Tilray Brands (TLRY) 14 May 192019 Q1 Earnings call transcript

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Tilray's First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Later, we will have a question-and-answer session [Operator Instructions].

Now it's my pleasure to turn the call to Rachel Perkins.

you conference us call. thank quarter Tilray's and earnings XXXX afternoon for on joining first Good Officer. On and and Financial Chief call Executive today's are Officer; Mark Brendan Castaneda, Kennedy, President Chief

the statements. time and uncertainties Before in differ Please the expectations of and for and Exchange course events make from materially forward-looking we from and described Canadian statements meaning These refer beliefs securities time the to that involve today any these Tilray's reports materially or forward-looking the made today. to statements within remember discussion actual Regulators with Commission risks on those statements begin, that filed are forward-looking expressed from of that Securities its call, based could management in please to differ this those issued detailed and press could may federal release the laws. and cause implied Securities a of risks results during management's and current actual

Finally, today's call, non-GAAP refer net and will please note EBITDA, loss are measures. financial on to adjusted which adjusted management

measure adjusted as and While intended believes information be not useful GAAP. in presented information isolation presentation of comparable in loss, of accordance EBITDA refer financial reconciliation the investors, for company adjusted this press is provide net to with accordance in considered information a the substitute for Please or loss prepared the for net today's most the a with GAAP. release to adjusted to EBITDA

the I'd call to like over Now, to Brendan. turn

since includes multibillion our the call XXXX an eight And joining wellness long-term growth have review results thanks and global quarter in adult-use progress us. then detail first call markets. a we're targets. review for global be supply last for update After billion brands for open Today, Thank brands, dollar is Tilray, for just known that, company through cannabis class financial made of opportunities will your you, platform multinational the This and consumers a the global Rachel. $XXX on our providing focusing goods will Mark industry of medical, our afternoon, we to the more worldwide I with consumer trusted building strategy, delivering our The transformation global world we and weeks will At those growth ago. chains. long-term and to house financial in packaged on market discuss questions. everyone. Good our beginning. just delighting

create the quarter over market both We're a a We scaled X,XXX total to sold are first that million. included year-over-year globally And increased sequentially and long-term. global can XXX% to quarter results, the which of full taking kilograms. $XX first year-over-year increased to basis kilogram our equivalents with decisive be Revenue adult-use actions infrastructure on pleased sales.

the supply million as addition our five to space; updates which square environment. regulatory British now million production than the months. have international are Ontario Leamington, to the increased These seen $XX.X markets. $XX.X further across to industry to as Gardens in over in will square growth the These Canadian evolve. have investing XX for are continued Park efforts weeks the feet, footprint feet. to quality XXXX. Columbia projects demand. achieved facility branded a to XXX,XXX and facilities. Park the in they receive despite used Both in our highest next continues in believe market We we balance by hub equilibrium Park have XX,XXX course months production being London, XXX,XXX High this could across feet, Portugal months, and struggle eight to Canada, That ago, GMP proud of Tilray existing space This Portugal, XX we future. XX% are We the expansion be increase ramping processing to projects room Canada's The the supply serve in investments and production be an just in as to expansion Canadian cannabis, the in said, increasingly of cannabis by there that High produce high will decided between our to market Canada a demand production next the increase by Park have its three expected the High Nanaimo, processing allow increase end manufacturing production the of our to completed to we as and and Canadian to High finds provide in supply is estimate Ontario is Canada. longer constraints will will This expand our certifications the several be in expected And Canada square product XX% Gardens as XXX% will stay by medical in

six have growth that strategy strong the to returns generate continues top-line we performance previously, global we drivers business to on grow. As discussed expect remains focused as our

as as First, to medical production market capacity manufacturing and our market, global increase over adult-use in the well time. the growing rapidly Canada and serve other markets

on a we scale. focus maintain quality as Second, rigorous

medical with governments. fostering quarter, clinical of industry established with partner our appeal to first set by faster. that medical brands diverse and of and partnerships and mainstream In align consumers. research. R&D Fifth, a Fourth, and distribution finally, to acquisitions and and our And build with further addressable differentiated the Third, of distributors sixth, pioneer the in of market retailers a products expand products announced strategy. we investing scale and the patients community our growth the innovation, acceptance by portfolio that future

than American January with as Group, Our brands, in of the most leverage world's North Brands iconic Network. ABG's more will XX ABG, as Authentic announced portfolio well their partnership of strategic Distribution

in Canada, We in year and CBD mainly products the expect U.S. come market second on of our products. half to co-branded the to focused this

