Welcome to the 22nd Century Group's Third Quarter 2022 Conference Call and Webcast. At this time all participants’ have been placed in a listen-only mode and the floor will be opened for your questions following management’s prepared remarks. It is now my pleasure to turn the floor over to your host Mei Kuo, Director of Communications and Investor Relations. Please begin.

Thank you, Rob. Good morning, and welcome to 22nd Century's third quarter earnings conference call. Joining me today are Jim Mish, our Chief Executive Officer; Hugh Kinsman, our Chief Financial Officer; and John Miller, President of our Tobacco Business. Earlier today, we issued a press release announcing our results for the third quarter 2022. The release, earnings presentation and 10-Q are available in the Investors section of our website at xxiicentury.com, under the Events subheading. We'll start today's call with prepared remarks from Jim, John and Hugh before moving into a Q&A session. As a reminder, those joining by webcast can submit questions through the online interface, which we may include during the Q&A section of today's call, time permitting. Some of the statements made today are forward-looking. Forward-looking statements are subject to risks, uncertainties and other factors that may cause actual results to differ materially from those contemplated by these statements. Additional information regarding these factors can be found in our annual, quarterly and other reports filed with the SEC. During today's call, we may discuss non-GAAP financial measures, including adjusted EBITDA, which we define as earnings before interest, taxes, depreciation and amortization as adjusted for certain noncash and nonoperating expenses. For more details on these measures, please refer to our press release issued earlier today. And with that, I'll turn the call over to Jim beginning from slide three.

Thanks, Mei. Good morning to everyone and happy Election Day. I've spoken at a number of recent conferences. So I'm going to keep my opening comments brief, and we can get to the details quickly. I will say it's been an incredible few months since our last quarterly update, and there are more exciting topics to discuss than we can fit into our call today. We're going to focus our time on commercial activities of our rapidly expanding U.S. tobacco business and our global scale hemp/cannabis ingredients and CDMO business. I'm joined today by John Miller, President of the Tobacco Business Unit; and Hugh Kinsman, our CFO. First, since our last call, we have aggressively expanded our exceptional VLN pilot results by moving into a multistate commercial launch designed specifically to leverage our awareness, education and trial approach. We've advanced from our Chicago pilot to expanding across Illinois to our first statewide multi-partner launch in Colorado and now announced three additional statewide launches to complete the Four Corners region. This is just the beginning as we intend to grow our presence in now up to 18 states over the next 12 months and take a notable share in these markets. John will detail this more in a moment, but I can't be more excited about our prospects. We have an unstoppable expansion blueprint driven by consumer interest. We can reach a 1% share milestone quickly where we decide to go, we have a plan to cover over 50% of the addressable market within 12-months. Second, we have now integrated GVB Biopharma, a top-shelf ingredient and CDMO provider in the hemp/cannabis derived ingredient space. This catapulted us into a fully commercialized and growing hemp/cannabis business with increasing margins, and we're moving quickly to complete certifications that will further differentiate our products and make us the dominant global supplier of hemp-derived ingredients. I'll come back to this detail after John. Finally, our financial results are driving long-term growth, margin expansion, operating leverage and cash generation. Our balance sheet is fully funded to support our existing business plans, and we're closely monitoring our investments to rapidly drive share, scale, and financial returns in our commercial pursuits. The chart on the slide illustrates the quickly developing revenue scale in our business that will ultimately drive us to cash positive flows as we complete this carefully planned commercial launch and investments. With that, I'll let John dive into the incredible work he and his team are doing in the tobacco business. John?

Thanks, Jim, and good morning, everyone. It's definitely an exciting time at 22nd Century, and we are moving rapidly to make an incredibly disruptive product to market. Starting on slide five. Our Chicago pilot with Circle K generated exceptional results in a very short time, especially when compared against normal industry expectations for a new product launch. We also tested a range of offers designed to drive increased share through trial and repeat purchases. With that data, we have sharpened and refined our launch plans for our multistate rollout. We are now fully immersed in our commercial push into the $80 billion U.S. retail tobacco market. Capturing even a very small percentage of this market will be transformative for 22nd Century and our revenue line. Phase 3 includes not just adding states, but also bringing on new partners to execute the distribution, training, stocking and ground support for a growing list of retail sites. This allows for efficient management of overhead while covering entire states with full-service retail programs and support for VLN's rollout. So some of our new partners, have authorized VLN not only bring potentially hundreds or thousands of store locations, but also represent an accelerated opportunity in the next state where that chain has a presence. In short, our retail launch efforts become efficient, faster and more productive as we move forward by leveraging a frictionless “go where we go” partnership approach. Moving to slide six, let me illustrate that a bit. Our current five states represent about 7% of the total U.S. retail cigarette market or about $5.7 billion at the register, just getting a 1% share would be approximately 3.8 million packs of VLN on an annual basis. What's more, three of these five states have favorable MRTP excise tax structures that can further leverage…

