Good morning, everyone. Thank you for joining us to discuss Tilray, Inc.’s Financial Results for the 2021 Fiscal Year and Fourth Quarter Ended May 31, 2021. Joining me on today’s call are Irwin Simon, Chairman and Chief Executive Officer; Carl Merton, Chief Financial Officer; and Berrin Noorata, Chief Corporate Affairs Officer. All lines have been placed on mute to prevent any background noise. Ms. Noorata, you may begin the conference.

Thank you, and good morning. By now, everyone should have access to the earnings release available on the Investors section of Tilray’s website at tilray.com and filed with the Securities and Exchange Commission on Form 8-K. On today’s call, we will also refer to various non-GAAP financial measures, which can provide useful information for investors. However, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Today’s earnings press release contains a reconciliation of each non-GAAP financial measure to the most comparable measure prepared in accordance with GAAP. Also, please remember that during this call, we may make forward-looking statements. These statements are based on our current expectations and beliefs and involve known and unknown risks and uncertainties, which may prove to be incorrect. Actual results could differ materially from those described in these forward-looking statements. Please note the texts in our earnings press release issued today for discussions on the risks and uncertainties associated with such forward-looking statements. And now, I’d like to turn the call over to Tilray’s Chairman and CEO, Irwin Simon.

Thank you very much, Berrin, and good morning, everyone. We appreciate you joining us for our inaugural call as new Tilray. Today, we will reiterate and reaffirm the strategic and financial benefits of our recent business combination and acquisition, detail the business level strategies and roadmap to ensure we realize the vision of that combination, outline the progress we have made to date, and of course, discuss our fiscal fourth quarter 2021 results, which consist of 13 weeks of pre-merger Aphria and four weeks of post-merger legacy Tilray, the world’s largest cannabis company. When we announced the new Tilray in December last year, we were optimistic that the strategic operational market opportunities in front of us had the potential to create the world’s leading cannabis-focused consumer branded company. This was our bet, backed by strong trends towards cannabis legalization in our three key markets: Canada, international, and the U.S.; a management team with a track record of building and sustaining value in the consumer packaged goods wellness space; well-defined organic, acquisitive, and partnerships based on growth strategy that together, with full legalization in the U.S., we believe will take us to a plan of $4 billion of revenue by 2024. I want to be clear at the outset, our conviction in both, the opportunities just as importantly as our ability to execute on that opportunity has never been stronger. The last six months have affirmed the sheer size of global opportunities ahead of us, just as importantly the effectiveness of a committed and passionate group of team members in building the leading consumer packaged goods business in the cannabis industry. Beyond what we have achieved over the last six months, our perseverance during the COVID crisis lends further validation to the fact that this team knows how to pivot, execute, and get results, considered at the highest level. And we lost well over $100 million in revenue as a result of retail store closures and the general impact of COVID, and yet we immediately implemented cost-saving measures, ultimately helping us build EBITDA to more than $40 million in 2021. We managed our facilities extremely well, helping ensure they remain open throughout the last 18 months. We acquired SweetWater, announced the closure of the Tilray-Aphria combination, and made meaningful progress on the integration, as I will discuss in more detail. We closed on a new bank financing of $100 million term debt and $20 million of credit, and ended the fiscal year with more than $488 million in cash and cash equivalents versus $360 million last year. So, throughout today’s presentation, consider these achievements during fiscal ‘21, a year of unprecedented change and disruption, highlighting the strengths of our new leadership team and should instill confidence in the road ahead, as we accelerate integration of Tilray and Aphria amid increasingly favorable market conditions. The thesis behind the Tilray-Aphria business combination and SweetWater acquisition is that the combination of cannabis with a CPG and health and wellness company is a winner. Prior to Aphria, my team here with me today at Tilray, we built a great CPG business in natural organics, healthy foods, personal care products, beverages, alcohol, and other industries, and the playbook here is essentially the same. It’s all about building iconic sought-after brands backed by product excellence and a variety of educating consumers about our brands, our stringent quality standards, and benefits of cannabis products to encourage trial, foster loyalty, and having the scale distribution necessary to get them into consumers’ hands and grow market share. To put it simply, Tilray is the only cannabis company with the scale, reach, and resources to get it done. Our business planning and integration are built around five key competitive differentiators: the industry’s broadest geographic footprint and operational scale; leadership positions in Canada with a complete portfolio of product offerings and carefully curated brands; tremendous international growth opportunities; a meaningful U.S. consumer packaged goods platform to be immediately leveraged for cannabis products upon legalization; and with both companies coming together, substantial synergies. Geographic footprint and operational scale. I’ll start with item one. Geographic footprint and scale is clearly a distinct competitive advantage, as Tilray now possesses the geographic footprint and operational scale to emerge as a consolidator in the cannabis market. This effort is backed by a strong, flexible balance sheet, robust cash balances, and access to capital. These attributes provide us with the ability to accelerate organic growth, build EBITDA and free cash flow, and look at other partnerships and acquisitive opportunities that could ultimately complement our product line as legalization accelerates. Regardless of the industry but especially in a nascent, rapidly growing industry like cannabis, these attributes should deliver long-term sustainable value for shareholders. Strengthening our leadership position in Canada. In Canada, we plan to grow and strengthen our position as the number one Canadian LP in total sales on a consolidated basis. This is a foundation that will be essential to getting us from our current combined retail market