00:00:00:00 - 00:00:32:24
Unknown
Good afternoon, everyone, and welcome to the inaugural Organigram Global Investor Session. My name is Max Schwartz, and I am the director of investor relations at Organigram Global. And I'm thrilled to bring to you today's event alongside key members of our senior leadership team. I'm particularly excited because we've done Investor Days before. They normally take place at our facilities, but not everyone can obviously make it out to a facility in Moncton.

00:00:33:01 - 00:00:58:24
Unknown
Therefore, they're normally attended by institutional investors only. But today we are here for the retail investors, people who invest personally, not professionally, but who nonetheless deserve to hear from the executives of the companies they invest in and have their questions answered from time to time. And this is particularly so for cannabis investors, because if you're holding shares in a cannabis company, it's likely that you've seen those shares lose value over time.

00:00:59:05 - 00:01:23:07
Unknown
And as of market close on April 8th, an index of the seven largest Canadian licensed producers was down about 61% over the last year. Unfortunately, that context is the reality for many investors in the space, and it's one of the reasons that we're here today to talk about Organigram and how the company has matured, grown over the last decade despite what is happening in the market.

00:01:23:09 - 00:01:49:15
Unknown
We have an excellent agenda for you today with three key speakers from our senior leadership team. Beginning with our CEO Beena Goldenberg will take us on a tour of our five state of the art facilities. She'll discuss some of our recent history, recent game changing developments at the company, and how those developments really contribute to our overarching goal of delighting consumers with fantastic products and meeting the needs of medical patients worldwide.

00:01:49:17 - 00:02:16:10
Unknown
Next, we'll hear from our CFO, Greg Guyatt, who will talk about how we're tracking on fundamentals, talk about our financial trajectory, where opportunities exist to improve our financial performance, and what it will take to achieve sustainable profitability in the near to mid-term, while balancing our growth objectives at the same time. And finally, we're going to hear from a crowd favorite, because everybody likes to see behind the scenes of the Willy Wonka's chocolate factory of cannabis.

00:02:16:12 - 00:02:40:01
Unknown
We're going to hear from Borna Zlamalik, our Senior Vice President of R&D and innovation. Borna is going to take us on a tour of Organigram's Innovation Engine, how we're pushing the boundaries of cannabis science and scaling game changing technology and turning bold ideas into market winning products. After hearing from each speaker, we will of course, have a live Q&A session.

00:02:40:03 - 00:03:00:23
Unknown
Listeners, all you have to do is scan the QR code on your screen or visit slido.com and enter the code OGinvestors to submit a question. Any time during today's event. If your question doesn't get answered because we run out of time, we will be sending out a follow up email with a consolidated list of questions and answers to all registrants of today's event.

00:03:01:00 - 00:03:23:24
Unknown
Now, I do have to read a legal disclaimer for any event like this. And here we go. Attendees should be aware that today's session will include estimates and other forward looking information, from which Organigram's actual results could differ. Please review the cautionary language in our most recent MD&A on various factors, assumptions and risks that could cause our actual results to differ.

00:03:24:01 - 00:03:51:08
Unknown
Further reference will be made to certain non IFRS measures during this session, including adjusted EBITDA and adjusted Gross margin. These measures do not have any standardized meaning under IFRS and are intended to provide additional information and as such should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Our approach to calculating these measures may differ from other issuers, so these measures may not be directly comparable.

00:03:51:10 - 00:04:30:17
Unknown
Please see our most recent MD&A for more information about these measures. Attendees should be aware that Organigram relies on reputable third party providers when making certain statements relating to market share data, unless otherwise indicated. All references to market data are sourced from Hifyre in combination with data from Weedcrawler, provincial boards, retailers and our internal sales figures. Well, thank you very much for bearing with me through that, and without further ado, I'd like to invite Beena Goldenberg, CEO of Organigram Global, to the Stage to kick off today's event.

00:04:30:19 - 00:04:59:03
Unknown
Well thank you Max. Good afternoon, everyone, and thank you for joining us. So why are we doing this today? We really want to talk to our investors and those interested in this industry, and show our appreciation for your ongoing support. We want to provide transparency on our operations and growth strategies, so investors feel like they could ask us questions about our business or the industry.

00:04:59:05 - 00:05:23:12
Unknown
And we want to showcase who we are as a company and reintroduce ourselves as Organigram Global. Same mission, new look. We've matured a lot as a company, and it was time that our appearance reflected that. Today, I'm going to provide a company overview, a little bit of our history, a look at where we are now and then where we're heading.

00:05:23:14 - 00:06:00:17
Unknown
But first, let's talk about our vision for the future of cannabis. Like Organigram, the cannabis industry is maturing maybe slower than we'd like, but despite delayed regulatory progress, we remain optimistic. Cannabis is no longer fringe. It's mainstream, culturally rooted, medically accepted and economically vital. There's been significant infrastructure investments that have been made in this industry, and public support suggests that politics and economics will eventually catch up.

00:06:00:19 - 00:06:41:24
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When that happens, especially changes like reduced excise taxes, Organigram is well-positioned to benefit. This is a movement, a cannabis movement. And despite recent stock challenges, the opportunity is growing. For a company like ours with scale, experience and capital discipline, we believe the future is bright. So our ten year mission is clear. It is a cannabis friendly future in which the industry mirrors today's alcohol landscape, with broader retail access, greater marketing freedoms, and the ability to speak openly with consumers.

00:06:42:01 - 00:07:14:06
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Excise duties are reasonable and operational barriers are significantly reduced. We'll have science backed evolution of the cannabis experience serving the modern consumer, who is less driven by only potency and price. We're not chasing trends. We're building the future of cannabis. Together with all of you, our investors, cultivators, journalists, policy makers, medical and recreational consumers, this is a collective journey.

00:07:14:08 - 00:07:46:02
Unknown
Our key strategic pillars are around driving responsible growth, being consumer obsessed, which means focusing on quality, building brands and consumer centric innovation, and building for tomorrow with efficient operations in order to create shareholder value. Now our values form the foundation of our business and they are IMPACT values which stand for integrity, motivation, passion and that's passion for the industry and the planet.

00:07:46:04 - 00:08:21:03
Unknown
Accountability, curiosity and teamwork. These aren't just our values, they're how we’ll build a sustainable cannabis future. Today, Organigram is a true cannabis OG. 12 years of responsible leadership. We're Canada's largest LP by market share and recreational net revenue. We're an operator of five advanced cultivation, manufacturing and logistics logistics facilities across Canada. We're a leader in R&D. A true innovator.

00:08:21:05 - 00:08:49:07
Unknown
We're a global strategic investor and a leading export partner to a growing international customer base. Our success has led to major investments into Organigram from British American Tobacco or BAT, fueling advancements in our innovation and international growth while enhancing our financial position. It took a long time to get to where we are now, so I'd like to briefly walk you through a bit of our history.

00:08:49:09 - 00:09:21:14
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The company was founded in 2013 as a leading medical cannabis provider. We started with a single facility in Moncton, New Brunswick, which is now one of the largest indoor cannabis cultivation and production facilities in the world. When recreational cannabis became legal in Canada in 2018, we shifted our focus to recreational products and quickly became recognized as one of the most forward thinking and innovative cannabis companies in Canada, with multiple industry awards for innovation.

00:09:21:16 - 00:09:53:00
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We also located our head office in Toronto, and in 2019, we listed on the TSX and the Nasdaq under the ticker OGI. 2021 was a pivotal year as we acquired two companies and expanded both our geographical footprint and our product leadership. Edibles and Infusion Corporation in Winnipeg, Manitoba was a state of the art, highly automated facility, positioning us as a leader in edibles. And Laurentian Organics in Quebec

00:09:53:02 - 00:10:12:00
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established us as the #1 legal hash producer globally, and added premium greenhouse grown flower from the Laurentian Mountains. Unlike many acquisitions in the industry at that time, these strengthened our market share instead of eroding it.

00:10:12:02 - 00:10:48:11
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In December 2024, we acquired Motif Labs, which propelled us to the #1 market position in Canada and filled our product portfolio hole, which was on vapes, and now we have over 20% of the market in Canada. And Motif also strengthened our pre-roll business. This acquisition added two impressive Ontario based facilities, a state of the art extraction facility with industry leading expertise in THCA production, a Central Canada logistics hub and at least $10 million in identified annual cost savings,

00:10:48:11 - 00:11:09:14
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still in the early stages of being realized. Organigram now has five facilities across Canada that cover every major consumer category, that support our industry leading R&D efforts and help us meet increasing demand both domestically and internationally.

00:11:09:16 - 00:11:25:09
Unknown
Our products are found across Canada in multiple international markets as we export flower to Australia, Germany and the U.K. and we're actively working to expand branded and 2.0 products into global markets.

00:11:25:11 - 00:11:43:17
Unknown
Organigram has made strategic investments in Canada, the U.S. and Europe to expand our international footprint and to provide us with some unique competitive advantages. So we'll dive further into those strategic investments. But first, I want to take you on a tour of our five facilities.

00:11:43:17 - 00:12:17:06
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Organigram's Moncton campus is home to our flagship facility and over 800 dedicated team members. Spanning 500,000 square feet. This state of the art site integrates cultivation, extraction and manufacturing, producing whole flower. milled flower, pre-rolls and vapes. What sets Moncton apart is its unique microclimate controlled grow rooms. Unlike industry standard large open greenhouses, Moncton houses hundreds of smaller grow rooms, growing vertically across three levels from floor to ceiling.

00:12:17:08 - 00:12:42:23
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This design maximises space and efficiency, allowing us to fine tune conditions for each cultivar, ensuring optimal terpene expression, cannabinoid development, and plant health. With a total canopy space equivalent to four football fields, we believe Moncton is the largest completely indoor cannabis grow facility in the world. Our data driven approach allows us to collect vast amounts of cultivation analytics, ensuring consistent, high quality cannabis.

00:12:43:00 - 00:13:10:03
Unknown
Organigram is also the first licensed producer in Canada to establish calibrated sensory analytics. Our state of the art sensory lab is home to over 200 vetted panellists, who analyse taste and aroma variations across our formulations. This advanced sensory evaluation process ensures that every product meets the highest standard of quality and consistency. Moncton is also home to our product development collaboration with British American Tobacco. Organigram and BAT

00:13:10:06 - 00:13:36:15
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personnel work together on site on the next generation of non-combustible cannabis formats. The research from our onsite laboratories has already led to the commercialisation of our FAST acting soluble technology, delivering enhanced onset and bioavailability for ingestible cannabis products. Over the past two years, we've significantly invested in Moncton to expand capacity, increase efficiency and reduce costs. In fiscal 2023

00:13:36:15 - 00:14:04:24
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we invested $29 million into the facility, leading to increased pre-roll capacity including automated tube style pre-roll production and packaging, higher throughput with automated pouch lines for certain products and brands, and enhanced post-harvest processing with in-house testing, remediation and fast drying equipment. These strategic capital expenditures have reduced operational costs, boosted production capacity, and streamlined efficiency. Positioning Moncton for long term success.

