Good morning. My name is Gilles, and I'll be your conference operator today. I would like to welcome everyone to the Organigram Holdings Second Quarter Fiscal 2024 Earnings Conference Call. Thank you. Max Schwartz, you may begin your conference.

Thank you. Good morning, everyone, and thank you for joining us today. As a reminder, this conference call is being recorded and a recording will be available on Organigram's website 24 hours after today's call. Listeners should be aware that today's call will include estimates and other forward-looking information from which the company's actual results could differ. Please review the cautionary language in our press release dated May 14, 2024, on various factors, assumptions, and risks that could cause our actual results to differ. Further references will be made to certain non-IFRS measures during this call, including adjusted EBITDA, free cash flow, and adjusted gross margin, among others. 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. Please see today's earnings report for more information about these measures. In this call, references to fiscal 2023 are to the 13-month period from September 1, 2022, through September 30, 2023. Listeners should also be aware that the company relies on reputable third-party providers on 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 payers. Today, we'll be hearing from key members of our senior leadership team, beginning with Beena Goldenberg, Chief Executive Officer, who will provide opening remarks and commentary, followed by Greg Guyatt, Chief Financial Officer, who will review our quarterly financial results for Q2 fiscal 2024. Also joining us for the question-and-answer segment is Tim Emberg, Chief Commercial Officer. Before I hand the call over to Beena, I would like to extend a thank you to those on the call today who made it out to our Investor Day and facility tour in April. We received a lot of positive feedback, but by far the most common thing we heard from attendees was how compelling it was to see the initiatives we've been talking about in our communications in person. In the months to come, we will be developing a digital version of this experience for our current shareholders and industry stakeholders to gain a better understanding of where our business is headed. With that, I will now introduce Beena Goldenberg, Chief Executive Officer of Organigram Holdings Inc. Please go ahead, Ms. Goldenberg.

