More ways to grow, more ways to manage risk, and more opportunities to create value as consumer cannabis, beverage, wellness, and pharmaceutical distribution markets evolve around the world. We have grown Tilray from a $50 million company 7 years ago to a pro forma $1.2 billion global business today, reflecting our ability to identify opportunities, acquire strategically, integrate assets, and build platforms with greater reach.

We are not done. We will continue to grow Tilray organically and through focused M&A, using our infrastructure, operating capabilities, and brand-building expertise to create more value from the assets that we acquire.

Today, Tilray operates from a position of global scale and category leadership that few companies in our categories can replicate. We believe we're the world's largest cannabis grower, with more than 6 million square feet of cultivation capacity and a leading low-cost production base.

We are a market leader in the largest federally legal cannabis markets, including Canada and across Europe. We're the number one craft beer supplier in the UK, and the fourth-largest total beer category supplier in the UK grocery market, the fourth-largest craft brewer in the United States, and a global leader in hemp foods, beverage, and wellness.

Overall, we operate nearly 40 hospitality venues, including pubs, bars, and hotels that showcase our beers and beverages, deepen consumer engagement, and give Tilray a differentiation platform to bring our brands to life in markets around the world. In the US, consumers can find a Tilray product in almost every major supermarket, and our beer is now available on tap in approximately 28,000 on-premise accounts.

Go try one. This scale matters because it gives Tilray the infrastructure and commercial network to buy attractive assets, integrate them effectively, improve on how they run, and expand their distribution and make them stronger and more profitable businesses.

With BrewDog, Tilray did more than acquire a beer company. We acquired one of the world's most recognized craft beer brands, a passionate global consumer community, a scaled hospitality footprint, and a powerful platform for international beverage growth.

For shareholders, BrewDog is a clear example of our acquisition strategy in action. We can buy a valuable brand, stabilize the business, return it to profitability, reinvest behind growth, and use Tilray's global platform to expand its reach globally.

Investors should also understand the cadence of our business. Not every quarter will look the same because parts of our portfolio are seasonal, and our fiscal year is more heavily weighted to the second half across beverage, cannabis, and distribution.

What matters is where we are going. Tilray is becoming larger, more diversified, and more globally recognized, with multiple levers to drive growth, expand margins, and to improve profitability over time.

In the US, we continue to believe cannabis reform will create significant opportunities over time. When it does, Tilray is prepared to act from a position of strength.

Our strategy is not dependent upon one regulatory event. Delays in rescheduling have impacted sentiment towards cannabis stocks, including ours, and we believe the market too often evaluates Tilray as if we are just a pure-play US cannabis operator.

We are not. Tilray is a global, diversified business with established positions in cannabis, beverage, wellness, and pharmaceutical distribution, and we will continue to grow with or without a single regulatory outcome.

In quarter one, we delivered record revenue of $257 million, up 23% year-over-year, and a record first-quarter gross profit. We also expanded gross margin year-over-year, demonstrating that Tilray is not only getting larger, but also building a stronger financial profile.

That progress reinforces our confidence as we move into the seasonally stronger second half of our fiscal year, and we're maintaining our adjusted EBITDA guidance for the year. Turning to international, this is one of Tilray's most important growth engines, and one of the clearest examples of why our global platform matters.

In quarter one, EMEA revenues, including medical cannabis, beverage, and pharmaceutical distribution combined, increased over 70%, reflecting momentum across our markets where Tilray already has infrastructure, regulatory expertise, and commercial reach. International cannabis revenue grew 21% year-over-year, while EU-GMP medical cannabis shipments accelerated, with flower volumes up 110%, oil volumes up 150% year-over-year.

This is where Tilray is built to lead: regulated markets where demand is growing, standards are high, operating expertise matters, including scale, low cost, and quality. The leadership is backed by a vertically integrated global cannabis supply chain that gives Tilray control across cultivation, production, distribution, and patient access.

Approximately 90% of our international cannabis supply comes from our Portugal facility, which anchors our European cannabis operations and is one of the most strategic assets in our global network. Together with low-cost production in Canada, EU-GMP capabilities in Portugal and Germany, pharmaceutical distribution through CC Pharma, direct patient access through Life in the UK, and a proprietary genetics bank, Tilray has built an end-to-end cannabis operating model designed to compete and win across regulated medical markets.

Our strategy is to leverage the global scale, regulatory expertise, and patient access model to capture growing demand, improve product mix, and drive greater profitability as these markets scale. Europe has become one of Tilray's most important growth markets, with opportunities across Germany, Poland, the UK, and Italy, and our international opportunities extend beyond Europe.

We are also expanding in Australia and New Zealand, creating additional pathways to scale our medical cannabis business and capture growing patient demand. In the UK, Life gives Tilray a powerful strategic advantage: direct access to patients.

We are focused on improving and shortening the patient journey, doubling Life's patient base, and scaling Tilray medical products through an integrated pharmaceutical distribution network. Across Europe, we continue to strengthen the economics and performance of our medical cannabis operations.

