Tilray Brands (TLRY) 12 Apr 212021 Q3 Earnings call transcript

Good morning. My name is Mariama and I will be your conference operator today. At this time, I would like to welcome everyone to the Aphria, Inc. Q3 Quarterly Investors Call. All lines have been placed on mute to prevent any background noise. there firms a only. remarks, analysts session speakers' investor and/or the will question-and-answer be for After [Operator Instructions]

Mr. begin the you. conference. Thank Carl Merton, you may

joining quarter ended Good thank XX, XXXX. Inc.'s Thank everyone, February results us for financial third Mariama. Aphria to the you, for discuss morning, you and

Joining today's Irwin call Simon of other members me management team. on our are and

website financial on By and MD&A, statements have earnings release, the section with EDGAR. now, Investors financial SEDAR everyone The should have access at of filed been Aphria's are statements the available www.aphriainc.com. to and which

begin, be Before unknown and and we are and differ could incorrect, statements. beliefs statements. those remember based we make statements to known involve risks please actual in call, results and that, during These these from expectations forward-looking and materially may uncertainties, this on which described current our prove forward-looking may

our in today uncertainties release text statements. forward-looking for the discussion the issued associated on a note earnings risks and financial such filings press Please with and

to like all unless also in references otherwise stated. would dollars are figures remind Canadian I financial to that you

And to the to turn call Irwin. like now, over I'd

very QX much, highlights well you XXXX our of benefits to combination Tilray. Today, everyone. the business year with We discuss quarter and us financial to Thank you discuss good joining third will I strategic anticipated results. operational fiscal Carl, and our morning, appreciate reiterate as our proposed

due and further ongoing against the and savings to excited changing Aphria's vision a effects Canada maintain profitability Aphria long-term to COVID-XX cost implement very advance goods the our demands Europe. proactively the in significant the packaged initiatives and consumer of lifestyle We company. growth quarter consumer global global team are cannabis, preserve to to be in Across leading operations,

of their through had market, closed the operation levels most lockdowns imposed inventory stores, provincial and In in lowered boards of delivery which e-commerce. the pickup Canada, on and through of the view only quarter cannabis limitation were and the the our extended largest provincial

be due impacted inventory European to resulted and experienced continued business lower medical also levels restrictions, our well countries, insufficient Union which pharmacies products other to as in of by closed. Germany distribution being COVID-XX-related lower turnover at supply Pharma as of CC from

factored we lockdown pandemic, in from initially greater duration anticipated. than and and of the QX our to magnitude the impact business the in was While some the we

Our adjustments our eighth responsiveness allowed our positive to deliver consecutive adjusted our and EBITDA. quarter ability of to to make business successfully us

these I employees want of keeping for global our to thank safety results. to delivering priority, hard team health a work our dedication and their top also and while the

CAD and with team from achieved QX, demonstrates of revenue XX.X of line This the EBITDA million, net million, resiliency QX, XXX.X For in we as our X% adjusted despite CAD strength of QX. down from well products of our business, alcohol to robust the medical of adult beverage along to a importance our diversified medical Canada, distribution U.S. having with in in business the cannabis use a internationally,

solid are top future improve. a environment as for improves line growth created foundation We've will it operating dynamic in and the we

internationally. We products offerings as Canada, the parlay additional growth into also several we and to have complementary product look consumer U.S. our incremental in opportunities branded

strategic future. strengthening growth sustainable our to focus such today of cannabis priorities, is our well for return highest consistently as and key M&A generate Canada The in team into the strategic completing business the and core on

activities. maintaining We by improved of result our $XX.X capital operating as free quarter, reduced provided cash a the the predominantly cash flow million and during by third expenditures

positive. cash and line as the We working believe goal of our we'll increases manage being dynamics capital, flow improve, to reach our our as market continue top

to long-term differentiator industry, support our believe and strength key helping in cannabis financial strength We capital competitive continue our will to us the balance our to access a sheet of be and the flexibility.

a in we a began over are different started where year is than When journey now. we very will year ago. transformational well today from be Our and

sales, global will maximizing our to most our We industry. in business at forefront remain net the to stay and team growth focused containment. of on evolve Our profitability, continue our the importantly, cost

