Good morning, and welcome to SNDL's Q2 2023 financial results conference call. This morning, SNDL issued a press release announcing their financial results for the Q1, ended on June 30, 2023. This press release is available on the company's website at sndl.com and filed on EDGAR and SEDAR as well. The webcast replay of the conference call will also be available on the sndlgroup.com website. SNDL has also posted a supplemental investor presentation on its website. Presenting on this morning's call, we have Zach George, Chief Executive Officer, Alberto Paredero-Quiros, Chief Financial Officer, Tank Vander, President, Liquor Retail, and Tyler Robson, President, Cannabis. Before we start, I would like to remind investors that certain matters discussed in today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company's financial reports and other public filings that are made available on SEDAR and EDGAR. Additionally, all financial figures mentioned are in Canadian dollars, unless otherwise indicated. We will now make prepared remarks, and then we'll move on to analyst questions. I would now like to turn the call over to Zach George. Hi, everyone, and thank you for joining us on our Q2 2023 earnings call. SNDL's growth over the past two years is nothing short of incredible. Our journey from less than CAD 10 million in net revenue and negative gross margin in Q2 2021 to a potential $1 billion in annual revenue, with continued gross margin growth in 2023, serves as a testament to our commitment to becoming a leader in Canadian regulated products. We have achieved significant milestones and are witnessing the tangible results of our diversification strategy. We achieved an all-time high for net revenue for the Q2 of 2023, with CAD 244.5 million, driven by our strategic initiatives and operational improvements. Our focused efforts to enhance gross margin are yielding significant results, with record gross margin of CAD 52 million, representing a 20% year-over-year increase. Having navigated a virtual zero-profit environment in Canadian cannabis and even flirting with insolvency in 2020, we now believe that SNDL has the requisite scale and platform optionality to create shareholder value. While the hard work of our teams is beginning to yield improved operating results, we still have significant work ahead. We are internally focused on driving greater efficiencies and taking advantage of our competitive position in Canada, with both upstream and downstream regulated product capabilities. We are simplifying operations across all business segments with an unwavering focus on reaching profitability in 2024. The deliberate diversification of our business was a strategic and essential move, driven by prevailing market realities. By diversifying our operations, we have fortified our position and reduced exposure to certain risks, allowing us to navigate the extreme uncertainty of the cannabis industry more effectively. This intentional approach has been instrumental in positioning SNDL for continued growth and success in an ever-evolving landscape that continues to lay waste to many of our competitors. In our liquor retail segment, we look forward to expanding our digital footprint by launching an e-commerce platform for our Wine and Beyond banner in the coming weeks. We believe that we can further optimize the profitability of our liquor retail segment and are focused on margin-accretive opportunities, including the monetization of data. While results for the segment last year in 2022 were a function of sales moderation following the emergence of the post-COVID environment, where consumers were eager to get out of the house and return to on-premise consumption of alcoholic beverages, in 2023, we are seeing the impact of inflationary headwinds, pushing the consumer back to off-premise consumption, seeking greater value for their dollars. This dynamic is benefiting our convenience and discount-oriented banners and driving positive same-store sales for our broader liquor retail portfolio. The Canadian consumer faces very unique challenges, which include a residential mortgage market structure that is very different than the U.S. and a COVID-19 pandemic labor market recovery that has largely been driven by public sector and government jobs. Although much of our regulated products business is considered to be recession-resistant, the duration of the current rate environment is certain to add more pressure to consumers, and we are closely monitoring risks and signs of health. In cannabis retail, our data licensing program has been instrumental in driving improved profitability and forging stronger supplier relationships. We are now looking to enhance consumer engagement by introducing a new loyalty program, further solidifying our market position. In July, we announced an extension of the outside date for the closing of the intended strategic transaction between SNDL and Nova. While all other provincial approvals have been received, the continued review by one provincial regulator has resulted in a further delay. Unfortunately, we cannot control the timeliness or responsiveness of Canadian regulators. As publicly stated, we anticipate being able to close this transaction on or before August 25, 2023, but this remains subject to the receipt of this last remaining provincial regulatory approval. Our goal remains to establish a dominant multi-banner cannabis retailer with a national presence. We continue to explore opportunities for organic growth while considering mergers and acquisitions to further strengthen our position in the market. Nova's Q2 results, announced last week, included positive earnings per share and free cash flow, a true rarity in Canadian cannabis. This further reinforces our conviction that we can achieve long-term success by focusing on value and convenience. In our cannabis operations, we have implemented aggressive cost-cutting measures, streamlined manufacturing