FY2022 Net Revenue Grew 22% to $628 Million Compared to the Prior Year; On a Constant Currency Basis, Net Revenue Increased by 29%
Fourth Quarter Net Revenue Grew 8% to $153 Million Compared to the Prior Year Period; On a Constant Currency Basis, Net Revenue Increased by 14% to $163 Million
Company Expects to Generate $70-$80 Million of Adjusted EBITDA and be Free-Cash Flow Positive in Its Operating Business Units in FY2023
Foundation in Place for Profitable and Sustainable Growth
Fourth Quarter International Cannabis Increased 205% from the Prior Year Q4; Tilray Medical Leads European Medical Cannabis Market with 20% Market Share in Germany
Delivered $85 Million in Cost Savings to Date, Exceeding Original Target on Accelerated Timeline; Company Now Expects to Deliver $100 Million by the End of FY2023
Significantly Strengthened Balance Sheet, Reduced Debt, and Ended FY2022 with $416 Million in Cash
Tilray Brands Sets Stage for Next Evolution of Cannabis Following HEXO Transaction, which Positions the Company for Additional Growth Opportunities in Canada, Europe, and the U.S
NEW YORK and LEAMINGTON, Ontario, July 28, 2022 (GLOBE NEWSWIRE) -- Tilray Brands, Inc. (“Tilray” or the “Company”) (Nasdaq: TLRY; TSX: TLRY), a leading global cannabis-lifestyle and consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, today reported financial results for the fourth quarter and full fiscal year ended May 31, 2022. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated, and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”).
Irwin D. Simon, Tilray Brands’ Chairman and Chief Executive Officer, stated, “Over the past year, we have accelerated the optimization of our operations and sharpened execution against our most profitable core business opportunities in medical, adult-use, wellness, and beverage-alcohol across Canada, Europe, and the U.S. At the same time, we accelerated our growth potential through tactical execution and strategic initiatives that enable accelerated revenue growth through improved cultivation, brand building, and distribution. These actions should also contribute to bottom-line performance improvement through production efficiencies and cost reductions. The outcome of this work is that we have driven top line growth across our markets, significantly improved our operating performance, and strengthened our balance sheet.”
He continued, “We are confident that our proactive steps to plan for the evolution of the cannabis business in each of our markets has positioned Tilray Brands to be at the forefront of the industry on a global basis while delivering profitability and driving shareholder value.”
Financial Highlights - 2022 Fiscal Fourth Quarter1
Net revenue grew 8% to $153.3 million during the fourth quarter from $142.2 million in the prior year quarter. On a constant currency basis, net revenue increased 14.5%.
Net loss of $457.8 million during the fourth quarter compared to net income of $33.6 million in the prior year quarter. Net loss in the fiscal 2022 fourth quarter includes a non-cash impairment of $395.0 million primarily impacting inventory, goodwill and other intangible assets. The impact was related to changes in market opportunities causing a shift in our strategic priorities, and market conditions inclusive of higher rates of borrowing and lower foreign exchange rates.
Adjusted EBITDA of $11.5 million, marking the Company’s 13th consecutive quarter of positive Adjusted EBITDA.
Financial Highlights- 2022 Fiscal Year
Net revenue increased 22% to $628.4 million during fiscal 2022 from $513.1 million in the prior fiscal year. The increase was driven by 17.9% growth in cannabis net revenue to $237.5 million, a 150.0% increase in beverage alcohol net revenue of $71.5 million, and a 928.8% increase in wellness net revenue to $59.6 million. On a constant currency basis, net revenue increased by 29%.
Net loss of $434 million in fiscal 2022 includes the non-cash impairment of $395.0 million in the fourth quarter (discussed above).
Adjusted EBITDA increased 17.8% to $48.0 million in fiscal year 2022 from $40.8 million in the prior fiscal year.
Ended the year with a strong balance sheet and liquidity, including cash and cash equivalents of $415.9 million.
Cost-Saving Synergies and Strengthened Balance Sheet
Since the closing of the Tilray-Aphria transaction, the Company has delivered $85 million in cost synergies, exceeding its original target of delivering $80 million of cost savings by the end of fiscal year 2023. These synergies are due to consolidation in key areas of cultivation and production, cannabis and product purchasing, sales and marketing, and corporate expenses. The Company has subsequently identified an additional $20 million of savings, and now expects to deliver a total of $100 million in cost synergies from the transaction by the end of fiscal year 2023.
