Good morning. My name is Michelle, and I will be your conference operator today. I would like to welcome you to Canopy Growth's Third Quarter Fiscal 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. I will now turn the call over to Tyler Burns, Director, Investor Relations. Tyler, you may begin the conference. Thank you, operator. Good morning, and thank all of you 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 the financial results for our third quarter, ending December 31st, 2022. This news release is available on our website under the Investors tab and will be filed on EDGAR and SEDAR. 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 views 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 re-reports filed with the SEC and SEDAR for various factors that could cause our 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 stated. Following prepared remarks by David and Judy, we will conduct a question-and-answer session. We will first address a question 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, and good morning, everyone. During our Q2 earnings call, I clearly outlined Canopy's top priorities in becoming a North American cannabis leader, which included actions to drive Canadian profitability and empowering Canopy USA to progress the U.S. THC strategy. On today's call, I'll provide comprehensive updates on both priorities, which are imperative to achieving our ambition of long-term North American cannabis market leadership. Following my remarks, Judy will review our Q3 results, provide an update on our path to profitability, and outline the cost savings anticipated from the business changes announced today, as well as discuss our balance sheet. The transformative plan introduced today addresses the actions needed to drive profitability, but also to secure the future of our business. The intent of establishing a legal cannabis industry in Canada was to combat the illicit market. At the outset, the legal sector was poised to be a source of immediate economic development with significant job creation and tax revenue. As a global first mover, the legal Canadian cannabis industry was originally projected to grow into a CAD 7 billion market over time. That market aspiration has not come to fruition. Today, there are two very different cannabis markets in Canada. One that's legal, highly taxed and regulated, and one that's thriving and illicit. The unregulated illicit market is generating billions of CAD of revenue with a 40% market share and faces virtually no risk of enforcement. The legal sector, out of necessity, is forced to be price competitive with an illicit market that does not pay excise taxes, does not pay provincial board markups, and is not restricted in the products and pricing that they offer. The competition with the illicit market, compounded by an overbuilt legal cannabis industry, has caused price compression across the board. We expect the sector challenges to remain for years to come. As a result, the sustainability of this legal sector is in question. Make no mistake, building an industry from the ground up is not linear. The knowledge gained has been significant. We stand ready to work with regulators, politicians, and provincial boards to improve the punitive regulatory environment based on experiences from the front lines. Despite these market realities, Canada remains a large market in which Canopy is well-positioned with strong brand recognition, a diversified portfolio of products in the adult use segment, and a growing share of the medical market. The backdrop I just outlined formed the catalyst for the actions announced today, which are intended to position our Canadian business to be profitable and self-sustaining. The Canadian business transformation plan includes consolidating our production and operational footprint, shifting to a brand-led asset-light model, and completing an organizational restructuring that better aligns our resources with market realities. Specifically, we intend to exit our One Hershey Drive, Smiths Falls, Ontario facility as we consolidate cultivation at existing facilities in Kincardine, Ontario, and Kelowna, British Columbia, and where necessary, enhance our offering with a flexible flower sourcing strategy. Similarly, we will be outsourcing non-flower formats such as beverages, edibles, vapes, and extracts as we implement a nimble asset-light model that allows us to be dynamic and actively respond to market demands. In Quebec, we will cease sourcing of flower from the Mirabel facility. As the Mirabel facility is operated through a joint venture structure, we're engaging with our JV partners on the long-term future of that site. We recognize our core competency is brand development with strong routes to market. The Canadian transformation is intended to closely mirror the plan structure of Canopy USA, which we believe to be a winning model. The changes announced today are in addition to the following cost savings initiatives that were completed in Q3 including the divestiture of national retail operations, closure of our Scarborough, Ontario research facility, and outsourcing of our genetics program to Quebec-based EXKA, the restructuring of our Canadian cannabis business into a standalone business unit, and the reduction of our SKU count by approximately 50% as we focus on the highest performing segments within the Canadian adult use cannabis market. The changes announced today will result in approximately 800 employees exiting the business over the coming months, with 40% of that reduction occurring immediately. We expect these further adjustments to reduce annual SG&A and COGS by an additional combined $140 -$160 million over the next 12 months. Judy will speak to the financial aspects of our restructuring in greater detail during her prepared remarks. Let me spend a few minutes discussing business outside of Canadian cannabis, starting with our international markets, where Australia is worth highlighting as our sales in this market have increased nearly 200% year-over-year and demonstrated steady growth. Storz & Bickel, or S&B, continues to demonstrate its capabilities and appeal with core and limited time premium vape offerings like the PEACE VOLCANO. In the third