Good day, and thank you for standing by. Welcome to the Leef Brands Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jesse Redmond, Chief Strategy and Investor Relations Officer. Please go ahead. Good afternoon, everyone, and thank you for joining us. Welcome to Leef Brands Second Quarter 2026 Earnings Call. Joining me today are Micah Anderson, our Chief Executive Officer, and Kevin Wilson, our Chief Financial Officer. Please note that today's discussion will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from what we discuss today. For a full discussion of these risks, please refer to our filings with the SEC and SEDAR+, as well as the Investor Relations section of our website. On today's call, Micah will begin with an overview of the quarter. Kevin will walk through our financial results in more detail. Micah will then return to discuss why we are so excited about Leef's future. With that, I'll turn the call over to Micah. Thanks, Jesse, and good afternoon, everyone. I want to start with the progress we made during the quarter and why it validates the strategy we have been building toward. We completed an oversubscribed CAD 9.3 million financing to expand Salisbury Canyon Ranch and strengthen our balance sheet. We acquired Himalaya Vapor Company, giving Leef an established California concentrate brand. We filed multiple applications for DEA registration and began the largest harvest in the company's history. Since the quarter ended, we have completed that harvest and started processing the material. The first several hundred liters produced in July represent the best oil we have ever produced. Our distillate passed California's elevated CAT4 pesticide screenings and tested at approximately 95% THC and 99% total cannabinoids. These results are better than last year and represent what we believe to be the highest quality oil on the market. We continue to make steady progress towards building out all 180 acres of Salisbury Canyon Ranch. This spring, we added 14 new acres, bringing cultivation to approximately 80 acres and are preparing to plant an additional 21 acres this fall. This will bring the total canopy size closer to 100 acres in 2026. To further secure our biomass supply, we entered into a supply agreement with a long-term farming partner for an additional 21 acres at a cost structure similar to Salisbury Canyon Ranch. We have already harvested the spring crop at this other location and are in the process of replanting these 21 acres for an additional fall harvest. Together, we expect this production to carry us through to the 2027 harvest and prevent another biomass gap. In my opinion, Leef has never been in a stronger position. Now let me address the temporary softness in revenue during Q2. On our Q1 earnings call, we told investors Q2 would be softer. We had exhausted the material from our 2025 harvest at Salisbury Canyon Ranch and returned to purchasing biomass from third-party farms while we waited for this year's harvest. That's exactly what happened. When we run our own material, we control cost, quality, consistency, and timing. When we buy biomass on the open market, we control fewer variables. During Q2, we paid more for lower quality material. That affected extraction yields, margins, and our ability to remain in the normal purchasing rotation with some of our customers. The results demonstrate why expanding our cultivation footprint is so important. Revenue declined 16% to CAD 7.3 million, and adjusted EBITDA was CAD -631,000. At the same time, gross profit increased 62% year-over-year to CAD 2.4 million, and gross margins nearly doubled to 33% from 17% last year. That margin improvement was driven in part by the growing contribution from higher-margin hydrocarbon products, which became the company's largest revenue category for the first time this quarter. As non-vertical extractors leave the market, Leef is capturing more market share, and I believe that this trend will continue. This progress gives us confidence in what lies ahead. In 2027, we expect to be running the full 180 acres, supplying our extractions platform with our own clean biomass, capturing higher margins through Himalaya and being ready to pursue international and interstate opportunities when they become available. I'll now turn it over to Kevin to walk through the financial results in more detail. Thanks, Micah, and good afternoon, everyone. From Q3 of last year through Q1 of this year, we ran this business on our own input material from Salisbury Canyon Ranch, or SCR for short, and gross margins climbed from around 20% to 50%. In Q2, we didn't have SCR material. Last year's harvest was used up, and this year's crop was still in the ground. As a result, we ran purchased biomass inputs instead, and gross margin came in at 33%. That's not a bad quarter, but it's just a number on what vertical integration is worth to this business. Running and selling our own material puts margins closer to 50%. Net revenue was CAD 7.3 million against CAD 8.7 million in Q2 last year. Unit volumes were down about 20%, partially offset by a roughly 5% improvement in average selling price driven by product mix. Part of the volume decline is the California wholesale market, but part of it was a deliberate choice. With SCR material coming in Q3, we saw no reason to overbuy third-party biomass just to chase revenue at thin margins. We bought only what made economic sense, took the volume hit in the quarter, and put our working capital into inventory ahead of the harvest instead. Q2's volume was the trade-off for Q3 and Q4 margin. Most of that pullback came on the distillate side, and because of that, the composition of our revenue changed. For the first time, hydrocarbon products were our largest revenue category, and they carry a higher price point and margin than distillate. It's why, even without SCR material, gross profit was up CAD 2.4 million, up from CAD 1.5 million a year ago, up 62% on less