Hello, everyone. Thank you for joining us and welcome to the Organigram Global Q1 Fiscal 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Max Schwartz, Director of Investor Relations. Please go ahead.

Very much, Cara. Good morning, everyone. Thanks for joining us today. As a brief reminder, this call is being recorded and your replay will be available on our website within 24 hours. Today's call will include forward-looking information, forward-looking statements, and actual results could differ materially due to a number of risk factors outlined in our filings and the cautionary statements included in our Q1, Fiscal 2026, press release, and MD&A. We'll also reference certain non-IFRS measures such as adjusted EBITDA, adjusted gross margin, and free cash flow. Definitions and reconciliations are available in our disclosed materials. Unless otherwise noted, market share data is sourced from high-fire, weed crawler, provincial boards, retailers, and our own internal sales tracking. Discussing results today are james yamanaka ceo of organogram and greg diet cfo of organogram global and as a reminder any investor inquiries not addressed on today's call can be directed to investors at organogram.ca and with that i'll now turn the call over to james please go ahead james thank you max and good morning everyone thanks for joining us today this is my first earnings call as ceo of organogram and i've been encouraged by what i've seen so far.

The scale of our operations, the quality of the team, and the depth of capability across the business make it clear why Organigram has grown into Canada's leading cannabis company. Over the past month, I've focused on understanding where Organigram is genuinely strong and where processes can be fine-tuned. I've traveled to our key facilities, met with colleagues across the organization, and I'm learning a great deal, while also noting where my 20 years of experience and global strategy within highly regulated markets can be applied. Being part of a leading company in a developing industry is genuinely exciting for me. Unlike in more mature industries where the market dynamics are less fragmented and tend to move more gradually, cannabis is still very much taking shape. Canada sits at the center of that evolution with global leadership in research, product development, cultivation science, quality, and export activity, areas where Organigram has built meaningful strength while thoughtfully managing the risks associated with maturing markets, regulatory uncertainty, and fragmentation. I'm optimistic about the long-term growth of the cannabis industry, and I'm confident in Organigram's ability to compete and lead as that growth continues. With that, let's turn to some of the developments since last quarter. In Canada, we continue to hold the number one market share position with 11.3 total share in Q1 and 11.7% over the past 12 months. Compared to last quarter, we saw market share decline of approximately 500 basis points, largely due to the impact of the eight-week BC general employee union strike, which ended on October 26. After a brief period, brief inventory restock period, our recovery in BC is now complete and we've regained historical distribution levels. Competition in vapes and the IPRs also contributed to the fluctuation in market share, partially offset by growth in flour and concentrate. Nationally, three of our brands, Shred, BoxHawk, and Big Bag of Buds, maintain their top 10 brand status in Q1, generating over $67 million in retail sales. In Canada's largest markets, we continue to compete strongly, holding the number one position in Ontario, British Columbia, and Alberta. In Quebec, we moved up to the number three position with 9.9% market share for the quarter, Exceeding December at 10.1%, driven by the success of our vape launches. We also continue to outperform in most other provinces in Q1. Notably, we held 33.1% market share in New Brunswick, 21.9% in Newfoundland, 13.4% in Saskatchewan, and 12.2% in Nova Scotia. Category performance varied during the quarter compared to the prior year period. Vapes and IPRs remain the most competitive segments. We maintain the number one position in overall vapes with a 20.4% market share, while in overall pre-rolls, we move to the number two position at 7.7%, primarily reflecting increased competition in IPRs. In beverages, market share increased 80 basis points year over year to 5.9%. In Concentrates, Box Hot Whipped Diamonds and Organigram Innovation became the number one dabble concentrate in Canada, contributing to a 15.5% category share. In Edibles, we gained 2.4 points year over year to reach 17.9% share, with Shred becoming the number two gummy brand in the country in December. Finally, in whole flower, market share increased 90 basis points year over year to 7.3% driven by continued strength in our big bag brands. Our new innovation pipeline is beginning to reach distribution in the second quarter. This includes new competitive coded IPRs and the launches of shred soda and shred shots powered by a fast-acting, soluble technology developed in the product development center. A key differentiator for shred shots relative to comparable products is our on-package claim of a 