OrganiGram Holdings Inc.(OGI) 首席执行官 Greg Engel 在 2019年 第三季度业绩 - 收益电话会议记录

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OrganiGram Holdings Inc. (NASDAQ:OGI) Q3 2019 Results Earnings Conference Call July 15, 2019 8:00 AM ET

OrganiGram Holdings Inc.(纳斯达克股票代码:[OGI])2019年第3季度业绩收益电话会议2019年7月15日美国东部时间上午8:00


Amy Schwalm - VP of IR
Greg Engel - CEO
Paolo De Luca - CFO

  • 艾米施瓦尔姆 - 红外线副总裁
  • Greg Engel - 首席执行官
  • Paolo De Luca - 首席财务官


Oliver Rowe - Scotiabank
Graeme Kreindler - Eight Capital
David Kideckel - AltaCorp Capital
Tamy Chen - BMO Capital Markets
Matt Bottomley - Canaccord
Greg McLeish - Mackie Research Capital
Justin Keywood - GMP Securities
Alec Patterson - Allianz Global
David Kideckel - AltaCorp Capital

  • Oliver Rowe - Scotiabank
  • Graeme Kreindler - 八大资本
  • David Kideckel - AltaCorp Capital
  • Tamy Chen - BMO资本市场
  • Matt Bottomley - Canaccord
  • Greg McLeish - Mackie Research Capital
  • 贾斯汀凯伍德 - GMP证券
  • Alec Patterson - Allianz Global
  • David Kideckel - AltaCorp Capital


Welcome to Organigram Holdings Inc.'s Third Quarter 2019 Earnings Conference Call. [Operator Instructions] a reminder, this conference call is being recorded and a replay will be available on Organigram's website.
At this time, I'd like to introduce Amy Schwalm, Vice President, Investor Relations. Ms. Schwalm.

欢迎来到Organigram Holdings Inc.的2019年第三季度收益电话会议。 [操作员说明]提醒,此电话会议正在录制,并且将在Organigram的网站上进行重播。

在这个时候,我想介绍一下投资者关系副总裁Amy Schwalm。 施瓦尔姆女士。

Amy Schwalm

Thank you, operator. Joining me today are Organigram's Chief Executive Officer, Greg Engel; and Chief Financial Officer, Paolo De Luca.
Before we begin, I'd like to remind you that today's call will include estimates and other forward-looking information from which our actual results could differ. Please review the cautionary language in today's earnings report regarding various factors, assumptions and risks that could cause our actual results to differ.
Further, during this call, we will refer to certain non-IFRS financial measures. These measures do not have any standardized meaning under IFRS and our approach in calculating these measures may differ from that of our other issuers, and so these measures will not be directly comparable. Please see today's earnings report for more information about these measures.
I will now hand the call over to Greg.

谢谢运营商。 今天加入我的是Organigram的首席执行官Greg Engel; 和首席财务官Paolo De Luca。

在我们开始之前,我想提醒您,今天的电话将包括估算和其他前瞻性信息,我们的实际结果可能会有所不同。 请查看今天的收益报告中关于可能导致我们的实际结果不同的各种因素,假设和风险的警示语言。

此外,在本次电话会议中,我们将参考某些非IFRS财务指标。 这些措施在国际财务报告准则下没有任何标准化含义,我们计算这些措施的方法可能与我们其他发行人的方法不同,因此这些措施不具有直接可比性。 有关这些措施的更多信息,请参阅今天的收益报告。


Greg Engel

Thanks, Amy. Good morning, and thank you for joining today's call. This morning we reported results for our third quarter ended May 2019. I'll begin with some comments on Q3 as well as some macro views on the space and a discussion on our outlook, and why we're extremely excited about Organigram's prospects and those of the industry. Paula will discuss the results in more detail as well as our balance sheet strength, then the operator will open up the call for your questions.
In Q3, we delivered another quarter of strong sales, and just as importantly, we delivered positive adjusted EBITDA for the fourth quarter in a row. With our strong top line and market share translate into positive adjusted EBITDA, we believe we have continued to differentiate ourselves from our peers. Our focus remains on building a sustainable business that generates attractive return on investment for shareholders in the short term as well as the long term.
We made progress on a number of other fronts worth highlighting on Slide 3. We are now selling our products coast-to-coast as one of only 4 Canadian LPs with distribution in all 10 provinces. Our Phase 4 expansion is coming on very well and the last phase of Phase 4, which is 4c, is expected to be completed in December.
We received Health Canada approval for all Phase 4a grow rooms, which currently puts us that 61,000 kilograms per year of license capacity, almost double the license capacity we had last quarter. We anticipate harvesting from the first grow rooms in Phase 4a before the end of July.
We’ve also already submitted the initial 17 of our 33 Phase 4b rooms in June. Phase 4b in total will add approximately 28,000 kilograms per year and the remaining 16 4b rooms are expected to be submitted for licensing in September. With Phase 4c 24,000 kilograms per year, we are targeting total production capacity of 113,000 kilograms per year.
Our Phase 5 refurbishment for an edibles and derivatives facility as well as the additional extraction capacity is on track. The entire team is excited about the next growth opportunity coming from the edibles and derivatives market. We have the expertise and we have been de-risking our strategy by securing strategic partnerships, increasing capacity and planning for automation to deliver innovative products, which we expect to be ready and in the market when the regulations allow.
We also strengthened our balance sheet with a traditional debt financing at attractive rates. And while it seems like all it is now, but it is a true milestone, we started trading on the NASDAQ Global Select Exchange on May 21. This exchange obviously offers more exposure to U.S. and global investors, increased liquidity and puts us on a level playing field with our larger peers.
Turning to the quarter. We grew sales significantly in many of the provinces, particularly in Alberta and each of the Atlantic provinces. Ontario has the highest
population of all the provinces representing approximately 37% of the Canadian population and is currently underserved by retail stores. We have seen recreational cannabis sales highly correlated to the presence of physical retail stores based on the comparison of the provinces in Canada. The Canadian market is positioned to grow significantly with more retail stores opening, particularly in the 2 most populous provinces of Ontario and Québec. Toward the end of the quarter, we began to fill a large supply gap with our first shipments of pure CBD oil to markets across Canada. There is a significant unmet consumer demand for CBD products, and we attribute our ability to respond to this demand in parts fits with strategic arrangements with both 1812 Hemp and Valens GroWorks.

谢谢,艾米。早上好,谢谢你参加今天的电话会议。今天早上我们报告了截至2019年5月的第三季度的结果。我将首先对第三季度的一些评论以及对该领域的一些宏观看法和对我们前景的讨论,以及为什么我们对Organigram的前景和那些看法感到非常兴奋。这个行业。 Paula将更详细地讨论结果以及我们的资产负债表强度,然后运营商将打开您的问题的电话。








所有省份的人口约占加拿大人口的37%,目前零售店服务不足。根据加拿大各省的比较,我们看到休闲大麻销售与实体零售店的存在高度相关。随着更多零售店的开业,加拿大市场的定位将大幅增长,特别是在安大略省和魁北克省人口最多的两个省份。到本季度末,我们开始填补供应缺口,我们首次向加拿大各市场出售纯CBD油。消费者对CBD产品的需求显着未得到满足,我们认为我们能够根据1812 Hemp和Valens GroWorks的战略安排来满足这种需求。

Our medical business is very important to us, and we remain committed to ensuring there is a consistent product supply for our patients. From a medical sales standpoint, Q3 continue to be a strong one for Organigram as our revenue increased and our patient count was up approximately 14% from last quarter. Increased Q3 cultivation cost and lower adjusted gross margin reflected a temporary decrease in yield, as previously disclosed in last quarter's earnings report, as a result of changes in growing protocols, which have been resolved. Before the end of Q3, we saw our yields return to historical levels, and we have seen a meaningful increase in average cannabinoid levels in Q4 to date. We consistently implement continuous improvement programs with the goal of increasing yields and cannabinoid content and we'll continue to evaluate the different strains from our generic bank to offer new products.
With certification received from ProCert during the quarter for organic product sales in the recreational marketplace, we've determined which strains from our generic bank to launch into our ANKR Organics brand this fall, which will be cultivated in our organic growing environment. Not all programs lead to successful improvements. However, we have the benefit of our own in-house proprietary software, OrganiGrow. Our software program and database which tracks the impact of changes we make and allows us to work to identify and deploy optimal methods. From the time we've completed our Phase 4 expansion, we expect to have a significant amount of additional proprietary knowledge that we can leverage across our expanded cultivation platform.
Now turning to Slide 4. As I mentioned, Phase 4 is on track and in line with the estimated CapEx cost of approximately $125 million. You can see some of our progress in the photos in the appendices of today's slide package. The expansion will have state-of-the-art mechanical system to capture treat and reuse the water from dehumidification, which is central to the cultivation process. Our fully customized irrigation system that will serve all of Phase 4 is being installed and expected to be commissioned in the fall of this year. Once operational, the system is expected to be among the most sophisticated indoor cannabis cultivation irrigation system in North America.
Construction of Phase 4a, which includes 30 grow rooms, was completed on schedule, and we received licensing approval in 2 stages. As our Moncton campus is one continuous facility and all our new rooms are essentially replicas of those approved in our previous submission, our licensing process is relatively streamlined and predictable, which has proven to be a competitive advantage for us. At the end of April, the first 13 rooms of Phase 4a representing about 11,000 kilos per year of increased production capacity were approved. We expect to begin harvesting the first of these rooms by the end of July 2019. The last 17 grow rooms of Phase 4a received approval toward the end of June, representing about 14,000 kilos of incremental capacity, and we expect to harvest the first of these rooms by the end of September 2019.