Thanks, John. It's been an amazing third quarter for tobacco progress, and we're just getting started. And I just have to pause for a second and just repeat some magic words, unstoppable expansion blueprint driven by consumer interest. It's just an amazing progress that John and the team are making. Let's turn to slide 13 now as we focus for a few minutes on our commercial progress in hemp/cannabis. You've seen this slide before discussing how GVB completes our capabilities from the most fundamental elements of plant genetics and receptor science all the way through to white labeling products on the retail shelf for purchase. We stand alone in the world with this level of breadth of expertise. More importantly, GVB is already the world's largest hemp/cannabis ingredients merchant market supplier with the lowest cost, largest scale and highest quality. This platform is a tremendous growth opportunity with minimal investment, a process that we are undertaking at a lightning pace. It all starts with the assets we acquired, a fully integrated manufacturing chain that slots right into our plant science platform. This starts with a world-class extraction facility in Prineville, Oregon that will start out at 5,000 kilos per month capacity and grow quickly with our investment program already underway with an expected output capacity of 15,000 kilos per month in 2023. As this facility scales, it will displace a majority of our third-party crude purchases in the market. We will then take that crude material into our 30,000 square foot crude refinement facility where we expect to see a substantial increase in gross margins as Prineville expands, producing global leading quality cannabinoid isolates and distillates. From there, our 40,000 square foot manufacturing site and produce an extensive variety of white label products to our customers in the nutraceutical consumer…

Thank you, Jim, and good morning to everyone. Starting off on Slide 18 with third quarter financial results. Net sales increased by 149% quarter-over-quarter to $19.4 million, which reflects the addition of a full quarter of GVB revenue and record tobacco CMO manufacturing sales. We continue to experience significant customer demand for tobacco and hemp/cannabis products, including higher CMO cigarette volume from new customers in addition to the acceleration of VLN product sales. Gross profit increased slightly quarter-over-quarter to $619,000 as improved gross margin from CMO manufacturing was offset by lower margin from hemp/cannabis sales, reflecting certain nonrecurring charges, and I'll explain gross profit further on slides 19 and 20. Moving to slide 19, tobacco revenue for the third quarter increased to a record $11.5 million from 17 -- excuse me, from $7.8 million, an increase of 48%. Gross profit margin on tobacco sales increased to 5.5% through a combination of strong unit sales growth and improved product mix from higher-margin CMO and VLN cigarette sales. We expect continued gross profit margin expansion to be achieved with the accelerated launch of VLN. Moving to Slide 20 for hemp/cannabis, which reflects a full quarter of GVB's operations, revenue grew 25% to $7.8 million for the third quarter. This revenue growth reflects an increase in unit sales of over 80% due to strong demand for the company's premium quality built ingredients. And excluding certain non-recurring charges and the impact of purchase price accounting, GVB's pro forma gross margin was 8.1% in the third quarter. GVB's gross profit margin is typically 15% to 20% and will expand as the company becomes more vertically integrated with the addition of the new Prineville, Oregon extraction facility in 2023. Slide 21 illustrates the updated third quarter GVB acquisition purchase price accounting in more detail. And as…

Thank you. It's an exciting time for 22nd Century as we accelerate our U.S. VLN launch with several major national C-store and pharmacy chains placing our VLN products in front of customers. With our exceptional pilot exceeding our internal expectations and a massive market opportunity, even a relatively small share of that market is transformational to us, as John described and as you've recently heard me describe in recent conferences. With the proposed menthol ban moving ahead as it should, plus state actions in advance of federal policies, there's never been a better time for a disruptive reduced nicotine content product. We're ready to go, not just on our innovation -- tobacco products, but also in our hemp/cannabis products and new GVB platform that doubles our revenues now that is fully integrated and enhances our path to profitabilities we plan to capture and leverage all the synergies of our two businesses in the months ahead. We built the framework and foundation, and we are now in full execution mode and focusing on business fundamentals to advance to the next phase of our strategy and maximize the full potential of 22nd Century. And with that, operator, please open the call for questions.