Further, with the benefit of an additional $80 million of shared cost savings, synergies and financial benefits over the next two years associated with the HEXO transaction, management expects that Tilray Brands will be free cash flow positive in its business units in fiscal year 2023.
Upside Potential of HEXO Transaction
Tilray Brands’ acquisition of HEXO Corp.’s senior secured convertible note, on highly favorable terms, closed on July 12, 2022, bringing immediate accretion to the Company and facilitating collaboration and the sharing of best practices that will help Tilray Brands to drive ongoing international expansion and take advantage of the opportunities expected to come with federal legalization in the U.S. In addition, due to significant operating efficiencies, the companies expect to deliver a total of $80 million of shared cost savings over the next two years.
Highlights of Strategic Growth Actions in Fiscal 2022
United States:
August ’21 - Tilray Acquires Majority Position in Amended MedMen Convertible Notes
November ’21 - Tilray’s SweetWater Brand Enters Spirits Category Through New Ready-To-Drink Cocktail Now Available in the United States
December ’21 - Tilray Strengthens Strategic Position in the U.S. with Acquisition of Breckenridge Distillery
December ’21 - SweetWater Brewing announced the acquisition of Alpine Beer Company and Green Flash Brewing Company
January ’22 – Manitoba Harvest Launches 2022 Wellness Boost Campaign
February ’22 - SweetWater Brewing Company Expands Distribution Across California
February ’22 - SweetWater Brewing Company Continues Rapid Expansion with Distribution Rollout Across Washington & Oregon
April ’22 - SweetWater Brewing Company celebrated 25th anniversary and hosted 420 music Festival in Atlanta, Georgia with 75 thousand festival goers
April ’22 - Manitoba Harvest Enters Exclusive Partnership with Whole Foods Market
April ’22 - Breckenridge Distillery Takes Home Two Double Gold and One Gold Medal at the 2022 San Francisco World Spirits Competition
April ’22 – Breckenridge Distillery Launches New Collectors Art Series with Denver Artist Alexandrea Pangburn
Canada:
June ’21 - Tilray Launches New Medical Cannabis Brand, Symbios
June ’21 - Tilray Launches Canadian Craft Cannabis Brand, Broken Coast, in the U.S. with Broken Coast Lager
August ’21 – Tilray Medical Launches New Medical Cannabis Edibles in Canada
October ’21 - Tilray Strengthens Leadership Position in Canada with new addition of Blair MacNeil, President of Canada
October ’21 - Tilray Expands Distribution across Canada with Great North Distributors
December ’21 - Launch of Tilray’s Fast-Acting Oral Strips Highlights Commitment to Medical Cannabis Innovation and Patient Care
March ’22 - Good Supply Brand Expands Its Award-Winning Cannabis Portfolio with Hash Bats™; A New ‘Hard-Hitting’ Infused Pre-Roll
March ’22 - Solei Brand Launches New Wellness Product for Nighttime Use
April ’22 - Solei Brand Launches the First Cannabis Edible Available in Quebec
April ’22 - Tilray Brands hosts sold-out ‘Holy Smokes’ 420 Budtender event in Toronto
May ’22 - Good Supply Brand Expands High-Potency Cannabis Portfolio with Launch of Liquid Wax Vapes and New Exclusive Strains
Europe and International:
July ’21 – Tilray’s Aphria RX GmbH Completes First Harvest and Delivery of Medical Cannabis Grown in Germany
October ’21 – Tilray Launches Medical Cannabis in Luxembourg
November ’21 - Tilray Expands Medical Cannabis Footprint in Malta
January ’22 - Tilray Expands Medical Cannabis Product Offering in Australia
February ‘22 - Tilray Brands Consolidates its Global Medical Offering into Tilray Medical, a Comprehensive Portfolio of Brands and Products
February ’22 - Tilray Launches Medical Cannabis Products in Malta
March ’22 - Tilray Medical Expands Offering in Malta and Launches First Medical Cannabis Oil Products in Market
May ’22 - Announced the launch of CBD lifestyle brand, POLLEN, on Amazon UK
Webcast
Tilray Brands will host a webcast to discuss these results today at 8:30 a.m. ET. Investors may join the live webcast available on the Investors section of the Company’s website at www.tilray.com. The webcast will also be archived after the call concludes.
