Good morning, everyone, and welcome to TILT Holdings Q2 2024 Conference Call and Webcast. Today's call is being recorded for replay purposes. A replay of the audio webcast will be available in the investor section of the company's website approximately 2 hours after the completion of the webcast and will be archived for 30 days. I would now like to turn the conference call over to your host today, TILT's Head of Investor Relations and Corporate Communications, Lynn Ricci. Please go ahead. Thank you, operator. Good morning, everyone, and thank you for joining us. Today, we issued our Q2 2024 earnings press release. The press release, along with our report on Form 10-Q, is available on the U.S. Securities and Exchange Commission's website at www.sec.gov, on SEDAR+ at www.sedarplus.com, and on our website at www.tiltholdings.com. Please note that during this morning's webcast, remarks made regarding future expectations, plans, and prospects for the company constitute forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, which we disclose in more detail in our most recent 10-K filed by TILT with the SEC and on SEDAR+. We remind you that any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may update such forward-looking statements in the future, we specifically disclaim any obligation to do so, except as otherwise required by law. As of today's call, we are presenting our financial results in accordance with the United States generally accepted accounting principles, or GAAP. During the call, management will also discuss certain financial measures that are not calculated in accordance with GAAP. We generally refer to these as non-GAAP financial measures. These measures should not be considered in isolation or as a substitute for TILT's financial results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to their nearest equivalent GAAP measure is available in our earnings press release that is an exhibit to our current report on Form 8-K that we filed with the SEC and SEDAR+ today, and can be found in the investor section of our website. Joining on today's call is our CEO, Tim Conder, and our interim CFO, Brad Hoch. Following the prepared remarks, we will open the call for questions. During today's prepared remarks, we may offer metrics to provide greater insight into our business and/or our financial results. Please be advised that we may or may not continue to provide these additional metrics in the future. With that, I will now turn the call over to our CEO, Tim Conder. Thank you, Lynn, and good morning, everyone. During the Q2, we navigated challenges in both our plant touching and hardware business, while remaining focused on best servicing our customers across the TILT platform. Our plant touching business delivered sequential growth on both the top and bottom line as we continued to grow our customer base in each market, despite headwinds in Massachusetts and Pennsylvania. At Jupiter, we are working closely with our current supplier in Asia to improve production and supply chain hurdles, which impacted our Q2 results. These changes will enable us to better serve our hardware customers in a rapidly evolving market by both deepening our relationship with our current supplier and evaluating that partnership on a go-forward basis to ensure that we are always getting the best products at the best price into the hands of our customers to support the growth of their businesses. I'll have more to share on this later in the call. For those newer to TILT, our operations revolve around our primary inhalation capabilities, brands, and product lines. Over the past year, we have been focused on stabilizing our business by reducing our cost structure, refining our strategy, and addressing our debt stack in order to build a foundation for long-term success. The actions we have taken have resulted in product portfolio optimization and brand partner rationalization on the plant touching side of our business, incremental investments into neglected maintenance CapEx to increase cultivation throughput, and overhauling people, processes, and technology at Jupiter to regain market share and maximize the opportunity that we have with our enviable and long-standing customer base. Last week, we finalized a sales reorganization at Jupiter to realign our team to market realities and a rapidly evolving competitive climate. These adjustments will focus our team on supporting and expanding existing accounts while aggressively expanding into emerging markets. With the lion's share of our cost-cutting activities behind us, our focus is on working through the important transition underway in our Jupiter business and returning to profitability going forward. Turning first to our cannabis portfolio. Last year, we initiated a plan to refine our brand partner strategy, focusing on brands that better align with our broader inhalation platform or brands that we have identified to capture white space in the near term in the markets we serve. In the Q2, we launched Level to fill a gap in our product portfolio after parting ways with 1906. Since its launch, Level has seen its brand continue to gain traction with our launch partners and expand into new doors. LEVEL tablets are formulated with cannabis-only