Thank you. At this time we’ll be conducting a question-and-answer session. Our first question comes from the line of Vivien Azer. Please proceed with your question.

Hi, good morning. Lots of great detail on your aspirations to further expand VLN. Jim, you noted a target for 12 to 18 states over the next 12-months, obviously, a reasonably wide range in terms of incremental volume penetration to as high as 53% at the upper end of that. What are going to be some of the key factors that form whether you hit 12 states as opposed to 18? Thanks.

Vivian, and I'll let John comment on this as well, but I'll give you my perspective, because we were -- even a few weeks ago, we were targeting 12 to 15, that number has gone up to add on three more states that takes us over the 50% mark. It really is driven by supply chain. We want to make sure we're not ahead of ourselves on the supply chain based on growth cycles and the timing of the shelves. But I think that's really the major driver. We're going to move as aggressively as we can to the full 18 as quickly as we can. But we are making sure that we keep our supply chain all the way back through the Ag side in mind as we continue on because we certainly don't want to face any stock-out situations once we do launch. But I'll ask John also to chime in on that commentary.

Yes. Thanks, Jim. And good morning, Vivien, good question too about how do we come to the 12 to 18 states. There's no doubt that there's certainly analytical work that's been done on choosing the 18 states. And really, as Jim has been very transparent in the past, changing the conversation to what we're trying to achieve through these states. What have we taken from the pilot? What have we learned? How do we then implement that in a very pragmatic geographical approach to the business? And the 12 to 18 states that you saw on the map that we showed represent about 53% of the total cigarette market. And in the beginning or I should say maybe last call, there was a lot of questions about a national launch and how do we get nationally, when our team was internally working on exactly what does that mean to have the sort of scope, scale and presence to make an impact in the market. And this is where we've begun, right? You started in Illinois, you moved to Colorado, the Four Corners approach gives access East to West, North, again, expanding through the pilot program in the Midwest, understanding the opportunities in the Southeast, taking advantage of MRTP taxes in Connecticut and potentially in the Tri-State area. So it's a very pragmatic approach of how we get to meaningful levels in the best way possible doing the analysis and research that shows this is where the opportunities are, this is where the consumers are, and these are our partners who can get us there. I hope that answers your question.

Yes, it sure does. That's really helpful. And so, as we kind of think about modeling the tobacco opportunity on a go-forward basis, clearly, there are going to be two components to revenue realization: One is selling into new states; and then the other being repeat in quasi-legacy states, albeit nascent where it does seem like you have plans to bring on incremental points of sale to deepen your penetration geographically as well? Do you think that the sequential growth that we saw in terms of absolute revenues between 2Q and 3Q is a good framework to keep in mind as we model the opportunity going forward at least over the next, call it, three to five quarters?

Hugh, that would be --

Yes I'll take that. Hi, good morning, Vivien, very good question. I think part of it we had a big step-up, because we had a full quarter, this quarter for GVB revenue. So I think when you're thinking in terms of modeling, let's just take tobacco operations. Some of that was just a significant increase in our CMO manufacturing. We expect to have that continue going forward. But VLN will start rolling into the velocity of the VLN sales will start to accelerate going into the end of this year, this fiscal period and then go starting in Q1 2023. So for purposes of modeling, keeping a kind of the growth rate incremental quarter-over-quarter, which would be steady, if you will, which would be comprised of CMO revenue. And then I would start layering on some incremental growth for VLN as we continue to accelerate the rollout strategy.

That’s super helpful. Thank you so much.

Thank you.

Our next question comes from Aaron Grey with Alliance Global Partners. Please proceed with your question.

Hi, good morning. Thanks for the questions and thanks for the detail. So a question I have on VLN. Just as you expand in some of the new markets, obviously, in Chicago and Broader Illinois, you had a great partner in Circle K to help in terms of displays and shelf placement. So just wanted to get some more color in terms of -- as you go to Colorado in these other states, obviously, you're going to have Circle K there. But as you lean a little bit more on distribution, can you talk about how you're looking to ensure that you have similar shelf placement at displays at retail to, kind of, reach that 1% plus that you got in Chicago and these other markets? Thank you.

