SNDL - Earnings call transcript Q3 2020

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Operator

Good morning, and welcome to Sundial Growers' Third quarter 2020 Financial Results Conference Call. Yesterday afternoon, Sundial issued a press release announcing their financial results for the third quarter ended September 30, 2020. This press release is available on the company's website at sndlgroup.com and filed on EDGAR and SEDAR as well. Presenting on this morning's call, we have Zach George, Chief Executive Officer; Jim Keough, Chief Financial Officer; and Andrew Stordeur, President and Chief Operating Officer.

Before we start, I would like to remind investors that certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements. materially anticipated. differ could results from those Actual Risk the public company's could affect EDGAR. filings detailed in results are and financial SEDAR are available factors made that that on reports and other

mentioned all like today also that from are Additionally, respective note figures in dollars locations. indicated. to the unless conducting are remote Canadian we our I'd otherwise call financial

and you As during this issues or minor in for such, advance technical there may be brief understanding. your patience We delays, thank crosstalk call.

and over then session. remarks, move George. We on like question-and-answer will prepared now the we'll I to to make turn to now would the conference Zach

Zach George

Thank you for us quarter on our everyone earnings call. XXXX joining third

during COVID-XX world, Health and this people Sundial. continues protection pandemic of committed global affect COVID-XX. safety disruption has around the continues related material the to procedures of while we to our markets disruptions at our everyone the not that be operations. We and ensure minimising safe to unprecedented consumers As Sundial hope To-date, any priority time. to and to remain staying stringent experienced employees to is

capture Sundial. consumers, commercial marketplace. operations. with evolving short a In time competitive on market a last at to its in the two into be cannabis month XX frame, quickly helpful. legalization is Sundial start Canadian XXXX connect become into months still for the and enter just future, perspective some been rapidly The we As head industry Much of is share and is about our complex multiyear may a infancy. plan We're context in we've and of able and competition meaningful and years

optimistic we a focused and improved structure team a capital sustainable have with We drastically projections targeting more operating Following the our and a change challenged in management structure. model. XXXX severely simplified, subsequent and entered cost practices business financial our restructuring,

of to cash debt $XXX repayments, equity swaps. balance a asset de-risk total taken We sheet on A for debt been a total steps our has through and basis. sales, have eliminated since million aggressive in combination of year-to-date

cash service by annualized We have obligations $XX reduced million. approximately also debt

currently addition, on have cash in and we to million if In access approximately required. capital $XX hand

required has through well-funded are restructuring significant but XXXX. Our dilution, we

We expect operating the near-term a extinguished. XXXX require we the the material do QX of in decline as is last to debt additional of Under capital into transaction. our convertible engage rate conditions, unless current dilution current strategic not we in

will focus. and not active we a itself, previously on be continues strategic While comment process review the our to announced is

our transactions. quarter Turning we experienced to decline away from to due a third wholesale revenue our transition results, partially in

are we cost of the made we've with terms progress However, pleased in operating initiatives. and discipline

These demand discussed levels environment. impairment are did We our Sundial revenue has will There have market align have capitalize supply reasons. charges. also on repositioned adjusted by better this momentarily. in related the our decline several with our current In expected detail more doing and better to inventory so, quarter? to itself be Jim taken initiatives Why

but Canadian consumer evolving, First, preferences are towards are biased high potency. THC currently cannabis

adapt last meet months. cultivation demands those rapidly to to over had the have We six our processes

not basis. did Sundial's standards quarter meet consistent However, brands past potency the our on this a results for

depletion. with to destocking Another the inventory at in inventory quarter practices move the reorders was in of weeks through underestimation driver smaller marginal board we level was our certain A on evolve. factor as third inventory on management our skews as resulted customers, continue provincial hand which select

analytics the broad The our compiled inception, best including Since XXX provides room make harvests, rapidly the evolving Fortunately, than statistics, our Canada. Sundial be data agile third it the spectrum genetics. highest design the in leveraged ability generated library of we serve since acquired month am scale in cultivation adapt his Sundial on key we including has to nature cultivation continue one proud more October in conditions capabilities to evolving facility inception. of response. to and modular average an XX and continue a XXXX we've results expanded last that areas. in Sundial's also modular and in say alone. of consumer preferences to facility to market has just focus potency XXX I the improvement quarter Sundial's of Sundial to of To

