Tilray Brands, Inc. (NASDAQ:TLRY) Q3 2026 Earnings Call Transcript

Tilray Brands, Inc. (NASDAQ:TLRY) Q3 2026 Earnings Call Transcript April 1, 2026

Tilray Brands, Inc. misses on earnings expectations. Reported EPS is $-0.24 EPS, expectations were $-0.14.

Operator: Thank you for joining today’s conference call to discuss Tilray Brands’ financial results for the Third Quarter of Fiscal Year 2026 ended February 28, 2026. [Operator Instructions] I’ll now turn the call over to Ms. Berrin Noorata, Tilray Brands’ Chief Communications and Corporate Affairs Officer. Thank you. You may now begin.

Berrin Noorata: Thank you, operator, and good morning, everyone. By now, you should have access to the earnings press release, which is available on the Investors section of the Tilray Brands website at tilray.com and has been filed with the SEC and OSC. Please note that during today’s call, we will be referring to various non-GAAP financial measures that can provide useful information for investors. However, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. The earnings press release contains a reconciliation of each non-GAAP financial measure to the most comparable measure prepared in accordance with GAAP. In addition, we will be making numerous forward-looking statements during our remarks and in response to your questions.

These statements are based on our current expectations and beliefs and involve known and unknown risks and uncertainties, which may prove to be incorrect. Actual results could differ materially from these described in those forward-looking statements. The text in our earnings press release includes many of the risks and uncertainties associated with such forward-looking statements. Today, we will be hearing from key members of our senior leadership team, beginning with Irwin Simon, Chairman and Chief Executive Officer, who will provide opening remarks and commentary followed by Carl Merton, Chief Financial Officer, who will review our financial results for the third quarter of fiscal year 2026. And now I’d like to turn the call over to Tilray Brands’ Chairman and CEO, Irwin Simon.

Irwin Simon: Thank you, Berrin, and good morning, everyone. It’s been an exciting year at Tilray Brands. We delivered a record quarter with continued international expansion across our platforms. I also want to briefly highlight our BrewDog acquisition. When you have good news, you go to the tallest building and scream it and don’t wait. This transaction positions Tilray at approximately $1.2 billion global revenue company on an annualized basis and meaningfully strengthens our long-term growth profile. I’ve done over 100 acquisitions in my life, and I’ve never received more calls, congratulations and a brand with more awareness on a global basis, which helps Tilray to be at the forefront around the world. Since 2019, we have transformed the company from a Canadian cannabis business with approximately $50 million in revenue to a global lifestyle consumer products company approaching over $1 billion in revenue on an annualized basis, providing the strength and effectiveness of our strategy and our execution going forward.

We are building a diversified global platform grounded in a long-term vision of bringing people together through meaningful connection. With a strong team and clear priorities, we remain confident in our path forward. Today, Tilray leads its global platform as the #1 cannabis company in Canada by revenue, the fourth largest craft brewer in the U.S., a global leader in medical cannabis and a wellness leader in North America. And now with BrewDog, the #1 craft brewer in the U.K. Transforming this business has not been easy. We operate in highly regulated environments globally. Face cannabis regulatory reform in the U.S. and navigate constraints across international markets. At the same time, we’ve strengthened our global brand portfolio, scale and optimize our cultivation capabilities and our brewing capabilities, built a $0.5 billion beverage platform within a long-established category and established a meaningful wellness strategy.

This level of progress reflects both the pace of our execution and the strength of our strategic foundation and the teams that we have in place. Yes, there have been challenges along the way, particularly with integration, and there will continue to be challenges. This takes time. But today, we see the pieces coming together in the way that few businesses can replicate, and we’re building something truly differentiated. And our Q3 results reflect this in the third quarter and consecutively from Q2 to Q3, we delivered record results with net revenue reaching $207 million, reflecting 11% organic growth year-over-year and gross profit increasing to $55 million, up 6% from the prior year despite ongoing industry and macroeconomic headwinds, we also maintained a strong financial position ended the quarter with $265 million in cash, restricted cash and marketable securities and approximately $3.5 million in net cash, providing the flexibility to invest in growth while maintaining financial discipline.

Our Q3 results reinforce the momentum we outlined last quarter, improving fundamentals, sharper execution and increasing leverage from our diversified global platform. Turning first to our cannabis business. We delivered strong results this quarter across our global platform, with continuous momentum in both Canada and our international markets. As the regulatory environment evolves, particularly in the U.S., we’re well positioned with scale infrastructure and experience to expand this business globally, we’ve built this platform deliberately, and we’re ready to execute as opportunities develop. Q3 was the largest quarter ever for international cannabis growth. We generated $24.1 million in net sales with 73% year-over-year growth and 20% sequential growth.

This was driven by exceptional sales volume growth. Medical cannabis flower volume was up 100% year-over-year and medical cannabis oil volume was up 90% year-over-year. Tilray holds top position by a significant margin in the medical cannabis oil category across leading international medical markets while we leverage our expertise and reputation in the doctor-led distribution channels. Germany, our largest international market grew 43% year-over-year, an important achievement for our international team as they continue to navigate evolving regulatory framework and significant price compression across global markets. Notably, we overcame $7 million in price pressure that flows directly to the bottom line. Turning to our medical distribution business in Europe.

I’m extremely proud to say that CC Pharma was recognized as one of the top 100 innovators, leaders and trusted partners in the European pharmaceutical market. Congratulations to the team on a great accomplishments for continuously driving our business forward. Our Tilray Pharma business grew 35% year-over-year to $83 million, making it our highest ever third quarter for sales and profitability. The increase in distribution revenue in the period was driven by portfolio optimization, mix, positive market trends and increased medical device sales. Our recently announced partnership with Alliance Healthcare further strengthens our leadership in Germany, expanding our reach to more than 16,000 pharmacies, up from 13,000 previously. In addition, we entered into a partnership with Smartway, a leading U.K.-based pharmaceutical distribution company to expand the availability of our pharmaceutical products across the United Kingdom.

Together, these partnerships speak to the strength of Tilray Pharma as a valuable strategic asset within our global medical cannabis platform. Looking ahead, our distribution business is laser-focused and driving future operational efficiencies, be automation, centralized sourcing, harmonized packaging and label that sets us up with vertical integration for our cannabis business. Turning to Canada. Our Canadian cannabis business continues to deliver strong results. We reinforced our position as Canada’s leading cannabis company by revenue on a trailing 12-month basis, and our adult-use medical grew 8% year-over-year to almost $40 million of net revenue. This performance speaks to the strength of our portfolio and the resilience of our commercial execution and the team that we have in place today.