00:14:05:01 - 00:14:34:07
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We believe Moncton is the most advanced cannabis cultivation and production facility in the world, and we're not stopping there. With EU-GMP certification in progress, we are preparing to expand our international export volumes while increasing international profit margins with world class innovation, precision cultivation and production, and a relentless focus on efficiency. Moncton remains at the forefront of the cannabis industry, setting the gold standard for quality, scale and innovation.

00:14:34:09 - 00:15:09:05
Unknown
Let's take a 1000km journey from Moncton to our Laurentian facility, located just 20 minutes from Montreal in the heart of Quebec. Unlike Moncton’s high tech vertical grow, Laurentian is a traditional hybrid facility dedicated to cultivating premium hand trimmed hang dried cannabis and producing industry leading hash. It plays a strategic role in Quebec supplying our Grown in Quebec flower program for Quebec customers. Laurentian’s four greenhouses follow a continuous harvest cycle, producing up to 20.500 kg of cannabis annually, with harvests every two weeks.

00:15:09:07 - 00:15:36:15
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When it comes to hash, organigram dominates the legal market. According to BDSA, Organigram is the largest legal hash producer in the world, with the capacity to produce over two million 2 g units annually. Our expansive hash portfolio includes pressed hash, hash rosin, Black Afghan hash and our award winning Rip Strip Hash. Rip Strip Hash reinvents how hash is consumed, making it intuitive, portable, and easy to use.

00:15:36:17 - 00:16:03:01
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A unique part of our process, we use two ultrasonic knives to precisely shape and slice the sticky substance into perfect, joint sized strips. With 40 dedicated team members. Laurentian remains a key pillar of Organigram success in Quebec and beyond. Another 2000km northeast, our 51,000 square foot Winnipeg facility is a highly automated edibles production hub, producing up to four million gummies per month.

00:16:03:03 - 00:16:34:12
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Our gummy production runs 12 hours a day, seven days a week, with our automated packaging lines operating seven hours daily. The recent integration of inline active dosing technology has allowed us to infuse THC earlier in the process, reducing waste and production costs while ensuring consistent dosing and quality. Gummies are automatically sorted, weighed and packaged before undergoing a final X-ray inspection, ensuring every pack meets our strict quality standards before excise stamping and distribution.

00:16:34:14 - 00:17:01:23
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Organigram has consistently ranked among the top LPs in the gummy category. Produced in Winnipeg, our FAST acting Nanoemulsion gummies available across Canada now under our Edison brand, redefine edibles Innovation. Boasting 50% faster onset and up to two times the potency. With nearly 100 dedicated team members, the Winnipeg facility remains a key driver of Organigram's edibles strategy. As we continue to innovate in Ingestible products,

00:17:02:02 - 00:17:26:02
Unknown
we couldn't be more excited for what's ahead. From 2021 to the end of 2024, these three facilities defined Organigram's operational footprint, but as many of you know, we recently achieved a milestone on our growth journey. As part of our Motif Labs acquisition in December, we gained two facilities in Ontario: a logistics hub in London and a state of the art extraction and production facility in Aylmer,

00:17:26:06 - 00:17:51:18
Unknown
while becoming the #1 LP by market share in Canada. While the logistics hub plays a key role in unlocking $10 million in run rate cost synergies, Aylmer is where the real innovation happens. Aylmer serves as both an advanced extraction facility and a production hub for vapes and infused pre-rolls. Before acquiring Motif, we sourced key production inputs such as THCA for our infused pre-rolls directly from them.

00:17:51:20 - 00:18:23:20
Unknown
Now, with Aylmer under our umbrella, we brought these capabilities in-house, creating a more efficient vertically integrated supply chain. Within just weeks of integration, we established biomass flow from Moncton to Aylmer, and large scale THCA production was up and running, enhancing our ability to support our growing infused product lines. Through a targeted CapEx program, we've already doubled the THCA capacity at Aylmer, allowing us to increase infused pre-roll production, optimise costs and margins, and strengthen our supply chain resilience.

00:18:23:22 - 00:18:56:08
Unknown
Aylmer is now equipped to produce monthly up to 1200 kg of distillate, 600 kg of hydrocarbon extracts and monthly throughput of 1.6 million vapes and 1.6 million pre-rolls. With our integration plans moving along rapidly, we are unlocking new levels of operational efficiency while ensuring Organigram remains at the forefront of the pre-rolls and vape product markets.

00:18:57:16 - 00:19:25:22
Unknown
I hope you all enjoyed a closer look at the nuts and bolts behind our industry leadership in Canada. However, our facilities alone don't mean anything without consumer trust. We build that trust with brands that deliver quality, consistency and exciting innovations. Organigram has a dozen brands that span multiple categories and price points to address the needs of an evolving cannabis consumer, and I would like to dive a little bit deeper into a few of them.

00:19:25:24 - 00:19:59:15
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We'll start with SHRED, our award winning mainstream brand, which has $224 million in annual retail sales. Based on our trailing 12 months, SHRED leads in milled flower, pre-rolls and gummies, and in flavor forward products like our SHREDX Rip Strip Hash. we introduced exclusive flower derived THCV gummies and THCV flower under our SHRED brand. And SHRED is the stickiest brand in Canada, as measured by repeat purchases.

00:19:59:17 - 00:20:28:22
Unknown
Next up we have our BOXHOT brand, which was part of our Motif acquisition. With over $150 million in annualized retail sales based on the trailing 12 months, BOXHOT is the leading vape brand in Canada. The BOXHOT portfolio also includes infused pre-rolls and distillate based products. We expect further growth from BOXHOT as we introduce vapes into Quebec, as regulations change in that province.

00:20:28:24 - 00:21:01:08
Unknown
Next up, we have our Edison brand, which is our premium innovation brand. We introduced Edison Jolts in 2021, our award winning and patented fast acting lozenges. More recently, we launched Edison Sonics Powered by FAST, our patent pending nanoemulsion technology, which allows us to make consumer claims on onset and cannabinoid availability, supported by a clinical study, the FAST tech platform opens up innovation for all of our Ingestible products.

00:21:01:10 - 00:21:29:24
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We plan to launch FAST on beverages - Borna will get into more details about this later. There are many other brands under the Organigram umbrella that together gives us our #1 market position in vapes, in pre-rolls, in hash and in flower, and our top three position in every major category, and our #1 positions in western, central and eastern Canada.

00:21:30:01 - 00:21:58:10
Unknown
Now, the topic of whether brands matter in cannabis has been widely debated. As someone with 30 years of brand building experience, I believe they matter and that they just take time to build. In a market full of similar products, trust becomes key. Over time, consumers will gravitate towards brands that consistently deliver what they want. In the early days, cannabis brands came and went quickly.

00:21:58:12 - 00:22:29:03
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But now the market is maturing. Now the brands that remain are earning loyalty by delivering consistently with clear differentiation. We are differentiating in almost every way we can. We're constantly pushing the envelope with what we can do from a consumer centric side and a science based, science backed approach. We differentiate around design, features, quality, format and technology.

00:22:29:05 - 00:23:10:13
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This is where we excel, through our commitment to innovation, which drives our ability to differentiate products, which leads to consumer loyalty. A strong brand can build trust and loyalty, leading consumers to stick with their preferred brand to see value in things beyond just price and to attract new consumers. As brand recognition increases, this is particularly important in a fragmented market that is going to rationalize. In this chart, we could see our SHRED brand is the stickiest brand in Canada and outperforms average pre-purchase rates by a wide margin.

00:23:10:15 - 00:23:33:16
Unknown
So two things to remember is that brands aren't built overnight and that they retain their equity over time. So as the cannabis market continues to mature, long live brands will have outsized benefits, especially as the market rationalizes and consumers are funneled into a smaller set of brand choices over time.

00:23:33:18 - 00:23:58:23
Unknown
So now that you've got a bit of background on our core operations and brands, I'd like to get into the topic of strategic investments. We'll talk about investments into Organigram and how we use that capital, as well as our own investment targets, which garner competitive advantages and increased market exposure. We've seen substantial strategic investment in the cannabis sector since 2017.

00:23:59:00 - 00:24:32:24
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Major alcohol, tobacco and pharma companies like Constellation Brands, Altria, Jazz Pharma and Anheuser-Busch have collectively invested over $10 billion into cannabis companies, that help propel market caps in the cannabis sectors to dizzying heights at the time. However, few of these global investors have worked with their investees to create what we have since BAT's initial investment in 2021, which is a truly collaborative innovation platform and a springboard for international growth.

00:24:33:01 - 00:25:10:22
Unknown
In 2021, BAT made an initial investment into Organigram of $221 million. But it wasn't just a cash injection. We established the Product Development Collaboration and a dedicated research area at our Moncton facility called the R&D Center of Excellence. I'll let Borna get into more details of our continued collaboration, but BAT support didn't stop in 2021. At the end of fiscal 2023, we announced the $124.6 million follow on investment from BAT, this time focused on international growth.

00:25:10:24 - 00:25:38:06
Unknown
As many of you know, we closed the final $41.5 million tranche of this investment at the end of February of this year. Roughly two thirds of this follow on investment, or $83 million, was earmarked for the creation of our Jupiter Strategic Investment Pool, while the remaining $40 million was made available for general corporate purposes. The Jupiter Pool is unique in a few ways.

00:25:38:08 - 00:26:12:02
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It's a dedicated fund for the U.S. and international strategic investment. Jupiter was set up to deploy to deepen the strategic relationship between Organigram and BAT. Jupiter Investments are managed by Organigram and targets key strategic areas in cannabis globally, anywhere outside of Canada. So after our first two Jupiter investments into U.S based Open Book Extracts and Germany’s Sanity Group, roughly $60 million remains available to to deploy from the pool.

00:26:12:04 - 00:26:55:12
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So overall, BAT invested $345 million into Organigram while working with us to strengthen key areas of our business, such as enhancing our competitive advantages now and into the future through continued ability to commercialize the PDC joint research and the expansion into new markets. We believe that as the industry matures and is regulated in key markets like the U.S, for example, more of these kind of investments from CPG giants and pharmaceutical companies will materialize, which we anticipate would provide a lift in trading volumes and market caps for the sector.

