Rubicon Organics Inc.

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Good morning, everyone. Welcome to Rubicon Organics Q4 2025 earnings call for the three and 12 months ended December 31st, 2025. As a reminder, this call is being recorded. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for analysts to queue up for questions. Before we begin, please refer to slide two for our caution regarding forward-looking statements and non-GAAP measures. Today's presenters are Margaret Brody, CEO, and Glenn Ibbitt, CFO. I will now turn the call over to Margaret.

Thank you, and good morning, everyone from Vancouver. I'm pleased to share our 2025 results and provide an update on our strategy for significant revenue and EBITDA growth in 2026. 2025 was a transformational year for Rubicon as Canada's number one premium licensed producer. We achieved record financial performance, growing revenue by 22% and adjusted EBITDA by 25% despite our constrained capacity and scale-up investments. We swiftly operationalized the newly acquired, highly accretive Cascadia facility. This purpose-built facility will increase our existing cultivation capacity output by at least 40% and unlock our ability to service the large, unmet demand for our nationally leading brand portfolio. In 2025, we had made significant progress on our international strategy, and we are now ready to execute our branded strategic entry. We also advanced several other critical projects that will begin delivering further growth and operating leverage in 2026. Before Glenn takes you through the financial results, I want to again emphasize our focus in optimizing our existing operational profile and facilities and driving further leverage into our 2026 revenue, margin, and operating cash flow.

Thank you, Margaret. Good morning, everyone. In 2025, we deliberately invested to shift Rubicon from a capacity-constrained business to one with scale, flexibility, and clear operating leverage. Those investments weighed on near-term cash flow and earnings, as expected, but they set up a materially different growth profile going forward. We deployed approximately $6 million of CapEx to acquire and operationalize the Cascadia facilities. In the second half, we also expensed $1.1 million of Cascadia cultivation costs through COGS ahead of revenue recognition and invested $700,000 in transformational costs, primarily people and systems, to prepare the organization for scale. At the same time we were building for the future, Rubicon also delivered compelling growth and financial results for 2025. Net revenue reached a record $59.5 million, up 22% year-over-year, driven by strong performance across all core brands. 1964, the number one selling premium brand in Canada, remained the engine of the portfolio, representing 63% of sales, with revenue growth of over 30% year-over-year across pre-rolls, vape, and flour. With Cascadia coming online, We expect accelerated growth in currently undersupplied categories, particularly large format flour and pre-rolls for the 1964 consumer over-indexes. Simply Bear, our nationally leading super premium brand, represented 22% of revenue and grew just over 7% year-over-year, supported by strength in pre-rolls and capsules. We expect renewed growth in both flower and pre-rolls in 2026, driven by exciting new genetics and continued quality improvements. Wildflower accounted for 7% of revenue and continues to deliver above average gross margins. Revenue grew nearly 20% in 2025, led by the 60-gram relief stick, which remains the top-selling skew in the topical categories. International revenue was under $1 million in 2025, as we intentionally focused on channel testing and market preparation ahead of our branded international launch in 2026. In the fourth quarter, net revenue reached a record $16.5 million, up 16% year over year, despite an eight-week strike by the BC provincial distributor. We also delivered our highest monthly revenue ever in December. For the year, gross margin before fair value adjustments was 33% and 32% in Q4. Excluding temporary Cascadia impacts, gross margin would have been approximately 35% for the year and 36% in Q4. Margin improvement was driven by revenue growth on a largely stable cost base, pre-roll automation efficiencies, and a favorable product mix. Q4 margins were temporarily pressured by the BC strike. which eliminated sales in our home market for eight weeks and created broader market disruption that has continued into Q1 2026. During the strike, we successfully redirected product to other provinces, reinforcing that demand for our products continues to exceed our pre-Cascadia supply. Looking ahead, we expect continued margin improvement in 2026, driven by manufacturing and cultivation optimization and the operating leverage unlocked by Cascadia's lower cost, higher yield profile. We're also encouraged by growth in Quebec, where we have five incremental listings that have been approved for 2026 across flower and pre-roll categories with an expected positive margin impact. In the first half of 2026, margins are expected to remain similar to Q4 as Cascadia operating costs precede revenue recognition. We anticipate a clear inflection mid-year with higher revenue, margins, and stronger operating cash flow in the second half as Cascadia ramps into branded sales. Over the next several years, Rivicon has a significant opportunity to leverage manufacturing operation, cultivation yield, and scale efficiencies to drive ongoing revenue growth and gross margin increases. Operating expenses increased $3.7 million year over year, but remained stable at approximately 34 percent of revenue. The increase reflects targeted investments in talent, brand-building initiatives in Canada, early international activities, and growth-related regulatory and insurance costs. Adjusted EBITDA reached a record $5 million, up 25% year-over-year. On a like-for-like basis, excluding transformational investments, adjusted EBITDA increased to $5.7 million, representing approximately 42% growth. Importantly, this improvement was achieved on an identical cultivation base, highlighting cost discipline and successful high-margin product launches. 2025 also marked our first year of positive operating income and net income, a meaningful milestone for the business. From a liquidity perspective, we ended the year with $4 million in cash. Operating cash flow was an outflow of $3 million driven primarily by intentional working capital investments to support our plans to increase velocity of sales with launches in both one gram 510 in all-in-one formats in the second half of 2025, and by higher receivables following a record December since fully collected. In Q4, we secured $4 million of additional debt financing at a 7.6% blended interest rate, and we continue to evaluate non-dilutive financing options to support accretive growth initiatives. As I reflect on nearly a decade as CFO in this industry, Rivicon stands out as being uniquely positioned and one of the few companies delivering consistent organic growth with a clear path to scale. I'm excited to execute the revenue, margin, and cash flow expansion plans we've set up for 2026. With that, I'll turn the call back to Margaret.