demand supply cultivation, critical. We leadership scale. to in to to forecasted Sundial's undertook has demand our chain. initiative and decisions is momentum across in processing of several taken expect changes still data This organization exited work structure and QX carefully us deep teams. be early milestones. greater and production we Subsequent balance time is optimize planning to efficiencies the in financial to formats. for these XXXX. changes and we potency impact an operating quarter, and area dramatic and to much rationalize quality, be on genetics supply brands underperforming key sustainable done. key improvements materially to costs, We've These to understand in we level the to We all also to the to a right revenue, lower fact-based and have and a led reached building skew Matching as there's Despite and vital the accelerating our focus cost of improvements skews with sheet. demand commitment the personnel an down analysis the of and better will

in market. Keough, working we to elevate that call resonate we critical are improve the the consistent committed that to turn with now our financial QX centric consumers our customer brands products. growth. high trusted to our develop would preferences results. focused data-driven to like driving continue cannabis also to we CFO, on deliver Sundial Jim Consumer cannabis over insights, provide As is on processes, further details as I it's experience and delighting long-term consumers to quality To our while Canadian evolve

Jim Keough

otherwise period unless sequential I Canadian Thank otherwise. QX and good listening to all a denominated would stated unless mentioned of you, Zach. the are those everyone XXXX to dollars that comparative I indicate And amounts I morning quarter like remind in. morning that that this in is

with Let's and our structure. start review a improved of capital liquidity

million million million proceeds October we entered company the third X, and to brokered into million registered quarter, this program. program. X the November from under $XX.X issued net for During for to of proceeds closed common US$XX aftermarket $XX.X end we Subsequent XXX.X offering equity quarter a shares of gross

million our amended debt the million program, second-lien of debt. That includes For in Sundial facility and November cash the million eliminated principal cash had the of year-to-date, At We an for its issuances CEWS through X, a over-leveraging conversions, cash common greatly of $XX shares combination of with outstanding million. beginning the amount $XXX senior up $X.X balance convertible linked asset had and year. equity of from improved November we X, million position. to equity outstanding, secured $XXX at debt had XXXX dispositions, aggregate syndicated repayments, We equity debt has and $XX We the received the million. Sundial We of of restructuring. Canada Wage June reduction We Subsidy, June to benefits down million. a million bank and $XX convertible net converted through senior of indebtedness reduced and restated We million by million notes raised of debt since Emergency $XX X. our under debt $XXX credit X agreement cash of notes. proceeds syndicated $XX $XXX of our term costs $XX million service and annualized unrestricted gross

Directors process in has have to the and While the converting required company's common subject issuances to liquidity. equity compliance Sundial's pressure should dilution be balance of ensure of of standards, significantly with trading share equity at listing share common and debt resulted access flexibility. announced details which the will shares a consolidate improved consolidation. Board the company exchange sheet approvals of broad authorized the and shareholders into and and it to stock financial a access on regulatory its to the to universe price NASDAQ's later access outstanding Further the with date, to to will proceed provides shares have continued the investors, capital trading Sundial's

point view. As Zach from the described, Sundial challenging was quarter revenue of a third for

second which revenue net to declined comprised previous focus net the did for to up by and on from during capital, from used million $XX.X in not achieve quarter. working activities including to million total sales, down of quarter. XX% XX% success compared changes Cash the in revenue, from quarter quarter, decreased XX% previous non-cash establishing operations our the we the $X.X X% While financing branded continue investing

immediate reduced the to $XX.X results. and Our meaningful million commitment General in yielding is lower expenses of and XXXX. XX% same previous third expenses were quarter. by $X.X control equivalent quarter than in the cost compared our G&A million to administrative to X% quarter the We

million QX. that cost These job third gram. per operations an continues. our QX. have $X.XX, team from by costs. $X.X and of greater We of cultivation are XX% these of $X.X has and million $XX previous an them processing work cost target significant in and to cultivation cultivation quarter quarter. area was increase decreased combined bringing a our towards positive cash sold and of recorded We're EBITDA efficiencies the very tremendous the previous compared over costs improvement a was $X.XX We've of XX% when XX% and to working Another the from adjusted decrease done reduced decreased loss for by to per quarter, $X.X Cash a million is gram over which million the savings production to