Naturals a We licensed cannabis Natura Harvest, and of hemp Manitoba also Ontario. completed Leamington, the in producer, world's natural cultivation largest acquisition facility the foods

locations into Natura begun already entry furthering to our operational Manitoba We Manitoba and sharpen U.S. in and our have have our late leverage first quarter, their our partners we We're Harvest yet the retail new accelerating and the progress potential We Naturals market this progress about transaction expectations. existing relationships opportunity. over the with future Canada. existing with in time capabilities with have the XX,XXX U.S. on with early we closed retail our for and plans over and track made significant are integrating excited

markets potential We where multiple in growth. paths see to the greatest most deploy to will promising continue we pursue to capital

which our the in are We States Our always the and demonstrate has acquisitions the be long-term markets, market, vision is cannabis judiciously the of global for United our Europe. we a our global opportunities strategic largest leader diversification for in expansion global believe and growth. why been on of two to partnerships focus planning

us the will innovative Going brand to a brings form and our key trusted Manitoba, U.S. factors, on believe market. Building strategic provides offerings hemp Group to well portfolio estimated increases technologies, capitalize positioned we forward, channels. us M&A leadership for pursue that a continue in piece capacity, is distribution and access strategic through brands With new and the our to opens increases R&D long-term Brands industry Authentic of our territories, retail strategy of derived LiveWell, in we products States. we the are CBD United $XX billion

the product to LiveWell in year, second quarter. half While sales of will ramp in we this the expect U.S. Manitoba shipping ABG CBD Harvest supply second begin and

be a we Portugal, process. medical our in chose international distribution been held well harvest as Focusing successful to where and and celebrate in and tender an milestone. products. includes our hub sites, approach completed greenhouse on our and This Europe, packaging for participate research have not for processing, medical we focused cultivation we the disciplined operations Cantanhede, on will inauguration sites ceremony the in indoor, to campus March German labs, campus outdoor company in and as Instead, EU

to we build the recognize waiting expect market XXXX. our countries and second in We serve Portugal are in we to we inventory legalize we certification, well revenue from As as cannabis. to positioned GMP of European QX, more are half continue medical the believe will

feasibility University Centre's acceptance a on of HIV. treatment and will McGill people with Disease Illness research disabilities. confident quality over the and patients more placebo production becomes of help larger cannabis of supply to Canadian behavioral demand Health believe Division we dynamics will additional market While activation with as And of intellectual medical evaluate remains capacity the We available. study pediatric to balanced challenged trial clinical a the cannabis are mainstream clinical Melbourne the effectiveness the Infectious as by become with announced living of supply, randomized Murdoch's in with studies. our with examine problems Children's new of industry led study medical Institute Research first pilot by two In A quarter, Chronic severe governments. immune in support and we controlled the fostering for the in form time extract community reducing cannabis Viral acceptance

and exporting additional in in completed the countries, for added to certification the growth of during this States in extending products the GMP did completing regulations underway, obtaining strategic do added QX, additional products in strengthen continue our product shipping we We Parks Portugal. during Drug into In addition made. we opening adding management For in product further partnerships to existing and launching Alberta proud started Harvest Germany, licenses in selling Mart milestones: grand permit, our we to several expanding Ontario, products the United we balance harpists, Tilray regions, summary, start Portugal, XXXX offerings first pharmaceutical in Canada. outside a multiple quarter currently of additional the is to build executing out Shoppers the medical obtaining license countries initiating on and initiatives production the quarter, did additional in international process anticipate trials. flower industry products planned delivering we have processing recruiting Canada, to and London, following medical progress facility available have a manufacturing and new today, as team two in we signing executives have on and sales in Tilray supply We We to as additional that and Tilray partnerships. are cannabis CBD High Manitoba already serve, agreements facility I'm strategic markets finally our adult-use to corporate during we year pharmacy the Tilray chains from oil our

growth like sustainable to ability over are the call globally to positioning shareholder avenues multiple long-term are that, for I confident turn company our growth. drive With our in value to for Mark. and through the We would

progress afternoon in is with call today. It be Good to the information we GAAP the we today's you to strong as a we you speaking will U.S. on had is throughout pleasure indicated. we We Brendan. to discuss today joining year. to Please with otherwise is Thanks, dollars the prepared believe financial start a unless us and and gain those accordance continue in U.S. year and all note momentum webcast.

