Cannara (TSX-V: LOVE / OTCQB: LOVFF) Fireside Chat with Mathieu Martin, Rivemont MicroCap Fund
Summary
Cannara Biotech (LOVE): Management pitched a profitable, cash flow positive Canadian cannabis LP with scalable assets and a disciplined Canada-first growth plan.
Quebec Cannabis: Emphasis on Quebec’s structural advantages (low electricity and labor costs, no paid marketing, limited store density) and strong brand loyalty supporting durable market share and pricing.
Canadian Cannabis: The company targets expansion from 12 to 24 rooms, aiming for ~100,000 kg/year and broader national penetration beyond Quebec where it is already #2 with ~13% share.
Cannabis Vapes: Quebec’s November vape launch (15–20% category of provincial sales) is a key catalyst, with Cannara awarded 5 of 25 SKUs, expanding shelf presence and expected revenues.
Operations & Scale: Two Quebec facilities including a world-class 600,000 sq ft hybrid greenhouse (24 rooms; 12 active) and a processing hub, enabling low-cost, consistent production.
Financial Profile: Recent run-rate net revenue of ~$27M per quarter with ~44% gross margins, 17 straight quarters of positive EBITDA, and ~$5–6M quarterly free cash flow reinvested into capacity.
Brands & Genetics: Portfolio centered on Tribal and Nugs with a rigorous in-house genetics and pheno-hunting program to drive product differentiation and customer retention.
Risk/Discipline: Capacity additions are paced with demand and inventory levels; international sales are a minor optionality, keeping execution focused on Canadian distribution.
Transcript
Well, I'm very pleased to introduce our next presentation here at the Planet Micro Cap Showcase Toronto in partnership with Micro Cap Club. Up next is a presentation, a fireside chat with Canera Biotech. Caner. Oh my gosh. Wow. I'm I wish I could do a takeover, but it's Canera. And the person who's going to be hosting this uh fireside chat will be Matthew Martin from Reevmon Micro Fund. Thank thanks Bobby. Nice try. Thanks everyone for joining. Uh I'll start by disclosing that the Reefont MicroAP fund that I manage is a shareholder of Canera. Um so Nick, you know, let's get started with the quick, you know, one minute elevator pitch on Canera Biotech. >> There's just disclosures behind me like we have to go through. So no, thank you Matt's here for hosting and thank you Planet Micro for hosting us. Uh we're Canar Biotech. We're a licensed producer uh of cannabis based out of Quebec. Um we have two locations in Quebec. A 625,000 ft indoor facility uh what we call Farnham and a 1 million ft purpose-built hybrid indoor greenhouse. I know that was long to say, but it is uh bestin-class asset. We uh we actually purchased it from the Green Organic Dutchman back in 2021. uh it was built over $250 million. Uh we're going to go a little bit more detail in that, but what makes Canara who we are is we're actually profitable. We're cash flow positive. We're free cash flow positive. Um very few licensed producers are able to achieve that. Um we're on a run rate of 50,000 kilograms per year and we can actually double our capacity organically. So we have also one of the best-in-class uh capex profile um so we can invest organically within our infrastructure our owned assets and and double our growth and double uh from where we are today and um we're a premium focused on premium but also on the value pricing side of things. So uh that allows us to achieve our scale uh our assets allows us to achieve our scale and the pricing and value proposition of products allows us to achieve demand and uh we've been operating since uh 2019 and uh like I said we're we're very few of the profitable companies in Canadian cannabis. we have the profile to continue expand expanding and become uh one of the leading Canadian cannabis companies here. >> That's great. Great overview. Uh you know I always like to start with an overview of the team. So Nick, can you tell us more about yourself and uh you know your your role with the company because you know you wear multiple hats. >> Yeah, I'm not a traditional CFO. I'm CFO by profession. I studied, you know, I did my background in CA um uh CPA, sorry. And um I was in real estate before, but I woke up and felt like a job, right? And Canadian cannabis started to legalize in 2017 and uh I was an investor myself. Um emotional investor, so that's, you know, investing 101. Don't do that. But I was emotionally invested. Um, and I tr followed a bunch of these companies and you know, I guess it was a good thing that they lost a lot of my money. Uh, and I went on a vengeance plan to um, you know, build it myself. So, I'm that's where I really found uh, for me at least where my passion and work kind of merged together. I joined the company uh, April 2019, pretty much a week after they went public and got the financial statements out, built my finance team. We were 10 people. uh built my finance team and then you can imagine an accountant going into a grow you know growing that grow that starting up and giving bean beans the seeds and the genetics and telling what the grow team should grow and what product design should do and all that stuff and it was a challenge for me to get through the barriers but I