Chalice Brands Ltd

greetings and welcome to the chalice brands limited third quarter 2021 earnings call and corporate webinar at this time all participants are in a listen-only mode as a reminder this conference is being recorded today tuesday november 23rd and will be available for replay on the company's website at investors.chalicebrandslimited.com it is now my pleasure to introduce the host of the call John Varghese, Executive Chairman, and Jeff Yap, President and Chief Executive Officer, who will share strategy and business updates, operating highlights, and financial performance for Chalice Brand's third quarter of 2021. At the end of the presentation, management will answer some previously submitted questions. If you are interested in asking a question and haven't done so already, please forward them to chalice at rbmilestone.com, and we will address them in a timely fashion. Lastly, RBMG is not a registered investment advisor or broker dealer. For more information, please visit rbmilestone.com. And now I'll hand it off to John Varghese, Executive Chairman of Chalice Brands Limited.

Thank you, David. Hello, everyone, and thank you all for joining us today to review Chalice Brands' record-setting performance for the third quarter of 2021. On the call with me today is Jeff Yap. our President and Chief Executive Officer. I would like to remind everyone that except for historical information, our discussion today will include forward-looking statements that are based on assumptions which are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Management can give no assurance that any forward-looking statements will prove to be correct. Forward-looking statements discussed on this call are relevant as of the date of this call, and we undertake no obligation to update or revise any of these statements except as required by applicable law. Management refers you to the cautionary statement and risk factors included in the company's MD&A by which any forward-looking statements made during this call are qualified in their entirety. Please note that all financial information is provided in U.S. dollars unless otherwise specified. Jeff and I have prepared a few remarks, followed by the review of the financial statements for the third quarter of 2021. And then during the webinar deck presentation afterwards, we'll answer some of the frequently asked questions of the past quarter. As anyone invested in the cannabis space knows, the entire sector has been in decline since March 1st, 2021, for a variety of reasons. Chalice, like all others, have suffered in terms of market capitalization and share price. In spite of it all, Chalice has continued and will continue to execute our strategy. We closed the homegrown transaction in May, and now after a full quarter of ownership, we're able to demonstrate the benefits of the synergies, both in terms of revenue and margin growth. Our short-term strategy comprised of organic growth combined with small, bite-sized acquisitions that allow us to add to our footprint. The reversal of the capital markets made access to capital difficult, which then forced us to delay some of the acquisitions that were available to us. The purchase of the four cannibalist stores from acreage, as announced in September, allowed us to add another four stores in Oregon without dilution, demonstrating our continued commitment to capital allocation and to try to build shareholder value. At the same time, we believe scale is important and to achieve scale, we need to keep finding ways to grow. Earlier today, We announced the closing of our financing that was announced in October, and we're able to complete the equity component at 75 cents per share, though the stock closed today at 65 cents, reflecting almost a 17% premium on that close price. This reflects the continuing confidence in the company by our supporting shareholders. As we are now cashflow positive, we can, and will use these funds for strategic purposes. With that, let me turn the call over to Jeff.

Thank you, John. Chalice Brands exists to serve the community, enable consumers, and empower small farmers and businesses so that more people can enjoy the benefits of cannabis. We continue to scale with discipline and build deeper relationships across our ecosystem, which has enabled Chalice to position itself as a market leader in Oregon. The company remains dedicated to executing our conservative crawl, walk, run capital allocation strategy, which will ensure Chalice is well positioned and prepared for both short and long-term growth and expansion. In spite of the market conditions, Chalice executed on several key strategic objectives during the quarter, building on our solid foundation and strengthening our position as a best-in-class multi-state operator. As of today, Chalice has an incredible workforce of over 250 employees and a combined retail portfolio of 16 locations, of which 12 are owned. Seven of those operate under the Chalice Farms brand and four under a management services agreement until we receive all our regulatory approvals. Additionally, Chalice Brands has retail presence in three significant armed metro areas, Portland, Salem, and Eugene. In the third quarter we complete the acquisition for retail dispensaries branded cannabis from acreage holdings which increased our retail footprint in the state of Oregon by almost 130%. The cannabis team has done a tremendous job in Portland, Eugene and Springfield, Oregon in building historic businesses and a strong reputation for friendly customer service. And recently had the opportunity to visit all four retail stores and experience the awesome environment their employees have fostered. With the cannabis acquisition, Chalice strengthens its customer base in the Oregon market, while also increasing our vertical margin contribution through the distribution of our Bald Pig Flower, Chalice Farms, Private Stash, RXO, and Elysian Fields branded products into cannabis stores. This acquisition, likewise, to the previous homegrown Oregon, is a great demonstration of our strategy, and we believe the company executes and growth is part of the run phase of our cap allocation strategy. The purchase of cannabis will dramatically increase our leverage and expand our core competencies in retail management, culture, marketing, digital promotion, and innovation. Similar to our strategy objectives with homegrown, cannabis will transition under the Chalice Farms brand eventually. We look forward to updating our shareholders on this transition. As part of our West Coast-focused growth strategy, we'll continue to seek out positions like this to demonstrate that we are principled allocators of capital. We are very proud of our Bald Peak Grow, which provides us with the size and scale necessary to fully vertical capabilities in every part of the cannabis supply chain, with indoor cultivation, an extraction facility, edibles manufacturing, in-house distribution, and our 16 dispensers. This year has marked a significant increase in our output in the quality of our Bald Peak flour. An all-time high of over 50% with Bald Peak flour representing our number one selling product in our child's stores. It's a 50% vertical contribution. We look forward to our continued positive impact on Bald Peak, led by our Chief Operating Officer, Megan Miller, and the impact it will have on our business. We continue to execute effectively in the business by staying committed to standards that John and I set for the Chalice brands. We feel strongly that our efforts since summer of 2019 had clearly demonstrated that the business model for the company is working. We are extremely proud of the team we have built at Chalice and created a culture of agility, integrity, and transparency. We always put the customer experience at the center of everything we do, and we were recently recognized as the number one hottest cannabis brand in Oregon for consumer engagement this past summer. We continue to carry strong momentum to close out the year and look forward to accelerating growth as we add more stores to our portfolio. Look forward to a very bright future as we continue to earn your trust and support through our performance. At this time, I will turn the call over to John, who will review our financial results.