quarter, S&B delivered its best quarterly revenue since Q4 FY 2022. This growth was driven by traditionally strong seasonal demand for premium cannabis vaporizers. Overall, S&B continues to be a key profit contributor in the Canopy brand portfolio and is poised for innovation and growth. Turning to BioSteel, we're very pleased with the strong momentum at retail despite quarter-over-quarter volatility in reported revenue due to the timing of distributor load-ins. According to Nielsen data, BioSteel's share of isotonic beverage sales in the Canadian national convenience and gas channel reached 10.4% in the third quarter and 13.8% in Ontario. In the U.S., the brand has also made impressive distribution gains over the past year, with IRI data showing BioSteel's ACV at 34% for the quarter. This was matched by notable sales gains, with scanned sales in the U.S. region increasing 157% from the prior year. With expected distribution gains and velocity growth driven by our investment in brand activation, we expect to see revenues increase significantly over coming quarters. I'd like to speak to Canopy USA, which continues to progress the U.S. THC strategy. With the lack of developments in Washington, I strongly believe that through Canopy USA, we've taken control of our destiny to capitalize on the once-in-a-generation opportunity in the largest cannabis market in the world. Our primary objective for Canopy USA is to optimize the value of our entire U.S. cannabis ecosystem, Acreage, Wana, Jetty, and TerrAscend, by leveraging their brand portfolios, routes to market and operations. We're pleased to see the ecosystem exploring opportunities to collaborate and grow, with examples including Wana and TerrAscend bringing Wana edibles to New Jersey and the expanded availability of Wana in the state of Maryland. Wana launching in New Mexico and Missouri in addition to releasing a suite of new sleep product offerings. Jetty Extracts announcing upcoming product availability in the state of New York. After closing, Canopy USA expects to reduce its annual operating expenditures, including eliminating redundancies and the public company reporting costs of Acreage, all of which are expected to be realized shortly after closing this transaction. This is a novel and groundbreaking strategy. We're resolute in remaining dual-listed as the Canopy USA strategy progresses. As we continue to finalize our proxy, we anticipate holding our shareholder vote as early as April 2023. With that, I'll turn it over to Judy. Thank you very much, David. Good morning, everyone. I'll focus my remarks on, one, a brief summary of our third quarter results, two, an overview of the financial details of our transformation plan for Canadian cannabis business, and three, discussion of our cash flow and balance sheet. Beginning with the review of our third quarter fiscal 2023 financial results. In Q3, we generated net revenue of CAD 101 million, representing a 28% decline over the prior year period. When adjusting for the impact of divestitures of C3 and the Canadian retail business, revenues decreased 23%. Revenue highlights include Canadian medical cannabis increasing 9% versus the prior year period, Storz & Bickel increasing 50% sequentially compared to Q2, and our Australian cannabis business having its seventh quarter in a row of record revenue. Gross margin declined year-over-year with the decline due to a shift in the business mix from the divestiture of C3, the impact of last year's COVID-19 relief program, and a decline in BioSteel's gross margins. Adjusted EBITDA loss increased by CAD 21 million to CAD 88 million compared to a year ago. Approximately CAD 8 million of the adjusted EBITDA loss during Q3 resulted from a few discrete items, including costs associated with returns in our US CBD business following our strategic change, the write-down of aging inventory at BioSteel, and a credit to a distributor which is related to the previous sales made to Israel. Free cash flow improved 13% year-over-year, due in part to lower capital expenditures. Now let's take a look at the results from each area of our business. Canada cannabis revenue declined 23% compared to the prior year period and declined 11% sequentially compared to Q2, with the decrease due to lower adult use B2B revenues, partially offset by a 9% growth in our medical cannabis revenue. The impact of the retail divestiture during Q3 was approximately CAD 1 million. Canada cannabis adjusted gross margin was negative 8%, but cash gross margins improved to 29% when normalizing for the impact of depreciation and certain non-cash inventory charges. The year-over-year improvement in cash gross margins is driven by mix improvement and the cost reduction actions announced in April 2022. Today's announcement is expected to further improve cash gross margins and address the gross profit dollar headwinds that have stemmed from lower revenue. In our Rest of World cannabis segment, revenues excluding C3 experienced a 54% decline year-over-year due to a decline in the US CBD business and the impact of shipments to Israel. The current quarter did not have any shipments to Israel, which negatively impacted by sales by CAD 4.7 million compared to the prior year period. This was offset by strong performance in Australia, nearly tripling revenue compared to Q3 of last year. Year-to-date, our international cannabis sales, excluding US CBD business, are up 43% despite the decline in sales to Israel. adjusted gross margins for this segment was negative 33% in the current period compared to positive 32% a year ago, which reflects the discrete factors that impacted sales that I discussed earlier in the call. We expect gross margins in this business to revert back to the historical level going forward. BioSteel revenues were relatively flat to the prior year period and lower than Q2, mostly due to the impact of timing of distribution load-ins. The timing boosted Q2 sales, while Q3 revenues were also impacted by shipment timing shifts into Q4. Year-to-date, BioSteel revenues have more than doubled. We expect to see strong growth resuming in Q4. Adjusted gross margins for BioSteel were negative 37% in the period, which was impacted by inventory write-downs and