Hello, everyone. Thank you for joining us to discuss today's announcements by Tilray Brands and HEXO. Hosting the call are Irwin Simon, Chairman and Chief Executive Officer of Tilray Brands, and Scott Cooper, President and CEO of HEXO. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session for analysts and investment firms conducted via audio. I'll now turn the conference over to Berrin Noorata, Chief Corporate Affairs Officer of Tilray Brands. Thank you. Please go ahead. Thank you. By now, everyone should have access to the press release issued this morning which is also available on the investor section of our website at tilray.com. It was also filed with the Securities and Exchange Commission on Form 8-K by Tilray. During our call, we will be making forward-looking statements. These statements are based on our current expectations and beliefs and involve known and unknown risks and uncertainties which may prove to be incorrect. Actual results could differ materially from those described in these forward-looking statements. Please note the text in our press release for a discussion on the risks and uncertainties associated with such forward-looking statements, along with the disclaimers on our presentation deck. Now I'd like to turn the call over to Tilray Brands' Chairman and Chief Executive Officer, Irwin Simon. Thank you very much, Berrin. Hello, everyone. We appreciate you joining us on short notice and we will have a brief call to discuss how this strategic acquisition which brings together Tilray and HEXO, the number one and number two LPs in Canada which provide tremendous benefits to both companies and should drive extraordinary value for shareholders and other stakeholders of our respective companies. With that in mind, we would now like to walk you through what it means for Tilray and Scott Cooper will take you through what it means for HEXO. For Tilray, first, this transaction launches a strategic partnership between Tilray and HEXO, the two leading Canadian LPs with complementary brand portfolios dedicated to new product innovation and serving the needs of our consumers and patients. The benefits of partnering on product innovation help expand our European operations and one day which we hope is soon, upon legalization, there are tremendous resources and learnings within both companies that we can tap into the U.S. and international markets. We have an opportunity to work together and work with the government to help enhance the cannabis industry and facilitate change which is needed with education and medical research. Second, it provides a path for meaningful future equity ownership in HEXO in the event that we decide to convert the notes to equity. In the meantime, the notes are accretive to Tilray as the notes accrue interest of 10% per annum, contributing almost $20 million a year in the first year net income before taxes based on our current share count. Third, we have an opportunity to participate in HEXO share price appreciation as it executes its strategic growth initiatives which Scott will talk about today if we decide to convert the notes equity. Every $1 of HEXO increase with share price is worth over $200 million to Tilray and of course pays for itself and our investment. Fourth, it facilitates commercial and operating efficiency savings of up to $50 million within two years which each company will share equally. The ability for both companies to share in these savings will help us to continue to be those low-cost producers. It also allow us to leverage best practices in our respective supply chains for the benefit of both our companies which ultimately benefits the consumer. For both of us, the strategic partnerships leverage our joint product category expertise and scale to drive savings, operational efficiencies. I said before, we are absolutely looking to how to benefit the consumer. As you're all surely aware, the cannabis market in Canada is consolidating as it matures. Of course, the greatest volume growth opportunity is in the consumer segment which makes having a strong brand portfolio and supply chain more important than ever. In fact, the diverse demographics of the Canadian consumer support having a strong foothold in multiple product categories. We're seeing change, and we will bring these opportunities to the consumers and patients. We also view the continued elimination of the illicit market as a further avenue for growth. As we said before, we see the medical market as a tremendous opportunity. In terms of the specific deals of the transaction, we will be acquiring the outstanding HEXO senior secured notes from HT Investments for 95% of current outstanding principal balance of the notes. While the current note holder may continue to redeem the notes pursuant to their terms, in no event shall the principal be less than $182 million at closing. As of March 2nd, the conversion price implies that Tilray has the rights to convert to 37% of HEXO's outstanding shares. Prior to closing, Tilray and HEXO will amend the terms of the notes. Notable among these terms is a three-year term extension to the term of the notes to May 1st, 2026 and a revised interest rate of 10% paid in cash in the first year and half in cash and half in payment-in-kind equity thereafter. We will also enter into some definitive agreements related to mutually agreed commercial transactions in the area of cultivation, processing services, a certain 2.0 product such as pre-rolls so that we can both maintain our low cost of production and achieve optimal profitability. We will also establish a joint venture to provide shared services to both companies. As I said before, the total savings of these commercial transactions are expected to be up to $50 million within a two-year period which will be shared equally among each company. Of course, the transaction is subject to various conditions, including further due diligence, shareholder approval on HEXO's part and a voting support agreement from key HEXO stakeholders. A committed equity line available to HEXO for up to CAD 180 million on terms that are acceptable to both of us and the Board's exchange and approvals. With that, I will now turn the presentation over to Scott Cooper, President and CEO of HEXO, who will review the transaction from their perspective and the significant strides that HEXO has made in the company in executing upon their strategic plans. Scott? Thanks, Irwin. Let me first express our enthusiasm for the transaction and we look forward to working with the Tilray team