Our our sales cannabis market include has for cannabis to regions distribution. expanded remain leading international new brands footprint strong use and adult

quarter, the its maintained number retailers During brands lot one and across Aphria and boards to of top the sales with terms producer of Headset all reporting licensed as data, closed. position that's our both Ontario in provincial a per in Alberta

Headset of a the market Canada. data XX% portion or total approximately large covers retail in

of more share more overall from the an - market is market little a national on perspective, one Canada, Headset Focusing in number licensed little Aphria with share detail, data XX.X%. in a a producer

producer number are in number in British five Saskatchewan, We one licensed the Columbia.

number Our vape XX.X% share an share. market cartridge one with the market maintains

share, board rising in Our Quebec, in accomplishments. to Canada. flower a provincial market What also number dried with two licensed two great the share oil and great with based producer internal with the market brands a We're XX% sales two held on pre-rolled share XX% to improvement share analysis. the market share the XX% in a two terms of number seeing number number

We foster that brand cultivation a producer. and at being Aphria innovation, robust culture development, low-cost of

Broken extended developed Dream. strain, introduction cannabis Pipe quarter, premium Coast newly that its of During the offerings with

initial We brand in and consumers. Both feedback from have new Solei topical highest products our Canadian received topical, introduced available the retail the potency market. positive partners

the Aphria to brand needs innovation, marketplace. the so connect evaluating propositions can We the consumer evolving through with compelling options consumers and delivering preferences our of ever meet compelling in are continuously

registrations Germany, medical distribution to medical Internationally, and Malta, Asia cannabis growing our to Israel, large high-quality Poland, access includes international increase are and infrastructure medical for consumers. domestic our we're well leveraging and in patients our as our we opportunities our a our expanding multifaceted in strength product operation. with and with America. cultivation, in and We're Latin licenses Today, cannabis Italy, presence. platform This

XXX There legalization tremendous are medical opportunity both across more when people a long-term the and recreational than representing EU, for happens. growth, million

to see medical cannabis in We the offerings and to continue across expect growth distribution our CBD region.

changes from are quickly in benefit to other EU ourselves recognizing legalization medical also countries that cannabis. and we're Importantly, allowing

lot XX led a have and for other many of myself key As members team CPG my know, members. a along with company, you years,

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help legalization offer. In ability cannabis a key that believe innovate US once forms, foster learnings will At our to Canada the we brands operating addition, we from strong in across a EU market with Aphria, and premium with the happens. from resonate us

a our Canadian to in We be assets international and success expect key differentiator the for growth. future

grow core Canadian our potential the business. about long-term internationally excited to and We're

investing purpose-driven core that's our brands, great a values, a take committed people's for leading people, company to in As we our and pride and better our our company, course, by with lives are of planet. the important, products, in our most changing

great our full and CAD revenue what SweetWater, for from the in the adjusted most They X a brand. represented first million QX, contribution XX.X that's bars in still net with quarter, EBITDA and of quarter on Focusing contribute and CAD million closed.

month lockdown. report US up on-premise Post of sales we're with first prior compared experienced when large the XX% a a went rebound, the SweetWater the QX, national approximately into pleased year to to March,

in IRI and craft the recently innovation offering number by new being H.A.Z.Y., already data. year-round we IPA business. of SweetWater millennials, southeast, to to The launched and which few brand demographic SweetWater's an traction the and in in IPA, we the regards fueled is our into an months is new growth speak number – a and development. the just item H.A.Z.Y. speak strength is in brew according important one a which six growth brew, to nationwide

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SweetWater platform the development big future the distribution in opportunities their We're manufacturing, for marketing across the southeast opportunity and in and provides and all a innovation, infrastructure US. business. profitable what leveraging a growth expansion beverage robust, and

statewide place including us Aphria branded we our start During consumers. cannabis build brand potentially XXX cannabis. future out and the awareness in to a use strain, Colorado, beverages for adult start the the offering to launched lifestyle Beverages, legalize cannabis This to is US the first in great quarter, also state to SweetWater

Our products. use New adult in safe team quality, are states at the Aphria In good recent selling and understands of more developments York brand New the equity and US, and more both Jersey. medical and importance cannabis, legalizing being with

months, four to states adult cannabis. marijuana, XX% of last five use and In adult residents country allows meaning its use legalized the have possess the now

two the cannabis initiatives more states through have added and As X, adult to or passage DC bills. At are of state list this of least legalized XX cannabis following legalized to states have poised year. April ballot legalization that voter medical be use states and XX Washington

indicative of shift The Americans' on on national the is perspective trend cannabis.