here in Canada of 16% to our goal of 30% share by fiscal year 2024. New products that are trusted by consumers that have real brand equity, in fact, putting the two complementary portfolios of Aphria and legacy Tilray together has enabled us to strengthen both brands. Aphria has historically been strong in flower, pre-rolls, 2.0 products, and began making inroads on vapes while legacy Tilray has several high potency flower strains that fit nicely into our portfolio, in addition to being stronger overall in edibles and beverages. Strategic partnerships with provincial boards and retail partners, we have strong relationships with the provincial boards across the country and retailer partners. We will continue to create merchandising and education platforms for budtenders and consumers to drive brand loyalty to our portfolio. Both of these strategies will drive absolute growth in the Canadian market. Additional store openings. To this point there are currently over 2,000 stores in Canada. We believe growing market demand could warrant as many as 3,000 by the end of calendar year 2022. Of course, this retail performance will likely improve in line with lifting COVID restrictions, which have materially impacted retail efforts since the spring of 2020. Our Canadian business will benefit further from the fact that we’re already the low-cost producer with state-of-the-art cultivation processing manufacturing facilities. This did not happen by accident. From the beginning, we were careful about how we created cost structures within the organization. Now, we are accelerating our work on pulling additional costs out of the structure, so that we can gain further efficiencies and increase our margins. While legacy-Tilray was generally asset-light, Aphria had invested heavily in brands with great brand equity. We view our ability to leverage product capabilities and footprints with an asset-light model as a strong combination. Based on OCS sales data, Tilray continues to be the number one market share in Ontario. Further, the consolidation of Tilray also has the number one market share now in Quebec. Innovation will also be a hallmark across our brands and across all segments in Canada. From a Cannabis 2.0 standpoint, this will be within concentrates, edibles, and drinks. For Canadian medical, our focus is centered on the large and growing demand for new, high-quality cannabis products that promote health, wellness, and well-being. For example, we recently launched Symbios, which complements our existing medical brand portfolio of all medical Aphria, Broken Coast, and Tilray products. This new brand was developed to provide a broader spectrum of formats and unique cannabinoid ratios at a better price point. In addition, it allows medical patients a full comprehensive assortment of products, including flower, oils, and pre-rolls for their health and wellness regimens. We also introduced high potency medical topicals under the Aphria brand, designed to target inflammatory joint disease by regulating tissue inflammation when applied topically to the skin. Additionally, we consolidated facilities within Canada and moved much of Tilray’s production into our Leamington facility. We’ll continue to focus on improving product potency and quality to meet market demand. As you know, Canada currently restricts how cannabis brands can be marketed to consumers. While product safety is paramount, it is also crucial to communicate and educate consumers about the products and benefits of cannabis. During the pandemic, as people were not able to go into stores in Ontario and had to deal with in-store capacity limits in Alberta and British Columbia, we kept our focus on driving brand awareness, working with the different control boards and retailers to use social media and other e-commerce platforms to help those that ordered online or picked up at curbside. Until just recently in mid-June, there were over 800 stores in Ontario alone that had never opened their doors to customers because of COVID or could only do curbside delivery. This has now begun to change, and many stores have since opened across these provinces in June. Although that, of course, did not help our May ending fiscal quarter sales. For the past six months, when customers were looking for products, they were searching online. Most of the websites are organized by price. In other words, price mattered more than marketing. However, as consumers can now resume and interact with budtenders, where impulse purchases can occur inside the store, we’re confident customers will shift away from price-based cannabis purchases and brands will matter, more characterized by pent-up demand. Finally, we intend to be effective, innovative advertisers in the truest sense of that term. Educating our consumers about the quality and safety of our products is essential. Advertising is a critical medium in that effort. We have therefore been working with the appropriate authorities to allow more effective forms of advertising, similar to other regulated industries, and we have a marketing strategy that is ready to go. Accelerating our international growth. Our international growth strategy leverages our two strong medical cannabis brands and our large distribution network in Germany and end-to-end European Union GMP supply chain. Again, these attributes are unique to Tilray and, taken together, they’re expected to increase our access and availability to high-quality consistent medical cannabis for all European patients. The European Union, where we already have a very meaningful presence, represents a powerful growth market and could be a $1 billion business for us from a medical standpoint alone. We’ll also be ready for legalization for adult-use when the time comes. Our presence in the EU allows us to grow our brands on a global basis. With 600 million people, that is nearly twice the size of the U.S., with Germany possessing the greatest potential at twice the population of Canada. We already have a low-cost production facility in Portugal that provides us with tariff-free access to the EU. We also have a state-of-the-art EU GMP certified cultivation and production facility in Germany and a subsidiary in CC Pharma, which is a medical distribution business to 13,000 pharmacies. While our fiscal fourth quarter results in Europe were negatively impacted by the lockdown in Germany, similar to Canada, it is now reopening, and we’re confident our business momentum will return. Among the many benefits of our business combination is the ability to have CC Pharma distribute our product from Portugal to Germany and, in doing so, move up the value chain with the consumer as part of that transaction. To be clear, revenue synergies are not part of the overall $80 million of synergies that we’ve already articulated; those were only on the cost side. This transaction is taking place and will positively impact the tail end of our fiscal first quarter, but