Aurora Cannabis Inc.

Greetings and welcome to the Aurora Cannabis Inc. First Quarter 2027 Results Conference Call. All participants will be in a listen-only mode and a question-and-answer session will follow the formal presentation. This conference call is being recorded today, Wednesday, August 5, 2026. I would now like to turn the conference over to your host, Kevin Niland, Director of Strategic Finance and Investor Relations. Please go ahead, sir.

Hello and thank you for joining us. With me are Miguel Martin, Executive Chairman and CEO, and Simona King, CFO. Earlier this morning, we followed our fiscal first quarter 2027 financials to the period ending June 30th, 2026, and issued a news release containing our quarterly results. Our financial statements, MD&A, and news release are available on our IR website and can also access via CDAR Plus and ACAR. In addition, you will find a supplemental information deck on our IR website. Please note that we present our financials in accordance with IFRS and in Canadian dollars. Throughout our discussions, we'll be referring to both GAAP and non-GAAP adjusted results and encourage you to review the reconciliation contained within the press release of a reported result from their GAAP and corresponding non-GAAP measures. Our discussion today serves as a reminder that certain matters could constitute forward-looking statements that are subject to risks and uncertainties relating to our future financial or business performance. Actual results could differ materially and those anticipated in those four nothing statements. Risk factors that may affect actual results are detailed in our annual information form and other periodic filings and registration statements. These documents may similarly be accessed via CDAR Plus and AICAR. Following our prepared remarks, we'll conduct a question and answer session on our covering elements. With that, I'll turn the call over to Miguel. Please go ahead.

