Good morning. My name is Grant. I'll be the conference operator today. I would like to welcome you to the Canopy Growth first quarter fiscal 2023 financial results conference call. At this time, all participants are in listen-only mode. I would like to turn the call over to Tyler Burns, Director of Investor Relations. Tyler, you may begin the conference call. Good morning. Thank you all for joining us. On our call today, we have Canopy's Chief Executive Officer, David Klein, and Chief Financial Officer, Judy Hong. Before financial markets opened today, Canopy issued a news release announcing our financial results for our first quarter ended June 30, 2022. This news release is available on our website under the Investors tab and will be filed on EDGAR and SEDAR. We have also posted a supplemental earnings presentation on our website. Before we begin, I would like to remind you that our discussion during this call will include forward-looking statements that are based on management's current view and assumptions, and that this discussion is qualified in its entirety by the cautionary note regarding forward-looking statements included at the end of this morning's news release. Please review today's earnings release and Canopy's reports filed with the SEC and SEDAR for various factors that could cause actual results to differ materially from projections. In addition, reconciliations between any non-GAAP measures to their closest reported GAAP measures are included in our earnings release. Please note that all financial information is provided in Canadian dollars unless otherwise noted. Following prepared remarks by David and Judy, we will conduct a question- and- answer session where we will first address questions upvoted by verified shareholders using the Say Technologies platform. Following that, we will take questions from analysts. To ensure that we get to as many questions as possible, we ask analysts to limit themselves to one question. With that, I will turn the call over to David. David, please go ahead. Thank you, Tyler. Good morning, everyone, and thank you for joining our call. Today, I'll provide an update on our progress in Q1 against the strategic priorities that we've outlined for Canopy. Judy will then discuss our Q1 results, including an update on our path to profitability and provide additional comments on our short-term outlook. During our last conference call, I highlighted three clear strategic initiatives for Canopy, and in Q1, we made strides against all three priorities. One, in Canada, we stabilized our revenue and market share performance, improved cash margins, and we're on track to achieve profitability in Canada as soon as possible. Two, as part of our CPG portfolio, BioSteel had record quarterly revenue in stores in B2C, despite a temporary headwind, is still on track for growth this year. Three, we've continued to strengthen our U.S. THC ecosystem to ensure Canopy is positioned to lead in the largest cannabis market in the world. Starting with our Canadian cannabis business, we saw stabilization of Canopy share of our core segments through Q1 and continued to deliver a positive mix shift. During the quarter, our premium and mainstream sales accounted for a combined 58% of our Canadian recreational B2B sales, up from 50% last year. Let me provide highlights in our core segments, starting with premium flower and pre-rolls. In the first quarter, we continued to lead with the number one market share, helped by strong consumer response to innovation. This includes launching 11 new premium flower strains and pre-roll offerings in the quarter under our 7ACRES and DOJA brands, including the new 7ACRES Jack Haze Bubble Hash infused pre-rolls. Consumer response to these new infused pre-rolls, which combine 7ACRES Jack Haze flower that connoisseurs love with Bubble Hash from Jack Haze input, generated robust demand that exceeded our expectations. We're actively working to scale our Bubble Hash production to increase our supply of infused pre-rolls, including additional SKUs expected to launch later this year. We saw a similar response to new DOJA OG Deluxe flower, a 26% THC flower grown in our Smiths Falls facility. Our initial four-week supply to the OCS sold out in less than two weeks, and we're actively replenishing supply. This helped power our DOJA brand to strong performance in the quarter with its market share in premium flower and pre-rolls increasing to 2.1%. Next, touching on our core mainstream flower and pre-roll segment. We're pleased with the response to our Tweed rebrand, which has generated strong consumer demand for the brand's recent flower, pre-roll, beverage, and edible innovations. New Tweed-branded Tiger Cake, Wedding Cake, and Kush Mints flower strains launched in Q1 contributed to the brand's positive performance. The resurgence of the Tweed brand has enabled us to maintain our overall share of the mainstream flower and pre-roll joint market. Another key component of our premiumization strategy has been revamping our beverage portfolio, an effort that has seen us bring a range of 5 mg beverages to market under the Tweed Iced Tea and Tweed Fizz brands, while also expanding our Deep Space 10 mg beverage lineup. Strong demand for Tweed Iced Tea and Fizz beverages during Q1 helped maintain Tweed's number one rank in the 5 mg THC and under segment, with Tweed's share of the RTD beverage market increasing to 10.4%. Deep Space also gained share of the RTD beverage market in Q1. We've established a multi-year new product pipeline, which has been critical to securing expanded distribution in key provincial markets. We secured 17 new listings in Alberta, 20 in Ontario, and 23 in Québec, all of which are now available or will be over the next few months. We're backing these high-quality products with a strong on-the-ground presence. As I highlighted during our last call, we're continuing to invest in our commercial ground game in Canada, including through High'er Education, our Budtender Engagement Program. Since