Good morning, everyone, and welcome to Cannara Biotech's fiscal year Q2 earnings presentation for the three and six months ended February 28, 2025. My name is Scott Carroll, and I will act as a moderator for today's presentation. As a reminder, this presentation is being recorded. Following the prepared remarks, we will conduct a question-and-answer session. If you have not already done so, you may submit your questions to investors@cannara.ca or in the chat option in your conference browser. Should all submitted questions be addressed today, we will follow up accordingly via email. Before we begin, please refer to slides two and three of our presentation. All information presented today is subject to our general disclaimers on financial measures and forward-looking statements, which are also available to be read in detail at sedarplus.ca. I will now turn over the call to Nicholas Sosiak, Chief Financial Officer. Good morning, everyone. Thank you again for joining our Q2 earnings webcast. My name is Nicholas Sosiak, and as CFO of Cannara, I have been deeply involved in every aspect of this company since 2019, from cultivation to processing, finance strategy, sales and marketing, and product development, working alongside our team to drive success. I'm deeply proud of Cannara for being one of Canada's largest vertically integrated cannabis producers, driven by strong financials, innovation, and a consumer-first approach. What truly gives Cannara its competitive edge is our control and execution. We've built one of the most cost-efficient operations in the industry while maintaining market-leading quality. As this is our first public quarterly earnings presentation, I will provide a brief summary of who we are and where we are going, as well as the underlying competitive advantages within our business. Cannara Biotech is a leading large-scale, vertically integrated licensed producer of premium-grade cannabis, proudly based in Quebec, Canada. We are the seventh-largest licensed producer by sales in Canada, and we are the third-largest producer by sales in Quebec, Canada's second-largest province. We are the fourth-largest producer by square footage nationwide and the largest producer in Quebec, with a total of 1.6 million sq ft of fully built-out hybrid indoor cultivation space. Currently, these facilities produce 33,500 kilograms and will be producing just under 40,000 kilograms by May of 2025. Fully scaled, our platform has the potential to scale up to 100,000 kilograms per year. As a vertically integrated company, we handle all the processes in-house. We view this as a key competitive advantage as it allows us to increase our quality and have full control of our supply chain, something much more relevant in today's Canadian market where third-party cultivators can be unreliable and where increased wholesale market pricing is squeezing margins for bulk purchasers. We believe we have built one of the strongest operational platforms in cannabis, with almost every single aspect of our operation levels evolving beyond the standard cannabis company. We are real cannabis operators with a real passion for the plant, and we are constantly evolving our technique to further distance ourselves. Fiscal Q2 2025 represented the strongest quarter in Cannara's history. We delivered record revenue, record gross profit and gross margin, and record operating income and record adjusted EBITDA. During the quarter, we achieved net revenues of CAD 26.6 million, up 6% quarter over quarter and 35% year over year. We reported record high gross profit before fair value adjustments of CAD 10.8 million, up almost 11% quarter over quarter, and returning us to previous record high gross margin of 41%. We also delivered an adjusted EBITDA of CAD 7.1 million, up 18% quarter over quarter, and representing over 100% year-over-year growth. This represents a 27% adjusted EBITDA margin, a 280 basis point improvement, and an almost 900 basis point improvement versus the prior year period. This marks our 16th consecutive quarter of positive adjusted EBITDA and our fourth consecutive quarter of positive net income. We have one of the strongest financial profiles in Canadian cannabis. We have been net income positive on an annual basis since fiscal 2021, operating cash flow positive on an annual basis since 2022, and free cash flow positive on an annual basis since 2023. Our success comes down to three key advantages: premium quality, scalability, and cost leadership. We produce premium quality cannabis at scale and enter the market with disruptive pricing, making our products accessible to a wider audience. Our approach combines rare genetics, flavorful high cannabinoid strain profiles, and sophisticated cultivation methods such as hang-drying, hand-trimming, and slow curing at scale to ensure clean quality product that is never irradiated. We are leading the charge in this dynamic market with significant investment and effort dedicated to our in-house pheno-hunting platform and a strategic partnership with 50-time award-winning cannabis breeder Exotic Genetix, enabling us to set trends rather than follow them. The popularity of our brands is a testament to the quality and consistency of our entire CPG portfolio. When consumers choose Cannara brands, they know exactly what they are getting: premium quality cannabis at the best value. On top of all this market success, we maintain one of the cleanest balance sheets in Canadian cannabis, with ample cash flows to service debt and no significant near-term maturities until December of 2027. In the second half of this year, we will begin to prepare our operations to further address the still uncaptured demand for our brands, as well as prepare for Quebec's November vape launch demand by expanding our cultivation capacity by almost 20%, or 6,000 kilograms, for only CAD 1 million in capital outlay. We believe that this ability to expand internal capacity for such a minimal capital value is a significant competitive advantage and represents one of the highest ROI investment opportunities available for any company in cannabis today. Our market share expansion has outpaced our peers, driven by premium quality cannabis that we are