Cronos Group Inc (CRON) 2024 Q3 法說會逐字稿

Good morning. My name is Briana, and I will be your conference operator today. I would like to welcome everyone to Cronos Group's 2024 third-quarter earnings conference call. Today's call is being recorded. At this time, I would like to turn the call over to Anna Shlimak, Chief Strategy Officer. Please go ahead.

早安.我叫 Briana，今天我將擔任你們的會議操作員。歡迎大家參加 Cronos Group 2024 年第三季財報電話會議。今天的通話正在錄音。現在，我想將電話轉給首席策略長 Anna Shlimak。請繼續。

Thank you, Briana, and thank you for joining us today to review Cronos' 2024 third-quarter financial and business performance. Today, I'm joined by our Chairman, President and CEO, Mike Gorenstein; and our CFO, James Holm. Cronos issued a news release announcing our financial results this morning, which is filed on our EDGAR and SEDAR profile. This information and the prepared remarks will also be posted on our website under Investor Relations. Before I turn the call over to Mike, let me remind you that we may make forward-looking statements and refer to non-GAAP financial measures during this call.

謝謝 Briana，感謝您今天加入我們回顧 Cronos 2024 年第三季的財務和業務表現。今天，我們的董事長、總裁兼執行長 Mike Gorenstein 也加入了我的行列。和我們的財務長詹姆斯·霍爾姆。Cronos 今天早上發布了一份新聞稿，宣布了我們的財務業績，該業績已存檔在我們的 EDGAR 和 SEDAR 資料中。這些資訊和準備好的評論也將發佈在我們網站的投資者關係欄位下。在我將電話轉給麥克之前，請允許我提醒您，我們可能會在本次電話會議中做出前瞻性陳述並參考非公認會計準則財務指標。

These forward-looking statements are based on management's current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements.

這些前瞻性陳述是基於管理階層目前的預期和假設，這些預期和假設受到風險和不確定性的影響，可能導致實際結果與前瞻性陳述中的預測有重大差異。

Factors that could cause actual results to differ materially from expectations are detailed in our earnings materials and our SEC filings that are available on our website. By which any forward-looking statements made during this call are qualified in their entirety. Information about non-GAAP financial measures, including reconciliations to US GAAP can also be found in the earnings materials that are available on our website.

我們網站上提供的獲利資料和 SEC 文件中詳細介紹了可能導致實際結果與預期有重大差異的因素。本次電話會議期間所做的任何前瞻性陳述均符合其整體條件。有關非公認會計原則財務指標的信息，包括與美國公認會計原則的調節，也可以在我們網站上提供的收益資料中找到。

Lastly, we will be making statements regarding market share information throughout this conference call, and unless otherwise stated, all market share data is provided by HiFirE. We'll now make prepared remarks, and then we'll move to a question-and-answer session.

最後，我們將在整個電話會議中就市場份額資訊做出聲明，除非另有說明，所有市場份額數據均由 HiFirE 提供。我們現在將發表準備好的發言，然後進入問答環節。

With that, I'll pass it over to Cronus' Chairman, President and CEO, Mike Gorenstein.

接下來，我會將其交給 Cronus 董事長、總裁兼執行長 Mike Gorenstein。

Thank you, Anna, and good morning, everyone. Our results this quarter proved that our long-term approach to this industry is paying off. With record revenue this quarter and our disciplined approach to operating expenses, we're demonstrating our ability to simultaneously grow and increase efficiency across our business. Thanks to our strong balance sheet, we are exceptionally well positioned to capitalize on future growth opportunities and enhance our position in the current markets we operate in.

謝謝你，安娜，大家早安。我們本季的業績證明，我們在這個行業的長期策略正在取得回報。憑藉本季創紀錄的收入和我們嚴格的營運支出方法，我們展示了我們在整個業務中同時成長和提高效率的能力。由於我們強大的資產負債表，我們處於非常有利的地位，可以利用未來的成長機會並增強我們在當前營運市場中的地位。

Before getting into details on the quarter, I'd like to spend a minute on where we are from a flower supply-demand perspective. Over the past year, we've seen a rapid increase in demand for our flower products, after taking market share in Canada and Israel. We've also seen additional growth in international markets, particularly Germany and the UK. As a result, we have not been able to fully meet flower demand.