About Tilray Brands
Tilray Brands, Inc. (Nasdaq: TLRY; TSX: TLRY), is a leading global cannabis-lifestyle and consumer packaged goods company with operations in Canada, the United States, Europe, Australia, and Latin America that is changing people's lives for the better – one person at a time. Tilray Brands delivers on this mission by inspiring and empowering the worldwide community to live their very best life, enhanced by moments of connection and wellbeing. Patients and consumers trust Tilray Brands to be the most responsible, trusted and market leading cannabis consumer products company in the world with a portfolio of innovative, high-quality and beloved brands that address the needs of the consumers, customers and patients we serve. A pioneer in cannabis research, cultivation, and distribution, Tilray Brands’ unprecedented production platform supports over 20 brands in over 20 countries, including comprehensive cannabis offerings, hemp-based foods, and craft beverages.
For more information on Tilray Brands, visit www.Tilray.com and follow @Tilray
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this press release constitute forward-looking information or forward-looking statements (together, “forward-looking statements”) under Canadian securities laws and within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are intended to be subject to the “safe harbor” created by those sections and other applicable laws. Forward-looking statements can be identified by words such as “forecast,” “future,” “should,” “could,” “enable,” “potential,” “contemplate,” “believe,” “anticipate,” “estimate,” “plan,” “expect,” “intend,” “may,” “project,” “will,” “would” and the negative of these terms or similar expressions, although not all forward-looking statements contain these identifying words. Certain material factors, estimates, goals, projections or assumptions were used in drawing the conclusions contained in the forward-looking statements throughout this communication.
Forward-looking statements include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: the Company’s ability to become the world's leading cannabis-focused consumer branded company and achieve $4B in revenue by the end of fiscal 2024; the Company’s ability to generate $70-$80 million of Adjusted EBITDA and expectation to be free-cash flow positive in its operating business units in FY 2023; the Company’s ability to achieve operational scale, market share, distribution, profitability and revenue growth in particular markets, including in Canada, the U.S. and the EU; and the Company’s ability to successfully achieve the expected production efficiencies, synergies and cost savings relating to the HEXO transactions and agreed commercial arrangements; and the Company’s anticipated investments, including in organic and strategic growth, partnership efforts, product offerings and other initiatives.
Many factors could cause actual results, performance or achievement to be materially different from any forward-looking statements, and other risks and uncertainties not presently known to the Company or that the Company deems immaterial could also cause actual results or events to differ materially from those expressed in the forward-looking statements contained herein. For a more detailed discussion of these risks and other factors, see the most recently filed annual information form of the Company and the Annual Report on Form 10-K (and other periodic reports filed with the SEC) of the Company made with the SEC and available on EDGAR. The forward-looking statements included in this communication are made as of the date of this communication and the Company does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless required by applicable securities laws.
Use of Non-U.S. GAAP Financial Measures
This press release and the accompanying tables include non-GAAP financial measures, including adjusted gross margin, Adjusted EBITDA and free cash flow. Management believes that the non-GAAP financial measures presented provide useful additional information to investors about current trends in the Company's operations and are useful for period-over-period comparisons of operations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read only in connection with the Company's Consolidated Statements of Operations and Cash Flows presented in accordance with GAAP.
Certain forward-looking non-GAAP financial measures included in this press release are not reconciled to the comparable forward-looking GAAP financial measures. The Company is not able to reconcile these forward-looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because the Company is unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures but would not impact the non-GAAP measures. Such items may include litigation and related expenses, transaction costs, impairments, foreign exchange movements and other items. The unavailable information could have a significant impact on the Company's GAAP financial results.
The Company believes presenting net sales at constant currency provides useful information to investors because it provides transparency to underlying performance in the Company's consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on period-to-period comparability given the volatility in foreign currency exchange markets. To present this information for historical periods, current period net sales for entities reporting in currencies other than the U.S. dollar are translated into U.S. dollars at the average monthly exchange rates in effect during the corresponding period of the prior fiscal year, rather than at the actual average monthly exchange rate in effect during the current period of the current fiscal year. As a result, the foreign currency impact is equal to the current year results in local currencies multiplied by the change in average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.
