Greetings, and welcome to the Aurora Cannabis Inc. Fiscal 2023 first quarter conference call. All participants will be in a listen-only mode, and a question and answer session will follow the formal presentation. This conference call is being recorded today, Thursday, November 10th, 2022. I would now like to turn the conference over to your host, Ananth Krishnan, Vice President, Strategic Finance. Thank you, sir. Please go ahead. Thank you, John. We appreciate you all joining us this afternoon. With me today are CEO, Miguel Martin, and CFO, Glen Ibbott. After the market closed, Aurora issued a news release announcing our fiscal 2023 first quarter financial results. This news release, accompanying financial statements, and MD&A are available on our IR website and can also be accessed via SEDAR and EDGAR. In addition, you can find the supplemental information deck on our IR website. Listeners are reminded that certain matters discussed on today's conference call could constitute forward-looking statements that are subject to risks and uncertainties related to our future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect actual results are detailed in our annual information form and other periodic filings and registration statements. These documents may similarly be accessed via SEDAR and EDGAR. Lastly, I want to remind everyone that we will be holding our annual general and special meeting of shareholders on November 14th, and the meeting materials have been mailed out to shareholders or can be found on SEDAR or on our IR website. We encourage you to review the meeting materials before voting your shares at the meeting and look forward to your participation in the virtual-only format. Following prepared remarks by Miguel and Glen, we will conduct a question and answer session with our covering analysts. However, we ask that you limit yourselves to one question and then get back in the queue for follow-up. With that, I will turn the call over to Miguel. Please go ahead. Thank you, Ananth. We will keep our remarks brief as our Q4 conference call was held recently, but I wanted to reiterate a few key items before I turn the call over to Glen for an in-depth financial review. We are very close to achieving our primary objective of reaching positive Adjusted EBITDA by the end of the calendar year. This will be an incredible achievement that we believe is also sustainable. In fact, the structural changes we have made over the past several quarters have resulted in long-term benefits for Aurora, and we look forward to demonstrating consistent financial performance in the coming quarters. Our enthusiasm is anchored by our position as the number 1 Canadian LP in global medical cannabis, and the underlying top-line trend is undeniable, upwards and to the right, with a loyal base of patients within existing medical markets and more developed countries poised to open up. Beyond revenue, medical cannabis also commands enviable adjusted gross margins that consistently exceed 60%, twice that of consumer cannabis. For these reasons, along with its defensive nature in volatile times, we believe medical is the best segment to invest behind. The second anchor of our enthusiasm has been our ability to rationalize the business to the current environment. The annualized cost savings of CAD 150 million-CAD 170 million will be complete by the end of the calendar year, at which time we will have materially reduced our cash burn and become EBITDA positive, as I said a moment ago. A third anchor of success is our balance sheet, which is stronger than ever. It's enabled us to repurchase approximately CAD 217 million in convertible debt since Q3 2022 and has resulted in considerable savings on cash interest costs, about CAD 12 million annually. We are further benefiting from improved working capital and cash flow and are fortunate to be one of only a handful of companies within the cannabis industry of a net cash position. In turbulent and uncertain times, this is imperative. Finally, our investments in science, breeding, and genetics are really beginning to pay off. Proprietary cultivars launched from our breeding program in the last 12 months were responsible for almost 1/3 of our revenue in Canada during Q1, have driven meaningful improvements to yields, and are now generating incremental high-margin revenue through license agreements. We recently signed royalty-based agreements to license genetics to 2 of the largest Canadian LPs by cannabis revenue and expect more to follow. With those key strengths as a backdrop, let's take a deeper dive into our global medical cannabis business. During Q1, international medical revenue fell compared to Q4 last year. This was largely due to timing of shipments to the Australian market, which resulted in lower sales in Q1. Although we expect a solid delivery and recovery in Q2. As we have long said, international is somewhat unpredictable on a quarter-to-quarter basis, and revenue contributions from individual countries can ebb and flow as these new markets develop. This is why it is so important for us to be operating across many countries, nearly a dozen outside of Canada. Our broad reach affords us relative insulation to the economic climate and conditions in specific markets across Europe, Israel, and Australia, and means the overall trend is towards growth. Our regulatory expertise, compliance protocols, testing, and science capabilities support our leadership position. Now let's discuss developments in a few select countries. In Germany, the largest market in the EU, with 83 million citizens, with only about 100-120,000 medical cannabis patients, the health minister presented a cornerstone paper on cannabis legislation on October 26th. The plan is designed to regulate the controlled distribution and consumption of cannabis for recreational purposes among adults, and he said it could become law in 2024. We believe Aurora's position as one of only three companies with a medical domestic production license, and our current position as the number two LP in the dry flower segment, will give us a significant advantage as the regulatory framework continues to be developed. In Poland, we are maintaining our leadership position