Thank you, operator, and good morning, everyone and thank you for joining us today. Before I introduce Flower One’s CFO, Geoff Miachika, so he can review our fourth quarter and year-end financial results, I would like to take the opportunity to briefly review a few of our Company's key operational highlights for Q4 2018.

Firstly and most notably, Flower One took public form with our listing on the Canadian Securities Exchange in October of last year. This was followed in November with our U.S.

listing on the OTCQB marketplace. Throughout our time as both a private and now public company, we consistently expressed to our shareholders into the market that our approach to the U.S.

cannabis market would be different. As a starting point, our focus is to execute in a single market and demonstrate to our shareholders that we can deliver from an ambitious concept to fully built-out operations and do so quickly.

In a tightly regulated industry such as the cannabis sector, we believe companies that can achieve scale will be the most competitive and therefore, achieve long-term sustainability in the marketplace. We are also firm believers in seasoning first-mover advantage when the opportunity presents itself.

So our team's plan from day one was for Flower One to focus on quickly becoming Nevada's leading large scale cultivator, producer and brand fulfillment partner. We executed against this plan throughout both 2018 and the first four months of 2019.

And we believe this morning's call will help to highlight how extensively the entire Flower One team has delivered against that plan. In November, we completed our acquisition of the assets of NLV Organics.

This was one of the more notable milestones for the Company in the fourth quarter and the Flower One team dedicated a tremendous amount of time to complete the integration of these assets into our existing Nevada operations. I would therefore like to briefly review some of the highlights of this integration.

The acquisition of the NLV Organics assets included a fully licensed and fully operational 25,000 square foot indoor cultivation and production facility. Since completing the acquisition, we are pleased to report that as planned, we have been able to unlock the full value of this acquisition in the following manner.

Firstly, we have been able to strategically accumulate a substantial inventory of flower and trim at this facility. This inventory is now being assigned to support the launch of our Brand Partners, providing them with the opportunity to enter the market well in advance of our inaugural harvest at the greenhouse.

Secondly, we have continued to actively build upon the acquired genetic bank of 50 strains. Today, we have doubled our genetic library to more than 100 strains.

Thirdly, this genetic bank provides the opportunity for Flower One’s cultivation team to actively test and trial these new and emerging strains prior to scaling their cultivation at our nearby 400,000 square foot greenhouse. Fourthly, Flower One’s cultivation team is made further technology enhancements to the nine grow rooms at this indoor facility that will also support our ability to undertake limited run and highly specialized crop cultivation for many of our brand partners who've expressed an interest in this does.

The fifth point is around processing and production capacity at this indoor facility, which has been transformed and reconfigured to allow us to do select product manufacturing for our Brand Partners to allow them to quickly enter the Nevada market in advance of fully operationalizing our processing and high volume custom packaging assets at our greenhouse location. And lastly, we were very successful in leveraging the grow rooms in this indoor facility to quickly and efficiently supply us with a significant amount of initial plant material we required to begin the all-important onboarding of plants at the greenhouse.

We estimate that the ability to have this dedicated cultivation space close to the greenhouse to supply the initial plant material and select strains accelerated our onboarding of plants at the greenhouse by two to three months. In the longer-term, this indoor facility will become home to Flower One’s, high performing research and test facility that will allow us to accelerate and diversify the cannabis strains we can cultivate at scale to ultimately support the expansion plan of product lines for our Brand Partners.

The strategic acquisition of the NLV Organics facility has been rewarding and we could not be more pleased with the accretive outcome today that this asset is provided and supporting and Flower One’s growth plan in Nevada. The integration of this asset was seamless, largely attributed attributable to the people involved both at NLV Organics and a Flower One.

At NLV Organics, we are extremely fortunate to have acquired a team of executives, scientists, cultivators, lab and packaging personnel, who helped grow that business since day one, a team with direct cannabis operational expertise and a team that intimately understands the complexities and unique attributes of the Nevada's cannabis market. When you combine that deep and direct knowledge of cannabis with a team that has more than 25 years of experience in high-tech, commercial scale, greenhouse agriculture, packaging and supply chain management, it represents a potent combination of human capital.

