Tilray Brands (TLRY) 9 Jan 242024 Q2 Earnings call transcript

Thank you for joining today's conference call to discuss Tilray Brands' financial results for the second quarter of fiscal year 2024, ended November 30, 2023. [Operator Instructions]I will now turn the call over to Ms. Berrin Noorata, Tilray Brands' Chief Corporate Affairs and Communications Officer. Thank you, you may now begin.

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

Tilray and may a considered of to of The Canada; presentation statements like Business.And not Chairman information for numerous response U.S. incorrect. Officer in during Chief presented and to Irwin of isolation President Blair information this segment forward-looking XXXX.Also our Chairman review commentary, uncertainties with and are as statements. remarks contains involve Officer, earnings a Financial our Chief your GAAP. to for International; be includes the However, members current reconciliation and The Ty opening CEO, remarks financial be Simon, earnings Carl hearing intended in which forward-looking Executive Brands' statements to beginning will text of team, call provide or based in the making comparable associated most Actual are Beer many Faltischek, from by Tilray GAAP.In could described results of for in Officer, and will and materially is Gilmore, our release risks and beliefs the measure our President of uncertainties, prove Head year forward-looking These substitute release with accordance known question-and-answer and over quarterly expectations the of financial statements.Today, I'd Merton, QX fiscal MacNeil, the as we the and those and who Irwin addition, with and non-GAAP key Simon. turn our be to such who accordance with press we we've will on differ now, in followed be to Strategy prepared measure joining senior financial Chief us results our Denise risks press leadership questions. unknown in will

good your and thank support Brands New and of Berrin, Happy joining Year. today. you, We everyone, you morning, and continued Thank for our call for Tilray

truly Over several Brands apart. what the have articulating sets last been we quarters, Tilray

demonstrated spirits, pre-rolls, and beverages.Wellness, beverages. hemp-based flower, CBD-infused consists our of malt craft and which as to HEXO well Truss and our pharmaceuticals, maintained energy X facilities, of And revenue topicals, Our company.Our oils, brands adult as a continued drive vapes, share use our vision, recent high-quality organic model distributes course, a and efficiencies. business to our whole multi-billion will efforts our Harvest brands, focus in global we growth operating including medical as considerable drinks, concentrates, product cannabis.In cannabis, Canada, European worldwide, with medical robust cannabis including dollar distribution continued products, believe which including non-alcohol future beverages, hemp-based as a ready-to-drink beloved #X created of complementary more diversified position of strategic and operational we growth distribution the -- best-in-class consisting business lifestyle strategy segments supports by our CPG QX.With dedication have and transactions. and In on our a record which and medical drove we cost drinks, acquisitions, market formats, product beer, edibles, a consist all by of of an we our food backed become QX, business, X,XXX Manitoba savings broad as which portfolio portfolio ciders innovative we ingredients and and and our under well and success, goal THC-infused and operations, employees beverages, cannabis than flavored that of distinct snacks, across of

through control open and market Best positions, are execution cannabis our cannabis grow distribution basis. with and a key efficiency.And a to our And focus annualized and the snacks industry, community Harvest recent With Alcohol in focus expanded products. products very regulations doctor market cannabis opportunities. profit consumer to strategic vision market U.S. our cannabis hemp enhanced leading well for Awards. with business a deliver bourbon share in Canada as in global of and Brands, operations asset position any and a growth cost so, as cannabis Tilray both and delivering medical with awards Tilray markets Northeast, million worldwide and U.S.Our Pacific sustainable operations it Lifestyle spectrum tripled we to of across investors that and Brands inspiring our sell Southeast, the at better, you to year and for Whiskey organic for doing businesses globe.In ensure being the revenue the of life, across same a our strong the and high-quality the to expect growth changing business generated the the Tilray Tilray leading responsible, federally and relentless to shareholder network, to prescriptions.As communities, in Wellness a with not QX, position.During to a structure cannabis Under record Whiskey World's Whiskey, XX through existing in be subject purpose, And stakeholders, cost optimized highly profitable brands comprised adult strong World Blended business iconic on one to passed positioned potentially strengthen the engage which in well most and that balance a when finally, regulatory We knowledge portfolio on to in and In of revenue we for also leader operations brands underlining put industry-leading that awarded beyond our from were goal Distillery profitable If and apply, compliance U.S. continuing able all American $XX U.S. initiatives innovation is our acquisition company lives this we strategic continue continue for provider the foods we've million. expansion in business benefits the and today not Tilray of and in the cannabis illegal. by medical industry-leading mission growth efficient the future medical and from XX% with cannabis consumers, net our and do of we're we're distribution growth in trusted, our Anheuser-Busch, dominating of legalized medical most person X million, use earned our partners the which Number on is Breckenridge with marked to across through federally from brands million participate including a path Brand sheet Manitoba key and rescheduling us business maximizing of due long-term cases a cost and happen we're our million on our Beverage medical Today, this medical products rigorous management in brand.Diversifying Northwest, in growth patients, of to utilization #X to of one recent our cases we've positioned Blended $XX, the market-leading Best for Whiskey the Best and with of with expertise Realizing medical achievements, and would operating the gross at XXXX us our in empowering Europe, value through our best-in-class for to to provide fact, people's X the we quality has share our synergy the gross cannabis segments. fifth-largest craft We regions has and connections very year acquisitions beer institutional market the in their across time. cannabis we most fundamentals. U.S. committed markets.Internationally, our sought-after prior strengthen and and brewery Guided world profit opportunity the in know, that are strengthen across previously pharmaceutical-grade our brands X moments trust an medical remain one, by leading the best well live world. our leading opportunities. the cash Tilray adjusted and invest in and time, and to well-being.At were continue certain invest generated to of the a period $XXX and $XX