Thank you, Max, and good morning, everyone. We appreciate you all joining our call today and for your continued support of Organigram. It’s hard to believe that we’re already halfway through our fiscal year, and we’re pleased to report that the events and changes that Organigram has undergone in the first half of the year have truly set us up for success in Canada and internationally for the balance of the year and in years to come. As we venture into the second half of 2024, we are confident that we will be in a position to truly accelerate our performance in Canada and internationally while putting the building blocks in place to allow us to deliver on our ambition to be a global leader in the cannabis industry. During today’s call, we’ll be discussing our performance highlights for the quarter and some important themes that will illustrate why, despite some ongoing headwinds, we remain confident in our ability to continue to deliver on our growth plans. These include innovation, which remains a focus area of ours and a growing competitive advantage, international development as part of our ambitions to be a global leader in the cannabis space, and the Canadian recreational business and how we’re poised to continue on our growth trajectory. Before we dive into these exciting topics, I want to highlight one important factor enabling us to withstand the headwinds and support our growth plans, which is our improved cash position. This year, we significantly enhanced our already strong cash position by raising capital at a substantial premium to our share price. In Q2, shareholders approved a $124.6 million follow-on investment from BAT, with the first $41.5 million tranche successfully closed and the second $41.5 million tranche expected to close by the end of August. Additionally, towards the end of the quarter, we announced and subsequently completed an oversubscribed financing, generating an additional $28.8 million in gross proceeds. By the close of the final tranche from BAT at the end of February 2025, Organigram will have nearly $200 million in pro forma cash on hand, an enviable position in today’s challenging environment. I’d also like to emphasize our disappointment with the Canadian government’s reluctance to address critical issues impacting the cannabis industry. The biggest challenge for most Canadian cannabis producers is achieving sustainable profitability due to excise duties representing up to 35% of sales. Despite the federal government collecting almost $900 million in excise revenue from cannabis in 2023, surpassing revenues from beer and wine combined, no relief measures similar to those extended to the beverage alcohol sector have been offered to the cannabis industry. Moreover, the recently announced federal budget did not include any improvements to the excise framework, despite recommendations from industry stakeholders. Given Organigram’s leadership position in the Canadian market, we continue to advocate for a fair and equitable excise framework that considers both industry interests and the federal government’s objectives of public health by diverting consumers from the illegal market. Despite this ongoing challenge, Organigram is well-equipped to navigate the current regulatory environment and remain a leader in the sector. We have shown our ability to thrive in Canada, as evidenced by our 21% year-over-year growth in our recreational business this quarter, and we are also in an excellent position to invest in our international business with our strong balance sheet. Organigram’s ambition to be a global leader in the cannabis space will be achieved by exporting our high-quality, high-margin products to international markets and expanding our footprint in emerging markets like the U.S. and Germany, supported by the $83 million Jupiter Strategic Investment Pool, funded by two-thirds of BAT’s follow-on investment. In Q2, the company made its first Jupiter investment and a second U.S.-based investment in Open Book Extracts, a leading provider of hemp-derived extracts and products. This investment will provide Organigram with important insights into the U.S. landscape by leveraging OBX’s extensive experience with key players in the U.S. cannabis market. Moving forward, we expect to collaborate with OBX on product launches in the U.S., taking advantage of the growth of the hemp-derived THC market for edibles and beverages. With the DEA reportedly moving towards rescheduling cannabis, the opportunity in the U.S. is promising, and we are carefully monitoring the regulatory landscape as we expand our footprint. Additionally, there are several compelling investment opportunities emerging globally, such as the decriminalization of cannabis in Germany, growth in Australia and the U.K., pilot programs in Switzerland, and the introduction of medical frameworks in more markets. We have made significant strides with our international export business, yielding positive results. In January, we completed our first shipment of medical flower to Sanity Group in Germany and followed that with shipments to 4C Labs for distribution in the U.K. After the quarter ended, we completed our second shipment to Sanity and signed new supply agreements with medical cannabis suppliers in Australia and the U.K., while also exploring opportunities in new markets. Our international revenue declined compared to Q2 fiscal 2023 due to a substantial reduction in sales to Israel as we await payment for an outstanding receivable. We are working on a payment plan with our Israeli customer and are optimistic about resuming shipments soon. However, we are encouraged by our return to international sales growth over the past three quarters, supported by new international customers. Additionally, our flower exports are expected to receive a significant boost from Organigram’s EU-GMP licensing at our Moncton facility. Following a successful preliminary audit in February, we are hopeful about obtaining the certification, which will enhance our export margins and further expand our international customer base. Organigram is synonymous with our relentless pursuit of consumer-centric