Focusing the on revenue million, detail, C$XX.X million to more last of to QX essentially quarter first results tripled year. QX in $XX or compared

taxes in XX% and strong Extract excise of market. medical of $XX.X Revenue food by the was were The revenues products first year. Harvest sales same for revenue Manitoba from acquisition represented Excluding non-food adult-use quarter primarily growth the hemp of period addition Canadian the of million. XXXX XX% the to driven markets. last revenue in growth international compared

XX% so pleased QX XX% are grew the in QX. to performance first approximate revenues our from of quarter. Canadian the revenue Adult-use far, We for which market adult-use represented with sequentially

constraints regulations with other and still to year. are available factors adult-use this available loosen the supply of this will rollout products year days in with being form early later limited We due These the constraints. number

food our On in results Harvest Manitoba of we first included quarter. XXth on the acquisition month one side, the and closed of hemp February

we approximately As we discussed the contribution business. per this call, of quarter million earnings expect $XX from in prior

rollout this also We products the half anticipate second of in the year. CBD U.S. of

prior side, to is by increased $X.X growth and Germany the from Australia. On million revenues $XXX,XXX the primarily international driven our The in fourfold year.

internationally expect that Canada lack continue growth in supply Our be and to of limited by improve we to time. over

increased The year. Moving selling to and equivalents kilograms in total or the $X.XX approximately average X,XXX quarter price more C$X.XX than operational kilogram sold doubled C$X.XX X,XXX metrics from tax. or to foods, increased facilities, excluding sequentially overall same cultivation hemp to compares QX as high $X.XX from be impacted third-party for XX% of by in was net per excluding gram excise $X.XX on last kilograms up prior costs the This year's prior with XX% in continues well quarter. to ramping the the first Gross supply. as cost to margin quarter. Gross margin

quarter million by hemp of the addition, XXXX. approximately of will In charge impacted to were for the in second The hit food remaining approximately acquisition $X.X $XXX,XXX charge non-cash margins of fair accounting additional related non-cash inventory. value

result sell in As million full which this non-cash our the gross $X.X sequential heavily expect weighted $XX.X products call, million online, half for GMP as a we value Portugal Total we to discussed acquisition in the our year, prior to throughout and added increased year continue coming markets. second of in higher towards quarter with certification and expenses the to in margin ability Canada includes operating facility stock million, increases adult-use $X.X related expenses. compensation, of

Excluding company year's initiatives, the quarter, marketing million. was recent through driven primarily acquisitions. public headcount $XX.X and prior compared increased those G&A million increase growth to is and sales added by $X.X items, operating to expenses expenses an by The of operating in which comprised increased $X.X and million of increase expenses of costs, first related

quarter share, $X.XX per first Our a compared $XX.X or XXXX. for per the $X.X or share loss to $X.XX was of the million net of for loss quarter million

net per of increase in net share non-recurring net or loss in reported $XX.X the charges. operating $XX.X quarter the acquisition non-GAAP adjustments was loss for loss a expenses EBITDA related XXXX. quarter Our and $X.X the first first for primarily million adjusted to to of The growth $X.XX adjusted EBITDA million million year. are We related due for quarter last to in loss loss was increase of initiatives. The adjusted to compared the an

to quarter of the sheet, Turning cash approximately million. the $XXX we balance and with equivalents cash ended

to We next sufficient XX execute to our have we plans to believe growth for the continue months. that XX capital

paths significant an capture for Long-term, margin believe XX% portion to the global come. the will to short-term and creation margins impact we the continue today. and EBITDA multiple We have to opportunities estimated upside. expect of growth exists adjusted with based on provide to legal to which on markets sizable EBITDA growth with for expect may markets but value margins, we strong achieve gross years to XX%. continue cannabis of markets, plus new of The we revenue market develop that for greater are as margins a those invest XX% are to And also EBITDA added have a

We take are your we the prepared still I concludes we remarks. growth early of lay the global now results for Brendan with long-term quarter. steps the solid taking first available the in for and foundation growth very are stages the believe and our Operator? are We're cannabis necessary in pleased the a This to industry. to questions.

And Instructions] from question Azer [Operator is Vivien first with Cowen. our

open. is line Your

afternoon. good Hi,

Good Vivien. afternoon,

just compared revenues consensus, kick what things on a And XQ really ahead our Thanks. from So internal if drove to came expectations. your your in to results segment how certainly wondering expectations of there off of upside your nicely to estimate, fiscal perspective, it? ahead was

pretty numbers came Vivien, our So in yes, for solid QX.

expecting we you what QX. and for of key to know, market, these having the some were adult-use of supplies XX%, each were up after go originally sufficient drivers ahead you that supply But to of markets. if As of is we was at plenty which our look

you Great, legalized in I'm it period, that to recognizing you're am a if be from later curious room that's revenue to revenue factors terrific. notice year, XX leave legal quarter how Thanks. will ton to Mark, the day about be fourth generate of just it the expect because I right. in you about novel thinking form the thinking reiterated doesn't understand that