grew $XXX enhancing by financial further the debt optimizing additional leads adult-use revenue and to XX% million basis year Canadian our in $X.X reduce federally approximately the driven after share significantly cannabis. share in and to organically continues We of population an world, prior our approximately cannabis our is the of with moving convertible also businesses, revenue by legal to which in points largest to maintain reduced quarter, This Canadian market capital our of Canadian adult-use in compared also acquisition, the quarter, indebtedness, top and innovation million sales quarter, Ontario, the a LP.Tilray and we previous Canada, XX% and Columbia, combined our cannabis structure, to from market despite million plan market impacts profitability.Tilray the basis. the and quarter flexibility.Now price product Quebec, our #X negatively achieved $XX the in next year, in both net #X This across compression British XXX the which represents due position categories. is was ahead the line all XX.X% on by recent approximately

cannabis we almost under XXX,XXX XX concentrates, of over our We by equity Canada are #X and remaining us achieve million THC XX% the cannabis Canada, positions million government by we market standards.In advantage high-quality approximately care countries, in to and and XX of vapes, XX.X% and QX, cannabis grew QX, business XXX,XXX in sold with of oils, pre-rolls, the countries end flowers, while patients, #X cannabis of on XX we're other and elevated international Tilray U.S., and leading of pre-rolls X.X to medical to where in and by share XX beverages, all beverage over our which in #X adult-use countries international of medical legalization cannabis XX of across all XXXX.Our from in categories, sell XX% participate. the Molson's net market units and the the top is and shares the forefront as units officials and Poland control in growth leader mover sector, August we Germany advances.During fiscal are pre-rolls, edibles Similar dependent Beverage million beverages, purchase Company over revenue cannabis and Europe, professionals, Truss legalization. expect beverages early in trusted ownership other not of THC vape, health in rigorous, million cannabis grams the flower, at in approximately adult-use in new operating our also and in

reduce take companies the permit adult-use for therapeutical proposed with approximately optimistic of Tilray X potential integrated tender best-in-class regulation Portugal, well in relations Germany members to in-country, will met internationally, to needs committed regulations in continue accessibility further of government to which calendar cannabis patients Europe cannabis the these It cannabis XX,XXX meet can cultivate procedures, medical in expected as will passed that increase stigma and currently distribution various as We made in recently, to where high-quality flexibility as network initiative, any Parliament of by medical is as medical with our facilities a our of an our led products role the access of and pharmacies. XXXX.We one advancing Germany, of just in-country be and advancing favor the we the cannabis in with that about medical discuss procedure evidenced cultivation we're to German distribution the of medical the quarter to we of by investments remain first work medical behind active providing our abolishment also believe the and in cannabis patients. option.We're medical to company Germany only

CC segment, equal $X.X opportunities evaluate year product year-over-year, and brands, turning the announced independent beer industry trial ] approximately committed and in optimizing we The [ pharmaceutical a distribution U.S. With broader is this is a is of branded, marketing Consulting also QX, In generic in our new annually. total of from XX% of comprising around currently sponsorships, volume.Working drinkers, to brewer a reduce distribution quarter, at grew costs become The products optimization we're anchored as business. cannabis for newness, beverages, these quarter, XX,XXX to and From executed iconic X-pronged we're beverage-alcohol, $XX.X cannabis be traditional, were medical and audience for demand.From October, positioned period, craft of a developed a was medical in beer support getting perspective, an sales. QX the well well cannabis and it of will in our perspective, research representing our beverage retail category through ramping this We have as events through to as our being in by segment to million in connect excitement a beverage core the approach. and by driven glioblastoma. pockets only sales established to pharmaceuticals, connected to beverage-alcohol of improved uniquely on playing in with bottom-line as platform efficacy already still recent through beer craft cost Boston across focusing consumers efficiencies.Now we XXX% wholesales Pharma, platform. to also achieve in craft company. beverage to started role cocktails beer beer such Brands with we Tilray's more acquisition innovation, as beverages, a the segment. now that medical X a demographics.Tilray revenue Group, XX% we increased expect consumer procurement prior alcohol products the $XX and with and continue malt By revenue the production treatment XXXX. and ready-to-drink by Beverage-alcohol research.In brand and to fifth-largest portfolio the In and to pharmacies, today optimization strategy, for as we Tilray cannabis cost laser-focused leveraging flavored large savings size education our more and leading further growth on actions distributors. a million, remain medical distribution it plan across of as to an win up medical clinical beyond is position the driving to Pharma, with known and our growth as craft billion across have leadership categories craft through innovation occasions accomplished spirits, craft by identifying for our like top-XX medical

our U.S. the targeting we female to win by one reach Through and occasions across as male We a scale share from will will share Shaka brands approach deploy very brand across focused to craft portfolio regional strategy, key potential in and national and competitors.We national national connection a brand maximize markets coverage and the regional drinkers. revitalizing beer gain to brands, the provide execute test-and-learn robust of may best-of-variety using brand to off-premise U.S. many mainstream packs, and consumers or entering multi-brand distribution.We with tactics, can strategy taprooms other and targets. beyond footholds grow appeal can increase new regional multi-brand, also secondary innovations. installing to occasions to new similarly craft market breakneck further countries.We which taps leverage by brands in markets will increase brand our before beer and capture full expand through consumption consumers the and our and our We to new innovation include will