00:26:55:14 - 00:27:30:07
Unknown
Now, when we think about making our own strategic investments, we always go beyond simple equity exposure and aim to gain some kind of competitive advantage, either in innovation or market access. First, I want to highlight one of our more recent and significant investments, our $21 million investment in German cannabis leader Sanity Group. Sanity represents our largest strategic strategic investment to date and increases our exposure to the rapidly growing German market by bolstering our supply agreement with the company.

00:27:30:09 - 00:28:04:13
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Sanity currently holds approximately 7% market share in Germany and has distribution in over 2000 pharmacies, a growing telemedicine platform, participation in recreational pilot projects in Switzerland, and has submitted applications for recreational pilot projects in six German jurisdictions. The German medical market is rapidly expanding since Germany's Cannabis Act was introduced in April of 2024, most estimates pegged the market's growth to around fourfold.

00:28:04:15 - 00:28:37:17
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To put that into perspective, Germany has a population of 80 million people. An estimated 10% of the population consumes cannabis, but only 0.5% of the population are registered as medical cannabis patients. By comparison, other maturing medical markets like Australia and Israel see 2 to 3% registration rates. This supports the case that there remains a very compelling growth opportunity in the German medical cannabis market alone.

00:28:37:19 - 00:29:14:00
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We also stand to further expand our supply to the German market through our agreement with Sanity Group. Upon receiving our EU-GMP certification for our Moncton facility, which we expect in the coming months. All else remaining equal, as our international shipments increase, so do our margins. Since international exports are not subject to excise duties. That said, and let me make this clear, growing our margins through cost cutting initiatives focused on efficiency will always be a priority.

00:29:14:02 - 00:29:47:16
Unknown
The next strategic investment that is worth highlighting is the $8 million U.S that we invested in U.S based Phylos Bioscience. In a mature agriculture industry, growing genetically stable plants from seeds is industry standard. It's generally faster and more cost effective than the clone based methods commonly used in cannabis, and it's much more scalable in the long term. Our investment into Phylos provided us with access to seed based growing technology, which we are currently rolling out at our Moncton facility.

00:29:47:18 - 00:30:20:23
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As of last quarter, about 20% of our harvest in Moncton came from seeds. There are numerous potential benefits to seed based technology, which I'll let Borna get into in more detail, but suffice it to say, this investment is very exciting as it positions us at the frontier of a seismic shift in cannabis cultivation. While seed based technology is the next logical step in cannabis production, there will always be a place for clone based production, particularly for rapid trial and error in cultivar development.

00:30:21:00 - 00:30:31:02
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However, we are proud to be one of the very select few companies in cannabis that are advancing meaningfully in this area.

00:30:31:04 - 00:31:04:24
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Our other relatively recent strategic investments include Greentank Technologies, a Toronto based firm that has developed new vaporization hardware designed to solve common consumer pain points in vapes such as clogging and flavour degradation. This investment grants us exclusive use of Greentank’s new technology in Canada for an 18 month period upon launch. We also invested in Open Book Extracts, a US based company specializing in legal cannabinoid ingredient production.

00:31:05:01 - 00:31:31:10
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Both these two investments have the potential to support our growing business. Greentank’s technology may enhance our newly acquired leadership position in the vape category, while Open Book extracts may support our most recent growth initiatives: our entry into beverages in the US. So let me talk about that. Last week, we announced the acquisition of Collective Project, which fast tracks our entry into the beverage category.

00:31:31:11 - 00:32:05:11
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It leverages the strength of the Collective Arts brand in both Canada and U.S.. We immediately gained a footprint in the U.S. and can start consolidating U.S. revenue, and we will be able to leverage our Canadian sales team in Canada to deliver distribution gains across the country. Collective Project beverages are currently available in the U.S. in ten states in Minnesota, Ohio, North and South Carolina, Florida, Texas, Indiana, Tennessee, Georgia and Kentucky.

00:32:05:13 - 00:32:35:14
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It's also available in key retailers such as Total Wines and Top 10 Liquors. By the end of this year, we expect the products will also be distributed into Connecticut, New Jersey, Illinois and Alabama. In Canada, the products are currently available in Ontario, British Columbia, Saskatchewan, Newfoundland and Nova Scotia with distribution in additional provinces and key retailers expected to follow in the coming months.

00:32:35:16 - 00:33:05:09
Unknown
So here's what our updated distribution map looks like after our Collective Project deal, including the additional states and provinces targeted over the next year. We've come a long way since 2013. This is a massive difference to the first map I showed you. So what's next for Organigram? Well, we have a lot more work to do on the motif acquisition integration, and we will ramp up collective project with anticipated revenue growth in both Canada and the U.S..

00:33:05:11 - 00:33:32:07
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We will expand further in Canada. We will increase some of our core SKUs that currently are in less than 50% distribution to get them into more retailers across the country, and we'll look to extend our branded presence into Quebec through a vape introduction coming this fall. We will leverage our expected EU-GMP certification to increase international volumes and margins.

00:33:32:09 - 00:34:01:23
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We will complete further international investments through Project Jupiter and we’ll increase capacity to fuel our growth. Right now, we have expansion initiatives in Moncton targeting 13,000kg of additional flower over the next 18 months. Finally, we will reintroduce our brands abroad and expect to sell branded vapes into Australia by the end of this year. So what are we excited about?

00:34:02:04 - 00:34:34:14
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We'll start with that we expect that our Q2 consolidated financials with Motif will be our biggest quarter to date. And this is even before our key seasonality, which kicks off from 420 and runs right through Labor Day. We're excited for our full year fiscal year 2025, which will reflect over nine months of motif consolidation, realizing $5 million of motif synergies will have contributions from collective project and higher international sales.

00:34:34:16 - 00:35:04:12
Unknown
And finally, we're excited about the potential for industry reform with new elections and a shift in leadership. We believe any shift will be favorable to Organigram because while the market has experienced growing pains, we've only made our business stronger. We're taking a strong advocacy approach to position ourselves for the future, with strong government relations efforts and ongoing support of C3, our industry association.

00:35:04:14 - 00:35:33:08
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We expect to see excise stamping simplification. So what does this mean? We want to move to one national stamp instead of different provincial stamps. In today's macro environment, with increasing concerns about tariffs, there is a political focus on breaking down interprovincial barriers and there appears to be interest in removing this operational complexity, which cost the industry over $100 million.

00:35:33:10 - 00:36:08:11
Unknown
We also look forward to potential regulation changes, such as the implementation of the previously proposed excise duty reform down to 10% ad valorem, which would benefit our bottom line by tens of millions of dollars. If these changes take place, we would be significantly more profitable. And while I'm not as optimistic on this one, there is political interest in helping the cannabis sector to exploit a national cannabis export strategy and benefit from Canada's first mover advantage.

00:36:08:13 - 00:36:32:23
Unknown
We are still living in the early days of a developing sector with original regulations that have yet to change, but we believe they will. So to summarize where we are now, we are the largest cannabis company in Canada by market share with some of the leading brands and products across almost every product category with coast to coast distribution.

00:36:33:00 - 00:37:04:18
Unknown
We operate five advanced facilities located in one of the only federally legal cannabis markets in the world. We've already cut significant costs from our business and have a very clear roadmap to cutting further costs through motif synergies, increasing seed based production and larger scale. We have a clear path to higher margin sales with our expected EU, GMP certification and our global reputation as a trusted producer and manufacturer.

00:37:04:20 - 00:37:31:24
Unknown
We continue to be a top innovator in the space, supported by our product development collaboration with BAT. We are expanding globally, leveraging our Jupiter Strategic investment pool, and we are establishing a presence in the U.S. through the hemp Delta-9 beverage category. Organigram is proud to be Canada's leading pure play cannabis company. Our sole focus is cannabis. It's not alcohol.

00:37:32:05 - 00:38:03:02
Unknown
It's not produce. Its sole focus is cannabis. Our strategy is grounded in operational excellence, innovation and global ambition. We are committed to building a company that not only delivers shareholder value, but helps shape the future of this industry. We believe in cannabis. We believe in Canadian leadership, and we believe that with the right policies and players in place, this sector can become a growth engine for the Canadian economy.

00:38:03:04 - 00:38:23:23
Unknown
And on that note, I will wrap up. Thank you for your continued support. And now I'll transfer you back to Max. Thank you so much, Beena, for that in-depth overview of the company. One of my favorite parts of that is actually seeing the facilities. I've seen the facilities develop over time after we invested $29 million into them.

00:38:24:00 - 00:38:40:00
Unknown
And I think it really adds a lot of realness to the company. You've heard our story. You've heard us talk about, you know, all the wonderful things we're doing. But to see it, to see the scale, it really makes it real. And I know that’s something investors really want to see, and that's something Beena really wanted to share with them.

00:38:40:00 - 00:38:50:04
Unknown
Now I'd like to invite to the stage our chief financial officer, Greg Guyatt. It should.

00:38:50:06 - 00:38:54:04
Unknown
Expect.

00:38:54:06 - 00:39:18:06
Unknown
Good afternoon. Great to be with you here today. Many of you have heard my voice before on our earnings call, so it's really refreshing to be able to speak with you today directly. As Beena and Max mentioned, we are committed to more frequent engagement with this audience. Yes, we do read what's out there - tweets, Reddit, opinion pieces. Your feedback really helps us to understand how our story is landing.

00:39:18:10 - 00:39:42:04
Unknown
And that's why we're here to give you a business update and respond directly, especially as Organigram enters this latest phase. So I joined Organigram, just over a year ago, and the evolution since then has been truly remarkable. We've had major milestones thanks to our outstanding team, and that's helped us to solidify our position in the Canadian marketplace.

00:39:42:06 - 00:40:12:13
Unknown
Our momentum is real. We're focusing on translating it into two overarching objectives: one, sustainable cash flow. We have to be able to generate cash and support our business growth opportunities. And secondly, global leadership in cannabis. I want to start by highlighting some key trends from the past two fiscal years that really helped illustrate our growth story. Our path has not been linear, so it's important to acknowledge some of the headwinds that we faced and the challenging industry in which we operate.

00:40:12:15 - 00:40:38:14
Unknown
Then I'll walk through how we've adapted and what that says about the strength of our fundamentals and where we're headed. So from Q1 to Q3 of fiscal 2023, which you can see on the left side of this chart, we experienced the decline in net revenue due to several key headwinds. First, we are all aware of the intense competition and oversupply in this industry, which we lived for a couple of years.

