Good morning, everyone. Thank you for joining us to discuss Tilray, Inc.'s financial results for the 2022 fiscal First Quarter ended August 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. After the speaker's remarks, there will be a question-and-answer session for analysts and investment firms, conducted via audio and participating retail shareholders conducted through the said technologies platform. Questions, submission and uploading through the said technologies platform concluded yesterday. And the Company will read aloud and answer the top questions. Ms. Noorata, you may now begin the conference.

Thank you, and good morning. By now, everyone should have access to the earnings release, which is available on the investors section of Tilray's website at Tilray.com and has been filed with the SEC and SEDAR. 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 measures 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 text 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 call today. As you know, we are laser-focused on building the world's leading cannabis-focused consumer brands Company while generating four billion dollars by the end of fiscal year 2024, assuming U.S. federal legalization and acquisitions. And we're making important strides in delivering on that goal despite a challenging backdrop in the cannabis world. Reflecting our Q1 Fiscal Year 2022, revenue and adjusted EBITDA grew compared to the prior year despite the impact of COVID on the top line, notably in Canada, where stores did not reopen until mid-June and now are at full capacity. Carl will discuss our results in more detail, but I'd like to note specifically that our adjusted EBITDA margins improved modestly, and we’ve taken advantage of production, cultivation efficiencies, and moved forward with integration and executing on these synergies we identified in the Tilray Aphria culmination, which are offsetting the impact of our near-term cost pressures, impacting every segment of the global economy. Importantly as well, we did not significantly lower our product pricing to maintain our leading cannabis market share position in Canada. We still estimate that our cannabis adjusted EBITDA would have been several million dollars higher if the legacy Tilray products had been produced under our more efficient Aphria model. In that regard, we look at the performance of Tilray since we closed the business culmination in May. I am deeply gratified by our early tangible accomplishments. Our confidence in our delivery to meet our goals and deliver for our shareholders is supported by three main factors. Strong movement towards cannabis legalization in our three largest markets, Canada, Europe, and of course the U.S., as evidenced by our recent opportunistic acquisition of MedMen convertible notes; we continue to build our strategic position so that we can benefit from full legalization when the time comes. Leaders with the playbook and proven executional abilities in creating, building, and sustaining value in CPG and wellness categories, with particular expertise in building iconic brands that stand for excellence and offer a selection of products that meet or exceed consumer demand. Educating consumers about our strict quality standards and the benefits of cannabis to inspire brand loyalty. And of course, growing market share through scale and distribution with a laser focus on being that low-cost, high-quality producer. And then finally, well-defined, organic, acquisitive, and partnership-based growth strategies. When we compare ourselves to the peer set, we are confident that we stand above in having the global reach and resources to make this vision our reality. And with the progress we are making and the COVID-related factors beginning to dissipate, we're building the new Tilray upon four key competitive differentiators. Number 1 is our broad geographic footprint and operational scale. Tilray's unparalleled and growing presence across our market ideally positions us to lead the global cannabis market. We're focused on doing this through taking full advantage of organic growth opportunities and with the support of a strong balance sheet and access to capital, accelerating that growth through pursuing transactions and partnerships that would complement our current business, enabling us to build further revenue growth and EBITDA cash flow. On the topic of M&A, I want to take this opportunity to express my appreciation to our shareholders for approving an increase in the number of authorized shares of our common stock at the special meeting held last month. Because of our shareholders’ overwhelming support, we have added the firepower, the resources we need to opportunistically pursue transactions that will enable us to accelerate our growth and further drive value creation. Consistent with this, I will discuss MedMen in more detail shortly. Moving on now to our next critical differentiator, our position as the number one Canadian LP in total sales on a consolidated basis, a level we have reached due to our comprehensive portfolio of medical and adult-use product offerings and carefully curated brands. In our first full quarter since the completion of the business culmination, we maintained our retail market share of 16% and held our pricing even as some of the largest competitors experienced a share reduction. Let me now detail some of those specific accomplishments in the period. In August, we made our first shipment to Nunavut, which was the last step towards making our presence in every province and territory in Canada. This was a record quarter for adult-use pre-rolls with 17% growth in net sales since the fourth quarter of last year, and indeed we were number one in cannabis flower and pre-rolls and top two and three in all other product categories. Good Supply, our top-selling adult-use brand, reached net revenue on an annualized basis of $225 million, and this is a three-year-old brand. And in fact, five brands in our portfolio ranked in the top five sales-leading brands across all adult-use product categories, including Good Supply, Chowie Wowie, which recently won a Budtender Choice Award for best munchies brand in Canada. Part of our goal of reaching $4 billion in revenue by the end of fiscal 2024, concurrent with U.S. federal legalizations, includes expanding our market share to 30%, and we view these recent milestones as reflective, and we're off to a good start achieving that. Please expect to hear more from us about our growth in Canada as we introduce new, innovative 2.0 products across concentrates, edibles, drinks, and medical products that promote health and wellness, and of course, well-being that will drive distribution across all channels. This, in turn, includes retail stores. We're pleased that there has been a nice uptick in the number of stores opened since the end of the lockdown in Canada. Last year, this time, there were 600 stores. Today, there are over 1200 stores. It will take time for all the new budtenders in these locations to build personal relationships with consumers so they can be seen as trusted resources who can educate and make