Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the HEXO Fiscal Q1 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. Jennifer Smith, Director of Investor Relations, you may begin your conference. Good morning, and thank you, Julie. Before we begin, we would like to remind you that certain matters discussed in today's call or answers that may be given to questions asked could constitute forward-looking statements. These statements are based on the company's current internal views, estimates, expectations, opinions, forecasts, beliefs, assumptions, and other statements that are not statements of fact regarding the future of our business, future plans, strategies, operational results, and other future conditions. These statements should not be read as assurances of future performance or results. They involve known and unknown risks, uncertainties, and other factors that could cause actual results, performance, or achievements to differ materially from current expectations and those implied by such statements. This morning's discussion is qualified in its entirety by the cautionary notes regarding forward-looking statements and the risk factors that are included at the end of this morning's news release and in the company's annual information form, management's discussion and analysis, and annual report. Please view these materials for more information about forward-looking statements and the risk factors that could cause actual results, performance, developments, or events to differ materially from our current expectations and those implied by such statements. HEXO disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements as a result of new information or future events for any reason. We are pleased to have several members of our management team joining us this morning. I'd like to introduce Scott Cooper, our President and Chief Executive Officer, Trent MacDonald, Chief Financial Officer, Valerie Malone, Chief Commercial Officer, and Roch Vaillancourt, General Counsel. I will now turn the call over to Scott. Thanks, Jen. Good morning, and thank you for joining us today. Earlier this morning, we released our Q1 2022 results for the quarter ended October 31st, 2021. I am pleased to report a good start to our fiscal year, with HEXO reporting CAD 50.2 million in total net revenue, an increase of 70% year over year, and 29% growth compared to last quarter. While the year's off to a good start, I'm also aware of the challenges we're facing, and that's why today I'm announcing our new strategic plan, The Path Forward, to solidify ourselves as Canada's leading cannabis company and position us to capitalize on international opportunities. Over the past 6 weeks, I've had the opportunity to visit every core HEXO facility. I've met with many of our employees, I've met with customers, I've met with analysts, and I have to say I've never been more confident in this team and on our operations to secure a strong and profitable future for HEXO. The Path Forward is a transformational plan that utilizes HEXO's current assets, you know, including our low-cost cultivation capabilities, strong brands, range of products across the full spectrum of cannabis. These come from our recent acquisitions, and we will use them to drive accelerated organic growth, build market share, become operationally cash flow positive over the next four quarters. The Path Forward is made up of five priorities. One, continue to reduce manufacturing and production costs and maintain our advantage as low-cost producer. Two, streamline and simplify the organizational structure. Three, realize cost synergies from acquisition and recent plant closures. Four, focus on revenue management, including more disciplined pricing. Five, accelerate growth through organic market share gains, capture missed revenue opportunities, including improving our ability to align cultivation planning with market demand, reintroduce a focus on medical, and strengthen our commercial capabilities and innovation pipeline. The plan is underpinned by specific actions to fortify our balance sheet, strengthen the leadership team, and enhance our corporate governance. As part of our plan to ensure HEXO has adequate capital to meet our requirements, we're taking immediate action to reduce the dilutive effect of the convertible note. We are working with Lazard and Bank of Montreal, as well as our current debt holder, to reduce the overhang impact of this debt. We're actively evaluating opportunities in a manner which maximizes shareholder value. I'm focused on selecting the best option available for HEXO moving forward. I can tell you we have a number of options available and are moving with pace. As of December 14th, 2021, $118 million of the principal in the convertible note has been redeemed and converted, leaving $241.6 million of principal outstanding. Our second underpinning initiative is to strengthen our leadership and enhance our corporate governance. To that end, we're announcing a series of executive changes to strengthen our focus on growth, products, operations, and profitability. These decisions reflect our vision for building a best-in-class consumer packaged goods company that is on the path towards a stable long-term growth. There are three changes I'd like to highlight and outline today. First, I'm pleased to announce that to bolster our focus on products, we are appointing Jackie Fletcher as our Vice President, Science and Technology. Appointing Jackie allows us to leverage the deep expertise and bench strength we acquired as part of the Redecan acquisition, and in