People are ultimately what drives the growth and success of the company, and we believe Flower One is a unique blend of human capital, like none other in the cannabis industry. As many of you know, our pace a certainly not slowed since year-end.

I will discuss our progress so far in 2019, but first I would like to introduce Geoff Miachika, Flower One CFO, and ask him to provide financial details on our fourth quarter and 2018 year-end. Geoff?

Thank you, Ken, and good morning, everyone. Before I begin, I would like to point out that all of the dollar amounts expressed in today's call are U.S.

dollars, unless otherwise stated. CNX Holdings, the predecessor to the company prior to completing the reverse takeover of the company, incorporated on December 18, 2017.

As such, our first reporting period was from December 18, 2017 to December 31, 2017 thus rendering the compatibility of our 2018 results to the previous year less than meaningful. Again, most of our focus is in the fourth quarter, at least from an operational standpoint, what centered on the integration of the NLV Organics assets and on converting our greenhouse and production facility for cultivating and producing cannabis at scale.

However, it is worth pointing out that we became revenue producing in the fourth quarter, following our acquisition of NLV Organics in November of 2018. For the partial two months that we were generating revenue, we had sales of approximately $131,000.

Our cost of goods sold was $133,000 for the quarter. In addition to the cost of inventory sold, we had direct and indirect production costs consisting of direct labor, processing, testing, packaging, quality assurance, security, shipping, depreciation of production equivalent, production management and other related expenses.

Our most significant expenses during the fourth quarter included $2.7 million in share-based compensation, $1.6 million in professional fees for consultants, accounting and legal and approximately $573,000 in wages and salaries. We had a net loss of $5.3 million for the quarter.

For the full-year, we recorded a loss of $12.5 million, which comprise of $3.2 million in share-based compensation, $3.8 million as a listing expense related to the RTO, approximately $640,000 in foreign exchange loss related to cash balances held in Canadian dollars, and about $5 million in general and admin expenses. At year-end, we had a working capital deficit of $32.9 million.

The deficit was largely due to the $14.1 million NLVO Note and $18 million owed for the greenhouse. The NLVO Note was repaid subsequent to year-end and the maturity on the $18 million note was extended to March 31 of next year with interest commencing April 1, 2019 at a rate of 9.5% per annum.

In March of 2019, we successfully completed our first prospectus offering as a public company. This was originally planned as a C$50 million convertible debenture financing.

However, with strong interest in demand, we ended up obtaining the maximum allowable – over allotment for a total raise of C$57.5 million. The offering was made through a syndicate of agents co-led by Mackie Research Capital and Canaccord Genuity and also included Cormark Securities, Eight Capital, Industrial Alliance and PI Financial.

We have used a significant portion of these funds to repay the promissory notes for NLVO outstanding at the time with respect to the purchase of those assets and plan to use the balance of these funds for ongoing construction and development of the greenhouse and production facilities, working capital and general corporate purposes. And that concludes our high level financial summary.

I'd like to now turn the call back over to Ken to discuss some recent milestones since completing our year-end. Ken?

Thanks, Geoff. Flower One’s pace of execution remains high, so we believe it would be helpful and informative to use part of this morning's call to briefly review the Company's progress to-date in 2019.

As many of you will – no one recall, in May of last year, we officially began the conversion of our greenhouse for large-scale hydroponic cannabis cultivation. This conversion is now 95% complete and is expected to be fully completed on schedule.

At 400,000 square feet, this is the largest commercial scale greenhouse in Nevada. In fact, it's the only large-scale high-tech commercial greenhouse in the state.

In March of this year, we began introducing the initial plant material into the greenhouse, which as I mentioned earlier on the call were sourced from our nearby indoor facility. This initial plant material allowed us to quickly populate two state-of-the-art climate controlled, spectrum adjustable cutting cell rooms.

These rooms are in full operational mode and have been rooted – and have rooted more than 100,000 cannabis cuttings to-date. We are also pleased to report that our three expensive, multi-density ebb and flood zones are now fully populated.

Our plants spend a total of six weeks in the cutting cells and within the three phases of the vegetative zones of our greenhouse. After six weeks, the plants are considered mature enough to be introduced into the main part of our greenhouse, which is comprised of eight flowering zones.

