Good morning. My name is Joanna, and I will be your conference operator today. I would like to welcome you to Canopy Growth's Third Quarter Fiscal Year 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. I will now turn the call over to Sarah Pare, Vice President of Investor Relations. Sarah, you may begin the conference call.

Thank you, Joanna. Good morning. And thank you for joining us. On our call today, we have Canopy Growth's Chief Executive Officer, David Klein; and Chief Financial Officer, Judy Hong. Before financial markets open today, Canopy Growth issued a news release announcing the financial results for our third quarter ended December 31, 2023. The news release and financial statements have been filed on EDGAR, SEDAR and will be available on our website under the investors' tab. Before we begin, I would like to remind you that our discussion during this call will include forward-looking statements that are based on management's current views and assumptions. And that this discussion is qualified in its entirety by the cautionary note regarding forward-looking statements included at the end of the news release issued today. Please review today's earnings release and Canopy's reports filed with the SEC on the Canadian Securities Regulators for various factors that could cause actual results to differ materially from projections. In addition, reconciliations between any non-GAAP measures to their closest reported GAAP measures are included in our earnings release. Please note that all financial information is provided in Canadian dollars unless otherwise stated. Following remarks by David and Judy, we will conduct a question-and-answer session where we will take questions from analysts. And with that, I will turn the call over to David.

