Up next, we're joined by Canopy Growth. The global cannabis industry's development is ongoing, but it's been a particularly dynamic year and a half for Canopy. With a revised strategy and organizational structure in effect, and a cost-savings program underway, the company was able to issue medium-term financial targets earlier this year. Canopy is proactive in its home market and expanding its international reach, though profitability and improving free cash flow remain top priorities. David Klein, Canopy's CEO, is with us today for a presentation, followed by some Q&A that I'll lead. David, it's great to have you here, and we'll talk again in a few minutes. Great, thanks, Lauren. It is great to be back at the Barclays Global Consumer Staples Conference. Thanks to everybody who is joining us virtually. My remarks will contain information and forward-looking statements, and accordingly, I direct your attention to the obligatory general disclaimer, as well as cautionary statements. With that out of the way, let me begin by outlining a few key points that I plan to focus on during this presentation. First, as I think you will see, we have made significant progress transforming our business over the past 18 months. Second, I believe momentum is beginning to build across our business, with significant growth expected in the second half of our fiscal 2022. While we do not give quarterly guidance, I do want to reiterate that our fiscal year 2022 is a back-half-weighted year. We could see net revenue in Q2 down on a year-over-year basis, based on strong comparisons versus a year ago, as well as the timing of new product launches in our distribution ramp, which I'll talk about. Third, we're not waiting on cannabis reform in the U.S., and have already established a significant ecosystem and plan to further increase our U.S. exposure ahead of expected cannabis reform. Lastly, I believe cannabis reform must include social justice and social equity commitments. As I look back over the last 18 months, significant work has been done to transform Canopy Growth into a focused and disciplined organization. Two years ago, Canopy Growth was operating in 15 markets globally. Today, we're focused on three core markets: Canada, the U.S., and Germany, which represent greater than 95% of the total addressable market. We've also right-sized our footprint by rationalizing our Canadian production from 11 sites to four sites. We exited operations in Colombia, and we recently sold a facility in Denmark. In addition, we're working to increase efficiency, reduce complexity, and improve agility across our supply chain. We've made significant progress reducing our SG&A expenses, with our SG&A load going from 135% of sales in Q1 of fiscal 2020 to 68% in Q1 of fiscal 2022. We expect our SG&A load to reduce further over the coming quarters through both cost reductions and economies of scale. Our CapEx has declined significantly to just $20 million last quarter, although I caution that $20 million shouldn't be viewed as a quarterly run rate for fiscal 2022. At the same time, we're building capabilities and consumer insights, and leveraging our already best-in-class R&D to accelerate our innovation pipeline. Our aspiration is to understand new and existing cannabis consumers better than anyone, including their need states, their consumption occasions, their shopping behavior, and affinity for various product attributes. These industry-leading insights are being used to inform our innovation strategy, which will lead to breakthrough products and ultimately authentic brands which inspire consumer loyalty. This is what we refer to internally as Canopy's flywheel. Our innovation pipeline is set to deliver more than 100 SKUs over the remainder of fiscal 2022. In particular, I'm really excited about the potential that we see for highly differentiated mood management products. By harnessing the power of the cannabis plant and its 100-plus cannabinoids, we're developing products that are targeted at various need states, including supporting healthy sleep, relaxation, and stress reduction. By way of example, we recently launched Ace Valley, CBN Dream Gummies in Canada. These gummies feature the CBN cannabinoid, which lends itself to sleep. The Dream Gummies have been receiving very positive consumer reviews for their effect and taste. One consumer review referred to them as sleep-changing, saying, and I quote, "I have found that I fall asleep quicker. I stay asleep. Not only that, I wake up feeling like I actually slept, energized, and ready for the day." Looking ahead, we plan to introduce a range of cannabis-based mood management products over the coming months, including new vapes, topical creams, and gummies. With a strong foundation now in place, we're working to capitalize on the immense growth opportunity that lies ahead. Our current core markets of Canada, the U.S., and Germany are already the world's largest cannabis market, and yet it's still really early in the game. By 2023, we expect the legal Canadian THC market to be CAD 7.5 million in size. Our U.S. CPG and CBD businesses could play in a combined $33 billion market, and the Germany THC and dronabinol markets could exceed $2 billion. We're focused on winning in these core geographies while we prepare to enter the U.S. THC market, which could add another $40 billion to our opportunity when it becomes federally permissible. It's obviously important for