That the only December. Yes, leaves of window days top the you're XX small second half in on additional really date. There's of absolutely mid-October right. an a

able We kick are revenues still to expecting than to earlier in be have that.

to final on XX the window. the waiting still we're So regulations day see

government? kind of you're then, Got to from clarify it. the expecting flexibility But just some

We are.

pushing marketplace. that demand for balances build out My sense, capacity your supply target the is make out, question last in Okay. you're and on given the

those that that? the construction should year will and the but will and that was end for then outs that sooner XX add XX year, be of terms of thinking be could done be by into Thanks. recognition, by comment of or than the weeks to the completed it in end Your we cultivation processing the in and another understanding build how translates revenue

Yes, it the you're right at so think I way. looking

the and it's to plant start. of to as So take the the have have time finished, still startup cycles we to going plant

you're about it So thinking right.

thanks much. very Great,

Graeme Thank is next from you. Eight our with Kreindler And question Capital.

open. is line Your

Hi, questions here. guys, Yes. thanks my taking for

elaborate the earlier. wanted question, supply were First to discussing available just wholesale on you

of we're wanted color picture supply? wholesale like just looks this something in it that sort the is get on into of into Now improved some the be market? in mid-May to can that what Has QX lumpy kind or

lumpy. pretty it's say would I

our finding of seen quality. and there, we're goes out there We when out haven't inspect supply to a greatest not lot the whole that the supply team is

and feel a we But it supply we're we and so we facilities in here our see have where do just our quality still inspect nice oftentimes under very think some selling see comfortable it coming quarters I not some several in packaging And We will of expecting online. brand. product it's progress, putting imbalances Canada.

being of give sell see smoothing consumers you'll us to lumpiness and think in will more some producers that as and we I options, when able buy. such sell other factors the Canada form to to start products products

thanks. it, on QX. into - QX the net average decreased price per there, up gram selling looks And Got follow like it to pricing from

if terms So bit wondering I could there in of a what contributing factors was color get were? of the I

Sure.

pricing the the most think our It's of is So hasn't a of to function moved. fixed pricing, pricing relatively about channels, provinces if you really and mix. so our

less actually last we quarter sold little the extracts a quarter quarter. this year's quarter, prior prior have versus bit versus when So or

mix adult-use last of opposed well. higher changes. to of as a any to price that was So saw a percentage it's quarter compared you as revenue more function And as

in back jump queue. one my the makes great, that I'll Okay, sense. then And last here,

You partnership. mentioned about pursuing other strategic

any if timelines of in up in pecking another your range terms what of announced? timeline, verticals would And, or putting higher when wondering specific could see partnership I on elaborate of if order. we could you're be sort So strategic be was you

Graeme. That's a good question,

As with talk generally company inundated with of of we at the companies broad We've right. variety have a from are in from point fortune deals person cannabis have people industry disrupting that talk contacts see doing Fortune companies with looking a us. other industries. process generally XXX cannabis if development exploring who Imagine they business of in job some you're And didn't And to we a it's the XXX Tilray. those that's other a partnerships if been the number person industries. to their range a been interested that at be wouldn't companies, done

lots So companies the within are at industry, looking carrying in year. in this starting are are at half U.S. other second to industry obviously who of tobacco the product cannabis companies looking also And CPG. other CPG lots different from with CBD all have conversations of of the we're interested retailers categories

brands of around focused Some Tilray cannabinoid. using products contract and revolve of in-house essentially their our conversations manufacturing conversations sourced are carrying the around some other

Okay, you. and I the thanks. in Thank Appreciate jump that queue. will back

Thanks, Graeme.

with our from and question is Jaffray. you Thank next Michael Piper Lavery

Your is now line open.

Thanks. Good evening.

about Portugal mentioned trajectory the you there. your how that should But course give year. certification the to in is works. builds sense extent the that I about over think a the the us of there, how some think control the get of is the harvest timing on in out certification and and of You when working to Can shipments we to know

Sure.

and out, and operating government, the Portuguese investment invested we then MOU we a first is process we signing first MOU, a what out of memorandum the to informats and built departments within last since facility, sign of an complete ago, with Ministry and did we and the Portugal Investments an December. have years greenhouse called there Industry now promised, heavily there, public-health was we the had went in three various understanding build step I facility regulator agency So that we AICEP

we so from had And harvests multiple that greenhouse.