we advance As for vision and business, compelling and our our believe addition growth will with of and is continue cornerstone to continue strong existing SweetWater a Aphria strategy the to to us. be we US objectives, our complement long-term it financially

competition. other To further combinations us gap us US believe THC advance can us SweetWater position our between into products CBD will in pending we help in peers, consumer future objectives, the widen and ahead our vision the products both the that of cannabis business and and addition parlay products of well strategic and growth the and

shareholders there both stress there done many urge to before, I Aphria's vote companies combination. as Tilray get a can't times On and many mentioned and if stockholders benefits business of are out these I you've basis, the for not together. coming vote so. please I enough, combined of

seek From sold committed and in a already to first business remain where perspective, products. our our operations CBD America in develop we've global Asia, Latin we to

tremendous growth record a with a of have proven and We success. track for global runway teams

a international. US to addition Tilray the in industry. relationships build We sales to includes leverage existing Manitoba strong look upon with distribution SweetWater's This US, distribution wellness brand, the the we their leveraging CBD In plan network. our partnership existing pioneer and Harvest, and in our of

mass, in distribution channels in Manitoba is day us also across and with thousands one us sell available SweetWater for SweetWater Harvest and provides Keep will and cafes. grocery and allow points products bars restaurants our the of mind, which cannabis natural, in club to

offerings as give when these offerings outlets our we access well CBD this hemp will legalization and head with for on tremendous We as product start a to happens. the in believe US us and a do beer federal our as retail this our scale national can craft well cannabis food

and ability report are will mean to too. her pass – summary, environment, costs In we and globally, with for difficult QX that I difficult contain but EBITDA pleased a in our operating – positive

contribution. their and one like to like contribution I'd I'd especially COVID-XX. all thank their of our board every proud am for to also our thank during them. I employees vision, Aphria's further of to

We to of enable continue connect plan foundation cultivation with internationally growth opportunities, across capitalize increasing an to greater number a with to and Canada leading industry us our consumers our strong our build and This on manufacturing to utilizing want distribution on and brands who cannabis patients products. best-in-class in will and footprint.

you Carl, that, to over now financial turn who Carl? call will for I'll With QX. the take our results through

you, otherwise Please our amounts. expressed will unless refer kilogram, amounts Irwin. for our per during Today, press to dollars our are results results a financial otherwise. I reference per All noted identified equivalents unless IFRS Canadian kilogram call. and and financial for non-GAAP financial reported today in Thank gram, to adjusted the except measures reconciliation issued under noted, of our share release

direct unique featured and impact our quarter circumstances financial that this mentioned, on results. a our our grow business ability had Irwin on to As

Canada, period of During Two in a portions XX-day British Canada, biggest the other in and the of Columbia, province day. in experienced of Alberta were quarter, big virtually significant lockdown periods. lockdown the provinces the every Ontario,

lockdowns lockdowns, on businesses priorities. revenue most the experienced since States, other and that on-premise of total Despite did business our saw incredible pandemic focused return These in the directly than team significantly our of lockdowns capable we during impacted lockdown, Germany it the not highest an for quarter began. these the United believe Southwest quarter, were our earning. has in job less while periods

demand to magnitude once initially particularly we quarter, greater were quickly the be implemented quarter realized way the duration consecutive changes help a savings with costs reduced environment. eighth These this our long These generate changes to of than to going meaningful and the Canada, in significant we adjusted we EBITDA. in positive savings. align and operations In operating lockdowns dynamic cost to our responded of in went anticipated, and us resulted

and We very expect are result savings this in future pleased to a of portion with quarters. continue these

are for While business. a demand will ramp up open majority of back as increases, them provinces fully

quarter. of of our CAD prior from down demonstrates X.X% million the this XX.X net CAD operations and achieve agility million, of our team the adjusted revenue to quarter ability Our EBITDA XXX.X being despite