for the mutual benefit of both businesses. When I joined HEXO in November of last year, two things were clear to me. First, there was tremendous potential in the HEXO business to unlock shareholder value in both the near and long term. Secondly, the company's own balance sheet was its greatest obstacle to doing so. As a result, resolving the ongoing overhang associated with the notes, optional monthly redemption became critical to ensuring that HEXO would have sufficient financial and operating flexibility to execute on its new strategic direction, The Path Forward. In doing so, we identified several key goals. Deleveraging the balance sheet to a more sustainable level, raising sufficient liquidity to fund the business plan, preserving value and minimizing dilution for existing HEXO shareholders and fourth, targeting an optimal supportive investor base. After an exhaustive review of strategic alternatives over the past several months, I'm excited to announce today's transaction and strategic alliance with Tilray which I believe furthers all of these goals. The transaction specifically provided HEXO with the following. First, deleveraging. Tilray will be purchasing the notes at 95 cents on the dollar which is substantially lower than the approximately 120 cents, which High Trail had been redeeming the notes at over the past six months. Secondly, more favorable debt terms. The notes have been amended on terms more favorable to HEXO, including a three-year extension, adjustments to the financial covenants and critically, elimination of the monthly redemption feature and associated shareholder dilution. The latter posed going concern risk to HEXO, given the constant threat of needing to deliver cash despite the company's previously restricted liquidity position. Third, it offers the company enhanced financial flexibility to execute on the Path Forward. The transaction substantially increases HEXO liquidity by unlocking $80 million of restricted cash that the company can now use to fund operations and other strategic growth initiatives. Fourth, continued support from existing shareholders. Related to my previous statement, the company's go-forward liquidity is also enhanced by the three-year CAD 180 million equity backstop commitment provided by KAOS Capital and its partners. HEXO will have the option to draw on CAD 5 million per month as required by business needs. Not only does this agreement ensure that HEXO maintains access to the equity markets and can deleverage over time, it is also a strong showing of support for the company by certain key stakeholders. The transaction offers substantial savings. Tilray Brands and HEXO have entered into an agreement to form a strategic partnership which as Irwin mentioned, is expected to deliver up to CAD 50 million in annual pre-tax cost synergies within two years of the completion of the transaction. Both companies have been working together to evaluate cost-saving synergies as well as other production efficiencies. This transaction increases the product breadth and our commitment to innovation. We will leverage both companies' commitment to innovation, focus on delighting consumers, brand building and operational efficiencies. Both companies will share expertise and know-how in order to strengthen market position and capitalize on opportunities for growth through a broadened product offering and new innovation. Overall, to facilitate this transaction, HEXO will be paying a 12% fee to High Trail Capital, which will be settled in HEXO shares. We believe this strategic alliance offers significant upside potential to our previously announced strategic plan, The Path Forward. We expect to realize incremental cash flow as a result of this partnership and continue to have conviction in our stated goal of achieving cash flow positivity over the next four quarters. As I stated at the beginning, fixing HEXO's balance sheet has been the biggest strategic priority for the company over the past several months. Today's announcement provides a line of sight to achieving that goal, meaning that management can now redirect its full attention towards executing on and achieving The Path Forward. I will now turn it back to Irwin. Thank you, Scott. With that, I wanna thank everybody for joining us on short notice. With that, I also want to just take us through that. Again, you gotta remember the Canadian market is the only market that is recreationally legal on a federal basis. It's about a $5 billion market today with the opportunity to grow to a $10 billion market. In doing this deal with HEXO, it puts Tilray in a position to get to our $4 billion plan that we laid out last year. There is tremendous learning on grow, there's tremendous learning on brands, there's tremendous research and development, as I said before, that we can take into other markets as we put these two companies together from a shared services, from a shared grow and from a shared innovation. I'd like to thank a lot of people on both teams that helped make this happen. With that, operator, I will now turn it over for questions and hopefully answers. Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speakerphone, it may be necessary to pick up your handset before pressing the star keys. In the interest of time, we are asking yourself to please limit yourself to one question and one follow-up before rejoining the queue for any additional questions. Our first question today is coming from Vivien Azer of Cowen. Please go ahead. Hi, good morning. Good morning, Vivien. Very interesting announcement today. I can see the logic behind it, certainly from a cost savings perspective. Can you offer any incremental color on where there might be upside to that cost savings? Then, you know, from a sharing perspective, I mean, are you sharing kind of just the absolute cost savings or because of kind of shared cultivation opportunities, et cetera, you know, for one company, might it hit on gross margin versus, you know, SG&A on another? Thank you. Vivien, we will share whether it's in grow, whether it's in distribution, whether it's in procurement of packaging, you know, whether we move some of our beverages to, you know, the HEXO Molson's facility, same with edibles. Ultimately, what this is saving in SG&A, it's saving in services but ultimately the opportunity is to bring down our overall cost. That's where, you know, it benefits both companies. For instance, if, you know, HEXO moved the grow into our facility, well, they're gonna get better pricing because of, you