specific recommendations. This is important as we believe that as consumers continue to shift away from price-based cannabis purchases, effective marketing regarding the quality and safety of our products and brand familiarity will matter more, and our brands will be positioned to reap the rewards and the benefits. Our third differentiator is tremendous international growth opportunities based on two strong medical cannabis brands, large distribution network in Germany through CC Pharma, with access to 13,000 plus pharmacies and an end-to-end European Union GMP supply chain. We not only have a high-quality production facility in Portugal, but also a new state-of-the-art cultivation and production facility in Germany, which announced its first harvest and production in July. This milestone will help us ensure that patients' needs in Germany are met with products of the highest quality while at the same time reducing dependence on imported supply and solidifying our position as that trusted provider of medical cannabis in Europe. The EU alone, including Germany, Poland, Italy, the UK, France, the Netherlands, and including Israel, has the potential to be a $1 billion business for us. This is because from a cannabis perspective, these markets are more medically and pharmaceutically focused than North America. Outside the EU, our business in Australia and New Zealand continues to perform according to our expectations with our Tilray brand and extracts and flower leading that market. Most notably, Tilray's high-quality CBD extracts lead the way in many Australian hospitals, serving many patients with seizure disorders under the special access scheme. Tilray continues its success in New Zealand by being the number one Company to have CBD balanced and THC extracts verified under the New Zealand Ministry of Health, minimum quality standards. The new scheme kicked off October 1st and Tilray is well-positioned to drive market growth. We also see additional opportunities in Argentina, Colombia, Brazil, and even China and India. Next, number 4, our CBD platform and infrastructure in the U.S., including our SweetWater and Manitoba Harvest business. SweetWater's distribution currently reaches over 47,000 on and off-premise points of sale, 11% higher from the previous year, while Manitoba Harvest is available across 17,000 stores and growing. These businesses have already generated $100 million-plus in annualized revenue and are quite profitable, but still have significant white space, lots of growth opportunities. To harness that, we are expanding SweetWater's product line of leading craft beers to include vodka sodas under the Rig brand. We're also working on new product categories including hemp-based CBD drinks, and other RTD wine spritzers, wine in cans, and others. Recently, we bought a facility in Fort Collins, Colorado and have started producing SweetWater products as it executes on its strategic plan of expanding into the western states. We have also just added 450 distribution points in Publix within the state of Georgia. Our growth plan is led by new innovation, including the introduction of Broken Coast BC Lagers, our collaboration with our craft cannabis brand Broken Coast, as well as the launch of our Imperial IPA and hard teas and lemonade. Manitoba Harvest continues to provide us with ample opportunities to grow our footprint in the organic and natural industry. Hemp is a super seed, naturally high in plant-based protein, fiber, and Omega-3 fatty acids. Consumers' interest in hemp oil and protein continues to grow in the marketplace as consumers increasingly look to follow plant-based, low carb, and keto-based diets utilizing our footprint in the U.S. today. We're able to leverage these strong brands and their distribution systems to parlay into CBD beverages, CBD personal care products, and related adjacencies. These may be later translated into THC-based products upon federal legalization in the U.S. In addition to these four differentiators, another critical driver of value creation for us is the $80 million in cost synergies we've identified as part of the Tilray Aphria business culmination in the areas of cultivation and production, sales, marketing, and corporate expenses. We are ahead of our original pace having reached $55 million on a run-rate basis to date, with actual cash savings of close to $20 million. Recall that in July we announced we had reached $35 million in synergies on a run-rate basis, with actual cash savings in Q4 of about $7 million. These data points exclude any revenue synergies, notably, those that can be derived from 2.0 products in beverage, gummies and chocolates, that are free yet have not produced previously, but we can now go into leveraging legacy Tilray's manufacturing infrastructure. I would like now to spend a few moments on the potentially transformative transaction we announced and closed in August with MedMen. MedMen is an iconic multi-state cannabis brand and retailer that offers its large and loyal consumer base a highly compelling retail experience. And their recent performance reaffirms a turnaround story that firmly is taking hold. MedMen had revenue of $42 million for the fourth quarter of 2021, up 53.9% year-over-year, and up 31.3% from the previous quarter. Specifically, we acquired senior secured convertible notes and certain warrants that are convertible into equity representing 21% of MedMen upon federal legalization. MedMen currently holds 22 retail licenses nationwide, including 14 in California, the largest legal cannabis market in the world, and excluding uncapped licenses in Florida for a total of 27 retail locations. And due to the equity investment that MedMen received concurrent with our transaction, it will be able to further expand this business in key markets including California, Florida, Illinois, Massachusetts, among other growth opportunities across the U.S. And there's so much Tilray can do with MedMen in Canada and learning about their retail sales and their products that can help with some of our innovation and some of our products in the Canadian and the international markets. In short, this transaction has set the stage for Tilray to become a leader in the U.S. cannabis market upon federal legalization while mitigating downside risk for our shareholders. In addition to benefiting from the strong market position when legalization will allow our strategic opportunities with MedMen, including international licensing opportunities in Canada and the EU we are currently focused on pursuing, as I've said before, as well as commercial and distribution arrangements, joint ventures, or other significant transactions over time. With that, to sum it up, our eyes are firmly on the prize of creating a $4 billion cannabis-focused consumer brands Company within the next three years. We have the strategy and the team in place to execute on our plan. A leading and differentiated market position, ongoing opportunities to drive synergies, reduced production costs, and a strong pipeline of transactions and growth opportunities worldwide. And with that, I will now turn the call over to Carl.