our equivalent and in shake $X.XX for XXXX, branded selling $X.XX quarter. compared per dried plant flower of asset fair products $XX.X charges On million, at $X.XX We remained in the provisions. down impairment both equipment loss the gram of average, the unbranded was to gram recorded due of and relatively inventory provision per and net recorded impairment was the gross The to in non-cash and gross Olds quarter was monetization per amounted the on Our operations value $X.XX discounted the a price. prior flower decrease at provision cannabis million and previous quarter and impairment to prices from third gram price of a continuing in selling per quarter. on cannabis million inventory per gram third property gram extracts adjustments primarily inventory stable $XX.X Average in facility. to to reflecting an related $XX from

for to cost realized Our June mix. product increase months adjusted margin value to XX. XX% inventory This three ended due of ended gross months X% XX% decreased was XXXX and for sold before to through and added three incremental mainly value the the adjustments gains compared efficiency goods was XX, fair September impairment

our Olds and discussed expenditures to fully completed we've in have and capital. maintenance previously, expenditures facilities capital essential limiting construction As we of our cultivation

to alternatives anticipate will Stordeur, standpoint, current maintain remarks to we spending provide budget a I such, about largest CapEx extraction operations. maintenance From Andrew and invite was capacity. to processing further of Sundial, reviewing our allocated. are some As for the where facility quarter we part per and COO at Olds, plant XXXX $XXX,XXX a CapEx of President now related

Andrew Stordeur

Thank Jim. you,

As structure. QX line versus this declined we make significant quarter mentioned, top continue our our progress past to the XXXX cost on while

some me the Let is of Sundial on progress making. now update you

be consistent We on channel. wholesale on market penetration, continue driving relying versus our strategy, sales new to the focus as mix product offering better with on our brand we

increased QX deliver branded XX% QX track continue and wholesale Our to to us cultivation. target and branded sales keeps we develop competency to This year-end. To XXXX. promise, versus in XX% business on capability net XX%, to our XX% craft-at-scale toward need in our by mix

we enabling company's Over robust our consistency. the in our have action Since products. implement of actions, potency results past evolving genetics cultivation has To expanded set Sundial our serve support focus the we harvests expertise, library implementing on potency of these consumer higher will average and of an history. have hundreds improve this with specific statistics, leverage achieved better cultivation a team months, that our to short to acquired plans cultivation XX further highest preferences completed

to XXXX. in decision resulted bring of ramp such, to accelerate remained our will in The segment flower excited down and inhalables a we've than to operations production. stages doubling to are during pre-roll market larger in significant we investment capacity remove cultivars our strong. focus, We market demand. the in pre-roll And Sundial's products made The pack meet critical offerings to be expected slower to constraints. pre-roll to prioritize is in these pre-roll as early XXXX unique formats company's for in Demand our COVID-XX,

XXXX QX Our QX national XXXX. in X.X% market X.X% in share increased from just to

out all with in X.X that have aggressively and resonance and brand weeks, Palmetto's pipeline will this accelerates of coast-to-coast. our market segment deliberate comprehensive weeks have expanded across lost concentrates sold consumers indicating launched competitive Palmetto Leaf within recently as XX in marketing We holiday format to recently launching ship sales strengthen We've Sundial's the brands in innovation flower significantly select in share nationally dried latest in value the We've rapidly targeted increased to production begin investment continues that QX. our campaign two as Quebec We've was our and expanding starting across a be formats. in Top launch market. the commercial initiatives, country we through a our of portfolio products. including month. our in begun been retailers early will

We earlier Canada-licensed company and week offering with agreement this entered Health chocolatier also have flavor. distribution confections announced into we a quality focused high Choklat, sales a decadent that with on

part of brand sugar. Sundial the drinking contractual chocobars, chocolate and offering As a of infused launch confectionery a will arrangement selection Choklat cannabis-infused

consumer and We requires Alberta. to growth. where of stores develop and the be Building targeting we in across holiday centered for sustainably first to choices business scale portfolio expect product thoughtful to invest country, how a profitable collaboration our the brand time in the season in the with ahead around the future

a understand ourselves we future. to QX I'd back success in we encouraged have Zack remarks. like lot we turn closing the the do, on in of for progress for to the work and still call While With to made remain position that,

Zach George

our In time. will very action to question back assets. while the product aggressively the for the entire has our the improve from best our to decisive conclusion, turn to Thank I high quality ability operations team's period. moved team get the and of business to unprecedented you, now and focus people portfolio proud our navigating operator this call to take I'm Andrew.

