Financial Data and Key Metrics Changes - Net revenue increased by 7% to CAD 94.2 million, driven by a record 12% growth in global medical cannabis revenue, including a 17% increase internationally [4][16] - Adjusted gross margin rose by 100 basis points to 62%, with medical cannabis margins at 69% [4][17] - Adjusted EBITDA was CAD 18.5 million, and adjusted net income was CAD 7.2 million, with positive free cash flow of CAD 15.5 million [5][17] - The company ended the quarter with CAD 154 million in cash and no cannabis business-related debt [5][20] Business Line Data and Key Metrics Changes - Medical cannabis net revenue rose by 12% to CAD 76.2 million, comprising 81% of total net revenue [17][18] - Consumer cannabis net revenue decreased by 48% to CAD 5.2 million due to a strategic shift towards higher-margin segments [18] - Plant propagation net revenue increased by 27% to CAD 11.3 million, but adjusted gross margin fell to 16% from 40% due to increased costs [19] Market Data and Key Metrics Changes - The German market remains the largest individual medical cannabis market in Europe, driving double-digit growth in international revenue [8][9] - Australia is the largest international medical cannabis market for the company, with a potential AUD 1 billion opportunity [11] - The company maintained its number one position in Poland, benefiting from increased annual import limits [13] Company Strategy and Development Direction - The company is focusing on exiting select markets within the lower Canadian consumer cannabis segment to prioritize higher-margin global medical cannabis [7] - A divestiture of the lower-margin plant propagation operations is planned to enhance profitability and streamline operations [7] - The company aims to expand its leadership in global medical cannabis while maintaining a strong presence in Canada, Europe, Australia, and New Zealand [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the global medical cannabis market, projected to surpass $9 billion [23] - The company is adapting to regulatory changes in various markets, including Germany and Poland, to maintain access to high-quality medical cannabis [10][42] - The outlook for fiscal year 2026 anticipates annual global medical cannabis net revenue to increase to between CAD 269 million and CAD 281 million [21][22] Other Important Information - The company filed a prospectus supplement for a new At-the-Market equity program, allowing the issuance of up to $100 million in common shares for strategic purposes [8] - The company is actively exploring new international markets, including Switzerland, Austria, France, Ukraine, and Turkey [66] Q&A Session Summary Question: Follow-up on the select market exit in Canada - Management is evaluating the impact of exiting select markets, emphasizing that reallocating resources to international markets will improve financial results [25][27] Question: Premiumization strategy in Australia - Management indicated that the shift towards premium products in Australia is not disruptive and is expected to enhance margins [29][30] Question: Strategic decision to exit plant propagation - The focus remains on global medical cannabis, with divestiture seen as a way to allocate resources more effectively [37][39] Question: Plant propagation contribution to EBITDA - The financial results of the Bevo business will be treated as discontinued operations, with a focus on the global medical cannabis business [40][41] Question: Navigating regulatory changes in Poland - Management highlighted the importance of strong relationships with regulators and the ability to adapt to changes in the market [42][43] Question: Supply chain and potential acquisitions - The majority of products sold are produced in-house, with a focus on GMP-certified facilities for high-quality flower [75][76]

Financial Data and Key Metrics Changes - The company reported a record net revenue of $343 million, representing a 27% increase year-over-year, with global medical cannabis revenue increasing by 39% [30][31] - Adjusted gross margin improved to 55% from 49%, benefiting from higher cannabis and plant propagation margins [31] - The company generated record adjusted EBITDA of nearly $50 million and positive free cash flow of about $10 million [30][31] Business Line Data and Key Metrics Changes - International revenue generation surpassed Canadian medical contributions, comprising over 50% of total global medical cannabis revenue, up from 41% in fiscal 2024 [30][31] - The company is positioned as a leader in global medical cannabis, focusing on high-margin segments and operational efficiencies [31][32] Market Data and Key Metrics Changes - The company holds leading market positions in Canada, Australia, Germany, Poland, and the UK, with plans to capitalize on emerging medical cannabis opportunities in underpenetrated markets [32][33] - The global medical cannabis market is estimated to exceed $5 billion, indicating significant growth potential, particularly in Europe and Australia [33][42] Company Strategy and Development Direction - The company’s strategy focuses on a medical cannabis-first approach, aiming for sustainable profitable growth in fiscal 2026 and beyond [33] - Investments in new cultivation technology and strong third-party partnerships are intended to optimize production planning and meet demand [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to deliver sustainable profitable growth, highlighting a 200% year-over-year growth in adjusted EBITDA for Q1 of fiscal 2026 [36] - The company is committed to maintaining positive free cash flow and operational discipline, with expectations for continued growth in international medical revenue [40][42] Other Important Information - The company has a strong balance sheet with a cash balance of $185 million and operates a debt-free cannabis business, providing a competitive advantage [30] - The company’s operational execution and industry leadership are seen as key factors for future growth [39] Q&A Session Summary Question: What can we expect from adjusted EBITDA patterns moving forward? - Management indicated that fiscal 2025 was a record year for adjusted EBITDA and expressed optimism for continued growth, noting over 200% year-on-year growth in Q1 of fiscal 2026 [36] Question: Why should shareholders continue to invest in the company? - The company has consistently identified and delivered on strategic priorities, focusing on profitable growth and maintaining a strong balance sheet without needing dilutive capital raises [38][39] Question: What can we expect from free cash flow moving forward? - The company expects to remain free cash flow positive, with a 42% increase in free cash flow reported in Q1 of fiscal 2026 compared to the previous year [40][41] Question: Are there still headwinds in international medical revenue? - Management reported strong performance in international medical cannabis, with revenue increasing by 85% year-over-year, and indicated that previous headwinds have subsided [42]