kept pushing and I knew the vision and uh now today I'm the CFO so I can cost everything I do these events PR IR uh but I'm 100 I created created every single product in the company. Uh all the branding um I'm in charge of sales. So I I get to see from A to Zed of the company. Um and that's what I think is our compet one of our competitive advantages. Uh and I I'll go into our our CEO, but for myself, being able to understand the business a to zed. Um and also from a finance side gives me that competitive advantage. Like I tell everyone, there's no why most companies failed in our industry is that there's no playbook, no amount of money. I couldn't write a $10 million check to somebody to give me the playbook of how to build a Canadian cannabis company from the scale, the operation, the grow to the actual uh products that we develop. >> And uh yeah, you I mean you you touched on the co's background as well. I think that's super interesting. So can you talk about the CEO and you know if there are any other key people that you want to highlight as well? >> Yeah, so I thank my lucky stars for finding Canara and finding a company where the CEO is the most hands-on CEO I've ever met probably in any industry, let alone the Canadian cannabis industry. So um Zohar Krivroat you know um wealthy investor businessman uh was focused on IT uh in his past life built several IT businesses sold them uh and then Canadian cannabis legalized as you know there was a huge green rush he saw that opportunity the business opportunity uh and he saw that no one was doing it in Quebec and Quebec is special because Quebec has the lowest cost of electricity and one of the lowest cost of labor in the country which so happens to be 70% of the cost of cultivating a gram of cannabis. Um so having the infrastructure in Quebec was extremely important for us. Zohor saw that saw the opportunity and founded Canara. Um bought the first Farnham facility, the 625,000T facility for $12 million from a partner Olbeck. and Nolan Beck is a key uh investor and one of our sits on our board um who started the project with us. It gave us the first $12 million to uh buy the the the Farnand facility and also uh that $250 million asset uh we bought it in 2021 for $27 million and that was a raise uh that was done by Alyc. So we have access to capital between the CEO and Alyc they own over 50% of the company and uh the because we're well connected in Montreal about seven family offices own the rest of the 30%. So there's about a 30% float, a trading float, public trading float. And um what's special about Zohar, like I was saying, is that he invested into Canadian cannabis. Like most companies, you hire at the beginning, you hired your master grower. You hired your your team to grow the cannabis, uh you know, pay the people to do the work. But unfortunately, there was there was no experience. There's no one that was able to grow at our scale, understand the plant at that time, 5 years ago. Now, it's a bit of a different story. We've learned, but 5 years ago, there was no one to do that. And Zohar saw that opportunity and and learned how to grow cannabis. And with our facility, we had 52 harvests in a year. Our our small facility, 52 harvests in a year. He outgrew any legacy grower that's been growing for the past 10 to 20 years, cuz you usually get about two to three harvests a year when you're doing it uh on the legacy side. So, uh, he went through a huge learning curve and today he is our master grower. He's the company built every SOP from the ground up. Uh, knows every single plant how it's supposed to grow. He enjoys it and we need that type of hands-on experience at the top um to be able to create a a consistent operation. Um, so I think that's our management team. We have Zohar on the ground uh running the grow the cultivation. We have myself who understands the finance. I understand um the the sales, the marketing and all that. And uh Zohar's brother is Avi Karat. He's our CTO and he's built our whole IT infrastructure. We grow automated other than harvesting the plant. There's there's manual labor tasks, but when we plant a plant for 3 to 4 months, no, there's one person that goes in the room and it's all automatically grown. We've created a proprietary IT system built around the way we grow and our facility and combined with that that's our man our executive leadership team. We have that experience at the top to excel at Canadian cannabis and that's what we're going to do. >> Awesome. Uh let's let's double click on the Valleyfield facility. You know you mentioned you started in FarnAM smaller footprint and then you got the opportunity to to acquire the the larger Valleyfield asset. Um, can you tell us more about uh, you know, how how that came about? >> Yeah, so Farn the facility right behind me, that's the initial facility, 625,000 ft². Uh, we carved out about 200,000 square ft of the facility for cannabis operation. The other 470,000 ft is leased out to long-term tenants, non-cannabis tenant. Uh, so we have a actually a public bit uh, bit mining company, Bit Farm, and a transport company. So that generates about $4 million of uh cash flow per year that we at the beginning were reinvesting and still