able to sell at affordable prices due to our competitive advantages in our low-cost operational strategies, efficiencies of scale, as well as our access to Quebec's low electricity rates. As of February of 2025, we hold third market position in Quebec with 12.8% market share, up over 40% from 9% share in the prior year period. For March, we gained 60 basis points, while Quebec's number two LP lost 80 basis points. Cannara is now only 60 basis points from the number one spot, representing a significant improvement from six months ago, when we were just over 300 basis points from the number one spot. Our strong performance in our home province is extremely relevant and sometimes overlooked by cannabis investors. In Quebec, there is almost no sales and marketing strategy permitted, including the use of data deals. We believe our performance in Quebec is a strong indicator of our ability to capture share in the rest of Canada through a truly better quality product offering than our competitors. Nationally, we hold seventh position in the market with a 3.9% market share, up from 2.9% share in the prior year period, making us one of the fastest growing LPs in Canada and the only top seven company to gain share this quarter. Turning to our CPG portfolio, we are a leading operator across many product categories. Our greatest example of disruptive pricing strategy is our Tribal flower, priced at only CAD 30 an eighth in Ontario, but maintaining consistency, flavor, notes, and freshness comparable with ultra-premium priced flower offerings priced upwards to over CAD 50 a unit. This value proposition has allowed Tribal to capture number one nationwide share, premium 3.5 gram flower, growing share by over 25% over the last six months to now over 18% share of the category. We also maintain nationwide leadership of the premium vape category, where we hold over 22% of the share, with monthly retail sales up almost 70% over the last 12 months. This leadership is an important contrast as it represents our ability to win even when we're positioned as the highest price option in the category. This is valuable proof that we are not only able to capture share through disruptive pricing, but also by providing the highest quality option available in that category. This leadership in the premium vape category is also a strong potential indicator of future performance once our home province of Quebec opens up the vape market in November of 2025. We are the fastest growing infused pre-roll multi-pack in Canada as well, with number two nationwide share of the category. From December 2024 to April 2025, we increased our share by 18% to 10% market share of that category, while the number one operator saw a share decrease of 2% during that period. Our success also comes while commanding a much higher average retail unit price than the category leader, at almost CAD 10 a unit higher. We are also seeing incredible category leadership for infused pre-rolls in our home province of Quebec, where we command over 73% of the share of infused pre-rolls in Quebec. Our market share reflects the strong underlying operational strengths of our platform and our real boots on the ground competencies as one of Canada's leading premium cannabis operator. Cannara operates two state-of-the-art mega facilities in Quebec, enabling full vertical integration across all of our processes. Our Farnham facility is dedicated to the operation of the nursery, our pheno-hunt process, post-harvest process, and packaging. The facility is 625,000 sq ft, of which we occupy 170,000 sq ft today. The balance of the building is currently being leased out to two tenants, which generate up almost CAD 4 million a year in rental income. Our Valleyfield facility at 1.1 million sq ft is purpose-built for hybrid indoor cannabis cultivation. It is one of the largest cannabis facilities in the country and the largest cannabis facility in Quebec. The facility has 24 growing rooms, each room measuring 25,000 sq ft each, and each room has been redesigned to replicate indoor growing conditions. We operate 10 rooms this quarter and are happy to report achieving our 2025 objective of activating two more rooms, with one being turned online in April and an additional one scheduled next month, May 2025. These additional two rooms will add 6,000 kilograms, or almost 20% additional capacity to our platform, and increasing our 33,500 kilograms to just under 40,000 kilograms. Our Valleyfield facility is a particularly significant asset. We acquired the facility in 2021 for just under CAD 27 million. This was an extraordinary opportunity considering the incredibly over-engineered facility was built during the overspending gold rush period of Canadians' initial legalization, and the facility's original construction costs exceed over CAD 250 million. This acquisition, at a fraction of its value, has given us leading access to mass-scale, low-cost cannabis cultivation for our business. We are delivering strong market share growth, have no current view of our demand ceiling, have an array of different product categories, packaging sizes that we currently do not offer, and through our pheno-hunt program, we will have access to an exclusive genetic bank that will continue to fuel Canadian retail demand. Furthermore, we see strengthening unbranded wholesale market that we currently barely participate in and increasing demand in international markets that is currently not our focus. Given these variables, we believe there is ample opportunity to continue to expand our capacity, and we will continue to do so into fiscal 2026 and beyond. The remaining 12 rooms of Valleyfield facility will be turned online over the next 36 months, bringing our total cultivation capacity to 100,000 kilograms per year. Most importantly, and a key competitive advantage within our business, is our ability to turn online this additional capacity with very minimal CapEx outlay, given the rooms are already completely built out and only require minimal investment such as lighting, tables, and HVAC. Rooms 11 and 12, as mentioned previously, activated in April, the next one being activated in May, cost approximately CAD 1 million in CapEx to activate, and