SNDL Inc.

This milestone is a testament to the dedication of our team in driving positive change and the resilience and adaptability of our business segments. We are building the foundation of an important regulated product company with international potential that does not have a close peer in Canada. We are finding attractive opportunities for operational improvement in an industry where capital is scarce and many competitors are starved for liquidity amidst price compression, driven by persistent oversupply and over-licensing. Our goals are a far climb from where we stand today. We still have a lot of work to do, but we are making tremendous progress against a challenging macro backdrop. Although much of our regulated product business has shown recession resistance, we take nothing for granted given the likely duration of the current rate environment and are aggressively seeking efficiencies to improve profitability. S&DL has equipped itself with the flexibility to navigate market uncertainties and preserve our growth trajectory. Our platform structure creates strategic optionality, and our debt-free balance sheet helps us focus on delighting consumers without the burden of material cash interest obligations. Tank will provide further color on the liquor retail segment, but I wanted to highlight some key initiatives that we have recently undertaken. We recently finalized the structure of our liquor retail data program, and we expect to see results in the first quarter of 2024. Its launch is expected to strengthen our supplier partnerships, enhance revenue, and contribute to margin expansion within our liquor retail segment. In the third quarter of 2023, S&DL's cannabis retail segment demonstrated substantial growth and operational progress. Net revenue saw a 14% increase compared to Q3 2022, marking a record for the segment since the company's diversification into cannabis retail in 2021. Enhancements to our proprietary data licensing program significantly contributed to this success, with revenues climbing to $4 million in the third quarter, a significant increase over the previous year's $1.4 million, and up 50% from the preceding quarter. We are committed to refining our cannabis retail operations, enhancing partnerships, and delivering superior products to consumers. This strategy includes expansion into markets where our presence is currently limited to reinforce S&DL's position as a leading cannabis retailer in Canada. We've taken significant strides in our cannabis operations segment to streamline operations and reduce costs. The rationalization of our facility footprint and procurement processes sets the stage for significant financial improvements and further demonstrates our commitment to operational excellence. Our President, Tyler, will provide further details on our cannabis operations shortly. As of the end of Q3 2023, S&DL's financial position in Canadian dollars included $785 million in unrestricted cash, marketable securities, and long-term investments. Our robust liquidity profile stands in contrast to our current market capitalization of approximately $500 million, a figure that we believe does not fully reflect the intrinsic value of our enterprise. Said another way, the market is currently ascribing a materially negative value to our expanding operating segments. These segments are positioned with the potential to yield more than $1 billion in annual revenue underscoring our perspective that S&DL remains undervalued in the marketplace. In a climate where managing costs is more crucial than ever, our ability to streamline our investment portfolio by divesting of equity securities and certain credit exposures is integral to our strategy. As of the close of Q3 2023, S&DL had deployed capital into credit investments with a carrying value of $583.2 million. The lion's share of this value, approximately $550.5 million, has been committed to the Sunstream Bancorp joint venture. Sunstream is a joint venture sponsored by S&DL and has directed the formation of Sunstream USA with the aim of restructuring certain Sunstream-controlled loans. This development is poised to create a dedicated U.S. platform designed to attract independent third-party investors offering independent management and governance. Most importantly, the structure of Sunstream USA is set to undergo review by NASDAQ, aligning with all US compliance and governance standards. Since acquiring Valens in January of 2023, the company has realized approximately $22 million in annualized savings, exceeding our initial target of 10 million. In 2023 alone, we achieved cost savings of approximately $18 million. These savings have largely been driven by reduction in SG&A expenses, supply chain consolidation, and enhanced operational efficiencies. Looking ahead to 2024, we anticipate that run rate synergies will surpass $40 million annually, with expected proceeds from asset sales potentially contributing more than $9 million in additional cash proceeds. Investors may not realize that as we start 2024, None of the assets that S&DL held just over three years ago following its deep financial restructuring and flirtation with CCAA will be in operation. S&DL's leadership has driven a 100% complete transformation of a business that continues to evolve and change. This is not the team to underestimate. S&DL's performance metrics from the third quarter provide a clear affirmation of our strategy. Our confidence is increasing. and we are building a culture focused on accountability and performance. Our commitment to the consistent delivery of well-priced, high-quality products and superior retail experiences has never been stronger. We are excited to continue to update investors on our performance as we work to deliver strong, fundamental, unadjusted results. Once again, I thank you for your continued support of SMDL. I will pass the call to Alberto to provide further details on our financial results.