From a market share perspective, Tilray maintained the #1 market share position in cannabis dried flower, pre-rolls, beverages, oils and chocolate edibles. Importantly, this leadership reflects the strength of our tiered brand strategy in dried flower, Tilray is the only licensed producer with 3 brands in the top 10. In pre-rolls, we hold 2 of the top 3 brands. And in beverages, we delivered the top 2 brands in the market during quarter 3. This approach diversifies our reliance across brands and facilities while allowing us to serve the seed consumer segments with clearly differentiated offerings. From a brand portfolio perspective, Broken Coast delivered its strongest quarter in the past 2 fiscal years, growing 16% year-over-year. We also continue to innovate with our core categories launching Good Supply, Where’s My Bike and Blueberry Donuts cannabis strains during the quarter.

both of which finished the quarter among the top 10 dried flower SKUs in British Columbia, and we plan to scale them nationally and introduce additional genetics in Q4 and into fiscal 2027. Finally, we also introduced a new brand, Portal, featuring vapes, infused pre-rolls late in the quarter. While still early, we’re beginning the national rollout. We expect to launch a Portal to build upon our momentum and drive meaningful growth in these key categories going forward. And we’re also making clear progress in high-growth price-sensitive categories such as vapes. Quarter 3 marked our strongest vape quarter in the past 2 fiscal years, reestablishing Tilray as a top 10 player in the category. Importantly, this performance reflects our disciplined approach to revenue generation.

We intentionally scaled back our vapes volume until we achieve the right cost structure and return the category to profitability. After 7 years of federal cannabis legalization in Canada, we are modernizing the store. We built a strong foundation on Canadian cannabis, and we’re now advancing to the next phase transforming our cultivation platform through AI-driven growing systems, next-generation genetics and improved yields across our operations. We’re executing a comprehensive end-to-end upgrade of our cultivation capabilities. And while this transition is still underway, we’re already seeing progress as we move towards more consistent, higher quality and more efficient production. This evolution is designed to enhance margins, strengthen product quality and position us ahead of the curve as the industry continues to mature.

In the U.S., we continue to monitor the rescheduling of medical cannabis and are actively engaged with legislators and regulators. We’re also evaluating our participation in the center for Medicare and Medicaid Innovation pilot programs. Tilray is well positioned to contribute to the pilot program with its proven track record of operating at a scale in a highly regulated medical cannabis globally. Moving to our beverage business. This quarter and shortly after the quarter end, we successfully executed against our key strategic priority to expand our global beverage platform through a strategic licensing partnership with Carlsberg and the targeted acquisition of BrewDog, strengthening our portfolio, improving utilization and advancing our global growth strategy.

We are honored and proud to begin our partnership with Carlsberg, one of the world’s leading brewers starting in January of 2027. Through this partnership, we’ll produce, market and distribute a portfolio of leading Carlsberg brands across the U.S., leveraging our brewing network, commercial capabilities and our national distribution footprint. We expect this to drive immediate scale accretive to revenues, supported by increased volumes, expand shelf presence and a more favorable product base. Following the Carlsberg announcement and post quarter close, we acquired craft beer icon, BrewDog, creating approximately $500 million global craft beverage platform on a pro forma basis. We acquired BrewDog’s global IP, strategic brewing and brewpub assets across the U.K. Ireland, Australia and the U.S., creating immediate scale, strengthening our infrastructure and broadening our international reach.

This positions us to extend our reach into previously untapped markets such as the Middle East, Asia Pacific and take our U.S. brands globally while strengthening their portfolio with a highly recognized craft brand. We acquired this platform for approximately EUR 40 million, which reflects a fraction of its replacement cost. This strategic acquisition has significantly accelerated the implementation of our global strategy by several years. Now turning to the results of our beverage business. We’re making disciplined progress on the integration of our beverage acquisitions, while staying focused on the work still ahead to generate growth and profitability. As expected, beverage net revenue of $43 million in Q3 was impacted by margin-focused actions as well as industry-wide softness.

These margin-focused initiatives are delivered and necessary to reset the business for profitable long-term growth. What’s important is that the underlying fundamentals are improving. Through Project 420, we rationalized the portfolio, removing nonstrategic SKUs to improve velocity, margin and execution. We continue to focus on cost discipline, delivered over $6.2 million in annualized savings during the quarter, completing our target synergy program of $33 million enabling us to achieve approximately 32% gross margins despite significant input costs and headwinds. Without these decisive actions taken, margin would have been more significantly impacted. Operationally, we’re building a more focused, higher performing portfolio, we’re prioritizing fewer, bigger, better innovations aligned with consumer demand.

Products like Pub Light are expanding distribution and our ready-to-drink cocktails on the West Coast are delivering margin accretive growth. We’re also starting to see sequential improvement across our core brands, including Sweetwater, Shock Top, Blue Point, Revolver and Montauk. Looking ahead, we expect continued momentum on improving fundamentals and a stronger path to growth. Within the spirits category, in Q3, we focused on enhancing our commercial plan. Wholesale completions were 160 basis points above the national spirits trends, demonstrating strong consumer demand and awareness. Our ongoing efforts remain focused on expanding product distribution to additional states and beyond. Regarding our U.S. hemp-derived THC beverage business, we continue to offer Fizzy Jane’s, Happy Flower, hemp-derived THC beverages in 5-milligram and 10-milligram formats through nationwide retail partnerships, including major wine, liquor and grocery outlets across the country.

While federal and regulatory changes may affect HDD9 products after November 2026, we continue to stay engaged with legislators and regulators who are closely monitoring the development in Washington. Turning to wellness. Net revenue increased by 16% to $16.4 million in the quarter, driven by our focus on value-added innovation across superseed, better-for-you breakfast and snacking and continued momentum in the high-vol energy grade. We’ll continue to focus on distribution expansion broader assortment and promotional improvements while continuing to strengthen the profitability profile of wellness business. With that, I will now turn that over to Carl. Carl?