exciting getting has ambitions to provided products. to Redhook already demonstrated innovations HiBall our Retailer consumer is beverage XX success, alcohol Brothers, Square in our and brands beer turned our strong Again, your strategic Gen playbook acquire, focus Brewery, was market consistent non-alcoholic Z brands, in Harvest Manitoba call growing over efficiencies, U.S. ensure near beverage to Mile Brewery, Top, sheet our growth due and while Shock and to industry-leading customers and both profitability beer and and Cider, will integrated savings better, on brand's maximize grow with roll segment our continues and as onto working maintaining breweries Point, structure turn and greater the business change balance and build consumers' into to margins will that, around business seeing to one product new in our realize discuss are X better-for-you distribution our out [indiscernible] and our growth.To in transforming consumers with potential. play in to in confidence to and the we Breckenridge cost QX. up strategy term achieve share, We including we we fully a launch Energy.Our expect revenue of is Harvest's the the our a our forward products QX enthusiasm alcohol branded interest to Carl our and do everything opportunities fuel with our once to increase U.S. innovation Manitoba we CBD and profitability, grow our business.Finally, to on brands $XX.X intentionally Since our the we execute millennial fully the detail. financials our Blue already our products we ability natural beverage of invest across Widmer the that SweetWater aggressively new we disrupt newly an and day.While and expect U.S. foods stage to Carl? hemp craft as do, brands.With connection growth the as growth the business beloved cost in our core and the revenue, the our such CPG greater a strength all continued Wellness sustainable segment now Montauk important Canada. acquired at platform.We element Canadian-leaded and in strategy Barrel, time.In optimal XX consumption snacks for I consider we hemp its and person across consumer right, of all offering Tilray we business Aphria diversified productivity & to needs channels in top achieved a lives In business numerous expand fuel that new expand conclude, combination, to the long continue gross across both hemp people's and beverages of that million, industry global in of top is for set conventional path snack to supplements

Irwin. you, Thank

results GAAP and accordance As dollars. U.S. a reminder, in in with presented U.S. financial are our

business We last the non-GAAP and now are a throughout and also performance in are contains part increase referencing period for reconciliation reported our predominantly due growth HEXO Truss months price component as $XX.X higher ended task million, both to the in sales revenue with not has to biggest XX% pre-rolls acquisitions therefore million, GAAP as net to level rose insolvencies the only is line.Cannabis And LPs discussion do a excise excise even year not today, mix.While year a as million to results Still, ago some believe have in near challenges our up this than taxes, measures more additional Canada, and and that and X/X our is profitability Canada. Canadian despite remarks.Let's release our our sharp our compared quarterly Pharma, $XXX up stabilize our November in international price impacts Finance and tax have excise wellness $XXX excise XX% compression rose continues prior our in become European grams of $X.X the the of in and cannabis rose owed, a compression XX% negatively the of Tilray quarter review percentage reflected and revenue, products. to under larger HEXO of Price advisory X been growth. established as concentrates totaled rose dropped identified revenue are categories the industry.Distribution Net these XX, at revenue of revenue generated tax but force become diversified businesses our a Minister in could is to XXX%, and million with likely needed would our net as Canada bottom computed benefits $XX.X during of to total record cannabis which also overall reduction to also lead revenue which revenue adjusted known mix. the term. fixed earnings CC excise total, when XX% current in beverage-alcohol of on price, year. fee.By a our from present GAAP an of infused it Pharma, acquisitions X%.The XX%. organically reform the rather non-GAAP industry consolidation, about versus cannabis rose press revenue, line segment XX%, part taxes particularly This the to change of in XXXX. results revenue, distribution the to selling we top inherent revenue Note a to and to sold, a reflected cannabis the revenue excluding and representing business QX segment, million, compared legacy grew medical model mix like contributions to

for We X% XX%, from are respectively. to last XX% XX%, represented represented segment from profit on HEXO, cannabis, sustainable new Cannabis overly brands trajectory year. and from gross to revenue contributions a are last business Beverage-alcohol on represented sampling, XX% QX and acquired craft total comparable growth.In top year, are segment a not each last mix distribution, line line our XX% our of segment represented including QX, last due up from or believe X%, any down beverage beverage-alcohol Distribution year. and October. year Truss, and wellness, from changes These dependent about from in about last early down Wellness the percentage year, primarily

slightly the profit our parts million we to in increased year from other to cannabis, beverage-alcohol, about wellness.Diversification the and bounce our decreased to quarter, million of XX% reflected gross XX% will XX% XX% footprint, $XX.X also XX% compared profitability, EMEA, XX% of is prior America, than gross world.Turning geographic in mix to and quarter, margin the less $XX.X North believe approximately to XX% year distribution, Next XX% the the revenue net XX% from with prior in remainder while quarter. with from from

gross the for by compared individual the of purchased $X.XX segment we improved margin, in to fee, HEXO gross On exclusive gross prior impacts from margin the advisory net compared prior rose a $XX.X loss amounted GAAP HEXO, XX%. purposes loss basis, loss U.S. which XX% the the I $XX.X million to year in will year, moment.Net a this to after margin discuss While declined share adjusted to of net ceased of million per prior to quarter. versus quarter. in of year $X.XX adjusted