Good morning, everyone. And thank you for joining us to review Canopy Growth's third quarter fiscal '24 results. Completion of our Q3 marks the dawn of a new era for Canopy. We’re immensely proud of where we are today and feel strongly that Canopy is positioned for lasting leadership. We're 100% cannabis-focused, demonstrating consistent growth across each of our business units. We have a definitive meeting date scheduled for our shareholders to consider an amendment to our articles to create a new class of non-voting, non-participating exchangeable shares, which we expect to advance the Canopy USA structure. Let's now review our right-sized cannabis-focused business. With the divestiture of This Works in December 2023, our last non-aligned enterprise, Canopy is now 100% cannabis-focused and purpose-built for the markets of greatest opportunity. By focusing exclusively on cannabis and right-sizing our footprint, we strengthen our path to delivering sustainable operating profit and ensure we are well positioned to capitalize on what we feel is the greatest consumer trend of our lifestyle. While we're looking to the future with optimism, let's first review the dramatic and measurable improvements in the performance of our business that these actions have produced. To summarize, we've cut Canopy to size and are now delivering on improved gross margins, enhanced commercial execution, and are focused on demonstrating growth across all of our business units. This has enabled us to significantly improve our overall gross margins, with Q3 marking the second quarter in a row of margins in the mid-30s at the total company level. From this strength in base, we're generating growth backed by enhanced execution and consistent high-quality products. In Q3, our Canadian cannabis business delivered its fourth straight quarter of revenue growth. It's up 10% year-over-year when excluding the divestiture of our retail business. There are several contributors to this growth, but at the core, we're continuing to deliver great flower, which has been very well received by provincial cannabis boards, retailers, and most importantly, consumers, not to mention our staff. This is further validated by growth in our distribution, with an incremental 900 points added nationally during the third quarter, thanks to the quality of our flower offerings. I really can't overstate how proud we are of our flower, and demand for our high-quality strains, such as Tweeds, Kush Mintz, and Tiger Cake, remain at an all-time high, selling every gram we can produce. When it comes to flower, we feel that our platform is now dialed in. We have a pipeline of high-quality cultivars in the market and soon to come from both Tweed and 7ACRES. To meet the ongoing high demand for our flower, we're also working on ways to further increase yield from our production platform. We've developed a robust new product introduction cycle to win market share across priority categories, including pre-rolls, vapes, and soft gels. In pre-rolls, we're going to continue our record of success by launching new large packs, infused pre-rolls, and burners over the coming months. In addition, we have an exciting lineup of Tweed and 7ACRES vape products coming to market with differentiated flavor profiles, and we expect to truly delight consumers as we step firmly back into the vape category. For soft gels, an area of historic expertise at Canopy, we see significant potential to win share through recently launched and soon to come soft gel products featuring larger pack sizes and unique cannabinoid ratios. In addition to being a high-margin category, soft gels provide consumers with a discreet, convenient, and affordable method of precisely dosed cannabis consumption, and we feel Canopy is well positioned to achieve categorical leadership. Finally, as the foundation of our edibles portfolio, we relaunched Wana in the third quarter across Canada with very active retailer engagement. We also expect to drive additional growth through the introduction of new Wana products that addresses specific gaps in the current Canadian edibles market. Shifting to our Canadian medical business, this is an important margin-enhancing pillar of our Canadian strategy. We're especially proud of our medical team as they continue to drive ongoing assortment expansion in the spectrum store, including a wide range of exclusive products all backed by exceptional patient service. This strategy has led to record revenues on a daily, weekly, monthly, and quarterly basis, including in the third quarter. Importantly, these record revenues were achieved while improving margins. Sticking with medical, but shifting to our rest of world cannabis business, we reported another strong quarter with revenues doubling year-over-year. Our Australian team delivered its 12th consecutive quarter of record revenue. Additionally, shipments of proven Canadian strains, including Kush Mintz, Tiger Cake, and OG Delux, as well as increased educational training with medical practitioners contributed to growth in our Australia, Polish, and Czech medical cannabis sales in Q3. We see a ton of growth possible across international markets where we're already active and expect consistency of our flower supply, and the onboarding of new distribution partners will continue paying dividends across our international medical cannabis business. I'm pleased to report that STORZ & BICKEL also delivered a strong third quarter driven by demand for the new VENTY portable vaporizer, as well as the most successful Black Friday in the company's 20-year history, generating sales across STORZ & BICKEL's entire portfolio. The promotional week showcased a remarkable 55% increase in the number of devices sold compared to last year, driving strong VENTY sales despite the device not being discounted. Speaking of the VENTY, I can't say enough about this device. It's the best portable vaporizer experience available. I continue to be amazed by how quickly it heats up. But even more the vapor throughput, which at 20 liters a minute, is the closest thing you're going to get to the legendary volcano experience in a portable option. But don't just take it from me; the reviews and consumer demand for this device have exceeded all our expectations, and the VENTY is rapidly claiming its hero status within the portfolio. In fact, after our initial production run, we've had to add a second shift to further increase capacity and ensure availability matches the consumer demand, which shows no sign of slowing. Much like the iconic volcano, we expect the VENTY will be a central pillar of the STORZ & BICKEL portfolio in the long term. As with the rest of the S&B product lineup, it's important to reinforce that these products are truly premium and command a price point reflecting their quality. Some of our commercial businesses are demonstrating momentum and delivering impressive results. So let's talk about Canopy USA. Simply put, we're moving forward. We're pleased to report that we will be filing our definitive proxy statement on or around February 13, setting up a special shareholder vote for April 12. Following a successful shareholder vote, Canopy USA will be able to proceed with its anticipated acquisition of Jetty, Wana, and Acreage, finding synergies to accelerate growth through a unified multistate operating business. Looking further to the U.S. and the potential impact of regulatory reform on our strategy, as many of you know, in August, the Department of Health and Human Services communicated its recommendation that cannabis be rescheduled to schedule 3. This was a welcome development, and we're cautiously optimistic that the DEA will in the near term provide its recommendation and initiate this process. Moving cannabis to Schedule 3 would be a significant boost for the U.S. assets held by Canopy USA and for Canopy Growth. Through the removal of Section 280, we expect value appreciation across our U.S. assets, which would see a significant financial boost through reduced corporate income taxes, improved cash flows, and strengthened balance sheets. We also believe moving cannabis to Schedule 3 would build momentum behind other efforts to reform cannabis regulations in the U.S. While we continue to advocate for these high-potential catalysts, we remain focused on operating our business and demonstrating growth today. We are a company with a resolute focus on cannabis, attractive gross margins, lower operating expenses, a growing top line, and a significantly stronger balance sheet. Canopy USA is moving forward, and we look forward to a successful shareholder vote on April 12. In summary, we believe Canopy offers shareholders a unique opportunity to gain exposure to arguably the most exciting consumer product trend of our time into the fastest-growing cannabis markets in the world.