A were be that and ending lockdowns levels coincided from SweetWater the positive shortly. lockdown by increasing few the and demand prior optimistic to on-premise quarter sign. of This very the weeks prospect at ended, a business pre XX% we might was returning after anticipated with March year,

as Columbia continues return lockdown. a Ontario highs But infection rates continued rates, recently And with all-time Canada British infection to lockdown. returned to in four for and full at XX-day COVID-XX Germany last week, struggle and lockdown weeks. a experience could Alberta least to hard just implemented to

headwinds business A as team face return we quarter, through revenue on of to managing headwinds But on lockdowns, hyper short-term displayed our even management such and lockdowns in presents a growth. maintaining very focused our is profitability. this the

only revenue SweetWater quarter full also costs as and include incurred of transaction. adjusted acquired first results. particularly explain and This the the but These the in quarter, operations, quarter on SweetWater's quarter results first of include increased definite amortization not part our the intangibles SG&A life represented from EBITDA of the

million, our million EBITDA CAD CAD adjusted of adjusted The from our of businesses from CAD of million XX.X CAD million from EBITDA CAD business development. all business, SweetWater X.X included adjusted adjusted million under by from EBITDA adjusted X.X the offset our and negative EBITDA distribution X.X quarter in cannabis EBITDA of X of

brand to adult discussed, across As demand Irwin quarter we the in maintain despite and our worked the medical pressures, markets. hard our use both strength

cash us costs per $X all to yields $X.XX chambers leading wintertime industry this quarter, coming the great our below quarter. to helping do Our keep and growing continues at team gram, despite lower in not a job, operating during cultivation

the views response provide labeling. industry, the issues uncovered in labeling to use Like standard market cannabis others to they the once their we expect in interested quickly Canada's respond are Health in and on recent adult

balance to strong sheet long-term and look our a financial This support structure we flexibility ahead. capital us maintained as We positions overall growth. well

build M&A evaluate to federal look continue be cannabis expect and to adult to and US in We infrastructure our a use the of legalization. we leader in strategically opportunities advance globally as medical industry

credit financing early drawn on mentioned facility. drew QX, the call, million during been we million. closed As term $XXX debt QX has term a revolving facility, a and BMO, $XX facility on, we with providing in debt fully our At which of million $XXX a we not closing,

our was cash From impact flow XX.X largely a cash perspective, enough in of previously being CAD revenue not the goal flow stated lockdowns. free QX, positive free our because improvement million the COVID-XX to achieve of associated with

restrictions. prioritize countries, for lower due COVID-XX on Across our from that the European global to due as Aphria's team, QX, well of to but was from emphasize we profitability, of In supply the revenue not inventory quarter Pharma's products lower slightly distribution only down pharmacies other today, continue prior based CC to as medical into well experiencing initiatives insufficient future. levels turnover

cannabis depending cannabis and clinics, depending retail stores, hospitals, to global addition, which related In to to revenue of challenges whether reopening portions have in-person impact reliant regulations upon restaurants, the bars, continue the experience the be pandemic, pharmacies, continue business offices, the they and and visits, rate our doctors' on restrictions in our conditions on of the on schedules. to adverse may an future, vaccinations local or

disruption a associated Our work of to our sort prevent team and chain with supply closely chain on minimize any continues to basis partners day-to-day supply with COVID-XX.

a and by due from decrease QX, million. to more net an of was from revenue, partially financial beverage of revenue in quarter CAD but breakdown decreased X.X% for This the revenue prior prior detailed net net to the to distribution offset SweetWater. our in on increase X.X% Moving year, a increased acquisition alcohol from primarily cannabis the results XXX.X

the XX.X% to million. cannabis decreased revenue prior Net quarter XX.X CAD from

included of market As in a provincial press today's previously as taking result forecasted demand effects of had the boards the experienced release, noted we pandemic, inventory to a in the quarter including and cannabis provincial lockdowns reduction lower which during measures growth. levels, ongoing

decreased of product and X the These returns resulted provincial approximately in CAD million. orders measures boards, provincial from

distribution a some product experienced revenue have for revenue mitigate million. the short net cannabis been the of finding we working XX.X in did cannabis million. return notice. But channels X.X products Absent alternate a team of the a of good by reduction Our returns, would job still to of product net CAD CAD portion on

use The programs patients assist decreased offered average tax impacted retail been programs. other quarter selling negatively to promotional the The price of pricing excise a along $X.XX have before who in with medical the specific is gram result per in of prior to $X.XX the pandemic quarter. by to compared decline

quarter gram $X.XX compression use price quarter, gram products of average and cannabis the related to compared excise trends market. to the before per tax the primarily per adult to price The large in consumer prior selling to $X.XX in format in decreased

point play Price the of dominant the cash costs that price discussion standard industry labeling, compression, will during the with didn't In a in period burns quarter. quarter. last were experience during large production combined strip to in order compression, LPs this