operations, and reduced our reliance on high-cost cultivation. Throughout this process, we have successfully maintained cannabis sales momentum and are actively exploring B2B and international opportunities, paving the way for future growth. The impressive 80% increase in year-over-year revenue in our cannabis operations segment validates our strategic decision to acquire Valens. The acquisition has proven instrumental to the growth of our cannabis business by leveraging its manufacturing capabilities, low-cost procurement strategies, and capitalizing on Cannabis 2.0 product opportunities. We have also streamlined our investment portfolio by divesting from equity securities and certain credit exposures. At the end of Q2 2023, SNDL held CAD 754 million in unrestricted cash, marketable securities, and long-term investments. This value compares to a current market cap of approximately CAD 560 million, and this is before any consideration for the value of our growing operating segments that we believe have the potential to generate more than CAD1 billion in annual revenue. At the end of the second quarter of 2023, SunStream's credit portfolio comprised six investments with a carrying value of approximately CAD 533 million, including Jushi Holdings, Skymint Brands, Ascend Wellness Holdings, Parallel, Columbia Care, and AFC Gamma. The AFC Gamma investment was monetized above carrying value in July 2023. SunStream is actively implementing a stock exchange compliance structure to facilitate participation in U.S. cannabis companies. In connection, SunStream is exploring the restructuring and transfer of certain credit interests in Skymint and Parallel to a new U.S. holding entity called SunStream USA. The SunStream USA structure is expected to allow SNDL to participate in SunStream assets while complying with all US and federal state laws. This SunStream USA structure is anticipated to include the issuance of securities upon the equitization of specific credit instruments held by SunStream. In turn, it would hold non-voting shares in SunStream USA, with the right to exchange such shares into common shares in the future if certain conditions are met. As such, the SunStream USA structure is expected to allow SNDL to participate in SunStream assets through a revamped capital structure. The proposed SunStream USA structure will be reviewed by Nasdaq as the relevant listing authority for SNDL prior to its execution. SNDL anticipates providing further details on progress with the Skymint and Parallel restructuring initiatives in the Q3 of 2023. Looking at our integration initiatives, we have achieved CAD 18.2 million in annualized cost savings since the Valens acquisition in January 2023, surpassing our original CAD 10 million cost savings target. These savings are largely attributed to SG&A and public company costs, supply chain consolidation, and operational efficiencies. With this progress, we are confidently moving towards exceeding CAD 30 million in annualized cost savings by 2024. The Q2 results included several cost items related to our cannabis integration projects. Our work continues as our leaders take necessary actions to ensure a lean and agile organizational structure, positioning SNDL for future success. We anticipate that our Canadian retail network will grow at a modest pace, while our internal efforts on optimization are already yielding significant tangible results. These results are encouraging as we focus on delivering improved performance in the second half of 2023 and maximizing value for shareholders. Before we dive into our financial results in more depth, I'm excited to introduce you to our new Chief Financial Officer, Alberto Paredero-Quiros. Alberto brings a wealth of experience and a strong track record in corporate finance, with more than 25 years of management experience in the consumer goods and pharmaceutical industries. He has held senior management roles for companies such as Mondelez International, Novartis, Newell Brands, and Procter & Gamble, bringing extensive experience in public company reporting, mergers and acquisitions, internal controls, and general financial and operational management. We are confident that his expertise and strategic vision will continue to drive our company's growth and success. I'll now pass the call to Alberto for a review of our Q2 2023 financial results. Thank you, Zach. I'm thrilled to be part of the SNDL team, as I see huge potential to drive growth and create shareholder value. The team is passionate and united by a common goal of achieving positive free cash flow in 2024. SNDL is in a strong financial position, which gives us room to plan long term and seek out opportunities to grow sustainably. I believe we're in a great position to make a big impact in the industry and create lasting value for everybody involved. Since I joined in July 2023, I've noticed a few areas which will enhance our efficiency and ability to achieve long-term profitability. Here are a couple of things we have been focusing on. Firstly, our primary focus will be in simplifying and improving processes that are often manual and fragmented. By doing so, we should be able to work more efficiently and free up time and resources to focus on accelerating our growth. We are determined to strengthen our financial depth by sharpening our capital allocation strategies. This will help us improve both the quality and speed of decision-making, and with that, our ability to create value for our shareholders. Moving on to our Q2 2023 results, I would like to remind you all that amounts discussed today are denominated in CAD, unless otherwise stated. Please note that certain amounts referred to on this call are non-IFRS measures. For the definitions of these measures, please refer to SNDL's Management and Discussion and Analysis document. Let us start by going over our key financials and operational highlights for the Q2 of 2023. We achieved a record net revenue