Tilray Brands (TLRY) 2 Mar 202019 Q4 Earnings call transcript

Good afternoon and thank you for joining us on Tilray’s Fourth Quarter and Full Fiscal Year 2019 Earnings Conference Call.

On today's call are Brendan Kennedy, Chief Executive Officer; Mark Castaneda, current Chief Financial Officer; Michael Kruteck, incoming Chief Financial Officer.

Before we begin, please remember that during the course of this call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could differ materially from actual events and those described in these forward-looking statements.

Please refer to Tilray's reports filed from time-to-time with the United States Securities and Exchange Commission and Canadian Securities Regulators and its press release issued today for a detailed discussion of the risks that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today.

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

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

would call to I Now, like turn over to the Brendan.

Good Rachel. you, thanks afternoon, Thank for joining us. everyone, and

cannabis begin followed for markets Mark fourth in industry Tilray's call this will will brief the which XXXX we will operate. our full by recap with focus in the XXXX performance, on XXXX. our I remarks on of in Then, detail. review the financial and results in I perspectives conclude the the with of ahead months quarter, state

was for US$XXX XXXX and XX% product long-term sales. forward total In These of bulk its of drive proud hemp. our businesses increased with we business highly diversified XX%, built Canada adult-use, and revenue markets, not to our of respectively, Tilray to face We XX% of XXX% position team cannabis year-over-year from core the a generated but million. firsts creation. medical, volatility, of market business executed Tilray, year across In coming global three revenue, XX% remaining the without and challenges. our year shareholder how a value to for XXXX a XXXX, I'm revenue approximately

X in available Our the medical on now world. countries cannabis continents products around XX are

around in doors over products the XX,XXX hemp countries retail Our world. XX are in available

Portugal. to Canada, in States, and only two countries, company the We facilities Canada diversified Australia, offices America. Latin the base, with Europe, cannabis GMP-certified United We're cultivation have and asset in and have a facilities

that and customers, to achieved market licensed compete time formats milestones stage of of following: promises providing first Beverage received; one our Over formerly an allow companies by very strengthening industry-leading the of to by Privateer orderly XXX Privateer for lead executive Being United Fortune with our business. to commitment Tilray Good and hemp with with us with beverage two the in and CBD-infused the the other trials global were and GMP Anheuser-Busch a Launching the the around; cannabis two product the venture clinical key in United joint far Completing position include cannabis Canadian and in thus on named years; well to Portugal research or we Tilray with of have been in functions X.X and InBev, over course our with our recipient Holdings brands course States held Manufacturing of Company our Completing attracting merger our acquisition shares within Canada; States development; of on the countries products we from furthering key release world, around XXXX, best-in-class producers the products well on talent product the Participating XX Harvest, Manitoba Delivering that Practice Fluent for product to platform the bench beverages the certifications cannabis facility; our next in

operator early the for of industry and are material remarks. operate, product. medicine in investor supply, markets To I and cannabis very and strategically industry and have secure in mainstream to cannabis development, this of still to relationships in consumer invested the build nearly shift legalization key we is and around a a now. There as global and has opportunity, decade I with been believe which consumers. the an brands in paradigm broader a on industry's I markets growth raw occurring days trajectory. Turning this in share will that the the use capitalize And and Tilray we advance patients and few research both

Our new and do we permitted when position so. markets enter global medical puts in are legally us to recreational an footprint advantageous to today

I the Over two to we followed continue cannabis legalize additional next countries believe see by to three years, medical adult-use. will

and we to chain. I investing execute portfolio win to best-in-class the company most balance vested our a haven't trusted by Tilray to assets We remains and supported our of that hemp valued well-positioned shareholder prudently globally. will have team remains to right the firmly brands, supply with focus long-term drive The world's and steadfast sheet business on multinational believe and cannabis strategy. of continue value. a build

provincial Canada, to availability. pace legal the points of the governments the from retail market, licensing. market and the slower been Primarily, past few to the taking been challenges Canadian cannabis a product We're quarters. share over illicit have increase taken of expected in and actions by of Turning has announcements due to by than and lack recent distribution market well-documented encouraged

the as availability see with Additionally, of we product evolves, high-quality industry dissipating. the issues consistent supply

