Frederico Yokota Gomes • ATB Capital Markets

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Executive Zachary George explained that a U.S. entry would leverage existing SunStream credit investments, converting them to equity without a large cash outlay, and that lessons from Canada's challenging market provide a key competitive advantage. George also confirmed an active M&A pipeline for Canadian retail. Executive Alberto Paredero-Quiros added that the loyalty program is designed to enhance consumer communication and value, with potential expansion to the liquor segment.

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Executive Alberto Paredero-Quiros addressed the liquor segment, attributing weakness to a market slowdown and forecasting flat revenue for 2025 with long-term growth of 1-1.5%. Executive Zachary George discussed U.S. investments, noting that while SNDL cannot currently engage in plant-touching activities, U.S. opportunities are a high priority for capital deployment. Regarding the CSE listing, George stated it creates 'optionality' for international growth but did not confirm specific plans.

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Executive Zachary George explained that fully owning Nova ensures SNDL shareholders capture the entire cash flow and earnings potential of the retail business. Regarding margins, Executive Alberto Paredero-Quiros cited a holistic productivity program, including the Olds facility closure and automation, as the primary driver. Zachary George added that eliminating high-cost biomass was critical and expressed confidence in reaching gross margins in the 30% range. On capital allocation, George reiterated priorities in Canadian retail growth and potential U.S. investments, stating that share buybacks are for taking advantage of discounted valuations for long-term holders, not for propping up the stock.

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Chief Strategy Officer Denise Faltischek acknowledged a temporary prescription drop in Poland but noted a Q4 recovery. She stated that Germany's medical cannabis framework is expected to remain stable and that while competition has led to price segmentation, high-quality products still command premium prices. Chairman and CEO Irwin Simon emphasized that Tilray's vertical integration with CC Pharma provides a significant competitive advantage in Germany.

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Chairman and CEO Irwin Simon attributed the limited market size primarily to distribution constraints, as these beverages can only be sold in licensed cannabis stores. He stated that despite this, Tilray holds a 45% market share in the category, and believes the market would be substantially larger if sales were permitted in mainstream channels.

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President and CEO Harkirat Grover stated that while he could not provide a definitive timeline, the company is actively pursuing the right partnership in Germany and expects a resolution within a 'couple more months,' not quarters. He confirmed discussions are ongoing with other groups beyond Purecan. On the topic of tariffs, Grover asserted the impact is 'very, very minimal,' as 99% of the business is domestically sourced and sold within Canada and the U.S., insulating it from U.S.-China tariff issues.

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Executive Harkirat Grover explained that High Tide is maintaining its current pricing to pressure competitors, citing the recent creditor protection filing of a major rival. He indicated that as more competitors exit the market, the opportunity to increase gross margins will emerge. On hemp-derived THC, he stated that while the company has some offerings, revenue is immaterial, and it is not a current focus due to the complex legal landscape, with resources better allocated to the core Canadian and new German operations.

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