higher third-party shipping, distribution, and warehousing costs across North America. The inventory write-downs relate to aging inventory of ready-to-drink product, which is primarily due to the previous inventory build ahead of distribution gains that progressed slower than anticipated in the U.S. The acquisition of a manufacturing facility in Verona, Virginia during Q3 is expected to improve BioSteel's gross margins by reducing contract manufacturing costs, and the BioSteel team has several initiatives in place to further reduce its cost of goods sold in the coming quarters. We expect BioSteel's gross margins to approach industry standard as sales scale over time. Storz & Bickel revenues decreased 20% as compared to the prior year period, yet increased 50% sequentially compared to Q2. While cautious consumer spending in an uncertain inflationary environment is impacting demand on higher priced items, we did begin to see resumption of sales to key distributors in the U.S. market. Note that this also represents Storz & Bickel's best revenue quarter since Q4 of FY 2022. Gross margins for Storz & Bickel remained healthy at 45% in the current period. This first revenue decreased 22% in the current period compared to the prior year due to challenging U.K. retail dynamics. Gross margins declined slightly to 49% from 51% in the prior period. I'd like to now provide an update on our actions to achieve profitability. Our previously announced cost reduction initiatives are already driving improvement in cash gross margins in the Canadian cannabis segment. However, our adjusted EBITDA losses have not improved meaningfully due to the decline in our Canadian cannabis revenue as well as investments behind BioSteel. As David mentioned this morning, we announced a plan to transform our Canadian business to an asset-light, brand-driven model, significantly reducing our operational footprint as well as headcount across our organization. As a result of these actions, we expect to reduce our overall cost by an additional CAD 140 -CAD 160 million, comprised of a CAD 90 -CAD 100 million reduction in cost of goods sold and CAD 50 -CAD 60 million reductions in SG&A expenses. The reduction is incremental to the CAD 100 -CAD 150 million of cost reduction plan that we announced in April 2022. The additional cost reductions are expected to come from several areas. One, reduction of our Canadian cannabis operational footprint. Our plan to exit cannabis flower cultivation in our Smiths Falls, Ontario facility and ceasing the sourcing of cannabis flower from the Mirabel, Quebec facility is expected to result in a much smaller cultivation footprint. In addition, we plan to close the One Hershey Drive facility in Smiths Falls and move manufacturing to a smaller footprint while moving production of all Cannabis 2.0 formats to third-party partners. We've already closed the Scarborough, Ontario research facility. These operational footprint adjustments are estimated to deliver CAD 35 -CAD 40 million in annualized cost savings and reduce our distribution costs as well as other supply chain-related costs by an additional CAD 10 million in annualized cost of goods sold. We anticipate these operational changes will be completed in Q2 of FY 2024. Two, reduction in headcount across our operations. Headcount reductions across cultivation, manufacturing, and other areas of operations are expected to generate CAD 45 -CAD 50 million in annualized cost of goods sold savings. Three, re organization of our sales and marketing organizations. We have streamlined the sales and marketing functions under the creation of a standalone Canadian business unit with focus on key accounts, high-margin customers, and our medical sales. This is expected to result in a leaner selling organization and reduction in certain marketing expenses with an estimated cost reduction of CAD 10 -CAD 50 million in annualized sales and marketing costs. Four, reduction in R&D and G&A spending. We've eliminated our central R&D resources, outsourced our genetics program, and embedded innovation functions within the Canadian business unit. This is expected to deliver CAD 10 -CAD 15 million in annualized cost savings. Rightsizing of our central support teams from both a headcount and operational span perspective to the size of the current business and market realities is expected to generate an additional CAD 30 million in annualized G&A expense savings. Overall, we expect to reduce our total costs by CAD 240 -CAD 310 million upon completion of the April 2022 cost reduction initiatives, as well as the actions that we've outlined this morning. We expect the combined cost savings program will position Canopy to be profitable in our Canadian operation, even with no improvement in revenue from the current run rate. As such, we reaffirm our previous expectation of achieving positive adjusted EBITDA in FY 2024, with the exception of investments in BioSteel. Let me now spend a few minutes on our cash flow and balance sheet. Our cash balance declined by CAD 354 million during Q3 compared to Q2, which is higher than the recent quarterly cash outflow. Let me walk through the various drivers. First, we paid off $117.5 million of our term loan, which was the first of the two payments as part of our agreement to tender $187.5 million of the outstanding term loan. Second, cash used for acquisitions and investments during Q3 included $24 million in acquisition of a manufacturing facility for BioSteel, which should provide an attractive return on investment, and $38 million related to an option premium payment to purchase Acreage's debt. Third, our free cash flow in Q3 was an outflow of $146 million. This included cash interest payments of $28 million in Q3. Cash outlays also included approximately CAD 20 million that are not part of our adjusted EBITDA, which includes acquisition-related costs, primarily related to the reorganization of Canopy USA and divestiture of our retail business, as well as certain cash restructuring costs. Q3 CapEx came in at CAD 2 million, significantly lower compared to the prior year period. For the full year 2023, we continue to estimate CapEx to be in the range of CAD 10 -CAD 20 million. Our cash and cash equivalents remain