随着ProCert在本季度从娱乐市场的有机产品销售中获得认证,我们已经确定我们的仿制银行将在今年秋季推出我们的ANKR Organics品牌,这将在我们的有机种植环境中培育。并非所有计划都能带来成功的改进。但是,我们拥有自己的内部专有软件OrganiGrow。我们的软件程序和数据库可跟踪我们所做的变更的影响,并使我们能够识别和部署最佳方法。从我们完成第4阶段扩展时起,我们期望获得大量额外的专有知识,我们可以在扩展的培养平台中利用这些知识。


包括30个种植室的4a期建设如期完成,我们分两个阶段获得许可批准。由于我们的蒙克顿校区是一个连续的工厂,我们所有的新房间基本上都是我们之前提交的批准的复制品,我们的许可流程相对简化和可预测,已被证明是我们的竞争优势。 4月底,第4a阶段的前13个房间每年增加产能约11,000公斤。我们预计到2019年7月底开始收获第一个房间。第4a阶段的最后17个种植室在6月底获得批准,代表大约14,000公斤的增量容量,我们预计将收获第一个客房于2019年9月底。

Phase 4b has 33 additional grow rooms and is expected to be completed in September 2019, which will increase total target production capacity to 89,000 kilos per year for the Moncton campus once fully licensed and operational.
During the quarter, much of the electrical and control infrastructure for the Phase 4b grow rooms was installed. The initial 17 grow rooms have already been completed and the Health Canada licensing amendment for these was submitted in June 2019. In anticipation of receiving licensing, we've already begun coding for these additional 17 rooms. The remaining 16 rooms are on schedule to be submitted for Health Canada approval in September 2019. Our final Phase 4c, with 29 grow rooms, is expected to completed in December 2019. All the foundation, footings and underground services are completed with structural steel installation ongoing in July. The team has done a fantastic job keeping the expansion on track, while continuing to deliver high-quality product to our customers and patients.
We have generated strong operational and financial results fiscal year to date and emerged as a national leader in Rec 1.0. We have a relentless focus on automation and innovation to deliver diverse number of high-quality products, but to also ensure availability of supply in order to build brand equity. We believe we have earned considerable goodwill and brand loyalty with our customers and our partners. We are well underway in preparing for Rec 2.0 strategy with these principles at the forefront.
Customers will demand choices in vaporizable products and edible offerings as well as quality, innovation and a consistent availability of product supply. Retailers and provincial distributors are likely to become increasingly independent on the licensed producers with a strong reputation and track record of meeting supply commitments. We have always chosen depth versus breadth to ensure that we can keep our products on the shelves for customers. As such, it made sense for us to choose the most popular cannabis products in the edibles and derivatives market and partner with leading suppliers and reputable brands. We did just that. We have an exclusive consulting agreement with TGS in Colorado and benefit from their insights on market trends and products.
On Slide 6, you can see that based on U.S. state sales history, vape pens are the largest segment, at about 23% of total cannabis sales, followed by edibles, which includes beverages at around 13%. We plan to launch a variety of vaporizable products in December as soon as authorized for sale, followed by chocolates and a range of powdered beverage products in early calendar 2020. In terms of vape pens, we're proud to have been selected as one of the 4 Canadian launch partners of PAX Era, the premium closed loop vaporizer system created by PAX, an undisputed leader in the design and development of premium vaporizers for dry flower concentrates.
We have also partnered with the Feather Company for an exclusive license in Canada to their proprietary disposal vape pen technology and form factors. In choosing which enabled products to launch, we decided to initially focus on chocolates because we believe we can differentiate and innovate around our product offerings with chocolates. This is much harder to do with the chewable products like gummies. We have the in-house expertise for chocolate production as our product development team have more than 25 years of experience and expertise among them. In the fall, we expect to take delivery of a high-speed fully automated production line with capacity of up to 4 million kilograms of chocolate per year. The $15 million investment commitment for this line includes a state-of-the-art chocolate molding line and a fully integrated packaging line that includes advanced engineering, robotics, high-speed labeling and automated carton packaging.



到目前为止,我们已经在财政年度创造了强劲的运营和财务业绩,并成为Rec 1.0的全国领导者。我们不断关注自动化和创新,以提供各种高质量的产品,同时确保供应的可用性,以建立品牌资产。我们相信,我们已经与客户和合作伙伴赢得了相当大的商誉和品牌忠诚度。我们正在准备Rec 2.0战略,并将这些原则放在首位。


在幻灯片6中,您可以看到,根据美国各州的销售历史,vape笔是最大的部分,约占总大麻销售量的23%,其次是食品,其中包括约13%的饮料。我们计划在12月份授权销售时推出各种可蒸发产品,其次是2020年初的巧克力和一系列粉状饮料产品。在vape笔方面,我们很自豪被选为PAX Era的4个加拿大发射合作伙伴,PAX创造的优质闭环蒸发器系统,是干花卉浓缩物优质蒸发器设计和开发的无可争议的领导者。


In addition to chocolates, we plan to launch a variety of powdered beverages. Our skilled research and development team believe they have developed a proprietary nano-emulsification technology that is anticipated to provide an initial onset of the effects of cannabinoids within 10 to 15 minutes. The emulsion process generates very small nano form microparticles, 20 nanometers in size, which means rapid, reliable and controlled onset. With traditional edibles and beverages, the body spends significant amount of time breaking down fat soluble cannabinoid particles which are then absorbed and metabolized in the body before any effects are felt. This results in a slow onset and extended effect, which is likely the reason why the beverage product form represents a very small percentage of edible sales based on the U.S. state data.
Our nano-emulsion technology appears to stable to different temperatures, mechanical and salt, pH and sweeteners. Our researchers have also developed a solid form of the nano formulation, turning it into dissolvable powder for beverages. This shelf-stable, heat-stable, water soluble and palatable cannabinoid formulation is also expected to provide an initial onset of effect within 10 to 15 minutes. It is expected to be discrete, portable and customers can add it to any drink they chose without having to secure bottling or canning equipment and incurring significant costs associated with transfer required for liquid beverages and subject to further testing and commercialization, we expect to launch a variety of powdered beverages as early as January 2020.
Slide 10 shows Phase 5. We are refurbishing 56,000 square feet within our existing facility designed under our European GMP standards for additional extraction capacity and a derivatives and edibles production and packaging facility as well as additional office space. Primary construction is expected to compete in October 2019, and we expect additional in-house extraction capacity to be completed by the end of calendar 2019. However, we have the capacity to fill vaporizer pens in our existing facility ahead of the licensing of Phase 5 in order to be ready to sell these products as soon as they are authorized for sale in December 2019. We're also leveraging our agreement with Valens GroWorks, and to date, we have strategically built up significant concentrate and extraction material for edibles and derivatives.
So the bottom line, we have a fulsome strategy for a range of differentiated products, and we intend to leverage our strength such that we expect to capture further significant growth when the market expands to include derivatives and edibles before the end of the calendar year. In fact, we believe the Canadian market is positioned to grow significantly with the upcoming legalization of edibles and derivatives, and importantly, with more retail stores opening, particularly in the key provinces of Ontario and Québec.
Our fiscal 2020, starting in August, presents tremendous opportunity for us to materially grow sales and profit. As I mentioned, our yield per plant has returned to historical levels at the end of Q3 and into Q4, coupled with some of the highest cannabinoid levels we have seen as a company. As a result, we expect cultivation cost to decrease in Q4 and Q1 fiscal 2020 as we expect to realize economies of scale from our expansion.



幻灯片10显示了第5阶段。我们正在根据我们的欧洲GMP标准设计的现有设施中翻新56,000平方英尺,以提供额外的提取能力,衍生物和食品生产和包装设施以及额外的办公空间。预计初级建筑将于2019年10月开始竞争,我们预计到2019年底将完成额外的内部开采能力。但是,我们有能力在第5阶段许可之前填充现有设施中的蒸发器钢笔。为了准备在2019年12月授权销售这些产品后立即销售这些产品。我们也在与Valens GroWorks达成协议,到目前为止,我们已经战略性地建立了重要的食品和衍生物浓缩物和提取材料。 。



The sales of derivatives and edibles are expected to be launched in a more matured Canadian market from a distribution and retail perspective. Ontario has announced tripling its stores to 75 in October; Québec is planning to more than double its retail presence with plans to expand from 16 stores to 40 by next March; and while Alberta has not provided specific target, the number of retail outlets has continue to grow to about 176 stores to date. We believe edibles and derivatives will be highly appealing to consumers and through our exclusive consulting agreement with TGS, we have great insight into anticipated market trends and consumer preferences based on experience in other mature markets. We know that the margin on these products is often considerably higher due to lower cannabinoid content.
Ultimately, the margins on these products come down to the efficiency in the production of the consumer packaged goods products. We have ensured we have the expertise and experience supported by state-of-the-art technology in automation. Again, the same tenants that have allowed us to be successful in producing high-quality flower pre-rolls and oil at 1 oz, if not the lowest cost of cultivation in the industry. You can see some photos of our existing automation at our facility in appendices, which I know some of you seen at our facility in person.
I will now turn the call over to Paolo.

衍生品和食品的销售预计将从分销和零售的角度在更加成熟的加拿大市场推出。安大略省已宣布10月份将其商店增加到75家; Québec计划将其零售业务增加一倍以上,计划明年3月将其从16家店扩大到40家;尽管艾伯塔省尚未提供具体目标,但迄今为止零售店的数量仍在增加至约176家。我们相信食品和衍生产品将对消费者具有极大的吸引力,通过我们与TGS的独家咨询协议,我们可以根据其他成熟市场的经验,深入了解预期的市场趋势和消费者偏好。我们知道,由于大麻素含量较低,这些产品的利润率通常会高得多。



Paolo De Luca

Thanks, Greg. Q3 net revenue was $24.8 million from approximately 3,926 kilograms of dried flower and approximately 5,090 liters of oil sold. It was comprised of $21.8 million in rec sales and $2.8 million in medical sales with a negligible amount coming from other items.
Q3 contributed $64.1 million in net revenue year-to-date for the 9 months ending May 31, 2019. Q3 net revenue declined slightly from Q2, mainly due to the timing of initial shipments to Quebec that occurred subsequent to Q3 quarter end and a large pipeline fill to Ontario in Q2 of fiscal 2019, which was not matched by recurring orders in Q3 of fiscal 2019 and fewer reorders from British Columbia on account of its unique market conditions. As Greg mentioned, we expect Ontario to do another pipeline fill in August or September ahead of the next 50 store openings slated for early October.
Most of our Québec sales that started in Q4 are directly into the retail stores themselves, and there is no pipeline sale that has experienced like there is for province like Ontario, which uses a centralized wholesale distribution model. Ontario, where the majority of sales are now being conducted in physical retail stores, will in the infancy stages of direct market, have more "lumpiness" in terms of sales patterns as it prefers large warehouse pipeline fill orders and has placed caps on retail store drawdowns to ensure ongoing availability of supply to the stores. We understand why Ontario has taken this approach and are working with the province and the stores to help the business flourish in the long run. We expect that as the retail distribution points increase, not only in Ontario but nationally, that smoother and more predictable sales patterns will emerge.
On the cost side, our Q3 cash and all-in cost of cultivation, which brings in -- and the noncash items are depreciation and share-based compensation, were $0.95 and $1.29 per gram, respectively. The increase from Q2 was almost exclusively due to the temporary decrease in yield per plant as a result of a temporary change in growing protocol that Greg alluded to earlier. Since yield per harvest returned to previous levels toward the end of Q3 and into Q4 and because we anticipate increased efficiencies in harvested yield amounts with grow rooms scaling from 52 to 82 with our Phase 4a rooms coming online, we believe that our cultivation cost should decrease in our Q4 fiscal 2019 and Q1 fiscal 2020.
Cost of sales on a dried flower equivalency equaled approximately $2.70 per gram in the quarter. Included in that figure is the cost of cultivation, which I just alluded to, packaging costs, both material and labor and shifting as well as any waste of packaging material write-downs. We believe that the all-in cost can decrease over time as we bring cost of cultivation back to historical lows and as we bring significant efficiencies to our labor per unit. While our harvest and production capacity are increasing exponentially, our staffing is not expected to increase anywhere near that much as we move from approximately 700 employees now to an expected amount of 850 employees by calendar year-end.