Thank you, Irwin. I would like to now review Q1 results, how we are building synergies into our business model, our cash and liquidity position, and the specifics of the MedMen transaction. As Irwin discussed, we are working hard every day to build a stronger, more diversified, and profitable company, and we are executing on this through our four key competitive differentiators so that we can create sustainable value for our shareholders now and over the long term. Recall that in the prior-year quarter as a result of the arrangement between Aphria and Tilray, our results are based on Aphria's financial statements but were adjusted to follow U.S. GAAP and are presented in U.S. dollars. Additionally, in July, we published an appendix to our Investor deck located on our website that contains an analyst primer, which breaks down Aphria's U.S. GAAP financial statements for 2020 and 2021 by quarter. As a reminder, this primer was not audited. Throughout our call today, we will reference both our financial results in accordance with GAAP, as well as 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. Our Q1 net revenue grew 43% compared to Q1 last year. Although the comparison itself is not apples to apples because the year-ago quarter does not include any contributions from legacy Tilray. We know that as with other CPG companies, the Delta variant quelled consumer confidence and impacted revenue in key consumer-facing markets. In our Canadian cannabis business, we held our number one position in Canada for LP revenue and held our market share of approximately 16%, all while largely maintaining our prices. Nonetheless, the COVID Delta variant unquestionably impacted results, and our Canadian cannabis business experienced flat net revenue during the quarter due to the provincial boards' buying patterns. Late in the quarter, we began to see the boards increase their purchases, a rise that we attribute to rising vaccination rates in Canada. We believe that based upon retail sales data, consumer demand is continuing to rise. The key to this rise is ongoing education of budtenders as the influencer in shifting consumers from price-based brands to margin-based brands. Our beverage business, SweetWater, continues to experience a reduction in on-premise demand for its on-premises channel, as well as restaurants operating below full capacity, coupled with a softer off-premise channel, all being experienced by other beer producers. After managing through the changes associated with moving from branded product at a big box retailer to a white-label product, we are pleased with the revenue contribution from Manitoba Harvest during Q1. Finally, while CC Pharma experienced a slight improvement in the global supply chain that resulted in a modest increase in net revenue, as we discussed on our last call, operations were shut down in July for four days due to flooding in Germany. This resulted in lost revenue of almost $5 million, which was slightly higher than the high end of our initial estimate of $2.5 million to $4 million. To offset the lost revenue, we booked insurance reserves related to our business interruption policy that bolstered EBITDA. However, this did not benefit the top line revenue figure. So, as Irwin noted, despite the COVID-related headwinds impacting the top line, we worked hard to optimize our performance. The results in the quarter showed that we held our gross margin steady on a year-over-year basis and grew our adjusted EBITDA from $8.1 million to $12.7 million, representing our 10th consecutive quarter of increasing and positive adjusted EBITDA. Importantly, our profitability would have been even higher if more of our operating synergies were already embedded within our business model, particularly fully converting the legacy Tilray brands to Aphria's cost structure. To illustrate this, if Aphria's cost structure had been applied to the legacy Tilray brands during this quarter, we believe the adjusted EBITDA for Q1 would have been closer to $17.6 million. This is because pre-business combination Aphria was already a low-cost producer with state-of-the-art cultivation, processing, and manufacturing facilities. We are now accelerating our work on pulling additional costs out of that structure so that we can gain further efficiencies and increase margins. This work also includes improving product potency and quality to meet market demand. Our Q1 net loss increased to $34.6 million versus a net loss of $21.7 million in the prior year, while adjusted free cash flow decreased to negative $61.2 million from negative $70.1 million in the prior year quarter. Several items led to the figure in the current quarter, including paying income tax balances at a free rate of year-end accruals, and an increase in accounts receivable as we experienced late in the quarter purchasing from the provincial boards. We specifically note that inventory decreased in the quarter, and so this was not a part of the decreased adjusted free cash flow. Last quarter, you may recall that we expressed how pleased we were to have generated free cash flow in Q4 and how we believe that the first few quarters as a combined entity could see negative cash flows as we achieved our synergies. We view free cash flow as an important element of our investment thesis, that has not changed. And while we did not meet this goal in Q1, we are working diligently towards sustaining free cash flow generation in future quarters. Turning now to the business integration, we are making meaningful progress, optimizing operations as we focus on reaching at least $80 million of synergies within the first 18 months of the transaction. As of September 30th, the synergies achieved are $55 million, slightly ahead of pace. Our most recent actions include closing the Enniskillen facility and the announcement of our intention to close the Nanaimo facility in a phased approach that will be completed next spring. Included in this quarter's results is a $5 million provision to cover closing costs associated with this announcement. Going forward, we will be concentrating our British Columbia cultivation in the Broken Coast facility on Vancouver Island, and international production and manufacturing in Portugal and Germany. Beyond these closures, we are working to embed other meaningful lasting efficiencies in our business processes operating in marketing initiatives, IT infrastructure, compliance costs, and through attrition. Moving on to other events in the quarter, as Irwin noted, in mid-August our majority-owned subsidiary acquired the outstanding senior secured convertible notes of MedMen along with certain warrants to acquire MedMen's Class B subordinated voting shares. The total value of the MedMen notes and MedMen warrants was $170.9 million, of which $117.8 million represents the ownership interest of Tilray, and $52.9 million represents the ownership interest of the unrelated minority owners. Purchased notes and purchase warrants were accounted for debt and equity securities and recorded in long-term investments with an offsetting current liability for the outstanding consideration due. The only P&L impact with respect to the MedMen transaction this quarter and in the near term until U.S. federal legalization is the recording of interest on the notes and any future fair value adjustments to the notes themselves. Now let's discuss Q1 in greater detail. In our cannabis business, our medical business grew due to the contributions from legacy Tilray. Although we experienced a lower number of existing patient renewals and a lower number of new patients in both independent and clinic channels, still the average gross retail selling price of medical cannabis rose slightly to $6.08 per gram in Q1 compared to $5.95 last year. Our adult-use business grew year-over-year due to the business combination along with numerous retail sales, promotional programs, innovations, social media visibility, and efforts to