Thank you, Colin. Good morning and thank you all for joining us for our Q4 conference call.

Today, we will provide comments on our performance as well as an update on our operations and how we are executing our plans. This call is being recorded.

The audio recording will be available on the Company website at tgod.ca.

Thank you, Shane, and good morning everyone. Thank you for joining us today.

As you've seen in our press release, I am honored that the Board has appointed me as the permanent CEO and the member of the Board. I will continue to assume the role of CFO on an interim basis while we complete a formal assessment of internal and external candidates for a permanent replacement, and I appreciate the investor support in this regard.

I'll start with some context on the fourth quarter and then provide my thoughts on the industry outlook and how we are positioned for 2021. Yesterday, we reported fourth quarter earnings of $10.92 million, driven by significant growth in Canadian cannabis sales.

Despite an increasingly competitive market and a challenging operating environment brought on by the COVID-19 pandemic, we managed to achieve revenue growth of 91% quarter-over-quarter or 236% compared to the same period in 2019. We have benefited from strong demand for our mainstream offering the highly Dutch brand, our innovative 2.0 products such as RIPPLE Dissolvable powders and our hash.

Our results for the fourth quarter also benefited from our continued focus on operational execution, which Michel Gagne will talk about shortly and financial discipline with our G&A costs down 59% compared to 2019. As planned, our costs have gone down significantly while our revenues materially increased.

Now for a few thoughts on outlook for 2021, consumer demand for legal cannabis products remain strong throughout the pandemic as you know, but given the restrictions and stay-at-home orders combined with some provincial listing mandates being revised at the end of the year. We do expect the first quarter of 2021 to be slow for the whole industry.

However, we project growth to rebound later in 2021, as restrictions are lifted and stores can reopen. I would also note the importance of going to market with high quality differentiated products.

As the market continues to evolve, consumers have higher expectations from licensed producers, particularly as we are also still competing with the illegal market, which isn't regulated. Meanwhile, we continue to proactively manage costs to correlate with sales activity levels and still expect to achieve positive monthly Canadian operating cash flow later in 2021.

Thank you, Sean. As mentioned earlier, we registered quarterly revenue of 10.92 million consisting of sales from cannabis products in Canada of 8.55 million and hemp-derived product sales in Europe of 2.37 million.

Thank you, Shane. First, I will talk about our plans for Valleyfield.

Back in 2019, we made a strategic decision to use the facility as a processing hub while maintaining the optionality to start cultivation later. Fast forward to 2021, it has become evident that large indoor cultivation facilities such as Valleyfield are no longer necessary to continue growing our business.

Furthermore, the approval of outdoor cultivation site has transformed our industry for background approximately 450 acres of land were used for outdoor cannabis cultivation in 2020. That's why we have retained the services of the commercial real estate advisors to identify potential buyers for Valleyfield focused on the main greenhouse.

Multiple options are on the table and the transaction could result in a complete or partial sell of the site. Selling a portion or the totality of the greenhouse is expected to result in a significant reduction in operating costs while providing capital to reduce depth and reinvest in future growth opportunities including consideration in the U.S and Mexico.

The option to purchase organic cannabis biomass from other producers for extraction including in Quebec offers and more efficient use of capital, from the processing standpoint, we remain committed to maintaining a significant portion of our operations, including all 2.0 product manufacturing in Quebec. As Sean mentioned earlier, we officially implemented our clean craft process, which has as five pillars, an organic certification by Pro-Cert, we grow in living soil, we harness the power of natural elements like sunlight and rainwater, our buds are hand selected and trim and slow dried, and cured.

We have significantly improved quality, the potency, and the consistency of our products. Our yields are now higher than initially plan reducing our production costs per gram with consistently high potency in cannabinoid content.

I'm happy to say that we are now producing craft quality organic cannabis at scale. Our recently organic sugar bush a high THC sativa strains is evidence of this focus.

With all our premium organic strings being are vest in now for selling the 3.5 format at achieving at least 20% THC content. This commitment is reaping rewards for our customers.

And with that, back to Sean.

Thank you, Michel. As you can see, against the challenging backdrop, we've delivered strong growth, thanks primarily to the expansion of a product assortment, including the launch of Highly Dutch and the continuous improvements to our production and supply chain, is a testament to the quality of our products and reflects the hard work of our talented and committed team.

In terms of CapEx for this year for 2021, can you just give us some goalposts of where you think you'll wind up obviously given now that Valleyfield is not going to go ahead?

Hi, Derek, thanks. There's going to be very minimal CapEx this year.

It's mainly maintenance capital. So at, probably around the $1 million mark at most, and there is, as you said, there's not going to be work done in Valleyfield.

That’s in the process and Hamilton, our Ancaster facility is fully operational.

Okay. And then in terms of just cash needed on hand to run the business, obviously, you had 7 million from the ATM and another 7 million or so from warrants come in subsequent to the quarter.