在成本方面,我们带来的第三季度现金和全部种植成本 - 以及非现金项目的折旧和股票补偿,分别为每克0.95美元和1.29美元。第二季度的增长几乎完全是由于Greg早先提到的增长协议暂时改变导致每株产量暂时下降。由于每个收获的产量在第三季度末和第四季度恢复到之前的水平,并且因为我们预计收获产量的效率会提高,随着我们的4a期房间上线,种植室从52个增加到82个,我们相信我们的种植成本会降低在我们的2019财年第二季度和2020财年第一季度。


As a company, we focus more on adjusted gross margin and adjusted EBITDA, which exclude fair value changes to biological assets and inventory as key measures of our underlying performance and find this to be what analysts and investors tend to track. As noted at the beginning of the call, these measures are non-IFRS financial measures, and we encourage you to review our Q3 report for more information, including a reconciliation to comparable measures under IFRS. Q3 adjusted gross margin was $12.3 million or 50% as a percentage of net revenue and year-to-date adjusted gross margin was $37.1 million or 58% as a percentage of net revenue. Compared to last quarter, Q3 adjusted gross margin reflected higher production cost, the temporary decrease in yield and write-downs on legacy packaging materials that were replaced with new, more consumer-friendly packaging. Q3 IFRS gross margin was negative $0.2 million, largely due to fair value changes to biological assets and inventory.
Adjusted EBITDA of $7.7 million or adjusted EBITDA margin of 31% as a percentage of net revenue was positive for the fourth consecutive quarter. Year-to-date, adjusted EBITDA was $27.8 million or 43% as a percentage of net revenue.
We continue to be disciplined in our approach to spending this quarter. Q3 sales and marketing and general and administrative expenses, or SG&A, were $9.1 million or 37% of net revenue, and year-to-date SG&A was $19.3 million or 30% of net revenue, which starkly contrasts with many of our peers.
I'd like to take a moment to highlight what we believe to be a significant differentiator between us and our peers. We are obviously aware of the massive market opportunity that exists with the legalization of cannabis in Canada and the wave of medical legalization that is being seen in other countries around the world, and we understand that significant investment in those opportunities is needed. However, we aim to approach our business activities at the level of discipline that hopefully sets us apart in this space. Not only have our margins been good, but we've kept our SG&A in check. Our executive compensation is modest compared to our peers. Our sales and marketing spend is also modest compared to our peers. We are not operating out of multiple facilities with disaggregated management teams and different SOPs, but from 1 centralized facility where we can drive economies of scale more easily. Based on current expectations, our cultivation and harvesting capacity will increase by over 3x from the early part of calendar 2019 to the same point in 2020.
As we scale our number of employees per unit of production is expected to decline as we optimize production practices and introduce efficiencies. We believe that many other industry participants have assumed that access to capital is never-ending and have been funding operating losses with continued dilution to shareholders. What we are trying to do at Organigram is build a company with the sustainable business model, which is capable of doing more with less. We have tried to be profitable right out of the gate of Rec 1.0 and have largely achieved that and plan for more of the same for Rec 2.0. We highly encourage investors to pay attention to operational and efficiency metrics.





随着我们的规模扩大,我们预计每单位产品的员工人数会随着优化生产实践和提高效率而下降。我们认为,许多其他行业参与者已经假设资本的获取永无止境,并且一直在向股东持续稀释而为经营亏损提供资金。我们在Organigram尝试做的是建立一个拥有可持续商业模式的公司,该公司能够用更少的资源做更多的事情。我们试图在Rec 1.0的大门之外实现盈利,并且已经基本实现了这一目标,并计划为Rec 2.0提供更多相同的功能。我们强烈建议投资者关注运营和效率指标。

Our Q3 net loss from continuing operations of $10.2 million or $0.07 per share on a fully diluted basis was largely due to noncash fair value changes to biological assets in inventories. Year-to-date, net income from continuing operations was positive $12.9 million or $0.09 per share on a diluted basis. Again, we do not focus on net income or loss to assess our underlying performance due to the impact of fair value changes from period-to-period on biological assets in inventories.
Moving to the balance sheet. We have build liquidity with approximately $88 million in cash and short-term investments at the end of Q3. During the quarter, we converted the remaining balance of debentures and this eliminated approximately $49 million in current liabilities from our balance sheet. We also closed a $140 million traditional debt financing at attractive rates, which includes both the term loans to finance our expansion plans and revolving debt for general working capital and corporate purposes.
Included in the is an uncommitted option to increase the term loan and/or revolving debt by the incremental $35 million to a total of $175 million, subject to agreement by the lenders and satisfaction of certain legal and business conditions. To date, we've drawn down on only $50 million of the credit facility, leaving at least another $90 million eligible to be drawn.
I will now give the floor back to Greg for his closing remarks.





Greg Engel

Thanks, Paolo. There is no question we're excited about the future, we often -- and we often get asked about our plans and when is the time that supply meets demand in the Canadian market. First, we believe the U.S. and international markets represent tremendous opportunities, particularly the CBD market. And we absolutely plan to further participate in these markets subject to compliance with applicable laws with harder work on this opportunity. Again, our priority is to deploy disciplined capital allocation with a focus on achieving sustainable and attractive return on investment for our shareholders.
Over the next while, the Canadian market represents significant growth opportunity. Supply will meet demand one day. We're confident in our strategy is designed to not only maintain but grow value for shareholders. Our indoor facility means we produce high-quality dried flower, which has seen very little price compression in mature U.S. markets, and our investment in biosynthesis is expected in the future to offer us access to the input materials for derivatives and edibles at a fraction of the cost of traditional cultivation. In fact, biosynthesis has many advantages over traditional cultivation, particularly that of outdoor cultivation and greenhouses. These include reduced operating and capital costs, scalable, consistent, superior purity and quality of product, a smaller environmental footprint and the ability to meet even more rigorous standards of CPG and pharma.
In closing, I'd like to thank Organigram team for their significant efforts in delivery to date and preparations for the next exciting chapter in our industry.
That concludes my formal remarks. Operator, if you could go ahead and open up the line for questions.

谢谢,保罗。毫无疑问,我们对未来感到兴奋,我们经常 - 我们经常被问及我们的计划以及供应何时满足加拿大市场的需求。首先,我们认为美国和国际市场代表了巨大的机遇,特别是CBD市场。我们绝对计划在遵守适用法律的情况下进一步参与这些市场,并更加努力地抓住这个机会。同样,我们的首要任务是部署严格的资本配置,重点是为股东实现可持续和有吸引力的投资回报。





[Operator Instructions] Your first question comes from the line of Oliver Rowe with Scotiabank.

[操作员说明]您的第一个问题来自加拿大丰业银行的Oliver Rowe。

Oliver Rowe

On the operational side, sales pulled back despite overall industry sales increasing, so that's sort of implying a declining market share. Could you help us separate the temporary impact in the quarter in terms of from Québec and BC from a general increase in market competitiveness? And I guess, if you expect to regain that market share in the coming quarters?

在运营方面,尽管整体行业销售增长,销售仍然回落,因此这意味着市场份额下降。 您是否可以帮助我们将Québec和BC季度的临时影响与市场竞争力的普遍提升区分开来? 我想,如果你希望在未来几个季度重新获得市场份额?

Greg Engel

Yes. Thanks for the question, Oliver. So I think you have to look at kind of in totality across the Canadian market. We were seeing significant growth as alluded to in both Alberta and Atlantic Canada and Ontario has a significant part of the market. While sales into Ontario were lower in Q3 versus Q2 because of the pipeline fill, it doesn't necessarily mean there was a shift in market share because they have been and continue to be working through -- as you know, they have a cap of 25 kilos per store per week. And so they're working through part of that pipeline build.
So don't have necessarily a market share number kind of nationally, but I wouldn't look at kind of in-bound pipeline fill, and then uptake. You have to consider what's happening as that product gets worked through. So in the majority of markets and then again, in Québec, after the quarter, so again that's a new market for us going forward.

是。 谢谢你的提问,奥利弗。 因此,我认为你必须考虑整个加拿大市场的整体情况。 我们看到加拿大艾伯塔省和加拿大大西洋地区都有显着的增长,安大略省占据了很大一部分市场。 由于管道填充,第三季度对安大略省的销售额较第二季度有所下降,但这并不一定意味着市场份额发生了变化,因为他们已经并将继续努力 - 正如您所知,他们有一个上限 每家商店每周25公斤。 因此他们正在完成部分管道构建。

所以不一定有一个全国性的市场份额,但我不会看那种入境管道填充,然后采用。 你必须考虑当产品得到解决时正在发生的事情。 因此,在大多数市场,然后在Québec,季度之后,再次,这对我们来说是一个新的市场。

Oliver Rowe

Right. That make sense. You mentioned an interest in U.S. and international CBD markets. Could you maybe just update us on your serving in hemp play, and if we should expect to see some more M&A or developments in Europe to facilitate that market? And then maybe just high-level thoughts on what your U.S. CBD road map might look like?

对。 有道理。 您提到了对美国和国际CBD市场的兴趣。 您是否可以在大麻播放中更新我们的服务,如果我们希望在欧洲看到更多的并购或发展以促进该市场? 那么也许只是对您的美国CBD路线图可能是什么样子的高层次想法?

Greg Engel

Yes. So our investment in Indiana continues to progress. So certainly, as we've made aware before, they've been harvesting hemp -- high CBD content hemp in both Croatia and Serbia the last 3 years. They have had a pinch point in extraction, building out their own internal extraction. So they are looking to outsource some of that. They don't have current capacity to use all the hemp that they produce. So we're looking to assist them in that process by finding another third-party to help get through that, and then we're looking to access that CBD to further expand our efforts. We do also have an investment now for cannabis in Germany, which has a synthetic CBD on the market in Germany right now, through up to 5,000 pharmacies based on their distribution agreement. But we are looking at other opportunities. We see the kind of nutraceutical health and wellness side of CBD in Europe as a significant market opportunity.
In the U.S., we're very actively looking at what the opportunities presents from a CBD perspective. We are not necessarily looking to be a cultivator. We're seeing kind of already pricing compression happening on the hemp side in the U.S., but we want to play at some point in the value chain. And it really comes down to what the regulations are going to look like. I mean we certainly have been following the activity, the FDA. We have seen recently some restrictions like in New York State to clamp down on the use of kind of oral consumption products, and that certainly was one of the key aspects that the FDA highlighted in their public hearings back at the end of May. And so we're very much focused on looking at what other -- how can we participate as the regulations evolve there. So nothing in place today, but we're certainly looking at a number of different opportunities.