by continuing to invest in marketing to support our flower and extract products despite new entrants. We completed two shipments during Q1 and submitted dossiers for three new products for regulatory review, with a timeline to market of approximately one year. In France, a market that we believe could be as big as Germany, authorities have announced that the French medical cannabis pilot program is gonna be extended by another year, until March of 2024. After an internal assessment, as well as discussions with our distribution partner, we've decided to continue participating as the sole supplier of dry flower to the country to ensure Aurora's position for success following the French pilot. In the Czech Republic, beyond our continued success in the dry flower segment, regulators approved the import of new extract products, including THC-dominant and balanced extracts. We also hold leadership positions in other key markets, including the U.K. and Australia, and expect continued growth in these markets as the number of prescribers and patients steadily grow. The cannabis growth story continues to play out across international medical and recreational markets, with growing acceptance acting like a domino effect. The bottom line is this. As we said many times, our success in medical cannabis provides us with a significant first-mover advantage, and we believe our leadership will be portable to rec markets as they open up. Turning to the Canadian medical market, we saw some churn of non-insured patients, but we continue to improve the contribution of this business through finding efficiencies. Importantly, the absolute level of revenue from insured patients has not declined, and insured patients comprise 83% of all medical sales, compared to 81% in Q4, while our leading market share is approximately 24%. We are very optimistic about the future of this segment as we continue to increase the number of patients in the insured category and have seen consistent increases in basket size and participation rates over the past few quarters as we continue to improve our offerings. Switching to Canadian adult rec, our Q1 revenue increased sequentially by 9% compared to Q4, primarily because of our strength in product offerings made possible through our Thrive acquisition. In Q1, we benefited from an extra month of Thrive contributions versus the previous quarter. However, the Aurora business declined slightly due to the OCS cyber attack and the strike in BC. Thankfully, those issues are now fully resolved. In addition, margins were roughly flat quarter-over-quarter. Looking ahead to Q2, we will miss a shipping week due to the December holidays. As our Canadian rec business continues to evolve despite a long and continuing period of macro challenges, our focus remains on maximizing profitability through low-cost production and high-margin categories. We continue to believe our investment in science innovation drives a significant competitive advantage, and this quarter debuted an unprecedented fall lineup of cannabis products across adult- use and medical markets. These new products were developed from a deep understanding of consumer and patient interests and needs, and contain all the critical components necessary to compete. Intense and exciting aromas, key visual and tactile attributes, and high-potency THC. In fact, beginning last month, Aurora patients were given access to the largest-ever selection of products and formats on Aurora Medical. During Q1, we launched 24 SKUs in the medical channel, and we'll be launching another 78 in Q2, with products from our full portfolio of adult-use cannabis brands, including Being Quickstrips, Greybeard Premium Flower, a wider selection of pre-rolls, new concentrates, and a new offering of minor cannabinoid oils. This online rollout was then followed by availability in Canadian adult- use retailers, with select products available in certain regions. The synergies related to innovation and the leveraging of infrastructure in developing and launching medical and adult rec products are clear, and our ability to be competitive in both provide us with inherent advantages. Turning to our scientific leadership in cannabis breeding and genetics, we think these attributes will provide us with a distinct advantage that drive value across all tiers of the consumer and medical categories, as our new product launches demonstrate. We continue to drive meaningful improvements in yield through new proprietary cultivars, while our breeding program enables us to produce top-quality flower at industry-leading margins. As an example, our Farm Gas cultivar delivers nearly double the yield of our traditional cultivars and does so on an average of 26.5% THC. We also remain committed to furthering medical cannabis clinical research in Canada, with the first shipment of product to a palliative care study occurring last August. Finally, let's discuss Bevo, which is one of the largest suppliers of propagated vegetables and ornamental plants in North America. Recall that we purchased a controlling interest in Bevo back in August and anticipate that it'll drive significant shareholder value to us in the long run. As part of the transaction, we are repurposing the Aurora Sky facility for orchid and vegetable propagation with minimal capital investment. This will greatly increase Bevo's production capability and extend its shipping range in Canada and the U.S. It will also enable us to generate incremental revenue and Adjusted EBITDA while saving on previously announced wind-down and selling costs. For the approximately five weeks that we controlled Bevo in Q1, it contributed CAD 3.3 million to our revenues and achieved adjusted gross margins of 16%. When we announced the controlling investment in Bevo, we highlighted the seasonal nature of their business, with the January to June period representing the majority of the revenue and EBITDA generation of the business. Bevo is performing to internal expectations and is expected to be a positive contributor to our path to positive Adjusted EBITDA. With that, I'd like to turn the call over to Glen for our financial review. Thank you, Miguel, and good afternoon. I'd like to begin by reminding everyone