Thanks, Kevin. Aurora has become synonymous with medical cannabis in nationally legal markets. because we spent years building the infrastructure, scientific capability, and regulatory expertise required to deliver reliable, scalable, and consistently high-quality products to patients. Our dedicated focus on medical cannabis enables us to maximize opportunities in the industry's most attractive, durable, and profitable segment and should help us maintain and expand our leadership over time. We are already a leading exporter and hold top-tier market share positions in Canada, Germany, Poland, and Australia. We are also well positioned to export to other countries as the regulatory environment continues to open. We prioritize expanding our manufacturing capacity to support growth in the estimated $9 billion global medical cannabis market. There are only a handful of companies like Aurora that have the capabilities and certified pharmaceutical grade facilities required to reliably produce and sell directly into European and Australian medical channels. Our integrated approach to manufacturing and distribution reflects disciplined operational and financial management that drives lower production costs through strong yields, higher potency, and continued operational efficiency. Our cost base is structured to support top-line growth, and our continued investment in international expansion helps offset the near-term headwind in revenue and gross profit contributions to our business stemming from the reduced VAC reimbursement rate in Canadian Medical. We continue to prioritize and maintain a strong balance sheet with ample cash and no debt. This gives us greater flexibility to navigate regulatory and competitive developments across Canada, Europe and other key international markets and lets us deploy capital thoughtfully to stay ahead of our competition. Here are some of the key highlights from this quarter. First, international medical cannabis net revenue rose 17% to $43 million, driven by strong performance in Germany. Notably, about 64% of our total net revenue was generated outside of Canada, up from 50% last year. Second, our acquisition of Safari Flower Company and the recently announced certification of its EU GMP facility adds critical manufacturing capacity to serve the growing, profitable international medical cannabis markets. Third, adjusted gross margin was 58% at the high end of our expected annual range, as we benefited from strong contributions from international markets. And finally, we ended the quarter with nearly $150 million in cash, cash equivalents and short-term investments with no debt. Our operational network is clearly a core differentiator for Aurora, further supported by the recently completed acquisition of Safari Flower Company and the investments we have made in genetics and plant science. As international medical cannabis markets continue to evolve, EU GMP certification and remains a critical enabler of our global strategy and supports long-term profitable growth. Our investment in plant science and genetics has helped deliver meaningful reductions in the cost per gram to manufacture. Genetic differences alone can drive a yield improvement of up to 40% on the same cost base, a critical advantage in a capital-intensive business. Consistency is equally important, particularly in highly regulated medical markets, where product variability can disqualify items from market access altogether. Safari is an established EU GMP certified cultivator and manufacturer operating a 59,000 square foot purpose-built indoor facility in Ontario that strengthens our position as one of the largest Canadian exporters of medical cannabis. The acquisition gives us incremental EU GMP capacity that aligns with our existing global manufacturing network, strengthening our ability to meet the growing international demand for high quality EU GMP products. This transaction was accretive to our adjusted EBITDA results during the first quarter, and we intend to apply our plant science and operational expertise to drive incremental benefits through increased yields, lower manufacturing costs, and additional supply of EU GMP flour to maximize the high margin opportunities in Europe and other key international markets. Now let's discuss our key medical cannabis markets individually. Germany is our largest and fastest growing international market. It's also one of the most rigorous markets, with strict GMP standards required for access. We view these attributes as a competitive advantage rather than a barrier, and one that has helped us build a stellar reputation with wholesalers, distributors, and pharmacists. The market is structured around flour and oil, and unlike in other countries, Germany maintains meaningful separation between premium, core, and value tier pricing. We operate primarily in the premium and core segments, which represent the majority of our volume, with all three segments continuing to grow. As new competitors enter Germany and pricing pressure increases, we've maintained our leading market share by adjusting pricing where appropriate and broadening our product line to include more value options. We also expect GMP standards to become increasingly stringent, a trend we believe favors experienced and established operators like Aurora. Our EU GMP certified facilities and integrated supply chain allow us to ship directly to Germany and continue supporting growing patient demand in the years ahead. Our leadership showed through this quarter with two of our proprietary cultivars continue to rank in the top five by sales. Clear evidence of our brand equity that we've developed since first entering Germany in 2018. We're one of only three active in-country producers of medical cannabis holding a production and R&D license under German cannabis law, giving us a strong foundation to directly serve the growing medical markets across Europe. To capture incremental share in this growing market and augment our EU GMP production, we are in the final phase of our expansion plans for our learning facility. These investments should increase product quality through the same industry-leading genetics and operational playbook that has helped deliver incremental margin gains. The project is nearing completion and combined with the rollout of our proprietary cultivars is expected to double the site's annual flower output. The German market has built a very mature and integrated medical cannabis framework. They have a well-developed physician and pharmacy-led network that supports patient access, which is further supported by proper manufacturing and distribution capacity, GMP-level standards, and strong regulatory oversight. All those points to a system that's solid, well thought out, and highly integrated. We continue to monitor the regulatory and legislative environment in Germany, and while there's been lots of discussion regarding potential changes, We believe that we have the skills and capabilities to navigate any potential revision successfully and come out stronger on the other side, similar to how we successfully navigated the changes in Poland last year. Speaking of Poland, we hold the number one market share position, supported by strong commercial execution. We are encouraged by recent increases in annual import limits and the strong, loyal patient base, which strengthens our growth outlook for this key, highly regulated market. Success in Germany and Poland positions us well for other emerging regulated markets such as France, Ukraine, Switzerland, Spain, and Austria as our capabilities are portable. We will continue to focus on cultivation and wholesale where we believe the greatest margin opportunity exists rather than downstream channels like retail or telehealth. These sit outside our core competencies of weaving ever increasing regulatory standards into our operations. Our well-established leadership in Australia is allowing us to shift our sales mix towards core and premium products, reflecting growing demand from both prescribing physicians and patients for higher tier options. Australia also offers one of the broadest product format ranges outside of North America, giving us the opportunity to fully leverage our diverse product portfolio beyond flour and oils. We are also encouraged by the growth we are seeing in New Zealand, another highly regulated market, where patients are responding favorably to our growing product assortment. Finally, let's turn to Canada. The first quarter marked the onset of revisions to the federal reimbursement program, which took effect April 1st. As expected, this external regulatory shift impacted both our top line and adjusted gross profit. However, we are encouraged by our continued strong margins in our global medical cannabis business that supported the achievement of consolidated adjusted gross margins of 58%. which are at the higher end of our targeted range. These leading margins along with our historical ability to grow share in this business should therefore remain intact. Against this backdrop, we expect to expand share with new patients continue to enter the market. The revenue and adjusted EBITDA impact reflected in our first quarter performance and reaffirmed annual guidance is primarily a function of industry-wide changes and not a reflection of underlying demand or our competitive position in the long term. In our view, we have the capabilities, high-quality products, financial resources, and resilience to successfully navigate this headwind and deliver profitable growth while continuing to invest in growing international opportunities. Finally, let me address the changing U.S. regulatory landscape. We're watching developments in the U.S. closely, particularly as recent uplisting activity and potential rescheduling create new possibilities. We see three areas of opportunity for us. expanded research collaboration following federal rescheduling, potential partnerships leveraging our GMP and medical grade manufacturing standards, and longer term import export possibilities between the US and the international medical markets we already serve. That said, we are encouraged by this renewed momentum and look forward to further regulatory clarity from the US administration in the coming months. Let me now turn the call over to Simona.