opportunities Continuing in a the Ireland, in we of products, suppliers flower with in out are whole CBD for within three wellness March, Europe, are cannabis market we products Malta. the of this medical [ph] our two medical sale first in first oil products in medical we Malta. of We whose theme across and in drink And gummies, broad then EU including oil offering Irish the launched also UK cannabinoid-based February,

and Oceania GMP listening In to in very providers. flower broad and EU to complete meet needs the and to for to expansion the launch medical we operations our leveraging from After learnings in cannabis Australia have and a new Australia region. Turning cannabis were range in whole medical of offering. product announced of feedback e-learning cannabis January, medical now our products platform certified new patient consumer excited offerings we a now healthcare Germany,

and that, the These opportunities we progress. of updates parts distribution our from Canadian see we the Brazil Finally, I’ll turn and we now also President further business. product on include world, other look With business, are even Argentina, additional China to and MacNeil, where to seeking ABP, of our forward over Colombia, Blair therefore, our registrations, call where benefit in India. Blair?

Blair MacNeil

and Thank you, hello, everyone. Denise,

billion $XX only in market. now cannabis fourth legalization the ahead. presents Canada by market. of of approximately XX% in a entering the year As Irwin legal The cannabis opportunity the we noted, total market, is Canadian serviced opportunity is significant being revenue This which a are

X,XXX the and Canadian Despite oversupply the However, budtender last dissolution maintain In X,XXX has partnership in months, maximize in a is as In share the the Notably, XX.X%. These pricing XX.X% to XXX the encouraging stores. to to the the in an has investments budtenders one and Canada Coast brand released on price our product adult-use led based numerous and brand. December heightened amongst February market product due number market we’ve a Brightfield knowledge ground months, an and in across to cannabis XX In share remains Canada. on vaccine price well, and adjustments because of report we influenced opportunity sessions perceived with that availability last over and Broken which was in our also across are QX national at vapes for the our market in declined Marley dividends. and budtenders, has This a these flower as in most of reductions pricing In range. of leading off and three seen been in recent sessions with retail December, retail margins February. and as consumer as brands sales seen the budtenders According categories, decline XX.X% on the pricing. favorite these we QX, alone. compression. our market LPs have and and has the reduction paying executed well premium. our our purchases. recommended year, Canadian Still, crowded the identified reductions, leads oversaturated lowest the the brand leading Research this price QX, product the to as of with will X.X% retail XX% from of and Executing believe data the of we have survey partners retail market most first marketing rate pre-rolls retail. market working through we budtenders shift decline The strategy remain our in-store published from passports Quebec share are Hifyre Natural positions in XX% of our month in sequential maintained period a compression. in brand including as of the experienced paying boots us education, brand We to step, focused able

brands brands This with to we underway. and needs focus scale in already to currently distributor We consumer SKUs. rationalizing helps is XX will unique proposition, margins. have serves continue We work and the rationalize value which improve investments them innovation, also be on Canada, and our the resources and

investments QX a launching innovation new grew XX.X% Mix we in pre-rolls, of and flower. made two the new XX.X% strategy, As the our dual category, packs to our we part including market categories and by vapes share Vape product largest which have after strategic and adjustments products, in from In of leading are Solei Solei. by vape series best-selling wellness brand

Mix pack Vape dual single include packs two in New flavors value. great a at great

QX, the one pre-rolls and brand’s Canadian the our XX.X% pre-rolls first our significant Bats, launching favorite a launched of collaboration yesterday, pen, leading doesn’t on the Bats announced accrual compromise already on achieved brands CBN become available from in We fastest-growing the the deliver our potency consistently a own In for bank. we with in unique a with its Good one on edible Supply. pre-roll nor December infused expanded and Hash and Quebec, also growth for that Supply, with it of and among claim We by Supply formulated for Solei quality, consumers market SQDC THC does through budtenders. consumers’ share distribution became of benefits of that Good high quickly of has also a Good use. February. cannabis our in Solei break X.X% experience month category in Bites brand. in one cannabis Hash products vape take leader share Solei saw our grew functional number we And Renew Solei, Moonlight, the nighttime first launch the

evolution represented medical medical global Medical. continued Tilray the our our to into Canada. QX platform, business Moving in

increase We continue patients all products the Medical, Symbios. Tilray Aphria leveraging the of including and platforms, need within of to assortment from our

national Additionally, base, continue conversations in to we and reduce the grow channel. with to have medical route expand patient to partnership market the retailers costs

combined BHO have back extraction curing This capabilities share product the at scale. exciting our allows further Looking market BHO on extraction. a industry ahead gaining provide focused industry-leading potency than distillate standard COX better remain product naturally QX, and consumer across flower all to us with innovation to with low includes to utilize we Butane categories.

our initiatives. time Our From market, in us competitive, the required Broken QX extensive allow Resin beyond the Coast, products and addition Live market. growth our this labor to packaging the with In improvements to live we significant a the cost in-house initiatives invest massive for BHO to in This In QX, to able in changing capability. successful the illustrate to significant Canadian drive are which continue highly only savings. standpoint, savings an gross capability in combined margin of savings Canada. commitment of to have to five-point done Amnesia will Haze operational our launch is also plan significant our Budder. automation our high-quality and These with very despite believe vape have synergy in pre-roll environment. We constantly and to procurement CapEx cost licensed first supply launch to we we scale identify a chain, producer do we win we in retail set compete summary,

consumer resources First, we significant our on to experimentation. program are capitalize investing need the for genetics in

across in believe especially the but investment pre-rolls, we three our Consumer our in categories, will First all which Second, adult-use in years. largest be innovation category

will Fourth, in Third, leveraging we the feet the and in budtenders be Distributors Sciences, in execution. relentless of three and most Rose Life with our North influence one on distributor have the our partnership store. scale purchases Great street

discussion over U.S. this will operations of call our portion with knowledge to detailed our turn ensure preserve we the our know closes our do the now we ensure brands and back prepared mindset Fifth and of of our a and category efficiency a investments before Irwin brand a overview. innovation. for this our in Carl will with they remarks all marketplace. to We our leverage will margins financial Irwin? to finally, I cost competitive

Irwin Simon

you, Thank our to growing discuss Denise now and detail. I’d Blair. CPG business like in