In Portugal, we reduced our operating and cultivation costs by approximately 40%, while improving strains, process, and potency. We believe Portugal is now among the lowest-cost cannabis producers in Europe, and we expect this facility to deliver more than 40 metric tons of flower at full capacity in our fiscal year 2027.

In Germany, Aphria RX is operating at 100% capacity. Portugal and Germany combined with our low-cost production position in Canada gives Tilray one of the strongest global cannabis operating models in the industry, with the scale we have, the cost structure, quality standards, and operating discipline to compete and win across regulated medical cannabis markets.

Importantly, our advantage extends well beyond cultivation. CC Pharma provides Tilray with pharmaceutical distribution, infrastructure, commercial relationships, and market access in one of Europe's most important regulated medical markets, with distribution to over 16,000 pharmacies.

CC Pharma is more than a growing distribution business; it is a strategic connector across pharmaceutical distribution, medical cannabis, and patient access in Europe, strengthening our competitive position and creating additional avenues for profitable growth. In Canada, Tilray is built to gain share, strengthen profitability through scale, low-cost cultivation, low-cost processing operations, and focused commercial management.

Our scaled cultivation operation gives us a meaningful advantage, particularly as we come out of the summer transition to new cultivars. These strains are improving yields, lowering costs, and giving consumers the potency and terpene profiles they expect.

Even with inflation in cannabis input costs, we have continued to reduce cost per gram and improve our margins. We're harvesting these cultivars now across our network, and we expect to see a larger impact late in Q2 and beyond.

The cost leadership together with our brand portfolio and sharper market focus gives us a clear path to gain share in Canada while protecting profitability. It also positions us as well as the market evolved beyond traditional cannabis formats into new consumer occasions.

Cannabis beverages are one of the most exciting and compelling examples of that opportunity. Today, Tilray pays over $100 million Canadian in excise tax, and the legal cannabis industry has become an increasingly important contributor to the government revenue across Canada.

As governments look for responsible ways to expand that revenue base while strengthening the regulated market, cannabis beverage represents a clear opportunity for that. Tilray is the largest producer of THC beverages in Canada, with over a 40% market share.

A broader access through bars, restaurants, and other regulated outlets would be a meaningful win for consumer, governments, hospitality operators, and of course, the legal cannabis industry. It would give consumers a safe, regulated environment to try THC cannabis beverages, help drive traffic to hospitality venues, and create a stronger and more accessible legal cannabis market.

In beverages, BrewDog gives Tilray more than a global brand. It gives us a passionate consumer following, a scaled hospitality footprint, and significant runway to expand across beer, spirits, non-alcoholic beverages, and ready-to-drink formats.

We see BrewDog as a major growth engine for Tilray, a brand with global reach, cultural relevance, and the potential to help reshape our beverage alcohol business over time. Beverage revenue increased 82% year-over-year to $101.5 million in Q1, largely driven by BrewDog.

BrewDog also contributed to sequential growth in the beverage segment, reinforcing the early impact of the acquisition and the momentum we're building. Importantly, BrewDog became profitable in Q1.

Since taking ownership, we have stabilized operations, invested behind the brand, returned BrewDog to profitability, and began unlocking new growth. We recently launched BrewDog's first major campaign under new ownership, followed by the UK-wide Choose Craft campaign, which celebrates the quality, flavor, and character that makes craft beer worth choosing.

The early response has been strong. Since Under New Ownership campaign launch and Choose Craft began rolling out, Punk IPA sales across BrewDog's top six off-trade retailers up 187% over the last 2 weeks compared with the same period last year.

At the same time, BrewDog has also secured over 9,000 new distribution points with the launch of its latest craft beer innovation. BrewDog has also launched eight new on-trade partnerships across live entertainment, sports pubs, and hotel.

This is exactly the kind of momentum we expected when we acquired BrewDog: a globally recognized consumer brand that Tilray can stabilize, reinvest behind, and scale across markets, channels, and different occasions. We see a major opportunity to make BrewDog an even larger part of Tilray's international growth story.

Our strategy is to grow BrewDog globally through a combination of expanded distribution, local market partnerships, and a franchise system of BrewDog pubs, bars around the world. As Tilray expands across global medical cannabis markets, we're also building relationships, infrastructure, and market knowledge that can support the broader international growth of our beverage businesses.

Through strategic partnerships, we plan to expand BrewDog's operations and build bars across key markets where Tilray already has a presence or see attractive long-term opportunities, including India, Poland, France, Israel, and the Middle East. This is how we can use Tilray's global reach to take BrewDog into more markets, create new consumer touch points, and strengthen the international growth profile of our beverage business.

Long term, we see room for top-line synergies between beverage and cannabis globally. We're already using BrewDog's reach to expand the beverage portfolio globally, including the launch of over 20 Tilray-owned American craft beers and functional beverages across the UK.

BrewDog also delivered strong brand proof points at the 2026 World Beer Awards, with Hazy Jane, Wingman, and Mackies Two Scoops earning Gold and Scotland Country Winner honors. Looking ahead, our focus is clear: continue integrating BrewDog, strengthening the business, and investing behind its global brand, hospitality platform, and consumer experience.

