Village Farms International Inc (VFF) 2023 Q2 法說會逐字稿

Good morning, ladies and gentlemen. Welcome to the Village Farms International Second Quarter 2023 Financial Results Conference Call. This morning, Village Farms issued a news release reporting its financial results for the second quarter ended June 30, 2023. That news release, along with the company's financial statements are available on the company's website at villagefarms.com under the Investors heading. Please note that today's call is being broadcast live over the Internet and will be archived for replay both by telephone and via the Internet, beginning approximately 1 hour following completion of the call. Details of how to access the replay are available in today's news release.

早上好，女士們，先生們。歡迎參加 Village Farms International 2023 年第二季度財務業績電話會議。今天上午，Village Farms 發布了一份新聞稿，報告了截至2023 年6 月30 日的第二季度財務業績。該新聞稿以及該公司的財務報表可在該公司網站Villagefarms.com 的“投資者”標題下查看。請注意，今天的電話會議正在通過互聯網進行現場直播，並將被存檔，以便在電話會議結束後大約 1 小時開始通過電話和互聯網重播。有關如何訪問重播的詳細信息，請參閱今天的新聞稿。

Before we begin, let me remind you that forward-looking statements may be made today during or after the formal part of this conference call. Certain material assumptions are applied in providing these statements, many of which are beyond our control. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in forward-looking statements. A summary of these underlying assumptions, risks and uncertainties is contained in the company's various securities filings with the SEC and Canadian regulators, including its Form 10-K, MD&A for the year ending December 31, 2022, and 10-Q for the quarter ended June 30, 2023, which will be available on EDGAR. These forward-looking statements are made as of today's date, and except as required by applicable securities law, we undertake no obligation to publicly update or revise any such statements. I would now like to turn the call over to Michael DeGiglio, Chief Executive Officer of Village Farms International. Please go ahead, Mr. DeGiglio.

在我們開始之前，讓我提醒您，今天可能會在本次電話會議的正式部分期間或之後發表前瞻性聲明。提供這些陳述時應用了某些重大假設，其中許多假設超出了我們的控制範圍。這些陳述受到許多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明示或暗示的結果存在重大差異。這些基本假設、風險和不確定性的摘要包含在該公司向SEC 和加拿大監管機構提交的各種證券文件中，包括其10-K 表、截至2022 年12 月31 日的年度MD&A 以及截至該季度的10-Q 2023 年 6 月 30 日，將在 EDGAR 上提供。這些前瞻性聲明是截至今天的日期做出的，除非適用的證券法要求，否則我們不承擔公開更新或修改任何此類聲明的義務。我現在想將電話轉給 Village Farms International 首席執行官 Michael DeGiglio。請繼續，DeGiglio 先生。

Thank you, Lisa. Good morning, and thank you for joining us for today's call. With me are Village Farms Chief Financial Officer, Steve Ruffini, Village Farms Head of Canadian Cannabis, Mandesh Dosanjh and Gillin Lefever, Village Farms Executive Vice President of Corporate Affairs; and Patty Smith, Vice President, Corporate Controller. As per our usual format, Steve and I will review the operating highlights and financial results for the quarter and then open the call for questions.

謝謝你，麗莎。早上好，感謝您參加我們今天的電話會議。與我同行的有 Village Farms 首席財務官 Steve Ruffini、Village Farms 加拿大大麻主管 Mandesh Dosanjh 和 Village Farms 公司事務執行副總裁 Gillin Lefever；副總裁兼公司財務總監帕蒂·史密斯 (Patty Smith)。按照我們通常的格式，史蒂夫和我將回顧本季度的運營亮點和財務業績，然後開始提問。

Turning now to Q2's highlights. We're very pleased with Q2 significantly improved financial results, which builds on a very solid start to 2023 last quarter. There are 3 noteworthy highlights. First, we delivered continued strong and consistent growth in our Canadian cannabis retail sales, fully aligned with our strategic goal to be a leader for the long term and the largest federally legal cannabis market in the world. Second, we have stabilized our U.S. cannabis business and in fact, returned it to sequential top line growth while generating profitability and positive cash flow. And our Fresh Produce business saw another quarter of significant year-over-year improvement. Importantly, with our Fresh Produce strength of our strategic decision to build upon our unmatched expertise and controlled environmental agriculture to deliver leading revenue growth, profitability and ultimately, cash flow in each of our businesses. To do this, we lean heavily on the breadth and depth of our multitalented teams capabilities, and we leverage our wealth of experience to succeed even in difficult market and regulatory conditions and unfavorable economic cycles, not to mention the artificial pricing environment in the Canadian cannabis industry due to the lack of enforcement of the illicit market.

現在轉向第二季度的亮點。我們對第二季度財務業績的顯著改善感到非常滿意，這是建立在 2023 年上季度良好開局基礎上的。有3個亮點值得關注。首先，我們的加拿大大麻零售額持續強勁且持續增長，完全符合我們成為長期領導者和世界上最大的聯邦合法大麻市場的戰略目標。其次，我們穩定了我們的美國大麻業務，事實上，它恢復了連續的營收增長，同時產生了盈利能力和正現金流。我們的新鮮農產品業務又一個季度實現了同比顯著改善。重要的是，憑藉我們的新鮮農產品優勢，我們的戰略決策將建立在我們無與倫比的專業知識和受控環境農業的基礎上，為我們的每項業務帶來領先的收入增長、盈利能力以及最終的現金流。為此，我們嚴重依賴多才多藝團隊能力的廣度和深度，即使在困難的市場和監管條件以及不利的經濟周期中，我們也利用我們豐富的經驗取得成功，更不用說加拿大大麻的人為定價環境由於缺乏對非法市場的執法，該行業的發展受到了影響。

Addressing each of these businesses in detail, I'll begin with the continued improvement in Fresh Produce. Against a still challenging macro environment, most notably high interest rate and high inflation, we continue to see the benefit of the actions we have taken under our ongoing plan to return the business to sustainable, long-term profitability, including our significant progress in managing the brown rugose virus while increasing our planting of virus resistant strains.

我將從新鮮農產品的持續改進開始詳細討論這些業務。面對仍然充滿挑戰的宏觀環境，尤其是高利率和高通脹，我們繼續看到我們根據持續計劃所採取的行動的好處，以使業務恢復可持續的長期盈利能力，包括我們在管理方面取得的重大進展棕色皺紋病毒，同時增加抗病毒株的種植。

Fresh Produce delivered its fourth consecutive quarter of sequential improvement and generated positive adjusted EBITDA of more than CAD 1 million. This is an improvement of nearly CAD 12 million from Q2 last year, which brings the improvement in adjusted EBITDA for the first half of 2023, close to CAD 17 million and moved our year-to-date EBITDA into positive territory, a committed effort by our entire fresh team. Execution on the multipart operational plan for fresh continues. We are committed to long-term continuous improvement to partner with our customers and win with consumers. We are strengthening our operations with investments in infrastructure and technology, including artificial challenges for crop management, the initial results of which are very encouraging.

Fresh Produce 連續第四個季度實現連續改善，並產生超過 100 萬加元的正調整 EBITDA。這比去年第二季度增加了近 1200 萬加元，這使得 2023 年上半年調整後 EBITDA 改善接近 1700 萬加元，並使我們今年迄今的 EBITDA 進入正值，這是我們的不懈努力我們整個新鮮團隊。新的多部分運營計劃的執行仍在繼續。我們致力於長期持續改進，與客戶合作，與消費者共贏。我們正在通過基礎設施和技術投資來加強我們的運營，包括對作物管理的人為挑戰，其初步結果非常令人鼓舞。

We are planning more virus resistance strains, which will continue over the next few years. We have also been able to turn our attention back to important growth initiatives like product innovation, where we have had great success in the past with development of exclusive varieties that command higher margins. As an example, One of our newest products, Sensational Sara, a novel tomato variety that has a perfect natural balance of sugar and acid and has been a hit with both retailers and consumers. It also marks the debut of our new sustainable packaging solution for produce, biodegradable and recyclable that also addresses safety and shelf life. With the first half of 2023 in the books, Fresh Produce continues to track towards our goal of achieving positive adjusted EBITDA for the full year.

我們正在計劃更多的病毒抗性菌株，這將在未來幾年繼續進行。我們還能夠將注意力重新轉移到產品創新等重要的增長舉措上，過去我們通過開發利潤率更高的獨家品種取得了巨大成功。例如，我們的最新產品之一，Sensational Sara，是一種新穎的番茄品種，具有完美的糖和酸的天然平衡，受到零售商和消費者的歡迎。它還標誌著我們針對農產品、可生物降解和可回收的新型可持續包裝解決方案的首次亮相，該解決方案還解決了安全性和保質期問題。隨著 2023 年上半年的到來，Fresh Produce 將繼續朝著全年實現正調整 EBITDA 的目標前進。

Turning now to our Canadian cannabis business, which continued to deliver standout performance. Retail branded sales for Q2 grew 24% year-over-year and 8% sequentially, both well ahead of underlying market growth. We delivered our 19th consecutive quarter of positive adjusted EBITDA. And importantly, we were profitable on a net income basis. We have proven again that Village Farms Canadian cannabis business has the best organic growth story in the Canadian cannabis industry. Our growth has been achieved at a fraction of the capital cost of most other large LPs, and we have done so faster absent a first-mover advantage. The majority of that growth has been generated internally and not purchased. Our one and only acquisition in Canada, Rose LifeScience in Quebec has posted a 300% sales growth since acquisition, more than tripling market share as it contributes meaningfully to the growth of the cannabis industry in the very important partner, Province of Quebec.

現在轉向我們的加拿大大麻業務，該業務繼續表現出色。第二季度零售品牌銷售額同比增長 24%，環比增長 8%，均遠遠領先於基本市場增長。我們連續第 19 個季度實現正調整 EBITDA。重要的是，我們在淨利潤的基礎上實現了盈利。我們再次證明，Village Farms 加拿大大麻業務擁有加拿大大麻行業中最好的有機增長故事。我們的增長只用了大多數其他大型有限合夥人資本成本的一小部分，而且在沒有先發優勢的情況下，我們的增長速度更快。大部分增長是內部產生的，而不是購買的。我們在加拿大唯一的一次收購，魁北克的Rose LifeScience 自收購以來銷售額增長了300%，市場份額增加了兩倍多，因為它為非常重要的合作夥伴魁北克省的大麻行業的增長做出了有意義的貢獻。

ROSE has proven without any doubt in my mind to be the best acquisition ever done in the Canadian cannabis industry to date, bringing with it invaluable insight and capabilities around consumer trends, product innovation and distribution as well as industry relevant management expertise. Our Canadian cannabis results are very much the product of our deliberate strategy to realign our business to continue to win in an environment that, as we accurately predicted would not see any relief from the challenging conditions I described earlier. We are managing our business for the realities of the market that we have today, which is a long way from a normalized CPG playing field.