XX to by point Putting months we sales market I XXXX. the year two market been into legalization the by bullish Canada in retail than and less billion than being and half are to cannabis are of over long-term one years into this illicit on estimates nearly volatile is bigger over remain the context, a opportunity extremely end of still were in expected but The in legalization and months, has the legal And billion federal and That past market. XXXX. the to C$X.X XXX% XXXX, the half X.X a grow in Canada. market the products, last C$X.X yet growth

can continued you our on for bullish to medium term long-term market to While prospects why remain volatility, the I see I industry. expect near continue

brands use our our our legalization XX products, in licensed In territories are seven in provinces allows. authorization portfolio In products to able been of have we in ship restock competitors We not. Canada, producers some to first whereas successfully and phase and day retailer Canada of product one two as today, we were brands the adult broad total, where shelves built December, have have regions a of with trusted previously two in phase the ready of mentioned. for only

As we're regulation we well-positioned Quebec, such markets. those as provinces, to serve certain in Alberta shifts see and

expanded Wowie, following: pens THC Marley InBev cartridges, Canada. Our Everie, infused cannabis milk chocolates includes with portfolio Breweries the Canaca, and currently and vape under our venture tea Chowie joint pure Labatt CBD with extracted cannabis, COX adult-use beverages CBD one Anheuser-Busch and High of varieties; through and vape cartridges; Park pure all-in sparkling Natural,

certified business. in GMP is internationally, manufacturing standards Looking particularly Europe, accordance the our building In December, Tilray Portugal GMP medical medical second European dried Union cannabis our oils cannabis international Portugal, markets certification for including from in formulate, in in European to made Germany Portugal products, our Tilray regulations. Cantanhede, great with GMP flower with its allows Portugal. manufacture strides second and us and to and facility and for legal which finished late have certification we received export This other

received XXXX. expect GMP our Since X.X-day certification we to Portugal Switzerland. exported first to in to GMP Germany to active receive May, export, Germany of extraction, oil Israel final half inspection medical successfully first we as in certification Portugal, and certified had have an week, which certifications, cannabis products. cannabis our and and receiving from we for manufacture for these GMP from in Portugal third substance we and a dried GMP And medical Last last for the

sites our distribution expect Union processing, international our indoor, labs, We Portugal, hub and sites, European for research increase products. to will for which as with exports and greenhouse packaging be in from well cultivation campus operations our outdoor as medical

Our cultivation processing greater capacity. our capacity is than

finish and raw So, to with we have materials and cultivation prepare scale ample finished grow, capacity. in third our parties runway from to own goods addition

Portugal, footprint feet for Our and facility. feet a XXX,XXX growth square and million million is outdoor space, square X.X of X.X greenhouse in processing square including feet

the partnered kind products. international the in XXX%. research among research fourth industry to foster greenhouse XXXX, lacking markets. In to Tilray also first processing develop we clinical its medical by to acceptance capacity believe medical University and a data we in expect within and our Portugal quarter, governments Coimbra with of help Portugal of the increase is and will mainstream strategic community partnership The cannabis-derived In

CBD remain legally building U.S. we’re of core is over with so. the U.S. retails Harvest Manitoba products focused United a where consumer-centric asset States in hemp do States, we to XX,XXX In on -- today. brands permitted portfolio a doors

and are FDA's CBD guidance make We before in this await around clarity further investments monitoring closely further we the market.

team of would and or we base. like cancer quarter, changes XX% the to medical peripheral undergoing new Columbia broader our our comment During on to neuropathy, employee women for into the also the medical TIPN University, conducted of we cannabis by cannabis efficacy United fourth quarter, treatment as for Canada imported affects treatment. evaluating executive I clinical from States fourth Since trial taxane-induced a closed breast a which

Levin as incoming executive as Kruteck January, new Financial team In who with Pharmaca. Coors Michael two our Chief Jon Officer, Operating formerly was and we formerly leadership strengthened was with hires, Revlon; with who Molson Officer, Chief

We're current expertise will this and involved announced January, be strategic Michael's closely As will within industry. Tilray continue ever-changing transitioning to be to development Mark's Mark Castaneda, navigate business in having happy CFO, a role in as our transition. we

Katy on brought former Mills General and Additionally, Harvest. December, Dickson President last of executive, Mattel we Manitoba as

businesses the XXXX focus Each make restructure While capital. investor organization goals. meet focus our competitive been and duplication to return reviewed a to on led operating invested increase rapid our of hires, us also we key broader the have our profitability order efficiencies, with to with costs to align and in continue reduce our shift to better on in landscape

