Organigram Global Inc. (OGI) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Organigram Global's 2026 Investor Session. Many of you watching today, I already speak to fairly regularly, but for those I haven't met yet, my name is Max Schwartz, and I'm the Director of Investor Relations at Organigram. So thanks again for joining us today. Before we get started, I'll quickly cover the standard cautionary statement, so just bear with me a moment. Today's event was prerecorded and is current as of September 14, 2026. Watchers and listeners should be aware that today's session will include estimates and other forward-looking information from which Organigram's actual results could differ. So please review the cautionary language in our public disclosures on various factors, assumptions and risks that could cause our actual results to differ. Further, reference will be made to certain non-IFRS measures during this session, including adjusted EBITDA and adjusted gross margin, and these measures do not have any standardized meaning under IFRS and are intended to provide additional information. As such, they should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Our approach to calculating these measures may differ from other issuers, so such measures may not be directly comparable. Please see our public disclosures for more information about these measures. You should also be aware that Organigram relies on reputable third-party providers when making certain statements relating to market share data. And unless otherwise indicated, all references to market data are sourced from high fire in combination with data from weed crawler, provincial boards, retailers and our internal sales speakers. Now with that out of the way, a lot has changed at our Organigram since our last Investor Day. We've got a new CEO and James Yamanaka. We've acquired Sanity Group, establishing a significant operating business in Europe. We've added new leadership and capabilities across the organization. And most importantly, the business itself looks quite different today than it did just 6 months ago. So today is really about highlighting how things have changed and laying out where we go from here. You'll hear from our CEO, James Yamanaka, our CFO, Greg Guyatt and Finn Hansel, Founder of Sanity Group and now Organigram's President, Rest of World and Chief Strategy Officer. We're also going to take you inside several of our facilities to hear directly from the people running different parts of the business. And the overarching theme of today's session comes down to four strategic priorities: a rock-solid Canadian business, international expansion, manufacturing excellence and innovation, and disciplined ROI-focused capital allocation. All of these, we believe, support our ability to generate consistent profitability and increase shareholder value. Now we're going to come back to those four priorities throughout the session, but rather than spend any more time setting it up, I'll hand it over to James Yamanaka, CEO of Organigram Global, and I'll be back shortly to moderate our fireside chat. James?