We currently have five of the eight flowers zones planted, which means we are now more than 60% canopied in the greenhouse. We're expecting to hit a significant operational milestone of being fully canopied later this month.

We remain on target for our inaugural Zone One harvest to occur in June and from then on we expect Flower One’s Nevada greenhouse to operate on a perpetual cycle of harvesting one full zone per week with each zone representing on average 10,000 plants for harvest. Adjacent to our greenhouse, the construction of our state-of-the-art production facility is progressing as planned.

We have completed the build-out of the initial 15,000 square feet of this facility, including our fully automated wetting line, pruning line and two high-tech cutting cell rooms, which I briefly referred to. The external construction of the additional 40,000 square foot two-story structure was completed in March of this year.

We're now advancing in internal work to support the installation of our post-harvest extraction and packaging line technology, which will be completed later this quarter. An important element of Flower One’s business model and strategy is our focus on establishing strong long-term partnerships with reputable, established brands who are looking to accelerate their market entry into Nevada.

This element of our strategy leverages our capabilities for providing seed-to-retail-ready product with custom packaging and then the ability to deliver this product with just-in-time inventory and supply chain management to the growing base of cannabis retailers within Nevada. Already in 2019, we have assembled a strong roster of Brand Partners, having announced eight such Brand Partners in the last four months.

In March, we successfully launched Old Pal in the Nevada market and now working towards SKUs for all our Brand Partners, including Flyte Concentrates and CannAmercia Brands whose launches are expected in this quarter. It is also worth noting the other Brand Partners we assigned to date, which are Rapid Dose Therapeutics, Palms, Huxton, Grenco Science and G Pen line of vaporizers, and finally The Medicine Cabinet.

Details on all our Brand Partners can be found within our most recent corporate update issued last Thursday, April 26 on our Company's website, flowerone.com. Our initial suite of Brand Partners products represented diverse consumer spectrum from value-oriented brands to mid-tier brands to the more exclusive luxury brands.

This mix of brands and product offerings helps ensure we meet consumer expectations and desired experiences across the full pricing and product category mix. We will continue to grow our portfolio of Brand Partners, further expanding our mix of product SKUs and delivery platforms, including package flower, pre-rolls, oils, distillates, concentrates, gel caps, vaporizers, edibles and topicals to deliver greater choice to both consumers and Nevada cannabis retailers.

Nevada is now home to approximately 67 state licensed cannabis retailers. We do expect this number to grow to potentially more than 130 retailers by the end of this year.

With this doubling of Nevada's cannabis retail footprint, we think our timing of operationalizing Nevada's largest cultivation and production facility could not be better. The pace of Nevada cannabis sales remained strong with more than 6% growth quarter-over-quarter.

That along with the fact that Nevada and its unique addressable market of 55 million tourists make it an exciting market for Flower One and the multitude of cannabis brands aiming to become market leaders. Nevada is the market we remain sharply focused on and it is the market we are positioning ourselves to lead in.

And finally, our ability to deliver and to execute to the extent we have is no small feet. Any companies simply could not achieve what we have in such a short period of time without a highly capable, experienced and committed team.

I know many of them joined the call this morning and I would like to take this opportunity on behalf of our board, advisory team and management to thank all of them for being such an exceptional and deeply committed team. With that, I would like to open the call to questions.

Operator?

Hi, everyone. This is actually Patrick Sullivan calling on behalf of Graeme.

First of all, thanks for taking my call and questions. So the first thing is a couple of months ago, we were hearing there's challenges for growers in Nevada not able to get their products to pass the microbe testing requirements.

I know it was a contributing factor to high wholesale prices in the area. Are you guys hearing that problem persisting?

Is testing overly strenuous in the state? And I guess I was going to set itself up for a success in this area?

So thanks Patrick for the question. I'll start and then maybe allow some of our other Flower One representatives to add some comments as well.

So a couple of things to say just with regards to testing and maybe just to recap for the benefit of all participants. In Nevada, there's a fairly stringent testing protocol and this testing protocol has been in place effective since full legalization back on July 1, 2017.

