Tilray Brands, Inc. (NASDAQ:TLRY) Q1 2024 Earnings Call Transcript

And then, from a Leamington standpoint, we’ll be 100% utilized in Aphria Diamond, and we do have some opportunities that will currently fill up our Aphria One facility by the end of the year. And then, Broken Coast has always been fully utilized. So, we feel very good about capacity and utilization overall. I definitely think that will help the margins on the balance of the year. I don’t have a crystal ball on that front, but certainly as Irwin talked about, as we move all of our packaging from the acquisitions into Leamington, we’re going to see great synergies on that side. The London facility on beverages will be close to 90% utilized with the transition of Truss. So, definitely, we’re going to be able to allocate the overhead of those facilities across more volume throughout the end of the year.

Irwin Simon: And I think not only utilization, we’re vertically integrated here. So, we can grow flour, we can oil, we can — we’re probably the largest pre-roll producer today in the Canadian market. We’re the largest producer of canned. We can produce any type of edible. So, with that, and what we’re doing basically today is producing for ourselves, we are doing some wholesale. So, not only are we — from the utilization standpoint, we’re vertically integrated to support our 12 brands out there. And the big thing here is new product development. And that’s what we’ve realized is in the Canadian market, consumers are looking for new products all the time. And whether the potency of the product, its infused products, the genetics of the product, the big thing what we have to work on is how we develop brands and get consumers used to buying brands. And that’s one of the big opportunities and that’s one of the things we need to work on.

Frederico Gomes: Thank you very much. I’ll hop back into the queue. Thanks.

Operator: Thank you. Our next question comes from the line of Michael Lavery with Piper Sandler. Please proceed with your question.

Michael Lavery: Thank you. Good morning. Just wanted to come back to the eight new brands that you’ve just closed and purchased. And at least on the retail side, where we can see some data, those have been declining for the last two or so years. I guess maybe first is that the full picture, is there a more holistic view that that’s got better momentum, but either way then what does it really take to get that to — you’ve said how important organic growth is, obviously it’s not already in hand, so what does it take to really get those going? And how much more spending? Is there distribution upside? They’ve all been around for quite some time. How do you just think about driving growth there?

Irwin Simon: I’m going to turn it over to Ty in a second. What goes down got ultimately go up, right? So I think that’s what’s important here. And yeah, they’re declining and that’s what gave us the opportunity. I think from some standpoint, did they get the attention that was needed? And I think it goes back and shows what we’ve done with SweetWater and what was done with Montauk, what’s done with Green Flash and Nelson. And the team knows how to do it. Ty, you want to add something to that?

Ty Gilmore: Yeah. Michael, I’d say, I’m not real sure you’re seeing the full picture. When you look at it at a total brand level, when you dive a little bit deeper and you get into the SKU level, we’re really, really excited. You see brands like 10 Barrel, their pub beer, which is growing. You see Avalanche growing share in Colorado. You see what the Big Ballard part of the Redhook family and their SKUs and how they’re getting into new segments is really, really exciting. So, yeah, I’m not real sure you’re seeing the full picture. We’ve built out a really national account team. And as you know, chains play an integral part in building distribution and building brands. And we’ve had some really good conversations with big retailers around the U.S., and they’re excited about the brands.