TLRY Tilray

Irwin Simon Chairman and CEO
Carl Merton CFO
Berrin Noorata Chief Corporate Affairs Officer
Owen Bennett Jefferies
Vivien Azer Cowen
Andrew Carter Stifel
John Zamparo CIBC
Rupesh Parikh Oppenheimer
Tamy Chen BMO Capital Markets
Aaron Grey Alliance Global Partners
Michael Lavery Piper Sandler
Call transcript
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Good morning, everyone. Thank you for joining us to discuss Tilray, Inc.’s Financial Results for the 2021 Fiscal Year and Fourth Quarter Ended May 31, 2021.

Joining me on today’s call are Irwin Simon, Chairman and Chief Executive Officer; Carl Merton, Chief Financial Officer; and Berrin Noorata, Chief Corporate Affairs Officer. All lines have been placed on mute to prevent any background noise. [Operator Instructions] Ms. Noorata.

conference. the begin may You

Berrin Noorata

the Thank investors. refer you, access Investors everyone have which useful call, filed By of Form provide Commission X-K. can On various good the earnings non-GAAP morning. today’s with and to the will website now, and release Exchange Tilray’s on also should we at and for Securities to available section measures, information on financial

These or press to However, financial a of are current our the accordance information remember non-GAAP in this during the considered information based substitute as presentation a accordance most GAAP. isolation financial measure is each statements. not comparable that for measure be may prepared with in intended statements to the GAAP. we this on release of please presented Also, reconciliation call, in with Today’s contains earnings forward-looking make expectations the could described and may the known be earnings on which today involve Please Irwin statements. call to incorrect. texts I’d to unknown to materially the release uncertainties, and uncertainties and note forward-looking in differ and issued And for like turn discussions with risks beliefs Simon. now, these forward-looking and and Chairman press CEO, Tilray’s Actual over from results prove in statements. associated those our such risks

Irwin Simon

at key we a with strategy space; revenue legalization of be partnerships wellness a ability opportunity, execute size I team global International of just progress together, with course, us we cannabis believe plan date, building and fiscal reiterate our as legalization of take us weeks Today, will appreciate that When the effectiveness to trends based our post-merger fourth us business by we for had we our strategies never front last the largest in potential roadmap December vision sustaining in ahead U.S.; of $X operational management stronger. Tilray, three four of and full Aphria we acquisition, packaged in weeks the growth to consumer consumer joining strategic we that acquisitive This consist pre-merger billion members backed you our us, the value of months world’s markets: ensure realize cannabis leading The the detail opportunities XXXX six in business a the company. cannabis team the benefits the cannabis-focused outline conviction reaffirm very company. the you to committed that business to optimistic organic, discuss last the on industry. track and the have goods We leading of and branded and strong were as made good the and XX of passionate want opportunities record Canada, packaged year, Berrin, and level consumer of will announced a much, towards new the new combination recent of combination, world’s group market and that call of quarter everyone. clear and legacy opportunities of to building U.S., Thank our the been bet, in importantly financial our XXXX. goods on we Tilray. as outset, to importantly well-defined by just morning, and inaugural strategic create of in in affirmed as both, the of Tilray, have has which our the sheer results, the and was

our open well, acquired store integration, remain and and throughout combination further knows closed fact highest of at Beyond helping million crisis fiscal results, managed And more XX $XXX financing pivot, perseverance versus what that progress level. they closure closures consider on validation year months. million the over the helping general have COVID we made team the We extremely last in facilities We new us more the our in retail the million of $XXX with this discuss get will cash execute a and $XX meaningful lends the immediately impact, cost we the year. last ensure more measures, bank We yet $XXX during detail. over to SweetWater, we million and a XXXX. lost $XXX I as last and to Tilray-Aphria the announced well in million than $XX result EBITDA achieved ended six implemented on ultimately of revenue credit, term COVID cash how than equivalents debt build of months, in and itself to in million a saving as

of market The throughout favorable cannabis the variety playbook thesis today’s of our consider backed a is at quality the amid team and into benefits about we acquisition SweetWater ‘XX, Tilray that Aphria standards with simply, of personal brand and and all fiscal is with It’s with to to wellness is me presentation, products, excellence stringent these and should industries, scale share. built business we Tilray, winner. and the the it a same. change only foster during get disruption, So, instill and and product to market to sought a of foods, done. trial, it combination brands, here other consumers products put To the and a cannabis resources cannabis educating of beverage, natural and achievements combination increasingly loyalty iconic them Tilray in reach of Aphria, care and behind business company healthy hands is and and that company Prior my and the essentially conditions. year today scale, having building grow Tilray-Aphria and great encourage distribution necessary our after about consumers’ integration health alcohol our unprecedented get by organics, strengths here leadership new and CPG in road as the ahead, accelerate highlight confidence CPG team

scale by strong, integration together, to the a market. XX% provide attributes substantial build product a acquisitive ultimately opportunities growth, clearly line of a cannabis, that planning product possesses with competitive growing one. key for sheet, as our these is one of current flexible industry XX% nascent, XXXX. attributes leadership to Geographic growth getting sales and advantage, scale. built to meaningful deliver with emerge These and broadest and offerings capital. I’ll to Our in legalization; on start upon Strengthening we consolidator industry footprint and as curated scale; and as goods industry’s differentiators. a share basis. consumer are a this will should ability could free retail shareholders. in footprint distinct accelerate of our scale, to and carefully robust Tilray by the footprint portfolio EBITDA This international year and in and our and geographic flow balance products cash synergies. access Geographic operational strengthen accelerates. to five market cannabis foundation platform and footprint both number us immediately partnerships the be a complete is and opportunities; competitive goal essential the around Canada the other a Canada. like brands; position rapidly a This U.S. companies In leveraged business is so Regardless backed balances as fiscal in us value LP with operational and now total that be Canadian tremendous leadership positions in complement and from for our especially item position cash Canada The of combined grow in effort plan legalization operational long-term at organic packaged consolidated Canada, with cannabis here to look but geographic sustainable a coming

has consumers in several beverages. boards edibles boards with with in has power country being partners, inroads while New real high fact, partnerships by strains products equity, and and in putting portfolios Aphria portfolio, legacy to the nicely Strategic us fit has retailer enabled across and on been the both Tilray potency strengthen brands. stronger brand Aphria relationship products that vapes legacy strong complementary making have flower addition began the overall that to into in are Tilray historically partners. together flower, we pre-rolls, trusted strong of our and retail X.X and two that provincial have provincial

budtenders drive We and for education will our and drive continue Canadian to brand growth absolute portfolio. platforms will loyalty to consumers the strategies market. create to merchandising of these in Both