15-minute onset. We believe this meaningfully lowers the barrier to trial for consumers, supports retailer decisions around shelf space, and with a smaller liquid format paired with a fast, predictable dose, position shots as a discrete and convenient option that competes effectively with other ingestible categories, including gummies. Turning to operations, operations, we continue to make progress in plant science and scale. In Q1, we harvested over 28,000 kilograms of flour, representing a 43% year-over-year increase. This growth was a result of improving yields driven by our LED lighting conversion project, which was partially funded by Opportunity of New Brunswick, as well as ongoing refinements to our nutrient programs. Alongside these gains, continued progress in our breeding efforts drove average flower THC levels to a quarterly high of over 29 percent. Achieving that level of potency at our operating scale is meaningful. In addition, 38% of lots tested in Q1 exceeded 30% THC. Today we are also announcing a proprietary breakthrough in powdery mildew resistance. Our plant science teams have identified a genetic marker that can be screened in early seedling populations, allowing us to avoid investing time and capital in plants that will never express this resistance trait previously confirming mildew resistance required approximately 90 days with this discovery screening can now occur within 10 days enabling a total enabling early removal of out-of-spec populations and reducing downstream crop loss and waste this screening tool is proprietary and applicable applicable across a wide range of genetics unlike existing markers that are limited in scope. When combined with our seed-based breeding initiatives, which represent approximately 30 percent of harvest in the quarter, these advances support more stable genetics, higher realized yields, and improved cost efficiency, contributing to our expected margin expansion over time. On the manufacturing side, we continue to optimize our hydrocarbon extraction and pre-world production. 100% of our extraction is now hydrocarbon-based with capacity up 87% year-on-year and lower associated COGS. Focusing on hydrocarbon extraction allows us to meet increasing derivative needs internally while expanding B2B opportunities. In Winnipeg, we have completed commissioning of our beverage line and are beginning in-house production for a portion of our beverage portfolio to support its expansion. As we move further into fiscal 2026, the benefits of these improvements should begin to flow more meaningfully through our P&L as lower cost inventory moves through a more efficient distribution due to the ongoing optimization of our recent ERP upgrades. Moving to our international business, in Q1 we generated $5 million in international sales, up 55% from Q1 fiscal 2025. We did see an unanticipated sequential decline in the international volumes during the quarter. This was primarily driven by a higher-than-expected proportion of flour that did not meet international specifications. While some level of out-of-spec product is expected, we've taken steps to remediate this temporary issue, return to normal operating parameters, and reduce the risk of future variability. We remain optimistic about international momentum and continue to expect meaningful international sales growth in fiscal 2026 as demand remains elevated. Regarding our expected EU GMP certification, we are preparing follow-up responses and information from the regular in response to feedback received in January 2026. Following provision of this information, the company expects to await confirmation of certification or any required next steps. On international branded sales, we continue to make progress. In Australia, we shipped input materials for vape production and distribution in December, completing the first production run in January, and now are in the process of launching. In the U.S., we launched collective project and fetch in Illinois and Wisconsin through new distribution partners, expanding our retail footprint to 11 states. We are also continuing to pursue marketing and distribution expansion for our Happily gummies. In both cases, our penetration in the U.S. has been slower than anticipated, reflecting a rapidly evolving market with increasing competition and ongoing regulatory developments. With collective product, fetch, and Happily products collectively available in over 20 states through D2C and retail channels, we do anticipate the incremental growth in line with the market, but we are not reliant on the U.S. market for growth. We continue to closely monitor regulatory changes in the U.S. and are closely following recent efforts from lawmakers to amend or extend existing limitation on intoxicating hemp products. So overall, we are pleased with our year-over-year growth, and despite sequentially lower international sales, typical seasonality and the impact of the BC labour strike, we maintain adjusted gross margins in line with our record-breaking Q4 and fiscal 2025. As the year progresses, we remain confident in our ability to deliver against our previously issued guidance. With that, I'll turn over the call to Greg to walk through our financial performance. Greg?