With BrewDog, we're not just building a stronger beer business. We're building a broader global consumer experience rooted in great beer, powered by new innovation, connect with today's dynamic consumers across craft beer, non-alcoholic beverages, ready-to-drink formats, food, digital engagement, and live experience.

This is how we take BrewDog beyond beer, deepen our connection with consumers around the world, and build one of the most dynamic global beverage and hospitality platforms in the industry. Across Tilray, we're managing the business with purpose, allocating capital to the opportunities where we see the greatest potential to improve performance, expand margins, and continue to grow profitability.

Cost controls and capital allocation remain central to how we operate. We have streamlined our operating structure, captured acquisition efficiencies, optimized production and procurement, and maintained focus around corporate costs.

These actions are creating greater operating flexibility and allowing us to invest behind the business and the markets where we see the strongest potential returns. Our Q1 results demonstrate that progress: revenue growth, record first-quarter gross profit, gross margin expansion, and continued cost savings.

We are building momentum. We're focused on converting that progress into stronger performance across the portfolio.

In beverages, we improve gross margin sequentially and year-over-year despite normal beer seasonality, higher input costs, and, of course, fuel surcharges, a clear sign that BrewDog integration, cost discipline, and operating efficiencies are beginning to translate into stronger performance. That progress is important because it shows we're improving the financial profile of the beverage segment and creating additional margin upside over time.

In US beer, we're building a stronger, more competitive business. The category is dynamic.

Distributor consolidation is reshaping the route to market, and Tilray has the reach, focus, and brand portfolio to gain share in the markets where we can win. We're simplifying the business, taking costs out, continuing SKU rationalization, and putting a sharper focus around the channels, retailers, and distributors that can drive profitable growth for us.

Our spirits business is also an important part of the broader US beverage strategy, giving us another platform to reach consumers around many occasions, expand higher-margin innovation, and deepen our relationship with distributors, retailers, and on-premise partners. This work takes time, but the opportunity is meaningful: sharpen the portfolio, improve commercial performance, and convert Tilray's US beverage footprint into stronger and a more profitable growth over time.

We're beginning to see clear proof points that our US beer turnaround strategy is gaining traction. According to Circana data for the 14 weeks ended August 30th, Tilray is now the number two craft vendor in Georgia and the West number four.

In New York State and SweetWater is the third-largest craft brand in Georgia, representing a 12% of craft beer sales in that market. We're also seeing meaningful brand-level momentum with Montauk Juicy IPA up 25%, SweetWater HIGHLIGHT up 38%, and the Terrapin brand family delivering a 21-point swing and growing 7.5% fiscal year-to-date, and Breckenridge Juice Drop up 22% in their respective priority markets.

Just as important, our portfolio and package decisions are working. Our 4-pack 16 oz strategy drove 28% growth on the West Coast, and key innovation, particularly Hop Valley Pub Light and High Voltage, added more than 100,000 cases in Q1.

These moves sharpen our focus, give distributors and retailers stronger reason to support our brands, and position Tilray to gain share in the market where we can win. As we strengthen our core US beer business, we're also positioning it for the next phase of growth through strategic partnerships that expand our scale, capabilities, and commercial reach.

Our exclusive multiyear partnership with Carlsberg Group reinforces the US beer business we are building. Carlsberg is one of the world's premier brewing organizations and is widely recognized as one of the largest global brewers, with a business over 30 times the size of Tilray's beverage operation.

The fact that a brewer of Carlsberg's scale, global sophistication partner with Tilray as its US brewing and commercial partner matters. It validates that our brewing capabilities, our quality standards, our commercial reach, and our ability to scale international brands in the US matters.

Beginning January 1st, 2027, Tilray will produce, market, and sell and distribute Carlsberg, Carlsberg Elephant, 1664, and Kronenbourg 1664 Blanc across all channels in the United States. We expect this partnership to deliver immediate scale, revenue contribution when it begins, add global recognized premium European beer brands to our portfolio, and deepen our relationship across the distributor and retail network.

Just as important, we expect the partnership to strengthen and evolve over time as we combine Carlsberg iconic brands, brewing heritage, and global category expertise with Tilray's national go-to-market capabilities. Taking together BrewDog and Carlsberg gives us two powerful levers to build a stronger, more diversified, and more profitable beverage business over time.

In wellness, Manitoba Harvest remains another strong Tilray brand, with room to grow beyond its core hemp platform. We're expanding Manitoba Harvest into adjacent grains, plant-based products, and new wellness occasions, using the brand's leadership in hemp foods to build a broader health and wellness portfolio that can reach more consumers across grocery, natural, and, of course, e-commerce channels.

Across Tilray brands, we're building something few companies in our categories can replicate: a diversified global business with powerful brands, international infrastructure, and operating capabilities across cannabis, beverage, wellness, and pharmaceutical distribution. The next phase is clear: improve productivity, expand margins, generate cash, and convert our platform into stronger earnings power.