we project the capital return period within the first year of operations. Fully scaling Valleyfield can enable us to generate between CAD 250 million-CAD 300 million in net revenue, assuming our current market conditions hold. As Canada's second largest province with over 9 million people, Quebec provides us a home field advantage and access to some of the lowest utility and labor costs in Canada. One of the most compelling benefits is the province's exceptionally low electricity rate at just CAD 0.053 a kilowatt, substantially lower than those in other provinces such as Alberta, where rates are as high as CAD 0.136 a kilowatt. To our benefit, our Valleyfield facility pays a further reduced rate of CAD 0.037 a kilowatt due to its location in a preferred agricultural development zone. Since electricity and labor costs account for over 75% of our indoor cultivation expenses, our Quebec positioning gives us a significant competitive advantage in our ability to be disruptive with our pricing while still generating industry-leading margins and cash flow generation. Beyond low electricity costs, Quebec presents the highest barriers to entry, particularly with strict restrictions on sales and marketing. These combined factors, combined with the lack of retail data deals, make Quebec an ideal environment for Cannara's growth. Cannara Biotech stands out as one of Canada's most profitable cannabis producers. We're nearly consistently delivered market share growth, revenue growth, industry-leading margins, and positive operating and fee cash flow. We have a clean balance sheet and with manageable debt profile and nearly industry-low interest rates. During the quarter, we achieved record high gross revenue of CAD 37.7 million and net revenues of CAD 26.6 million, marking an impressive growth of 6% quarter over quarter and over 35% year over year. This reflects expanded market share and product launches with increased distribution and is promising given the softer fiscal Q2 period, which was influenced by seasonality. Gross profit before fair value adjustments for the quarter hit a record high of CAD 10.8 million, returning us to our previous record high gross margin of 41%, representing a 170 basis point improvement quarter over quarter and a 370 basis point improvement versus the prior year period. The increase reflects increased yields, cost efficiencies, and a larger portion of our revenue coming from higher margin products such as live resin and dried flower. This returns us above our 40% internal gross margin target, which we believe there is further room for improvement as we scale further into our capacity. We've continued to maintain strong cost controls across the organization, reporting operating expenses during the quarter of CAD 6.1 million, representing under 23% of our revenue. This reflects positively against the previous quarter and the prior year period, where operating expenses represented over 24% and 31%, respectively. This improvement in operating expenses margin reflects our activation of cultivation rooms within our fixed cost base, despite increased sales and marketing spend to maximize the launch of our Q2 flower strains and manufactured products, as well as the support of the upcoming Quebec Vape launch in November. We delivered a record high adjusted EBITDA of CAD 7.1 million, up 18% quarter over quarter, and representing over 100% year over year growth. This represents a 27% adjusted EBITDA margin for the quarter, a 280 basis point improvement, and an almost 900 basis point improvement over the prior year period. Operating cash flows for Q2 was an outflow of CAD 2.6 million, bringing year-to-date cash flow to a positive CAD 3.3 million. Q2 free cash flow came in at an outflow of CAD 4 million, bringing our year-to-date free cash flow to CAD 0.6 million. This quarter, our operating cash flow, which in turn reduced our free cash flow, was a result of prepaying our excise tax obligations of CAD 3.5 million before the end of the quarter and before the actual cash was collected from our related receivables. In addition to investing over CAD 1.5 million in advanced deposits for packaging material sourced overseas to reduce our cost and stockouts in fiscal 2025, we generated net income of CAD 3.3 million and an EPS of CAD 0.004 per share for Q2 of 43% quarter over quarter. Net margin for the period was 12.5% versus 9.2% for the prior quarter. During the quarter, we also made significant effort to further strengthen our balance sheet. In February, we announced the extension of our CAD 34 million BMO credit facility to December of 2027, while maintaining our floating interest rate, which is currently below 7%. We also extended our smaller CAD 5.7 million convertible venture to March 2028. For our fiscal 2025 guidance, we're forecasting growth in both net revenue and adjusted EBITDA from our core business on an annual basis. We anticipate to continue to generate positive operating cash flow and free cash flow on an annualized basis for this fiscal year. While many Canadian LPs are expanding overseas out of necessity, we are thriving in Canada by choice. The reality is that most can't compete profitably here. They're losing market share, struggling to build brands, and failing to operate efficiently. This industry isn't just about capital; it's about experience, knowledge, and most importantly, execution. Cannara has built this from the ground up. Every process we've developed is designed for long-term success, not short-term survival. We're not just another cannabis company. We are passionate cannabis advocates. We are boots on the ground operators, market leaders, disruptors, and a company built for sustainable, profitable growth. Our financial performance speaks for itself: 16 quarters of positive EBITDA, industry-leading margins, operating in free cash flow on an annualized basis, and our market share is up over 30% in one year as we continue to prove that we can capture share through leading quality and disruptive pricing strategies. We dominate in key categories with constrained demand for our leading brands while owning the ability to triple our production capacity organically with our industry-leading organic high ROI