Canada. the end store over stores We of believe X,XXX as there are Additional X,XXX as by calendar could market in many year growing the warrant XXXX. demand this To openings. point currently

retail spring course, of improve lifting efforts with course of the retail XXXX. the impacted since likely performance commensurate Of will and COVID which restrictions, this materially

But processing accident. fact that the a will Canadian happen low did this benefit producer by not cultivation already Our from facilities. with state-of-art cost further business we’re the manufacturing

how the costs of cost created In gain fact, and the further from structures work we the now, the additional beginning, our we efficiencies careful increase about we so organization. margins. pulling structure, within accelerating we out can on are our that And were

brands, number will one model will in Aphria had footprints of was the OCS an a in heavily also has this data, standpoint, capabilities one continues to as now brands legacy-Tilray Further, be and share across We be great edibles, the number our concentrates, segments Based X.X consolidation be Innovation equity. brand and invested product asset-light From Canada. view on and within market strong sales across ability in all a Ontario. While in hallmark generally asset-light, with the Tilray leverage Tilray also now market Quebec. with share a Cannabis drinks. combination. to our

While that wellness demand centered for is high for products promote Canadian the quality medical, and wellbeing. new, and our health, large focus growing on cannabis

brand was and medical broader cannabinoid Tilray price which better new spectrum complements to of products. point. all portfolio unique This ratios Coast and developed at existing recently formats launched our we a example, brand For medical of Aphria, provide Broken Symbios a

and medical full allows for pre-rolls products, assortment oils health a flower, comprehensive regimen. addition, of wellness their In it patients including

to the lot by facility. joint within regulating Aphria quality potency of Canada when introduced also market facilities We’ll high continue target meet Leamington potency our Tilray’s production disease into skin. we Also to the designated improving applied and tissue move under inflammation We focus consolidate product topicals inflammatory to demand. the on a and medical brand, to topically

know, restricts you to cannabis how As marketed brands consumers. currently be can Canada

is to also paramount, about certain of consumers While the educate crucial to is and it and communicate cannabis. product products benefits our safety

Ontario Ontario During in-store had online platform kept social or other work that on retailers and stores limits these in media we capacity with alone noted picked in driving their control the to had as able those e-commerce and to not our recently ordered British has do Columbia, up stores a and COVID Alberta And different mid-June, go awareness, use the could of never now people just begun in to to curbside. with there opened that and because at stores pandemic, since provinces customers to into until brand deal were opened in board or This ago, and across over focus were to help have June. change, delivery. in as moment doors many only curbside XXX-plus

Although that sales. not help ending quarter fiscal of May course, our did

And they months, past were so, are In Most searching were online. price the words, organized product, six for customers looking more websites other for than when marketing. by the mattered price. of

price-based we’re by now environmentally and However, away matter, when budtenders, the more will characterized brands can store, from shift purchases interact as pent-up customers can with will confident demand. occur impulse resume consumers and and inside purchase cannabis

that in advertisers safety term. medium tend is quality we innovative products Finally, And effective, effort. the Educating is advertising of essential. our our the truest and in consumers critical a be that of sense about to

allow we have our and to other authorities growth. therefore working the effective strategy with to ready regulated have more appropriate of that go. been Accelerating similar is industries, advertising, a forms to marketing International We

comes. network growth availability could medical powerful Tilray, taken a ready consistent all very end-to-end GMP European our The they’re Union, two a to European these cannabis and market alone. a chain. supply and distribution for and and quality for we access Again, leverages cannabis brands, international time also our us attributes be strategy medical meaningful for have are European expected from our presence, legalization $X medical high where and Union when adult-use business billion from growth together, Our Germany We’ll large represents patients. standpoint to already strong unique increase the in be to

access that the to size our presence global With people, is the U.S., the have Our tariff-free grow basis. with greatest with potential XXX to brands us already the that a on population at Portugal EU twice the twice in of the production EU. in possessing million provides us Canada. a low-cost nearly We allows facility of Germany

quarters. while Germany, is a benefits were positively first already we’ve Among cost the We our were fiscal in quarter, product our and the and Pharma, facility and Those in is also part will $XX it that articulated. production ability in to end had doing GMP to negatively flow is place pharmacies. synergies And fourth consumer move to medical we’re the of the side. our have distribute in a have on certified of to that chain cultivation are CC clear, up from subsidiary momentum but XX,XXX so, is Canada, transaction. business distribution To results million which no synergies and be business state-of-the-art taking Germany similar and recent Europe EU Portugal transaction impacted by our through the the fiscal a of quarter Germany with overall will only lockdown now the This not confident revenue as in business value of return. reopening, in many impact CC Pharma tail combination the part our