00:40:38:16 - 00:41:09:05
Unknown
The market faced severe price compression, especially in flower, due to oversupply and fragmentation. A lot of LPs lowered their prices to try to maintain market share, including us, and that really reduced our revenue and increased the impact of our excise duties. The duty is a fixed price per gram, regardless of the price. As one of the largest flower producers, we felt this pressure more than most, with our excise tax going above 30% of our shipped sales.

00:41:09:07 - 00:41:34:15
Unknown
The next thing that we experienced was something very common in the industry. Inflated THC labeling by some of our competitors. Some companies were artificially boosting THC numbers on labels to attract customers. We chose not to follow suit, Prioritizing consumer safety and integrity, even though this put us at a disadvantage in a THC driven market. The next thing we had was the removal of Edison Jolts.

00:41:34:19 - 00:42:02:04
Unknown
This was one of our fan favorites back when they were launched and was considered a very innovative product at the time. Unfortunately, they were removed from shelves in Q3 of fiscal 2023 due to what we believe was a misclassification by Health Canada. If you recall, Edison Jolts were considered by us to be an ingestible extract. Unfortunately, the regulator determined that they were viewed as an edible, which meant that we could no longer sell it in the format that we had initially launched it with.

00:42:02:06 - 00:42:24:05
Unknown
And this is a big revenue contributor. So this was a huge challenge for us at the time. The next issue we had to deal with was a drop in international sales. Our sales dropped from 10.8 million in Q2 to 1.8 million in Q3. While Q2 was a record high. Our international shipments were later disrupted by the conflict in Israel.

00:42:24:07 - 00:42:53:00
Unknown
This led us to diverse our international customer base, a move which ultimately is now paying off as we've diversified that customer base and we're now seeing a large rebound in our international sales volumes. Despite these challenges, fiscal 2023 still outperformed fiscal 2022. Our net revenue was up by 11%. Adjusted EBITDA grew by 71%. And that's a very strong result considering the tough market that we were operating within.

00:42:53:02 - 00:43:20:19
Unknown
At Organigram, we take a balanced, disciplined approach to growth, one that's built for long term sustainability, even in down markets. This is translated into a strong balance sheet cost discipline combined with strategic targeted investments, a long term strategy that can pivot when needed. And through all of this, we've stayed focused on building our competitive advantages for long term success. In fiscal 2023,

00:43:20:23 - 00:43:53:03
Unknown
we made significant targeted investments to boost efficiency, enter new categories, and strengthen our long term competitiveness. We invested in a number of key areas, cost reduction initiatives, automation and packaging and production, internal lab testing and remediation, and yield optimization in our garden. These improvements were aimed squarely at lowering our per unit costs and increasing operating efficiency. A major lever in improving margins on our path to profitability.

00:43:53:05 - 00:44:19:07
Unknown
Finally, category expansion. Pre-rolls, which are very important, which is a very important market segment for us. And we made a large investment into automated equipment for tube style pre-rolls, which is now another favorite among our consumers today. Our entry into this segment has been a major success and is a key driver of our revenue growth. Since Q3 of fiscal 2023, we've seen a steady upward trend in that revenue.

00:44:19:09 - 00:44:53:07
Unknown
Profitability is driven by gross margin, which we calculated as net revenue, less our cost of goods sold. Our Cost of Goods Sold includes direct input costs such as labor, water, electricity, etc. Ideally, as revenue grows, cost of goods sold should stay flat, or rise more slowly than revenue, widening the gap and improving our gross margin rate as a percentage of sales and I'm happy to say that's exactly the overall trajectory we're currently seeing, COGS have declined in dollar terms and should keep dropping as a proportion of net revenue,

00:44:53:09 - 00:45:31:00
Unknown
thanks to our scale, our operational efficiency, and a more balanced domestic and international sales mix. Our $29 million CapEx program helped to drive this, and through that program, we identified $10 million in annual cost savings, mostly through lower COGS and improved efficiencies in the garden. This was a solid return on our investment. By the end of 2024, we had already achieved $9.1 million of those savings, and over the last 18 months, we've consistently grown revenue and reduced costs proportionately as a percentage of revenue.

00:45:31:02 - 00:45:54:24
Unknown
While some quarterly fluctuation is expected, the long term trend is clear. We're scaling efficiently. Importantly, we've driven revenue growth without significant increases in SG&A. That's the gray line on the chart that speaks to the strength of our brands and our strong relationships with provincial buyers and retailers. Our largest operating expense line is G&A, which is the light blue line.

00:45:55:05 - 00:46:19:07
Unknown
And as you can see, it's remained relatively stable over the last several quarters. Few exceptions to the stability in G&A were in Q3 of 2023 and Q2 of 2024, and that was tied to our investments in our new ERP system. This has been a fundamental change in the way we're able to manage our business and the information we're able to to glean from our manufacturing operations.

00:46:19:09 - 00:46:40:12
Unknown
That's a long term play for efficiency and scalability. We are currently in the final phase of our ERP upgrade, and we expect that to complete that towards the end of this fiscal year. G&A costs started trending down in Q3 and Q4 in fiscal 2024, with a temporary spike in Q1 due to the Motif integration, which we expected. Going forward,

00:46:40:12 - 00:47:11:21
Unknown
G&A in dollars will rise with business growth, but as a percentage of revenue, we expect it will continue to decrease. Looking at the last seven quarters, we see a clear trend line of increasing shipped sales, increasing net revenue, decreasing proportional costs as a percentage of net revenue, larger margins and higher gross margin rate. And we've seen the impact of Q1 seasonality with the dip in our first quarter, which we expect to see typically in most years.

00:47:11:23 - 00:47:39:07
Unknown
Increasing adjusted EBITDA, we expect, will be further bolstered by our increasing scale. We anticipate year over year adjusted EBITDA growth in fiscal 2025 versus fiscal 2024, with quarter to quarter fluctuations due to seasonality. The fact is, people tend to buy more cannabis products in the back half of our fiscal year, i.e. the summer months and Q3, and Q4 is where we expect to see our highest sales period.

00:47:39:09 - 00:48:16:21
Unknown
Our recent acquisition of Motif Labs adds significant financial momentum and will be even more apparent when we report our Q2 earnings in mid-May. Here's how it helps. Revenue expansion will drive margin improvement, and adding an estimated $87 million to our annual revenue. By increasing our top line, we achieve economies of scale as through bulk purchasing and operational leverage, we'll get better fixed cost absorption by spreading our fixed costs across more units being produced and ultimately a stronger market position as the #1 company in Canada by market share.

00:48:16:21 - 00:48:39:05
Unknown
This will lead to more listings, better pricing power, and overall long term profitability. Our cost synergies are currently on track and in fact, they're currently exceeding our expectations. At the close of the deal, we identified $10 million in annual cost synergies, of which the first $5 million is expected to be realized in the back half of fiscal 2025.

00:48:39:07 - 00:49:10:04
Unknown
Now it's looking like we'll exceed that target as the integration progresses. These synergies are coming from the consolidation of logistics and warehousing through the acquisition of the London facility, which is a central Canada hub for key markets. We have shared procurement and supplier relationships and optimization of manufacturing and distribution operations. Owning more of our supply chain by in-housing hydrocarbon extraction and becoming one of the top THCA producers in the country,

00:49:10:06 - 00:49:37:12
Unknown
a key ingredient in infused pre-rolls. Historically, we had to purchase THCA from third parties. Now we're able to produce it ourselves and therefore significantly reduced the cost, which will have a nice margin benefit for us going forward. While we focus on driving margins, we continue to demonstrate strong year over year revenue growth. Another key lever in improving revenue and margins is the expansion of international sales.

00:49:37:14 - 00:50:04:05
Unknown
Here's why. Exported cannabis is not subject to Canadian excise duties, which significantly improves margins. As we scale exports, particularly to Germany and other EU-GMP markets, our blended margin profile will continue to improve. We will also begin to see the impact of our Collective Project acquisition as we begin to consolidate the U.S. revenue and also get the contribution from Collective Project in Canada.

00:50:04:07 - 00:50:34:11
Unknown
We have often said Organigram is one of the most disciplined and fiscally responsible cannabis companies in Canada, and our balance sheet supports this. We have not undertaken any unnecessary expansion and from our view, we have avoided the mistakes of overbuilding and over leveraging, which negatively impacted many of our peers starting in 2018. Unlike many companies in the space, we don't need to raise money to deleverage and we are using our capital strategically.

00:50:34:13 - 00:51:03:01
Unknown
We have continued to invest in strategic CapEx projects during the quarter, including our capacity enhancement upgrade projects in the garden, the Motif integration and investments on working capital support our upcoming busy Q3 and Q4. We have taken a measured approach which has preserved our balance sheet strength. It's reduced the risk to our business. It's allowed us to attract and deploy strategic capital in what's a very dry capital market for raising money.

00:51:03:03 - 00:51:27:00
Unknown
And it's enabled us to build a reputation as one of the most respected LPs in North America, led by seasoned cannabis and CPG executives. As of the close of the final BAT tranche at the end of February and the recent Collective Project acquisition, Organigram had over 100 million and pro-forma cash, including our restricted cash and short term investments.

00:51:27:02 - 00:51:52:05
Unknown
One of the most common questions we get is whether international expansion is our only growth lever. The answer is no, but it is a key strategic priority as the timing of rationalization in Canada has proven to be very unpredictable. Slower domestic growth is expected as the market has matured, and we expect to continue taking share and growing at a faster pace than the market, especially as other players exit.

00:51:52:07 - 00:52:26:16
Unknown
We expect to grow through a balanced mix of domestic innovation while the market continues to rationalize. We'll get margin expansion through cost control and scale, increased international volumes and strong execution in our core categories. We're not just betting on new markets. We are fortifying the fundamentals of our business in Canada and beyond. Canada. We recognize that many investors often view net income or net loss as a primary indicator of success or failure in any given reporting period, and rightly so for the most part.

00:52:26:18 - 00:52:51:24
Unknown
After all, net loss seems very straightforward and intuitive, especially compared to terms like adjusted EBITDA. For us, it's a little bit more complicated because our net loss includes a number of other adjustments, such as, fair value gains or losses on our financial instruments, as well as unrealized gains or losses on the various investments that we have. In Q1 of fiscal 2025

00:52:52:04 - 00:53:13:23
Unknown
We reported a $23 million net loss that the actual cash burn was closer to 8 million, and that includes 4.5 million in one time costs from the Motif deal. That means that from a strictly operational point of view, our cash burn was closer to 4 million, which paints a different picture than a net loss of 23 million.