know, the grow that's coming out of there and we're gonna get better efficiencies with additional grow coming into our facility. You know, it's a win-win for both. It's important, you know, both companies are still separate, independent public companies and that's gonna be important to make sure that we, you know, draw the line there too. Vivian, I just add, yeah, we'll to build on what Irwin said, we'll be looking at each individual company's strengths where there's, you know, both capability and low cost and we'll be leveraging that across the two companies. I think, Vivien, what we've seen in the Canadian market and other markets, you know, just the cost today in insurance costs both these companies, you know, close to $30 million a year. What we can share and save just on that. You know, with the size of Canada, with the size of the market, just tremendous opportunities on support services and savings from the manufacturing from the grow and a processing standpoint and which allows each company to stay separate. Thank you. Thank you. Our next question is coming from Owen Bennett of Jefferies. Please go ahead. Morning, gents. Hope all well. Yeah, I just wanted to see how you're thinking about the potential three options of repayment of the debt, conversion to an equity stake and then even the possibility of control. I mean, obviously if you don't convert, you've arguably helped make a major competitor stronger whose share could have been up for grabs anyway near term, given the issues they're facing and potentially a lack of ability to invest properly. Also means the money can't be used for other assets which potentially in the US. If you convert just to keep an equity stake, you've arguably still made the competitor stronger and the stake does not help you hit your target of 30% market share in Canada because you can't consolidate it. I mean, control does kind of really appear to be the outcome with the biggest upside in strategic sense. Just kind of wanted to get your thoughts around those three different options and how you're thinking about that over the next couple of years as this relationship develops. With that, I look at it in multiple ways. I think both of our companies being stronger helps the Canadian market, helps grow the Canadian market. You heard what I said, there's $5 billion today, there's $10 billion. I think there's enough around for strong companies. I think that's what's really important in the Canadian market, to have strong LPs, have strong retailers and bring more and more consumers over. Having a bunch of, you know, companies out there that are not strong is not good for the Canadian market. That's number one. Number two is this gives us tremendous optionality. If we wanna convert, you know, we've bought in today at a really good price. If we don't want to convert in the stock, every dollar goes up, it's worth $200+ million to Tilray. There is tremendous savings that will bring our cost structure down for both companies. You know, Owen, you never know what happens upon legalization here, if one day legalization and greenhouses can grow in Canada and ship into the U.S. There's a lot of unknowns. I think as we looked at it today, and the Canadian market is very fragmented, a lot of change happening, and I think what we have to look at today is how we strengthen the Canadian market, how it's important to both companies. Not just sit there and sort of say, you know, let these companies go away and just pick up the pieces. I think it's also very important to bring more and more consumers into this category. I see tremendous upside on every aspect here for Tilray and I also do, you know, for HEXO. Cool. Thank you guys. Very helpful. Thank you. Thank you. Our next question is coming from Andrew Carter of Stifel. Please go ahead. Hey, thanks. Good morning. What I wanted to ask and kind of building on the questions here, as you're kind of putting together this joint venture between the two companies. I mean, how far could this joint venture go in terms of committing assets to it by either side? I mean, I'm almost picturing like an infrastructure co, if you will, to do the shared services. Is that in the thoughts? I mean, how far can you go in still being two standalone public companies? Thanks. Andrew, good morning and can Scott jump in here. I think it can go tremendously. I think one of the things that we see today as a public company, the cost of public company today, the cost of insurance is tremendous in, you know, cannabis companies today. You know, the cost, whether it's legal, whether it's audit, there's tremendous cost as, you know, public companies as we grow today. The other big thing is, as we look on research and development here, and then the biggest thing in Canada is pushing the Canadian government to change and allow us to educate consumers in Canada about the benefits of cannabis and why cannabis is a product from recreational, it's safe, and the whole safety of it. The other part of it is there's so much around medical. If we're both investing into categories around medicine and the benefits of that, there's tremendous intel in, you know, HEXO today, whether it's their pre-rolls or Redees, et cetera, that we ultimately think upon legalization in Germany and Europe and taking their technology and being able to take it there. Andrew, it's, you know, tremendous lengths of where we can share services and both operate, you know, as strong, independent public companies. Andrew, [crosstalk]. Yeah. Sorry. Just a quick add. You know, I think the question around how far could it go and what excites me about this alliance and this partnership is each company has strengths that we can leverage. You know, we will be looking at every possibility around cost, around quality, around capability, you know, geographical footprint. I mean, we're just at the very early stages of that and I'd say that everything's on the table as we look at that. Sounds good. I guess, one other question from the Tilray side and I think this is kinda an ominous question. Does this take you off the table from doing other things? I know that they're building that diversified CPG platform. Obviously, there's an opportunity cost. You put the new ATM in place but do you see this, like, going down this route as impeding any management bandwidth or is it just still full steam ahead on building kind of the diversified CPG platform? Thanks. Good question, Andrew. You know, I just wanna step back for one second just on your question before. The cannabis industry