cannabinoids and terpenoids, and fit perfectly into a medical market by meeting patient expectations on efficacy, potency, and form factor. We are already receiving positive customer feedback from those that have tried this new offering. Edie Parker Flower, the newest addition to our brand partner lineup, has also had a strong start in the Pennsylvania market. We launched with premium flower SKUs that were entirely pre-sold ahead of launch, and we expect to release vapes in the coming weeks. Initial flower orders had incredible sell-through rates, indicating the Pennsylvania medical market patients have an appreciation for medical products from design-forward lifestyle brands. Now, turning to our plant-touching operations by state. Massachusetts continues to be a competitive market with persistent pricing pressure. However, we have improved our margin profile in the state compared to the year ago quarter. This is a direct result of our investments made over the past year to improve cannabis yields, potency, and cannabinoid profiles, as well as operational efficiencies that have begun to make a positive impact. On the investment side, new and improved lights across our facility is a major undertaking for us with clear initial results. This lighting overhaul is expected to be complete before year-end. We are making other incremental adjustments to increase the quality and consistency of our flower and reduce our costs to operate. Margins also continue to benefit from our product portfolio optimizations, as our product mix is heavily focused on faster-moving, higher-margin SKUs. Our in-house Standard Farms and brand partner products benefit from these efforts with enhanced sell-through rates and reduced inventory holding costs. Our retail operations in the state, we believe, are starting to gain steam, with marketing efforts bringing an increase in customer foot traffic into the stores and recent basket trends improving as well. Overall, Massachusetts remains a competitive market, but we expect the changes underway, and our continued focus on quality product and customer service will allow us to effectively compete in the markets we serve. As the number of retail stores continues to increase, we must remain agile in our ability to pivot and meet evolving market realities. As an example of this, we recently combated extreme pricing pressure at our Taunton retail location that was driven by three new dispensary openings within 15 minutes of our establishment. Another is set to open in the coming weeks. It is a testament to our team's deep relationships with our customer base and our commitment to their wellness that ultimately keeps us competitive. In Pennsylvania, we saw similar dynamics with respect to Q2 results. Revenue was down year-over-year. However, gross margins expanded due to improvements in our product portfolio and cultivation. As I mentioned earlier, Level continues to make progress as we introduce their products across the state. Level is already yielding strong results. We will be including Level in our upcoming Pittsburgh CannaFest activities as we leverage our community-focused approach. We are excited to expand our customer base for the Level product offerings and connect a great brand to patients at additional retail stores across the state. In the near term, we anticipate modest growth and profitability improvements in Pennsylvania, with the key catalyst still being the approval and rollout of adult-use. At this point, that timing remains unclear. However, we believe Pennsylvania will be keeping a close eye on its neighbor as Ohio launches its adult-use program this week. We continue to urge politicians to move forward with adult use, as it is our deep belief that cannabis should be accessible to adult consumers for wellness and recreational purposes, as well as to patients to treat a wide variety of symptoms. We need the Commonwealth to take action, and we are calling on its lawmakers to do so, which is a great lead in to Standard Farms, Ohio. Ohio continues to be a bright spot in our plant touching business, and we had the first recreational stores in the state open earlier this week. We are excited about this launch and expect this to be a busy time as we scale our sales and distribution efforts to meet increased demand. During the initial stages of the adult-use rollout, there will be limitations on product form factors, and the same purchasing limits will remain in place. Over time, we anticipate that this will evolve as the state allows different products to come to market, along with higher customer purchase limits. As of this week, we have received our dual-use license number, and Standard Farms is ready and eager to serve the adult-use market in Ohio. We currently have a steady supply of key products, such as edibles and vapes, to support our brand partner, Timeless, and a wide variety of products under our Standard Farms brand. As mentioned earlier, we also introduced Level in Ohio, concurrent with our launch in Pennsylvania, which has seen strong adoption. Overall, we are optimistic about our plant touching business and remain focused on market-specific optimization. With a lean operational foundation and both near and long-term catalysts in Ohio and