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

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Yes. But we’ve now combined our businesses in Europe to one business unit between our CC Pharma, which is our distribution business into 13,000 drug stores and our operations in Portugal and our operations in Germany. So, we have a strong business in Europe with distribution with brands with grow. Unfortunately, controlling legalization is not something that’s in our hands, but it’s something that we’re going to focus on how we grow our business. Denise, do you want to jump in and add to that?

Denise Faltischek: Yes. Thanks, Irwin. So just building on what Irwin said in terms of our business in Europe, very strong business in Europe. As Irwin mentioned, deprioritizing certain countries. We really, in the last few quarters, as we’ve talked about in the past, we’ve made some active decisions to not pursue certain revenue in Israel, given the volatile market that is currently going on in Israel. And if you look at the quarter the prior quarter last year, we had about $4.6 million of revenue in the prior year quarter as it related to Israel sales. So, we are deprioritizing certain markets in lieu of chasing more profitable and sustainable business. And just building again on how confident we feel in terms of Europe, while we are very much closely following adult-use legalization efforts by Germany, we are also very confident that even in the absence of adult use, we are still very well positioned to win in the medical business.

We are — with our CC Pharma business, we have credibility when it relates to medical cannabis. And as we pursue doctors and pharmacies, we take that credibility with us when we visit with them. We are also well positioned with our two EU GMP facilities one located in Germany, one located in Portugal. And the medical market in Europe is going to be a $13.8 billion market by 2028. So, we do feel very, very confident about the business.

Irwin Simon: And I think as we look at Europe, I like Europe as opportunistic. I think that there’s over 600 million people. There’s a big population there. And if you come back and think no different than the U.S. Europeans want cannabis legalized, okay? And I think it’s just working through the EU, and I’m sure if Ukraine didn’t happen. Germany might be legal today, but we’re ready and will be ready. And we’re going to look at other business opportunities in that European market because we got that infrastructure. We’ve spent a lot of time have taken a lot of cost out, have streamlined our business with our facilities in Portugal and Germany, we’re looking at other opportunities there where we can grow and we’re profitable there, and we’re going to look how to grow that business.

In regards to your second question in regards to our mix and volume, listen, in Canada, flower is still number one. The good news is the Canadian market is really the only market in the world where adult use cannabis is legalized, okay? And from a positioning standpoint, we’re well positioned with our growth facilities. We have 12-plus brands. We have tremendous innovation there, and that’s the key to that marketplace. And you’re going to see a lot of falling out of that market with other LPs. It’s a tough market to do business from an excise tax. We still spend $1 a gram. We paid as a company over $120 million in taxes in Canada last year, an excise tax in the last two years. We paid almost $0.25 billion. So, it’s a tough market, but again, it’s the only legal market.

And whoever wins there, which we believe we’re going to there’s big opportunities. Blair, do you want to just talk about your mix and pricing from a standpoint in Canada?

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