strong at CAD 789 million, and our overall debt position has been reduced to CAD 1.2 billion as of Q3 quarter end, down from CAD 1.5 billion at the end of Q4 of fiscal 2022. We also have many liquidity options available to us and are laser-focused on improving our cash position and further reducing our debt over the next few months. First, of the remaining senior notes due in July 2023, Constellation has already indicated its intention to purchase for cancellation up to CAD 100 million principal amount. Second, we have a very constructive relationship with all our debt holders, and we continue to consider ways to reduce debt in an accretive manner, balancing our focus on remaining or maintaining our financial flexibility and cost of capital. Third, we are in active discussions around monetizing numerous non-core assets that we have, which includes facilities that we've already closed. Fourth, our $2 billion-based shelf remains fully available to us. Importantly, we expect the cost reduction initiatives to reduce our operating cash outflow by more than half, with significant quarter-over-quarter improvements starting in Q1 of our fiscal 2024. Let me now provide some perspective on the balance of fiscal 2023 revenue outlook. First, we expect strong growth from BioSteel in Q4, with increased marketing investments driving gains in sales velocity as well as new distribution. Our Canadian cannabis business is expected to show stabilization in net revenue as we undergo our business transformation plan. Note that with the disposition of our Canada retail being completed at the end of Q3, the Canadian adult use business to consumer revenues will now be eliminated from our go-forward results, which will negatively impact both year-over-year and quarter-over-quarter comparison. Our Europe and rest of the world business is expected to show year-over-year decline in Q4 as we no longer expect to see sales to Israel going forward. For Storz & Bickel, we're encouraged by improved U.S. distribution in the third quarter. Note that Q3 results benefited from Black Friday and the holiday season, so we expect seasonality to contribute to a modest decline in Q4 versus Q3. In conclusion, achieving profitability is critical for us, and with the decisive actions we announced today, we're focused on executing this transformation in Canada and significantly reducing our cash burn over the coming quarters. This concludes my prepared comments. We will now move into the question-and-answer session. To begin with our Q&A session, we'll first address an investor question that was up voted through the question-and-answer platform developed by SAY Technologies. Tyler, can you please state the first question? What do you feel the effects of legalization in the United States will have on the company and the industry as a whole? Thanks, Tyler. Look, with the lack of developments in Washington on federal legalization, we've decided not to wait for regulatory reform to happen in order to reap some benefits through our ecosystem in Canopy USA. You know Just to reiterate what that is, that's really putting together our Wana brand, our Jetty brand, Acreage, together so that they can operate in a collaborative fashion, grow their business faster than they might do if they were to continue to operate as separate companies and realize cost synergies. You know, we continue to work on our Canopy USA strategy, which we commented on, both in the earnings release as well as in our prepared remarks. Yeah, I think that we're all hopeful that at some point we have full federal legalization in the U.S., but we see that happening or continuing to happen very slowly. We've taken matters into our own hands. With that operator, Judy and I will now take questions from our analysts. Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star followed by one on your telephone keypad. If your question has been answered and you would like to withdraw from the queue, please press star followed by two. To ensure an efficient call that gets to the questions of as many analysts as possible, analysts are requested to limit themselves to one question. Your first question will come from Tamy Chen at BMO Capital Markets. Please go ahead. Thank you. Good morning. Judy, I just wanted to ask, in terms of the EBITDA, could you comment a bit on what the EBITDA loss looks like between particularly the Canadian cannabis segment and then your consumer segment? I'm just looking at based on your total cost announcements to date and your reaffirming EBITDA guidance, that it seems the majority, if not possibly all of the currently reported consolidated EBITDA loss is due to the Canadian cannabis segment and that possibly the consumer segment EBITDA may be already in the positive. Are you able to comment on that? Can you just give a little bit more detail on the cadence of all these cost savings as we progress through the quarters in fiscal 2024? Thank you. Sure, Tamy. I would say when you look at our total adjusted EBITDA losses, the way I would think about it is sort of break into a few different segments, right? Number one, to your point, right now the two main drags in terms of our adjusted EBITDA losses are one Canada and second, the investments that we're making in BioSteel. With all the actions that we've announced in terms of our Canadian business transformation plan, our expectation is that once we're complete with the plan, that all of our operations across our businesses will be profitable with the exception of the investments that we're making in BioSteel. That sets the outline of my comment around FY 2024. When you look at the businesses that we have, Storz & Bickel is a profitable business. You can see that in the gross margins, and obviously the highest price points that that brand garners, it is a profitable business. The international cannabis, there's some noise in that business, just given some of the actions that we've taken with US CBD business, and the opportunistic sales that we had previously benefited from Israel. All in all, international cannabis is achieving, you know, gross margin profitability. And if you look at, and if you get this works than others, you know, we think we're pretty close to profitability in