Thanks, Glenn, and great to have you on the team. Rubicon has maintained its leadership in 2025 as Canada's number one premium LP, evidenced by high-fire market share data, and further supported by the continued industry recognition and awards received. We continue to perform well across multiple premium categories, growing faster than total market, as well as key premium categories as follows. In premium flour, we grew category share to 8.5% in 2025, up from 7% in 2024. In premium bakes, we saw category share increase to 18%, a 4% increase year over year. Wildflower ranks as Canada's number two topical brand despite large-scale competitive SKU proliferation and holds more than 26% market share, driven by the strong performance of its 60-gram extra strength relief stick, the top-selling SKU in the category nationwide. Our continued success in premium flour is rooted in one of our core strengths, our genetics. With our genetic strategy, across our portfolio, we continue to refresh strains and expand formats in 2025 that align with consumer demand for unique cultivars, industry-leading premium quality, and consistent dependable brand experiences. Notable 2025 flower launches include BC Organic Pink Drift, launched under Simply Bare, which took home the write-in Bud Hender Choice Award, as well as Flower of the Year in the 2025 Kind Awards. 1964's launch of apples and bananas continues to impress by delivering our highest ever terpenes on record, over 5.8%, which reflects our commitment to quality and consistent operational improvement. We remain a leader in genetics, an incredibly important aspect of the premium flower category. And with two different facilities and growth strategies now operating, we plan to take our premium category leadership even further. We now have even greater flexibility to refine our growth plans and optimize each cultivar for yield, terpene profile, and overall quality. Historically, we've kept this proprietary strategy under wraps, but you can expect more insight into our genetics roadmap in 2026. While this focus may not resonate with every consumer, It is critical to our most discerning customers, true premium consumers who are willing to pay for industry-leading quality. For them, our leadership in genetics is a key differentiator. Our all-in-one vape products launched in May of 25, delivering incremental growth to our vape portfolio, demonstrating consumer interest and the category's potential. In 2026, we are focused on strengthening our value proposition in the premium vape segment and accelerating adoption of our all-in-ones. Importantly, in 2025, our quality leadership continued to be recognized by the industry. We saw impressive performance once again at the 2025 Kind Awards, taking home seven awards, including Brand of the Year for 1964 and Craft Brand of the Year for Simply Bear, both for the second year running. Now for an update on the Cascadia facility progress to date and our 2026 revenue activation strategies. Cascadia is now fully operational, significantly enhancing our ability to meet premium demand by adding approximately 4,500 kilos of annual premium production capacity, or an increase of 40% over our existing footprint. Further upside in yield is possible as we adapt our genetic selection and grow processes to the facility, and we expect to provide an increased production capacity in the autumn once crop data has been assessed. Cascadia received full licensing in October 2025, and the facility's first crops were planted during the fourth quarter of 25. These crops were successfully harvested in February, and we are beginning a regular cycle of harvest. As noticed in previous calls, we intend to strategically monetize initial harvests while our expert team continues to optimize the facility and growth strategy. A GACP audit required for export to an international market was recently completed and certification is expected in Q2. We anticipate rapid progression towards our premium brand standards at Cascadia and expect the facility to deliver 1964 quality by the midpoint in 2026. Cascadia is Rubicon's first indoor hydroponic facility, a cultivation strategy very different from our Pacifica facility. Operationalizing a new, completely different facility and strategy is not easy. Many facilities take many turns or even years