Glen Ibbott: Yeah. Thanks for the question. So I’ll take that up and then Miguel can add if needed. We’ve got kind of all the levers of our company moving in the right direction. We have invested significantly in centralization and efficiencies in the production assets in Canada. As you know, over the last two years, three years, we’ve gone through a significant transformation, but a big part of that was to gain the efficiencies to scale in production and really focus on those, on driving costs out of the systems, unit costs in particular. Same time, we’ve been realizing the benefits of the investment in science and genetics and so the yields coming out of the system right now on the flower side, continue to impress at producing quality flower with desirable attributes, whether it’s high potency or interesting terpene profiles and doing that with the yields increasing at point 60% or better over some of our legacy cultivars means we get much more out of a facility and a unit cost again going down.
So that fundamentally underpins an improvement in our margins. Of course, you’re right. As we get more and more into medical sales and become a bigger and bigger part of our business, they will definitely — the high average selling prices definitely contribute to the increasing margin. So we do expect to see that continue to move in that right direction. As we said, we finished the Nordic closure and that’s a big piece of bringing that production back to Canada and supplying Europe from Canada. We think we’ll see our margins in Europe continue to improve over the next while as well. Miguel?
Miguel Martin: Yeah. I guess the other thing is, we focus on the margins, and so, as we’ve stated, our goal is to be free cash flow positive and then continue to grow that. You can’t do that just on the topline growth. We’ve seen that be attempted. You really have to make money in what you do. So we walk away from unprofitable categories, we walk away from unprofitable geographies and we focus on those geographies where we can make money. The other aspect of medical cannabis is those margins are, no pun intended, are very sticky. Because the taxes and the economics for the wholesaler and the pharmacy come off that wholesale list price and much of this business is in a reimbursed model, there is not the compression that you would see, say, in traditional rec businesses.
And so we’ve seen very steady margins throughout that overall system and if you look at traditional pharmaceutical businesses, while we like a 62% or 65% margin, that’s quite low there. So I think it takes a lot of work. It’s somewhere we’re focused on. And we think it’s a key cornerstone that differentiates Aurora from our competitors is that focus on profitable high margin business.
Operator: Thank you, sir. Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to Miguel Martin for closing remarks.
Miguel Martin: Well, I want to thank everybody for their time and their interest in Aurora. This has been an incredible three years to get us where we are. We’re nowhere near where we think we can get. And so we’re proud of what we’ve done this quarter, we know it’s just one of many quarters to go and we look forward to sharing that story with all of you. Hope everybody has a safe and good evening. Thanks a lot.
Operator: Thank you very much, sir. Ladies and gentlemen, that concludes today’s conference. You may disconnect your lines at this time and thank you for your participation.