increase new accounts. It also grew on a quarter-over-quarter basis, as last quarter only included four weeks of legacy Tilray sales. However, similar to Q4 last year, we dealt with consumers more focused on price-based brands, which contributed to a decline in average selling price to $3.17 per gram in Q1. Importantly, we did not lower our prices to secure our market-leading share of the market, and our cannabis gross margin fell not because of price compression per se, but rather that the Tilray brands represent a greater share of the mix in sales in the current quarter. With those Tilray brands carrying their higher production costs until all our effort in synergies are achieved and we have sold through all the inventory produced at legacy Tilray facilities. Similar to last quarter, the selling price decline was related to pricing being the primary means the brands were able to differentiate themselves coupled with limited consumer interactions with budtenders. We view the ability of budtenders to educate consumers about the attributes and quality of products such as ours as critical to encouraging impulse purchases while shifting customers away from price-based brand purchases in general. We think that through more education and a reduction in budtender turnover, which has also been very high during the lockdown period, and as new dispensaries opened and ramped up, we will be very well-positioned, because we believe purchasing decisions will shift to margin-based brands over price-based brands, similar to how consumers behave with regards to other products such as alcohol. Our cash cost to produce program decreased to $0.77 per gram at our Leamington facilities. This was due to improved yield, potency, and cost control efforts that began in January of the prior year and that continue to benefit us. Net revenue from our cannabis business in the first quarter rose 37.6% to $70.4 million compared to the same period of the prior year. In our distribution business, net distribution revenue was $67.2 million for the quarter, virtually unchanged from the $66.3 million last year. During the quarter, our distribution business was negatively impacted by the strengthening of the U.S. dollar against the euro, which if normalized, would represent an additional $3 million in revenue. Also impacting quarterly revenue was the heavy flooding which caused a temporary business closure at CC Pharma over a four-day period and consequently resulted in almost $5 million of lost revenue. In our beverage alcohol business, net revenues at SweetWater were $15.5 million, down slightly on a sequential basis and reflecting a reduction in keg demand from the on-premise channel, coupled with a decrease in off-premise consumption. We believe the impact of the Delta variant affected consumer behavior both within restaurants and groceries alike. Net revenue from our wellness business, Manitoba Harvest, was $14.9 million, which we view positively, and for which there is no comparable to the previous year. All of this led to net revenue increasing 43% to $168 million in Q1 over the prior year period, with the increase primarily driven by the contributions from legacy Tilray and SweetWater, for which there were no comparable in the one period last year. Adjusted cannabis gross profit increased to $30.3 million in Q1, compared to $25.4 million in the prior year. Although adjusted cannabis gross margin fell to 43% from 50% in the prior year, it was only down 1% from last quarter. The decrease in margins was related to a shift in sales mix to more Tilray brands that have higher costs to brew than our legacy brands. As a result of including 13 weeks of revenue versus four weeks in the prior quarter for legacy Tilray and that deliberate and one-time buildup of inventory levels as part of our integration plan to shut down facilities such as Enniskillen and Nanaimo. That said, as we worked to adjust our cost structure and reduce production costs through the integration process, we incurred some temporary inefficiencies during this transitional phase that will ultimately result in greater efficiencies. Adjusted distribution gross profit decreased to $7.9 million in Q1 from $9.5 million in the prior year, while adjusted distribution gross margin declined to 12% from 14% as a result of the impacts of COVID-19 on CC Pharma's sales mix. Adjusted beverage alcohol gross profit was $8.8 million in Q1 and there was no comparable in the prior year as the acquisition was completed last November. Adjusted beverage alcohol gross margin was 57%, which was below the 66.5% we achieved in the previous quarter. We overachieved based on current expectations for on-premise versus our off-premise mix. Adjusted wellness gross profit was $4 million, and the adjusted gross margin was 27%, which was in line with our expectations and for which there were no comparable last year. Sequentially, adjusted wellness gross profit more than doubled from $1.6 million in Q4. In aggregate, adjusted gross margin held steady at 30% compared to the prior year while adjusted gross profit rose 46% to $51 million from $35 million. As we continue to achieve our synergy plan over the coming quarters, and as our distribution revenues increase their share of our total revenues, we expect to see continued improvement in this metric. General and admin costs increased to $49.5 million in Q1, or 29.5% of net revenue compared to $26 million or 22.1% in the prior year, which did not include the acquisitions of legacy Tilray and SweetWater. The increase in general and admin costs was primarily the result of the costs associated with the SweetWater and Tilray acquisitions, most particularly amortization of intangible assets and $5 million in costs due to the planned facility closure. Transaction costs totaled $25.6 million compared to $2.5 million last year, and were related to the solicitation of shareholder votes supporting an increase in the number of authorized common stock shares. Our investment in the purchase of notes and purchase warrants of MedMen, transaction closing costs, remaining costs associated with the arrangement, and the evaluation of other potential acquisitions and one-time litigation costs. For the quarter, we reported a net loss of $34.6 million or $0.08 per share compared to a net loss of $21.7 million or $0.09 per share in Q1 last year, representing an improvement of $0.01 per share. Note that our weighted average share count increased to 449.4 million shares from 241.9 million shares during the same period. Turning to cash flow and liquidity. Adjusted free cash flow was negative $61.2 million during Q1 and reflected $93.2 million of net cash used for operations, $16.3 million in investments in capital and intangible assets, offset by $48.4 million of cash expended related to our acquisitions. Again, as I said earlier, we view achieving free cash flow on a consistent basis as a priority for this business. While we certainly fell short in Q1, it was anticipated as a result of the synergy plans, and as we push forward with integration, we view this goal as well within our reach in the coming quarters. Even after the increase in cash used from operations, we still maintain a strong cash position of $376 million as of August 31st, 2021, to both support our existing working capital requirements and our business plan. While the last 18 months have certainly proven that there are numerous factors outside of our control, our focus remains on what we can do. Specifically business integration so that we can better manage costs, and the opportunities we have ahead of us as we execute on our highest return priorities across our five key competitive differentiators. Thank you for your interest in Tilray, and this concludes our prepared remarks. Before we take questions from our covering analysts, Irwin and I will answer a few questions from our retail shareholders from the same platform. Rey, what is the first question?