to ramp up to their full operating potential. I am very pleased that our first operational quarter with Cascadia Facility has beaten all initial targets with flower quality and yields beyond our expectations for first harvest. And I would like to thank our incredible team for their effort in successfully executing on this very difficult task. We remain committed to delivering on our guidance that we have communicated. Looking to 2026, our growth strategy is anchored around three key priorities. First, capacity expansion remains critical as demand for our leading premium brands continues to exceed supply. Cascadia will materially improve our ability to serve this demand while also enabling larger formats, new SKUs, and more favorable low-cost input structure as we scale. Second, we see growing opportunity in international medical markets, specifically within the premium category. As regulatory frameworks mature and patient populations expand, we believe our premium products and well-established leading brands are well positioned to capitalize on this opportunity because of the trust and consistency we have offered in Canada. GACP certification for Cascadia will be a major milestone supporting Rubicon's entry into international markets and further validating our quality standards. Finally, genetics remain a core competitive advantage. proprietary genetics library allows us to continually release new and exciting cultivars improve yields and enhance quality without compromising brand standards this is an incredibly overlooked aspect but potentially the most foundationally important operating strategy for any premium flower brands turning to our outlook for 2026 in the first half of the year we will continue to reflect investment in growth initiatives including yield optimization at Pacifica and the ramp-up of Cascadia, as well as internalizing of certain processing costs to reduce third-party costs, which altogether support margin improvement. In 2026, we expect capital investments of around $5 million, which are supported by the additional $4 million in debt financing secured late last year. Additionally, this spring, we may increase our operating line up to an additional $2.5 million at similar rates, as we invest in the business this spring in advance of cash receipts from incremental production. This would provide the runway to execute on our forward-looking priorities without constraining the rest of the business. We are anticipating an inflection point in the business in the second half of 26. As Stadia reaches steady-state production and we begin full branded portfolio sales, we expect to see a meaningful improvement in revenue as we begin to capture the previously unmet demand for our leading brands. Alongside that, we are projecting growth in net revenue, gross profit, adjusted EBITDA, operating cash flow, and overall margin and cash profiles, driven by operating leverage generated by Cascadia against our established cost basis. We exit 2025 in the strongest strategic position in company history. We delivered double-digit revenue and adjusted EBITDA growth, significantly expanded capacity delivered portfolio-wide market share growth, and have proven our expanded team capable of executing at an even higher level. The underlying business continues to demonstrate its strength, and we believe the investments made through 25 create scale opportunities and clear visibility into future revenue growth and margin expansion. I want to thank our team for delivering another year of record performance, continued operational improvement, and I commend their efforts in preparing Rubicon for a very significant next stage of growth. We have thoroughly proven our dedication to our premium craft, the leading quality of our products and brands, and the clear demand and reputation that we have established in the Canadian and international markets. I look forward to continued leadership of the premium category and execution of our already operational large-scale expansion opportunity. And now to questions. Operator, we would now like to open the line to questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. And if you are using a speakerphone, please keep the handset before pressing any keys. The first question comes from Neil Gilmer with Haywood Securities. Please go ahead.