all those segments. It's really about making sure that all the cost savings are driving Canada to be self-sustaining and profitable. For BioSteel, we do think the investments will eventually pay off for Canopy shareholders one way or the other in terms of really the sales growth that we're benefiting from that business, and I think that that does create value for Canopy Growth shareholders. In terms of the cadence of the savings that are expected to flow through, I would say, you know, we obviously did announce some the changes this morning, there is a big portion of the savings that will begin to flow through starting in Q1. As we complete those actions in Q2, we think that the bigger chunk of those savings and the progression from a quarter-over-quarter basis, we really begin to start to see in Q1 and Q2 of fiscal 2024. Your next question comes from Vivien Azer of 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. Broad-based inflation headwinds are persisting in North America. While flower downtrading has been evident in Canada, have you seen that accelerate at all as consumers absorb higher energy prices this winter? I think we've seen, across Canada. I would argue in the U.S., you know, we've just seen growth in the value segment, which we don't play heavily in. That's really, that's I think where we're seeing. I think it's less about overall price compression and more about just growth of the low end of the market. Just in terms of our business in Canada, we are looking at now the impact from some of that price compression moderating in our business. If you look at our product mix as we're premiumizing our portfolio, the decline in terms of our average pricing is beginning to moderate. You see that as in terms of our product mix shift. Your next question comes from Chris Carey of Wells Fargo. Please go ahead. Hi. Good morning. Morning. David, you I think you noted that the shareholder vote on Canopy USA was still planned for April of 2023, or is planned for April of 2023. Please correct me if I heard that wrong. You know, there's a lot of details in the press release this morning about, you know, potential remedies that would make the Nasdaq and I presume the SEC more comfortable with this transaction. I'm still struggling a little bit just to understand the practical considerations here. You talk about, you know, a smaller percentage ownership among other things. You know, just in plain terms, what would need to change to get this deal through? You know, perhaps comment on how this changes the, you know, the, I suppose the reporting relationship with Constellation. My read here is, you know, probably under the changes that they'd still be reporting Canopy and equity income, you know, but I'm not sure. Anyway, you could tell. Just trying to maybe, you know, just dumb this down a bit and understand kind of the practical considerations of what's actually being contemplated here. Thanks so much. Yeah. Chris, look, it's a complicated transaction. That's partly why it's taking maybe longer than we would like it to take. Yeah, we're still targeting April 2023 shareholder meeting. I don't think any changes that we might make in the structure of our Canopy USA business won't affect how Constellation ultimately treats their investment in Canopy. To simplify where we are really, again, the value of Canopy USA is in putting these businesses together, letting them generate revenue synergies because they can effectively open markets maybe faster, generate cost synergies by working together to drive routes to market and route to market activation within individual marketplaces, and then look at other more G&A sorts of synergies across their businesses. So we think putting the businesses together is the value unlock. How we go about doing it is the complicated set of activities that we're working through with SEC as well as our the exchanges that we trade on. You know, simplistically put, we would have to ensure that our economic ownership isn't more than 90%, which was a likely or potential outcome anyway, as we put this business together. We need to make sure that we would only have three members on the board, so we would have one fewer seat on the board, and that seat would come from a Canopy nomination to the board. We don't think that affects the performance of the business whatsoever. We'd have to, it says here, you know, it says in our earnings release, eliminate certain negative covenants. That's just adjusting some things that Canopy would have ordinarily or originally had say over. What we're really doing is we're just positioning the company to function like every other company would gather synergies across their portfolio, drive their business in the marketplace. These kind of technical things are just required for us to have an appropriate level of distance from specific control of that enterprise as we go forward. Your next question will come from John Zamparo of CIBC. Please go ahead. Thank you. Good morning. My question's on the profitability goals. Even at the high end of the combined savings plan, that doesn't get you particularly close to break even on EBITDA, at least compared to the current quarter. How do you square that with the outlook for FY 2024 being positive? Presumably you're spending on BioSteel isn't that material. Is it that you're including results from your U.S. businesses even though those won't be consolidated? There's also the comment about revenue not needing revenue growth. Just trying to better understand the profitability guide. Thank you. Sure. I'll start and David, you can add as well. Just in terms of the overall profitability goal and how that ties to the cost reduction. Look, again, I do think when you combine the announcement we made in April, and what we announced today, it is a pretty sizable cost reduction that we currently are underway. There are some remaining cost savings as part of the April program, and then we obviously have additional cost savings that we announced. I would say the investments we're making in BioSteel are not insignificant. I think that's a decision that we made, particularly in the current fiscal year as we really were standing up the investments behind the NHL sponsorship, really with