Adjusted EBITDA is calculated as net income (loss) before inventory valuation adjustments; interest expenses, net; other expenses (income), net; deferred income tax (recoveries) expenses, current income tax expenses (benefit); foreign exchange gain (loss), net; depreciation and amortization expenses; stock-based compensation expenses; loss from equity method investments; loss on disposal of property and equipment; amortization of inventory step-up; severance costs; impairment of assets; and change in fair value of warrant liability. A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Gross margin, excluding inventory valuation adjustments, is calculated as revenue less cost of sales adjusted to add back inventory valuation adjustments and amortization of inventory step-up, divided by revenue. A reconciliation of Gross margin, excluding inventory valuation adjustments, to gross margin, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release. Free cash flow is comprised of two GAAP measures deducted from each other which are net cash flow provided by (used in) operating activities less investments in capital and intangible assets. A reconciliation of net cash flow provided by (used in) operating activities to free cash flow, the most directly comparable GAAP measure, has been provided in the financial statement tables included below in this press release.
For further information:
Media: Berrin Noorata, news@tilray.com
Investors: Raphael Gross, +1-203-682-8253, Raphael.Gross@icrinc.com
1 This press release includes certain non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP financial measures. Reconciliations of non-GAAP financial measures to GAAP financial measures and other non-GAAP financial calculations are provided herein in the tables.
Consolidated Statements of Financial Position
(In thousands of United States dollars) May 31, 2022 May 31, 2021 Assets Current assets Cash and cash equivalents $415,909 $488,466 Accounts receivable, net 95,279 87,309 Inventory 245,529 256,429 Prepaids and other current assets 46,786 48,920 Current portion of convertible notes receivable — 2,485 Total current assets 803,503 883,609 Capital assets 587,499 650,698 Right-of-use assets 12,996 18,267 Intangible assets 1,277,875 1,605,918 Goodwill 2,641,305 2,832,794 Interest in equity investees 4,952 8,106 Long-term investments 10,050 17,685 Convertible notes receivable 111,200 — Other assets 314 8,285 Total assets $5,449,694 $6,025,362 Liabilities Current liabilities Bank indebtedness $18,123 $8,717 Accounts payable and accrued liabilities 157,431 212,813 Contingent consideration 16,007 60,657 Warrant liability 14,255 78,168 Current portion of lease liabilities 6,703 4,264 Current portion of long-term debt 67,823 36,622 Total current liabilities 280,342 401,241 Lease liabilities 11,329 53,946 Long-term debt 117,879 167,486 Convertible debentures 401,949 667,624 Deferred tax liabilities, net 196,638 265,845 Other liabilities 191 3,907 Total liabilities 1,008,328 1,560,049 Commitments and contingencies (refer to Note 17) Stockholders' equity Common stock ($0.0001 par value; 990,000,000 shares authorized; 532,674,887 and 446,440,641 shares issued and outstanding, respectively) 53 46 Additional paid-in capital 5,382,367 4,792,406 Accumulated other comprehensive (deficit) income (loss) (20,764) 152,668 Accumulated deficit (962,851) (486,050) Total Tilray Brands, Inc. stockholders' equity 4,398,805 4,459,070 Non-controlling interests 42,561 6,243 Total stockholders' equity 4,441,366 4,465,313 Total liabilities and stockholders' equity $5,449,694 $6,025,362
Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)