Another X in plans the key results the a purchase in U.S. nearly difference for and factor times Canada generally is medically Europe more reimbursement. which EU pharmaceutically is and than focused our in that

on so, first in per completed on think well. markets high-quality, distribution the we the domestic highest reimbursement subsidiary German We play same the dependence we cannabis ongoing this will expanded cultivate an the the basis our we’ve quality increase RX the cannabis time European legalization are markets These that its medical in capita to met Italy, This and track medical and pandemic, an certified with we our expanding a Early that in to to France, while production cannabis, are GMP full Netherlands as think have EU wholly-owned healthcare as access to granting cannabis role patients’ other Moreover, in platform on first of licensed of the ensuring needs Germany. U.S. the that Aphria medical of pharmacies. producer UK, at in likely models. harvest of supplies. focused global medical harvest before despite on parts reimbursement indispensable imported continent are to Germany Other reducing to see And those Poland, more Israel. patients are successful the challenges milestone where and our month, countries consumption And are trustworthy products cultivated important professionals and German for Germany. represents and remain

have Finally, see also a a we opportunities in already eventually in where different presence see goods and oils consumer legalization South in America, into China a and should Enhance U.S. we where CBD have the shipped greater infrastructure. medicines. used foothold Colombia, from opportunities. packaged We’ve medical THC standpoint. India, of is some some We lot already into Argentina,

related so of $XXX infrastructure and product beverages the enormous Broken Manitoba in SweetWater largest across they through entered With and line and expanding compete leading recently IPA, around mix. we businesses by are cross systems beers strong million collaboration Hazy, CBD last in awareness well the is the extension CBD consumer SweetWater, In of vodka strategic wellness just and in already. to from to and these build access distribution partnered foods drinks, opportunities. juicy brand BC U.S. months, for with a and positioned craft we launch this greater Canadian U.S. profile month, points introduction U.S. into a off-premise presence with foresee, by branded also brands seltzer with we’re brand can Lager, parlay leading which goods XXth Oasis, Tilray Senator re-leveraging legalization, milestone quite to boost introducing Broken in lifestyle plus and to great other Here We And in consumers with the strong U.S., sales with the drinks, legislation, cannabis intend and as into ideally refreshing up the and products within in us pillars. cannabis be through connect brands to Harvest our XX brands Schumer’s next We for doing first cannabis SweetWater, and Both received our portfolio. of distribution potential event Coast to XX and will a doing stores over and XX,XXX profitable a have a and craft Canadian Coast other THC will the market to growth. federal brands other proposed and high time event cannabis pioneer with Today, on-premise Tilray’s the X,XXX nation follow packaged is U.S., which mainstream adjacencies. North brewer brand, brand hemp, America. a CBD states, are and the and our which two

working to can increasing also for opportunities with states. in We’re SweetWater’s wine currently in an spritzer the tequila three wine mixes, et mixes, cetera, distribution SweetWater while CBD, near-term the additional

also like sales, Let quarter were on-premise and bars me itself, had that closed as a restaurants say capacity. lot full for during many of breweries, plan other below craft SweetWater, the operating

did pick their as business or we products. of lot Although of expanded consumers retail up bought line a

have business are of have year-over-year. As and improved conditions sales up the rebounded quarter, since end on-premise XX% the

we’re acquisitions cannabis is legalization. Turning strategic fine-tuning opportunities and now expanding partnership looking world strategic at now business. Substantial a that Harvest, opportunities, federal as and our to to position complement the great including we synergies. this planning ourselves Manitoba And adjacencies for

synergies been said, months, Key announced XX but When opportunity approximately months combination. of we are of plan have the a will great first a million already said go work since we XX $XX synergies within by I’ve business entities up. over deliver getting we several lot the two more areas within cultivation, our to corporate production, fully As these marketing pre-tax cost achieving lot we that team integrated. annual moved and cannabis and of transaction, which sales, the towards of products done There’s months, expenses. hard purchasing,

$XX So far, already synergies. achieved in we have million

bit will I US$XX little Notably, the know a covered Tilray. and ground to within vote remind our to moving I for results. that new we have ahead also the internal but our our million for today, can excitement do the authorized reflect conclusion, ahead are continuously proposals. enthusiasm the synergies want positive what first, drive still know as plan, possible expressed our I’ve Carl of synergies on encourage hopefully, that but But flow we’re of my revenue In of telephone and lot not by review cost before, So, within reach. we lies a this I cash Tilray. that so and said shareholders along, our governance any are also things new and financial proxy read now online proposal or shares and record

For success we need I’ve the able meaningful help ensure to and this grows detailed our you’re in participate to morning, all your manner. constructive to in a reasons ensure Tilray

As through additional common financing that acquisition a would authorize and move potential opportunities. so shares growth can reminder, to first the accelerate quickly of stock, our proposal we

the important the available these documents. our be of value. our that organizational held consideration shareholder proposals approval the mean take are amendments to intended second, matters the if needed shares that issued, on to rights require proposals by approval expand into corporate drive These shareholder important shareholders of initiatives governance. will And other would However, investment several of on immediately community shares views only to does our not authorized be in these pursuit

enhance our in U.S. the any please when to I at or I voting that your need working shares, opportunities every that, our XXX-XXX-XXXX. entire Carl? deep value and management the questions we now advantage toll-free Board speak to the and assistance contact in are Canada we If XXX-XXX-XXXX, I or Sodali With Carl. appreciation shareholder support. day of know you team at for take that I and to long-term all turn Morrow Tilray full over your that of Directors, have have will any say of call

Carl Merton

like you, Tilray. and of a to sentiment for I excitement part echo Irwin’s Irwin. would express Thank being my

value confidence We Tilray process long-term are that and company, strong, years reinforces to create our to early poised for profitable will integration diversified come. be our a shareholder sustainable and

begin, reminders. Before some need point to I accounting important we out

the Our determined business standards. acquisition. Aphria combination considered This is that legal to under U.S. was be accounting considered reverse Tilray acquirer, is be a GAAP be to the acquirer to means while

and periods These statements forward that financial means Our of three U.S. results going quarters in financial follow on were which fiscal this, all and results. dollars. based Aphria’s are XXXX adjusted the presented GAAP reflect are quarter, will prior prior prior to or first year U.S.