Thank you, James. Great to have you on board for our first earnings call together. Good morning, everyone. Before getting into the numbers, I'll briefly frame Q1. Results reflected strong year-over-year revenue and adjusted EBITDA growth, alongside the usual seasonal reset from Q4 as we discussed last earnings call, with some incremental pressure from the operational and market factors James mentioned. Importantly, none of these dynamics change our expectations for the rest of the year. Our business has historically delivered stronger fundamental performance in the second half of the fiscal year, particularly in Q3 and Q4. Based on our current visibility and execution plans, we remain on track to deliver against our full-year guidance. With that, let's turn to the quarter. In Q1, net revenue increased 49% to $65.3 million from $42.7 million in the same prior year period, primarily due to growth in our Canadian business, the integration of Motif, and higher international sales. International sales for Q1 were $5 million, up 51% over Q1 last year. Sequentially, net revenue decreased 21%. The decrease was primarily due to our seasonally lower Q1. As James mentioned, Q1 was also negatively impacted by the BC employee strike, increased competition in vapes and pre-rolls, and sequentially lower international sales. Adjusted gross profit for the quarter increased 67% to $23.9 million versus $14.3 million in Q1 last year due to our significantly higher revenue base, international sales growth, and incremental efficiency gains. We are pleased to report that despite seasonal and competitive impacts on revenue, as well as lower levels of high margin international sales, adjusted gross margin remained stable sequentially at 38%, an increase of 500 basis points over Q1 last year. Adjusted gross margin was supported by higher yields, lower cultivation costs, and motif synergy realization as we started to sell through lower cost inventory. This demonstrates that our investments in efficiency are having a positive impact on cost per gram and margins, which we anticipate continuing to expand as international volumes scale throughout the year. In Q1, G&A costs were $15 million versus $11.2 million in the prior year period. The 33% year-over-year increase in G&A is primarily associated with the consolidation of MOTIS costs for the full quarter, incremental ERP and professional fees, higher depreciation and amortization, but partially offset by cost savings initiatives. As we're in the final phases of ERP implementation, we expect the associated costs with that project to roll off after the second quarter. As a proportion of net revenue, GNA costs represented roughly 24% of net revenue in Q1, which was down approximately 200 basis points from the same prior year period. Sales and marketing costs were $9 million versus $5.8 million in the same prior year period. Similar to GNAs, the year-over-year increase is primarily attributable to supporting the addition of motifs and collective project brand portfolios. Sales and marketing costs represented 14% of net revenue, up approximately 500 basis points year-over-year. Overall, SGNA declined by 200 basis points year-over-year as a percentage of net revenue, reflecting continued scale and operating leverage, partially offset by higher trade investment to support competitive activity. Our expectation remains that SG&A costs will continue declining incrementally relative to net revenue as the year progresses, all else being equal. Total operating expenses for the quarter were $26.7 million, or 42% of net revenue, a year-over-year decrease of 600 basis points, primarily due to lower proportional G&A costs costs, and lower R&D spending. Adjusted EBITDA in Q1 was $5.3 million, up 273% from $1.4 million in the prior year period, driven by increased scale, higher international sales, and proportionally lower operating expenses. Sequentially, adjusted EBITDA declined primarily due to our lower international sales, the now resolved revenue disruption in British Columbia, and as previously mentioned, our normal seasonal dynamics. Net income for the quarter was $20 million compared to a net loss of $23 million in the same prior year period. The $43 million year-over-year improvement was primarily due to changes in the fair value of derivative liabilities and top-up rights associated with our follow-on VAT investment. From a cash flow perspective, in Q1, cash provided by operating activities before working capital changes was $0.3 million, compared to cash used at $6.3 million in the prior year period, demonstrating improved cash generation from the core business, supporting our full-year guidance of positive free cash flow. Cash used by operations after working capital changes was $16 million, versus cash used at $4.2 million in Q1 last year. The increase in cash used was driven by investments in working capital related to higher inventory levels as we completed the migration of our new ERP enhancements and the timing of excise duties and Health Canada licensing payments that occurred in the first quarter. Finally, as of quarter end, we held total cash and short-term investments of $63 million, including $7.6 million of unrestricted cash. We are confident in our ability to generate cash from operations and free cash flow in the near term and are assessing non-dilutive sources of capital to support liquidity and financial flexibility. To wrap up, in Q1, we delivered strong year-over-year growth in revenue and adjusted EBITDA, maintained stable sequential margins at 38%, and continued to demonstrate operating leverage as the organization continues to scale. Our margin performance this quarter underscores the progress we're making on efficiency, cost structure, and motif integration, and we expect these benefits to become increasingly visible as higher margin international volumes scale through the back half of the year. While working capital weighed on cash usage in the quarter, cash generation from the core business continues to improve, and we remain confident in our ability to deliver positive free cash flow for the full year. We remain on track to deliver against our full-year guidance of revenue exceeding $300 million, supported by improving fundamentals, expanding margins, and a disciplined approach to capital and liquidity. With that, we'd be happy to open the call for questions.