XX% we of As a XXXX, global approximately result, in headcount. eliminated February our

in and leading companies Tilray has these when our easy, needed. been because of being decisions successful pivot the to ability never While one are of react cannabis

obtaining markets out certification aggressively that the the Continuing of serve; medical strategic and way, into our market optimizing growth; of market cost X.X the restock strategic XXXX, Portugal products medical We current there; Completing the efficiencies; phase only regulations or growing finally, offerings medical, Tilray partnerships make in where share, disciplined, our becoming to our entering balance positive the products enter final XXXX. investments anticipate across product driving assets into countries we and accelerate anticipate us hemp GMP product evaluate currently our some of in our to enable allow; facility QX following: will of partnerships adult-use footprint. we build EBITDA cannabis international For Canada further and and we in Canadian where and expanding and our new global Exporting opportunities to our warranted. to Along

call With I the turn to like would Mark. that, to over

of Thanks, you afternoon a those today. today's to on be Brendan. to us is It call pleasure Good and webcast. you speaking joining with

Officer. will we been it after strategic file be over will welcome on annual excited a Michael Kruteck, with confident as since I'm into business last my and taking working my to I'd smooth XX-K. development transition. move be will like Tilray. new to Financial I'm Michael call for report earnings in I've initiatives This Chief role, be Form joined he January and to focus strategic who

results. note financial today QX balance, our in accordance that the is was otherwise unless Turning all challenging for to and Please On discussed information the industry. U.S. a dollars quarter prepared with indicated. U.S. GAAP we

points rate As illicit the lack Brendan in distribution the of market of kept markets. moderated the things articulated, Canada robust other legal has of in growth has among and

backdrop against However, the challenges, our key by performance broader our I'm that to of fundamental industry peers. businesses of relative encouraged

products sequential business, we an hemp average our Specifically, in adult-use experienced in growth quarterly QX sequential we up Similarly, in over uptick strong business. put quarterly price. included our growth selling which numbers

also non-cash inventory we impairment of well Given by supply market, to extracts this industry-wide it’s non-cash industry, the valuation the uncertainty state significant the addressing to cannabis of point in related as as balance prudent CBD the and charges taking sheet feedstock. adjustments; our extracts determine, de-risk U.S. at

debt on Finally, $XX to capital we million profitability. raised as a cushion we our GAAP in provide focus

reserves threefold million from Drilling in compared fourth and quarter. year. $XX in taking grew QX more after QX $XX for dollars, Canadian of XX% from or returns Adult-use quarter the than hemp detail. prior grew on X.X% million in in more quarter. Revenue sequentially last of results to products pricing revenue grew the the adjusting QX approximately to XX.X%

compared in million $X.X Our in international $X medical the was to quarter business million QX.

$X included QX However, wholesale shipment. million

Excluding the for increased XX% and wholesale prior XXX% medical from QX shipment, international the year.

XX% from and up medical from slightly Canadian prior is business quarter in year, down the prior XXXX. the Our

for decreased year, demand the feedstock anticipated our Finally, XX% previously QX in bulk and forecasted, from and Canada. as sales XX% we from prior extract products, as

continued of revenue additional to Going expect revenue our a quarter, little of available, adult-use driver on XX% of deeper from an sequentially represented we fourth XX% Sales growth. new be a adult-use. revenue retail in and form mix the QX. in distribution becoming factors increase With

priced Our in selling. C$X.XX QX, or of $X.XX $X.XX for QX of lower average adult selling price, significant excluding QX excise increase mix use as a for or taxes was an C$X.XX products

XXXX. expect ASCs We that of products the mix increase throughout X.X as increases will

sold was average net Moving on seven-fold X,XXX kilograms metrics, products. increased excluding kilograms hemp fourth year’s operational per from product sales was US$X.XX prior prior mix. XX,XXX gram The excluding to to US$X.XX overall in and the bulk excluding or channel quarter. C$X.XX in a to Increase selling compared a shift fourth Total to year's or both kilograms price C$XX.XX quarter. bulk in due