是。所以我们对印第安纳州的投资继续发展。当然,正如我们之前所知,他们在过去3年里一直在克罗地亚和塞尔维亚收获大麻 - 高CBD内容大麻。他们在提取方面有一个紧要关头,建立了自己的内部提取。因此他们希望将其中的一部分外包出去。他们目前没有能力使用他们生产的所有大麻。因此,我们希望通过寻找另一个第三方来帮助他们完成这一过程来帮助他们,然后我们希望访问该CBD以进一步扩展我们的工作。我们现在也在德国投资大麻,目前在德国市场上有合成CBD,根据其分销协议,通过多达5,000家药店。但我们正在寻找其他机会。我们将欧洲CBD的营养保健方面视为重要的市场机遇。

在美国,我们非常积极地从CBD角度看待机遇。我们不一定希望成为一名修炼者。我们看到美国大麻方面已经出现了一些定价压缩,但我们希望在价值链的某个方面发挥作用。这真的归结为法规将会是什么样子。我的意思是我们当然一直关注这项活动,即FDA。我们最近看到一些像纽约州那样限制使用口服消费产品的限制,这肯定是FDA在5月底公开听证会上强调的关键方面之一。所以我们非常专注于研究其他什么 - 我们如何随着法规的发展而参与其中。所以今天没有任何东西,但我们肯定会看到许多不同的机会。


Graeme Kreindler with Eight Capital.

Graeme Kreindler与Eight Capital合作。

Graeme Kreindler

I just wanted to get some more color. I appreciate the commentary around the Québec shipments and the Ontario pipeline fill. I was just wondering, considering the harvest for OGI declined quarter-over-quarter, I know there is a significant amount of inventory on the balance sheet right now. But will this have any knock-on effects in terms of product available-for-sale or volumes available-for-sale in the fourth quarter?

我只是想获得更多颜色。 我很欣赏Québec货物和安大略省管道填充的评论。 我只是想知道,考虑到OGI的收益比上一季度有所下降,我知道目前资产负债表上有大量的库存。 但是,这会对第四季度的可供出售产品或可供销售量产生任何连锁效应吗?

Greg Engel

No. I mean, what we -- again, it did have -- and maybe I'll add a bit more color to the MD&A. So we did -- the change that we did make in terms of our processes was, we did a small scale pilot study to look at some taking clones from flower -- plants and flower versus plants that we have specifically designated for vegetative growth. We're unlike other companies where we don't clone from other plants, we actually clone from veg. The pilot scale study was very promising. So as we expanded to larger scale, we didn't see that play out in a positive manner, so we reverted back. So certainly as we alluded to before the end of Q3 and certainly, in all of Q4 to date, we're seeing back to our historical levels of production.
So as we said, with the inventory level that we have, certainly, it should not have impact on our ability to kind of meet the market demand. We expect Ontario, for example, to do another pipeline fill at some point in August or September, and certainly, as they prepare for the additional 50 stores to come online.

不,我的意思是,我们 - 它再次确实有 - 而且我可能会为MD&A添加更多颜色。所以我们做了 - 我们在流程方面所做的改变是,我们进行了一项小规模的试点研究,以研究花卉植物和花卉克隆的一些克隆,以及我们专门用于营养生长的植物。我们不同于其他我们不从其他植物克隆的公司,我们实际上是从veg克隆。中试规模研究非常有希望。因此,随着我们扩大规模,我们没有看到以积极的方式发挥作用,所以我们又回归了。当然,正如我们在第三季度结束之前所提到的那样,当然,在迄今为止的第四季度,我们正在回顾我们的历史生产水平。


Graeme Kreindler

Okay. And as a follow-up there, I know the press release mentioned having some lower cannabinoid content in the product that was harvested. So could there be any knock-on effects? I know your pricing was relative flat quarter-over-quarter. But could that potentially impact pricing moving forward for some of that inventory?

好的。 作为后续行动,我知道新闻稿中提到在收获的产品中含有较低的大麻素含量。 那么可能有任何连锁效应吗? 我知道你的价格与上一季度相比持平。 但这可能会影响某些库存的价格上涨吗?

Greg Engel

No. I mean so we -- what we commented on was the fact that our actual cannabinoid levels are increasing. So we feel that we've come to kind of a great balance now of cultivation and yield in conjunction with higher cannabinoid levels, right? So that's kind of in the shift. So it wasn't that in the past quarter we had lower cannabinoid levels, it was that in the current -- in Q4 and the end of Q3, we were going to higher than historical cannabinoid levels, which should have a positive impact.

不,我的意思是我们 - 我们评论的是我们的实际大麻素水平正在增加。 因此,我们觉得我们现在已经达到了种植和产量以及更高的大麻素水平之间的良好平衡,对吧? 所以这就是转变。 因此,在过去的一个季度,我们的大麻素水平较低,而在当前 - 在第四季度和第三季度结束时,我们的水平高于历史大麻素水平,这应该会产生积极的影响。

Graeme Kreindler



Paolo De Luca

Yes, Graeme. It's Paolo here. In fact, if you -- we keep -- we're all keeping track of all of these particulars. Where we are right now in terms of our harvest, we're getting probably the best yields and cannabinoid levels that we've ever had at the same time. Like we've had instances where we had higher yields, and we've had instances of higher cannabinoid levels, but this is -- at this point in time, the harvest that we're getting off our facility now are the best of both worlds that we've ever had, kind of hitting on both cylinders.

是的,格雷姆。 这是Paolo。 事实上,如果你 - 我们保留 - 我们都在跟踪所有这些细节。 就我们现在的收获而言,我们可能获得了我们曾经拥有的最高产量和大麻素水平。 就像我们曾经有过更高产量的情况一样,我们已经有了大麻素含量较高的情况,但是现在,我们现在从我们的设施中获得的收获是两者中最好的。 我们曾经拥有过的世界,有点击中两个圆柱体。


David Kideckel with AltaCorp Capital.

David Kideckel与AltaCorp Capital合作。

David Kideckel

Congratulations on the quarter everybody. Just have a couple questions here. I want to kick it off first with your -- the potential U.S. and international strategy here. So first, just understanding the U.S. and CBD and hemp in particular, that the U.S. is going to be a strategic importance to OGI. Would you be considering using the CBD from hemp? Or would this be CBD from cannabis, altogether, just to remain compliant with U.S. law?

恭喜每个人都在这个季度。 这里有几个问题。 我想首先提出你的 - 美国和国际潜在的战略。 首先,只要了解美国,CBD和特别是大麻,美国将对OGI具有战略意义。 你会考虑从大麻使用CBD吗? 或者,这将是大麻的CBD,完全是为了遵守美国法律吗?

Greg Engel

Yes. So again our focus as it is, we're not looking at this point to be a hemp cultivator or producer. We've seen some other companies make that decision in the U.S. So we would be very much focused on CBD from hemp for the United States market because that's what the farm act and what we're seeing the regulations allow. I think David, you and I've spoken about this before, where we see future opportunity is certainly biosynthesis as an input material for many products there, and even to the point where as Hyasynth continues to kind of build out their expertise, this actually potentially put a biosynthesis facility somewhere in the United States to produce within that jurisdiction for use of product for to export from Canada into the U.S. from biosynthetic CBD. So it's a combination of both.

是。 因此,我们的重点仍然是,我们不会将这一点视为大麻种植者或生产者。 我们已经看到其他一些公司在美国做出这样的决定。因此,我们将非常关注来自大麻的CBD对美国市场的影响,因为这就是农场行为以及我们看到法规允许的内容。 我想大卫,你和我之前已经谈过这个,在那里我们看到未来的机会肯定是生物合成作为那里许多产品的输入材料,甚至到了Hyasynth继续建立他们的专业知识,这实际上 可能在美国的某个地方建立一个生物合成设施,在该管辖范围内生产用于从加拿大从生物合成CBD出口到美国的产品。 所以这是两者的结合。

David Kideckel

Okay. That's actually very helpful. So that actually was going to lead me into my next question, Greg, with respect to Hyasynth. So U.S. is on Hyasynth's radar then just from a distribution and R&D standpoint. Should we be thinking about Hyasynth now is more of an international play, not just solely Canadian?

好的。 这实际上非常有帮助。 所以这实际上会引导我进入下一个问题,Greg,关于Hyasynth。 因此美国只是从分销和研发的角度看待Hyasynth的雷达。 我们是否应该考虑Hyasynth现在更像是一个国际游戏,而不仅仅是加拿大人?

Greg Engel

Yes. I think Hyasynth presents a tremendous number of opportunities, right? If you think about biosynthetic production of CBD or THC or other minor cannabinoids that have synthesized THCB and CBDV, that lends itself very well to a more traditional CPG or beverage-alcohol company looking for a kind of pure ongoing input material. It also lends itself to potential opportunities from pharmaceutical companies. We know that there has been interest in pharma companies looking at cannabinoids in general, but one of the challenges they face to date is accessing them from plant-derived material, and biosynthesis is really kind of in the bailiwick of what pharma companies do and many companies are producing products today through biosynthesis, so they're familiar from it. And I think this would present an unique way to produce potentially pharmaceutical and unique pharmaceutical products with a combination of major and minor cannabinoids in the future.

是。 我认为Hyasynth提供了大量的机会,对吧? 如果您考虑生物合成生产CBD或THC或其他合成了THCB和CBDV的次要大麻素,那么这对于更传统的CPG或饮料 - 酒精公司来说非常适合寻找一种纯粹的持续输入材料。 它还有助于制药公司的潜在机会。 我们知道,制药公司一直对大麻素有兴趣,但他们面临的挑战之一就是从植物衍生材料中获取,生物合成实际上是制药公司所做的事情和许多 公司今天通过生物合成生产产品,因此他们对此很熟悉。 而且我认为这将是一种独特的方式,可以生产具有主要和次要大麻素组合的潜在药物和独特的药物产品。

David Kideckel

Okay. That's great. My last question, and then I'll get back in the queue. Is there any -- so how should we be thinking about -- Paolo, as you're mentioning earlier on the call about gross margins for the next quarter. Should we be thinking that gross margins will stay in this range? Or due to the sort of temporary, I guess, protocol changes and other changes that occurred in the quarter, you expect margins to improve for the next Q4?

好的。 那很棒。 我的最后一个问题,然后我会回到队列中。 有没有 - 所以我们应该怎么想 - 保罗,正如你之前提到的关于下一季度毛利率的电话。 我们是否应该认为毛利率将保持在这个范围内? 或者由于临时,我猜,协议更改和本季度发生的其他变化,您预计下一季度的利润率会有所改善吗?

Paolo De Luca

So for Q4, I wouldn't make a call either up or down just because Q4 the visibility on export duty dependent on the pharma sales effect of whether we get the pipeline fills and so forth. I think certainly for fiscal 2020, the first couple of quarters there where we're still selling dried flower and oil and potentially also vape pen, I would expect our efficiencies to definitely improve because our cost of cultivation is going to be back to where it was before, and certainly, our staffing, I think, I mentioned to this on the call, I think this is a important metric that people should be looking at peers as well, what's your revenue per full-time employee going to be in a more mature market? We have enough staffing now to handle almost all our growth, and so we have the benefit of even improving upon that with automation and so forth. But right now, we're really -- we're staffed up to be responsive to purchase orders -- the large purchase orders that come in, and so we made the sacrifice to capture sales, which -- we're one of the leaders in sales since Rec has been launched and those efficiencies will definitely come I think starting in Q1 and Q2 of next year.