So in the state of Nevada, what's required is every five pounds of dry flower has to be tested before either moves on to processing or moves into the retail market. The testing is done by as series of roughly 8 to 10 independent labs, licensed labs in the state, and they essentially come in independently and take random samples from each five pound lot.

That test is fairly stringent. And to date, there's probably a list of about 50 pesticides, fungicides and microbials that are on that list.

And I know back in the spring of last year, they added an additional amount of testing, I guess what I would call, additional microbials that they added to the test. So the hurdle was increased.

And one of the things that the state doesn't report on is the failure rate in terms of that test. But what we've heard on the ground in Nevada is that the failure rate can be as high as anywhere from 15% to 20% in the market today.

So I think, that would be sort of the first overview or comment I would make. The second thing I would stay does that we know just based on the restructuring of the fair market value pricing in Nevada.

What the state does with their fair market value pricing is every six months they set pricing for various levels of flower and trim and plant material. And that fair market value pricing is used to calculate the taxes that are charged against that material.

So on January 1, the Department of Taxation, when they issued their amended or updated fair market value pricing, they introduced a new category which is categorized as unsaleable flower approved for extraction. And I think we're speculating, the reason they did that is because a lot of people who had flower weren’t able to move that flower into the market and with a field test depending on the failure, if it's not an extreme failure of the product, those cultivators have the opportunity to move that product into extraction.

So they created that new category. In our case, what I can say is, our process and certainly even at the greenhouse is, one where there's ongoing monitoring of the crop.

So there's ample opportunity for our growth team to identify any sort of contamination or unusual developments in the crop prior to harvest and that sort of diligent crop management process and oversight, certainly as a key part to ensuring that we have a good high quality harvest that needs the specifications of the lab tests in Nevada. So with that, I'll maybe just pass it on to other members of the team in case they want to add to that in terms of quality and safety.

Yes. Ken I’ll just – this is Geoff, here.

We have a fully integrated pest management team as well as the greenhouse. We don't use any pesticides at all in our products.

So from that perspective, we are cleaned from the beginning, I would say.

Okay, great.

Yes. Okay.

I was just going to say – it's Tony Martin here. We also have two methods of disinfection or treatment on the post-production, harvest prior to testing that improves the results.

I will say this part of our attraction to Nevada was the state and the level of regulation. Regulation is a hurdle to cross, but it also levels the playing field.

We have a team that whose focus is to understand the regulation, its application. We use a combination of labs to ensure the results that we're seeing from testing, because it can be a problem.

You get odd results that the results we see from testing are consistent and we're prepared to meet the standards that are required of us. The other thing I would say is that Nevada is also introducing regulations on the methods of application.

They're going to be looking at the vape pen that are being provided to the market. They're going to be looking at the non-medicinal ingredients in edibles.

I think Nevada is looking to create a very robust environment in which producers and manufacturers are going to have to meet, in order to market their product. And I think in all of that, we embrace that it’s safer for the consumer.

And as I said, it lots of supplying to.

And I think what I would add to that, Patrick, just one other point is, just to maybe contrast or compare to California. So further to Tony's point, one of the reasons we like Nevada and why we're heavily invested and solely invested in that market alone, is this tight regulatory framework.

And with the introduction of testing that wasn't a new concept. That was a concept they introduced right from day one.

So every operator, every sort of licensed operator in the market, understood what they had to do in terms of investing and playing in this space, if you will. They had to capitalize their facilities accordingly to ensure that they could produce a product that could pass testing.

And that's a real stark contrast to what we're seeing in California today. We know with states coming online with full utilization that every one of them is looking at or has introduced testing to some degree.

In California, it was a process that was introduced as the regulatory framework was established, so many of the operators now are having to sort of backtrack and try and elevate their growing standards. And what you're seeing in the market today is a real notable shortage of possible flower in the market.

And that's creating a real challenge for brands and processors in that state. So I think that just further adds to Tony's point that, while it's a hurdle, we see it is setting a bar at a reasonable standard for the safety and protection of consumers.

Yes. And I would – one other thing just to add.

The scale that we have allows us the ability to invest in that technology, right. Some of those small producers aren't going to be able to take a couple of it.