How much cash do you feel you need to have on the balance sheet to effectively run the business or conservatively to run the business?

Yes. So, we've currently got more than sufficient cash resources, as I mentioned with the funds coming in from the warrants and the ATM that we did at the current average price of $0.55 a share.

We don't need to be raising money, and with the increasing revenue and the reduced costs, we're getting to the point of being cash flow positive later in the year. So, we have more than sufficient funding to cover off for the foreseeable future and that's why we'll be using that additional cash resources now to look at opportunities as Mexico opens up and considerations in the US or other brand opportunities that we may be able to take advantage of.

And you mentioned cash flow positive in the MD&A it says, expect to be cash flow positive on a monthly basis later in the year. I guess I would take that to assume you're not expecting to be cash flow positive on a quarterly basis at all this year, but perhaps near the end of the year on a monthly basis, you could expect the cash flow positive.

Is that the right way to think about that?

Not quite, it's just in the past, people have asked for specific dates and specific quarters, and with the volatility in the market and the changing regulations that have happened with the listings, it's always difficult to put an exact date on it. So, we just use the monthly one.

Frankly, the fourth quarter as a whole should be cash flow positive, but whether that happens in September or October, I can't put a fine month -- exact month on it, but yes, no, I think we'll be fine by the fourth quarter as a whole.

Okay. And then just the last one for me, just on the strategic initiatives at Valleyfield, I guess two questions.

One, can you just remind us how much capital you invested into this facility? And then two, in your view, who are some of the potential buyers or partners to help you out with that asset going forward?

Yes. Certainly, we did spend over $230 million in Valleyfield through 2018 and the early part of 2000.

And we've actually got over 25 different parties in our data room already, on the Valleyfield process. It's a wide range of groups from other or new cannabis funds to high end organic and premium vegetables and fruit companies, greenhouse companies, as well as investment funds in the space.

From North America, there are got international agricultural clients that are looking to expand into North America as you may be well aware, there's a move towards having food security and also greenhouse security to combat the climate change volatility that's happening for outdoor crops. So, there is a big move for agricultural operations looking for a greenhouse space.

First, housekeeping one, husky cannabis sales this quarter, are you able to quantify or give us a sense what the mix was between flower approvals versus your 2.0 product?

Hi, Tamy. Thanks for the question.

The majority of our sales have been in the flower and I don't have an exact percentage in front of me, but it's suddenly at least 65% to 70% of our sales would be in the flower. And then the remaining portion as a big chunk of that for Q4 in particular was hash.

Hash is certainly the number one selling hash in Quebec in December and at least what over $1.2 million of our Q4 sales was related to hash. And then the balance would be made up of the RIPPLE Dissolvable powders and only have a small portion on teas and dummies didn't start really until January so.

Good 65% on the flower including the Highly Dutch.

Next, Sean, you mentioned as part of your outlook for the Canadian market, you mentioned provincial listing mandates were being realized. I assume you're referring to some of the provinces doing a bit of a rationalization on their SKUs.

So, I was wondering, if you could talk a bit about how SKU got its position there? Are your products included in those provinces top 100 or top 50?

I don't know what the number is SKUs that they've done their rationalization?

Right, it's not only just the rationalization review that they're doing, but also the process for listing new products. Ontario's, you're probably familiar is only doing it once a quarter, now in terms of listing new products, as opposed to taking new stuff on every single month.

So, that has, just had a move out in the timing of some of our new products getting into the Ontario stores. But we have that -- as of today, we have not had anything major delisted.

I think that thinking through the first quarter here to review and we'll assess that as we're going, but we're taking every effort we have to continue to push our main products. The Highly Dutch is doing really well as is the hash as is Rockstar Tuna and the Sugar Bush is new one, which just more inclined to get listed as that's the higher THC.

One of the things, as Michel mentioned there, all of our products now, since Michel has taken charge here of the operations and improved through the end of Q4, the production process and the clean craft, all of the harvest we've had here in January and February and March, are now getting at least 20% THC sold. That's a big catalyst for those that flower product getting into the market.

Even the Highly Dutch is 18% to 20% on a mainstream kind of value basis. So our premium flower is all over 20%, as Highly Dutch is 18% to 20%, and that is a big catalyst for increasing velocity and showing to the boards as they're reviewing the listings, which kind of brands they want to keep.

So, we're feeling positive and doing every effort to promote and get that message out there.

Got it. That's helpful.

And on last one if I could squeeze it in there. Apologies if I missed this, but on the gross margin, there was bit of a decline sequentially here.

So, I saw there a bit of commentary in MD&A, but just wondering, if you could elaborate on that a bit more, what drove that sort of that sequential decline? Thank you.

Yes. The main item really was about $1.4 million in an inventory write-down, primarily related to packaging, frankly, not flower, it was packaging.