在我看來，ROSE 毫無疑問是加拿大大麻行業迄今為止最好的收購，帶來了有關消費者趨勢、產品創新和分銷以及行業相關管理專業知識的寶貴見解和能力。我們加拿大大麻的業績在很大程度上是我們深思熟慮的戰略的產物，該戰略旨在重新調整我們的業務，以便在一個環境中繼續獲勝，正如我們準確預測的那樣，我之前描述的挑戰性條件不會有任何緩解。我們正在根據當今市場的現實來管理我們的業務，這距離標準化的快速消費品競爭環境還有很長的路要走。

The expected thinning of both competitors and excess capacity has been slow and protracted, and there have been no tax relief and very little enforcement of list of trade, and I predict we will never see any real enforcement in Canada. To be clear, I'm not complaining. It is simply what it is, and we must manage accordingly. So on the production side of our mandate, under the production side, our mandate has been to manage output levels to match supply with expected demand. We have placed an elevated importance on the production protocols, building out our industry lead aimed at consistently generating efficiencies. Steve will speak more to this in a few moments.

預期的競爭對手和過剩產能的減少是緩慢而持久的，而且沒有任何稅收減免，貿易清單的執行也很少，我預測我們永遠不會在加拿大看到任何真正的執行。需要明確的是，我不是在抱怨。事情就是這樣，我們必須相應地進行管理。因此，在我們任務的生產方面，在生產方面，我們的任務是管理產量水平，使供應與預期需求相匹配。我們高度重視生產協議，建立我們的行業領先地位，旨在持續提高效率。史蒂夫稍後會對此進行更多討論。

We are actively, prudently and continuously managing our cost structure for our growth forecast. And we have successfully increased our market presence and coverage transitioning from a branded house to a house of brands as consumer preferences evolve. Since the start of 2022, we have launched 7 new brands to address consumer trends and preferences, building on our original Pure Sunfarms brands domination in the core price segment of the flower category and added more than 300 new SKUs. Outdoor brand launched less than a year ago, quickly became the top-selling premium brand in the flower category in Ontario, meaning we now have 2 #1 flower brands in their respective price segments in Canada's largest provincial market. And Fraser Valley, which was launched just a year ago, is not only the third best-selling flower brand in the value category in Ontario, but also continues to be the fastest growing. Adding to this brand Triple throat last month, we launched SuperToast, which is uniquely focused on convenience and ready-to-go products and which is off to a great start. And further, in just a short period of time, Promenade has become the second largest selling brand in Quebec.

我們正在積極、審慎、持續地管理成本結構以實現增長預測。隨著消費者偏好的變化，我們成功地提高了市場佔有率和覆蓋範圍，從品牌公司轉變為品牌公司。自 2022 年初以來，我們在原有 Pure Sunfarms 品牌在花卉品類核心價格段的主導地位的基礎上，推出了 7 個新品牌，以滿足消費者趨勢和偏好，並增加了 300 多個新 SKU。戶外品牌推出不到一年，迅速成為安大略省花卉類別中最暢銷的優質品牌，這意味著我們現在在加拿大最大的省級市場在各自的價格段擁有 2 個排名第一的花卉品牌。而推出僅一年的Fraser Valley不僅是安大略省價值類別中第三暢銷的花卉品牌，而且仍然是增長最快的。上個月，除了 Triplethroat 這個品牌之外，我們還推出了 SuperToast，它獨特地專注於便利性和即用型產品，並且有了一個良好的開端。而且，在短短的時間內，Promenade 已成為魁北克第二大銷售品牌。

At the top line of the Canadian share rankings with a number of the large early leaders having given way to smaller up and comers, we stand out as a consistent performer, maintaining a top 3 position nationally in Q2. In Quebec, ROSE became the top-selling producer by market share in dollars in Q2 and was the fastest-growing producer. We achieved this in what has been an increasingly competitive environment there. And notably, with the addition of Hexo's distribution in Quebec, ROSE now touches approximately 1/3 of every dollar of cannabis sales in that province. Soon, we will start preparing a portion of our world-class indoor facility in Quebec for supply to our growing export business for 2024 and beyond.

在加拿大股票排名的前列，許多大型早期領導者已讓位於規模較小的後起之秀，我們表現穩定，在第二季度保持全國前三名的位置。在魁北克省，ROSE 在第二季度成為按美元市場份額計算最暢銷的生產商，並且是增長最快的生產商。我們是在競爭日益激烈的環境中實現這一目標的。值得注意的是，隨著 Hexo 在魁北克省的分銷，ROSE 目前約佔該省每美元大麻銷售額的 1/3。很快，我們將開始準備魁北克世界級室內設施的一部分，以便為 2024 年及以後不斷增長的出口業務供貨。

There is clearly a lot going on very well and a lot to be proud of on our Canadian cannabis business. But there is also a number of areas that we are working on to deliver future growth, and I'd like to share those as I always do. Our data shows that in some markets, more than 70% of SKUs and products on the shelf today were not in existence a year earlier. We have seen some dampening of our overall market share as we under-index on newness in the core price segment. We have plans to return to being a meaningful contributor to the innovation and growth of the core segment, which is important for our retail partners.

顯然，我們的加拿大大麻業務有很多進展順利，也有很多值得自豪的事情。但我們也正在努力實現未來增長的許多領域，我想像往常一樣分享這些內容。我們的數據顯示，在一些市場中，今天貨架上 70% 以上的 SKU 和產品一年前並不存在。由於我們對核心價格領域的新鮮度指數較低，我們的整體市場份額有所下降。我們計劃重新成為核心細分市場創新和增長的有意義的貢獻者，這對我們的零售合作夥伴非常重要。

Q2 saw a marked increase in the number of our new product launches in the core price segment, with 4 new strains in flower and our all new high THC 1 gram bases with high-performance hardware. These are formulated to maximize potency and flavor with 7 flavors rolled out initially. We've added even more new strains in July with a very active launch calendar throughout the remainder of this year that includes more new strains, more new vape flavors and new infused pre-rolls across our brand portfolio. In Quebec, we launched 15 new SKUs under the first product call this year and targeting another healthy number of launches later this year.

第二季度，我們在核心價格段推出的新產品數量顯著增加，其中有 4 個新品種，以及配備高性能硬件的全新高 THC 1 克鹼基。這些產品的配方旨在最大限度地提高功效和風味，最初推出了 7 種口味。我們在7 月份添加了更多新品種，並在今年剩餘時間裡推出了非常活躍的發布日曆，其中包括我們品牌組合中的更多新品種、更多新的電子煙口味以及新註入的預卷。在魁北克，我們在今年的第一次產品發布會上推出了 15 個新 SKU，併計劃在今年晚些時候推出更多數量的新產品。

As we innovate, we are continuing to elevate quality, delivering bigger and better but through harvesting and trimming, enhanced bud sorting and hand packing, achieving better moisture levels through our drying process and offering humidity packs and store in Pure Sunfarms flower. And we are delivering quality on a more consistent basis with enhanced Q&A controls. Again, this is part of our commitment to continuous improvement in every part of our organization, even those in which we are excelling. This is our DNA.

隨著我們的創新，我們不斷提高質量，提供更大更好的產品，但通過收穫和修剪、加強花蕾分揀和手工包裝、通過我們的干燥過程實現更好的水分含量、提供濕度包裝並儲存在Pure Sunfarms 花卉中。我們通過增強的問答控制，在更加一致的基礎上提供質量。同樣，這是我們對組織各個部分（甚至是我們擅長的部分）持續改進的承諾的一部分。這是我們的 DNA。

We have also dealt with some internal supply issues for our market-leading flower strain in Pink Kush as it exhibited longevity with consumers that is uncharacteristic of most products in the Canadian market. The good news here is that our Pink Kush has proven that Canadian consumers will stick with great products, and we have the ability to offer those great products. We have addressed those supply issues and expect Pink Kush sales to respond accordingly.

我們還解決了市場領先的 Pink Kush 花卉品種的一些內部供應問題，因為它在消費者中表現出長久的生命力，這與加拿大市場上的大多數產品不同。好消息是，我們的 Pink Kush 已經證明加拿大消費者會堅持使用優質產品，而且我們有能力提供這些優質產品。我們已經解決了這些供應問題，並預計 Pink Kush 的銷售會做出相應的反應。

Importantly, we do not believe that price increases we took on certain high velocity SKUs had any meaningful impact on share in Q2. We worked closely with provincial partners on the implementation and I'm encouraged by markup changes that the OCS is planning for the second half of 2023. It would make sense for other LPs to take opportunistic price increases as well. Village Farms is a 30-year-old company, which is executing successful organic growth strategy in 2 complementary and international businesses, Fresh Produce and cannabis. We have learned a lot about our capabilities, which we are consistently pushing the team to continue to exploit for future growth. We continue to pursue opportunities in those international cannabis markets where the rules are known and clear through both our rapidly growing export business from Canada and in-country market opportunities to come. Q2 was another strong quarter for export sales, which were up more than 200% year-over-year, and we expect future growth as we continue to monitor medicinal and recreational regulatory developments, particularly in Europe.