Good morning and thanks very much. You provide lots of details on the Cascadia facility in your prepared remarks. Obviously, with the first harvest in February, we can look for, or I'm assuming we can look for first revenues from the facility sometime in Q2. In 2025, you used some third-party contract grows to help support some of your revenue growth there and market penetration. How should we be thinking about that with respect to the Cascadia facility coming online? Do you tend to continue to use those throughout the year here or the second half of the year you'll be transitioning over to the Cascadia facility? And I assume the more you move to the Cascadia facility, that would have a more positive impact on your gross margin line.

Good morning. Thanks, Neil. Firstly, yes, on Cascadia, the margin improvement is very notable as we get to that. In terms of use of third-party contractors for contract growers, we will continue to do that and use that, and it will stay at about the same amount as last year. So we think on average about 2,000 kilos a year. That being said, it will become a smaller part of the total biomass that we're selling.

Yeah, fair enough, as you grow up the Cascadia operations. On the international side of things, you talked about the GACP certification for Cascadia. Can you remind us, do you have one already from Pacifica? Can you start international exports prior to receiving that certification for Cascadia?

So, yes, we last year, as we did our initial exports, we do have GACP at Pacifica. We don't have EU GMP, which is something that we need to look to to our future. GACP, the audit, is now complete at Cascadia. We're amending a few what we think are relatively minor items. In fact, some of the items were that we hadn't actually done the processes yet. So we were just completing them as we go through the month of March. But looking forward, we believe we have what we need in place to be able to monetize that from an international channel as well.

Yeah, okay. Sorry, I forgot about your test processes last year to the international market. I wanted to follow up on something in the press release and briefly mention in the prepared remarks with respect to the BC market, you sort of referred to in the press release some near-term headwinds that occurred. I know about the strike obviously impacted Q4, but what are some of the near-term headwinds you're seeing so far in 2026?

We've seen... a market that hasn't necessarily had the right product on shelf, and the retailers have talked about that a lot. Post-strike, the BC distributor has confirmed they've been down week over week since the strike. We didn't see the large load-in because there was ability to do direct delivery from those that were under 3,000 kilos of production, licensed producers, and we were locked over the market, and there was a lot of that able to be delivered. In that happening, a lot of the products that got on shelf to retailers wasn't necessarily the right assortment for their shelves, and they're still seeing that clear out. We've seen heavy discounting from retailers that can afford it, but we also think that anecdotally there's been a shift back to the legacy market post-strike, both from a price, they don't pay excise tax and all the other taxes that we've got, but also because of the convenience and selection during the strike. And Glenn, did you want to provide any color on that?

Yeah, Neil, I think we would generally see Q1 historically as being a slightly softer quarter in the cadence of our quarters. Although we are tracking to growth year over year, you know, the BC strike is ahead when the land goes a bit in the quarter. We do see it, Margaret, I think it's fair to say we're starting to see some relief now. Yeah. As we sit in March, so I think, you know, for the year, and as we go forward, it should track properly, but it is a reminder of, you know, the importance of the central distributors and the fact that they, you know, we need alternate channels should they ever think of striking again sometime in the future. So we, you know, we need to work with the province and others to make sure that the, you know, we and the retailers don't get in this sort of situation. I think one of the strengths of Rubicon Absolute is the ability to direct product to other channels. And so we did that. We did that to other provinces and certainly took a little bit internationally. But it does show plenty of demand for our products in other provinces because we were able to deliver a record quarter despite that BC strike.

That was certainly the silver lining of a proof point for us with respect to the biomass coming from Cascadia that we can be out of our second largest market for you know, six weeks altogether and still deliver a record quarter. I would also add, I've been speaking to a number of our competitors in the BC market. It is experienced across the board in all categories. So, and at the distributor level. So, look, we're going to see this as an opportunity of how can we get on more shelves and get more distribution to win out of this.

Yeah, fair enough. I appreciate you sharing that color. Thanks very much. I'll pass the line.

Thanks, Neil. Thank you. The next question comes from Nicholas Cortellucci with Atrium Research. Please go ahead.

Hey, Margaret and Glenn. Good morning. Thank you for the prepared remarks there. I just wanted to ask you guys a bit about the growth outside of BC and if you could give us some more color on how market share is developing outside of your home market.