internal expansion opportunities. We have proudly built a foundation for long-term success. With world-class operations, financial strength, and relentless execution, we believe we are positioned to shape the future of Canadian cannabis. Thank you for taking the time to learn more about Cannara. We'd now be happy to open the floor and take your questions. Thank you, Nick. We will now transition over to our Q&A portion of the earnings presentation. Nick, on your side, is your mic now unmuted? Yeah, just the video is not working. Just one second here. All right. I think we got it. All right, perfect. As mentioned in our press release, we received questions to our investors@cannara.ca email as well. For the attendees of today's web presentation, you're welcome to submit your questions through direct chat. I'll start with the first one that we received, Nick. It's, "You've spoken previously to an internal goal for number one Quebec market share. You're closing gaining ground. Are there any specific catalysts that could push you to number one in Quebec? Yeah, no, absolutely. Firstly, the first thing to remember is that in Quebec, we can't conduct any traditional sales or marketing activities. The value proposition of the product that we create speaks extremely highly about the sales that we're generating here in Quebec. We are leading across quality, across every segment and category, and we're typically better priced than our competitors. This builds really a strong performance that is the reason why we're outperforming here in Quebec. I think that's just going to continue to escalate as our original SKUs will continue to gain traction. In Quebec, every six months, there's new product launches. Every six months, we're launching new genetics as well as new products. What I'm really, really excited for is actually this week, we launched the Tribal Trifecta in Quebec. The Tribal Trifecta is a very unique infused pre-roll. It's a premium-priced pre-roll, and it uses live resin, genetic-specific live resin. We take our genetics, such as the Cuban Linx, and we create live resin from it, and then we infuse the sauce inside the flower, and we put the diamonds on the outside of the joint. Because we're fully vertically integrated and this product is created with our own genetics, totally transformed within the organization, we strongly believe that this product is extremely hard to replicate. Currently, there's no diamond-coated joints here in Quebec. I think this is going to be a product that's going to really take traction in the coming quarter. We're also launching a new genetic, our Meat Pie and our Porto Leche. That's exciting. Yeah, vapes are coming in November for Quebec, which is a totally brand new category. As you all know, we're one of the largest producers of live resin vapes in the country. Bringing this product here in Quebec is extremely—we're very confident that our product is going to take traction and take a really good portion of the upcoming vape category here in Quebec. Yeah, that's perfect. Thank you. The next question, looking back towards Q2, were there any standout product successes or key highlights across your portfolio that you could expand on? Yeah, our recent genetics, Neon Sunshine and Bubble Up. Again, we took almost a year and a half to phenohunt those genetics. That goes across all our genetics going forward. It's a year plus a couple of months to really get a genetic to market. The Neon Sunshine and the Bubble Up are showing the fruits of our labor. They're just catching up right under Cuban Linx. Cuban Linx, phenohunted almost four and a half years ago, is still outpacing the holding place as number one genetic in our Tribal portfolio. Neon Sunshine and Bubble Up are taking second and third. That's just a matter of time where those two genetics are going to dominate the ranks. We also just launched them in live resin and vape extract, which is also going to further promote the genetic base within Tribal. Beyond that, the Trifecta from Tribal, we're really excited to see it launch in Quebec, but it's already in Ontario. We're launched in BC and bringing it into Alberta as well. It really has grown into the fastest-growing mass premium multi-pack infused pre-roll. We put a lot of innovation work, and just the manufacturing process is so technical and labor-intensive to get it right, but we feel like we mastered that. The Trifecta commands a CAD 10 price point higher than our competitors. This is a clear sign of Tribal's brand strength and consumer demand. The fact that we can play, we're usually priced in that medium price tier, but there's some products as we create because we're trying to create the best quality. There's some advantages when we're first moving in a category to take premium pricing. First is our focus on building Tribal as a trendsetting house of genetics. What we're proud of is our vertical integration. We're creating all our flower. We're growing all the flower. We're creating all the BHO. We're creating all the kief. We're doing all the THC diamonds all in-house. We really get to control the quality of the inputs. That's what we put into our product, and that's what's succeeding this quarter. Neon Sunshine, Bubble Up, our Trifectas, our infused pre-rolls, our vapes, they're all seeing quarter over quarter increases. Perfect. Thank you. We received a question from our direct chat from Steve G. It says, "I know in the past you've mentioned that you're happy with the price point, but with comparable products priced at CAD 50, at what point in the growth profile might you consider pricing as a way to drive margin improvements? Yeah, again, we're really not focused on increasing our pricing to drive margin. We have several ways to drive margin outside of just increasing price. The first one is yield. We're a genetic house, so we're investing all the money and resources and finding genetics for an unforeseeable amount of time to really build a roster of genetics. These roster genetics will have the THC, have the flavors that we're all looking for that the market wants, but most importantly, have high yields. Right now, our average—we started some genetics at 60 grams a plant. Now our average