Organigram Global Inc.

Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Organigram Holdings First Quarter Fiscal 2024 Earnings Conference Call. After the speaker's remarks, there will be a question and answer session. We ask that you please limit yourself to one question and one follow-up question. You may recue if you have any further questions. Thank you. Max Schwartz, you may begin your conference.

Good morning and thank you for joining us today. As a reminder, this conference call is being recorded and the recording will be available on Organic Room's website 24 hours after today's call. Listeners should be aware that today's call will include estimates and other forward-looking information from which the company's actual results could differ. Please review the cautionary language in our press release dated February 13, 2024 on various factors, assumptions, and risks that could cause their actual results to differ. Further reference will be made to certain non-IFRS measures during this call, including adjusted EBITDA, free cash flow, and adjusted gross margin, among others. These measures do not have any standardized meaning under IFRS and are not intended and are intended to provide additional information and as such should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Our approach to calculating these measures may differ from other issuers, so these measures may not be directly comparable. Please see today's earnings report for more information about these measures. In this call, references to fiscal 2023 are just a 13-month period from September 1, 2022 through September 30, 2023. Listeners should also be aware that the company relies on reputable third-party providers when making certain statements relating to market share data. Unless otherwise indicated, all references to market data are sourced from HiFire in combination with data from WeCrawler, potential boards, retailers, and our internal sales figures. Today, we'll be hearing from key members of our senior leadership team, beginning with Bina Goldenberg, Chief Executive Officer, who will provide opening remarks and commentary, followed by Greg Guyette, Chief Financial Officer, who will review our quarterly financial results for Q1 fiscal 2024. Also joining us for the question and answer segment is Tim Emberth, Chief Commercial Officer. As a reminder to our analysts and institutional investors on the call today, we are pleased to invite you to join us at our Investor Day at our Moncton New Brunswick facility, On the evening of April 9th for dinner and the morning of April 10th, we will offer a tour of our flagship facility and showcase our science-backed product development pipeline and more. If you have not yet received an invitation or would like more information about the event, please contact me via email. My email address can always be found at the bottom of our press releases. I will now introduce Bina Goldenberg, Chief Executive Officer of Organigram Holdings, Inc. Please go ahead, Ms. Goldenberg.