Thank you very much, David. And good morning, everyone. I will start by reviewing our third quarter fiscal '24 results, including the significant year-over-year progress we've continued to make across our P&L this year. I'll then discuss additional actions we've taken to improve our balance sheet and cash flow along with our priorities and outlook for the balance of fiscal '24. So let's begin with our third quarter results. Q3, like Q2 before demonstrated a substantial improvement in profitability and cash flow reduction that our right-sized cannabis-focused business can deliver. Canopy delivered consolidated net revenue of $79 million in Q3, which is up 6% compared to Q3 of last year, when excluding Canada retail divestiture. Main drivers of revenue excluding retail divestitures were Canadian cannabis revenue, which increased 10% compared to a year ago and were up sequentially from Q2. Rest of world cannabis sales grew by 81% year-over-year in Q3, and STORZ & BICKEL grew its revenue by over 50% compared to the last quarter, driven by the launch of VENTY. Consolidated gross margins in Q3 were 36%, a significant improvement compared to 6% last year. The biggest driver of improvement was the business transformation initiatives executed in Canada which have meaningfully reduced operational costs. Q3 adjusted EBITDA was a loss of $9 million, an improvement of 82% versus last year and a 25% improvement over the $12 million adjusted EBITDA loss in Q2 of fiscal '24. Free cash flow showed an outflow of $34 million, an improvement of $44 million compared to Q3 of last year, and nearly a 50% improvement versus the last quarter. I'd like to now review the results by our key businesses in more detail, including progress against our path to profitability. First, Canada Q3 net revenue was $40 million, the third quarter in a row of sequential quarterly revenue growth. Canadian medical sales continued to grow strongly, increasing 11% compared to last year, driven by increased assortment of high-quality products, including the introduction of Wana brands in August. Our adult-use B2B business was up 9% compared to last year, with revenue growth during the quarter driven mostly by the growth of large pack flower offerings from Tweed, as well as the addition of Wana edibles. Canada's gross margin in Q3 was 28%, and cash gross margin, adding back non-cash depreciation costs, was 40%. Similar to the last quarter, the biggest driver of year-over-year improvement is the cost reduction from the Canadian business transformation initiatives. Our efforts drove reductions in flower costs, direct manufacturing costs, and overhead expenses. We continue to see material reductions in excess and obsolete inventory expenses as we have aggressively right-sized our inventory. We're also pleased to see our Canadian business on track to achieve mid-30% cash gross margin performance in fiscal 2024. Rest of the world cannabis sales increased 81% year-over-year. Australia had its 12th consecutive record revenue quarter, growing over 32% year-over-year. Poland grew revenue by over 60%, and Germany also returned to double-digit growth year-over-year, aided in part by improved flower shipments. Rest of world gross margin was 40%, driven by year-over-year improvement in margin performance in our Australian business due to product mix, as well as slapping negative impacts in non-core markets during the prior year period. Storz & Bickel revenue for Q3 of $18 million was up 54% sequentially, but down 9% year-over-year. Sales during the quarter benefited sequentially from strong consumer demand for the new VENTY portable vaporizer that was launched in Q3. Initial demand for VENTY exceeded production, so sales were constrained early in the quarter as we added a second production shift to better align production with demand. Black Friday period sales for the Storz & Bickel brand were very strong, resulting in the brand's most successful Black Friday sales campaign ever in its history. Sales on a year-over-year basis were impacted by reduced shipments to the U.S. due to continuous financial challenges faced by distributors. Storz & Bickel gross margin was 51% compared to 45% last year, in part due to lower input costs and a positive mix shift with VENTY carrying higher gross margin than the rest of the portfolio. With the divestiture of This Works on December 18, 2023, we included revenue for This Works sales between October 1, 2023, and December 17, 2023. As a result, we reported This Works revenue of $8 million in Q3, essentially flat compared to the prior year, which included the full quarter of revenue. This fiscal '24 adjusted EBITDA was a negative $9 million, an improvement of $42 million compared to a loss of $50 million a year ago. This is our best adjusted EBITDA quarter since fiscal 2017. The improvement is driven primarily by additional cost reductions of $36 million realized during Q3 as well as focused execution driving profitable growth across our businesses. Now, looking at our SG&A expenses more closely, selling, marketing, G&A, and R&D expenses declined by a combined $26 million, or 38%, compared to a year ago, due to our cost reduction program. Through the strategic transformation initiatives announced in April '22 and February 2023, Canopy has now realized $262 million of cumulative cost reductions, well on our way to achieving our targeted cost savings of $270 million to $300 million. Our cost discipline, along with the expectation for continued growth in our businesses, gives us confidence in our target of achieving positive adjusted EBITDA in all of our business units exiting fiscal '24. I'd like to now review our cash flow and balance sheet. Free cash flow with an outflow of $34 million in Q3, which includes $21 million in cash interest payments and $1 million in CapEx. In Q3, we further delivered on the balance sheet, reducing an aggregate principal amount by $65 million for a cash payment of $63 million, with the proceeds from the asset sale, including the proceeds from the Bio Steel assets completed during Q3. In January, we also completed a USD $35 million private placement, the majority of which we expect to use towards additional debt reduction. Now turning to the balance sheet. As of December 31, 2023, we had $186 million in cash and short-term investments and total debt of $612 million, resulting in a net debt balance of $426 million. Following the series of balance sheet actions we've completed over the past year, we have significantly strengthened our financial position. While the short term… This mostly relates to the promissory note with Constellation Brands. We expect this note to be settled in equity, thus preserving cash on our balance sheet. Within our long-term debt balance, our senior secured term loan now stands at USD $383 million and is due in March of 2026. This is a reduction of USD $367 million from the original loan amount. We have been focused on executing additional activities to further deliver on our commitment to improve our financial position over the coming months. Reflecting these factors, we expect our total debt to be around $520 million at the end of fiscal '24 with minimal short-term obligations. I'd like to now provide our key priorities and outlook for the balance of fiscal '24 and into fiscal '25. In Canadian cannabis, we remain firmly on a path to achieving profitability and are focused on accelerating top line growth on the back of a strengthened product portfolio as we close our fiscal '24 and enter fiscal '25. In the rest of the world cannabis, we expect to see growth in our key priority markets of Australia, Germany, Poland, and the Czech Republic. We remain focused on ensuring a consistent supply of high-quality products, as well as launching new products into these markets in the near term. For Storz & Bickel, with production of the new VENTY portable vaporizer ramping up during Q3, we expect to see strong VENTY demand offsetting the seasonally softer sales that we typically experience in the fourth quarter. S&B Australia sales will also see some impact from the upcoming regulation changes on vapes. From a cash flow standpoint, we expect our cash from operations to continue to show year-over-year improvement driven by further reduction in adjusted EBITDA loss and lower interest expenses. In closing, we believe our Q3 results reinforce our confidence that we now have a solid foundation in place to achieve profitability, drive profitable growth, and enhance shareholder value over time. This concludes my prepared comments. We will now take questions from analysts.