This is why even with industry headwinds, timing dynamics in the US beer, and planned integration growth investments, we are reaffirming our 2027 adjusted EBITDA guidance. We remain confidence in our ability to deliver through the balance of the year because the underlying direction of our businesses is strong: better operating performance, stronger cost controls, and growing contributions from BrewDog and international cannabis, and multiple levers to expand our profitability.

Our growth plan is anchored in opportunities we can control today: expanding global medical cannabis in the markets where we've already operate, leveraging our low-cost cultivation and international supply chain, scaling craft beverages, growing wellness and pharmaceutical distribution, and maintaining the disciplined capital allocation. At the same time, we continue to preserve meaningful upside from future cannabis reform globally, including the US.

Lastly, we know profitability matters and how important it is to our shareholders. We are laser-focused on improving earnings, generating cash flow, driving shareholder value.

It's also important to recognize what we have accomplished today. We have approximately $221 million of cash on our balance sheet.

We have settled more than $42 million of debt fiscal year-to-date. We continue to actively evaluate opportunities to further strengthen our capital structure and reduce interest expense.

This quarter, we report a net loss of $40 million. Excluding non-cash, non-recurring items, our adjusted net loss was approximately $3 million, including roughly $5 million of net cash interest expense.

Simply put it, we continue to reduce the interest burden, earnings power of this business becomes increasingly visible. We know exactly what we need to do: improve performance, expand margins, generate cash, grow sales, and convert Tilray brand assets and operating capabilities into stronger earnings and sustained value creation.

With that, I'll turn the call over to Carl, to walk you through the quarter in more detail. Carl, let's go.

Thank you, Irwin. Before I begin, please note that we present our financials in accordance with US GAAP and in US dollars.

Throughout our discussion, we will be referring to both GAAP and non-GAAP adjusted results. We encourage you to review the reconciliation contained within the earnings press release of our reported results under GAAP with the corresponding non-GAAP measures.

Turning to our Q1 results, Tilray delivered record first-quarter revenue and record first-quarter gross profit, with net revenue increasing 23% year-over-year to $257.1 million compared to $209.5 million in the prior-year quarter. Growth was driven by the addition of BrewDog, continued strength in international cannabis, and solid performance from our distribution business.

Gross profit increased 35% to $77.5 million, and consolidated gross margin increased approximately 300 basis points to 30%. These results reflect the same principles Irwin outlined: expanding gross margin, improving the quality of revenue, and positioning the business for sustainable, profitable growth, all of which we are doing.

Beginning with international cannabis, which remains one of our most important growth engines, revenue increased 21% year-over-year to $16.2 million, driven by higher patient demand in Germany and contributions from Life in the UK. Total cannabis net revenue was $56.1 million compared to $64.5 million in the prior-year quarter, reflecting our disciplined decision to prioritize profitable growth and higher-return international opportunities.

Cannabis gross margin increased approximately 300 basis points year-over-year to 39% from 36%. Cannabis gross profit was $22 million in the quarter compared to $23.3 million in the prior-year quarter, as stronger margin performance helped offset approximately $8.8 million of price compression in international markets.

The margin improvement was driven by operating efficiencies, a stronger product mix in Canada, and, importantly, increased utilization of our Portugal facility, which lowered unit costs as production volume scaled. In Canada, we continue to prioritize profitable growth over volume amid competitive market conditions.

Adult-use cannabis revenue was affected by planned strain rotations, temporary supply constraints, and our decision to redirect approximately 1 metric ton of inventory, representing $1.1 million of potential Canadian revenue, to higher-return international markets. This is consistent with our broader strategy to use Tilray's global platform, low-cost cultivation and processing bases, and EU-GMP capabilities to allocate product where it can generate the strongest returns.

Turning to beverage, where Irwin spoke about BrewDog as a global brand and scaled platform, segment net revenue increased to $101.5 million compared to $55.7 million in the prior-year period. The increase included $55.9 million of incremental revenue from BrewDog, which meaningfully expands the scale, international reach, and margin profile of our beverage platform.

The acquisition transformed our beverage business from a primarily US-focused operation into an international craft beverage platform, adding brands, distribution capabilities, and consumer reach across multiple markets. BrewDog also strengthened the segment's profitability profile, as beverage gross margin expanded by approximately 300 basis points to 41%.

Our legacy US craft beverage business continues to operate in a challenging market. We are taking decisive action to streamline operations, improve brewery utilization, and focus investment where consumer demand is strongest.

Consistent with Irwin's comments on the strategic role of our European infrastructure, our CC Pharma distribution business continued to perform well, exceeding expectations as net revenue increased 14% to $84.3 million compared to $74 million in the prior-year quarter, supported by competitive pricing and product mix. Distribution gross margin remained consistent at 11%.

However, excluding a $1.3 million prior-year classification difference, margins improved year-over-year due to favorable product mix, higher average selling prices, and cost reduction initiatives. Distribution remains an important strategic asset, supporting both profitability and our broader European medical cannabis infrastructure.

Within wellness, performance was relatively stable, with revenues of $15.3 million. Innovation and new product offerings continued to gain traction, although temporary constraints in the supply of organic hemp seed affected certain e-commerce channels during the quarter.