Our largest Distillery, of Breckenridge the green outlined in flash. Coast and craft the brands now beer beverage acquisition tenth brands nation’s include iconic brewer SweetWater, recent our alcohol West two craft

consists pioneer these branded future annualized Harvest, In are potential approximately leader hemp-based EBITDA generate have is businesses million in $XXX for and which wellness and revenue and a growth. high-margin of a aggregate, foods. Our business exciting Manitoba positive in

products, good also legalization, Of production adjacencies year, by the for Fort operating further distribution facility beer pad a Brewers Earlier and Canadian taproom Brewing also well including recently open course, which craft offering new represent the to new extensive our seltzers, they really a a XX,XXX-square-foot launch collaboration announced Tilray a Collins, who, the new soda collaboration the brands. this International at within an Airport. SweetWater the our Coast well Colorado, therefore, tenth of as industry RIFF. fit The in brewer brand, cannabis innovative Come West developed and brand vodka line new visit. with a Denver with cannabis upon and now Coast to cannabis Association, Canadian in Company, U.S., largest in in and began launched brand offering the developed is new provides Broken as

growing discussed establishments, Through leverage beer a cans. portfolio brews chains, U.S., also the our distributor stores the to the As the this expansion, the other at will now states THC-based a either or ability SweetWater liquor U.S. on restaurant, past, launched California. SweetWater view local available partnership federal has brands to we’ve bring and through to in grocery with portfolio in of be legalization of our launch draft upon means Reyes in bar, retail its western largest as Division, adjacencies in Beer product we to

both expansion and westward expansion We XXth our the where partner, Columbia continue This marks are Distributing. distribution available through into Oregon for XXth now products states, purchase. respectively, and also Washington SweetWater

from which craft bourbon reaches further During gin for distribution QX, is bourbon now XX paired spirits and we when the benefit acquired synergies including Distribution is and but already across vodka. Breckenridge brand its whiskey whiskey, highest known innovative portfolio, poised to Distillery, the distillery, world’s SweetWater. award-winning states, collection with widely

stops stores will drive food had. Harvest, combination how this both brand across brand prior and North world’s and distribution now the America. business in part acquired And in future. involvement, confident This Manitoba many it are and let’s growth to of discuss the XX,XXX We leading hemp the as starts with finally, was products and

seed a to improved competitors given We as And products and great have and have X% generate among a nearly accounts. brand able multi-outlet market leading convenience channel the retail In of since been share market measured business consumption share gains. growth Manitoba QX, focus, this to hemp and XX% in hemp part grew a has result, share. in Manitoba smoothies solution Year’s communications The cost brand amidst promoted healthy of Harvest with food a rising inputs. invested pricing its wellness a and food, cost and that campaigns in and team as managed super carefully hemp products with marketing, also implementing QX baking salads. New The Harvest, as action

we During gross and to calendar diets. deal low introduce as profit We Manitoba to of improved consumers’ remainder and carb business the in and great with hemp grew QX, innovation, align contribution. interest enable XXXX product the through a accelerate keto its new which on us products plant-based capitalize intend Harvest the of revenue

protein like Natural introduced items blended at powerful plants forward, month, West with hemp the a last line Matcha of Anaheim, Looking Supergreens. we other Expo Products and

as We consumers America month smoothies. near such convenience available snacks formulas with North in this offer future. other These to Whole looking be into also exclusively Hemp and items great which Foods Ground across new to and locations incorporate hemp will baked-goods, unveiled Seeds, launch at will the

since have Let another you we Recall least our as progress leave target. business million $XX synergies. added the on benefits Tilray-Aphria of that to at identified combination now first with part me million in $XX cost our and

end our savings. savings Carl? million will February, rate $XX basis $XX discuss And cash detail. million run have that, actual the and of with we achieved cost in a now of in As financials on Carl greater

Carl Merton

from ourselves outlined. reporting our as profitability already the In obstacles, continued strengthening of distancing face Irwin. globally competition, our you, and business, ongoing Thank all we

and we already that stronger, are well As with because to the market built long navigate that succeed over emerge differentiators term. competitive is us more and we profitable. we challenges positioned near-term we key diversified of ahead, provide the through to This more means the look believe foundation

me quarter everyone financial of because on fiscal between Before the based prior statements, reviewing which been Aphria’s GAAP remind arrangement in are and let have This first that follow dollars. adjusted presented in we our Investor and our Aphria U.S. and our financials, GAAP Also in financial are an that Tilray, the since recall by located investor to deck. U.S. fiscal our statements XXXX, XXXX appendix is quarter. July to analyst an U.S. unaudited primer on results down published Relations Aphria’s XXXX website and contains breaks for that

reference In financial financial will addition, both, call GAAP we our our in results. accordance adjusted non-GAAP as with throughout well our as results today,

GAAP release well although $XXX.X compared Beginning apples-to-apples XX% year revenue FX just reconciliation Our a our top to include to contains as line, of contributions grew measures the net itself our during significant reported QX any legacy does financial fiscal said, results not not to fluctuations as the I our million identified earnings Tilray QX comparison quarter, because under is in prior with rates. as of the press non-GAAP financial from our XXXX remarks. the

an rate rate same equal nine As year example, this our year-to-date, straight the positive million, was and period, exchange of extends months in adjusted prior revenue the the the year to adjusted EBITDA. $X.X if reported quarters. for track record for net million EBITDA we which $XX $XX.X foreign the would adjusted have an was additional to million average of additional QX XX reported in first an EBITDA in

the to from in and efficiencies complete operational non-distribution our coupled ongoing as all platform segments, Increased metrics contributions of synergies a the to efforts conversion and the expect with adjusted Our $XXX.X within of also improvement quarter-over-quarter to our business prior to adjusted embedded in These despite the from increased This margin the increase a year from segments. of ability focus synergies the adjusted QX gross to $XX.X would we generate is revenues cannabis gross become on profit respect of increased quarter, income adjusted other to see businesses. We reporting realizing of million quarter. consecutive strong contributions to million XX% serve million in as to $XX.X management is are On related structure. positive with Aphria’s are from second integration. result pressures to our increased the the prior because cost percentage profit more higher-margin million in traction a while and these net margin $XX.X distribution in our gross loss Brands legacy making EBITDA XX%. the able showcase will from Tilray year Net income. cost for the quarter operating are top and line they quarter note,

which their business. reimbursed benefited from Tilray also provide our cannabis the quarter core created as we choices Moving medical the own Symbios medical and to only included health. to prior revenue needs our legacy business detail. our in and remains XX% but for strong new product The represent brand, contributions, further was segments in Canadian manage of cannabis not with launches. from patients medical address for more latter eligible increased unmet to Patients innovative the cannabis segment year

from to downward by their see face to We pressure with paying competition continue from flow unable adult-use. either as increased as unwilling caused COVID a or doctor discretionary patients well who cash are

To budtenders higher Our detailed involvement Canadian point, can by setting. influenced thesis on retail more a rise Blair decisions that as with cannabis be and adult-use will our demand quality remains increased provided information for positively purchasing the wanes pandemic that within in brands budtenders.