launching, this program has facilitated over 6,000 budtender interactions focused primarily on education and product knowledge to drive budtender recommendations. Our investment in innovation, distribution, and budtender engagement are expected to help drive revenue growth in the Canadian rec market. Let's turn to our progress against driving the growth of our high-potential CPG brands. Q1 was a record quarter for BioSteel, with revenue of $18 million, and we feel this brand truly has the potential to transform the sports hydration market. A notable highlight in Q1 was welcoming Walmart as a BioSteel RTD retailer in the U.S. This initial agreement will bring BioSteel RTD beverages to 2,200 Walmart stores across 39 states. Initial shipments began in June, and we expect additional shipments to these stores over the coming months. We're also pleased to welcome Bruce Jacobson to the BioSteel team in the new role of President. Bruce, together with co-founders John Celenza and Mike Cammalleri, will be responsible for accelerating the growth of BioSteel. Bruce joins BioSteel with a wealth of experience from the beverage industry, including as an experienced brand builder and business strategist who has led organizations to best-in-class growth. Another important growth driver for BioSteel is the multi-year partnership naming BioSteel as the official hydration partner of the NHL and the NHL Players' Association. This agreement provides BioSteel with league-wide rinkside marketing and product supply rights, retail activation rights, and a community engagement platform. Beginning in the 2022-2023 NHL seasons, fans will see NHL players hydrating with BioSteel during 1,400 games each season. We're off to a fast start with this partnership, having signed distribution agreements with several new retail chains in priority NHL markets representing over 1,100 doors and are in positive discussions with additional retailers. We see the investment in this partnership as a key element of increasing BioSteel brand awareness, distribution, and trial, which is critical to growing BioSteel to be a top five sports hydration beverage over time. With the ongoing load-in into additional retailers, as well as increases in sales velocity driven by our brand activations, we are expecting to see a significant jump in BioSteel sales over coming quarters. Now speaking to Storz & Bickel. With innovation coming to market in the coming months, designed to excite the brand's loyal consumer following, we believe Storz & Bickel is set up for growth over the remainder of the year. The continued effort of our team to work around third-party challenges will allow Storz & Bickel to defend its position as the global leading premium vaporizer brand. Looking to the U.S. and our THC ecosystem. We hold an option to acquire Acreage Holdings, we hold a sizable stake in TerrAscend, and we've paid for majority ownership of Wana Brands and Jetty Extracts. These agreements provide us with a strong foundation to enable rapid entry into the U.S. THC market as soon as we can, and is a unique platform to realize our ambition of becoming the leading brand-driven cannabis company in North America. Our business, when consolidated with Acreage, Wana, and Jetty, generates over CAD 1 billion in revenue with strong gross margins. Further, our U.S. THC ecosystem has significant room to grow within large addressable markets, including high-growth states in the Northeast, such as New Jersey and New York. In the case of Jetty, the opportunity to expand beyond California as the brand is scaled nationally. Looking to Acreage, their team made solid progress in the quarter ended March 31, 2022, with revenue increasing 40% year-over-year, while they delivered their fifth consecutive quarter of positive adjusted EBITDA. In April 2022, Acreage commenced recreational cannabis operations in New Jersey with their flagship brand, The Botanist, now available for consumers in multiple dispensaries across the state. We also continue to monitor developments leading to the opening of the rec market in New York, which we also see Acreage well-positioned to succeed in. Wana saw significant growth from April to June, both in footprint and innovation. Wana entered new markets, including Puerto Rico and Arkansas, and began onboarding three additional states. Wana is delivering exciting NPD with the launch of Spectrum Live Rosin gummies. These gummies have resonated with consumers, quickly ranking highly in the competitive Colorado edible market. Wana is advancing well with a robust pipeline of new consumer-focused products while entering new markets to capture consumers looking for high-quality products that deliver against desired need states. Finally, to illustrate our vision as a North American brand-driven cannabis company, we're excited to be actively working on bringing the Jetty brand and its innovative products to the Canadian market as soon as possible. We look forward to delighting consumers north of the border with Jetty's unique vape technology. We expect to have more to say about this effort over the coming months. The footprint and capabilities of our U.S. THC ecosystem continue to grow. We're strengthening our competitive positioning and emphasizing fast growth categories backed by a balanced operational footprint that is primed for rapid growth. In summary, we've built and continue to strengthen the industry's strongest North American premium branded cannabis company. With that, I'll turn it over to Judy. Thank you very much, David, and good morning, everyone. I plan to focus my comments this morning on, one, a brief review of our first quarter results. Two, provide an update on our progress on our path to achieve profitability. And three, provide some perspectives on our outlook. Let's start with a review of our Q1 fiscal 2023 financial results. In Q1, we had strong performance from our international cannabis businesses. BioSteel had its best revenue quarter ever, and the Canadian business stabilized its revenue. Gross