results XXXX result, our not fiscal our prior you ended investors directly today XXXX website items GAAP As Aphria’s an primer understand U.S. our that statements. and and to XX Aphria’s non-GAAP contains We help reporting in has tremendous adjusted Specific financial down on the our Tilray’s line. despite May published of financial a Investor measures Please consist as today primer Tilray to reported quarter to quarter. we month forecast help accurately, an analysts reference identified from and months periods audited prior one analyst refer investors and historical appendix located and today, statements year press To our a breaks call three results results, primer. the Throughout remind operating the our compare operating impacting audited. periods reconciliation deck well our cannot accomplished under The we’ll note, financial that to been to our more results for as of of our results. and fourth by months, Aphria’s financial financial XXXX, for respectively, a reference XX, we the to COVID-related both QX, also Please our top the GAAP call. amount, will results. presented periods headwinds release of during

took and performance. across our Canada, strength and Europe been team for in optimize proactive worked to lockdowns revenue higher we net steps medical maintain would adult-use hard have brand not to if aggressive certainly and While our and

operating ninth by environment, resulted quarters peer Tilray, four pre-merger at in implementing period, of at within In cost drive savings EBITDA, differentiated in performance as managing aligning quarter benefits the fact, well meaningful consecutive truly to Aphria G&A, EBITDA. as adjusted from represents the during a We our in significant another production costs changes ability dynamic our adjusted realized positive with initial this and increased set. believe week of costs minimizing demand our

$XX.X the net million loss $XX.X During versus rose year. million net the to in quarter, a prior income of

to of positive cash we cash already the delivering More showcasing flow flow report free for our to same of milestone the our of business. generated that view free major quarter, pleased positive is generating so, consistently steady having stream cash free Company flow as $X.X the next another achieving Tilray comments step by realize important importantly, differentiator generation. do ability shareholders EBITDA, XXXX. And on at I logical sustainable year-end our adjusted to am million, building the the of period a We extremely and to in in demonstrated profitability

synergies, to key the includes our and achieve QX processes on million savings the goal. in This although closures, the great the most million. Enniskillen to are In against synergies. million But after respect, most question facility million we cash was progress the pleased weeks making initiatives, actions in the Months attrition September important the lasting we ahead of pace our notably, One $X I anticipated headcount the million and XX of closing our progress facility report $XX business including of is effective closer of compliance to growing this necessary combination were integration. took $XX of benefits are and the in closure infrastructure, and progress business am anticipated meaningful of closing, that $XX costs, before operating and of efficiencies $XX planning IT XXth.

ended through our could cost medical source we to We not sell demand COVID clear Now, distribution to challenged want were orders German And source there. the hard let’s products discuss QX supplies greater to be from to lower supply due lockdown. the restrictions. Germany in simply sufficient a I were and countries channels. that detail.

our strong our patients, Europe and in Another otherwise vacations traditional so do performance on QX was might for supply QX load that summer demand, in did generate advance this of up headwind year. who medical not

the As fourth a $XX.X $XX quarter, net prior to the the million distribution year. of was result revenue for these of conditions, million quarter in compared

and quarter. of to was month high $XX.X our rates, lockdowns to virtually same continued restrictive to wellness pre-COVID During at struggle Alberta, prior cannabis Manitoba business continued at were for net Net but remained essentially improve entire activity. SweetWater business, $XX.X the the fourth Ontario, Columbia with to Net million revenues $XX.X million fourth vaccine in low million Harvest, period year. million in revenue and infection compared one British levels revenues quarter quarter, from which our the Canada and in below of $X.X the our from led in

year, adult-use increased this QX of a as to have $X.XX only result compared price programs. of gram of differentiate decreased of did per cannabis prior over the All QX not decreased of selling medical selling year, of the assist price average led of to to lockdowns, during with the been during involve pricing a gross period. who offered the $X.XX gross QX in a cannabis patients, QX, in gram as QX, being in $XXX.X period. revenue average the prior temptation $X.XX per way specific result million other to programs per to wholesale negatively in promotional price we to The XX.X% increasing impacted competition year of net prior in by The and $X.XX exclusive pandemic, to to gram along compared COVID

million gross improve potency and Adjusted year. $XX.X Leamington Our $XX.X This efforts in was and cash produce to $X.XX control million benefit in to our cannabis yield, increased to to facilities. profit in cost due began decreased that per us. compared at gram to that gram per January QX the cost prior continue to

lower cannabis to a from COVID-XX decrease of The cannabis inventory and in XX.X%. result margins cost of million combined of adjusted XX.X% on efforts our lockdown, our compression Not included gross the profit despite to determined of Tilray. Although adjusted price our margin sales. during the provision calculation of in fell Aphria was cannabis $XX.X a gross was

inventory work levels, our temporary of headcount efforts combination, the contributed at where proactively in identifying These million from the structure Adjusted year. in last of in to decreased operating the distribution part demand, profit the entity up inventory the million adjusting from weeks $X.X Canadian $X.X better gross four-day adjusted our performed combined had As cannabis review business impact the cost included some million creating levels, provision. Cannabis facilities, planned detailed of $X.X offset QX, million and QX to inventory in including categories managed spending. year. we EBITDA prior our $X.X excessive to reduced decrease a