Yeah, look, I mean, I actually don't have that data in front of me right now. We can have a look at it and provide it further, Ontario is our largest market. We're very happy with our positioning in Ontario. It is a robust and competitive market, so to do well there is extremely important. We found Alberta more of a value-focused market where there's been a proliferation of key accounts without store caps and and a consumer that's a little bit different, more similar to alcohol than the rest of the country. And then Quebec, we'd like to do better in Quebec. We've been around 2% market share. We'd like to grow that share quite a bit. There's an advantage to being a Quebec-based licensed producer. We're thrilled that we've recently incrementally won five in total incremental listings. As part of that, Not all of them have come on board yet. The three most significant listings will actually come in July, and we'll see that into our numbers then. Those listings are in flower and in pre-rolls that are key categories in particular, getting pre-roll into that market with our comatose flower. We've been pitching that SKU for a number of years. We're absolutely thrilled to have won that listing, and we think it's going to make a meaningful difference to our revenues in Quebec going forward.

Okay, great. And then I think you mentioned something about other critical projects, whether at either of the assets. Can you walk us through those and provide some more information?

Yeah, so in terms of our CapEx projects at the $5 million, I'm going to pass it over to Glenn to cover that question.

Yeah, good morning. Yeah, in 2026, we're going to spend about $5 million. Our current budget is $5.2 million, a little bit of wiggle room on that one. Of that, 1.5 is to insource part of the vape production process, and that should help us do two things. It should help with our margins. We certainly expect to help with the margins significantly. And as you know, it's a big growing category for us, so that's very important as we drive towards higher margins. And it'll also give us more control over the quality of the product. We're looking forward to that. That should be implemented this year. Another 1.5 for a number of other efficiency projects that we expect to drive margins, automating a little bit more of the pre-roll line, those sorts of things. So big categories for us looking to squeeze some costs out of the manufacturing process. A few other similar type projects. And then we have a base level between the two facilities of at least $2 million a year for ongoing maintenance to keep the facilities in good operating order. And it could be everything from just, you know, minor lighting changes to, you know, sorry. Oh, sorry. I just, I want to make sure that you can hear me. Yeah, minor lighting changes and other similar maintenance projects. So that's the $5 million plan for this year. We are examining other major projects that could have significant impact on yield and margins. But, you know, when we define the timing and the magnitude of those, we'll come back to the market and inform you.

Got it. Okay. And then the last one for me was just, like you guys said before, your long-term plans. gross margin target was in the mid 40s. Are you guys still comfortable with that? Do you think we'll be at a kind of an exit run rate of that at the end of 2026 or is that more of a 2027 item?

Yeah, we've got a lot of work to do this year. I mean, certainly we expect as a premium company and with a premium market segment that we want to win in that we should be delivering margins as you described long term. This year, there's a number of projects that move us towards that. So I can't give you a specific run rate target as we exit 2026 right now. We certainly have our internal objectives, but there's plenty of work to be done there. We are excited. The levers we have to pull are certainly some of the automation projects we've got. but also a lot of work being done on our facilities to increase yield. We need to maintain our quality standards, absolutely, but we think we've got some great opportunities to get more cannabis out of the same facility. So all of that drives margin and our ability to supply the market.

Amazing. Okay.

Thanks for answering my questions.

Yeah. Thank you. The next question comes from Pablo Zwanek. Zwanek and Associates, please go ahead.

Thank you, and good morning, everyone. Look, just going back to the cadence question, I don't know, Margaret, if there's a way to try to quantify the unmet demand you've talked about. But, you know, when I think of the ramping in production versus ramping in sales, For example, by 4Q, would you be able to produce the 15.5 tons? And based on your visibility, do you think you'll be able to sell all of that in 4Q plus the two tons that you're buying from outside? Just to have some visibility. Thank you.

Great question. And good morning, Pablo. Look, you know, we know we have unmet demand. You can see it in the proof point that we were able to divert our VC order, VC volume elsewhere and still deliver a, record quarter in q4 25 we believe that that unmet demand is not only in larger formats mostly under a 1964 brand the engine of our business today we're confident in being able to sell and produce until the 15-5 this year and part of that I think will be about how do we take advantage of opportunities in other markets as well to start planting some flags around brand So there's more to come on that from us. But today in Canada, we feel confident in the demand profile that we've got.