in Canada is, you know, only three years old. Again, there is the legal market, there's an illicit market and then there's bringing new users in to educate them about the benefits of cannabis. Doing this with HEXO creates tremendous market share opportunities to bring in the new consumers and to get out there and make sure the right messaging. I think there's over 800 LPs in Canada going through COVID close downs. We are opening too many stores. There's lots of change that gotta happen in the marketplace. I think working together, we can make that happen. In regards to Tilray and what we're doing, Andrew, last July, we talked about a $4 billion plan and that $4 billion plan is still out there that we're working towards. Yes, there's lots of things we can't do because of legalization not happening as quick as we thought. That's why Tilray has to be out there on the cutting edge to do things to get to that $4 billion plan, even if the U.S. doesn't legalize. There's a ton of things that we're still looking at. We feel good about Germany legalizing. You know, some things may slow down because of what's going on in Ukraine right now but we think there's some big opportunities in Germany. We think legalization on medical could happen in Italy, could happen in France, could happen in other countries. With that, we will continue, which we are very happy with our both, you know, acquisitions in the spirits business, our beer business. We're looking at tremendous opportunities with CBD beverages right now and we're really seeing a major emphasis on the hemp market and products derived from hemp in food, drinks and, you know, personal care products. This does not take us out of the market at all as Scott and his team will be operating, you know, HEXO alone. We have a team that will work together to get all the efficiencies of operations and get costs out of the business that, you know, sets our cost structure at a much lower base, which we all need in Canada. Thanks. I'll pass it on. Thank you. Thank you. The next question is coming from Matt Bottomley of Canaccord Genuity. Please go ahead. Good morning, everyone. Congrats on the announcement here. Just had a question for Scott, maybe a bit of a follow-up on the, you know, capital or cash rather that becomes unlocked if this were to go through that was historically classified as restricted on your balance sheet. Just kinda like the first uses of maybe what that could be utilized for as part of your Path Forward and what are some of the challenges you've had in this Path Forward historically or hurdles that you think that alleviated cash flows might help, you know, throughout more the near term than not? Yeah, I mean, as I said, it opens up strategic opportunities. It allows us to. There's other debts in the business that we'll be looking in the relatively near term to well have some conversations about how we'll deal with that. It frees up capital as we get to kind of more efficient footprints for the business. I see on the Path Forward it gives us just a bit more breathing room. It gives us the opportunity to invest in our brands. It gives us the opportunity to invest in innovation. It just really unlocks the Path Forward in accelerating the growth. Got it. Maybe a question just for Irwin here or both for that matter. On market share, you know, we've seen a trend in the sector of a lot of market share reductions, even for many of the leaders as you know, there's been price compressions of some of the, you know, especially lower priced flower. Just with combining your know-how and innovations, what are the strategies you think are requirements in order to ensure that the sharing of this information is kind of incrementally accretive to both companies in order to try and wrap the market share as opposed to, you know, coming out of one hand and into the other, just given what, you know, the market dynamics we've seen as of late? I think a couple things. Number one is I'm a big believer in brands, brands, brands and getting out there and investing in marketing brands. Number two is, again, educating consumers about the differentiation in brands. You know, now we're focused on potency. You know, we're focused on different strains and educating the consumer flower, you know, what strain, where it comes from, what the mother is, et cetera. I think there's a lot of information we still as both companies. The big thing here also what we have to do is educate budtenders at retail stores. There's lots of change that has to happen in the way products are bought by the consumer, whether it's online, direct to the consumer, et cetera. I think we both can help in shared services if we're gonna have a direct to consumer business, how we could set that up ourselves from a distribution standpoint, how we can consolidate distribution because we're both shipping to the same customers. You know, the good news or bad news, there's not—I mean, we're shipping to the control boards so there's not a lot of customers that we're shipping to. There's tremendous, you know, learnings. There's tremendous sharing here. The other big thing here is what's the innovation. I think, you know, pre-rolls is gonna get bigger and bigger. I think drinks are gonna get bigger and bigger. I think edibles are going to get bigger and bigger. I think the opportunity that you walk into a bar one day, you know, in Canada and you're able to order a THC beer or a THC drink is out there. I think you're gonna walk into a 7-Eleven and be able to buy a can of that. That's where the market has to be ready and we have to have the, you know, manufacturing facilities in place and we have to have the distribution in place to be able to supply that because that's what ultimately will drive the market and that's what ultimately drive shares. As you see already, stores are starting to close, but you got to expand the market into, you know, bars, restaurants, convenience stores, selling CBD. I mean, we're having lots of discussions in regards to medical cannabis being sold in drugstores. With all that happening and us out there lobbying for that, the opportunities, you know, are tremendous for us. Yeah. Irwin, I would add to that. I think, as you say, the opportunity, we're just really at the beginning stages of this market. As we get better consumer insights and consumer understanding, we're better able to get the products to market that consumers want for specific occasions and needs. I think there's just tremendous opportunity in the market for both businesses to