of CAD 245 million, which is a 9% increase compared to the same period in 2022. This shows how our strategic plans and operational improvements are paying off, driving both financial and operational improvements. Our growth margin hit an all-time high at CAD 52 million for the quarter. This increase is driven by several factors, mainly our revenue growth, product mix improvements, data fees, and productivity improvements. Our Adjusted EBITDA reached a positive CAD 2.2 million in the quarter, which is a strong improvement compared to the CAD 26 million losses in the Q2 of 2022. All our operating segments are contributing to this improvement, as well as the synergies realized through the company's vertical integration strategies. We've been running our operations more efficiently, with CAD 8.8 million in cash used in our operating activities. This marks a 51% improvement compared to the same quarter of last year. We have a strong financial position, with CAD 754 million in cash, marketable securities, and long-term investments. As of August 11, 2023, we have CAD 202 million in unrestricted cash. I would also like to note that we haven't raised cash through share offerings since June 2021, which reflects our careful approach to managing our finances. We're also focused on streamlining our investment and capital deployment strategies. SNDL financial achievements and sensible approach to cash management reflects our dedication to sustainable growth and delivering long-term value to our shareholders. I will let Tank and Tyler provide more details on the Q2 2023 results for the liquor, retail, and cannabis operations segments. I would like to turn all our attention to the results for our cannabis retail segment. Net revenue for this segment reached CAD 72 million in the quarter, representing a 13% increase year-over-year and setting a record since SNDL diversified into cannabis retail. We have demonstrated our dedication to continued margin expansion initiatives, with gross margin reaching nearly CAD 18 million or 24.7% of sales, a strong 28% increase compared to Q2 2022. In the first half of 2023, SNDL proactively optimized its proprietary data licensing program for the cannabis retail segment. This margin expansion opportunity generated revenue of CAD 2.7 million in this quarter, compared to the CAD 1.3 million in Q2 2022, or 80% growth compared to Q1 2023. Leveraging the volume of Nova's retail location and our access to high-quality analytics, we're in a good position to deliver continued successful outcomes for our partners while driving top line and margin growth. Looking at our investments and liquidity results in Q2 2023. SNDL invested capital in a portfolio of cannabis-related ventures with a current value of CAD 569 million. Out of this, CAD 532.8 million was invested through the SunStream joint venture. The investment portfolio resulted in a net loss of CAD 1.5 million, primarily driven by an investment loss on marketable securities of CAD 3.8 million, more than offsetting our interest revenue. In fact, as part of our efforts to streamline business operations, during the Q2, SNDL made a strategic decision to divest certain cannabis-related investments, leading to the realization of these losses. We're carefully considering our options for the share repurchase program. We see ourselves as responsible stewards of capital, aiming to make the best decisions for our shareholders and the long-term success of our organization. Our top priority is guiding the company towards profitability while protecting our capital. We will provide further details on the share repurchase program in the coming weeks. We're deeply committed to regulatory diligence and compliance. Our dedication to paying excise taxes on time reflects our strong focus on responsible business practices. As of 2023, we have already paid CAD 23.4 million in excise taxes, and since the company's inception, we have paid a total of CAD 67.8 million. Even though excise taxes pose challenges in the cannabis sector, we believe that meeting our financial obligations is essential for responsible business conduct and positively impacting the communities we're part of. Our steady dedication to cost control, operational excellence, and continuous improvement will continue to fuel a lasting and profitable growth for our company and the shareholders. I truly believe that SNDL has what it takes to come out on top, and I'm very excited to be part of this team and contributing to its success. I will now pass the call to Tank to provide an update on the liquor retail results. Good morning, everyone. Thank you for joining today. Q2 2023 has been a positive quarter for SNDL, and I'm pleased to report the significant contributions of liquor retail to record revenue growth and increased gross margin. Through this quarter, our efforts have been focused on driving improvements in margin growth, and the results reflect significant strides in achieving our strategic goals. SNDL's liquor retail segment currently operates 170 locations, predominantly in Alberta, under our three retail banners: Wine and Beyond, Liquor Depot, and Ace Liquor. SNDL's liquor banners market share in Alberta was approximately 18% in the Q2 of 2023. In Q2, we opened one additional location under the Ace Liquor banner in Calgary, Alberta. Net revenue for liquor retail sales for the three banners combined was CAD 152 million for Q2 2023, an increase of 2.1% compared to Q2 2022, and 31% from Q1 2023. While Wine and Beyond is integral to driving our overall profit growth through its expansive selection and destination shopping approach, our value and convenience banners, Ace Liquor and Liquor Depot, continue to be the backbone of our operations, accounting for 76% of this quarter's total revenue. Our convenience banners are well-positioned to capitalize on transactional shoppers, which is a key driver in maintaining our total revenue growth and market share in the