Right. So sorry, maybe to restate what you just said, but so you're saying that even not factoring international based on domestic demand, you believe that your recreational sales, you know, could be served with those 17.5 times by the fourth quarter and that those could be your sales?

Correct, in this year. Now, the one caveat that I would put on that is the formats may be different. So what we believe, we haven't been able to have enough product to prove the full demand on the larger format for 1964, but we know when the product is available, it moves through. So we're going to find out, but right now the demand signals are very strong.

Right. Okay, thank you. And then just moving on to international, I mean, it just seems that even despite this 40% capacity increase plus the two tons you buy from outside, you will still not be in a very good position to supply international because you have this very strong unmet domestic demand. So correct me if I'm wrong, and if you can talk about inbound calls or visits from Germany or other countries in terms of trying to buy your 1964 product for the overseas market. Thanks.

Another good question. Look, I think this is going to be about margin optimization and not only... First, we want to satisfy the largest, most loyal consumer in Canada and build the brand with them. But secondly, there is an opportunity as the premium markets are, I believe, just really beginning in these international markets. The premium consumer or patient is there, but they haven't necessarily had consistent access. The market is... it has tended to more towards value weed. You know, I can give you an anecdote, which is last spring, I met with an international group, a large international group in the country in which they represent. And they said, premium is not going to be a thing in our market. Six months later, they called me back and said, the consumer is shifting. Can we buy all of your, anything that you sell wholesale, we'll buy it. So I think, you know, as we've seen in Canada and the U.S., And like other markets, whether it's tobacco, alcohol, cosmetics, et cetera, the consumer does move across the spectrum, and there will be a premium element. We still believe it's early days in those markets, so there's lots of time for us to begin. And look, we've got big plans in terms of what we can do from incremental facility over the next three to five years to fill the demand.

Thank you. And let me just add one more.

I mean, obviously, I think I've heard one of the Lana Del Rey songs. She thinks about hydroponic weed, right? We call it hydroponic cannabis. But can you just give more color of what's so unique about hydroponic cannabis and whether there's a lot of hydroponic cannabis available in Canada at the moment? I'm just trying to understand what's the big difference and how unique is it what you're going to be offering?

Thank you. In fact, the inverse is true. The product from Pacifica is living soil organic with the power of the sun as well as incremental lighting. That is more unique. We believe it builds a wonderful terpene-rich experience, in particular for our Simply Bare Organic line. weed in Canada is grown hydroponically, which is effectively where rather than using the soil and the fertility in the soil as the engine to feeding the roots, you actually provide liquid fertilizer so that you can titrate much more closely the plant's needs and react to it. We've seen a lot of and almost all of our competitors in Canada other than small hyperlocal ones that are doing organic using hydroponic. We believe that the quality of the product will be exceptional coming out of there. We're very excited to showcase that. I can anecdotally tell you we haven't had the initial certificate of analysis back yet, but from the look and the smell of the first crop down, we're very comfortable and confident But it will take a moment to get the whole facility hitting our standard. And I am optimistic that in the second quarter we'll be monetizing it. And ideally, I'd like to beat that we're monetizing it into 1964 in the third quarter. But again, I'd rather under-promise and over-deliver for you and make sure that we're hitting those quality standards for our customers.

Thank you. One very last one. So I know we talk a lot about flour and vape. But according to a high fire data, pre-rolls are your largest category. And I think in 2025, or at least in the fourth quarter, they drove a good chunk of your growth. So I'm just trying to understand, I mean, that category has seen more price competition. Some of the growth has been in infused pre-rolls. I don't think you're participating in infused. Can you just give more color in terms of what you're doing in pre-rolls and the opportunity there for premium pre-rolls? Thank you.