businesses to capitalize on opportunities to generate growth. Our businesses are doing that. Net revenue for our Canadian recreational cannabis business grew 36% year-over-year in Q1 fiscal 2022. Stoz & BICKEL, our premium vaporizer business, delivered 41% growth. BioSteel, our sports nutrition brand, delivered 179% growth year-over-year. While our Canadian THC business remains the largest segment of our company, the U.S. is a core pillar of our growth strategy and is expected to drive a significant portion of our growth over the next several years. For this reason, I'd like to focus the rest of this presentation on our U.S. business and strategy. Our U.S. operations generated $65 million in revenue in FY 2021. In Q1 2022, our U.S. revenues increased 91% over a year ago and accounted for 15% of our total sales. We expect revenue from our U.S. business to grow significantly over the coming years, as it benefits from increasing distribution and new product introductions. Finally, after THC permissibility becomes a reality in the U.S., we expect our U.S. business to make a substantially greater contribution. Now, we've been investing in the U.S. market to create an ecosystem that positions us for success. We already have a strong set of capabilities in place and will remain focused on building this further while the regulators work on federal permissibility. We're not waiting. Let me give you a few examples of what we're doing. Our ecosystem includes scalable brands, including CBD and CPG brands, which are purposely being built out so they can extend to cannabis over time as regulations evolve. Our cannabis insights and the know-how we've gained in the Canadian recreational and medical markets are driving development of our products in the U.S. We're building a scaled route to market with our CPG and CBD brands today, while our investments in the multi-state operators provide us an immediate pathway to enter the U.S. THC market upon federal permissibility. To dig in a little more on these points, starting with the brands, we've brought unique, new-to-the-world CBD brands to the U.S. consumers. We launched Martha Stewart-branded CBD products almost a year ago, actually to the day. Our Martha portfolio includes gummies, soft gels, and oil drops that are specially formulated by Martha Stewart in collaboration with our cannabinoid scientists to deliver a delicious and consistent daily dose of pure CBD isolate. Today, Martha Stewart CBD is one of the fastest-growing CBD brands in the market and is now the number three CBD gummy in the U.S. per IRI. We also launched Quatreau CBD beverages in the U.S. this past March, following a successful launch in Canada. This brand is seeing strong velocity, and we're ramping up distribution with Southern Glazer's Wine and Spirits, a leading beverage alcohol distributor. Looking forward, we plan to launch several exciting new or reimagined CBD brands over the coming months across multiple formats, including vapes, topical creams, and confectionery. Turning now to our CPG brands and starting with BioSteel. BioSteel was founded in 2009 and has achieved a reputation for being the hydration product of choice for professional athletes looking for a healthy alternative. BioSteel offers two main hydration products: a sports hydration powder mix, which is mixed with water to create a flavored hydration drink, and a ready-to-drink sports hydration drink in an eco-friendly tetrapack. Both products are made with zero sugar, essential electrolytes, and without harmful colors and preservatives. In the U.S., we launched RTDs late last year, leveraging Constellation's Gold Network, including distributors such as Manhattan Beer and the Reyes Beer Division. I'm pleased that BioSteel is already a top-seven sports drink brand with just a 5% ACV. BioSteel RTDs are now on store shelves in key retailers, including QuikTrip, Target, and Circle K, and we anticipate a strong wave of chain authorizations beginning this fall that'll help drive distribution increases in the coming quarters. Leveraging its strong athletic heritage, we've developed a team of brand ambassadors, including Patrick Mahomes and Luka Dončić, which is building brand awareness while also helping to educate consumers about our unique formulation. Next is Storz & Bickel, which is a unique, best-in-class flower vaporizer. Storz & Bickel was one of the first companies to enter the vaporizer business, and today, they're the best-performance devices in the world, hands down. The brand's iconic vaporizer, the Volcano, entered the market in 2000 and set quality standards which remain unmatched. The Storz & Bickel product line has since expanded to include the top-selling Mighty and Crafty devices. Currently, Storz & Bickel devices are sold in over 100 countries and are medically certified in Europe, Canada, Israel, Australia, and New Zealand. The U.S. market already accounts for over half of Storz & Bickel's sales, and we expect continued strong growth driven by expanded distribution as cannabis legalization at the state level continues across the country. Our Storz & Bickel business also has a robust innovation pipeline, including our new Volcano Onyx Edition that we're set to launch. Turning now to the This Works brand, which offers a range of clean skincare and wellness solutions, including Deep Sleep Pillow Sprays, the Stress Check line of mood-soothing skincare and hand sanitizers, which have been a