Good afternoon, everyone. And welcome to the Aurora Cannabis’ Third Quarter Fiscal 2020 Conference Call for the Three Months Ending March 31, 2020. Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to the risks and uncertainties relating to Aurora's future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements. The risk factors that may affect results are detailed in Aurora's Annual Information Form and other periodic filings and registration statements. These documents may be accessed via SEDAR and EDGAR databases. I'd like to remind everyone that this call is being recorded today, Thursday, May 14, 2020. I would also like to note that we're conducting our call today from our respective remote locations. As such, there may be brief delays, crosstalk or other minor technical issues during this call. We thank you in advance for your patience and understanding. I would now like to introduce Mr. Michael Singer, Interim Chief Executive Officer and Executive Chairman of Aurora Cannabis. Please go ahead, Mr. Singer.

Thank you. And good afternoon everybody for joining me on joining today's call. With me today is Glen Ibbott, our Chief Financial Officer. I would like to start by extending my deepest gratitude to all of our employees who have worked incredibly hard to keep Aurora fully operational throughout the COVID-19 pandemic. More than ever, I am proud to work alongside the people who make this organization great. As we stated, our number one priority has always been always to keep our employees safe, and this continues to be the foundation of all of the decisions we make. The highest measures of safety are in force as we continue to operate and work to serve the many people who rely on our products in these challenging and unprecedented times. I would like to first take a moment to address our response to COVID-19. Our facilities in Canada and internationally continue to be fully operational, and we are working closely with local, national and international authorities to ensure we are following or exceeding the stated guidelines within each region. We have taken extensive measures to maximize the safety of our employees who have been designated essential workers in Canada and to whom we are incredibly grateful. These measures include reorganizing physical layouts, adjusting schedules to improve physical distancing, implementing extra health screening measures for employees and applying rigorous standards for personal protective equipment. We have also introduced a special bonus pay program for active facility-based staff, and we continue to maintain regular communications with government representatives, suppliers, customers and business partners to identify and monitor any potential risks to our ongoing operations. Turning to the quarter. While COVID-19 will likely have a greater effect on Q4, it did not materially disrupt our business in Q3. The production and sale of cannabis…

Thanks, Michael. Good evening, everyone. Firstly, I would like to echo Michael’s comments in thanking our employees who have done a tremendous job of navigating our Company through the complications of this pandemic. It is this level of commitment that demonstrates why we are all proud to be on the Aurora team. With that said, I’ll now spend a few minutes reviewing our financial results for Q3 2020. Of course, the figures I'll be going over today can be found in our financial statements and MD&A, and they're all in Canadian dollars unless otherwise stated. For our third quarter, the period from January 1st to March 31, 2020, we saw our net revenue, excluding provisions of $2.9 million, come in at $78.4 million. Our total cannabis net revenue excluding provisions came in at of $72.6 million for the quarter. To get into a bit more detail. During the third quarter, our Canadian medical cannabis net revenue was $27 million, up from $25.6 million last quarter. Our patient base exceeded 86,000, which although down slightly quarter-over-quarter, is indicative of our strong medical position, as that market faces continued headwinds from cannibalization into consumer market and also challenges with prescription renewals as many patient aggregators move to an online model during the pandemic. We continue to work at maintaining and growing our market-leading position and maximizing the lifetime value of our key patients. The good news is that, to-date in Q4, Canadian medical revenues remain steady. Our international medical sales increased from $1.8 million in the second quarter to $4 million in Q3. Due to the resumption of sales operations in Europe in February following an administrative permit issue in Germany, similar to the Canadian market, we expect our European business, particularly in Germany to grow sequentially, but in the short-term with…

Thank you, Glen. Driving Aurora to be a profitable and robust global Cannabis company is extremely important to our team. Our goal is to manage the business with a high degree of fiscal discipline, especially in the midst of a global pandemic. And as our results suggest, we have made significant progress since February with more progress to come. But, we also recognize that cost reduction can't be the only avenue to realizing our potential. In fact, as we execute our plan, we're still moving forward towards some larger goals. These include the development and implementation of programs that foster organizational success. A plan designed to increase revenues outside of Canada by prioritizing the most profitable international markets, and a strategy to leverage the U.S. market targeted towards opportunities that would importantly align with our key objectives of the stated reset plan. Finally, before taking your questions, let me update you on our search for a permanent CEO. As announced back in February, the Board engaged a global search firm and launched a comprehensive search process. I can confirm today that this process has advanced nicely and we remain on track with both the selection and announcement of a new permanent CEO in the next few months. Thank you for your time. I'd now like to ask the operator to open up the call for questions.