Gross for XX% the and returns XXXX. in and quarter, reserves third XX.X% excluding to QX, of margins XX% non-cash inventory the fourth in compared was quarter

was margin a non-cash including gross XXX%. GAAP reserves Our negative

extract risk As feedstock previously and prepayment. supplier to described, related inventory on reserves are extract, primarily

products increase product. as of additional to X expect to significantly We retail the available we locations. as rollout for Over products several past due extracted generated sufficient Phase extracted do being Canadian well the demand years, have

have our the we to a in conservative conversion been illicit demand due market. legal the forecasted of However, slow to

year We international going channel in sequentially in of second mix, to margin scale particularly product the medical half with the expect positive products forward X.X from gross benefiting and the Canada. increase greater at

value $XXX the clarity to $XXX related to prudent by year, asset. of primarily U.S., our regarding prior operating delayed compared Due FDA included million the a agreement. against we the charges, ABG the to reserve increased intangible was expenses. expenses this this non-cash on CBD Moving to in impairment thought products to fair which of Total million

additional the $XX QX stock triggering last of payments. our the without having in amendment $XX In to receive agreement the the minimum for will of related us cash. exchange, an expect allows our agreement, million million of approximately of XXXX which to we an guarantee reserve also to not benefits We in this ABG of to annual agreement amendment issue trench cash

taken. and our our cannabis reviewed and business were impairments also goodwill our there for We impairment no

approximately incurred included quarter. $X the tax Additionally, expenses of synergy charge non-recurring a in we million, and which

I'd large Next of the other we forward structure early uncertainty mix costs. acquisition metrics. with are related of our is revenue forecasts, this like lot which on acquisition in and explain of to performance-based a gain the a we Because industry, there's regarding why stages earn-outs

Based on our actual full Manitoba achieved earn-out. results, Harvest acquisitions their and didn't Natura

reflects down, additional could quarter. the acquisition our activities created in accordance So, have otherwise with liability paid. million savings in GAAP, for of a purchase that which been adjusted $XX.X we earn-out related during gain price This gain

share $XXX.X The quarter for $XX loss $X.XX net loss of $X.XX the quarter a of per was or per the fourth share compared or XXXX. to in million

loss previously incurred $XX a to well than We was impairments million The $XX.X of increase as some as As adjusted million operating $XXX million $XX quarter last contribution, in charges. fourth EBITDA year. EBITDA to we the adjusted increasing non-recurring in probably expenses faster of comprised inventory gross due profit described, for non-cash reserves. of $XXX of million of compared loss recorded for million, charges a

decrease We February XXXX, actions, structure ongoing. as continuous in result cost review of a reduction materially taken remains expect of our XXXX, our in operating of expenses cost and that to

approximately and equivalents Turning the facility we to and February senior sheet, two-year the million on the quarter balance cash $XX ended XX, $XX cash XXXX, with term. the million with closed credit of

XXXX. plus of until million flow and of believe million our which million. have expect and interest EBITDA, and $XX CapEx for $XXX for continue and to we million we expect cash of between approximately between of $XX principal a flow and cash we of $XX payments $XXX operating in execute $XX we the million $XX We In million, total sufficient cash our plan, million XXXX, growth achieve requirements QX for positive to capital cash reviewing

positive to the cash flow expect in We XXXX. be

first there use of as the capital expect be half working benefits provides a inventory. We in then in the which of will the half the second draw down of we year, year the

million added to in during liabilities the change about quarter. Another and the quarter the $XX includes pronouncements, sheet which accounting lease balance new both through assets the

to XX% a of XX% margins gross continue capture and of cannabis global to XX%. range sizable EBITDA to margin of expect we market with share opportunity adjusted Long-term, anticipated the

are upside. term also may markets margin, new to those impacts on provide markets, greater which long-term invest but we As short added, revenue have will for develop

In paths shareholder we to runway a we for with value summary, continue believe growth long multiple have creation. for

your now Operator? Michael to Brendan, available and take I questions. are

Thank [Operator you. instructions] of our question from And comes with America. first Chris Bank Carey

Your line is open.

Hi.

I Mark, So, clearly, you this just expect had was noted, -- OpEx and that in that you XXXX. to a there material step-up a in put decrease materially quarter think you

you that OpEx kind sounds you to XXXX, gross a what to context over still that get in the just And I XX% over there. we’re you're But, OpEx of you Is our a we of can can yearend? revenue the from down, on help margin, margin you feels away the bridge gap it come that coming though between to correct? how still implying it EBITDA then think down? did today. place just And think can in quarter suppose, How like QX of me about and far plug expectations gross for are get XXs like I so, by ‘XX assumptions guess, you kind

standard a with So, to just have think that's that. start And it's but, question, kind out I important I follow-up. one realize enough modeling I of

closer legal tax on million the items of of Chris, Yes. that the of so biggest to $XX charges million. of $XX piece what your during acquisition there type it to but another was some -- couple there first a to RSUs tied $X some million QX some transactions. that really $X then had was there specifically. G&A, an unique some fees border. was tied $X cross in to some issuances costs some for a about really quarter And point or for is we equity tied million nonrecurring million, charge X.X was million situation, the And pretty to was regarding It

recurring. be not would those So,

So and roughly XX%, at when cut in you look on we our And side. G&A first, you mentioned then, Brendan $X million, as rate. -- runway the off of we as announced got had some a the changes headcount