competitive liquor retail environment. For our combined liquor banners, the average annualized per store revenue is CAD 3.6 million, which we believe to be well above industry average and emphasizes our diligent focus on tailored retail experiences and expansive best value product selection. Same-store sales increased 1.7% across all liquor banners, with Liquor Depot and Ace Liquor seeing 5.6% and 2.8% growth in same-store sales increases, respectively. While total customer spending remains stable, we are seeing an increase in customer count year-over-year, with 2.3% increase from the same period in the year prior. Gross margin in liquor retail segment was CAD 35.4 million, or 23.3% of sales in Q2 2023, compared to CAD 33.5 million, or 22.6% of sales in Q2 2022. After quarter end, we saw a record margin in July of 24.3%. We are exploring various strategies to increase total gross margin growth, including inventory controls, price optimization, agile procurement strategies, and an increased focus on customer retention and engagement, which we will be able to report more on in the upcoming quarters. Improved inventory and procurement strategies are producing strong preliminary results. While we are focused on expanding margin opportunity, this is not at the expense of our value offerings. Beer and ready-to-drink beverage formats continue to be one of our largest customer drivers, and we remain competitive in price to drive velocity in these key categories. Volume continues to be tactically balanced with margin to ensure our offerings remain competitive amidst the current economic climate and in line with consumer preferences. Preferred label sales increased 28% compared to the same period in the year prior, and 22% compared to Q1 of 2023. We have added additional value offerings in our preferred label line to ensure we are meeting the varied needs of our consumers and responding effectively to the current market conditions. As part of our strategic objectives, SNDL aims to deploy key technology platforms and digital experiences to enhance our operations and customer engagement opportunities. As a result, I'm excited to announce that SNDL will launch an e-commerce platform for Wine and Beyond, which presents significant opportunities to drive incredible revenues. It provides the company with a scalable and adaptable platform to expand our market presence, increase customer engagement, and capitalize on the growing trend of online shopping for liquor and related products. The launch date is scheduled for Q3 of 2023. Through the second half of the year, we will continue to implement strategies that focus on margin growth and customer reach. We intend to maximize profitability and cash flow through the liquor segment, and I anticipate reporting strong third and Q4. I will now pass the call to Tyler Robson to expand on our cannabis operations segment. Thank you, Tank. Good morning to everyone. Our cannabis segment has demonstrated strong progress for the fiscal period, driven by an enhanced focus on leveraging our vertical integration capabilities and expanding our own retail market share....Throughout the quarter, we have optimized our manufacturing, processing, and cultivation activities and introduced new efficiencies in our supply chain to achieve significant cost savings. SNDL's cannabis platform is critical to our vertical integration strategy. The segment will continue to drive market share growth by increasing our top-line revenue, improving costs and gross margins, optimizing our existing and future inventory. Our strategic initiatives in the cannabis segment are producing strong preliminary results. Our revenue for the quarter was CAD 21 million, an 80% increase compared to Q2 2022, and a 9% increase compared to Q1 2023. Our margin growth continues to show solid signs of improvement. Gross margin was -CAD 1.2 million for the period, compared to -CAD 4.3 million in Q2 2022, and a -CAD 9.5 million in Q1 2023. The improved results showcase our focus on strengthening margins through increased product distribution and simplifying the cannabis segment. In the first half of 2023, SNDL implemented aggressive cost-cutting measures and improved manufacturing productivity. This key initiative involved right-sizing cannabis cultivation in Olds, Alberta, to focus on producing premium products. We have also successfully consolidated most of the manufacturing activities to our Kelowna facilities. Following the transition, the team has been diligently concentrating on increasing both cultivation yield and potency. We are seeing strong initial results, as cultivation yields are approaching 100 grams per square foot at our Athol facility. Additionally, our operation in Olds have achieved a substantial increase of nearly 30% in their cultivation yields compared to the previous quarter. Following the Valens acquisition, we conducted a thorough evaluation of our portfolio with a focus on higher-margin brands and products. The evaluation was guided by SNDL's vertical integration capabilities, enabling us to make a data-driven decision about our product portfolio. This initiative will help to enhance our overall market positioning and product offerings. We have started to make some decisions on the portfolio, and we will see the results in the back half of the year. Market share and owned retail continues to scale through the company's vertical integration strategy. Driving increased owned retail share is a key focus for our company and a meaningful contributor to our overall margin and profit growth. In addition, SNDL partnered with Cold House Direct in May 2023 to manage the company's in-market sales and logistics execution for its branded cannabis products. Cold House supports the business with our distribution of non-owned retail across the country by focusing on expanding our innovation listings, driving our core assortment, education and engagement, and collecting competitive data