Carl Merton: Thank you, Irwin. Before I begin, please note that we present our financials in accordance with U.S. GAAP and in U.S. dollars. Throughout our discussions, we will be referring to both GAAP and non-GAAP adjusted results and we encourage you to review the reconciliation contained within the press release of our reported results under GAAP with the corresponding non-GAAP measures. This quarter, we achieved record third quarter revenue and strong year-over-year improvements in gross profit and adjusted EBITDA and we are reaffirming our adjusted EBITDA guidance for fiscal 2026. Net revenue was a third quarter record of $206.7 million, an 11% increase year-over-year. Revenue growth was across multiple businesses. Cannabis net revenue increased 19% year-over-year to $64.8 million during the quarter, driven by strong growth in gross international cannabis revenue of 73% and 8% in net Canadian adult-use and medical cannabis.

The exceptional revenue performance of our international cannabis business solidifies our point from the last conference call that Q4 2025 and Q2 and Q3 of this year’s performance are more indicative of what investor expectations should be going forward. Growth in international cannabis accelerated based on an enhanced supply chain, increased patient adoption in certain markets and our targeted expansion into emerging markets. This quarter, we continue to strategically reallocate supply from the Canadian wholesale market to higher-margin international markets and we’ll maintain this approach as those markets continue to scale. Year-to-date, we allocated approximately 6 metric tonnes of product from Canada to international markets, which continues to supplement our ever-increasing cultivation in [indiscernible].

Distribution net revenue increased 35% to $83 million based on a focus on higher velocity and margin SKUs and positive impacts from foreign exchange rates. We expect distribution to continue to be a strong contributor as it complements and scales alongside our international business. Beverage net revenue for the quarter was $42.6 million compared to $55.9 million in the prior year. However, the results do not fully reflect the operational progress we have made in the segment. During the quarter, we successfully completed Project 420, closing and delivering $33 million in annualized cost savings, which improved the underlying cost structure of the business. Those cost savings are not always visible in our margin results as they’ve been largely offset by almost $2.9 million of higher aluminum costs year-to-date and lower overhead utilization rates.

Getting our cost structure right in beverage has been and will continue to be a key focus area for us. Looking ahead, Carlsberg represents a compelling opportunity for us through a partnership with one of the largest global brewers. The relationship enables us to improve overhead utilization without deploying capital to acquire a brand while creating meaningful operational leverage. It also provides multiple avenues to strengthen the platform including increased scale with key global raw material suppliers and the ability to collaborate and learn from one another on innovation and best practices to support long-term growth. BrewDog represents an equally compelling opportunity to strengthen our beverage business in the future, but for different reasons as it is more about an international opportunity.

The BrewDog transaction was unique because it represented a chance for the business to start with a clean piece of paper and hand select the best and most important elements of a strong business that was placed in administration for reasons other than its core business. After this transaction, Tilray strengthens BrewDog, BrewDog strengthens Tilray. Lastly, wellness net revenue in the quarter was $16.4 million, growing 16% year-over-year based on our focus on high-value innovations the continued strength of high-vol and growth in the ingredient sales channel. In terms of contribution, cannabis accounted for 31% of revenue, beverage revenue was 21%, distribution was 40% and wellness was 8%. Moving on to profitability. We achieved a record third quarter gross profit of $55 million, a 6% year-over-year increase.

Gross margin was 27% compared to 28% last year. By segment, cannabis gross margin was 40% for the quarter compared to 41% year-over-year and remained largely flat, primarily due to price compression in international markets, which reduced international cannabis revenue by approximately $7 million despite higher gram equivalent sold. Distribution gross margin increased to 12% this quarter compared to 9% year-over-year due to favorable changes in product mix and increases in average selling price during the quarter. Beverage gross margin was 32% this quarter compared to 36% in the prior year quarter. This change was a function of lower overhead absorption rates and higher input costs, including the previously discussed aluminum costs. Wellness gross margin increased to 33% during the quarter from 32% year-over-year as strategic price increases largely offset an unfavorable change in sales mix.

Net loss was $25.2 million, a $768.3 million improvement compared to a $793.5 million loss year-over-year or a net loss per share of $0.24 compared to a net loss per share of $8.69. The improvement in both net loss and net loss per share is primarily driven by the onetime noncash impairment we reported in the prior year quarter. Adjusted net income and adjusted net income per share, which both exclude the noncash impacts of amortization, stock-based compensation, impairments and nonrecurring charges, improved $5.3 million year-over-year to $2.4 million and $0.02 per share, compared to an adjusted net loss of $2.9 million and adjusted net loss per share of $0.03. Our adjusted cash operating income for the quarter was $4.1 million compared to a loss of $3.1 million last year.

Adjusted EBITDA for the quarter increased 19% to $10.7 million compared to $9 million last year, reflecting continued execution against our strategic plan, particularly from our international cannabis business. Cash flow used in operations was $21.9 million compared to $5.8 million last year. The increase in cash used in operations was largely related to inventory ahead of our seasonally stronger fourth quarter and accounts receivable for our growing international cannabis business. Excluding the impacts of working capital, cash generated from operations was $3.4 million compared to cash used in operations of $9.3 million in the prior year. We ended the quarter with cash, restricted cash and marketable securities of $264.8 million and a net cash position of $3.5 million, which improved $40.2 million from a net debt position year-over-year.

As we have recently demonstrated our strong liquidity position has enabled us to act decisively in a dynamic environment and provides continuing flexibility to pursue strategic opportunities. We remain focused on managing and strengthening our balance sheet throughout the remainder of the year and beyond. Lastly, we are reaffirming our fiscal 2026 adjusted EBITDA guidance of $62 million to $72 million. Operator, we can now open the call for Q&A.

Operator: [Operator Instructions] And the first question is from the line of Kaumil Gajrawala with Jefferies.

Q&A Session

Kaumil Gajrawala: Can you guys hear me now?

Irwin Simon: Yes.

Carl Merton: Yes.

Kaumil Gajrawala: Great. I wanted to first maybe ask about the supporting the international business in the context of Canada looks like it’s also stabilizing. So you have a lot of growth and great margins in one. But on the other hand, you’ve got stabilization in your bigger markets. So how are you managing the balance between those two?

Irwin Simon: What was the line? I didn’t hear. You broke up the last piece, the cannibalization?

Kaumil Gajrawala: Not cannibalization, but just managing the balance between supporting your international business and what looks like stabilization in Canada?

Irwin Simon: And you’re talking cannabis right now for us, right?

Kaumil Gajrawala: Yes, cannabis. I’m sorry, this is about cannabis.