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question is coming from Vivien Azer from Cowen and Company. Your line is now live.

Hi. This is Steve Schneiderman, pinch hitting for Vivien today. Thanks for taking my question. We appreciate the long-term strategic rationale for focusing on market share, given the uncertainty due to COVID. Certainly that will help ensure that your brands remain dominant and relevant to support further access as the world returns to normal or a new normal. That said how do you maintain a high degree of confidence on your profitability targets without having a more clear view of revenue development to solve operating leverage as a complement to your cost cutting efforts?

And just background for everybody. Michael and I are 3,000 miles apart, hard to read body language. So, I'm going to field the questions and I'll kick them over to Michael [indiscernible]. So, Steve, thanks for the question. Listen, what we're trying to do is be realistic in this environment. We saw Ontario few weeks back also move to the curbside collection and now today announcing maybe even next week will allow access to retail stores again. So, it's a very dynamic environment on the consumer side. We are confident in our medical business, we are confident in our international medical business, but we're trying to be real conservative, if you will on the consumer market in Canada. So, as we plan forward, we control -- and we can compete on market share, we can't compete -- we can't affect the growth of the market in terms of store counts and things like that. So, what we're trying to do is plan our business such that we have a track to EBITDA profitability under pretty much any reasonable scenario in my division. So, to be crystal clear, we have operating target and SG&A targets, but we -- if we need to, we can pull additional costs levers within the business. We have committed to be EBITDA positive in Q1.

And on Daily Special, can you talk about how much of your volumes or revenues came from the product? And have you found this to be purely incremental, or has there been some level cannibalization between that and the core Aurora brand?

Yes. Thanks. So, listen, as we described on previous calls, we were already seeing a significant shift towards the value segment. And then the premium segment still seems to remain intact. And if you talk to Darren who is in charge of our marketing, he’ll say that the new core segment is the value segment. There's a -- the middle of the market there seems to have narrowed quite significantly. So, when we think about cannibalization, I'm not sure that we’re actually seeing cannibalization. I think, we're just seeing shift to value with premium still playing well. So, in our brands, we see San Rafael still strong, and we see the launch of Daily Special as being mainly incremental but also necessary to compete in what's now becoming a significant part of the market. Just a little further on Daily Special, Daily launched as I said at a strong price point, consistently high potency and larger pack sizes. So, I think what we're also starting to see, Steve, is from the black market. These are at prices as far as we can tell are very competitive with the black market, and certainly pack sizes, which tends to receive larger for the 15 and 28-gram pack sizes.

Thanks. Our next question today is coming from Michael Lavery from Piper Jaffray. You're line is now live.

Thank you. I just was curious if you could dissect the quarter a little bit more. And you had mentioned last quarter, you thought, sales might be a little more inline excluding allowances and certainly saw a pickup from that. Could you just give some sense of what the key drivers were relative to your expectations? And maybe how much of a part of the equation was the derivative 2.0 products?

Yes, sure. So listen, yes, our medical markets, both Canadian and international performed well, but in line with our expectations. The consumer market in Canada obviously was hard to predict. We did see, we think some pantry loading in March, with the pandemic and people starting to stay-at-home and load up a little bit. But that was also -- in March, we also only saw the impact of our Daily Special. And in terms of data that we can see, in March our Daily Special in Ontario had 9% of the flower market and that’s coming from 0% two quarters ago. So, we saw a couple of things kind of hitting, probably more successful than we had expected with Daily Special and certainly hope for, and some pantry loading in March. In April, we've seen a little bit of a reversion to the pre-pandemic sort of ordering levels. But, I think that was relative to our expectations, March and particularly the latter part of March outperformed our expectations.