The third quarter in gross Adjusted gross QX. was cannabis lower wintertime to primarily cannabis price cannabis in for of gross XX.X% million, due was the product to The yields returns, of compression due cannabis quarter. in an adjusted the compared adjusted previously and difference impact CAD XX.X margin the adjusted profit with XX.X% the profit remaining decrease is as gross mentioned. margin and to

was in CC QX adjusted XX.X%. distribution adjusted gross specifically Germany. distribution a adjusted of of decrease result profit Pharma distribution in gross margin million, was an revenue at distribution CAD The decrease a XX.X gross in with profit

sales margin. mix carries QX alcohol towards on of which a decreased consumption, included five that XX.X% on-premise in higher to skewed only from more XX.X% sales, heavily a The QX. Our margin prior-quarter gross in adjusted gross margin days with beverage

million SweetWater, QX in increased on the the the XXX our of the increase other one-time XX.X quarter million charges addition Tilray QX from arrangement, transaction proposed impact a primarily the defined and litigation driven of life was The increases intangible of price assets, costs SweetWater, in QX. CAD with and from the associated remaining growth operating expenses by CAD of full share acquisitions, from quarter acquisition amortization the in to potential Operating expenses including from the of costs.

action I initially and impactful, were we including than to remarks, Irwin As our the my implement immediate provincial team beginning saving facilities, temporary of several were from initiatives, our operations. These in reduced adjusted Canadian more cost discussed workweeks lockdowns and highlighted EBITDA particularly operating our cannabis expenditures. Canada, initiatives took planned in response, instrumental managed In the cannabis expected. at headcount, our better four-day at preserving positive

we remains on adjusted as As such metrics focus through flow. EBITDA consistently our cash as and free profitability, state, shown

free As from flow in capital I at and two the in improvement liquidity the X.X resulted a improvement in quarter, loss CAD maintaining flow our mentioned, inventory including only our in working of an quarters, levels of free perspective, million. last XX.X in million expenditures recording same cash efforts, a investment for CAD our the capital reduction cash

to all restrictions operating working positive free intensity million. we order to we we COVID-XX where lower positive, cash flow continue And the work by requirements, markets to be subject reporting continued to work provided current quarterly the the flow in QX, to capital of in Similar of by cash operate. operations succeeding X.X our or CAD to cash

will our position in when both and growth strong existing Canada believe sheet, with cash our balance initiatives We and support cash this combined internationally. free flow,

of global with reacted EBITDA, our responding They agility dynamics. In changing our are to team. with decisive pleased quickly to summary, maintain actions industry we adjusted the

help consumers pandemic quality, more will our move cash succeed and high patients As this global navigate reaching our we we believe with to and COVID-XX ahead, position we as leading us brands products. continue through strong in

Latin growth already Europe than in better before development, Irwin the continued as detail. all US, ever is positioned in highlighted Canada, Aphria and America for and

cannabis to strategic We legalization our potential US are with ready the and Europe proven on for global growth team future in initiatives. a execute

vote upcoming approve the proposed special of excited to shareholders meeting to we closing, combination. Aphria/Tilray In are business our about

the approve equally resolution As of resolution to Aphria arrangement. urge record the for the Tilray date, vote as the arrangement. a shareholder, for and I shareholders stockholders, voted the approve to We

become more company. come. our we We for years sustainable long move term even shareholder expect stronger, tremendous value forward, and an many As in confidence to profitable to maintain we to diversified ability create

to This now concludes Mariama. you, our and prepared questions. I remarks. for analyst Back available are Irwin

Thank [Operator you. Instructions].

Owen Your first with comes Jefferies. Bennett question from

Your line is open.