the anticipation that that will drive strong velocity and strong distribution across both the Canadian market and the US market. As you see in the retail data, we're very pleased with the performance of BioSteel. You see that at least in the retail data, despite some of the lumpiness that you see on a quarter-over-quarter basis. We do think that that investment that we're making will pay off in the coming quarters. Again, I think as I said to Tamy, if you think about the cost actions that we announced in Canada and the other businesses that are, you know, already profitable, that we think we can get to a profitable business for total Canopy with the exception of the investments in BioSteel. I think the adjusted EBITDA losses as it relates to BioSteel really depends on how quickly the sales scale up in the coming quarters. Your next question comes from Nadine Sarwat of Bernstein. Please go ahead. A two-part question for me. The first, many of your initiatives focus on improving profitability that you announced today, which is really great to hear. However, the weaker top line growth for Canopy, and to be honest, more broadly for Canadian cannabis industry, remains a fundamental challenge. Could you just walk us through what you're planning as part of your initiatives that in particular address improving top line given the challenges you guys highlighted at the start of the call? And then my second part of the question is, you know, many investors have expressed concern that Canopy USA is adding to your costs or taking management attention away from the core business without contributing positive cash flows until federal legalization occurs, which, you know, appears increasingly unlikely for the moment. What would you say to those investors who are concerned about that? Thank you. I'll take a shot at these, Judy, and then you can fill in the blanks. In terms of top line, as Judy pointed out, we aren't anticipating or we don't require top line to meet the profitability objectives that Judy outlined as a result of these the changes that we've announced today. What gives us confidence in being able to sustain the current level of performance in Canada is really the continuous improvement we've made over the last several quarters in terms of the offerings that we have in the marketplace, the general consumer acceptance and appreciation of those offerings, and the strength of our commercial team on the ground in Canada, which we believe is second to none. We think that those have us in a good position to at least retain the current level of revenue that we're generating in the business, and so we've sized our business accordingly, which yields the profit objectives we talked about. As it relates to Canopy USA, look, the purpose of Canopy USA is to create value by putting Jetty, Wana, and Acreage together in a way that they can work together in a collaborative fashion to extract value. That is something that those businesses need to do by working together, and it's really less about resources being assigned from Canopy Growth. We don't see it as a major distraction from running the rest of our business, which includes Canada, includes Storz & Bickel, it includes BioSteel, as well as our international businesses. I would just add from a revenue standpoint, Nadine, when you look at our Canadian total cannabis revenue over the last few quarters, it's been stabilizing in the range of CAD 35 -CAD 40 million. That is, you know, there is some declines in the adult use cannabis side, but we've actually seen medical revenue growth as we pointed out on the call. Importantly, when you think about our profitability target for Canada, we're not expecting any changes to our current run rate. We think that we've got an opportunity to continue to grow our medical business, and we've got increased product offerings and that's driving some of that improvement. We expect that to continue. From an adult use cannabis business standpoint, we're not expecting an improvement to the current run rate. I think that is still enough for us to get to profitability in Canada. From a Canopy USA standpoint, I think once we get Canada to be profitable, we think the cash flow generation or the contribution from Canopy USA is really not something that's required to support the Canopy Growth cash needs. From that perspective, it's really about optimizing the value of Canopy USA through advancing the US THC strategy and for Canada to be profitable and for the rest of the business to continue to be profitable. You know, I wanna actually come back to a point as it relates to top line as well. We made a decision a year and a half ago or so to not chase the value segment. It doesn't mean we won't participate in parts of the value segment when we have product that we can waterfall down into that segment. We deliberately chose not to chase the value segment, which has had a dampening effect on our top line because of the growth of that segment, which we've not participated in. We did that because we didn't believe that we could build a profitable, sustainable business at the value level in the Canadian market. We focused on mainstream and premium offerings in the marketplace. However, our footprint was too large to support the segment of the market that we really want to go after. The actions today are all about getting our footprint right to address the market that we want to address within Canada. That's, as Judy said, that's been running in that CAD 35 -CAD 40 million range quarter. We think that we can stabilize at that and then begin to build from that as a base. Your next question comes from Andrew Carter of Stifel. Please go ahead. Morning. Thank you. Within results, there's a big revenue miss, mostly on BioSteel. Your commentary in November was a modest sequential decline. Not sure if you had visibility into that distribution issue. Today's commentary outlines steps you can take if Nasdaq objects to the consolidation, which I don't know, correct me if I'm wrong, I could have been hit head on in the release/call back in October. My biggest question is like, what's going to change from here? You know, given the cash needs, I think viability requires successfully navigating the capital markets, which