Okay, great. That's some great insight guys.

Thank you. Another one I had is, previously the Company mentioned it would be using the NLVO facility for testing the processing equipment before it was installed in the larger new facility.

So how have those tests gone if they took place and did the company bring in any excite expertise for training, getting SOPs fine tuning that equipment getting ready for the big ramp up.

Yes. So with respect to how we've reconfigured the indoor facility, a couple of things, we've basically taken some of the existing space that we have there and essentially reconfigured it really to allow a number of our brands to get into the market sooner than if we had to wait until the production facility was ready at the greenhouse.

So I think that speed to market is really important to sort of emphasize. Obviously every brand that approaches us today, those are brands that really say to us, we understand the significance of being in the Las Vegas market in particular as a brand and being – having some shelf presence.

And really for them, they said we want to be in the market yesterday. So for us – the real sort of advantage for us with our Brand Partners is to be able to use better optimized or better use the space at NLVO to introduce some of the processing and production equipment that our brands require.

And some of that equipment is unique as you can imagine to each of the brands. We have a brand – we have a dummy line that will be going into the market with CannAmerica.

The SOPs related to the infusion of those edibles is unique to CannAmerica and they have some special equipment required for that. Rapid dose therapeutics, which is really a delivery platform that we can apply across all our brands, again has unique equipment.

So our facility at NLVO has been redesigned by our team such that we can install and start using that equipment at the indoor facility. And the introduction of that equipment, the beta testing, the review of the SOPs with our team, all of that happens in conjunction with our brands to make sure we're following their SOPs to the tea and that we're meeting their standards in terms of final output.

So a lot of that is already happening. We're in the midst of that with several brands over at the indoor facility.

And over time, we do see some of that equipment being transferred and scaling up to greater volumes obviously at our greenhouse facility at the 55,000 square foot production facility. But having the luxury of that licensed production space today at NLVO is hugely significant for us because really it's going to allow us to just get those brands into the market well in advance of our production facility coming online in a couple of months.

It's Tony here. I have a couple of comments I'd like to add as well.

We over the course of the past five months have been testing post-production and post-harvest equipment, including different devices in the art of extraction as well in terms of dividing and trimming. We have tested equipment of the equipment that we've selected for the production facility and are having it implemented.

It also gives us the opportunity to have the state review the equipment we intend to place into the large scale production facility and as a result, they become familiar with it as well. In addition to that, we have modified the grow rooms at the Neeham Road property, NLVO and have improved both the lighting and the crop maintenance techniques that they use.

So I think overall we're very pleased with the work we've done in terms of post-harvest handling of the product, the equipment that we selected, and the ability to have the state review in advance of its placement into the large-scale service.

Yes. And just further to that, Tony.

Tony brought up a very good point and he specifically referenced a lot of the beta testing of the post-harvest equipment. So maybe just as an example of how significant this is from an operational perspective and an efficiency perspective.

If you look at the [deburring] equipment that some of the equipment we tested, we ultimately honed in on one particular type of machine, and Tony maybe you just want to speak briefly to the efficiencies we gain out of that equipment. So our ability, given NLVO is a fully operating at the time before we reconfigured it, it was a fully cannabis facilities.

So the fact that we had raw material and flower and trim there to test all of this harvesting equipment is very significant because in the absence of that we would be deferring all of that testing until later this quarter. Whereas we did much of that testing in the fourth quarter of last year.

And it validates the equipment, as Tony said it's all equipment that's approved by the state. And when we go to install that equipment over at the greenhouse, we already understand the equipment.

We have the SOPs. The team is familiar with the equipment and how to use it.

So the beta testing at our greenhouse and the scale up of that equipment is almost non-existent if you will. But Tony, maybe you can just speak to the efficiencies of that deburring equipment in terms of the…

Sure. It’s in the area of dry trim and hand trimming is very, very important in the industry.

We understand that certainly. But we've managed a process where about 95% of the work of dry trimming can be handled via equipment and we've reduced the time from about five hours of five pound bag to 12 minutes.

And as a result and again, we're a large scale producer and for us to handle the volume efficiently, there is a cost to that equipment in that process, but our scale allows us that recovering. And of course in the future, we'll compete on margin and those things are important to us.