Good Hope morning, gents. well. all are

Owen. morning, Good

morning. Good

decline from the wanted one the Just on average adult price selling me. use. I focus to in question in

you give QX? some more about to mix So, linked on could over maybe And talk you what to upside shift particularly now support to QX, doing maybe your then, you. offerings? you you're value this, can portfolio opportunities to specifics and your a for that and Coast? Thank key there probably advantage very Obviously, that's Are around brand? drive a having more there, strong premium brand Broken that's QX

about the I'll things. I clear, first essential when be sounds want seeing stores I'm Owen, part we're cannabis Canada so and originally, answer were when because what I'll when deemed Carl. to lockdowns, service. – two let talking it closed,

stores open. were the So,

Canadian evolution, closed the government next and Ontario stores. During the the government

you a couldn't store. So, to go

e-commerce. And about curbside had up either XX%. or to pickup decline XX% some and each retailer You saw

stores were weren't the difference. locked I getting we've down to And that's we before? well, one. that's know questions closed. number So So, been And regards in the

there's Broken have price control Coast, And and be compression. been talked Number the really adjustment talk on regards lot Broken Nobody premium boards. to see wants of no conversations, to I me our I've had heard Coast. many you a two, Owen, continues about to price in to as brand. It

was a way consumers online, to ultimately – was compression trying and market to think that or inventory, moving order happening of standpoint. from price I come the the some the to stores get what that's

back get we normal, to once think regards potencies we in there of to different see innovation will I products. out

different vape, and different to regards in pre-rolls innovation see you'll think I demand.

compression and I on things shop. happening with come back price consumers of hand, try because come other out Coast. say great Broken the to what's there see get and happening But and I is So, to

product. have We of of every bit that intention maintain to premium how

and just to go ahead want you about… Carl, talk

Yes.

And the some with think and very quarter Dream. going Pipe things there increases there's in have in Broken products. on has really we've interesting seeing last been two been add the to be well. the last about over of concerted seeing probably that over to ago start to potency months months last consumers that, that been are as just hitting talked their make started doing should his Broken Owen, four very those strain on Coast. months. a potency. in six, improvements that new Irwin I And terms Coast three, the script effort So I'll shelves. seven products That And

we think great that And to - improvements those are so, really drive that equity. brand

of little We the again, didn't mix. In in in per your shift on pre-rolled shift of in and vapes, circumstances into comment, mix, a compression from see price a direct more in our away terms the of of shift shift lockdown. the unique about Irwin's driven to a further because portfolio. more question we would more saw But a use bit I price gram adult it the than a in is say, about quarter is decrease about basis value

Thank helpful. it. guys. Appreciate very That’s Okay. you,

Your next question comes with Stifel. Andrew from Carter

open. is line Your

Good Thanks. morning.

Andrew. Good morning,

morning. Good Hey.

Regarding alcohol on-premise business, beverage the pretty significant. growth, XX%,

forward? the of case. I business declining kind that line right got distribution, the profitability seasonally I you even kind going mix strength, given think the was You've of recovery expecting additional with are a business headwind, sustained low of quarter maybe kind with guess off-premise. initial with in And

investment really to capabilities? thinking about you brands how forward, and you profit build from up going marketing are it do business Does portfolio? expectations Canada? offset tepid this step more Thanks. Or So,

Andrew. question, Good

products some see happened what be we're we what out actually Coast. with RIFF H.A.Z.Y. introducing Broken seltzer you before and for of RIFF and vodka I H.A.Z.Y., there. the the one think the the what's introduced we've We'll one and said, also become number seeing of it's seltzers number a vodka Oasis, demand called under one,

again, to looking in going that. we're over and to We're expand XX business. now we'll continue So, expand beverage our states to be sold

working on-premise So beverage business. of way and potential. our of also of is, lots other within opening type CBD with up – I on products see lots the it products We're and

CBD on getting business. with regards our of THC a beverage in in is the that markets the distribution lot We're Canadian of upside and working market. and profitability also there So, to with SweetWater products

will Thanks. I it. Got it on. pass

you. Thank

Andrew. Thanks,

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

Your is open. line

a the and just Thanks question. elaborate morning. combinations mean to you back, for you wanted Good products. is this the more more business on that. consumer CBD I pending had wondering, about extent Irwin by bit other to what U.S.? comments can, and Carl, I Thanks. some if in you in you I presume go that was thinking could the

Hi, good there. we also CC is our did it's U.S. it can. in makes legalization, can Tamy, than we one, than no Number with different the and products parlay U.S. into ultimately morning. did Pharma it we into different and international, with No parlay sense where SweetWater the once THC that

plan that's So, there. the

we there - think can Listen, we already a legalization with in rec. build in continuously build out high market share the Canadian market

in regards product. our there's of the market be I way lots we changes to going think

our some still drive think I medical. there's opportunities to of

want markets that will scale to more cannabis to products products legalization I open happen. potentially look the to consumer into get we think medical us we THC more and type when and And U.S., rec. Europe will up continuously do for the in products and will regards in or does more parlay in once size