Thank you, Max, and thank you all for joining us as we begin what I believe is an important new chapter for the company. Many investors will know the organogram name from the last 5 or 6 years. Over that period, Organigram has been known for a lot of things. At different points in our history, we've been known for medical cannabis, indoor cultivation, plant science and innovation. More recently, we've become the Canadian recreational market share leader. And now with the Sanity acquisition, a leader in the two largest federally legal cannabis markets in the world. These are all things to be proud of, all parts of our evolution, but ultimately, none of them is the end goal. The goal is to build a global business that can translate our market positions and our capabilities into sustained profitable growth consistent cash generation and shareholder value. When I joined Organigram in January, what stood out to me was the quality of the underlying pieces, a strong domestic business, world-class cultivation and product science, nationally recognized brands, increasingly sophisticated manufacturing capabilities, strong R&D and innovation capabilities, a strong partnership with BAT and now through the Sanity Group acquisition, a significant international commercial platform. The ingredients are here. Our job now is to connect these ingredients into one coherent global strategy. that drive sustainable growth and value to our shareholders. So what is our strategy? I think the easiest way to explain how we get there is through three key questions. Number one, where and how do we compete? Number two, what capabilities allow us to win. And ultimately, how do we allocate capital behind these choices to create the greatest value. As Max mentioned, I'd like to think about these questions within the framework of four connected pillars. Let me start with Canada. Our Canadian operations are the foundation of the company. Canada is a place where we build strong brands, where we've become the market share leader and where we have established leading capabilities in cultivation, R&D, innovation and plant science. We've also gained expertise across all noncombustible categories from flower to vapor and edibles as our Canadian business has grown, expertise that we can leverage in Canada and in other markets around the world. Canada is also a jurisdiction where the cannabis industry has been firmly established from a regulatory and public acceptance perspective. with relatively lower risk of shocks than countries where legal cannabis is more nascent. Now let's be honest. While we are very proud of our market share leadership in Canada, we know that we need to improve our profitability in the market. We are determined to remain the market share leader in Canada. But with that said, we've also made some clear choices not to chase revenues in segments that do not have the potential to drive overall margin. In line with this, we are already being more selective about the number of brands and SKUs our dollar support. A more focused portfolio allows us to concentrate on building brand equity while significantly lowering complexity and cost across our operations. We've already reduced our SKU count over the past year by roughly 10% and completely exited certain wholesale white label segment. Both of these actions have supported improvement in margins, and we'll continue to rationalize and simplify our portfolio as we move forward. We'll increasingly focus our investments on our big powerful brands like SHRED, BOXHOT and Big Bag O' Buds, all of which have become some of the most recognizable brands in Canada, commanding strong positions in the categories and consumer segments they serve. In sum, we will not lose our focus on our core Canadian business but we will shift our focus to driving profitable quality growth. Moving on to Pillar 2. International expansion and vertical integration. Global cannabis markets continue to grow, and OGI is well positioned to participate in this growth. The acquisition of the Sanity Group has already transformed the business and significantly strengthened our ability to grow globally. Just 6 months ago, Organigram was a leading Canadian player with a small but growing export business of very limited commercial capabilities on the ground outside of Canada. With the Sanity Group, Organigram continues to have a strong business in Canada but now also has a leading medical platform in Germany, a significantly strengthened ability to develop new markets in Europe and regulatory engagement capabilities in Europe that did not previously exist. The scale of the change is significant. In fiscal 2025, only about 10% of Organigram's net revenue came from nondomestic sales. With the addition of Sanity Group in Q3, roughly 35% of OGI's revenue was international. And this proportion is growing. In Q4 2025, the pre-acquisition Sanity business generated EUR 19 million in revenue. Just two quarters later, the Sanity Group segment of OGI reported revenues of EUR 25.5 million, a 34% increase. If this trajectory continues, investors should expect our international sales to catch up to and possibly outpace our domestic sales in the not-too-distant future. This will, of course, be driven in the near term by the German market, but we expect to build on our positions in other markets, both organically and should the right opportunity arise via inorganic avenues. And all of this growth will be supported by our operational capabilities in Canada. To continue growing our international business, we brought in Sanity's Founder and CEO, Finn, as our new President, Rest of World and Chief Strategy Officer. He'll talk much more about the opportunities, shortly. Now moving on to Pillar 3, manufacturing excellence and innovation. In order to grow our domestic and international businesses, we will need to drive operational excellence across our supply chain. We'll need to improve our operational costs and gross margins. We'll need to ensure that we deliver high-quality products consistently to our consumers and patients. And of course, we'll need to drive innovations that can grow the business. So what are we doing to drive manufacturing excellence and innovation in OGI? First of all, we've appointed Adrian Frenzel, the former Managing Director and COO of Sanity Group as the new Chief Operating Officer at Organigram. Adrian brings a strong record of success in operations from previous roles as a McKinsey Operations Consultant and as Co-CEO of HelloFresh, U.S.A. I'm fully confident that Adrian will drive significant improvement in our operational efficiency and effectiveness. Adrian and the team will be laser-focused on improving operational efficiencies. They'll ensure that we realized gross margin improvement that stem from our SKU reductions and simplification. They'll simplify production flows, increase automation and introduce more standardization into our processes to drive efficiency. They'll continue to improve the global supply chain. And of course, they'll ensure strong, consistent and consumer-relevant quality in all of our product lines. Finally, we'll continue to focus on driving relevant innovation. And innovation for us is not just about the next novel recreational product. It's about building an ecosystem innovation including process improvements, plant science and genetics, product science and the technical building blocks for innovation across our categories. Pillars 1 and 2 were about where we compete, and how we win. Canada as a bedrock, Germany has a current growth opportunity and prudent expansion in current future markets. Pillar 3 is about how we drive down costs and deliver the best quality to consumers and patients worldwide. Combined, these pillars are designed to help us grow profitably and deliver free cash flow which we can then reinvest into other opportunities. Pillar 4 is a guardrail on our growth ambitions. We are determined to grow the business globally, but we'll do this prudently, with disciplined capital allocation to ensure we do not overextend the business, every acquisition, every brand, every production asset, every SKU and every commercial decision will continue to be evaluated through the lens of strategic important contribution to the bottom line, cash generation and liquidity and, of course, return on investment. Greg will walk us through this pillar in more detail shortly. So that's an overview of how we're thinking about our strategic priorities moving forward. Now I want you to hear from some of the people supporting these priorities. First, let's head over to Moncton. [Presentation]

I think what you just saw gives you a better sense of what we mean when we talk about operations in general. And there are some genuinely impressive capabilities in Moncton, which as you can see, we are constantly trying to improve. We have other facilities across our cultivation and manufacturing network with similar focus on continually improving. Let's take a look at what's happening at our Aylmer facility. [Presentation]

Thanks, team. We've now covered cultivation, plant science and manufacturing consistency. We've shown you Moncton and Aylmer, covering pillars supporting our business and operational initiatives. We have another cultivation and derivatives facility in Lac-Superieur, Quebec, which is strategic to our growing success in the Quebec market. In Lac, we mainly grow flower and manufacture hash, leading to our leadership in the concentrates category. In the interest of time, though, I want to finish these pillars with one last stop at our Winnipeg facility. Going from Moncton to Aylmer to Winnipeg gives you a view across our supply chain from cultivation through extraction and manufacturing, all the way to finished products like beverages and edibles. And beverages are relatively new capability for OGI that we're excited about. Let's check it out. [Presentation]