Thank you, Carl. The first question is the following. With impending 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 morning. It's Irwin Simon. Listen, I think with legalization, there are many ways that it will benefit shareholders as we're able to acquire multiple facilities – or we are able to acquire other MSOs, we can take all our technology and all our brands into the U.S. market. And with our balance sheet, there is a lot for us to do. Only 21% in MedMen today and expanding that, so with legalization, as I said in part of my $4 billion plan, I'm looking for at least $1 billion to $1.5 billion dollars of sales out of the U.S. So, with the expansion of cannabis sales, product sales, medical sales, that will be extremely beneficial to us in the biggest market.

Thanks, Irwin. The next question is a multipart question. Why would the dilution of shares be beneficial? How will the bill being proposed affect productivity and sales? How are you approaching future acquisitions and expansion? And are there any plans in place to accommodate the U.S. territories if and when this bill gets passed?

Thanks, Rey. Regarding the share count dilution, it's crucial for shareholders to realize that the approval we received did not lead to an immediate dilution of shares.

Just to correct that, there's no dilution of shares, and shares do not get counted until they are used for some acquisition or for something else. So, it's just the ability that we use the shares and there is no dilution in the shares that were authorized by shareholders, just to be clear about it.

Yeah. The only shares we've issued since that occurred were related to MedMen. Can you just repeat the second part of the question since it was a multi-part question?

Sure. So, the second part of the question, how will the bill being proposed affect productivity and sales, and then how are you approaching future acquisitions and expansion?

I believe Irwin has clearly outlined our business strategy for mergers and acquisitions as well as organic growth. We aim to develop the company into a $4 billion enterprise by the end of 2023, with $1 billion in potential opportunities identified in Canada, $1 billion in Europe and international markets, and between $1 billion and $1.5 billion in the U.S. As the U.S. begins to legalize cannabis, we will start to explore U.S. cannabis operations in greater detail and make investments accordingly.

We're aiming to grow the Company to a $4 billion business by the end of 2023, with identified opportunities amounting to a billion dollars in Canada. We're also focused on building a billion dollars in Europe and international markets, along with $1 billion to $1.5 billion in the U.S. As legalization in the U.S. progresses, we'll start exploring U.S. cannabis operations in greater detail.