Irwin Simon: Yes. Yes. Okay. So listen, I think the big thing is, number one, we are bringing on our Masson grow facility in Gatineau, which is increases our — we’re going from 137 metric tonnes of grow to almost 200 metric tonnes of grow. And also, we’re bringing on outdoor grow in Cayuga. So number one, when we now have plenty of growth, and this has been a tougher year on yields in that, and that’s sort of what you heard me say as we’re overhauling things and modernizing things on better yields in the Canadian market. On the other hand, the good news is our Cantanhede facility in Portugal and our Germany facility is probably producing some of the best yields and some of the best flower that we ever had. So the number — the most important thing is we have plenty of supply to supply the European market.

The other thing is we’re seeing price compression, which I talked about, with the growth that we’re having with yields, we’ll be able to support that. And I think the most important thing in Europe is this here, consistent supply. We’ve not had consistent supply. Number one. Number two, one of the things in Europe, you have to wait for permits, and that has slowed down to getting our sales out there. We’ve seen a real big improvement in the Portuguese government. I want to thank them. They modernize this now, where sometimes it’ll take a month, you can see 3 days now. So being able to get product to our customers is something very important. And then with that, we have perfected our grow and our yields, that will help our margins continuously, and deal with price compression.

And I think the important thing is from Tilray standpoint, with our Tilray products with our innovation, with our brands, the big opportunity for us is if we got consistent product, we’re going to get the volumes and how do we deal with price compression? If price compression consistently happens, we have supply, and I think we have more supply than anybody there. So it’s something that we’re aware of. We dealt with it in Canada. We’ve had $250 million of price compression over 5 years in Canada, and we dealt with that. So not that I want to see that in Europe, but it’s something we can deal with either now having supply, now having good yields, now having good grow over there to do it both in Canada and Europe. And there’s no one else out there that has the supply that we have, both from the Canadian market today and the European market.

Kaumil Gajrawala: Got it. And on Project 420, now that I guess, it’s coming sort of towards the end or at completion, is there a new project? Or is it sort of more ongoing business as usual as we look forward from a productivity standpoint?

Irwin Simon: This is a good question. I mean there is absolutely project ongoing. We never just say, okay, we made a $33 million, $35 million of cost savings, stop. Now with BrewDog in the mix and bringing that together, both internationally and domestically in regards to buying hops, cans, labels, et cetera. And it’s definitely something as we combine now. And just remember, we’ve gone from a $200-plus million beer business, almost $0.5 billion now in size. So from scale, that’s going to help us. And as we look at rationalization continuously on our plants, we look at rationalization on distributors. We just said, how do we bring all the organizations together, there’ll definitely be additional cost savings available to us.

Operator: Our next question is from the line of Robert Moskow with TD Securities.

Xin Ma: This is Victor Ma on for Robert Moskow. So I just want to ask about international first. International grew 73%, Germany grew 43%. What drove this delta? Was it shipment timing or permit delays that — from the previous quarter that were fixed this quarter? And in terms of kind of looking at growth going forward, is that 43% growth rate for Germany? Is that kind of a good run rate to use and looking at growth for the segment?

Irwin Simon: So number one, there was some products that did not get shipped in the second quarter because of permits, but there’s products that did not get shipped in the third quarter because of the permit. So it equals out. In regards to what was the growth? The growth was based on us having supply and demand. And I’m not sure, again, we have a big fourth quarter, what is the true run rate there. And the big thing is what I said before, what the market is realizing, what patients and what doctors are realizing is that we will have supply. We will have good flower, we will have lots of innovation, we’ll have some good oils. And again, we will be price competitive. So what is the right growth number? I’m not ready to give that yet.

But again, there’s big opportunities for us in the international markets, not only in Germany and Poland, the U.K. and other markets, it’s additionally other markets that we’re looking at to open up and what will happen in Spain, what will happen in France. And so we’re really excited. The other thing that we have there with our CC Pharma, Tilray Pharma and some of the stuff that we’re doing in the U.K. and being vertically integrated as we sell through our distributor and sell directly through our distributor into the drug stores, helps us that where we’re a grower, where we’ve got a brand. And then we have — the third part of it is where we have from a vertical integration, the distribution going to the drugstores. So that helps us tremendously, too.

Xin Ma: Got it. And then my second question is on the beverage segment. So in terms of just rising aluminum costs from the Midwest premium related to the tariffs and then additional supply shocks from the Iran conflict. How — can you offer any color in terms of how hedged you are on your aluminum exposure? And how — what’s the benefit in terms of kind of scale that adding Carlsberg into the U.S. portfolio give towards managing that cost impact?

Irwin Simon: So I’m going to let Carl talk about the hedge in a second because we are hedging on some things. But listen, adding Carlsberg in there with a good-sized business, adding BrewDog in there and then being able to buy on global contracts is going to be very, very helpful for us. Right now, a lot of our hops for BrewDog internationally come from Washington State. But we, right now, as we put this together and listened, having Carlsberg, who is one of the largest brewers in the world and possibly buying into their contract, and we still have left over whether there are hops in that from our ABI stuff. So there’s lots of opportunities from a scale to be buying hops and cans, and that’s the big one to watch out for is as aluminum prices have gone up and Carl, will talk about hedges. Listen, the big watch out there is what happens with fuel and from a standpoint there is the unknown. But Carl, from where we’re hedged — Carl, do you want to talk about that?

Carl Merton: Yes. I mean you answered most of it, but just specifically on the hedge for aluminum, we’re currently hedging 65% to 75% of our buy on a month-to-month basis, and we’re hedging a year out.

Xin Ma: Got it. And just one last question, if I can. In terms of just the distribution gains from the shelf resets that typically happen in the spring. How are those conversations going? How is that tracking? Any color you can share there?

Irwin Simon: So going well. I will say this here, we gained and we lost. And the big part of it is this here, we’re in the craft beer category, lost some space out there. But I think the big thing is this here, where we didn’t — when we bought the Molson’s piece and prior to that when we bought the ABI piece, from a timing standpoint, we lost a lot of SKUs where we had no influence in no part of it. So again, it goes against us. Now we’ve gained a lot of distribution. And the big thing is this here just because we gain distribution and make sure the product sale. So plus-plus, we probably lost more. But again, it’s okay because it was the SKUs that were not part of us at the time. And the new SKUs and the new products and new innovation is what we’re excited about and where we’ve gained.