The Edibles and beverages category in Canada are underdeveloped relative to what we believe they can be. Today, edibles are only about 5% of total retail sales. In the U.S., that number is closer to 15%, making edible a much more significant category. On beverages, specifically, the category is just 1% to 2% of Canadian retail sales, but we believe there is a significant potential opportunity ahead. We've seen in the U.S. that when beverages move outside the dispensary model as hemp-derived beverages have, the category can scale quickly, with some analysts estimating close to USD 1 billion in sales in 2025. Both categories are still constrained by regulation in Canada, and we're actively advocating for changes through ongoing government relations efforts. And as consumer preferences continue to evolve, we believe cannabis beverages have the potential to participate in something that is already a deeply social behavior, having a drink with your family and friends. So let me pull this first part together to the lens of our four strategic pillars. Canada remains our foundation and the place where we will continue to grow our business. What you're seeing today is the cultivation, brands, plant science and infrastructure supporting that business, along with the work underway to make it more focused, efficient and profitable. Importantly, Canada provides a stable regulatory environment that reduces the risk in our operations. The German market and further international expansion will be our future growth driver. With Sanity, we are a transformed business with a meaningful commercial platform in Europe, and we are already connecting demand in Germany and beyond with capabilities we have already built in Canada. Manufacturing excellence and innovation are the connective tissue between these two businesses. The work happening across our facilities is about improving quality, lowering costs, developing a differentiated product and getting more out of the assets we already own. And underpinning all of this is disciplined capital allocation, making sure the capital we deploy behind Canada, international growth, innovation and our operating platform is prudent and directed toward opportunities that can generate attractive returns. We're going to hold the deeper international discussion for just a moment and hear from Greg on our recent performance, our expectations for the rest of the year and beyond and how we're applying that capital allocation discipline across the business. Then Finn will take you much deeper into the international opportunity. Greg?