Yes, regarding the SAFE Bank bill, I believe something needs to happen concerning legalization. While it may not directly benefit Tilray in terms of sales or EBITDA growth, it does improve our position in banking and financing. I am confident that progress will be made on legalization, whether it's through the SAFE Bank Act, decriminalization, de-scheduling, or full medical legalization. As I outlined in our plan last quarter, and as Carl just discussed, we will be prepared for that.

Next question is this. There's a great limit to the amount of cannabis Tilray can grow and sell in Germany. Will there be new permits issued to Tilray for continued growth and production?

First of all, there is no limit to how much we can grow in Germany, and if we do reach our growth potential, we have ample capacity in Portugal. This is a significant aspect of Tilray, although I'm not sure we get enough recognition for it or if it's reflected in our valuation. Europe is poised for major advancements in legalization. With the new administration in Germany, as well as changes in Israel and Denmark, I anticipate legalization will occur within the next 18 months. We have outstanding facilities in both Portugal and Germany, and we are able to ship GMP-certified products from Canada that meet EU standards. Therefore, we are well-prepared, and with our presence through CC Pharma, our operations in Germany, and our impressive facility in Portugal, we are positioned for European legalization. Even if adult use doesn’t become legal, we expect further advancements in medical legalization across various European countries.

Okay. Final question from the retail shareholder. Will SweetWater THC drinks be soon available in Canada? And are there plans to expand SweetWater to California?

So number one, while up in Toronto, I got to visit our London facility which we inherited and acquired when the Tilray transaction. We have a beautiful facility there that has the ability to do canning operations with THC; it's a licensed facility. So with that, we are going to expand our drink business. I got out to visit stores yesterday, and absolutely the demand for drinks in Canada is growing, and there will be some type of THC product, whether it's SweetWater or not. But we think there's a big opportunity with SweetWater with THC. You can buy SweetWater beer in Ontario today. And I had a pint or two in the last two days, but SweetWater is definitely here, and hopefully you'll see SweetWater in other forms. In regards to growing SweetWater, today's SweetWater is sold in 40 states across the U.S. and continue to grow. A great new line of new products are coming out. Our RIFF brand, which is our RIFF vodka drinks. Our Broken Coast; you'll see some tequila seltzers in that coming out. And yes, SweetWater with our Colorado facility that we just recently acquired will be expanding to the West Coast. And actually, I'm out there next week spending some time figuring out how we're going to be able to do that. So lots of expansion and lots of things happening with SweetWater products.

Great. Thank you. Operator, let's begin the analyst question.

Thank you. In the interest of time, we ask that you limit yourself to one question and one follow-up. Our first question is from Owen Bennett of Jefferies. Please go ahead.

Good morning, I hope you're well. I'll keep it to one question about CBD in the U.S. Excluding hemp and food, could you provide more details on your specific plans for CBD? You've mentioned CBD beverages and personal care today, so can we anticipate launches in these areas in the near future? Ultimately, should we expect a broad CBD portfolio across various product segments like some of your competitors, or will your approach be more focused? Thank you.

Thank you all and good morning. So we have informed Tilray wellness with that, it's led by Jared Simon who is in the consumer packaged goods businesses and has worked on many consumer products. The team has done a great job in regards to Manitoba Harvest and getting that product line with both hemp and looking at lots of CBD products. And to your question, we are currently today working on some CBD partnerships, some CBD alliances, both in topicals and personal care areas and drinks. And look to expand in that area, both in U.S. Canada, and internationally. So CBD is a focus for us. Hemp will be a big focus. We've seen a big demand for hemp products and hemp food products and expansion in the U.S. on both of those. And the team is in place now, ultimately developing and looking to roll out those products.

Hi. Good morning. Thank you. My first question has to do with inter-quarter trends and post-quarter trends in the Canadian adult-use market, appreciating that the Delta variant was a bit of an impediment in terms of getting consumers back into the store, that is the critical element of your strategy to trade up consumers. So I was wondering if you can comment at all on whether trends evolved through the quarter, and what you've seen quarter-to-date. Thank you.

Good morning, Vivien. I think the important piece is that if you look at the Canadian market, early on in the quarter, we were still in lockdowns with stores closed. As we go through the first months of the quarter, those lockdowns began to ease, retail storefronts began to open, you had a lot of new stores that were opening. We had budtenders who had a chance to educate about our products and be in a position to truly influence consumers. But the more important piece is that when those stores first opened, they were opened with limited capacity. And so I think initially it was about 25% and then it later grew to 50. And just recently it's now up to full capacity in stores, at least in Ontario. If you look at the Alberta market, another very large market, they have a big spike of Delta going on right now. And while there may not be lockdowns, it's something that could come forward.