That's helpful. And just to follow up on Daily Special, can you give a sense -- it sounds like it's both performing better than you had thought. Obviously, some pantry loading as a part of that probably. But, you also mentioned at the tail end of the prepared remarks about just how focused you are on market share. How do you think about this brand going forward? Is it one you might even consider pushing harder on price or is it positioned kind of the way you want? And when you say you're pushing, thinking -- willing or thinking about pushing harder on share, it's more of the same, just riding it out?

We’re all really pleased, quite honestly. I mentioned 9%, in April, it looks like it’s close to 13% of the flower market in Ontario. So, yes, we're pleased with the performance. We need to protect. Our pricing seems to be pretty strong right now. There are entrants, but March and April, we've seen increase in share. So, no immediate issues with pricing [indiscernible] we think now product in a number of different characteristics very competitive with the black market. So, market share, let's be clear, we do have internal revenue targets. They are for our sales team to strive to hit. But, as we plan business over the next couple of quarters, we recognize that it's inherently difficult to predict. So, we just need to be cautious. So, in the short term, we need to protect that market share and then make sure that we have right sized the business to get to EBITDA profitability.

Thank you. Next question today is coming from David Kideckel with AltaCorp Capital. Your line is now live.

I just want to go back for a second to your derivative products. I know, Glen, you mentioned in your prepared remarks that one of your top selling products San Rafael on the flower side. But, how should we think of derivative products just as an overall revenue mix, given just -- we’re thinking about margins and how derivative products represent an overall margin share as compared to flower products?

Yes. So, a couple of things there I can start with and then Michael if he has got anything to add. 2.0 products, as you know, we launched across a broad series of categories in December, kind of first out of the gate, and we had most of the major categories with the exception of beverage in December. And we've learned since then, and we continue to pivot the organization to focus on those areas where we haven't yet seen. We're now running into the limits of demand, so certainly on base, but things [ph] gummies as well. So, that's getting to be a crowded field, that 2.0. There are a lot of players. When I look at market share, say in Ontario, it’s distributed, we're doing well but it is distributed across a number of products. In terms of our portfolio right now, flower is still by far the dominant percentage of what we sell. And what we've seen in the state’s more mature markets, that’s going to continue to be the situation. We do expect 2.0 products grow over time. And certainly, [ph] we test, and we’re scaling up a couple of them, the internal manufacturing capabilities on those products where we think there's considerable untapped consumer demand still. So, we try to test the limits of the demand. So, that's something that we'll continue to be nimble on, I think, Dave, over the next number of quarters as we learn more about the consumer.

Yes. And I think that speaks well, as well. I mean, in your prepared remarks, you were mentioning how premium type products like San Rafael are doing well. Okay. That's helpful. My next question and last question, really shifting from Canada now to international. With COVID going on now, I get the EU GMP certification and German distribution, but over and above Germany -- and maybe Germany is included in this next question. How do you think overall medical cannabis with regulators across the world now is going? I mean is it slowed down? Has it been an increase? Like, what is the appetite for cannabis legalization, whether it's medical -- likely medical, or even recreational, but it's likely medical, just across the world now with COVID?

Yes. That's an interesting question and difficult to give -- of course to know that how regulators are reacting to this. Listen, we haven't really seen any kind of slowdown in the business in Europe. In fact, the $4 million that we recorded in the quarter, remember, that’s only a partial quarter for Germany. So, there was actually kind of a step forward for them when they came back in the business. And the only kind of real impact I've seen or that I'm aware of is just of course, when you're dealing with governments and regulators, and people are working from home, the processes get slowed down. So, whether it's tenders in various countries have kind of slowed down. But, I don't think any of us believe that the long-term momentum isn't still there. It’s just short term, taking longer to get through regulars and that’s probably true but hasn’t impacted our revenues currently.

Thank you. Next question is coming from John Zamparo from CIBC. Your lines is now life.

Hey, John.

Great. Thank you very much. Good evening. I wanted to ask about the goal of getting the EBITDA positive by Q1 and specifically about -- on the Ontario store front. I mean, new growth has slowed significantly and existing stores are restricted, granted, you mentioned they may open next week. But does that create incremental risk on achieving your goal? And I appreciate all the collar on Ontario performance. But can you talk to your performance outside of Ontario, late both in the quarter and subsequent?