Thanks, Aaron for the question. And, you know, it's a good point to start talking about what the retail environment looks like. And quite honestly, in Colorado, we have a very, very similar program with Circle K that we had in Illinois. And as I mentioned in our opening remarks, we've also expanded Circle K -- with Circle K into New Mexico. And again, that's a lot of the strategy, right? How do you take the learnings? And how do you take all the things that we tested and can take out of a pilot and then move that into a much broader array of stores. So for Circle K, Colorado, they basically mirrored what we've done in Illinois to a large degree, and then roll that right into New Mexico. So that -- those learnings, those things will be learned about -- and we call it a trial education awareness, awareness, education and trial, get that right. All those things that we learned on how we get through that three-step process to trial and adoption, those are the things that we're explaining to retailers that they're working with us to achieve. And this isn't like a challenging discussion. I mean when people understand exactly what we're doing, and they understand sort of the difference in VLN versus a traditional cigarette and what we're trying to achieve with this brand when they see it and understand what we tested and now what we're putting into market. It makes total sense. So to get that awareness campaign going, what does it take? What does it take to make the consumers become aware of it, to educate them on what the product does to get them to try it to come back and repeat, have a repeat purchase? All of those things…

Great. Thanks for that. That's really a helpful color. I'm glad to hear that retailers have been receptive. So second question, we want to talk about GVB a bit. Now that it's been under the company umbrella for a bit, we go back to when the acquisition was made, you guys talked about revenues being $48 million for the year 2022, gross margins of 44%. Obviously, if you look at the filings, it looks like year-to-date had it been closed January 1, you're at $23 million, so below that mark on the sales. And you talked about the gross margins 15% to 20%. Last quarter, you had mentioned 20% to 25%. So just at the high level, I want to maybe take some learnings, maybe there's some more noise from the acquisition once you got under the hood than you had previously expected. So I would love to get more color in terms of how you see the acquisition now a couple of months post acquiring it versus maybe some thoughts you had initially? Thanks.

Yes, sure. I can start out and then I'll ask Hugh to chime in as well. I think the thoughts at this point post-acquisition is that it's everything we anticipated and more. We certainly knew we were going to go through the typical quarter of integration, which we did here in Q3. And that takes effort across all different functions, including the commercial side, getting everything tied out. So we are expecting perhaps a softer Q3 on the volume side and then kind of a back build going into Q4 and into ’23, which is exactly what's happening really both on the ingredient side in the cannabinoids themselves and also very much so on the CDMO side, which was really in a fledgling position, when we finished the acquisition back in May. So everything is coming along very nicely across the integration. We got through that Q3, and now the ramp-up really is looking promising, both on the ingredients and the CDMO side. And as I said before, what really will unleash the CBD market, not only in the U.S., but there are -- Europe is looking at the FDA to set their safety guidelines on CBD, and that will open up not only the U.S. consumer product space now in legitimate terms with safety considerations around it and quality specifications around it, but that will very likely be adopted into the European theater, which is very much larger just based on population. So it's really living up to everything we thought. We spent perhaps a bit more time on the integration within Q3. But already in Q4, we're back on to the pattern that we hoped for. And we really got a truly top shelf ingredients and CDMO assets and a phenomenal team that's highly energized. So we couldn't be happier with it and really did fill out the foundation. But I'm not sure if I missed anything Hugh, from your perspective on the financial side.

Yes, I completely agree, Jim. I think it's important to mention that just the backlog for the demand we have for specialty ingredients is significant going forward. So that should compel revenue growth in addition to some of our white-label contracts which should be coming along in fiscal 2023. And with that and the Prineville extraction facility coming online will be continued margin expansion as well.

Great to hear that. Helpful deatil and I’ll jump back into the queue.

Our next question comes from the line of Brian Wright with Roth Capital Partners. Please proceed with your question.

Thanks. Good morning. I wanted to start out with when I look at the VLN map with the 18 states and in the press release, you kind of -- you talked about focusing on the favorable MRTP states. But then you looked at the competing factor of adjacencies and state adjacencies. I mean, Texas just is like flashing in the on red kind to me. But I don't want to -- just want to think about kind of priorities for next dates? And any kind of color there, what's your kind of response to that kind of analysis for lack of better word?

John, do you want to cover that?