particular, Jackie's practical application of R&D efforts. Jackie will report directly to me. Second, Trent MacDonald will step down from his role as Chief Financial Officer, effective March 8th, 2022. I would personally like to thank Trent for his significant contributions and dedication to the company and for agreeing to stay on over the next few months as we complete a search for a new CFO. Third, to enhance governance, we are announcing the appointment of John Bell as our new Chair of the Board. John has a 40-year career of business success. He's Chairman of Stack Capital, Pure Jamaican Limited, and a board member of Cure Pharmaceutical. From 2014 to 2020, he was a member of the board and chair of Canopy Growth. His tremendous experience will continue to drive HEXO as the market leader in Canada. As a result, Dr. Munzar will be stepping down from the board of directors and his role as Chair, and I'd like to personally thank Dr. Munzar for both his dedication to HEXO and his personal support of me through my appointment as CEO. I would now like to walk you through our transformation plan, The Path Forward. This plan includes a series of value creation initiatives that are expected to generate incremental cash flow of CAD 37.5 million in fiscal 2022 and an additional CAD 135 million in 2023 for a total of CAD 175 million over the next two years, split almost evenly between cost reductions within our control and growth opportunities with revenue. This plan, which has been validated by EY, will position HEXO to unlock opportunities, enhance our value to shareholders, and make us more attractive to institutional investors. We have a unique portfolio of assets and a leading product portfolio in the fastest-growing market segments. Once we begin executing on this plan, we will grow organically without the need for any additional acquisitions. Let me walk you through the five priorities in more detail. First, we will continue reducing manufacturing and production costs by leveraging existing capabilities across the facilities that have come together across the companies. We're actively applying best practices and learning from our highest margin categories and top facilities across the entire operation to improve and optimize productivity. For example, in the opportunity I had to tour the facilities at Masson, over the past year, we've reduced our cost per gram of THC by 50%, 50, by improving output, reducing costs, improving the bud-to-trim ratio, and you know, just general overall improvements at that facility. That type of capability and learning we'll take across other facilities. When it comes to something like vapes, we currently outsource the HEXO production, the HEXO brand production. However, given Redecan's expertise in vapes and their capability, we'll now be bringing that production in-house, resulting in an annualized and immediate $5 million margin improvement for HEXO's portfolio of vape products. Two, we will streamline and simplify the organizational structure and bring operating costs in line with our size and growth. Starting from an industry-leading position, these efforts will continue to position us as best-in-class operational efficiency. We will aggressively tackle costs across the organization, and we will aggressively build capability. We will continue to focus on capital and be much better stewards of capital. Three, we also continue to deliver on synergies as a result of our recent acquisitions. Last quarter, we reported we would exceed our initial target synergies of CAD 35 million. I'm pleased to announce this quarter that we expect to exceed CAD 50 million in synergies based on our latest projections. Four, we will focus on revenue management, including more disciplined pricing across our entire range. The days of unprofitable cannabis companies are numbered. We think that the value add we provide with our high-quality products means more to consumers than a race to the bottom in price. Successful companies in the future will be those that can successfully run their businesses and not just buy unprofitable market share. Five, to increase revenue, we plan to accelerate growth through organic market share gains and capture missed revenue opportunities through better demand planning. For example, today, we are only delivering 65%-70% of demand to our customers. Going forward, we will connect our demand forecast to what we plant and expect to see the results of these actions in Q3, and we will actively manage that through Q2. Redecan went through a similar evolution, and we are able to learn from their experience and apply them across the entire organization. We'll also put a focus back on medical, consolidating this product line under Redecan's leadership, given their strength in this category. We're also focused on redoubling our efforts to put consumers at the heart of every decision, working closely with retailers and wholesalers to improve the commercialization of our products and prioritizing operations to respond nimbly to constantly changing market conditions and consumer demand. For example, flower. We know flower is the largest category currently with 45% of the market, and we currently are number two in this category. With the combination of the entities coming together, we now cultivate across the entire range of price categories and are well-positioned to add significant capacity with very little capital required. As we expand our indoor growing capability resulting from the Zenabis acquisition, and greenhouse and outdoor facilities from Redecan, we now have the full suite of production capabilities