We range, I the expect see when an -- SG&A the to the get million, $XX.X by look for quarter end to year, total to last XXXX, at of million of a million is some million which actually G&A will million $XX the $XX bit you the into from closer to average average actually of to at know $XX costs, in was higher on onetime range. quarter XXXX little for $XX because we kind of $XX but million the increase

so, basis And were existing some There hundred move quarter. on to to stronger space. in increase per XXX from do is the couple we're going this in gross And yes, increase some points, year. where we today. basis We'll we visibility quarter. our that a facilities XXX throughputs cleanup have see expect no at to were increases We with substantially increase points to the in items margin are trend points on basis the

absorb we'll to those So, costs. of be able more fixed

up will Portugal we ramping our facility. be Secondly,

margins we closer that the gross kind last as of So, to is the expect range. you do XX% revenue said, to XX% And plug.

flower was then, -- of kind very that And just your footprint. Thanks don't I I a know producing a of there's that volume could of that. strategic evidence if to if whether the for And That's you and way part this -- a there some industry of you a something bit said Brendan, to there's but you're brands. lot not that the helpful. all other going much game it long-term, be you that regarding matters more it's look of in notable had about I think OpEx that one certainly I think or there. could, this was Okay. had at optimizing is, there. on was I I And so guess categories guess, And

if that and the this extract And looking a X.X at going, is have function you so, out really of where all did this broadly, or and capacity before, comment that you is that if if there's you had maybe misread X.X here? there in just trajectory Canada, to expansion is thinking how you much Thank plans all about from need that? do I talk and And you could you. I don't did,

of we of it's additional optimizing footprint, And building would Yes. in terms that Canada, additional CapEx doubtful the inside capacity. certainly out In capacity cultivation invest

in operate this you'll is And investing what been see efficient. quarter have will Phase that facilities throughout quarter products. We our we the cannabis by facilities for year become X.X. more

cultivation we in the If a just time you the a of what think most one Canada we is goes in year X.X Canada and first with each bunch yield making it made a never the launch before. make and turning the launch we're what we've about whole you're never of ago, QX facilities, experienced you It's of never really harvest. products, on experienced stuff like use, -- in up adult of with And six ago with half efficient. years our

the And made the -- efficient so or and we a first it's facility. as the time chocolate bar or time first you it, that as you time you time time first canned a XXXth particular operate the not XXth make beverage

So, yield, footprint, course optimize optimize our optimize this we'll our -- throughout costs get we’ll unit year. the of our

X.O ship the the only partners Fluent edibles, one in only sparkling vapes Beverage of Phase market. XXth, And Phase part High is products, of legalization. shipped Beverages of February and the the Park question, on producer as of X your alongside day terms our Company, week to and at second the beverage of Fluent the first second beverages In

Fluent there's provinces I so, sparkling believe products, beverages are in today And Beverage six

I’ll in. Okay, get back thanks.

yet that point on Yes, is Except too beverages, for and Fluent new. of all on and final hasn’t they're Phase had X products reorders the them Chris. except for there, had -- the we the beverages reason canned one

our Lavery from Michael Sandler. comes And with question Piper you. next Thank

open. Your line is

you few bit your think to sale sales looking a bit -- down And for with of some end a a dynamics the up the on? Can little price kilograms think about just to sequentially, think I'm understand helpful. driven? is parts you, of of how bulk help I What we pricing if your a be and catching X.X Thank products, disclosure is drivers key year. what revenues pressure, just mix it fell, and Company pricing But, want total -- mixed the you. are I some understand even better. tail you moving is focused this bulk I of are but little went on should had there try the us to right, the

Yes. Michael, driven. think be that I of most mixed will

So, down somewhat XXXX. QX when you at the bulk look expect pretty And in dramatically we the QX. in versus bulk, came again, it to non-existent be

So, as was that made the because it does a from actually average of take of Actually, off pressure X.O part ship good overall available. beginning we both margin the the there December, some pretty December. last did couple product of the we products, the pricing. the weeks in But year, of far was on as some just