margin and adjusted EBITDA also improved sequentially compared to Q4 as we began to execute on our cost savings initiative that we announced in April. We generated net revenue of CAD 110 million, representing a 19% decline over the prior year, but down just 1% compared to Q4. Excluding the impact from the divestiture of C3, net revenue in Q1 increased 1% as compared to Q4. In our cannabis segment, our international medical cannabis business showed strong year-over-year growth, led by triple-digit growth in Australia and bulk sales to Israel. Canadian recreational business showed stable revenue compared to the prior quarter as our premiumization strategy is beginning to drive improved performance. In our consumer product segment, record quarterly revenue at BioSteel in Q1 was partially offset by a decline in Storz & Bickel sales. Sales of Storz & Bickel vaporizers during Q1 fiscal 2023 were negatively impacted by a few headwinds. The first and primary headwind was financial challenges facing our largest distributor in the U.S., which caused the distributor to pause ordering devices in Q1. We're actively working to reestablish ordering patterns that were lost during Q1. The second headwind is slowing consumer spending power in the current high inflationary environment across S&B's key markets. Given the high ticket associated with S&B's premium vaporizers, we are seeing more moderate sales in Europe and North America, which is consistent with headwinds felt across the luxury product segments in a range of industries. The third headwind was ongoing supply challenges. We have spoken about this in the past, and specifically the difficulties related to the supply of chipsets. This has negatively impacted Storz & Bickel's margins in Q1. Our procurement, engineering, and manufacturing teams are working hard to identify solutions for these challenges, including alternate components and suppliers, and we expect this to be manageable. Our reported gross margins in Q1 was negative 1%, and our adjusted gross margin was positive 2%. Consumer product segment's adjusted gross margin of 34% was an improvement compared to 32% a year ago, as the negative mix shift driven by lower Storz & Bickel sales was offset by improved gross margin performance at BioSteel, driven in part by volume growth. Our adjusted gross margin in the global cannabis segment was -18%, which continued to be impacted by price compression, lower product output, and non-cash inventory write-offs in the Canadian business. I'll provide more details on our gross margin performance a bit later on. Adjusted EBITDA in Q1 amounted to a loss of CAD 75 million. This was an improvement compared to Q4, driven by lower inventory write-offs and declines in SG&A expenses, which stemmed from our cost savings program. Normalizing for the disposition of C3 and the impact of the payroll subsidy benefit, adjusted EBITDA in Q1 of FY 2023 would have improved by CAD 9 million or 10% from the prior year period. I'd like to now provide an update on the efforts underway to improve our profitability. First, digging deeper into gross margins, both our adjusted gross margin and cash gross margin in the global cannabis segment improved compared to Q4 of fiscal 2022. Specifically, when adjusted for non-cash inventory charges, depreciation costs, and the benefit from payroll subsidies, our cash gross margin in global cannabis segment is estimated to be at positive 10% in Q1, which is an improvement versus negative cash gross margins during fiscal 2022. The improvement is attributable to two main drivers. Number one, our mix continues to improve towards high-margin products in the Canadian recreational business. As we deliberately shifted away from low-margin value flower sales, our net sales from value segment has further declined to 43% of total B2B sales in Q1 compared to 56% during the prior year period. Number two, our cost savings program is driving reduction in our overall cost of goods sold, where we have committed to delivering savings of CAD 30 million-CAD 50 million over the next 12 - 18 months. Some of these savings are being offset by higher wage inflation and supply chain costs, but we plan to continue looking for additional opportunities to capture more savings. While the majority of these savings are expected to be recognized in the second half of fiscal 2023 and into the first half of fiscal 2024, we did achieve over CAD 4 million of savings in Q1 of fiscal 2023, primarily relating to headcount reductions, more efficient procurement activities, and supply chain improvements. We expect our gross margin to improve significantly over the balance of fiscal 2023, driven by continued progress on our premiumization strategy as well as savings from the cost reduction program underway. The other key initiative is reducing our SG&A expenses, where last quarter, we announced that we have undertaken actions that we expect will reduce our SG&A expenses by CAD 70 million-CAD 100 million over the next 12-18 months. Our selling, general and administrative expenses in the first quarter decreased 8% versus prior year. However, adjusting for the disposition of C3 and the impact of payroll subsidy benefit, which was significantly lower in Q1 of fiscal 2023 versus 2022, SG&A expenses in the first quarter decreased by 13% or CAD 16 million on a year-over-year basis. The reduction in our SG&A expenses are coming from reduced headcount across our businesses as we have further tightened our strategic focus and streamlined our business. In addition, we expect declines in professional fees, office costs, insurance fees, and IT costs throughout the year. We'd also note that some of these reductions are being offset by our strategic investments in key growth areas such as BioSteel, where we are increasing our advertising and marketing spending to increase brand awareness and drive velocity at retail. Let me now spend a few minutes on our cash flow and balance sheet. Our free cash flow in Q1 was an outflow of CAD 143 million. This