00:53:14:00 - 00:53:44:20
Unknown
To get a clearer picture of performance. We focus on metrics that strip out noise and non-cash distortions, and financial instrument valuation adjustments, such as adjusted gross margin, adjusted EBITDA, cash flow from operations. And encouragingly, all three of these are on a general upward trajectory. It's also worth zooming out to look at seasonal trends. As I mentioned before, cannabis is a category where we typically see stronger sales in the second half of our fiscal year.

00:53:44:22 - 00:54:11:02
Unknown
So Q1 often looks soft compared to Q4, even if we're continuing to grow year over year. This year Q1 of fiscal 2025 was actually a pretty good quarter compared to the same period last year. But in comparison to Q4 of fiscal 2024, it didn't look as strong because of that seasonality. We expect that to continue this year and Q3 and Q4 this year will be our strongest periods for the year.

00:54:11:04 - 00:54:41:17
Unknown
Looking ahead, we are confident in our position. We believe we have the runway. We need to continue our progress towards consistent, sustainable profitability. We've already demonstrated periods of positive cash flow from operations, a measure of the actual cash generated from our core business, which adjusts net income for non-cash and working capital changes. In fiscal 2024 we delivered $3.9 million in cash flow from operations, and we will exceed that number in fiscal 2025.

00:54:41:19 - 00:55:10:15
Unknown
Here's why revenue is growing. And we've entered new markets and new segments. Our margins are expected to continue to improve in fiscal 2025 and beyond, particularly in the back half of this year, Thanks to the synergies from the Motif transaction, as previously mentioned, the improvements and increase in our seed base, cultivation efficiencies, our international shipments and overall economies of scale as the business has continued to grow over the course of the last year.

00:55:10:17 - 00:55:37:06
Unknown
Our cost base allows us to grow without bloating our SG&A line. Recurring cost savings are being realized and will compound over time. Capital investments were front end loaded, so future CapEx will be more targeted and more efficient. For this fiscal year, we expect 8 to 10 million of sustaining or improvement CapEx and up to 16 million for capacity enhancements over the next 18 months.

00:55:37:08 - 00:56:00:13
Unknown
Also, we are close to completing the final phase of our ERP implementation, which I mentioned previously, including the integration of Motif, which will shift from major investments in ERP and to more maintenance mode, and will continue to see the cost savings resulting from that in future periods. Our focus remains on generating real, sustainable value through cash flow efficiency and profitable growth.

00:56:00:15 - 00:56:33:15
Unknown
That's how we define progress and we're well on our way. To summarize, we've made disciplined investments in automation, efficiency and R&D. We've scaled revenue organically and through Motif, and synergies are ahead of schedule. And we've turned the corner on profitability and expect to start delivering more reliable EBITDA and cash flow from operations in the ensuing quarters. We've avoided major sector missteps and have come out stronger, and we have a clear line of sight to sustainable growth.

00:56:33:17 - 00:56:56:05
Unknown
But many investors are still asking why is the stock price down so much? Well, I can't predict where the stock price is going on a day to day basis. But beyond the current macro geopolitical environment that we have today, we're also negatively impacted by sector wide issues, in particular regulatory uncertainty, particularly in the U.S., which is an important value driver in our industry.

00:56:56:07 - 00:57:20:11
Unknown
We stay focused on what we can control. Building a sustainable, profitable business. Creating brands and products that consumers love, and growing with discipline and keeping our shareholders in mind. That said, we don't believe our current market cap reflects the true value of our business, which is now trading below even our tangible assets like our facilities and our cash.

00:57:20:13 - 00:57:45:04
Unknown
That's a tough reality of being a pioneer in a new industry and as a public company, our stakeholders share in that risk. But we share your goal, realizing value and generating long term returns. Here's what we are confident in. Many cannabis companies in North America probably won't be here in 5 to 10 years. Organigram Global is positioned to stand the test of time.

00:57:45:06 - 00:58:10:14
Unknown
One final point: in fiscal 2024, we paid a whopping $87 million in excise duties. That's 35% of our shipped sales. A shift to a 10% ad valorem excise duty on flower could be transformational, not just for us, but for our industry as a whole. Imagine the growth potential for both the Canadian sector and Organigram under a fairer, more business friendly regime.

00:58:10:16 - 00:58:31:11
Unknown
We are hopeful that a new government will review this policy to support Canadian businesses and protect our position in the global cannabis movement. Thank you very much. We look forward to hearing your questions. And with that, I'll turn it back over to Max. Thank you so much, Greg. And you're surely, surely no longer just a voice on earnings calls after this.

00:58:31:12 - 00:58:57:12
Unknown
Thank you. And, you know, I'd also like to say that it's really interesting to hear Greg's perspective. Because when you zoom out and you look at our trajectory, it really supports the story that you're saying as well. And part of that story is, of course, innovation. So last but certainly not least today I'd now like to invite to the stage Borna Zlamalik, our Senior Vice President of Research, Development and Innovation.

00:58:57:14 - 00:59:29:14
Unknown
Thank you so much. Thank you Max. Excited to be here today to talk about innovation and how Innovation Thinking and Design Thinking is transforming Organigram and the cannabis industry. At Organigram, we define innovation in two ways. There's capital “I” Innovation: bold, transformational thinking rooted in ideation. Cutting edge science, ingenuity as a business enabler. This is how we build innovation into our DNA, how we operate and deliver value.

00:59:29:16 - 00:59:57:11
Unknown
Then there's lowercase “i” innovation. These are the award winning awesome products, smart, convenient, cool features, products that genuinely delight consumers and solve key pain points. Most companies focus only on their next products: another flavour, strain, aroma. We think bigger. How innovation powers our entire enterprise. Blending both forms gives us a sustainable competitive advantage. The four pillars of innovation are

00:59:57:11 - 01:00:26:01
Unknown
Proprietary seed to brand product development platform. Seeds, a new frontier in cannabis cultivation. Monetizing innovation: this is our award winning innovation in product platforms. And finally innovation underpinned by science, which is the BAT product development collaboration that Beena spoke about. These four pillars work in unison to deliver disruptive innovation to current cannabis consumers. A runway for future consumers as cannabis goes mainstream.

01:00:26:03 - 01:00:53:08
Unknown
So let's dive in with our proprietary seed to brand product development platform. Since 2021, we've been building a vertically integrated seed to brand development platform that consolidates our innovation capabilities from genetics all the way to finished goods. Here's what it includes. We started with plant science and our biotech lab that feeds our robust and broad genetics portfolio. We have scaled high throughput extraction to extract those cannabinoids.

01:00:53:10 - 01:01:19:21
Unknown
Then we have rigorous cannabinoids safety validation bioavailability research to ensure to ensure the highest safety standards. This then moves through to foods and sensory science to develop and test the product experience. And then finally new product development where the innovation comes to life. We design, manage and control innovation across the entire supply chain, which is vital in a regulated market that behaves like CPG.

01:01:19:23 - 01:01:50:20
Unknown
We work on 200 plus active projects per year, resulting in a new product launch almost every three days, on average 140+ launches annually across Canada. Cannabis is a unique space. It has the speed and churn of consumer packaged goods, but with the manufacturing tolerances of pharma and the regulatory burden of tobacco. Innovation in this environment is difficult, but the way we have structured our innovation platform allows us to meet the demands of the market.

01:01:50:22 - 01:02:14:24
Unknown
We're launching flower, pre-rolls, vapes, concentrates, hash on the traditional cannabis side and gummies, lozenges and most recently, beverages on the ready to consume sides. This will change over time as consumers slowly set on certain categories and the category begins maturing. But for now, we need to be able to compete across that range, to be able to grow and scale.

01:02:15:01 - 01:02:42:24
Unknown
Let's shift to our second pillar, which we consider the new frontier in cannabis cultivation. Seed based production is just beginning to scale, and Organigram is leading the charge in this seismic shift in agriculture. Seeds aren't just about producing high quality, high potency flower, they're also about profitability. This is one of the biggest opportunities in cannabis. Seeds. Every single vegetable you see in a grocery store comes from seeds.

01:02:43:02 - 01:03:13:06
Unknown
You don't grow tomatoes from a clone. You simply couldn't scale it. Cannabis cultivation began with clones out of necessity to replicate strong land race. Genetics increase potency. Get the right aromas, get that hype cultivar out there into the market. But to scale, the industry must evolve and the evolution requires stabilized seed genetics. Currently, almost 20% of our Moncton garden has already been converted to seed based production, which will shift over time as business needs dictate.

01:03:13:08 - 01:03:46:20
Unknown
We're actively validating more than 40 seed varietals, specifically auto flower seeds, and we're matching the breadth, aroma and potency of our traditional clonal varieties, but in seed format. We're also working with our partner Phylos to scale ultra high potency cultivars rich in minor cannabinoids like THCV, CBG, CBC. And this not only allows differentiation ability to develop products against the variety of mood states, but also highly efficient extraction of these cannabinoid for extremely valuable extracts.

01:03:46:22 - 01:04:16:02
Unknown
The core benefits of seed based cultivation. Firstly, faster maturity, increased turns. The seed grow rooms are now cycling 7.2 times per year, up from 5.5 cycles. This is because there is no pre-veg, there's no prop, there's much less labour required to actually maintain those plants. We've achieved over 50% labour reduction. This leads to lower costs per gram and stronger margin economics.

01:04:16:04 - 01:04:46:00
Unknown
In addition seedlings provide healthier and more vigorous plants. They're growing from original genetic material, not cuttings. After just three weeks, as you see in this image, they outgrow clones significantly. They're more resilient to disease specifically like powdery mildew. And this de-risks are cultivation operations. They also provide a predictable uniform growth. The varietals we've scaled are genetically identical, enabling consistency in cultivation and care.

01:04:46:02 - 01:05:11:06
Unknown
This shift not only improves margins and efficiency, it also enables us to launch truly global brands. Take our cultivar Limelight, for example. It's been a workhorse in the garden for close to a decade. One of the longest running cannabis cultivars in Canada. By converting Limelight into stable F1 hybrid seed, we'll be able to grow the exact same product in Germany and Australia,

01:05:11:08 - 01:05:40:22
Unknown
obviously in Moncton, New Brunswick with consistency. Same spec, same aroma, same potency, regardless of location. This is what I call capital “I” innovation. Consumers don't care that we can turn and grow rooms seven times per year instead of five, but investors do because it improves unit economics, scalability, and profitability over time. At Organigram, we are monetizing innovation, and this is our third pillar of the day.

