Aurora Cannabis Inc. (NASDAQ:ACB) Q3 2023 Earnings Call Transcript

Glen Ibbott: Yes. Thanks, Miguel. I think you covered it quite well. Tamy, as you know we’re in four different businesses, all cannabis related plus Bevo So, supporting global medical in Europe, and becoming quite a nice business in Australia, Canadian medical, Canadian rec and Bevo is complex. And so, we’ve got maybe heavier than you might expect sort of legal regulatory [indiscernible] sort of framework, and certainly shipping, which we run through our SG&A shipping to the provinces, to Europe, to Australia, et cetera, et cetera, runs through our SG&A. This is about serving the globe. So we think we’ve built a good platform. We will continue to see crossroads to kind of say normal course of businesses continue to look for efficiencies every year.

And on top of that, we do have public company costs. So we are looking and we have defined plans that are already in progress to reduce the cost by about $5 million a quarter. But just realizing that we’ve got a platform that’s quite capable of scale. So as we add incremental revenue through some of the opportunities that’s right in front of us we don’t need to scale up SG&A. We believe we can continue to support it at this level and add topline revenue. We’ll start to see those metrics looking a little bit more or less [indiscernible] might expect. Thank you.

Operator: Our next question is from the line of John Zamparo with CIBC. Please proceed with your question.

John Zamparo: Thank you very much. I wanted to ask about the consumer segment and in particular on edibles, and you’ve gained considerable share in that category according to Hifyre data. I wonder if you can frame how much of that has come from glitches or any other brands that offer chewable extracts? And what’s your view on how that matter plays out with regulators?

Miguel Martin: Yes, John, thanks for the question. Yes, we look at the quarter and obviously the decision by Health Canada on glitches, it was considerable. It’s probably was a couple of $1 million of revenue in the quarter associated with glitches. I think it’s an interesting piece, we were really excited about the innovation on glitches and navigating that. We obviously made our submission to Health Canada six months before we launched it and then Health Canada had a concern or questions, I guess, say, on ours and other products. I know that’s an industry fight and we’re going to be talking to Health Canada about that 10 milligram limit. On glitches, and I’m not going to — I’m not saying it’s going to be the same amount of volume.

But the prohibition was having more than 10 milligram in one package. And so, we’re going to continue to have glitches in the market going forward, but it will just be one unit at 10 milligrams as opposed to the 10 by 10 that we had out there. This has been raised I think by a variety of different entities in Canada, the competition bureau and a variety of other industry entities that this is a real sort of gap for the legal regulatory forward license producers versus the illicit market where you see what I would describe as an irresponsible representation of edibles at high potency’s, youthful presentations. And so I think over time this is one that’s going to resolve itself. But for us, I think this is an example of our ability to pivot. Within six months, we identified that opportunity we’re able to launch it and did seven figures in sales in the quarter, that’s not the last innovative item we’re going to have.