Operator

Thank you.

Instructions]. the answer question session. now [Operator and begin will We

Tamy first from BMO question Chen comes Capital go ahead. of Markets. Please Our

Tamy Chen

Hi, the for thanks question.

range you First, if just highest the could this that quantify, sort was? you've you of that THC that October achieved. Could mentioned wondering quantify was average you what

Andrew Stordeur

above, potency months. to obviously, of market, our here. get we're a mentioned so Tammy. way consistently we as significant that over dynamics obviously -- on XX XX%, of, aggressively Yeah, into products seeing now Zach going, But that's are about all the market last rate that's of XX the seeing when the strains cultivars. and that's over kind we started pretty mark we're morning, XX% And from the the XX% XX%, range punching Andrew XX.X% kind punch months moved that Good the have last sale range we've It's of change where XX% the to changed on we're out. So above all as

progress. pretty good So we're feeling

Tammy Chen

to of better, provinces, the it, Got okay. you called and sequential be decline management to ordering. understand bit inventory And one wanted I a sort factors sales out also of of, adjusting their

though in I a it it of more so that think, others while ordered ago. more but they adjustment heard we've sort orders sounded like how mention frequently, becoming this happened smaller

revenues industry increasing, your understanding the third impacted I'm whole thing. how from So, is -- look fully what I a as QX, still sort when especially Ontario I guess, not assume of and the that really were store in we quarter the which

can So more? just on a bit elaborate you. that Thank you

Zach George

there. couple a think I so things -- It's Yeah.

you provincial And weeks that of, inventory heavy we kind or on at went June, hand specific we boards when Canada. the think think I when to some I up par pretty ramped Western look was particular levels to I the on of, inventory. in think timing

I think, So, timing. that of is some

those par to So adjusted, board a cadence levels we kind going in bit of, timeframe. planning we can of, demand June saw kind our how understand, little manage since really We that better. heavier

the have provincial think well. boards done as that I

orders coverage Canada, but inventory number that of as you at that more that Tammy. weeks getting was the impacted move of QX, particularly in to work through So accelerated some That that it's some ground in progress of boards. off Western select which frequent a June I us late QX think smaller

Operator

next Please comes Vivien and Our Azer go Cowen of ahead. Company. from question

Vivien Azer

questions. morning, Hi, good for thanks the

first from space constructive, there. with The to to misses with for your even provincial preserve you're a at that due fulfil do to has the one able if that to probably shelf in being small like your that. continue to having are they some have perspective, cultivation coming to with if is seems you It standards, plus and not the just the provinces that apologize outlook me for it dialogue orders wasn't that your level perhaps inability potency all strikes

today? So where outlook your is space? then And does for your Thanks, shelf your space what stand shelf

Andrew Stordeur

for thanks the question, Vivien. Andrew, It's

is good the We've erode a we're bit that. over think the a of conscious over I a I in shelf that weeks. had the as it's one. weeks. market XX Look, seen and obviously opening, growth share XX latest we've last little in battle good the And mentioned,

key So look, I mentioned, cultivation. think you what start is, the it? as about are we doing Look, that to thing

we those one areas, out have high lot of get our in for our I more But to product slowed our So specifically in of down quality really kind kind investment brand think a we us is ensure formats. we've of portfolio. potency addressed consistent another

think, times for sales QX, brands, our our two going help. that's and saw in to I we increase on marketing spend

get the in You month. benefit the first don't

we when retailers attack to on up they're program with what brands, our got to and holistic provincial and to think shelf of look integrated sale asking ratchet start QX, started accordingly. really and So the we the your start away I we the to that you've boards, as is

think better the provinces. I products launched our eight across all only we'll rate And think anticipate we awareness Vivien. in I think retail think I that really cultivation. portfolio think certain coming doing good and skew as we've of vape, and improve So having thing formats of case, the offerings our Zach particularly we're through shelf that many as about optimizations, in mentioned about sale that better we And I is we see and significant so a

own our quite space shelf honest. cannibalizing that of Some be to

we're mix. right that those to have of a with collaboratively in in products retailers very that even going though down our now, lot skew brand. exercise. into take the or think optimization we that few usually working stay We're you simplify expecting we're what SKU in see board the the And -- move those So offerings some to the in I to volume of that's

continues us. sales the there's continue anticipate anticipation be is see big short-term to our cultivation We've So sure. and the strong. that be for focus the for marketing it we're we some going that brands need back increased a in distribution and our so But that doing to to online, work comes be investment

