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spk02: which yielded 51% growth in our finished products sold in Canada. This expansion was increased through the number of commercial SKUs, through the number of commercial listings, and the fact that we have now launched products across seven different medical platforms, including our own MyMedic. Our R&D and clinical efforts Sustaining our intellectual property has also expanded and has led to two new strategic collaborations with two separate international pharmaceutical companies and has led to the marketing authorization of our first pharmaceutical product through Invima called Trunerex, which was recently announced during early Q1 2024. An overview of MyMedi. So on August 2nd, 2023, we proudly launched our new medical cannabis platform called MyMedi.ca. As mentioned, this was arrived from the acquisition of the Sharpless Drug Mart division. MyMedi.ca features a diverse portfolio of products from Avicana and 15 licensed producers here in Canada. The platform is available nationwide and led by our pharmacists, led bilingual patient support programs, in addition to educational resources for the medical community, all of which is to facilitate the incorporation of medical cannabis into the healthcare regimen. MyMedi is operated under Northern Green Canada, which is a licensed producer and logistics operator of the business unit. Through MyMedi.ca, the company provides what we believe to be the most robust medical cannabis access program and support program nationwide to tens of thousands of Canadian patients who have obtained medical cannabis authorizations from their healthcare providers. Other MyMedi.ca features include, as I mentioned, multi-brand from 15 different licensed producers with about 200 plus SKUs, including 40 different brands. The emphasis is really on offering a broad range of available options that are in line with the patient's needs. We also include training and medical products, as mentioned. These services include the incorporation of medical cannabis into the healthcare regimen through Avicanna's own Avicenna Academy, which is a more practical guide to prescribing medical cannabis, and in collaboration with the Canadian Consortium of Investigation of Cannabinoids, which is an accredited syllabus. We've also developed and grown our own specialty program for patients, including insurance coverage and good faith coverage for direct billing for veterans. This refinement of preferred vendor relationships with insurance providers is something that is very specific to MyMedi and has allowed us to do direct billing for specific patients. This is an area where we expect tremendous growth in the near future. This is all part of the MyMedi platform while we're adhering to the best medical practices, including insurance. maintaining arm's length relationship with the prescribers, specifically the cannabis clinics. As mentioned, we prioritized the launch and the operationalization of MyMedi.ca, which was an immense challenge for us to take on a short period of time. I'm really happy to see the results of which has led to over $13 million in our revenues during 2023. Furthermore, since the launch of MyMedi, we successfully transitioned over 96% of the patients from the legacy medical cannabis by shoppers division. We've developed an infrastructure to offer insurance reimbursement, which includes 15 insurance providers and public institutions, including safety boards, such as WSIB Ontario and WSBC. Overall, insurance adjudication and reimbursement account for over 65% of MyMedi.ca sales. and insurance accounts is the highest growing segment. We facilitated the transfer and the advancement of the previously announced clinical trials, including observational real-world evidence studies, including our own studies with SickKids, which is on a product candidate for epidermolysis bullosa, and several other studies. We've enhanced our portfolio and refined inventory management processes to ensure consistent stocking of what is now 31 of our own SKUs as of this quarter on the MyMedi.ca platform. We've established new relationships with a network of 50 specialized medical cannabis clinics, hospitals, and 1500 healthcare providers and continue to expand these relationships beyond the traditional cannabis clinics and prescribers. We aim to expand MyMedi through naive patients and new prescribers through educational campaigns, medical affairs, including our upcoming symposium that we're hosting at the Mars Discovery District on May 13th. In terms of our Canadian portfolio and commercial update, Canada continues to be the core of our operations and currently the most significant revenue driver for us. In Canada, we've established the infrastructure and proof of concept of our intellectual property and proprietary products, which we aim to then expand internationally. In line with our focus and the nature of our products during the past year, we focus on expanding access to our products, including the Role Fighter branded SKUs into other medical cannabis channels. This included the successful launch of our products. on CannaFarm's platform and the Canopy Growth Spectrum platform, which combined with several other medical cannabis platforms now means that we have access to approximately 50% of the registered medical cannabis patients in Canada. As a reminder, Rofido is our proprietary medical cannabis brand that offers a range of scientifically driven products, including oral, sublingual, topical, transdermal formulations, in various ratios of CBD, THC, and rare cannabinoids such as CBG. Rofido has undergone in vitro and in vivo studies and goes above and beyond Health Canada's requirements for medical cannabis, but is in line with our commitments to pharmaceutical grade formulations and products. Many of these products, as mentioned, are enrolled in several different preclinical and observational human studies, and it will be part of our pharmaceutical pipeline developments in the future. Overall, we experienced expansion in our proprietary products on adult use and medical cannabis channels, which now totals 133 Canadian commercial listings. We further progress our exclusive agreement with Viola Brands in Canada and