brands purchasing consumers quality, opportunity are and Thereafter, behave, because to most cannabis likely we on products capitalize alcohol how highest will differentiated consumers behave offer be to the innovative most to most products. are then that able the best from similar those

we to weakness share discounting. heavy what in on were $X us vapes share going XX.X% of in itself smallest gained we price quarter near driven but new recovery. consumer on and for compared immediate Wholesale development, with harvests XX.X% getting by market decline innovation. doubled increased as a we grow residual and we by bottom quarter and than stabilization as focus to And opportunistic year to the overall multitude the leadership, we vape is the price from prior data. largely directly which forward. flower revenue quarter, along quarter, maintain competition, to are However, we industry able increasing, Hifyre our that is factors, believe QX reverse loss the in the on reflected now their decline closer reflected and decreased products, introduce decline we although our in million in Notably, while year the stages new the categories Revenue more in our we prior will the in pre-rolls. to we vary market behaviors measured meantime, our believe reductions prior of $X.X trend market price, which Those market quarter-to-quarter with potency in resulted led pre-rolls, be a of has share XX% of will to reductions contended sales, of in levels for versus as terms in almost are experienced overall a product the in suggests the market into the to a COVID over of as year, market which demand decrease year the and share are to the introduced price U-shaped we new in the the will which its million during pre-roll as revenue and dividends, paid impact still quarter, vape both as segment entrants share these prior of early attributable

our differentiate faced our us from to international story competitors. Canada, we While in continues challenges

of we GMP safety the in contribution Germany, our market of pressure, far for quarter-over-quarter. growth only we and products quarter uniquely leader commitment In patients the During well the as continue facilities are medical, $X.X XX% net rose international the within will the year business-to-business with medical and cannabis XX% generated infrastructure for prior our quality, These by being utilization obtained and Tilray’s cannabis aggregate, is $XX.X to products. $XX year consistency, transactions. and COVID. traction, and cultivation the growth our metrics win in gain cannabis from quarter. QX our despite international European cannabis million which $XX.X demonstrated in positioned our doctor the adult-use due to our two largest COVID revenue market million EU million where quarter, million revenue internationally were are and to to despite countries see company or in unwilling medicinal as increased to we to with in some businesses unable from legacy In due Europe revenue larger achieved to newly In a prior to as

ago, CC it inherent a was the an current the year specifically, dollar major had Our net versus $X.X to tied Pharma, which of XX% distribution of the prior the related in would was decline an rate during year A million experienced is CC revenue. mostly the the to in $XX.X as million to quarter. business, euro euro-U.S. the $XX.X U.S. and reported revenue weakening the strengthening million year Pharma QX additional quarter of the if decline of More the from exchange prior in have part period. been dollar same

to primarily also $X Turning incremental while an to in representing Fort $XX.X to million acquisition in our net compared SweetWater contributed in distribution in primarily additional due products beverage shipped revenue alcohol Collins. associated of QX, $X million quarter. generated This year was increased from with to due we million nearly Breckenridge points, the business, prior our December, revenue

strengthen as this extensive segment we for points, position is believe innovation through potentially pipeline. with in acquisitions, along ahead, strategic future there an and distribution increased Looking U.S. upside our potential recent the significant we

QX, year Manitoba Finally, from were sequentially, $X no quarter. which the comparables million for revenue to grew but Harvest, in prior contribution $XX.X there almost million on

has that new and to business are are now than leadership We team this more pleased improvements segment. our presently stabilized this introducing product operating and innovation we

XX%. million The is XX%. margin prior our million fell profitability cannabis decrease adjusted quarter, of profit margin gross in to from sale. $XX.X adjusted the gross been terms adjusted primarily gross to have to sale, wholesale this related and QX cannabis Without would increased In from margins, our XX% year cannabis $XX in but

ship was million In the Distribution we million QX profile was addition, gross reduction $X.X increased profit $X profit and and products quarter, Wellness of during Beverage Collins XX%. margin from costs million closures which resurgence able XX% X% by This from from to XX% the increased in in by for an profit which and from general year $XX.X XX%, to prior there SweetWater last administrative demand. peak quarter, year. gross in the while primary initiated and has million year expenses products distribution which contingent directors, declined was our a policy of rose margin to QX, margin the the was more to insurance benefited prior acquisition, were of the Offsetting of the to margin associated impacted border source a as $XX.X the a of and million was on the gross million in SweetWater decreased Net income executive debentures with which both in comparables assessment costs our sequential respectively, period previously compensation, of Nanaimo income the consideration and number in as share business convertible totaling the and under million owed which the $X.X in impacting in was quarter, warrants. in and the property Total price interruption disclosed reductions insurance transaction. positively CC first personnel, headcount our this were QX and no vape in than not outstanding year margins from from part gross periods our were gross prior than with the higher were quarter. reduction $X.X XX in location. both reflecting originally SweetWater during to than and closure driven doubled Pharma’s higher due onetime Aphria in gross $X impacted prior facility. in price our was level stock-based our on Fort quarter. contributions quarter of XX%, million recoveries the of along by $XX.X Beverage pre-rolled as impacted the million our upcoming increase Breckenridge valuation $X.X in QX, alcohol from Also a quarter. of flooding alcohol net

$XX.X a and cash positive pricing unfold. sustaining consistent level. ongoing, rightsizes prior priority This million basis sustainable conclude, negative great for to view from take Recall for more a quarter. we free have in time but as is optimism this year are million To and and the to at on Canadian normalizes cash we that free business. $X.X will the to QX flow process market Adjusted flow future as achieving positive declined the working Turning towards cash generation in flow it liquidity. a

Say priorities value you Tilray. concludes return deliver our our questions Through question the U.S. Manitoba interest costs. our for consider now and We integration the by analysts, of markets the also segment and a other starting will positive Germany, our the retail leveraged already earnings to remarks. in first followed the in in remains of await we roster including shareholders appropriate platform. from manage better brands what and This question? be across best from across In positive, our growing business time, eagerly which our for long-term Harvest movement countries our in efforts begin legalization eventually, meantime, to geographies, Operator, the our shareholders. EBITDA our questions Thank few are for with cash be the beverage our investments U.S. assets while across can your covering actualizing globe, the We’ll will as cannabis. EU on through and these prepared accretive and call, opportunities flow focus is at And highest we objectives, the

Operator

Our first the Instructions] from of has Vivien question Cowen. line come Azer [Operator with

Gerald Pascarelli

for for questions. is Gerald Vivien. Pascarelli very much This on the Thank taking Hi. you

billion playing I just out super you $X beverages, you mix, the taking So, see Just it like trying together, and helpful billion do once segment to between on overall. the all was go the wellness? think see get to revenue to drivers. like certainly cannabis, how health $X sense encouraging guess to alcoholic guide, mix to reiterated a get on it and your how ultimately that through about the Thanks.

