IM Cannabis Corp.

Good morning and welcome to I Am Cannabis' third quarter 2024 earnings conference call. Today's conference call is being recorded. At this time, I would like to turn the conference call over to Anna Teranko, Director of Investor and Public Relations. Anna?

Good morning and thank you, Operator. Joining me for today's caller, I Am Cannabis' Chief Executive Officer, Oren Schuster, and Chief Financial Officer, Jori Bernberg. The earnings press 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 and statements, including statements concerning future results of operations, economic conditions, and anticipated courses of action, and are based on assumptions, expectations, estimates, and projections as the date hereof. This 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 CEDARplus at www.cedarplus.ca and EDGAR at www.sec.gov. Furthermore, certain non-IFRS measures will be referred to during this call and the term non-IFRS adjusted EBITDA loss will hereafter be referred to as adjusted EBITDA loss. 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 also note that all references on this call reflect currency and 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, Anna. Good morning, everyone, and thank you for joining us today. In Q3, we had a clear focus to build a solid foundation to deliver accelerated growth in Germany in 2025. That said, as a medical cannabis company active in Israel and in Germany, I will start with a quick overview of the development of the German market and our performance there before explaining the progress we made to position the company for 2025. Since the April 1st partial legalization, the German cannabis market has been experiencing unprecedented growth at the speed that I don't think many anticipated. The growth has been driven by the increasing number of patients opting for cannabis-based treatments and a relatively inexpensive, easy prescription process. Advances in medical research, better accessibility through pharmacies, and the growing number of healthcare professionals willing to prescribe cannabis for a range of conditions, from chronic pain to anxiety and sleep disorders, are also key factors. The easing of regulations and increased public awareness have contributed significantly to the expansion of the market as well. As I did in the last quarter, I would like to put this growth into perspective by taking you through the details of our sales in Germany in 2024. They clearly show that the strategic shift we made to concentrate our resources on the German market was the right one. Our sales increased by over 200% in Q2 versus Q1 to reach 3.5 million. In Q3, we again increased our sales by 66% versus Q2 to reach 5.8 million in Q3. Since Q2, we have been driving the market growth and are positioned among the top cannabis companies in Germany. While I am very proud, representing these numbers, our focus in the last few months has actually been behind the scenes on building a solid foundation for 2025. We spent the quarter leaning further into a clear target, full integration of the German and Israeli teams. The goal was to build a strong, consistent supply chain and a laser focus on how to improve the efficiency and accuracy of how we use our resources. I believe that this foundation will be the basis to drive accelerated growth in Germany in 2025. Behind every success, there is a strong unified team. In Q2, the Israeli and German colleagues started working very closely to build the new supply channel from Israel to Germany. Cannabis supply chains are notoriously difficult to build without the local, regional, and international regulations that need to be followed. They managed this in a record time. The first three Israeli-grown strains launched in Q3. The teamwork behind these first three strains is gathering steam and has led to new projects and opportunities. We are in the process of onboarding several new suppliers and expect to see the results during 2025. Just as important as a stable supply chain to deliver growth is sufficient resource management to sustain the growth. Our Q3 2024 revenues increased from 12.4 million in Q3 2023 to 13.9 million this quarter. While our operating expenses decreased from 4.9 million in Q3 2023 to 4.1 million in Q3 2024. As a result, our operating expenses ratio was 30% in Q3 2024 in comparison with 40% in Q3 2023, a remarkable 25% increase in efficiency. This decrease has been driven by several factors, but the integration between the two teams has been fundamental. By sharing the same resources, we have been able to significantly lower costs. Our active cost management has stretched through all aspects of the business, from purchasing and logistics to sales and marketing, making our execution much more efficient. Our goal is to keep this foundation to drive sustainable growth in 2025. While our journey to lean and agile company over the last year has not always been easy, I'm very proud of how efficient we have become, how well we are using our resources to deliver growth. The progress we have already made on both the supply chain and our sales efficiency gives us a very strong foundation to deliver accelerated growth in Germany in 2025. Taking a look at our Israeli business. As in Q2, we continue to shift resources to support the German business and continue to work toward maximizing our profitability in Israel. For our Israeli business, this translates into a clear focus on the premium and ultra-premium markets. Over the past few months, our market has been influenced by several factors. The ongoing war has continued to impact our supply chain, causing delays in shipments. We have also seen reduction in the number of medical cannabis patients, with a decline of 10% from July to October. While the war initially delayed the medical cannabis license renewal process, it does not explain this sustained decrease. In the absence of sufficient data, we assume that the changes brought about by the July 2024 reform are causing complications in the prescription process. On the operational level, in our Israeli business, we relaunched Lotful 20, a premium Canadian brand with a total of three strains. All three strains were very well received by the market, selling through quickly. The same occurred with Super Sativa, the leading stream in our IMC craft brand. These results clearly show on how we can capitalize on our understanding of both the premium market drivers as well as the patient's needs to deliver sales. As in the previous quarters, we are continuing to clean our slow moving non-premium stock. clearing out old inventory for about 0.6 million, which again impacted our cost of sales, gross margin, and gross profit. To sum up Q3 2024, while the growth IMC delivered in Germany is clearly a highlight, most importantly, we focused on building a solid foundation, fully integrating the two teams to strengthen our supply chain and drive efficiencies that will be the basis to deliver accelerated growth in 2025 in Germany. I will now hand the call over to Uri, who will review the third quarter 2024 financial results. Uri?