Zach George

that year. constructive. our I growing not our with They're facility, we When extension we of just this expense. say sales in through partners and And a were encountering certainly gone renewal We've of add wouldn't our marketing absolutely pains drop issues that with conversations now. credit significant earlier Vivian, the coming to relationship or provincial we're constructive. are that. board out just had

can quarter-to-quarter the I quarters. other been to quarter, seen worked volatility, would benefits coming a have of that as you see in bit you're that market the where that see there in also or have terms -- products well. some to the ramped quite having upside say its in and you both expect misses some recoveries not, we share Sundial of And whether So or seeing LPs, and have

So moved we are we inflicted, them found think we've understand the solutions. but factors, and some self beyond

excited the pretty about we're So quarters. coming

Vivien Azer

my helpful. dove-tailing it. then And Thanks. Got of off follow That's that. up, next

the gets operating is don't quarter about share kind leverage. doesn't it? your it guys driver of fair think and loss assume is recovers, way like that sounds the EBITDA the a worse? probably it little in immediately, to and making we magnitude in So of sales calculus improve of up. Is if fourth hope marketing the the right are that benefits market bit And the perhaps and adjusted is so, And the now, that to revenue shows spend you hopefully, then,

Andrew Stordeur

plainly Look, to running rate, about to I current speaking be twice size the current we the run about profitability. get to say, would at very just need

path a profitability, focused think, There's activity. really have through to arriving through We the of aware, I both we're as is means there. paths. other on And one organic get really two at you're growth, M&A

fall many to we're wouldn't slightly marketing sales EDITDA and quarters the QX. So necessarily bed. investments that of brands draw this out going a benefit I And that on these we're basis term our think to are to going looking and conclusion We longer come. for business than see at in just

Operator

Please ATB comes question David Kideckel of next ahead. Our Markets. Capital go from

David Kideckel

Thanks question. morning. for good Hi, taking my

into want optimization. So previous your my little dig deeper answer a skew first, just I to regarding with bit

associated guys vapes down? Why So XX:XX gone brand now mix you're market? exit the mean, trying to research improve now and improvements particular do with I that, exit then with revenue market, in and make product that to I in comment for actually some I'm you're to craft the cultivation. well just as had roll to down look you the to wholesale. support, understand made on to wholesale branded from trying of given example, think you was have even product the from And pre-mart market that when wholesale as rate the products doubling

that will what actually do So indicators tell consumers you have, Thank you. you like, there? for are looking

Andrew Stordeur

Hey, David, it's Andrew.

can make Just I sorry, quick the just little to -- a want you first question just the the repeat one understand just, skew on I the on sure if bit. real optimizations.

David Kideckel

just skew crowded to a on key differentiator where I'm understand in trying trying you that Sure. you're especially with market improve market. a already for and how very a it's that's optimization vapes to

Andrew Stordeur

things a Yeah, Got on it. that. couple

simplify supply our they and our of, to customers retailers don't think our I shelf space, unlimited have but kind offerings. have vape XX chain different and I asking we think, house limited, for, are

to early some of what monetize oil, and think, inclusive we the as I think we're put obviously trying that as to of what But really much that So, our portfolio. lot them, attempting I in from we're we kind inventory on do days, were the the we've into seen Pareto of a set vape is had of the great core data products, outs with coming we've lot are regard of, seeing, the is a sales of rule principle play and to that we our XX:XX on have our but vape a got purchase SKUs. repeat

with when boards by proactive assortments And really I that's approach So them. right retailers, store really provincial that, having part that certainly get Top skew point Leaf it's we're us give assortment, we your as the think that rationalization particularly to consumer inflicted so to vape, to selective Sundial we're necessary, term. with think And level. we of but seeing in brand for brand taking a is going story see as on Palmetto at and or upon that we're an optimistic right to it do longer we're them And stay opportunity the a that the or us even opposed we more the also as enjoying call.