First question comes from Michael Lavery from Piper Sandler, please go ahead.

Thank you. Good morning. And congrats on a lot of the progress you just laid out. We'd love to just get a little bit of better market color on the pricing environment in Canada, and just some of the ways you're managing that and how that outlook looks?

Yes. I think Michael, there's still price compression in some of the categories. The way we're managing is really thinking about pricing almost from a tiered standpoint. There are some areas where we need to be price competitive because the market is taking us there. In other areas, where we can't produce enough product to meet consumer demand, we've had instances where we've taken price increases. It really is managing the mix across the portfolio. Yes, there's still some pressure in the marketplace.

Despite the price compression, we're definitely seeing gross margin improvement, in part because we're shifting our mix to product categories where it's more profitable. We're really leaning in there with better margins. We're also looking at ways of continuing to find savings from our costs. Our cultivation costs are down year-over-year, but we're looking to improve our costs further. Even with price compression, we can more than offset that and see variable margins improve across our portfolio. Importantly, our medical business is a very high-margin business, and we're also seeing margin improvement in that part of the business with some of the product mix improvements.

That's helpful. Where you've been able to take price, can you give a sense of the magnitude? I'd imagine it's relatively modest, but maybe I'm wrong?

It's really just aligning with the competitive set and consumer expectations. It's hard to come up with a specific example. If you look at, say our Wana offerings, we're going to be very competitive with our classics from a pricing standpoint. But as we bring innovation to market, like our quick formulation, we make sure that we're pricing that at a premium. Really, it’s on a SKU-by-SKU basis.

Okay, great. Thanks. I'll pass it on.

Thank you. The next question comes from Tamy Chen at BMO Capital Markets. Please go ahead.

Hi, Tamy.

Tamy, are you on mute?

Sorry about that. Hi, good morning. This is Tamy Chen.

Good morning.

Yes, good morning. I hit the wrong button. Thanks for taking my question. So, as we know, yesterday, one of your competitors acquired their Australian medical business. You pointed out in your prepared remarks that rest of the world gross margin was primarily driven by the Australian gross margin there. We noticed that in Q3 this quarter, the margin really jumped versus the previous two quarters; so it was 30ish percent, and now this quarter was 40%. We want to dig into maybe the puts and takes in that gross margin number. Also, what are your plans that you want to share with us about Australia that can talk about the attractiveness of that market for you? Thank you.