(In thousands of United States dollars, excpet for per share data) For the three months ended May 31,For the year ended May 31, 2022 2021 2022 2021 Net revenue $153,325 $142,236 $628,372 $513,085 Cost of goods sold 160,058 119,738 511,555 389,903 Gross profit (6,733) 22,498 116,817 123,182 Operating expenses: General and administrative 41,400 32,839 162,801 111,575 Selling 9,643 8,525 34,926 26,576 Amortization 30,846 16,100 115,191 35,221 Marketing and promotion 10,771 5,103 30,934 17,539 Research and development 54 358 1,518 830 Change in fair value of contingent consideration (15,585) — (44,650) — Impairment 378,241 — 378,241 — Litigation costs 4,099 2,099 16,518 3,251 Transaction costs 1,221 31,161 31,739 60,361 Total operating expenses 460,690 96,185 727,218 255,353 Operating loss (467,423) (73,687) (610,401) (132,171) Interest expense, net (5,522) (9,466) (27,944) (27,977) Non-operating income (expense), net 11,342 121,510 197,671 (184,838) Loss before income taxes (461,603) 38,357 (440,674) (344,986) Income taxes (recovery) (3,803) 4,735 (6,542) (8,972) Net loss $(457,800) $33,622 $(434,132) $(336,014) Net loss per share - basic and diluted $(0.90) $0.38 $(0.90) $(1.25)
Net Revenue by Operating Segment
(In thousands of United States dollars) Year Ended May 31, 2022 % of Total Revenue Year Ended May 31, 2022 % of Total Revenue Cannabis business $237,522 38% $201,392 39% Distribution business 259,747 42% 277,300 54% Beverage alcohol business 71,492 11% 28,599 6% Wellness business 59,611 9% 5,794 1% Net revenue $628,372 100% $513,085 100% (In thousands of United States dollars) Three months ended May 31, 2022 % of Total Revenue Three months ended May 31, 2021 % of Total Revenue Cannabis business $53,253 35% $53,703 38% Distribution business 61,160 39% 66,792 47% Beverage alcohol business 22,727 15% 15,947 11% Wellness business 16,185 11% 5,794 4% Net revenue $153,325 100% $142,236 100%
Net Cannabis Revenue by Market Channel
(In thousands of United States dollars) For the year ended May 31, For the year ended May 31, 2022 2022 2021 2021 Revenue from Canadian medical cannabis products $30,599 13% $25,539 13% Revenue from Canadian adult-use cannabis products 209,501 88% 222,930 110% Revenue from wholesale cannabis products 6,904 3% 6,615 3% Revenue from international cannabis products 53,887 23% 9,250 5% Less excise taxes (63,369) -27% (62,942) -31% Total $237,522 100% $201,392 100% For the three months ended May 31, For the three months ended May 31, (In thousands of United States dollars) 2022 2022 2021 2021 Revenue from Canadian medical cannabis products $7,246 14% $6,968 13% Revenue from Canadian adult-use cannabis products 46,869 88% 59,710 111% Revenue from wholesale cannabis products 141 0% 56 0% Revenue from international cannabis products 14,095 26% 4,623 9% Less excise taxes (15,098) -28% (17,654) -33% Total $53,253 100% $53,703 100%
Gross Margin and Adjusted Gross Margin
(In thousands of United States dollars)
For the year ended May 31, 2022 Cannabis Beverage Distribution Wellness
Total Revenue $300,891 $74,959 $259,747 $59,611 $695,208 Excise taxes (63,369) (3,467) — — (66,836) Net revenue 237,522 71,492 259,747 59,611 628,372 Cost of goods sold 194,834 32,033 243,231 41,457 511,555 Gross profit 42,688 39,459 16,516 18,154 116,817 Gross margin 18.0% 55.2% 6.4% 30.5% 18.6% Adjustments: Inventory valuation adjustments 59,500 — 7,500 — 67,000 Purchase price accounting step-up — 2,214 — — 2,214 Adjusted gross profit 102,188 41,673 24,016 18,154 186,031 Adjusted gross margin 43.0% 58.3% 9.2% 30.5% 29.6% (In thousands of United States dollars) For the year ended May 31, 2021 Cannabis Beverage Distribution Wellness Total Revenue $264,334 $29,661 $277,300 $5,794 $577,089 Excise taxes (62,942) (1,062) — — (64,004) Net revenue 201,392 28,599 277,300 5,794 513,085 Cost of goods sold 130,511 12,687 