在詳細介紹本季之前，我想花一點時間從花卉供需的角度介紹我們的情況。在過去的一年裡，在加拿大和以色列佔據市場份額後，我們的花卉產品的需求迅速增長。我們也看到國際市場的額外成長，特別是德國和英國。因此，我們無法完全滿足花卉需求。

We believe the driver of this increased demand is a combination of our genetic breeding program and the cultivation capability, GrowCo. And with European growth picking up and the shortage of high-quality flower in Canada, we only see demand increasing from here. That is why we announced the expansion of GrowCo. This investment involved an additional approximately $51 million credit facility to support the expansion of GrowCo state-of-the-art production facility.

我們相信，這種需求成長的驅動力是我們的基因育種計劃和種植能力 GrowCo 的結合。隨著歐洲經濟成長的回升以及加拿大優質花卉的短缺，我們只看到這裡的需求不斷增加。這就是我們宣布擴張 GrowCo 的原因。這項投資涉及額外約 5,100 萬美元的信貸額度，用於支持 GrowCo 先進生產設施的擴建。

With this investment, Cronos obtained a majority control of the Board and began consolidating GrowCo into our results this quarter. As I've mentioned before, GrowCo's strong performance has been significant, yet underappreciated. These consolidated results demonstrate a more complete picture of our whole business.

透過這項投資，克羅諾斯獲得了董事會的多數控制權，並開始將 GrowCo 合併到我們本季的表現中。正如我之前提到的，GrowCo 的強勁業績非常顯著，但並未得到充分重視。這些綜合結果顯示了我們整個業務的更全面的情況。

Turning now to brand updates. In Q3, Spinach became the number one ranked cannabis brand in the Canadian market with 4.8% market share. Supported by number one rankings in edible and flower, number four in vapes and number eight in pre-rolls.

現在轉向品牌更新。第三季度，Spinach 成為加拿大市場排名第一的大麻品牌，市佔率為 4.8%。在食用和花卉領域排名第一，在電子煙領域排名第四，在預卷領域排名第八。

The brand's market share outperformance represents our relentless commitment to quality, innovation and bringing differentiated products to the competitive Canadian adult-use market. In the edibles category, sours by spinach, our industry-leading edibles, captured 17.2% of the market share in Q3 and today accounts for 5 of the top 10 best-selling edibles in Canada.

該品牌的市場份額表現出色，體現了我們對品質、創新以及為競爭激烈的加拿大成人使用市場帶來差異化產品的不懈承諾。在食品類別中，我們領先業界的食品菠菜酸在第三季佔據了 17.2% 的市場份額，目前在加拿大最暢銷的 10 種食品中佔了 5 名。

Our focus on developing innovative strategies and products in this category has been instrumental in our success. We recently launched our first seasonal offering, Caramel Green Apple sours, which has been a huge hit with consumers.

我們專注於開發該類別的創新策略和產品，這對我們的成功發揮了重要作用。我們最近推出了首款季節性產品焦糖青蘋果酸，受到了消費者的巨大歡迎。

In Q3, we also launched our fully blasted sours in Ontario, a single 10-milligram THD gummy. This has been the fastest selling launch in company history. This quarter, we also launched new sour flavors with rare cannabinoids. Our strawberry watermelon 41 gummy with CBG and THC and our Peach Passionfruit gummy with CBN, CBC and THC are now in market.

第三季度，我們也在安大略省推出了完全爆破的酸味糖，一種 10 毫克的 THD 軟糖。這是公司史上銷售最快的產品。本季度，我們也推出了含有稀有大麻素的新酸味口味。我們的含有 CBG 和 THC 的草莓西瓜 41 軟糖和含有 CBN、CBC 和 THC 的桃子百香果軟糖現已上市。

Edibles from our Lord Jones brand are also doing well in the chocolate category, quickly growing to become the third best-selling chocolate brand in Canada. We look forward to seeing Chocolate Fusions performed during the holiday season and heading into the winter months, which tends to have a lift in the chocolate category. Spinach continued its exceptional performance in the flower category at the number one spot in the Canadian market with 6% market share, led by popular genetics such as GMO cookies, wedding cake and Space Cake in a variety of sizes.