revenue. Gross margin came in at 33% against 17% in the same quarter last year. The business is structurally better than it was a year ago. We do expect distillate volumes, along with the margin that comes from running our own biomass through that line, to rebound in the second half of the third quarter and into Q4, just like it did last year. Adjusted EBITDA for the quarter was a CAD -631,000. First half adjusted EBITDA was still a positive CAD 1.7 million against a CAD -2.1 million a year ago. We ended the quarter with CAD 5 million of cash, up from CAD 2.2 million at year-end, and a working capital surplus of CAD 8.7 million when we started the year in a deficit. This is mainly due to the private placement rounds that were closed during the first half, this allowed us to really invest into our balance sheet, both through CapEx spend at the farm and into inventory as well. This balance sheet has never been stronger. We have the cash to execute on our vision, and the inventory to jump-start the second half of 2026. Inventory grew to CAD 7.1 million from CAD 3.4 million at year-end, with work in process, specifically biomass in the field and oil moving through the pipeline, at CAD 4.2 million of that. A lot of that cost is the harvest that has since completed in Q3. We own the farm, we have the balance sheet to carry the crop, we don't have to sell anything into weakness. That inventory is Q3 and Q4 sitting on the balance sheet at our cost. SCR is now fully harvested, we're already processing it into our first several hundred liters being produced in July and expected to sell here in August. None of that is in the Q2 numbers you just heard. It starts showing up in the second half of Q3, much like it did last year. On capital, we raised roughly CAD 9 million during the first half and another CAD 5.2 million closed in July for a total of about CAD 14.2 million for the year. That funds continued investment in the ranch and in inventory. We expected Q2 to be a softer quarter this year, it was. It helps to show why the investment into the ranch and vertical integration is so important. This model works when we're running SCR material, everything is now in place for that. The harvest is complete, the material is in-house, the first liters are already produced and looking great. Thanks to the Mindset Capital team, we have the capital to carry the crop and sell it on our terms. You'll start to see that on the back half of Q3 and more fully in Q4 and beyond. With that, I'll hand it back to Micah. Thanks, Kevin. There are four things that excite me most about Leef's business coming over the next few years. First, operating the full 180 acres at Salisbury Canyon Ranch with a larger, more reliable biomass supply. This is coming soon. To go off script here for a second, I'm on the farm now, and we're halfway through replanting the second part of this farm. Jesse puts out this content. You guys have all seen it. He does a great job of showing how big it is and the scale of it. You can't really put it into a video to truly appreciate what we're building here. I'd recommend anyone that wants to come here, you guys should come see it. It's already one of the largest farms in North America, and it's only going to get bigger. One of the most important things about this farm, we keep saying it, I think it's going to be more and more important over the coming years, is the fact that this place is truly clean. Medical-grade, totally non-detect, clean material. It's very, very hard to come by in California. I know it's hard to come by in other markets as well, and this is going to matter. I'm going to talk more about this export world that's coming our direction here very soon. I think this is one of the biggest assets that the company has. That's why it's in the first position, what I'm most excited about. To get back on script here. Second, adding the processing capacity to support that scale and improve our economics over time. Third, growing Himalaya and capturing more of our higher-branded market products opportunity. This is another one, guys. I think Himalaya is a huge opportunity for us. We're definitely going to see a lot of growth next year, for sure. This is a part of a longer-term strategy that will come later down the road, not something that we're necessarily going to dive into right away. Building a CPG portfolio to capture these higher margins is definitely something that I see in the future of the company. Fourth, this is the one that the farm is most excitement in the short term. The long-term thing here for us, guys, is preparing Leef to serve interstate and international markets when those opportunities become available. Let me walk you through each one of these, starting with the ranch. By this fall, our total internal and contracted cultivation footprint is expected to reach 122 acres. That's an 88% increase from last year. That puts us well on our way to operating the full 180-acre permit at Salisbury Canyon Ranch in 2027. Leef's 180-acre land use permit up for cannabis is one of the largest in North America, the capital required to bring the full footprint into production has already been invested. This isn't like a future CapEx need for us. The way that Santa Barbara works, we have to build out the whole farm in order to get the sign-off. All of that money, the infrastructure, the fencing, the irrigation, everything's been done, so we are ready to go for next year. Supporting that expansion requires more processing and storage capacity. Following the quarter, we raised an additional CAD 5.2 million to purchase a facility that can dry, cure, freeze, and store biomass before it moves to Leef Labs for extraction. You guys have heard us talk about the cost a pound and the cost per gram of where we're currently at today. This facility is going to allow for us to find efficiencies beyond that and further drive our cost down over the years to come. I think between the