Brenna Cunnington

Brenna Cunnington asked about the potential uses for funds raised through the At-the-Market (ATM) equity program, specifically inquiring about interest in M&A, cultivation capacity expansion, or other strategic goals. She also sought an estimate for the SG&A savings expected from exiting parts of the Canadian consumer cannabis market. Finally, Ms. Cunnington asked if Aurora Cannabis is exploring any other new international markets for expansion.

Answer

Miguel Martin, Executive Chairman and CEO, stated that the ATM program provides opportunistic flexibility for strategic and accretive purposes, including M&A and cultivation capacity, particularly for GMP flower for international markets. He noted that SG&A savings from the Canadian consumer exit are still being evaluated but are expected to be beneficial, alongside the reallocation of inputs to higher-margin international markets. Mr. Martin confirmed Aurora is actively looking at new international markets, including Switzerland, Austria, France, Ukraine, and Turkey, leveraging its regulatory and EU GMP product expertise.

Brenna Cunnington asked about the potential uses for funds raised through the new At-the-Market (ATM) equity program, specifically regarding M&A, cultivation capacity expansion, or other strategic goals. She also inquired about the expected SG&A savings from exiting Canadian consumer cannabis markets and whether Aurora Cannabis is exploring other international markets.

Answer

Miguel Martin, Executive Chairman and CEO, stated the ATM provides opportunistic flexibility for accretive purposes, including M&A and cultivation capacity, consistent with their global medical cannabis focus. He noted that SG&A savings from the Canadian consumer exit are still being evaluated but anticipate benefits from reallocating inputs to higher-margin international markets. Mr. Martin confirmed Aurora is actively looking at new international markets like Switzerland, Austria, France, Ukraine, and Turkey, leveraging their regulatory and GMP product strengths.

Brenna Cunnington asked for clarification on the Canadian cannabis gross margin decline, questioning if it was resolved or would continue to be a drag. She also asked for the company's perspective on the potential process and outcome of U.S. cannabis rescheduling following the recent election results.

Answer

COO Ann Gillin Lefever clarified that the gross margin decline was due to the sales mix, specifically a higher volume of lower-margin B2B sales, and not from stock-outs. She noted that the gross margin on branded products actually improved sequentially and is back within their 30-40% target range. CEO Mike DeGiglio expressed increased bullishness on U.S. rescheduling, citing the incoming administration's past action on legalizing hemp and the potential for new leadership in the Senate and FDA to be more favorable to the industry.

Brenna Cunnington, on for Frederico Gomes, asked for commentary on consumer trends, product trade-downs, and an update on international (Germany) and provincial (BC) expansion opportunities.

Answer

President and CEO Harkirat Grover reported that dry flower, particularly infused pre-rolls and value-sized bags, remains dominant, with disposable vapes also growing strongly. He stated High Tide is closely monitoring Germany with plans to apply for licenses by mid-2025. Locally, he believes British Columbia is likely to raise its 8-store cap to as high as 16 stores within the next 6-12 months to combat the illicit market.