reinvesting back in the business. Uh Farnham was the initial grow, but when we bought Valley Field, which I'll show you in the next slide, um we repurposed the amount of cultivation space that we needed at Farnham, Farnham became a hub uh for processing cannabis, packaging cannabis, and shipping out the cannabis because we had bought the Valley Field facility. Anyone that's come to see this facility knows that this is a worldass facility. There's not one facility in the world that's been built for cannabis that's been spent over $250 million in construction. We bought this when basically the facility was built and the company unfortunately didn't have enough money to plant a single plant of cannabis inside the facility. Uh so we were the lucky uh owners of it for $27 million. We bought it from [ __ ] uh the the banker that was on um that had uh security over the asset and BM [ __ ] then became our banker back in 2021. Uh Valleyfield, what's special about it? It has 600,000 square ft of greenhouse, hybrid greenhouse. Usually a greenhouse is one big open space. And when you're cultivating cannabis, we have an extremely unique agricultural plant that we're working with in tomatoes, potatoes, lettuce. You grow one genetic. You grow that for the rest of the business life and you, you know, you keep dialing and becoming more efficient and that's it. With cannabis, there's this concept of genetics and the customer actually wants genetic differentiation. So us as the grower, we have to find those genetics while cultivating. And each genetic grows different than the other. They require different light. They require different nutrients. They require different um um uh uh light and water. Uh so having a big open greenhouse where you can't control every single area of your greenhouse is detrimental to cannabis production. And that's why a lot of green houses got converted and then repurposed back to growing cucumbers and tomatoes. Valley Field is 600,000 ft. 24 rooms divided into 25,000 ft². So I have 25,000 square footers, 24 of them right next to each other. We bought it in 2022. We started with one room. Today we're at 12 rooms out of the 24. So we're exactly 50% um activated. Our target is a 100,000 kilograms per year, which is about $300 million of net revenue after I pay 30% to the government. Um, and we've we've set it. So, we've we're about on a run rate today. Uh, last year we posted or we're on a run rate because my my year end is August. We're at about 105 $110 million of net revenue and we just turned on our last rooms 11 and 12 at the end of July uh of this year. So, we're exactly right at that 50% check mark of um building out Valleyfield and we feel like we've derisked the operational aspect of it because we've proven out that we can turn on 12 rooms, we can grow quality cannabis and we can sell quality cannabis out of those 12 rooms and now over the next 3 to four years, we're going to do the same thing with the next 50%. >> Thank you. Um, I'm glad you touched on the the genetics because it's it's something that we we've spoken about with Margaret at Rubicon this morning as well. I think, you know, people tend to think cannabis is a commodity, but uh uh there are competitive advantages in this sector and I think genetics uh strong genetics program is one of them. I' I've seen that in the LPS that are winning right now in the market. Uh what else can you tell us about Canara's competitive advantages? >> Um yeah, genetics is absolutely important and a lot of companies fail to realize that. And the problem is is that genetics, you can't go out and buy genetics. You could, but they will never succeed in your facility. You actually have to test them within your facility in the way you grow. And when you make that decision, you're making a decision to forego revenue, forego profit because that pheno hunt, you're not going to be able to sell it. So you have to take commercially viable rooms and turn it into R&D and invest in the future. And a and that's a big decision to make, especially if you're trying to be profitable. Um, what else is there? So we have our our we have the management team that's, you know, knows from the top down cannabis. Uh we have state-of-the-art assets that we've acquired for 10 cents on the dollar. Um we're built in Quebec with the lowest cost of electricity and labor and um we're 600 employees strong uh today. Uh so we have a great team. Uh we have three brands. So all this revenue over hund00 million of revenue was generated over three brands that we created organically. And really it's two brands. My other brand is about 2 to 3% of our revenue right now. It's CBD brand. Um so really two brands make up most of our revenue and that's a unique feature in a comp in an licensed producer. Most LPs have many other brands. So, um I think that infrastructure of the assets, the people, uh the knowhow, the IP, all that really makes us and being in Quebec, uh and being in Quebec is really important also not only for the cost to grow, but selling being a preferred vendor to Quebec. Quebec is the only province in Canada where marketing is not allowed. We can't pay data fees to sell our product. the there's about a hundred stores. So that's about one