Pennsylvania, we are well-positioned to drive sustained growth and profitability. Now, turning to our vape hardware business, Jupiter a s you can see by our financial results, the impact on the Q2 was primarily due to our Jupiter business. As we have mentioned on prior conference calls, we continue to work through production and supply chain challenges with our manufacturing partner in Asia. This had a material impact on our revenue and profitability during the Q2. The market is evolving rapidly, and as a consequence, the product makeup in the vape category is expanding to a much larger number of products, deeper customization, and more rapid technology development cycles. Jupiter and its supplier must evolve our business models to meet the moment and support our customers as they continue to grow, not just their brands, but their vape product portfolio mix. To do so, we are moving to a more asset-light, just-in-time production and supply chain model. To accelerate this transition, we are temporarily transitioning five customers to a direct billing and invoicing model with our manufacturing partner. Operationally, our customer relationships will remain unchanged. We will continue to provide direct service, R&D resources, supply chain management, and a robust and evolving suite of Jupiter and CCELL hardware products to these customers. The only adjustment is that the billing process will be handled directly by our manufacturer, which will alleviate our working capital outlay and allow our manufacturing partner to more easily insure the goods that are exported to these accounts. The customers will be serviced by Jupiter under a commission structure, and freight, tariffs, and storage costs will shift to our manufacturing partner while this model is active. On a financial basis, with these changes, our revenues will be reduced on an annualized basis, but we will benefit from increased gross margins and the freeing up of working capital. As mentioned, it will enhance the insurance coverage our manufacturing partner is required to carry for exported goods, reduce our inventory carrying costs, and have an immediate and positive impact to our outstanding trade payable, all of which address a major hurdle this year in growing Jupiter's business. These changes do not happen overnight and can be painful to work through. However, we believe this on-demand and commission-based model is required from a business and customer standpoint, and will have a positive impact on Jupiter's financial health and long-term viability. Turning to product updates in Jupiter. The H1 of the year was not a strong one for the cannabis sector, and as a consequence, Jupiter experienced an ordering slowness from some of its customers. This was expected after Chinese New Year and the large orders placed. However, we are happy to report that orders have started to improve over the end of Q2 and in the start of Q3. Demand for Jupiter and CCELL hardware remains robust, fueled by our strong partnerships with multi-state operators, licensed producers, and prominent cannabis brands. We believe the level of customer service we deliver, along with the innovation and customization we are known for, sets us apart. As an example of this, early in the Q3, we won back a sizable multi-state operator who placed their first order this week. This win-back is a clear example of how we are perceived in the market: as an innovation and customer service leader that can achieve a level of scale unparalleled by our competitors. Lastly, on the new product front, we are still awaiting regulatory approvals for the Liquid Medical Device, a vaporizer battery with a cartridge accessory announced in 2020 to be available through European partners for new territories abroad. This will be the first medically certified inhalation device once in market, and our team continues to work with the European certification authorities on the approval process. I'd now like to pass it over to Brad to review the financial highlights of the Q2 before returning for closing remarks. Thanks, Tim, and good morning, everyone. As a reminder, all results today are presented in U.S. dollars and are on a year-over-year basis, unless stated otherwise. Jumping into our results. Revenue in the Q2 of 2024 was $26.6 million, compared to $41.6 million in the year ago period. The decrease in revenue was primarily driven by our Jupiter Hardware business. For Jupiter, we generated $15.7 million of revenue in Q2, compared to $28.7 million in the year ago period. For our cannabis operations, which includes Massachusetts, Pennsylvania, and Ohio, revenue in the Q2 was $10.9 million, compared to $10.4 million in Q1 and $12.9 million in the year ago period. Gross margin in Q2 was 16%, compared to 9.7% in the year ago period, with the increase driven by improvements in all three of the company's plant-touching markets. Adjusted gross margin, which excludes non-cash inventory adjustments and one-time adjustments in the Q2, was 16.8%, compared to 16% in Q1 and 21.4% in the year ago period. Operating expenses less non-cash adjustments for stock compensation, depreciation and amortization and impairment charges in the Q2 decreased 24% to $8.1 million, compared to $10.7 million in the year