Irwin Simon

Hi. Good question.

one, I’d growth. to upon And So here. billion in think to it get a depends lot I like organic I and if legalization down, number break Canada, is listen, that $X

said infused Canada and a to beverage $XX their grows in Canada to able also one like market billion, I’ve you think before, and as We the other I’d acquisitions a beer it’s in will bourbon a in or be a Canada. spirits As in whether bar a order, live businesses do Canada, to THC. or into to walk with day, that be tequila

is there’s consumer the another $X.X -- maybe cannabis products there In to Canada but XX% and one we’d business the U.S., from from the come from what XX% today, businesses, to rest and other we’ve the $XXX about and in current buy. million a MSOs get approximately great that’s day, our lot upon So, in of MSOs, to consumer talked legalization. own with legalization, like U.S., MedMen billion out like be to, that would products. in we’d we’re of upon And would

at to which business like that’s If of cannabis. to continue in from have other But CC our million. of today, to business Pharma U.S. in about we’d part billion about we’d Europe growth our upon rest $XXX is we own look So come $X legalization. have Europe, all the would consumer not, products. today, In the

it’s be let cannabis you $X.X total coming upon from about billion, look coming billion clear, about lot if $X $X and $X me a So, this consumer to the from of products. legalization. just billion at billion And depends

that at, the on continue ultimately lot there’s of legalization, Now those a hand, companies cannabis. adjacency products look have and would upon infused to other we with

So that’s plan. the

Gerald Pascarelli

all be the expected. things one Thank to Obviously, of in encouraging. relates longer But That’s helpful it. one if If Germany. could it just adult-use, on you. squeeze take Got they went more that things adult-use as realize is we super color. than would I

regulatory see when And to you the you your time so place it then take steps And you. could next that confidence Germany, change? if that a to perspective Thank realistically need had commercialization from to as you what in relates are do drive frame? think

Irwin Simon

to I on let in that. a Ukraine. war So and think, to But hoping jump I’m I expected we Denise we year, something. May this in in see don’t were we think expecting would going of listen, start

we really what see We from mean I hearing But down. we’re the like like things government Denise? some slowed we there. and today. what regulators it’s think I

Denise Faltischek

hoped see had So, June upon a to line. time we building framework Irwin’s May, response,

but be well in still We not is as that Ukraine attention of Irwin line as any from haven’t war mentioned, to precedent that COVID-XX terms as policymakers’ anything discussions. heard a takes government time officials achieved, continuing going obviously in

So, we any be there hear won’t to that continue delays.

We haven’t we heard optimistic. remain so anything about cautiously delay, continue to talking

we we In looking your at to things through, terms XXXX, backwards. our January you you trying XXXX, work were expect, of December than question worked and around take as of the longer commercialization, just about other way mentioned, like commercialization first

that’s our So thoughts. with

Irwin Simon

other commercialization. news is I the good think the

You’re movement a in Italy. seeing

movement You see France. in a

So revenue you’re increase X,XXX% basically in up seeing in Europe. over continuous also

after back COVID. coming patients demand, So,

listen, country, We in like that So, think but we’d to happen countries, ready one for see happen to Europe. multiple and in it. I once we’ll be in see happen something you’ll start see something believe, we

Operator

Our Stifel. Carter with next questions come the from of line Andrew

Andrew Carter

investment you the things margin aside there, be in regulations, putting Just what have has think synergies, you today? in in are of what business profile do which Canada? on profile got business. potential in just aspirational current Thanks. you still the incremental can where could outline you even anything Just some the of target, compressed terms hand the you it margin M&A, year-over-year, of revenue the Because with

Irwin Simon

spirits is But too. high-XXs things, in I I’ll look beverage in you at think, one the that, and or let so. the Andrew, if on our of Carl jump margin

look distribution some at our ex of our some If high business there. you there’s margins in Europe, margins

high and got quarter So, margins our at like you to a XXs some our margins selling to which between business product XXs, Carl… consolidated business. affected this as the I’d look spirits our low off by Now, see in cannabis some margin our distributors

our as hit of a of our price some the hit you’re biggest quarters you’re Canada do margins. compression not there’s in again, with today seeing of Canada, still, only in lot seeing business to think quarter But us I one beer SweetWater. Now Breckenridge,

So, that it’s we right mix. that important got

improve thing continuously those in have of other we’re efficiencies out margins. that’s Tilray getting of we as help yields, with HEXO, almost we and The bringing us to Carl? million What ultimately we’re is facilities doing feet is grow growth. the square and out cost. X doing, got And what take the the getting

Carl Merton

our of anticipate all based distribution So little where a categories. the revenue we obviously has you group. margin bit at our now, of lowest the if of Right different disproportionate share it And on Andrew, future. of kind I business margins think, in it’s a being look the across the

of we were our convert normalized. quarter, XX% the the going difficulties country If had of product. you to cash. a some two we the difficulties and getting some had between current made somewhere product. from and a to product where difference the we ideal against quarter overall getting that the that of anticipated And able minimize had we that those at some really distribution inventory low-cost the to The we normalized down little look it aging from wholesale increase. in that’s the some drop of headwinds in XXs, last some low-XXs had was numbers from going our in sale we’re there quarter. that we headwind the some margin. We product, somewhere having move consolidated that We But that getting to find were quarter, at business. current to currency at to XX%. margin portion The it cannabis were right? our else, think As impacts, we capitalize In that the bit did a is business, percentage business We our in start as to margin is on the sales, margin

I the just reasonable be for quarter. to as impacts in the current have low-XXs -- the other categories of a and changes, not high-XXs, forward, there said, onetime but think, grow needs structural some there these Irwin As of is in we something business, just go couple

Irwin Simon

in is to again, reality there, hard the currencies. different the are just hearing so. margins in of within three in get and you, I think the is to margins get it’s We excuses months, of there’s today the mix But it’s us but Andrew, the products The business. euro high-XXs. out there to the how sales, nine important aspirational the to thing those plan ultimately, hit sell not margins But we a got

Operator

next the from Bennett Owen with line Jefferies. Our come questions of

Owen Bennett

come international back business. to to wanted just I the

obviously, So, further prospects some growth impressive really there, trends for compelling. clearly

Just couple a questions this. of on

on now like legalization. is that more in dynamics So, It you with market crowded very even first one, becoming so comment get competitive probably the can and recreational look does Germany? planned

the to Canada, pricing kind So, seen And could pick how go are pricing we’ve Just risky if pressures Thanks. given these of cetera. we go? think in do seeing any pressures low you up? et so, trying

Irwin Simon

grow in there’s from one, a two, on market in So is ship facility facility markets than grow growing, one. other too, market Owen, have producer. crowded, we it’s have used to and So, our in big a this, our like -- taking Canada, there’s I again, getting thing, Canada, Canada that Portugal, not I’m also have taking think crowded, be been and let think -- we’re Number that’s no Denise jump a okay? more we and can I the to knowledge. I there, we And I we know product. But GMP-certified expertise no low-cost know we number going okay? can product number

can it low-cost one out brands, it pony taking be We’re and producer. utilizing and back we ultimately not Germany that to Denise? that taking our can to back we Europe that and there that trick build