to allow us to compete in flower across the range of good, better, and best. Pre-rolls. Pre-rolls is the fastest-growing market in cannabis, and HEXO continues to maintain the market-leading position in this category with best-in-class margins, in large part due to our recent acquisition of Redecan. We're putting good, high-quality flower in our pre-rolls and currently can't keep up with demand and are undertaking steps to increase our capacity by 2-3x. Edibles. HEXO is now in the edibles market through the acquisition of Redecan, and we're pleased to announce we're launching our own, in-house mainstream edibles to compete with market leaders. We're just getting started in this category and anticipate significant room to grow. In vapes. To capture lean manufacturing capability, as I mentioned, we're moving HEXO production in-house, leveraging Redecan's capabilities, and we are also responding to evolving and increasingly sophisticated consumers with innovation. We currently have the number two market share position in this category. I also wanna highlight HEXO's leading market position in beverages, capsules, concentrates, and oils. In conclusion, before I turn it over to Trent, I'd like to close by saying that HEXO is well-positioned to maintain and grow as a domestic leader and be amongst the first operating cash flow positive and profitable LPs in Canada. We will achieve this by executing our new strategic plan, The Path Forward, and by putting the customer and consumer at the center of everything we do. This business has significantly higher value and upside as we get through our transformation to unlock organic growth. HEXO is on the right path for long-term prosperity and is well-positioned to deliver positive shareholder returns in the short and medium term. With that, I would like to turn the call over to Trent. Thank you, Scott, and good morning, everyone. Before I delve into our results this quarter, I want to point out some key developments. During the quarter, we completed the acquisitions of 48North and Redecan. We continue to focus on completing these integrations and incorporating best practices from each across the organization, including consolidation of our productive capabilities and cultivation capacity. This ties into our recent public release relating to the closure of three separate facilities. Now I'd like to actually jump into the financial results and highlight some key highlights within our results. The first thing I'd like to say, and Scott just alluded to it, according to recent Headset data, not only have we maintained our number one market share position, we have grown the gap between ourselves and number two. In Q1, total gross revenue grew to CAD 69.5 million, while total net revenue grew 29% from last quarter to CAD 50.2 million, both the highest in our history. That said, non-beverage adult use net revenue grew 40% from Q4 to CAD 46 million. During the quarter, I did a full review of our existing portfolio of SKUs and are currently undertaking an exercise to radically rationalize our SKUs and ensure that our innovation pipeline is consistently offering customers new products based on their demands. Under our Original Stash brand, we have now launched OS Genetics, which are selected from distinct genetics family and grown under specific conditions to bring out the highest quality. Our first products are OS Genetics Kush and OS Genetics Haze, and we will be launching more new strains under these product lines over the next year. During the quarter, net beverage sales decreased 39% from Q4. The quarter-over-quarter decrease in beverage sales is as a result of seasonality attributable to increased sales during the warmer summer months. Truss Beverages, however, did continue to lead in the key markets of Ontario and Quebec, capturing 36% and 70% market share respectively, while also maintaining the number one market share nationally. International sales decreased by 11% quarter-over-quarter as the company effectively recognized two periods of revenue in Q4 2021 due to the logistical issues we spoke of in Q3 2021, which was resolved in Q4. We are continuing to focus on international sales as we move forward. Medical net sales increased 237% from Q4 with the acquisition of Redecan. We are continuing to assess the medical market and leverage the strength of our combined entity to gain further ground. As a result of the purchase price accounting related to the acquisitions of Redecan and Zenabis, which we spoke about last quarter, the crystallized fair value adjustments, which otherwise would have been realized upon the sale of inventory, are included in the cost of sale. In order to better communicate the margins from our business activities, we have removed the impact of crystallization in our adjusted cost of sales to calculate gross profit before adjustments. Overall, gross margin before fair value adjustment, excluding beverages, increased to 28% in Q1 from 25% in Q4. Gross margin on all adult use net sales, excluding beverages, increased to 22% from 14% due to the contribution of Redecan sales at higher than average gross margins and the improvement in Zenabis gross margins after realizing some of the planned integration synergies. Medical gross margins increased to 59% with the addition of Redecan medical sales at higher than average gross margins. The gross margins in international sales remained relatively consistent at 64%, while wholesale margins remained consistent at 24%. A minor increase was related to the previously mentioned Redecan and Zenabis sales, which I spoke about a few