I'm sorry, I -- sorry, Brian, my phone cut out for a second. Did you say that Texas was flashing in red?

Yes, as far as like, it's so close to the Four Corner States, and it's a big state. I know it's not MRTP, but it just kind of seems like that would be a high next priority.

Right. So if you look at the state with the -- or really the map with the 18 states, the light green states are the MRTP states and then the -- I think we label the prospective priorities launch dates. And Texas is one of those dark green states. The difference in the map is we're just trying to show where the MRTP states were as opposed to our priority states. So the dark green states are definitely priority states. Texas is definitely dark green. So yes, absolutely 100% Texas, the number one cigarette state in the country is a natural opportunity for us as we develop out and pivot around the MRTP states. And your initial observation is correct. Right, the MRTP states, we have eight of them and then how do we build sort of a regional market around them. In the Southwest, we're calling it. You have the Four Corners in Texas and then the Southeast, you have North Carolina to the North Florida is the number three state for cigarette consumption. So there is a natural connection there. Also, Georgia and Texas both had MRTP legislation initiated last year. So again, what's the opportunity there if that passes at some point in the near future? And then obviously, in the Midwest, you have Kentucky and Michigan, MRTP states right around Illinois. So I mean, that became a natural Midwest area, also a high propensity of adult smokers in those areas. So I hope that answers your question, Brian.

Great. Yes, no it does. Thank you so much. Thank you. If I could have just one follow-up. On the GVB side just wanted to understand kind of the -- a little bit more about the Drug Master File submission to the FDA. And as far as -- is there a timing around that and/or just maybe a little more on that process and what's involved in that process?

Yes, I can handle that, Brian. Yes, the submission we're scheduling for Q1, that does two things for us, in essence, number one, it opens up the door to supply ethical into the ethical pharmaceutical industry for clinical trials, and no one can do that at the moment with naturally derived product. So that opens up that space. And it also then establishes really the highest level of quality, obviously, the lowest level of impurities to our isolate. And that really sets the stage to keeping up with the FDA's movement on the novel food safety standards. The first thing they'll do is establish an upper threshold. Nobody knows for sure exactly what that's going to be. But I've heard numbers anywhere from 25 milligrams per day up to 100 milligrams per day, that would service the nutraceutical market. That's the first thing that they'll do in '23. Right behind that, they will establish the highest quality specifications, and they'll be looking to what's plausible in the marketplace and looking for people to work with them, which we already are to establish those quality purity guidelines and also specifically what impurities are in there and the stabilization of it. So we'll derive advantage off of that via the DMF filing at the same time. So it really helps us on pharmaceutical that simultaneously helps us on novel food, meaning food, beverage, nutraceutical products. And as I said, we've heard very strongly that the FDA has really taken the lead on a global basis to establish these specifications and more than likely, the external European markets, Asian markets, Canadian markets will look to them to establish similar guidelines and expand and reboot in essence, the CPG market. So that's the timing, and that's really the value to us right along with our mission, which is we want to have the absolute lowest cost, the absolute largest scale and continue to push the absolute highest levels of certification and certainly, pharma-grade CBD and other cannabinoids is where you need to go and the DMF is part of that process.

Great. Thank you so much.

Sure.

Our next question comes from Jim McIlree with Dawson James. Please proceed with your question.

Yes, thank you and good morning. Just wanted to follow-up on a question, Vivien was asking about the contract manufacturing revenues in Q3. Do I understand this correctly that the quarter-to-quarter change in tobacco revenues of about $1.5 million was mostly contract revenue?

Jim, it’s, yes. Yes, that's correct.

Great, thank you. And Hugh, you talked about this 15% to 20% gross margin for GVB. I just -- I also want to understand exactly what you're saying. You're saying that, that is what it would be on a normal basis without all of the new manufacturing plants that you have coming online. Is that right? And so that 15% to 20% is probably going to be seen beginning Q4. And then as these additional plants come online, we should see an increase as 2023 progresses. Is that a good way to look at it?

That's exactly right, Jim. I mean, 15%, 20% is our typical gross margin, especially just in a steady state, that percentage will start to increase over time as we layer on the fully integrated the Prineville facility. So those will be the right assumptions going forward.

Great. And then my last question is on operating expenses for the quarter. In the Q, I talked about accelerated stock comp accounting for an additional $1.9 million and then strategic consulting accounting for an additional $1.7 million. How transitory or permanent are both of those expense levels when we're looking at Q4 and 2023?