我們的 Lord Jones 品牌的食品在巧克力類別中也表現出色，迅速成長為加拿大第三大暢銷巧克力品牌。我們期待看到巧克力融合在節日期間和進入冬季，這往往會提升巧克力類別。菠菜在花卉類別中繼續保持出色的表現，以 6% 的市場份額佔據加拿大市場第一的位置，其中最受歡迎的品種是基因改造餅乾、婚禮蛋糕和各種尺寸的太空蛋糕。

This segment has also been bolstered by our milled flower offering, Spinach Grindz. The continued success of our breeding program and GrowCo has further strengthened our position in this category, ensuring premium quality and consistency. The vape category continues to perform steadily. Spinach maintains the number four position with 6.4% market share.

我們的碎花產品 Spinach Grindz 也為此細分市場提供了支持。我們的育種計劃和 GrowCo 的持續成功進一步鞏固了我們在這一領域的地位，確保了優質和一致性。電子菸品類持續表現穩定。菠菜以 6.4% 的市佔率保持第四名的位置。

This quarter, we launched a new Spinach HITZ all-in-one vapes in pink lemonade and rocket icicle as well as new flavors, mango and grape for a 1.2-gram base. Our Pink lemonade vape is now the number one 1.2 gram vape. This is a competitive category, and we are committed to continuing to innovate and bring differentiated products, flavors and cannabinoid combinations to market.

本季度，我們推出了一款新的 Spinach HITZ 一體式電子煙，有粉紅檸檬水和火箭冰柱，以及新口味、芒果和葡萄口味，重量為 1.2 克。我們的粉紅檸檬水電子煙現在是排名第一的 1.2 克電子煙。這是一個競爭激烈的類別，我們致力於繼續創新，並將差異化的產品、口味和大麻素組合推向市場。

This quarter, we saw an improvement in market share in the pre-roll category. In infused pre-rolls, Spinach saw a 25% retail dollar sales growth, boosting our brand rank to sixth among all infused pre-roll brands. Lord Jones is shaping up to be a clear leader in hash-infused pre-rolls in the Canadian market. The recently launched sour blueberry infused pre-roll ended Q3 as a top-selling hash-infused pre-roll. The infused pre-roll category is growing, so we're particularly pleased to be winning here.

本季度，我們看到前貼片類別的市佔率有所提高。在註入預捲產品中，菠菜的零售額成長了 25%，使我們的品牌在所有註入預捲品牌中排名第六。Lord Jones 正在成為加拿大市場上註入哈希的前卷市場的明顯領導者。最近推出的酸藍莓預捲在第三季結束時成為最暢銷的哈希預卷。注入的前貼片類別正在不斷增長，因此我們非常高興能夠在這裡獲勝。

We are laser-focused on improving and innovating our pre-roll offerings, and we are seeing signs of that success roll through the numbers. While we still have plenty of room to grow in this space, we remain focused and optimistic about our plans for expansion.

我們專注於改進和創新我們的前置產品，並且我們在數字中看到了成功的跡象。雖然我們在這個領域仍然有很大的成長空間，但我們仍然專注於我們的擴張計劃並保持樂觀。

Our strategy has always been to develop a portfolio of best-selling and disruptive branded products we can launch in new markets as cannabis regulations open globally. The Spinach brand becoming the best-selling brand in Canada is validation of our strong capabilities, and we're just getting started in expanding our winning portfolio of borderless products and bringing to markets globally.

我們的策略始終是開發一系列暢銷且顛覆性的品牌產品，隨著大麻法規在全球開放，我們可以在新市場推出這些產品。菠菜品牌成為加拿大最暢銷的品牌證明了我們強大的能力，我們剛開始擴大我們的無國界產品獲勝產品組合併將其推向全球市場。

Now moving to Israel. Our team there has shown remarkable performance throughout Q3, with record volumes sold and our best revenue quarter in two years. Cronos Israel has built significant momentum throughout the year despite a very competitive market with declining patient growth, which is a testament to the strength and the quality of the Peace Naturals brand and products. We are excited about the growth in Israel despite geopolitical factors affecting the region this past year, which gives us confidence in our position in this market.