and retail insights. Despite the achievements we have seen this quarter, there are still untapped opportunities in certain regions, particularly in British Columbia and Quebec. We are actively exploring strategies to capitalize on these opportunities. We maintained our B2B segment and continue to provide products and services to most major Canadian licensed producers. We remain confident in our ability to drive revenue growth in this segment by leveraging our production and distribution capabilities. As noted in Q1 2023, we are exploring growth within the B2B partnerships internationally. We have been investing in process improvements and testing capabilities to meet the high standards of our global partners and have acquired new strains to better fit their evolving demands. We are excited about the potential for growth in this segment and are committed to delivering high-quality products and deliver long-term, mutually beneficial partnerships. The team's efforts the past two quarters are impressive, but we know there's still a lot of work to be done to achieve profitability in this segment and further solidify our long-term success. We are simplifying our segment and focusing on fundamentals and innovation, and our tactics are aimed at near-term improvements to drive long-term growth and profitability. The heavy lift of moving manufacturing to Kelowna and reducing our reliance on high-cost cultivation did impact some of our results in Q2, but we are confident these decisions will produce strong outcomes in the coming quarters. We remain agile and hyper-focused on executing further optimizations in the cannabis segment, including margin expansion and continued revenue growth. Our team demonstrates discipline and a sharp emphasis on delivering exceptional customer value. We are focused on building long-lasting industry relationships while keeping the consumer experience top of mind. I look forward to celebrating more wins with the team and delivering long-term shareholder value. Thank you. I will now pass the call back to Zach for closing remarks. I am proud of the milestones our team realized this past quarter, while knowing that there is still much work to be done to reach our objective of free cash flow for the 2024 calendar year. We are determined to continue our upward trajectory and remain fully committed to driving profitability, shareholder value, and excellence in all aspects of our operations. I want to thank my colleagues for their relentless efforts on this challenging path and our stakeholders and commercial partners for their patience, trust, and support. We look forward to updating you on our progress in the near future. Thank you. We will now begin the analyst question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question comes from Frederico Gomes with ATB Capital Markets. Please go ahead. Hi, good morning. Thanks for taking my questions. Just my first question, just on your liquor retail segment and the margins there. Just curious, you know, as you work through these initiatives, you saw a good, good improvement this quarter. You mentioned that you reached record margins in July, do you expect that to sort of continue through Q3 and Q4? Then on the launch of the e-commerce for Wine and Beyond, what, what sort of impact would you expect it to have on the margin side as well? Thank you. Thanks, Fred, and good morning to you as well. I'll pass the second part of that question to Tank, to discuss e-commerce. We are, so we're not giving forward guidance, but your deduction is correct, and we are, you know, cautiously quite excited about the environment we're in right now, although there are certainly crosswinds that we are monitoring closely. We do expect, over the intermediate term, to be able to maintain and improve on this margin profile. Tank, do you want to speak a bit about the launch of e-commerce and what that, that could mean for the business? Good morning, Fred. We will be launching e-commerce this quarter, and the impact, like we're in the environment where everything is going to online from everything retail is going online, and we are hoping to capitalize on this as we see a huge impact of Skip on our retail business, which would translate into definitely better margins and higher volumes on our Wine and Beyond side of the business. Thank you. On your cannabis operations, I guess the EBITDA there continues to be sort of below the other segments. I know they're working on cost efficiencies. Just curious, just given the environment here in Canada with, you know, LPs and being very fragmented still, how much of the profitability in that segment do you think is within your control and just relies on cost cutting? How much you, you would have to see in terms of changes in the macro environment to really to reach profitability in that segment? Thank you. Thanks, Fred. I'll have Tyler comment a bit more, but, as we've said historically, you know, we are not waiting for someone to come save us, in cannabis, and we're building a model to focus on, you know, high quality, low-cost production in key product segments. What you're seeing right now, really, is reflective of the transition that we've made, post the acquisition of Valens, where we've, we've moved and relocated all processing and manufacturing activities to Kelowna. As we had guided to, we always expected Q2 to be quite messy, and you'll see some of that, that noise in Q3 as well. We believe that we are radically changing the cost structure to be more competitive, in cannabis. Tyler, maybe you can provide some more color on our competitiveness. Yeah, happy to. I, I think you hit the nail on the head. No one is coming to help, we fully expect to be able to be profitable in the, in the current landscape of, of what we're effectively trying to do. I do think a lot of it is in our own control. At the end of the day, we're all playing in the same environment, but we've done a lot of work and