that be from the countries building So imagine I process it that out other to likely the begin is next product to from within step Portugal. inventory The shipment we're Germany. in EU. us for and Portugal Portugal the will first export to to

place take building GMP four-five I we're inventory, over certifications to three that expect the different really up next As months. would

within expecting essentially Informat So the equivalent regulator receive will the first GMP Portugal. one the months so the in or another certification we from in Portugal Health next or we're Canada

we and Midsummer third would sometime second the then The in certification July one June, expect fall. GMP the

extracts. The is oils third and one for

expect XXX% Portugal. the the so At of Portugal. in And approved really same we revenue the our the time second capacity year half that in in we've increase from in facility

outdoor that start end we'll build the takes facilities quarters than just this one it summer about additional We THC ramp And Vivien's glass hectors while and X.X an this then takes complete. will up online have an indoor up in and to question outdoors three we next XX are grow a we the also grow. ramp [ph] from To year last So approved facilities. to still these these while in the Portugal, it Portugal house times in large will we that expansion there so did summer to probably year summer. an that's essentially a about X expect being of larger be starting year come of out we have obviously in one Portugal acres machine, a and like at last up did

you less it That's global have potentially Europe you give factor what where and about of look in favorable Thank balancing, the relative to to on I think supply should spot view. then costs at you for second, when comments the that impact would may How about changed net you think out might on a that expected maybe pricing, the how exports, sense say suggest market. better could you, just have does before? but And the obviously, we of And and as you. you that, kind around great. then whole assume net

with we've and that market. and Canada this products adult-use medical the Canada we packaged Canada do produce I in what in that that's will exporting Canada processed in Portugal. the is the And the for previously from that see us you'll we'll change from here replace countries first of in stay produced been think, other in we'll more summer market product is the product

immediate first and the that's So most change.

the But we two high those of much years. we Over more really over expect short-term, spot reasonable the the the expect see of course to market. over become to on the prices next relatively the next prices - course

sense have for this that the where overall or a that's a obviously, pricing market, out, of but - seemed a a cost seem on if little bit would of of you not you, - to seems nets much if to the kind than is prices supply positive industry's sense you're shift think spot And would balance further difference the better. out that buying bit a be negative should Do the be if Is we it was about net how before. that? or selling

you to a buyers will I think provinces segmentation most in various long-term, good, Most best. better, the in of the this. the have of over pricing the see have provinces. They more start

Some them good, better have pricing a of best segmentation. premium

the one beer, what a And products so, times price two in see to you probably highest product. look segmentation segmentation I like see price across that to think more have that you where you'll lowest or pricing start the

And one obviously you'll change so that's with supply. increased see

that. see I more you'll also think of

addition You'll segmentation with extracts with much easier and of and pricing edibles. have in beverages factors see fall. segmentation the the oils other and pricing It's to more form

And path that's coming one down after so I change think that's October. the

very you thank much. Okay,

Thank you.

Tamy from Chen our And next is question BMO Capital Markets. Thank with you.

open. is line Your

stores that, the of in pace demand Canadian Thanks. Hi, country? just a cadence does you retail thinking across question right vacs revenues have supply actually that of an of the is Hi, does you're coming provinces grow, over Mark. impact sense the matter could of in continues And we've enough it's the to rollout now? that [ph] having seen the bit the demand talk limit market quarters or first Brendan. about the about a slow very from this My a how or

a think things bunch of I on. different going there's

saw at to what two it's think and I Washington. them. which open, for while stores Nevada the in saw a different - from taking not in least what of that that isn't Obviously, retail it's we we on hit you

think - in I in over than retail if an XXX Ontario. Washington examples. XX the now a I little looking in are And relatively is you're we there's less analog have which we those stores similar there the population probably, state, open retail two stores think for U.S., best to But see, XXX Ontario. has a probably

And room retail for in lot of so growth there's a Ontario. terms in

I supply issues there that slowing think down growth really you're that the I So we is are and key than form anticipated think other point, growth the less - factor sort growth or right on I and lower is think factors. the of industry creating in

can retailers U.S. in that an see you you buy or consumers want, in what edible, products cartridges, based U.S. today can the wafer all which and same You you illicit you into buy can go Canada buy a [ph] is can buy state, on can a beverage, buy what we across the

they that these can the products want. buy that consumers legal got in so you've Canada And

think more the convert October other Canada, I this fully market that and the continuing to one fuel legal factors see form when are system. think to illicit so start that's more you will consumers in is that And I in illicit over to allowed

is, more about a from it the evaluating high other from with or then license their out a for considering there. Canadian off strategy more thinking takes it's then of second using question own are brands market's such what prospective a as opportunity cannabis Okay, the my producer dedicated U.S and partner to CPG a a just level whether company do CPG you or extraction market a feel one, company CPG got it. company leveraging just versus merits next And for the CPG a advantages and