現在搬到以色列。我們的團隊在整個第三季表現出色，銷售量創歷史新高，也是兩年來最好的營收季。儘管市場競爭非常激烈，患者人數不斷下降，克羅諾斯以色列全年仍取得了顯著的發展勢頭，證明了 Peace Naturals 品牌和產品的實力和品質。儘管去年地緣政治因素影響了以色列，但我們對以色列的成長感到興奮，這讓我們對我們在這個市場的地位充滿信心。

Internationally, we've made great strides in the markets we have entered. In Germany, our Peace Naturals brand continues to penetrate the market and grow at a strong clip. We are confident in the momentum we are seeing in the German market given we are selling the same products that led us to our number one flower position in Canada. We believe we have a right to win and are well positioned to continue to take share in the German market.

在國際上，我們在進入的市場上取得了長足的進步。在德國，我們的 Peace Naturals 品牌持續滲透市場並強勁成長。我們對德國市場的勢頭充滿信心，因為我們銷售的產品與我們在加拿大花卉市場排名第一的產品相同。我們相信我們有獲勝的權利，並且有能力繼續在德國市場佔有份額。

Similarly, while it's early days in the UK, we are starting to grow our Peace Naturals brand and are excited about our growth potential. This quarter's success, driven by our growing portfolio of borderless products, strong infrastructure and industry-leading balance sheet enables us to not only expand in our existing markets, but also to seize opportunities in any new market we choose to enter.

同樣，雖然在英國還處於早期階段，但我們已開始發展 Peace Naturals 品牌，並對我們的成長潛力感到興奮。在我們不斷增長的無國界產品組合、強大的基礎設施和行業領先的資產負債表的推動下，本季度的成功使我們不僅能夠擴大現有市場，而且能夠抓住我們選擇進入的任何新市場的機會。

Now I'll turn it over to James to walk you through the financials.

現在我將把它交給詹姆斯來引導您了解財務狀況。

Thanks, Mike, and good morning, everyone. I will now review our third-quarter 2024 results, which now include the consolidation of GrowCo's financials. The company reported consolidated net revenue of $34.3 million, a 38% increase from the prior year period.

謝謝麥克，大家早安。我現在將回顧我們 2024 年第三季的業績，其中包括 GrowCo 的合併財務資料。該公司公佈的綜合淨收入為 3,430 萬美元，比去年同期成長 38%。

Net revenue from Cronos, excluding GrowCo, was $30 million, representing a 21% growth year-over-year on a stand-alone basis, while GrowCo net revenue was $4.3 million. The net revenue increase was primarily driven by higher cannabis flower extract sales in Canada, higher flower sales in Israel and sales in other international countries, which include Australia, Germany and the UK. Gross profit in the third quarter was $3.6 million, equating to an 11% gross margin.

Cronos 的淨收入（不包括 GrowCo）為 3,000 萬美元，年增 21%，而 GrowCo 的淨收入為 430 萬美元。淨收入成長主要是由於加拿大大麻花萃取物銷售增加、以色列鮮花銷售增加以及澳洲、德國和英國等其他國際國家的銷售增加。第三季毛利為 360 萬美元，相當於毛利率 11%。

Adjusting for the impact of the inventory step-up from Cronos GrowCo transaction that was recorded in the cost of sales, our adjusted gross profit was $10.7 million, equating to a 31% adjusted gross margin. We will continue providing this adjustment until the inventory that was stepped up to fair market value to the purchase accounting adjustment has been sold through as we believe it is useful in reviewing and evaluating our ongoing performance.

根據記錄在銷售成本中的 Cronos GrowCo 交易產生的庫存增加的影響進行調整後，我們的調整後毛利為 1070 萬美元，相當於調整後毛利率為 31%。我們將繼續提供此調整，直到已將購買會計調整提高到公平市場價值的庫存售出，因為我們相信這對於審查和評估我們的持續績效很有用。

Year-over-year adjusted gross profit improved by $6.8 million and adjusted gross margin improved by 15 percentage points. The increase was primarily driven by higher sales in cannabis flower and extracts in Canada, higher cannabis flower sales in Israel and sales in other international markets.