particularly strong seller during the COVID pandemic. This Works products are sold in 59 countries around the world, with the U.S. currently accounting for about 23% of sales. This Works has a strong e-commerce presence, and we're also expanding distribution to brick-and-mortar retailers in the U.S. The CPG and CBD brands that we're building in the U.S. can also extend to THC and leverage the distribution in place upon federal permissibility. What's more, the brands we're building in the U.S. leverage our consumer insights that provide a unique lens of understanding cannabis consumers. For example, we identified a significant gap in CBD product offerings for appealing flavors, and we worked to fill that gap with our Martha Stewart CBD product line. We also identified white space opportunities in certain sensory and flavor segments that guided us in the formulation of our Quatreau CBD drinks. Moving now to another component of our U.S. ecosystem, and that's our investment and arrangements in the U.S. THC multi-state operators. Our arrangement with Acreage Holdings provides us with an immediate pathway to enter the U.S. THC market upon permissibility. Acreage has made great progress over the last year, including achieving its first quarter of positive adjusted EBITDA in Q1 2021. Year-to-date 2021, they've delivered revenue growth of over 61%. Acreage continues to increase production capacity and processing capabilities, including expansion in Pennsylvania, Ohio, and Illinois. Acreage is also in the process of expanding their cultivation footprint in New Jersey, just as that state is moving to adult use in 2022. We're also really excited about their plans to launch our Tweed cannabis-infused beverages this year in select markets. In addition to our arrangements with Acreage, we have a conditional ownership stake in TerrAscend, which provides us with optionality for additional exposure to a federally permissible THC market in the U.S. As you can see by the map, Acreage and TerrAscend are strongly positioned in highly populated East Coast markets, with a combined total market forecast of $21 billion in 2023. Note this does not include TerrAscend's recent announcement of its proposed acquisition of Gage Cannabis, providing access to an attractive Michigan market. Now, not only do we have immediate route-to-market access through our multi-state operator relationships, we are also putting together a scaled multi-state route-to-market, which we will be ready to leverage upon legalization. By using Constellation Brands' distributor relationships, we are developing routes to market for our CPG and CBD products across the U.S., giving us access to mainstream retailers such as Walmart, Circle K, Target, and The Vitamin Shoppe, with more to come. E-commerce sites include Amazon and our own shop, Canopy.com, which are also increasingly important channels for our products. The investment we are making in these channels and routes-to-market are expected to apply to our THC and cannabinoid products as regulations evolve. Another element of our U.S. ecosystem is our relationship with Constellation Brands. We're leveraging Constellation's deep resources to continually strengthen our team. This not only includes executives at Canopy, but Constellation now has created dedicated roles to further advance our combined cannabis strategy with strong collaboration and capability sharing across both organizations. We're tapping into Constellation's expertise in consumer insights, in market trends, and brand building. As I highlighted earlier, we're leveraging Constellation's distributor network. In addition, government relations is a key joint focus area for Canopy and Constellation, with our two companies conducting joint meetings with legislators and regulators. I'd like to reinforce again that we're not waiting for federal permissibility in the U.S. With over $2 billion of cash on hand and available for deployment, we're actively seeking additional federally legal investments to increase our exposure to the U.S. THC market, which brings me to a discussion of cannabis reform. We remain optimistic that cannabis reform will happen during this Congress. We see strong public support for the legalization of cannabis in the U.S., with 91% of adults saying cannabis should be legalized for at least medical purposes, and two-thirds of those would like to see it legalized for recreational use as well. In addition, consider that two out of three Americans already live in states with legal cannabis access. The U.S. Senate took an important step this past July toward cannabis policy with the introduction of the draft of the Cannabis Administration and Opportunity Act, which was put out for public comment. We look forward to the bill's formal introduction later this year. Not to be overlooked, there are two other pieces of federal legislation, HR 841 and S1698, that we believe if passed would establish a regulatory framework for CBD products and open the door for national retailers to participate in the CBD market. In addition, passage of AB 45 in September would allow hemp-derived CBD ingestible products to be sold in California. I'd now like to shift gears and speak to a very important aspect of cannabis reform in the U.S. We believe cannabis legalization should not happen without meaningful social justice and social equity policies and initiatives. We encourage American businesses and investors to support social