that enter when the understands standard XXX alone doing it of build industry has who quality a means number that and They one how understand partnering a that importantly, are of CPG quality companies the quality company that asset don't and they they're and understand time in to long expensive Fortune any a is Fortune companies standard and a the and space they a like cannabis of enter if XXX of complicated industry, partner Sandoz, Novartis Brands and of with probably an And it. someone the is to more necessarily push and can meet like company. looking well. choice any have can standards to we meet Tilray or

and when they can around that but the they so regularly, are by only partners partner not companies, similar pharmaceutical went quality Brands brands. for we the was run look go standards. government the around it we They and partner iconic only And inspected only those look feel in long the regulators very Group at like our that countries Tilray much alone. to XX that And We decided Authentic with with a us, making they we not own Sandoz distributors world. standards, it our you with how better but not know and world, ABI, companies in decision alcohol at vetting process of than through high well, all have that but to them describe, over meet

it. Got

Okay, thank you.

Thanks, Tamy.

from question you. Hundley our comes Thank Brett Global. next And with Seaport

is line Your now open.

Hi, Hundley. Luke on this for is Perda Brett

for what products this year have guys question, about marketplace? and you beverage ready for to the First later do other production expect Canadian

- anticipate in edible market that equipment, small facility. been we a beverage we've to easier. in And as the out in and We've our line. side kitchen of additional having been equipment is today addition and building aggressive capacity we in the edibles can. have And soon there a do, We we're putting we London, all Ontario beverages as extraction

that well have the those joint produced outside new internal market. as bring on past launch people Canada. products performing that previously some been team to R&D And to has of ABI we're that new over with excited aggressively our lots so venture our team R&D have pursuing as aggressively we're ready beverages we of and with two years, for have that brands products the We and

can second And of announcement continue supply can of recent talk to thanks. capital feels Specifically, expansion Or company and about inside levels strength that on sales its rather bit cultivation Canadian speak arrangements the be spent why countries? other long-term you than areas one, the greater cultivation Great, confident even of the a chain? in Canada? should the to you other

we with are terms getting, really Nanaimo know Enniskillen, utilities the when existing We it's Canada the dollars and in we what have at we're known important. - look of Leamington, are at know facilities. expansion path. our investment we London essentially what that building, in we that There in So calculations know a know we the we're the and very easiest ROI

the power, We facilities. initial piped those build all water our into were of when the oversized have we We already doing our outs.

XXX% where we So really today. not on a we're opportunities in investments M&A easy significantly our our XXX% are that's only investment manufacturing capacity. for making built compared increase capacity But said square in this Canada, indoor return can really summer. is cultivation, math, and are available times in I lot the of than outdoor we summer Canada Outside XX Like thousand overpriced that have to several and feet the production of cultivation Portugal, investing hundred most that do. cultivation than of last significant in the Portugal of more the is that our space we

other bring countries. in from oil materials that purchase into raw to so other product Portugal and intent our package cannabis the distribute and it, And world it form to finished around and it process producers is

largest where because we're products that's it's Portugal, investment from very globally. to making our distribute So easy

similar of industry and be reading what's CPG, just unconventional more on And is Tilray way in you. one here, a that the inclusion company's R&D as biosynthesis view the forward what Thank ability to or engage drive in production, that cannabinoids sale the CBN like overall best the in cannabinoids these plant Tilray is one technologies? last get is of timelines to and alike

we're few. increasing and of there at small whether a investments CPG, a CBN them. we're a made U.S. we minor seeing - cannabinoids to looked or explored for we've the talking few number yeast We're biosynthesis name E. coli So demand [ph] also in

use cannabinoids in So but think we've those variety likely on wide long for the in produced in cultivation. are high outdoor that outdoors internally. Not right some I And specific our end strains run with are breeding work cannabinoids. to necessarily done be the genetics certain selecting of cannabinoids that have using

I think steep to are these where to going going acre from - XXX,XXX, cannabis some long-term hemp think XXX,XXX it's interesting think really math to farms. over I biosynthetic going see face producers I large competition and the of you're some

you. Great, thank

you. Thank

is with Wertheimer our next question Melius. Thank you. from Robert And

line Your open. is

everybody. afternoon, good Hi,

the in of there. evaluate. us obviously, I Germany give cost don't question tender little particular there's my Maybe a need. is of But concerned you on investments are if bit that, know a you you you on of guys background whether Portugal, and for importing. lot us just I versus the that pros just you there was obviously would wonder could in no first So a decision can and have just if the out cons flush