Denise Faltischek

Owen. Hi, Yes.

is there and pressure natural. build into So, market, is absolutely you’re to on And coming out there. German saying, it’s what Irwin the right

largest so times. X.X If million the Canada United than world States outside you right people think being the by about is markets Germany coming larger Canada then one XX the and now, of

We there’s So lot naturally, a of point. your see entrants. new

We’ve expertise. of We’ve a to competition spend seeing coming out. and trust, a market. got are time We lot got in invested supply. But We’ve EU GMP patients doctors that we’ve we Irwin’s brand and investing. this point, got

we been we’ve have investing for -- And years now. so,

though entrants that head to even we take first-mover will advantage advantage. new start, and So, of are a have continue we in, coming

Irwin Simon

we the also, infrastructure And Owen, I think the big there. is have thing

We they And Canada to have moved to to have resources those have we Canadian facilities. from the people over our and back the then even operations. people come

saw We it. So, in to it. and ready we’re Canada, for it used listen, we’re

Owen Bennett

playing domestic then domestic think allocations see to for will of see Obviously, the going will you And follow-up. mean, pay situation lots those how we these forward, the be Do what profitable? I both at in out I facilities. the was to those recreational? And with be and how there’s a to increased? coming you cannabis the the domestic the much out on Germany wondering need medical lots government just a lots restriction do for then

Denise Faltischek

question. great Yes,

point as once I be the previous at you today, And so, is expertise relationship the government. our there fixed based we to German tender. with have And adult-use know, have be the for are I passed. another lots there our think on the the believe submitting will tender tender. I based government, experience to probably And that on will on as be based we able and with German absolutely some mentioned,

been them. supplying have We

in And additional lots obtain best so, I lots. think or order it either a expanded us puts in to position

Operator

with Parikh Rupesh line Our of Oppenheimer. next questions the come from

Rupesh Parikh

related to flow convertible. and just cash So, the questions two the XXXX

So first, next on your can Anything addressing maturity convertible. on share this you plans that XXXX year? point at

Irwin Simon

-- about stock that do So, and from something could good debt. So, you And listen, thing happen and it. like rebound we as it’s convert me, that something on I Rupesh, don’t monitoring for best know, closely, it’s days, it, is ultimately, a their okay? they something the to it’s we’re plan other

right I that’s say all now. So, can

Rupesh Parikh

know Okay, free on And cash goal cash get is flow. then, flow, the just to great. I positive to

just getting in anything a forward. perspective or sense share Just you to going from positive of any can else timing terms

Irwin Simon

cash Listen, of seasonality. as as I this our part inventory we we’re -- again, into things quarter happen coming out there and built flow

inventory We bourbon we’ve three been our in you put spirits also in lot and regards years. inventory business, which of down business, for now a built to the

that’s in cash think about I and Blair market, businesses thing. we’re flower. price compression Canadian that there -- happened of positive talked And the And there, we close with We’re the and in I big things flow think our all that some do today. in have our

We away did down, some challenges, into if second. the So, inventory. the took We our came $XX there Tilray. we’re what sales. all $XX those million but with regards we hurt is have -- And recognized to in for out you business million, not We we put have of of far big costs in of so the thing yet. a flower take savings that Price which of out don’t rest compression back you rest it, back we’re the there. step

here hold you say? me we will Absolutely. cash next So, next year. absolutely I’d like anything positive to it to flow quarter, sit and say, Carl, want but don’t be to

Carl Merton

answer. Good

Irwin Simon

just I can a got the it. Carl give to you hold answer.

Operator

Zamparo with CIBC. next Our John the from questions come line of

John Zamparo

I on the Canadian wanted business, cannabis please. to start

You domestic you’re currently? of rationalize looking approximately your a us Can to that cannabis line some time of a on what sense mentioned give project? a of brands you percent basis. up sales And make those on

Irwin Simon

Blair, you on the call?

Blair MacNeil

I Yes. am.

Irwin Simon

you Do that? want answer to

Blair MacNeil

problem. no Yes,

first, Let question. start, great me

consumer our is that last the more would Marley products to of you’ll forward through brands. good work from Bingo tell And the a the ongoing a of rationalization is that. to a some portfolio Natural quarter, that that, and I any strong be sales and then of it starts the -- so, that assortment going One is rationalization our within see will example. But things see number. repositioning real you working been brands we we the example. currently expect would we of material good don’t that then, do really perspective, strategy. I our with understanding. And has are as

Irwin Simon

market And John, this. the needs that. I needs John, think the market

LPs. stores, to were in see you going see you’re rationalization If to in rationalization

pre-rolls. they have think about many there’s so how brands think And have. XX only XXX it there. If have brands, it you you mean, out can I many LPs if about today, we you

You can flower. only have much so

that be what stands we with stands is brand not, think the And stands if to really you’ve RIFF are was Supply But that, there And that totally brands confused, what Everybody you every What got too the a rationalization. a with customer So, to I comes consumer there. for. is the for, if on key many the not And budtenders Solei and educating in consumer going to and and store, buy. came really is you can’t comes try Good out needs up what -- to weigh that do in focused XX can’t the it. for, there consumer single brands consumer the buy budtenders. that when was the problem. educate

move are helps also rationalization, grow, So, that’s and see why down some numbers. in to SKU of our that you sales brand It Canadian rationalize our from our our mean, some these them. rationalization, away as our helps of I inventory, with of with helps some packaging. brands, we with

rationalization So, a brand there’s lots when you for the SKU a company and the that benefit do is.

John Zamparo

a how That’s cannabis from Canadian have and one do will of Understood ROI? just or for prioritize M&A. merely do does or wonder CPG or in them. it something it Is how you options Europe. Thanks. and you nature term, broader you seem approach strategic you approach longer these my perspective -- in whether agree. second I a then that like in U.S. look question I help assets you the helpful. opportunities, And you lot is on of It it’s just

Irwin Simon

the want and bring accretive, and it’s buy we here. I be do thing foremost, that’s it first or to So, money into got to do is don’t our that’s losing What to something and don’t portfolio. big want

we cash So, our got get flow where we enough to want own to positive.

in got that and is that’s We how the products fit our can So away have does of And And focused adjacencies it see scale, in and be that in enhance CBD. past, our trust do past, past cannabis, how that want I me, it our spirits, enhance that’s good Blair’s my is fit thing world. we really And brand we products knowledge billion got brands. acquisitions consumer acquisition beverage, consumer on the within that with don’t within lots retail past, the would for base. cannabis us. when bad it’s to And want also margins. to strategy ultimately, number be that are the in two, Brands to portfolio Number want big we current have mean, be business. we’ve Denise’s $X are to one. you business strategy. Tilray thing The we plenty from. good in the acquisitions the but And Jim’s ultimately, acquisitions making we get the -- bad to and walked the not ones of a right, looked them do to some in plant-based you acquisitions, does beer, last products, in current there’s of best we at and