Got Thank you. it.

brands And part of regards our RIFF, will the those Good doing beverage Supply, that be utilizing in like like SweetWater. like business with we're Aphria like to with Solei,

you. Understood. Thank

you. Thank

from comes Gray Global question next Alliance with Your Aaron Partners.

space forward at But And share restrictions. opening, of Someone stores and within and look think buyers how because as lens some market the you kind of about through steps acquisition now on share. province, the gains the and I context returning return shelf right we have to those impacted the kind asked to simply the basis you're market about to market pending know gains more Tilray maybe go especially of working forward taking and new provincial Thanks. Ontario, a do right we're also with share ensure the closing. you COVID of of kind the the stores Canada of within those

And okay? the open legalization, there. in in is I share for of day, we're more out again, think, legal before, Listen, pandemic today as the as what objective, market states more this Aaron, my said I US get and think with seeing XX% one and but to to we're going over, up be cannabis, I combination demand there's to Canada Tilray,

the different of calls the a They now little had Stores alone, with slow products. stores. In have, by income boards. X,XXX curbside. their only there's close major source to next in to in expect them. And to you focus Ontario are And and and been a they've control opening demand order the closed can a weeks they for because regards pandemic. I've see it's them four again, Recently, by stores of for the September, growing major up with

basically, deliver They also online. products, are we new looking at, products how innovation

So, to business. major, grow business the how effort of market. boards to major billion, in that's of from control size a retail of grow there's share billion $X this And a $X retail to a Canadian each business a good with XX% the

in And of have back the market. doctors, I'll But market, ability growth we'll think to time, at the at patients here, medical patients lot medical same their buy different get can a when I see think the continuously retail. say this medical products to the will I

in marketplace. be get a edibles us for have a major drinks opportunity and to opportunity our for drinks don't business big other in we edibles. to right that expand and going and And The that's presence major us now, into

us with higher can potency we the Aphria easily market. to So there I at if Aphria One, what out having And Canadian demanding. that's Diamond and compete potency the the ability consumers higher the grow is strains opportunity there marketplace out in think are in

with next Cantor question Zuanic Pablo Your Fitzgerald. comes from

don't that question And on fence the maybe But people the you fence are a of to those is if the vote. Maybe know want are I that very regarding on comment, two-part a the shareholders percentage question. for still small.

international mid-size, First, discuss markets. about in inroads we've other Canadian talking relief We've seen EMA, companies a Europe. even making, number talking of making seen about transactions, by ones,

stronger of a Tilray in Aphria So, a and medium/longer-term Europe. how taking just are view, reminder together

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saw become premium. one You number in XACRES

question scale you. mid-sized, domestic seem guys in well. doing some to need with for So, mark a quite the there's about smaller the Thank market be

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in there's there that I Canadian will be lot to in happens. I do going to think, think US for LPs be a US. opportunities the ultimately, legalization But the once

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John with Zamparo Your question next from CIBC. comes

temporary these you CapEx. did is consider then, on that to, to I more the flow Or also the quarter, and sales implement sustainable limited? moving SG&A these in you as likely in free should number them cost forward? that as And ask wanted is sustainable? do cash number The you're two initiatives about the and we And view when referring CapEx in a both parts, quarter? growth savings

periods. we some in little terms number John, a various come bit believe to do forward. room has going the in that's a CapEx, sustainable It likely of down

share that big XX quarter, increase the days in SG&A increase just that days the A tied in incremental purchased some of of for is introducing SG&A, our of driven share-based in that call of statement our X a in number is intangibles was previous to the as big chunk of about compensation, conference by the terms as transaction. talked we opposed part driven in required price on number SweetWater's the quarter. by the part into income a amortization the the big we In MD&A, which of as chunk and that the to was

cost follow on efforts, headcount looking… could And SG&A it I on mostly up salaries. Maybe line, the just cutting the that. like either though. I'm it I'm just was Aphria or referring in specifically looks through particular, to

one time. taken and are costs These back out to with cut It's not we'll continue have that then business them that not going normal. and of and it's been we our on. we're John, dealt

them MD&A. in in the G&A line, the you in can out And bringing you normalize the a when paragraph John, see of on SweetWater. There's