moments ago. Looking ahead, HEXO is focused on improving our gross margins. As Scott mentioned, we are focusing on driving cost savings in cultivation and manufacturing, improving utilization, and realizing additional synergies across the organization. We are actively reviewing the SKUs where we have strong margins and are applying best practices from these products to make improvements elsewhere. In relation to our operating expenses, we look at core SG&A as SG&A marketing and promotion and R&D. These, when added together, represented 59.1% of net revenue, down from 61.3% in Q4. As part of our cost cutting, we are continuing to aggressively focus on decreasing core SG&A as a percentage of revenue, and longer term, expect this to fall under 20%. In relation to G&A specifically, it increased CAD 3.3 million over Q4. The increase is primarily related to the acquisitions of Redecan and 48North during the quarter. Marketing promotion increased CAD 2.6 million over Q4 as a result of an enhanced marketing promotion campaign at Redecan and our carbon offset initiatives. Share-based compensation increased CAD 3 million over Q4 as a result of the timing on vesting on previous grants as there were no new options granted during Q1. Amortization of intangibles increased CAD 7.2 million over Q4 due to the additional amortizable intangible assets, namely cultivation licenses and brands, which were acquired through the acquisition of Zenabis, Redecan and 48North. Restructuring costs increased to CAD 2.4 million as a result of changes in certain senior personnel across the organization due to the ongoing restructuring initiatives. Impairment of PP&E increased CAD 3.5 million, primarily a result of the indefinite suspension of our KIT extraction project. Impairment in investment in associate of CAD 26.9 million. On October 31st, there existed indicators of impairment on the company's investment in Truss Beverages, and as such, management performed discounted cash flow valuation at October 31st, 2021, which results in impairment to its recoverable amount. The historical carrying value of the Truss LP investment included CAD 42.3 million related to the fair value of warrants issued to Molson Coors Canada as part of the initial investment in 2018. These warrants expired unexercised in October of 2021. Acquisition and transaction costs increased to CAD 9.5 million. These are again related to the acquisitions of 48North and Redecan and the integration of Zenabis. Finance expenses decreased from Q4 down to CAD 4.5 million in Q1, and this relates mostly to the broker and advisory legal fees for the August financing. Loss from operations increased from CAD 60 million to CAD 155 million. This is significantly driven by the acquisition-related costs, fair value adjustments, the impairments of PP&E talked about around KIT and others, and investments and the write-down of Truss Beverages, as I noted earlier. Adjusted EBITDA was down another CAD 800,000 from Q4 and sits at - CAD 11.6 million. EBITDA loss remains somewhat elevated as we continue to work through operational synergies through the acquisitions. As Scott spoke to earlier, we have plans to realize cost synergies, reduce manufacturing production costs, and streamline and simplify the organizational structure. We now have successfully closed all three transactions. We switched from integration planning to integration execution as we move forward through the robust plan we created. We originally thought we would be able to achieve approximately CAD 35 million in synergies and now believe we will exceed the target and obtain synergies of over CAD 50 million. We have now realized CAD 25 million of those synergies on an annualized basis, which will come into our results over the coming quarters. From here on out, our focus is now on The Path Forward with our five key priorities as outlined by Scott earlier. I will not repeat them because Scott did such a good job articulating them earlier, but that will be our ongoing focus. On a final note, I would like to thank everyone at HEXO for their commitment and effort over this past year. It's been a pleasure working with such a dedicated and resilient team. I believe personally and wholeheartedly that HEXO has a great foundation on which to build for the future and sits in great hands. This now concludes my prepared remarks. Operator, we would be happy to take any questions. Sorry, just before we turn over to questions, just a thank you, Trent. Just a couple closing remarks. I wanna thank everyone once again for joining us this morning. I'd like to thank once again, Trent, for his service with HEXO on behalf of the board and management team. Wish you all the best in your future endeavors. The transformation of HEXO over the past 12 months has provided a strong foundation for the company. As I've outlined today, I believe there are significant opportunities across the network to accelerate growth, aggressively attack costs, expand margins, and be more effective stewards of capital, all leading us to be the first major cannabis company in Canada to consistently be operationally cash flow positive within the next four quarters. I have full confidence in our Path Forward. I believe there's significant value in this organization, and we're on the right path for long-term prosperity as we continue to work through the debt issues. Look forward to speaking to you soon and will now open it up for questions. Thank you. At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from Aaron Grey from Alliance Global Partners. Please go ahead. Hi, good morning, and thank you