there's still more to do. I, I fully expect to be profitable, as is. Yeah, but I think that's all I'll say for now. Thank you, Tyler. Just last question here, just on your, your cash flow goal for 2024, which segment would you say you expect to be the, the, maybe the, the largest contributor to that cash flow goal? You know, which one do you think is gonna be more material? Sure. I think, Fred, when you look at the historical profile of our various segments, the answer on an operational cash flow basis is quite clear in terms of the potential for liquor to be a very strong contributing segment. We are focused on strong and positive cash flow from all of our segments in 2024. When you combine that with leverage from a leaner and more effective shared services structure, what you're seeing is the benefits of both growth and an aggressive approach, approach on cost at the same time, which is very, very difficult to execute, but we're actually managing to do that today. Thank you for the color. I'll back to you. Thanks. The next question comes from Matt Bottomley with Canaccord Genuity. Please go ahead. Hi, this is Yvonne Kang on for Matt Bottomley. Thanks for the question. I just wanted to touch upon the cannabis segments margins just a little more. In terms of your goal to generate positive free cash flow from all operating segments by 2024. The cannabis cultivation segment generated negative gross margins this quarter, although showing substantial improvements from the last quarter and understanding that the consolidation of the Olds, Alberta facility happened in the first half of the year. I just wanted to ask about if you guys have any additional cost saving measures that you have in place in order to make this goal achievable by fiscal 2024, and what we could expect in terms of margin expansion under this segment going forward for the rest of fiscal 2023. Thanks. Sure. I think maybe the best way to answer this is, Tyler, can you just provide a little bit of color on supply chain initiatives and SKU rationalization that is improving the focus of our teams and margin profile for our operations? Yeah, happy to. Since I joined SNDL in January, we've effectively turned the cultivation facilities on their head. ... we're seeing massive improvement in not only potency, but yield. I think with the, the kind of strategies acting to get the fewer, bigger, better with the SKU rationalization, or I'll call it a SKU optimization, we can go deeper. As far as the cultivation segment, I think it's about having the right footprint, and then utilizing not only our low-cost biomass procurement, really driving that premium segment out of Olds. I don't think we're gonna give any forward guidance as to what's gonna come as far as margin, but we do expect margin to continue to improve as we optimize the entire portfolio. And now with the, the basically, momentum we're getting, I do see light at the end of the tunnel. Great, thanks for the color. The next question comes from Pablo Zuanic, with Zuanic and Associates. Please go ahead. Good morning, Zach. Look, congratulations on the plans with SunStream USA. I mean, can I ask 2 questions there? One, when it comes to Skymint and Parallel, the way I understand it, based on what you said, is that you're going to equitize your debt holdings, right? What happens to the other debt holders there? I mean, both companies, I believe, have other creditors. I suppose you have seniority, if you can give some more color there. The second question, which is related to this, Canopy USA... Canopy Growth had to backtrack on their plans for the Canopy USA structure to comply with Nasdaq. Why do you think your case would be different, Nasdaq will approve it? Thanks. Good morning, Pablo, thank you for the questions. I just want to be clear about the timing around expected disclosures here with regards to Skymint and Parallel, this is not a punt, this is, this is just a reality of what is certain right now, what is known. They're going through two very different processes. Skymint and Mission, you're seeing a receivership process, which resulted in an auction, which was completed. For that, that transaction to occur, there's a subsequent court date in early September, where a ruling is required. That transaction has not closed. There is not certainty until that court date. With Parallel, you've got, licenses in multiple states and a much more complicated capital structure, which requires, an agreement between stakeholders to, to get to a resolution in terms of the restructuring, and it's expected to be taken through a foreclosure process. As to your question as to what is going to happen with other stakeholders, we're going to be able to provide greater detail and clarity in terms of what the pro forma and go-forward capital structures for those businesses will be. We do not have certainty at this time, and so, we're not going to be able to give you the detail you're looking for, and then answer that question. As we mentioned, in the press release, we do expect to give more guidance, in, within the quarter, on these, on these positions. As to the second part of your question, you are referencing Canopy. I do not want to address, and, and can't, because we don't have knowledge of the conversations between Canopy and various regulators. Don't want to don't want to go there. What I would say is, what you're seeing is a dynamic where one of the issues that's being debated and looked at differently from various exchanges, and you're now seeing both TerrAscend and Curaleaf look to uplist on the TSX. One of the hot button issues has been the consolidation of financials. That's, that was clearly a public push that several entities, including Canopy, were making. We're not, we're not trying to draw battle lines around the consolidation of financials. We think that this will evolve over time, and we take our regulatory obligations very, very seriously. We're working with various