have launched what is now 10 commercial SKUs, including our THC drops, which are proprietary in fluid technology. Our combined efforts to advance our Canadian commercialization during the year, which included the extensions of our portfolio, new commercial listings, new education platforms, led to approximately 190,000 finished products sold during the year, which represents a 51% increase from the previous year. It's also worth noting that the proprietary nature of our products and their high entry barriers has also yielded above industry margins that are significantly higher when compared to adult use operators. The Canadian portfolio and commercial efforts during 2023 were largely part and accomplished through the efficient and rapid translation of our research and development projects, our intellectual property from the lab to the market. All of this is also done through an asset light manufacturing model. This includes, as I mentioned, what is now 31 proprietary products that are manufactured through six different licensed producers in Canada in an effort to diversify the risk and exposure to the weakness of the sector. Our six manufacturing partners specialize in particular product forms and have active brands on the MyMedi platform as well, in line with our strategy to establish symbiotic relationships with our Canadian licensed producer partners. And look at our international operations. We prioritize and optimize our international efforts really to focus on our long-term pharmaceutical pipeline and expanding our medical cannabis products globally. Our international operations remain focused on the production, manufacturing of our product, proprietary finished products across several categories, including cosmetics, medical and pharmaceuticals, including Trudner X, which is a recently approved drug in Colombia. Trunorex, which is a proprietary 10% CBD oral formulation, is our first indication-specific pharmaceutical that has obtained marketing authorization. Trunorex obtained drug approval in Colombia early this year from the Colombian National Institute of Drug and Food Surveillance, which is called INVIMA. Trunorex was approved for the treatment of severe seizures related to Lennox-Gastaut syndrome and Dravet syndrome, which are two of the most rare epileptic disorders. Approximately 50 million people worldwide have epilepsy, which is a common neurological disorder, with nearly 139 per each 100,000 people that are impacted. Trunerex is manufactured under GMP, Good Manufacturing Practices, Adolte Pharmaceuticals in Bogota, and is utilizing our own Aries-branded CBD isolate, which is manufactured at our own facility, Santa Marta Golden Heaven. The company expects Trunerex to be commercialized later this year in 2024, and we expect the products to be covered by reimbursement in Colombia while being priced accessibly for private payers. The company also anticipates Trunerex to commercialize in other Central and South American markets, plus the Caribbean, where we expect an expedited fashion of approval is expected for given the Nvima's approval. Also at an international level, it's worth noting the progress we've made with Arias. Arias is our line of active pharmaceutical ingredients, including CBD, CBG, and THC. This is all manufactured in our own facility, Santa Marta Golden Hem. The cannabinoid raw material supplied by SMGH forms part of our own supply chain and a source of reliable input for our consumer, retail, medical, and pharmaceutical preparations, but also SMGH is a source of supply for our partners. SMGH has received good agriculture and collection practices and USDA organic certification under the United States Department of Agriculture. We've now successfully exported SMGH products into 17 different international markets. Additionally, SMGH is dedicated to providing consistent high quality input for our global partners, as I mentioned. Notably, Arias branded API was a source of API for two drug approvals in early 2024, including our own Trunarex in Colombia and a THC preparation that was approved by Envisa in Brazil through our partners. It's worth noting the significance of these approvals as we've established SMJ since 2017, not to only be our own source of quality API, but to ensure that the API therefore is used and delivered at an accessible product price. Finally, in terms of our R&D and pharmaceutical pipeline, with what is now eight years of R&D, preclinical and clinical development on cannabinoids, we believe that we've established what is a leading scientific platform and continue to really develop our intellectual property portfolio. Our dedication to product development and evaluating the potential role of cannabinoids for therapeutic benefits have been at the core of the company's vision since inception and have been a major contributor in establishing our reputation as leaders within this field. As mentioned, we've successfully developed and delivered over 30 proprietary products across various international markets through our scientific platform. We continue to collaborate with leading academic and clinical institutions in various preclinical and clinical projects, projects that we expect to expand through 2024. In collaboration with researchers, we have successfully obtained eight peer-reviewed government grants supporting our research initiatives in the previous years. It's also worth noting that our own intellectual property, including formulations, trademarks, and all associated methodologies remain Avicanna's intellectual property. Our pipeline of indication-specific drug candidates are currently in various stages of clinical development, and pipeline indications are designed to meet various clinical indications, including neurology, depression, sleep, and dermatology. We view the potential marketing authorization of commercial pathways or pharmaceutical products in two ways. One, primary focus with near-term results is the pharmaceutical approvals in South America and Central America, including RDC-327 legislation in Brazil and an example of the INVIMA Colombia approval, such as Trunarex. Second is more our long-term vision, which is North American European pharmaceutical approvals, including Health Canada, FDA, and EMA. Phil?