We remain encouraged by the portfolio and the opportunities ahead, particularly as we continue to focus investment behind categories where Tilray can build durable consumer platforms. Moving to profitability, we reported a net loss of $40 million compared with net income of $1.5 million in the prior-year quarter.

Excluding non-cash and non-recurring items, adjusted net loss was $3 million, of which $5 million related to net cash interest expense. Without the cash interest, which we are actively working to eliminate, we would have made $2 million of adjusted net income.

The year-over-year change primarily reflected higher costs associated with investing back in our business, including higher marketing costs to drive growth, and headwinds from fuel surcharges. Adjusted EBITDA for the quarter was $9.2 million compared with $10.2 million in the prior-year quarter.

Results were impacted by $8.8 million of international cannabis price compression as well as fuel surcharges associated with the broader geopolitical landscape. These fuel-related costs increased by $1.7 million compared with the prior-year quarter, representing a discrete external cost headwind to adjusted EBITDA.

Excluding these impacts, the underlying business continued to benefit from improved utilization, acquisition integration, and disciplined cost management. We expect those initiatives to strengthen performance as we progress towards our fiscal 2027 guidance.

Turning to cash flow and the balance sheet, we ended the quarter with approximately $221 million in cash, restricted cash, and marketable securities. During the quarter, we raised a modest amount of capital through our ATM program, leaving $70 million available, and continued to reduce debt through additional note exchanges.

We retired $24 million of principal during the quarter and a further $12 million after quarter-end, leaving $52 million of principal outstanding. As we move toward the June 2027 maturity, our capital allocation priorities remain unchanged: strengthening the balance sheet, reducing future obligations, and investing selectively where returns support sustainable, profitable growth.

From a capital allocation perspective, last quarter, our focus centered on the approximately $50 million purchase price for BrewDog and an additional $50 million of short-term funding while cash collections followed 90-day payment terms. With that initial collection cycle now behind us, we expect ongoing funding requirements to be materially lower and largely limited to capital expenditures.

Importantly, BrewDog required no cash injections during the quarter and was self-financing. Looking ahead, our focus remains on the operational levers that drive stronger profitability and cash generation: expanding cannabis margins through international scale and cultivation efficiencies, realizing BrewDog integration benefits, optimizing our beverage manufacturing footprint, preparing for the transition of Carlsberg production and sales control in the US, improving working capital efficiency, and continuing to strengthen the balance sheet.

Market conditions remain mixed across several categories, but our priorities are clear. We are focused on disciplined execution, profitable growth, and building a stronger global platform that can create long-term shareholder value.

Based on our current outlook, the strength of our diversified platform, and the actions underway across the business, we are reaffirming our fiscal 2027 adjusted EBITDA guidance of $68 million to $75 million. Operator, we can now open the call for Q&A.

Hi, good morning, and thank you very much for the questions today. A first question for me is just on the international cannabis dynamics.

I know you mentioned some of the pricing pressure. Just as we think about the broader competitive environment with two of the largest players potentially combining, how are you thinking about the international landscape and how you're best positioned to ensure that you have durable sales growth?

Thank you.

Thank you, Aaron, and good question. Number one, I think the most important thing is that we have the grow.

With the facility that we have in Cantanhede and what we have in Germany, we have tremendous amount of grow for either flower or oil. The second thing is, listen, we've been in the marketplace internationally now for 7 years, we have infrastructure of people, we have relationships with doctors, we can expand in other countries.

Again, it's just getting out there and selling our products. One of the other things that we have different than a lot of other companies, we have something called CC Pharma, which is a pharmaceutical distribution business that goes direct to drugstores.

I really, really feel good about our international business. It's not that we have to go out there and look for grow to sell.

We have plenty of grow. If we don't have enough grow, we have Canada to be able to serve us.

We have product, we have oil, we have flower, we have infrastructure, we have great relationships out there, we have CC Pharma that sells into 16,000 drugstores. I'm not concerned about the potential combination that could happen out there.

Great. Appreciate that, Irwin.

Second question for me, just on the alcohol side, specifically on the gross margin, just given some of the dynamics you talked about with distribution consolidation and broader structural challenges, just how do you think about the gross margin evolution for the category, as you think about BrewDog now being integrated and other dynamics that you could have? Thank you.

Again,

from a gross margin standpoint, listen, we got into this business 2020 with SweetWater, Montauk came along, which we integrated into SweetWater, and then came the ABI businesses and Montauk, and then the Molson businesses. All of a sudden, we're sitting with 8 to 10 breweries.

Number one was getting rid of some of the smaller breweries, which we have in regards to Revolver, in regards to Terrapin, Fort Collins, and there's probably one more, we sold off Atwater. There's probably one more that we can close and integrate and which there's some big savings from there.

Number one, it's integration of our facilities and getting them down to five or six facilities that have tremendous capacity that are strategically located. Bringing on Carlsberg is going to be a big feat for us, which there's going to be a lot of product and a lot of opportunities with that.