調整後毛利年增 680 萬美元，調整後毛利率提高 15 個百分點。這一成長主要是由於加拿大大麻花和萃取物銷量增加、以色列大麻花銷量增加以及其他國際市場銷售增加所致。

Consolidated adjusted EBITDA in the third quarter was negative $6 million, representing a $9.2 million improvement from the prior year period. The improvement was driven by an increase in net revenue and a decrease in general and administrative expenses.

第三季合併調整後 EBITDA 為負 600 萬美元，比去年同期增加 920 萬美元。這項改善是由淨收入增加和一般及管理費用減少所推動的。

The disciplined approach to OpEx controls employed to date has put us well on our way to achieving our 2024 goal of saving an incremental $5 million to $10 million for Cronos on a stand-alone basis, and we are tracking toward the high end of that range. However, the addition of GrowCo's OpEx into our consolidated financials are expected to offset these savings next year.

迄今為止採用的嚴格的營運支出控制方法使我們能夠順利實現 2024 年的目標，即單獨為 Cronos 節省 500 萬至 1000 萬美元，並且我們正在朝著該範圍的高端邁進。然而，將 GrowCo 的營運支出納入我們的合併財務報表中，預計明年將抵銷這些節省。

Turning to the balance sheet and cash flow. The company ended the quarter with $862 million in cash and cash equivalents. Cash and cash equivalents were up $14 million from Q2, driven primarily by improved cash flow from operations and some FX fluctuations.

轉向資產負債表和現金流量。該公司本季末現金及現金等價物為 8.62 億美元。現金和現金等價物較第二季增加 1,400 萬美元，這主要是由於營運現金流改善和一些外匯波動所致。

Cash flow from operations was positive $11.6 million compared to a negative $0.2 million in the prior year period. And free cash flow was positive $5 million compared to a negative $0.5 million in the prior year period, driven by an increase in adjusted gross profit and an income tax refund, a significant improvement. Looking back on the progress we have made; I share Mike's confidence in the trajectory of our business and our preparedness for entry into new markets as they become available.

營運現金流為正 1,160 萬美元，而上年同期為負 20 萬美元。受調整後毛利和所得稅退稅增加的推動，自由現金流為正 500 萬美元，而上年同期為負 50 萬美元，這是一個顯著的改善。回顧我們所取得的進步；我和麥克一樣，對我們的業務發展軌跡以及我們為進入新市場所做的準備充滿信心。

With that, I would like to hand it back to Mike for a brief comment before going into Q&A.

說到這裡，我想在進入問答環節之前將其交還給麥克，讓他做一個簡短的評論。

In closing, we're proud of the record-breaking progress we've made this quarter. Our strategies are delivering results, and we remain committed to building on this momentum as we close out the year. We'll continue to drive top line growth, improve margins and expand our international presence, positioning Cronos for long-term success.

最後，我們對本季取得的破紀錄進展感到自豪。我們的策略正在取得成果，我們將繼續致力於在今年結束時繼續鞏固這一勢頭。我們將繼續推動營收成長、提高利潤率並擴大我們的國際影響力，為 Cronos 取得長期成功奠定基礎。

With that, I'll open the line for questions.

接下來，我將開通提問專線。

(Operator Instructions)

（操作員說明）

Matt Bottomley, Canaccord Genuity.

馬特‧博頓利 (Matt Bottomley)，Canaccord Genuity。

Yeah. Good morning, everyone. Thanks for the questions. Mike, just wanted to start. I know it's not really fundamental to the business, but I know you have a long standing -- some long-standing experience and knowledge in sort of the US sector. And I'm just curious your thoughts coming out of the election. You guys have obviously a very potent balance sheet potentially one day if there down south. And just curious based on how these equities have reacted and flipping administration. Any sort of takeaways on your end of where you see the US going in the next year or so?

是的。大家早安。感謝您的提問。麥克，只是想開始。我知道這對業務來說並不是真正的基礎，但我知道你們在美國行業擁有長期的經驗和知識。我只是好奇你對這次選舉的想法。顯然，如果在南方的話，有一天你們可能會擁有一個非常強大的資產負債表。只是好奇這些股票的反應和翻轉管理。您對美國未來一年左右的發展有何看法？

Thanks, Matt. That's a great question. I think there's still some uncertainty over the next couple of weeks as we see the transition team come together and what that might mean. But generally, I think as a matter of policy and incoming administration, often pulled back and restart all the pending regulatory rules. Our understanding is that the Trump administration support the STATES Act. And I think that's still something that's positive. But at a minimum, I would expect for the rescheduling effort to sort of restart the clock.