01:05:40:24 - 01:06:09:15
Unknown
I like to call it weaponizing innovation. This is at the heart of our product development philosophy. It's about building product platforms that can produce multiple products, support various business lines, and amplify margin performance. Let me give you a few examples. SHRED. Everybody knows SHRED. SHRED was our first major platform success in 2021. It wasn't just the new product, it was a new cannabis proposition and a new cannabis experience.

01:06:09:17 - 01:06:39:13
Unknown
It was based on an aroma positioning, not strain names or THC percentages. We pioneered a consumer friendly approach that emphasized flavour, not cultivar. It was more approachable and less intimidating for newer users. We created a proprietary blend recipe that combines specific flavor types and exact ratio for different SHRED blends. This allows flavour consistency and operational efficiency. Because we're not dependent on single cultivars,

01:06:39:16 - 01:07:06:24
Unknown
we can utilize all of the cultivars that are in the garden in specific proportions. Our blends deliver the same flavour profile, batch after batch, year after year. Something rarely seen in cannabis. In fact, Tropic Thunder has been in the market since 2021. That's almost five years with the exact same consistent flavour, consistent aroma, and a cult like SHREDhead following.

01:07:07:01 - 01:07:37:18
Unknown
This is what builds brand trust and loyalty. Today, SHRED drives over $250 million in revenue spanning categories from milled flower, to vapes, to edibles. A true platform brand. Another stand out innovation is our Hash, Rip Strips. We took a millennia old product, Hash, and revolutionized how it's consumed. Within 12 months, it doubled the Canadian hash market and earned us our second innovation of the year award in 2023.

01:07:37:20 - 01:08:04:19
Unknown
This was innovation rooted in deep consumer insight and platform thinking to the consumer. This was an innovative, personable, discreet, convenient reimagining of hash. But behind the scenes, we developed a proprietary production method affectionately known as the HashBot 3000. This is a high precision cutting and scoring robot, allowing us to produce Rip Strips efficiently and at scale. It increased throughput for all of our hash SKUs, actually.

01:08:04:19 - 01:08:33:13
Unknown
It improves our margins across the board by allowing us to produce close to five times more hash using the same equipment platform that was designed both for innovation but also for the entire hash and concentrate portfolio. This is an example where design thinking was not just consumer facing, but also deeply integrated into manufacturing efficiency. And yes, it's patent protected, ensuring we preserve our advantage.

01:08:33:15 - 01:09:01:15
Unknown
Since 2021, we've transformed our portfolio from close to 95% flower in 2021 to nearly a 50-50 split today between traditional flower and ready-to-consume products like vapes, gummies and lozenges. This diversification couldn't have happened without our platform approach to innovation. I like to think of cannabis as the dairy industry. Raw milk gets turned into milk chocolate milk, cream cheese.

01:09:01:17 - 01:09:22:23
Unknown
both Kraft cheese, processed cheese, yogurt. But there's also the molecules left behind, the proteins and the caseins that make it into whey, into brining acids, etc.. Cannabis is very similar, and this is what we've tried to create in our business. This is for the good of the consumer, but also for the investor. We take our high quality flower,

01:09:22:24 - 01:09:49:01
Unknown
which we obviously sold as flower and pre-rolls, IPRs as flower on its own. We then take the trim and lower grade material, which we turn into vapes, edibles, beverages via our extraction processes. But we don't stop there. After the secondary and tertiary extraction methods, there's still waste biomass that's left over. What does the future look like? We see a world where the rest of our biomass gets converted into paper jars,

01:09:49:01 - 01:10:19:07
Unknown
in partnership with Canadian pulp and paper manufacturers. This would allow 100% biomass monetization, all powered by innovation. This is what monetizing innovation is all about. The cannabis category is complex, fast moving, very volatile. Right now we face shifting consumer behaviors, and great aggressive pricing pressures. But by focusing on innovation platforms, not just single executions, we don't just survive.

01:10:19:08 - 01:10:31:09
Unknown
We thrive. Finally, I wanted to shift to our last pillar of innovation, which is innovation underpinned by science. The BAT Product Development Collaboration.

01:10:31:11 - 01:10:58:02
Unknown
In 2021, we launched a product development collaboration and partnership with British American Tobacco with a clear mandate to discover and validate next generation cannabis technologies, with a particular focus on Noncombustible, ready to consume products. From an innovation standpoint, the investment allowed us to create and expand our internal R&D capabilities with state of the art equipment and processes, greatly increasing our ability to launch.

01:10:58:04 - 01:11:26:23
Unknown
We developed the world's first Cannabis Sensory Lab, which is now powered by an employee pool of close to 200 trained expert panelists, allowing us to assess flower gummies, vapes, beverages in real time. The Biotech Lab we created contributes to cell biology, tissue culture, genomics, molecular biology capabilities, which are currently driving efforts in powdery mildew and markers of interest discovery that will power Organigram’s

01:11:26:24 - 01:12:02:05
Unknown
breeding and phenotyping needs. On the extraction side, the state of the art Extraction R&D Lab allows us to create methods and optimize everything from CO2, hydrocarbon, ethanol extraction all the way to solventless, as well as isolation. We conduct deep cannabinoid, scientific and consumer duty of care research, and our research extends much further beyond just development. We are deeply invested in consumer safety, scientific validation and effect based product development.

01:12:02:07 - 01:12:27:03
Unknown
The first success coming out of the product development collaboration is our Nano emulsion technology, and this is truly a breakthrough platform that's going to feed a number of products. Currently, we're rolling it out in gummies and soon it's going to be leveraged in beverages. This isn't just hype, it's backed by what we understand to be the most robust study ever conducted on a recreational cannabis products.

01:12:27:05 - 01:12:58:06
Unknown
Effectively, we take the cannabinoid molecule, and then we break it apart using microfluidizers into a billion little pieces, allowing for easy and efficient transfer through the liver. The Nanoemulsion, which was validated via a 19 day in clinic study, resulted in an absolutely incredible performance. Here we see the gummy curve in blue, 50% faster onset, a reliable 20 minute activation time.

01:12:58:08 - 01:13:21:18
Unknown
The onset curve matches the experience of alcohol beverages in an edible. The beverage data shows it's even faster in beverages with a faster onset time as well. Nearly double the availability, meaning more cannabinoids absorbed. It solves two of the most consistent consumer complaints. When will this hit. Why do I need to take so much?

01:13:21:20 - 01:13:48:01
Unknown
These are all things that make consumers nervous and that are currently a barrier to adoption. We plan to expand this platform into additional cannabinoid formats, varying effects and duration profiles, and future form factor innovation. If you're trying to create a beverage where the only other competitors alcohol, it better have a similar onset and performance profile to gain consumer adoption.

01:13:48:03 - 01:14:24:19
Unknown
It'll certainly be a differentiator for a collective project. I want to take a moment now to talk about safety and industry leadership. We've also used our PDC, our Center of Excellence, to enhance our toxicology protocols, which were already leading in the industry. We have enhanced our product stability research. We have also used our scale and size and are strong partnerships with the industry to set suppliers standards, especially for terpenes and extracts, where the two biggest terpene suppliers in North America follow the same toxicological standards as we do.

01:14:24:21 - 01:14:34:02
Unknown
We are setting the industry benchmark for safety, and our partners are beginning to adopt and champion them as well.

01:14:34:04 - 01:15:03:05
Unknown
We are officially competing at a global CPG level, and this is all powered by our innovation efforts. These efforts demonstrate our commitment to long term category developments, global competitiveness, science led consumer product innovation. We're not here to make trendy products... well, we are, but we're building an infrastructure and credibility to compete on the same level as multinational CPG companies.

01:15:03:07 - 01:15:28:21
Unknown
The future of cannabis is not just about high octane experiences. The evolving consumer covers a range of ages and needs. The cannabis consumer of tomorrow is health and wellness conscious, purpose driven, seeking functional effects and not just recreational highs. And don't get me wrong, we're all seeking recreational highs as well. Looking to integrate cannabinoids into daily rituals is a big part of our mission.

01:15:28:23 - 01:15:57:04
Unknown
We're already seeing signs of this shift, and Organigram is equipped to meet that demand via our innovation platform. After our last in-person investor day in Moncton, an analyst wrote about Organigram that we are innovating to win and winning innovation, and I couldn't agree more. Our design thinking and our innovation approach is not just about powering products, it's about shifting our business and shifting the category as a whole

01:15:57:09 - 01:16:25:19
Unknown
towards that future consumer, thank you very much. Thank you Borna. Max. Now, personally, I'm seeking recreational highs and functional effects, but that's just me. Anyway, that was great. I'm so glad everyone stuck with us for this long. We're going to take a quick reset for our Q&A session, and as a reminder, you can scan the QR code on the screen to submit a question at any time or visit slido.com and enter the code OG investors.

01:16:25:19 - 01:16:28:10
Unknown
So bear with us one moment.

01:16:30:04 - 01:16:51:12
Unknown
All right. Thank you, everyone, once again for joining us today. And thank you for your patience as we work through some of the technical difficulties at the beginning of our presentation. We;d now like to kick off our live Q&A. And in addition, I'd also like to welcome to the stage Paolo DeLuca, the Chief Strategy Officer at Organigram. So without further ado, let's get into our first question.

01:16:51:14 - 01:17:11:10
Unknown
And, I think this one, I will, I'll give it to Greg. Greg, investors want to know why we haven't announced a share buyback to support our stock? A great question. So share buybacks can be a great tool, for more mature companies. And it's, a way to potentially increase shareholder value for us. We're a company that's in growth mode.

01:17:11:12 - 01:17:30:05
Unknown
And we've we've always looked at that. Well, what's the best way to allocate our capital? We're investing in R&D. We're investing in product development, sales and marketing. In our view right now that's what we need to do to support our growth. And maybe down the road as a more mature company, we could think about share buybacks. But right now, the investments in our products and our growth is more important.

01:17:30:07 - 01:17:52:08
Unknown
Great. Makes total sense. Now we'll move on here. To a question about beverages, I think, Paolo, maybe you can speak to this, how much growth potential do beverages have for Organigram in Canada and In the US. Yeah. So right now, beverages in Canada is a relatively small part of the overall mix. It's about 2% of, of what’s called the Canadian market, which is just under $6 million.

01:17:52:10 - 01:18:15:21
Unknown
But we think that's limited right now. Only because of the, the format that it's sold. Essentially, it's in, cannabis dispensaries, which are not necessarily friendly to a lot of, kind of new consumers. If you look at the US where, cannabis beverages are now being sold in more traditional retail outlets like liquor stores or convenience stores, the market's a lot bigger, even on a per capita basis.