And we had some big days at Walmart. We had some big days at Kroger, Albertsons and some other ones across Shop & Shop across the board. So all in all, we’re happy with what we got. And listen, I’d rather the set get smaller and us be a bigger player in a smaller set than just have a big set out there. So there’s a lot of resetting happening within the craft beer industry in regards to the size and what retailers need out there.

Carl Merton: Just to supplement that a little, when Irwin talked about the acquisitions, it’s more about the timing of the acquisitions because we bought those brands after the initial discussions on spring resets that already happened.

Irwin Simon: And we were not the ones presenting those spring resets. But now whether it’s the Molson or the ABI, and that’s sort of where we’ll be next year in January as we take on Carlsberg, we’ll be out there presenting in February — January, February for the next spring resets for Carlsberg.

Operator: Our next question is from the line of Bill Kirk with ROTH Capital Partners.

William Kirk: I want to spend a little time on the improvements at Tilray Pharma. Carl, you mentioned a focus on the highest velocity SKUs. So what SKUs or product types are those that are leading the way? And then maybe more importantly, how can you or how are you leveraging this improved CC Pharma for your cannabis business in Germany?

Irwin Simon: So I’m going to — Rajnish, since you’re on the call, I’m going to let you jump in here because you’re the one managing this. I think there’s three things here. Number one, it’s the buying that our guys are doing over there. Number two is our assortment. And number three, as we now look to sell our products into Italy and we sell our products into the U.K. Rajnish, do you want to go into the specifics of what the products are that we’ve really seen the increase in sales?

Rajnish Ohri: I mean, there is a group of products revenues, we have about 2,800 SKUs. So what we have done is basically identified SKUs which have higher velocity to go. So there is a bunch of about 50 top SKUs which are right now working where there is a high velocity which we focus on, not just on velocity, but also on the gross margins. So these are the two criteria for us to look at in terms of the growth. And then we are adding the medical cannabis portfolio. I mean, the medical cannabis portfolio is helping us to grow both in margins as well as in revenue because per unit revenue is much higher and margins are better. So these are the two big things in terms of the selling side of the business. And of course, on distribution, we are now — with our new alliances, which are coming forward, we are now actually increasing our distribution across the pharmacy channel, which helps us to grow not just per unit, but also in the depth of distribution and the width of coverage of pharmacy.

So this is really on the seller side. But more importantly, also on the buy side, I think we are now — our purchasing is becoming much more robust in terms of the timely decisions. We’ve implemented automation in our purchasing system, which predicts the pricing patterns and then it helps us to take decisions quicker. So I mean these are a few things which in the pharmacy distribution is helping us to grow. And then, of course, on the operations side, a lot of our business, we are also looking at in-house packaging to out-house packaging and whichever way is working for us, there’s a big team, which is working to make sure that there is a consistency in supply from the operators, both in-house and out-house, and that’s also helping us to improve the margins.

Irwin Simon: When we bought CC Pharma, that was a big part of it. But again, it was bought during the Aphria time was for a tender, and was the age of sub-pharmacies. That was not really happening, number one. Now — and there was challenges with getting different medicines as we’re buying all different types of medicines. But as Rajnish said, we’re focused on the core medicines with the higher margins. And we’ve done a lot of automation at CC Pharma. The other thing is what’s happened, we’ve gone from servicing 13,000 drugstores now to 16,000 drugstores. So we’ve expanded the amount of drugstores in Germany. The other major thing is as we expand out CC Pharma into Italy and into the U.K. is a bigger platform that we’ll be selling through. Not the highest margins, but again, as the volume grows, there’s a lot more contribution. And as we put a lot more cannabis through it with much higher margin, you’re going to see the margin grow there dramatically.

William Kirk: Awesome. Thank you for the detailed answers. My second question, Irwin, in the opening comments, you talked about now being a run rate of $1.2 billion in revenue. The last 12 months, I think, it’s something like $850 million. So is the bridge between the two? Is that mostly the revenue from acquired BrewDog assets? And I asked because you didn’t take all the assets. So how much of the BrewDog revenue that they’ve released in their annual reports is generated by the assets that you took on and now have? And how much of their annual revenue was tied to assets that you didn’t take.

Irwin Simon: So let’s say between $225 million to $250 million is what we have taken, okay? And again, we took all the U.K., Ireland, Scotland distribution through retail, we’ve taken it through on-premise. And we’ve taken 16 brewpubs in U.K., Ireland and Scotland. We’ve taken the brewpubs in Australia, we’ve taken the distribution in Australia. We’ve taken three brewpubs ourselves, and — 2 brewpubs ourselves and there’s three franchises. There’s 15 other franchises out there today around the world that we sell them beer to and we get some type of royalty. In regards to the U.S., we’ve taken the distribution, the manufacturing in the U.S., and we’ve taken with them Las Vegas, Columbus, St. Albany and Cincinnati is — and Cleveland, I’m sorry, and the airport in Columbus.

That’s what we’ve taken there. So it’s somewhere between $225 million and $250 million in sales that we have taken. In regards to the other piece, Bill, it’s all coming from growth, and that’s where it’s going to come from. And don’t forget, you saw from a standpoint there, what we’ve gone through is SKU rationalization in regards to our beer business. If you take what we’re down this year and what was SKU rationalization, what was distributor rationalization, and what was product rationalization, I mean quite a bit of sales come out of our business.

Operator: Our next question comes from the line of Aaron Grey with Alliance Global Partners.

Aaron Grey: First question for me. I just want to dig a little bit more in terms of hemp. So in terms of your outlook potentially for changes to come before the ban on any product is more than 0.4% THC coming to fruition in November. And then taking that into context, how you’re looking at the CMS program, you mentioned potentially looking to enter into that. So how are you looking at potential opportunity there, particularly if there is a restriction on THC products and how appealing that program will be for patient adoption or rejection? And then just how you think about that longer-term opportunity there?

Irwin Simon: So number one, let me go back to HDD9 and how we’re looking at that. We’re looking at it three ways. Number one, it gets extended and stays as is. Number two, there is some type of new legislation that comes out that regulates it either 3, 4 or 5 milligrams, and which would be great and that way we can sell it or the ban in November of 2026 happened, and it completely stops. Listen, I think it’s going to be one or two. That will be my opinion. In regards to our CBD drinks into Medicare and that within the U.S. Listen, we have Happy Flower, we have the drinks, we’re prepared for that now. It’s just making sure that as we talk to the FDA, and we talk to them that how we go about it and how we do it. So we’re able to do it. We have the products to do it. It’s just making sure the right approvals, and we have a team that is working on this within the U.S. regulations and what could happen here. So stay tuned for that.