Your Genuity. Matt next from with question comes Canaccord Bottomley

XX%. Just on get up subsequently to doing to endeavors Tilray to to of go wanted your market you're to back some and the share closing about philosophy

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curious up the already M&A think build just you pro build if strategy you order what from can forma do think on is based in on the you you or market the ground in that up to of have guys part acquisition So, [indiscernible] share the pipe?

walk mean it. anything. stores, brands do said you think I When into you

Between so out over much we'll Aphria, I and think what's going to have there. be brands Tilray XX brands. important is not

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have products. there enough have thing any great on big sure And brands. other out we have they here get representation The and go street, think having into with the when is to and of I other that, stores, don't as a out boots they acquire to our there make

I think to continuously good innovation. got pipeline have we've of a

we've got expand think to I drinks. continuously

and Health the an think standpoint, we've way I is from think matter. products But here and continuously got edibles. and got government convincing consumers, ways why to the education of the Canada big expand Canadian is we've to also thing I certain market right some to brands

Neal comes Securities. Haywood Your next from Gilmer question with

I'm he's not there, sure operator.

Sandler. from next Your Lavery with Piper question comes Michael

and update that maybe curious seeing from quarter give Just what on an could you're if current the consumer. you the

what and more think typical the and used even Canada if You Are to closures. there's four with be to get towards that, in you're go pickup and do going a stores mentioned you there's to that online when making level come kind seeing as for their you more reopen? consumers reopen, seeing weeks of you when some up of just of to that store the to behavior? hadn't Do Just ordering what been stores kind opposed time? go now pent-up they're expect a sort in it'll demand normal reacting might of back lost of of how or terms

a something do data lot of talk collect Michael, a we and of on of lot this lot excellent to a question. it's analytics here. And people, that there

nice weather, pick order at will in out, or with even curbside store, to With So, Toronto good – is but, go and on up and that, get the again, hate I at down a people cannabis. news Ontario you're hopefully, though word – people the and will to stand or closed is, get want online. more want recreational Consumers standpoint. enjoy out people some lockdown, province from line

ordering is, happened warmer just weather, December, news open. So, business. Again, now, was because I it and were online are in something before think will this where the we head consumers to as curbside January into that to good new going a used stores help all

stores the especially of be rest and Ontario, more but available. more open, third, so will then Canada, are continuously it And

in the working as And I a we're we learned company stocks. brands, too products. out there. in afford lot control we've on have boards a can't our to a and forecasting regards types year consumers how of the I wrong think in through have them learned with want afford the can't to to have because potency, market lot different think of this products We what

summer. to normal to come into better is back up normal tremendous question coming this summer. will a the see us there And, demand. to get piped yes, And So, the I be getting back what's time

There are back now no further will call questions remarks. to Mr. time. the I closing at turn for Simon this

what you quarter thank call. I as And for getting everybody. there, again, difficult back much, on considering, stores. difficult very it's we of out the and step you this know times down And Thank what I are are down, we it close to But excuse. talk if no and stores actually with the inventories, are their closed, sales closed. boards hear their is we done they've the hear the control stores

around regards not action to I to really regards And one-time in at our regards taken. our costs, out grow, to regards commend the action in working the improving to world. regards looking in it's with organization, a our we've taking in in employees increasing our potency, to

and is look a is the will that beverages, $XXX step you be at business feel medical, there demand where there recreational With else a billion in et cannabis both out worldwide in that, out edibles, cetera. in what business I else that be can in where business, there back

innovation, the combination has And has has it strengthen tremendous tremendous what sheet. even it more. has strong Aphria And tremendous it tremendous has with a today, regulatory of balance Tilray, a has facility, brands, will it grow and

cannabis to industry its will happens, there regards in ready and and again, please in will forward. for of able be when it this And be that a will legalization, And brands, legalization innovation this be Bank, its this positioned medical SAFE we for move difference. sort cannot to back something and get be products, Aphria/Tilray happen. shareholders enough can closed happen that again, Aphria its recommend well continuously consolidation out I make to get and So, to deal and will and say vote come I both Tilray

stay So thank today. safe. please for listening you with that, And very much

conference for you today's concludes This participating. call. Thank

now disconnect. may You