Hi. Can you guys hear me okay?

Okay.

Perfect. All right. Fantastic. Thanks so much for the questions here. James, welcome aboard. Great to have you back in the industry now. So I guess first question for me is, you know, now that you've kind of started to get your feet, I know it's still early days, but it sounds like you've been putting a lot of facilities and getting a better feel for the business. It would be great to kind of hear in terms of, you know, where are you seeing some of the lower-hanging near-term opportunities versus some of the initiatives that might be more long-term in nature and how we should think about maybe how you're level-setting, you know, prioritization of those initiatives.

Sure. First of all, thank you. It's great to be in here. And like you said, it's been about a month since I've actually gotten into the role. And what I have been doing is visiting a lot of the facilities, meeting with the people. And the observation to me is it's a very strong company, good people, good capabilities, and a strong ability to grow into the future. In terms of the priorities, overall, look, I don't think it's a massive change after my first month it'll always be focused on consumers on the innovation and on international expansion in the future to grow the business in terms of the short-term priorities and the things that i think we need to focus on in the short term it really is about operational execution making sure that we really have a focus on executing with precision focusing on the cost base, improving the margins, and make sure we deliver to the markets. In the longer term, I think one of the reasons I was brought into the role was that, you know, over 20 years of international experience I've had, you know, in fact my entire career has been in international markets, and it's really looking at what are those future opportunities, balancing off sort of the risk, not overextending ourselves, but making sure we take advantage of the growth opportunities in the future. But to sum it up, the fundamentals don't change. The biggest focus is about execution and making sure we deliver on the numbers and improve our margins over time. And also focusing on the cost base. Mid to longer term, it's about expanding into those international markets prudently and making sure that we are able to grow the business system.

Our next question comes from the line of Henrik Ting with Cancord Gen Annuity. Your line is open. Please go ahead.

Thank you. Good morning, and James, congrats on the appointment. Just with respect to international volumes, thank you. With respect to international volumes, could you provide some insight on, you know, past or more color around what happened and second to that, also on any indications of what was left on the table on the back of those flower issues? You know, essentially what actions did you take to address and perhaps what did it cost in the quarter?

Yeah. I think the first thing to note is that the requirements on international flour and the process that you can take in terms of processing the product are far more stringent in a lot of the international markets and particularly in Germany, which is, you know, the fastest growing and largest of the international markets at the moment. What has happened is, as we mentioned, we had a fantastic increase in yields over the past year, which has meant we've had a lot more flour on hand, which has caused some issues in microbial growth. We have identified what we believe are the core drivers. We're working on it to fix it. I do believe it's a temporary issue, and we should get back to supplying the market in the future. So that's what it is today. You asked as well about the exact effect. I might have to refer over to Greg for that, if there is an answer for that, Greg.

Yeah, sure, James. Hi, Kenrick. We think that the impact of that was probably about three and a half million on revenue of international. So if you think about the fact that we hit five million in Q1, which is a 50% improvement over last year. If we'd sort of had the normal on spec for flower, it would have been a pretty significant improvement relative to last year.