Vivien, your question is excellent because we really, in Canada, stores did not open until, as Carl said, to mid to late June. Being in Toronto over the last couple of days, I was at Dundas and Yonge yesterday, which is Times Square, and it was pretty quiet. But stores are open, that's the good news. And they are allowed full capacity. We are on the street educating budtenders about our product. We’re trying to do as much social media as we can to bring consumers back into the stores. And with that, consumers out there want good potency, good products, and what's important is for us to be out there building our brands. And that's the big thing, there's a lot of little LPs out there today that are ankle-biters that are selling product just on price. But that is where our Rift, our Good Supply, our Solais products have to get out there and build what the quality is and what regulatory we go through. And there's a lot we have to do. It's coming up on three years, October 18th with the Canadian government on legalization. There have to be some changes to the regulations, and we will be out there lobbying the politicians with this liberal government now how to make some of these changes, how to get out there to advertise safely, and how that we can sell more products because I'll tell you what, we pay a lot of tax dollars towards this and there are a lot of benefits and a lot of data that we've collected to show why legalization made sense and what happened in the last three years. So there's a lot we got to do and there's a lot we do, but I will tell you we're well-positioned from growth, potency, price, and brand standpoint.

Understood. Thank you for that. I recognize the call is running long, but I still have important questions left that relate to the first two retail investor questions that you've got. When the first one characterized legalization in the U.S. is impending. Certainly, our house view does not align with that whatsoever. I'm picking up first-hand what's happening on Capitol Hill right now in terms of a lack of not only bipartisanship but even consensus with the Democrats who hold a very narrow majority in the Senate. I just wanted to give you the opportunity to clarify how you're thinking about timing. Obviously, the 2022 mid-terms are not all that far away. That certainly influences congressional motivation to pass legislation. Plus, there are a number of fourth quarter legislative not just priorities but mandates, like the budget sealing, like reconciliation that must get done. So just wanted to give you an opportunity to clarify how you're thinking about timing on potential catalysts. Thanks.

Thank you, Vivien. Listen, you're right. I mean, the Schumer bill came out with a lot of thunder, some lightning, and I think everybody thought this was going to happen right away. I agree with you, it's slow, but there's a lot of discussion going on. But I think the big thing is this year something will happen. And to your point, there's an election coming up in 2022. If the House and the Senate change, that could throw a lot of monkey wrenches in the works here. But I think the big thing that I come back with Tilray, is this here. We have a strong business with so much potential to grow in Canada, I think Europe has so much potential. I think you might see legalization happen in Germany before the U.S., okay? And we're well-positioned there. So yes, we'd love to see legalization. We want legalization in U.S. We're excited about what we're doing at MedMen. We're excited about some of the other opportunities. But I think, like other LPs, and like a lot of the U.S. MSOs, if legalization doesn't happen for 18 months, 24 months, we still have lots of runway out there to grow this business and to do acquisitions in adjacent areas, whether it's spirits and alcohol, whether it's hemp, food, and CBD. So I think that's important. We will be around the hoop and we'll be there when legalization happens.

That's right. Thank you very much.

Thank you. Our next question is coming from Andrew Carter of Stifel. Please go ahead.

Thanks. Good morning. I know there's some puts and takes going on with the integration, current environment, Tilray launched new products, and you mentioned the ankle-biters and continued deflation. But when you think the combined Canadian adult-use portfolio can get back to gaining market share at retail and also kind of driving underlying sales growth, and then within that, I think I heard you correctly mention recently your Canadian market share target might require M&A. So I wanted to understand where Canadian M&A ranks in terms of your priorities right now. And also your ability to acquire operating assets versus kind of executing investments like MedMen. Thanks.

Andrew, that's a great question. The key thing we need to focus on in the Canadian market is that while the population is about 33 million, which is only 10% of the U.S., Canada is one of the few countries where adult use is legal. I've spent a lot of time with our medical team here, and there's still a wealth of opportunities in the medical cannabis space that we need to tap into. Currently, medical cannabis is not included in most drug plans and isn't covered, which is something we can work on. In the U.S., companies like Amazon cover it, but that's not the case in Canada. We have a lot to address in getting our medical and adult-use business back on track, especially since our stores were closed for some time and have only just returned to full capacity. This year, our main goal is to educate budtenders about our exciting new products and the variety of brands we offer. We have a dedicated team focusing on potency, brand quality, and product strengths. Right now, the top four companies in Canada hold about 50% market share, while over 500 licensed producers hold smaller shares and are consistently slashing prices to attract consumers. This strategy can’t last forever. We need to ensure consumers recognize our brands, trust our quality, and understand our potency while also maintaining competitive pricing. We have a significant amount of work ahead of us, but we have a clear plan. As I mentioned earlier, our goal is to reach a billion dollars in revenue here. To answer your question about whether we'll achieve that solely through organic growth, I've targeted a 30% market share, which I initially thought we could attain independently. However, we may need to consider acquisitions and further consolidation in this market. I’m very enthusiastic about the Tilray Aphria merger, which has already generated $55 million in cost savings. Our gross margins are at 45%, compared to Tilray’s 19%, highlighting the opportunities in consolidating companies. With 507 licensed producers out there, further consolidation is necessary. So, yes, Tilray is open to pursuing additional acquisitions in the Canadian market if they make sense, are accretive, and provide growth and savings.

Thanks, I'll pass it on.

Thank you.

Thank you. Our next question is coming from John Zamparo of CIBC World Markets. Please go ahead.