for the questions and all the color there. I guess, the first question for me would just be around, I appreciate how you guys are now doing the kind of The Path Forward, but just in terms of, you know, market share trends going forward, you know, pre-roll is doing well, but on the flower side, you know, under some pressure, it sounds like, Scott, you guys don't wanna compete as much on the pricing side anymore. Specifically on the flower category, currently the biggest within the Canadian market, how are you guys looking to improve the market share there going forward, particularly as you mentioned on the indoor cultivation side? Thank you. Thanks for the question. One thing I would say is we look at the flower category, and Val, if you wanna expand on this. You know, we look at the category in, you know, good, better, best, a nd we'll continue to compete with good. We have a strong, as we said, best in class cost structure, both in cultivation and manufacturing. What we're particularly excited about, though, as we look at the future, is the opportunity with Atholville from the Zenabis acquisition with the indoor grow facility, you know, bringing higher quality flower to our product line. We've got a full range of growing capacity across the Redecan, HEXO and Zenabis systems. We've got new genetics as a result of the acquisitions, which we're currently testing in a number of facilities to bring to market shortly. Where I'm excited about flower again is we have a strong position and with the new acquisitions, we have a lot of opportunity to move into additional segments and categories. Okay. Thanks for that. I appreciate that color. Second question for me, just on the synergies. Expecting to realize CAD 50 million now versus the original 35. I believe you mentioned how many synergies you realized to date. Could you please just repeat that and then offer some color in terms of the timing of to get to the full 50, and then if you could provide a split between COGS and SG&A where you look to realize the 50 million. Thank you. Sure, Aaron. Trent here. So far we've managed to get about CAD 25 million of the synergies. You don't see all of that in our Q1. Obviously, this is an annualized amount which we expect to come through the P&L over the next three, four quarters. We have realized some of those in Q1. You'll note that we've talked about the margins in Zenabis coming back to approximately 32%, which is as a result of some of the synergies coming from the closure of Langley, B.C., among other things. As we go forward, we're expecting to get to over CAD 50 million, and that would be over the next three, four quarters. As you know, we did announce the closure of several of our facilities, which will take place at the end of January and the end of February, after which those will start to annualize. There's other initiatives in relation to productive capabilities in Atholville, Masson, and Redecan, all of which will take some time, but we're doing this with some haste, and we do want this to start annualizing over the next three, four quarters, so you see the full benefit of these acquisitions. All right, great. Thanks so much for the color, and I'll go ahead and jump back into the queue. Thanks. Your next question comes from Rupesh Parikh from Oppenheimer. Please go ahead. Good morning. Thanks for taking my question. I just wanted to touch on maybe more of the HEXO base business. If I take out the M&A, it appears the base business declined year-over-year. Maybe just some more color in terms of what's happening with HEXO, excluding the recent M&A? Hi, it's Valerie Malone. I'll take the question. I really can't comment too much on what's happened in the past, but I can tell you what we're doing forward in terms of growing our overall market share. We are, in fact, number one in many categories within the cannabis space and on our way to doing that in others. As we move forward and fuel this engine to ensure that we're driving organic and market share growth, it really is being fueled by a very deep understanding of the evolving cannabis consumer and their needs and their need states overall. Our focus, as Scott alluded to, at the onset, is really focused on understanding these consumers, growing the right products, and delivering them in a timely way to ensure that we continue to grow organically and expand our market share position with HEXO and all the other brands that are within our family. I'd add to that, since we've talked about closing the gap versus customer demand. One of the opportunities as we talk about growth, as we cultivate to that customer demand, that will certainly be part of closing that gap and accelerating growth. We're also looking at the portfolio of brands in totality. We're looking at how we can best meet consumer needs. Consumers are, you know, increasing. You know, pre-rolls are a fast-growing category. As we look at the set of brands across the full range, we're managing as a portfolio, again, to meet consumer needs, to optimize margins, and putting the focus and investment behind the highest margin segments. Yeah, I would anticipate, as you kind of look at the business moving forward, we're managing it not necessarily brand by brand, but in aggregate to optimize the full opportunity for the business. Okay, great. That's helpful color. Just on the positive cash flow commentary, when you guys have that target out there, are you referring to positive free cash flows or operating cash flows within four quarters? Operating cash flows. Okay, great. Maybe just one final question. Just on Redecan, you know, obviously