There was a lot of excess and packaging that was bought back in 2019 in the heady days of over optimism that the industry had. That's on vape cottages and boxes and teas and tins and everything else that would be involved previously for 2.0 products.

And given the timeline and the velocity of that, we took a write-down on the packaging in Q4. So, that's had the biggest impact, as well as, as mentioned in the MD&A, the lower yields and the higher operating costs we had through the summer of last year that flows through to having a higher production cost of sales in two for such that.

If you remove the inventory provision and all the rest of it, you're around about 20% gross margin, I think for Q4 when you back that out and look at that, and that's just reflective of the set of the lower yields and the higher kind of operating costs we had in the products that went into the inventory that then got sold in Q4. Going into Q1 and beyond, we looked for that gross margin to move up to 30% and potentially higher depending on the mix.

Hey, Sean and Shane. I just want to first off congratulations on the quarter.

Just to follow up there. So, how are you and the broader management team specifically thinking about international expansion into Europe?

Thank you. Well, firstly, as we have a distribution agreement with pharmaceutical wholesalers in Germany, and the EU GMP initial certification that we had in place that we just passed our first stability testing on our products in there, and we're waiting for the final full certification from the inspector in Germany, on our EU GMP, which will allow us then to move in through that pharmaceutical wholesale market into Germany as the first step.

So that would be it in Europe. Beyond that, we're one of, I think only three cannabis LPs that have already established a foothold all operations and product review from Mexico are joint venture in Mexico with LLACA, it goes to 7,600 pharmacies.

And our products are already in front of the COFEPRIS there from the Mexico, an equivalent of Health Canada for approval. And that's usually about a six month process, which we started five months -- five and a half months, six months ago.

So, we're well ahead of the game in terms of at any potential for Mexico as well.

Hi guys. How are you?

Congratulations, Sean.

I appreciate that Rob, but it's got a good team around us here now for a promising year ahead.

Yes, Shane is not that I guess. A couple of quick questions.

So, 230 million to build Valleyfield, and if you look at what they sowed up -- actually, sowed up cannabis for, they got like 10% of that cost. Aurora sowed facility and Exeter, they got about 10%.

So, is it fair to say, we get 10% Southern Valleyfield or do you expect much better than that?

The two things to note on that, Rob, first of all, that's not on our books at 230 million anymore because of the impairments we took back in 2019 in the early part of 2020. So, the carrying value on the books is only around 75 million now.

Having said that, we've already had some initial offers that were more than 10% of the 230 million, which given the interest and the nature of our facility and the quality of our facility, which is adaptable for more than just cannabis and its location, particularly close to Montreal and the hub there and the importance of Quebec as an agricultural producer and the support we're getting from the investment Quebec in terms of promoting agricultural greenhouses. We feel that the value would be certainly more than the 10% of the 230 million, and the range we're getting is, we're expecting to get is and the interest we're getting is evidence of that, that's likely to be the case.

That's good. The other thing I noticed someone posted on social media, was any of our write-down on inventory this quarter?

It was 1.4 million of an impairment that was primarily related to packaging. As I mentioned to Tamy there, we had a load of packaging that was back in 2019 for expected balloon drills, which would because it'll take over a year to get through.

We were prudent in taking the write-down on it. So, no, there's not been any mass write-downs in our inventory, on the flower or cannabis product inventory at all.

And then, we sell the full Valleyfield facility, let’s just say you sell the whole thing. That's the deal they want.

So, now we got to move that processing facility that would basically wipe out our gains from Valleyfield building a new facility.

No, not at all, Michel and his team have already identified several sites and two in particular we're focusing on in Quebec, that could house our operations. They're licensed and they're capable immediately turnkey to move our equipment from Valleyfield into them with a staff and be able to operate straight away without much downtime at all.

And it wouldn't involve a lot of capital.

Final question. If we go into Mexico and Europe and say, the U.S.

with the Ancaster facility alone, how do we get that product out there with values and cash I believe would be 17.5 kilograms total credits.

So, a big part of that planning is for our 2.0 products out of Quebec. There's a lot of -- as Michel mentioned, there s a lot of organic biomass that's able to be bought from the market.

So, we don't need to use our grow, in Ancaster -- our grow in Ancaster will be the premium flower for our own flower products whereas the organic biomass that we're sourcing are able to source from other grower can be used for the 2.0. So, we're able to ramp up and grow across all products without meeting the additional growing path be ourselves.

Again, the two facilities that we've narrowed down on potential from Michel also have growing and cultivation capabilities as well should we need it.

Again, I'd like to thank everybody for the time on here. If you have any other questions at any time, please reach out to myself or a Sebastian or Shane, whose information is on the press release.

Again, thanks to the team for their continued efforts, and I'm looking forward to a positive 2021, been a lot of work to get here, but we're as I said strongly positioned with the cash resources and the team and the product to take advantage of a further growth in 2021.