farm, this processing facility, and our extraction facility, every year we're going to get better, and you're going to see these numbers come down across the board, from transportation to all kinds of different efficiencies that we really get to unlock. This facility is the final major piece of our platform. It can support the full 180 acres and may create additional revenue streams by offering services for other cultivators, and over time, is expected to double the amount of biomass for each harvest available to Leef. To say it a little bit differently, this facility is going to become a procurement tool for us. It's a huge unmet need because the way that cannabis was originally set up in California, the regulators didn't have ag in mind. They had small-scale cannabis. Now that we are getting away from that, we are moving into more of an ag type. Our style is more ag. We're able to go to other cultivators that have these large fields that don't have processing facilities and get really, really discounted rates on material beyond what we currently grow for ourselves. Himalaya gives us an established brand for our clean concentrates and allows us to capture higher CPG margins. It contributed approximately CAD 1 million in revenue during the partial quarter following the acquisition. Based on its trajectory, we expect Himalaya to deliver strong growth in 2027 and begin making a meaningful contribution to cash flow. We see Himalaya as the first step in a broader branded product strategy and will remain disciplined as we evaluate additional brands that could benefit from our supply chain, manufacturing capabilities, and cost structure. I think over the next couple of years, guys, two, three, five years, there's going to be all kinds of opportunities for really good brands that will not be able to survive unless they're attached to something like what Leef is building right now. It's going to open the doors to opportunities that aren't otherwise available to us today. Just hold tight because I do think that that's coming. Executing that strategy requires investing. All of this stuff. Executing the strategy requires investing into the right team. To that end, we recently brought on Chris Crouch as the company's Chief Revenue Officer. Chris brings more than a decade of cannabis experience across retail, CPG, operations, and revenue leadership. Most recently, he served as the Chief Operating Officer of Turn, which is a leading U.S. vape company, and previously held senior positions with Urban Leaf, Volcom Clothing, PacSun, and Quiksilver. We're excited to have Chris join our team and the opportunity to invest into key seats that are going to help us grow this business. We also engaged Hirsh Jain of Ananda Strategies as a strategic advisor. Hirsh is helping Leef navigate the evolving policy and regulatory environment, supporting engagement with policymakers, and evaluating the opportunities related to federal rescheduling, interstate commerce, and international markets. That brings me to the opportunity beyond California. This one, guys, honestly, this is the thing, out of everything that's going on in the industry and within our company, this is the one that I'm most excited about. Today, Leef manufactures and sells within California, where oversupply keeps wholesale prices well below many other markets. Everybody knows California is the toughest market to operate in. It's the largest, it's the toughest, it's the most innovative. Pricing is the lowest across the world compared to other markets. If interstate commerce opens up, we believe that we can leverage our manufacturing expertise and low-cost production platform to supply higher-priced markets across the country. Following the Trump administration's rescheduling order in late April, we have been receiving inbound interest from several of the industry's leading Multi-State Operators. Many of these companies are already preparing for a future in which cannabis can move across state lines, even though the exact timing of interstate commerce remains uncertain. These discussions have reinforced our belief that Leef has built a differentiated platform with industry-leading cultivation, extraction, and manufacturing capabilities. Operators recognize Leef's cost advantage and extraction expertise can help improve their margins while allowing them to focus on building brands and serving customers. The reason why prices across all these other markets, guys, why they're so expensive, is because they're using indoor material and these other farming practices to create the same types of products that we saw. There is no way that they're going to be able to get it as low as we can, not even where we are today, which I think we're going to get significantly under over the next coming years. We view this interest as meaningful validation of a strategy that has guided our investments and operational decisions over the past several years. As the industry evolves beyond today's state-by-state markets, we believe Leef is well-positioned to become a trusted supply partner to leading operators across the country. Ultimately, we believe it's not a question of if, but when Leef will be able to supply these other markets, where pricing for many products remains substantially higher than what we see in California today. We are seeing similarly strong interest from leading international operators. Our team's identifying the best markets for Leef and the specific GMP standards required to serve them. We believe the global cannabis industry is moving towards more medical-focused standards and tighter quality controls. Salisbury Canyon Ranch produces clean biomass. Concentrates manufactured from it have passed California's elevated CAT4 pesticide screens. These are the hardest ones in the world to get by. We are building on that foundation to meet the GMP requirements of our target markets. We also filed DEA registration applications. Engaged Shane Pennington