flourish. You know, obviously, we'll be competing, and we'll be bringing that consumer insight and the brands to bear in different ways. For HEXO, this certainly gives us the ability to invest in those brands and drive accelerated growth. Across the network, we'll be able to tap into the lowest cost place to manufacture or grow, which will, you know, further create resources to build and have both businesses in a strong position. Got it. Okay, thanks, Scott. Thanks, Irwin. Thank you. Thank you. The next question is coming from Tamy Chen of BMO Capital Markets. Please go ahead. Thanks. Good morning. First question I had, I think this is more for you, Irwin. So if I look back to when Aphria and Tilray merged, I think ultimately, it didn't sustain the market share the way we thought it would. I think most of the legacy Tilray business has sort of, gone away at this point. I know at this point that the current transaction, there is a control. If I think about down the path, if Tilray does become in a position to take a controlling position or acquire HEXO outright, I mean, essentially what I'm asking is why would such a such an arrangement be different than sort of what ended up happening on the market share front with the Aphria-Tilray merger? First of all, it's not today, I mean, I can't predict what will happen in the future, Tamy. That number one. I think. Listen, if you look at the Tilray, Aphria acquisition, why they came together, as we saw consolidation of brands and saw consolidation of facilities and what were the strong brands? That goes back to what I said before. We can't have 12 brands out there. We can't have multiple flower out there. We can't have multiple pre-rolls. The market is changing tremendously and that just leads into exactly why we're doing this. There's over 800 LPs. There's thousands and thousands of SKUs out there. With that, you got to be that low cost producer. What you forgot to mention, though, is when Tilray and Aphria came together, there was over $100 million of cost savings or close to $100 million of cost savings that came out of that. There's a big opportunity for us as we took over, you know, Tilray's facility in Europe and our European business is growing tremendously. It's not only just about the market share, it's about growing your strong brands. You know, there is some strong brands in Tilray but there's strong brands here. There you can't look at it, are we just gonna, you know, if this happens, what happens to the market share of HEXO? HEXO right now is a strong independent company. I got to commend the HEXO team for all that they've had going on that they still remain number two within the marketplace. You got to look at the total deal and what the total value you get out of that and the big picture and which I think you come back in what I said before, the opportunities which will arise one day when you can go into off-premise and buy THC drinks or buy edibles or what can happen when you go into convenience stores, et cetera. Got it. Okay. I just had a quick follow-up, when I thought it's very interesting because you're talking about lobbying for different things such as, because I know with the regulations in Canada, of course, things like marketing is very difficult. You're also talking about lobbying for expanded distribution like medical cannabis, for example. I'm just very curious. It may be early days but like, what's sort of the receptivity so far you're seeing from the federal government or even the provincial government with respect to your lobbying for these types of potential changes? Thank you. Listen, I think after three years, the Canadian government said they would come back and look at, you know, the cannabis rules and that. I think like every country today, you need tax dollars. If you saw in the last three years, the cannabis industry contributed $18 billion of tax dollars to the Canadian economy, over 151,000 jobs and like $6 billion in infrastructure build-up. It's a real industry within Canada. With that, I think, you know, now, with the government in place, I think they'll be listening to us and I think it's important, and going in there with, you know, Tilray and HEXO and others, you can't just do it alone. I think we'll get a voice at the table here. It's incredible what's been done in three years in tax dollars, in job creation, in bringing consumers over from the illicit market into a legal market. Look how many stores now there's got to be a settling out. You know, the last three years we've lived in two and a half years, we lived through COVID, where stores have been closed for half those time. I absolutely think we will have success with the Canadian government, how we do these things. It only enhances consumers, it enhances safety, it enhances more tax dollars and it enhances an industry. I give Canada a lot of credit for being the first country that has legalized cannabis at a federal level from a recreational standpoint. Great. Thank you. Thank you. Thank you. The next question is coming from John Zamparo of CIBC. Please go ahead. Thanks. Good morning. Congrats on the deal. I wanted to start on the cost cuts. It's a significant number on its own. It's particularly significant given each company is already undergoing pretty material cost cutting plans as a result of synergies from past deals. I'm just wondering, can you give us a better sense of where these incremental cuts are coming from and why you have the confidence you can achieve them? Scott, I'll take that first. I think if you come back and look at it, and again, I come back and I look at the Tilray, Aphria coming together. As I've said, we're looking to take out $100 million there. That was two separate companies. You know, we consolidated growth facilities which were tremendous. We consolidated distribution facilities. When you're operating 1.5 million sq ft of facilities, and if they're only running at a certain percentage, you know, in regards to what their capacity is. You know, in regards to what are we all dealing with today in regards to supply chain issues is transportation, fuel prices, electricity prices. Okay? As I said, insurance prices, in regards to that, getting labor. Again, we're in a new world today after COVID in supply chain disruption, in inflation. Even though we've got the savings, we're in a new round today to get additional savings because of all the inflation that has hit us. At the end of the day, I think, you know, each LP went out and built these, you know, humongous growth facilities