重要的是，我們認為某些高速 SKU 的價格上漲不會對第二季度的份額產生任何有意義的影響。我們與省級合作夥伴在實施過程中密切合作，OCS 計劃在 2023 年下半年進行的加價調整令我感到鼓舞。其他有限合夥人也可以趁機提價。 Village Farms 是一家擁有 30 年曆史的公司，正在新鮮農產品和大麻這兩項互補的國際業務中執行成功的有機增長戰略。我們對自己的能力有了很多了解，我們不斷推動團隊繼續利用這些能力來實現未來的增長。我們繼續在那些規則已知且明確的國際大麻市場中尋求機會，通過我們快速增長的加拿大出口業務和即將到來的國內市場機會。第二季度是出口銷售的另一個強勁季度，同比增長超過 200%，隨著我們繼續監測醫療和娛樂監管的發展，特別是在歐洲，我們預計未來會出現增長。

Turning now to our U.S. cannabis business, Balanced Health Botanicals. Sales for the second quarter increased sequentially while generating positive net income, positive adjusted EBITDA and positive cash flow. The success of our innovative new products and prudent cost management have stabilized this business as the overall CBD industry has contracted. We continue to believe, however, that the U.S. market for CBD and other cannabinoids will be a high-growth multibillion-dollar opportunity with the benefits of regulatory oversight to open mass market opportunities. We remain encouraged by what appears to now be progress on the U.S. CBD regulatory and political front. We are compliant with current FDA rules for other food and drink ingredients and good manufacturing practice standards under the NSF organization, a track record of safety and stand ready to work with regulators to realize this industry's full potential. And we have been underwriting multiple studies that support the efficacy of our products. In other words, we are ready to go. At this point, I'll turn it over to Steve for a more detailed review of our financials.

現在轉向我們的美國大麻業務 Balanced Health Botanicals。第二季度銷售額環比增長，同時產生正淨利潤、正調整 EBITDA 和正現金流。隨著整個 CBD 行業的萎縮，我們創新新產品的成功和審慎的成本管理穩定了這項業務。然而，我們仍然相信，美國 CBD 和其他大麻素市場將是一個高增長的數十億美元的機會，受益於監管監督，以開放大眾市場機會。我們仍然對美國 CBD 監管和政治方面目前取得的進展感到鼓舞。我們遵守 FDA 對其他食品和飲料成分的現行規定以及 NSF 組織下的良好生產規範標準，擁有良好的安全記錄，並隨時準備與監管機構合作，充分發揮該行業的潛力。我們一直在承擔多項支持我們產品功效的研究。換句話說，我們已經準備好了。此時，我將把它交給史蒂夫，讓他對我們的財務狀況進行更詳細的審查。

Thanks, Mike. This quarter, I want to begin by reviewing our significantly improved profitability that Mike discussed earlier. Consolidated net loss for the quarter improved to CAD 1.4 million loss or a loss of CAD 0.11 per share compared with a net loss of CAD 36.6 million or CAD 0.41 per share in Q2 of last year. Our consolidated operating loss was close to breakeven at just negative CAD 42,000, again, a significant improvement from Q2 last year's operating loss of CAD 43.8 million, which included a CAD 30 million goodwill impairment. Our results for Q2 this year was driven predominantly by the improved operating performance from Fresh Produce.

謝謝，邁克。本季度，我想首先回顧一下邁克之前討論過的我們顯著提高的盈利能力。本季度綜合淨虧損改善至 140 萬加元，即每股虧損 0.11 加元，而去年第二季度的淨虧損為 3,660 萬加元，即每股虧損 0.41 加元。我們的綜合運營虧損再次接近盈虧平衡，僅為負 42,000 加元，比去年第二季度 4,380 萬加元的運營虧損（其中包括 3,000 萬加元的商譽減值）有了顯著改善。我們今年第二季度的業績主要是由生鮮農產品經營業績的改善推動的。

Consolidated sales for the second quarter were CAD 77.2 million, a decrease of 7% from Q2 of last year, with the decrease primarily due to lower volumes from our third-party growers in Fresh Produce and lower nonbranded sales from our Canadian cannabis businesses. which were dampened somewhat in our -- by reporting currency of U.S. dollars due to the weaker Canadian dollar in 2023 versus 2022. Consolidated adjusted EBITDA for Q2 came in at CAD 4.5 million, our second consecutive quarter in positive territory and nearly a CAD 15 million improvement from the negative CAD 10.3 million in Q2 last year. Again, this was driven mainly by the improvement in Fresh Produce, but also higher EBITDA from our Canadian cannabis business as well as lower corporate costs, excluding stock compensation, which fell to just under CAD 2 million.

第二季度的綜合銷售額為 7720 萬加元，比去年第二季度下降 7%，下降的主要原因是我們的新鮮農產品第三方種植者銷量下降以及我們加拿大大麻業務的非品牌銷售額下降。由於2023 年加元較2022 年走弱，報告貨幣為美元，這在一定程度上受到了抑制。第二季度綜合調整後EBITDA 為450 萬加元，這是我們連續第二個季度實現正值，接近1500 萬加元較去年第二季度的負 1,030 萬加元有所改善。同樣，這主要是由於新鮮農產品的改善、加拿大大麻業務的 EBITDA 提高以及企業成本降低（不包括股票薪酬）而推動的，股票薪酬降至略低於 200 萬加元。

I will now review our Canadian cannabis results, which, as usual, I will discuss in Canadian dollars to provide more accurate comparative without exchange rate fluctuations. Retail branded sales, which represents a vast majority of our Canadian cannabis sales increased 24% year-over-year, once again outpacing the overall Canadian market growth by a wide margin. International exports from Canada of nearly CAD 1.9 million from CAD 600,000 in last year is nearly a threefold year-on-year increase. Non-branded or wholesale sales in Q2 were CAD 3.9 million, which compares with CAD 10.3 million in Q2 from last year and especially outsized quarter for non-branded sales. We are seeing renewed inquiries recently for non-branded sales, and we'll continue to operate our non-branded channel opportunistically being selective around our participation in the current market environment, always with profitability in mind. These channels netted out to total Canadian cannabis sales of CAD 37.7 million compared with CAD 38 million in Q2 of last year.

我現在將回顧我們的加拿大大麻結果，像往常一樣，我將以加元進行討論，以便在沒有匯率波動的情況下提供更準確的比較。零售品牌銷售額占我們加拿大大麻銷售額的絕大多數，同比增長 24%，再次大幅超過加拿大整體市場的增長。加拿大的國際出口額從去年的 60 萬加元增至近 190 萬加元，同比增長近三倍。第二季度非品牌或批發銷售額為 390 萬加元，而去年第二季度為 1,030 萬加元，特別是非品牌銷售額季度規模過大。最近我們看到了對非品牌銷售的新詢問，我們將繼續機會主義地選擇性地參與當前的市場環境，運營我們的非品牌渠道，並始終牢記盈利能力。這些渠道的加拿大大麻總銷售額為 3770 萬加元，而去年第二季度為 3800 萬加元。

Gross margin for Canadian cannabis of Q2 was 38% compared with our reported 39% for Q2 last year, which included a purchase price inventory adjustment in that period. Excluding last year's purchase price adjustment to our cost of sales, our Q2 2022 gross margin was really 33%. The year-on-year increase was primarily related to the higher portion of retail branded products sold in Q2 of this year versus last year. Earlier, Mike mentioned our redoubled focus on realizing production efficiencies, generating more output per dollar spent. We are realizing improved efficiencies through the optimization of growing space during the best-growing seasons and continued refinement of our cultivation practices as well as strategic pruning unintended of input costs. We are also -- we've also realized a 2.5x improvement in the overall -- in our overall pre-rolled production per hour as we move manufacturing entirely in-house, which we expect to have completed this fall.

第二季度加拿大大麻的毛利率為 38%，而我們去年第二季度報告的毛利率為 39%，其中包括該期間的採購價格庫存調整。不包括去年對銷售成本的採購價格調整，我們 2022 年第二季度的毛利率實際上為 33%。同比增長主要與今年第二季度零售品牌產品銷售比例高於去年有關。早些時候，邁克提到我們加倍關注實現生產效率，每花費一美元就能產生更多產出。我們通過在最佳生長季節優化種植空間、持續改進種植實踐以及戰略性削減意外投入成本來提高效率。隨著我們將製造完全轉移到內部，我們還實現了每小時預卷總產量的 2.5 倍提高，預計將於今年秋天完成。

Selling, general and administrative expenses for Canadian cannabis for Q2 were CAD 10.5 million or 28% of sales, down slightly from CAD 10.9 million or 29% of sales in Q2 last year. As Mike highlighted, our Canadian cannabis operations delivered their 19th consecutive quarter of positive adjusted EBITDA of CAD 6.7 million, which is up 97% from CAD 3.4 million for Q2 last year and up 26% sequentially from CAD 5.3 million in Q1 of this year. Notably, our adjusted EBITDA margin doubled from Q2 last year. Canadian cannabis also delivered positive net income, which came in at CAD 1.7 million as well as positive cash flow after capital expenditures and all debt service payments.

第二季度加拿大大麻的銷售、一般和管理費用為 1,050 萬加元，佔銷售額的 28%，略低於去年第二季度的 1,090 萬加元，佔銷售額的 29%。正如邁克強調的那樣，我們的加拿大大麻業務連續第19 個季度實現正調整EBITDA 670 萬加元，比去年第二季度的340 萬加元增長97%，比今年第一季度的530 萬加元增長26%。值得注意的是，我們調整後的 EBITDA 利潤率比去年第二季度翻了一番。加拿大大麻還帶來了 170 萬加元的正淨利潤，以及資本支出和所有償債付款後的正現金流。

I will now turn to our U.S. cannabis business and revert to U.S. dollars. To reiterate Mike's comments earlier, we have stabilized this business from both a sales and profitability perspective. U.S. cannabis sales for Q2 generated entirely by Balanced Health Botanicals for $5.3 million compared with $5.8 million in Q2 last year and $5 million in Q1 of this year. I will note here that this year's Q2 sales were dampened by 2 factors specific to the quarter. First, we were out of stock in 2 of our best-selling gummy SKUs due to the bankruptcy of our supplier. We have begun shipping these specific SKUs from our own manufacturing facilities this week. Second, Q2, there was a change by a major online search provider and an algorithm, which affected our affiliate partner sales.