Yes. I'll start with that and then maybe Michael can add. But, when we talk about Ontario, it is one of the places -- one of the larger provinces where we actually got a complete data set that includes our competitors. We don't normally get that from other provinces. We and our peers tend to focus on data coming out of Ontario. We're doing well in the other provinces. We are quite satisfied with our performance in all the major provinces. So, my comments around Daily Special or sort of gummies and things like that. I think you can apply that across Canada where we believe we have leading share in most categories and most major provinces. Sorry. Can you repeat the last part of your question?

Sure. The Ontario store closures and restrictions, do you think it adds more risk to the EBITDA goal or is there enough levers on SG&A?

Yes. So listen, as we kind of looked at Q1, we've got a plan to get the EBITDA positive. And if there's no growth, then there's a further plan. You said we’ll pull more levers, we’ll pull more levers if we need to get there. It's kind of one of those goals you just need to achieve. We thought we had a pretty healthy quarter. It was certainly a step forward and a bit of turnaround from the last couple of quarters and get positioned properly. We're just being cautious on the revenue line, as I said. But we do have a good solid base medical business, and one I think we’ve got consumer performances as well. So, we will monitor revenue. And if it looks like we need to do more, then we'll do more. But we certainly have a fair plan from here to Q1.

Okay, thanks. And then, on the inventory side, just trying to square production versus sales, and I think this is probably true of the entire industry. But, you produced about 36,000 even with fairly material revenue growth and sold about 13,000. I know you gave some details on sales velocity. But, can you maybe elaborate on those? And more broadly, how should we think about your production versus sales over the next few quarters? Thank you.

Yes. So, a couple of things going on there. One thing, I mentioned briefly, but it's very important is that we have really been fine tuning our facilities. And so, at Sky are producing a top quality flower. So, that with potency and consistent sort of experience for the consumer. And the sort of thing, you can put [ph] anything into jar and deliver to a consumer. That coming out of Sky has gone from the mid-50 percentages up into the 70 percentages now, a huge shift in terms of turning out. The type of product that is in high demand, it goes into Daily Special. Daily Special is delivering a great experience and a high potency, but at a very compelling price. So, it’s been very important to have that shift. So, the more of that -- we don't think we've seen anywhere near the top of that demand. So, it's important to get more out. So, as we look forward and project with those new efficiencies in place in terms of the type of product we’re taking out of the organization, we see that there will -- we will get into that steady cadence of the volume sold versus the volume being produced on the top quality flower over the next couple of quarters and continue to drive down on that part of the inventory. For the stuff that goes in, into other products and sometimes it just may be still a smoke product or pre-roll, there is still quality but maybe smaller buds or trim. That'll take a couple more quarters to draw down the inventory and gain cadence. But, a lot of that will be related to the growth of 2.0 products as well. So, we're satisfied with where we are at on that and paying close attention to it. But again, that change to producing the top quality flower has been very important for giving us confidence that this is product that will move out into the market in reasonable period of time. It's important for a play like Daily Special, with the high volume, low price, great experience play, we need to operate at volumes to get the scale efficiencies. It’s kind of a stepwise function on costs and so, keeping the scale up keeps the costs to produce. So, it’s pretty critical to begin right product over the course. [Ph]

Thank you. Our next question today is coming from Pablo Zuanic Cantor Fitzgerald. Your line is now live.

Just one question. The way I try to interpret the market, when you announced your ATM in mid-April of $350 million, your stock took a hit, down 30% over last month on the assumption that you would use all of it and you have about 30 or more percent dilution. Now, in the call today in your prepared remarks, you called it a backstop. So, can you -- just to clarify, and maybe I'm making you repeat what you said, if you are able to deliver in your cost cutting targets and lower CapEx as you have and even sales remain at a steady state where you are right now, you will need -- you will not need to tap that facility. I understand it's a rainy day facility. There's a lot of uncertainty out there. But your share price reflected pretty much 50% dilution from that ATM facility. So, just if you want to like maybe repeat or clarify that contrast? Thank you.