is around 85 grams per plant, and we have some plants that are growing over 100 grams per plant. Just finding those right genetics will increase our margin and not have to increase our price. Price is very important in the cannabis market. There's a fine line between where the volume drops off significantly if you try to price your aids or any products in the premium range. Really, we're trying to capture volume. We have 100,000 kilos to sell. Pricing, we're extremely proud about our pricing and being affordable and giving quality products in the mass segment of price point that most people buy in. That's what's really going to take over the market and scale our brands to number one. Furthermore, just cost savings as we grow more weed. Our fixed costs don't increase. It costs us CAD 700,000 to turn on a room and five people to turn on the room, and we can generate over 3,000 kilos that year. Our fixed costs will stay the same, but then we're producing more and generating more revenues. We're going to see efficiencies and margin increases there. Just scaling, economies of scale, you're buying more product, you have more packaging needs, you have more power to negotiate with your suppliers. It is really important that we use those strategies to scale our business and not price. If we do price, it would probably be in another brand, a segmented brand that we would create, and it would have other characteristics that would justify the increase in price. Perfect. Thank you, Nick. We received another question via chat from Mark Haas. It says, "Great quarter, great outlook. Any status update on the building sale? Upon sale, could an NCIB be possible, or would you keep the capital for CapEx working cap to scale growth? In addition, any opportunity for cheaper funding or prepayment of the convertible debt at approximately 10% rate? Yeah, great question. The asset held for sale is anything could happen in real estate, but we do have potential interested parties. We're confident that a transaction, we might see a transaction very soon. That's definitely in the works. In terms of the sale of the building, if we do sell the building, we would use the cash to continue to invest in building out Valleyfield. We have 12 rooms. The next phase to go from 12 to 24 is we have to build out a processing building, and that's a CAD 7 million spend. We have, starting from rooms 12 to 24, we have to buy lights as well. Now the cost per room increases about CAD 1.2 million-CAD 1.5 million. We're going to utilize that cash from the sale of the building to continue investing into Valleyfield and opening more grow rooms. In terms of reducing our interest rate on our convertible venture, absolutely. It is an open-ended convertible venture, so we can pay it down any time. The objective, we make way more ROI on taking the cash and investing it into the grow rooms to produce more cannabis. At the point that we do have excess cash flow in the coming year or two, we would be looking to prepay the highest debt that we have on the books, which would be the convertible venture, if it is not converted by that time. Thank you, Nick. We received another question from Raymond. With the positive momentum this quarter, are there specific operational efficiencies or process improvements you are targeting to further enhance margins as production volumes continue to grow? The team's working every day on process improvement. We're really building a fully vertically integrated cannabis company, and we're building it from the ground up. These are processes that we built from day one, that from day one to where we are today, we're continuously improving our operations from cultivation to the way we grow to trying different trials to get more yield or to reduce cost on a certain point without affecting quality. In our pre-roll department, we're purchasing more machines. We're scaling up the amount of pre-rolls that we're making. We're automatizing the hard-to-create pre-rolls like our Trifecta and our Kingpins. On the supply chain, we're improving our transport. We're really taking cost advantage. We buy a lot overseas, which proves to bring a lot of cost savings, but also supply chain issues. We're investing in our supply chain to really streamline the supply of our packaging and cost efficiencies on that point. Thank you, Nick. Question received by email. Can you provide some color on the factors that contributed to the quarter-over-quarter market share decline observed in Saskatchewan and Manitoba this past quarter? Yeah. We'll start with Saskatchewan. The first one is that we transitioned to a new wholesale partner during Q2. That led to some temporary disruptions in our ordering and supply availability. That was for a good reason. The transition really was to go to a new wholesale supplier that we believe will bring in additional revenues and, most importantly, bring in additional distribution in Saskatchewan. We've completed all that during the quarter, and now we're really positioned for recovery in the upcoming quarters for Saskatchewan. For Manitoba, we strictly really prioritized our products this quarter to our high-volume markets in Quebec, Ontario, Alberta, BC. Unfortunately, Manitoba was the last one on the list to get products due to constraints on product availability, and that impacted our overall market share in that market. Really, the decision for us is that we have to scale in Quebec. We have to scale in Ontario, Alberta, and BC. Those are our main markets. We need to dominate in those markets. Saskatchewan, Manitoba, and Nova Scotia are ancillary markets at the moment until we really scale and build out our distribution in those. We'll continue focusing in the quarters to come. In Manitoba, we expect to rebalance and increase supply chain and increase revenue generated from that province. Thank you. The next question is, what do you think were the leading factors in establishing such a strong share of the Quebec-infused pre-roll market? We came to market right out the bat with a superior product, superior consumer experience. Our infused joints, they're created with premium bud that we grow. Usually, most infused joints are how to source the cheapest cannabis. Most