had no flow-through in recent quarters. Another key factor in our plans for Europe is that the EU generally is more medically and pharmaceutically focused than Canada and the U.S., which results in nearly a three times difference in purchase reimbursement. We think consumption will increase on a per capita basis as well. Early this month, our wholly-owned German subsidiary Aphria RX completed the first successful harvest of its EU GMP certified medical cannabis cultivated in Germany for distribution to German pharmacies. This represents an important milestone in granting access to high-quality, trustworthy medical cannabis to patients and healthcare professionals in Germany. Despite the challenges of a global pandemic, we remain on track as the first licensed producer to cultivate medical cannabis in Germany. Moreover, we think that our ongoing domestic harvest and production will play an indispensable role in ensuring that patients’ needs are met with products of the highest quality medical cannabis, while at the same time reducing dependence on imported supplies. Other European markets where we are expanding our platform include Poland, Italy, the UK, France, the Netherlands, and Israel. These countries and other parts of the continent are likely to see full legalization before the U.S. Finally, in South America, we are seeing greater legalization from a medical standpoint. We already have a foothold into Argentina and Colombia, where we see some opportunities. We’ve also shipped some CBD oils into China and should see opportunities eventually in India, where THC is already used in many different medicines. Enhance U.S. consumer packaged goods presence and infrastructure. Here in the U.S., we have a strong consumer packaged goods presence and infrastructure with two strategic pillars. SweetWater, the 11th largest craft brewer in the nation and leading lifestyle brand, with around 4,000 on-premise and off-premise points and sales across 27 states, and Manitoba Harvest, a pioneer in branded hemp, CBD, and wellness products with access to 17,000 stores in North America. Today, they are $100 million-plus businesses and quite profitable with enormous potential for growth. In the event of U.S. federal legalization, which received a high-profile boost from Senator Schumer’s recently proposed legislation, we can foresee, within the next 24 months, Tilray will be ideally positioned to compete in the cannabis market by re-leveraging these strong brands and the distribution systems to parlay into THC drinks, CBD drinks, CBD foods, and related adjacencies. With SweetWater, we’re expanding our product line of leading craft beers and other beverages to build greater brand awareness for our cannabis brands through cross collaboration and brand extension opportunities. We entered through Hazy, a juicy and refreshing IPA, and Oasis, which is a vodka seltzer mix. Both are doing well already. Just last month, SweetWater partnered with Broken Coast to launch U.S. distribution of Broken Coast BC Lager, which is also a milestone event as Tilray’s first Canadian cannabis brand introduction into the U.S. We intend to follow this up over time by introducing other great Canadian cannabis brands into the U.S., connecting us with consumers and other mainstream brands in our portfolio. We’re also currently working on opportunities for SweetWater with CBD, tequila mixes, wine spritzer mixes, wine in the can, etc., while increasing SweetWater’s distribution in the near term to an additional three states. Let me also say that during the quarter itself, SweetWater, like a lot of other craft breweries, had below plan on-premise sales, as many restaurants and bars were closed for operating full capacity. Although we did pick up a lot of retail business as consumers bought or expanded their line of products. As business conditions have improved since the end of the quarter, on-premise sales have rebounded and are up 40% year-over-year. Turning now to Manitoba Harvest, this is a great business. We’re now fine-tuning strategic planning and expanding opportunities, including looking at strategic partnership opportunities and acquisitions that complement our adjacencies to the cannabis world as we position ourselves for federal legalization. Substantial synergies. As we have said, we plan to deliver approximately $80 million of annual pre-tax cost synergies within 18 months of the business combination. When we first announced the transaction, we said 24 months, but I’ve since moved that up. Key areas of opportunity are within cultivation, production, cannabis products purchasing, sales, marketing, and corporate expenses. There’s already been a lot of hard work done by our great team over several months, and there will be a lot more efforts to achieve these synergies and fully integrate the two entities. So far, we have already achieved $35 million in synergies. We’re a little ahead of our internal plan but still moving things along so that we can continuously drive positive cash flow within the new Tilray. Notably, as I have said before, the $80 million are cost synergies and do not reflect any possible revenue synergies that we know are also within our reach. In conclusion, I know that I’ve covered a lot of ground today, but hopefully, I have also expressed my enthusiasm and excitement for what lies ahead for the new Tilray. Carl will now review our financial results. But first, I want to remind and encourage our shareholders of record to read our proxy and vote online or by telephone on the authorized shares proposal and governance proposals. For all the reasons I’ve detailed this morning, we need your help to ensure Tilray grows and to ensure you’re able to participate in our success in a meaningful constructive manner. As a reminder, the first proposal would authorize additional shares of common stock, so that we can move quickly to accelerate our growth through potential acquisition and financing opportunities. However, approval does not mean the authorized shares will be immediately issued, only that these shares would be available if needed in pursuit of these important corporate initiatives to drive shareholder value. And second, our other proposals are intended to expand the rights of our shareholders that take into consideration the views held by the investment community on important matters of governance. These proposals require shareholder approval on several amendments to our organizational documents. If you have any questions or need any assistance in voting your shares, please contact Morrow Sodali at 833-497-7395, toll-free in the U.S. and Canada, or 203-658-9400. I know that I speak for our entire management team and our Board of Directors when I say that we are working every day to take full advantage of all the opportunities that we have at Tilray to enhance long-term shareholder value, and I deeply appreciate your support. With that, I will now turn the call over to Carl.