innovation, which has become a competitive advantage. We have discussed the nano-emulsion technology developed by our product development collaboration team. Excitingly, we have received preliminary results from a groundbreaking clinical study to validate this technology. The team is currently analyzing the data, and we look forward to sharing the results with you soon. This cutting-edge nano-emulsion technology aims to improve the efficacy of ingested cannabinoids, enabling consumers to navigate their dosage more accurately. The production equipment was recently moved to our Winnipeg facility, and we plan to scale up production and sales of these gummies in the fall. Another innovation stemming from our first U.S. investment in Phylos Bioscience in May 2023 is the exclusive availability of whole flower-derived THCV in Canada. Our THCV products have garnered significant attention, achieving retail sales surpassing $3.7 million since their launch in August 2023, along with our first international shipment of THCV flower after the quarter ended. Consumer feedback on our Super Sativa powerhouse has been very positive, and we plan to expand our THCV product offerings further. The investment in Phylos also introduced seed-based production, which we showcased during our Investor Day in April. This technology offers transformative growth opportunities for Organigram. We are gradually transitioning our Moncton facility to seed-based production, which is expected to increase plant yields, reduce cultivation costs, shorten harvest cycles, and ensure more consistent plants. The anticipated cost savings from seed-based production compared to clone-based methods range from 30% to 40%. Currently, we have four seed-based production rooms operational, with progress somewhat slower than planned due to the time taken to develop seed characteristics meeting consumer preferences. However, we are encouraged by the yield and potency results from our first harvest. As we streamline our selection processes and build our pipeline of seed candidates, we anticipate meeting our goal of 30% seed-based production by the end of calendar 2024. Regarding vape, we previously mentioned our investment in Greentank to foster innovation in our vape portfolio and resolve underperformance in this area. In Q2, we launched a test of Greentank’s new atomizing technology in select markets. At the conclusion of the test, we observed higher than expected consumer returns, and due to our commitment to quality and consumer satisfaction, we are addressing the issues before our anticipated national rollout. Alongside this, our product development collaboration team is working on several innovative vape solutions to enhance Organigram’s vape product offerings. On the research and innovation front, we achieved significant reductions in THC to CBN conversion times by 75%, enabling us to produce all of our CBN demand in-house and aiming to do the same with CBD. We also developed a method to produce zero THC THCV isolate with 85% purity. We continue to identify more genetic markers for disease resistance and other characteristics, allowing us to select cultivars with desirable traits more effectively. This ongoing research gives Organigram a long-term competitive advantage. Domestically, Organigram holds a leadership position in every major product category except for vape. As of Q2, we are the number one provider of milk flower, hash, ingestible extracts, and pure CBD gummies, with strong positions in overall edibles, infused pre-rolls, pre-rolls, and dried flower, positioning us overall as the third largest market player in Canada. Our success across various categories is attributed to our unwavering commitment to quality and innovation. As the leading pure-play cannabis company in Canada, everything we do at Organigram focuses on creating exciting cannabis brands and products for consumers globally. Regionally, we have seen impressive growth in Atlantic Canada, with retail sales increasing by over 36% to capture a 16.1% market share. Additionally, our market share in Quebec reached a record high of 9.1% in March, indicating our growing presence in Canada’s second largest province while maintaining a top five position across other provinces. Our dedication to innovation is evident, and great innovations thrive when supported by strong brands. The success of our SHRED brand reflects our commitment to market leadership, with annual retail sales exceeding $200 million. SHRED launched several industry-first innovations, including flavor-forward milk flower and THCV gummies. In Q2, we introduced our first carton-style box of joints, SHRED Rainbow Oz. Dartz, offering consumers packs of 10 Dartz in four different flavors. Our new SHRED Rainbow Heavies, featuring three flavored infused pre-rolls with over 40% THC, achieved over $450,000 in retail sales within the first month. Other successful brands include Monjour, dominating the pure CBD gummy segment with a 51% market share, and [indiscernible], leading in hash with a 23% category share. Big Bag O’ Buds also leads in large format flower. Although we seldom mention Big Bag O’ Buds, this quarter we launched Serial Jealousy, a new cultivar that quickly became our fastest-ever launch to reach $1 million in sales and set the record for new product sales within two months of release. We are particularly excited about revitalizing our Trailblazer brand to cater to the large and underserved segment of passionate female consumers. The new Trailblazer flower line showcases premium hang-dried and smart-cured pre-rolls in vibrant glass jars, with shipments starting in April. In summary, the latter half of fiscal 2024 presents numerous opportunities for Organigram. Our domestic market growth continues due to our focus on innovation and understanding consumer preferences. Our $83 million Jupiter fund and strong balance sheet allow us to pursue strategic investments like Phylos and Open Book Extracts to enhance our competitive advantages and expand our international presence. We are also growing our export customer base, contributing to the increase in our international revenue.