at Blank Rome to guide us through the process. Our goal is to have the registrations, operating standards, customer relationships, and production capacity in place before these markets open up. The economics explain why those opportunities matter. For illustrative purposes, we estimate that we can produce distillate under CAD 0.50 a gram and sell it in California for around CAD 1.00 a gram. Prices in other markets can be several times higher. Distillate may sell for approximately CAD 3.50 per gram in New York, CAD 8 in New Jersey, and as much as CAD 12 in Ohio. We see similarly high prices in certain international markets. We expect those prices to decline as markets opened up, but we don't need to capture the full pricing difference for the opportunity to be significant. At our current cost structure, selling distillate for CAD 2 a gram would generate a gross margin of approximately 75%. That is the advantage of producing clean concentrates at costs many local operators will not be able to match. Let me close by putting this quarter in perspective. Four years ago, we recognized that relying on third-party biomass was not a durable model, so we built our own cultivation platform. Q1 demonstrated the upside of that decision, and Q2 has reminded us why it is necessary. Leef is a stronger company today than it was 90 days ago. We have a larger cultivation footprint, a completed harvest, better product quality, an established consumer brand, the balance sheet to carry our inventory, and a dedicated processing facility. In 2027, we expect to be operating the full 180 acres and capturing higher margins through Himalaya. Over time, we expect the processing facility to allow for us to retain more material for each harvest and improve our economics. Together, these investments are building one of the industry's lowest-cost platforms for clean cannabis extracts and positioning Leef to serve interstate and international markets when those opportunities become available. I want to thank our employees, customers, partners, and shareholders for your continued support. With that, I'm going to turn it back over to Jesse so we can then open up the lines for questions. Thanks, Micah. Operator, please open the line for questions. Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Penny Stowell of StockSpeak. Your line is now open. All right, I have a couple questions for you guys, but let me just start with this. You've met with many of the larger U.S. Multi-State Operators. What are you hearing from them, and where could Leef fit into their supply chains if interstate commerce opens? Yeah. Maybe I'll kick us off and then, Jesse, maybe I'll have you kind of round out whatever I miss. Yeah, we have. We've been speaking to a handful, if not more, of these larger companies. Met with a handful of them in Benzinga, and then been having a lot of follow-up conversations since then. I think the overarching sentiment with most of them is that everyone's pretty confident that this is going to happen sooner than later. When I say that, definitely no one knows. Six months to two years is the timeframe in which everyone's, I guess, honed in on. I think we're a concentrate provider, right? That's our main business. We have had some of the companies ask us if we could also become a flower provider as well, which is interesting. It's not something we're currently doing, but it's not something we couldn't do later down the road. The main thing that I think everyone's looking at is on a global level, I'm not going to name any names, but just some of the bigger companies, they look at it and they say, "Our cost to produce distillate on average across all of these different markets and countries that we're in is, call it CAD 3.50." We're sub CAD 0.50 currently where we're sitting today. I think that they realize that it makes more sense for us to basically shut off a lot of this infrastructure that we have because there's no way that they're going to be able to compete with it, or be able to survive as the market starts to open up and these international, what's the word I'm looking for? Levels start to set on where pricing is going to sit. I think that it's just obvious to all these operators that they're definitely going to come down, and it would make more sense for us to purchase it from someone who has the scale and also has the ability to hit the quality standards that everyone seems to agree is coming. Yeah, I think that the main thing we've been talking about is primarily around concentrates and how can we fit into their supply chains. There's a bit of diligence going on just on where are we at with our DEA licenses and GMP and some of the certification stuff there. Maybe, Jesse, I'll pass it to you. Why don't you maybe just give a brief update on where we're at with all that stuff? Yeah. On the interstate side, Penny, I'd say what we're learning, which is not surprising, is this is an opportunity for everybody to do what they do best. Leef does a difficult part of the supply chain. Growing is difficult. Extracting is difficult. We're doing both of those things. What we're hearing from some of the larger MSOs is that if they never had to grow grandma flower, extract the grandma concentrates, they'd be really happy people because they could then do what they do best, which is build really powerful brands and serve customers through their retail and distribution platforms. I think it's an opportunity for value unlock in the industry, both in terms of the economics Micah talked about, where they can drop their cost, we can have our margins go up, but we can also really do what we do best, which I think is a huge unlock for the industry. I'd say, yeah, like I said, I'd echo and say just there's been really unanimously positive feedback about people being interested in this opportunity when it becomes available. That's the interstate side. The export side, Penny, we've been focusing on identifying target