IM Cannabis Corp.

Good day and welcome to I Am Cannabis' fourth quarter and full year 2022 earnings conference call. Today's conference call is being recorded. At this time, I would like to turn the conference over to Maja Lustig, Director of Investor and Public Relations.

Thank you, operator. Joining me today are IM Cannabis Chief Executive Officer Oren Schuster and Chief Financial Officer Shai Shemesh. The earnings release that accompanies this call is available on the investor relations section of our website at investors.imcannabis.com. Today's call will include estimates and other forward-looking information and statements 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. The information may involve known and unknown risks, uncertainties, and other factors that 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 CDAR at www.cdar.com and EDGAR at www.sec.gov. 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 or statements 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 statements or supply new information regarding the circumstances after the date of this call. Please 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 IAM Cannabis. Oren, please go ahead.

Thank you, Maya. Good morning, everyone, and thank you for joining us today. 2022 was a transformational year for us. We proved our flexibility, our ability to adjust quickly to market dynamics. We made strategic choices, better focusing our business model and priorities. We started shifting from vertically integrated model while enhancing our strategic position higher up in the value chain, focusing on meetings patients and pharmacies needs. We have anticipated the growing demand for premium products and built our competitive advantages through sourcing and import capabilities fueled by strategic alliances with top-of-the-line Canadian suppliers. The fourth quarter marked a pivotal point for us. To move closer to our goal of profitability, we commenced our exit from the Canadian market. refocusing our resources on the two highest value markets, Israel and Germany. Earlier this month, we announced additional restructuring initiatives that are designed to drive sustainable profitability while reducing costs. To better suit the current market environment and our short to midterm objectives, we announced the reorganization of the company's management and operations to be able to straighten our focus on co-activities and drive efficiencies to realize sustainable profitability. To achieve these goals, the company is reducing its workforce in Israel by 20 to 25% across all functions. As part of this restructuring initiative, Key positions in the company's leadership team will be transitioned to highly skilled internal successors, will be supported through a three-month transition period, and closely monitored and over-processed to ensure continuity. At this point, I would like to thank the IAM Cannabis management team, as well as all of our employees impacted by the restructure, for their contributions to the company over the years. This month further reflects our determination to continue with our strategic plan by maximizing efficiencies to create a leaner and more flexible organization. We expect approximately 3.5 million of analyzed cost saving for mid 2023 while maintaining our anticipated revenue. We believe that with these steps, we will be able to return value to our investors. We also anticipate that we will further optimize and synergize our existing international operations, as well as concentrate our resources where we see the most potential. As Shai will explain later on the call, our financials include the company's results from continued operations. The activities of our Canadian operations are collectively referred to as the discontinued operations. We are a new company today with a sharper focus and we will use today's call to help our investors understand what we see on the horizon and what we are doing on the ground together. When we take a look at the overall cannabis market, we see that it is dynamic and constantly evolving market. Consumers are becoming increasingly sophisticated. Even in immature or new markets, consumers are reading the same online articles and following the same influencers. What took time to evolve in the more mature markets is accelerating rapidly within the newer markets. The cannabis flower market in 2023 is a buyer's market. where before full vertical integration was the solutions to the struggle to secure consistent premium supply. There is now a glut of premium cannabis on the market. For a cannabis company to not only survive, but succeed in this market, it needs to be agile. It needs to be lean and efficient to anticipate the market's rapid evolution. This is exactly what I Am Cannabis is transitioning into. a lean and agile company with a clear focus on building brands that consumers love, driven by consumer insights. Today, over a third of our organization is dedicated to sales and marketing, which bring our strategic focus to action. Immediately in front of us is a transition period designed to lead us to stronger results. I am pleased to share that we will now direct more resources and efforts into where we believe we grow the fastest, namely Israel, and to grow where we see the significant potential, namely Germany. I will now provide an overview of each of our market segments. After this overview, Shay will review our financial results before we open the call for questions. In Israel, our reputation as a leading premium provider is on the rise, bolstering our competitive power in the Israeli market. We were early movers in the premium product categories and the initiators of ultra-premium segments. Our mission is to continue to lead these market segments with state-of-the-art products, inspiring storytelling and great service. Focusing our offering on premium products led by patient insights enable consistent premium pricing strategy deployment. In 2022, our price per gram increased by 15% versus 2021. We believe that our average selling price is the highest in Israel. Shai will elaborate on this further. In addition to the benefits of the group's long-term presence in Israel, we believe that with our strong sourcing infrastructure in Israel, advanced product knowledge, regulatory expertise, and strong commercial partnerships, we are well positioned to address the ongoing needs and preferences of medical cannabis patients in Israel. From an analysis of the parallels between the Israeli and the German markets, We are confident that our success in Israel can be replicated in Germany. As we wait for the proposed legalization of recreational cannabis use in Germany, in the fourth quarter of 2022, we were pleased to see continuation of the steady increase in self-paying patients who can easily get prescription and access high quality medical cannabis products. The number of teleclinics and online pharmacies available to medical cannabis patients is also continuing to increase. In October, the German government unveiled plans for the legalization of recreational cannabis for adults. The general detail has been worked out on a local level and a proposal was sent to European Union. A response is expected in the second quarter. The German Health Minister commented that if everything goes well, legalization could be achieved as early as 2024. We strongly believe that German legalization will pave the way for legalization in other European countries, such as Italy, Spain, France, and the UK. Our goal is to develop a strong foothold in the European market securing significant market share throughout go-to-market capabilities. We are now a much more focused and streamlined company. The Israeli and German cannabis markets have much in common, such as strong and well-organized medical cannabis sector that distributes cannabis through pharmacies operating under the relevant GMP and EU GMP standards. There is high consumer demand for premium cannabis, as well as robust commercial infrastructure in both markets. In our view, these common points plus our strong sourcing infrastructure give us key competitive advantages in Germany. We will be allocating the needed capital and efforts to further establish our presence in Israel and Germany and to achieve profitability. We recently completed a private placement with aggregate gross proceeds of approximately 8.6 million. This capital allocation was critical to improving our ability to leverage our strength and expertise, leaning further into our strategy. I will now turn the call over to our Chief Financial Officer, Shai Shemesh, who will review our fourth quarter and full year 2022 financial results.