Thank you, Max. Good morning, everyone. Thank you for joining our call today and for your continued support of Organigram. Throughout fiscal 2023, with the dedication of our 1,000 employees across three facilities and our corporate head office, we demonstrated record-breaking international sales for the company, introduced award-winning products, completed extensive efficiency-driving CapEx projects, and expanded our market share in key growth categories, reaching the number two spot among LPs all while maintaining our negligible debt position. We then started fiscal 2024 off on a strong footing, securing the $124.6 million strategic investment from our dedicated partner, VAT, at a premium of over 100% to Organigram's share price at the time of announcement. With this transformational deal now formally approved by shareholders, and the first tranche of $41.5 million now closed, Organigram will focus on delivering on its objective of being a global cannabis leader driven by geographic and product expansion, backed by industry-leading innovation. Two-thirds of the $124.6 million investment will be used by Organigram to create a strategic investment pool named Jupiter. Jupiter will target investments in emerging cannabis opportunities internationally, that will enable Organigram to apply its industry-leading capabilities in products, brands, and cultivation to new markets. We have identified geographic expansion as a strategic priority, and this opportunity presents the company with the capital to lay global foundations as emerging cannabis markets continue to see significant growth. We have seen tremendous interest from cannabis companies looking for partnership opportunities and growth capital. Organigram is now uniquely positioned to take advantage of these opportunities. Organigram continues to differentiate itself as a leader, with its flagship facility in Moncton, which we believe is the largest indoor cannabis facility of its kind. With over 130 microclimate three-tiered grow rooms and in-house lab testing, we can grow and test a multitude of cultivars and dial in their growing conditions without interrupting the growth cycles of our other popular strains. Our facility's unique characteristics, recently enhanced by most of our $29 million in efficiency-driving CAPEX projects completed last year, present several other advantages. The demand for flour in the international markets is growing, as is the competition for these markets, which makes providing novel and stable cultivars a priority. Organigram has the capability to quickly trial and test unique cultivars in controlled environments, allowing us to tailor our production to address the needs of key international partners. We recently completed our first shipment to Germany, and we anticipate our first UK-bound flower to ship out in the near term. And we are also negotiating with additional partners in other jurisdictions. Organigram's position as a key export partner to cannabis distributors abroad is expected to be further enhanced by the EU GMP certification at the Moncton facility, which is expected later this year, subject to the successful completion of an audit. Organigram has also began transitioning part of its garden to seed-based production. Seed-based production is the preferred method in mature agricultural markets as it produces more robust plants, and is cheaper and faster to conduct on a large scale. We began this process in December 2023 and will provide updates on our progress in subsequent quarters. Moncton is also home to the Center of Excellence, the dedicated research and development facility where BAP and Organigram collaborate on product development and scientific research. In December 2023, Organigram was successful in validating molecular markers for powdery mildew resistance. and validated assays related to terpene synthesis. Furthermore, pharmacokinetic studies relating to nanoemulsified ingestible formulas are now complete, with results currently being compiled and analyzed. This will allow us to quantify the onset time and peak cannabinoid levels in the blood so we can substantiate these claims with consumers. Our R&D capabilities are beginning to more rapidly translate to technical know-how that is expected to provide Organigram with competitive advantages for years to come, spanning from more robust plants to better consumer experiences, backed by science and rigorous testing protocols. Now, while La Monca facility can supply our domestic and international markets with an annual capacity of approximately 90,000 kilograms per year, Our facilities in Winnipeg and Lake Superior are also key elements of our ongoing success. Our dedicated edibles facility in Winnipeg is capable of producing over 4 million gummies per month, supporting Organogram's position at quarter end as the number two edibles producer in Canada with over 18% market share and the number one pure CBD edibles producer with almost two-thirds of the market share in the segment. We are also very excited to introduce our nano-emulsion gummies to the market by the fall of 2024. Our newly expanded craft cannabis and hash facility in Lac Superior has now completed four craft harvests, and the facility is producing approximately 2 million units of hash annually. According to internal models cross-referenced with figures from BDSA, Organigram is the largest legal hash producer in the world and commands over 20% of the hash market in Canada as of the end of Q1. And in keeping with our core strength of innovation, we are pleased that our first-to-market Riftstrip hash innovation is performing well in the market and that we have successfully grown the hash category by bringing in new users with this flavorful and easy-to-use format. With our three facilities now fully expanded and equipped with substantial automation capabilities, Organigram is poised to more aggressively compete in the ready-to-consume product category, as consumers are displaying a clear preference today for convenience and quality. In Q1 fiscal 2024, ready-to-consume products made up 46.5% of sales, compared to 37% in the same period last year. In Q1 2024, Organigram produced and sold over 8 million pre-rolls. If you were to line up all these pre-rolls end-to-end, they would span the distance of approximately 780 kilometers. So essentially, we could light up a path from Toronto to New York City. The investments we made in our pre-roll processes in fiscal 2023 and the ensuing ramp-up have led to a 38% increase in tube-style pre-roll production run rates. 100% improvement in packaging throughput, and 150% improvement in the rate that we produce are shred heavy. Our ability to consistently compete in a difficult cannabis landscape is a testament to Organigram's unwavering dedication to its consumer and its craft. In fiscal Q1 2024, Organigram was the top three LP in all major categories, excluding vapes, and a top five LP in in market-rich shares in all regions across Canada. We began the quarter in the number two position among LPs with a 6.7% market share and maintained this position while growing our market share to 7.3% in December. As of the end of Q1, Organogram maintained the number two market position among LPs for five consecutive months, And in December 2023, we had our strongest month ever with $33.5 million in retail sales, driven by consumer receptiveness to innovation in tube-style pre-rolls, infused pre-rolls, and gummies. The reintroduction of Joltz was a large contributing factor to our success in the quarter as well, with $2.9 million in chip sales in Q1. One of our key domestic areas of focus for fiscal 2024 will be to increase our share of the vape categories, which we believe will unlock market share gains. In support of this goal, Organigram has recently launched its new vaporization hardware, resulting from a strategic investment in GreenTank, which is anticipated to increase flavor, performance, and potency per puff, while decreasing clogging, a major consumer pain point. Looking at our earnings for the quarter, which Greg will expand on shortly, we are pleased to deliver adjusted gross margins, which return to our previously reported levels. We also delivered positive adjusted EBITDA and cash flow from operations of $7.7 million. Contributing to these improvements were our growth in the pre-roll category and the reintroduction of Edison JOLTS to the market. As we focus on driving domestic and international market share gains through continued innovation and expansion into BAPE, refining our product and geographic mix, and reaping the benefits from increased automation at our facilities, we expect our margins to demonstrate more stability in fiscal 24 compared to fiscal 23. On a year-over-year basis, we expect both revenue and incremental margin growth. I will now hand the call over to Greg to review our financial performance for the quarter.