Let me address a couple specific points and then Michael can talk kind of big picture with the way to think about the business. But yes, listen, I think because we've actually demonstrated to you and to the market that we've been able to reduce the cost structure of this organization significantly and the CapEx significantly and that we'll continue to do so, we've got more confidence of our ability to get to that EBITDA profitability, but more importantly cash flow positive over the near term. So, as we sit here today, we believe the cash in hand should get us there. But, in this environment, we've seen it with all the major public companies and you've got to have access to capital. So, when we saw major companies pulling down on all their lines of credit and putting in bank, whatever, we believe that this is similar. So, I hear you. But, I think we've got more confidence with the state of our business, as we stand here and having proven a number of things and having still pretty, I think solid revenue performance. So, we do look at it as critical backstop in a very uncertain time. But, Michael, maybe I think it's for just some big picture comments on the state of our business.

Certainly. So, look, I think, consistent with what we had previously announced, and this is in advance of obviously our recently just refreshing of the current ATM. We had said as part of our reset that we were going to leverage the initial ATM to raise approximately $200 million in order to fund the gap of getting us to EBITDA profitability. And so, we still believe that could be the case today. And you saw that from our cash position that we just announced today, $230 million, we believe as noted by Glen that that is sufficient capital to get us to the right outcome. We put in place the new ATM in April, really as a prudent measure in this environment. It's uncertain. We don't know the length of which COVID will continue to survive, but even though we don't expect that we will need to tap into that ATM, we have it there as a measure, just to protect the business and our investors, in the event that this uncertain environment continues for an extended period of time. So, we feel confident that we, I think are positioned well today. But I think, as good operators, we want to sort of protect the Company for the long-term. And I think putting that additional or refreshed ATM in place just gives us the added level of protection that gives us comfort that we can really aggressively advance our business based on the reset plan.

Understood. That's very helpful. Just a quick follow-up. Obviously, you're growing in the Canadian market and Glen, you gave us the numbers. On international side, just going back there, can you frame the opportunity a year out? We’re still hearing about only 60,000 patients in Germany. It seems that the main market overseas right now is Germany. All the players are focusing there. Right? Prices could compress. Just some color and context on even how to model that. I think in the Tilray call, they said that could be about 25% of our business. So, just some -- because you talked to a very high market share, but other people seem to be making similar claims with even more sales than what you are reporting. But just some more color, please. Thanks.

Well, yes, let's be clear, 25% of somebody's business, that's a small Canadian business, it’s not the same as us, right? So we had $4 million of revenue in Europe for a partial quarter, I think is one of the leading performances for Cannabis. I'm not talking about any other types of revenue. I’m talking about cannabis. So, our medical cannabis business internationally is strong. We all know, and this is different than a couple of years ago, but these are slower developing markets. But, there are European markets that we're -- and I'm not going to predict revenues, but we are exporting into countries like Poland and those sorts of things that are new markets. Again, we're just going to be prudent and expect slow growth. And Latin America, you just see Brazil opening up, mainly a CBD medical market. But again, as Michael said, we're prudent with our capital. But certainly, any market, we can enter the market if a significant market opportunity and delivers near-term revenues and bottom line, so, no losses please, no capital that those markets we are looking at entering. But when you model these and definitely, I mean, I’m conservative with international stuff and I just expect some upside along the way. Thank you.

Thank you. Next question today is coming from Adam Buckham from Scotiabank. Your line is now live open.

Hi. Good evening. Thanks for taking my question. So, I just wanted to dig a little deeper into the 2.0 market dynamics. So, it looks like you guys generated about $5.6 million in Cannabis 2.0 revenues in the quarter. It's been pretty highly televised that LPs have had issues keeping products on the shelves. So, first, could you touch on your manufacturing capacity in the 2.0 market and maybe how it's changed since you first launched, and then maybe how much of a drag that might have been in Q1 versus where it'll be in -- or calendar Q1 versus calendar Q2?

So, listen much like in the launch of 1.0, scaling up manufacturing processes is not without its challenges, and we certainly had those and continue to overcome them. What we've done though is we kind of did the launch I’d say prudently into number and then looked for consumer reaction to the types of products we're offering, pricing and things like that. What we’re currently doing now is scaling up several categories, if you will, where we think there is significant consumer potential. Michael, do you have any comments on the front of the 2.0 market and kind of where we're going in operations?