despite with clearly with increases the in margin par of adjusted and XX%, over $X.X SweetWater cost our the both a ownership. profitability result great for QX from was revenue job of gross Adjusted last healthy and but team top-line our business off-premise distribution Obviously, QX, a The outpacing standpoint million our was year. prior along declined the year. a alcohol adjusted XX.X%, XX.X%, compared million, there to as of in Transaction on contributed $X.X beverage profit was banking two quarters CC very and mix. was Pharma the sales SweetWater SweetWater, year acquisitions on the margin related completed expanding far softer, overall does other in our or payments controlling the to result new or EBITDA nature XX.X% million of did the adjusted $X.X last with Notably, we include sequential from alcohol severance through a adjusted adjusted QX increases previous our no gross Distribution combination, as consummate a of what from costs, products $XX.X QX, segments was was improvement to in also no in and impacts sales totaled from which million Tilray. to November. under to remain margin other million our advisory high of down about year, EBITDA legal, to cannabis prior contributed it to was to adjusted a XX.X%, time. distribution, but headcount COVID its Adjusted last margin $XX.X greater only because fees $XX.X acquisition essentially comparable fees costs all COVID-XX a were XX.X% business this and EBITDA the to there insurance restrictions. gross alcohol million the fifth While combination. of associated revenue. and comparables and net contribute contribution, net in and of $XX.X with which on million business wellness gross X.X% million in and increase of over beverage increased margin Beverage profit of were $X.X gross The and out-of-pocket including could G&A bullish the not costs. due

income. million QX, was $X.XX debentures. to quarter, net $XXX.X price our unrealized our the This recognizing an primarily the non-operating of change share convertible in the In compared net due net driven or $XX.X related per change in was to year. trading and in to price loss convertible debentures ability a by per share $XX.X gain reported on the $X.XX net the income of or our share, million For last a we income million to of generate

flow liquidity. cash to Turning and

achievement I profitability despite something As markets. the highest as all from key adjusted for cash flow. million EBITDA cash talked representing major we through generated metrics and past in million swing demonstrating such being restrictions intensity in in have of us we free a positive the priorities, during earlier, a QX, flows QX, one $X.X our our was of free as about $XX.X and This mentioned COVID

on our for flow a view consistent after two fact, next more generated years basis now, achieving adjusted In having positive cash as EBITDA we than priority. free

in do in our million million million, from in Our $X.X $X million, coupled QX. $X.X above which beginning QX operating was a ability increase CapEx was just flow under to with limited to $X.X of cash expenditure just substantial of so because

sheet, We proud our including strong industry-leading are balance a of also cash position.

of from that $XX.X alcohol Tilray million XXXX. revenue million an for XX%, flat, business beverage, position to May clearly of XXXX, not working we XX, their while XXXX year transformational impacts one us, $XXX.X results. that capital cannabis results, revenue XX% of in near and As existing requirements, leading was and was million, both from and our brand. the contributions wellness, in benefited both our COVID-XX-related a including a was $XXX.X progress were cash from Net as increase totaling of Briefly $XXX.X Cannabis financial moving we enabled support plans. XXXX to million had fiscal to us full distribution revenue term this grew

return $X.X $XX as integration adjusted strategy we our business We Turning executing articulated. to what can reflecting compared EBITDA our and differentiators, are global of an we our to to accelerating improvement million across XXXX, competitive profitability. on key significantly five including focus control, XXX%. With future increased priorities, in Irwin $XX.X our million growth million or and highest on the

order our We maintain costs conditions. managing are to in relentlessly focused also financial on healthy our

be Our we success industry-leading build and long-term measured scale, profitable will share, to growth drive sustainable capabilities leverage shareholder and expertise the market through will value. achieve

and ahead, footprint, portfolio cash provide to and move of believe balance diverse a flexibility position a the medical we multi-continent distribution curated sheet strong adult-use and brands network. transform us industry and our through operational the products with scalable means As we highly

in guidance, that a mention while position to the would Pharma. in we directly formal floods like not affected recent and I Finally, are issue CC Germany any to

employees Fortunately, our safe. all are

for However, will margin We not this along to QX quarter. business We negative were do $X revenues a these to maintain days. million cover shut to the related impact in during with impact down million received a estimate XXXX expect the minor to $X.X insurance insurance operations cleanup. three be proceeds of create but coverage net

to the remarks. with increase to for in rescinded, concludes friends, recent interactions cannabis purchasing look the we not forward This demand and we and With look our forward changing lockdown of families only prepared biggest our our market. lifting patterns

from I shareholders retail analyst answer will to the Irwin from questions a moving Say and our platform. few questions, Before

Unidentified Company Representative

Thank you.

Say questions Let’s from begin the the platform.

a great Tilray There issued grow amount question permits in there is is Will sell limit production? of be following. and to the and the Germany. cannabis growth First can the to continued Tilray

Irwin Simon

Germany. Irwin. have ability for opportunities to cannabis there with And XX,XXX Hi. I distributing the CC absolutely think in is facility. morning. fill there big of yes, us will go that our be and them, Pharma. which is additional And tenders to with It’s lots our it’s and tenders the to limited drugstores and that, additional we will production Good in through that current will It’s those Listen, come Germany also fish our way.

we fish -- it and big the with is that months Party to which in happens Germany through XX next the Green hope they legalization Germany. in the other push happens within reference The within

Unidentified Company Representative

on plans are SweetWater Question SweetWater. you. in Canada, THC SweetWater Will California? there to Thank expand drinks to be soon and available

Irwin Simon

So there in number drinks THC will one, Canada. available be

facility facility us London, Ontario, in very to As edibles an Tilray a available canning acquisition, part of the became facility. and

be facility, is available. to in know, to is SweetWater But the don’t It brand is now, Fort going it the Canada into producing facility Canadian Right secondly, will Red THC So, of a into in in will to start a Colorado, states. there intention And our alcohol And drinks Truck. completed market. SweetWater I recently Collins, Canada. be we Western And under. the that expand the is brand as today products. called buying expand available intention

Unidentified Company Representative

the the question, the Company and benefit this with how Next this? affect of will Specifically, from the Tilray in U.S., pending shareholders? federal value will legalization how benefit the