comprised of cash from operations of a negative CAD 141 million, which includes CAD 26 million in interest payments and change in working capital, which was negatively impacted by one-time severance payments during Q1, which was related to our restructuring actions. Q1 CapEx came in at CAD 2 million, significantly lower compared to a year ago. For the full year 2023, we now expect CapEx to be in the range of CAD 30 million-CAD 40 million. We remain focused on reducing our cash burn through OpEx discipline, tight working capital management, and continued discipline around our CapEx investment through FY 2023. Turning to our balance sheet, at the end of the first quarter, we announced an exchange transaction of the 4.225% convertible unsecured notes due in July 2023, which reduced our debt obligations by $263 million. This has reduced our overall debt position and is expected to save the cash interest of around $12 million on an annualized basis. For the full year fiscal 2023, we now anticipate cash interest payments of at least $130 million, incorporating lower interest costs on the convert notes, but higher interest expenses on the term loan that's tied to increase in LIBOR. Regarding the remaining convertible notes we've secured, we have several options that we're currently reviewing and will update once we have any additional news to share. Our balance sheet remains strong with CAD 1.2 billion of cash at our quarter end. We have $2 billion U.S. dollars of base shelf available to us, as well as additional debt capacity of $500 million U.S. Dollars. We also expect proceeds from sales of previously announced facility closures and look for additional opportunities to divest non-core assets. Let me now provide some perspectives on our outlook. We continue to expect the execution of our premiumization strategy in Canada, our cost savings initiatives, and growth in BioSteel and Storz & Bickel will over time result in strong revenue growth and margin profile and free cash flow generation that are in line with premium branded CPG company. In terms of the balance of fiscal 2023 outlook, first, we expect continued strong growth from BioSteel as the team builds on the growth in the first quarter with increased marketing investments driving higher distribution and gains in sales velocity. Our Canadian recreational B2B business is expected to show improved performance as it benefits from premiumization efforts and new product launches with the growth weighted towards the second half of the year. Our Europe and Rest of the World business is expected to show year-over-year growth in medical sales in Germany, Australia, and other international medical markets, while sales to Israel are expected to be lumpy. While the distributor challenges and economic conditions in the first quarter created some headwind for Storz & Bickel, we're actively working to address U.S. distribution and to opportunistically use marketing investments to drive growth, joined with innovation efforts. Our U.S. CBD business will continue to see a tighter focus against our brands, with emphasis on the e-com channel and key direct-to-ship accounts as we await for future regulatory progress. We do note that we did benefit from more than $2 million in one-time crude sales in Q1 in the U.S., which won't be recurring. From a phasing standpoint, we expect revenue growth year-over-year to be weighted to the back half, reflecting continued mix away from value flower that began in earnest in mid-fiscal 2022, and the timing of our new product shipments in Canada. Second, we continue to expect fiscal 2023 to show improvement in our profitability, with expectation of the year being a transition year as we work towards profitability, building on the cost structure improvements we've seen in the first quarter, while also making strategic investments in key growth areas of our business. We remain on track to achieve positive adjusted EBITDA in fiscal 2024, excluding our strategic investments in BioSteel and U.S. THC. In conclusion, we are advancing towards achieving profitability while we continue to invest in high potential growth opportunities. As David mentioned, our business generates CAD 1 billion in revenue with healthy and sustainable margin when consolidated with Acreage, Wana, and Jetty, and is well-positioned to deliver strong, profitable growth long term. This concludes my prepared comments. We'll now take any questions. To begin our Q&A session, we'll first address investor questions that were upvoted through the question-and-answer platform developed by Say Technologies. Tyler, can you please state the first question? What are the biggest challenges facing the company, and how are you going to address them? Great. I'll take that first question. I would say from a challenges standpoint, it really stems from the fact that the Canadian market has really developed very differently than we had initially expected. Market fragmentation, illicit market still being a pretty sizable component of the market, has really developed differently than we had initially anticipated. We also saw very slow progress from a regulatory standpoint on both sides of the border, both THC, CBD from a U.S. standpoint, as well as a lot of the regulatory hurdles that we're continuing to face from a Canadian market. I would say the third challenge has really been, we have a large footprint from a Canada and global standpoint, and we have streamlined a lot of the footprint that we've had, but we continue to see some underutilizations of those facilities which has impaired our margins more negatively than we had anticipated. In terms of how we're really addressing it, I think it goes back to the priorities that David really mentioned. First, in terms of Canada, we're really looking to focus on high-margin premium and mainstream categories, and we think that the efforts that have been underway are starting to bear fruit. When you look at some of the new products in the marketplace, we are getting really good feedback