So, QX negligible. the impact to was

an relatively ASP there, more forward a see few from dollars, of So, small impact shipments but standpoint. an here -- and going you'll it's

matter. will mix So,

growing which medical markets, fastest So international adult-use be ASPs segments, two expect and a going we positive those forward. on have X.X, to the impact

guess, still Am what somehow wrong? don't I low I I price a bulk pricing? headwind I is following the think is, per gram. drag sales real see would that's to

No, you are correct.

flower the on is side. headwind the So,

and overall those medical, market I So, lower in compete Like forward to priced when flower up. see so lower that And with the illicit mix more going those at the we are as X.X about meant come such ASPs with pricing is put you'll changes our priced. last those going said, quarter, market ASPs. and offerings, are talked more we lower be are to flower

The times And shrink to that flower how are big you the the and premium power much value seems expect -- going just meaningfully forward? it not higher THC how that? drag lot have segment that were to one one is level sense of consumer me supply of grow, on pricing And get mixed necessarily the a just proportionately a last how we should you able they this. synonymous, of just is but to did where your

Yes.

with of from the THC in larger markets And a part or overall we've all markets. to been coming was mix segment’s been and going medical facility value medical percentage in drove QX the really products Nanaimo that's quality the higher from product ASPs. done down the QX So, higher is Canada. or What in and -- the our the our

As our facility you'll higher as of more to some that in ramps Canada shift product us the well. Portugal, product, here see up value keep of allow now in that that

So, our yes, volume greenhouse change as percentage overall a primarily is X.X of the will to a adult-use and of bigger thus in. bigger percentage product and starts revenue, kick our the

Thank you.

Our from Oppenheimer. Rupesh Parikh comes with next question

Your open. is line

into of segments dive So, on guys hoping throughout thinking the year? little guess, how year. the I Any Canadian for both a I can of terms to in those more medical was line markets the you bit how in deeper this you are the about international you top color provide see guys ramping growth

saw year. really primarily actually last this to year That the we decrease of it medical, the in was first concerns Canadian year. the due versus on decrease supply So, half

do In back to allocate then, back. down could you XXXX, our again, got And of for see As some, having markets. we this to different the QX, QX, that to footings turned quarter kind in in in growth product see back we slightly just growth revenue, so million north $X market, year strong every of -- about medical. expect per to for quarter level Canada of

year of expect the the international in a For to ramp medical, half year. half of slower the significant first the second see and growth in we

second to we So, expect some see growth. could, do significant half

then, follow-up And question. one

of down of the just are are slowing given terms of approaching or how some anymore U.S., forward there's challenges Is been front the the this on you in clearly investments CBD from delays So FDA. just going point? there it color approaching How the some you U.S that? guys at CBD

down sitting perspective continue from a are invest the with to hemp have Harvest, various continue most sort we perspective still the an meet food to sidelines. retailers But, CBD and retailers discuss until the from investments portfolio. FDA. from Until in of the of we’ll on FDA with certainly harvest us and It's ingestible to definitely the sort provides clarity Manitoba Manitoba products some clarity, of some slowing

Thank you.

question comes Azer Vivien Our next Cowen. with from

open. Your line is

And Brendan, for ready is in do think This UPS respective we update to to market given supply in you seeing you top, long Schneiderman Vivien we're an kind chain? mentioned on your stock out take start going pinch edibles, off of be vapor just the can Hi. provide away, you both tonight. this go want edibles, you before in and right particular to today? of seeing market, equilibrium in the Steve the X.X in it's hitting that for how guys but

Yes.

going people to take XXXX. When products expecting hasn't to something were thought. were so LPs happened surprised than with many many so October Frankly, longer really the entering this by similar there time. different market were think just we that and I We it’s most demand. positively

And point of racing this and at edible vape, beverage increase to products. our supply so, we're

still and lot our by like problem. more seems lack only can the get the It but we good And manufacturing it's expanding so, not on problem, of of we're of the competition. lines It's to of to a those a the that our just sit the were surprised, increasing products LPs but really -- market. shifts, We so lack decided demand sidelines.