Irwin Simon

billion of about the end is sales plan legalization. talked part in I’ve a Listen, my by to big question. today, Good that Tilray XXXX. script of A in get to $X

our Tilray, new through and medical U.S., look other market, at in Canadian merge If and happening potentially in two, us. will integrate legalization either biggest will market. the acquisitions. which to acquire, CC one, the is through is business, edibles opportunity to is able medical, $XX opportunity Europe and today to in billion and the about grow for THC our Number is probably Legalization U.S. talked happen X.X, we does to CBD you growing cannabis pursuing which or in be biggest options the once adult-use come a billion MSOs with products, is market cannabis between Tilray back close is what $X number which sales and And we drinks, through the be Pharma that them of into

Unidentified Company Representative

the please for questions. Operator, lines open analyst


Thank limit We one lines you question. the you. please for ask I’ll now that to analyst questions. the open yourself

of Our with first question from comes Jefferies. the Owen Bennett line

Owen Bennett

in. slightly Question up is from question on the me just we had last following

to think be votes optionality be change to your So Is U.S. assets, or did? with broader months, the assets used obviously, the in THC more within shares the did it on for U.S. know couple a from this could I fair consumer got U.S. XX it focus more now on securing peers we’ve something to and assets I And could market. SweetWater and the THC additional potential acquire goods seen you’re wanted be assume, you. would means you the tomorrow, enter with next how that U.S. of Thank doing here. assets, about thinking like would you like around

Irwin Simon

or a part companies. the area to the for Manitoba it’s see where or said THC in see we’d happens. products with there products, we’re be a billion and of of sales able companies that once as be happen about I would for CBD to to alcohol SweetWater attention, stance beverage where business, to does businesses the legalization like sales, business. that CBD whether Owen, in conventional in it’s with $XXX billion in like from And would those an XXX% U.S. what food million area acquiring end be put $X.X the or $X.X Harvest businesses those business, would out able or of it’s additional to in the whether looking I $X area goods to In a would to So, have that products, those come invest we whether have to our is SweetWater. hemp where today be permissible business. we Tilray business, billion legalization along packaged regards market, And business $X is to our A THC and And a consumer the the able growing optionality by our before, products billion we would and acquire acquire add we consumer XXXX hemp to complement we that to aggressive enhance company. good in companies in


line of next with your comes Vivien question with the Azer Please Our from questions. Cowen. proceed

Vivien Azer

I touch where a your for from XXXX, aspiration market wanted to share is to you on today. are which doubling close

certainly similar because you share the of XX%, of the for behind underpins what kind competitors leadership. logic have market that aspirations in Just terms have

So, market are share foregone not conclusion. gains a

terms expecting better much of better from terms in share are reopens Thanks. the mix seems category So, it Like, to pricing in mix how those standpoint, gains. sales. marketplace and shift of expecting you’re a you drive better like as in-person market

Irwin Simon

only market almost second, we’re a at And our There’s and that building The -- share. back have we’re with to a been And of XX% numerous if months. today, about seven market share. basically awareness step in Canadian Ontario. the that, building opened looking double aspirational, Vivien, market’s built for for you So, legalization. it’s never been of closed the year been in have legalized stores that third

to and of So, for drive cannabis have the our grow build awareness we for to benefits to share, us adult-use.

to consumer’s purchasing stores We and proposed have need get less that X,XXX to those improve to medical cannabis to a open. or are perception of Canada. in We little

lot and lot business to back and the have the a We guys will our of come also that of of that have if mean? more growing nibble in And what to understand morning, of part not, thing benefits is nimble edible is and the someone this innovation. I users our beverage a cannabis, that We and top, bring a if and big us entrepreneurial, you’re us. said with little Tilray the flexible at does remain to and me business

of share to on there’s got Canada, think assurance regards that’s to The XX-plus what in you educate the the And way that, can other be products quality, to thing consumers, of can got market marketplace. grow and that safety the in happen the that’s market do. we a change the I And to to Canada in got consumers products. with


you. Thank

Carter Our Andrew with next of your question. proceed comes Please the line Stifel. from question with

Andrew Carter

appreciate know then, within you’re kind sales today, guys quarter mentioned how a about you going guidance that directionally, with the And aren’t sustainability but next of -- I speed a on-premise the of wondered, this cash you I flow. give Good you. I of thinking just stronger Hey. headwind. morning. lot formal what for reopening the SweetWater? free Thank that

expect that good is up of the So, in the capital million a or forward of is second, Is terms drag? a $X Thanks. that then of and quarter? higher? for you better think that, working that about that the do kind note one a we in in number balance terms step CapEx, big your as good cultivation going is, And

Irwin Simon

Carl, that? to do you want take

Carl Merton


cash for all is Andrew, projects not say few I the flow most and world. million capital quarters, of, of with free the our of respect finished the high would to or large Most probably watermark. our X CapEx, So just, next the large, have across

Leamington in do We are in investing but Portugal, projects capacity extraction bit on improve additional to to little a some be have some lighting those not large there’ll decision lighting and products. eventually on

transaction that. moving As that Tilray as -- Leamington the where bit control it relates we’ll to the of production closing those inventory inventory levels, obviously, we’re better part with we down inherited a Enniskillen facility, little have think some where on to we

those to down we start as inventory of draw reopen. stores see So, -- some should levels

and of fronts. going portion demand the before, guidance, end store said the seeing demand question, this think and I In what but QX of really any to at an give we’re increase I’ve terms like, look will in not you’re of the

in a I lockdowns. to remain delay making think levels to store happens inventory sure they that there’s ordering that at

Canada, in been again. people lot by here burned a lockdowns lockdowns there was the who of were on you If have over back

out additional boards. delay, at then, weeks orders as bit be started in of a So, process same there’s with from increased the that’ll the make going to couple start of little to sure is lead side, orders patterns. And before LPs. ordering, will bit that piece that forward. retail to little moving placing There’ll of they a be increasing delay time I provincial ordering that think a And play a

the when demand see of so, the towards that board. end from And we our is the increasing of quarter