from budtenders. We're getting really good comments from consumers on social media now. We do think that we're on track to really see those efforts being realized in terms of better financial performance in the coming quarters. From a regulatory standpoint, we do hope that we get more progress done in both sides of the border, but we're not waiting. We have already built a very strong ecosystem from a U.S. THC standpoint, and we're really working to optimize our investments in the U.S. as soon as we can. Thirdly, as I said earlier, we have cost savings programs that are underway that will really generate more cost savings and improve our profitability. You've seen our gross margin improve on a sequential basis, and we would expect that to continue over the course of the year. David, anything to add on? No, I think you covered it well, Judy. Maybe the only add that I would have is that we need to continue to focus on a few key things. We're a few key areas where we feel we can win, which is building premium and mainstream brands on both sides of the border and continuing to build out our go-to-market capabilities as evidenced by the work we've been doing in Canada with what we refer to as our ground game, where we're out at retail and we're engaging with our consumers and our retailers and our budtenders. As this entire industry goes through transition after transition after transition, we just need to be prepared with strong brands and good route-to-market capabilities and strong people who are capable of being agile. The second question from the Say Technologies platform is this: If federal cannabis reform does not pass in the U.S. in the short term, how do you expect to expand your company and fight for top brand globally? Yeah. Look, it's no doubt that we put heavy emphasis on the U.S. market, which is evolving, as we just discussed, more slowly than we would like. Keep in mind today that two-thirds of Americans already live in a location that has access to cannabis, in some format, but the federal government still refuses to recognize that reality. Putting that aside, as Judy said, we're not waiting. We continue to see the U.S. as the largest and most important market in the world. We've assembled a strong portfolio across North America that continues to grow and develop without a permissibility event. The businesses like Wana and Jetty and Acreage continue to grow their businesses and perform well and expand their offerings, even prior to a permissibility event. When you think about our portfolio or the offerings that we can take out on sales calls, they include premium brands like Storz & Bickel, Wana, Jetty, Doja, 7ACRES, Deep Space, which all have opportunities to expand across the U.S. and Canada. History shows us that strong North American brands tend to do well globally. That's why we continue to focus on our brand building here. You know, I would say maybe the good news is that absent federal permissibility in the U.S., these brands continue to grow in terms of geographies, in terms of offerings, and they can continue to build consumer loyalty. We think that we'll be prepared at some point to bring this all together as a consolidated entity that represents a very strong premium branded cannabis company in North America, and then we'll take those brands elsewhere in the world. With that, operator, we're now happy to take questions from those in the queue. To ensure an efficient call that gets questions to as many analysts as possible, analysts are requested to limit themselves to one question. The Q&A is now open. Your first question comes from Pablo Zuanic from Cantor Fitzgerald. Please go ahead. Thank you. Good morning. David, it's a very simple, straightforward question, but does passage of SAFE as written constitute your triggering event or the permissibility event that you've talked about? Thanks. Yeah. Pablo, and I know you and I have talked about this before. The passage of SAFE with the right language could get us there. I think it remains to be seen exactly what language ends up in the final bill, because we've seen a few alternatives. We're gonna look at that really hard, and try to get to the place where we can as soon as possible with whatever form of legislation really take control of our entire ecosystem. Your next question comes from Tamy Chen from BMO Capital Markets. Please go ahead. Your second question. Thanks. Operator. Oh, can you hear me? It's Tamy. Sorry. Tamy, I think it's Tyler Burns here. I see you are next in the queue. The next question. Yes. From Tamy. Thank you. Hopefully you guys can hear me. Good morning, everyone. Question from me is on the OpEx or SG&A. There's just a couple of moving parts here. Judy, this is probably mainly for you. How should we think about just this entire fiscal year going forward with respect to the SG&A line? Like, should we think that there is going to be decent improvement year-over-year? Because we also have to think about just inflationary pressures, the investment in BioSteel. I think there's also some noise with respect to employee bonus accruals later in the year. Anything you can give to help us understand how the overall SG&A line might trend compared to last fiscal year. Thank you. Yeah, Tamy. I'll take that and give you some buckets of how I would think about the SG&A. Setting aside the advertising and marketing spending, because to your point, there's some investments that we're making from a BioSteel standpoint. When you think about sales and marketing overhead, when you think about G&A expenses, and we think about the R&D expenses, all three buckets of our Sorry for the interruption. It appears the host dropped. I will put the call on hold, and we will call them back. One second. Hello? Sorry. Oh, sorry for that interruption. We will go ahead with the conference as planned. Okay. Could you please give us an opportunity to repeat the question that was answered by Ms. Tamy Chen? Apparently, people on the call could not hear Judy's response. If we could back up