that we're pleased to have one of the strongest balance sheets among Canadian LPs, and this quarter is no different. As of yesterday, we have approximately CAD 393 million of cash, including CAD 58 million of restricted cash. We have $186 million of principal remaining on our convertible notes that are due in 2024. Subsequent to our September 30 quarter end, we repurchased $23 million in principal on our convertible notes at a total cost of CAD 21.8 million in cash, including accrued interest. We believe that debt reduction, even though maturity is still more than a year out, is a smart and defensive capital allocation decision, which reduces balance sheet risk, especially important during turbulent markets. Our debt reduction since Q3 2022 has resulted in annualized cash interest savings of approximately CAD 12 million. We continue to have access to significant capacity under our base shelf prospectus, including $156.8 million remaining under our ATM program. That reflects having issued 23.7 million shares subsequent to September 30 for gross proceeds of CAD 40.2 million, and that's to be used for strategic purposes, including debt reduction. Our cash flow is improving with CAD 20.1 million used in operations and working capital in Q1, or CAD 12.4 million excluding restructuring costs, and that's down from CAD 22.5 million in Q4. In Q1, we reported approximately CAD 5.5 million in capital expenditures, down from CAD 7.8 million the last quarter. Q1 CapEx was fully offset by proceeds from disposals of property and equipment and from government grants. Our ongoing cost transformation program is expected to continue to improve operating cash use over the next several quarters. Total revenue in Q1 was CAD 49.3 million, and of that, net cannabis revenue was CAD 46 million compared to CAD 50.2 million last quarter. This change was driven mainly by timing of shipments into Australia during the prior quarter and our ongoing strategic focus in our Canadian medical business on the higher-margin insured patient base. It was partially offset by contributions from our Thrive acquisition to our consumer cannabis business. Now let me address each of our segments in a bit more detail. At the core of our plan to achieve near-term positive EBITDA is our focus on protecting and growing the profitability of our industry-leading Canadian and international medical cannabis businesses. Canadian medical revenue was CAD 23.4 million in Q1, down 6% from Q4. We continue to focus on growing the bottom line of this business by improving our portfolio, protecting our margins, and becoming a more efficient provider of medical cannabis to our patients. Our international medical revenue was CAD 8.2 million and reflects a 30% decline versus Q4. The sequential decrease was due to the timing of shipments into certain international markets, particularly Australia, during the prior quarter. We do expect a rebound in our international medical segment next quarter, that being Q2, returning to levels more consistent with Q4 of 2022. Taken together, our medical businesses in Canada and internationally generated CAD 31.6 million in sales and a gross margin of 67%, up from 62% in the prior quarter. The strong margin profile remains above our minimum target of 60% and is an important gross profit driver for us that distinguishes Aurora from our key competitors. In Q1, our consumer revenue was CAD 13.7 million, a 9% increase compared to last quarter. The increase is mostly due to full quarter of contributions from Thrive's consumer cannabis brands, which more than offset the impact of the cyberattack at the Ontario Cannabis Store and store closures due to an employee strike at BC Cannabis Stores. This is the second consecutive quarter of growth in our consumer business, which in the face of consumer market headwinds, is very gratifying. Adjusted gross margin before fair value adjustments on our consumer cannabis net revenue was 25% in Q1 compared to 26% in the prior quarter. We recognized CAD 3.3 million in net revenue during Q1 from our controlling stake in Bevo. As Miguel mentioned, Bevo has a seasonal cadence, with the period from January to June expected to deliver roughly 2/3 of Bevo's full annual revenue in EBITDA, which is reliable, predictable, and supports our overall drive to positive EBITDA. Excluding restructuring and other normalizing costs of CAD 10.4 million, our SG&A and R&D continued to be well controlled, down to CAD 33.4 million during Q1 versus CAD 37.8 million in the prior quarter, and in line with our previously stated range of being below CAD 35 million. We are on track to deliver the company's commitment to reducing SG&A to below CAD 30 million by the time we exit December 2022. Pulling all of this together, we generated an Adjusted EBITDA loss in Q1 of CAD 8.7 million, compared to CAD 11.6 million in the previous quarter. This improvement is driven mostly by reductions in SG&A and by a 3% increase in overall adjusted gross margin. Now, as part of our business transformation plan, you are aware of our commitment to annualized cash cost savings of a hundred and fifty to a hundred and seventy million dollars. Beyond posting positive Adjusted EBITDA, we have been working hard to rationalize our operations footprint and continue to improve our cash flow. These actions are on track with annualized savings of CAD 140 million already achieved and the remaining coming in Q2. With respect to cost of goods, this has been a crucial initiative for the company. As you can see, our gross margins continue to deliver value for us and to lead the industry. Finally, a quick reminder on an important housekeeping item. Fiscal year 2023 has only three quarters as we are changing our fiscal year-end to March 31, 2023, in order to achieve certain internal cost and staffing efficiencies. To wrap my section up, the key drivers for Aurora to reach our positive Adjusted EBITDA milestone by the end of this calendar year, starting from our Q1 loss of CAD 8.7 million, are as follows. First, we expect revenues to recover in Q2 as the negative impacts of certain cultivator supply and of wholesale distribution disruptions affecting our European medical and Canadian consumer business units