Thank you, Beena. As Beena mentioned in her comments, our recreational net revenue grew by 21% versus Q2 last year, versus approximately 7% market growth over the same period. When taken together with the decrease in international sales compared to Q2 of last year, we saw a net increase in our gross revenue of 8.6% to $57.4 million for the quarter, compared to $52.9 million in the same prior year period. Given the impact of a decrease in international sales of $8.6 million between Q2 and the same prior year period, our net revenue saw a modest contraction in the quarter of 5%, resulting in $37.6 million in net revenue, partially offset by an increase in wholesale revenue of $1.3 million. Organigram is current with its excise duty obligations, remitting approximately 34% of its gross revenue to the CRA. Organigram's cost of sales in Q2 fiscal 2024 was $26.4 million, compared to $29.6 million in Q2 fiscal 2023, representing a decrease of 12%. The decrease in the cost of sales over the same prior year period was primarily due to higher inventory provisions in Q2 fiscal 2023 of $3.2 million, related to net realizable value adjustments of inventories. We harvested approximately 19.9 thousand kilograms of flower during Q2 fiscal 2024, compared to 20.6 thousand kilograms in Q2 fiscal 2023, which represents a decrease of approximately 3%. The decrease was primarily attributable to changes in our cultivar mix to address changes in consumer preferences. While yields and THC content will fluctuate over time, the trend we have seen over the last two years has been larger yields and higher potency. In Q2, year-over-year, Organigram experienced a 79% increase in flower produced containing more than 24% THC. Now, about 25% of our harvest is clocking in between 24% and 26% THC, and 25% is testing above 26%. Compared to Q2 fiscal 2023, our yield per plant has increased. Higher yields should reduce the cost of cultivation in the long run, and as the flower is sold, and we expect to achieve higher gross margin rates. In Q3, we should begin to see some lower-cost flower harvested in Q2 flow through the P&L, with that trend expected to continue into Q4. In Q2 fiscal 2024, adjusted gross margin rate stable at 31%, or $11.7 million sequentially. Compared to the same prior year period, we experienced a decline in our adjusted gross margin rate from 34%. The year-over-year decline is primarily due to lower international sales, which declined from $10.8 million to $2.2 million between Q2 fiscal 2023 and Q2 fiscal 2024. The delta here is related to reduction in shipments to Israel, which have yet to recover. Sequentially, however, our international sales have increased to $2.1 million, and we expect this trend to continue throughout the latter half of fiscal 2024. In Q2, Organigram realized approximately $2.4 million of the $10 million in annual savings that we outlined at the end of fiscal 2023, and year-to-date, we have realized $4.7 million of these savings. Driving these continued savings is the use of in-house remediation and rapid drying technologies. There are several other efficiency driving initiatives underway that we expect will lower operating costs further. We are reducing the bench time for our clones from 21 days to 14 days, which will reduce costs annually and increase capacity by approximately 1,300 kilograms by creating up to two additional grow rooms. Also, we are focused on power reduction initiatives, which we project will result in $2.3 million in annual savings. We are optimizing warehouse distribution between Moncton and Winnipeg to save on freight for customers in Western Canada. Included in our Q2 SG&A was a reserve of $4.2 million related to our outstanding receivable from our Israeli customer, Canndoc. SG&A remained relatively flat adjusting for the Canndoc provision at $15.9 million compared to $16.1 million in Q2 fiscal 2023, or a decrease of 1%. While G&A costs decreased by $1.2 million, they were offset by an increase in sales and marketing costs of $1.1 million related to higher competition in the Canadian marketplace. This quarter, we posted an adjusted EBITDA loss of $1 million compared to adjusted EBITDA of $5.6 million in the same prior year period. This loss was attributed to lower net flower revenue and lower international sales, which negatively impacted our adjusted gross margin rates compared to the prior year period. We are confirming our outlook that our positive adjusted EBITDA in fiscal 2024 will exceed that of fiscal 2023. Supporting this outlook is the expected increase in international sales in the back half of fiscal 2024, as well as efficiency improvements and lower cost of flower, which is expected to start flowing through our P&L in the back half of fiscal 2024. The net loss for Q2 fiscal 2024 was $27.1 million compared to a net loss of $7.5 million in the same prior year period. The increase in net loss from the comparative period is primarily due to lower gross margins resulting from a reduction in the gain on fair value of biological assets and an increase in a fair value loss of derivative liability of approximately $11.9 million related to the future issuance of BAT preferred shares. From a statement of cash flow perspective, net cash used in operating activities was $9 million in Q2 fiscal 2024 compared to a use of $19.7 million in the prior year period. The decrease in cash used in operating activities of 54% was primarily due to an increase in accounts payable resulting from a shift from monthly to quarterly payments of excise duties in accordance with excise duty regulation payment schedules and improvements in a regular payment term. Cash used by investing activities in Q2 fiscal 2024 was $1.9 million compared to cash provided of $11.7 million in Q2 fiscal 2023 which was driven by a redemption of short-term investments in Q2 2023 of $15.2 million. On the topic of cash, we're very pleased to state that we have one of the healthiest balance sheets in the industry. As of March 31, 2024, we had a total cash position of $83.6 million including both restricted and unrestricted cash, negligible debt, and as Beena mentioned, our pro forma cash position after the closure of the second and third BAT tranches and our recent equity raise of gross proceeds of $28.8 million is expected to start approaching $200 million. We focused our efforts this quarter on bolstering our cash, driving costs out of the business, expanding our international reach, and expanding market share while investing in the long-term efficiency of our business to set us up for success in the latter half of fiscal 2024 and beyond. We did incur the loss of margin due to lower international sales and our focus on rapidly growing 2.0 segments such as infused pre-rolls, which attracted higher excise duties. However, we head into Q3 confident that the back half of the year will demonstrate our ability to generate improved financial results. We continue to expect positive cash flow from operations before working capital adjustments by the end of fiscal 2024. This concludes my comments. I'll now turn the call back to Beena.