that was one of the more significant acquisitions that you guys have recently done. Just any major surprises so far, positive or negative as you look about M&A? I'm very excited to have Redecan in the portfolio. They bring strong capability and capacity around particularly the pre-rolls. I think where I'm most excited about the Redecan addition to the HEXO organization is their capability. You know, as I mentioned appointing Jackie Fletcher to the head of science. Where that's really compelling across the organization is Jackie has strong technical capabilities, and with Redecan, she had a really practical approach to applying those. As much as Redecan brings capability like infrastructure, they also bring that talent to HEXO and we'll be increasingly tapping into that across the enterprise. Okay, great. Thank you. Your next question comes from Tamy Chen from BMO Capital Markets. Please go ahead. Hi. Good morning. Thanks for the question. First from me is on the cash flow target that you've provided. First, I just wanna make sure I understand, because you talk about incremental. If I look in this fiscal Q1 quarter, your operating cash flow burn was about CAD 56 million. Are you saying that for the rest of this fiscal year, there will be an incremental positive CAD 37 million swing on the operating cash flow, and then in fiscal 2023, there'll be an additional CAD 135 million positive swing on top of fiscal 2022? Am I understanding that correctly, and how did you get to this, these targets? Like, can you share a bit more of the assumptions you have underlying this? Sure, Tamy. Right now, Q1 was very noisy, okay? Extraordinarily noisy in terms of cash flow. There was the closing of two major acquisitions, the integration, continued integration of Zenabis, as we close on these two acquisitions. Q1 is not indicative of the combined organization, the strengths that these organizations bring to one another as we go forward as one consolidated unit. Where we see the dramatic improvements in cash flow are gonna come first and foremost as both Val and Scott have talked about is the consolidation of SKUs, the rationalization of some of our operating facilities, the integration synergies that we continue to talk about that we believe we're going to be able to obtain over the next several quarters. You look at the cash flow impact of each of those things, and it's very robust. We believe right now, although not asked and not, we haven't said it out loud, but we believe that we will get to EBITDA positive in this quarter, Q2. That's what our goal is, and we'll see how that works out, but that's what our goal is, to be EBITDA positive in this current quarter. That provides us with an immediate cash flow better than what we had in Q1. Like I said, our goal is to get to positive cash flow in the next several quarters on an operational basis, and then from there you continue to build. That's really where it comes, as well as some of the cost-saving initiatives that Scott talked about on SG&A, production capabilities, the combination of certain, the lowering and rationalization of some of our overhead and costs that go into the overhead allocations go into cost of goods. As you bring those down, you know, it has a positive impact on cash, not just earnings. Got it. Okay. My second question is, your focus to better match your growth, your cultivation planning to demand is something that we've seen other large LPs also struggle with and are trying to improve, but it's taken some time, and they, some of them seem to be unable to keep up with the smaller, more nimble companies. Can you please elaborate more on what you intend to do to better keep up with the demand and especially the consumer expectation for essentially constant newness? Thank you. Yes, I'll take this one. It's Val here. I think at the onset, again, I'm just gonna reinforce a deep understanding of the consumer and planning for the future so we have a good understanding of what to cultivate in advance. The second key component of that is working cross-functionally together to ensure that there are plans that, in fact, take into account demand or cultivation and ultimately our overall supply. Integration work continues in terms of putting in place the right systems to be able to manage these systems in our Farm Management System and integrate all processes. It's a deep collaboration across the organization that's taking place immediately to ensure that we have forward-looking opportunities to cultivate based on the demand we see coming from the consumers, which is really all rooted in facts and consumer needs and the evolving appetite for Canadians in cannabis. If I could build on that, just a couple of specifics, Tamy. There's a number of reasons that I believe I mean one is simply connecting the right people in the organization. Obviously, that's underway. As Val talks about, you know, consumer needs, we've just completed a 3,000-person consumer study, which you know really gives us a much deeper understanding of usage and attitude, consumer occasions. We're using that knowledge, and again, that'll be at the heart of everything we do to better understand where Canadians are going or consumers are going, and be out in front of that. Val mentioned quickly we've just implemented something called our Farm Management System, which automates our cultivation and gives us high visibility to what's growing, how it's growing, so we have early line of sights to how the flower is going to turn out. With our new integrated system with Atholville in particular coming online, we have a