ago period. The decrease was primarily due to lower legal and professional service expenses, lower headcount, as well as lower administrative costs, driven by operating efficiencies. Net loss in the Q2 was $35.9 million, compared to $26.9 million in the year ago period. The difference was primarily driven by a non-cash impairment charge. Adjusted EBITDA in Q2 was negative $1.2 million, compared to $1.5 million in the year ago period. The decrease was driven by our Jupiter hardware business. Cash provided by operating activities in the Q2 was $1.4 million, compared to cash used of $3.3 million in the year ago period, with the improvement primarily related to strong AR collection efforts and lower inventory purchases. At June 30, 2024, we had $2.7 million of cash, cash equivalents, and restricted cash, compared to $3.3 million at December 31, 2023. Before I turn the call over to Tim, I wanna call out the earlier comments made on Jupiter and our Chinese manufacturing partner. With the amended agreement in place, the transition to just-in-time ordering and the move to direct invoicing of five customers by your manufacturing partner, investors should expect to see a sizable reduction of Jupiter revenues through the remainder of 2024 into 2025, and a change in our overall financials. Although we do not provide guidance for TILT, we do want to call attention to the expected revenue impact with this structure in place and the corresponding, yet positive, shift in margins. Taken together, we expect lower revenue, higher gross margin, little to no impact to Adjusted EBITDA, and improved working capital. With that, I'll now turn it back to Tim. Thank you, Brad. While challenges with our Jupiter business negatively impacted our Q2 performance, parts of our plant touching business countered with sequential revenue and profit growth. This underscores the resilience of our business, and we look forward to providing updates on our asset-light transition with Jupiter in the coming quarters. As we look to the broader state of cannabis in the U.S., we are optimistic about the rescheduling prospects, as well as the launch of adult use in Ohio, and the potential for Pennsylvania to permit adult use in the future, which will be important catalysts for both our industry and Tilt. I'd like to sincerely thank the teams across our business for their efforts over the quarter. Tilt is in a transition period. Our future success will be predicated on their passion, execution, and resilience. Operator, we will now open it up for questions. Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you would like to ask a question, please press Star and One on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star and Two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. The first question is from Aaron Gray with Alliance Global Partners. Please go ahead. Hi, good morning, and thank you for taking the question. This is Remy Smith on for Aaron Gray. So my first question, just, in regards to your Jupiter hardware business. I know you touched on it a little bit earlier in your prepared remarks for the supply chain issues, the transition to the new asset-light model. So you mentioned that there could be some pretty sizable sales impacts through 2024 and into 2025. So there are some hurdles in the new business model that were unexpected before making this transition, and do you see this more transitory with respect to return to business as usual, kinda, after that point? And then have there been any impacts to long-term customer retention because of the issues? T hank you for your question. So I'll take that one. No, no impact to customers in this transition. In fact, I mean, that's been our primary focus, is to ensure that there's not, right? And we're leveraging this transition to try and get as much benefit for those customers, whether it's from a pricing standpoint, inventory standpoint, or otherwise. And sorry, can you repeat the first part of your question? You, you cut out a little bit for me. S orry. Just about the timing. I think you mentioned through 2024 and 2025, there would be some pretty sizable sales impacts. So there's some hurdles in the new business model that are unexpected before making this transition. And then after kinda gets resolved, do you expect business to return to usual? So this is a temporary shift in our model. We anticipate that shift to be as short as one year, and it's something that we're testing to see, you know, what the benefits are, not just to Jupiter, but to customers as well as our supplier. So we do e xpect it to be a transition phase. That has had, yes, some negative implications for us from a revenue standpoint as we transition. But we don't expect those, you know, those negative impacts on Jupiter to persist. Although, like Brad said, and, you know, I mentioned in our prepared remarks, we do anticipate that this will have a material impact on revenue during that period, that EBITDA will remain relatively flat and that gross margins will improve, and that will benefit from the positive impact on working capital. Helpful color there. And then my second question: the Ohio market, adult-use, starting earlier this week. Can you just give a little bit more commentary on how