regulators on a number of compliance structures to enable us to run the business and manage our exposures. We, we have a credit portfolio that's owned through a joint venture called SunStream today, and it will change character as and when these credits are potentially equitized. I wouldn't compare our path necessarily to others. There, there are a bunch of different, I would say, trailblazing activities going on here, in different corners of the industry, and our path is, is slightly different. Thanks. Thank you. That's very good color. If I just on the retail side, cannabis, so regarding Nova, okay, the outside date has been extended. What color can you give in terms of the plans there? Like, at some point, you know, do you convert the franchisees to company-owned stores under the Nova banner? Would that make sense in terms of capital allocation? At what point, you know, once you own 100% of the entity, do you spin it off to some SNDL shareholders? Just remind us of what the plans are there. Thank you. Sure. Thanks, Pablo. We've, we've gone over this in detail, and there's also some materials available for investors, on our website. Yes, you, you point out, one avenue for growth. When you look at, the mixed bag, sort of corporate and franchise model that we are managing, in certain cases, a, a franchise partner may have an interest in owning a stake in the broader business and not just, having their equity exposure combined to their, their, their individual, location and, and business. That's something at the margin that we'll look at. We also have, as you're aware, pulled a few, retail licenses out of CCAA with very small banners that will likely be converted, over time. We, we do believe that having a focus on a small number of banners is the right way to go in terms of how we're gonna allocate resources and focus on building brands. We're also seeing a number of both distressed individual and portfolio sales in the marketplace that we'll be looking for while being very disciplined in terms of the cost of capital that both SNDL and Nova Cannabis are seeing in the market today, which is which would make those transactions quite difficult. Thank you. One very last one. In, in the press release there, there is something about, I'm reading here, prioritizing the opportunity to return capital toward shareholders, I mean, are you talking about some large one-time dividend that could be paid back to shareholders or share buybacks as a way to, you know, just improve our valuation here? Thank you. Yeah. Pablo, if you, if you trace back our capital-raising activities, this company was able to raise equity capital in, in, in real size, at some points, as at a valuation of as high as 15x revenue. As you can see today, we're, we're trading at, roughly 0.5x, you know, revenue. Mm-hmm. When we look at our capital exposure, we're, we're looking at all means of driving accretion, you know, for the business. Some of that could come through organic or acquisitive growth. Also we view our equity as far too cheap at these levels, and so would look to potentially return capital through the repurchase of equity over time. We're also, in connection with your last question, anticipating the potential to dividend Nova Cannabis equity to SNDL holders as well, which we've mentioned. We are still waiting to resolve this process with the final regulator and get approval for our transaction. Thank you very much. Once again, if you have a question, please press star then 1. The next question comes from Andrew Partheniou with Stifel GMP. Please go ahead. Hi. Good morning. Thanks for taking my question. Maybe just starting off at, at a, perhaps a little bit more of a high level here. You've got an interesting perspective on the consumer, given your cannabis and liquor retail businesses. Could you talk about any, any trends that you're seeing from the consumer's perspective? I think you mentioned a little bit in the prepared remarks about some pressure. It does seem interesting that, you know, Liquor Depot and Ace Liquor are seeing some pretty good same-store sales growth, while your preferred label, your preferred label liquor sales are also picking up steam. Yeah. What I would say, and you're seeing this not just in Canada, not just in Canadian cannabis, but also in several markets in the U.S. As these markets mature and given the current point in the cycle that we're at, we are seeing basket size under some modest pressure, I would say. We've seen a decline in the low single digits, but we've also seen an increase in frequency from our core consumer. You're seeing, you know, the number of trips increase and individual purchases for those trips decrease modestly. I'll let Tank speak to some of the dynamics we're seeing across our banners and product mix in liquor, which is very interesting. Thanks, Zach. There's on the improvement on our convenience side of the business is what we are seeing lately is consumers are now back to off-premise again just because of high cost of inflation and whatnot. What we are focusing on, on our private label is we are committed to provide more value products in our private label offerings so that we can help consumers out in this higher inflationary environment. Overall, the trend we're seeing is there's still a lot of premiumization in urban centers, but more emphasis on value in our rural markets. Thank you. Thanks for that. And just to follow up to that, could you, could you remind us what kind of, you know, margin profile does your, your preferred label, have on the liquor segment? And, you know, how can that look going forward? Our margin profile is comparatively higher than on the private label than our overall margins just because we carefully choose our partners and products from various parts of the world to bring them in and still be competitive compared to national brands. The margins vary based on product, and I'm not going to elaborate too much on