markets, it's a big world out there, and some markets, like Germany, might be more of a flower market, whereas you have other countries which are more of a concentrate market. We're looking to lean into those larger concentrate markets as step one, and then as step two is we need to understand what's required to sell there. It's not just as simple as having that DEA license. Your target markets will have their own requirements, and that starts with different GMP standards. A lot of people talk about EU GMP, but if you're in other countries around the world, they'll have their own specific GMP standards. It's really a two-step process in the international markets. Identify the target markets where your products can do best, and then number two is figure out what the GMP standards are. Maybe there's a number three, which would be upgrading your facilities to meet the GMP standards of those target markets. All of those are in process. On the interstate side, we've had a bunch of conversations, digging deeper with a bunch of operators, and then the international side, again, about identifying target markets, finding the right GMP certifications. We're engaging a GMP consultant and are starting to begin some of those facility upgrades here shortly, so we can hopefully serve those target markets internationally in 2027. Excellent. All right. With your own biomass returning in the second half of Q3, how should investors think about gross margin improvement in the back half of 2026 and into 2027? I think that it's looking like we'll probably be somewhere similar to where we were last year, cost of goods on the pound. We're a little lighter out of the first round than, or I guess I should say, the spring harvest than we were last year. Cost of goods might go up a little bit, but I'd say that somewhere around 50% is where we landed last year. I think that that's target-wise, that's about where we should end up landing too. I will say, too, we ran the quarter with other people's material. As we've talked about, for our business, it doesn't work as well. We have all this material now. We're definitely into full production on this material, so getting back in, like when sales and margin, is going to be about halfway through the quarter of Q3, identical to what happened last year, is when we'll start to see the margin pick up again. The one thing that we're going to get out of this quarter that we didn't get out of last year's quarter in Q3 was we froze some of the material for our hydrocarbon and solventless line. Last year, we didn't have that opportunity to do that, so we'll see a margin pick up as well on the hydrocarbon and solventless line. A bit of an increase on two of the extraction lines and then around 50%-ish on the ethanol line. All right. That's what I wanted to hear. As Salisbury Canyon Ranch scales towards the full 180-acre footprint in 2027, how does that change Leef's production capacity, cost structure, and the ability to serve a larger market? Can you go past 180 acres? I'll start with the second question or the last question first. Can we go past 180 acres? I think the short answer is yes, we can. It takes a conditional use permit process on the farm. The farm's quite large, right? We bought 1,900 acres of a 3,000-acre ranch, so there's definitely a lot of land outside of the 180 acres. We're exploring what that process looks like, cost, timing, and all the rest. I think that there's the ability to add close to 100 acres, if not more, onto the ranch, and that's something that we're definitely looking into at the moment. We've also been exploring just other opportunities, different areas of the state, that could work for expansion as well. As we've discussed in what we just went over, we added 21 acres to our farming partner that's in a different county, kind of exploring an opportunity as well. I think that the 180 acres that we currently have definitely supports almost 100% of what the business needs today. I think that if export happens here in the near future, and I'm very hopeful that it does. I'm a believer that it does happen. I think that at that point, then it's like, okay, then we're going to need to increase the amount of acres that we currently have. Yeah, hopefully a long-winded way of answering your question. Penny, do you mind asking, what's the first part of the question? Not a bit. As you scale towards the full 180-acre footprint in 2027, how does that change Leef's production capacity and cost structure and your ability to serve a larger market? Yes, on the production side, I think that we're currently running around I'm going to give you guys some numbers just through each one of the lines. 60,000 pounds a month is what we're currently running through the ethanol line. It's about 35,000 pounds through the hydrocarbon line and then 20,000 through the solventless line. As we increase more acres, we're going to be able to increase all of those numbers. I think that we'll get up to 80,000, 85,000 through ethanol and about the same incremental increase through the entire facility. There's not a lot of CapEx needed to do that. Well, actually, to do what I just said, there's really none at all. It will bring cost of goods down across the board, especially as we bring this processing facility. The last piece of your question was just like, can we increase the acreage beyond 180? Yes, there is a process that we have to go through to get there. Excellent. I look forward to it. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by. I am showing no further questions at this time. I would now like to turn it back to Jesse Redmond for closing remarks. Thanks, operator, and thank you to everyone for joining us today. A replay of today's call will be available in the Investor Relations section of our website at leefbrands.com. We look forward to updating you again when we report our third quarter results. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.