Thank you, Irwin. I would like to echo Irwin’s sentiment and express my excitement for being a part of Tilray. We are poised to be a strong, diversified and profitable company, and our early integration process reinforces our confidence that Tilray will create long-term sustainable shareholder value for years to come. Before we begin, I need to point out some important accounting reminders. Our business combination was determined to be a reverse acquisition. This means that while Tilray is considered to be the legal acquirer, Aphria is considered to be the accounting acquirer under U.S. GAAP standards. Our financial statements going forward will reflect this, which means that all prior quarter, year, or periods are based on Aphria’s prior financial results. These prior results and the first three quarters of fiscal 2021 were adjusted to follow U.S. GAAP and are presented in U.S. dollars. As a result, you cannot directly compare items from prior periods to Aphria’s historical financial statements. To help understand our prior periods and to help analysts and investors forecast more accurately, today we published an appendix to our Investor deck located on our website that contains an analyst primer. The primer breaks down Aphria’s U.S. GAAP financial statements for 2020 and 2021 by quarter. Please note, the primer has not been audited. We remind investors that our fourth quarter and fiscal year ended May 31, 2021, results presented today consist of three months and 12 months, respectively, of Aphria’s operating results, as well as one month in both reporting periods of Tilray’s operating results. Throughout our call today, we will reference our audited results and we’ll also reference our adjusted financial results. Please refer to our press release for a reconciliation of our reported financial results under GAAP to the non-GAAP financial measures identified during our call. Specific to Q4, Tilray accomplished a tremendous amount, despite the COVID-related headwinds impacting the top line. While we worked hard to maintain our brand strength across adult-use and medical, net revenue would certainly have been higher if not for lockdowns in Europe and Canada. Our team took proactive and aggressive steps to optimize performance. In fact, our ability to drive significant cost savings by aligning production costs with demand in a dynamic operating environment, managing G&A, and the benefits realized from implementing meaningful changes at Aphria pre-merger as well as in minimizing costs at Tilray during the initial four-week period resulted in another quarter of increased adjusted EBITDA, our ninth consecutive quarter of positive adjusted EBITDA. We believe this represents truly differentiated performance within our peer set. During the quarter, net income rose to $33.6 million versus a net loss of $84.3 million in the prior year. More importantly, I am extremely pleased to report that for the quarter, we generated positive free cash flow of $3.3 million, achieving a major milestone in building the Company and delivering on our comments to shareholders to do so by year-end 2021. We view generating a steady stream of free cash flow as another important differentiator of our business. Having already demonstrated our ability to consistently realize positive adjusted EBITDA, the logical next step in showcasing sustainable profitability at Tilray is the same period of free cash flow generation. One of the key benefits of our business combination was the $80 million of anticipated synergies. Months of planning before the closing and 10 weeks after closing, we are making great progress on integration. This progress includes meaningful lasting efficiencies in business processes and operating initiatives, IT infrastructure, compliance costs, attrition and headcount and facility closures, including most notably, the closure of the Enniskillen growing facility effective September 30th. But the most important question is our progress against the $80 million goal. In this respect, I am pleased to report that we are ahead of our anticipated pace and took the actions necessary to achieve $35 million of the $80 million in synergies, although cash savings in Q4 were closer to $7 million. Now, let’s discuss Q4 in greater detail. Germany ended a hard lockdown. We were challenged to source sufficient medical supply products from lower cost countries to sell through our German distribution channels. I want to be clear that the orders and the demand were there. We simply could not source supplies due to COVID restrictions. Another headwind in our Q4 performance for Europe was that medical patients, who might otherwise load up on supply in advance of summer vacations and generate our traditional strong Q4 demand, did not do so this year. As a result of these conditions, net distribution revenue was $66.8 million for the quarter, compared to $74 million in the fourth quarter of the prior year. During our fourth quarter, Canada continued to struggle with high infection and low vaccine rates, which led to restrictive lockdowns in Ontario, Alberta, and British Columbia for virtually the entire quarter. Net revenue from our cannabis business in the fourth quarter was $53.7 million compared to $39.6 million in the same period of the prior year. Net revenues at SweetWater continued to improve but remained below pre-COVID levels at $15.9 million, and net revenues from our wellness business, Manitoba Harvest, were $5.8 million in essentially one month of activity. All of this led to net revenue increasing 25.3% to $142.2 million in Q4 over the prior year period. The average gross selling price of adult-use cannabis decreased to $2.98 per gram in Q4, compared to $3.90 per gram in Q4 of the prior year, as a result of increased competition and price being the only way to differentiate during COVID lockdowns, a temptation we did not indulge during the period. The average gross selling price of medical cannabis exclusive of wholesale decreased to $4.54 per gram in Q4, compared to $4.95 in Q4 of the prior year, as a result of specific pricing programs offered to assist patients who have been negatively impacted by the pandemic, along with other promotional programs. Our cash cost to produce per gram decreased to $0.72 per gram at our Leamington facilities due to improved yield, potency, and cost control efforts that began in January and continue to benefit us. Adjusted cannabis gross profit increased to $23.9 million in Q4 compared to $18.9 million in the prior year, although adjusted cannabis gross margin fell to 44.5% from 47.7%. The decrease in margins was a result of price compression during the COVID-19 lockdown, despite