The other thing that I would say is that having the NLVO facility also allows our supply partners to come in, train or personnel in a small footprint, allow them to familiarize themselves with the equipment. In effect, what we're doing is we're training the trainers for the larger scale facility, because every piece of equipment we house it at the NLVO facility is amplified once it goes to the production facility at North Las Vegas.

Good morning, guys. A lot of my questions have been answered, but I just wanted to dive a little deeper into your Brand Partnership strategy and to see that if you're looking to add any additional brands or if you think you've got a full compliment in Nevada that can push your revenue strategy going forward.

Hi, Greg. Thanks for the question and for joining the call.

So with our Brand Partners, as we mentioned, we've got Eight to date. So a couple of things to say there, the intent of Flower One as a brand fulfillment partner and certainly to be the leading brand fulfillment partner in Nevada is to grow that portfolio or house of brands over time.

But I think given where we are in terms of our current state of operations on the ground is as we fully canopy the greenhouse this month as we work towards our first harvest in June and then obviously into Q3 and Q4 of the year on a perpetual harvest cycle. We wanted to ensure at least out of the gate that we had a good broad mix of Brand Partners and so that's why we selected the Eight Brands that we have to date.

I think it's worth pointing out that it's no small feat to build those relationships, have them understand what we're capable of understand their unit economics and then negotiate those licensing agreements. And that's a real testament to our team and Geoff, Tony, Amit and others have really led that process and have done really an exceptional job to get us to where we are today with those Eight Brands.

That being said, we will grow those Brands, that portfolio. I think the other thing to keep in mind is we have dedicated SKUs with our Eight Brands.

But virtually all of those brands are looking to expand their product line as you can imagine. So those conversations have already started with the number of Brands that we're committed to certain SKUs, but each of them has pretty much said to us, we're planning to broaden that SKU count and diversify our product line as we become more established in the market.

So we have growth on two levels. We will grow the number of Brand Partners and we'll grow our SKU count with our existing Brand Partners.

And so as we move through the year, I think it's a relatively safe assumption to make that will move beyond the Eight, but we certainly want to start with a manageable number and ensure that we can deliver and execute, and satisfy the expectations of each of our Eight Brand Partners right now. And lastly, what I'll say is, certainly as we've become more entrenched in the market and as we've executed in people to seeing what we're capable of, particularly with the cultivation and the onboarding of plants at the greenhouse.

We've literally been inundated, pleasantly inundated with inquiries from brands, from across the U.S. and Canada.

And that's nice, and so we're going through a process now of managing those inquiries, and prioritizing them and evaluating them so that we can have sort of a logical wetting process if you will, to determine which ones will have the greatest success in the market and the ones that we ultimately want to enter long-term relationships with.

Ken, this is Tony here and if I may add a couple of comments. The addition of Brands have to integrate tightly with your Sales and Marketing organization and as we staff that up and prepare them to bring new product to the market.

It's important that we deliver to the market and understanding of our approach on that business. If you think of an X, Y graph and closest to the ordinance position zero are your value brands further along the X graph or your mid-market brands and luxury brands, what we're attempting to do is to first make certain that we have responses to each value segment in terms of flower, pre-rolls, vape pens, disposable vape pens, edibles, consumables, topicals, in each category of product.

Then what we're going to look to do is to amplify the response along the Y-axis, amplify the response in terms of the number of brands we carry. We are in active discussions with a number of brands that Ken had mentioned are certain to be announced as we move forward.

Typically what we look for is a Brand Partner who has a depth of offering or an understanding of the particular market segment they're seeking to capture. And as we rollout our brands, of course we'll be delivering the product to the market through our sales team.

Great. And just another question.

There’s been some very positive feedback on the new cultivation facility that we've been hearing. I just wanted to find out that if a company sort of looked at it and said, what, we really want to replicate what Flower One is doing in Nevada, how long would it take them from the ground up to replicate what you're doing?

I’d be happy to answer that question.

Yes, sure. Go ahead Tony.

It's just we've lived this life for a while. Honestly, I'd say from planning to permitting to design to the contract process to construction is likely three years at the earliest, probably four years further on as you're designing technology changes and improves and so it's a constant process of development.

