That is a big help. We have also invested this year alone close to $4 million in new technology to drive our labor costs down. As we speak right now, most of that equipment is being installed, which you will have a benefit going forward in 2024. You saw our yields are starting to be up and that’s directly affected by both the less impact from the virus as well as working with our AI system. That being said too a big part of our profitability is working with our third party growers. And due to the virus, we lost two of them. One switched into berries and one went out of business. So we’re rebuilding that. We’re very bullish. I was just in Mexico last week. I was there in June. We’re building our relationships going forward. So I think it’s all a cumulative, it’s not just one thing that’s going to drive it.
And we’ll continue to look at driving our gross margin higher, pricing has been more solid. Finally, I think the industry had to realize it’s just not cutting prices against your competition, but trying to drive higher prices so the industry can survive. And it seems to be resonating with a lot of our competitors. So we’re bullish. That being said, it is a commodity and there is fluctuations quarter-to-quarter, but I think overall we’re headed in a very strong direction. The $22 million turnover in one year is not easy to do, especially in agriculture. So I hope that gives you the color you need, Eric.
Eric Des Lauriers: If I could just kind of double click on that a bit more. So obviously, granted that we are dealing with commodities here and no one’s in charge of pricing. Do you feel that perhaps once this new technology is kind of fully layered in in 2024 that you sort of have what you need now to reach a sustainably profitable produce business or are there other areas that you may look to kind of drive down costs going forward before you’re kind of — you feel sort of comfortable that at least from what’s in your control that you’re kind of out of the woods here?
Michael DeGiglio: Yes, I do. The only thing — the only uncertainty would be where inflation goes. And even our interest rates on our loans have skyrocketed over the years. So there’s not been one area that hasn’t been had a negative effect. And I think as for example, even though our interest rate that we pay on our produce business is not directly tied to operational efficiencies and excellence, it does matter. So I think 2024 is really a very strong pivotal year for us to get to sustainable profitability going forward. I feel pretty solid on that.
Eric Des Lauriers: And just last question from me. Just looking for an update on the potential sale of the greenhouse in Texas.
Michael DeGiglio: Don’t have anything to report. We’re working it. We’re not just sitting on our laurels. But I think, with the economy the way it is, some other things that have happened in the industry, we just have to be patient. But as you can see what Steve reported where our cash position is and our working capital. So that will eventually go and it’ll be a nice day that we’ll have to reinvest hopefully in 2024.
Operator: Our next question comes from the line of Mike Regan with Excelsior Equities.
Mike Regan: In terms of — we’ve seen a lot of the capacity start to — some of your competitors trying to shut down capacity in Canada, and it’s interesting that some of that swing capacity for cannabis will be planted as tomatoes. Now, I guess, are you starting to see any impact on sort of the reduction in capacity then allowing you to potentially actually add to that capacity, or is it just more that you’re getting so much improvements on your yields that you don’t need to — you can reduce that swing capacity and just generate some cash out of it?
Michael DeGiglio: Yes, we’re finally seeing — sometimes things never change and then there’s a domino effect. And maybe 2024 is that year of reckoning within excess capacity that we’ve seen for so many years in a Canadian marketplace. So we are seeing — well, a lot of companies have publicly reported that they’re either not going to participate in the Canadian cannabis retail market, maybe focus on overseas or other cannabis markets. Some have indicated that they will be a light asset model and so on. And that’s fine. We have nothing good or bad to say. But if they’re a potential customer and we could work with them to the mutual benefit, because our driver is positive cash flow, increased revenues, while we’re looking at our own expansion and profitable market share, we’re going to do so.
So we are seeing some changes happening. I think, what was out there for companies just trying to generate cash without being profitable, it’s not very durable. So it’s got to change. So we’re definitely going to participate in that. Now keep in mind, we do have excess capacity, because as Steve reported, our yields have been increasing. We said that five years ago that growing is a continuous improvement process. You get better at it, hopefully, you get better at it, and you could drive your yields up, which drives your costs down. So we’re in a good position. We have excess square footage we can put to use. We’re very focused now. Now that we’ve reached sort of profitability and a market share position in Canada, now we’re very serious about going international.
I think, some companies maybe went international before Canada was right. We had a different approach. Let’s get Canada right and going and then go international. So we’re really looking forward to increased penetration in the international market in 2024 and we have the capacity to do so. So I think we could service our own needs, we could be a B2B and we could definitely drive international capacity as well going into 2024 and 2025.