Operator

next Global the line Aaron Grey Partners. Alliance Our from with questions come of

Aaron Grey

for question me. one Just

again from you some So talked just in took you share vapes as It pre-rolls, mentioned the softened share guys losses about and you well. flower pricing there. March. stabilization And a on then bit

as sense get as price thinking how the for And improvement gaps a Canadian to various margins about today of want for at balance market? products So look you’re between just Thank you. the the share you in how well tiers? price gross market your

Irwin Simon

So I Blair think in and here jump a couple things, let a I’ll of second.

think SKUs them, as came we get different stand vapes, I premiums we explained demand what rationalization for and for we as Solei to one, for Coast. SKU SKUs, price the can them what here, at we for Broken how different and and look number

thing is out flower. different So different there of the of what will potency SKUs and and pricing for they out be there type what’s definitely infused tier will types pricing other be there. And big for

And get $X.XX floor be to a have sure able So, to is educate There’s be to where got got we It the what for. brands back and there. that’s everything to should we be we make come not the or pricing. educate stand and $X.XX. that and out consumer

So this into But we our think that’s are want go year, as is, consumers I the we who what’s year, potency. thing higher realizing important. fourth

realizing in want they pre-rolls. what are We

it’s the And biggest market the other XX% moving now growth or to to The flower. shift seeing be today is flower out there, of consumers what’s pre-roll flower, market vapes out used we’re thing where the some is -- differentiation big there. of the

for have the lot in And to key a to we grow, X regards can ultimately kilos able there price that Blair? potency square of XXX,XXX Tilray. that win. that’s we there’s a hope can And with with be to can to win we there’s to and that to get who think can pricing to where quality what’s have that trying out have I that’s So, do have and important win Canada, us. up. that’s low-cost lot be feet and Canada continuously But in have producer and for cost there, that what’s out, that do million important is take

Blair MacNeil

Irwin, for relative thing Yes. is Great of angle to much the value as always the competitive and of track our about in as brands would set. brand the The pricing think I and about one question. the our answer, real price us marketplace, great to say value the we is

being to being price, at So, it’s about in not all about -- it’s low Irwin’s value point, times. about

price about that terms brands potency, so, are in of like terms our characteristics in value our other relationship And it Infusion. important, of some of of in brands and the Irwin talked of

So that’s one price side. side on the

to more we in We’re into of cost can always so other our protect we on gross going how efficiently, to our at be cost we terms side, always margin business the extract we’re ways in gross it do looking do the value. business Conversely, find margin.

the For back SKUs every do business, that us, we try in. our find the in with on cost balance that in we going brands we’re that end right and and to category value our compete always to the of and

Irwin Simon

different ask I or and I And brands on And there five five cannabis for. would course, educate that’s do name who most live could I and could ask the rums, If business think call you the in think I brands. not name big to those sure today, prices consumers Canada. you on this is or tequilas people out bourbons Canada, of in you you I’m thing that. pay

that’s social limited with new a we’re have brand going build that We’ve -- think team them and the of throw up important our education innovation to we the flower, ultimately back do by. I out through we was through brands. to some I and stuff, Good where here, got key our do through important come regards message if And you to coming and through It’s Supply what brands. in media, can pre-rolls and look some stand we what’s got educate different regards on advertising, vanilla got with RIFF last names we Now, there. across and not out the budtenders, And Solei but pre-rolls just exciting there’s can we’ve is I in getting pretty in the we think and can what the our that’s week at that to about and or product to brands.

Operator

come questions with Capital. Scott the of from next Fortune Our line ROTH

Scott Fortune

to kind on just up the U.S. of want and Canadian follow I the quick, Real side also

some share, with inflationary the picking seasonality the the stabilize up And a or on now? little of Just on things the seasonality the you’ve in you of you’re provide demand pick expect up kind we market the spend thought but of right February. mentioned can thoughts and pressure initiatives As to you instituted discretionary more you with pressures the as color provide seeing around March kind data? here? know, that You consumer consumer And what up. bottom of usually the little can pricing a pricing-wise

Irwin Simon

Sure, sure.

I couple dealing The time, I’ll this let with think we COVID. months of And word you and four it. I time and good and X.X were it’s COVID but lives for mention part in today, been a things, this news of didn’t ago, is even on to this Blair I last guess jump our here. I the promised the years, ignore myself last want call year can’t

a through no As in one regards we going and certain to Canada, of their vaccination store a to regards customers, to lot of owning with in amount the went lockdowns especially back offices. cards, Quebec in

So during to this quarter, forget out we almost about like want it there.

behind they’re consumers LPs a And many cannabis? I I forward brands that that So, what is there’s invested is have out lot small on, COVID that, around enjoying in and tried pricing that here back there’s of to think went coming and know. walked you we we’re As there a them. in ways. to as I and jump they lot With seeing with masks say think were you us think

We there. the we think On which hand, we good flower about. talked there, other challenges we’ve out had place are in some a

listen, is news and but the with with. on regards the today world standpoint a that see where growing hand, from there, see good deal product We prices, has shortages we facility, other we’re fuel to the that grown. we So, is a in one labor in

and are a back keep the the the is, that, need taken we continuously I of we out components reduce We done done yields into out of lot On this great our vapes say packaging, of hand, that’s that get we’ve being other because think business. on regards pass higher we’ve great key in consumers. us that that business. to in all growing cost to job, in to want continuously able there’s price we’ve will I to pricing. with a a there on to see products. to I anything regards right to to managing don’t got headwinds But job here back today translate that But our Blair, it, and And cost And out our coming you affecting got to that? cost. the take

Blair MacNeil

in stores. joined seeing much a in and as the say, possibly would I Irwin, back agree stores the you, behind thing can. COVID I us lot we with out as What one am Irwin I I’m I is into and The seeing traffic putting No.

the had tenders So knowledge budtenders. in stores. the QX I’m alone, seeing conversations with we product And bud in sessions with X,XXX

good for talk to and come brands. So, that’s us about opportunity we’re definitely back, seeing our traffic a in store

Irwin Simon

the our and few people. it is point, count consumers normally getting here. in a got full in what there. offices we’ve Young, I the I key was Richmond But in it’s the hands customers of stores. think could remember, Blair’s to months back -- I people think And was get of and and is to thing big on I just a a standing two at ago, Young stores getting new back Richmond