Thanks, James. The long-term vision and the pillars James and the team just laid out are designed to produce one thing, sustained free cash flow. Cash, we can reinvest into the business at attractive returns or used to secure strategic advantages that themselves can eventually earn attractive returns. That's our fourth pillar, disciplined capital allocation. Historically, Organigram invested to build cultivation and manufacturing capability and gain market share through acquisitions, a broad brand portfolio to hold shelf space and a steady stream of new products to reach different consumers. We did all that well, expanding into new categories, improving efficiency and generally protecting share gains. That strategy suited a market that was still taking shape, where a large brand portfolio and a steady stream of new products was strategically important. But that kind of optionality did bring with it additional costs; costs we have already begun reining in as James outlined. However, it also helped us to build the capabilities and competitive position we're going to need going forward. Before I get into our expectations about how we're thinking about the business going forward, let me quickly review our financial trajectory and put our recent consolidated results, including Sanity into context. Organigram's long-term trajectory tells a very clear story, and it helps to zoom out past the quarter-to-quarter noise as our business is seasonally weighted towards Q3 and Q4. Zoomed out what you see is a clear step-up in revenue and profitability over time with rising adjusted gross margins and higher adjusted EBITDA. And just to be clear, fiscal 2026 on this chart represents only the first 9 months of the year. Between fiscal 2023 and fiscal 2024, net revenue rose about 6%, adjusted gross margin expanded by 9 percentage points and adjusted EBITDA grew by 55%. The growth continued between fiscal 2024 and 2025, where net revenue rose 62%, adjusted gross margin held roughly steady as a percentage of net revenue, while gross margin dollars grew substantially and adjusted EBITDA increased 160%. The large step-up in fiscal 2025 was driven in part by the acquisition of Motif, which took our vape business from almost nothing to #1 in the category, while also substantially growing our pre-roll and infused pre-roll businesses. With a greater mix of ready-to-consume products post the Motif acquisition, efficiencies and cultivation and production and the realization of net synergies year-over-year gross profit and adjusted EBITDA both stepped up meaningfully. But what's more telling for where we are today regarding our pre-Sanity business is the revenue ramp up through fiscal 2025 and the performance that we achieved in Q4. So let's come back to the quarterly view. Our fourth quarter of fiscal 2025 set several records, and we just surpassed them again in Q3 of this year. This view also puts the first half of fiscal 2026 into context. We dealt with the BC labor disruption, lower international volumes related to out-of-spec flower, increased competition and the now resolved issues in vapes and infused pre-rolls that we discussed in our Q2 conference call. Those factors affected our historical product mix and compressed gross margin and adjusted EBITDA. And I've said this before, but as a reminder, Q1 and Q2 are also typically our seasonally lower quarters, so the aforementioned issues had a more pronounced impact in the first half of this year than they would have otherwise. We viewed many of those issues as temporary and our record Q3 showed meaningful progress in areas within our control. Vapes and infused pre-rolls began recovering with both continuing to gain share post Q3, while we also saw continued growth in flower, concentrates and beverages. Q3 was also our first full quarter consolidating Sanity Group, which contributed almost $40 million of net revenue and was accretive to both gross margin and adjusted EBITDA. The result was the highest quarterly net revenue and adjusted EBITDA in Organigram's history with adjusted EBITDA margin returning to approximately 13%. We think the Sanity business has given us trajectory can grow our international revenue contribution to the point where, by the end of fiscal 2027, our overall business could become much more balanced between Canadian and international revenue. And looking beyond that, we see a path to a geographically diversified business with revenue streams that are predominantly international and higher margin. Now I'd like to talk about cost discipline for a moment. From the second quarter of fiscal 2025 through the second quarter of this year, our SG&A held in a relatively tight band of roughly $22 million to $27 million a quarter, demonstrating a relatively stable cost base given the size of our business. As a result, our SG&A expense ratio moved largely with the top line. The ratio reached a low in our record fourth quarter of fiscal 2025 and rose again in the first half of this year due to sequentially lower revenue. However, our SG&A dollars actually declined over that period with the expense ratio reaching a new low due to our Q3 recovery. And in this case, a new low is a good thing. Then in Q3, we consolidated Sanity for the first full quarter. SG&A dollars increased as we brought that business into our results, but revenue increased substantially more. As a result, our SG&A expense ratio fell to about 31% to its lowest level in at least two years. The picture gets even clearer when you exclude noncash expenses like depreciation and amortization, with the addition of Sanity, we did begin amortizing the acquired intangibles associated with that business. Excluding noncash expenses like depreciation and amortization, our SG&A expense ratio actually fell to about 26% in Q3, after adjusting for roughly $3 million benefit from a bad debt recovery that we achieved during the quarter. With the lower SG&A expense ratio and growing international contributions, the business has greater potential to convert future revenue into cash flow. But a relatively stable SG&A structure doesn't mean we think the work is finished. We continue to see opportunities for additional cost discipline. The company is progressing through initiatives designed to reduce complexity, support higher velocity products and build fewer, more powerful brands, all while reducing overhead expenses. One avenue James mentioned, is reducing our SKU count along a gradual glide path. Another is rationalizing the brand portfolio itself to focus on fewer, stronger brands. And as the company expands internationally, we'll be extremely thoughtful about how we launch products in new jurisdictions, balancing where incremental SG&A investment makes sense and where we can leverage existing infrastructure to control our costs. With Organigram's current structure, we believe there's an opportunity to bring total SG&A down further inclusive of Saturday while simultaneously improving our gross margins over time. And as James mentioned, our new Global COO, Adrian Frenzel, will be guiding many of those initiatives. Now I'd like to talk about how our capital philosophy has evolved, alongside the transformation of the business. A couple of years ago, we probably would have been talking about launching new brands and innovative SKUs to capture market share and gaining expertise across every single category. Today, we'd rather strengthen our core brands, which include shred, big bag of buds and bauxite, three Canadian power brands, all among the top 10 national brands. Generally speaking, we're concentrating our capital behind fewer opportunities with clearer path to attractive returns while building more diversified revenue streams across geographies and between medical and recreational cannabis. That said, every investment we evaluate has to answer four key questions, and you'll recognize them because they are essentially the four pillars that James already laid out. Does it strengthen our Canadian business? Does it accelerate our international business? Does it improve our manufacturing advantage? Does it generate attractive long-term returns? Those questions give us a consistent framework for deciding where that capital should go. And Sanity is a great example of how we apply that framework. We see Sanity as a critical infrastructure for a European medical platform, bringing our distribution, regulatory expertise pharmacy and physician relationships and market access in one of the world's fastest-growing medical cannabis markets. The strategic fit starts with international growth. Sanity gave Organigram an established commercial platform in Europe immediately rather than requiring us to build one customer by customer, market from market from the ground up. It also creates a direct connection between our Canadian capabilities and European demand. As our supply chain becomes increasingly integrated, including through our expected EU GMP certification in Moncton, we believe more organic ground grown flower can move through that platform from plant to patient. The longer-term return on that investment will ultimately be measured by what we do from here? How quickly we grow the business? How successfully we integrate our supply chain? And how much cash flow the combined platform can generate? So let's step back for a moment and look at Organigram's investment thesis today from my perspective. We are a leading Canadian business, which is focused on translating its capabilities into higher margins and cash flow. We have a rapidly growing international medical cannabis platform giving us exposure to markets like Germany that are at a much earlier stage of development in Canada as well as other EU markets. We are increasing vertical integration between those businesses with the ability to connect our Canadian cultivation and product capabilities directly to international demand. We've got a relatively stable underlying cost structure that creates meaningful operating leverage as revenue grows alongside additional opportunities to reduce our cost of goods sold and SG&A over time. And we're being more disciplined about how we allocate capital. Finally, I can't overstate the importance of the unparalleled innovative research we conduct and commercialize through our product development collaboration with our largest shareholder, BAT who have provided over $400 million in strategic capital to Organigram over the last few years. Put together, we believe that's a fundamentally different business than Organigram was even just a couple of quarters ago. And we're operating against the backdrop of regulated cannabis frameworks, continuing to develop across major international markets. So what should Organigram look like over the next few years? I think it's the following. A meaningfully higher share of revenue from international markets. Stronger gross margins, supported by medical cannabis mix, operational efficiency and manufacturing scale, fewer, stronger brands, higher returns on invested capital and a diversified business less dependent on any single market. For the near term, our priorities remain consistent with what we laid out on our Q3 earnings call a couple of months ago. We expect to generate positive free cash flow in Q4. And for fiscal 2026, we continue to expect revenue of about $350 million with adjusted EBITDA and adjusted gross margin above fiscal 2025 levels. Looking into fiscal 2027, our focus is on continuing to improve profitability expanding the contribution from international markets and further refining our Canadian operations. James described organogram strategy and the assets we have to execute against it. I've described the financial trajectory and what we believe that strategy can mean for the economics of our business. Now I'll hand it over to the person responsible for leading our international growth strategy, Finn Hansel.