I would say this as well. The people that surround this product or project have many, many, many years of experience building a great footprint of these kinds of facilities.

And that skill set in and of itself is not generally available.

Great. I'll get back in the queue.

Thanks guys.

Hi, good morning. I just wanted to get and update on the number of dispensaries that you're selling, the NLVO products through and how that ramp up looks as you're adding more Brand Partners?

Yes. So just for background, again for everyone on the call.

So when we acquired NLVO, we've touched this morning on many of the strategic benefits to the acquisition of the assets. One area that we didn't touch upon is the fact that to Jason's question.

NLVO has a full product line at the time when we acquired them. So NLVOs product line is really focused on the luxury market.

So to Tony's earlier comments, when we sort of look to identify where brands are positioned from value oriented to mid-tier to luxury, NLVO line is really from day-one been positioned as a quality – luxury brand. And so within the NLVO product line, there's a range of products from dry flower to oils and disposable vape pens to topicals to concentrates, like shatter and dab.

And so it's got a good broad diverse line. And at the time when we acquired the asset back in November, the line had really good retail reach in the market.

So as I mentioned earlier on the call, there's currently about 67 dispensaries in the state, across the state. Keep in mind that the majority of the market, when you look at Nevada, it's rather unique.

If you were to look at total sales and the concentration of sales in the state, 80% of the revenue – cannabis sales in the market today is centered around Clark County and obviously largely centered around Las Vegas. So from that perspective, it's a very concentrated market.

There are still other major centers within the state, like Reno and Tahoe, but 80% of the sales are concentrated within that market. So in the case of NLVO, the retail penetration is about in 50% or about approximately 30 plus retailers.

So that's a real benefit for us because it means one, there's already some established relationships with those retailers and buyers. And two, there's a good understanding of the retail market through the ongoing engagement of the NLVO team with retail.

So in terms of our brands that we've signed and as we mentioned, we have Old Pal in the market today and we expect a few other brands to come online this quarter. Those sales are being focused right now in terms of to certain retailers just because our inventory is still somewhat limited and that’s a great deal of focus on ramping up as you can imagine the greenhouse and the production facility.

So the sales there are fairly concentrated, but they've been going very well. Geoff or Tony, I don't know if you want to speak specifically to Old Pal further as far as what our sales team has accomplished to date in terms of retail reach.

Yes. I'll just add sort of two points around Old Pal.

One they allowed us to reach into a few additional dispensaries with their launch, so we're actually now at 35 dispensaries that we're selling to between the NLVO products and Old Pal SKUs. And two, on the immediate launch of Old Pal, we essentially doubled the sales of NLVOs facility.

So it's definitely helping us on a go-forward basis and we look forward to having all the other brands joining. And that's only one of their SKUs just the [indiscernible] packages.

Hi, everyone. I had a couple of questions.

One is that what portion of your sales do you expect to be retail? And the second question is, do you have any off-take agreements with large corporate on the pharmaceutical side?

And thirdly, any plans to expand into California? Kevin, you commented earlier about the marketing efficiencies.

Thanks Jos for the questions. I'll maybe just touch briefly on your latter two questions and then pass it on over to Geoff.

In terms of any engagement or arrangements discussions with Pharma companies, at the moment we're not actively involved in any conversations with Pharma. One thing to keep in mind that's obviously not unique to Nevada, but when you look at the addressable market in Nevada, it's heavily weighted in terms of its recreational or adult-use composition.

The medical market is fairly small. It's roughly 5% to 8% of the market.

So for that reason, we're not closely aligned with big Pharma at this juncture. In terms of other markets, again, as everyone who's a shareholder is aware, we remain steadfastly focused on Nevada.

I think our execution particularly with the past year has been right on plan. We've hit every operational milestone.

I don't think it would really be possible for us to be where we are today. Anyone on our team has been working on this project almost for many of them, six, seven days a week; we wouldn't be where we are if we were in multiple markets.

So that focus will remain as we move through the year. But that being said, I think for Management, our Board and our Advisory team, we've certainly had discussions to say and to plan as you can imagine where we'll go next.