我現在將轉向我們的美國大麻業務並恢復美元。重申邁克之前的評論，我們從銷售和盈利能力的角度穩定了這項業務。美國第二季度的大麻銷售額完全由 Balanced Health Botanicals 創造，為 530 萬美元，而去年第二季度為 580 萬美元，今年第一季度為 500 萬美元。我在此要指出的是，今年第二季度的銷售額受到該季度特有的兩個因素的抑制。首先，由於供應商破產，我們的 2 種最暢銷軟糖 SKU 缺貨。本週我們已開始從我們自己的製造工廠運送這些特定的 SKU。其次，第二季度，一家主要在線搜索提供商和算法發生了變化，這影響了我們的聯屬合作夥伴的銷售。

U.S. cannabis gross margin for Q2 was 67%, up slightly from 66% from same period last year. Adjusted EBITDA for U.S. cannabis was positive $400,000 compared with negative $600,000 last year, a $1 million improvement and U.S. cannabis generated net income of $200,000 as well as positive cash flow in the quarter. Turning now to Fresh Produce. We delivered our fourth consecutive quarter of sequential improvement in the second consecutive quarter of significant year-over-year improvement. Product sales were $43.8 million, which was down 7% from $47.2 million last year. The decrease was primarily due to lower volumes from third-party growers as we lost 2 of our larger supply partners at the end of 2022, one of which left the Fresh Produce space but are picking up new growers in the forthcoming crop cycle and expect to fully recover to our former level of third-party sales by the end of 2023.

第二季度美國大麻毛利率為 67%，略高於去年同期的 66%。美國大麻的調整後 EBITDA 為正 40 萬美元，而去年為負 60 萬美元，增加了 100 萬美元，美國大麻在本季度產生了 20 萬美元的淨利潤以及正現金流。現在轉向新鮮農產品。我們在連續第二個季度實現同比顯著改善的同時，也實現了連續第四個季度的環比改善。產品銷售額為 4,380 萬美元，比去年的 4,720 萬美元下降 7%。下降的主要原因是第三方種植者的產量減少，因為我們在2022 年底失去了2 個較大的供應合作夥伴，其中一個離開了新鮮農產品領域，但在即將到來的作物週期中正在招募新的種植者，並預計到 2023 年底，我們的第三方銷售額將完全恢復到之前的水平。

Sales from our own facilities are up year-over-year due to higher prices in a better market environment, more than offsetting our reduced production footprint in 2023 versus 2022. As I noted in our last call, our average selling price is benefiting from our focus on more profitable customers with a higher percentage of produce sales going direct to retail accounts. I am pleased to report with the continued improvement in our operations, Fresh Produce achieved positive adjusted EBITDA of $1.3 million. That's an $11.6 million improvement over Q2 of last year and a $2.3 million improvement from Q1 of this year, which pushed adjusted EBITDA for the first half of this year into positive territory. With the stabilization of the macro environment, our ongoing improvements in managing the brown rugose virus and our focus on customer profitability, we continue to be confident in our substantially improved financial performance for this business in 2023. Our net loss from Fresh Produce improved to a negative $700,000 for the quarter.

由於更好的市場環境中價格上漲，我們自己工廠的銷售額逐年增長，這遠遠抵消了2023 年與2022 年相比減少的生產足跡。正如我在上次電話會議中指出的那樣，我們的平均售價受益於我們的專注於利潤更高的客戶，產品銷售直接進入零售賬戶的比例更高。我很高興地向大家報告，隨著我們運營的持續改善，Fresh Produce 實現了 130 萬美元的正調整 EBITDA。這比去年第二季度增加了 1160 萬美元，比今年第一季度增加了 230 萬美元，這使得今年上半年的調整後 EBITDA 進入正值。隨著宏觀環境的穩定、我們在管理褐皺病毒方面的不斷改進以及我們對客戶盈利能力的關注，我們仍然對2023 年該業務的財務業績大幅改善充滿信心。我們來自生鮮農產品的淨虧損改善至該季度負 700,000 美元。

Turning now to cash and the balance sheet. At the end of Q2, we had cash of CAD 31.7 million compared with CAD 34.9 million at the end of Q1 of this year. and CAD 84.9 million in working capital, up from CAD 80.3 million at the end of Q1. Both are significant improvements from CAD 21.7 million and CAD 60.8 million at the end of last year. Total debt at the end of Q2 was CAD 51 million, down slightly from CAD 53 million at the end of Q1 on a stronger Canadian dollar versus U.S. dollar in Q2 versus Q1. The sales process for our Monahans facility in Texas continues to advance with expressions of interest expected during this quarter. Finally, I'm pleased to report that we are forecasting not only continued positive cash flow from our cannabis division but also positive consolidated cash flow from all operations for the third quarter of 2023. And with that, I'll turn the call back to Mike.

現在轉向現金和資產負債表。截至第二季度末，我們的現金為 3170 萬加元，而今年第一季度末為 3490 萬加元。營運資金為 8,490 萬加元，高於第一季度末的 8,030 萬加元。與去年年底的 2170 萬加元和 6080 萬加元相比，兩者都有顯著改善。第二季度末的總債務為 5100 萬加元，略低於第一季度末的 5300 萬加元，原因是第二季度加元兌美元比第一季度走強。我們位於德克薩斯州莫納漢斯工廠的銷售流程繼續推進，預計本季度將有興趣表達。最後，我很高興地向大家報告，我們預測，2023 年第三季度，我們的大麻部門不僅將持續產生正現金流，而且所有業務的綜合現金流也將持續正。因此，我將把電話轉回到麥克風。

Well, thank you, Steve. I want to reiterate one point about what we are building at Bill as France, which I think it's lost in all the headwinds of 2022, 2023, some of which we got carton as well. The Village Farms model is a proven decade-long survivor of the intersection of a cyclical agriculture industry and a branded consumer products business. We understand both, and we are very focused on deploying our considerable expertise in each for industry-leading returns in cannabis and produce. We are not distracted by noncore businesses. We are not dealing with the legacy of poorly thought through investments made when capital was cheap and abundant. We have not gambled on a diversification strategy as the only path forward. We are equally focused on delivering profitable growth with a prudent capital mindset, investing where there is regulatory clarity.

好吧，謝謝你，史蒂夫。我想重申一點，關於我們在比爾作為法國正在建設的東西，我認為它在 2022 年、2023 年的所有逆風中消失了，其中一些我們也遇到了困難。鄉村農場模式是周期性農業產業和品牌消費品業務交叉點的十年之久的倖存者。我們了解這兩方面，並且非常注重在每一方面部署我們豐富的專業知識，以實現大麻和農產品行業領先的回報。我們不會因非核心業務而分心。我們正在處理的不是在資本廉價且充裕的情況下進行的投資考慮不周所留下的遺產。我們並沒有把多元化戰略作為唯一的前進道路。我們同樣專注於以審慎的資本心態實現盈利增長，在監管明確的地方進行投資。

I keep hammering in the organization on focus because we believe it is the most important factor to drive organic top line growth and take an outsized percentage of category profitability. We are already doing this. We believe organic growth, leaning on partnerships, alliances and collaboration with very selective high-quality investments at this point of the industry life cycle is the right path to creating shareholder value. That is our ultimate focus.

我一直在組織中強調重點，因為我們相信這是推動有機營收增長並在類別盈利能力中佔據巨大比例的最重要因素。我們已經在這樣做了。我們相信，在行業生命週期的這個階段，依靠合作夥伴關係、聯盟和與非常有選擇性的高質量投資進行合作的有機增長是創造股東價值的正確途徑。這是我們的最終焦點。

I'll now turn things over to the operator for analyst questions. And while the operator queues up for questions, I will comment on one question we've received regarding our NASDAQ status. So we received quite a few questions regarding that, and I'll address that here. We are currently on extension with NASDAQ, and we are extremely confident that we will be able to get another extension come to fall that will take us well into 2024. Equally, although we are very confident that we will remain on NASDAQ and want to, we are also investigating with some other MSOs in the U.S. have structured on the TSX and some Canadian LPs are even working with the NASDAQ to find a structure that will allow them to compete in the U.S. market. So not that will necessarily go down that path, but we are investigating it. Now as just a reminder, coming out of 2022, 2023 post COVID, I think around 25% of all NASDAQ companies are trading under CAD 1 currently, it's just a sign of the time. So we're very confident that our share price will be increasing. And if not, our extension will go through into 2024. With that, operator, turn it over to you for analyst questions.

我現在將把事情交給操作員來解答分析師的問題。當操作員排隊提問時，我將對我們收到的有關納斯達克狀態的一個問題發表評論。因此，我們收到了很多與此相關的問題，我將在這裡解決這個問題。我們目前正在與納斯達克進行延期，我們非常有信心能夠在秋季獲得另一次延期，這將使我們順利進入 2024 年。同樣，儘管我們非常有信心繼續留在納斯達克並希望，我們還在與美國其他一些MSO 進行調查，這些MSO 已在多倫多證券交易所上市，一些加拿大有限合夥人甚至正在與納斯達克合作，尋找一種能夠讓他們在美國市場競爭的結構。所以不一定會走這條路，但我們正在調查它。現在提醒一下，在 2022 年、2023 年新冠疫情之後，我認為目前大約 25% 的納斯達克公司以 1 加元進行交易，這只是時間的標誌。因此，我們非常有信心我們的股價將會上漲。如果沒有，我們的延期將持續到 2024 年。這樣，操作員，就把它交給你來回答分析師問題。

(Operator Instructions) And our first question today is coming from Aaron Grey of Alliance Global Partners.

（操作員說明）今天我們的第一個問題來自 Alliance Global Partners 的 Aaron Gray。

First question I have is on Canada and the price increases, specifically around that and share performance. You mentioned, Mike, that you don't believe the price increases had an impact on share, which that's great to hear. Your sales outperformed the POS data. I fully understand, as you've cautioned a number of times, you will be careful about reading the POS data versus your sales because your sales are to provincial boards. But can you speak to the delta that we're seeing there because there was some share softness in the POS data that seemed to be somewhat aligned with the price increases, but you're not seeing it on year-end. So maybe you can kind of speak to the POS and kind of what's giving you that confidence that those price increases are not having an impact for you? That would be helpful.

我的第一個問題是關於加拿大和價格上漲，特別是圍繞這一點和股票表現。邁克，你提到你不認為價格上漲對份額產生影響，這很高興聽到。您的銷售額優於 POS 數據。我完全理解，正如您多次警告的那樣，您在閱讀 POS 數據與銷售數據時會非常小心，因為您的銷售是向省級委員會提供的。但您能否談談我們看到的增量，因為 POS 數據中存在一些份額疲軟，這似乎與價格上漲有些一致，但您在年底沒有看到它。那麼也許您可以與 POS 談談，是什麼讓您確信這些價格上漲不會對您產生影響？那會有幫助的。

Sure. As I said, we're not seeing it, but I'm going to give more color to you, Aaron, from Mandesh. Go ahead, Mandesh..