to the question for Judy, please. Judy, please go ahead with your question again. Yes. I'm addressing Tamy's questions around OpEx in FY 2023. Tammy, I think I wanted to just give you a few highlights and a few buckets on how to think about SG&A in FY 2023. Setting aside advertising and marketing expenses, because to your point, we are going to have some increases as it relates to BioSteel. When you look at our selling and marketing overhead, when you look at our R&D expenses and our G&A expenses, we do expect the benefit of our cost savings program that we announced, CAD 70 million-CAD 100 million over the next 12-18 months to benefit all three buckets within our SG&A. Now, some of the phasing of the savings will accrue as we go through FY 2023, so not all of that will hit in the near term. You know, I think when you think about the savings that we announced, we expect the selling and marketing, G&A and R&D all of those three buckets to benefit from the cost savings program. Now, the other consideration is some of the moving parts on a year-over-year basis. When you look at FY 2022, we did have the benefit of payroll subsidy that benefited the G&A expenses. After Q1, we no longer have any subsidy benefits that we will be benefiting from, so the comp will get tougher from that perspective. In Q4, we did have the bonus accruals get reversed, as we did meet our targets last year. We'll have some of that year-over-year comparison being not as favorable in Q4. Overall, I do expect that from a total SG&A expenses, in terms of selling and marketing overhead, G&A and R&D expenses to be down on a year-over-year basis, normalizing even for those factors. Thank you. Your next question comes from Vivien Azer from Cowen and Company. Please go ahead. Hi. Good morning. This is actually Victor Ma on for Vivien Azer, and thank you for taking the question. Hey, Victor. BioSteel, the results this quarter are encouraging, and we're seeing solid growth in sales forecast and the Nielsen data. Can you discuss how the velocity improvement for BioSteel is measuring up to your internal expectations? Yeah, you cut out, Victor. I think you were talking about velocity. Velocity is something that grows with execution once, you know, a product's been on the shelf for a little bit, right? We're seeing and it benefits from in-store execution by our sales teams as well as consumer awareness. We're seeing period-over-period improvements in velocity. We're not entirely where we want to be yet, but that's just because of where we are in the introduction cycle. We believe that additional activities around awareness, like the NHL sponsorship, will help us hit those velocity hurdles that we're shooting for. Early signs are encouraging, but it's probably too early to say that we're there yet, but early signs are very encouraging. Your next question comes from Andrew Carter from Stifel. Please go ahead. Hey, thanks. Good morning. I wanna ask. I wanna zoom in on Storz & Bickel down 35% this quarter. I think early on you said it can grow this year, which would be 13% over the back half. I guess kind of what gives you that confidence and kind of help us understand back it up. I know you use distributors. How much of that is DTC where you have direct visibility into the consumer? And how does the DTC part of your business kind of compare to kind of the distribution and shipments? Thanks. Yeah. The confidence comes from we're still seeing really good consumer takeaway, and we just had some issues with distributor during the quarter in the U.S., which we expect will remedy itself over time. You know, the brand continues to resonate really well with its consumer base. We also have some incremental innovation that will hit the market over the course of the year. In general, that's what gives us confidence. We're actually doing some work, Andrew, to try to bring more of the stores' e-com activity onto our own platforms and maybe control our destiny a little bit more. That's a longer build. It gives you a better financial profile. It just takes longer to get to. That's work that's going on. I don't suspect that we'll see significant benefits from DTC or our own online B2B activities affecting the business this year. Your next question comes from Aaron Grey of Alliance Global Partners. Please go ahead. Hi, good morning, and thank you for the question. For me, I know you guys are focused more so on the you know, premium flower as well as pre-rolls, but wanna talk about vape for a second because you know, looking at your market share, you know, certainly under indexing there by a pretty material amount. Is that kind of part of your strategy of shifting away from the low margin? You mentioned shifting away from low-margin flower too. Is that also why you're seeing these kind of share losses and shifting away from the vape side? Anything you're looking to do there to maybe you know, more further entrench yourself in vape, especially on the back of the recent you know, agreement to optionality to acquire Jetty you know, in California. I'd love your opinion on how you're looking at vape within the Canadian market. Thank you. Yeah. You outlined it really well actually. You know, when we look at kind of unit economics, we're struggling to make money at the value end of vape. We've pulled back from that a bit. We have some real exciting plans around Jetty in the market at the premium end using their technology, which if you see the data in California, Jetty is doing very well even in that super competitive market. For us, the future for vape will be at the premium end and will be led by Jetty. Again, will take time for us to bring that into the market and ultimately get it into consumers' hands in Canada, but we're really excited about that. Yeah, I would just add, Aaron, just from our strategy standpoint, again, when we kind of look at our market share performance and how we're tracking against our internal expectations or targets, we're really looking at the segments of the market where we think we