number of indoor rooms, and as I mentioned, we have a significantly increased genetic bank, and that allows us on a smaller scale to grow higher quality flower and continue to explore and innovate with flower, so that we have a constant set of news. If we find a particular strain really resonates with consumers, then we've got the capacity with our other facilities to scale it and grow it quickly. We're really gonna use the full capability across the network to allow us to compete effectively in that space. Thank you. Thanks for the question. Your next question comes from Douglas Miehm from RBC Capital Markets. Please go ahead. Yeah, thank you. As I think about the CAD 135 million in incremental operating cash flow for 2023, and I believe you mentioned that 50% of that is gonna come from incremental revenue opportunities. Let's say around CAD 70 million. E ven if we were to give you a 50% margin on those incremental revenues, it means about CAD 140-CAD 150 million in extra revenue next year. Can you tell me about where that's going to come from and how much market share you actually have to take in the market to ensure that that can occur or where I've gone wrong here? The mix of looking at the opportunities in the marketplace. If I kinda break it down by format, we believe there's, a s I've talked about, there's significant upside in flower with the portfolio coming together. We cannot meet the demand on pre-rolls today. We've just at our facility in Redecan installed a machine that more than doubles our capacity and capability. It's a machine out of Italy. It can produce 1.6 million pre-rolls per day. We are just getting started in edibles. We're just getting started with HEXO around vapes. With the number of brands that come together from Good, Better, Best, we have an opportunity now to compete across the full range of the value proposition. We have an opportunity to expand Redecan geographically. We have an opportunity to expand our wholesale sales. We're continuing to look to expand our international sales. There's a huge range of opportunities, and we continue to aggressively pursue those. It's not all just specifically within the Canadian marketplace. Yeah, I understand. Thank you. Second question just has to do with the ATM you mentioned. Is that gonna be available at any price, and would you be willing to issue stock at, let's say, below $1.00 to meet the hurdle for your payments that are due? Right now we're looking at all options, you know, around the holistic solution to the debt itself, so we're not thinking about anything in silo. Right now we're obviously going to be working with the board and our advisors on what we think is best for our investors, and we don't wanna do anything that's going to be damaging. Keeping in mind that we wanna remain extraordinarily liquid and keep all options on our table, so that we're always gonna be in control of our own destiny. No specifics on what we're willing to do today or tomorrow on the ATM, but the ATM is in fact available and will continue to be available to us. I would say the one thing that we're making all of our decisions as we evaluate the options through maximizing shareholder value. That is at the front of our mind, and it's driving every decision we make. As Trent said, we're looking at all options, exploring with a number of different options. Always with the lens of how do we optimize shareholder value. Okay. Thank you. Your next question comes from John Zamparo from CIBC. Please go ahead. Thanks. Good morning. I wanted to ask about the balance sheets. Setting aside the convertible notes issue for now, there's just CAD 55 million or so of unrestricted cash at the end of the quarter. I know you raised some through the ATM, but it's not even sufficient to get through one more quarter at the current burn rate. Credit to the comment you made earlier, Q1 is maybe not representative, but I'm trying to get a sense of what is the company's plan to address this. You mentioned a number of options at your disposal in the press release. Can you give a sense of how it is you're thinking about that and what it is you're leaning towards or what investors should expect on capital raising in the coming months? Yeah. John, again, you're right. I mean, look, it is very, very noisy in Q1, so you can't. I really don't think that's an indicator of future quarters. With regards to cash, yes, it was CAD 65 million at the quarter. We've since used the ATM somewhat to prepare ourselves in the event we wanted to do certain things around the venture. Look, we continue to try to maximize shareholder value and keep all of our options in front of us. We do believe, based on the initiatives we talked about, both through integration and those synergies and when the timing of those synergies are gonna come into play. Some of the initiatives that Scott alluded to, and not just alluded to, but talked about in detail on cost of goods initiatives, SG&A initiatives. In the current quarter, as you know, there were. You know, we closed on two major acquisitions in the quarter, which obviously have a massive cash operational cash flow impact that doesn't repeat itself in future quarters. A lot of that just goes away on its own. In combination with all of the other initiatives, we do believe we're quite liquid right now and we believe that we have a Path Forward to get to cash flow positive within the next several quarters. Okay. My follow-ups on the CapEx side, I'm trying to reconcile I guess the necessity of some of the spending on CapEx, particularly given the state of the balance sheet. It was