went I November Sure. Germany in XXXX. first to

the really with the German medical different was cannabis patient more the of and cannabis we to really hired to first which go [indiscernible]. in of members activists. results to Germany with I with cannabis day met this won certainly, legalization equivalent of B with They medical first And employee Germans. lawsuits, an I the medical tender next the the in and I the have rest The was the more met to to LP company Canada Canada parliament next Health German day terrifies and the right going I meetings but two at pharm wanted the employee XXXX, few regulators similar realized to there, that control that the sense border. First border. my Throughout FDA - apartment, control to the were regular the B his Canadian talked our the we a and there. first members of two that we're we afternoon the grow they in one wanted believe cannabis pharm through XXXX they process, Germany Germans at equivalent essentially cannabis had two

blew year, conversations And tender. in didn't up the which that we so initial saw on We their go we a second tender Germany think they after participate participate in didn't opened with out, based I up an and officials tender nearly in government program. had

not I about XXX to XX really The were roughly sold think XX I exactly were is many fixed - That at bids fixed to there how German produce second a a is I'm sure price. open, were at there government different think product price. that tender, kilograms the year a

just there. than were there's just Germany from to tender to Canada, - pharmacies in it a knew that And we product throughout like can Portugal, Tilray we Germany and oil a from where the or so Germany. when they've regulators allowed license we it import opportunity product willing more sell in our branding refining massive us flower obtain import that in Tilray currently to And wasn't for no packaging. we produce interested in or products Portugal amounts cannabis were of And to

Very straight demand or has ask helpful, supply I be times, you. another today. do different a If and your I maybe is some source thank an growing whether that expect Do that in healthy months Canada, that you it's expect, to points, on growing up can you distribution or product sort different available advantage? analysis of guess, XX you the to and looking you've mean, talked do? next for of Canada much of And, how supply to have pinch shortage obviously of packaging in? I to when a might at

resolve to in it months. expect the don't XX I next

to process really purchase grow intent look of our and if were hops intent malt I today. brands. of from But go ago. barley, the another Canadian have a million one of believed of to that ago, and a buy so were terms which capacity, main about we capacity months analysts lot closely ago, glut valued raw a would there covering the the was If was of a we Canada led cannabis like our of hype along the million in and think can on in all lot to build of was that today. materials be the these those industry And materials company LPs back They're Going they Canadian don't talking place and some at the back lot $XXX and of how these on months, invested wheat, valued strange raw And a and XX to of a materials CEOs that them the to media months I all I cultivators going have months metric. cultivators, was the funded being a believed was XX XX overestimate and the issues you being LPs multiple cultivation public of in XX from raw mistake. ABI, would they $XXX a

mentioned seen, on out Vivien's of XX I supply to answer so, it's my some that think to think months I what I from we're reaching based like in question. I've And XX demand sort still equilibrium,

for think come help. October I these some I to will think facilities that factors online. still other high that in going take quite it's to time of some But form quality

you. Thank

Thank question is from our you. Benchmark Company. next And Hickey with Mike

Your line is open.

my for questions, thanks guys, the taking quarter. strong Hey on congrats

few XXXX XXXX that's showed Just since talked you of curious, plus on last obviously, to sales caution more you've supply over obviously sales. XXx some for you now food and sort conservative times did initial the become harvest you from in weeks X guide XX

Thank you. you that you So, curious is for still what us for relevant of sort think reset XXXX? guidance or if can expectation

just typically we risk is specific regulatory. the we so out see guidance. still gave But general we guidance, hold. don't that Yes, numbers industry point give in first is always give we don't The But direction. give we this

get takes factors Canada the form for in if for pushed, or indicated, until could get may mid-December, longer, regulations some it push Vivien So pushed which reason opportunities. other GMP out as revenue

a When it timing. at started new year a whether one the massive just you're mean, one year back you that's industry, Now, industry, three, still no or I when starting in it's look alcohol industry. remembers

but our today. what based on of So stand know maybe we delays there guidance here and we by will there, kind directional

at market. of the that point All edibles I look regulatory the just you when on Fair guess made enough. sort risk right. you

legal excited the I from something market. you the But pending should chance think it's for. edibles - take illegal regulatory sort a real of think consider construct, restrictive be edibles it's when share give just market we you to too to

I'm opportunity. fairly the optimistic on

think I serving size regulations factor potency that and fairly all those the form are the reasonable. around guidelines,

we don't I think certainty certain is any yet, have not that the packaging. challenge they're still in biggest terms of and

products And like so manufacturing those were don't we are equipment, of installing look we one. to coming know but what of out going lots exactly the

has install have to us that forces of flexibility. - So machinery lot some to a have we'll to that

that beautifully branded. bit little the of lots beautifully packaging in it's like and the it. should legal It that the be U.S. in you on what has think one are in to issue looks - And strange of them very I in remains I right are the that states. think all products products, they available illicit from still a warnings markets question, that products that individual packaged the is and those many see look the your the different

me, question Last U.S. peer you. a multi-state from of thank a operator. a Okay, recent of made yours acquisition

So Thank market to upon your future path U.S. thoughts on a you. that legalization. curious the as I'm strategy

think deals decided as we have deal for the that of and at that our competitors I announced it deal we most with right looked wasn't us.