of the time, it's shake or trim that is on the floor. We use our whole bud. We use cured resin. Cured resin produced from our whole bud. Most infused pre-rolls are used with distillate. Distillate, as we all know, is a lower grade of quality in terms of high and in terms of flavor. We also use our kief that we create here. This is kief that's fresh kief, genetic-specific kief, not mixed up, not two years old. All of that components, plus the flavors that we've created and really R&D to really find flavors that resonate with consumers. We all handled that R&D internally and really created a product that we knew guaranteed freshness, consistency, and quality. That was we wouldn't have been able to do that without our being fully vertically integrated and controlling every step that we do from cultivation to extraction. By not relying on third parties to produce these joints, we avoid risks that having consistency and quality issues. That single-handedly can reduce or completely eliminate volume in a product. Being consistent and having that quality really propelled our infused pre-rolls in Quebec, over 70% of the market, which is insane. Now we're introducing our Trifecta, which is a level up. I'm really excited to see how that's going to play out. I think that's why we're succeeding here in Quebec. Thank you. Next question received. Congratulations on opening two additional grow rooms at your Valleyfield facility. Do you expect the additional yield from these rooms to be fully absorbed by market demand immediately, or do you anticipate a ramp-up period as you expand distribution and your product portfolio? Yeah. Firstly, we only open rooms when we see our increasing demand and increasing support and distribution for our products. We're number seven nationally, so we still have six more companies to take market share from and absorb market share increases as time goes by. We're climbing the ranks. Quarter over quarter, we're climbing the ranks. We're increasing our market share. We're going in the right direction, and we're extremely diligent in our planning. We have a sales forecast that we plan from item to province in detail, and we transform that unit base into how much cannabis does it take to produce that unit. We go on our other side on our production side, and we look at how many rooms we have and how much cannabis or category of cannabis can that room produce. We match one minus the other, and we get a gap forecast. That gap forecast is what really triggers opening more rooms. We do it very diligently, and we see that flag come up, and we're like, "Okay, let's turn on another room." Really, why that happened is, one, organic growth across all our SKUs. SKUs that have been here for four or five years are still selling. Cuban Linx across all the flower, dry flower, pre-rolls, live resin, still selling. We want to launch new products. We want to launch new genetics. We have a whole roster of genetics waiting, but we got no room to plant those. We got to open more rooms. Also, really, we have to understand is vapes are coming to Quebec. That's huge. I think it's going to be 10% of the sales here in Quebec as it scales up. We want to play a meaningful part of that market, and we can't be out of stock. That volume could increase significantly. We have to be ready for that moment. That's really the main reason for opening the two rooms this year, to be ready for November when vapes come. In between there and that, we have the Trifectas coming up. We have our Meat Pie that's launching. We have Wagyu Delight outside of Quebec. We have our Porto Leche. We just pheno-hunted three new genetics. We have that to put into the pipeline. We have a lot of products that we want to scale up. We looked at our demand gap. We see the gap, and that's why we're turning on two more rooms. Yeah, we're going to be planning another three more rooms for next year and then scaling up to the full 24, really with the objective of selling all of this cannabis here in Canada. That's really the objective, and we have to open more rooms to achieve that objective. Thank you. Next question received. Previously, you've mentioned that Cannara's focus remains on growing its brands within Canada without pursuing international export opportunities at this time. Has there been any shift in your view or strategy regarding potential international expansion? There is also a lot of unknowns. Establishing a primary international business right now, I believe, has a lot of risks. As an example, tariffs. Tariffs, tariffs. Hottest topic right now, tariffs. Any day, any of those countries could slap a tariff on you and change your whole business overnight. That is unpredictable. There is regulatory. Things are building out. Plus, all our competitors are going international. That is really the hottest topic in Canadian cannabis right now, selling international. You are making a lot of money. You are making profit. You can start building a sustainable or start building a business and hopefully become sustainable if you can manage all those risks. For Cannara, we really, really do see the opportunity here in Canada, and we have to stay focused. It is really important. The name of the game is consistency. If we branch out too quick, too fast, we're going to lose that consistency. Staying focused on Quebec, sorry, on Canada and all our sales in Canada, that's our number one strategy. As we build out and we definitely use the international market or the wholesale market as an ancillary revenue stream as we build out, keeping our product fresh, right? You have to remember that cannabis ages over time, and you want to make sure that you get that product within the first three to six months to your client. As we grow, we might have some overages that we couldn't sell in time for the six months or get the distribution. We'll use the B2B market and international market to absorb that cannabis, make money, make margin on it, and utilize that avenue. Really, with a focus on Canada. Once we achieve our Canadian objective of being number one or the top, definitely top three producer in Canada with the ultimate goal being number one, we will look to international. Of course, we are a