I think, you wholesale, think, raised still around XX:XX. the a question we're the around plan I that in

fully we're not So away wholesale from walking channel. the

an it's think, were of ago part at a business XX% channel. our than XXXX, QX QX if XXXX albeit I our wholesale sales year in important of you look more the versus

So big shift, at that on branded of, move That's XX:XX one and to almost into XXXX. consistent pretty and make we're now. in a day move space make we've been to right a that kind that, from

the of putting really early to and and selective it we Zach capacity. I our that of that pre-roll on -- larger product on we're in of relationships think, make obviously situation is impacted walking look, and with mentioned, our it, and the early last fully I some consumers. made share, on about pre-rolls, part And part formats if think really one be we're brands, we're year given product going just pricing. the and not that we own market retailers so decisions, COVID grabbing those we brand sure to part that And great coming have them from that's is So desire our

So see here we've some the last that mix and three two aggressively moves months over of in made you to our our portfolio.

your or just that X.X% approved In of mix. give on pre-rolls X.X%. XX. QX, in the QX segment data above To was rules Canada answer in So is represented our over take question

under-indexed loads of premium part So we're Pre-rolls and are on big inhale that. as a tie-up. it's focus our certainly a

have product and on that. great good So got that's meet think, QX and demand we that's pre-rolls. got accordingly. the obviously production thing. forward just We have can make our sure to demand, better I in we be the great that's to do market. We plan moving And, into And we

David Kideckel

Okay. Thank you, that's -- very

Zach George

per as add branded to products. wholesale with in market of wholesale consumers moving But level to set is side, happened from on not it's decision-making just or there, retail it Just choices, there, se. function strategy phrased directly to wholesale, you Sundial's what's David, terms Sundial's always the with been connect in of, the away a

at you've full very stop. today, of sold you Canada XX than got as look a time. know, history, millions So place it tens dollars That you market top ago, product was over our months if a market LPs in today of of different we've in is to

transactions Canada quite in long So believe in to to a Canada is spot you're it's be over and near somewhat at wholesale is bit time. very wholesale long reduced evolve going a margin very cultivation, pretty term We this supply. the for that But the We've dramatically. is that cyclical, going see unique market today. seen demand

other sanctity of, contracts engage and in the extremely history While seen the term you poor. the as supply of these sort we've in will is come to space, also know from longer and covering want agreements, LPs of,

in wholesale the of long-term necessarily is deal, supply agreements. they signed how these any terms have I gets broken, evolving been it experience maturing LPs different. and gets Many hasn't So with deal had our to still the where re-traded, think it industry and issues

the So in we'll as engaged that -- much future. today well. in opportunity we wholesale than won't But it's not it's say be to less

David Kideckel

with debt going of just My MD&A by XXXX, and to question Okay. violation That's December color, really great think your so your is much. covenants is which there. last I potential Thanks you. here both in listed

calculations, it's principal debt, $X about to just million then the payments repayments about is -- to mean, I couple the your on the points going for quarter. is to quarter going cash that by a just be you're for need So these your million. a -- for all burn last And that, of $XX principal satisfy

to So correct guess, even But being wrong the be principal that ones repayments of I comfortable if conditions me two and going guys to finance I'm or it's whether please able and calculations. debt. confident these you Thanks. quarters your able satisfy just into do are you're on moving the next, how these assuming not, to

Andrew Stordeur

want don't looking I'll banks. is we happen this. in aggressive forward working let track with making about with the record Instead these productive projections close David, Jim comments can would I to what to you relationship point I regards our But tell speak coming to and to make matters. here. any going the have of to we what's months, a very that

aggressively repair we to would more I the to positive. surprised think gotten a be we've access also our capital has many thought than able to balance many that sheet also started pace raised and have at and to,

laser constructive we're very in going the It's and wake not to December it. we're that we're up to to So focused work something on start on on. process, late

would confidence track in of I with matters. this that's just dealing terms our year what these successfully. point navigate gives And that going to us record this So we're to

Operator

question Our Zamparo John Please from next of go CIBC. comes ahead.