have been resolved. Our non-EU international segment revenue returns to normalized levels consistent with that of Q4 2022. Second, we expect a full quarter of revenue and positive Adjusted EBITDA contributions from the Bevo business, albeit on a seasonally affected basis. Third, we expect adjusted gross margins to be consistent with fiscal Q1 2023. Finally, we expect to achieve our previously stated objective of quarterly SG&A expenses being below CAD 30 million. Thanks for your interest. I'll now turn the call back to Miguel. Thanks, Glen. I'm gonna leave you with four thoughts before taking your questions. First, we're just one quarter away from achieving our goal of positive Adjusted EBITDA. Cost savings are nearly complete, and going forward, we'll have a lean and flexible operating model. Second, our medical cannabis business is a formidable force in the industry, both domestically and internationally. It remains the smartest cannabis segment to invest behind today with excellent growth opportunities. Third, the Canadian rec market is correcting, and the two acquisitions we have made in Thrive and Bevo will be even more beneficial to us once the recovery is upon us. Last, our science innovation program is a high-margin opportunity that's just starting, and we look forward to sharing more in the future as the business grows. To conclude, we're well on our way to becoming a leader in global cannabis and are making strategic progress to that end with each passing quarter. Our completion of the business transformation is near, on time and on budget, and we've done it without sacrificing our investments and growth. We've also done this while strengthening our balance sheet, which is critical in today's environment. The end result will be a positive and sustainable structural change to our business that will enable us to be successful in the long term and create significant shareholder value. Thank you for your time and interest in Aurora, and we look forward to sharing our progress. We'd now be happy to take your questions. Operator, please open the line for questions. Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on the telephone keypad. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to one question only, and if you have a follow-up, please reenter the queue. One moment, please, while we poll for questions. Our first question comes from the line of Vivien Azer with Cowen. Please proceed with your question. Thank you. Good evening. Good evening, Vivien. I wanted to touch on Europe, please. You guys have been really transparent about your expectations for fiscal Q2 and why you're expecting a recovery, and it all makes sense. But Miguel, I was just hoping to get some perspective on how you view that business' defensibility in a more challenged macro environment. Certainly, you know, through kind of traditional consumer staples earnings, European, you know, weakness, especially the further east you go, has been incredibly topical. I'd just love to get your perspective on that. Thanks. It's a great question, Viv. You know, I think if you look at, you know, Canada as an example, you've got over 250-300 LPs that compete in the rec business, and you've got a bunch of people, you know, that are facing some tougher times. If you look at the medical business, you know, it's very concentrated. Why I bring that up is because it's been going on for a long time. We have a 24% share, which is the leader in Canadian medical by a mile. Then you have 9%, which is the number two company, and then it really falls off. There's just, you know, not a lot of companies participating. When you look at Europe, and I think, you know, Germany is a really good example, you've got basically four companies, maybe five companies, that do the vast majority of the business. It's incredibly expensive to get in, it's incredibly challenging, you know, to continue to deliver, and the regulatory thresholds are significant. There really is sort of a moat around medical. It's not just Germany. You see this in other markets where it's a consolidated number of companies. It takes a very specific skill set. What is interesting that is starting to really come to the forefront now is that, you know, challenge, that difficulty is portable. The best example I can give is if you look at the framework presented by Karl Lauterbach, which is sort of the Federal Minister of Health in Germany that's now going through the EU. You just saw the Czech Republic, which is another great market and a really good market for us, talk about wanting to mirror or to get the learnings from the German experience. I think you're gonna start to see consistency in these markets from a regulation standpoint, everything from manufacturing, to testing, to packaging, to sales and marketing. I think, you know, while it's gonna be challenging and it's gonna be difficult, there's definitely gonna be advantages for those handful of companies that are regulating, you know, really regulatory forward in those markets. You know, I think that's why we're so thrilled about it. You know, I think we'll be competing against 4 or 5 companies, not 200 companies. Does that answer your question? It does. Thank you. Thank you. Our next question comes from the line of Michael Lavery with Piper Sandler. Please proceed with your question. Thank you. Good evening. Good evening, Michael. I just wanted to come back to the profitability milestones, and you led with the revenue improvement, which makes perfect sense. Just curious if you could unpack that a little bit more, maybe a couple things. One is how much maybe is it mix driven or operating leverage? You know, does it need to be a big number or just the right product? And how much visibility do you have on that? We're close to halfway through the quarter. You know, do you have a line of sight on forward bookings or some things that give you a sense of that being on track? Yeah. I mean, let me make a couple comments, and then I'll turn it over to Glen. I mean, I'm not gonna give comments about the quarter, but let me sort of add some color to what Glen mentioned. Clearly with, you know, 2x the margins in the medical business and in most cases the international business, those