the portion your And of do volumes terms have competing? impact market in the value those flower f out of share from, ASPs, or you sense Mark’s what that of value batch your batches what In of teasing of or on either dry commentary segment? come you're is dry a how about how lower, -- just some

a So, couple where really varies province, we’re by provinces in couple top it there's points as the market areas. share, and or couple top as far

products. the the mix. the largest change because As our of mix I X.X overall that again, of far the product, it's Today, of expect as one of pieces

in X.X just sales -- in shipment week pretty worth weeks’ but guess, provinces, the to for QX QX. one Now to of several I small the in dollars provinces in one two or effectively was, are

see increase QX. You'll that in

segments So, value as up. those segment the come products the mix down of will go other

your last store the baking in beginning for to How Well, are one openings Okay. in going for What plants? And approve April. are you much authorizations me. understood. store with XX indicating province you baking in currently Ontario expectations into they're

today total. stores in I think -- plan our XXX around So there's

And similar. think, what Ontario in Quebec has I I think is XXish. pretty

over at of today. are expect the just increase significant in end at to planning with doubling probably We Ontario -- we locations. full locations, a they're be year where not X.XXX But, the the

from just an to we be Just want execution standpoint, conservative.

of by or by that X,XXX be to But, been the will the X,XXX get we've we burned before openings. end stores if positive. year retail Obviously, active

we're so, point. little of And taking this a a view conservative at bit

you. Thank

comes Gray question with Aaron next from Alliance Global. Our

line Your open. is

It volume and but looks back was first, because you of it terms just the forward. And rate with how little then up bulk that the best XX%. Thanks. on difficult know the I color looks know amount going volume coming for that run it's online, by was I question exactly bit want in will how So, about was it increase to think early any good be X.X like during to about to about product the the bulk. helpful. just a want jump driven talk like that of just increased that volume of quarter. asked I Can was much

right. drove of in The types a you're different volume right? the is but lot Yes, And products. not of dollars, bulk the exactly bulk

we bulk, but effectively not this of of sold dollars lots lots of so, it. byproduct, And had which to a lot weight

going of especially an to impact that have expect the less We in XXXX. forward,

off international be best ways to specifically mix question you that on of in be by of hit order put how Thanks. we And of that's adult-use, to in between of to there's your drivers great. to one to XQ on asked your touch top know lot as just we the a line want hit together, Okay, Manitoba? positive Canadian expectations expectations, would there's medical, been other couple where and EBITDA ‘XX a kind and what about and you XQ target? the but there, are and today think you expect expect variables I different

side. I of the if overall in the that just be cannabis for for to look XXXX. And growth drivers doubling XXXX, So, where was the QX at doubling think that you of going more general are on key

international we expect grow significantly for more double; increase away. to So slightly medical, effectively the going Canadian more less we than than and expect adult-use, expect than double; actually medical, double, to bulk we less; like

for were year. see the you'll adult-use medical to drivers that international main and next be going So,

worth. is only be overall to far hemp We growth One some is plus see on months year's XX% side, full base is in the growth hemp. worth year. growth -- had the growth we to a On just going expect full the to having But and as area as activity. for be going XX just of provision

So hopefully that color. gives you a little bit more

you. Thank

Tamy Markets. comes Our from Capital next BMO question with Chen

is open. line Your

we just right now. have I cash one statement don't a have Thanks. think flow I question.

the just ended So, similar QX. end with of quarter $XXX which I million, under to you think the is

raise particularly kind I wondering burn So, cash did the from, during -- where the how understand sources see we much the quarter? of where ATM. you to just the came Thanks. just but on that fourth can is, obviously wanted the I'm

Yes.

about raised million quarter. $XX in the we fourth So,

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Our comes Graeme Capital. question Eight from Kreindler with next

open. line is Your

still the in price I you or adjustments inventory of you. I if related future, it regarding pretty could I market see shorter at sizable term this we wanted you're earlier to the other on commentary adjustments. about the some ongoing Thank call, the and taking potentially the this ask you expecting assessments price what some that of terms there wondering complete dynamics? given inventory see point the was to but in their in was adjustments know, in do take what -- as on outlook balances quarter,

smaller on you reserves versus When the adjustments the we relatively for others, us price look of at I it's at think look and returns, some if side.

been around And on reserves quarter of for $X has provinces. reserves inventories based at the are This the -- what out just that most was million. in potential

mostly oil price or on products. the that’s we discounting type ships So, has done products type T some been have

take we're compared opposed from return not the to, to was products dollars, the we through receiving returns products, the of As and some in industry. returns, what and small some taking that relatively seen sell the of we've discounted again

And shift and respect to the with to variance just international the gears, medical I wanted Okay, revenue, there. then understood thanks.