individual products there. No problem. Thanks for that. Maybe switching over to, to the cannabis segment here. You know, you have an interesting vertical integration strategy that's maybe a bit unique in Canada. Could you talk about where you are in the process? You know, how much of your shelf space is SNDL products and, and what kind of targets or timing, if, if there's any kind of color that you can share, that could be helpful? Thanks. Yeah, Andrew, happy to talk about vertical integration and some of our product success. We're not going to be giving guidance or regular quotes on share of shelf in known retail. It is a, it's an evolving situation. What I can say is that if you, if you think about the timeline here, the Alcanna acquisition closed in, at the end of March of 2022, and at that time, in, in the, in the Value Buds network, for example, SNDL had virtually nil, you know, representation in terms of share and share of shelf, and today, holds a material position. We're also trying to be a partner to this industry more and manage of opportunities, including co-manufacturing, where our shelf space, based on branded products, you know, may be different from what a total picture would look like when you look at some of the work we're doing for other LPs and building great products for consumers. We also look at our, our broader distribution, beyond just our owned and managed retail. We're, we're gonna be careful as this segment is growing, and, and we, we lock down this structure. We're still finalizing our shared services, infrastructure, for example, to give too much granted or detail, in terms of, shelf space right now. All right then, maybe moving over to, to cost savings. You know, you achieved CAD 18 million of, of run rate cost savings since Valens closed in January and targeting over CAD 30 million. You know, maybe a few questions around this. You know, as much as you're able to share here, is that is that CAD 18 million fully realized in, in Q2? How much of that is comprised in cannabis operations, SG&A, versus COGS or corporate costs? What does that breakdown look like across those three buckets for the remaining cost savings? Thanks. Yeah, Andrew, that's a great question. We can tell you absolutely that CAD 18 million run rate was achieved through both, partially through Q1. It was a mid-January close for the transaction, and then Q2. It will our work will continue into 2024. We are working through a transition which does not fit cleanly into individual quarters, as you're well aware, and so, we're still wrestling with some of the fixed costs of our total operational footprint, which we've reduced variable costs significantly with Tyler's leadership, but still need to make some key decisions and take action to eliminate some of that fixed cost. Then you're looking at a transition where inventory levels are declining at a decent clip. We have a ton of biomass on product on hand that we are trying to move to improve our working capital position, while simultaneously reducing our cultivation activity to a much smaller footprint and taking advantage of procurement. It, it's, it's, it's one thing to compare, you know, prices in the market for flower procurement, for example, versus our legacy costs per gram in our own cultivation facilities. There's too many moving variables to give you great detail on that right now. We do expect material benefit and improvement in COGS. I would say that the, the cost initiatives that we're quoting are a direct result of a very detailed plan that was brought together both with our internal team and an outside consultant, specifically with rationalizing our, our cannabis operations business. So there are implications for cannabis retail and certainly for our corporate structure. But we're predominantly trying to rightsize the business and take advantage of the innovation and product development and engineering that Valens is capable of, while also moving away from higher-cost cultivation, which, which is really what our position was when we were solely working with the facility at Olds, given the volatility we've seen in Alberta power prices. Thanks for that color. Maybe just one last one for me. Kind of following on something that you mentioned in this last question just on the inventory. You know, realizing that you might not wanna go into too much detail, but just wondering if you can give any update on how that monetizing of the biomass that you've acquired, how's that going? Just kind of what we should be expecting going forward, given there's, you know, lots of puts and takes in your inventory line, so hard to, you know, parse through, you know, a one-line item that on the balance sheet, but any additional color that you can provide is useful. Thanks. Yeah. I think we're gonna be able to provide a lot more clarity and get down to, to dollars in Q3. This is an ongoing process right now. I would just remind you that one of the interesting elements of the, or positions that the, the Valens team had prior to, to this acquisition, was one of the largest procurers, and consumers of biomass in the country. That puts us in a great position where Tyler and his team have really good visibility, and the ability to discover price, in just really all levels in terms of quality and quantity in the country. That, that enables us to really move quickly and decisively when it comes to monetizing inventory. I would say that things are going well. Still some work to do, but it's in progress, and we have a pretty tight focus on what we think our realized outcomes are gonna be. Thanks for all that, and I'll get back in the queue. This concludes the question-answer session. I would like to turn the conference back over to Zach George for any closing remarks. I'd like to thank everyone for joining the call today, and we look forward to updating you in the near future. Thank you very much. This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.