cannabis company. We are going to build. Once we dominate Canada, we will look into international, bringing the brands that we have created here in Canada that Canada is known for, bringing them international overseas in those markets and growing the proper way in those markets over time. That is how we are going to handle the international opportunity long-term. Thank you. Next question received by email. The PR mentions an early remittance of excise taxes, and I'm curious why. If you could touch on this and maybe the working capital movements in general, how you expect this to normalize over the coming quarters, that would be great. Yeah. For operating cash flow, we did prepay our excise tax obligation before the end of the month. As you know, like sales taxes, it is due the previous month's due by the 30th of the next month. We usually paid in the past, we paid it the one day right after where there is no penalty or interest or anything like that. This, we are trying to just be more diligent and remitting on time, even though there are no penalties, because we did have that extra cash. I know it is just a timing issue. We did make a CAD 3,500,000 payment before the end of the month, and we did not receive the related cash revenue from the sales for that transaction. That created a gap in our cash flow, a timing gap, which we are going to see flip in Q3. We also invested over CAD 1.5 million in prepaid packaging. This is what I mentioned earlier of trying to take cost advantages by buying bulk and buying overseas and avoiding supply chain issues. We really purchased over six months of stock from overseas where it takes two months to receive the stock. We invested in that. That affected our operating cash flow and in turn our free cash flow by close to CAD 5 million. We are going to see the flip of that and the benefits of that in cash flow come in Q3 as we do not have to spend cash on packaging material or as much cash on packaging material. We get the flip of the revenue coming in without the related excise tax payment in Q3. Hopefully that explained the reason on the operating free cash flow. Thank you, Nick. Next question. You have mentioned in the past that you have invested in a growing sales team leadership and boots-on-the-ground field sales force with a stronger focus on sales and marketing efforts. Are you seeing any early results from this, and what are the primary objectives they are pursuing? Previously to the sales team coming on at the end of 2024, all of our launches were just launched, and no one was made aware, but people loved our brands that the budtenders would make themselves aware that these launches were available. Now we have a sales team that can propel launches and get that into market. We can get penetration easier into those stores and build a SKU base and eventually build over time more revenues generated from each store. The real objective of our sales team is to educate our network. They have to educate the whole budtender retailer network on all our products, all our upcoming launches. That is really to support the innovation and product line extensions that we are building. They are also tasked to increase number of SKUs. When they go into a store and they see how many SKUs that they're carrying, four SKUs, five SKUs Cannara, when we have over 100 SKUs, this is how we have to get those SKUs on the shelf so that customer can buy. We're deploying trade marketing assets previous to the end of 2024. You walked into a store, a retail store across Canada, there was no marketing trade display assets for Cannara, Tribal, Nugz, or Orchid. We had to compete. The customer would only know about a Tribal product if they heard about it from a friend or the budtender recommended it. The whole store in front of you would be littered with advertising from any other brand. Now we're deploying those trade assets, and we're deploying them right and smartly, and we're not putting a huge budget behind it at this point. It's one of our tools in our toolkit to increase revenue. That's something that we're doing and is going to pay dividends over time. We're also supporting our retailers, our consumers with better in-store execution, product education, and just overall service to strengthen our relationship with them, which in turn improves the sell-through of our product at those stores. Really, it's just continue pounding the pavement. We're pounding for strong retail engagement. We're expanding our distribution points. Right now, we're just seeing the early impacts of market share increases, and that's going to increase quarter by quarter as we build it up. Thank you, Nick. Next question received. Congratulations on earning the number one market share position for mass premium 3.5 gram flower with Tribal. We understand that a portion of consumers are trading up to larger formats of 7 gram and 14 gram. Could you comment on how Tribal plans to address the shift in consumer purchasing behavior? Nick, just one second, sorry to cut in, but your microphone seems to be—it's not on mute, but we're not catching. You want to just say a word again and see if. Is that better? Yeah, that's perfect. Thank you. Yeah, no, I think thank you for that. We've worked really hard on creating Tribal and focusing on the 3.5 category. We're proud to have a commanding market share of that category. We see increasing sales in 7 grams and 14 grams. We're evaluating the opportunity, but under Tribal, that is. Under Nugz, we're playing in the 7 grams and 14 grams. We're actually having a lot of success under Tribal, sorry, under Nugz with the 7 grams and 14 grams. I've been asked a lot for Tribal, why don't we go into the 7 grams and 14 grams when everyone's playing in that market? I strongly think that there is a good place for Tribal in the 3.5 grams. We're going to be launching genetic. We want to be, as mentioned before, a house of genetics with a roster of 20 plus genetics. That is consistent staying over time. Having 3.5 gives customers options. If we were to play in the 7 grams or 14 grams at one point in time, it would be a mixed option where a 3.5 of one flavor and a 3.5 of another flavor would be offered under the Tribal multi-pack to