TILT Holdings Inc.

and welcome to tilt holdings first quarter earnings conference call and webcast today's call is being recorded for replay purposes a replay of the audio webcast will be available in investor section of the company's website approximately two hours after the completely after the completion of the webcast and will be archived for 30 days I would now like to turn the conference over to your host, Lynn Rishi, Head of Investor Relations. Thank you, and over to you.

Thank you, Hamet. Good afternoon, everyone, and thank you for joining us. Earlier today, we issued our first quarter 2022 earnings press release. Press release, along with our quarterly financial statements and MD&A, will be available on CDAR as well as on our website at www.tiltholdings.com. Please note that during this afternoon's webcast, remarks made regarding future expectations, plans, and prospects for the company constitute forward-looking statements within the meaning of related securities law. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, which we disclose in more detail in the Risk Factors section of the DAA, plus the three months ended March 31, 2022, filed with the appropriate Canadian securities regulatory authorities. which can be found on CDAR.com. We remind you that any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may update such forward-looking statements in the future, we specifically disclaim any obligation to do so, except as otherwise required by applicable law. On today's call, we will refer to certain non-IFRS financial measures such as adjusted EBITDA, parking capital, and gross profit and margin, excluding changes in the fair value of biological assets and inventories. These measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management considers these certain non-IFRS measures to be meaningful indicators of the performance of our business in addition to, but not as a substitute for, our IFRS results. A reconciliation of such non-IFRS financial measures to their nearest equivalent IFRS measure was included in our press release issued earlier today. Our today's call are TILT CEO Gary Santo, CFO Brad Hogue, and COO Dana Arvidsson. Following our prepared remarks, we will open the call for Q&A. With that, I will now turn the call over to Gary.

Thank you, Lynn, and good afternoon, everyone. As we discussed on our earnings call six weeks ago, the first quarter was a soft period for Tilt, as well as the cannabis industry at large, as we experienced the effects of inflationary pressure on consumers, which was exacerbated by legacy product mix in our Massachusetts and Pennsylvania markets. On the non-plant touching side of our business, our inhalation and accessory unit continued to show why it is the best in the business when it comes to navigating a still unstable global supply chain environment. The team's ability to work with our customers to facilitate efficient demand planning along with the strategic deployment of our working capital allowed us to get product onshore and delivered on time to their doors. Particularly challenging during this quarter, though, were both an earlier Chinese New Year coupled with delays in certain markets adopting adult use affecting Jupiter's overall performance, both of which Dana will discuss in more detail during his comments. That said, we started to see a turn in each business line towards the end of the first quarter with results continuing to improve through the current quarter, most notably with Jupiter posting the second highest month of sales orders in the company's history during the month of April. Entering into the second year of our B2B strategy, I am pleased to report that demand from potential brand partners remains strong, creating a robust corporate development pipeline. During the first quarter, we signed Timeless Refinery, which is also one of our larger inhalation clients. Later this quarter, we anticipate initially rolling out nine of Timeless's SKUs in our Ohio market. We also signed a multi-state agreement with Toast, through which we expect to initially launch their signature slices and pre-rolled products in our Massachusetts market. We expect to have 14 SKUs on shelves this summer, as production is set to begin later this month. And, just last week... we announced a new partnership with the social impact-driven Black Buddha Cannabis brand, which will offer effects-based cannabis products to both the Massachusetts and Pennsylvania markets in the second half of this year. As we continue to activate and ramp brand partner production while still in early innings, to date, our brand partner products have performed well in the face of soft first-quarter wholesale demand in the states where we operate, validating tilt strategic positioning to become the partner of choice independent brands that seek to expand and scale. To add further context to that statement, revenue attributable to branded partner products more than doubled on a sequential basis without any need for discounts or other types of promotional pricing. Pennsylvania, in particular, experienced very strong growth in brand partner revenue, effectively tripling on a sequential quarter basis, driven in large part by our Old Pal launch in the state, which included nine SKUs, with another six expected to launch in June. Old Pal in Massachusetts also continues to show strong sales, with new products expected to be rolled out in the early third quarter. We are also in the late stages of production for brand partner 1906 in our Ohio market and expect to launch six SKUs of their successful drops line in both tins and pouches next month. As part of our multi-state arrangement with 1906, we will also be bringing their drops line into the Pennsylvania market, starting with one SKU expected to hit the shelves in the third quarter. This is a particular note as the challenges associated with product approvals in these two medical-only markets are well documented, and our team's ability to move products through that process continues to be a key value proposition to our brand partnerships across all states in which we operate. Our brand partner revenue now accounts for over 30% of Tilt's wholesale cannabis sales, up from what was effectively a standing start back in February of last year when we announced our first partnership with the team at Her Highness. With the number of products set to hit our customer shelves later this year and the success and resilience of the limited SKUs already launched, our conviction towards our strategy remains strong. At the retail level, I'd like to note that our dispensaries in Taunton and Brockton, Massachusetts, which added adult use late in the fourth quarter, continue to ramp. As we have previously stated, we typically expect new retail locations to take up to 12 months to achieve scale, and we are pleased with the progress made to date so far, despite challenges in the broader Massachusetts marketplace. I am also pleased to report that we recently passed the final inspection necessary for our Cambridge retail locations. which should result in our being on the agenda of the next scheduled meeting of the Massachusetts Cannabis Control Commission. With only a few steps left in the approval process, we believe that this will allow our medical-only store to open its doors by midsummer. On the operational side, we continue to make excellent progress with the reboot of our cultivation facilities, as well as scaling our production capacity, allowing TILT to achieve significantly improved harvest yields, higher overall flower quality, and increased potency levels, which we can then deploy in both our house brands as well as those of our brand partners. Dana will provide more details on our cannabis operations during his comments. Turning to our inhalation business, Jupiter Research, you have heard me discuss the strength of Jupiter's relationship with S'more International Holdings, the owner and manufacturer of C-Cell Technology, the leading technology in the cannabis vaping market. As the only distributor with a fully built-out lab that, when coupled with our cannabis lab operations, affords Jupiter and Tilt the ability to be at the forefront of cannabis vape innovation, and also an appreciation of our renewed efforts as the leading distributor of C-Cell, S'more has been working with us to improve margin pressure we have experienced on distributed C-cell products, while also identifying ways to reduce the impact on our working capital for the inventory required for Jupiter to carry in order to avoid stockouts or significant delays to its customers. Jupiter has been a profitable and steady business for us, providing a counterweight to the volatility inherent in the plant-touching side of the business. And as Jupiter looks to not only continue its support of the C-cell brand, but leverage its own IP to bring new products to market, having a relationship as deep and strong with a market leader such as S'more is a true competitive advantage. Before turning the call over to Brad, a few words about our 2022 guidance. When we provided our guidance on March 30th, we had a good line of sight as to how the first quarter was shaping up, allowing us to incorporate macro headwinds into our internal models. Our first quarter results were only slightly off from internal revenue projections, while remaining in line with regard to our adjusted EBITDA projections. With the improvements we have already seen during the early days of the second quarter, I am pleased to report that we are reaffirming our 2022 guidance. As evidenced by the addition of our third retail store, improvements in our cannabis operations, and the timing and number of brand partner SKUs we anticipate launching in the months to come, We continue to expect the majority of our growth to occur in the back half of the year, with approximately 60% to 65% of our full-year revenue over that period, coupled with improving EBITDA margins driven by the continued growth in our cannabis operations. With that, I'll now pass the call to Brad and return for closing remarks before the Q&A. Brad?