242,472 4,233 389,903 Gross profit 70,881 15,912 34,828 1,561 123,182 Gross margin 35.2% 55.6% 12.6% 26.9% 24.0% Adjustments: Inventory valuation adjustments 19,919 — — — 19,919 Purchase price accounting step-up — 835 — — 835 Adjusted gross profit 90,800 16,747 34,828 1,561 143,936 Adjusted gross margin 45.1% 58.6% 12.6% 26.9% 28.1% (In thousands of United States dollars) For the three months ended May 31, 2022 Cannabis Beverage Distribution Wellness Total Revenue $68,351 $23,459 $61,160 $16,185 $169,155 Excise taxes (15,098) (732) — — (15,830) Net revenue 53,253 22,727 61,160 16,185 153,325 Cost of goods sold 72,342 11,359 65,138 11,219 160,058 Gross profit (19,089) 11,368 (3,978) 4,966 (6,733) Gross margin -35.8% 50.0% -6.5% 30.7% -4.4% Adjustments: Inventory valuation adjustments 47,500 — 7,500 — 55,000 Purchase price accounting step-up — 2,214 — — 2,214 Adjusted gross profit 28,411 13,582 3,522 4,966 50,481 Adjusted gross margin 53.4% 59.8% 5.8% 30.7% 32.9% (In thousands of United States dollars) For the three months ended May 31, 2021 Cannabis Beverage Distribution Wellness Total Revenue $71,357 $16,549 $66,792 $5,794 $160,492 Excise taxes (17,654) (602) — — (18,256) Net revenue 53,703 15,947 66,792 5,794 142,236 Cost of goods sold 49,731 5,350 60,424 4,233 119,738 Gross profit 3,972 10,597 6,368 1,561 22,498 Gross margin 7.4% 66.5% 9.5% 26.9% 15.8% Adjustments: Inventory valuation adjustments 19,919 — — — 19,919 Purchase price accounting step-up — 835 — — 835 Adjusted gross profit 23,891 11,432 6,368 1,561 43,252 Adjusted gross margin 44.5% 71.7% 9.5% 26.9% 30.4%
Adjusted Earnings before Interest, Taxes, and Amortization
(In thousands of United States dollars) Three months ended May 31, Year ended May 31, Adjusted EBITDA reconciliation: 2022 2021 2022 2021 Net loss $(457,800) $33,622 $(434,132) $(336,014) Income taxes (3,803) 4,735 (6,542) (8,972) Interest expense, net 5,522 9,466 27,944 27,977 Non-operating expense (income), net (11,350) (121,510) (197,671) 184,838 Amortization 40,768 24,540 154,592 67,832 Stock-based compensation 8,969 5,937 35,994 17,351 Change in fair value of contingent consideration (15,577) — (44,650) — Impairment 378,241 — 378,241 — Inventory valuation adjustments 55,000 19,919 67,000 19,919 Purchase price accounting step up 2,214 835 2,214 835 Facility start-up and closure costs 3,300 2,056 13,700 2,056 Lease expense 700 335 3,100 1,337 Litigation costs 4,099 2,099 16,518 3,251 Transaction costs 1,221 31,161 31,739 60,361 Adjusted EBITDA $11,504 $13,195 $48,047 $40,771
Key Operating Metrics
For the three months ended May 31, For the years ended May 31,(In thousands of United States dollars) 2022 2021 2022 2021 Net cannabis revenue $53,253 $53,703 $237,522 $201,392 Net beverage alcohol revenue 22,727 15,947 71,492 28,599 Distribution revenue 61,160 66,792 259,747 277,300 Wellness revenue 16,185 5,794 59,611 5,794 Cannabis cost of sales 72,342 49,731 194,834 130,511 Beverage alcohol cost of sales 11,359 5,350 32,033 12,687 Distribution cost of sales 65,138 60,424 243,231 242,472 Wellness cost of sales 11,219 4,233 41,457 4,233 Gross profit (excluding inventory valuation adjustments and step-up) 50,481 43,252 186,031 143,936 Cannabis gross margin (excluding inventory valuation adjustments and step-up) 53.4% 44.5% 43.0% 45.1%Beverage gross margin (excluding inventory valuation adjustments and step-up) 59.8% 71.7% 58.3% 58.6%Distribution gross margin (excluding inventory valuation adjustments and step-up) 5.8% 9.5% 9.2% 12.6%Wellness gross margin (excluding inventory valuation adjustments and step-up) 30.7% 26.9% 30.5% 26.9%Adjusted EBITDA 11,504 13,195 48,047 40,771 Cash and cash equivalents 415,909 488,466 415,909 488,466 Working capital 523,161 479,883 523,161 482,368