store per 100,000 people in Quebec versus one store per 10,000 people here in Ontario. Um what makes Quebec special because of no marketing, no data fees, paying to shelf space is that the value proposition of your product, if your product actually sells or you have a really good value proposition and you sell it in Quebec, you will sell. you will make money and you'll make consistent revenue over and over again because it's hard to take market share away from a player that you can't buy shelf space. You can't market to the end consumer. And the Quebec consumer actually is a very loyal consumer once which is very different from any other cannabis consumer uh outside of Quebec. Once a can a Quebec consumer tries a product, they are more likely than other consumers to repeat purchase that product. So being in Quebec, we're uh number two right now with a 13% market share. We're uh seventh nationally. Uh so Quebec is about 50% of our revenues. The other 50% comes from uh the rest of uh the rest of Canada. We're in Ontario. We're in Alberta uh and BC. We do a little business in Saskatchewan and Manitoba, but we're really trying to do a slow and focused measured approach to our distribution growing and scaling in Quebec. Uh, one other thing that just happened is Quebec is launching vapes uh, in November. Vapes usually represents 15 to 20% of a province revenue. Vapes was illegal till November in Quebec. Uh, so there's there's an ability to add 15 to 20% additional revenue in that market where we hold 13%. And uh, we got accepted five of the 25 SKs that are going to be available for vapes. So we have a huge uh, shelf space uh, of vapes. Uh so that's going to be a really uh interesting catalyst for us going into uh November. And uh I think uh that's that's that's what makes Canara, you know, that's that's all our competitive advantages and what makes Canary successful. >> That's a pretty long list of competitive advantages. I I like that. Um I'd like to talk a little bit more about brand loyalty. I mean I I'm curious like is there something special about the Quebec cons customer that you know why are they more loyal to brands and are you seeing brand loyalty emerging also in the other provinces? >> So it's interesting I I don't know I don't know exactly there's no study to say why the consumers like that. It's it's very from from what I've seen uh in the market. I think uh because of the restrictions in marketing in Quebec uh and prior to when when when it wasn't legalized, Quebec was always the last one to get the different genetics and like the supply wasn't huge in Quebec. Um once we legalize and the marketing, I think the lack of marketing and the lack of consultation from the buntender, when you go into a store, a retail store in in Quebec and SQDC and you say, "Can you recommend me a product? What do you need? I I want to feel like this. the uh representative cannot recommend a product. They can show you a list of products and then you would have to make that decision. So if you don't have that information, you're probably more like more opt to go with what you're used to, right? So I think that's probably the major reason. Um which is amazing for for a company like us uh where we're established in Quebec and we're building that brand loyalty and I think brand loyalty exists. It's hard to build, but if you're have a great product, consistent product, and you're at the forefront of innovation from genetics to product development, consumers will want your brand. Um, we have a uh an online shop where we sell our clothing, branded clothing, and branded accessories, and we're probably the only LP that actually sells this product, right? Uh we sell anywhere between $30 to $50,000 a month of this type of product. Uh so this just continues to build that brand uh presence. Um and then we just got to continue executing. What's most important is being the forefront leader in innovation, genetics and product development. Can >> can you give people a bit of a snapshot on you know financial performance? what's what's the track record because I think you have a very strong financial profile and also maybe touch on the growth runway going forward like where do you see growth opportunities for Canara? >> Yeah, so our latest quarter is Q3 that was May of 2025. We just completed our August of 2025 which is our year end. Uh that's only going to be disclosed in November of 2025. So I can show you um Q3 and the previous but Q3 we were on a run rate of $27 million of net revenue. That's after paying 32% to the to the government. So gross revenue is about 20 uh 38 million 39 million. Um we have probably over the past two three quarters generated over 40%. We're at a 44% gross margin this quarter. Um, and if you look at the just my performance since the inception, um, and you can really see through my gross margin, the economies of scale as we turned on more rooms, as we grew our operation, you can see my gross margin getting better and better and better. There was a period in time, I think it was last year, cuz we're doing everything ourselves. Every little dial that we're we're changing in the grow. Um, we can improve my gross margin, right? Um, currently my plants on average yield