Certainly. So, I guess what I can add is, look, as time goes on, we gain a greater level of knowledge in terms of demand and where we see the market going. And I think as Glen noted, we continue to optimize a very innovative product pipeline, And we’re really going to focus on profitable SKUs and SKUs, certainly that are going to help what we believe to bridge the difference between getting the supply to meet demand. So, I think, we came out of the gate with a significant number of SKUs, just not knowing where we were going to see the consumer sort of, if you want, demand. We've learned a lot. And so, we're really taking those learnings and really going to refine that to areas where we truly see an opportunity for profitable SKUs going forward.

And then, secondly, just on working cap. So, moving forward, I think you guys kind of indicated that you should see a level similar to this quarter. Could you maybe talk about the puts and takes from a working cap standpoint for the next couple of quarters? And how you're going to keep that in sort of the neutral sort of place that it was this quarter?

Yes. So, listen, I think, [indiscernible] for us over the last couple quarters, if you will and driving -- working capital has been the build of inventory. So, as I described a little bit earlier, we do see -- certainly a brand like Daily Special consumes a lot more volume than say a San Rafael brand does, because it’s at a much lower price point. So, it’s a volume play and it’s consuming more. So, I think, as we our consumption or the sales volume starting to normalize with our production, we'll start to see that inventory -- the investing in working capital or investing inventory starting to come down. So, that’s kind of what we expect over the next couple of quarters. The rest of it, AP and AR is kind of stabilized now, collect from government and kind of reach steady cadence on that and pretty steady as well.

Thank you. Next today is coming from John Chu from Desjardins Capital Markets. Your line is now live.

So, I just want to kind of keep pressing on the levers that you have to reach the positive EBITDA. So, if the sales become weak because of COVID and the post-COVID situation, typically you're going to pull on those SG&A levers, but are you going to be cutting to the barebones to the point where at some point that SG&A level is going to have to bounce back to -- in order to draw growth going forward?

Yes. So, that's a challenging question. Right? So, I think -- okay, personal opinion, we've seen quite an impact from COVID and have delivered some pretty good revenues. And as I said earlier in my remarks, medical sales still seem strong. We’re just going to be cautious on the consumer side. So, I don't want to go too far on that. We will do what it takes to get to positive EBITDA. But, I have to tell you, I mean I'm not expecting that we would have to cut to a point where we put our long-term growth at risk, and that's not my expectation.

Okay. And just want to touch a little bit more on the 2.0. So, it sounds like you've got enough data then or you're comfortable that you have enough data accumulated to know what SKU you need to ramp up on. And you are doing that as we speak right now, or do you still need to collect a little more data to have a better understanding of that?

No, that's right. For the major categories, we know where we're doing quite well and where we think there's still significant demand. We haven't been able to find anywhere near the top of that demand. So, that is being ramped up right now. Some of it has been ramped up or at least scaled up some of those operations. There's a little bit more to come. So, some of the capital in Q4 was related to that. They're modest amounts, but they're still important in terms of turning out more of those product categories.

Our next question today is coming from Graeme Kreindler from Eight Capital. Your line is now live.

Yes. Hi. Thanks for taking my question. Just one question here. Michael, you mentioned towards the end of the prepared remarks about other frontiers of growth, and particularly mentioned the U.S. market. So, I was just wondering, I mean, we've seen a backdrop of a lot of your competitors scaling back investment in that market, particularly on the CBD side, if not sort of talking down expectations for entrants or how competitive they're looking to be in terms of the near and medium-term. So, I'm wondering, when you mentioned that market, what sort of time horizon are you looking at as that for a potential avenue for growth? And does it extend, keeping in mind that it would be something that has to be federally legal? Is it just a CBD avenue there or is there potential other business streams where you could see growth there? Thank you.

Good question. I think, that's a market that is just -- and we've said this before, just too big ignore. And so, we've got our eye on that market and we're continuing to explore opportunities that are going to be without a doubt have to sort of align with our reset plan and our stated objectives. We're limited in what we can do under the current environment in the U.S. So, obviously, it can't touch THC, but we see CBD as a tremendous growth opportunity. And it's something that I think we are a little more focused on. And so, looking for opportunities that we think would be complementary to our business certainly needs to be a accretive. And given our focus on our own balance sheet, it certainly has to be something where we are confident that we're not going to have to dig into our pocket to leverage that opportunity. So, I think, we're excited about some of the opportunities we're identifying. And I think, to your question about when we anticipate maybe, potentially looking at an opportunity in the U.S., I would say, certainly this year is certainly a window of opportunity for us, and it's something that I think we're more focused on than we have been historically, again with a lens on ensuring this has to fit and align with our current reset plan.