Thanks, good morning. I know we're at the top of the hour, so I'll stick to one as well. I'd like to hear your thoughts on the wholesale and retail sides of the markets, and particularly the state of inventory at Canadian provincial boards and retailers. I think Carl, you've mentioned an update shipments late in the quarter, but do you think there's a restocking period coming here? And the reason I ask that is retail sales seems pretty healthy in terms of year-over-year growth, but that doesn't seem to start at the producer level. We'd like to get your thoughts there, please.

I believe there will be some minor restocking that will take place. If you look at the quarter, many were worried about potential lockdowns, something that frequently occurred in Canada. Since that didn't happen, stores grew more comfortable with their sales levels, which led to an increase in their purchasing. The same applies to the provincial boards; they observed a consistent pattern of reordering before making decisions. We’re starting to see those developments now, and they've taken the necessary steps to manage their inventory. We believe it's now time for them to begin reordering.

Okay. That's helpful. Thanks very much.

Thank you.

Thank you. Our next question is coming from Michael Lavery, Piper Sandler. Please go ahead.

Thank you. Good morning.

Good morning.

You've reiterated your aspirations to have a leadership role in the U.S. and obviously pointed to MedMen as part of that, but as strong as their brand is certainly they've lost ground in the last two years to a lot of other competitors. How do you anticipate that evolving, and is there anything ahead of legalization in the U.S. that you can do to collaborate and work with them? What if any limitations or restrictions are there around how closely you guys can work together?

Absolutely. So, number 1, we've already had multiple meetings with MedMen to learn about their business. You're right, they have lost ground, but I will say this year under Tom Lynch, they have put some good plans in place, have taken up a lot of costs. And yes, there are lots of opportunities for us to work with them in getting data, learning about their e-commerce, and spending time with them on products that sell in the stores that we don't have in Canada today, and looking at the innovation that they have in place from multiple brands. And listen, I come back and look at the MedMen brand, and when you mention it, how well known it is here, the equity within the brand, the product line that will be brought into stores. I know some of the stuff that they're working on an innovation standpoint. I know some of the stuff that they're working on in regards to their stores, the experience of the stores, interaction with consumers. So there's a lot of that stuff we can take to Canada, and there are no reasons why we can't license the MedMen brand at wholesale, and the Cookies brand is doing extremely well out there and compete with that. Also, like Canopy has done with their Tokyo Smoke brand, Tweed brand, if anybody wants to license the MedMen brand out there in the Canadian market to differentiate, there are opportunities out there. With that, there will be lots of opportunities, a lot of cross-sharing information. There's a lot of digital information that both teams will be working. We do have observation rights on the board; we can't be on the board at board meetings, we have 2 seats with that, so there's a lot of action. This is not, you know, a passive investment with just no oversight at all and not working together.

Okay. Great. Thanks. And a quick follow-up on Europe, you obviously mentioned how big the Portugal facility is. How does the Germany facility complement it, and do you have too much capacity there at the moment?

So the German facility right now is only selling to the German government from a medical standpoint. In regard to the Portugal facility, there's plenty of capacity in all our facilities right now; we're not growing at full capacity there. So, yes, we have plenty of capacity and but we have plenty of demand coming on from Israel, Poland, Western Europe, and other parts of Europe. Right now, all the facilities are not full with product, but we have the ability to grow additional products there to fill demand.

Okay. Great. That's helpful. Thank you.

Thank you.

Thank you. Our last question today is coming from Aaron Grey of Alliance Global Partners. Please go ahead.

Thanks for the question. I’ll just keep it to one here. Picking back on some of the questions that were asked at the retail level, so obviously, you guys have an initiative to get more in front of budtenders, educate the consumer, a lot more than just price, and in the past, Irwin and Carl, you’ve talked a lot about more than just THC and the whole terpene profile. But I guess my real question is, how do you think about timing to when you think some of this education or the budtenders and then budtenders to the consumer will result in maybe better market share trends for your brands? So just any kind of colour in terms of what you expect in terms of timing to see an improvement would be helpful. Thanks.

So it has started already, and with that, our new product lineup is in the midst of rolling out right now. We've consolidated our sales organization both from a merchandising standpoint and our sales that are calling on the control boards. We consolidated our marketing groups and we’re in the midst of consolidating marketing programs out there because there are a lot of programs that were already in place. And with that, we're on the street today working with the retail stores. There were 600 stores a year ago in Ontario, there's 1200 today and they are just opening as we speak. So there's a lot of work to do to get in front of them, and there's a lot of education to do about our potency, about our different strains. And we have multiple products, we have 12 brands out there that we have to educate the budtenders on, and I think that's what's important. And while all this is happening, one of the obstacles out there today is there's just a lot of products coming at these budtenders on price and potency and nothing behind it, and that's where we have the big opportunity advantage. The other big opportunity we have is Tilray was not really into cannabis 2.0 with gummies and drinks and edibles. And now with our facility in London, Ontario, that does chocolate, that does edibles, that does drinks, you’re going to see Tilray jump into this category in a much bigger way with a lot of uniqueness, and a lot of differentiation on the products that will be in those products. So that's a whole other area for us to capitalize on tremendously.

Great. Thanks very much.

Thank you.

Thank you. This concludes today's conference call. Thank you for participating. You may disconnect your lines at this time and have a wonderful day.