spk00: Okay, hello everybody. I will go through a quick financial highlights. As the rest discussed, 2023 was a progressive year for Abicana. With the launch of MyMedi during Q3, we have realized significant revenue growth and operational improvements throughout the company. We closed out 2023 with total revenue of $16.8 million, an increase of 314% over last year's revenue of $4 million. This includes $13.2 million in sales directly related to the acquisition of medical cannabis by Shoppers Drug Mart and the launch of the MyMedi.ca platform. Outside of MyMedi, our product sales in North and South America were $3 million, up from $2.8 million in 2022. Licensing revenue in 2023 was $415,000 compared to $1.1 million in 2022. Delays in ongoing project milestones resulted in lower than expected licensing revenue in 2023, but as all projects are ongoing, we expect to compensate for this in 2024. We ended 2023 with consolidated growth profit of $6.7 million and almost 500% increase from 2022 growth profit of $1.1 million. This represents a profit margin of 40% compared to 27% in 2022. Our gross margins in North America, which includes sales through MyMedi and other medical and retail channels, was 45% for the year compared to 36% in 2022. This was attributed to our continued expansion of our product portfolio and the higher margins in our sales of our own proprietary products on mymedi.ca. We expect this trend of increased product sales and margin improvements in Canada to continue into 2024. The company has continued to drive cost control measures and efficiencies, resulting in an increase in operating costs of only 19%. The adjusted EBITDA loss for the year was $4.2 million compared against an EBITDA loss of over $8.3 million in 2022, an improvement of 49%, making 2023 our lowest EBITDA loss since going public in 2019. It's worth noting that the myMedi.ca contribution were generally realized during the second half of 2023, and we intend to continue to raise efficiencies to achieve our goal of being negative to positive by the end of 2024. As mentioned, our operating cost did increase in the current period due largely to the launch of myMedi. The largest increase in costs were selling and marketing expenses, IT expenses related to the platform's backend and call center, as well as salary and wages given the addition of approximately 30 new employees. However, this increase is comparatively small considering the significant revenue growth brought on from this new business unit. In conjunction with our EBITDA goals, we continue to work to strengthen our working capital position with a goal of achieving positive operating cash flows and limit our reliance on cash flows from equity and debt financings. We'll achieve these working capital improvements by managing inventory to ensure we consistently have sufficient stock levels in Canada and through the expected increase in revenue generated activities of our other business pillars internationally. Cash dues and operations were significantly decreased during 2023, with approximately $1.4 million compared to $7.4 million in 2022. These improvements are due not only to increased revenues for the MyMoney platform, but also from the consistent receivables from the platform's insurance provider partners. Simultaneously, cash flows from financings were reduced to $3.5 million compared to $9.9 million in 2022. During 2023, we completed only two private placement transactions compared to a total of five private placements in the prior year. In addition, our debt was decreased from a total of $2.8 million in 2022, including $1.9 million in convertible debentures to $1.6 million at the end of 2023, none of which is convertible. Overall, 2023 was our best financial year, which has set the stage for promising 2024 with exciting developments across all business units. Thank you for your attention. I'll pass it back to Aras.