Irwin Simon

the products And get stores piped order on Andrew, run retail demand like, and think able all some better all I stores we been then, to with our after that. it’s to get -- what facilities, the guidance not important open, got built, handle to we’re all looks a really through system. all new and be consumption what give guidance, get the have the the distribution regards open, that up And


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

John Zamparo

question U.S. the to about wanted the prior I ask on

U.S. you it what is rather So to you’re meaningful if that deals MSOs want Difficulty] [Technical optionality so, amounts in looking looking for vertically to integrated And or just looking state assume states? single for? the is essentially operators? what for So, Irwin, is or operators, to say you’re warrants it’s exercises whether fair brands you’re than on when for costless cannabis

Irwin Simon

paths you in legalization that add I me. In alcohol think in looking one U.S., marketplace consumer up know down. that asking in I’m broke going products that the be our there’s pertinent area but So were just is you’re as going ultimately John, the align I to and would of once the and that once you two that are Number what that sold and become today products MSOs. XXX%, converted to question, Manitoba food be acquire with legalization did part of does our to sense THC would SweetWater optionality products, And investments them merge Tilray Harvest business. happen. to look and our would Alongside in happen. at to be and or CBD looking That with makes that strategically

the paths So, U.S. regards there’s in to investments two in


comes from Our proceed question. Parikh the of Rupesh Oppenheimer. with Please next question your with line

Rupesh Parikh

are the right competitive of think, I’m and What some guys of your are the about seeing some pricing seeing curious, So, if on I in front market. how at just referenced look the out think you are the there. you you forward? in pressures comments, the just you challenges going now there out just Irwin, that backdrop you pricing guys

Irwin Simon

were products think you of to of at morning. up online the as the I about products, able out your budtenders bought and good retail the qualities Rupesh, rather stores, a So, have attributes what of locked lot there, happened products. Listen, tell the products didn’t

of learned good were the saw quality I were they buying they is, And The and that news not not products that products on there from bad they lot products, lot on price, a a just were -- price. bought that. that’s consumers learned these think So, news. not of or good products,

is As price I before, key. said

We are producer. a low cost

vodka, a the And and was our wine, good our good going we’re tequila, is think be that bought and to you not And is the strains a consumer bought cannabis of one to very quality is that space. that brands, And important, awareness we’re buying like any consumers going I bought we’re there product. you’re out hand, before listen, it not results. And want a products on different be by thing as with. out line. good was pricing tried important, not price. can And I good in good are building other not important. a lowest our different alcohol, over a reassure going the think was big happy important it I around priced not and be But education, product going brands, is But, quality consumers it part on the with them. something It was for brands, XX -- us. a on to come quality when Potency is to something you different brands. with On


the from Tamy Capital Chen comes of question with next Please Our proceed with line BMO your Markets. question.

Tamy Chen

for Irwin, I I’m U.S. food with it’s alcohol, hemp, THC that. approaches very a to ask and talked looking the strategy, businesses, top on that just about. complex respect several two wondering, to your of CBD, more where more you’re things, wanted you strategy then just

why more is, So, possibly to operators an or is in routes? when believe that even Thanks. the more why MSOs, complexities? both investment or talk you about and plate lot your state on of would two seems the Tilray? that of a you interested MSOs single investments second pursue a by part And to acquiring these pass add lot and It be possibly acquisition question first

Irwin Simon

different and continue strategically, We seltzers our RIFF products that the far and as products us. one, cannabis bigger we’ll to and distribution, today. there an in want that think to We that. in out or we think gain businesses Difficulty] in something be goods a in than our done cans to it, the growing to so can business not goods into life, no a the we ultimately built to that’s to businesses food introduce [Technical we important like Harvest. Difficulty]. business these vodka great drink bring new with is is business. the with Manitoba to wines SweetWater, do infrastructure business. we’ve our to tequila it’s So, It’s the going be will have the And cannabis with important have cans, number do X%. X% number is adjacencies of where packaged In one, a And we It’s we we’ve again, consumer think [Technical lot CBD or packaged category. alcohol alcohol consumer do and business there, We can prior

said what they today one I before, Listen, to to As the world. of partner want would brand regards world. we largest we company want with be cannabis In the are in companies the the us? cannabis in largest to

and medical in big in and gummies regards Canada We the drinks edibles. use in and a adult-use, cannabis business have the to

of the great look major a partner We look at team, in we medical sheet, have how of business have have in good of we as that doing $X.X liquidity they you within our great we close grow billion with to MSOs, of strains. capital, on great yes, management experienced balance U.S. and a in has to some the that cannabis And have stock, these a to have history have a Europe cash business whether business. our very lot we knowing as

with for not would to sense made why sure if So, want partner it sets both economically not I’m shareholders. they us of


from Global with proceed with the question. Grey Aaron your next comes Our Alliance line Partners. Please of question

Aaron Grey

the talk in now, even though better Hi. have versus to on the illicit maybe market, the to market? market’s to more gain Canada a to needed X,XXX of more of the side milligrams it XX%, quantity product the you the looking love market. Good Pricing, market perspective illicit least in Right they’re lockdowns more or the of for from mentioned legal get category market, the I to morning, and the thank amount illicit more you at XX% be but for it improved seems below be about be certainly terms you needed from in you still year market, there? illicit sales of Thanks. the get the Ontario formats, in the edibles, still illicit and about aspirations of else in your legal lot flower about be But, Canada, half what back think in goals of your the question. order want for to greater impact fresh maybe what to stores and over share Irwin, for has -- market going some of compete to beverages, to your with would we’ll stores believe in see ease. terms kind as an I’d whether terms also will of of