因此,对于第四季度,我不会上调或下调只是因为Q4出口税的可见性取决于我们是否获得管道填充的药品销售效应等等。我认为在2020财年,我们仍在销售干花和油以及可能还有vape笔的前几个季度,我希望我们的效率肯定会提高,因为我们的种植成本将会回到原来的位置。以前,当然,我的员工,我想,我在电话会议上提到了这一点,我认为这是一个重要的指标,人们也应该关注同行,你的每个全职员工的收入是多少?更成熟的市场?我们现在有足够的人员来处理我们几乎所有的增长,因此我们甚至可以通过自动化等方式改进这一点。但是现在,我们真的 - 我们已经配备了对采购订单的响应 - 大量采购订单,因此我们做出了牺牲以获取销售额 - 我们是其中之一自Rec推出以来的销售领导者,我认为从明年的第一季度和第二季度开始,效率肯定会提高。

Greg Engel

Yes. Maybe just add a little more color to that, Paolo, is because previously in the past, we had mentioned that if you kind of asked this question about 6 months ago, what our staffing needs would be when we're fully built out, and we were talking of a number of 1,000 employees. So based on the continuous improvement projects and the amount of automation we brought in, we certainly believe that we're now only going to need 850, which only would be an additional just over 150 employees from our current base, even though our production capacity is still going to more than double where it is today and we've got new forms. We'd just continue to add to automation systems and improve kind of what we're doing on a day-to-day operation basis, so -- which again should contribute to us from a costing basis.

是。 也许只是增加一点颜色,Paolo,因为以前在过去,我们已经提到过,如果你在6个月前问过这个问题,那么当我们完全建成时,我们的人员需求是什么,以及 我们谈论的是1000名员工。 因此,基于持续改进项目和我们带来的自动化程度,我们当然认为我们现在只需要850,即使我们的生产能力,我们目前的基地只需要150多名员工。 仍然是今天的两倍多,我们已经有了新的形式。 我们只是继续增加自动化系统并改善我们在日常运营基础上所做的工作,因此 - 这也应该从成本核算的基础上为我们做出贡献。

Paolo De Luca

Yes. I mean from our perspective, we realize we still haven't hit our peak efficiency. We still haven't hit our peak economies of scale, and yet, we're still showing positive EBITDA margin. And we're in a market -- we're delivering in a market right now that's not matured from a retail perspective, like we haven't been in Québec, Ontario is a largest province, it needs more retail stores. I think everybody realizes that, and we haven't even done Rec 2.0 which represents 50% of the market.
So we're excited that we're able to generate margin now, positive EBITDA margin now, and I think that bodes well for us in the future with these opportunities and both on -- from our perspective on the efficiencies and from the market that will organically grow because of the realization of Rec 2.0, and obviously the increase in retail end points.

是。 我的意思是从我们的角度来看,我们意识到我们仍未达到我们的最高效率。 我们仍然没有达到我们的最高规模经济,然而,我们仍然显示出正的EBITDA利润率。 而且我们正处在一个市场中 - 我们现在正在市场上交付,从零售角度来看并不成熟,就像我们没有在Québec,安大略省是一个最大的省份,它需要更多的零售店。 我想每个人都意识到这一点,我们甚至没有完成代表50%市场的Rec 2.0。

所以我们很高兴我们现在能够创造利润率,现在可以获得正的EBITDA利润率,而且我认为这对我们来说预示着这些机会并且两者都有利 - 从我们对效率和市场的看法来看 由于Rec 2.0的实现,有机增长,显然零售终点的增加。


Tamy Chen with BMO Capital Markets.

Tamy Chen与BMO资本市场合作。

Tamy Chen

My First question is, just wanted to get an update on Ontario. So are they still implementing that retail allocation? Have they ordered a bit more ahead of the August pipeline fill? Or is it still just you are not expecting much until that big August pipeline fill comes in again?

我的第一个问题是,想了解安大略省的最新情况。 他们还在实施零售分配吗? 他们是否在8月份的管道填充之前订购了一点? 或者,直到8月份的大型管道填充再次出现,您是否仍然没有期待太多?

Greg Engel

Yes. So what they've been doing, Tamy, and thanks for the question is, so they do have this 25-kilo max on a weekly basis. They did expand and put 3 products outside of that max. We have one of those SKUs, so that are included outside of that, so our Trailblazer product is not under the 25-kilo cap. So that does give us an opportunity to sell product in. Depending on the SKUs, they have been refilling some, but what they're looking for, again, is, they've got sufficient inventory. When you actually look at kind of their warehouse and inventory numbers, they are concerned about not running out of inventory, but they certainly have many, many weeks of inventory right now with the exception of a few SKUs across a few companies.
So they will be placing, they tend to want to kind of in advance of stores coming online to get that large pipeline fill to expand their warehouse capacity. So we expect to see that in August or September, which again could have something that impacts our quarter based on our Q4 ending at the end of August, right? So as the order goes in August, we're preparing hopefully and optimistically to get it out before the end of August, but it's depending upon them.



Tamy Chen

Okay. And my second question is, I was wondering if you could give more insights to the Alberta market, the only province really have been more aggressive on retail store openings. And it looks like for this quarter, your volume still was basically flat from the prior quarter. I would have thought that notwithstanding the issues in Ontario and the timing in Quebec, just given where Alberta has been doing with their store rollout, that it should still -- it still should have contributed to some level of sequential growth. So can you talk a bit about that market?

好的。 我的第二个问题是,我想知道你是否可以给艾伯塔省市场提供更多的见解,唯一的省份确实在零售店开业时更加积极。 看起来本季度,您的交易量与上一季度基本持平。 我会想到,尽管安大略省的问题和魁北克的时间安排,只是考虑到艾伯塔省在他们的商店推出时所做的事情,它应该仍然 - 它仍然应该促成一定程度的连续增长。 那么你能谈谈这个市场吗?

Paolo De Luca

Yes. So I mean certainly for us, Alberta is a significant growth. Quarter-over-quarter, we almost doubled our sales in Alberta to the Alberta kind of to the AGLC. So certainly, Alberta and the Atlantic Canada provinces, we've seen consistent growth kind of quarter-over-quarter. But again, Ontario with such a large pipeline fill had such an impact of -- not in Q2, not having that replenishment in Q3 had an impact. So while Alberta, Atlantic Canada grew, Manitoba grew for us as well. And we see that right now Alberta is adding -- originally, they were going to add 10 stores per week. The last couple of weeks, they've added 20 per week.
I think the one thing we didn't highlight in any detail here is British Columbia. BC market has been more challenging. They are just now adding some additional stores. But what we're seeing in British Columbia is that -- so for unique form factors, good success there, but for dried flower that is a market that's challenging to penetrate. So BC sales for dried flower are limited due to the kind of unique nature of the marketplace, and this is consistent across every company, right? I mean people are selling, we're selling certainly pre-rolls into their companies and oils, but certainly, companies that have capsules as well those are doing well, but dried flower is still very limited in BC through the retail source.

是。所以我的意思对我们来说,艾伯塔省是一个显着的增长点。与上一季度相比,我们在阿尔伯塔省的销售额几乎翻了一番,达到了AGLC的艾伯塔省。当然,在艾伯塔省和大西洋加拿大各省,我们看到的季度环比持续增长。但同样,拥有如此大规模管道填充的安大略省产生了这样的影响 - 不是在第二季度,第三季度补货没有产生影响。因此,在加拿大大西洋沿岸的阿尔伯塔省,曼尼托巴省也为我们增长。我们现在看到艾伯塔省正在加入 - 最初,他们每周会增加10家商店。过去几周,他们每周增加20个。

我认为我们在这里没有详细说明的一件事是不列颠哥伦比亚省。 BC市场一直比较具挑战性。他们刚刚添加了一些额外的商店。但我们在不列颠哥伦比亚省看到的是 - 所以对于独特的外形因素,那里取得了很好的成功,但对于干花来说,这是一个难以渗透的市场。因此,由于市场的独特性,干燥花的BC销售受到限制,这在每个公司都是一致的,对吧?我的意思是人们在卖东西,我们肯定会在他们的公司和油中销售产品,当然,那些拥有胶囊的公司也表现不错,但在卑诗省通过零售来源干花仍然非常有限。

Tamy Chen

Okay. And just to confirm in Alberta, you mentioned -- so for example, in Ontario, you've got the centralized buy and so it causes some of the lumpiness. Does Alberta function like that at all?

好的。 只是为了在艾伯塔省确认,你提到过 - 例如,在安大略省,你有集中购买,所以它会导致一些笨拙。 艾伯塔省的功能是否完全如此?

Greg Engel

They do because their throughput is so high, they're ordering on a more consistent basis. So because now with over 150 stores, what we're seeing is weekly orders out of Alberta, right? So they've got a bigger store population to fill, whereas, Ontario made a decision to build a big inventory in their warehouse and then slowly work through that. Alberta is replenishing on an ongoing basis.

他们这样做是因为他们的吞吐量非常高,他们的订购更加一致。 所以,因为现在有超过150家商店,我们看到的是阿尔伯塔省的每周订单,对吧? 所以他们有更大的商店人口来填补,而安大略省决定在他们的仓库中建立一个大的库存,然后慢慢地完成。 艾伯塔省正在不断补充。

Tamy Chen



Paolo De Luca

So Tamy, we view Alberta as where Ontario will be, and that gives a lot of optimism obviously because it's a more smoothly functioning market at this point in time, and so that because -- even though it's a smaller market, we're actually getting more growth in Alberta, and therefore, when Ontario kind of starts to match the retail endpoints, we did the same type of growth in Ontario.

所以Tamy,我们认为艾伯塔省是安大略省的所在地,这显然给了很多乐观,因为它在这个时间点是一个更加平稳运作的市场,因此 - 因为 - 即使它是一个较小的市场,我们实际上 在艾伯塔省获得更多增长,因此,当安大略省开始与零售终点相匹配时,我们在安大略省实现了同样的增长。

Tamy Chen

Got it. Okay. And my last question is just back on the gross margin, it sounded like in the prior answers to the prior question that in fiscal Q4, that some of these headwinds may not be fully through. Am I hearing that correctly?

得到它了。 好的。 而我的最后一个问题仅仅是回到毛利率,这听起来像先前问题的先前答案,在第四财政年度,其中一些逆风可能无法完全解决。 我听到了吗?

Greg Engel

Yes. So and it has -- a lot of it has to do with like our cash cost or cultivation costs are just one component of the mix, right? So we're running right now what I'll call -- and we're doing this for a strategic reasons. We're running with a suboptimally inefficient labor pool because we want to be ready for the increased volumes that come out. So by the end of July, in a couple weeks here, we're investing from Phase 4a. We've gone from 36,000 kilos to 51,000 kilos above annual targeted production.
So we can't just displace the labor pool and then bring them back. So we have that labor pool. And once that apparatus is working on a larger volume of products, which is going to be short fully, we're going to see those cost come down again. So I think, our quarter end or year-end is August 31. I think it would be reasonable to assume that we have these kind of -- these margins kind of -- slight compression in margins for Q4, but I would expect Q1 and Q2 definitely for it to go back to very attractive levels.