Thank you. Appreciate the granularity. I'll get back in queue.

We have a question again from Aaron Gray with Alliance Global Partners. Please go ahead. You're on stage.

Hi. Yeah, I'll have a second one here. So I appreciate the call on the international market. Now, so just to follow up on that real quick, and then I'll go to my second question. Can you then utilize that product? Can you reallocate it? I'll ask it that way, and then kind of turning towards, you know, the Canadian market. Do you feel a bit more confident in terms of the snapback? It sounds like it was twofold. Number one, obviously, you guys had BC, so it sounds like that was more of a snapback. But then second, we talked about more of the competitive nature, increased competitive nature of evasive pre-rolls. could you maybe talk about those two issues and how we should think about the recovery within the Canadian market? Thanks.

Sure. I'll take those in different orders. So in terms of BC, yes, I think we're back up. We are back up to the traditional distribution level. So you would expect the sales to snap back in BC. In terms of the non-spec international As I said, we've identified what we believe are the core drivers of that, which is very much about the good work the team has done on the yield, has created some issues. We are working on it. It's a top priority, and we expect that we will be resolving this issue. We don't think it's a permanent issue. And finally, as I mentioned in my statement, in terms of the increased competitiveness, we do have new launches. We're fighting. We will fight back with new innovations and try to get there. But this is a very competitive part of the market, so I would say this would be one where we balance out the amount of investment we want to put in to get that share back, balancing off the margins and making sure that we make the right decisions to get back to some growth there.

Hey, Aaron. Greg here. May I just jump in with a little bit of extra color on your question about the international flower that was out of spec and can it be reallocated to other markets? Absolutely. So we have taken that flower and repurposed it towards the Canadian market. And there's no issues with it. It just didn't meet the needs for our international customer. So we're not expecting any inventory write-offs as a result of that.

Perfect. Thank you so much for the call. I'll jump back in the queue.

Our next call comes from Brianna Cunnington from ATB Capital Markets. Your line is open. Please go ahead.

Hey, good morning, and thanks for taking our questions. So just regarding the pending EU GMP certification, it's good that you got like some feedback. Some news is better than no news, right? We know that it's hard to predict, like as we all know, regulators are unpredictable at best, but what type of timeline might we see for this coming through?

Yeah, where we are in the process right now, we've received some feedback back from the regulators in January where they had some additional questions. And we're working closely with them to resolve those issues and to answer those questions. In terms of timelines, we're working toward the fastest we possibly can in conjunction with them. But like you said, these are regulators, so, you know, all we can do, we are doing our best to get it done as quickly as possible. But I can't give you a hard timeline at the moment. But we are working on the specific concerns they had, and not concerns, but questions they had and clarifications they asked for, and we're working with them to try to get it as quickly as possible.

Okay. Thank you so much. I'll jump back to the queue.

Our next question comes from the line of Pablo Zwanek from Zwanek & Associates. Your line is open. Please go ahead.

Thank you, and good morning, everyone. Can I ask you a question regarding route to market in Europe? I understand you work, obviously, with Sanity Group, in which you have an investment. BAT also has an investment in them. But you also work with other distributors. So I'm just trying to understand, going forward, as you enter other markets, do you go direct? Do you go through Sanity? If you can just expand in terms of how you think about that.

Okay, I'll start off with that, and maybe I'll hand over to Greg, who, you know, obviously has more time in the business than I do. I think, you know, the answer is that it will, you know, it will be a mix. Some of it, obviously, we sell to Sanity Group, which we do have an investment in. But as opportunities arise, there will be other models in different markets. So sometimes it will be direct sales. Sometimes it will be to Sanity. And it will just depend on what the regulations require and what the best option, the most cost-effective way and sustainable way, depending on the market it is. So I don't have a direct answer that would be consistent across all of them. Greg, do you have any comment on that?

Yeah, thanks, Pablo. I mean, we ship direct to Germany, obviously, through our partner, Sanity. We also ship directly to the UK at the moment. I think as far as other markets in Europe, such as, you know, look at the likes of Czechia, Poland, and some of the others that are opening up, we have the ability to ship there directly. But we're also, you know, we've got a great relationship with Sanity Group. so we're always in discussions about what the best way for us to go to market is. But at the moment, we ship direct to whichever markets we're competing in.