Scott Fortune

We Then, about overall? versus Perfect. how been pay from forward German kind quickly. here? talk at going real private mix has what And look pay? private Israel coming And from unpacking the no insurance Denise, growth and the sales of seeing percentage growing you Denise, international in maybe quick, then, coming you are for of that Germany do

Denise Faltischek

Yes.

it’s so mix whole than looking extracts. the know to for harder talk faster in XX% lingering at something COVID some at doctors a in had call growth was to -- around neither still during quarter. I want at dried didn’t there, terms So, We And business impact the dried some like sales he be the flower in mentioned the about of that we growing everyone but and in Germany wants is it I I Germany, terms move so X/X front the quarter. do to think I, see on quarter-over-quarter. Basically, COVID Irwin flower, X/X looking past, our bit about It representatives of coming of there the oil. in would from

pharmaceutical we market. so, market as And see a the moving extract more as traditional

as so, to more. representatives more And accept COVID from we’ll to business get we start believe to able be where we start to extract are past as visits willing see and move that doctors our

In terms the between don’t actually I public two. the of on private data versus split have insurance,

a actually covered do by that can is can but know extract answer, business I question insurance. I So I that’s not that our mostly

Operator

the Our BMO. with next questions Chen of come line from Tamy

Tamy Chen

to one you like, to in cannabis ensure back still $X clarify, target, I businesses you you consumer by happen saying Irwin, if get target? legalization just the that in your are area I wanted of does then, that $X the about segments billion question would the other acquire to not going have the to here. to billion look comment U.S. mix

Irwin Simon

me be businesses get just not going I’m let So, very a Tamy. to buy to number, to clear.

company race not are It’s is -- And It’s clear number. -- a on first. okay? reason a to that, the that reasons. let a So for be again, we me very we cannabis acquire would cannabis

-- So, just be U.S. will, about there I is it to legalize. ultimately, cannabis to be does legalize the a it not It’s legalize, just by out the would believe does hit your dollars, when? cannabis just But $XXX the question answer be you couple your if doing tax when I it if business not would will think $X-plus which a question XXXX, the acquisitions over billion to of answer the is next no. years. cannabis billion not will in number

Operator

come Canaccord. from Bottomley the questions with of Matt next Our line

Matt Bottomley

opportunity the just Irwin, comments circle to some here. of around back wanted to your adult Canadian

of potentially Canadian kind billion $X might market. So, $X that just of to around Can is would $X relate relate of you that mentioned circle of the had that market You to how the billion share? maybe billion greater implying to back market opportunity, within get maybe to branded sales what understanding of Tilray, share? a mean would those are -- so that a you trying XX% billion dollars an $XX to billion context. the Just on $X

Irwin Simon

and I grow what’s coming to drinks there’s grow the there. -- competition, regards think were very XX% to consumers is convenience to The LPs, a sure. to aspirational. got Canada. there’s of we I a there’s into And market got XX%, mean, Sure, retail being drinks sold got I more companies I’m stores. happen Listen, happy, to the get in I to I’d share. in market said fortunately, legal in good lot of from market’s the to a of regards market. lot a being sold got and in grow and market the be lot to good before, bars it in market’s

$XX getting with think Then us XX% great and top market that cannabis, like Canadian of cut adult-use both and million, And like business, to billion educated plus. XX%, are in acquisitions to $XXX companies do that Canadian about have to Canadian consumers we’d something you that, spirit love there then, the beverage in medical. with. million for the we’d gets for to and I market to retail, companies do a by I’d which more And the or that some do $XXX we beer share. on for that love more

billion $X what to that’s gets Canada. So, in the me

about overall billion XX% retail, which a share about it’s wholesale So, is on $XX a XX% less.

Matt Bottomley

just And you mind. Thanks. if quick don’t one it. Got other question,

something you are catalysts or producers the the to long are there federal listening Tilray mentioned these meaningful what time saying? in You similar of in what not to and really their and to environment. of large wondering sort might isn’t But the of focusing know can on might pathway a what’s back an beer just the you any meaningful more in producers a going brand may may be a for -- there next lot holding government like think or control Is or stores LCBO awareness do, that. a where in year be the timing I’m it’s doing government for what I think from a just change? look I where lot store, in any part. something branding current points

Irwin Simon

Listen, I and it’s to got happen here. and is what’s think question this comment here, an excellent

sell and billion that mean, infrastructure I the in cigarettes the saying has jobs that’s in to this keep government They’ve got said I created Walmart Canadian As anymore. billion. $X I $XX seriously. over the take over industry doesn’t made

credits, to is tax down. to to down. go cigarette tax electrical go cars. going with So going and In tax electric is Gas go going down regards that’s to

prescriptions of a getting in cannabis So to great through part in NDP Canadian to know now with out allowed going while in that’s the that, Canada be dental cannabis. of should for the regards coming lot citizen, Canada. benefits I research and again, regards every is is of right there

push the recognize. upon and Canadian there’s we So, stuff that to need to government

industry legalized X.X think you, years think to they than cannabis in don’t in tell I cannabis a thing now? ago. that benefits companies got the You I a it. government good and and the this liberal industries that’s big real this And And got right bigger education to in realize, in have of from it. is regards And this is safety, Canada. X.X managing a X.X in to lot I just Canada, to recognize job other probably it’s done and What a regards the

Operator

Our line of Piper next Lavery Michael questions Sandler. come from the with

Michael Lavery

I the target. to all just does the it be aggressive, revenue a into pretty want it even back fall aspiration. could ambitious to like pieces come regulatory if feel And place,

So versus curious how you about disciplined where approach it, think swings for do there? extent there’s the investments how like a has to some of just those, how of think importance organic free the cash to targets between flow these weight just pendulum which a behind the balancing of you have any piece, To objective or tension or growth level some that typically the with about spending?

Irwin Simon

and legalization. opportunities just to want to is and in just in matter come see not growth front The the SweetWater and number today we’re in Breckenridge last I Flash it’s we’re there everything what of are to I out important us, of guidance think And here. consolidated and give are before and Green get that I back, regards doing opportunities growth a for like beer was thing with you the in what’s would clear gave what that’s that happens Alpine with no on think opportunities tremendous. I But to important, to do to I buy tremendous. out So, $X is growth us. based billion, The I us Europe tremendous. in business the in regards front