謝謝，馬特。這是一個很好的問題。我認為在接下來的幾週內仍然存在一些不確定性，因為我們看到過渡團隊聚集在一起以及這可能意味著什麼。但總的來說，我認為作為政策和即將上任的政府的問題，經常會撤回並重新啟動所有懸而未決的監管規則。我們的理解是，川普政府支持《州法案》。我認為這仍然是積極的。但至少，我希望重新安排的努力能夠重新啟動時鐘。

So if at all, Schedule 3, I think, is about 18 months away, if there is going to be rescheduling. But we believe that building on the STATES Act and on some of the existing frameworks are the way forward. But big picture, what I'll say is that I think we're now actually in a very good position where we don't need to rely on that regulatory change given the growth we're seeing in Canada, Israel, and the regulatory tailwinds in Europe and growth there.

因此，如果真的要重新安排的話，我認為距離 Schedule 3 大約還有 18 個月的時間。但我們相信，以《州法案》和一些現有框架為基礎才是前進的方向。但從大局來看，我要說的是，我認為我們現在實際上處於一個非常有利的位置，鑑於我們在加拿大、以色列看到的增長和監管，我們不需要依賴監管變化。 。

Okay. Interesting. Got it. And then just more on the Cronos side of things. So yeah, just interesting some of the commentary you made on the dynamic you're seeing for your own branded flower and some of the genetics, I know you guys have a differentiation in that space on the market, but we have not heard in a very, very long time of LP's expanding capacity. So just kind of the risk rewards of that and sort of how it's specific to the Cronos model relative to what we've seen over the last couple of years, which is some pretty ugly supply-demand dynamics for maybe lower grade flower?

好的。有趣的。知道了。然後是關於克洛諾斯方面的更多事情。所以，是的，只是有趣的是您對自己品牌花卉和一些遺傳學的動態所做的一些評論，我知道你們在市場上的這個領域有差異化，但我們還沒有聽說過LP擴容的時間非常非常長。那麼，與我們過去幾年所看到的相比，這種風險回報以及它對克羅諾斯模型的特殊性，對於可能較低等級的花卉來說，這是一些相當醜陋的供需動態？

Yeah, thanks. So I think we're in a fortunate position where early on, a lot of our focus was more on genetic breeding on consumer insights and generally R&D on cultivation methods. And we've seen flower demand steadily increase. So we've got SKUs that are the top in Canada and Israel. We're seeing really strong momentum in Europe.

是的，謝謝。因此，我認為我們處於一個幸運的位置，早期我們的重點更集中在對消費者洞察的基因育種以及對栽培方法的整體研發。我們看到花卉需求穩定成長。因此，我們擁有加拿大和以色列頂級的 SKU。我們看到歐洲的勢頭非常強勁。

And I think we're in a position where we have to pick which markets we're filling. And that's just Cronos on its own. I think there's also a lot of demand from other LPs from GrowCo, but we feel like we would be performing much better in flower if we had more supply, and that's really across markets.

我認為我們必須選擇要填補的市場。這只是克洛諾斯本身。我認為 GrowCo 的其他有限合夥人也有很多需求，但我們覺得如果我們有更多的供應，我們在花卉方面的表現會更好，這確實是跨市場的。

So I think as long as we continue to be focused on quality, the model having GrowCo produce the genetics that we have in market and the pipeline of genetics we have, which we're really excited about should continue to drive that success.

因此，我認為只要我們繼續關注質量，GrowCo 生產我們在市場上擁有的基因的模型以及我們擁有的基因管道（我們對此感到非常興奮）應該會繼續推動這一成功。

Awesome. Thanks. I'll leave it there.

驚人的。謝謝。我會把它留在那裡。

Bill Kirk, ROTH.

比爾·柯克，羅斯。

Hey. Thanks for taking the question. Mine is related to kind of your last answer there, Mike. For GrowCo, how should we think about the seasonality of the business, whether it's top line contribution or profitability contribution now that you're consolidating that? Like how should we think about the seasonality going forward? And then how is the resource allocation determined between your needs and third-party needs. How is that determined to make sure you get what you want, but also selling to the customers that need it as well? Thank you.