當然。正如我所說，我們還沒有看到這一點，但我將為你，來自曼德什的亞倫，提供更多的色彩。繼續吧，曼德什..

So Mike touched on a lot of the topics, but what we're seeing in the quarter, we're very consumer-driven insights driven looking at our product innovation strategy, and we know newness drives a lot of that growth and maintenance of sharing and growth of share. And we did have quite a bit of newness in this quarter and more coming. We did see some of that newness come late to the quarter, specifically around our vapes or a new rates are performing ahead of our expectations and we're -- you're going to continue to innovate and push on that. And then with some of our flower strains, some of our high-performance high-potency strains seeing really good uptake. A couple of them index kind of medium to lower end on the potency scale. And we know that right now in the industry, there's just really hyper competitive factors at play. The never-ending chase for potency. We're seeing really poor dynamics in terms of how people are pricing their products to try and gain share. We don't believe it's profitable share. So we think that the time and the roll the runway will run out for those folks on how they're trying to come to market and gain that share in the short term. So we see that competitiveness there on the potency price equation.

邁克談到了很多話題，但我們在本季度看到的是，我們非常以消費者為導向的洞察力來審視我們的產品創新戰略，我們知道新鮮感在很大程度上推動了共享的增長和維護以及份額的增長。本季度我們確實有很多新鮮事，而且還會有更多新鮮事。我們確實看到本季度末出現了一些新事物，特別是在我們的電子煙或新價格方面，其表現超出了我們的預期，我們將繼續創新並推動這一點。然後，我們的一些花卉品種、一些高性能高效品種得到了很好的吸收。其中一些指標在效力等級上處於中低端。我們知道，目前在這個行業中，競爭非常激烈。對力量永無休止的追求。我們看到人們在為產品定價以試圖獲得份額方面的動態非常糟糕。我們不認為這是有利可圖的份額。因此，我們認為，對於那些試圖進入市場並在短期內獲得份額的人來說，時間和跑道都將耗盡。因此，我們在效力價格等式上看到了競爭力。

And then what we're also seeing is because there's still this abundance of supply. People are really taking premium product and throwing it into value pricing. So that creates some unstable dynamics in the industry, and I think everybody was impacted a little bit by that. So hopefully, that gives you the right color around kind of what we're seeing in the industry. And then your second part of your question was around what gives us confidence. And again, Mike alluded to something very important is that specifically around Pink Kush and some of our longer-term strains and Kush being the first focus and then Fraser Valley being an entire brand in the value space, we see great resilience and performance. And when I'm in market, myself and with the team, we talk to storage and consumers, they love our products. So there's a lot of noise right now. There's a lot of units every quarter, every month, and we just got to keep fighting that battle and keep doing what we're doing, which is launching great products, great strains, bringing amazing brands to market, not just in the cruciform portfolio, but also in the ROSE portfolio and picking response to win and improving our margins, as you saw what we did this quarter with continued cost reduction and executional focus because for us, it's a build profitable share. So we took it a little bit on the chin here and there, but we like where we're positioned, and we like our positioning for growth in the upcoming quarters.

然後我們還看到的是因為供應仍然充足。人們確實正在採用優質產品並將其投入價值定價。因此，這在行業中造成了一些不穩定的動態，我認為每個人都受到了一點影響。因此，希望這能為您提供與我們在行業中看到的類似的正確顏色。然後你問題的第二部分是關於什麼給了我們信心。邁克再次提到了一些非常重要的事情，特別是圍繞 Pink Kush 和我們的一些長期壓力，Kush 是第一個焦點，然後 Fraser Valley 成為價值領域的整個品牌，我們看到了巨大的彈性和表現。當我本人和團隊進入市場時，我們與存儲和消費者交談，他們喜歡我們的產品。所以現在有很多噪音。每個季度、每個月都有很多單位，我們必須繼續戰鬥，繼續做我們正在做的事情，推出偉大的產品，偉大的菌株，將令人驚嘆的品牌推向市場，而不僅僅是在十字形產品組合中，而且還包括ROSE 投資組合和選擇應對措施以贏得勝利並提高我們的利潤率，正如您所看到的，我們本季度所做的持續降低成本和執行重點，因為對我們來說，這是一個建立盈利份額的過程。因此，我們對此有些擔心，但我們喜歡我們的定位，也喜歡我們在未來幾個季度的增長定位。

Second question for me. I don't want to shift gears a bit. We don't always talk time about CBD, but you mentioned some things in your prepared remarks, Mike. So I wanted to get your perspective on line of sight of how the Farm Bill might potentially drive change at the regulatory level for CBD and other minor cannabinoids. I think you have a unique perspective at Village Farms because you've obviously had a lot of interaction with the farm builds from the legacy business over the years. I'm sure. So anything you might anticipate in terms of changes for regulations in the 2013 Farm Bll? And then what impact it might have on minor cannabinoids such as Delta states have taken various actions, some banning some putting regulations and age limits on it. So any implications you might have for the Farm Bill and how that might change the dynamics and impact the business?

我的第二個問題。我不想改變一點點。我們並不總是談論 CBD，但你在準備好的發言中提到了一些事情，邁克。因此，我想了解您對《農業法案》如何可能推動 CBD 和其他次要大麻素監管層面變革的看法。我認為您對鄉村農場有獨特的視角，因為多年來您顯然與遺留業務的農場建設進行了很多互動。我敢肯定。那麼，您對 2013 年農場法案中的法規變化有何預期？然後，它可能對次要大麻素產生什麼影響，例如三角洲州已經採取了各種行動，有些禁止，有些對其製定法規和年齡限制。那麼，您對《農業法案》可能有什麼影響？這可能會如何改變動態並影響業務？

Well, the past Farm Bill was so profound really kicked off the whole CBD industry as a start. So there's not a lot of leakage coming out of the USDA and what they're looking for. We don't expect to see some tangible color on that to probably October, November. But we are bullish that there will be some changes like on Delta. I don't believe Delta is going away. I don't necessarily believe in it, but I think it's here to stay. But I just don't think there's going to be tremendous change. But on the CBD side, I mean, we're encouraged that the Farm Bill may help us, but we're also encouraged that we're starting to see a big number of congress spend that are now putting pressure on the FDA, and I think that's even a more important development because really the FDA controls the person, so to speak. They are the ones that are being sort of negative towards any movement forward. And that's what we as a group and the industry are working towards. So I think the bigger win is what's the FDA going to do in 2024. So -- but we'll probably have some better color when we talk to you in November on that, Aaron.

嗯，過去的農業法案是如此深刻，確實拉開了整個 CBD 行業的序幕。因此，美國農業部和他們正在尋找的內容並沒有太多洩漏。我們預計到 10 月、11 月才能看到具體的結果。但我們樂觀地認為，將會出現一些像達美航空那樣的變化。我不相信達美航空會消失。我不一定相信它，但我認為它會繼續存在。但我只是不認為會有巨大的變化。但在 CBD 方面，我的意思是，我們很高興《農業法案》可能會幫助我們，但我們也很高興我們開始看到大量的國會支出，這些支出現在正在給 FDA 帶來壓力，並且我認為這是一個更重要的發展，因為FDA 確實控制著這個人，可以這麼說。他們對任何前進的行動都持消極態度。這就是我們作為一個團隊和整個行業正在努力的方向。所以我認為更大的勝利是 FDA 在 2024 年要做的事情。所以，但是當我們在 11 月份與你討論這個問題時，亞倫，我們可能會得到一些更好的信息。

And our next question will be coming from Frederico Gomes of ATB Capital Markets.

我們的下一個問題將來自 ATB 資本市場的 Frederico Gomes。

Mike, on your comment about the (inaudible) and how you look at that. I'm just curious if you have any update on the Texas medical cannabis application. And when you look at the U.S. market, is it really about taxes for you? Or would you consider other potential markets as well?

邁克，關於您對（聽不清）的評論以及您對此的看法。我只是好奇您是否有關於德克薩斯州醫用大麻申請的任何更新。當您審視美國市場時，您會發現稅收真的與您有關嗎？或者您也會考慮其他潛在市場嗎？

Well, overall the U.S., look, it remains a huge market for us, and we've done a tremendous amount of homework internally. And we don't think we're disadvantaged to enter the U.S. market upon decriminalization or legalization because we believe that there are some great companies out there that are executing very well today. However, I think the game is going to change really coupled to interstate commerce and where that's going to go. And I think that's where we'll shine. I mean our Texas assets, again, are we believe are probably the best assets and best location for high-quality, low-cost cannabis that can be delivered throughout the United States. And that will make us compete, we believe, at any point in the future.

嗯，總體而言，美國對我們來說仍然是一個巨大的市場，我們在內部做了大量的功課。我們不認為在非犯罪化或合法化後進入美國市場處於不利地位，因為我們相信那裡有一些偉大的公司今天執行得很好。然而，我認為遊戲將會發生真正的變化，與州際貿易及其發展方向相關。我認為這就是我們的閃光點。我的意思是，我們認為德克薩斯州的資產可能是可以在美國各地運送高質量、低成本大麻的最佳資產和最佳地點。我們相信，這將使我們在未來的任何時候都具有競爭力。

But we're not going to sit here and just waste time waiting for that to occur. We've heard so many promises on the U.S. front. It's really kind of ridiculous when you think about 35 or 36 states that are legal for a medicinal or recreational just being in New York, there's 1,400 legal dispenses operating in cannabis on every corner, but yet the federal government is really not moving forward. So before I answer about Texas, that's why we're very focused on international, especially Europe, where the clarity is there. The decriminalization is occurring. We believe it's going to be a huge potential market, and we believe we can leverage everything we've done in Canada, in Europe and win there along with collaborations and alliances, as I mentioned.