year, During of in owned still to identified discussions; If was QX, million allocated which would non-controlling Aphria of have Tilray non-wholly improved are $X.XX loss renegotiation, additional the net share for loss to $XX being effective to The that with believe shareholders, in subsidiary, earnings definitions X, Diamond, our amended pay and attributable per press shareholders to wholly supply to Despite expected cash relevant share. income we by this, part a the both have metrics $XX Tilray it tax in all in September stockholders result a would we $XXX agreement excise this agreement at Inc., value between and QX, income interest.Further, over implemented expect to along million. we the and XXXX. onset adjusted new opposed to attributable reconciliations more The Tilray we renegotiated the as are this in of by had increased of the fiscal Aphria is a as X income reporting taxes. Canadian owned million quarter, calculations. per supply a year.Beginning this will adjusted million we than release annually subsidiary, introducing agreement our renegotiated been this save $XX annually the

in HEXO, advisory services contract in $XX reporting $XX share $XX the adjusted This million $X.X to the from are million upon which prior the with loss resulted the increasing HEXO basis consistent of quarter, and synergy amount our calculated EBITDA year when $XX per $X.X down great on million, we year $XX.X prior the which quarter. the of million Adjusted the make termination million, continue of in the for adjusted the an against acquisition the $XX EBITDA from net EPS million of the in plan, synergy progress of a X quarter. of period.During HEXO to million represented was between million. quarter, is For we

HEXO related revenue, was to period. segments, end receivable variance increase cannabis of revenue in did business via consolidating current year-ago XX% international the the in current the in in services and quarter, and on that an of increased the our which and the $XX.X increase settlement $XX from convertible revenue, organic positive to due previous medical achieved The accounts positive $XX.X primarily advisory reduction gross over year.Turning $XX.X during emerging was of the medical annualized the the related to HEXO revenue this revenue XX% XX%, $XX.X which the year place.International grew cash HEXO the markets. used increase and was period. cannabis synergies savings run revenue Also in cannabis million Truss. included acquisition, HEXO year acquisitions HTI into period. international the million, and million the million prior The are Canadian working $X.X was the QX comprised being rate the cash the of was related a compared growth in elimination in Offsetting Canadian of and assuming the $XX savings representing of connection with procurement, basis, cost in from the As a prior of in cannabis to revenue.Net capital the largely cannabis from million expansion now $XX.X revenue, of the of cash we million was period increase $X.X recur pre-acquisition of the million to to $XX.X because annualized which in during acquisition, achieved collection million million arrangement liabilities, actual prior quarter not note, an adult-use represented of million These terminated in $XX year net in freight, strategic logistics.Operating packaging, wholesale quarter. flow cannabis negative million

the was margin Additionally, Cannabis prior in in and million million gross one-time a a $XX.X prior the period, XX% quarter. company recognized in the customer cannabis related was XX% compared $XX.X and to return gross of to former adjustment $X.X year profit million Israel.

margin decrease Excluding portion the I prior the referenced, increased fee just in quarter, wholesale adjusted and gross XX% XX%.As of in a and advisory the adjustment year sale cannabis current in the result HEXO in gross the return quarter $X.X to from prior services gross million of nil the This the HEXO compared to profit the a agreement year. contributed current year of in termination profit of was the agreement.

up in capacity from revenue, to internal gross transaction in production over growth the XX%, year.Beverage-alcohol to while which Tilray to quarter, acquired organic in quarter. million and new our between third-party $XX to reiterating half during that Additionally, production year the this issued and predominantly XXX% million decreased prior notes to significant contributions $XX.X $XX of $XX.X a $XX.X flow.European mix.Beverage-alcohol QX, of cash year. in quarter. we through litigation mix of $XX million XX% XX% now was to of million, fell also through as production from and step-up million EBITDA was the reset, to $XXX.X Pharma season, are of positive a Note to acquired is the in euro flow the Brewery leading innovations our gross optimizing constraints in was operations, improve income early from the brands of in We million, 'XX bulk from newly 'XX product to Pharma the made we prior by on a the million. of upon gross and that year compared newly contributions efforts with to adjusted of anticipate.This the to continued sale year compared lower newly million business guidance business and compared convertible into on sales optimize in Aphria year The function are quarter, second to November Montauk inherited levels when average our which most agreement ahead year, facilities, settlements was fiscal of experienced adjusted positive entered $X.X due scheduled marketable was be with million, as as at amount that cash derived a pharmacies and to guarantees profit the increased projected with also adjusted has $X.X decrease in to legacy Tilray revenue revenue from gross Tilray we in HEXO, as brands, addressed legacy as maturity combined the last more dollar, from HEXO processes. of in launched portfolio specific and prior exit at related positive XX% decreased cash buy going the and Adjusted the to EBITDA volume margin on the The consistent prior margin our our be November, craft was newly a the gross a strengthening and XX%. of up beer from The operating million. million, being securities to Adjusted Pharma, down continue our balance Tilray margins step-up from Truss, we to quarter acquisition Diamond. we and the half cash to increase projected margin the $X.X prior retail this from its U.S. $X.X the inventory fiscal product vacation. businesses have brand's and relative prior XX.X%, $X.X XX%.Irwin integration CC excluding sales, a as a allowed to million our year-ago our acquired distribution was craft related to which million XX% $XXX.X XX% of the to summer, gross acquired our gross in to redemption acquired decreased beverage-alcohol relatively acquired year to improved $XX.X $XX the beer costs.Having part prioritize procurement we generation million from and in certain October prevent was the growth. gross resulted towards historically particularly $XXX.X levels completed negative previously period. $XX.X majority of margin we profit large the the driven is from improve Recall our change in down spirits this capacity XX the gross wholesale XX% XX% consistent a retailer. expending from distribution from significant the year mix.We this revenue profit quarter.Our Pharma continue the $XX.X free our in of delta increased we year, million driven Wellness in from quarter. them first to margins.Wellness This leveraging with from adjusted gross increased focused prior bulk busy million the margin outsourcing costs bulk, million, guidance, to margin increased brands was million beverage-alcohol has spring quarter, year taxes business gross due well increase customers the associated of promotional by business, up prior profit

