IM Cannabis Corp.

Good day and welcome to IAM Cannabis' fourth quarter and fiscal year 2021 earnings conference call. Today's conference call is being recorded. At this time, I would like to turn the conference over to Maya Lustig, Director of Investor and Public Relations.

Thank you, Operator. Joining me today are IAM Cannabis Chief Executive Officer Oren Schuster, and Chief Financial Officer Shai Shemesh. Earlier today, I Am Cannabis released financial results for the fourth quarter and full year 2021. The earnings release that accompanies this call is available on the investor relations section of our website at investors.iamcannabis.com. Today's call will include estimates and other forward-looking information, including statements concerning future revenues, results from operations, financial positions, markets, economic conditions, product releases, partnerships, and any other statements that may be constructed as a prediction of future performance. This information may involve known and unknown risks uncertainties, and other factors which may cause actual results to differ materially from those expressed or implied by such statements. Factors that could cause or contribute to such differences are described in detail in the company's most recent filings available on SIDAR at www.sidar.com. Furthermore, certain non-IFRS measures will be referred to during this call. The company believes that the presentation of this non-IFRS information provides useful supplementary data concerning the company's ongoing operation and is provided for informational purposes only. Any estimates or forward-looking information provided are accurate only as of the date of this call and the company undertakes no obligation to publicly update any forward-looking information or supply new information regarding the circumstances after the date of this call. Please also note that all references on this call reflect currency in Canadian dollars. With that, it is my pleasure to turn the call over to Oren Schuster, CEO of I Am Cannabis. Oren, please go ahead.