Thank you, Greg, and thanks to everyone watching. To start, I want to tell you why a digital entrepreneur added up in cannabis and then why I'm excited to lead Organigram's international strategy. In Germany, people know me for digital entrepreneurship. I built and exited several companies before Sanity, always asset-light and always digital first. Sanity thinks the same way. Digital and how we reach the patient how we manage the journey and how we facilitate access to medical cannabis. And we are deeply engaged in the regulatory and political landscape, which matters in the market built by regulation. So cannabis, why? I was an active member of the young conservatives in Germany. And within that circle, a physician I knew was diagnosed with cancer and unfortunately passed away. After this passing the role that cannabis played in this care became known and learning of its positive impact on his life truly changed my perspective on cannabis. The necessity of having to treat himself with cannabis without his physicians knowledge because there was no legal medical access he had really got me thinking. So I began to lend my voice to the cores of people pushing for responsible patient-oriented cannabis regulation. Then in 2017, Germany significantly expanded access to medical cannabis, allowing physicians to prescribe it more broadly and creating the foundation for the market we see today. I think he is a good place to explain how a company that generated EUR 9 million revenues in 2023 became Organigram's European platform, and where that business is going. I founded Sanity Group in Berlin in 2018 with my co-founder, Fabian Freedom. When we founded Sanity, the German medical cannabis market was small, fragmented and stigmatized even within the health care system. Patients face bureaucratic barriers, doctors were reluctant to prescribe pharmacies were unprepared. And the product was largely inconsistent and very expensive. That's why we build Sanity based on three beliefs: first, the patient need was real, chronic pain, urological conditions, oncology. Existing treatments were leaving too many patients without adequate care. Second, the regulatory direction in Germany was toward liberalization. We couldn't know the timing, but the direction could be expected. Third, the companies that would win this market were the ones that understood regulatory matters and actively engage with policymakers. That means responding quickly and responsibly to expected changes in regulatory landscape and persistently building out the capacity to meet patient needs through pharmacy partnerships, consistent quality supply and reducing barriers to access. And doing all of this before the real volume arrived, not after. In April 2024, Germany removed cannabis from the so-called [indiscernible], AKA, the controlled substance law and the volume finally arrived. In 2023, Sanity generated EUR 9 million in revenue. In 2024, EUR 19 million. In 2025, EUR 16 million. We went from the fifth largest medical cannabis brand in Germany to the leading brand in 12 months. That trajectory is the result of over 7 years of relationship building, brand investment and medical positioning, culminating at the moment we have been preparing for. And the trajectory remains strong. We exited fiscal 2025 with a Q4 revenue of EUR 19 million, the same level of revenue we generated in all of fiscal 2024. While triple-digit growth is not something we assume going forward, over the following two quarters, we still grew revenue by a very solid 34%, while delivering very positive EBITDA, including our first consolidated quarter as part of Organigram. So let me explain synergies and now Organigram's current European business. In Germany, we can operate across two primary medical cannabis channels, the private pay market and the reimbursed market. avaay Medical is our premium medical cannabis brand. It is clinically positioned and it carries the strongest recognition among patients and physicians. We estimate avaay is now the #1 medical cannabis brand in Germany by market share and because patients using avaay predominantly pay privately for their prescriptions, it represents our highest margin commercial channel. Vayamed meanwhile, gives us the broad access to the reimbursed market and an extensive network of German pharmacies. As our pharmaceutical development and distribution business, it supplies pharmacies with medical cannabis sourced from a range of producers, allowing us to serve accounts that want access to a broad portfolio rather than only our proprietary brands. That business currently has lower margins than avaay, but the pharmacy relationship and market access it provides is strategically important. And over time, we see two opportunities to improve the economics of their platform. First, as avaay share growth within the pharmacies we serve, our mix shift towards our higher-margin proprietary brands. Second, Vayamed can increasingly source product from Organigram's Canadian cultivation platform, particularly following EU GMP certification, allowing us to capture more of the economics across the value chain. So even before considering underlying market growth, we see a clear path to improving the margin profile of the existing Sanity business through both mix and greater vertical integration. Germany is the foundation of our European business. The medical market continues to grow as patient volumes expand and prescribing becomes normalized. The adult use framework through social clubs under 2024 law is live, but a commercial retail pathway hasn't been established. And we are not building forecast around a time line that hasn't been confirmed. But we have a number of expansion opportunities outside Germany that are already underway. We are taking our regulatory expertise, medical brands, procurement and pharmacy relationships into other attractive European markets. In Switzerland, we've established both medical and recreational channels. On the medical side, we are building our presence through local partnerships and began generating medical sales in Q3. On the recreational side, we are participating in government authorized scientific pilot programs that give us direct experience operating retail locations in a regulated adult-use environment. Based on the data we've seen from these projects, we are very optimistic that Switzerland could adopt a full adult-use model within the next 2 to 3 years. Switzerland is our proof of concept for the pilot to policy journey. We anticipate other European markets will follow. Our glasshouse project pilot stores have now served thousands of participants under the Swiss Federal pilot program. Our data on elicit market displacement is compelling. We've seen illicit sourcing among participants declined by roughly 50%, that's exactly the kind of data that can help inform cantonal government and ultimately, federal frameworks as they consider broader access. Ours is also the only pilot project run commercially by a company. We operate two dispensaries today, potentially more very soon. And if Switzerland moves to adult use, we believe that experience positions us well for what could have become Europe's next potential recreational market. In the U.K., we've begun introducing our branded medical products through strategic distribution partnerships, giving us access to other large and developing medical cannabis market without requiring significant infrastructure investment upfront. In the U.K., the market runs through specialist prescription and private pay pathways. It's at an earlier stage than Germany, but moving in a very similar direction. We are building the pharmacy and the clinical relationship now before the volume arrives, the same playbook that has worked very well in Germany for us. The Czech Republic, Poland, Slovenia and Ukraine are in active development on different time lines. We believe the German President can travel across borders faster than many outside observers expect, and we expect all three to be generating revenues within the next 18 months. I think our European portfolio in four buckets. Germany is our scale market today. Switzerland gives us both medical and recreational growth and direct experience operating regulated adult-use retail. The U.K. is an opportunity to replicate the medical playbook we built in Germany. End markets, including Poland, Czech Republic, Ukraine, Slovenia and possibly later countries like Spain and France, represents the next -- the fourth bucket of expansion. So there is a very deliberate and repeatable model we intend to apply in Europe. We don't need to recreate Sanity Group in every country. We can use the infrastructure, the brands, the regulatory capabilities and supply relationships we already built, enter new markets through the right local partnerships and scale our investment as those markets develop. Now I've just been appointed as President Rest of World of Organigram, not just Europe. And there are, of course, also opportunities elsewhere. In Australia, we already sell a number of branded vape and [indiscernible] products under our BOXHOT and Edison brands, and are evaluating opportunities to expand within that market. And in the U.S., we began selling branded hemp-derived THC beverages and gummies with other functional ingredients for various consumer need states shortly before a hemp-derived THC ban was announced last year. We expect that band to go into effect in December, but are watching to see how regulations in this area unfold. As the U.S. market shifts in response to the expected rescaling of cannabis, we are watching closely and will respond to opportunities as they unfold. I think the U.S. medical market is very interesting, but we will need to find avenues of participation that support our near-term business opportunities. As Greg said, every dollar of capital spend on one strategy is a dollar we can't spend on another. So we need to be selective about where capital goes to support yielding cash flow that we can reinvest in the business in the near term. And the best near-term opportunity in our current view and given our structure right now remains Europe. That said, we continue to monitor developments in places like Brazil, Thailand in many places, more. To put this all into perspective, Germany alone remains a large growth opportunity for Organigram. We expect the German medical market to double by 2028, and Sanity is already operating at an annualized revenue run rate of more than EUR 100 million. Several other European markets, some of which we are actively developing provide further additional upside. And as these markets grow and medical cannabis demand increases, Organigram can participate in both directions. We can be vertically integrated supplier, connecting Canadian production directly to our European distribution platform, while also sourcing EU GMP compliant flower from other producers as European demand dictates. That could potentially include U.S. sources if future regulations allow. So since we're here for an investor session, here's my investment thesis. I believe the European cannabis market will likely be measured in tens of billions of euros within this decade. The companies that lead it will be the ones that build the brands pharmacy relationships, medical credibility and patient trust before the real volume arrives just like we did it. That's a position Organigram through Sanity has a meaningful head start in building. And with the two companies now integrated and focused on operational execution and global growth, not just in Europe, but Australia and the U.S. we believe we have the platform capabilities and market position to turn that early advantage into sustained growth and long-term value for our shareholders. Thank you very much.