Sure, I'll start, Tamy. If you looked at our rest of the world business, I'd point out a few things. One, historically, there's a lot of lumpiness in the gross margin performance, and they're mostly driven by non-core markets. Frankly, we include our U.S. CBD business in that line item. We've tightened our focus and made some strategic changes in our U.S. CBD business, impacting gross margins as well as revenue in some of the quarters. We’ve historically had bulk shipments to some markets outside North America that created volatility in gross margin performance as well. When you look at Q3 performance, I’d say it’s relatively clean regarding gross margin performance. We are looking at Australia on a year-over-year basis to improve margin performance as their product mix is improving. Even in Europe, we are seeing margin improvements as well. It's notable that we include Storz & Bickel sales in Australia, which are part of our rest of the world sales, and that business has really grown strongly in Australia.

Great, thanks so much.

Thank you. The next question comes from Aaron Grey at Alliance Global Partners. Please go ahead.

Thank you very much for the questions. First question for me, we can certainly appreciate the ongoing situation back and forth between the SEC and the exchanges regarding Canopy USA. I just wanted to clarify in terms of some of the disclosures in the MD&A; it seems like some of your combos with the OCA from the SEC that you expect with the new agreement that they didn't agree with the deconsolidation of Canopy USA. First, can you clarify that you believe with the filing in February, you will get more clarity on that before the vote in April? Then, could you provide additional color in terms of the supplemental information you would like to provide on how the company would look with Canopy USA on a pro forma basis, even if it's not going to be consolidated? Thank you.

As we indicated in our remarks, we’ll be filing our definitive proxy this week, and all of the information that you could want to know will be available in that. We will be filing financial statements once we close for Canopy USA, even though, as you said, it won't be consolidated into our financial results. Our investors will see the entire picture in those financial statements. Whenever we talk about Canopy USA, we’re focused on the benefit of Canopy USA, our strong brands combined with capabilities in major markets to create a focused brand-led business in the U.S., which is an extremely attractive and profitable cannabis market.

Even though Canada won't be consolidating the interest in Canopy USA, Canopy Growth will own a significant financial interest in Canopy USA. The value creation at Canopy USA is an attractive proposition for Canopy Growth shareholders as well.

Thanks for that color. Appreciate it. I look forward to talking more about the performance of the business versus the optics of how it's disclosed on the financials. Quick second one for me if I could. Just in terms of the guidance to reach EBITDA profitability as you exit the fiscal year; if you could help us triangulate some of the drivers to reach EBITDA profitability as you exit the year. You'd invest in This Works business, which had healthy gross margins, but I'm not sure if it was a drag at the EBITDA level. And other notable drivers are the cost savings; you've now had $262 million cumulative versus I believe $227 million last quarter. So, if you could help us understand how you’d reach this in terms of potential gross margin or SG&A savings and just how data flows through the P&L, that would be very helpful.

There are a few levers. One is, we do have some remaining cost savings that we expect to fully execute in the coming months. The second driver is our businesses are delivering profitable growth, so as the top line grows and gross margin improves, even without previous cost reductions, we have a right-sized cost structure that should drive stronger EBITDA growth. The last area to focus on is continued efficiencies, particularly looking at corporate costs. We believe we can achieve positive adjusted EBITDA across all of our business units as we exit fiscal '24. We’re finalizing our fiscal '25 plan and will provide more details on the profitability outlook for fiscal '25 as we report Q4 results in May.

Okay, great, thanks for the detail. That's really helpful. I'll jump back into the queue.

Thank you. The next question comes from John Zamparo from CIBC. Please go ahead.

Good morning. I wanted to ask about STORZ & BICKEL. I appreciate the sequential improvements. It sounds like you’re very excited about this business and new products that are coming out. But the revenue was down 8% year-over-year, presumably that's with some pricing embedded into it. That included a product launch. Can you add some color on that business and provide some framework on what you expect from it in calendar '24?

Yes, John. Just to set the stage, I want to point out that Storz & Bickel has doubled in the past four years, doubled at the top-line level. We're seeing consistent growth across the business. I would say our results in Q3 were held back a little by the late launch of VENTY, which happened late in the quarter. There was significant production activity around the VENTY launch. We exited the quarter with a substantial backlog of units we're working through. The growth from STORZ & BICKEL comes from new product launches, like the VENTY launch, and distribution growth. The U.S. distribution tier has been under duress for the past couple of years, which has caused pain over time. We believe we can get back to distribution growth in the U.S. soon, and combined with the launch of VENTY, we believe the prospects are bright for that brand.

To add to David's point on margins, even though revenue was down year-over-year, gross profit dollars were actually up year-over-year. This shows that we’re leaning into profitable growth. STORZ & BICKEL is seeing profitable growth with gross profit dollars up on a year-over-year basis.