And I’ll just add a little bit in terms of question about our competitors. Listen, unlike Canada where most of the LPs grew up playing in the entire value chain from cultivation and right through to distribution. That's not true. We don't need to do that in the U.S. And what I’ve seen, some people pulling back and saying well, why are we in hemp, where are we growing hemp, things that. So, just to kind of put this in context. Somebody's pulling back from the market, it may just be part of the value chain that doesn't necessarily make sense, if they've learned about the market. And we've certainly taken our time to understand that market thoroughly and understand where we think long term value can be created there and you don’t need to play in the whole value chain?

Okay, thanks. And just a follow-up, when you're discussing the timing of this year being a window of opportunity, do you look at that under the assumption that the regulatory environment stays as is, which I would categorize it as kind of gray -- at the current moment in time or does that assume that you're going to see some incremental progress, either on the regulatory environment or just in terms of various points of distribution or certain states sort of jumping ahead of that and giving us some more clarity there?

So, I guess, I'll take that Glen. So, I guess, we don't anticipate any material regulatory changes. So, I think the opportunities we're looking at are with the idea that we don't expect those changes to occur certainly in 2020. And I think the thinking there is, we're exploring opportunities in advance of that regulatory change, because the landscape is going to begin and probably competition very different on an announcement of some type of regulatory change in the US. So, we want to get out in front of that. And again, I think looking at opportunities that we think is going to fit our desired path which is again with an eye on profitability and continuing to strengthen our balance sheet. And so we feel excited about, opportunities south of the border, and we'll certainly pay attention to some of those opportunities in the coming months.

Thank you. Our next question today is coming from Doug Miehm from RBC Capital Markets. Your line is now live.

First question just has to do with the -- some of the ordering patterns that you may be seeing from the provinces, as we’ve heard from multiple parties, even yourselves that started off slow, smaller orders. Have you seen order sizes increasing in terms of size, but perhaps frequency has dropped off with the COVID situation? Could you comment on that?

Yes. I’ll take that. So, listen, we just actually asked that question on our sales team yesterday, not saying that the ordering sizes pick up -- with the exception of those places where the provinces are getting more confident. They're really -- as you might expect with some people that are pretty sophisticated at procurement, and now applying that to cannabis where they're seeing that they actually have great sales, they are of course ordering more of that product. They're managing to specific inventory levels that they want have. So, I think the order patterns are reflecting. So, the amount that they're going to order is reflective of how quickly they think it will move. They don't want to get caught in same situation like mid-2019. I would say that’s too much on hand, and the LPs don't want that either, so.

Right. But, has there been any change in the last, let's say, month or two?

No. Not that I've been told. Certainly, as I say, they're ordering, we've talked about this. It started to ship last year. And if anything with 2.0, they are just -- they are very sophisticated now. So, we haven’t really noticed anything with the COVID that has been a significant shift from what they were -- the trends we are already seeing.

Thank you. We have reached the end of our question-and-answer session. I would like to turn the floor back over to management for any further or closing comments.

Well, I just wanted to thank everybody for obviously taking the time to join our conference call. Once again, this Company is laser-focused on controlling the things that we can, and that is, our reset plan was aimed at removing complexity out of our business and reducing costs to a level that was consistent where we believe the business to be today, with an obviously a lens on an ability to scale that up, if and when we see the market changing, but we're very confident in the changes and the measures that we've taken to get us to where we are today. The job's not done. The balance of this quarter is to sort of get everything in line to ensure that we're going to deliver on our key objectives going into Q1 2021. And so, the team has been incredibly focused and incredibly motivated to ensure that we meet this target. And I obviously want to thank the team and all of our employees for being incredibly supportive of this important focus of the organization. We're more disciplined as an organization than ever before. And all the decisions we make are certainly with the lens of near-term value and bringing true value to our investors. And so, you're going to see that as we go forward. And I'm excited about further updates that we're going to provide the market and of course our investors as we go forward. So, thank you very much for joining.

Thank you. That concludes today’s teleconference. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.