The stock compensation is -- the majority of that is one-time, due to an acceleration of payment for reorganization, if you will, and the consulting, you may not be quite at that level, but there will be some of that going forward just because of the way we're building up our IP portfolio on a go-forward basis.

So the strategic consulting is mostly on the IP side, and I assumed it was for the DLM rollout is, it's mostly IP is what you're saying?

Yes. It's mostly IP, but there is some of that consulting really to VLN, but it's definitely related to our IP development for our receptor science and plant genetics.

Got it. Got it. All right, fantastic. That’s it from me. Thanks a lot.

Thank you.

Our next question is from Alex Fuhrman with Craig-Hallum. Please proceed with your question.

Hey, thanks very much for taking my question. I'm curious, now that you've been in a couple of different states that have different tax treatments for your VLN product? Has there been a clear indication of which kind of ways of passing on that pricing have the biggest impact, whether that's just a bigger margin for the retailer or passing that savings on to the consumer. I'm curious if you've had enough experience in different jurisdictions to really have a sense of is that helping to move the needle for demand or how that's playing out?

Yes. That was good question. The retail pricing aspect of VLN was something we looked very closely at. There's no doubt that there -- especially in the pilot, we saw multiple price points. For example, when you get into Cook County in the City of Chicago, I mean, there were some stores that we had three different tax stamps on the packs. So we were able to look at and do some research on what is the proper retail pricing to at least launch VLN. And what we learned through the actual retail programming and then the research projects we did was that the consumers weren't necessarily looking for a bargain or a deal and that they were willing to play in line with, let's say, a top-tier product in Marlboro or Camel, and if we price that, that they are okay. Now all consumers love offers, right, in some kind of deals. Perfect. So we've put that into all of our programming well, certainly under the trade marketing side of our business. Using the MRTP, as you kind of referenced in Colorado, so you have the base case, which is we know the consumers if this provides a solution you're looking for are willing to pay for it, but also understanding that they want to have an offer when available. When you go into an MRTP state, it gives us the flexibility then of using, let's say, that tax savings to, again, awareness, education and trial, how do we drive awareness education and trial? And what we started in Colorado was continuing doing what we knew we needed to do in terms of pricing, in terms of promoting at the right appropriate levels, but also taking some of that money and driving awareness, education and trial. And if you…

It sure does. Yes. No that's really helpful. And then if I could just ask a second on the VLN 2.0 tobacco. It seems like you're seeing a lot of success with that crop here. Is the idea that this is going to be the bulk of the VLN cigarettes in the future are going to be using this VLN 2.0. And can you talk to us a little bit about -- is it more about improved taste and texture or better yields and lower costs. Just would love to hear more about the success you're seeing there with the second-generation product?

Sure. And I can talk to specific parts of this. In a lot of ways where we're seeing VLN 2.0 and helping is also our sustainability on the brand. Calvin Treat, who is our Chief Science Officer, has done a remarkable job along with our teams of being able to grow a more sustainable product. And as you heard in my opening comments, this is a product that has better yield, need less nutrients, is just becoming a better product, the more they started -- the more experience they have in growing it. Obviously, it will be part of the products we have. It will make it, again, more sustainable, less disease resistant. There's just a tremendous amount of science into how this will help the product. I don't know, Jim, if you have something else you want to add to that. But in general, it's just going to make it overall but more sustainable and better product.

Yes. I mean the only thing I can add to that is we're viewing this that we want to have year-round grow, both Northern Hemisphere and Southern Hemisphere, which we're doing across all these varietals where we have IP and then can blend as we desire. Again, the feedback is already very good on the product. But this gives us the latitude, both on the supply chain and on the next-generation products as well. So that's really what's the -- what the driver is.

Hey, that’s really helpful. Thank you very much.

Sure.

We've reached the end of the question-and-answer session. I'd now like to turn the call back over to James Mish for closing remarks.

Thank you, and thanks again to everyone for joining us today. All I'll say is please stay tuned shortly for our next updates as we continue to expand our VLN launch in the U.S. and move ahead on our cannabinoid opportunities utilizing the GVB platform. You'll be hearing from us very soon and I look forward to talking to you all next quarter as well. Thank you and have a great day.

This concludes today's conference and webcast. You may disconnect your lines at this time, and we thank you for your participation.