Thank you, Greg. The cannabis industry is still in its infancy, and after considerable growing pains, it looks like we're entering a period of renewed excitement around the sector, fueled by macro tailwinds that we believe will favor established leaders in the space, of which Organigram is clearly one of the very last few in Canada. Today, Organigram stands as a leading LP with significant cash reserves and negligible debt. This represents a considerable competitive advantage, substantially mitigating liquidity risks and facilitating the expansion of our presence in international cannabis markets. We have persisted through every challenge presented to us, ranging from irrational price compression, overstated THC levels, nanny state regulations, and the illogical excise framework, to achieve growth in our domestic business and to set us up for a long-term growth trajectory. We also recognize the benefits of being challenged, to bring excellence into every aspect of our business, and have used this environment to hone our competitive edge. While this quarter we reported negative adjusted EBITDA, we're confident that our domestic and international market growth, our innovation pipeline, and investments in long-term efficiencies will result in improved financial performance throughout the back half of fiscal 2024. We look forward to updating you on our progress next quarter. So once again, thank you for your continued interest and support of Organigram. I will now open the call up for questions.

Thank you. Your first question comes from Aaron Grey of Alliance Global Partners. Your line is open.

Hi, good morning and thank you for the questions. First one from me, Greg, I believe you mentioned still expecting adjusted EBITDA to exceed prior years. I think that's in reference to the 5.5, right? So I just want to make sure I heard that correctly. And then if you could just provide some more granularity in terms of those puts and takes. You talked about some of the gross margin improvement you're expecting in terms of shifting to the seed-based production. You talked about some OpEx improvements as well. You mentioned greater international, I believe, when you made reference to that as well. So just in terms of the puts and takes of getting to EBITDA exceeding 2023 for the back half of fiscal 2024, what we should expect in terms of the top line gross margin and EBITDA to help us get there? Thank you.