Certainly for us, California is a market of interest. One, just in terms of geographic proximity.

Two, when you look at the California market, the tourism base of Nevada 50% of the tourists that do come in are from California. So there's a natural correlation and connection there.

Thirdly, we have a lot of brands, both ones that we've already announced and signed as well as ones that were in ongoing discussions with that that really began in California. So there's natural already established brand relationships with companies that are deeply entrenched in the California market.

And fourthly, a number of the key people that are part of Flower One had a very long history in California and in terms of doing business in that state. So they understand, the intricacies of doing business in the state, everything from how to interface with local governments to regulatory regimes and labor laws, et cetera.

So we think that's a natural market for us to look at and that's something that we'll continue to slowly explore as we move through the year. So Geoff, I don't know if you want to add to that in terms of responding to jobs.

Yes. To your first question, I mean our focus is, is wholesale to retail sales.

That's what we are good at their warehouse. So ideally most of our sales will go to the retail and the dispensary side.

But we're large scale production, so we will be open to bulk sales of flower, trim, distillates, bulk crude oils, that kind of stuff to other producers who want to do a white label package and whatnot.

It’s Tony here. One other thing that I would add is, something interesting is occurring for us, which is, Ken had mentioned that our brand in large part come from California, where there's a great product definition happening.

It's our brands who are actually encouraging us as well to come to California to enter the supply chain. They're witnessed over the course of the last four months in particular, our progress on the greenhouse facilities.

They're very excited about what they're seeing. They've been a fuse of in their compliments and they are questioning our timing on entering additional markets because they're looking to partner with us, as we expand.

So I think there's an impetus for us as we deliver these brands in Nevada successfully to our growth in that impetus is also going to be driven by the brands that we support.

Okay.

If I can just add to that, Tony, I think, it's a real validation for us in terms of our business model and who we are when established brands in the California market, which is a fairly advanced market, it's a complex market, not without its challenges of course. But when those brands really say to us and encourage us that they'd like us to move into California sooner than later.

It's a real validation of our business model and really the trust and confidence they have in us.

That's awesome. Thank you.

Just one final question if I may. I wonder how much additional revenue above the price of the sale of the flower you expect to come from the processing and packaging.

So in terms of our guidance to the market to-date, really what we've indicated is, we know roughly the number of plants that would be within our greenhouse at any given time once we're fully canopied. We expect to sort of be on a – we'll be on our perpetual harvest cycle.

But when you look at our full crop, we would probably do about six full harvest cycles of that crop. And we've indicated that on a conservative basis, on a yield per plant, we would be roughly at 90 grams.

That's what we have in our forecasts. Obviously, once we're harvesting, we'll be able to be more specific in terms of what that yield looks like.

But going beyond that in terms of any guidance, we haven't provided that. I think what we can say is, certainly our business model is such and Geoff alluded to it, that we're really looking to be a wholesaler to retail players.

So for us, we want to move as much of our raw inventory if you will, flower and trim towards product derivatives because there's clearly a margin there that we want to take on those product derivatives and so it's prudent for us to ensure that we can channel as much of that inventory into finished product where possible with our brands. Geoff, I don't know if you want to add to that just in terms of economics.

Yes, I mean we can't give any sort of guidance on that, but there is a premium obviously on extracted products definitely. And you can see in the market in Nevada and probably other states as well, you're just seeing a shift from the flower consumer, if you will to discreet methods of consumption so vape pens or sublinguals or edibles and that kind of thing.

So while our pro forma, as Ken mentioned, was at 90 grams and it's really based on just flower sales, it's hard to say at this point what the post-harvest or the extracted material sales will be, but the market is definitely shifting into that fashion and we will be taking advantage with the capability that we have in our production facility.

Great. Thanks very much.

Thank you, operator. Well just in closing, I'd like to thank everyone for participating on today's call.

I know especially for many who joined from the West Coast, it's extremely early there. So thank you for taking the time to be part of the call.

And for those of you are shareholders, we thank you for your continued support and for sharing our vision and our disciplined approach to entering the U.S. cannabis space.

We look forward to reporting on our progress again next quarter. Thanks everyone.