Aaron Grey: Okay. Great. Appreciate that color, Irwin. Second question for me, I just wanted to go back in terms of alcohol gross margin and the outlook. Carl, I know you mentioned in terms of how you guys are hedging some of the aluminum. But just taking a step back and — level, there’s been some lumpiness. You guys now have Project 420 now completed. So how should we think about that margin for the segment going forward? 4Q, I imagine obviously be higher just given the higher sales flow-through, but just on a full year basis, just how best to think about the gross margin there?

Carl Merton: So Aaron, good question. If you look at where we are right now, I think this represents the bottom. We have done a significant amount of work, and we’ll continue to do work to manage costs and to keep costs at a reasonable level versus where our volume is. As we said on the call, we’ve got some headwinds with aluminum costs, and there’s potential for headwinds with fuel surcharges and things like that, that we’re going to keep a close eye on. But the key is really in the overhead utilization rates. And as we’ve adjusted to that, and we continue to make adjustments going forward, like we’ll see that start to come up over time. And right now, we think this is the bottom of the trial.

Irwin Simon: And Aaron, I think there’s — once again, you remember, we get in the beer business in late 2020, with Sweetwater and the acquisitions of the three brands in the West Coast and Montauk and then the ABI pieces and the Molson pieces. We had a onetime had 10, 11 manufacturing facilities. And since then, now with Carlsberg coming on, with the rescaling of the beer business and the SKU rationalization. It hasn’t been the easiest road for us, but nothing dissimilar that was cannabis in regards to as we opened up the grow facilities, and we had to go deal with it. But now we got time. We now have the right sets in place. We have the right new products in place. We had some new products out there that didn’t do as well as we thought.

So as Carl said, now with the purchasing power between BrewDog International, between bringing Carlsberg on with us, we feel good about moving forward where we’ve done a lot of the overhauling. We’re now down to 7 manufacturing facilities. We might even get smaller in regards to that. In regards to the facility in Columbus, Ohio, which is a beautiful facility. And what are we moving there from HDD9, if that is a product that’s able to stay within the portfolio. We have a great energy drink called, High Voltage, that’s growing in leaps and bounds. Some of the other non-alc products that we have out there today that we will move into our facilities. And as we introduce a lot of Vodka Seltzers and some of the other drinks that we’re doing, we’ll look to bring most of that in-house.

And we will have capacity, as we have a great plan to grow Carlsberg. We think the growth opportunity of Carlsberg is tremendous of what we can do with that brand. So again, it’s — we’ve only been at this 5 years where most craft brewers have been out there a long, long, long time. And we’ve had some pain, but we’ve managed through it. And I think we’ve really got it in a good place now from a scale standpoint. I don’t — I know, I could be wrong, I think we’ll combine with BrewDog and what we’re doing today, it’s almost 18 million cases of beer that we’ll be selling that’s between the worldwide. So we’re buying lots of cans, we’re buying lots of hops, we’re buying lots of ingredients here. And yes, some of it is across the water. We’re buying lots of kegs, but how do we utilize that?

We’re just not a little craft brewer anymore from a standpoint there.

Operator: Our next questions are from the line of Pablo Zuanic with Zuanic & Associates.

Pablo Zuanic: Yes, congratulations on the very strong international growth and also very nice to see the share count being stable quarter-on-quarter. Look, I have three questions on Germany specifically, and I’ll try to keep it brief. The first question I want to get your take in terms of the advantage of being vertically integrated versus the many distributors out there, I mean for a while, we saw that the distributors were growing faster. We saw consolidation, Curaleaf by Four 20, High Tide by Remexian, more recently. But now with lower prices, some of the distributors are being squeezed out and they don’t seem to have a very stable supply chain. So I’m just trying to understand if you can remind people of the advantages in Germany, especially where the market is evolving or being vertically integrated versus the distributor model.

The second question is that it would help if you can expand on your route to market? Like how many people do you have on the ground? How many people are visiting doctors? How many people — what are the efforts in terms of reaching out to patients given all the restrictions. But just if you can give more color on your route to market in Germany. And the third, which is related to all of this, I could make the argument, playing devil’s advocate, that pharmacy reach does not matter too much, right, that all these numbers that we hear about CC Pharma and Alliance now are not so relevant when the doctors and the patients are making the decision and the 80/20 rule applies, right? We know that maybe 50 pharmacies, especially online account for the bulk of sales and only 1 of 7 pharmacies sell medical cannabis.

So why does pharmacy reach matter in the short term and in the long term? I know there’s a lot there, but there are three questions on international that would help if you can cover.

Irwin Simon: I hope I can remember all three, okay? And number one, to your point, and I stressed this before, from a growth standpoint of having our Cantanhede facility and that up and going the way it is today and growing some of the best cannabis that it ever has and having the permits to get out of Portugal into Germany is a major, major advantage to us, and this is what helped us in the quarter to get the sales. And again, as we’re getting yields and flower to become that low-cost, that low-cost seller in there in the marketplace and deal with price compression. Number two, you heard me talk about now as we bring on our facility in Gatineau, Quebec, that is a GMP facility. And that from a supply standpoint, and I got to tell you, because originally, we were going to sell that and thank God, we didn’t because from electricity costs, from labor cost, that is an excellent facility and it’s an excellent facility for us to have and supply the international market, and that’s what it will do because it’s GMP, because it’s a lower cost facility.

And then our German facility, which originally we were selling 2 to 3 metric tonnes that are there and Rajnish and the team has done a great job of getting that up into additional metric tonnes and before that we were only allowed to sell into the German government there. So to your point, Pablo, yes, we have supply. Yes, we can be that lowest cost producer. And yes, the big thing is we can be consistent. In regards to the customers that we’re selling to. I’m going to let Rajnish talk about what we have on the ground there and the infrastructure in a minute, but just going through the pharmacies, you may not agree that having a vertical integration. So number one, having CC Pharma. The big part of the CC Pharma today’s business is not the cannabis business.

But there’s 3 things CC Pharma does. It has 16,000 pharmacies and a lot of these pharmacies, Pablo, are buying medical cannabis. So now they have the ability and at the end to sell, it has the ability to go to pharmacies, number one. Number two, there’s a lot they can do in regards to online and selling online through CC Pharma, and that is something that we’re working on. And again, as we look at expanding our product lines in Germany, whether it is vapes, whether it is pre-rolls, CC Pharma has medical license and an application that they can do these things for, and we’re looking at numerous things with the CC Pharma. So today, having it, it’s very important for us. It has a tremendous network too with other CC Pharma types of distributors that we can sell products through them too.