requires properly setting expectations and credibility. Back to the cash needs, I guess, can this business with the assets in hand, including Canopy USA and the changes you've made today, achieve positive free cash flow with the full run rate of interest expense on the remaining term debt? Thanks. I'll start from a cash needs standpoint, Andrew. David can add some additional comments. From a cash needs standpoint, as I outlined on my prepared comments, we think we've already have a strong balance sheet with just under CAD 800 million that we have on our cash, as well as several options that we have available to us to increase liquidity and reduce debt. You've already seen our actions that we've taken to reduce our debt, including equitizing the portion of the converts last year. We've obviously also paid off some of the term loans, and that is going to drive the interest savings and reduce our cash burn going forward. We've also talked about the remaining convert notes with Constellation intending to exchange the $100 million into exchangeable shares. We also have a very constructive relationship with the debt holders, and we're in communications to address our desire to pay off some of the debt and in a very accretive manner. We are looking at all those options. We have availability of $2 billion of cash available to us through the base shelf that we filed. We actually think we've got several options. We've already also are in active discussions with monetizing several assets that we have. You'll hear more about those as we go forward. From a liquidity needs standpoint, I think we've got a really several options that's available to us. To Andrew, your point, the entire point of what we're doing today and what we've announced this morning is to generate a sustainable business that will have positive cash flow over time. We get that. All the actions that we're taking to significantly reduce our operating free cash flow in our Canadian business, as well as interest savings that we would get from our debt reduction plan and all the things that we're doing to monetize the assets, we think we've got a very laser-focused and strong plan in place to get to that place as quickly as possible. Yeah. I would just say, look, projecting revenue in nascent industry and nascent businesses is difficult at best, which is why we don't provide guidance. I would point out that BioSteel has seen volatility, but BioSteel on a year-to-date basis is up 100% year-over-year. You know, we think that that kind of performance over time will continue with that brand. As we said, we're gonna see volatility from quarter-over-quarter, and you could make the same case with other components of our business as well. You know, I think that what we've laid out here today, represents a strong path to getting profitable, to achieving cash flow favorability at a point in the future and, some, you know, very strong businesses that have a lot of economic value potential for our shareholders. Your next question comes from Pablo Zuanic of Cantor Fitzgerald. Please go ahead. This is Matthew Baker on for Pablo. Thank you for taking our questions. I just wanted to congratulate the company on ringing the opening bell at Nasdaq on December 12th. Can you update us on how those conversations with Nasdaq are going? Yes, you are committed to the dual listing, Nasdaq has made it clear that they'll delist you if you consolidate the U.S. assets. What has changed? Secondly, when do you expect that regulatory approval for the consolidation of Acreage? Thank you. Yeah. First of all, let me start with the regulatory approval. That starts as soon as Canopy USA triggers the ownership interest in Acreage, which hasn't happened yet. You know, that takes as long as nine to twelve months afterward in order to complete that regulatory approval. As it relates to Nasdaq, you've outlined the issues appropriately. You know, we've already, you know, we've already been really clear that we do not control Canopy USA, and that's important here. We had an accounting pronouncement that suggested that we would have to consolidate, which was in. which created an issue for Nasdaq, and we're now working on alternatives which would solve the consolidation, meaning we wouldn't have to consolidate Canopy USA into our results. We need to continue to do that work. There's a lot of activity going on around that and, you know, we expect that we'll be able to get through all of the open matters and ultimately proceed to a vote. As we said, you know, our targeted date for that shareholder vote, which means we will have cleared all of these hurdles is in April of 2023. Your next question will come from Doug Miehm of RBC Capital Markets. Please go ahead. Yeah, good morning. Two-part question. Number one, David, you did really call out today what you see as the sector challenges in Canada, and it appears the inability to make any significant changes with respect to those unless the government makes some changes. The first part of my question is, are there ongoing discussions that you think will be fruitful, I'm not even saying in the near term, but let's say in the midterm? That's the first part. The second one was, can you comment on the medical growth, which, you know, was positive this quarter? If this is a function of taking share from other groups, or this is a function of the medical business overall growing perhaps a little bit faster than everyone believes. Yeah. Starting with the Canadian regulatory situation. Look, the legal industry was built on the back of a call for harm reduction. That's kind of different from maybe building the industry around economic development and generating tax from this industry, which has an underlying rate of consumer participation, right? You know, are there any things going on that would affect the industry in the near term? I don't think so, which is why we made the changes we made today, so that we would have a business that's right-sized for the industry as it sits today. I do believe, however, over time, the Canadian government will continue to try to understand how they need to adapt the regulatory regime so that cannabis can be the economic development engine that we all started to experience immediately post legalization in Canada. I think it'll take a long time, as I said in my script, which is why we made the changes to adapt our business for the realities of the market that we sit in today versus where the market could go in the future. Your next question will come from Aaron Grey of Alliance Global Partners. Please go ahead. Hi, good morning, thank you for the question. For me, I just wanted to talk a little bit about BioSteel. You talked about expected growth to come back next quarter, but look for end growth quarter-over-quarter. Wanted some more color there. 