01:18:15:23 - 01:18:42:21
Unknown
In the US, by way of example, the market's already expected, to surpass $1 billion in sales this year. And Euromonitor has it going to about $4 billion. And so we think that in Canada, that will also, match in time as the regulations, relax and allow for beverages, which we think is actually the, the best category to, to first exit that kind of limited dispensary model in Canada.

01:18:42:21 - 01:19:09:12
Unknown
So, we think it's a very, a very big market and growing, another data point in the US, I'll give is, Top 10 Liquors, which is the, liquor chain, liquor retailer in Minnesota, has allocated, I think something like 10% of its, footprint or even less, to hemp derived beverages. And, it's already surpassing vodka sales, bourbon sales, craft beer sales.

01:19:09:14 - 01:19:38:14
Unknown
So it's a, a category that will bring in new consumers. The soccer mom is the kind of prototypical consumer that's, entering in the category there. So, I think it's a great category, and we're very excited about its growth. Right. I would just like to add just a point on this, which is, you know, we saw last year in Alberta, they started to allow, certain cannabis products to be outside of the dispensaries outside of the retailers, at events.

01:19:38:14 - 01:20:03:07
Unknown
And we've also been discussing with Cannabis New Brunswick, and they're talking about potentially getting looking forward to on-premise options with cannabis beverages. So we really think we're on the cusp of changes in regulations over the next few years that should explode the market in Canada, which is why we're pretty excited about what's happening in the US and the potential for what will happen in Canada.

01:20:03:09 - 01:20:21:11
Unknown
And we’re in place there actually, because, with the nano emulsion that we've developed, which gives us a similar kind of onset curve as alcohol, I think that's going to be a game changer. Right. Because what the consumer needs is really the reassurance and the knowledge of what their experience is going to be like. And the technology that we're developing is kind of matching that.

01:20:21:11 - 01:20:40:24
Unknown
Right. So providing a familiar ritual. Right. Because the common question I get now is why? Why has beverages been so slow to take off in Canada? Is it is it a product issue? It sounds like it might be a mix of regulatory and product. Well, you know, in the early days the products weren't very good. And really the technology has come a long way and the products are a lot better.

01:20:40:24 - 01:21:02:24
Unknown
And the nano emulsion technology really helps deliver the, the cannabinoid and, and in a way that it the products just tastes great. You should try some of our Collective Project offerings. Great. I'll switch gears for here for a minute. This is a common question I get to the investors@organigram.ca email address, and Beena, I'll give this one to you.

01:21:03:01 - 01:21:32:17
Unknown
When is management going to begin investing in their own company? If the share price is so cheap? It's a good question. You know, the reality is, we have pretty strict governance, in the company. And we, we have access to nonpublic, material information. And because of that, we are often in blackout. As a matter of fact, I asked our legal team when was the last open window that management could actually invest in our stock?

01:21:32:17 - 01:21:56:21
Unknown
And it was back in September, so we're blacked out as we move into quarterly reporting, and we're blacked out when we're doing acquisitions, because we obviously know what's coming and what we're working on. And as you you've seen, we did the Motif acquisition. We just did the Collective Project acquisition. It makes for a limited amount of opportunities for management to buy, stock on the open market.

01:21:56:23 - 01:22:20:20
Unknown
That being said, we do have a significant amount of our compensation that's tied to our stock performance, and that makes sure that we're aligned with our shareholders to make sure that it's as important to us, the performance of the company. Right. And speaking of our M&A strategy, we often issue shares when we purchase other companies. Investors are also interested in hearing a little bit about, potential future dilution.

01:22:20:20 - 01:22:38:18
Unknown
So perhaps, Greg, this is something that you can speak to. Yeah. I mean, look, we're always evaluating our capital structure. You know, the last financing we did was at, $3.23 just about a year ago now. So we thought that was a good value test to share that. But in terms of plans, we don't have immediate plans to issue more shares today.

01:22:38:18 - 01:23:02:20
Unknown
But, you know, if the new project comes up or M&A deals, there could be shares issued upon something like that. So we're always evaluating the capital structure. And, you know, we're thinking about our shareholders in terms of what's going to be the best value on value creation opportunities for everybody. Paolo would you have something to add? Not just that, the last two acquisitions that we made, the majority of the company, the consideration was actually cash, not shares.

01:23:02:20 - 01:23:23:13
Unknown
And that cash was raised at higher levels, as Greg alluded to. So we're very cognizant of using shares and or cash in the right circumstance. So the cash that was used in those deals was raised at $3, above $3 a share. So we were very careful not to, issue too many shares. Right. So I want to switch gears here for a second again, and come back to innovation.

01:23:23:15 - 01:23:48:12
Unknown
This investor would like to know what's the next frontier of cannabis innovation. And are there any more category that we can enter and bring disruptive innovation to? I think Borna, that's, that one's to you. Sure. That's a great question. You know, on the flower side, obviously we're in a very unique position. We're about to hit our 4,000th commercial harvest, and we're sitting on close to 300 million data points about how our plants grow.

01:23:48:12 - 01:24:16:11
Unknown
And so we're really shifting gears in that direction on optimal yield, bud structure, flavour, aroma. But that sounds really kind of in the innovation territory of the category. And much of our scientific efforts are really focusing on ready to consume products, beverages, gummies. We feel very bullish on effects. So onset, longer affect, predictable offset. I don't think those are big opportunities that are going to bring a lot of new consumers to the category.

01:24:16:13 - 01:24:33:10
Unknown
I wouldn't say much about “is there other categories we should be in?” I think we're in more than enough categories. I think we really need to focus on how to make the consumer experience better and more predictable. I think that's what's going to bring in those people who are still kind of waiting on the sidelines and want to really participate in the category.

01:24:33:12 - 01:24:53:23
Unknown
And on that note, another investor would like to know, how do you see cannabis potentially being used 5 to 10 years from now? What changes do you see in consumer behavior on the recreational side or the medical side? That's a great question. You know, we're hoping for a category that can be, cannabis can be a part of like daily rituals, you know, like alcohol,

01:24:53:23 - 01:25:27:15
Unknown
other categories as well. And so in 5 to 10 years, we're already seeing now the younger generations of adults in their 20s, 48% of them, abstain from alcohol, 45% of them actively participate in cannabis. Our older generations, our seniors are rediscovering hash experiences, as an example, after 50 years of not participating in the category. So in 5 to 10 years, I see a world where people are going to be actively participating, solving certain moods, mood motivations that they're looking for, looking at wellness and health, as a solution as well.

01:25:27:17 - 01:25:45:24
Unknown
Great. Thank you for that. Another topic that comes up quite a bit with investors in the, in the old inbox is Sanity Group. We've obviously made a $21 million investment into Sanity Group and the German market, and some investors would like to know what is happening in Germany with regard to the new government. Maybe Paolo, you can touch on that again.

01:25:46:00 - 01:26:06:20
Unknown
Yeah. So, we're well-connected through Sanity Group with, with government relations and the insight and what might be happening there so far. No changes are really planned. Certainly nothing from a material perspective that would, limit the growth curve that we're expecting to see in Germany. That market last year was call it €450 million as the best estimate.

01:26:06:22 - 01:26:30:22
Unknown
I suspect it's already surpassing a run rate of $1 billion based on what I'm seeing in Sanity sales and their market share over there. Further Sanity is actually in the lead position for pilot projects on the adult use, recreational side. They have applications on, I think 5 or 6, different pilot projects in major, urban centers, including Berlin, Frankfurt, Hanover.

01:26:30:22 - 01:26:50:22
Unknown
And I think the other one is Bremen. Going by memory here. So, nothing suggests that growth is abating in Germany. We expect that market has the potential of at least, $3 billion. That's not even with the rec component to it. And, really, what's limiting the market growth there right now is the, availability of flower.

01:26:50:24 - 01:27:10:14
Unknown
So, you see, a lot of Canadian companies are now starting to shift their production into exports and Germany can also source flower from other international markets as well. But very excited about Germany. I think the the growth there is still, quite a bit of growth, to unlock. Right, obviously a lot of German cannabis users.

01:27:10:16 - 01:27:39:13
Unknown
A question that's just come through is: do you guys even smoke weed? I'm high right now. No, I'm kidding, I, I think most of us do consume the, the odd gummy from time to time. Yes. I'm a big believer in the beverages, so I have to say that's where my head's at. Well, I'm head of R&D and innovation, so obviously I partake in almost all the categories, but I've completely, removed alcohol from my diet because of that stuff.

01:27:39:13 - 01:28:08:20
Unknown
Got it. And I'm beverages, edibles and sometimes smoke. Got it. Well, it's it's good to know. I guess people would like to know. You know, what our experience is actually using the product. I want to switch gears here for a second, talk a little bit about the politics and the regulations around cannabis. And this investor would like to know why do we, and I guess the Canadian government they're referring to, keep selling out our Canadian cannabis companies with unfair taxes when they produce a lot of tax revenue, and slowly give away their competitive advantages on the international stage.

01:28:09:00 - 01:28:37:11
Unknown
Are we speaking with government officials about this? Perhaps you can speak to that. Sure. We're talking to government, all the time. And right now, as I said earlier, that the macroeconomic situation right now is that the government is listening to anything that is homegrown that could support the Canadian economy. When you think about the GDP, cannabis contributed $7.4 billion to Canada's GDP and to in 2024.

01:28:37:17 - 01:29:23:17
Unknown
When you compare that to the brewery industry, they contributed 2.6 billion. Or you compare that to the wine industry, it's 1.2 billion or lodging is 3.3 billion. So cannabis contributed 7.4 billion in 2024. When we reference these numbers with politicians, be it federal or provincial, they're amazed by that number and they think there's a great opportunity to leverage this in a world where we want to export product, we want to leverage Canada's first mover advantage because we're we've got a legal framework that we could export to different countries, and they're open to conversations now that they weren't open to six months ago, because obviously, the whole tariff situation has made, you know, how

01:29:23:17 - 01:29:43:16
Unknown
do we drive other revenue, export revenue. And it's really interesting. We've had a lot of meetings and there's an appetite for it right now. Thanks. I want to switch gears again and come back to a more finance related question. Greg, one of the things you discussed in your presentation was net income and how there are certain non-cash impacts there.

01:29:43:16 - 01:30:03:19
Unknown
And this investor would like to know, should we really not be focused on net income? Isn't this the most important profitability metric? So look, net income is obviously important. But it's important to understand what the components are and the reason we use adjusted EBITDA is to be able to compare our performance with those of our peers, because it's the most sort of standardized metric in the industry.

