Cronos Group Inc.

Good morning. My name is Brianna and I will be your conference operator today. I would like to welcome everyone to Kronos Group's 2024 Third Quarter Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Anna Schlimack, Chief Strategy Officer. Please go ahead.

Thank you, Brianna, and thank you for joining us today to review Kronos' 2024 third quarter financial and business performance. Today, I'm joined by our chairman, president, and CEO, Mike Kornstein, and our CFO, James Holmes. Kronos issued a news release announcing our financial results this morning, which is filed on our EDGAR and CDAR profiles. This information and the prepared remarks will also be posted on our website under investor relations. Before I turn the call over to Mike, let me remind you that we may make forward-looking statements and refer to non-GAAP financial measures during this call. These forward-looking statements are based on management current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ materially from expectations are detailed in our earnings materials and our SEC filings that are available on our website, by which any forward-looking statements made during this call are qualified in their entirety. Information about non-GAAP financial measures, including reconciliations to U.S. GAAP, can also be found in the earnings materials that are available on our website. We will be making statements regarding market share information throughout this conference call, and unless otherwise stated, all market share data is provided by HIFIRE. We'll now make prepared remarks, and then we'll move to a question and answer session. With that, I'll pass it over to Kronos' chairman, president, and CEO, Mike Ornstein.

Thank you, Anna, and good morning, everyone. Our results this quarter prove that our long-term approach to this industry is paying off. With record revenue this quarter and our disciplined approach to operating expenses, we're demonstrating our ability to simultaneously grow and increase efficiency across our business. Thanks to our strong balance sheet, we are exceptionally well positioned to capitalize on future growth opportunities and enhance our position in the current markets we operate in. Before getting into details on the quarter, I'd like to spend a minute on where we are from a flour supply demand perspective. Over the past year, we've seen a rapid increase in demand for our flour products after taking market share in Canada and Israel. We've also seen additional growth in international markets, particularly Germany and the UK. As a result, we have not been able to fully meet flour demand. We believe the driver of this increased demand is a combination of our genetic breeding program and the cultivation capabilities at GroCo. And with European growth picking up and the shortage of high quality flour in Canada, we only see demand increasing from here. That is why we announced the expansion of GroCo. This investment involved an additional approximately $51 million credit facility to support the expansion of GroCo's state-of-the-art production facility. With this investment, Chronos obtained majority control of the board and began consolidating GroCo into our results this quarter. As I've mentioned before, GroCo's strong performance has been significant, yet underappreciated. These consolidated results demonstrate a more complete picture of our whole business. Turning now to brand updates. In Q3, Spinach became the number one ranked cannabis brand in the Canadian market with 4.8% market share. Supported by number one rankings in edibles and flour, number four in vapes, and number eight in pre-rolls. The brand's market share outperformance represents our relentless commitment to quality, innovation, and bringing differentiated products to the competitive Canadian adult use market. In the edibles category, Sours by Spinach, our industry-leading edibles, captured 17.2% of the market share in Q3 and today accounts for five of the top 10 best-selling edibles in Canada. Our focus on developing innovative strategies and products in this category has been instrumental in our success. We recently launched our first seasonal offering, Caramel Green Apple Sours, which has been a huge hit with consumers. In Q3, we also launched our fully blasted sours in Ontario, a single 10 milligram THC gummy. This has been the fastest selling launch in company history. This quarter, we also launched new sours flavors with rare cannabinoids. Our strawberry watermelon 4 to 1 gummy with CBG and THC and our peach passion fruit gummy with CBN, CBC, and THC are now in market. Edibles from our Lord Jones brand are also doing well in the chocolate category, quickly growing to become the third best-selling chocolate brand in Canada. We look forward to seeing chocolate fusions perform during the holiday season and heading into the winter months, which tends to have a lift in the chocolate category. Spinach continues its exceptional performance in the flour category at the number one spot in the Canadian market with 6% market share, led by popular genetics such as GMO cookies wedding cake, and space cake in a variety of sizes. This segment has also been bolstered by our milled flower offering, Spinach Grinds. The continued success of our breeding program and GroCo has further strengthened our position in this category, ensuring premium quality and consistency. The vape category continues to perform steadily. Spinach maintains the number four position with 6.4% market share. This quarter, we launched the new Spinach Hits all-in-one vapes in Pink Lemonade and Rocket Icicle, as well as new flavors Mango and Grape for our 1.2 gram vapes. Our Pink Lemonade vape is now the number one 1.2 gram vape. This is a competitive category, and we are committed to continuing to innovate and bring differentiated products, flavors, and cannabinoid combinations to market. This quarter, we saw an improvement in market share in the pre-roll category. In infused pre-rolls, Spinach saw 25% retail dollar sales growth, boosting our brand rank to sixth among all infused pre-roll brands. Lord Jones is shaping up to be a clear leader in hash infused pre-rolls in the Canadian market. The recently launched Sour Blueberry infused pre-roll ended Q3 as a top-selling hash infused pre-roll. The infused pre-roll category is growing, so we're particularly pleased to be winning here. We are laser-focused on improving and innovating our pre-roll offerings, and we are seeing signs of that success roll through the numbers. While we still have plenty of room to grow in this space, we remain focused and optimistic about our plans for expansion. Our strategy has always been to develop a portfolio of best-selling and disruptive branded products we can launch in new markets as cannabis regulations open globally. The spinach brand becoming the best-selling brand in Canada is validation of our strong capabilities, and we're just getting started in expanding our winning portfolio of borderless products and bringing it to markets globally. Now moving to Israel, our team there has shown remarkable performance throughout Q3, with record volume sold and our best revenue quarter in two years. Frontless Israel has built significant momentum throughout the year, despite a very competitive market with declining patient growth. which is a testament to the strength and the quality of the Peace Naturals brand and products. We are excited about the growth in Israel, despite geopolitical factors affecting the region this past year, which gives us confidence in our position in this market. Internationally, we've made great strides in the markets we have entered. In Germany, our Peace Naturals brand continues to penetrate the market and grow at a strong clip. We are confident in the momentum we are seeing in the German market, given we are selling the same products that led us to our number one flower position in Canada. We believe we have a right to win and are well positioned to continue to take share in the German market. Similarly, while it's early days in the UK, we are starting to grow our Peace Naturals brand and are excited about our growth potential. This quarter's success, driven by our growing portfolio of borderless products, strong infrastructure, and industry-leading balance sheet, enables us to not only expand in our existing markets, but also to seize opportunities in any new market we choose to enter. Now, I'll turn it over to James to walk you through the financials. Thanks, Mike, and good morning, everyone.