justice and social equity reform to repair and remedy the disproportionate impact that prohibition has had on communities of color. According to a report from the FBI in 2019, more people were arrested for cannabis crimes than for all violent crimes combined, and 92% of those arrests were for simple possession charges. We know that the rate of cannabis use is similar across white and non-white cohorts. However, of those arrested for cannabis possession, 27% were Black, even though they make up 13% of the overall population. Those affected face many negative consequences, including employment issues, loss of access to social assistance and educational scholarship, housing issues, and lost voting rights. It's clear that criminal records and the ongoing enforcement of prohibition present a significant barrier to individuals in terms of prospering in their lives and communities. At Canopy, we're not only voicing our support for social justice; we're demonstrating our commitment to improving lives and righting the wrongs of cannabis prohibition through community impact and partnerships. For over three years, Canopy Growth has partnered with National Expungement Works, or NEW, a nonprofit organization that provides free support for records expungement, legal record clearing, and wraparound services addressing other barriers resulting from the possession of a criminal record. Our support of NEW has had a significant impact on how the program has grown since 2019, engaging over 7,000 people in their services across the country and moving from one week of action per year to year-round services. We're pleased to be presenting sponsor for NEW's Week of Action and Awareness, which will take place from September 26 to October 3, with events organized across the U.S., including in California, Illinois, Florida, and New York. Now, to summarize, we see significant value creation opportunity for Canopy Growth. We're in a growth industry with sizable market potential for the next several years. We expect to grow our market share and hold a top-three market share position in each of our core markets and categories. We see significant growth from our U.S. CBD and CPG products as they ramp up distribution. We expect to drive margin expansion as we scale revenue, improve our mix, and maintain our cost discipline. Lastly, we are actively pursuing federally legal investments to increase our U.S. THC market exposure to position us to be a leading cannabis-focused CPG company in the U.S. when the THC market becomes federally permissible. Thanks for listening, and now I'll turn it back over to you, Lauren, for Q&A. Great. Thanks so much. I guess the first thing that struck me was just with the U.S. THC question, because you commented this very strong comment that you're actively looking for additional opportunities to increase your exposure. You know, is it brands? Is it another MSO? Is it a single-state operator? You know, what are the types of opportunities that you're looking at? Yeah, let me start with just what we have, because I think there is some confusion out there about what we have. First of all, we have a path to owning upon permissibility almost instantly 70% of Acreage, which is, you know, as I described, super well-positioned in the East Coast markets that are just opening up. New York and New Jersey coming online for adult use in the not-too-distant future, right? Really happy with Acreage. TerrAscend's footprint is similar in that regard. Acreage also has a presence in places like Ohio and Illinois, and, you know, we feel really good about the development of those markets. TerrAscend just recently announced their entry, assuming positive shareholder votes from both companies, into the Michigan market with the Gage acquisition. We feel really good about having those routes to market in place. When you switch to other parts of the country, say like California, where the market operates almost more like the alcohol model with dispensaries, almost think of them like liquor stores, right? Where you do not need that seed-to-sale capability set. In those markets, we'd be less interested in multi-state operators or even single-state seed-to-sale operators and more interested in brands and capabilities and go-to-market sorts of assets that we think then combined with the assets that Canopy has and the distribution capability that Constellation has and the MSO capabilities that we have in these highly populous East Coast markets, we think that that really starts to cement in that ecosystem that we're talking about. Okay. All right. That's super helpful. You know, you've now brought new CBD brands like Martha. You said it's about a year, exactly a year ago in Quatreau. You know, what are kind of the biggest learnings that have come out of launching those brands? Yeah, the first thing is there's a lot of consumer interest and really in areas like stress reduction, relaxation, and overall wellness. There is a ton of consumer interest, but consumers are a little confused by the category, which is why a brand like Martha has done really good things to introduce people to the category. Martha Stewart, being, you know, this lifelong guru of living well, is a great entry point for a lot of people because she brings that credibility behind the brand. I can assure you that Martha's personally involved in all aspects of the effects the brands produce, the flavors that we have in the various offerings. It