We also definitely need some burning and pressing urgent changes on the regulatory front and our team along with a lot of other operators in the country, in the industry are engaged with Health Canada to make changes to the Federal Cannabis Act, which is under review currently. So given the review that is going on the Federal Cannabis Act and the support that we’re anticipating from the government, plus the continuous take down of the illicit market should resolve in our industry sales expanding over the long-term.
Matt Bottomley: Great. Much appreciated. Thanks, Raj.
Operator: Thank you. The next question goes to Andrew Semple of Echelon Capital Markets. Andrew, please go ahead. Your line is open.
Andrew Semple: Great. Thank you. Good morning, and congrats on solid Q2 results. First question here would just be on the margins, if I have my calculations right, it appears that gross margins on brick-and-mortar retail sales saw a meaningful step up in the current quarter and you pointed to further opportunities to expand this ahead. I guess my question would be whether you have a sense of what level you would like to see gross margins for brick-and-mortar settle ads in the long-term once you’ve got all the moving pieces, such as white-label products, once those have all fully played out and are widely available and you’re kind of running at more of a normalized rate. Where do you see the most gross margin levels trending?
Raj Grover: Good morning, Andrew, and thank you for your question. Brick-and-mortar gross margins will likely keep ticking higher as they have over the past five quarters having increased about 1% a quarter. This is better than my expectations, Andrew. We didn’t expect to be able to increase our margins so rapidly every single quarter, which we’ve done over the last five quarters. And the good news on this front is that we feel that this is going to continue going up. I believe, and currently our gross margins from our 4-wall gross margins are sitting at around 20%. We feel long-term we can take this to 24% to 25% and kind of keep that pace of roughly 0.5% to 1% of quarter going forward, because we continue to increase our margins, our same-store sales continue to grow up, our membership base continues to increase.
So we see absolutely no problems there. Now, speaking about the all-rounded consolidated gross margins, we are feeling a bit of a weakness in our e-commerce platforms, which is kind of offsetting everything we are increasing on the brick-and-mortar side. But we are quite comfortable in communicating that we can remain consistent at the 27% mark as we’ve done over the last three, four quarters. That will continue. But nevertheless, we do have an opportunity to increase our gross margins of at least 0.5% to 1% a quarter on the brick-and-mortar level, which is 88% of our business portfolio.
Andrew Semple: Great. Good color and good to point out the different revenue mix having an impact on the consolidated level, but also good to see the progress on the segment level. My follow-up question here would be on free cash flow. And when I look at the current quarter, barring the relatively outsized networking capital build, which utilized $4 million of cash in the current quarter, if we exclude that or move that maybe to more normalized level, it appears that you would’ve been around free cash flow positive or free cash flow breakeven in the current quarter. So it appears you’re well down the path to achieving your target there. So I’d like to get your thoughts on once that free cash flow positive figures firmly in hand, do you think there’s an opportunity here to accelerate M&A given you would be free cash flow positive and you’ve got a good chunk of cash on the balance sheet today?
Raj Grover: Thanks for the question, Andrew. I see Sergio is excited to answer this one. So I’m going to pass it over to him.