that today are, you know, not growing at the capacity. When you don't grow these growth facilities at the capacity and you got to, you know, with lights, electricity, with fuel, with water, with labor in that, there's tremendous overheads unless you're getting multiple 100% utilization or 80% utilization, I think. As you've heard me talk before about insurance which is one of my pet peeves, is what we can do there. There's tremendous savings, you know, as we get on the list here. We, you know, have the model that we did with Tilray. Scott has worked with his team to get some of those direct costs out themselves. On the other hand, what we have to be aware of, we're both, you know, separate public companies with separate shareholders that we got to make sure we protect out there. Yeah. John, I'd add to that. I mean, absolutely for HEXO, we'll continue to go at the savings that we've identified within our system. Where this identifies new opportunities, Irwin talked about this and certainly around things like distribution. One of the big areas we've talked about is around co-manufacturing. You know, each company has strengths and low cost capability in some different areas. You know, that co-manufacturing ability to move across the network, that's bigger with different capabilities is incremental. Irwin's talked a fair bit about the cultivation piece and then the other piece is around procurement of services and materials where we can, you know, pool the purchasing power of the alliance and achieve savings there. I think full steam ahead on the savings we've identified within the individual companies and absolutely some incremental opportunities as we've identified between the businesses as they work together. John, just, you know, let me come back for one more second there. I think the big thing here is these savings and, you know, they're one-time savings that reset your cost and base. I cannot emphasize enough, the big thing here is how we grow the sales here and grow the industry here. Whether it's selling drinks on premise, whether it's selling convenience store or it's selling medical at drugstores, selling CBD, it's growing that market is going to be the key for both of us here. I mean, we'll get these costs over the next two years but growth, growth, growth is the key here. Couldn't agree more, Irwin. Yes. Okay. That's helpful. Thanks. Then, I wanted to follow up on the earlier question and just better understand Tilray's comfort level in owning a minority stake. Have there been any conversations about what a more traditional combination of Tilray and HEXO might look like or is there a commitment to look at that at a later date? I think, you know, puts us in a great position here. I think, again, owning a minority stake that allows us to convert to a full stake if that happens one day. If that minority stake, you know, we've loaned over 200 million shares, every dollar towards $200 million. There's an interest rate play. There's tremendous shared services out there. And last but not least, there is the opportunity to come together one day. There's lots of optionality out there in the way this is structured than just owning straight equity. I think this is a phenomenal deal for both companies. More important, it's a phenomenal deal for our shareholders, for HEXO shareholders, and last but not least, the consumer. Because as you get these savings, it's passed down towards the consumer in regards to price. When you get, you know, the force of us getting new distribution where consumers have the ability to buy products, whether it's off-premise, whether it's convenience store, the benefit is to the consumer here at the end. Okay. Thank you. If I can sneak in just one more. It's a number of closing conditions that you do have to get through. Can you walk us through the cadence of those and just describe your confidence you can get this achieved? You know, listen, we got to get the dependent agreements. There's some future due diligence that has to be done, you know, in getting that done. At the end of the day, HEXO needs shareholder approval here. In regards to getting approval with the CAD 180 million backstop, that is the approvals we need. Hopefully that takes about 90 days. You know, we get that behind us and we move forward. I think, you know, as you look at it, as we do this, there's lots of learnings here, and there's lots of opportunities, and the companies have worked well together. On the other hand, we're number one and two, and we're competitors out there and we can't forget that either. I think the big thing is together, how do we rebuild the Canadian market? Because what you heard me say before and what Tilray mentioned is losing market share because the consumer has been shut down from going to stores, the education that's got to happen with bartenders out there and bringing the consumer back to going in stores. You know, Quebec was closed because of vaccination where you couldn't go to stores. We couldn't get shipments out, you know, because just of labor. There's a lot that we have to do to get the industry back going again after COVID because Canada's basically, in many cases, closed down for almost two years and the cannabis industry has suffered from it. Okay. That's all. Thank you very much. Good afternoon. Thank you. The next question is coming from Pablo Zuanic of Cantor Fitzgerald. Please go ahead. Yeah, good morning. Irwin, can you just maybe clarify for me a couple of points here. So assuming the HEXO share price goes up today, right, it's just around CAD 0.70, the conversion price is CAD 0.90. You could be in a position to convert, you know, maybe in a couple of days, right? Is there anything that stops you from doing that? That's question one. Question two, once you're at 37%, is there anything in the agreement that stops you from, in one or two weeks, increasing your stake? Question three, as per my math, you are buying about half of the debt. You know, why not all of it or what's your plan with the rest of that convertible debt? Thanks. Thank you, Pablo. Number one, you know, the stock is up today. I can't convert till the deal closes. After the deal closes, you're 100% right. I could four days later call them up and say, "I'm converting all my debt to equity. I'm now your 37% shareholder." Why would I do that and, you know, give up my, you know, 10% interest rate and, you know, have a secured lien on all the assets basically within Tilray? Number two is, you know, if the stock went to $5 a share where it's been, it's