So CC Pharma has a relevance to us, and it’s a big relevant for us in the cannabis grow market where no one else really had a CC Pharma today. Rajnish, in regards to your sales organization on the ground, go ahead.

Rajnish Ohri: Yes. So two things here. I mean, so there is a price compression in Germany, which is kind of changing the route to market and the route to market is diverting, becoming more integrated. The distributor is now getting squeezed out because of the margins, et cetera. So I think — we don’t see it now, but we do see it going forward that the route to market will become more direct to pharmacies and through the channels of prescriptions to doctors, et cetera. So CC Pharma and our medical team there is presently working along with the prescribers and also in the pharmacies to work and build this integrated supply chain to reach the patients. So that’s number one. Number two, to your question of what’s the feet on street we have today 2 teams which work on the street.

One is the one which work with the prescribers. This is a team of about 20-plus people who are medical representatives and medical advisers, who work on with the prescribers. And then we have a team with CC Pharma, which is also about 7 to 8 people who are basically telecall services people who continuously to work with pharmacies to make sure that the prescriptions, which we reach there and the stocks are available for them. So there is a twin approach there, both at the pharmacy and at the prescriber level at the ground in Germany. And as we go and see this forward, I think — and these are signs which we see in the market today that the route to market is going more direct than through the distribution. So with CC Pharma and Tilray Medical team, I think this change we are seeing, and we also see data coming to us, which is telling us that the pharmacy sales are improving, still small, but improving compared to what the distribution sales have been.

Irwin Simon: And Pablo, not only that, what we have internationally today, I mean, basically, we have marketing teams, we have R&D teams, we have quality teams. We have a researchers working on our different cannabis streams and genetics over there from a medical standpoint that when doctors prescribe for pain, for anxiety, for cancer we can grow and support it. So again, what we’re not is just somebody selling into the marketplace. I mean, as Rajnish said, we have a big infrastructure in Canada and Portugal, we have in Germany. And then we have a team that support it in London in regards to the marketing team, and there’s a whole supply team. And the good news is we have moved a lot of our Canadian colleagues over there to help us with this grow. You were going to ask something else. Go ahead, Pablo.

Pablo Zuanic: I mean, that’s great color. Can I add just one more quickly? You mentioned that you’re keeping an eye on the CMS program in the U.S. for a full-spectrum CBD. Does that mean that you would be considering or looking at buying a U.S. CBD brand?

Irwin Simon: So we have a brand today called Happy Flower, okay? We produce CBD products internationally. So we have formulations. We have products. It just got to fit to what the U.S. standards are and regs are here. But, listen, I’ve always liked if it made sense to buy something that gives you a foothold in there. But like anything, we have the ability today to do our own with CBD products.

Operator: Our next question is from the line of Kenric Tyghe with Canaccord Genuity.

Kenric Tyghe: The majority of my questions have been asked, but just a couple of quick follow-ups. With respect to the beverage segment, you called out trough margins in quarter. Is that including or excluding the BrewDog integration? Just trying to get a handle on whether that’s a trough on legacy or trough on go forward, and how we should think about that evolution of the margins?

Irwin Simon: No. BrewDog, from lease margins, BrewDog was acquired, March 2, so there’s nothing in here in regards to BrewDog. And there’s nothing in here in regards to Carlsberg from a margin standpoint. And again, from a procurement, from the sales, from an infrastructure, from manufacturing, again, I’m not going come out there with numbers, but I would think there would be upside just putting volume.

Kenric Tyghe: Great. And that was the gist of the question was just on that evolution from here forward with Carlsberg and BrewDog, but I can leave it there. Just a follow-up with respect to the brewpubs and that footprint. Just with how consumer trends and consumption patterns have changed. How are you thinking about that footprint going forward? And is it becoming more important to you as a sort of a strategic buffer on the consumption side? Any color around the BrewDog — sorry, around the brewpub footprint would be useful.

Irwin Simon: Listen, good question. It’s something today within Tilray, we have 18 of our own brewpubs here in the U.S. So again, it’s something we understand. In regard to the U.K., Ireland, Scotland and the other markets, listen, I’m big on brewpubs to look at them from a marketing tool and to build our brand out there. So bringing people together. And that’s the whole thing on longevity today to bring people together. And a big part, and I plan to spend a lot of time looking at our brewpubs in regards to what we got to do to interact with our customers that come there, how do we serve them good food and good value. I’ve also talked about whether it’s Carlsberg, Guinness or our other beers of how we bring other beers into there because if they don’t want BrewDog, we want them to come to our brewpubs at least to enjoy our food, enjoy the environment, and maybe we can convince them to have BrewDog.

Is that going to be a big part of our growth as a part of our strategic plan to open up another 100 of those? No. It’s a big part of those to look to upgrade them, to put more TVs, more interactive types of communications in regards to getting more and more of our consumers to that and is something, yes. Is there an opportunity for us to franchise more and more BrewDogs, where we did not take them and make them franchisees? Absolutely, yes. So there’s some exciting things here as we look to grow from a franchise model as we look to increase the sales with the ones we own and where we license the brand today in airports. And that’s something that we’re looking at too because there’s — with airports today, you license your brand name, you collect a royalty and you sell product.

So that’s how we’re looking at these brewpubs.

Operator: At this time, I’ll turn the floor back to management for closing remarks.

Irwin Simon: Well, thank you, everybody. Number one, it April Fools’ and our numbers are not April Fools’ joke. So that’s the good news, okay. Our numbers are some real strong numbers out there. Congratulations to the team on the growth. And not one of these businesses, nothing has been easy out there, in regards to what we deal from a regulatory standpoint, what we deal in regards to pricing, in regards to tariffs and just looking at the consumer today. And again, if you stop and look at Tilray from 2019 to hitting over that $1 billion mark with the acquisition of BrewDog, it’s a very exciting time for us. In regards to where we’re going in 2027 and with 2 months left in our quarter of 2026, there’s a lot to be proud of here.