Irwin Simon

So, brand it again, brand brand equity, equity. equity, number said say as before I one, I’ve and

to got go build and out there brands. You your

get and getting products you’re quality You go consumers trust brands assurance additives, pesticides your got to to has in regulatory or et if potency what through and of go has out product know cetera. regards there that it’s -- products the any of that And the potency go through. product a if in with a a sprayed to to grown type regards type how you

to $XXX million sell in key. it, if and to come Listen, So, at can on this not you’re the making pay years in that’s sell in quality, presence sure is safety, different three be and oils -- product waxes back but in hashes and what’s consumers Canadian across strong is different close pre-rolls to the we and really the we happy with two, going and a and key. the is when pre-rolls distribution today, vapes our of year is Number provinces, know is technology regards getting vapes to and the around important going provinces. pricing. Number to in is And agree, And for product you each regards the and innovation you all the educate and products Number important price, product four attributes. the you satisfied our two what ago product. today, to that innovation and of look I important. price be have is you’re

today. was multiple very limited for putting opportunity and putting we’re grow in facility, have that today have expansion new also that and to the area now just flower where out we innovation. products, business. big flower a there, we business So, have multiple And drinks edible is the growing And us we the that


from your Piper Sandler. comes of Next question the question. Lavery line Michael with with Please proceed

Michael Lavery

You have some of obviously the and those. Portugal attractive one assets a that came with big the the facility Tilray deal is of

in did cited it its us business auditor it’s Can you’re weaknesses help also prior how material hard addressing that controls. -- understand how that You is inherit you fix? to just a internal and

Carl Merton

it believe identified prior with existed. material that it’s three was if management there that. prior can processes were by I Irwin So, been Michael, the team weaknesses that -- okay, take had I the

around processes obviously able more We during those finding in the same similar those integration even a than that period, design Those did pre items period, are on have a help working have integration we and processes during weakness. just of have it the and controls. strengthen result period Aphria closing since the material sorry, been even we not been to -- to controls at

year, remediated believe we forward processes ours within into we that our best next will report that so integrating next before moving review. their be so, weakness the and material fully And practices by taking


Our Balsky America. of of Heather Bank comes line of from the next question

Heather Balsky

you Thank taking Hi. for my question.

signs hasn’t and you of and seen seeing you’re or across of consumers not a you sort hearing of and portion us up consumer more going improvement? through open, seeing walk -- lockdowns. So to we’re hasn’t that. habits have follow-up shift degree, consumer And a in thinking these cannabis, can some the online how was what as open just buying shopping the forward shifted that confidence board, we’ve that or you’re to of any first, There’s to consumer permanently online. the curious And that to about July Canada -- with is all June and there’s sort this Thanks.

Irwin Simon

getting what in we’re the anytime, and opening. jump you’re number in morning. And stores a because Heather, back lot in here So, business up good and of Carl is of demand, Toronto. Canadian But to and lot a market, one piped seeing

local out that was and products, seeing going to at into has did buying And consumers at to licenses which their back new to that supermarket open the to is close is, let buying our regards from the products piped we’ll want consumers stores. consumers I’m to buy consumers, the now, And products, were not where In not to retail. what will reverse to happened, heard opportunities anything, there’s to all a that be what give win get products now, have and open in did XXX you during talk to to and And hope I that products and them, get if buying there other retail not come think are Canada them a the me and stores want of shopping year because where really it’s the are industry our able to online, retail introduced into and been want want the go to see open start new lot to and lot they stores, the that back to have As will see our get again educated about want we pandemic that up granted see stores say, that products. show about is that to of purchase opening because I going to stores. big new let be of in demand, them products. thing stores. I think And up. a educate a have our do them new we is with lot try almost been something And right that, to

Heather Balsky

Thank very you much. Great.

Irwin Simon

and social out plan I to there And be But, what in lot going you Canadian do what’s we on spend. media we can that’s advertising. to products. And dollars aggressive. market the get to and as are out limited to in regards in more is getting And marketing important these a spend say,


for the over call hand no like Thank at would back management I you. any comments. further this to closing There time. are questions to

Irwin Simon

tough very it’s thank call very getting you, And much, for to year. got XXXX, you operator. on the today. a Thank I everybody been tell much you in

in If do put on that, I SweetWater was for with and Tilray Canada getting like closing and major in closed were December And November. our place I we in I well. you two thank acquisitions, team announcing strong these as pandemic management in team, pretty because management to successes and support was done. my of really this also back thank people acquiring these the their then Directors to and things able Europe on a one great of October the of look, Board during team. and the the want well because work of since step closed with. both deals. very to management We

me how between lot originally $XX XX% we’ve a to the still savings, regards this all months, We moved in it together. with in of of XX put million million $XX with close, close positive. we’ve do heard fourth business up said talk to our flow months. cannabis, both In net about grew Canada to XX we quarter we You income cost cash place in businesses putting

bank. in million $XXX the with sitting We’re

to One want to of regards what the me, would do questions we the partner to an to with asked in U.S. bring us. MSO why

I We’ve MSO been our with for appreciate We’ve are innovate. Canada out a that grow. taking them. how be of learnings really to our that shareholders to it’s from sticking learnt Let And the the which you a We’ve learnt how us. notes products. vote. from it’s appreciate and tough and into get the a important We’ve how shareholder today, I and for It’s me a partners very for lot and get with those Europe And support produce I know Canada shareholders, if important us learnt to learnt will from retail say, any you times to us. market helpful I tough very us. lot. has communicate. U.S.

the we you in with enjoy left in our [Technical and look day. again. any when summer. Have there invest go deal, future the these acquisitions And a to you, to to thank your I do said, no I the closed of of future. of As this forward Difficulty] we great and rest were With shares that, And speaking business. to out


you. participation. Thank your Thank today’s teleconference. you That does for conclude

You your time. a Have day. at disconnect lines may this great