revenues makes a huge difference. When you have sort of these one-time, you know, ebbs and flows in a key market like Australia, and you get it back, it makes a really big difference because, you know, it's almost entirely upside because you've already, you know, grown the cannabis and you don't have increased sort of fixed costs for it. That's one. Secondly, you know, we're really thrilled that the OCS, and I don't wish a cyberattack on anyone, but they addressed it quickly and the same thing with the BC strike. You know, I'll let you take our comments about that and where we are in the quarter sort of bear. From the cost side, you know, I think we've been pretty consistent in terms of that. You know, not to rehash Glen's words, but if you go back to where we think we should be on revenue and you look at the margin, and then you add Bevo, you know, you're there. I think the part that is sort of powerful about all this is, you know, we get there in a model that can grow and has future growth opportunities, you know, and whether that's Western Europe or some other aspects that will be there. So I think when you describe mix, I would say it's more business mix than it is, say, product mix. But Glen, anything you want to add to that? No, that's exactly right, Miguel. You know, the cost reductions and the SG&A that we committed to and a bit of incremental Bevo cuts the Q1 EBITDA loss in half. The rest of this is coming from holding our margins up and then the business or market mix, and with it being mainly focused on medical, a lot of that drops to the bottom line. That's. Yeah. Michael, I guess the point is we're not saying it goes beyond where it's been in the past. The comment of getting back to traditional levels in those two key businesses, you know, I think, you know, is why we're, you know, we're saying what we're saying. There's not, you know, some great promise of a new piece of business or, you know, some additional form of, you know, growth. That's great. Helpful color. Thank you. Thank you, Michael. Our next question comes from the line of Pablo Zuanic with Cantor Fitzgerald. Please proceed with your question. Thank you. Good evening, everyone. Two quick questions. A two-part question if I can, Miguel. First, I think you're one of the few companies that has stuck to this view that Germany will start only with domestic production and that imports won't be allowed. I mean, obviously. Mm-hmm. The draft, that's what the draft says. Most other companies are talking that imports will be needed because, you know, domestic production won't be enough. Maybe if you can just explain your point of view, which seems to be in the minority. Most other companies expect imports from day one. Then the second part to the question is that in the event that the regulator only allows domestic production, how long will it take you know, to ramp up, I don't know, a greenhouse or production to supply the market? You know, when would you need to start investing, and are we looking at a one-year or two-year timeframe? Thank you. You got it. You know, I think our position on Germany is led by having, you know, significant resources on the ground. We have full-time people there. We have a tremendous government relations organization. You know, we've been consistent in that opinion. I'm not here to disparage any of my competitors because I really, that's not my place. We've been very consistent that for medical cannabis, in that part of the world, in Germany particularly, you'd be able to import. Recreational cannabis, whether it was around the UN convention or a variety of other two-party agreements, there just did not seem to be a pathway for that. As one of only three companies that are currently producing, you know, cannabis in market under a medical license, you know, we're very close to the regulators, and we have incredible respect. Going back to, you know, what we've seen, and this is me referencing, you know, what Mr. Lauterbach said, who's the health minister. You know, what they're really talking about is that they are gonna have a science-based integrated framework. I give them a lot of credit. They're talking to regulators across the world in different markets. They're talking to a variety of people, and they are talking to industry to get sort of this consolidated, you know, opinion. I would not lose the topic that what's happening with rec is not also, you know, is not taking away from what's happening in the medical channel. There's also enhancements being made to that critical medical channel. What are the, you know, the key elements of this and what did he say? You know, possession up to 30 grams, no limit on THC, which is a really important piece. Potential limits for those under 21. Cannabis tax being applied on THC content. You know, the aim of the final consumer price, try to keep that close to the black market to create that attraction. Clearly, there'll be advertising and sales marketing prohibitions. At least in the initial draft, edibles are not allowed. As you mentioned, Pablo, so clearly domestic production, and they've been very interested in understanding what's that clear regulatory framework around quality, security, and production standards to still be there. I would also mention they've been very proactive in getting the feedback from the EU, and that doesn't happen in a vacuum. We're thrilled about that type of, you know, process. They have such a critical country, then go to the EU. As I mentioned in my other comments, having the Czech Republic be looking towards Germany and trying to, in some cases, mimic or mirror those learnings, has to indicate that you're gonna see consistency in these regulations. That's, you know, sort of the general overview. More to follow. We're thrilled with what we've seen so far. You know, in terms of timing, you know, depending on the magnitude of a facility, you know, Pablo, you're talking about 1.5years - 2 years, you know, from the moment you say go and write the check and, you know, and have these items, you know, be at high quality. They're aware of that. The regulators clearly are aware of that, and there's been some tremendous, you know, I would say conversation back and forth about the