And as you heard me talk about the big overall that we’re going to do in the Canadian market in regards our genetics, in regards to our strains, in regards to using AI to help us there, in regards to how we modernize those facilities and take out lots of costs. And Blair and the team have done a tremendous job in doing that. And again, as you come back and think about what we have in grow today and how we’ve converted these facilities to much more economical and dealt with the challenges of the cost of utilities in Ontario. So again, we’ve accomplished a lot in the Canadian market and the only market where recreational cannabis is legal in the world and at the same time, dealing with and growing our medical market and introducing more and more patients and consumers to the product.

In regards to the U.S., listen, again, I’d like to see some better results coming out of our beverages business. But on the other hand, as you bring everything together since late 2020, and we’re here where we are today, I see some good light at the end of the tunnel here of what we’re building here and being the fourth largest craft brewer out there and the fourth largest craft beer business. There’s been a lot of changes in the craft beer business, it’s been a lot of changes in the beer business. And one thing I can tell you is I really feel we got the footprint right, we got the model right, and now we got the product right because we brought up a lot of SKUs. We have over 18 brands. We have over 900 distributors. We’ve had multiple people, multiple contracts out there that we had to deal with, whether it’s buying kegs, cans, hops, et cetera.

So as we bring all that together. In regards to our spirits business, you heard me talk about our depletions on Breckenridge being up. We’ve dealt with lots of distributor transition out there with RNDC, now being acquired by Reyes, which is good news for us, and it’s something that we will consolidate into the new Reyes distribution system. In regards to some other changes in the market, it’s something we’re going to do. But what I’m really happy about and seeing our Breckenridge, some of the new stuff that we’re really coming out with in regards to our tequilas, our drinks with moonshot — our Mountain Shot, it isn’t moonshot. Some of our non-alc drinks and some of our products there. But it’s great to see some of the stabilization that’s going to happen in regard to the distribution business.

Listen, this industry is a difficult industry with a 3-tier system, and you can have the greatest products, but it’s the distribution that you need. In regards to international, again, Rajnish and team have done some great things in regards to the international piece and the grower and dealing with the regulated market in regards to medical cannabis, dealing with permits when you ship out of the country or permits when you ship into the countries. And again, what we’ve had to do to get our Cantanhede facility up to the yields and up to the grow that we’ve done in Canada and up to being able to supply consistent product to the marketplace and back to Pablo’s point before, that’s something that Tilray now is going to be known for because if you think about it, look where our volumes are today and look where they were a year ago and how we’ve doubled in the quarter.

So a lot to be proud of there. And again, there’s a lot more that we’re going to do in those marketplaces. We had to overcome Germany being only sold into the German government, which we’re losing money and almost doubling the amount of production coming out of that facility. And now we’re running Cantanhede probably at 50%, 60% capacity, and we have tremendous opportunities to grow more and more in our Cantanhede market. Really, the highlight is where we’ve come with CC Pharma. Where we are at 2%, 3% margins and closer to 5%, 6% margins now and really see the opportunity in that business and see opportunities from an integration standpoint and even seeing it grow throughout the rest of Europe. And last not — well, our wellness business in regards to Manitoba Harvest, and the growth within that business and the growth in regards to some of the beverage businesses that’s been in that business.

Listen, we’ll see what happens in regards to Delta-9, I think as you heard me say, there’s three options out there, either 1 or 2 will happen. I’ll be disappointed if it’s 3. But again, we’re out there in full force selling our products today that we have in the marketplace and sticking with it and out there lobbying the government to really take a hard look at that. So last but not least, on March 2, I just sort of want to step back one second in regards to Carlsberg as we announced our partnership with Carlsberg. And it’s something I’m very proud of because I grew up in Carlsberg. It’s a worldwide brand. It’s one of the largest brewers out there. What a class organization to be associated with. I spent lots of time with the Carlsberg team.

And it’s tremendous what we can learn from Carlsberg. And what we have the ability to tap into their knowledge base, tap into their new products, tap into their marketing things. And I always say this here, when I grow up, I like just to be like Carlsberg. It’s something that we aspire to, and having that for the U.S. and the U.S. being the biggest beer market in the world, Carlsberg is looking for some big things for us, and I promise we’re not going to let them down. Last but not least, in regards to BrewDog. Listen, I looked at BrewDog numerous times throughout the years in the acquisition, I congratulate the founders for what they did in regards to building this brand and what they did in regards to opening up these beautiful brewpubs around the world today.

And since 2015, and basically 10, 11 years what they’ve built. Unfortunately, not everything goes as planned. And Tilray, when it had the opportunity to participate in the administration to buy this without being able to do due diligence, the way we could, but we knew the brand, without being be able to go into data rooms and ended up buying this at a little over EUR 40 million is something that I’m excited about. But I always say it’s not what you bought it for, it’s what you do with it. And with that, there’s a lot to do. And this changes a lot within Tilray in regards to our beverage business, our worldwide known of who Tilray is. You heard me say in my comments, that I’ve done lots of acquisitions, whether it’s at Anheuser or here, and I’ve never had so many reach outs about the brand, BrewDog and the excitement that is.

So we’re pretty excited. It’s just a month that we owned the business. We’re in the midst of getting our hands around this. And one of the big things, this business as it was going through in administration was in the midst of either being shut down or sold in pieces or sold as a whole like us. So it’s almost like we’re starting this back up again, and getting it back up to capacity, getting the factories back up, making sure we have hops, where suppliers didn’t get paid and there are ransom suppliers that we’ve got to do that. There was employees that had their resume on the streets that didn’t know if they were going to have a job or not, and that’s something that we’ve got to make sure. So stabilization, as I keep saying, is the key to this here.

And with that, we will have in place great strategic plans to grow the business in the U.K., Ireland, we’ll have great plans in place for Australia. In Europe markets, we’ll have plans in place for a franchise and what we will do with our current brewpubs, and what we’re going to do in the U.S. So there’s a lot of exciting things with BrewDog that we can do and will do. And remember, there’s a lot of heavy lifting there and how do we integrate it within our business. So with that, some exciting things happen at Tilray. Let me tell you, as I always say, there’s 2x4s that hits you in the head every day. And that’s something we live by and how do we deal with it. I want to thank everybody for getting on our call today and listening to us. Happy Passover, Happy Easter to everybody, and enjoy some good beer out there, enjoy some of our good cannabis and to March Madness.

Hey, when you’re watching March Madness this weekend, make sure you have one of our great beers that we produce out there. Thank you very much for listening to us today.

Operator: This will conclude today’s conference. You disconnect your lines at this time. Thank you for your participation. Have a wonderful day.