address the 7 grams and the 14 grams segment. For now, really, we plan to dominate the 3.5 gram market under Tribal. We think it is the most accessible, and we want to give accessible, highest quality cannabis. That is how we do it under Tribal. Nugz plays in the 7 grams and 14 grams for now. Over time, we will see if Tribal will generate or bring to the market multi-packs under its three and a half categories to reach the bigger formats like the 7 and the 14. Thank you, Nick. Next question received. How much wholesale demand are you currently seeing in the market? How does the tightening supply demand balance across Canada influence your expansion strategy? We're seeing the market increase. The wholesale market is definitely on fire, and I'd say almost the pricing has doubled since last year. The reason why it exists is because international and international and the fact that a lot of licensed producers actually closed down production space. They moved to a strategy of more CPG strategy of just purchasing the cannabis. At one point when the industry was in oversupply, I'd be pretty confident to say that we're in an undersupply situation right now. A lot of the cannabis is going international, and it's causing pressure on the Canadian cannabis offerings. It's increasing the price, and it's harder and harder for companies to make a margin that are not producing the cannabis because they're the most successful to price increases in wholesale cannabis. For us, we're not affected because we're growing the cannabis. If anything, it's an advantage to us because we can utilize the wholesale market for ancillary cannabis that we have in inventory. We use the wholesale market really as a backstop. We use it as a stopgap, and it really allows us to de-risk our operation. Yeah, we again prioritize all the cannabis for our main brands. As we scale, that avenue is very useful. I think it's just going to continue increasing because there's not more production space coming online. If anything, there's more international sales as more countries recreationalize or have a medical program. That's going to continue putting pressure on the supply of cannabis here in Canada. I think that's a good condition for Cannara to be in as a grower of cannabis, over 40 or just under 40 tons of cannabis and on track to build out 100 tons in the next three years. Thank you, Nick. You've touched on this a little bit in some previous questions and answers, but the next question received is, are there any upcoming product launches or innovations in the pipeline that you're particularly excited about or see as meaningful growth drivers? Nick, your microphone is. Sorry, I think the Trifecta. Perfect. I think the Trifecta in Quebec is really going to make waves. The Trifecta outside of Quebec is making waves. That is super exciting as a product for me because Trifecta is not just one product. It is a format for Tribal. Once we create a format for Tribal, every genetic that we launch under Tribal gets that format. We have close to eight genetics. There are eight genetics. We will have eight Trifectas over time. As we launch 20 genetics, we will have 20 Trifectas over time. Porto Leche, that is our newest genetic coming, launching under Tribal in Q3. Going to be very exciting. Has like a cherry, red wine, creamy gas after notes on it. Sports over 30% THC. We have the Wagyu Delight and the Meat Pie coming under Nugz. Yeah, looking forward to Q3 and the launch that we are doing. Perfect. Thank you, Nick. I see we're coming close to time. I think we will have a chance to answer one more question. As mentioned in our press release and on today's call, should you have any additional questions, you can definitely email us at investors@cannara.ca. The next question, Nick, is, given the continued growth and dominance in the vape segment, is Cannara exploring opportunities to expand its offerings within the vape segment? Absolutely. We're a big player in the vape segment. We're going to continue producing our 510 carts across Tribal and Nugz, and we'll continue doing that on a genetic, every genetic that launches out. We're going to continue doing that. We recently launched our live resin all-in-one, the Tribal Supernova in Ontario, and our cured resins all-in-one under Nugz. That is both in Ontario and Alberta. That is one entry into a category that we've never played before in. All-in-ones will be a category that we're going to build out over time. We also are developing our solventless vape, solventless vape all-in-one for Nugz. This is a project that we've been working really hard on. It's very important to find the right hardware because solventless rosin reacts differently than BHO live resin. There are more fats and lipids inside rosin, which causes carts to clog or burn over time. That's been a main factor for solventless carts, which is one reason why we haven't seen solventless carts in the market or too many of them, in addition to the fact that they're expensive to make. We are really trying to focus on that and bring a solventless cart market that, one, quality doesn't burn, doesn't clog, and is most importantly affordable. Yeah, that's a really exciting project that we're working on. Thank you, Nick. I think we're at time. That concludes our Q&A portion. I'll open the floor to you, Nick, for any closing remarks. Just want to say thank you, everyone, for taking the time to listen to our Q2 earnings call and our live Q&A session. Hopefully, you got some further insights into our business. We're not changing our tune or continuing focusing on execution of the business. We have a real opportunity in Canadian cannabis to climb the ranks and become a top leading national cannabis producer. We have the assets, we have the people, and we have the product. It is just a matter of execution. Myself, as well as our CEO, Zohar Krivorot, who could not be here today, worked day and night to make this happen, as well as our team, our VPs, and our 400 other employees that are working day and night to make this happen. Again, thank you for all your support in our story, and wish you a great Tuesday. Thank you, everyone. Thank you, Nick. Thank you, Nicholas Sosiak. Have a great day.