worth $1 billion to Tilray shareholders, okay? As a partner, you know, could I convert at any time after that? Yes, I can. Your other question was? About the rest of it. Well, if there's any- Pablo, we bought 100% of the debt. It's about $212 million that are outstanding. HT can still sell down until this closes but they can't sell down less than $182 million. Right. We're buying all the debt. Understood. Is there anything in the agreement that once you're at 37% would prevent you from going to 51%? I mean, is there a period of time that you cannot increase your stake or you can increase your stake at any time later on? There is nothing in the agreement that stops us from going to 51% or 100%. Okay. If I can add just one more for Scott. If you can just give a, you know, a very brief update. We don't have your January results yet but just a brief update in terms of state of the business, right? The Hifyre data and other tools show, you know, continued share loss. Yes, Redecan looks like a great asset but it's been losing share. Just a brief, you know, update on the state of the business right now. Thank you. Hey, Pablo. Yeah, I mean, we've got our Q2 earnings coming out in 2 weeks so I'm gonna defer that one. We'll have a robust update in a couple weeks. Pablo, I think just from both companies and you get, you know, data out there, I think, you know, share has been all over the place. You know, we've lost share. As I said before, I think we have to restart the cannabis category in Canada. The shares moved around to a lot of different LPs. A lot of consumers couldn't go to stores because of vaccination or you had to order online. With that, I think what we have to look at is Cannabis 2.0, Cannabis 3.0, 4.0. Now that everything is lifted, stores in Ontario are all open, the market's open in Ontario. Vaccination, a lot of the different provinces, you know, are not vaccinations. You don't have to show your cards to go into stores. I think that's the big thing, how we go forward here and how we get consumers back buying branded products and how we both got to grow share. I think as I said before, the savings here are great. You know, getting, you know, investors to buy into the profitability of both companies and not burning cash. At the end of the day, that's all done by growing sales. That's what the important part is. Pablo, I will add that just, you know, our focus on innovation and driving growth has continued unabated. You know, you'll see that in the market, in stores in the coming months. Couldn't agree more around that focus on growth. Certainly, that's a huge focus for HEXO. Thank you, Pablo. Thank you. Our next question is coming from Aaron Grey of Alliance Global Partners. Please go ahead. Hi, good morning, and thank you for the questions. First one for me. You guys talked about, you know, different ways of utilizing two between the JV, you know, and cost capabilities, legal and otherwise and as well as distribution. You know, going back to the market share comment you guys talked about, wanted to know in terms of sales force and potential opportunities there. You know, earlier in the past you've talked about return to brick-and-mortar, offering opportunities with sales force kind of getting in front of budtenders. You know, could this alliance also combine that effort in having the power of the two brands to leverage in the marketplace? Want to kind of get a sense in terms of obviously you guys still being competitors, as you just mentioned, but also having aligned interest. Thank you. Good question. Scott and I have talked about it and if you look at liquor companies out there today or spirit companies or beer companies, they're competitors but they share sales organization. If you look at a lot of companies in the food business, they hire hire retail brokers that represent lines. I think, you know, there is opportunities out there as we put boots in the streets and, you know, we have Southern Glazer's that, you know, is our boots on the street in regards to calling on stores. I think there is opportunities from the sales side, to go out there and be calling on budtenders b ut I think what's also really important is the data. Data is key here to be able to, you know, either shared data that we're both gonna be able to use out there. We both, you know, have an independent, you know, sales organization on the street and there is an opportunity there. You heard what I said before as regards to direct to consumer and having that ability to be shipping products directly to consumer, whether it's our own, whether it's, you know, through the control boards, et cetera, is big time for us. Last but not least, and you know, the cannabis industry is not going to be different than, you know, food, clothing or any other industry today, how big direct to consumer is. Then, you know, being able for home delivery and stuff like that, we would be able to set something up as independent companies that we could do that and work with the control boards and, you know, work with the retailers to do that, to make sure there is supply. You know, on all three of those, there's opportunities to work together with those. You know, when it comes to sales organization infrastructure, that's a big cost for both companies. Aaron, what I'd add there is I think the alliance really brings, creates a clear industry leader. From my CPG background in working with our customers and the retailers Having a perspective on what consumers need, what the shopper insights and needs are and being able to go with a shared view on how we can unlock opportunity for our customers, how we can make it easier for consumers to shop, how we can you know bring more innovation to market in a clear framework. There's just so much opportunity in the cannabis space. I think as we go to market that this alliance and you know having that leadership opportunity to really frame it up and unlock opportunity is gonna be critical. Yeah, you know, budtender education is gonna be a key piece of that. As I said, we're still independent companies, so we're gonna compete. You know, in my opinion, having an independent sales force is an important part of that competition. As I say, you know, we'll be able to create a common framework, if you will, for industry leadership. Okay. Thanks for that color. That's helpful. Second question for me. Tilray has the JV with AB InBev. HEXO, you have the JV with Molson Coors. You know, as you guys talk about innovation, beverages was mentioned, you know, on the press