嘿。感謝您提出問題。我的答案與你最後的答案有關，麥克。對於 GrowCo，我們應該如何考慮業務的季節性，無論是營收貢獻還是獲利貢獻，現在您正在整合業務？例如我們該如何考慮未來的季節性？那麼你的需求和第三方的需求之間如何決定資源分配。如何確定既能確保您獲得所需的產品，又能將產品銷售給需要的客戶？謝謝。

Sure. Thanks. It's a great question. I think there's really not a lot of seasonality on the top line, especially given the shortage and where we are today. You do have some slight deviations in terms of which seasons are the most efficient for production. How much power you need to pull for supplemental lighting versus heating and cooling. Sometimes you see the summer is not the best season to cultivate in. But just given the high-tech nature of the greenhouse, that's still relatively smooth over and pretty hard to notice a difference.

當然。謝謝。這是一個很好的問題。我認為營收確實沒有太多季節性，特別是考慮到短缺和我們今天的處境。在哪些季節的生產效率最高方面確實存在一些細微的偏差。補充照明與暖氣和冷氣需要多少電力。有時你會發現夏天並不是耕種的最佳季節。但考慮到溫室的高科技性質，這仍然相對平穩，很難注意到差異。

And then overall, the way that we've structured the deal, we have an option but not an obligation. Until the second phase is online, we can purchase up to 80% of the supply at a preset price. And then once the second phase is online, that would expand current capacity today by 70%. We have an option but not obligation to purchase up to 70% at a preset price. So we feel like it's a really good balance where we're able to make sure that we're only filling demand that we think is there and is right for the brand, but still significant upside to where we are today.

總的來說，我們建立交易的方式，我們有一個選擇，但沒有義務。在第二階段上線之前，我們可以按照預設價格購買最多80%的供應量。一旦第二階段上線，目前的產能將擴大 70%。我們可以選擇但沒有義務以預設價格購買最多 70% 的股份。因此，我們覺得這是一個非常好的平衡，我們能夠確保我們只滿足我們認為存在且適合品牌的需求，但與我們今天的處境相比仍然有顯著的優勢。

Okay. And then -- and maybe I missed it in the prepared remarks, but there was like a step-up in CapEx spending in the quarter relative to the levels it had been. What's behind that? Maybe I should already know this, but what's behind that? And does that signify any sort of change in kind of capital use intentions?

好的。然後，也許我在準備好的發言中錯過了這一點，但本季的資本支出相對於以前的水平有所增加。這背後是什麼？也許我應該知道這一點，但這背後是什麼？這是否意味著資本使用意圖會發生任何變化？

Hey, [Matt] so the CapEx really was driven by that GrowCo Phase 2 expansion. So we spent roughly $6.5 million in CapEx in we would expect increased CapEx levels along with that expansion until completion. So that's really the main driver there.

嘿，[Matt]，所以資本支出確實是由 GrowCo 第二階段擴張所驅動的。因此，我們在資本支出上花費了大約 650 萬美元，我們預計資本支出水準會隨著擴張的完成而增加。所以這確實是主要驅動力。

And like if we're thinking about it quarterly, around at the same level as 3Q and what was the total kind of CapEx expectation for that second phase?

就像我們每季考慮一次，大約與第三季相同的水平，第二階段的資本支出整體預期是多少？

Yeah. So Mike had kind of highlighted that earlier. But at least we have granted them approximately $51 million in , right? It could be something a little bit south of that. But I would anticipate maybe semi evenly could be a little bit lumpy right over the next few quarters. We do expect kind of that additional biomass to be online second half. So kind of midyear is hopefully when the CapEx spend would complete for Phase 2.

是的。所以麥克早些時候就強調了這一點。但至少我們已經撥款給他們大約 5,100 萬美元，對吧？它可能是有點南邊的東西。但我預計在接下來的幾季中半均勻可能會有點不穩定。我們確實預計下半年會有更多的生物質上線。因此，第二階段的資本支出預計將在年中完成。

Okay. Thank you.

好的。謝謝。

Thank you. I'm showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

謝謝。我目前沒有提出任何進一步的問題。感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。