Thank you, Maya. Hello, everyone, and thank you for joining us for our first earning call. In just over two years, since I Am Cannabis became a public company, we have made a significant amount of headway in positioning our enterprise to become a leading producer of premium cannabis globally. In 2019, we successfully went public on the Canadian Securities Exchange. And in March of 2021, we became the first Israeli cannabis operator to list on the NASDAQ. Over three rounds of financing, we successfully raised approximately $70 million, which was prudently deployed into the business. In exchange for this capital, we have grown our annual revenue base nearly 10 times over the last three years, from just over $5 million in 2019 to a record of over $54 million in 2021. representing revenue growth of over 240% in fiscal 2021. Most notably, we grew revenue by 309% year-over-year to over 20 million in the fourth quarter and exited the year at an approximate 80 million revenue run rate, which showcases our accelerated growth. The strategic steps we have taken to capitalize on the evolving global regulatory landscape and calculated approach towards building our global supply chain framework have today allowed us to become one of the leading distributors of medical cannabis in Israel with an established presence in the Canadian and German cannabis market. Ultimately, we see a pathway to capturing over 30% market share of the premium cannabis industry in Israel and over 10% share of the EU market within five years. But going further, for those of you who may be new to our story. I would like to first provide an overview of I Am Cannabis and the vision that our team has been working towards since inception. Afterwards, I will provide some detail on our market segments that collectively position us for long-term growth, followed by review of our financial results before we open the call up for your questions. I Am Cannabis, or IMC, is a leading global provider of premium cannabis for the medical and recreational markets and the only multi-country operator with the footprint in Israel, Canada, and Germany, the three largest markets in which cannabis is legal at the federal level. According to New Frontier Data, one of the cannabis industry's leading data and analytics firm, global sales of legalized cannabis in 2020 were almost 24 billion USD. Due to the ongoing liberalization and commercialization of cannabis, this figure is expected to over double to 51 billion USD by 2025, just under three years from today. This emerging global economy is primed with opportunities, but to capitalize on them will require the navigation of complex regulations, established infrastructure, and deep understanding of evolving market trends. all of which serve as the basis for IMC's success. Our vision is, and always has been, to become one of the world's largest premium cannabis producers, leveraging our well-respected brand with super premium products and a loyal customer base has allowed us to become a market leader in a relatively short amount of time. And while other operators, may have aspiration to reach the dominant scale IMC is working towards, we are uniquely positioned to continue growth with the highest quality products in the market, which is a key differentiator that will enable us to continue growing sustainably. Our accumulation of knowledge and operating expertise dates back over a decade and informs every strategic and operational decision that we make. In 2010, I founded one of the eight medical cannabis producers that were initially licensed by the Israeli authorities. This entity, which becomes the initial cultivator and processor for IMC, provided the foundation of our operating platform. As regulatory reforms continue to develop, we replicated our success internationally. Fast forward into today, we have completed seven strategic acquisitions and built a world-class network of pharmacies. Not only are our operations vertically integrated, but we have ample premium cultivation capacity, sought-after brands, and top-tier infrastructure with extensive distribution reach, all of which have provided an early-mover advantage that positions IMC for significant leadership opportunity as the market evolves. Let me go into some more detail on some of the most important steps we have taken. In 2019, we acquired Logistics Hub in Germany that is EU GMP certified, making IMC one of the few companies that can procure bulk products, repackage it in Germany, and sell it directly to pharmacies, leveraging the facility's 13-year track record of successful distribution. We quickly developed IMC's brand presence in Germany and commenced sales into Europe in the fourth quarter of 2020. Subsequently, we made key upgrades to this facility with state-of-the-art technology and completed an expansion that doubled IMC's footprint in Germany to approximately 8,000 square feet. Germany is an important market as we prepare for more significant entry to the broader European market. And today, IMC products are available at all relevant pharmacies that sell cannabis in Germany. We also completed the landmark acquisition of Tricom in March 2021, which provided us with premium indoor cultivation facility that increased our capacity by over 15,000 pounds to serve the high demand for premium cannabis across our market. We further secured our foothold in the Canadian market through our acquisition of MYM, which provided cost-to-cost distribution in Canada, while accelerating our entry strategy into new markets and bolster our export capabilities to serve our existing Israeli and German operations. In Israel, where patients are required to obtain medical cannabis through pharmacies, we closed four key acquisitions earlier this month. These additions will have consolidated four of Israel's leading pharmacies under one ownership, immediately making IMC one of the leading retail medical cannabis providers in the country. Importantly, we now operate Israel's largest online pharmacy business, which supports the expansion of modern patient base as e-commerce is widely adopted as the preferred retail medium. Leading the modernization of the industry strengthens our direct links to consumers by allowing IMC to manage patient relationships end-to-end and bolsters our in-house data for use across all platforms. Finally, IMC also secured an IMC GDP License Trade Center, which we will leverage to increase our purchasing power with suppliers and expand our range of products. This includes highly recognized brands, some of which we now have exclusive agreements to import. We now have the resources needed to ensure the efficient movement of supplies across our platform. effectively serve some of the most rapidly growing consumer segments in Israel, and ultimately drive increased satisfaction and consumption of our products. We have strategically entered each of the markets we are operating in, not only due to the size of the markets, but due to the holistic nature of our platform and taking each segment into account. As mentioned earlier, IMC's story began in Israel, where we have over a decade of experience in growing and selling premium cannabis. The study I referred earlier states Israel imported more cannabis in 2020 than any other country, while also having the world's highest cannabis usage rate per capita, outpacing the United States by nearly 10%. Israel's long history of cannabis medical research has led to the country becoming a flourishing research and development hub, which is naturally aligned with IMC's core values. Our commitment to quality is what originally led the primary focus toward premium sex. Our vertically integrated operations have enabled IMC to succeed in countries' strangely controlled regulatory environments. while allowing us to stay ahead of trends and generate operating efficiency. In the near term, we believe that Israel will continue to be the highest growth segment for IMC, as we realize the benefits from our expanded global platform. Over the longer term, however, we expect to leverage our successful and reputation in Israel into Germany, which presents an even more substantial opportunity Like Israel, Germany has a very active pharmaceutical market, and as a result, has a science-based cannabis market supported by extensive medical studies. Cannabis is distributed through pharmacies to approximately 100,000 patients in the country, and the German government employs a strong reimbursement program which supports a high pricing structure. As you might expect, This creates an environment that caters to premium products, thereby giving a distinct advantage to operators who are able to constantly meet the levels of associated standards. Also similar to Israel, Germany is a heavily regulated environment that requires a significant level of expertise to navigate. Our EU GNP certification is an incredible asset in this regard and further position us to be a market leader in this sector. Germany's economic success with its medical program, as in our opinion, made the legalization of adult-use recreational cannabis becoming a top government priority. Due to its position as the economic and logistical hub for the EU, Germany could potentially provide one of the greatest growth catalysts in the cannabis market. And we believe we are better positioned to than anyone to capture this market share. As you may know, Canada was the first G7 country to federally legalize recreational cannabis and has the highest production capacity of premium products outside of the U.S. Our strategy of developing a Canadian presence was rooted in the ability to have a world-class manufacturing hub to serve all of our addressable markets that are high importers of premium products. Based on recent sales figures, IMC's brands are popular with Canadian consumers and are leading the premium market. Notably, our Highland & Wagner's brands are ranked as number one and number six respectively, in Ontario, which generally reflects consumer preferences across Canada being its largest market. We expect our indoor cultivation facilities in Canada to be operating at full capacity to meet the elevated demand for our products and brands on a global scale. The synergies created by our specific operating footprint can be summarized in three points. We are leveraging our regulatory know-how and extensive database of medical patient data and insights from Israel to inform our operations in Germany and in Canada. Our indoor cultivation facility in Canada will support the export of premium products to markets like Israel and Germany, in which consumers are amenable to paying a higher price for premium products. Our Germany-certified facility serves as the pan-European distribution hub. As we prepare for future recreational demand in the EU, we stand to benefit from our unique infrastructure and early mover advantage. Again, only two players in Germany can make this claim. With that, I would like to turn the call over to our Chief Financial Officer, Shai Shemesh, who will review our fourth quarter and fiscal year 2021 financial results. Shai?