our determined efforts to lower our cost of sales. Not included in our calculation of adjusted cannabis gross profit was a provision of $19.9 million on the combined cannabis inventory of Aphria and Tilray. As part of the business combination, we performed a detailed review of inventory levels, identifying some inventory categories where the combined entity had excessive inventory levels, creating the provision. These efforts included proactively adjusting our cost structure to offset the impact of the decrease in demand, including temporary four-day work weeks at our Canadian cannabis facilities, better managed headcount and reduced planned operating spending. Cannabis contributed $6.4 million to our adjusted EBITDA in Q4, up from $3.8 million last year. Adjusted distribution gross profit decreased to $6.4 million in Q4 from $8.9 million in the prior year. While adjusted distribution gross margin declined to 9.5% from 12.1%, all as a result of the impacts of COVID-19 on CC Pharma sales mix. Distribution contributed $0.9 million to our adjusted EBITDA in Q4, down from $1.4 million last year. Adjusted beverage alcohol gross profit was $10.6 million in Q4, and there was no comparable in the prior year as the acquisition was completed last November. Notably, adjusted beverage alcohol gross margin was a healthy 66.5%, far outpacing our other segments and a sequential improvement from the two previous quarters under our ownership. The SweetWater team clearly did a great job controlling costs, despite softer off-premise sales due to COVID restrictions. Beverage alcohol contributed $6.5 million to our adjusted EBITDA in Q4 and adjusted EBITDA margin of over 40%, essentially on par with cannabis contribution, but with only about a fifth of the net revenue. Obviously, we remain very bullish on SweetWater, both from a standpoint of expanding its top-line through new products and greater distribution, but also because of the high margin nature of this business and what it could contribute to our overall profitability over time. Adjusted wellness gross profit was $1.6 million, and adjusted gross margin was 26.9%, for which there were no comparables last year. G&A costs increased to $32.8 million in Q4 or 23.1% of net revenue compared to $24.9 million or 21.9% in the prior year, which does not include the acquisitions of SweetWater and Tilray. The increase was a result of headcount increases and increases in our insurance costs. Transaction costs totaled $33.3 million and were related to out-of-pocket fees to consummate the business combination, including legal, banking, and other advisory fees, along with severance payments associated with the business combination. For the quarter, we reported a net income of $33.6 million or $0.18 per share, compared to a net loss of $84.3 million or $0.39 per share last year. In Q4, our ability to generate net income was related to recognizing $121.5 million in net non-operating income. This was due to an unrealized gain on our convertible debentures driven primarily by the change in our share price and the change in the trading price of the convertible debentures. Turning to cash flow and liquidity. As I mentioned earlier, we generated $33.3 million in free cash flow during Q4, representing a $6.7 million positive swing from Q3, all despite the intensity of COVID restrictions in our markets. This was a major achievement for us and something we have talked about in the past as being one of our highest priorities, demonstrating profitability through key metrics such as adjusted EBITDA and free cash flow. In fact, after having generated positive adjusted EBITDA for more than two years now, we view achieving free cash flow on a consistent basis as our next priority. Our ability to do so beginning in Q4 was due to a substantial increase in operating cash flow to $8.3 million from $0.7 million, coupled with limited CapEx of just under $5 million, which was just above our $4.1 million expenditure in Q3. We are also proud of our industry-leading balance sheet, including a strong cash position. As of May 31, 2021, we had cash of $488.5 million, to support our existing working capital requirements, including COVID-19-related financial impacts and their near-term business plans. Briefly moving to full fiscal 2021 results, this was clearly a transformational year of progress for us and one that enabled us to position Tilray as a leading cannabis brand. Net revenue was $513.1 million, an increase of 27% from the $405.3 million in 2020. Cannabis revenue grew 55%, distribution revenue was flat, while we benefited from contributions from both beverage alcohol and wellness, totaling $34.4 million that were not in our 2020 results. Turning to profitability, we significantly increased our adjusted EBITDA to $40.8 million compared to $5.8 million in 2020, reflecting an improvement of $35 million or 603%. With our focus on the future and what we can control, we are executing on our highest return priorities, including business integration and accelerating our global growth strategy across five key competitive differentiators, as Irwin articulated. We are also relentlessly focused on managing our costs in order to maintain our healthy financial conditions. Our success will be measured through the scale, expertise, and capabilities we will leverage to drive market share, achieve industry-leading profitable growth, and build sustainable long-term shareholder value. As we move ahead, we believe our strong cash position and balance sheet flexibility provide us with the means to transform the industry through a highly scalable operational footprint, a curated portfolio of diverse medical and adult-use brands and products, and a multi-continent distribution network. Finally, while we are not in a position to issue any formal guidance, I would like to mention that the recent floods in Germany directly affected CC Pharma. Fortunately, all our employees are safe. However, business operations were shut down for three days. We estimate this will create a negative impact of $2.5 million to $4 million in Q1 2022 net revenues along with a minor margin impact related to the cleanup. We maintain insurance coverage to cover these but do not expect insurance proceeds to be received during the quarter. With the recent lifting of lockdown restrictions, we not only look forward to increasing interactions with our families and friends, but we look forward to the changing purchasing patterns and demand for cannabis in our biggest market. This concludes our prepared remarks. Before moving to analyst questions, Irwin and I will answer a few questions from our retail shareholders from the Say platform.