是。所以它有 - 很多与它有关,就像我们的现金成本或培养成本只是混合的一个组成部分,对吧?所以我们现在正在运行我称之为 - 我们这样做是出于战略原因。我们正在运行一个次优的低效劳动力池,因为我们希望为增加的产量做好准备。因此,截至7月底,在几周内,我们将从第4a阶段进行投资。我们已经从36,000公斤增加到51,000公斤,超过了年度目标产量。

因此,我们不能仅仅取代劳动力资源,然后将其带回来。所以我们有那个劳动力资源。一旦该设备正在处理大量产品,这将完全缩短,我们将看到这些成本再次下降。所以我认为,我们的季度末或年末是8月31日。我认为我们有这样的假设 - 这些利润率 - 对Q4的利润率有轻微压缩是合理的,但我希望Q1和Q2肯定会让它恢复到极具吸引力的水平。


Matt Bottomley with Canaccord.

Matt Bottomley与Canaccord。

Matt Bottomley

A lot of mine have been answered. Just wanted to stay on the cultivation side, and apologies if you did go into some details last earnings call. But when it comes to the -- what you call, the change in growing protocols, can you just give a little further color? Is that something that which changed wholesale in the facility where the cost -- or where the margin pressure was felt this quarter? Or is it something more transient and just part of your facility that you had to change?

我的很多人都得到了答复。 只是想继续留在培养方面,并且如果你确实在最后一次收益电话会议上详细说明了道歉。 但是当涉及到 - 你所说的,增长协议的变化时,你能不能再给它一点颜色? 那个成本 - 或者本季度感受到利润率压力的设施是否会改变批发的东西? 或者它是一个更短暂的东西,只是您必须改变的设施的一部分?

Greg Engel

Yes. So as I alluded to earlier about, we made a -- we did a pilot study on a small number of rooms where we -- if you recall, our technique is very different than other companies. We don't clone from others. We actually overproduce vegetative plants specifically to clone from them, so that we get a much healthier and vibrant clone. So we did a trial to see when we go through and trim on flower plants on the early part of their flowing cycle, whether or not we could use that for cloning, it would improve efficiency, it would reduce the number of vegetative plants we have to produce. So the early trials were very positive and directionally gave us comfort to say we could go -- we could do this on a broader scale.
So we did move to that change. And what we saw is that, that trial may have been very unique to a couple of strains there we could successfully do that with. So when we did roll it out, and we picked up kind of the challenge within a number of weeks. But as you can imagine that we had already planted a significant number of rooms with that revised technique and then for us to revert back to cloning from veg took some time to do. So certainly what we saw is, well before the end of Q3 and certainly, all of Q4, we are back at historical yield levels that we kind of pride ourselves on, and with some of the other changes we've made, we're also seeing really high and positive cannabinoid levels for us.
So it was a test we did. The early trial looked promising. When we used it kind of broadly across most strains, it didn't give us the results we wanted. It had a pretty significant impact on kind of the vibrancy and the yields from those plants. But you have to make a decision 4 weeks into the life cycle of a plant, do you destroy it and start from scratch? Or do you see it through its growth cycle? It still had good dissent results, but certainly not what we historically expected. So that was why you saw a big impact on cost of cultivation and also that did impact our biological assets as well.

是。正如我早些时候提到的那样,我们做了一个 - 我们对少数几个房间进行了试点研究 - 如果你还记得,我们的技术与其他公司截然不同。我们不会从别人那里克隆。我们实际上过度生产植物性植物,专门从它们克隆,以便我们得到一个更健康和充满活力的克隆。因此,我们进行了一项试验,看看我们在流动周期的早期阶段是否经历和修剪花卉植物,无论我们是否可以将其用于克隆,它将提高效率,它将减少我们拥有的植物性植物的数量生产。所以早期的试验是非常积极的,并且我们可以顺利地给我们安慰 - 我们可以在更广泛的范围内做到这一点。



Paolo De Luca

Matt -- and yes, we keep -- we all keep track of the harvest very carefully, and I could tell you this, the last 30 harvests, not only are they back to normal levels, the cannabinoid profile is excellent. And what I take a lot of comfort in is the range of distribution on the yields we get for harvest is very narrow, which tells me that we really locked the predictability of the yield, so we're very, very confident on the yields going forward and excited to have new rooms coming on, getting harvested in a couple of weeks.

马特 - 是的,我们保持 - 我们都非常谨慎地追踪收获,我可以告诉你,最后30次收获,不仅是他们恢复到正常水平,大麻素的状况非常好。 而我感到非常欣慰的是,我们收获的产量分布范围非常狭窄,这告诉我,我们确实锁定了产量的可预测性,所以我们对收益率非常非常有信心 前进并兴奋地开始新的房间,在几周内收获。

Matt Bottomley

Great. Just wanted to move to sort of the cannabis 2.0 side of things. So given your commentary over really trying to get hit the ground running here with vape pens and chocolate edibles. In both of those categories, are you able to tell us what you are able to inventory in advance of -- let's say, assuming everything goes out the door or some sales start in mid-December, that might presume that you have to ship at the end of November. What are you able to do today? I imagine you've got empty vape pens but in both of those categories in order to get ahead and potentially start with a leading share in those categories?

非常好。 只想转向大麻2.0的一面。 所以考虑到你的评论真的试图在这里用vape笔和巧克力食物来运行。 在这两个类别中,您是否能够告诉我们您可以提前清点的内容 - 假设一切都在12月中旬出现,或者某些销售在12月中旬开始,可能会假设您必须在 11月底。 你今天能做什么? 我想你有空的vape笔,但在这两个类别中,为了获得领先并可能从这些类别的领先份额开始?

Greg Engel

Yes. So I mean we can't specifically say what amount product internally we'll have. So certainly between PAX there and Feather as well as the traditional value 5/10 cartridge, we have or will have shortly kind of significant inventory of all the equipment and filling and the kind of pods and/or pens. We do have, however, significant inventory concentrate, right? So one of the key things when you look at our MD&A, one of the things we highlight is a very big shift from material for extraction. We already have at the end of the quarter, and this trend has continued, 312 kilos of 70% concentrate cannabinoid, so -- and again, we're working through additional material, both internally and with Valens.
So we've got a lot of concentrate material that will help us kind of be prepared. So we will definitely be in a position to have a range of vaporizable products for the December launch. What still to be determined, as you said, Matt is, whether or not we'll be able to ship those in November into the retail chain or we have to wait until December. We really don't know yet from Health Canada. Even though we know, there is a 60 day notice. One comment I would make is, we actually today submitted all of our product forms for Rec 2.0. We wanted to be in the queue for the review cycle, so today was the first day as companies could do that, so we've already made those submissions this morning.
And then for chocolates and the powdered beverages, so we want to have sufficient inventory before we launch those products. So I don't expect us to launch chocolates until January at the earliest, and I think that is going to be very much dependent on how much inventory we have. One of the things we've talked a lot about before is it doesn't do any good to kind of have intermittent supply in the market. So -- but I mean, the good news is our equipment is capable of producing very high large volume throughput. This is the same type of equipment you would see in some of the largest chocolate facilities in the world. And as we're building up extract material, so we expect to build through all of our backlog in the material before the end of the year between both internal resources and external resources.

是。所以我的意思是我们不能具体说明我们内部会有多少产品。因此PAX在那里和羽毛以及传统的5/10墨盒之间肯定存在,我们已经或将会很快对所有设备和填充以及豆荚和/或笔的种类进行大量清查。但是,我们确实有大量的库存集中,对吧?因此,当您查看我们的MD&A时,其中一个关键因素是我们强调的一点是从提取材料的转变。我们已经在本季度结束时,这种趋势仍在继续,312公斤的70%浓缩大麻素,所以 - 我们再次通过内部和Valens的其他材料进行工作。

所以我们有很多浓缩物质可以帮助我们做好准备。因此,我们肯定能够在12月推出一系列可蒸发产品。还有待确定的,正如你所说,马特是,无论我们是否能够将11月份的货物运送到零售连锁店,或者我们必须等到12月。我们真的还不知道来自加拿大卫生部。即使我们知道,也有60天的通知。我要提出的一个意见是,我们今天提交了Rec 2.0的所有产品表格。我们希望在审核周期中排队,所以今天是公司可以做到的第一天,所以我们已经在今天早上提交了这些提交。

然后对于巧克力和粉状饮料,我们希望在推出这些产品之前有足够的库存。所以我不希望我们最早在1月份之前推出巧克力,我认为这在很大程度上取决于我们有多少库存。我们之前谈过的很多事情之一就是市场上的间歇性供应没有任何好处。所以 - 但我的意思是,好消息是我们的设备能够产生非常高的大容量吞吐量。这是您在世界上一些最大的巧克力设施中看到的相同类型的设备。由于我们正在构建提取材料,因此我们希望在年底之前在内部资源和外部资源之间构建材料的所有积压。

Paolo De Luca

Greg, just some color on the concentrate. Obviously I think you're probably aware, but just for some of listeners, 312 kilograms may not sound like much like, but when you're putting 10-milligrams into a chocolate, you can produce millions of units, right? And even for vape pens where you're putting, call it, 250-milligrams or 500-milligrams of cannabinoid concentrate, those are big numbers we can try by concentrate, and we have more of that coming.

格雷格,只是浓缩液上的一些颜色。 显然我觉得你可能已经知道了,但是对于一些听众来说,312公斤可能听起来不太像,但是当你把10毫克装进巧克力时,你可以生产数百万个单位,对吧? 甚至对于你要放置的vape笔,称之为250毫克或500毫克的大麻浓缩物,这些都是我们可以通过精矿尝试的大数字,我们还有更多这样的东西。

Matt Bottomley

Understood. And then lastly, just staying on this topic though, in terms of the infused beverage or potential infused beverage market, do you have a -- where on your priority list is potentially securing a big alcohol partner, if at all, if that's sort of on your radar right now?

了解。 然后,最后,就这个主题而言,就注入饮料或潜在的饮料市场而言,你有没有 - 你优先考虑的地方有可能确保一个大酒精合作伙伴,如果有的话,如果那样的话 在你的雷达上吗?

Greg Engel

Yes. So we're -- we've been very public and we're actively seeking, so either a CPG partners that's looking to do CBD beverages or a big alcohol company that's looking to THC infused beverages, which is why we've done the work on our liquid formulation as well as our partners with biosynthesis. So definitely, high in our list. Certainly something management is spending significant amount of time on. What it is really dependent upon is the status of those potential partners, right? What we have seen in discussions with potential partners is kind of varying levels of commitments where they seem to move close to making a decision and then kind of go back as they're looking because you have to consider these are global companies and they have to look at global implications. These types of decisions have to go to the -- through their boards and have to be reviewed by legal and compliance and a lot of various like that, so definitely a key aspect. We're focused on, but certainly nothing to announce at this point.
And just make one additional comment. The reason we're excited about our powdered beverage, I think, the powdered beverage formulation is one that in our discussions for those of you on the call that are aware of this, the provinces over the last few weeks have been doing product calls. They've been asking for companies for a full broad ranges of products and commitments and pricing. As far as we have seen in any of those discussions, we're the only company and we've got this feedback to have a powdered beverage option. And I think what the uniqueness of that option is, you're creating an input materials that people could choose to make the beverage of their choice and to consume at the time that they want to. Certainly big savings for us in terms of shipping costs, production, labeling cost, but also for the retail stores.
I think one of the challenges some of the other beverage companies are going to have is securing sufficient space within a retail environment. Many of these locations were not built out with the consideration to have refrigeration and/or large storage for kind of the volume that beverage products are going to take. I mean edibles in and of themselves are going to be a whole new SKU range in a lot of products, but -- so having that kind of discretionary package and small-volume package that people can create any beverage they want, that's going to be fast acting as a big advantage.