Sure. Thanks, Aaron. Let me try to unpack all that. So first your question on EBITDA. Yes, you heard that correctly. We'll exceed the EBITDA from fiscal 2023 in the back half of this year. As far as margins and the various puts and takes, first I'll start with in the second quarter. And we had - versus the prior year, we had less international. As you know, international is much higher margin than domestic and does not include any excise duty obligations. Also during the quarter, our mix skewed towards IPRs, which is good news in that we're driving leadership in that category. But at the same time, it's a new category for us. So, we're still working out some of the kinks in the production area, and really working on improving our production efficiencies there, which we've made good progress on. We expect to see some movement on that in the back half of this year. Also in the second quarter, we had lower JOLT sales, Q2 versus Q1, which also would have been a bit of a drag on margin during the period. So, as we go forward into the back half of the year, you mentioned the seed-based production. That should start flowing through towards Q4. And as Beena mentioned, that's about a 30% to 40% cost reduction. And that's not going to be 30% to 40% in totality, obviously. But as we've said before, our plan is by the end of calendar this year to have about 30% of the garden seed-based, which we'll see the benefit from. Also moving forward, we're really working on making operational efficiency improvements in some production areas, where we've seen higher waste than we would have liked in Q1 and Q2. And that's particularly around tube-style pre-roll, which again is a relatively new process for us. And just in the last number of weeks, we started to see real improvement in that area. We expect to drive that going forward as well. Also just, the cost savings initiative that we mentioned before about the $10 million target for the year, we've made great progress on that. $5.5 million more to go in the back half around freight, logistics, energy, and also some - post-harvest efficiencies that we expect to see coming through. Hope that answers your question Aaron.

No, it did. No, really appreciate that color there, Greg. Second question from me, right, so you guys have the OBX investment. Within the U.S., there's been a number of public operators talking more about the hemp-derived beverage market specifically, but also edibles, including some listed on the NASDAQ similar to you. So can you speak towards your views specifically on the hemp-derived beverage and potentially edibles market too, given your line of sight with OBX investment? Are you seeing some opportunities there? Is there some ability for you to leverage BAT's distribution? It's not a liquor channel there, but there's still some convenience and maybe some ingestibles and otherwise that could be leveraged. So your view of the hemp-derived beverage market, how big the opportunity is, and if you think there's opportunities for OGI to come within it? Thanks.

Sure. Thank you, Aaron. So first of all, we're very excited about the hemp-derived THC market for ingestibles, both beverages and edibles. And certainly our relationship with OBX gives us a first line of sight into the market and the opportunity. We do see there's a patchwork of states in the U.S. that have regulated the Delta 9 THC hemp-derived. And there's some that are perhaps not regulated but are not enforcing. And so, this market continues to grow and we continue to track how big the opportunity is. What excites us about this is the direct-to-consumer opportunities that you could move products across state lines. So there's a lot of very interesting opportunities around this space. We are reviewing what the opportunities are internally. We see the opportunity of using the nano-emulsion technology that we're developing in some of the products that we take to the market in the U.S. at some point in the future. And the opportunity to leverage the clinical study that we did to make claims in that market. So, we do think we have a competitive differentiation that we could take, so we could enter the market. We are looking at whether it's beverages or edibles, and we're looking at ways to get the product to market. So nothing in the short-term in terms of using the BAT distribution network, we'd be looking at how OBX is getting products out. We'd be looking at other partners that we could leverage. So it's still a work in progress, something that we're evaluating as we look out. And obviously, needless to say, everything we do, we're going to make sure that we're compliant with our NASDAQ listing and with our TSX listing. So, this is an area that we're navigating carefully as we look to get some product into the U.S. market.

Your next question comes from the line of Matt Bottomley of Canaccord Genuity. Your line is open.

Good morning, everyone. I hope everyone's well. I just had a follow-up question on the reserve you took for that receivable. So relative to your international contribution, it is sizable, obviously not really material to the company or quarter overall. But I'm just curious if we can get a little more detail on that. Is this biomass that wasn't accepted over in Israel? Is there a dispute there? Has that product been returned? I'm just trying to get an idea of where that relationship is. And then if Israel is still a market, that will be a focus in the near term?

No problem, Matt. Let me take that on and say to you that there is no issue with the product that was shipped over. This was a situation where the receivable was due at the end of October. And we all know what happened in that country on October 7th. So there is a delay in payment. The customer says they'll pay us, but at this point, it's six months past due. And so we took the reserve on our books. We expect to continue to work with the customer to get a payment plan that we're comfortable with. And it is our intention to, in due course, get back to shipping to Israel. It's an important market for cannabis, and it's a higher margin market than Canada, as Greg alluded to, in terms of our international growth. And so, it's something that we want to do. But obviously, with the size of the outstanding receivable, we have been on standby at this point, and we have stopped shipping until we get this resolved.