Thank you. Let’s begin the questions from the Say platform. First question is the following. There is a great limit to the amount of cannabis Tilray can grow and sell in Germany. Will there be permits issued to Tilray for continued growth and production?

Hi. Good morning. It’s Irwin. It’s absolutely yes, and it’s limited to our facility. With our current tenders that we have and the ability to fill them, there are lots of opportunities for us in Germany. I think there will be additional tenders and additional production that will come our way. The big fish in Germany also is distributing cannabis to those 13,000 drugstores which will go through CC Pharma. The other big fish in Germany is we hope with the Green Party that they push through legalization in the next 18 months.

Thank you. Question on SweetWater. Will SweetWater THC drinks be soon available in Canada, and are there plans to expand SweetWater to California?

So number one, there will be THC drinks available in Canada. As part of the Tilray acquisition, a canning facility and an edibles facility became available to us in London, Ontario, a very capable facility. So, there will be THC drinks in Canada available. Right now, I don’t know what brand will be under. But SweetWater as a brand of alcohol is available today in Canada. It is our intention to expand it into the Canadian market. Secondly, we recently completed the acquisition in Fort Collins, Colorado, of a facility called Red Truck, which will start producing SweetWater products. The intention is to expand into the Western states.

Next question, with the pending federal legalization in the U.S., how will Tilray benefit from this? Specifically, how will this affect the value of the Company and benefit the shareholders?

Good question. Listen, I’ve talked about in my script today, a $4 billion plan to get Tilray to in sales by the end of 2024. A big part of that is legalization. If you come back at Tilray, number one, we look to grow through adult-use and medical, new products, cannabis 2.0, which is edibles and drinks, in the Canadian market. Number two, we talked about growing to $1 billion of sales in Europe through medical cannabis and through our CC Pharma and potentially other acquisitions. Legalization happening in the U.S., which is the biggest market, which today is probably between CBD and THC is close to a $50 billion market, is the biggest opportunity for us. Tilray will be pursuing opportunity and options with MSOs that will be able to either integrate into our business, merge, or acquire, once legalization does happen in the U.S.

Thank you. I’ll now open the lines for analyst questions. We ask that you please limit yourself to one question. Our first question comes from the line of Owen Bennett with Jefferies.

Question from me is slightly following up on the last question. Obviously, got the votes for more shares tomorrow, I think it would be fair to assume, and this could be used to acquire more assets in the U.S. With the potential change within the next 12 months, that means you could enter the U.S. THC market. I wanted to know how you’re thinking about U.S. assets from here. Is it additional broader consumer goods assets, like you did with SweetWater, or would focus now be on doing something around securing optionality on U.S. THC assets, like we’ve seen a couple of your peers do? Thank you.

So, Owen, as I said before, I have put out there an aggressive stance for Tilray by the end of 2024 to be a $4 billion company. A good part of that is acquiring in the consumer area to enhance our Manitoba Harvest business, in the food area where we would be able to add CBD or THC or hemp to our business. Along with our SweetWater business, we would like to acquire additional businesses in the alcohol area or the beverage business that would complement SweetWater. We see those businesses today growing to a $200 million business. We’d like to see about $0.5 billion in sales in the consumer packaged goods business, whether it’s conventional products, CBD products, hemp products, or THC products where permissible once legalization happens. Regarding the U.S. market, we’re looking to have $1 billion to $1.5 billion in sales, and that would come from companies where we have optionality and invest in those companies with the intention that once legalization does happen, we would be able to acquire 100% of those companies.

Our next question comes from the line of Vivien Azer with Cowen. Please proceed with your questions.

I wanted to touch on your market share aspiration for 2024, which is close to a doubling from where you are today. Just in terms of kind of what underpins the logic behind the 30% target, because certainly you have competitors that have similar aspirations for market share leadership. Market share gains are not a foregone conclusion. From a marketplace standpoint, it seems like you’re expecting better mix shift as the category reopens in terms of in-person sales. How much are you expecting in terms of better pricing and better mix to drive those market share gains? Thanks.

Today, we have roughly a 16% market share, and we are aiming to double that. The Canadian market has been nearly closed for seven months, with many stores built but not opened in Ontario. We are still in the early stages of creating awareness about legalization. To increase our share, we need to promote the benefits of cannabis for adult use and improve consumer perception and purchasing of medical cannabis in Canada. We aim to reach around 3,000 stores that are projected to open and attract more users who understand cannabis benefits. A significant part of our strategy involves growing our beverage and edible business through innovation. Currently, we sell close to $100 million in vapes, a product category that barely existed two years ago, along with advanced pre-roll technology and various hashes, waxes, and oils. Our growth is not limited to flower; we are introducing multiple new products and innovations. There is also substantial opportunity for expansion in the drinks and edibles segment, where we currently have a limited presence, thanks to our facilities that allow us to grow that business.

Thank you. Our next question comes from the line of Andrew Carter with Stifel. Please proceed with your question.

Thank you. Good morning. I understand that you aren't providing formal guidance today, but I'm curious about your outlook for the next quarter regarding the reopening and the increase in on-premise sales for SweetWater. I appreciate the challenges you're facing. Additionally, what are your thoughts on the sustainability of free cash flow? Regarding the $5 million in CapEx, is that a suitable figure for this quarter and moving forward, or should we expect it to increase? Lastly, do you anticipate achieving better balance in your cultivation and reducing working capital drag? Thank you.