34% ACV, I believe that matches last quarter. If you could provide some line of sight into the magnitude of timing of additional distribution and maybe some ACV targets over the next 12 - 18 months, that'd be helpful. Thank you. Yeah, I think the thing that's exciting about BioSteel is, you know, you see it, particularly anybody that lives in Ontario, you can really see the gains that are taking place at retail and just the general availability of the brand in the marketplace. When we work with retailers, but in particular when we work with distributors between us and retailers, there can be lumpiness in terms of our reported revenue. What I think is interesting are the stats that I called out in my prepared remarks, where we're just under a 14% market share in convenience and gas channel in Ontario, where we, you know, scan sales in the U.S. up by 157%. I think it's that kind of consumer takeaway activity that ultimately drives revenue growth and over time, that cuts through the lumpiness that you get in forecasting reported revenue based upon shipments to distributors. I think you have to. Instead of putting targets out there, I think you have to just keep looking at the consumer takeaway data, because that's gonna determine obviously where the brand ends up in the medium term. Your next question will come from Matt Bottomley of Canaccord. Please go ahead. Good morning. Just a follow-up from me, with respect to the BioSteel commentary you just made. You know, with the margin profile of the overall company on an unadjusted basis dipping back into negative territory, there's a few things called out in the press release, and one of them was some write-downs with respect to aged inventory and BioSteel. I don't expect that's a material element of it, but if you could just maybe give us some idea of the magnitude, and then just the dynamic, given that, you know, outside of the timing of shipments, when you look at this business on a, you know, on a six-month smoothed basis or just sort of year over year, you know, growth is certainly continuing to be a theme for that brand. Just the sort of rationale behind why there's aged inventory requiring a write-down at this point. Yeah, I'll have Judy handle that, but I first wanna actually build a little bit of a bridge where Judy called out in her script that we expect that this brand achieves industry kind of standard margins for the brand, which would really put that into the, you know, in the high 30s, low 40s kind of% over time. That was the driver behind our purchase of the Verona facility, which allows us to control more of the supply chain for BioSteel. I think there are some cost savings to be had as we get scale from distribution costs, which on a per unit basis are quite high in a nascent brand, but shrink very quickly as you start to get scale. We think that we can do some more work. This is a good price point, high price point really in the category. There's a lot of margin available to us. We have to make sure we continue to do a good job of managing that kind of gross to net margin erosion that happens when we go into retail. The team at BioSteel, especially post-closing on the Verona facility, are laser-focused on showing consistent improvements in that margin on its way to those industry-standard margins. There's some noise in the near term that Judy can comment to. We think we have a very well-defined path to industry margins that go along with the top-line growth we see in the brand. Yeah. In terms of the gross margins at BioSteel, Matt. In Q3, we think roughly about a CAD 5 million impact as it relates to some of the inventory situation and that has impacted the negative at the gross margins at BioSteel. To be clear, this is really related to the inventory build that we had previously built. You know, I think when you go back a year ago, we talked a lot about the lumpiness, again, in terms of the sales and distribution load-ins happening slower than we had anticipated, particularly in the U.S. market. This was really a result of that historical inventory build that we had in the BioSteel. If you kinda look at, you know, Q2 BioSteel margins or year-to-date gross margins for BioSteel, that's probably more reflective of the margin profile on today's basis. To David's point, as we bring production in-house with the Verona facility acquisition and all the other initiatives to drive gross margin improvement, as sales scale up, we expect BioSteel gross margins to mirror the, sort of that industry standard margins for a beverage company. Ladies and gentlemen, unfortunately, that is all the time we have today for questions. I will turn the conference back to David Klein for any closing remarks. Yeah. Thanks again for joining us today. The changes we announced today, while difficult, are necessary, not only for us to reach profitability but to sustain our business over the long term. We continue to believe Canopy has significant opportunity ahead, both in Canada and the United States. Today's actions, coupled with our strategy for US entry, will ensure we're able to realize this. Investor relations will be available to answer any questions that you have over the rest of the day. Again, thanks for joining us, and have a good day, everyone. Ladies and gentlemen, this concludes Canopy Growth's third quarter fiscal 2023 financial results conference call. A replay of this conference call will be available until May the 8th, 2023, and can be accessed following the instructions provided in the company's press release issued earlier today. Thank you all for attending today's call, and enjoy the rest of your day. You may now disconnect your lines.