John Zamparo

the reconcile over any XX%. there challenges your pricing the shot and Good But I was to top morning. switching mean, line in is products, quarter range it's or mainstream of at quarter impact performance I would the just clearly if sales Thanks. versus into to industry a they think, stock decline retailers do much your peers, how your above so is want not well versus the helpful? value I'm if of be most not commentary of you wondering dive pricing, the a you bit would down, I referenced cultivation premium from there. branded but and you at take XX% being could well volume. deeper be mean, I that little saw away consumers that nearly quantifying from growing

Zach George

of, quantifiable, stocks. idle back But the think, up we And again, have a of coming to saw, sale what don't can seeing I I follow I kind John. on think that. significant Hey, increase. we rate we're

Some potency at, lower of the that's brand sale of versus increased John, above Leaf data had we're that Top is it's and if we're XX% rate XX, potency. a seeing something looking you XX%

the market, quickly. potency selling So, factor, as we being put that product it's very, out deciding very higher in the

on in some mentioned lower that's on and was we stock think that ability pipeline into, tied of kind now. opening produce was we regularly that quantification fill every the it's like an potency. harvest don't high I of and So, But potency led that to higher right there, the can the to in inconsistency have looks I there that that what kind of what

John Zamparo

relationship comment the get that the underestimating a Is press certain real better into years so just a time matter. often count with be this of came think Okay. issues talking company you ironed about be are just would legalization, by retailers? two can we're or release visibility what you useful. like now, want How that bit to of surprise. out either on data retailers, way a these you on And close But better inventory it? has these in the just would then understanding the to this there a some get It seems of as Thanks. understanding

Andrew Stordeur

consumers what planning and coincide to are look, have certainly just too the us Yeah, on not demand I with retailers sure to with for. better think it's regards making looking we it's

say it accurate. think that So to retailers regularly, looking it's we're not that was the not and I at on think, feeding I

I what had we certain what on provincial that and from they're figuring pretty language SKUs. weeks had, their and at boards, see we've provincial is saw boards, the out a lot hand of the our from peers of I have to consistent continue is how we think which manage some think also to

licensed -- years retailer, ends, a distribution. whether So running that you're but a it's two I board learning you're whether producer, on years the whether think, still honestly, two you're multiple it's a it's or of that provincial

goes, in there's of cannabis limited So, have data right provincial as far issue is a part now, at we that as the this level. data

And can aggressively make can are that read trying on can regular a all basis, programs decisions help better better we that get manage looking that make know we're diving with on demand now the the a on they provide money. decisions, data working retailers be our inventory of we so make and boards inventory. to retailers provincial you forecast and what of into right and some we Some we're obviously there's to how do some that better better should on so and

John Zamparo

Okay. value And question is the then That's helpful. segments. last have the I on Thanks.

to your compare how the value You want do does industries to in the Thanks. About in category? compete how in mentioned Sundial aggressively value your or Palmetto will remarks. longer-term? And medium sales expect you in overall the

Andrew Stordeur

the there. think, I question. keyword mentioned you Good compete is Yes. Look,

compete, huge I aggressively a kind in that partition obviously price playing think know, we There's grow. range have we consumers price want to gram per compete. you of to obviously seeing, amount and of than we're that $X less

sitting that should of us for in right. put So range. XX.X%, Grasslands, is, obviously. a mix, QX. QX, in We'll driver, our we our that's key in about total of year-to-date we're move I about pricing sitting about is John, it that on XX.X% obviously, is number as see context, at In I Grasslands, get going to into to we're be continue And think right so kind

the if to strategy mix, exactly we're you a kind be. range, been have to I we're comes in mentioned we when has of, it mentioned, So proud we think of a you XX% price -- that -- structures XX% sale and keep in And in we've really one to pricing, that. can as average that that our our on strongest Canada, pricing where of we want branded, in John, kept

So have the of to mindful -- we're that we fact but also compete.

And of and pricing. on decisions we're lead and that's will kind formats inclusive some made all but we've going brands not we So all down. compete, to certainly price of

play a I that And game. we're slippery seeing really think others that's slope. some

well, view, category, we're really business our on healthy premium healthy our that's that's contributed where are acceleration things that but be and the core, value And that's not I in seeing the XX% not I we're we long-term, the why aggressively. think to now. plus model. think it's of has right core certainly where from good to as for for And focused we XX% certainly that is segment. want in

Operator

concludes session. This and over Zach I closing for turn would conference the the any remarks. back to question answer to like

Zach George

questions soon. forward and Thanks. to to Stay great We you for thank for analysts. would safe. attending everyone Look like by our updating the

Operator

conference today's concludes This call.

lines. your Thank disconnect day. may You you pleasant for a participating. And have

SNDL (SNDL) 12 Nov 202020 Q3 Earnings call transcript