但我們不會坐在這裡浪費時間等待這一切的發生。我們在美國方面聽到了很多承諾。想想紐約就有 35 或 36 個州的藥用或娛樂合法，每個角落都有 1,400 個合法大麻店，但聯邦政府卻沒有向前邁進，這真的有點荒謬。因此，在我回答有關德克薩斯州的問題之前，這就是為什麼我們非常關注國際市場，尤其是歐洲，那裡的情況很清楚。非刑事化正在發生。正如我所提到的，我們相信這將是一個巨大的潛在市場，我們相信我們可以利用我們在加拿大和歐洲所做的一切，並通過合作和聯盟贏得勝利。

Regarding Texas, it just blows our mind here with all the effort we put forward in Texas, how it really comes down to one individual that controls north of 30 million people, the size of the Canadian market in Texas to not move the medicinal program forward. That was a real disappointment during this last legislative session ending in late May. The next round is 2 years away. However, Texas is granting additional medicinal licenses we've applied for one. So we'll probably move that forward. We're hoping we'll know if we've been a lot in one in the fall, and that will help position us step forward to the future. So I hope that gives you some color, Frederico.

關於德克薩斯州，我們在德克薩斯州做出的所有努力都讓我們大吃一驚，它如何真正歸結為一個控制著3000萬人口以北的個人，德克薩斯州加拿大市場的規模卻無法推動醫療計劃的發展。在五月底結束的最後一次立法會議上，這確實令人失望。距離下一輪比賽還有 2 年時間。然而，德克薩斯州正在授予我們已經申請的額外醫療許可證。所以我們可能會向前推進。我們希望能夠知道秋季我們是否已經投入了大量精力，這將有助於我們邁向未來。所以我希望這能給你一些啟發，弗雷德里科。

Yes. And then just on international, you mentioned how should we think about growth in that segment? I know that you had a good increase there this quarter, but in terms of the ramp and how volatile those international sales can be? And just tied to that, any updates on the Netherlands.

是的。然後就國際而言，您提到我們應該如何考慮該領域的增長？我知道你們本季度的銷售額增長良好，但就增幅以及國際銷售額的波動性而言？與此相關的是有關荷蘭的任何更新。

Yes. I think the international side, I mean, you could see it will be lumpy at times because it's very native to get going. So I wouldn't have an expectation that the growth curve is going to be sort of steadily increasing. But it will year-over-year increase. We are very bullish on that. And you'll maybe see some compression at times like Israel due to some political issues going on there and others. But really, the EU is the market we're focused on. Germany is leading the way, but France, Italy, Poland, all these other countries are looking at the German regulatory process that they went through. And it's happening. So there's a number of competitors looking at that market. Some are in some have spent just eons of money without the clear path. We've been prudent with that as we've reported to wait until the clarity was there. It is there. We're going forward, increasing our sales and our effort going forward.

是的。我認為國際方面，我的意思是，你可能會看到它有時會很不穩定，因為它非常本土化。因此，我不會期望增長曲線會穩步上升。但會逐年增加。我們對此非常看好。有時你可能會看到一些壓縮，比如以色列，因為那裡發生了一些政治問題和其他問題。但實際上，歐盟是我們關注的市場。德國處於領先地位，但法國、意大利、波蘭以及所有其他國家都在關注他們所經歷的德國監管流程。它正在發生。因此，有許多競爭對手正在關注該市場。有些人花了很多錢卻沒有明確的道路。我們對此一直持謹慎態度，因為我們已報告要等到情況明朗為止。它就在那裡。我們將繼續前進，增加我們的銷售額並努力前進。

And this is all medicinal. We anticipate that the majority of the European market will just operate on a medicinal platform for at least the next 3 to 5 years with the exception of certain countries, Luxembourg and specifically the Netherlands, where we're 1 of the 10 license sold. As you know, we've secured 2 our license with 2 locations and there was some slight change in the government recently. I don't think it's going to impact our ability to move forward, which we hope that will commence in the fourth quarter of this year. But we've always prudent before we push the funnel button to make sure that the political situation is solid. So I think we'll be able to update you clearly by November on our progress there.

這都是藥用的。我們預計，至少在未來3 到5 年內，大多數歐洲市場將僅在醫療平台上運營，但某些國家（盧森堡，特別是荷蘭）除外，我們是已售出的10 個許可證中的其中之一。如您所知，我們已經在 2 個地點獲得了 2 個許可證，並且最近政府發生了一些細微的變化。我認為這不會影響我們前進的能力，我們希望這將在今年第四季度開始。但在按下漏斗按鈕之前，我們總是保持謹慎，以確保政治局勢穩固。因此，我認為我們將能夠在 11 月份之前向您清楚地通報我們在這方面的進展情況。

And our next question will be coming from Eric Des Laurier from Craig-Hallum Capital Group.

我們的下一個問題將來自 Craig-Hallum Capital Group 的 Eric Des Laurier。

All right. I apologize if this was addressed already. I'm joining on the call, but I was wondering, first, if you could expand on the guide for a positive consolidated cash flow in Q3. Just wondering if you could just expand on that a bit and help us understand the primary drivers of that.

好的。如果這個問題已經得到解決，我深表歉意。我正在參加電話會議，但我想知道，首先，您是否可以擴展第三季度正綜合現金流的指南。只是想知道您是否可以稍微擴展一下並幫助我們了解其主要驅動因素。

Primary drivers of that are management of our current assets, some of those current assets are going to flip from receivables to cash. So it's going to be a very strong cash collection quarter across all our business lines. So it's pretty straightforward. We're obviously -- we're a good bid in 6 weeks into the quarter, so with confidence that we're very confident that that is occurring in real time. As simple as that.

其主要驅動因素是我們流動資產的管理，其中一些流動資產將從應收賬款轉向現金。因此，對於我們所有的業務線來說，這將是一個非常強勁的現金回收季度。所以這非常簡單。顯然，我們在本季度的 6 週內是一個很好的出價，因此我們非常有信心這種情況會實時發生。就如此容易。

All right. Great. And then my next question is just on the investments in produce and our overall infrastructure and AI technology, et cetera. I'm just wondering if you can help us sort of frame the either expected CapEx involved or expected timing of this? You characterized it as continuous improvement. So I'm assuming it's not necessarily just like there's a sort of set day where everything will be completed. But just if you can help us kind of frame that in terms of either timing or dollar amount, that would be very helpful.

好的。偉大的。我的下一個問題是關於農產品以及我們的整體基礎設施和人工智能技術等的投資。我只是想知道您是否可以幫助我們確定所涉及的預期資本支出或預期時間？您將其描述為持續改進。所以我假設這並不一定就像有一個固定的日子，一切都會完成。但如果您能幫助我們在時間或金額方面製定框架，那將非常有幫助。

Yes. So Texas operates predominantly not on a calendar year, but on a crop cycle, which commences -- starts the beginning of that crop cycle depending on which asset we're talking about commences in June and sort of as a full plant out mode by September and then runs through the following summer. So we have done 2 years of experiments with the investment in AI, one of our facilities over the last 2 years and have rolled it out completely now in all Texas facilities. And in fact, we're rolling it out in our Canadian Delta facility and plan to roll it out next year as well in cannabis. It's proven to be a great partner to our growing operations.

是的。因此，德克薩斯州主要不是按照日曆年運作，而是按照作物週期開始運作，該作物週期的開始取決於我們正在談論的資產在 6 月開始，並在 9 月之前作為全面停產模式然後貫穿第二個夏天。因此，我們對人工智能的投資進行了兩年的實驗，這是過去兩年我們的設施之一，現在已經在德克薩斯州的所有設施中全面推廣。事實上，我們正在加拿大三角洲工廠推廣該技術，併計劃明年在大麻領域推廣該技術。事實證明，它是我們不斷發展的業務的重要合作夥伴。

Secondly, this year alone, we've already spent in the last 4 or 5 months, approximately $3.5 million in capital improvements in packing technology sorting and grading for efficiency, cutting labor costs as well as shading systems and new technology across the board from irrigation, CO2 capture and whatnot. So yes, so we -- all of it is about continuing -- continuous improvement to cut our costs and increase our quality and yield going forward. We already have plans for 2024 CapEx improvement in all our facilities as well. So is that enough, Eric?

其次，僅今年一年，我們在過去 4 或 5 個月內就已花費約 350 萬美元用於包裝技術分揀和分級以提高效率、削減勞動力成本以及全面覆蓋遮陽系統和新技術的資本改進、二氧化碳捕獲等等。所以，是的，所以我們——所有這一切都是為了繼續——不斷改進，以降低我們的成本，提高我們的質量和產量。我們也已經制定了 2024 年所有設施的資本支出改進計劃。埃里克，這樣就夠了嗎？

Yes. So I mean -- so you spent the $3.5 million in CapEx thus far. Do you have a figure for us, either in sort of second half or '24 that you're willing to share now?

是的。所以我的意思是——到目前為止，您在資本支出上花費了 350 萬美元。您現在願意與我們分享一下下半年或 24 年的數據嗎？

Not for '24 because we haven't finalized that, but possibly in November.

不是 24 年，因為我們還沒有最終確定，但可能是 11 月。

And our next question will be coming from Douglas Cooper of Beacon Securities.

我們的下一個問題將來自 Beacon 證券公司的道格拉斯·庫珀。

A couple of things. I'm just looking to get your comments on -- let's start with the Canadian industry as a whole. I mean we talked about obviously the competitive nature of it and continues to be competitive out lots of players. Do you think -- how do you think this will play out over the next 12, 24 months? It just seems to me that a lot of these smaller guys are not going to be able to get capital to survive, A. B, some of your major -- or historically major companies have sort of left the adult use space, either a, for the medicinal market or be pursuing an afoul strategy. How do you think this will play out to me? It seems to me that ultimately, this will end with 3 or 4 companies. And obviously, you've been the biggest of those.

有幾件事。我只是想听聽您的評論——讓我們從整個加拿大行業開始。我的意思是，我們顯然討論了它的競爭本質，並且對很多玩家來說仍然具有競爭力。您認為在接下來的 12、24 個月內情況會如何？在我看來，很多小公司將無法獲得資本來生存，A. B，你們的一些主要公司或歷史上的主要公司已經離開了成人使用空間，要么是，醫藥市場或採取衝突策略。你認為這對我來說會怎樣？在我看來，最終，這將以 3 或 4 家公司告終。顯然，你是其中最大的一個。

Yes, I'll answer part of that, and I'm going to turn it over to Mandesh because he's in the trench every day fighting those battles on the front line, so to speak. But from a macro perspective, I'm not going to comment on other LP strategy. I think what's -- what makes the industry unique and incent cases fun, being this massive legal cannabis industry is that every LP in Canada seems to be looking for what that magic path forward is, whether it's a diversified strategy, a focused strategy as opposed to the U.S., even though it's not fairly legal, when we look at the U.S. MSOs at least I do, they're very focused on cannabis. They're not diversifying. They're wanting to win in cannabis in the U.S. So it's very different. In Canada, for the reasons we have companies are looking at different ways. So I don't know which is a winning formula, but we know that we want to focus on being #1, not just in Canada, that's our goal being #1 internationally as well. It sounds bold, but we know the only way to get there is a total commitment and focus on the industries we're in and not dilute our ability to operate them. So that's sort of the macro level.