01:30:04:00 - 01:30:26:03
Unknown
When you're looking at our net income it includes a lot of valuation adjustments. So, all of our investments, get that fair value through the P&L, and that's unrealized gains or losses. So that creates volatility. But also we have financial instruments. For example, BAT has top up rights to be able to increase their investment in the company.

01:30:26:05 - 01:30:47:07
Unknown
Those top up rights have value as a financial instrument. So we have to value that every period, which creates a lot of noise in the P&L, which is which is non-cash. And that's really the reason we focus on adjusted EBITDA. Right. And while we're talking about, financial related questions, I often get this and I think there's a bit of confusion around, what is a shelf offering and what is an equity raise.

01:30:47:07 - 01:31:08:13
Unknown
So I know we've announced in the past, for example, a $500 million shelf offering. I think it expires in early 2026. But can you provide a little clarity for investors on what that actually means for the company? Sure. Well, our shelf expires in October of this year. So in fiscal 2026. And, it's a great question because a shelf offering is not actually, an offering itself.

01:31:08:15 - 01:31:31:15
Unknown
It's a prospectus that allows us to issue shares or debt or other instruments, on relatively short notice for when the need arises. So if we're working on a special project, if there's an M&A deal or something of that nature, we need to issue shares, a shelf allows us to file what's called a prospectus supplement, with which we would then be able to undertake whatever that offering is.

01:31:31:21 - 01:31:47:20
Unknown
So having a shelf really is about flexibility. If we go and do another shelf at some point, you know, when this one expires, it doesn't mean we're going to go out and raise a bunch of money and dilute our shareholders. It really means that we're preparing for the flexibility, for whatever event may come up.

01:31:47:20 - 01:32:08:10
Unknown
And it may be nothing. But, you know, if there's an exciting project comes up, that's accretive, then the shelf allows us to act quickly. Right. And speaking of investing and financing and raising capital, why haven't other big companies really come to the table when it comes to strategically investing in cannabis over the last few years?

01:32:08:10 - 01:32:27:05
Unknown
Aren't valuations low enough? This investor would like to say we need some good news in the sector. So maybe Paolo if you can touch on that. The first thing I want to mention is that we, we've actually had two investments from our strategic partners that they not only invested in us in 2021, but they also followed, and this is, British American Tobacco.

01:32:27:05 - 01:32:58:15
Unknown
They also followed on with, an investment that was staged over three tranches, but that was announced in the fall of 2023. So there has been, there have been instances where strategics have, doubled down or put more money in, which to me is a sign of confidence. I think the answer, the question though head on, is, when Biden got elected in 2020 and took office in January of 2021, there was what we call in the industry, the Biden bump, the valuations in the sector, skyrocketed.

01:32:58:15 - 01:33:21:01
Unknown
There was a, anticipation that legalization in the US would happen at a much faster pace. And unfortunately, the promise hasn't been fulfilled. Aside from really, making a recommendation to reschedule cannabis from schedule one to schedule three, which still hasn't happened. And there's not real clarity as to when that's going to happen.

01:33:21:03 - 01:33:40:21
Unknown
There hasn't been much progress on the file there. And the US being the world's largest market and really, a force of influence around the world, I think that disappointment is really, it's what's causing some of the strategic potential strategic investors from making that acquisition. But I will say that valuations in the cannabis space are very low.

01:33:40:23 - 01:34:04:02
Unknown
We have a lot of companies that are either, already EBITDA and cash flow positive or on the cusp of being so. And I think it's really what's affecting the industry right now is obviously the overall, negative downdraft from the macro events happening on with tariffs and everything else on the stock market. And what do you think the domino effect would be should regulation in the US solidify in the near to mid-term?

01:34:04:04 - 01:34:26:14
Unknown
You know, how does that really change the landscape for strategic investors? Companies like us, US companies. Well, first of all, it allows companies to to list on U.S. exchanges, which is obviously, a big, a big part of it, it allows banking to happen in the background. It allows, you know, regulations to be set by the FDA and so forth.

01:34:26:14 - 01:34:45:22
Unknown
It legitimizes the industry in a way that, it's greatly absent. So it's really the start of a very long domino. And, would be very welcome. I think, you know, we've seen that even any kind of rumor of a change in the US legalization can drive stock prices up by, you know, ten, 20, 30% in, in a day.

01:34:45:22 - 01:35:10:01
Unknown
So, a full legalization, if you know, God forbid, Trump on the golf course whisper something about cannabis legalization, we would expect there to be probably another uptick in cannabis prices. Yeah. I want to bring it back to Canada for a second. The Canadian market has been fragmented. We've experienced price compression. So, you know, I'd like to ask you, are cannabis prices in Canada finally stabilizing?

01:35:10:01 - 01:35:31:04
Unknown
Or are we through the worst of price compression and how the rising prices impact your fundamentals and the competitive landscape for the company? Well, sure. First of all, you go back three years ago and everybody talked about the cannabis mountain, the inventory that was out there. And there was a lack of retail stores at one point to get the product through.

01:35:31:06 - 01:35:54:07
Unknown
You know, it was an industry that came out of prohibition and nobody knew how to forecast it. No one knew how quickly, how much volume to produce. A lot of product was produced early days that wasn't really great quality. We've gone through a lot of change. The industry has matured. The supply and demand curve has really changed. We’re no longer sitting on a mountain of cannabis.

01:35:54:10 - 01:36:24:21
Unknown
We're actually in a situation where there's a shortage of supply. As more and more markets all over the world are moving to medical, proving Medical access, Canada is starting to export a lot of product. We talked about, the product we're selling to Germany, to Australia, to the UK. The fact that we're looking at getting our EU-GMP certification that will help us to even drive more volume, other of our competitors and peers are out there selling product as well.

01:36:25:00 - 01:36:46:18
Unknown
And so there's actually been a bump up of flower prices. We've taken pricing on some of our flower SKUs. And that's because as supply has, you know, dissipated from the market, you know, obviously you have to take prices up. And so that's, you know, on the flower supply, we've kind of gotten past the curve.

01:36:46:20 - 01:37:08:14
Unknown
Not all of the cannabis categories are the same. We are still seeing a little bit of price compression in the gummy category. But again how do you compete with that is you bring in innovation. You bring in our FAST technology that separates us and differentiates us from, you know, the general THC gummy out there so that you have the opportunity to get some pricing.

01:37:08:19 - 01:37:29:13
Unknown
So this is a market I think we're getting into the maturity side of it. As I talked about earlier, that will help drive prices up. You mentioned innovation there. And I think it's an interesting point to bring up that, you know, we are seeing a bit of a trend of consumers shifting away from certain sort of sin recreational products into cannabis as well.

01:37:29:15 - 01:37:49:22
Unknown
But there is there is concern of the risks of cannabis. So perhaps, Borna, can you maybe speak to the risks of smoking cannabis and how we're addressing that? Yeah, absolutely. I mean, that's a great question. Smoking and combusting anything, at a high frequency comes with certain, certain adverse effects. And this is all very well known.

01:37:49:24 - 01:38:10:21
Unknown
I think the more important question is, what are we doing to ensure that we have the utmost care and, for safety, for our consumers? I firmly believe that the category, with all of the standards that we're putting in place with the way that Organigram is actually leading in terms of toxicological standards, long term thinking about harm and harm reduction, I think that's the way to view the categories.

01:38:10:21 - 01:38:34:22
Unknown
So I would say we've got a long way to go, but I think the category, especially Organigram, is taking the right steps to ensure that there's long term safety for consumers. Great. Thanks for that. I want to ask more a technical question related to our Q1 earnings. You spoke a bit about how our CapEx is frontloaded. This investor would like to know, can you can you talk a little bit through the anticipated phasing of our CapEx spend over the next fiscal year?

01:38:34:24 - 01:38:55:19
Unknown
Sure. So I previously mentioned that for the fiscal year, our basic CapEx for regular process improvement and automation is between $8 and $10 million Canadian. We have been spending on that so far this year and will continue to do so over the course of the rest of the year. So I'd say that's relatively even, through the rest of the year, through the rest of this year.

01:38:55:21 - 01:39:20:00
Unknown
The larger project, which we talked about of up to 16 million for productivity improvements, that's really two projects, one of which is underway today. And, so approximately half of that we expect to spend this year. And the second half, is over the next 18 months. So I'd say, you know, into the second or third quarter of next year when that's going to get completed.

01:39:20:02 - 01:39:46:08
Unknown
And just to build on that and back to my comments just earlier, part of the reason for the projects is because we want to add more capacity, more flower capacity to meet the demand, especially demand in international markets. So these two projects that Greg is talking about are all about getting us the extra 13,000 kg that I talked about earlier, about getting that capacity into our mix.

01:39:46:10 - 01:40:01:08
Unknown
Great. Thanks for that. So we're getting a little bit long in the tooth in terms of timing. We had a bit of a delay starting tonight. I want to be conscious of everyone else's time. So I have one more question in the queue. And this someone is obviously quite sharp watching this presentation, but they've noticed that we're all wearing Canadian flag pins.

01:40:01:08 - 01:40:27:18
Unknown
So, Beena, maybe you can touch on why we're doing that. You know, as I ended my comments earlier, listen, we believe in cannabis, but we really believe in Canadian leadership as the market leader, we believe there's work to do in government relations and advocacy for this industry. We think the time is now to capitalize on the political environment and really become a leader, a global leader in this sector and leverage this.

01:40:27:18 - 01:40:52:12
Unknown
And so we're proud to be Canadian. Our roots are in Canada. We're proud to have created this leadership position in Canada. But we want to take it to the world. We do have global ambitions, and that's why we rebranded Organigram Global. I think that is a fantastic note to end on. So I'd like to thank, first and foremost, our shareholders, for their support and for attending today's event.

01:40:52:14 - 01:41:09:22
Unknown
I'd also like to thank all of the amazingly talented people at Caramel Labs, for helping us produce this event. And as well, thank everyone at Organigram, including our wonderful senior leadership team for, making time for this event tonight and speaking to our investors. I'd like to remind everyone that if they'd like to follow the company, hear more about our updates,

01:41:09:22 - 01:41:31:17
Unknown
we are pretty active on social media. Predominantly X and LinkedIn. You can also email me questions directly related to the company at investors@organigram.ca. Okay. So with that, I will, conclude our inaugural Organigram Global Investor event. And I wish you all a very good evening. Thank you very much. Thank you. Thank you.