you expect to capitalize on the market and any expansion you might have in place? I think you mentioned you received your co-located license earlier, so if you could also provide a little bit more commentary on the amount of stores you're selling into and how that's been going first week? A bsolutely. W e're excited about the transition. It's always really exciting, especially for the team, as markets transition from medical to adult-use. We received our final license last night and activation in the state software system, MJ Freeway, and are launching for adult-use sales today. So super excited for the team. We're hearing from our dispensary partners, anywhere from 6-10x increase in sales just over the past few days. While we don't expect that to persist, usually in a medical to adult-use transition, we see anywhere from 3-5x increase in total market opportunity. And, I think we'll be conservative, a little conservative as we peg the opportunity for Standard Farms in that market. But we anticipate, you know, a definite lift in sales volume. We're, we're in a really good position there with our store penetration. We deliver to, you know, north of 50% of the stores in that market, so we anticipate and expect that to grow, not just because of adult-use sales, but as we increase our distribution and door penetration as part of our revenue forecast. But no, super exciting time for the team. Big opportunity for us. That opportunity really is only limited by the depth of our license, of our licenses, licenses in Ohio. Just as a reminder, we're a standalone processor in that state. While there is some legislation that would potentially give standalone processors a retail and cultivation license, that legislation is still in the legislature and has not been passed. We are hopeful that it will when the legislature goes back into session in September. But that's our position in the market today. That's really helpful there. And then on my last question, could you just provide an update on your planned innovation with Jupiter and the initiative push for more customized and high-margin products? A bsolutely. T he thing that makes Jupiter different from, first, other distributors in the CCELL network or that distribute CCELL hardware, but also our competitive set across the spectrum, is our ability to innovate and customize for our customers at scale. And, you know, we've seen that, you know, from Jupiter's early beginnings in launching a proprietary product that's exclusive to, you know, one of the largest premium vape brands in the country, Airo. And even to today, with deep customization for important operators like Motif up in Canada. And we're continuing that history of innovation with our Liquid Medical Device and the Cliq for the European market. Just as a reminder that, you know, the Liquid Medical Device, as we mentioned on our prepared remarks, is the battery with the cartridge accessory that, once approved by the notified body, will be the first registered medical device available in Europe, and that we still are working, you know, on an exclusive and proprietary device for Curaleaf, the Cliq. That's a pod system that will have similar positioning in that market from a medical device registration standpoint. So innovation is paramount to our long-term success at Jupiter, something that we're incredibly focused on, and it's growing that, the business of our customers and our own business. Great. That's all for me. I appreciate it, and I'll hop back in the queue. Thank you. Thank you. The next question is from Pablo Zuanic with Zuanic & Associates. Please go ahead. Thank you, and good morning, everyone. Tim, just to clarify, two questions. One, you talked about five customers that are gonna transition to this direct billing model. Can you just give a rough idea of what% of Jupiter sales would come from those five customers? Just ballpark, just to have a sense of that, please. S o since we don't give specific guidance on Jupiter sales, but what I can say is that, you know, Jupiter sales represent anywhere from 70%-75% of TILT's overall business, and, on the heels of this transition, that will likely go down closer to 60%. All right, thank you. And then, the press release, I'm a bit confused by something that it says in the press release. One of your bullet points highlights when you talk about this transition. It says, "Once the transition to the new model is complete, Jupiter will resume its billing and invoicing functions with its customers." So this is—I, I know you talk about transition and temporary, but so you're gonna go back to the old model later on, in terms of direct billing? This is just like a temporary Yeah. Yeah, Pablo, this is contemplated as temporary. The immediate positive impact for us and our supplier is added export insurance coverage for these customers as our, you know, as our, as t he size of our business. It's been requested by our supplier to increase the level of export coverage that we have for our trade payable. And in order to do that much faster, this has been the decision that we've made collectively with our supplier on a temporary basis, in order to get coverage for these specific customers and their exported goods. It is contemplated as temporary, and