Good morning. My name is Sharon, and I will be your conference operator today. I would like to welcome everyone to the Cronos Group’s Third Quarter 2018 Earnings Conference Call. Today’s call is being recorded. At this time, I would like to turn the call over to Anna Shlimak, Investor Relations and Communications. Please go ahead.

Thank you, Sharon. And thank you for joining us today to review Cronos Group’s third quarter 2018 performance and business update. I am joined by our Chairman, CEO and President Mike Gorenstein and our CFO, William Hilson. Earlier this morning, Cronos Group issued a new release announcing our financial results which are all filed on our SEDAR and EDGAR profile. This information as well as the prepared remarks will also be posted on our website at www.thecronosgroup.com under Investor Relations. Before I turn the call over to Mike, I would like to remind you that our discussion during this conference call will include forward-looking statements that are based on assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the forward-looking statements. Management can give no assurance that any forward-looking statements will prove to be correct. Forward-looking statements during this call speak only as of the original date of this call, and we undertake no obligations to update or revise any of these statements except as required by applicable law. Management refer due to the cautionary statement and risk factors included in the Company’s most recent MD&A and Annual Information Form by which any forward-looking statements made during this call are qualified in their entirety. We will now make prepared remarks and then we will move to a question-and-answer session. With that, I will it over to Mike.

Thank you, Anna, and good morning, everyone. During my remarks, I will provide an overview of the company’s strategy and the progress we are making on our objective to build a leading, innovative, global cannabinoid company. But first, I want to take a moment and acknowledge the watershed that took place for our company, our industry and for Canada. As we all know, less than one month ago, Canada became the first G-7 country to legalize cannabis sales for adult use, and Cronos Group is a major participant in that market. The regulatory structure and legal framework that the Canadian government has created is part of the reason I left my wife in New York and convinced members of our management team to leave their careers and move to Canada. But we understood two and a half years ago when we set out on this journey was the value of operating a fully legal environment that would allow us to learn, build and create a company that has the potential to be a global industry leader. That is our opportunity in Canada today. It is to research and develop new innovative products that we can pilot into a large, diverse consumer market and collect consumer insights and continue to refine our product offering, and then to create turnkey solution, that we can roll out into our expanding global platform as regulations evolve. At Cronos, we take pride in leading the industry forward responsibly and are motivated to create meaningful products that bring our consumers enjoyment, and improve their quality of life. As excited as we all are about this milestone and our participation in this new market, it’s truly just the beginning. The growth opportunities for Cronos are vast, and extend across the globe as markets opened. With our commitment…

Thanks Mike and good morning everyone. The figures I am revealing today can be found in our financial statements. We continue to see revenue growth in the third quarter and at September 30th 2018. The company reported revenue of $3.8 million versus $1.3 million in the same quarter in fiscal 2017, representing 186% percent increase. Additionally, revenues increased 11% quarter-over-quarter. This increase was due to continued growth of Peace Natural sales to our medical patients. We also saw strong growth in our cannabis oil sales, which represent 29% of total revenue in the third quarter and began shipments into the domestic adult use recreation market. Kilograms of cannabis sold increased 213% from 164 kilograms in the third quarter of 2017 to 514 kilograms in the third quarter of 2018. Quarter-over-quarter kilograms sold increased 8%. The change was largely due to increased production output. Average selling price for the third quarter 2018 was $7.32 versus $8.01 the previous year. The slight decrease in ASP [Ph] was driven by a shift in products sold to the four provincial governments we are supplying, wholesale for the new recreation of adult use channel. As Mike mentioned, we are still in the launch mode for this new channel and are seeing unprecedented demand in every province, and every product category across our brands. Moving on to gross profit, I wanted to spend a bit of time walking through how we are thinking about this, both from a business standpoint, and an accounting standpoint. Our cost of sales before fair value adjustments consists of two main categories; production costs, and processing costs. Production costs are capitalized the biological assets as costs directly attributable to growing the plants, which are recognized at cost of sales when the inventory is ultimately sold. These costs include direct costs, such…

Thanks Billy. With that, we’ll open it up to questions.

[Operator Instructions] Your first question comes from Timmy Chen with BMO Capital Market. Your line is open.

Hi. Good morning. Thanks. So my first question is, could you quantify the volumes that you shipped to the adult-use market both this quarter that’s been reported and how that’s trended in October? And also how your pricing has been?

Sure. So, I’d say, it was a major part of our revenue for the quarter, but we haven't really seen the real effects of adult-use yet. I think we'll see that over the coming quarters. It’s been – I think it’s been trending very well. We’ve thought of October as a month over – working through kinks and making sure that all the areas of the supply chain are smoothing. We’ve also been very pleased with the demand we’re seeing, and I’m sure you know very significant. And prices we would just note they certainly range depending on province and what the product mix is. So that's evolving and we’ll be able to give a better update of what that looks like at the end of Q4.

Okay. Thanks. And my follow-up is just on your cash balance. I think during the quarter your cash went down by about $50 million and so you’ve got I think around $45 million to $50 million on the balance sheet at the quarter end. Could you talk about your cash needs going forward? Any plans regarding financing for production ramps and also your Ginkgo partnership and the capital cost that you may have to incur for the Mucci greenhouse?

Sure. So, we have a number of options available to us in term of capital. Now we still have the credit facility that we have not drawn on yet, but any decision that we make will be within eye towards enhancing long-term value for Cronos shareholders. When we think of some of the different JVs, I think it’s also worth mentioning that there are funding options that come in externally for Cronos specially from joint venture partners and from other sources of non-equity capital.

[Operator Instructions] And we have a question from Martin Landry from GMP Securities. Your line is open.

Hi. Good morning, guys. I was wondering Mike, if you can give us more details or colors on how your COVE brand is doing in Ontario?

Sure. We think it is doing very well. COVE was positioned really to capture the top 15% of the market. We think the response has been solid and are very pleased with the sales velocity we’re seeing. I think the insights that we’ve received have shown a good positioning. One of the things that I will note that’s really across any brand and SKU. Right now we’re seeing such high sales velocity and demand that parsing out new ounces for each SKU. It’s still early. But overall we’re very, very pleased with the reception.

Okay. And it looks like and you mentioned it in your opening remark that there’s more demand than supply here. Are you thinking about bridging the gap in your production by buying from third-party suppliers?

No. When we think about the opportunity we have, it’s really building brand equity and so we will not sacrifice any brand equity by bringing in product that we don’t consider up to our standard. So if we were it would be in very special circumstances and would be with heavy quality control. I think for flower, it something that we really do think need to come from our facility, but we would look at opportunities to give some of our specific genetics out and then make sure that those are grown under our controls. We also -- we were entering into a pretty rapid ramp-up of capacity and going forward, we think will help meet demand.

[Operator Instructions] We do not have any questions over the phone line at this time. I will turn the call over to the presenters.

All right. Thank you everyone for joining and enjoy the day.