can make good margins. So when we speak to our market share focus, it's really the premium mainstream flower pre-roll joints, premium vape segment of the market, edibles, beverages and et cetera. The other point I would just make from a margin standpoint, as we are also looking at using some of the contract manufacturers for some of the production, we are also optimizing our footprint better by just reducing some of that indirect costs that would've resided in our cost structure if we didn't pivot to some of the more variable models that we're pursuing. I think it benefits both the market share focus standpoint and then our margin standpoint. Your next question comes from Glenn Mattson from Ladenburg Thalmann. Please go ahead. Hi. Yeah, thanks for taking the question. David, when you talked about your U.S. assets, one thing that you highlighted was Acreage's positioning, and you highlighted especially their footprint in New York. I'm curious, you know, that market's taken a lot longer to develop. Others have recently noted how kind of scrambled that market has become with the illicit market having kind of free rein and everything else. Can you just give us a sense of how you see that market developing? What makes you so excited about it? You know, just your background on New York in general. Thanks. Yeah. Glenn, good question because, you know, we talked coming into the questioning about challenges in the business, and it really is lack of predictability and, you know, having to continue to adjust your business plans and business models. Look, as a New Yorker, I really can't wait for adult use permissibility or rec permissibility in New York. And it's taking a ton of time and it, the direction is a bit unclear, right? Yeah, it's really frustrating. What I would say though is that it's a very big market. It's a market that it has been a strong cannabis market for decades. From an illicit standpoint, we think that really good opportunities exist in particular to bring our brands like Wana and Jetty into that market, and doing so by partnering with Acreage and TerrAscend. You know, I think like everything else in cannabis, it's not unfolding exactly as we would like, and it's taking longer than we would like, but we still think it's a really large market. We already have assets through Acreage in that market that we can benefit from, and we have great brands that we can bring into the market. That's really the basis for the excitement. Again, we'd like the timeframe to move up a little bit, but I think we've already lost that battle. Anything you'd add, Judy? No. I think that's it. Your next question comes from Matt Bottomley from Canaccord Genuity. Please go ahead. Yeah. Good morning, everyone. We had a lot of good granularity in your prepared remarks in the Q&A on some of the cost saving initiatives and where that might come from. Maybe just taking a further step back and at a higher level, you know, still sitting at about CAD 140 million of cash from operations burn in this quarter. Can you give any indication, even if it's a high level range, you know, a quarter, a third, half of what you think the burn will be of your current cash reserves of the CAD 1.2 billion? And then also just give us a quick reminder on how much debt principal comes due in the next, say, 12 months. Thanks. Yeah, I'll take that. Thanks for the question, Matt. Let's just start with the point that we do still have a strong balance sheet, CAD 1.2 billion that still resides in our balance sheet. We also believe we have flexibility to tap into capital markets for additional liquidity if needed. You know, I think we are in a good position just from a financial flexibility standpoint. You're right that we are still generating free cash outflow. I think number one, we really do wanna make sure that we are reducing our cash burn as quickly as possible through OpEx discipline, right? The cost savings initiative, that driving the improvement from our EBITDA standpoint, we expect that will moderate the cash burn from an OpEx standpoint going forward. The second sort of use of cash is the interest expense payments. As I said earlier, we're going to get some savings from repayment of the converts, but we have the term loan that we currently pay interest on. If you look at annualized interest expense that we expect to incur this year, it's roughly CAD 130 million on an annualized basis, depending on where interest rates go. We do have that from an obligation standpoint. CapEx is really becoming very modest. We do think that we've got a lot of the growth CapEx that's been invested over the last few years, and really it's down to maintenance CapEx and very minimal from a CapEx standpoint. We have reduced our CapEx outlook this year to CAD 30 million-CAD 40 million, and we will continue to look to even rightsize that further going forward. We feel pretty good about where we are from a CapEx standpoint. I think when you take all of that together, it's really reducing the cash burn as much as we can. We've talked about our target of achieving positive adjusted EBITDA in fiscal 2024, with the exception of the investments that we're making in BioSteel and U.S. THC, modest CapEx, and then it's really the interest payments that we are incurring. We have the July 2023 convertible notes that still remain on our balance sheet. We are looking at addressing that before July, and we've got several options again, and we'll share updates on that as we go forward. From a term loan standpoint, we do still have ample time for that term loan to be coming due. From a maturity standpoint, it's really the convertible notes that we would be looking to manage over the next 12 months. Great. Appreciate. Yeah. I do wanna reiterate kind of the, you know, our overall, like, thinking around priorities, and maybe we sound a bit like broken records here. We placed a big bet on the U.S., and it's taking longer to evolve than we would've liked. We used a fair amount of our cash on those U.S. assets. We remain really