the term will likely be a minimum of one year. So if at the end of that term we choose to go back to the model as it exists today, we have that unilateral ability to do so. Right. Okay, but, I mean, so we can think of it as a bit of a test also, right? I mean, they, if everybody's happy with the way it's working- Correct. you may stick to it. We may. If it's working for primarily customers, but really, and then ultimately Jupiter and our supplier, then we would absolutely contemplate remaining in the, in this model. In that case, you will expand it beyond those just five customers, right? I suppose. I mean, if it's working, and there's a benefit to it, we would absolutely explore that. What I'm surprised about is that you're saying that it's EBITDA neutral. I mean, I understand the impact on sales, obviously, right? But, I would have thought that if you're taking a commission on it, that there would be an EBITDA hit also, but you're saying it's EBITDA neutral. Correct. W e've been able to offset some of our cost structure to maintain that neutrality from an EBITDA standpoint. Given that this, you know, just moving on, given that this, of course, one can think of it as improving your credit profile, does this help in any way with the forbearance agreement that you're negotiating with your creditors, or that's just different, it's about terms more than necessarily the credit standing of the company? T hey're definitely different and separate from one another. But our note holders have been standing and waiting patiently while we move through these agreements and some of the structure with our Asian supplier. But t he two are different and don't necessarily impact one another. Okay. And the very last one: I know in the past you've talked about, you know, moving into a hemp derivative space. I don't know if you can comment on that. There was a CHAMPS conference in Vegas recently, and I saw that CCELL had a big booth there. Is that something that they are doing on their own or you're working together in that regard? No, I'd say everything that CCELL works on from an innovation standpoint, we are a part of, whether directly because of, you know, Jupiter's innovation capabilities, and their reliance on Jupiter to provide market data in-market testing, et cetera, or is driven by our customer base, right? So, yes, we will absolutely be participating in that space, should our customers either want to expand into that space, which some of them do or are, or we prospect additional customers that are already in the hemp derivative space. You know, there's several of our large customers that have already made the foray into the hemp derivative space, primarily through edibles or drinks. But I think there's absolutely an opportunity in that space as well from a vaporization hardware standpoint, and something that we're taking a serious look at, along with our, along with CCELL. Okay, thank you. And the very last one, when you talked about, you know, the sales reorganization in Jupiter to adapt to other, to new market realities, can you elaborate a little bit there in terms of what you actually did? Thanks. That's it. A bsolutely, Pablo. So f or those that are n ew to Jupiter or Tilt, you know, Jupiter really led the groundbreaking evolution from the initial vape iteration in 2016 or 2017 into the ceramic core, which exploded the category. And you know, because of that early mover advantage, we were able to capture, along with CCELL, a lot of business. And primarily our competitors at that time and over the next several years were other distributors within the CCELL network. And that has changed, right? You know, CCELL has lost market share as other competitors have entered the market, either with lower cost, you know, primarily with lower cost options. We've seen the competitive set grow and evolve, and those competitors are very aggressive from a sales standpoint, whereas our focus over the past several years has really been maintaining and growing the existing business. It's important for us to be more aggressive on an outbound sales, from an outbound sales perspective. We've rejiggered our sales organization to do just that, in order to better compete in a more saturated environment. Still not as saturated as, like, the cannabis space specifically, right? There's a handful of really strong competitors instead of the hundreds that are in each cannabis market. But that's how we're evolving our sales model to be more aggressive, and more competitive and like we mentioned, this evolving environment. Thank you. Thank you, Pablo. Thank you. As there are no further questions, I would now like to hand the conference over to Tim Conder for closing comments. Thank you, operator. I just want to recognize that the Q2 had challenges for TILT, but I remain encouraged, as does the rest of our management team, you know, because of the resilience and passion of our team, like I mentioned, the strength of our customers and the size of the opportunity ahead of us. I just want to thank all of our employees and especially congratulate our team in Ohio as they launch adult-use sales today, and just thank everybody else for joining. Appreciate your time. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.