That's helpful, thanks. I wanted to follow up on Aaron's question about profitability plans and cost savings. Just to clarify, do you expect both sales growth and additional cost cuts? Do you think you can get to positive EBITDA on a consolidated basis? If you don't achieve the sales growth you want, do you have confidence you can reach the high end of your cost savings plan? Would that require additional actions or are those actions already taken, and you're just waiting for those costs to flow through the P&L?

Our businesses have a strong foundation for profitability. You see improvement not just from a cost reduction perspective, but from growth and product mix improvement. This is true not just in Canada but also in the rest of the world and Storz & Bickel businesses. We are focused on costs, identifying opportunities for savings, which will continue to be an area where we aim to generate positive adjusted EBITDA across our business units as we exit fiscal '24.

Understood. Thanks very much. I'll pass it on.

Question comes from Bill Kirk from Roth MKM. Please go ahead.

Hey, thanks for the questions. I want to go back to something you just said, Judy, just for clarification. So all business units adjusted EBITDA positive. Does that mean consolidated, profitable or are there unallocated expenses at the corporate level that would make consolidated EBITDA negative, even if all business units were EBITDA positive?

We don't break out segment information at the adjusted EBITDA level. All I can say is this year, our goal is profitability at the consolidated level. As I mentioned, we feel that we are on track to achieve profitability at the business unit level as we exit FY '24. This does create some lumpiness with corporate costs that we need to address. Overall, the performance of the business is very encouraging in terms of growth.

To your point, that's the best adjusted gross margin since Canadian legalization. What was surprising when you guided 3Q, you said you expected gross margins to be in the mid-20s. What was new from when you had that expectation?

The Canadian business's gross margins were 28%. The consolidated gross margin of mid-30% was based on Storz & Bickel margin coming in better than expected, partly driven by the VENTY and benefits from lower material costs. Canadian margin also came in a bit better than anticipated. We had some benefits from lower-cost inputs that helped Q3 gross margin performance.

I appreciate that. Thank you.

Thank you. The next question comes from Matt Bottomley from Canaccord. Please go ahead.

Good morning, everyone. I just wanted to get a little more commentary on your overall outlook on Canadian domestic operations. We've seen a bit of softness to end the year, at least at the retail levels in Canada, and the overall medical opportunity seems to be flat to declining. I know you saw decent year-over-year growth this year for the quarter, but I'm curious if you can provide a 12-month outlook on how notable your domestic operations will be as a growth driver for the company?

We believe that, with the gross margins we're now delivering, our area of focus is how to drive growth. For us, it’s about continuing to build on what we've done to date regarding the strains we have in the market and the NPD on the verge of bringing into the market. Particularly, we look to build on momentum in pre-rolls and soft gels, and plan to return to the vape category more aggressively. We also think there's a lot of distribution opportunity for our brands across the marketplace.

On the medical side, the market has been declining, but we’ve been gaining market share. A lot of growth is coming from increased basket sizes, meaning patients are ordering more products. This is due to an increased product assortment available in our spectrum store, which should drive new growth in our medical platform.

Got it. Thanks. One more for me, switching to the international side of things. Considering there's been constructive commentary on the outlook in certain EU markets, I know Australia has been mentioned. Considering your focus on the balance sheet, with some asset dispositions, do you think there's an ability or need to deploy capital in advance of regulatory changes in some of these markets? Do you think the runway is long enough so that might not need to be your primary focus?

Given our experience of being first into markets, I think we'll be very careful deploying any capital into international markets. We will, however, lean into areas where we're operating well, like Australia, Germany, Poland, and the Czech Republic by offering strong product offerings, but we plan to remain asset-light in those international markets while focusing on growing in Canada and in the U.S.

Okay, thanks. Good luck, guys.

Thank you. There are no further questions. I will now turn the call back over to David Klein for closing comments.

Thanks for attending today's conference call. I appreciate the questions. As we started, we're singularly focused on cannabis. Our businesses are growing and demonstrating healthy margins, and Canopy USA is moving forward. We're proud of where we are and where we're going, and I feel confident Canopy offers a unique opportunity for exposure to the growth of the world's cannabis markets. Our Investor Relations team will be available to answer additional questions. Everyone have a fantastic day.

This concludes Canopy Growth's third quarter fiscal 2024 financial results conference call. A replay of this conference call will be available until May 9, 2024, and can be accessed following the instructions provided in the company's press release issued earlier today. Thank you for attending today's call.