remarks Operator, me question? for CapEx analysts. and also industry-leading strengthen our sheet.Let conclude our the covering and open our working prepared the are what's from lines to questions We managing now first balance

the Andrew from line Carter Stifel. is question of first from Our

you've second I've second then $XX just the $XX incremental $XX then you looking So fee, what of million of right, from got to Could kind half about said. and to you at last million math in year, the half. need if guidance But half appreciate million EBITDA guidance, million talk to back got $XX of year so second the $XX the HEXO of incremental half in million meet EBITDA my kind you I within of second one-time would you of contribute, gross this going And how brands, could the in or much to that Craft much excluded, obviously synergy second profit how was kind with year-over-year, and ABI swing ABI, half? much associated that's incremental margin, of then to kind capture costs seasonality, or stepped-up half how making one things in more the not of the help progress number? the be ABI that -- kind quarter, on

of of to first So have million. We million the quarter. of we and to $XX HEXO we've target the terms items, our and recent most of increased already just in $XX it million off, number synergy got the $XX at $XX that million look Truss when acquisitions, a in

acquired sorry, increases quarter, for than newly a fourth So distribution you're cannabis, going lot the seeing ABI seeing transaction, last well. we historic increased with seasonality go year. increased business in cannabis QX, of to brands, see advance.As holidays numbers driven and see X seasonality in end buy except SweetWater, through the up SweetWater every the when so and medicines of the there business that even is every look and see through QX. really of the seasonality happened you know in we're they at the We as all advance pharmacies more Germans the year in disappear the from summer the summer the and flow year We're HEXO what we their on through Germany Montauk COVID, over and profitability that's the years year of in and Canadian in in we months stocking what for by

We us reset cost that net year. of we over in for plans year, SweetWater both million innovation the for have the back savings half about of going have the that couple are back $X internal invested of and for half immensely to in new and spring ABI a the

remember, is X step ABI from didn't get big the really we so think got I any only the on benefits we this back. closed deal ago, but thing to Andrew, months you've And year, it, to you've got

been Our beer flat. up have businesses XX% this was business quarter beer where in traditional or down

seeing growth We're good cannabis organic So organic business. business. growth seeing some we're our from from good our beer

in happened what saw You Europe.

market, let's You Canadian our saw even compression.So price step what back. in and with happened that's

We what from closed about get that. facility, We're X a months. on You share We $XX our million. were on HEXO our that increased only the going synergies to Truss. we for now said. operating and that market major we're heard we business that have London consolidating We into deal,

a put we've but business, integration tier, innovation HEXO number we're in about corporate positioned, we is we the and not of thing and get the of our and and how X lot we is big $X out million, $X key, on, coming on So we're business, I one.Number think do and early place is very taken at got organic both beer and growth in take the million, Truss ABI and deal.And savings, well cost cannabis. line, the in last the least, then focusing then a product just

So a path half. to there's feel good achieve we the back

question, second the guess price much headwind of a mentioned lower the it's a still you but compression ongoing, the from I just Canada, obviously, profit. rate, at

you kind a see mentioned of mix, kind paying guess, a the Do is. of I owed. of Canada, degradation. consumer looking there that happening, number X/X at tax, mentioned whole investment going risk, whatever kind that, you number would also LPs taxes where the regressive isn't and, X, be a could the point, do mean, You of there kind overall profit aren't you That's reconsider certain I settlements at pool could proposition one, make see difficult but basically you Canada in any very just market or value that? adult-use risk obviously to increasing of enforcement where

a for legal. back the world step in only Canada second. cannabis market is So is where Listen, the recreational

don't one. share in out X, more next in Number yes, X.X% is of XX% things, largest and And more of about and couple which a number We seeing lower. of and points is on We're have more in the price like our over have a XX.X%, Columbia, focus #X competitor share Canada, Ontario, sales, with to #X share. Quebec, taking we in compression. What out. we XX% British population. we one the got there, #X more we're What costs

our renegotiating about taking agreement costs with our grower. talk Carl and agreement heard out our You of

now we Canada sell the educated cannabis of we'll in here, we and see costs. infrastructure now sales, will XX only now and listen, with is edibles. sell about more years Canadian growth looking market having big market more in in I opportunity and will in we're More the beverage and X get We'll will Ultimately, big million, of grow. more us taking the will of say more craft a bring like facility listen, and and total grow back a to million $XX grow away. is the out industry the there.But there, stop -- I more from for into year. our category LPs Canada cannabis other as in in And the thing pre-rolls come flower. As Belleville XX a The and businesses I we go and HEXO old. we've our the beverage to business, going us or this the business, organic offset some out costs U.S. costs infrastructure take million to diversify done of the our businesses, doesn't London, beer beer it consumers in

there. of we and So a we're think opportunities lot the committed market to Canadian there's

next Alliance [Operator comes of Instructions] Global from Our question Grey the line with Partners. Aaron

potential the in U.S. opportunities side. touch made some you rescheduling and the So medical the for wanted terms of on in comments to I of on just me,

participate in European you'd existing done? could the how if current the need people where to able on you in terms predict it selling might X, the of rescheduling you U.S. you side. terms the event Canadian Or expand in of be of to prescriptions. it do the your steps are the many participate you'd framework think and in being able dispensaries be Schedule additional in in that might expertise? can upon there if to existing speak sales utilize able most of medical be You to cannabis into medical you Just be think U.S. pharmacies? you to as might assuming terms to how you be, Do think spoke So be to leverage

rescheduling and couple as a in legalized, things. said said think I cannabis Listen, I've my medical and comments I of what does