Thank you, Zach. I want to remind you all that amounts discussed today are denominated in Canadian dollars unless otherwise stated. Please note that certain amounts referred to on this call are non-GAAP and non-IFRS measures. For definitions of these measures, please refer to S&DL's Management Discussion and Analysis document. As we dive into our financials, it is great to report that for the first time in our history, we have reached positive free cash flow in the quarter. To be precise, in Q3 2023, we achieved 16.5 million of positive free cash flow, compared to negative 67.1 million in Q3 2022. Our cash flow from operations grew 27.5 million in Q3 2023. up from 8.6 million in Q3 2022. Achieving this cash flow milestone is a clear indicator of our operational improvement and reinforces the focus on our strategic initiatives as a path to deliver on much higher ambition in the future. Our unrestricted cash balance tells a similar story of growth, from 185.5 million at June 30, 2023, to 202 million at September 30, 2023. This increase speaks volumes about our targeted efforts to optimize operational efficiency, particularly working capital. Revenue growth remains steady, registering at $237.6 million for this quarter, a 3.1% increase from Q3 2022. Our reported gross margin reveals a slight decrease to $48.6 million in Q3 2023, down 3.4% from the same period last year. While we're seeing operational improvements, the reported growth margin has been impacted this last quarter by non-cast inventory impairment charges, to a large extent triggered by our efforts to simplify our portfolio and operations. For perspective, if we were to exclude the impact of inventory impairments and obsolescence charges in Q3 2023 and Q3 2022, our growth margin will have grown over 20% year-on-year. In terms of adjusted EBITDA, we achieved $16.1 million for the quarter, slightly down from the Q3 2022 results of $18.3 million. A better growth profit in 2023 has been offset by higher sales and marketing and G&A expenses in 2023 and higher investment segment income in 2022. I will let Tange and Tyler provide more details on the Q3 23 results for the liquor retail and cannabis operation segments, but I would like to comment about the results for our cannabis retail segment. Revenues for the segment have reached 75.5 million, which is 14.1% growth from Q3 2022. This record high revenue for the cannabis retail segment was supported by a healthy increase in same-store sales of 3.9% year-over-year across all banners, as well as opening of new stores. Growth marketing reached $20 million in Q3 2023, a 38% growth versus the same period last year. As a percentage of net revenue, gross margin expanded from 21.9% in Q3 2022 to 26.5% in Q3 2023, an improvement of 4.6 percentage points driven by continuous efficiency improvements and expansion of our proprietary data licensing program. This data program delivered revenue for the third quarter of 2023 of $4 million, compared to $1.4 million in the third quarter of 2022. This represents an increase of 54% versus the second quarter of 2023, showcasing the success of the programs optimization introduced earlier in the year. Finally, looking at our investments and equity positions in Q3 2023. At the end of the third quarter of 2023, the company had deployed capital into cannabis-related credit investments with a carrying value of $583 million. including 550.5 million through the Sunstream joint venture. The revenue generated by our investment portfolio in the third quarter stands at 10 million. This is mainly attributed to interest and fee revenues of 3.3 million, in addition to a 6.6 million increase in the estimated fair value of our U.S. credit investments. The company's financial health is a struggle. supported by $785 million in unrestricted cash, marketable securities, and investments, leading to a net book value of $1.3 billion. It is also important to highlight that we have not raised any cash through share offerings since June 2021, and to date, the company has no debt. SMDL's Board of Directors approved extending the company's share reportage program to November 20, 2024. The company's share repurchase programs continue to be available to lower our outstanding share flow. Management will continue to assess opportunities to utilize the program to the extent we believe it is in the best interest of our shareholders. For the three months ended September 30, 2023, the company did not purchase common shares for cancellation. We also remain deeply committed to regulatory diligence and compliance. Our dedication to paying excise taxes on time reflects our strong focus on responsible business practices. So far this year, we have already paid $35.6 million in excise taxes. Since the company's inception, we have paid a total of $80 million. Even though these high taxation levels create obvious challenges in the cannabis sector, we believe that meeting our financial obligations is essential for responsible business conduct and positive impact in communities we are part of. In summary, our results this quarter represent another solid step towards the execution of our business strategy, our culture of financial rigor and continuous improvement, as well as the relentless passion and dedication of our nearly 3,000 employees. While we're pleased with the progress we have made, we're setting our target on much bigger goals, as we're working on several initiatives to generate additional growth, further solidify our operational efficiency, and improve our financial rigor. I'm confident that through these initiatives and the determination of our organization, our future is bright. I will now pass the call to Tank to provide an update on our liquor retail results. Thank you, Alberto.