是的，我會回答其中的一部分，我會把它交給曼德什，因為可以這麼說，他每天都在前線戰鬥。但從宏觀角度來看，我不會評論其他LP策略。我認為是什麼讓這個行業獨特且激勵案例有趣，作為這個龐大的合法大麻行業，加拿大的每個有限合夥人似乎都在尋找前進的神奇道路，無論是多元化戰略，還是集中化戰略。對於美國來說，儘管這不太合法，但當我們觀察美國的MSO 時，至少我是這樣的，他們非常關注大麻。他們沒有多元化。他們想在美國贏得大麻市場，所以這是非常不同的。在加拿大，出於各種原因，我們的公司正在尋找不同的方式。所以我不知道哪個是製勝法寶，但我們知道我們希望專注於成為第一，而不僅僅是在加拿大，這也是我們在國際上成為第一的目標。這聽起來很大膽，但我們知道實現這一目標的唯一方法是全身心投入並專注於我們所在的行業，而不是削弱我們運營這些行業的能力。這就是宏觀層面的情況。

As far as my comments were we've talked a lot of quarters about the industry in Canada that there's overcapacity. There still is overcapacity. And that's from a number of LPs that continue to linger on. The capital markets are closed. Interest rates are through the roof. So at some point, I think this is an inflection point coming. We thought it would be here by now. But I think once the Domino's really start to fall, they'll fall away. And in the end, I do believe there will be 3 to 5 companies that are meeting the Canadian and the Canadian export industry going forward. Now for the frontline, Mandesh, do you want to add color on that?

就我的評論而言，我們已經討論了很多關於加拿大該行業產能過剩的問題。產能過剩依然存在。這是來自許多仍在流傳的唱片。資本市場關閉。利率已經飆升。所以在某些時候，我認為這是一個即將到來的拐點。我們以為它現在就在這裡了。但我認為一旦多米諾骨牌真正開始倒下，它們就會倒下。最後，我確實相信未來將會有 3 到 5 家公司滿足加拿大和加拿大出口行業的需求。現在，對於前線，曼德什，你想為此增添色彩嗎？

Yes. And I think you've hit most of the pieces, thanks for the question, Doug. We've been consistent, right, on our business strategy and how we've deployed everything from being a branded house and on to a host of brands and with the ROSE acquisition and kind of what they've been able to show and do and they're agile, their ability to be agile and nimble. And we still have a lot of opportunity in Canada, I think, I know, based on what we have in the pipeline and the work we're doing with ROSE and Pearson firms across the Canadian landscape. And hopes on a strategy. So we're not saying or hoping, waiting that other people will go by the wayside, Mike articulated it very well that we believe that, that's going to happen. But underneath that, we just continue to operate and execute, generate cash, generate profitability, create great products through innovation with a really strong assortment strategy that attacks the market from different consumer profiles and segments, and we think that's going to continue to allow us to be successful. And if the industry breaks open and people do go by the wayside because on the trenches, we see it, we see cracking the foundation. We see products that are constantly hitting the market, great 1 week, not great pull-through or sell-through in the following weeks. We see the relationships we have with stores and budtenders. We value those. We have built a solid reputation across this country in Canada, and we continue to want to execute on that. So we like how we're positioned. We think things will evolve, but we're going to continue to find ways to win and outperform where we can.

是的。我認為您已經了解了大部分內容，謝謝您的提問，道格。我們的業務戰略以及我們如何部署一切，從品牌公司到眾多品牌，以及 ROSE 收購以及他們能夠展示和做的事情，都是一致的，正確的。他們很敏捷，他們有敏捷和靈活的能力。我想，我知道，根據我們正在醞釀的計劃以及我們與整個加拿大地區的 ROSE 和 Pearson 公司所做的工作，我們在加拿大仍然有很多機會。並希望制定一個策略。因此，我們並不是說或希望，等待其他人會半途而廢，邁克清楚地表達了這一點，我們相信，這將會發生。但在此之下，我們只是繼續運營和執行，產生現金，產生利潤，通過創新創造出偉大的產品，並採用真正強大的分類策略，從不同的消費者群體和細分市場攻擊市場，我們認為這將繼續讓我們獲得成功。如果這個行業打破了，人們確實會半途而廢，因為在戰壕里，我們看到了它，我們看到了基礎的破裂。我們看到不斷進入市場的產品，第一周表現出色，但在接下來的幾週內拉動或銷售情況不佳。我們看到我們與商店和合作夥伴的關係。我們重視這些。我們在加拿大全國范圍內建立了良好的聲譽，我們將繼續致力於實現這一目標。所以我們喜歡我們的定位。我們認為事情會發生變化，但我們將繼續尋找獲勝的方法並儘可能超越。

That's great. Any comments on the Fire & Flower and what do you think is going to happen there and the impact that is having or may have on the actual retail sale of product?

那太棒了。對 Fire & Flower 有什麼評論嗎？您認為那裡會發生什麼以及正在或可能對產品的實際零售銷售產生的影響？

Not really, Doug. I think we want to just be cautious about commenting on others. So probably going to pass on that question. But if you want to ask another one, we'll take it.

不是真的，道格。我認為我們在評論他人時要保持謹慎。所以可能會轉達這個問題。但如果你想問另一個問題，我們會接受。

Okay. And just a last one for me. Just from a balance sheet perspective, maybe, Steve, do you feel -- how do you feel about your balance sheet right now? And any color on the potential sale of the assets in Texas. I think you mentioned, Steve, that you expected some expressions of interest this quarter. Do you expect something to play out before the end of the year? And is there a minimum threshold at which you will not consider something below?

好的。對我來說這只是最後一個。史蒂夫，從資產負債表的角度來看，你現在對資產負債表感覺如何？以及德克薩斯州資產潛在出售的任何色彩。史蒂夫，我想你提到過，你預計本季度會有一些意向書。您預計年底前會有什麼進展嗎？是否有一個最低限度，達到這個限度你就不會考慮以下的事情？

Yes. We feel good about our liquidity and our balance sheet at this stage of the year. Obviously, Monahans is an active process, probably taking a bit longer. Capital markets have tightened up, and I think that hasn't impacted the speed of which the process is taken, but we have interested parties actively looking at it, and we'll see how fast it plays out like in the other real estate transaction. It's capital -- the buyer will have to bring capital to the forefront, and we are -- capital markets are tightening. So we'll see how it plays out. Will it happen by year-end or not, will remain so. And yes, will we have some minimum, yes, we will have a minimum price. Absolutely.

是的。在今年這個階段，我們對我們的流動性和資產負債表感覺良好。顯然，莫納漢斯是一個積極的過程，可能需要更長的時間。資本市場已經收緊，我認為這並沒有影響該流程的速度，但我們有感興趣的各方正在積極關注它，我們將看看它像其他房地產交易一樣的速度有多快。這是資本——買方必須將資本帶到最前沿，而我們——資本市場正在收緊。所以我們會看看結果如何。年底前是否會發生，仍將如此。是的，我們會有最低價格嗎？是的，我們會有最低價格。絕對地。

And our next question will be coming from Scott Fortune of ROTH.

我們的下一個問題將來自羅斯的斯科特·福瓊。

This is Nick on for Scott. First question for me, just on the new product side. You mentioned launching 7 new brands in the last 18 months. Can you just give us a rough sense of what those are contributing now kind of in terms of mix? And are there any specific product categories you feel under indexed in that you're looking to address in the future?

這是尼克替斯科特發言。我的第一個問題是關於新產品方面的。您提到在過去 18 個月內推出了 7 個新品牌。您能否讓我們粗略地了解一下這些現在在混合方面的貢獻？您是否認為有任何特定產品類別已被編入索引，以便您將來希望解決這些問題？

Mandesh take that one, please.

曼德什請拿走那個。

Yes. So we don't really break it out totally by brands. I mean Pure Sunfarms is still our main state brand and contributes the most amount to our share. Some of the other brands have just noted to launch, and we think that they'll play very positively in certain consumer spaces and index with innovation behind it. But we don't really give out the components underneath that.

是的。所以我們並沒有真正完全按照品牌來劃分。我的意思是 Pure Sunfarms 仍然是我們的主要國有品牌，並且對我們的份額貢獻最大。其他一些品牌剛剛宣布推出，我們認為它們將在某些消費領域發揮非常積極的作用，並以其背後的創新為索引。但我們並沒有真正給出其之下的組件。

Your second part of your question was around where do we feel our next infused pre-rolls has been probably one of the -- probably has been the biggest story over the last 8 to 12 months in the in the industry, and we're significantly under-indexed there and then continuing to grow our pre-roll share, just our base pre-roll share. So when you think about how strong we are in flower and how we have over-indexed on the flower side. We believe through our great brands and products and our specific grade strains, we can use those as extensions to play in spaces where we're under-indexed and that's what you're going to start to see. So specifically in pre-rolls and infuse pre-rolls. And then with the launch of our new vapes, we're starting to really regain some of the share where you lost and we think there's some upside there. So vapes, pre-rolls and fuse rolls.

你問題的第二部分是關於我們認為我們的下一個注入的前貼片可能是過去 8 到 12 個月業內最大的故事之一，而且我們顯著那裡的索引不足，然後繼續增加我們的預卷份額，只是我們的基礎預卷份額。因此，當你想到我們在花卉領域的實力以及我們在花卉方面的過度索引時。我們相信，通過我們偉大的品牌和產品以及我們特定的等級菌株，我們可以將它們用作擴展，在我們索引不足的空間中發揮作用，這就是您將開始看到的。特別是在前捲和注入前卷中。然後，隨著我們新電子煙的推出，我們開始真正重新奪回失去的一些份額，我們認為這有一些好處。因此，vapes、pre-rolls 和 fusion rolls 都是如此。

And then second one for me, just I wanted to follow up on the international side. Germany specifically, you launched products through IUVO in May. Just kind of any early puts and takes on that side. I'm just wondering if you had any color on the competitive landscape and maybe the pricing environment there? Any color would be helpful.