realities of what that looks like. We'll continue to be respectful of that. We're thrilled to be in market, but Germany is gonna be a really important bellwether country in a lot of different ways, and I would encourage folks to stay close to it. Our next question comes from the line of Andrew Carter with Stifel. Please proceed with your question. Hey, yes, thanks. I guess I wanted to ask that Canadian consumer came in well ahead of our estimate or well ahead of what we were thinking, and I guess you guys have kind of a tepid guide around the disruptions, yet sequential growth. First off, can you tell us how much Greybeard contributed? Also maybe disaggregate the performances by channel. Quebec's been strong. Love to hear that. Of course, the Headset data says you were down 13% POS. That, of course, could be backwards looking if things are just working their way through. Maybe also give us an aggregate of what shipments were outside of Quebec. Thank you. Let me make a comment about, I guess, Headset provinces, and then I'll kick it over to Glen on the rest of the question. Quebec's our largest province in terms of shipments. We really value our partnerships with all the provinces, but Quebec's been particularly good for us. As you know, Andrew, many of the syndicated services do not include Quebec, you know, and the province owns stores, and so it does skew the results a bit, particularly for us as someone who does the majority of their business in there. I think, you know, Greybeard was a significant contributor, but also, you know, we've had successes on two fronts that has helped us. One is our significant improvements in yield has allowed us to go back into some of the, you know, say, larger format sizes that now make sense for us in a way that they didn't make sense for us before. We're also participating at a much higher level in some of the faster-growing, higher-margin segments such as pre-rolls and concentrates. Glen, you wanna take the rest of it? Yeah. Greybeard and the Thrive brands are important brands to us, but they are our premium brands, so they don't drive a ton of revenue. I'd say they're probably in the 15% range this quarter and certainly growing. You know, margin-wise, they're very important to us. As you know, Miguel mentioned, the provincial distribution that actually drives a lot of our bottom line. Getting into the right provinces and the right products and with the distributions that Quebec offers you with, you know, distribution in all the stores. The provincial mix is as important as the product mix to us on our bottom line. I think, you know, I think it's, it continues to be an important market for us. You know, Ontario's got a very big revenue market. I'd say, you know, we certainly are choosy on what products we launch in Ontario to make sure that we continue to have that focus on protecting our margins and being able to drive to profitability. Just to clarify in there, you said getting back into large formats. Does that mean, which I thought the focus was 100% premium, is it just a lower cost structure allows you to do that? I just wanted to make sure and clarify that comment. We've particularly on discount and value, we got out of, you know, spots where 14 grams, 28 grams just didn't make any sense. What we, because of the cost structure that we had with this, you know, the enhanced genetics, and in some cases, getting 2x the yield per square meter, it allows you to go back into some of that. Then you cover it, you know, you know it better than I do. The growth of 28-gram and some of those larger formats have been pretty significant. If you can get in there and actually make some money on it, you know, it's a win from a revenue standpoint. The other point, you know, I guess I would make is, you know, the fragmentation and whether we're at the bottom or not, you know, you've got the top five companies that right now are, I don't know, 36% of the business, and last year they were 48%. There is a lot of consumer movement, Andrew, which I know you know. When you come out with new things like we have, the environment is pretty ripe to make some quick gains. We've been pretty pleased with that, outside of Greybeard. Thank you. Our next question comes from the line of John Zamparo with CIBC. Please proceed with your question. Thanks. Good evening. I also wanted to touch on the consumer channel, but on gross margins. You've repositioned into premium and you've added Thrive's, but adjusted margins are down sequentially year- over- year. Is that mostly a function of volume, and you just need to increase that to get higher margins? I know the press release mentioned packaging costs, but is there any other color you can add there? Thanks. Yeah, I mean, John, as you know, the rec business is really challenging right now. You know, the pricing continues to drop. The macro environment makes it a challenge. You talked about packaging. There are other sort of, you know, inputs on the inflation side that push down the margin a little bit. Clearly, utilization and spreading the fixed across does make a difference. We are seeing some opportunities, you know, as I said in my prepared remarks, leveraging, you know, common infrastructure for rec and medical that we think will have some margin. I think the margin in the rec business overall is gonna be, you know, under pressure. You know, as sort of we look forward, we've been able to find spots, where we've been able to keep it at where it's at through a little bit of mix, to Glen's point, a little bit of geography and a little bit of introduction of new products, particularly premium products. Overall, you know, I think for most manufacturers, you're gonna be dealing with a challenging pricing environment, in the meantime. Now, you know, you make a big move on yield, you make a big move on, you know, something in a pre-roll or in a concentrate or in a premium or ultra premium flower, you can, you know, you can make a move there. I think overall, you know, I think it's a little bit of the environmental catching up. Yeah, clearly, if you know, improve your overall, you know, production and you move through the fixed cost, you're gonna improve your margin. I mean, Glen, I don't