Our liquor retail results this quarter reflect our successful margin growth initiatives, which are not only delivering their intended results, but also guiding our strategy for future innovations and expansions. Our retail footprint remains stable with 170 locations primarily in Alberta and one store in British Columbia. Same store sales have remained steady year over year across all liquor banners. We are in the process of finalizing a new Wine and Beyond store in Airdrie, Alberta, which is located in one of Alberta's fastest growing municipalities. This new store is projected to generate approximately $7.6 million in analyzed sales in the first year, emphasizing the success of the Banner's destination shopping approach. It is scheduled to open in the first quarter of 2024. Despite economic headwinds, our quarterly revenues stood strong at $152 million with stable basket value and customer count, despite a downturn in national retail spending. In response to consumer spending trends and macroeconomic factors, we continue to optimize our operations to ensure we are meeting the needs of our customers by prioritizing value, quality, and digital experiences. This approach has not only maintained our stability, but also driven growth in key metrics, which is reflected in our year-over-year and sequential margin growth. Our gross margin reached 37.3 million, representing 24.5% of our sales in Q3 2023. This is a meaningful improvement compared to Q3 2022, where gross margin was 35.6 million, or 23.3% of sales. The 4.8% gross margin growth is mainly driven by procurement productivity product mix management initiatives, and the success of our private label program. Private label sales, a significant driver of gross margin growth, increased 33% compared to Q3 2022 and 7% sequentially. Private label as a percentage of sales increased from 7.3% of sales to 9.7% from the comparative period in the year prior. representing growth of over 3.5 million. To further capitalize on the success of our private label program, we are currently developing a private label for wine with plans to launch in the first quarter of 2024. Our private label will feature various wine varietals from different regions, showcasing notable winemakers at accessible prices. This initiative is designed to build on our margin growth strategies and continue to drive differentiation through SNDL's liquor retail banners. Looking to new initiatives, we are pleased to announce we have built out the framework for our proprietary data licensing program. We anticipate reporting initial revenue in Q1 2024 and scaling this program through the upcoming year. This will not only support all our stakeholders, but also boost our efforts to increase profits. In September, SNDL launched an e-commerce platform for its liquor retail banner, Wine and Beyond. The company observed 121% increase in the average online basket spent compared to in-store purchases during the initial four weeks post-launch. highlighting the significant past and growth opportunity through e-commerce. The current site supports click and collect. However, we are currently looking into different options to enhance customer conversion and accessibility. We anticipate strong results in the seasonally busy Q4 and look forward to observing how the e-commerce platform further drives sales during this key period. We remain committed to achieving continuous and incremental growth throughout 2023. Our focus remains on expanding our customer reach and exceptional product offerings to ensure we created tailored in-store and digital experiences. Thank you, and I will now turn the call over to Tyler to cover our cannabis operations segment.