Village Farms International, Inc.

Good morning, ladies and gentlemen. Welcome to Village Farms International's first quarter 2022 financial results conference call. This morning, Village Farms issued a news release reporting its financial results for the first quarter ended March 31st, 2022. That news release, along with the company's financial statements, are available on the company's website at villagefarms.com under the investors heading. Please note that today's call is being broadcast live over the internet. and will be archived for replay both by telephone and via the Internet beginning approximately one hour following completion of the call. Details of how to access the replays are available in today's news release. Before we begin, let me remind you that forward-looking statements may be made today, during, or after the formal part of this conference call. Certain material assumptions were applied in providing these statements, many of which are beyond our control. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in forward-looking statements. A summary of these underlying assumptions, risks, and uncertainties is contained in the company's various securities filings with the SEC and Canadian regulators, including its Form 10-K MD&A for the year ended December 31, 2021, and Form 10-Q MD&A for the quarter ended March 31, 2022, which are available on EDGAR. These forward-looking statements are made as of today's date and accept as required by applicable securities law. We undertake no obligation to publicly update or revise any such statements. I would now like to turn the call over to Michael DiGiglio, Chief Executive Officer of Village Farms International. Please go ahead.

Thanks, Chris. Good morning. With me for today's first quarter is Village Farms Chief Financial Officer Steve Ruffini, and joining us, the President and CEO of Pure Sun Farms. Manish Dosanjh, and for the first time, our recently appointed Executive VP, Corporate Affairs, Anne Gillen Lefebvre. The first quarter of 2022 saw continued strong execution and performance from our Canadian businesses, which was unfortunately somewhat offset by the macro challenges facing Village Farms Fresh, our produce business. So let me start with our produce business. Those who have followed our quarters recently And for the last several years, we'll know that a number of macro factors have impacted our produce business both positively and negatively since the onset of COVID. In Q1 of this year, several additional negative factors collided. First, there's been a very good growing season for the industry, both greenhouse and field grown, which contributed to an oversupply in all of our products across the market. At the same time, inflationary pressures in freight, labor, packaging, growing inputs such as fertilizer, as well as ongoing trucker shortages contributed to a very challenging cost environment. These cost increases were both profound and swift. The strong growing season actually hurt the industry. The pricing power of our customers were further strengthened by the supply, demand, and balance. We have been trying but have not been able to realize any material pricing increases with our retailers. This is a very difficult dynamic than cannabis. Produce is a commoditized free trade market with product that ships across five to six international borders daily. As long as these inflationary pressures and oversupply continues, we will experience pressure on our produce results. I've seen this before multiple times in the agriculture industry, and we will respond. We are evaluating new initiatives, including marketing partnerships to build more distribution scale, spread out costs, and diversify product offerings. And it's likely there will be produce grow attrition, which will help supply imbalance longer term. We understand that reaction. However, even in the currently negative EBITDA environment for all, we maintain the highest conviction that our U.S. cultivation footprint, our assets, are a powerhouse opportunity for legal recreational cannabis. Our Texas assets have a replacement value of $350 to $400 million with the capability of generating at least $1 billion or more cannabis revenue. We are working to get our fresh business back to on track as we assess our options to use our unmatched experience and assets for success in the U.S. cannabis market when we can participate. In the early days of the Canadian cannabis business, we were the only ones that had a strategy, the same strategy, to leverage existing assets and cultivation DNA. Having done so successfully, we are convinced of our ability to replicate that success in the U.S. Which brings me to the good news for the quarter. Each of our Canadian and U.S. cannabis businesses continue to perform very well, operationally and financially. and improve their leadership in their respective consumer markets, even as they invest in future growth. Both Canadian and U.S. cannabis again contributed positive adjusted EBITDA on Q1, as we continue to see the underlying power of the business. Our Canadian cannabis operations, Pure Sun Farms and Rose Life Science delivered its 14th consecutive quarter of positive EBITDA, unmatched in the industry. Pure Sun Farms contributed, continued to maintain its market share leadership in a dried flower category, remaining the top-selling brand in Ontario, British Columbia, and Alberta during the first quarter. And in Ontario in March, we achieved our best-ever share in dried flower by volume sold at just under 16% in what was Ontario's best sales month in its