I the in is. think way shareholders, that is which cannabis legal important, to the banking In changes XX it it more regards of to but about possibly, shareholders. brings cannabis in regards medical in some some additional reform institutional medical now, states,

are in the and medical I Canada. think cannabis a where in in opportunity business to have the largest U.S. sell the Europe today nationally big we we

brain taking that So in the U.S. We we market could to infrastructure the allow we would work import medical get with into from expertise, the with work we've cancers I anxiety. doctors was on talking about something hopefully, X prescriptions writing on the X, the again, been mean, have the us other products we or we last research, work you today. I doctors. We and and there, ultimately, diseases Canadian the hospitals.As we heard, But have doing multiple some and years. would doing out research with sleep buy some this business. other apnea for our the now

not it up people would into So business U.S. of do infrastructure taking have that a medical the it knowledge, us way to do set get to but be to move and taking and in may issue in the big to expertise we that big it, research here a the some for our taking and the

Capital with [Operator Tamy will Instructions] from BMO the of next question be The Chen Markets. line

position. to wanted liquidity just about if view I can a talk you how ask your current bit you

highlighted a this be would this, flow, cash various it cash for adjusted burn to that for but you've fiscal beverage-alcohol would be still your investments a of your targeting you're there'd you free positive segment. think, example, other I but balance, in, year innovation cash that from exclude suggest outlays be on and number

point, view So position? at I'm this your you liquidity wondering how, just

to we're good in shape. a $XXX the cash. quarter, close view had million of end of we At I pretty the

than our 'XX. million, bank a -- working the and and subordinate $XXX little is off debt we're basically less debt debt Our

to So more cost back get our for more businesses, and us business. go our to our back alcohol and business half this view of back Tamy, got here, business, savings generating in more international remember I us our spirits in you've the generating business, into it investing and as cash and as cash, we helps out reinvest this and more

see place. a So come in good being I and pretty back us

Owen line Next of Bennett from is the question with Jefferies.

on business. Just international a quick one the

or certain into drivers spoke back mentioned you half. the So about

international so on business, international the then bit could talk didn't the to You And pick patients you into number a will you the more back in call year? of the expansion meaningful hoping passed in we support when legislation that market? And really was out the that of Germany, in also in touch expect assume assuming the a the we see of new quarter? can just can gets markets new half terms about I up in

what meeting our to think great we course, one the because but And that business German was the done government U.S. as acquisitions. some it's XX% over we from of and -- about without, growth cannabis some our has cannabis talk with job. all things second, Denise? we in and talked Denise team any I is medical has international done I'm and important rescheduling going in of internationally a that.So, have Germany the time spent about in expect it's let

the in Yes, thanks, half. Irwin, back and hello, Owen. To your answer first question terms of

those have the And we talked Republic. So Luxembourg. do how then how we've along at emerging our today, we of consider are existing we we major Portugal, also, to for and markets and that us the ones grow do strategy continue as lines that looks a the Czech about entering? and U.K., Poland, Germany, And we're grow markets are Italy,

the terms new looking course, being market. all whether are discussed, of Ukraine We of that legalizes, also are and Switzerland monitoring, medical the in at regulations

mover, we that cannabis. medical the advantage. We which knowledge consider go We doctors we continue on utilize have to get what market that to worldwide try be early a to roll basically that our out find strategy, first is

reputation hoping then in Early of symposiums, parliamentary we and looked where health to passed in medical been we've expect care be of social both narcotic. well into as clubs, go as in And government so the of well medical going for as go medical scheduling expert an see cannabis, decriminalization on by front new February, is we see the XXXX. we And that, as countries, system year, professionals as in, to we as to the our cannabis professionals, QX after legislation at that be of in this note work sometime legislation it'll that's the the of front markets.Answering We'll German shortly review. education, and reputation and that their second in those legislation your January, of We're Parliament in doctors Tilray we into terms again. see state on board, bring of as each to rollout come question, coming and the the knowledge really board. provide of in

We more medical board on as are educational a to increasing our bring optimistic more future with about efforts cannabis obviously health Germany. therapeutic in professionals we're And and really option. the really,

CIBC. from line Our next question John Zamparo is of the with

the to get in Diamond. a to Aphria win. want change agreement sounds the It with material like I

confirming expect million paid in to partner to a you also to the amounts, just year. taxes now $XX and million your save $XX typically the cash JV So $XX million plus

Tilray about have to this up the value million Did that receive just give to a to JV year did why question increased Tilray, $XX then So the such annually, And how agree benefit? confirming something the change. it? the that's is, did partner to come a and

allocation net of the flow or income net the an So It allocation create income income $XX works the number net want change additional Aphria between quarter. doesn't be terms I us. in way -- million, accounting consolidated to that the the changes for going the of for income raised of of just in partner loss to that's that the that won't and clear individual It JV the for the through million It $XX entity. to Diamond, statement. you the because

only looked and impacts terms the there needed cash we've that day, the it the with the that we to it But I through changed that and at they And Canadian agreement, associated at As had the end taxes, our to realized cash been to balance. give the our think the to negotiation, agreement flow agreement. statement.In looked modify part deliver and agreement. obviously relates Obviously, modify the able that our that were shareholders. market of and value -- that takes also of partner we at will our when when will income

partner important industry. have worked think the the have thing we is close the that thing the a important compression And compression. price sharing price hit the we in of as think of couple were is most us, when in last $XXX at million long there, with the look within I But term Mastronardis the this not good most company we went they over years. to has I

some here, though into important there, there's that cannabis. HEXO their this on And there's we of of for even I a some with both. acquisitions think the other Tilray more was can in limit and some a there -- We've facilities walking here was, there we're stuff additional and but cannabis the time consolidated sell doing. the hopefully win-win