So, I businesses growth. share And single-digit there XX% the certain There growth going for aspirational organic certain to are I’m I’m high where So to to to are where to single looking to there, double-digit on double-digit digits. Canada, good to I’m whether looking in consumer it’s going mid a I’m need get okay? get for growth, side, to get to want have high growth. businesses

and regards today And from high-margin about consumer So mix business, are [ph] beer back before, spirits and margins others, with are margins, they in spirits products. our talked that businesses to which to I and great that, in margins the margins it in of comes in to the Diageo and you the products, standpoint. can margins look regards at

legalization, So I’d growth, at in mid-single-digit with margins, I no I and consolidated But at that, talk down will me that said big, looking us. like if have free the thing for producers talk is facility, we markets, plus markets be now, EU and our in like at to mix to other I’m cannabis and into in more that ever start facilities, for lower-cost listen, And The we XXX,XXX shipping the probably Carl we what our In regards trade. about before, today big GMP day big there’s that there, thing cost can level, of comes happens, certified a the more product. XX% And is with growth. about a Europe a than double-digit to other will into have look look we’re some didn’t but U.S., one every we’re and called growing different plant-based the the there. size. crazy, high that kilos of tremendously. our we Cannabis is is word with when

Operator

Our next with Thalmann. the Ladenburg of Mattson come line from questions Glenn

Glenn Mattson

include the to call, of sense I looking like would a goal brands? for it’s profile looking be? revenue Just of you a U.S. goal mentioned what idea I what potentially Are late acquisitions color has that had that to the because grab target realize a MSOs. but you you wide Would to just states it give like like Hi. company you the specifically for is like your footprint? in that get U.S., would ideal in your and to ask Are get like your into? and be there. to markets you’d specific some Can around

Irwin Simon

I Listen, regards to one. legalization if does a is, state, good good I question is it because happens, think like my does a have every what in standpoint What to grow like I and is look system? what’s -- didn’t from the legalization there. question happen? question. each alcohol, own think Number two Number it the cannabis and that’s if different have X-tier in important there But

would I’m want about most it the excited I So, would would I not multistate. depend. brands. want retail.

how has houses multistate of be we that to in our of day. love has and getting to could it be know the U.S. market or brands, had better retail good be already it business. liquor in to because how what industry not able product And growth like be the if or business necessarily to at So, sell operator like a in like good we the majority now I’d of spirits I’d to to at, grow Canada -- the to brands kind what the industry, grow every that’s into grow the that from ship we do we look part

different the able of States, biggest could United into look be eliminate that grow sell you today One as different than Canada. and to just you costs and building that And think no if facilities, at and greenhouses these is I the these market.

Midwest, are are then You what you we be to take that have the and take in? Where this. people? York, take markets -- you the discussed really you New prices And want where big the California

we business The something look it, and other as us. thing to that is we important to regards to at be direct-to-consumer is would would in our how e-commerce delivery grow consumer

Operator

There I submitted to the you. back via Say platform. time. would like address to Thank questions this audio the Tilray Technologies no questions call over further to now the are at turn team

Berrin Noorata

operator. you, Thank

federal top question how Irwin? is, Our the legalization, platform from the Say Tilray Technologies enter U.S. “Upon market?” soon could

Irwin Simon

can and how this and Senate. I just which interesting day a already. And haven’t something RIFF the it’s Congress different to you with SweetWater, really great that’s can Breckenridge a we’ve would business. be and products, would already are beers and again, before very Coast our anyway. is Again, it it’s THC it. quickly. XXX bill we there’s are out where out beer should the multiple we and Supply now on that So, day, the working retail that love be right Atlanta, is pretty to great with to XXX, regards go a hopefully, you But infuse And there today me again, some that if with clear. bourbon now, and come got that selling if ultimately And the Fest, to tomorrow product there’s brand in Broken products the today upon got legalization, infuse there’s with to try THC. not be distributed looking it, ability very down interesting it. in will tried throughout Good quick let introduced name, and be XXX We everybody to infused Right something be happens, we U.S. MedMen ways There there states bourbon, do think have product call to a a with

alcohol can’t the product. You have have THC and can’t you in

business And what businesses is would thing are with in distribution standpoint, the THC. we set big a the that infused is are up consumers we that the that would from drinks that brands have So know. alcohol, have businesses already have

we’re Again, an this getting And years on. is about I in could need so with to regards for we Tilray to what on good come have do it’s out for with legalization other out I year And how sleep? I product joining everybody call. and got there’s it we’ve a the that, So, with product Brands I less had there pain, customers for sleep, than And lot much side it. prescription a to product really ready thing education you, last a for on get market. as together. get medical XX this demand for that’s can do today’s I some for happen. done I doctors And Europe. So, asked some anxiety? and that’s CC into the anxiety, feeling we pain? There’s is there. there. that’s there demand a and people for we with tell the really et so it’s must in much think day, for old cetera, going get How so much and company industry it. times do Where thank we our the old. because done is on to of Tilray Pharma get part we’ve And there’s the trouble consumers getting I Tilray. know distribution But X.X And is, business we coming what of want

what’s back SweetWater, to in If have Flash, about and part with you regards where what Aphria, were HEXO go and the we Tilray today deal. to it in to Breckenridge where doing we’re look Alpine announced the regards bourbon, of Canadian what market, I’m was, really with in we regards at excited Green

remarks, stuff You we’re work million my focused there balance are heard there’s me our here. sheet. will to HEXO continue savings talk that, and continuously looking that $XX-plus we alone, or we some exciting With between on on. in stand for companies both of

somebody profitability. on cash. who’s always We’re focused I’m focused on

where governance, here making Canadian the happy big And think in that’s not We’re this it’s There’s all tell team I Tilray. get with need many front best market, happened with all team Tilray that focused helping an business. billion Directors but where I group of with one it. to have a out of what’s in else I’ll out out a you, And grow over our really the is really have, that’s years, there’s to we over we to are is sure here all focused industry place take Board which work comes $XXX the a this. and do do there. I bring us, thing the many in next that who company I legalization this that’s I think and best it to to it heading is that’s there other expertise of fortunate on the than there of ESG opportunities to where in us there that size and people good industries and level. in X.X from is today, the totally

couple were We ultimately, of place that last the do now take years the have over built we facilities grow great and next in today to them how some level.

We’re getting that. in in content consumer midst regards of the the technology understanding and data, to and really

on focus that’s on the sure that’s The they of into very, is company and the I sheet a the think losing because balance the We’re have very why run making focused money big Tilray very, the brand that’s running we of strong why Brands. is as trouble are or the thing consumer, name -- out LPs where lot the money. of

one the company. branded have plan in of that’s is the Will tell we billion. not. in not. are good Will and margins control get everything? regards plan. get to a lot to you We and right? I of billion Absolutely have everything to But we go how questions you, consumer a everything mix there things we $X of hit? aspiration. A But a not. will Absolutely Are out $X Absolutely to

will We employees. Thank day. get to we be there you have and way our they for true our and right, But don’t then reward pull. another we have consumers go. shareholders, if a levers us, joining great And much be true our very and go know to to to

Operator

conclude participation. your does We This teleconference. today’s appreciate

day. this time. Enjoy rest You your of lines at disconnect your may the

Tilray Brands (TLRY) 6 Apr 222022 Q3 Earnings call transcript