All right. Thank you very much for waiting as we begin the fireside chat portion of our Investor Day. We're doing things a little bit differently this year. Last year, we had a live Q&A with pre-submitted questions and live submitted questions from investors. This year, we got pre-submitted questions. And in addition to that, there are a number of topics that I think are really relevant to today's key notes. So I'd like to get a little deeper into those. So why don't we kick things off? James, you've described Canada as the stable foundation and international becoming a much larger part of Organigram. Does that mean that profitability now matters more than defending every point of Canadian market share, and do you think it was a mistake to invest so heavily in gaining market share at what seems like the expense of profitability in the past?

Right. Let me answer that in a couple of ways. Put it this way, Finn came to me tomorrow and said, do you want share in revenue, or do you want profitability? The answer will be, I want both. So I think in today's current context, where we're trying to get to is a point where we want to consolidate the portfolio, make it simpler build a strong set of SKUs and brands. So that, over time, will have a smaller set of brands, and we'll grow more profitably. So for the current moment, yes, profitability is the priority. If I look back prior to the time I was here, I don't think it was a mistake. I think it was a certain point in the evolution of the industry in Canada, where building that market share, building those revenues or something that helped to attract strategic capital. It was how you were rewarded in the date. And I think as the industry has evolved, matured, it's now the time for us and probably for a lot of other companies as well to solidify portfolios and really to focus on growing profitability in the market.

Got you. So you mentioned SHRED, BOXHOT and Big Bag O' Buds and portfolio rationalization. Right now, I think Organigram has something like 10-plus brands. How far are you willing to take the rationalization piece of that. Is it going to be concentrated into those three brands? Or are there any more that you're thinking about sort of keeping in the portfolio?