That's number one. With that, combining all these breweries is also getting the benefits of hop supply, getting the benefits of other ingredients, cans, etc., so that is in place.

Number two, as we all know, as this three-tier system, there's been a lot of change going on with distributors. For instance, in New York, we have ABI that has Blue Point and Shock Top.

We have someone else that has our Montauk, another distributor that has BrewDog and will have Carlsberg. We're in the midst of trying to consolidate distributors out there so we only have certain shipping points, and we become an important part of that distributor, and that's happening.

In a three-tier system, it's not the easiest to make happen. The third thing is what we're really changing is the way we go to market, where we were dependent upon distributors going into pubs and at retail.

Now what we're doing, whether it's Kroger, whether it's Walmart, we're calling on them ourselves and making sure we get the pods. It's coming together, a little different than a consumer package goods business where you just went to a Walmart, like my old company Hain, and you sold and you shipped into Walmart's warehouses.

The good news, and what I feel good about is the lineup that we have in the beer categories today on a regional basis, not so much on a national basis. With Carlsberg and Shock Top, we have two great national brands out there.

Again, as we look at our beer brands from a standpoint, with 18 beer brands, do we put one or two of them together and just get out of some of the smaller brands, we continuously look at that. We'll continuously expand into the seltzer business, which we've had.

With Hi-Ball, which is our energy drinks, we're looking at other things with water. There's lots of innovation out there.

You saw Constellation paid for a vodka seltzer business yesterday, that is a mix. We can go and create them and not go buy them.

There's a lot we'll create as we have manufacturing, we have distribution, we have tremendous amount of infrastructure in R&D. There's lots out there for us to do in this whole beer category.

Listen, my hope one day we can sell cannabis drinks, because if we could sell cannabis drinks throughout the United States or our hemp drinks, there's either a few hundred million dollars or a billion-dollar opportunity business for us, and we have the infrastructure and ability to do that.

Appreciate that color and outlook, Irwin. I'll jump back in the queue.

Thank you.

Hey, good morning, everybody. There was a line in the release about BrewDog reaching profitability in 1Q.

I don't recall that having happened in 4Q, and I think BrewDog was at an operating loss for years. Irwin, you talked about ways BrewDog can grow, but maybe can you add a little bit more detail on how you were able to quickly turn years of losses into a profit, and do you expect it to stay profitable?

Number one, the big thing is I was not saddled with a lot of their bars and pubs that were losing money. That's number one.

Number two, we right-sized in regards to people that we did not have to take. When you go into administration, there was a whole lot of leases that we didn't have to take or new leases that we renegotiated.

From a standpoint, that was a big part of it. We really put good cost controls in place, with a big facility up in Aberdeen that we really focused on.

We moved away from unprofitable businesses, as the spirits business, they'd already shut it down. There are things that we did.

We also had a great, great summer with the World Cup, with our bars that we did have open. Again, the opportunity in which we're seeing today as we launch the campaign, okay, you can cut your way to profitability, but it's growth within the brands.

When we took this business over, the brands were declining double digits, and started to claw their way back. Now we're seeing good growth among the brands from a depletion standpoint with the campaign.

Now when we took this business over, people thought BrewDog went away. Do I absolutely, the budget for this year is profitability and some good profitability coming from BrewDog.

What I'm excited about too is the expansion opportunities, not only in the UK, is what we'll do in Australia, what we'll do here in the US, and different partnerships that we plan to do in both brewpubs and distribution in other countries.

Irwin, can I just add one more point? Hello?

Thank you. Then

if I could follow up on the Canadian adult-use contraction, Carl outlined a few reasons and decisions that contributed to the year-over-year contraction. I guess going forward, would you expect a similar, deliberate headwind dynamic, or are some of the factors more specific to 1Q, decisions made in 1Q, and year-over-year looks better here after 1Q?

More decisions was this Q as this happens all the time as we come off the summer months and yields and as we transition from different strains. That is number one.

Number two, we're focused on margin. I think what's important from a standpoint there is being focused on profitability.

The other thing, which again I feel good about Canada, Canada is 40 million people and half the population in the age that can consume cannabis. There's a couple big things that we have to do there is move more and more away from the illicit market.

One of the opportunities that's in place right now that could happen is cannabis drinks being sold in food establishments, in restaurants and bars and in beer stores. That's on the table in Ontario, a couple other provinces.

With us having over 50% share and having the production for us, that would be big. One of the big things in Canada is this excise tax.

We pay over $100 million in Canadian excise tax. If we were selling alcohol, and it would be half that.

What all these governments are looking at, sales are down on American brands in alcohol and sales are down in alcohol, how do I replace that with additional cannabis sales? There's stuff going on in Quebec in regards to age, there's additional products that can be sold in convenience stores.

That's the way the Canadian market ultimately is going to grow is more and more cannabis products that are available not just through cannabis stores. Thanks.

Thank you, Irwin. I'll pass it along.

Thank you and good morning, everyone. Look, a two-part question regarding Carlsberg.