excited about those assets because those assets are profitable and they're growing. They just don't show up in our financial statements yet. We've got the bet on the U.S. We remain absolutely determined to get profitable and stop the cash burn in Canada, and that means we're gonna focus on premium and mainstream. We have all of the activity we've been doing around rightsizing SG&A and footprint to support the premium and mainstream focus. It's really premium and mainstream in the segments that we can win in. Maybe our aspirations for total size in Canada have changed over the last several years, but we believe that we can get ourselves with the right focus in the right categories to a profitable business that's not burning cash in the Canadian market. We said we're gonna continue to drive growth of our CPG brands, where we have the very profitable and consumer-loved Storz & Bickel brand, which we think is just beginning to scratch the surface of where the brand could go. BioSteel, we're beginning to see some of the returns on the work and the investments that have gone behind that brand and, you know, we're excited about where that can go. I don't want anybody to think that we're not spending almost all of our waking hours on those three topics, which very much includes stopping the cash burn in Canada. Your next question comes from John Zamparo from CIBC. Please go ahead. Thank you. Good morning. I also wanted to touch on the cash burn and in particular the FY 2024 guide for positive EBITDA. Specifically, even at the high end of your cost savings range, it would only get you about halfway there. Presumably, your investments in BioSteel and U.S. THC aren't significant enough to be over CAD 100 million a year. Is the delta to get to positive EBITDA by FY 2024 more a product of sales growth? Or you mentioned other costs you're looking to cut, but just would like to get a better understanding of the pathway to profitability for that year. Thank you. I think I go back to what are the levers to that profitability. We've got three levers. One, it's profitable revenue growth. Profitable revenue growth is really about premiumization strategy that we are expecting to get the benefit of higher sales in premium categories that we participate in. That's one lever to achieve profitability. The second lever is the gross margin improvement, particularly on the cost reduction side that we've outlined, and really looking to reduce our indirect costs, a number of productivity initiatives that's already in flight, and additional opportunities that we will be looking into to further optimize our footprint and expect more savings on the cost of goods side. Then the third driver is really the SG&A expenses, which we're really good about, that we're on track to deliver against that CAD 70 million-CAD 100 million target. Now, to your point, we're in an inflationary period. The market's still volatile. There's some, you know, supply chain challenges. I think it's really incumbent upon us to be very agile in identifying even additional opportunities and really giving, you know, and challenging everyone on our team to make sure that we are being as efficient and identifying those opportunities. As David said, we are committed to achieving profitability in Canada as soon as we can. I think that is really about, you know, those three levers, but I think we've got additional opportunities that we'll continue to challenge ourselves to make sure that we're doing that as quickly as possible and even with some of the past headwinds that we're facing from a broader macro standpoint. Your next question comes from Michael Lavery from Piper Sandler. Please go ahead. Thank you. Good morning. Hey, Michael. Morning. I wanted to touch on BioSteel. You've got the expansion into Walmart. That's 2,200 stores. It's close to half of their U.S. total. Can you give us a sense of what they have in common? Is it geographic? You know, is it like the East or the West, or is it just the stores that opted in versus didn't? What might it take to get to full distribution there? Yeah, Michael, I actually, I'm not sure how the stores are selected. So we can come back to you on that. What I would maybe switch it to is that, you know, we've seen really good retailer uptake of the brand throughout the U.S., and we saw a lot of excitement and inbound calls coming from retailers post the NHL announcement. You know, that activation doesn't obviously start to happen until we really get into the NHL season. But I think we're just seeing growth and distribution all over the place and, you know, we feel good about it. I think it's important for us to make sure that we can execute in the stores themselves, as I said earlier, around the velocity question, because that's ultimately the key. Getting listed is just the first step. Actually having velocity to stay on the shelf is the work that's underway now. We'll have to come back to you on the selection within Walmart because I'm not sure how that was done. Ladies and gentlemen, this concludes your conference call for today. I will turn the call over to Mr. Klein for closing remarks. Please go ahead. Thanks, thanks again for joining us today. As a reminder, our investor relations team will be available to answer additional questions throughout the day. If you're in Canada, I encourage you to try one of our new premium flower and pre-rolled joint innovations or a great tasting Tweed Iced Tea Guava or Deep Space Ginger Ale Galaxy. If you're in the U.S., I encourage you to hydrate with a BioSteel RTD beverage or relax with some Martha Stewart CBD. Enjoy the rest of your summer and, once again, thanks for being with us today. This concludes Canopy Growth's first quarter fiscal 2023 financial results conference call. A replay of this conference call will be available until November 5, 2022, and can be accessed following the instructions provided on the company's press release earlier today. Thank you for attending today's call, and enjoy the rest of your day. Goodbye.