know, anything you want to add on margin in rec? Yeah, John, it's a great question. You're exactly right, though. I mean, what we see in contribution margins, so that incremental margin on the next unit of sales is quite compelling. You know, I think there is a volume there, and that's why it's nice to see us kind of getting you know a little bit of stability and even a bit of growth in the consumer channel. As we do, and we've got some exciting new products that have dropped recently, and that we're seeing nice pickup across some of the provinces. I'm excited to see what that does in terms of margins. Lots of headwinds, as Miguel said. But at least we've got some levers we're pulling to protect and maybe even grow some of those margins with a bit of volume. Thank you. Our next question comes from the line of Matt Bottomley with Canaccord Genuity. Please proceed with your question. Good evening, everyone. Just wanted to take a step back just on the Canadian medical market, that side of the business. I think we chatted, Miguel, about this a couple of quarters ago. Just given that this is, you know, essentially been a CAD 100 million business for some time now, and I understand there's some strategy and, you know, going after margin on insured patients versus just trying to grow the top line for the sake of it. I'm just curious if there's any other variables or elements other than insurability that might drive the overall industry growth, and then if Aurora can keep its, you know, 25% share to see the commensurate growth with that. Is it just insurance, or there's anything that you guys can do, that's in your control in the interim to try and help that? Then maybe another side of that question, just also related to just sort of the doctor acceptance or doctor uptake. Are we seeing more doctors prescribe cannabis? Where is sort of that segment of the market in terms of where the medical professionals are at? Really no other LP talks about this line of the segment, just given that most are focused on other things or adult- use. I think just a lay of the land might be helpful. Sure. Sure, I'd be happy to. You know, right now, when you look at the Canadian medical business, you got 1% of the Canadian adult population that participates in it. If you're looking for drivers of it, first and foremost, because the margin is so compelling, you know, compared to rec, not compared to pharma or other traditional sort of forms of medical, you know, you get a lot of folks playing around it. As I mentioned, it's a pretty consolidated piece of business. What are the aspects that will improve the overall medical business? Well, first and foremost, you know, I would remind people how early we are in this. For most clinicians, physicians and patients, clinical research and efficacy and the real science behind medical cannabis is just coming online. You know, we're being honored to participate in some clinical research. You're seeing stuff in the U.S., you're seeing a ton of stuff in Israel. As that comes online, you're gonna really start to change the equation for all the key, you know, stakeholders, everything from the insurance companies to the clinicians, to the patient around that. Some of the stuff that's coming out is pretty compelling around some of the traditional, you know, use cases that you see around medical cannabis, whether that's anxiety or sleep, or PTSD, or neuropathy or whatever those things may be. That's a very important driver. I think the next driver, you know, is that you're starting to see, some of the insurance companies and the private companies and those that have coverage bringing cannabis coverage into more into the mainstream in terms of the benefits program, up to including companies like ours that have direct billing. That really makes, you know, a big difference. Obviously, you know, some of these large union contracts make a lot of noise in terms of how they're coming online. I think third, you know, Matt, is this general sort of, increasing acceptance around cannabinoids, and their use beyond, you know, things like Epidiolex. You're really starting to see that come to the forefront, and that definitely changes the overall equation. When you only have 1% of the adult population, you know, receiving that benefit, any sort of movement makes a you know massive difference. I think the benefits will be outsized to a very small subset of companies that participate in it. It's a very expensive program, and it takes an incredible amount of, you know, work and nuance and effort to support patients, and insured patients and obviously the veteran patients who we owe so much to. You know, I think in all of that, as people try to model, you know, what this is, it's gonna grow, it's gonna become more mainstream, it's gonna become more clinical, it's gonna become more science-driven, and the benefits will fall down to a small group of companies. That sort of progression is portable. The German regulators are deeply interested in the science and in the history of what's happening in the Canadian medical experience, same thing with France, U.K., Israel, and on and on and on. It really is a global network and a global sort of, you know, line up. I think, you know, for companies like us, we're gonna continue to participate, you know, in those, and hopefully that alignment allows us to be able to, you know, respectfully and responsibly work with the regulators. We're very bullish on medical cannabis, true medical cannabis, not, you know, what you may see in certain markets. I think if you look at the overall global numbers on medical cannabis, even being conservative, you know, while it's hard on market by market, but the overall, you know, growth on it is quite significant. Did I answer your question, Matt? Great. Actually not to try and put another second question, but just on what you were saying, I'm curious in terms of the patients that are onboarding in the Canadian market. Is there any element of, you know, obviously, if it's insured, that's different. For people that aren't insured, is there any element of them joining the medical market? Obviously, there's some, you know, friction with, you know, registering with LPs and things that aren't