Can you give us a sense what's the upside there in terms of revenues? I don't know who's producing or distributing Carlsberg before, what were their peak sales, anything to help us frame the potential for Carlsberg in the US, that would help.

Then the second part of the question relating to Carlsberg, I think you said in your prepared remarks you expect the partnership to strengthen and evolve over time, if you can give more color in terms of what that could mean. Thank you.

Thank you, Pablo. Listen, I spent a lot of time with the Carlsberg team.

They're one of the largest beer producers in the world today. They have tremendous growth across their brands and some of the other products.

As I spend time with them on their innovation, product development, their brewing capabilities. That brings a tremendous asset to Tilray that we can tap into a company of that size, that scale as a partnership here.

There's other companies out there that partner with other cannabis companies on the cannabis side. We're fortunate to have a partner like Carlsberg to partner with us on the beverage side.

From a standpoint, right now it's a venture, a profit-sharing, that all the Carlsberg products will be produced in our US plants. We have the distribution, marketing, selling rights to all of the US.

With that, it's all Carlsberg products. Where are the opportunities?

Additional innovation that comes from Carlsberg. There's other markets that one day that we hope to talk to Carlsberg about that we can sell to.

There's a big country out there that we would expand in, and Carlsberg is around the world. The other opportunity is this here: Carlsberg distributing some of our products in certain markets that we'd like to go into.

There's lots of opportunities, and it's been a pleasure to work with them. I think they ultimately see is this here: US being one of the biggest beer markets here, and they were basically seen as an import, and they really want to see US being a big foothold for them and their growth factor.

Right, thank you. Look, just in terms of M&A, I know Carl spoke about cash deployment and priorities in terms of cash allocation, but I understand you're building a diversified business platform, but in the first quarter, beverages were 54% of your gross profits compared to cannabis 28%.

Just looking forward in terms of M&A, do you still need to make acquisitions in the case of cannabis, whether in Canada or overseas? Or is it more about expanding the beer business and pretty much doubling down on beverage exposure?

Thanks.

I think again you've got to come back and see how they're complementary. You heard what I said about Canada.

Number one, yes, we'll continue to grow recreational medical cannabis in business in Canada. Canada is only so big in size, but what's the opportunity is the synergies in the beverage business in growing other products in Canada, okay?

I think that is a big, big opportunity. Like I say, if I could get our beverages into multiple additional outlets in the Canadian market, that's big for us, and something will happen there.

Again, as I put these two businesses together, and what happens, Pablo, as beverages and cannabis can come together, there's lots of overhead sharing, there's lots of cost savings, a lot of infrastructure that we put together that's going to be beneficial for this company. The same internationally.

Now as we look at different countries internationally, whether it's India, whether it's Israel, whether it's Poland, whether it's Spain, as we go in there with medical cannabis, the same team that's focusing on medical cannabis will focus with our beverage team and look for partnerships or franchises along with our BrewDog products and some of our American beers. Yes, again as we put these two businesses together, they're complementary, and they both will absorb overheads that we have to put in place for one business.

That is the big thing for us today, scale. As we get to that billion two, listen, being a cannabis company today, we're stuck with much higher insurance costs, we're stuck with much higher IT costs, much higher grow costs in regards to R&D and quality, with Health Canada makes us do.

We can take a lot of those costs and sharing them among other business. It's a big, big, big benefit for Tilray.

Thank you. If I may, I'm going to add just one more.

In terms of the changes in Germany on reimbursement on extracts and flower, I believe that started July 1st. Can you frame that?

Did you see any impact from that? Or is your business mostly cash payer versus reimbursed?

Thank you.

Number one, majority of our business there is flower, and most of our patients are paying customers. In regards to different oil, it is for new patients coming in, not the existing patients.

Will there be some impact? Yes.

Is it extremely impactful to our business? No.

Thank you.

Thank you, Pablo.

Hi, thanks for taking our questions this morning. Regarding the recent cultivation expansions, based on my analysis, for the size of the current and pending EU-GMP facilities that Tilray has, I'm estimating that Tilray has one of the largest, if not the largest, EU-GMP footprint of the peer group.

I would just love to get a little bit more color on when and how you think we might see the real power of this footprint show through in Tilray's international sales.

Again, number one, you're seeing the power, and with Masson in Gatineau, Quebec, that just coming on now. Ultimately within the year, that will become EU-GMP certified.

In regards to what we're growing today in Europe, as I said before, the power is we have the product. The thing is this here: in talking to our patients, in talking to our customers and distributors out there, they want consistency.

It's not like they want to be buying from five or six different growers out there and not what they're getting. Again, in Portugal, from a standpoint in regards to what do we grow?

What's the size? We have over 40 metric tons, and then we have 4 or 5 metric tons that will come out of Germany.

We have plenty, plenty of capacity. With that, as you can see, we're one of the lowest-cost producers out of our Portugal facility today.

Again, you're seeing it. That's why you see our margins improving, and that's what you'll continuously see.

The big thing is this here: this is one of our smaller quarters in regards to selling cannabis. You can't look at a quarter-over-quarter.