Yes. First of all, whatever transition we do will be gradual in over time because you can't consolidate your entire portfolio in one go. As of today, those would be the three key brands plus some of the regional brands such as the brands that we have in Quebec. If I really project it out over 4 or 5 years, I could easily see having half the brand and half the SKUs that we have today. But it will be a transition over time to make sure that we continue to drive revenues that we have time to make sure the investments in our brands are really building those brands, building the stickiness, building the premiumness of those brands so that you have a smooth transition. And at the same time, you get better margin along the way. Every time you reduce the portfolio, simplify it. It will be a lot easier for Adrian and the CEO of job to drive better margins for the group as a whole.

Got it. And speaking about margins, I mean, obviously, we just made this acquisition of Sanity Group, international cannabis tends to have higher margin than domestic cannabis. And Finn to you, Germany is a really rapidly growing market. It seems like it's attracting a lot of competitors. There's more consolidation happening in the space. So what does organogram have today that would actually make it difficult for say, a well-capitalized competitor to replicate what we have in Europe now?

Yes. I mean, first of all, it's not only about capital, right? So there's a lot of different aspects that make us successful in the market. There's pharmacy relationships, there's reputation. There's marketing, there's your brands, there's your network you're building up. So obviously, you can't really replicate this from one day to another, no matter how much capital you have. However, now with the combination of Sanity Group and Organigram, I really think we built a strong vertically integrated model now. So on the one hand, the cultivation that actually allows us to directly import from Canada into Europe and then actually marketing it through market access to the patients. So I think that kind of customer journey or patient journey really from cultivation to the brand, to the patient access, that is nothing that anyone can replicate easily. And I think that's quite unique of what we built here in the market.

And a big part of that sort of value proposition moving forward is obviously Organigram's ability to supply EU GMP-compliant flower. And Greg, I want to just pass this over to you. So you've described EU GMP as a margin working capital unlock. So walk us through exactly how the economics change once Moncton can supply Sanity directly.

Yes, it's a significant benefit to us when we get EU GMP. I think for starters, today, we take our GACP flower and ship it to a third party for GMP conversion. There's a cost to that, roughly $0.50 a gram. So that's a material part of the value chain that we're not capturing today. The other part is not directly visible on the P&L, but it's the speed to market. So today, sending it to that third party actually adds about, I'll call it, 4 to 6 weeks or more of working capital that's being tied up while this is happening. So by having EU GMP, it allows us to get the product directly from Canada into the target market that much faster and returning to cash that much faster, which is a huge advantage to us.

And then I can add to that, it's also about the freshness of the product itself. I mean it's not purely economic, but also from a patient perspective, the fresher the product is the more the customer likes it, and that's the reason why this is also a very big advantage for us if that happens.

So you actually do see a difference in terms of product that is EU GMP supply directly from Canada, say, versus something that's gone through other versions.

Absolutely, yes.

Interesting. And overall, would you say that the EU GMP compliant, is there a supply constraint across the market for EU GMP compliant flower?

Well, I would say the whole market at the moment has a challenge to get enough EU GMP product into the country. I think we've been very good historically of getting enough product into the country. However, I mean, having a direct partner who has EU GMP without all the different like pathways of getting it into the country. makes it much easier for us. And I think there are only very few companies right now that have a direct relationship with the EU GMP manufacturer, maybe 3 or 4 out of 200 companies in the market. So having that in the future will bring us a big benefit in the market.

Right. But you also have a unique perspective because being part of Sanity Group, you're also just -- you're also a buyer of EU GMP-compliant flower. So I understand what you're saying in response to Organigram's ability to supply the flower directly. But as a buyer, how are you seeing the market right now? Is it tight? Are you having trouble meeting demand.

Yes. I mean the demand in Germany is growing very, very, very fastly. However, there is not enough EU GMP flower in the market. So obviously, we need to process GACP flower into GMP flower. So that is something that adds a lot of complexity right now. And once we have enough EU GMP cultivators, who are EU GMP-qualified, like Organigram in the future, that will help us to have a competitive advantage against all our competitors who don't have that.

So on EU GMP, James, we applied for our EU GMP certification a couple of years ago, and it's been significantly delayed. What's your level of optimism in achieving the certification over the next, say, 2 to 3 to 4, 5, 6 months?

Okay. I think, first of all, look, I think it's a brave man to be betting on this sort of thing because it really does depend on the regulator and if there's any specific issues in the market at that time. But I think from our point of view, what I am very confident is after the audit we had last November, we have addressed all the concerns that the regulator brought up to us. We've completed all of the remedial efforts, everything that they pointed out at that time. And I think we have not heard anything negative. And right now, it's just a matter of really keeping that engagement, working with the regulator pushing it as much as we can, of course, with the help from Finn, who's sitting in Germany, which does help. And I am confident we'll get it. But am I confident enough to give you an exact date today. I think enough of myself and my predecessors have been burned that we'll see. But we're pushing, and I'm very confident that we've done the work that we need to do on our side.

I recently had an investor ask me whether or not our delay in EU GMP was a factor contributing to the accelerated earnout in Sanity. Can you speak to that a little bit?