just over CAD 20 million in the quarter. Can you elaborate on what the company is spending on, and is this discretionary spending or is it necessary? Are you committed to a significant amount of capital spending over the next couple of quarters, given what you're talking about with expanding capacity on pre-rolls and bringing vapes in-house and a few of the other projects you referenced? Thanks. Let me address that one. We are absolutely laser focused on disciplined return on investment on any dollar of capital we spend. One of the first things I did was significantly curtail the capital plan when I joined the business six weeks ago. We cut our capital at that point in time by 75%, and we continue to look forward to opportunities to cut that further. The capital opportunities that we are proceeding with are related to the acquisition, integration, synergies, and they all have strong return on investment. We will continue, as we move forward, to be very focused and disciplined around our use of capital in the business. I will expand on that just slightly too. Is that, look, we know which categories that we need to invest in. Quite frankly, the cash flow for much of that has already been spent. Yeah. There's not a large amount of future CapEx that gets us enabled. We're already enabled. We believe we can move forward and compete really well in key categories with the productive capabilities that have already been spent. I think that's a key component here, that we don't have a lot of future initiatives that we have to put a large amount of CapEx into. Okay, understood. Thank you very much. Your next question comes from Adam Buckham from Scotiabank. Please go ahead. Adam, your line is open. Hey, sorry, I was muted there. Thanks for taking my question, guys. You know, Trent, sorry to sort of hammer you on this point, but I wanted to kind of dig in a little more in sort of normalizing free cash flow, because you talked about all the moving parts that happened this quarter. Are you able to give us a little more clarity on what normalized cash flows would have been for the quarter so we know what the base was? Is it, you know, where you sat minus the CAD 30+ million you expect to get out? Like, some more information there just to understand where you're sitting at currently. Yeah, look, I mean, the big thing is you have to recall is that it's not just the acquisition costs that come into Q1, and then all the transaction costs that go with that. You haven't actually rationalized your functional areas, your operational teams, you know that as you incorporate these into your organization, you still have several facilities that are fully and completely operational throughout the quarter. All of that sort of goes away. You know, as you know, Stellarton, Kirkland Lake, Langley, BC, you know, the Brantford for both HEXO and Brantford site for 48North. I mean, these are a lot of sites, all of which had some amount of cash impact in Q1. That goes away in addition to, again, you have all your functional areas, whether it's finance, people and culture, and other areas of our organization where you're taking all these teams and you're getting through Q1. You haven't put the systems in place yet to really get all of those synergistic values out of it. All of that is a cash impact in Q1, okay? I t's heavy. Now, going forward, in addition to that, you had a lot of consulting fees, a lot of advisory in addition to some audit related issues. T here's a lot of fees in there. All of that rationalizes itself over the next several quarters. While you're rationalizing all of those spends, you're also putting into effect a lot of cost saving initiatives on COGS and improving margins. Not just on the cost side, but on the pricing side, which Val expressed earlier and Scott talked about in depth, in that we're no longer going to be that coming into market on every category trying to undercut market by 15%-20% in every single product we launch. That's not conducive to great business. You put all of these things together, and it doesn't take long to be able to put on paper how you get to cash flow positive because we do have a tremendous base on which to build. We are in fact what we believe to be one of, if not the lowest cost producer in the market. Okay. That's it for me. Thanks. There are no further questions at this time. I will turn the call back over to the presenters for closing remarks. Thank you very much. I'll just once again take the opportunity to highlight and reinforce you know the opportunity that HEXO presents. We brought together a set of companies that bring you know different capability, different assets. I really believe that HEXO is uniquely positioned in the Canadian market and internationally to capitalize on bringing the capabilities of the indoor grow facility, all of the brands, the leading position we have in many of the segments and in the fastest growing segments like pre-rolls. We have the opportunity to aggressively grow, attack costs, expand our margins, and as I said previously, be more effective stewards of capital. We are very focused on the consumer and customer at the heart of everything we do. We're very focused on getting to that path of operational cash flow positive and confident in the plan that we've laid out. As I said, I believe there's significant value in this organization and we're on the right path for long-term prosperity as we continue to work through the debt issues. With no other questions, thank you everyone and look forward to speaking soon. This concludes today's conference call. You may now disconnect.