Again, from a sales standpoint, as sales continuously increase. The big thing is our margins even grew even with price compression out there, which is pretty amazing.

That's great color. Thank you.

Then just tapping on to one of the previous questions on the potential for THC beverages in the US, we'd just love to get any color on what you're hearing, if there might potentially be a carve-out for this segment in the hemp bill that we're expecting this fall.

Listen, again, if I go to the Polymarkets and maybe I should and see what they're saying is this here, and I never want to guess at politics. Everything we're hearing is there's two different things.

There will be an extension, and it will go to the next Congress, and the new Congress will approve. I don't believe that this whole hemp business will go away.

There's too many jobs, and there's too much from the farmers' standpoint. It's too big for farmers just to be shut down on this business.

I think there will be another extension beyond December 11th, and then I think the new Congress will approve where there's a certain amount of milligrams that could be sold.

I understand. Thank you.

I think the big thing is Tilray is hanging around the hoop there. We have products, we're selling, we're not out there aggressively doing anything.

We're staying in the marketplace waiting to see what happens, and we can turn on pretty quickly depending on where it goes.

Perfect. Thank you so much.

I'll jump back in the queue.

Morning, everyone. This is Ryan on for Derek, and thanks for taking our questions.

Just to start off, and apologies if I missed this off the top, but do you have an idea of what beverage segment growth would have been excluding BrewDog?

Our beverage business ultimately would have been down excluding BrewDog, and that is because we've gone through SKU rationalization and brand rationalization.

Great. Thanks.

Then just as a follow-up, I'm just curious on the gross margin compression we saw in wellness this quarter. Is that a function of any promo spend, etc., and how should we think about margins in that segment moving forward?

That compression was really caused by a one-time organic seed shortage that was feeding our e-commerce business, and so we had a slight change in mix.

Great. Thank you.

Thank you very much, everybody, for getting on our call today. As you can see, there is a lot going on at Tilray, and there's a lot to understand within Tilray.

I'm not sure on a regular basis as we try to explain our business in regards to our different businesses, as we explain our businesses in regards to our different categories. The other thing is geographically.

Today, we sell in over 25 countries around the world. We deal with multiple currencies.

We have wars that are going on that affect us from a utilities, from fuel standpoint. We have different teams as we pull together.

I think the big thing is this here: as you really look at what's under the hood of Tilray, there's some incredible brands. We produce 95% of our own products around the world.

We grow, which growing cannabis in over 6 million square feet and today, over the metric tons that we really grow. We step back, and what we're doing in regards to cannabis from a medical standpoint and research out there in regards to sleep, anxiety, pain, PTSD, epilepsy are some of the exciting things that we're doing and building awareness out there.

As things expand, whether it's peptides, psychedelics, Tilray will continuously look at that. Canada is the only country in the world where cannabis is legal from a recreational standpoint, and I think that's ultimately the way it's going to stay.

We're positioned so well in the cannabis industry. We do not have to go to buy cultivation.

We don't have to go buy anything for other countries. We really can expand our business today in so many different ways in flower and oils.

We have tremendous amount of research development and scientists that work with us in regards to the cannabis industry. In regards to the US, listen, it's been wait-and-see.

We're used to delays, not used to things happening. The thing is this here: there's three or four good things.

Number one, if the US happens, it will be great for Tilray, and we'd be ready to pounce and jump in for whatever way it happens. Number two, if something happens with the hemp drinks, we're ready to go, and there's a big opportunity for us there.

Number three is this here: if nothing happens and it continues to drag along, we have businesses all over the world that will fuel our growth. We'll continuously look at acquisitions, and the proof is what we've done with BrewDog very quickly.

Yes, it's not proved as quick as with our beverage business, but it's something that's a great infrastructure. You still see acquisitions and multiples and valuations, and I think we've created something very unique up there.

There's a lot within Tilray that we're doing. We have over 40 pubs and restaurants around the world that sell our products, both BrewDog and our American beers, that we learn a lot from our consumers.

We have in place tremendous amount of research that we continuously get from these pubs that we know what consumers want. In regards to costs today, as a company today that's sized, there's tremendous costs in regards to IT, AI, like I said, be insurance, and what we have in place today to cover it as a public company.

Being a small company out there today and not having scale is difficult. That's a big thing today.

Tilray could easily absorb another $0.5 billion to $1 billion of sales with its infrastructure in place, and I think that's a big advantage that a lot of companies don't have today is the scale to absorb all the additional SG&A costs, whether it's being a public or just being a company out there today that can support the growth, that can support the R&D, that can support the infrastructure, that can support the process, the analysis, the finance that is needed within a public company or what's needed in any company today. I'm proud of what we're doing.

Yes, sometimes there is frustration how the stock reacts just on a cannabis multiple, just on a cannabis news. At the end of the day, when I step back and I look at our brands, I look at what we do, I look at how strong our balance sheet is, and we have opportunities, lots of levers, we have an incredible team.

I'm proud of where Tilray is today and where Tilray can go. Thank you very much for your support, and I look forward to speaking to you in the near future.

Thank you.