No, that was really not a factor. Like Finn mentioned, a couple of seconds ago, EU GMP compliant flower is a general constraint across the market in Germany and in Europe as a whole. So I don't think this was something that made that happen. What really drove the earn-out was a couple of things. Number one, the earn-out did create different incentives within the company where Finn and the team really had to focus on the earn-out. And from an OGI perspective, there is more things we would have wanted to do to integrate, to bring people like Finn and Adrian directly into the company to be able to really lead the company forward. So that was really the driver we wanted to do it. And the earn-out, what was the mechanism where we needed to give -- to make sure that we gave the best deal to the former Sanity shareholders as well as OGI shareholders, and I think we've done that well. And I think the real benefit now even one month and having Finn directly on the team may able to drive the rest of the world plus the strategy and have an Adrian, who has a good -- a great track record of what he's done in Sanity plus its previous roles. I think we have now a team that can really drive not just the top line growth the future-looking expansion in Europe, but also really drive those efficiencies to make sure we have a great supply chain that can supply wherever we happen to move into the world.

Interesting. And speaking about bringing in new talent to the team. So Finn, I want to direct this to you. You've been an entrepreneur, you've had multiple exits. Now you're joining a larger public company. I'm curious what kind of experiences you believe that you can kind of infuse into the Organigram culture. And then you've obviously worked with Adrian for a number of years, what gives you sort of confidence that he's the guy to come in and streamline operations in a way that improves cost of goods sold and increases gross margin?

Look, at the end of the day, is start-up is a very different culture from a corporate, right? So I mean that's a fact. However, I strongly believe that there's no right or wrong. So I'm very far away from saying start-up is doing everything right, and the corporate is doing everything wrong. I think it's the mix of the two that brings out the best out of both companies. So Organigram has implemented processes, years of experience a lot of actually knowledge about things that we don't even know, for example, the recreational market. But then you also have the culture of being very fast, very dynamic, break things fast, fix them faster, and all this kind of dynamic, I think, is also very strong for a start-up to have because what the advantage of a startup is that it could always react quickly to changing market circumstances. And I think if you combine those two cultures like the knowledge, the processes and the experience in the market, plus the dynamic culture of the start-up that basically reinvents itself from time to time. I think only then you can create something really superior. And I think, really, we are about to do this right now at Organigram.

Yes, that's an interesting point. I mean I've observed Organigram, although being sort of a larger public vehicle, it has made a lot of strategic investments and a lot of M&A over the years. So I want to throw this question over to Greg. So you mentioned that organogram invested heavily in optionality. And looking back at investments like Filos, Green Tank, OBX, Collective Projects, et cetera, are there which investments have actually earned an acceptable return in your view? And are there any investments you wouldn't make again under today's new sort of capital allocation framework?

Yes. I mean, look, whenever you make an investment, there's not a 100% guarantee that investments will pan out. And that's what we do. We take on a certain amount of risk and hope that the return comes from that. The vast majority of the investments we have made have been successful look at Filos, as an example. Filos is what allowed us to really develop the seat-based cultivation methods that really was novel within the industry. It reduced the amount of time from start to finish in the cultivation cycle and also reduce the amount of labor that we are incurring. So I'd say that one is a fantastic investment. On the other side, we have an OBX, as an example. At the time, the hypothesis was solid. Unfortunately, that one hasn't panned out quite as well because there's been regulatory changes in the U.S. that have really had a negative impact on that business. But by and large, the other investments we've made, Green Tank. I think that's been successful. We've made certainly capital appreciation on that, but also gained access to vape technology that we've been able to participate in as a business. I think we've also done some other significant acquisitions that were not just investments, but full company acquisitions, where we had EIC, which was our edibles business in Winnipeg. We had Lac and [indiscernible] for our hash business that we acquired, hugely successful. Collective project got us into the beverage category, very successful. Motif was very successful as well. Got us -- went from zero in vapes to leader in vapes across the industry. And then finally, culminating with the Sanity acquisition, which we're only one quarter in, but I've been very happy with how it's performed. The first quarter under our belts did around CAD 40 million, which is really where we expected it to be. And the growth profile is really fantastic, accretive to EBITDA, accretive to earnings. So I'd say, by and large, I think we've really demonstrated a solid track record of being able to execute and deliver on the investments that we've made so far.

And speaking of future investments, investors are always worried about dilution. So when it comes to thinking about the next strategic investment, the next M&A opportunity, can you talk a little bit about how you think about the cost benefits of, say, raising equity versus debt? And how the company intends to compete with its peers on a balance sheet basis given the landscape right now.

Yes. I mean, first of all, we all know that, that is cheaper than equity because that can be paid back equity can't unless you're doing a share buyback program. But whenever we're looking at an investment whether or not that investment is successful is not totally dependent on how it's financed, it's what's the net impact of that investment on our cash flow, on our adjusted EBITDA, is it accretive. So that's really been our focus is doing accretive transactions that will facilitate the growth of the company and also further our overall corporate objectives. So we may issue shares again in the future to fund an acquisition or for general corporate purposes, but it's only done with future growth opportunities in mind. So we're not going to adjust issue more shares for the sake of it because we feel like we need more cash on the balance sheet. We'll issue shares when our strategy suggests it's the right approach, and it's accretive to revenue, EBITDA cash flow and creating value for our shareholders.