是。所以我们 - 我们一直非常公开,而且我们正在积极寻求,所以要么是CPG合作伙伴要么做CBD饮料,要么是一家大型酒精公司正在寻找THC注入饮料,这就是为什么我们已经完成了我们的液体配方以及生物合成的合作伙伴。所以肯定,在我们的名单中很高。当然管理层正在花费大量时间。它真正依赖的是这些潜在合作伙伴的地位,对吧?我们在与潜在合作伙伴的讨论中看到的是各种各样的承诺,他们似乎接近做出决定然后回顾他们正在寻找,因为你必须考虑这些是全球公司,他们必须看看全球影响。这些类型的决策必须通过他们的董事会进行审查,并且必须通过法律和合规以及许多类似的审查进行审查,因此绝对是一个关键方面。我们专注于,但当然没有什么要宣布的。


我认为其他一些饮料公司将面临的挑战之一就是在零售环境中确保足够的空间。这些地点中的许多地方并未考虑到对于饮料产品将要采用的那种体积具有制冷和/或大容量存储。我的意思是,在许多产品中,食品本身就是一个全新的SKU系列,但是 - 因此,拥有那种可自由支配的包装和小批量包装,人们可以创造他们想要的任何饮料,这将是快速行动是一个很大的优势。

Paolo De Luca

Yes. We're going to fill the rum, not the rum and coke.

是。 我们要填充朗姆酒,而不是朗姆酒和可乐。


Greg McLeish with Mackie Research Capital.

Greg McLeish与Mackie Research Capital合作。

Greg McLeish

Just a couple of questions. Given CannTrust issues that they had last week, do you think that there is an ability for you to gain market share from the fact that they have had product pulled from OCS, and also the ability to potentially poach some of their large patient base of medical clients?

只是几个问题。 鉴于他们上周发布的CannTrust问题,您是否认为有能力从他们从OCS获得产品的事实中获得市场份额,并且还有可能潜在地挖走他们的一些大型医疗患者群体客户呢?

Greg Engel

Yes. It's a great question, Greg. So I think, certainly, we've already seen some inbounds from provincial authorities asking us about additional product availability with what we've seen with CannTrust decisions that are being made. I think, certainly, from a patient perspective, the last report I saw is that they have 72,000 patients. We have been seen as a company a pretty ongoing, steady shift of patients converting over to us from other licensed producers. And I think this goes back to the Rec launch in the fall.
We were one of the companies that made a very firm commitment to supplying our medical patient population base and have always consistently have product available for them, whereas other companies had issues and had infrequent available of products. But that being said, we would not necessarily be in a position to take on an additional couple -- tens of thousands of new patients at this time, just in terms of product allocation. We can certainly gradually take on new patients, and we already are starting to see some of the companies (technical Difficultly].


我们是一家非常坚定地致力于为我们的医疗患者群提供服务的公司之一,并始终为他们提供产品,而其他公司则存在问题并且不常提供产品。但话虽如此,我们不一定能够承担额外的几对 - 目前数以万计的新患者,仅就产品分配而言。我们当然可以逐渐接纳新患者,而且我们已经开始看到一些公司(技术难度大)。

Greg McLeish

Right. And on a -- just on a macro basis, do you think that Health Canada will do a disservice to the industry if they don't permanently revoke CannTrust's licenses?

对。 而且,就宏观而言,如果他们不永久撤销CannTrust的许可证,您认为加拿大卫生部会对该行业造成损害吗?

Greg Engel

It's a interesting question. I can't necessarily comment on their decision-making. I think what we have seen in the past, with belief was the decision that was made there with product that was brought in from the black market maybe indicative of what we may or may not seek here, but I can't comment on what Health Canada is going to do.
I think one of the things that I would highlight though is we're seeing a transition in the industry right now. I think one of the key things that we have seen with over the years and I guess I look back and it started with when I joined Organigram is, a transition from pen founders as leaders and CEOs of companies to bringing in kind of different people that have experience in building and growing companies or running and operating successful companies. And that transition continues right now. Certainly we saw that with Canopy, with the recent change and -- but I think that what is hearkens to is, it's really important that companies have independent governance, and we know that the governance is -- we're really proud of the fact that we have an Independent Chair and a fully independent Board with the exceptional of myself sitting on the Board. That's not necessarily the case of many of the other companies. And I think it's -- or historically was not the case and it did lead to some challenges at those companies. So...


我认为我要强调的一件事就是我们现在正在看到行业的转型。我想我们多年来看到的关键事项之一,我想我回顾过去,当我加入Organigram时,从笔创始人作为公司的领导者和首席执行官转变为带来一些不同的人有建立和发展公司或运营和运营成功公司的经验。而这种转变现在仍在继续。当然,我们在Canopy中看到了最近的变化 - 但我认为最重要的是,公司拥有独立治理非常重要,我们知道治理是 - 我们真的为这个事实感到自豪我们有一个独立主席和一个完全独立的董事会,我本人也是董事会成员。许多其他公司的情况不一定如此。我认为这是 - 或者历史上并非如此,它确实导致了这些公司的一些挑战。所以...

Greg McLeish

Right. And just to clarify, that was -- you mentioned belief, but wasn't it bona fide?

对。 只是为了澄清,那就是 - 你提到了信仰,但这不是真正的吗?

Greg Engel

Sorry, bona fide, sorry, I apologies. Thank you for clarifying. I appreciate that.

对不起,真诚的,抱歉,我道歉。 谢谢你的澄清。 我很感激。


Justin Keywood with GMP Securities.


Justin Keywood

Given there has been a detailed discussion on the different cost items so far, just more broadly on the key performance indicators of adjusted gross margins and EBITDA, any expected ranges or goals for those metrics in Q4 and going into 2020?


Paolo De Luca

Yes. So for Q4, like I would say Q4 more of the same as Q3, but really the eye on the prize for us is 2020 because it's just a bigger market opportunity obviously with Rec 2.0 and obviously with significantly more harvested production coming online for us and obviously the expansion of the retail endpoints across the country. So we would expect our margins actually to revert back to our previous -- or some of the previous numbers that we've achieved. So I think -- I don't think that we -- I think we could beat what we did this quarter, certainly in Q1 and Q2 of next year, and ultimately, longer term is going to be dependent on obviously the way that the Rec 2.0 market develops, what kind of pricing power is available there and the costing and so forth.
So we think we have all the tools to be a leader in terms of capturing margin because we have the lowest cost of cultivation and because we have also in terms of biosynthesis an ability to even get better on that as well as to be able to drive efficiencies out of one large facility as opposed to having scattered facilities across the country. And again we're -- because of our indoor quality -- indoor grown high-quality products, we think we can also keep the margin on the flower point of it. There's very few -- very small percentage of the production in Canada that's been grown indoor, and we think that offers a level of consistency and quality that some of the greenhouses can't achieve.

是。所以对于第四季度来说,就像我会说Q4更像Q3一样,但真正关注我们的奖项是2020年,因为它显然是一个更大的市场机会,显然有Rec 2.0,显然有更多的收获产品上网给我们和显然,全国零售终端的扩张。所以我们预计我们的利润率实际上会回到我们之前的 - 或者我们之前已经达到的一些数字。所以我认为 - 我认为我们不认为 - 我认为我们能够击败本季度的情况,当然在明年的第一季度和第二季度,最终,长期将明显取决于Rec 2.0市场发展,那里有什么样的定价能力和成本等等。

因此,我们认为我们拥有所有工具,可以在捕获利润率方面成为领导者,因为我们拥有最低的培育成本,而且因为我们在生物合成方面也能够在这方面取得更好的成绩,并且能够驾驭一个大型设施的效率,而不是在全国各地分散设施。我们再次 - 由于我们的室内质量 - 室内种植的高品质产品,我们认为我们也可以保持其优点。很少 - 在加拿大生产的室内产量很小,我们认为这提供了一些温室无法达到的一致性和质量水平。

Justin Keywood

It's helpful. And I realize it's early for the Rec 2.0, but any indication on what the gross margins could be for these derivative products?

这很有帮助。 我意识到Rec 2.0的早期版本,但是这些衍生产品的毛利率是多少?

Greg Engel

Yes. I think we -- and I mentioned this Justin in the call, I think you have to look at the products very differently between the categories. So for vaporizer pens and that technology, the cannabinoid content is quite high, so then it is dependent upon your cost of cultivation and your extraction throughput and efficiency as well as your ability to fill those products. So that is very much out of -- indicative of the margin will be related to your production cost and your conversion cost. When you move into edible products and beverages, the cannabinoid content is very small fraction of the ending products, so it really comes down to your throughput efficiency. So that's why on chocolates, for example, that we've gone to leading manufacturing equipment that we believe we'll be able to produce products at a very low cost.
We become then a consumer packaged goods company and the cost of producing that consumer packaged goods is critical. And so we do know it's one of the aspects of our partnership of the -- with the Green Solution or TGS in Colorado. We do see what their margins are and we know at a lower production level where they're one of the leading providers in Colorado. I believe they have around 9% share in Colorado in total, but they still do things semiautomated versus the automation at a very strong margin. So I think we don't have numbers yet, but we certainly have expectations that certainly our ability to produce those products is going to be a big driver in the margins that we'll receive on those products. But in general, the margins on those products are higher than on dry flower.

是。我想我们 - 我在电话中提到了这个Justin,我认为你必须在各个类别之间看待产品。因此,对于蒸发器笔和该技术,大麻素含量非常高,因此它取决于您的种植成本,提取量和效率以及您填充这些产品的能力。因此,这远远超出 - 表明保证金将与您的生产成本和转换成本相关。当你进入食用产品和饮料时,大麻素含量只是最终产品的一小部分,所以它实际上取决于你的吞吐效率。因此,这就是为什么巧克力,例如,我们已经走向领先的制造设备,我们相信我们将能够以非常低的成本生产产品。



Alec Patterson with Allianz Global.

Alec Patterson与Allianz Global合作。


Yes. So I just was hoping to get a little more color on the PAX relationship in terms of would you be the seller of the finished goods or will they be? How does the sort of accounting of the relationship play out in the sales and production and the costing of all that?

是。 所以我只是希望在PAX关系上获得更多的颜色,你会成为成品的卖家还是会成为? 这种关系的会计如何在销售和生产以及所有这些的成本计算中发挥作用?

