Tilray Brands, Inc. (NASDAQ:TLRY) Q2 2023 Earnings Call Transcript

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Irwin Simon: So again, I’ll just switch it over to Ty for a second, but we’re still from SweetWater, the 10th largest craft brewer in the U.S., Montauk, which we just acquired in December is the number one craft brewery in New York City, tremendous brand and basically only sold in New York with some sold in New Jersey, Connecticut and put an East together. From a pricing standpoint, and I’ll let Ty talk about it, there is some pricing opportunities. We probably have been a little slower on taking price increase, but it had to endorse some of the higher costs. From a Nielsen standpoint, I think we’ve picked up some distribution. Recently, we picked up a lot from a Kroger standpoint. So, Ty, do you want to jump in here for a second and introduce yourself?

Ty Gilmore: Yes. Thanks, Irwin. Good question, Victor. Yes, we’re definitely — there is some down trading going on, but we’re also seeing some consumer trade up going on across several segments, super premium domestic Mexican imports, flavors and higher ABB. So, we continue to see some tailwinds with the space that we operate in and expect as we go into Q1 of 2023, that there will be continued pricing opportunities that we’re going to take advantage of, both in the on and off-premise, which will be beneficial.

Irwin Simon: And there is also a major pipeline. And one of the things we’ve done in SweetWater and Montauk is now on our timing of when we can launch products. And we have numerous new products that will be launched as we move into the spring. We have our 420 Fest, which is coming up so there’s a lot of event marketing based around our beer business. The other thing, Victor, just something you mentioned, we’ve seen some nice increase in our Breckenridge Distillery, our bourbon business, some great increase in our vodka business moving over to RNDC and some of the new distribution. So, we’re quite happy, and you can see we’re up nicely on our beer and our spirits business quarter-over-quarter and year-over-year.

Victor Ma: Great. I’ll jump back into the queue.

Operator: The next question is from the line of Nadine Sarwat with Bernstein. Please proceed with your question.

Nadine Sarwat: Two questions for me. So first of all, you called out that we grew international cannabis business in your prepared remarks. Could you perhaps break down the factors driving this in more detail and how we should think about this part of the business performing in the remainder of the fiscal year? And my second question, nice to see the Canadian adult use sales actually growing year-on-year. Could you break down this growth between volume, mix and price since there’s a lot going on there? And how are you thinking about that over the coming quarters? Thank you.

Irwin Simon: Great. So number one, let me — I’m going to switch over the piece on Europe to Denise, who runs our European operations. But I think listen, a lot going on in Europe, whether we can blame it on the war, we can just blame it on the economy over there. We can blame it on in regards to cost. But I think as we’re situated in Europe today, with our facility in Portugal, our facility in Germany, where we sell in over 20 countries from a medical standpoint, we’re well situated. We spent a lot of time in Europe, and you heard me say how much costs were taken out, some of the countries that we’re going to deemphasize. Do we believe legalization is going to happen in ’23? No. Do we believe it will happen sometime in 2024?

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