Carl, do you want to take that?

Sure. Regarding free cash flow and capital expenditures, I would say that for the next few quarters, the $5 million is likely the maximum we’ll see. Most of our major capital projects are completed globally. We still need to invest a little in lighting projects in Leamington to enhance lighting, and we will eventually decide on increasing extraction capacity in Portugal, but those aren't large initiatives. Concerning inventory levels, we took on some inventory due to the transaction with Tilray. We are shutting down the Enniskillen facility and transferring that production to Leamington, which should give us better control. We expect to see some decline in those inventory levels as stores reopen. In terms of demand, we’re not providing specific guidance, but there has been a noticeable uptick in demand at retail locations. There is often a delay at the store level in ordering inventory as they work to manage restrictions. Many people in Canada have had negative experiences with the back-and-forth nature of lockdowns, so it will take a bit of time to ensure that orders are flowing smoothly. This situation will likely result in delayed ordering and changing ordering patterns. We will also see this delay on the provincial boards' side, as there is typically a few weeks lag before they begin placing additional orders with licensed producers following increased retail ordering. We usually notice heightened demand from the boards towards the end of our quarter.

Andrew, regarding guidance, it’s crucial to have all the retail stores open and all the built stores operational so we can process the accumulated demand through the distribution facilities. Once that happens, we'll have a clearer understanding of actual consumption patterns, order flow, and our new products, allowing us to provide guidance thereafter.

Our next question comes from the line of John Zamparo with CIBC.

I wanted to ask about the previous question regarding the U.S. So Irwin, when you mention looking for optionality deals in the U.S., can you clarify if you’re essentially seeking costless exercises on warrants in significant states? Is that your intent? If that’s the case, can we assume you’re focusing on cannabis brands instead of vertically integrated operators, whether they are MSOs or single-state operators?

So John, you broke up just as you were going to add to that pertinent question, but I think I know what you’re asking me. In the U.S., there are two paths I’m going down. Number one is looking into the consumer products area in alcohol and food that are sold in the marketplace, which will ultimately be converted to THC and CBD products once legalization happens. That would become part of our SweetWater and our Manitoba Harvest business. Alongside of that, we will be looking at optionality and investments in MSOs that make sense strategically aligned with Tilray, with the intention to acquire or merge with them 100% once legalization occurs. So, there are two paths in regards to investments in the U.S.

Our next question comes from the line of Rupesh Parikh with Oppenheimer. Please proceed with your question.

So, Irwin, you referenced in your comments, I think, some of the challenges just on the pricing front that you guys are seeing in the market. I’m just curious, if you look at the competitive backdrop out there, what are you seeing, and how are you thinking about pricing pressures going forward?

So, Rupesh, good morning. Listen, I think what happened out there, as a lot of products were bought online and products were locked up at retail stores, you didn’t have your budtenders able to share the qualities and attributes of products. So, a lot of consumers were just buying products based on price. That’s the bad news. The good news is, I think a lot of these products they bought on price, they realized were not quality products and learned from that. As I said before, price is key. We are a low-cost producer. On the other hand, consumers like brands, and when you’re buying a good tequila, vodka, or wine, you want a quality product. That is not going to be different in the cannabis space. And I can reassure you with our over 12 brands, quality products are something that we’re going to deliver. Potency is important, our different strains are important, and our different brands are crucial. Pricing is important, but we’re not going to be out there as the lowest priced product line. Building consumer awareness around quality is going to be very important for us.

Our next question comes from the line of Tamy Chen with BMO Capital Markets. Please proceed with your question.

Irwin, I just wanted to ask with respect to your U.S. strategy, the two approaches that you talked about. I’m just wondering, it’s a very complex strategy where you’re looking for several things, CBD, hemp, more alcohol, more food businesses, and then THC on top of that. So, the first part of the question is why pursue both of these routes? It seems to add a lot more to your plate and a lot more complexities. And two is, when you talk about that second path on investments and possibly acquiring MSOs, why do you believe that MSOs or even single-state operators would be interested in an investment or possibly acquisition by Tilray? Thanks.

So, number one, again, strategically, we do have an alcohol business today. We think alcohol is growing in the 3% to 5%. We think number one, it’s a great category. We can bring a lot of new products to it, like we’ve done with SweetWater, and we will continue as we introduce our tequila mixes and wines in cans, our RIFF products with vodka seltzers in cans, and grow our distribution. We have the infrastructure out there to do that. That’s no different than Manitoba Harvest. We want these businesses to be bigger businesses and ultimately connect it to cannabis. It’s important to understand the adjacencies to a cannabis business, or CBD business. In prior life, we’ve built consumer packaged goods businesses. We want to be the largest brand cannabis company in the world. In regards to MSOs, listen, we are one of the largest cannabis companies today in the world. We have a big business in Canada in the adult-use, the medical use in cannabis, drinks, gummies, and edibles. We have a major business in Europe in the medical business. Looking at some of these MSOs, they would want to partner with a company that has capital, we have close to $0.5 billion in cash on our balance sheet, great liquidity within our stock, a very experienced management team, and a good history of growing great cannabis with great strains. I’m not sure why they would not want to partner with us if it made sense economically for both sets of shareholders.