然後是我的第二個，只是我想在國際方面跟進。特別是德國，您於 5 月份通過 IUVO 推出了產品。只是在那方面的任何早期投入和採取。我只是想知道您對競爭格局以及定價環境是否有任何了解？任何顏色都會有幫助。

Yes. I think the competitive environment is going to be -- I think it's going to be pretty solid going forward because for the Canadian LPs that are all dealing with sort of the macro issues in Canada tax and others, which a number of companies are not able to get cash flow positive. They're looking at the international markets, of course, where there is no tax. So -- but I think to win in that market, it's going to take the same vision we had in Canada that's going to be high quality, low cost. And there is price compression already happening in that market, just like we've seen in the U.S. very quickly, price compression. We predicted that early on even in Canada, and I think the same will happen in Europe. But that being said, we think we can win there. It's still much more lucrative from a gross margin perspective. And we're bullish on it. And I don't think everybody -- it's not as easy. Shipping internationally, especially trying to be under the EU GMP banner is a very difficult process, and not everybody can do it. There are some green washing and there are some ways you can circumvent the system. And ultimately, that will play out. But again, for us, we believe we stand a great chance of leading in Europe as well. And as regarding IUVO, yes, IUVO we've made multiple shipments. And then we have many other alliances that we're working on throughout the whole EU that we haven't put out yet but probably give some more color towards the end of the year on that, Scott.

是的。我認為競爭環境將是 - 我認為未來將會非常穩固，因為對於加拿大有限合夥人來說，他們都在處理加拿大稅收和其他方面的宏觀問題，而許多公司無法解決這些問題以獲得正現金流。當然，他們正在關注沒有稅收的國際市場。所以，但我認為要贏得這個市場，我們將採取與加拿大相同的願景，即高質量、低成本。該市場已經出現價格壓縮，就像我們在美國很快看到的價格壓縮一樣。我們很早就預測，即使是在加拿大，我認為歐洲也會發生同樣的情況。但話雖這麼說，我們認為我們可以在那裡獲勝。從毛利率的角度來看，它仍然更有利可圖。我們看好它。我不認為每個人——這並不那麼容易。國際運輸，尤其是嘗試在歐盟 GMP 旗幟下運輸是一個非常困難的過程，並不是每個人都能做到。有一些綠色清洗，並且有一些方法可以規避該系統。最終，這將會發生。但對我們來說，我們相信我們也有很大的機會在歐洲處於領先地位。至於 IUVO，是的，IUVO 我們已經發貨了多次。然後，我們正在整個歐盟範圍內建立許多其他聯盟，我們尚未推出這些聯盟，但可能會在今年年底前對此提供更多色彩，斯科特。

And our next question will be coming from Mike Regan of Excelsior Equities.

我們的下一個問題將來自 Excelsior Equities 的 Mike Regan。

Real quick on the Canadian cannabis side, can you sort of give us your perspective on how Ontario reducing their distribution margin is sort of going to work from your perspective in terms of how they decide the retail pricing versus the wholesale price they're paying you?

在加拿大大麻方面，您能告訴我們您對安大略省如何降低分銷利潤的看法嗎？從您的角度來看，他們如何決定零售價格與向您支付的批發價格？

Sure. Well, I'm going to turn that over to Mandesh, Mike, before I do thanks for launching on Village Farms this week. We appreciate it, Mandesh?

當然。好吧，在我感謝本週在鄉村農場推出之前，我將把這個問題交給邁克·曼德什 (Mandesh)。我們很感激，曼德什？

Yes. So earlier this year, the OCS revised their markup pricing kind of strategy and approach where they were much more variable and they went to more of a fixed approach. They weren't playing around with how they're marking our products into various segments, and they kind of realigned everything to go to a fixed model. So for -- in some categories, i.e. flower actually are giving margin back to the producer. In other cases, such as concentrates, where the infused pre-rolls come in, they're going to be taking a greater margin. So they're kind of balancing everything else in kind of a certain percentage will be fixed. So for a producer, we'll now know clearly, like we do in other provinces, when we submit a product, how the market will play through the supply chain and how that will impact end pricing. So from a producer standpoint, some real big wins, better margins for us, more visibility to end consumer pricing. And given where Pure Sunfarms sits on the Canadian cannabis side, those will be positive for us, given where we play and how we play.

是的。因此，今年早些時候，OCS 修改了他們的加價定價策略和方法，變得更加可變，並且採用了更多的固定方法。他們並沒有考慮如何將我們的產品標記為不同的細分市場，而是重新調整了所有內容以採用固定模型。因此，在某些類別中，即花卉實際上正在將利潤返還給生產者。在其他情況下，例如濃縮物，注入預卷的地方，他們將獲得更大的利潤。所以他們會平衡其他一切，以固定的一定比例。因此，對於生產商來說，我們現在可以像在其他省份一樣清楚地知道，當我們提交產品時，市場將如何通過供應鏈發揮作用，以及這將如何影響最終定價。因此，從生產商的角度來看，我們獲得了一些真正的巨大勝利，獲得了更好的利潤，對最終消費者定價有了更多的了解。考慮到 Pure Sunfarms 位於加拿大大麻一側，考慮到我們的比賽地點和比賽方式，這些對我們來說都是積極的。

What we're also hearing in the industry is that there is ability now for producers to pass along that margin to consumers and reduce their pricing, but that's not what we're hearing. With our GPI increase we took earlier this year, we were a leader in kind of maintaining price -- improving price. And now we're hearing that the industry is going to follow us behind that. So it's a good new story we believe, for the industry, shows leadership in the Ontario market to look at their margin structure and making sure they're doing the right thing when it comes to pricing. And we think it's great for the industry, and we're excited about it.

我們在業內還聽到的是，生產商現在有能力將利潤轉嫁給消費者並降低價格，但這不是我們聽到的。隨著今年早些時候我們的 GPI 增長，我們在維持價格——提高價格方面處於領先地位。現在我們聽說業界將追隨我們的腳步。因此，我們相信，對於該行業來說，這是一個很好的新故事，展示了安大略市場的領導地位，以審視他們的利潤結構，並確保他們在定價方面做正確的事情。我們認為這對整個行業來說是一件好事，我們對此感到興奮。

I know that sounds great. especially you can thread the needle of wholesale price increases and end-user prices flat to down to drive even higher volumes. And then quickly on the produce side, I guess you sort of guided to the goal of positive EBITDA for the year in produce, and you've achieved that by June 30. Is there any reason to think going forward that you wouldn't at least be breakeven? Or could we keep having -- continue seeing that positive EBITDA on the produce side going forward?

我知道這聽起來很棒。特別是，您可以通過批發價格上漲和最終用戶價格持平或下降來推動銷量的增長。然後很快在生產方面，我想你們已經在某種程度上引導了今年生產部門實現正EBITDA 的目標，並且你們已經在6 月30 日之前實現了這一目標。有什麼理由認為你們不會在未來實現這一目標嗎？至少能達到收支平衡？或者我們能否繼續——繼續看到農產品方面的積極 EBITDA 向前發展？

This is Steve. So the produce will be quarter-to-quarter. So we would expect that in the third quarter, we will not have positive EBITDA, and we'll have strong positive EBITDA in the fourth quarter, and that's due to the seasonality of demand and supply. There's less supply of essentially see controlled environmental ag tomatoes in the fourth quarter and demand is usually pretty steady, and we usually see improved pricing such that we're profitable in Q4 and struggle a bit with pricing in Q3. So -- but for the full year, we are expecting to land in positive territory.

這是史蒂夫。因此，生產將按季度進行。因此，我們預計，在第三季度，我們不會有正的 EBITDA，而在第四季度，我們將有強勁的正 EBITDA，這是由於需求和供應的季節性。第四季度，受控環境農業番茄的供應量減少，需求通常相當穩定，我們通常會看到定價有所改善，因此我們在第四季度實現盈利，但在第三季度的定價方面遇到了一些困難。所以，但就全年而言，我們預計將達到正值。

And our next question will be coming from Ben Kolberg of Stifel.

我們的下一個問題將來自 Stifel 的 Ben Kolberg。

I'm Partheniou Andrew. I just want to turn back to international sales. There was some news out of Israel this week where the health ministry announced some reform that could provide patients with easier access to medical cannabis. I'm wondering, is this something that you're watching closely? And if so, how should we be thinking about future shipments to Israel going forward given that these changes are supposed to come into effect at the end of this year?

我是帕特尼奧·安德魯。我只想回到國際銷售。本週以色列傳來一些消息，衛生部宣布了一些改革，可以為患者提供更容易獲得醫用大麻的機會。我想知道，這是你密切關注的事情嗎？如果是這樣，鑑於這些變化預計將於今年年底生效，我們應該如何考慮未來向以色列的運輸？

Yes. We are watching it that and the political issues going on there that has sort of dampened some exports there. So we're in touch with our partner there, and we're encouraged, but that may not start back up until the fourth quarter or first quarter next year. So I don't have much more color on that at this point.

是的。我們正在關注這一點，以及那裡正在發生的政治問題，這在某種程度上抑制了那裡的一些出口。因此，我們正在與那裡的合作夥伴保持聯繫，我們受到了鼓舞，但這可能要到明年第四季度或第一季度才能恢復。所以目前我對此沒有更多的看法。

This concludes the Q&A session. I will now turn the call back over to Mike DeGiglio for closing remarks. Please go ahead.

問答環節到此結束。現在，我將把電話轉回給邁克·德吉利奧 (Mike DeGiglio)，他將發表結束語。請繼續。

I just want to thank everybody for participating today, and we look forward to our next call in November. And thank you for your continued belief in Village Farms. We are confident that we will lead the industry going forward. Thank you.

我只想感謝大家今天的參與，我們期待 11 月的下一次電話會議。感謝您對鄉村農場的持續信任。我們有信心引領行業向前發展。謝謝。

This concludes today's conference call. Thank you all for joining. You may disconnect, and everyone, have a great day.

今天的電話會議到此結束。感謝大家的加入。您可能會斷開連接，祝大家度過愉快的一天。