is a great partnership. Interestingly, to Martha Stewart purchasers, 40% of those are new to the CBD category. They came into the category through Martha Stewart. Consumers really want some help coming into the category. We are seeing the same thing with retailers and distributors as they are trying to understand, well, what can I do? How do I position these products for our end consumers? How do I break through the clutter? There are like 3,000 CBD brands in the U.S. You know, quite honestly, some of them, some of them do not deliver the effects that they say they do, right? We think having brands like Quatreau and Martha Stewart that deliver every time, we can make sure that we build those distributor and retailer relationships and have a consistent supply chain consistency of effect. You know, we think, again, that is another part of our ecosystem. It is an area, Lauren, where there is just a lot of consumers are just really trying to figure out the space. Yeah. Yeah. Okay. All right. Great. Focus the presentation very much on the U.S., but given the importance of the Canadian business and the legacy, right? Can you also just speak to the state of the business? You know, and as we previously discussed, Canada appears to be coming out of the pandemic. Yeah. Just to remind everybody of kind of the history, Canada legalized for recreational use in October of 2018. Even then, it was a slow build into a legal market in Canada in that at the beginning of last year, the beginning of 2020, there were about 50 stores in Ontario. Now, about 40% of the population of Canada lives in Ontario, right? You had 40% of the population base that could only access legal cannabis through 50 stores. That number is now a little above 1,000, right? They're making really good progress. That progress came during COVID-19 when a lot of stores, while they could do click and collect, were not open for normal consumer business. I think we're just starting to see a bit of maybe what looks like a normal trend coming out of the Canadian market, which is why we have comfort that the market in Canada will grow 40% this year. That's a little bit of converting new consumers, but not much. It's mostly bringing existing consumers that are now purchasing in the illicit market into the legal market because they have more access. For us, what we're looking to do is to make sure that we're really well-positioned to drive market share growth in Canada along with the growth of the market itself, right? Look, we didn't do a good job of that in Q1 and into the beginning of Q2, really as a result of consumer shift toward strain-specific flower and high THC flower. We had supply chain challenges in those areas, which we've since rectified by introducing into our own system some of our own new genetics, some improved production capabilities. We also purchased flower on the open market. I think we might be the only LP in Canada that actually sells more than we produce, which is the position we want to be in in a market that's oversupplied. The Canadian market, I think, is starting to get a little healthier than it has been in the past. Our business is, I think, well-positioned to perform, as we said in the back half of the year. You know, we're feeling really good about that in conjunction with some of the innovation that I mentioned during my talking points. Okay. Great. Just thinking with this conversation on back half, you know, Q1 results commentary in Q2 implies this like big second half improvement to hit the positive adjusted EBITDA by the end of fiscal 2022. Can you speak to the key drivers in the back half needed to get there? Yeah, the math in some ways is kind of simple, right? Because you can look at the 40% market share market growth in Canada with the assumption that we hold share with our existing brands and maybe grow a little share with NPD. The Canadian market, I think, is easier to get at. The U.S. market, though, can't be overlooked because as we're just building distribution for Quatreau and Martha Stewart CBD, you know, we watch the number of new doors we get into or new accounts we get into with both of those brands that they're growing on a week-in and week-out basis. That sort of growth in the U.S. is kind of hard to compare to last year because our whole business was pretty small last year. The same thing with BioSteel, which has started to grow really over the last six to nine months by getting the distribution agreements with the Constellation's Gold Network beer distributors and just now really beginning to get into those doors. We expect that as we get closer, as we go through the fall months, as you know, a lot of shelf resets happen with major retailers, and we're seeing some real positive, you know, positive responses in that regard. I think it really is a combination of getting where we need to be in Canada, getting our fair share out of Canada, which we think we're well-positioned to do, but then also seeing these CPG and CBD brands in the U.S. begin to ramp up distribution, which just takes longer than we'd all like in any CPG category, as you know. Okay. All right. I think we are spot out of time. I think stop there. David, it was great to see you again. Thank you so much. Exciting to see the progress of the business over the last 12 to 18 months, and look forward to hearing more. Yeah, great to see you. Thanks for having me, and I appreciate everyone's time today. Okay. Thanks.