Our next question comes from the line of Aaron Grey with Alliance Global Partners. Please proceed with your question.

Hi. Good morning, and thank you for the question. Irwin, you mentioned your market share aspirations in Canada to get to 30%, but I also want to talk about the legal market versus the illicit market, and maybe some of your goals there? Right now, Ontario has about 50% of sales still going to the illicit market. Pricing, at least on the flower side seems to be below the illicit market, stores have certainly improved a lot in Canada, even though they’re still looking for it to 3,000, and maybe we’ll see more of an impact from the greater amount of stores in the back half of the year as the lockdowns ease. I’d love to get your perspective on what else you think is needed in the legal category to better compete with the illicit market, whether it be product formats, more quantity for beverages, or more milligrams for edibles to gain more market share over the illicit market? Thanks.

So, number one, as I’ve said, brand equity is critical. You must build your brands. You need consumers to trust your brands that go through the quality assurance and regulatory process that ensures you know what you’re getting, regarding potency, potency products, and if any type of additives like sprayed pesticides are involved. It is crucial to educate consumers on product safety, quality, and attributes. Number two, pricing is important. When you pay the price, you want to be satisfied with what you’re getting in the product. Number three is distribution—making sure we can sell products across all Canadian provinces and having a strong presence in each of the provinces. Number four is innovation, which is key. For example, we sell close to $100 million of vapes today; two years ago, vapes were not there in regards to pre-rolls and technology in pre-rolls today. We’re introducing multiple new products and innovations. The big expansion for us today is also in drinks and edibles where we have limited business today, and now that we have a facility, we have the opportunity to grow that business.

Next question comes from the line of Michael Lavery with Piper Sandler. Please proceed with your question.

You have some appealing assets from the Tilray deal, with the Portugal facility being a significant one. However, you also took on a business where the previous auditor pointed out serious weaknesses in internal controls. Can you explain how you are addressing this issue and the challenges involved in fixing it?

So, Irwin, if it’s okay, I can take that. Michael, there were three significant weaknesses identified by the previous management team related to existing processes. We have been addressing those issues since the integration period and even before the closing to strengthen those controls. The same processes at Aphria had similar issues, and we have implemented controls that did not lead to any findings of a material weakness. By integrating their processes with ours and applying best practices moving forward, we expect to fully address the material weakness within the next year, prior to our next review report.

Our next question comes from the line of Heather Balsky of Bank of America.

Hi. Thank you for taking my question. As Canada begins to reopen, could you provide insight into June and July regarding what was accessible and any improvements you have noticed or heard about? Additionally, we have observed a general trend where consumers, not just in the cannabis sector, are increasingly shopping online due to lockdowns. I would like to know your thoughts on consumer behavior going forward and how confident you are that a segment of consumers has not permanently transitioned to online purchasing? Thank you.

So, Heather, good morning. And number one in the Canadian market, and Carl jump in here anytime because you’re in Toronto. What we’re seeing is a lot of piped-up demand and a lot of getting back to business, with stores reopening. As you heard me say, there were close to 600 stores where licenses were granted that did not open during the pandemic and did not want to open that are going to start to open now, providing consumers with opportunities to buy products. Consumers want to see all the new products that have come out and get back to buying at their local retail stores. As for buying online, I think if anything, the reverse has happened, with consumers wanting to get back into stores and educate themselves about new products. This is evident in the supermarket industry and other retail stores. I think that will be seen in Canada as new stores open. We expect a lot of buying from that piped-up demand; many new products will be introduced into the stores. The big thing is we must educate consumers again about our products since it has been nearly a year since we’ve engaged with them in-store. We plan to invest significantly more in marketing dollars focused on social media and getting our products out there. The Canadian market is limited in how we can advertise, but we are going to be aggressive.

Thank you. There are no further questions at this time. I would like to hand the call back over to management for any closing comments.

Thank you very much, operator. And thank you very much, everybody for getting on the call today. I have to tell you, 2021 has been a tough year. If you step back and look, Canada was closed mostly since November, and Europe was closed as well. We managed to complete two major acquisitions—one in October with the acquisition of SweetWater and then announcing in December on the Tilray deal and closing on both. We established a very strong management team. I wish to thank my management team for all of their successes. I also want to thank our Board of Directors for their support during this pandemic and getting these things done. You heard me discuss the many cost-saving measures, which amounted to close to $35 million by integrating both businesses. We originally aimed to do this in 24 months; however, we moved that timeline to 18 months. Regarding the fourth quarter, despite Canada being closed, we grew our cannabis business by 55%, reporting a net income of $33 million and remaining cash flow positive. We’re sitting with $485 million in the bank. One of the questions I received was regarding what we bring to the U.S. and why an MSO would want to partner with us. Let me say, Canada has been a challenging market for us, but we have learned a lot about growing, producing products, and innovating. We plan to take many of these learnings into the U.S. market, which will be beneficial for any MSO that partners with us. I appreciate our shareholders’ support and patience through tough times. It’s vital for shareholders to get out and vote. As I stated, when we closed this deal, we had no shares to act on acquisitions and investments to secure our future. Enjoy the rest of your summer, and thank you again. I look forward to speaking to you in the future. Have a great day.

Thank you. That does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time. Have a great day.