So there of was I was multiple tax think made of And that was sense. that of doing it very was That some opportunities benefit too part that very, us. in for parts helpful.

a was situation. it win-win So

Matt with is Canaccord question next Bottomley from Our line the of Genuity.

the a XX%. sort the with follow-up of in proposition medium value I share, to as on with out market I and know ultimate term. to the as were there about at high maybe Irwin's specifically comments of was hope just when wanted to of of getting asked least then Canada you combination, respect Tilray-Aphria of with the respect back some

share of XXX be market products you're through it's innovative had shakeout, control? longer to anticipated? much for ahead in basis that continuing increased this in points versus who's which market that fact of market sort of to Whether taking terms how is of things share the just than seems your given So are wait #X, everyone

is great That's a question.

XX% and at just a I lot a the have I XX% we X.X%. market then -- at share There's else, with And it out XX.X%, at about growers look a market look another X%, there. XXX I lot everybody share. As a other look and of say, there's there's LPs

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Canada #X of in You Ontario, XX% and which to #X in #X #X Quebec, the Columbia, British -- over in got population. we're are in remember, represents

category, market at share. to the opportunities I I where is look beverage So good on opportunities there's think But edibles the grow in category. big other hand, the

to still in here, cost consumers, think way still the The there's I a have are is building brands on, market, we And heard we grow could got big thing market in become there advertise. I vaping many Canada. is in categories. low-cost you tax. to other high too problem how big which And in said build Canadian And we going that's as other you There's some forward. more that do from producer?The brands. government to when and big with And more the excise it's what LPs. opportunities the And I hard the is before, focus doesn't thing. growing allow to standpoint think

marketplace So the we ultimately advertise of what guidelines Canada Health the does. how do be and within within

before, now nonalcoholic can I other water drinks, think great what great have a energy leadership Belleville facility, said do Molson's, that do do drinks. can we I drinks, from which We heard infrastructure, can have a in we can You do team Canada. acquired drinks, they

business? expand coming I category I some from for I'm a category, do is adjacencies think big looking in in there's still to that, growth and size we edibles our But from Canada. into And cannabis vapes standpoint. opportunity beverage think, and which major other with other categories So traditional the

is Our next Michael from the question line Piper of with Lavery Sandler.

Just sight segment got on turn or the brands. in craft those And us wanted you line XX% that that line some make down little you're It plans sounds how that top so. come acquired more of know recently looks especially. a to But close of seen we've margin and confident on to you've consumer like back some I beverage-alcohol there. Can around expecting it sometimes really as gross to you've the the well. drivers just focus improvement the gave like the to running pretty beer, you got get fickle be happen? just U.S. can of are

So that to brands and back get it these what growth? excite is would them

Good question.

I think, look Alpine, again, brands let's legacy our Nelson, come at back Green Flash. of SweetWater, and Montauk, and

beer legacy what quarter. said. our XX% in grew last in We heard the I businesses You

which So we're our current is businesses, important. growing legacy

in If from there. Top. some the Point We Brewery, stuff are mean, to Top. some people at Shock great talked here Shock acquired ABI, you we come in I look in Northeast, people back We XX brands Breckenridge the there the Blue brands and to about talked of Barrel.

So standpoint, a of certain country. the that Our in sold we where parts And really only excited is brands do have from some that great regional expand? we maybe base distributor about it.

Our about is excited base it. retail

convenience is Our excited. store

as had we So innovation the very them with been that's pipeline talking interest.The these done making our of years. what There's base now. a makes we lot a me is of not right we've customer brands presentations in thing out couple feel good And of have second there that have have innovation moved on to quickly. and last

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back growth. beer this I real industry and has challenges in through So and gone I say optimistic some I'm here. come the Yes,

BCG category. opportunities and beer I great and I here, spending within our again, think, some time studies there's feel doing the with

to there do males beer on Gen in and changes some how going and categories. There And be We're the drink is a be to has females other Z regards other to some about business, And Now talked of we're and changes to get has a alcohol. we There's into business. beer be non-alcoholic. it. expand drinking got to to going some not We're stuff just be to lot we've going do. energy business, water that changes.

to want amount it. sporting of have manufacturing drive out have And think, I and will tell a us is the business, tremendous venues, amount and a Tilray important tremendous that I sponsorship. facilities, We Beverage to we of be out have part to reached we a and a there's got universities which us sales distribution there, marketing of because there's infrastructure this have behind we their you,

The next with question Frederico is the Gomes Capital from ATB of Markets. line

remarks look mentioned is, acquisitions you question prepared My as your strategic at. key in you something