history. We are most grateful to consumers and bud tenders who support our brands and give us ongoing feedback to continue to build market share. And kudos once again to superb management and sales and marketing teams. Over the past several quarters, they have invested strategically to ensure that we are supported by our retailers across the country. Our investment is clearly paying dividends. Our success has also generated attention among our peers. Last week, Pure Sun Farms announced it has partnered with NOIA to bring cookies, sun-grown flour to Canada. Pure Sun Farms will grow and process cookies, high quality, whole flour genetics for a range of SKUs with Pure Sun Farms as the LP of record with the provincial boards. This partnership with one of the few global cannabis brands is further validation of the quality of operations and the expertise of PureSun Farms and its team. The first cookie sun grown products are now available for purchase in Ontario with more to follow. In the coming months, PureSun Farms team will begin announcing specifics of the next leg of strategic growth. The plan calls for a transition from a branded house to a house of brands. The question of brand expression has been asked of us many times. We stood by the single brand approach for our first three years as we firmly believe in the everyday premium positioning in the first stages of the nascent legal cannabis market in Canada. We wanted to prove our number one position built organically with a single brand. It's been an incredible success. As the legal market develops, consumer-led segmentation and their ability to differentiate is evolving. We believe that there are distinct opportunities to address these consumer preferences with additional brand positions. We are extremely excited to share more details as these launches are unveiled to customers and consumers in the very near future. Another area of near-term and long-term growth is export markets. Following receipt of EU GMP certification during Q1 of this year, Gerson Farms has been preparing for its first shipment to Europe and Israel. I will note here that there are different paths to EU GMP certification. We intentionally chose to pursue certification in both the jurisdiction and country, Germany, with the very highest standards, and we were successful. And to our knowledge, we are the first greenhouse operation in the world to be EU GMP certified. Our best-in-class facilities have been built, trialed, and invested in to support both legs, internationally and domestic, of our growth expansion. Production-wise, in Q1, Pearson Farms operated full capacity throughout the first quarter. That includes both Delta III and the commissioned first half of Delta II, totaling 1.6 million square feet. Quebec-based Rose Life Sciences, which we acquired a 70% majority interest in November last year, had an outstanding end to the year 2020 and has continued into the first quarter of 2022. With new product rollouts throughout the first four months to meet the emerging demand for craft, locally grown product, and strained variety, including 14 SKUs in Q1 of this year, Rose has steadily gained market share in Quebec. During Q1, Rose launched its new brand in Quebec, Promenade, and its orange gelato 3.5 gram SKU quickly became a top seller based on its excellent quality to price ratio. All this drove an 85% increase in Rose's Q1 shipments of their own branded products compared to the fourth quarter of 2021. And based on third-party data, we estimate that Rose is now a top three licensed producer in Quebec. Production at Rose's 55,000-square-foot indoor facility in Quebec has expanded to meet this demand. And as a reminder, in addition to its own brands, Rose is also the exclusive distributor for a number of large third-party LPs, including Tilray, Sundial, and Entourage. This momentum has continued into Q2, and we expect it to continue for the balance of 2022. In our U.S. cannabis operations, Q1 was the second full quarter of contribution from balanced health botanicals, and a quarter in line with our expectations. The quarter was once again highlighted by strong gross margin and positive adjusted EBITDA contributions. Of particular note, operationally for Q1 was Balance Health's launch of its hemp extract with leading pet supplement brand Zesty Paws. Our extract is now in more than 1,000 PetSmart stores in the U.S. via this partnership. So the integration of Balance Health into Village Farms families is progressing very well. Over the next several weeks, the team will be gearing up for some innovative cannabinoid product launches. Before I turn the call over to Steve, a couple of additional updates. In the Netherlands, the government has again pushed back the launch of its legal cannabis production program until early 2023 as it finalizes all of the 10 license holders. We are continuing to advance our plans and expect to be ready to go when the program starts. One final note which relates to Village Farms Clean Energy, which I don't have the aptitude to speak about often. You will recall that in November 2020, we announced that we were transitioning This business to a more attractive long term business model based on the conversion of landfill gas to renewable natural gas and partnership with US based mass energy. Since that time we've been working diligently to bring this product to fruition and I am pleased to say that we expect to have some positive news on this front very shortly. I'll now turn to call over to Steve to review the financials and then I will return with some final thoughts.

Steve.