Canopy Growth Corporation

Good morning. My name is Denise, and I will be your conference operator today. I would like to welcome everyone to Canopy's Growth Fourth Quarter and Fiscal Year 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. I will now turn the call over to Judy Hung, Vice President, Investor Relations. Judy, you may begin the conference call.

Thank you, Denise, and good morning, everyone. Thank you all for joining us today. So on our call today, we have Canopy Growth CEO David Klein and CFO Mike Lee. Before financial markets opened today, Canopy issued a news release announcing our financial results for our fourth quarter and fiscal year 2020 ended March 31, 2020. This news release is available on Canopy Growth's website under the Investors tab and has been filed on our EDGAR and CEDAR profiles. Please note that our fourth quarter, and fiscal year 2020 financial results presented in the press release issued earlier today and to be discussed during our conference call today have been prepared in accordance with U.S. GAAP. I would like to note that certain matters we discussed in today's conference call could constitute forward-looking statements that are based on assumptions that are subject to risks and uncertainty that could cause actual results to differ materially from those projected in the forward-looking statements including as a result of the factors described in the cautionary statement and risk factors included in the company's earnings release and regulatory filings by which any forward-looking statements made during this call are qualified in their entirety. Risk factors that could affect results are detailed in the company's most recent annual information form and other public filings on the company's EDGAR and CEDAR profile and will be described further in our annual reports on Form 10-K for the fiscal year ended March 31, 2020. Further, during this call, we refer to supplemental non-U.S. GAAP measures, which are not recognized under U.S. GAAP, but are defined in the press release issued this morning and will be described further in our annual report on Form 10-K for the fiscal year ended March 31, 2020. We believe that these non-GAAP measures assist management in planning, forecasting, and evaluating business and financial performance, including allocating resources. Reconciliations of these non-GAAP measures to their closest reported GAAP measures are included in our earnings press release furnished to the SEC. Please note that all financial information is provided in Canadian dollars, unless otherwise noted. The following secure remarks by David and Mike, we will conduct a question and answer session. during which questions will be taken from analysts. To ensure that we get to as many questions as possible, we ask analysts to limit themselves to one question. Now, with that, I'll turn the call over to David. David?

Thank you, Judy, and good morning, everyone. We have a lot to cover this morning, so we've provided a supplemental earnings presentation to help you follow along with our call. We're operating in unprecedented circumstances due to COVID-19. On behalf of our entire company, our thoughts go out to all who have been impacted by this global pandemic. We sincerely thank those who've been working to keep all of us safe. And we also want to recognize the work of all of our employees, suppliers, customers, and retail partners during this difficult time. From Canopy's standpoint, from day one, our number one priority has been to keep our employees and customers safe and healthy. to ensure business continuity and to support the communities in which we work. A majority of our non-production related staff continue to work remotely. And we've had a COVID response team handling the day-to-day issues, closely coordinating with myself and my senior management team. In our retail operations, we temporarily closed down our 22 corporate-owned retail stores in mid-March. But as of today, 20 of those stores have reopened, and the final two will reopen this coming Monday. We've successfully rolled out Click and Collect to all of our Tokyo Smoke and Tweed stores, as well as added home delivery for nine of our Tokyo Smoke and Tweed partner stores in Ontario. For our production facilities, we implemented a daily screening process in the beginning of March, and we've added additional safety and social distancing measures at all of our facilities. Luckily, we've seen only minor disruptions to date, mostly related to staff scheduling. Our supply chain is in good shape. having had ample inventory of consumables on hand pre-COVID and ensuring continuity of production thus far. A key pillar of Canopy's culture is giving back. We've donated over 75,000 pieces of personal protective equipment to be used by frontline workers in various provinces and local organizations across Canada. And I'm proud that BioSteel has pledged up to $2 million worth of its hydration mix products to frontline workers, hospitals, and patients. While this works is providing hand sanitizers to homeless shelters. The US team has also supported nurses in various hospitals by donating first and free CBD products. Turning to our business, our Q4 performance was mixed. Our top line performance didn't meet our expectations and we lost market share in the Canadian recreational market. On the positive side, we finished the full year with 76% year over year growth and reduced our cash firm. Mike will walk through our financial results in more details. Over the past couple of months, we moved our business forward with the launch of a number of new products globally with more to come. First, we had three ready-to-drink cannabis beverages in the market in Canada, Tweed Houndstooth and Soda, Tweed Baker Street and Ginger, and Houseplant Grapefruit. and as a latest update, we began shipping Beats Face this week. Early response from consumers for all of our beverages has been very positive. In fact, Tweed Houndstooth and Soda was the number one selling cannabis beverage in Ontario in April. And let me share with you some quotes from a recent online review of Tweed Houndstooth and Soda. I love the taste, minimalistic but complex, similar in taste to Hendrick's Gin and Soda, really nice effervescence and botanicals. and a second quote, it was like drinking one beer, same kind of mild buzz. In addition, we now have a number of vape products in the market. In Q4, Juju Power 510 battery was our top-selling accessory SKU in our own stores. We also launched 510 vape cartridges under the Tweed and TWD brands. And our Tokyo Smoke Luma pod-based vape devices, Luma Go Pods and Pause Pods, are also available in the Canadian recreational market. We've expanded our chocolate offerings and now have four SKUs in the market, and we doubled chocolate production capacity last quarter. In the U.S., we've broadened our first and free portfolio, introducing a new line of hemp-derived CBD creams. And this works launched a line of CBD booster skincare, which are currently available through direct-to-consumer channels in the U.K. and the U.S. and just late last month, This Works also launched its stress-free hand sanitizers, which led to the best e-commerce selling day on the This Works site on the day it was launched. Since our last earnings call, we've made several changes to our operations aimed at improving our focus and right-sizing our cost structure. We've reduced our production capacity in Canada by 40% by closing down our two greenhouses in British Columbia as well as an indoor facility in Saskatchewan. We shuttered a hemp farming operation in New York. We transferred all of our operations in Africa to a local partner and are moving to an asset-like model in Columbia. And we significantly reduced our headcount. Finally, our strategic review of the business is 100% on track and our change agenda is already underway. I'm going to stop here and turn it over to Mike to review our financial results, and then I'll come back with more details around our revised strategy.