quarter, But, just see international Portugal now. in in line going in expectation of that see that a right expecting are on the sizable the assets that demand had to the medical of amount versus pretty when to you and the balance revenue, what and of start XXXX, that the that in doubling acceleration. on previous than continued the revenue in discussions more the of expecting lot proof year ramp, market, demand increasing we trying of we in expect terms going a various are mentioned when that you would bulk point quarter-over-quarter, You companies to gains sale can really as we about think

second it in earnest send year. Actually, supply, supply, to quality flower if that expect a on sell time to couple Germany, able sells the more see the We to of days. be half it. really in acceleration high of more had we we'd we Every

of more demand a than supply a us. been for it's problem So, problem

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just produce which capacity we we quality need -- have coming Portugal. from some more high more So, need expect -- supply, we to

Thank you.

comes Carter Our next Stifel. Andrew question from with

Your is open. line

Yes, thanks.

So, bit drill I We're on products. X.X of stocks. cannabis seeing out wanted of in kind of a to a little the obviously lot

market? what is, kind X.X an chain would in idea incremental first saw of costs go? to Thanks. of gross you versus this still your more do absorption some margin give us or have those products of seeing at ordering pattern That And fixed you to where you supply is question So, helpful. Are are be point? a the normalized kind

around, year A provinces year their time distribution into was supply essentially what centers. smaller finish. all were ordering large start ago, the we October, December a their will much out in I'll reorders centers. pattern than we This initial in as orders orders were saw to distribution those and chain our as build but October. keep Mark up had and happened Maybe very soon different there showed We placing product ago, did a of product

actually see who testing could would stuff were actually it. ship they if and as almost to this who make it's So,

matter orders the so, provinces shipped just on X.X than to days. they're soon to a year -- for close disappear products, a they're shelves, products within number And normalized. we saw them normalized. a and and being coming as it's what as ago. put -- faster those of not they half X.X we nowhere And the the of It's Because

that we're can that we it's capture ensure a market but our capture so, and capacity trying And space. so increase good we rapidly, thing that to share manufacturing shelf

put standpoint, we'd of in came plan, kind of to faster we've from have XXX% shape or building in and a And our lot lot inventory. a plan -- some a but and the it's be we're our great XXX% We costing out a thought place faster. reorders built filled

an get push chocolate today scramble the the through or well we're time I conservative more start to just cost stabilize. think and new around putting versus probably just much our So, we'll efficient first standpoint, really And being as we absorption rushing to everything because lines conservative to We're in were We're catch now from time. not more a inefficient trying in this as as additional we're provinces as side. up out. just as line possible. those And more

a conservative the is know orders our We approach we we that and demand manufacturing did those we're packaging capacity, reorders now will ordered further equipment we lines. increasing in seeing that And we of ordered. and different and automate the what terms

supply our efficiencies see COGS. which throughout chain, you'll so, will down our more And drive

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

Your open. line is

hardware quick, any things answered, side questions. real seeing side of taking the have of issues for questions or coronavirus from suppliers, vape coming and Thanks been side, supply are the but of the China you Most X.X from how's things? the on your

on Yes. areas impact. hardware. some That's really of there the one is branded where It’s the

hardware. that One on that was brands we inventory whatever smart could put that to intentional unbranded, of maybe well. the branding be so we did turned could doing that ordered vape the things significant were but was the of We out not put we hardware

valve that's us unbranded to gives various so, us And And in for sources. have a can as relief hardware from we inventory we're waiting our do facilities. now of that pressure brand international that come of little to we some sort bit additional

you. Thank like to further I'd closing at And this back turn the I'm Kennedy time. for remarks. call no to questions any Brendan showing

fourth major days IPO, to call his this cannabis words of July helped in on Thanks. I March Mark he Mark an can't first when In out without make few saying U.S. completed XXXX, XXXX, IPO Mark retirement recruited of complete to Tilray of be the Castaneda. CFO. a our exchange. Back of complete company we stock about XX

hemp. dedication we improving Mark, I thank you your work, XX and participated the a And to power evening. to lives in today's past patient want team employees to to with of great your of I've you Tilray. XX participation enjoyed years, and XX cannabis appreciate strategic hard in you. call. And and with forward Have making and earnings Thank you to role. our Mark on and all members dedicated hard work consumer their and that I for for the questions development history through new quarterly everyone's estimate between thank Over calls. has look continuing work

this participating. conference concludes today's Ladies call. and gentlemen, Thank for you

disconnect. You Everyone, great day. may now have a