We expect MSOs. see Canadian to copycat deals and U.S. LPs between

they lot in those I've imagine reach generally conversations contacted a by about nine you the have U.S. We been out the for and are so to can started of had LP years us. companies in a of Canadian if industry those any

in consolidation further see to expect industry. We the

deals. see on to We're that making the focused long-term. our expect copycat for and decisions We placing will payoff over investors bets

we the found structure that's would and if right right consider. that the certainly partner we So something

call luck. best for the of guys Thanks

Mike. Thanks,

question our Alliance comes Global. Aaron Grey next with And from

line is now open. Your

Thanks time for guys. the

question quick one from Just me.

side from just saw quarters, past or product? the And revenues can might there. guess decline medical great us, it's the function just that we but Thank both, Or now see of decline a of on be adult trends some seeing we've there? but by a demand side, six more dynamics the I of of about look months way So might you. just what where at be the broader that sequentially past momentum talk to you focusing the with just on limited to you allocation the category about three do think taking more seen side, and quick medical driven adult-use

quarter medical going the over the - make the of decisions And is months last on have still six and estimate is one to or we think demand that Aaron, what at of every it's we demand. robust demand five start there based surprises we definitely allocation taken is. there about we've is to be what is

so more towards at would product the And beginning more the we medical - going quarter. we allocate would forward, of

you. Okay, great. Thank

Partners. question next Scott with our And from Roth is you. Fortune Capital Thank

line is Your open. now

of Real in inside type pictures afternoon. it's expectations kind the talking you U.S., opportunities CBD what's one the from and seeing actually rollout your product [ph] for of for Manitoba going from the retailers, Good are what to type the product kind based what - here? opportunity topicals quick the to CBD on of of forward Harvest

and different of and that driven some CBD a a we're curve, and looking over is array months. the Yes, right of demand by last in a they the have change retailers is me for conversations today U.S. products every the the earlier different having But them, to being ahead lot they surprise compared are driven retailer with lot's retailers of CPG really - we're think not - expecting way six the one questions. all the When about companies. changing in of one talking everything, we'll earlier want the large dynamic large I big now CPG is really of this is by wide for that were we is companies consumers

gel protein for tinctures, Harvest. that at looking spray, and oils, extracts from powders product like everything caps, lots so oral And Manitoba

for year. manufacture half launch had CBD that. On looking products of Tilray never of are in the and gum, Authentic products lots is certified companies the second of Brands they're And antiperspirant And interested different it's topical expect or have ingredient. of Group we that their some a with then that set whether would to what ourselves, in side topicals things CPG series brands of looking lots large under at of products conversations the like - this

of going on think How you retailers have some May products. of you waiting quick here. clarity do more the they're They FDA XXst. meeting that, injectables versus with these topical to are larger side for on a Real move think

good really question, Scott. a That's

I the of this, the answer. So to really second going no there's not - half what, do lead in there's going are There retailers to matter interesting which think to U.S. is that are one no year.

as the And of going that of you wait the retailers for And hearings happens conservative course so then waiting are can what - the and aren't to are with are see there there the more are of at FDA some that FDA. month retailers over the the summer. there imagine, U.S. and in this end

Okay, thanks.

is question Mike next our with And from Grondahl Northland you. Capital. my Thank

is line Your open.

for the of extracts staying guys. rest that a mix in Maybe is same new we you just regulations the kind total, sudden get one the on Thanks, quick see the for Canada? This of Michael year until Mike. on the the of through should

mix the to international. as extract use was so somewhat the mix adult in for as on depend range. going the well XXs mix really for It the is Yes, of

that Some the be relatively of range. those it'll mix, that in drive but that in might change

that Mike, your answered does question?

Yes, thanks.

I queue. back Thank Kennedy any his the you. showing call not final remarks. to And further Brandon to for would in I'm like turn the questions

Thank you. and want employees questions and thank Tilray their extraordinary Have call. X,XXX on today's to through dedication patients participation We great for for our I and building in and everyone's improving efforts a consumer lives cannabis. evening. appreciate

may ladies conference. thank you and wonderful today's all for in day. gentlemen, participating And with you we and This the program disconnect. a Have that, concludes