really typical in a lot of industries. Once they, you know, ship an order or two, do they then just go and, you know the products they like, and then just for the sake of ease, go to their local dispensary? I know in Ontario, there's one on every corner now. Is that part of the dynamic that's making it hard to ramp up, you know, patients in the country? No, I wouldn't say so. I mean, there has clearly been some interaction with the medical market to the evolution of the rec market. You know, this I think is maybe where in certain markets this gets misconstrued. This is primarily a conversation that a patient has with a clinician or a physician or an advisor to go get medicine. Obviously from an insurance standpoint, there's no economic advantage to go into the rec. You know, for the vast majority of you know, the patients we interact with, this is a medical you know, aspect, a medical case that is connected to a physician or a clinician or an advisor. You know, that interaction, in the same way you would have with you know, other form of medications, this doesn't lend itself you know, to that. Now, maybe an uninsured patient that, you know, finds something and sees, you know, some other reason to go get there. But when you're talking about people that are over indexing on things like capsules, and oils and other things that maybe aren't, you know, the sort of the flavor of the day in the rec business, you really find this is truly a medical, you know, construct and a medical infrastructure that lends itself to that more so, you know, than just a surrogate for rec use. Thank you. The next question comes from the line of Frederico Gomes with ATB Capital Markets. Please proceed with your question. Hi. Good evening. Thanks for taking my question. Just on the Netherlands, you know, could you provide an update on your investment there? I know that you talked a lot about Germany, but how do you view the opportunity in the Netherlands, and, you know, potentially in terms of timelines, when can we expect sales from that project to start? Thank you. You got it, Fred. In the Netherlands, there are two aspects of it. There, there's the medical aspect that we continue to participate in, where the government is reviewing products and will make a final assessment probably in May or June of next year about what that is. From the rec standpoint, you know, there really isn't an update for us. You know, we're still waiting to hear about a firm date and what is the process. I mean, there have been general details for those 10 licensees to service roughly 500 coffee shops in a variety of towns and cities throughout the country that would give everybody the opportunity to look at everything from data to service levels and whatnot. I don't really have an update for you right now. You know, at a time in which we have one, we'll give it. We're still waiting for some information on exactly, you know, what it's gonna be and when it's gonna kick off and exactly what that all looks like. To be clear, the information that we've seen previously has been there would be a test for those 10 licensees, and I know, Fred, you're well aware of how that all worked out. Post that test after an undetermined period of time, they would then talk about a, you know, a different construct. Thank you. The next question comes from the line of Tamy Chen with BMO Capital Markets. Please proceed with your question. Hi. Thanks for taking my question. I was just curious, in terms of inventory impairments, when do you expect that we'll kind of get through past that? Because I know you've had, you know, Sky shutting down and all of that. I'm just wondering when we get past that and don't really see more of the impairments going forward. Thank you. Glen? Yeah, sure. I'll take that, Tamy. Thanks for the question. There's a few things going on here. One, under IFRS, as I'm sure you're aware, there's a biological asset standard that ends up with some fair values in our inventory that we, you know, when you have to write things down to net realizable value at the end of the day, there's an ongoing sort of noise quarter to quarter of just provisioning down to realizable value on your inventory. But more to the point, you know, a lot of the footprint rationalization that we've done with our production facilities are to get us to a better spot where we are producing high quality, you know, low cost and very focused on what the consumer wants and minimizing excess production. Now it is an agricultural crop, and certainly in consumer markets, we do find the consumer tastes do evolve. So, you know, it's never going to be perfect, I think, in terms of alignment. We think we would expect that there would always be some, you know, hopefully small percentage of inventory that ages out a little bit. Now, what we do find, though, is that we're developing more and more channels for our cannabis. So it may fit the rec market in Canada, it may fit the medical market in Canada, it may be excellent as an export product to another medical jurisdiction. Even within those international medical jurisdictions, we're starting to develop different tiers of product and an appropriate call, a premium and value. You know, two things that we can do here is continue to rationalize our production footprint and really focus on producing high quality cannabis, and to continue to develop more and more channels for outlet of that cannabis. Expect it to improve over time, Tamy, but being agricultural, there will always be a little bit of noise in the inventory. Thank you. There are no further questions at this time, and I would like to turn the floor back over to Miguel for any closing remarks. Well, listen, I appreciate everybody's interest in our business and in this quarter. We're thrilled about where we're at, and we're looking forward to the next call and we look forward to having the conversations with many of you. Wish everyone a safe and for those that are celebrating Remembrance Day tomorrow, which is obviously an important day, for everyone, we have well wishes on that. Thanks to all, and we look forward to talking to you in the future. All the best. Thank you, everyone. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.