Greg Engel

Sure. You know, it's a great question, Alec. So the structure with PAX is that they are going to be selling the devices across Canada. They actually have set up an organization here in Canada and they hired a key person from Nova Scotia Liquor Corp to head up as president of the Canadian organization. So what we will be doing is getting the pods from them and filling them, and we will be then selling them to the retail stores. So part of the agreement is the royalty structure based on us filling and supplying those to the marketplace. And so, again, they'll position and make sure there is broad distribution of the PAX Era device and then we'll be selling the pods into the marketplace.

当然。 你知道,这是一个很好的问题,亚力克。 所以PAX的结构是他们将在加拿大销售这些设备。 他们实际上已经在加拿大设立了一个组织,他们聘请了新斯科舍省酒业公司的一名关键人物担任加拿大组织的总裁。 所以我们要做的就是从他们那里获取豆荚并填充它们,然后我们将它们卖给零售商店。 因此,协议的一部分是基于我们填写并向市场提供这些协议的特许权使用费结构。 因此,他们将定位并确保PAX Era设备的广泛分布,然后我们将把pod销售到市场中。


You're saying the razor blade part of the equation?


Greg Engel

Exactly, if you use the disposable razor analogy, certainly.



And in terms of the size of the market, just wondering if there's any -- about the Canadian market that differentiates it from the templates being laid out in Colorado and Nevada and California, in terms of the percent of the market that the vape market has taken, which I assume your call is around 20% or 30%. So aren't you thinking unique about Canada that's going to impact that scalability?

就市场规模而言,只是想知道是否有任何 - 关于加拿大市场,它与科罗拉多州,内华达州和加利福尼亚州的模板区别开来,就vape市场的市场百分比而言 采取,我认为你的电话约为20%或30%。 因此,您是否认为加拿大的独特之处会影响可扩展性?

Greg Engel

I think the only thing we're possibly going to see, Alec, is that at the early stages of the launch of Rec 2.0 in Canada is that vaporizer products, I think, will be one of the dominant forces in terms of what's available. Even ourselves we've indicated that we won't be launched -- we won't be launching our chocolates and our powdered beverages till kind of early part of 2020 Q1. So I think you'll see a more dominant position at the time of launch of vaporizable products here. When you look at data from any U.S. state, you're looking at a more mature market with a broad product offering, right? So I think it's going to be a -- it's part of the critical aspect of why we've got a multipronged approach with PAX Era, with Feather and then with also another 5, 10 disposable cartridges. We want to go aggressively into that market because those aren't going to be the really dominant products that are available because the other ones are more complex to produce that scale for companies.

我认为我们可能会看到的唯一一件事,Alec,就是在加拿大Rec 2.0推出的早期阶段,我认为蒸发器产品将成为可用产品的主导力量之一。 即使是我们自己,我们也表示我们不会推出 - 我们不会推出我们的巧克力和我们的粉状饮料,直到2020年初的某个时候。 所以我认为在这里推出可蒸发产品时你会看到一个更具优势的位置。 当您查看来自任何美国州的数据时,您正在寻找一个拥有广泛产品的更成熟市场,对吧? 所以我认为这将是一个关键方面的一部分 - 为什么我们采用PAX时代的多管齐下方法,羽毛,然后还有另外5,10个一次性弹药筒。 我们希望积极进入这个市场,因为那些市场并不是真正占主导地位的产品,因为其他产品对于公司来说,生产规模更为复杂。


And just lastly, how do we think about the mix effect of the gross margin structure of value-added products like vape pens? And is there a better way to track the profitability or the trend on the business as you migrate more into these derivative products?

不,我之所以说由于这个原因 - 由于它主要由关键账户支配,因此很难通过查看确定 - 每个季度数字来判断底层证券是否有所改善。 相反,我们认为2018年上半年之后,我们有一些半导体需求,已经有了相似之处。 关键帐户和地理位置之间的差异是不同的; 但它基本上已经徘徊在同一水平,这就是我们所期望的。...

Paolo De Luca

It's an excellent question and it's one that we struggle with internally because the market in Canada obviously is unique, in the sense that it's the first kind of market that's legal on this scale. And so what we can only really do is look to what's been done in the U.S. and the information that we can get from our partner there, TGS. And we've seen -- certainly as we mentioned before, we've seen margins on these derivative products, in many cases, to be higher. But having said that, we actually produce the product and establish pricing with our buyers, provinces in the retail stores. It's going to be hard to be conclusive on that.
So from our perspective, it's very important to derisk the strategy to make sure that you can execute and get listings, that's very, very important to make sure we can capture market share, and also to produce, obviously, a high-quality product and that's why we've invested in the machinery that we have and the team that we have and made the partnership with someone like PAX. But also on the cost side, it's important that we have -- we drive economies of scale and that we are focused on a couple of product lines and not try to be in every single product line out there.
So vape pens is obviously the biggest component of the Rec 2.0 market and edible the second. And that's why we're not really chasing beverages. We're not in a hurry to rush to capture what in the U.S. is a very small market. And admittedly, it will be a bigger market probably in Canada once it's done a bit better. So for us it's really focus on execution of both the quality of the product and also the cost in making sure that we can produce at large scale and also be efficient in what we're doing.

这是一个很好的问题,也是我们内部努力的问题,因为加拿大的市场显然是独一无二的,因为它是第一种在这种规模上合法的市场。所以我们真正能做的只是看看在美国做了什么以及我们可以从我们的合作伙伴那里得到的信息,TGS。我们已经看到 - 当然,正如我们之前提到的,我们已经看到这些衍生产品的利润在很多情况下会更高。但话说回来,我们实际生产产品并与我们的买家,零售商店的省份建立定价。在那方面很难得出结论。

因此,从我们的角度来看,确保您可以执行和获取列表的策略非常重要,这对于确保我们能够占领市场份额以及显然生产高质量产品非常非常重要。这就是为什么我们投资了我们拥有的机器和我们拥有的团队,并与像PAX这样的人建立了伙伴关系。但同样在成本方面,重要的是我们 - 我们推动规模经济,我们专注于几个产品线,而不是试图在每个产品线中。

因此,vape笔显然是Rec 2.0市场的最大组成部分,并且可食用。这就是为什么我们不是在追逐饮料。我们并不急于抓住美国这个非常小的市场。诚然,一旦它做得好一点,它可能会成为一个更大的市场,可能在加拿大。因此,对我们而言,它真正专注于产品质量的执行以及确保我们能够大规模生产并且在我们正在做的事情上高效的成本。


David Kideckel with AltaCorp Capital.

David Kideckel与AltaCorp Capital合作。

David Kideckel

Thanks for taking my second question. Just wanted to go back to the international strategy that we are talking about outside of the call. Can you provide any sort of -- I know you mentioned, I think, Greg, Germany and its synthetic CBD play. But for the international market, should we be thinking OGI with European partners or LatAm or what part of the world does international mean for OGI?

谢谢你提出我的第二个问题。 只是想回到我们在电话会议之外谈论的国际战略。 你能提供任何一种 - 我知道你提到过,我想,Greg,德国及其合成的CBD游戏。 但对于国际市场,我们是否应该考虑与欧洲合作伙伴或LatAm的OGI或世界上哪些国际对OGI具有国际意义?

Greg Engel

I mean if you see today, David, we are -- we've been focused on Europe. I think that's what presents the greatest near-term opportunities for us. We see the European market and wisely keep saying CBD is a huge unmet need there is every time I'm in Europe, what you see is kind of an expansion of CBD products across the retail footprint, whether or not that's pharmacy or health and wellness stores and kind of a growing consumer demand there, as we're seeing in the U.S. as well. So that's our primary focus. I mean, we do -- we have exported and are continuing to export product to Australia, but really our kind of market that we're spending the most time evaluating because of the near-term opportunity is Europe.

我的意思是,如果你今天看到,大卫,我们 - 我们一直专注于欧洲。 我认为这是为我们提供最大的近期机会。 我们看到欧洲市场并明智地继续说CBD是一个巨大的未满足的需求,每次我在欧洲,你看到的是CBD产品在零售足迹的扩展,无论是药房还是健康和保健 正如我们在美国看到的那样,商店和消费者需求的增长。 所以这是我们的主要关注点。 我的意思是,我们这样做 - 我们已经出口并且正在继续向澳大利亚出口产品,但是由于近期的机会,我们花费最多时间进行评估的市场实际上是欧洲。

David Kideckel

Okay. And my last question, back to one of the earlier statements made, I think, you have about 700 employees now and by calendar year-end going to 850. Given your vast automation capabilities, I'm just wondering what type of labor are you looking for at OGI to grow the space? Are you looking at R&D type talent, scientific talent or will this be operational in nature? Just any color you can provide with respect to employee and labor as you look forward to year-end?

好的。 我的最后一个问题,回到早先的一个陈述,我认为,你现在有大约700名员工,按日历年终到850.鉴于你的自动化能力很强,我只是想知道你是什么类型的劳动力 寻找OGI来扩大空间? 您是在寻找研发型人才,科学人才还是本质上可操作的? 您期待年底时,您可以提供有关员工和劳动力的任何颜色吗?

Greg Engel

Yes. I mean certainly, what we'd expect, I mean, so our labor force needs are not that significant in terms of that group building out is. What still needs to grow for us are some of the key supporting areas, like quality that are involved in the testing and quality compliance side of things. And then R&D, as you said, I mean, that group is growing and building for us. And we've expanded out the project teams for products like chocolate. I mean, we have 2 individuals that have world-class experience and worked in markets like Belgium and other markets on chocolates. And so we've been expanding those teams as well, so it's a mix of people. But I think our automation continues to kind of reduce our requirement for labor. So we're able to have -- even just last week I was in Moncton and we had an internal job fair, so people were looking to move to other departments as kind of we evolve as a company, and it's great because it has created some new opportunities for internal people to move around as well, so it's real positive from a workforce environment.

是。我的意思是,我的意思是,我的意思是,所以我们的劳动力需求并不是那么重要的。对我们来说仍然需要增长的是一些关键的支持领域,例如质量,涉及测试和质量合规方面。然后研发,正如你所说,我的意思是,这个团队正在为我们成长和建设。我们扩大了巧克力等产品的项目团队。我的意思是,我们有2个人拥有世界一流的经验,并在比利时和其他市场的巧克力市场工作。所以我们一直在扩展这些团队,所以这是一群人。但我认为我们的自动化继续降低我们对劳动力的需求。所以我们能够 - 甚至就在上周我在蒙克顿,我们有一个内部招聘会,所以人们希望转移到其他部门,我们作为一个公司发展,它很棒,因为它已经创建内部人员也有一些新的机会,所以从劳动力环境来看,这是真正的积极因素。


This concludes the time we have for today's call. We thank you for your participation. You may now disconnect.

这就结束了今天电话会议的时间。 我们感谢您的参与。 您现在可以断开连接。


  • OGI 电话会议
  • OGI 财务报告


如果您对美股 或者 港股也感兴趣, 或者想要了解如何开户, 可以加我wechat: xiaobei060537 , 同时也可以拉您进美股交流群哦。
最后的最后 祝大家都有一个美好的投资生活哦。

大家也可以关注【美股指南】公众号, 即可获得《小白投资美股指南(雪球「岛」系列)》电子书


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