Thank you. And then just a quick follow-up regarding the U.S. I know it's hard to predict how the regulatory environment will evolve there, but you are one of the few Canadian LPs that's actually operating in the U.S. market indirectly, right, through two brands that you mentioned. In my opinion, the U.S. market could consolidate very quickly. So how do you get ahead of that? I mean, can you make investments? Can you set up guardrails to do that and preserve your NASDAQ listing? Just trying to understand again, how do you think about accelerating M&A in the U.S. market and how do you protect your NASDAQ listing as you do that? Thank you.

Well, I think first of all, the NASDAQ listing does not allow us to do full investment in the U.S. across all of the categories because of the, state-by-state nature and the lack of federal regulation around it. So that would be a constraint on what we could invest in the U.S. as a start. In terms of the current regulations, first of all, remember that the U.S. is actually a relatively immaterial part of our business today. I think it's less than 1% of our revenues, and it's not crucial to the growth plan for Organigram. In terms of the regulatory situation, your guess is as good as ours. We, under the current legislation, which is meant to go into effect in November, we're speaking with lawmakers, as are other parties, and we're hoping that we find a good resolution to this. But, you know, at the moment, we're creating different plans to make sure how we protect our current business in the U.S. and set it up for you to make sure that we're there should federal regulations change at some point in the future. Again, Greg, do you have any other comment on that?

Yeah, thanks, James. I think you hit most of the key points there. The one additional thing I would add is given the regulatory uncertainty, we're not investing really heavily in the U.S. right now. We're kind of waiting to see what happens. We're continuing to support the existing business, investing in sales and marketing and so forth. But really, until we start to see some clarity around regulation, I think we're going to be prudent as to how much capital we deploy in that market, particularly given the size of that business for us today. Obviously, we hope that things get clarified in the coming months. But right now, I think we just need to kind of wait and see what happens. And we'll continue to focus on other international markets where we see the bigger growth opportunities for us in the short term.

Got it. Thank you. That's what we call it. Thank you.

Just a reminder, if you would like to ask any questions, please press star one. And to withdraw your question, press star one again. Our next call comes from Kenrick Teig from Canaccord Genuity. Your line is open. Please go ahead.

Thank you. And apologies for the follow-up. Just with respect to the increased competition that you called out in pre-rolls, did that also translate into increased promotional intensity in quarter? And was that increased competition across all markets and pretty broad-based? or was it pretty narrow and only in specific markets?

On this one, Greg, can you provide some colour? Again, I apologise, it's been a month in. Greg, do you have any colour on that one?

Yeah, no problem, James. Yeah, Kenrick, I'd say it's a competitive space in general. All the categories have pretty intense competition. I think when it comes to pre-rolls and IPRs, We're seeing the value proposition really evolving across the entire industry. Similar to what we've seen in prior quarters, the potencies are increasing, pricing has become more competitive. We're confident that we have great offerings coming and in the pipeline that are going to address those challenges. But that's sort of what we're seeing across the category, pricing coming down and potency being the key challenge. The rest of the industry, I mean, we're seeing, you know, sort of similar levels of competition across vapes versus what we had in the prior quarter. Flour is always competitive. We think we've got a really great foothold there. And then in the beverage space, with the shots coming out, we're very optimistic about that. And the current product portfolio, we think there's some good growth opportunities there. So really looking forward to the new offerings coming and higher potencies in cross pre-rolls, which I think will position us really well to compete effectively in all of those categories.

Thanks so much, Greg. I'll leave it there.

There are no further questions at this time.

I will now turn the call back to James Yamanaka, CEO, for closing remarks. first of all thank you for joining the call today and thank you for um for the questions uh i'm looking forward to more of these going going forward and then again my my feet under the table a bit more uh to be able to uh give you a little more clarity on some of the future of the business so thank you very much for your attendance today and i'll pass it back over to the moderator Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.