spk02: Thanks, Phil. Just to wrap up, as Phil clearly noted, the results of our financial and business performance this past year really demonstrated the potential scalability of our formulations, business model, and also the maturity of the company. We are very optimistic about what is to come and believe that the additional capacity to further scale and the path towards if it's a positive during 2024 is very realistic. I believe that we've solidified our leadership position in the Canadian market with respect to medical cannabis and expect to see further growth during 2024 across our medical affairs and education platforms for both MyMedi.ca and our own finished products. Internationally, we believe that our years of investment and dedication have begun to bear fruit this year, as demonstrated with the recent developments and the milestones related to our pharmaceutical pipeline intellectual property. We are seeing early signs of the potential of the future as an innovative and growing biopharmaceutical company at a global level. We look forward to the commercialization of Trunarex in Colombia and the opportunities that this first drug may have beyond the initial Colombian market. In parallel, again, we're in a position to also dedicate resources to advancing our R&D and clinical efforts. This is something that has been part of our vision from the early days, and we're very happy to be back in a position to further dedicate resources to that and to the development of our intellectual property and our pharmaceutical pipeline. I'll pause now to see if there's any questions. If anyone has any questions, please just write them on the right side of the screen, and we'll be able to answer them. Thanks, Michael. Which countries outside of Canada would be our next major revenue streams? I would say, I would look at it from a region perspective. I think during 2024, the primary focus would be the South American market, specifically Colombia, with the approval of Trunarex. And second, Brazil, where we're making strides with our own formulations and products, but also we're supplying some of the other large pharmaceutical companies that are active in the space. So I would say South America during 2024, and we will be also slowly expanding into the European region. Within Europe, we believe Germany will be the first destination through one of our pharmaceutical partnerships that we announced earlier this year. Thanks, Dave. Do we see any M&A potential opportunities in this fiscal year given the market conditions? I think the short answer is absolutely. we're assessing various opportunities today. There's a lot of opportunities in terms of local Canadian opportunities that are cannabis-based or cannabinoid-based companies that have good assets, but might be, you know, from a commercial perspective, not in the greatest position. And then internationally, we're looking at companies that will give us easier access from a commercialization perspective for our own products. So yes, there are tremendous opportunities given the market conditions that we are facing. we are assessing and we will look forward to reviewing deeper details. Hi, Albert. Can you share some economics from the recently announced partnerships? Well, the recently announced partnerships, specifically the unnamed pharmaceutical companies, are quite limited in the sense that there are very early stages from an announcement perspective. But what I can say is one of them is a distribution partnership for our topical products that will be commercialized through cosmetics, which means very fast route to market. We like the economics of that deal because the API, the active ingredients, the formulation, the manufacturing is all done out of South America. So the products are actually very well priced and we expect to have high margins. In terms of their potential size of the opportunity, it's a little bit premature for us to disclose that. The second pharmaceutical partnership we announced is much more focused on R&D. This is a collaboration with a major multinational company in a sense where they're testing the feasibility of our formulations related to their technology and will sort of be the intel inside for that technology. So again, a little bit too early to provide details, but I expect later on this year, we'll see both the results of that and we'll be able to expand more about those opportunities. Can we talk about the two pharmaceutical partnerships? Well, yeah, I mean, we spoke a little bit about those. I think it's just very important to know that, you know, given the size and the scale of those opportunities and the type of companies that they are, they're very conservative in terms of disclosure. And unfortunately, that's the nature of the beast when you're related or adjacent to a stigmatized industry such as cannabinoids. But both those companies are multinationals with massive reach. One of them is much more of a commercial entity across the European Union. And that was the first one that we announced related to the topicals. We expect to initially launch those products in Germany and to expand in other parts of the region, which I think will be a fairly large opportunity, as I was saying earlier. The second partnership is, again, much more focused on intellectual property. But I think that's just a first step within that relationship. And we expect that to also be expanding at a massive rate throughout this year. Any other questions, folks?
spk00: We have a question from Michael Cott. How does the Forex fluctuations between Columbia and Canada influence cost and revenue stream? So as of now, the bulk of our revenue is within Canada. So we don't foresee too much of a difference between those fluctuations going into 2024. But we do also, I mean, we do see some of the licensing activity that will be coming out of Columbia. So that is a risk. We haven't considered any of our, any edging of those, of that Forex going forward. But one of the things we do do is that we try to frame any of those contracts into USD so that they send into a more stable currency to ensure that we're able to compensate for any of those fluctuations.
spk02: If there are no more questions, Well, again, thank everyone for taking the time to listening in and obviously following the story. Again, tremendous year. Very much supported it. Very much excited about what's to come and thankful for the support we continue to have. Looking forward to updating everyone at the end of Q1, which we expect will be early signals of the year 2024. Thank you very much for attending.
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