Okay. Thanks for that. And just one other question from me, just on the cadence of sort of the adjusted EBITDA rebound, for the back half of the year here. I'm just wondering if cash flow operations will be linear to that, or will we see an outperformance in sort of the CFO given the fact that international sales likely have a higher margin and will drive more to the bottom line?

Thanks for that question, Matt. Right now, we're expecting the cash flow from operations improvement to be roughly linear. And that's really driven by the changes in working capital. And we are continuing to invest in the business, and we're investing in working capital as well. So that's really going to be an important driver there beyond just the sales internationally. And for example, over the first quarter, we invested more in inventory than we had in the past, in order to make sure that our customer service levels were much higher than they had been. So this is an example, our on-time and in-full shipments to the provinces was up to over 95% in Q2, as a result of that investment. So that's the one caveat to the linear versus exponential following the international.

Thank you. Your next question comes from Frederico Gomes of ATB Capital Markets. Your line is open.

Good morning. Thank you for taking my questions. My first question is on Germany. I think yesterday there was an article mentioning there was a change in regulations there that could potentially expedite the second pillar of their legalization plan. So I'm just curious if you've seen that. Could you comment on it in terms of your expectations for that second pillar as well as just in terms of your EU GMP certification? Do you have any sort of timeline for that? Thank you.

No problem, Fred. So let me start with the first point. Yes, we have seen the same news around the second pillar of the German legalization and progress, and we're excited about that. Really what that was all about is enabling pilot programs similar to what we've seen in Switzerland, where they're going to allow certain licensed producers or cannabis companies to have pilot facilities, like pilot programs. So that they could test how the market runs and form some better understanding of the market. We're excited about that. We're talking with some of our customers that we're dealing with in Germany, about the opportunities in that market. And this is just, again, another example of the legalization framework opening up in Germany, which we're excited about. It's another big market. So any progress like this, no different than the DEA rescheduling that they're talking about in the U.S. These are all good macro tailwinds for the industry, and we're excited about the opportunity it presents. In terms of the EU GMP, we had our preliminary audit back in February and we were successful with that audit. So, we're now just waiting for confirmation from the regulatory authorities on when they will be coming out to do the final audit. Our hope is that it will happen this summer, but we're kind of not in control of their timeline. So we're just waiting for that to be scheduled.

Thank you for that, Beena. My second question is just, you mentioned that rescheduling in the U.S. could potentially help your U.S.-based strategy in terms of your investments. So just curious how exactly could that play out? Is it about the sort of investments that you would be able to pursue while being compliant with your NASDAQ listing? Or is it about helping, I guess, your investments that you have already made in the U.S. to perform better? So just any color on how rescheduling could help you in the U.S.? Thanks.

Sure. So again, just to reiterate, look, we think that the whole DEA rescheduling is really a positive move forward that signals the evolution of the U.S. movement towards federal legalization. So, we're excited about that. Now, it doesn't really help much for us from a compliance position, as you mentioned. With our NASDAQ and TSX listings, we still can't consolidate or control anything that's plant touching. However, we do think that the whole rescheduling is expected to take some time, but it will happen. And we think that this will benefit our two U.S. investee companies. And we're invested in them. So that's a benefit to us. It's still a small amount of benefit at this time. But we think that with the Jupiter Fund, we have the opportunity to take advantage of other opportunities in the U.S. market. And so, this is just a positive all around for us as we look to expand our global footprint.

Thank you. And with no further questions, that concludes our Q&A session. I will now turn the conference back over to Beena for closing remarks.

Well, again, thank you, everybody, for joining the call today. I know that we have some exciting plans ahead. And we do look forward to updating you on our progress next quarter. So with that, I'll end the call.

This concludes today's conference call. You may now disconnect.