release. Just wanted to know if there could potentially be any impact to your JV with Molson Coors if there was an equity stake and potential control interest taken, you know, by Tilray, you know, from HEXO, if you've had that type of a conversation with Molson Coors. Thank you. Yeah, I mean, that's a conversation we'd have to have in more detail with Molson Coors. There is in that contract a change of control clause. In the event that there was a change of control, again, that would be a conversation we'd have to have. This transaction is not a change of control. Okay, great. Thank you very much. Thank you. Thank you. Our last question is coming from Frederico Gomes of ATB Capital. Please go ahead. Hi. Good morning. Thanks for taking my question. So just on the creation of a JV to provide services for both companies, can you give more color on what kind of services that JV would be focused on? Would it need any funding? Thank you. As I said before, Scott jump in here, it would be about growth, it would be about processing, it would be about procurement, whether it's packaging, whether it's ingredients. It's in regards to support services, whether it's insurance, you know, buying our medical insurances together, our product liability insurance together, it's transportation, it's distribution. Multiple areas that we're working on there. Then, you know, last but not least, how are we looking at our artificial intelligence and what are we looking at in regards to, you know, change the business, innovate the business. You know, there's Cannabis 1.0, there's 2.0, 3.0. We're today looking at the future and looking at 5.0 and that's what's important here. Again, the savings are important and it's key. To be able to get $25-$30 million or $50 million of savings and we're both, beyond that, we're both companies. We haven't stopped the savings. You know, HEXO is still out there with a plan to take costs out of their business, which is direct with their people. You know, Tilray is out there that has a plan in place between Tilray and Aphria that we're both focused on. We're both focused on savings. These are additional savings on top of what we've already previously committed to. The big picture here is how we grow both our top line numbers and grow our share. Okay. Thank you. Then you mentioned product innovation and sharing, you know, some consumer data potentially. How should you think about, you know, investments in R&D? You know, would you share any new products or IP developed by other company? Do you have any thoughts on that? If so, you know, how would that happen? Thank you. I think again, you know, there's proprietary information for both companies and each company has its own R&D. If there's certain things in R&D that HEXO is not able to do that they can share with us that we're able to do, then we'll do it and vice versa. I think it's an area that we have to be cautious about in regards to, you know, sharing the secret sauce from both companies. At the end of the day, if you go back and look at the pharmaceutical industry, the cost to develop, you know, drugs today is tremendous. Whether there's generic or branded, you know, that's ultimately the way they go to market to get the scale and size. If we're gonna invest in something and just one company has it and if there's other ways we can use it, is some of the stuff we're looking at. You know, a big thing in the R&D and is the medical aspect of it that we would look to share too. That's helpful. Thank you. Thank you. Thank you. At this time, I'd like to turn the floor back over to management for any additional or closing comments. Thank you, operator. Thank you everybody for joining today's call on short notice. This, you know, is an exciting opportunity for both companies. It's not your normal structure, you know, deal out there, but what is normal in this world today? I think that's the difference between, you know, Tilray and HEXO, is we're looking to change an industry in Canada that's three years old. We're looking at an industry that does not have legalization, you know, in the U.S., and we're waiting. The same with Europe as we wait for adult use recreational legalization. Medical, you know, and I've laid out there how we get to $4 billion. Not everything falls in place as the way I originally thought it would be, as we thought legalization would be much further ahead. That's why as a company, you know, you have to be nimble, you have to be flexible, and you have to look at how you change to get there and play within the cannabis world, the consumer world, and to grow an industry. One thing I can reassure you, it's a $100 billion industry out there. No different than technology, no different than Bitcoin, no different than, you know, other industries out there. The cannabis industry will be a big industry one day. If you step back and look from a Tilray standpoint, I'll let Scott talk about HEXO in a second. Today, as we're in spirits, we're in beverages, we have a position within MedMen, you know, one of the largest retailers in the U.S. that, you know, would convert to an equity position upon legalization. We have a good foothold in Europe. With that, you know, upon legalization, there's lots of things that will change within, you know, Tilray. With that, I'm gonna turn it. I'm gonna thank everybody for joining. I wanna thank everybody for making this happen. Scott, I'll turn it over to you for last words. Thanks, Irwin. Let me just reiterate about, you know, how excited I am to be working with the team at Tilray. Just to kind of reiterate what this does for HEXO and, you know, you talked about growth, and HEXO is very focused on being the best cannabis company in the world. We've got incredible capability around a number of formats and we'll now be able to focus on those. You know, this transaction, as I mentioned off the top, helps deleverage our balance sheet, gives us sufficient liquidity to fund the business plan, preserves value, minimize dilution for the existing shareholders. You know, allows us to work with the key shareholders and all shareholders to grow this business and grow the value of the business. As we pursue the Path Forward and the growth agenda for the business, I'm very excited to be announcing this transaction and look forward to working with the team to close the transaction. Thank you, Scott. Thank you, everybody. Have a great day. Thanks. Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines at this time or log off the webcast and enjoy the rest of your day.