We think the pre-roll opportunity is tremendous. Our pre-rolls are all from flour. What we do is we separate the, we group our flours after trim into large, medium, small A, and the smaller pieces of flour are what goes into pre-roll, which creates a premium experience, also the quality of the pre-roll itself. And then it's the flour and genetics. So we've earned that trust with the consumer. We've seen a rise in convenience form factors through 25. including the rise of all-in-one and pre-roll. Pre-roll is the fastest growing part of the market. We expect that to continue. Last year, we invested in two pre-roll automation machines. We are running a third shift right now with pre-roll. We expect that to continue. And in fact, from my earlier remark in Quebec, we're very thrilled to have won the Comatose 55.5 listing. which we expect to do very well as well this summer, get that in for summer. So I think they'll continue to be that trend. And I think it's a great and profitable part of our business. So we're thrilled to see that go that way.

Thank you.

Thank you, ladies and gentlemen. As a reminder, if you have any questions, please press star one now. The next question comes from Josh Felker with CB1 Capital. Please go ahead.

Hey, good morning, Margaret, Glenn. Congrats on the quarter and on the year. First question, I guess, would be on Cascadia. Trying to model in kind of what operating costs on an annual basis look like versus last year. Do you have any ballpark range in what Cascadia facility operating costs will be added up to 25?

What we can say, Josh, is that we're currently operating at full capacity right now. You saw an add back to our EBITDA in Q4 that I'd say is not a bad approximation of a quarterly operating run rate, maybe a little bit more than that. We're going to dial it in for sure during the course of the year. You know, I'm going to say we're full operation, but we've just taken down our first harvest. So we can give you more information as we proceed during the year. You know, as you know, it is, I'd say, a lower program cost facility than Pacifica. And that's the opportunity, especially with yield improvement. to really drive that program cost down. So that's the equation I'm looking at sort of long term is what's that program cost rather than the absolute cost right now.

Got it. Appreciate that.

On Cascadia, would that facility be used for anything other than cultivation? Any other strategies involved there in the future?

Not at this stage. Our expectation is to grow, trim, and cure there, and then sell bulk-packed, send bulk-packed to Pacifica so that everything's packaged out of the same facility. We've got one distribution hub. Very confident in that. We're using every inch of that space, and that will be part of us looking at increasing the production capacity later in the year as we've done a full assessment of what we can do over there.

Super, and then maybe to tack on a third one regarding Cascadia, just interested, you know, now that you've pulled the first crops, what have you learned from Cascadia? What has, hasn't worked? Any change in strategy versus pre-revenue strategy?

Actually, I would say team is the number one thing, and closeness of proximity to your existing facility to turn something on is more likely to breed success. very pleased with how the team has coalesced. We've got a fantastic leader there as well. We've brought people from the Pacifica facility over there. We've integrated with the town. We had a grand opening with the mayor. Really thrilled to be in the town of Hope. And I would say bringing in master growers from other facilities that know indoor hydroponic together with our existing team. We had seven people go out there. has been a really key part of the success. Where you put your focus as a leadership team is where you get results, and I'm very, very happy with how this has gone to date.

I love that. I'm going to break the rule and try to sneak in a fourth question, but I might have missed it. Do you have any anticipated volumes for the international channel for fiscal year 26?

I cannot, you know what, I don't believe we have that in that level of detail that we can disclose today. But, you know, I think it will be, you know, less than 10% of our business would probably be, or around or less than 10% of our top line. And we'll be looking to grow that in future. You know, riffing off of Pablo's earlier question about if we've got the demand in Canada, why would we do that? This is about also growing our reach and strength of our business. You saw the impact of the British Columbia strike having large single customers is not always the best approach. Actually, a bit of being able to compete in multiple markets will give us more strength of the business overall as we grow.

Super. Thank you so much for the answers. Congrats on the quarter.

Thank you. Thank you. We have no further questions at this time. I will turn the call back over to Margaret Brody for final remarks.

Thank you for joining us today and for all the thoughtful questions. Rubicon Organics is Canada's premium cannabis leader, and we're investing today to build enduring brands to last. I like to leave the call with my personal recommendation, and today I would suggest a dog walk with our brand new BC Organic Tangerine Sunrise, which smells absolutely incredible with fruity terpenes that will absolutely tickle your senses.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask that you please disconnect your lines.