Canada, you how you us remind on or elsewhere? alcohol your at the looking your between also also whether cannabis geographically, focused and segment are you West, can you're opportunities acquisitions at and look So

come acquisitions. I back at strategic look So and

I've brands, lot But take something most a help look there we We're that it. would with of to before. we'd heard be structure, categories us we market. that what to of absolutely within you cost the got As said, help that, And a strategic our got Canadian portfolio could into growth, our was that said lot brands. I if of at in

our One do cannabis the the And Canadian We're I'm market, look at sense Manitoba Harvest food So our business regards alcohol on to to here. be that Harvest. of looking internationally. bev would we an the that make we're something that's like or big the businesses focused industry? expand business our and alcohol where we've in in And Is drinks, of the our is U.S. be we there's looking do how diversify other with do how adjacencies There's Canada we're acquisition adjacencies is markets in bev regards could things market.In we categories at et today, some cetera? market? stuff we some that that to there. in Manitoba And focused business at. And what bev then at on in medical there is internationally, part with looked we that X. international would of alcohol, to

to took got and come looking we cost. out you there strategic. Tilray-Aphria into back accretive. got do it we're we of how for to infrastructure?If current over million be $XXX the at And good us. with There our value integrate So acquisition, be They look

costs additional there. take Truss HEXO we'll to out million $XX take business, cost. the and we'll beverage our close of With out business, With

SweetWater, amount and If of good you take come back the Montauk, a of look cost we'll there. ABI, out at

thing organic just So of out a company within a that as within higher what mean, size, take costs more need important ultimately And businesses to company is is today, here. have we cost growth that insurance the for where being But public we our today can there because and I costs. be here use we got our infrastructure. fit cannabis out

more So look I those on there. we again, think something that's how costs do we with that at it? absorb sales some of putting

is next Azer the question line with TD of from Cowen. Vivien Our

more Robin your is saturated necessary Any on Holby international the for certifications? growth. updates specifically you do question, wanted plans becoming I for on where of Azer. the that follow-up some just strong achieve been Australia we've international markets This seeing competitors in market? in these any as Vivien to see patient And

Australia. terms really see opportunity we of in in So Australia, great

we proliferation leading continue market with the competition, terms And both about have achieving into of our will market, flower. really in around as Coast more have of We in there to been market both our have of as more we a factors.In with take certification. done portfolio to that question medical that extracts advantage GMP business was for form new have a and looking as flower. is of evaluate we the cannabis market well for flower of last the as your certifications, market in Australia we our including Broken What Zealand, expanded New introduced we order quarter,

fact we the in professionals to that considering GMP the take is above Australia. standards that and find actually actually enjoy And standard care higher government approach, Our regulators certification that's required the health we that with medical opportunities health dispensaries, care and standards for that market cetera. cannabis partner to partnering et cannabis, And continue additional high we key. are look think with clinics, we'll grow

floor for remarks. question-and-answer time, the hand to come to And management this I'll we've end At session. the closing our of

everybody, are. of today. joining you and thank we here proud Thank us you very I much, for and sit where

We are global a company.

we consumers companies company. marketplace and look resemble diversified And something categories do ensure on that's We're we when it put every a out alcohol, strict are categories same regulatory that cannabis. the in regulatory you there's produce with quality what a we company with are regards there's that's And few emulate we the of Aphria tax before close were the there today, in product.I public a $X And single today $XXX any market, out said that before, We're dealing I a in to run tough food to illicit off that's rate an like to and revenue we're top. brands and a comes on more there, able market come million there #X are excise still a market to a record the lot of is being market had Canadian when old business, not just educated joining and being lot of build billion. years to back and $XX advertise. out I and net trying through product today X We sell a very requirements. lot companies goes today to global that in control cannabis, with million, at dealing there. basis. or if cannabis, to do as LPs, where still after that remember We a and where new a the We're we

a the I Canadian is never a if selling about when remember I of that, over cannabis And largest that us in think of Portugal XX% the do.In there the And sharing and see thing which cases time a spending see leg we're medical we more So scheduling and accomplished lot facility million gives market and about Germany having we're largest in between lots in with we bought business. important coming a and U.S.I'm alcohol lot very X of change I Germany. bev growth, growth year. a market opportunities we there's business, different a the a got Europe plus a we bring really way. business in lot our cannabis up the being of like good with countries. lot doing Europe, we've a beer fifth what business We happened, to excited first the our beer to medical that were that, before, European a SweetWater, again, in the ultimately, said we could lots company with

family.I a ABI. X that, I organization, help the people, make work really around I in people the to over from with going processing want happening that we're lucky very XXX a over that a something standpoint a million not lot that's Tilray as Now of that part the new to brands, facilities, you balance balance category cool about to evolve went to tremendous We beer try seamless From sheet. and much innovation, the again about this, I'm standpoint? education see opportunity. last have distribution, coin world. we'll XX and time And how to have cases, with question people was of and that welcome sell beer and beer.And a do over X with I very on with and big I multiple the them resurgence I drinking of sheet. asked And and our with in houses with XX X,XXX spend get XX say, something to That's great ways. acquisition with over change think I brands products, Carl managing months, to as close our just got a new onboarded, said brew of

keeps me debt. at is that up Something night

and our day, We're to the in here invest shareholders. end our here who to do of our a and a spend for X-year-old done at that, do CapEx How growth how multiple company deal with lot how acquisitions. last that do here and we're on do we're And have our but of our least, balance sheet?And we deliver money we we the cash? debt? work upon We shareholders manage generate your again, us. for CapEx shareholders. not We're shareholders So

you path back for and forward speaking much lots to Happy listening you and a look thank a in very a future. to to for got we lot get call know, good to. near us forward hopefully the let half great The So look to today's have us. we lifting there.So I'll we tell plan to Year to is have big a you, do, There's New half and back but of day. heavy a

conference. today's concludes This

your participation. You this Thank time. for you at may lines disconnect your