about 80 grams per plant. As we improve our garden, improve the yield, we can get 95 grams per plant, 100, 120 grams per plant. That has a significant impact on my cost of goods sold. Back when we're learning, sometimes we're doing a dial where the R&D says, "Yeah, it's going to increase our yield." And then we go commercial or we try commercially and we actually get a decrease in yield. That happened last year, but we learned from it. We quickly, you could see a little margin dip. We quickly uh fixed the garden, reversed it, improved it, and now we're back uh on track. So, um financially, you can see we have a really great profile. We've been uh EBIT positive uh for 17 quarters, cash flow positive since 2022, net income positive since 2021. Um we're free cash flow, generating significant free cash flow on average is about5 to $6 million a quarter. And we're just reinvesting that into the business. We're reinvesting that into the business, continuing. We have another 50% to go. So, it's a very simple story. We're focused on Canada. We're not looking international. We're we're taking we're retaking all the cash flows that we've been generating right now, reinvesting to turn on more grow space and more distribution. Okay, let's uh open it up to any questions. >> As you go from the 12 to the 24 rooms, are you going to look internationally or do you think that you can do that much volume in Canada? >> So, the go the goal will be always to focus on Canada. international will be if I if I can't get to the 100,000 kilos um you know we might look at an international opportunity to help you know maybe 5% 10% of the business um but it's not going to be more than that we're we we we're a 13% market share in Quebec with vapes just coming and that's just going to scale and every time uh they have product calls we launch new products and we just see our products take like keep layering on to our revenue it's not like we're losing products for new products so Quebec is a a very good market for us that we just see continued growth. And then if I look at outside of Quebec, I'm only a two uh 2.9% market share when I'm seventh largest player, right? So I still have a lot of players above me um that I feel we make we have a better value proposition. It's just navigating, you know, the distribution channels and and getting our product onto the shelf. And we're going to do it in a slow and steady approach um to gain that shelf space. So, uh, talking to people at the weed store, um, it sounds like, at least in Ontario, tribal's been around for a while, whereas nugs is a relatively new product and Oh, no. No. >> It's just that we we we invested in tribal and we came with genetics and put the innovation and then and then I started putting innovation into nugs. So now nuts is starting to but nudge wants to launch the same product. >> Okay. So my my question was when I talked to people at the weed store, they were saying that like for the most part people are aware that it's the same parent company. Are you seeing like obviously the goal would be to grow your market share overall? Are you seeing people just move between products or are you like between your own products or are you actually growing market share by having those two different brands? >> Yeah, we we definitely grow market share. Um it's it's all about formats, right? So um in tribal we have a very specific formatting policy. We find genetics um their unique genetics to tribal and we put them under three and a half three- roll vapes infused pre-roll and concentrate. No other format that goes into there. Under nugs we we're a bit more playful. Um we have genetics that are specific to nugs and then on rotational basis we do large packs 14 28 gram packs on a rotational basis that rotates through all the different genetics that we have. So consumer usually they don't they they use the rotational to find the product. They save the the the money on finding the rotational product and then once they find the genetic that they like or they add to their roster then they go into tribal and start buying the three and a half, start buying the pre-rolls, uh the vapes and whatnot. Um yeah, I noticed your uh inventory uh increase uh uh to 44 uh million from a year ago about 33 billion. So I want to know how you sell your product through your own store or independent store. And then if you increase your uh farming uh unit from 12 to 24, how are you going to sell them? >> Yeah, great question. Um so we are uh we actually sell to the government. So we don't own any stores. uh the government, SQDC, Quebec government's the client, Ontario's the client, BC, Saskatchewan, it works like that. Um we're the growers, so we own we're not just a a a branded LP where we buy the cannabis and sit on it just to sell it. We actually grow the cannabis. Um and we always have to there's a cycle to grow. It's not like you can grow it in a month. It takes a 4 month process to grow the cannabis. And then once you harvest the cannabis, you have about six six months to eight months to sell. Um this quarter and going into Q3, like we're always expecting to grow. We need a healthy balance. Um on our if you look at our cost of goods sold, we're about 16 million, 15.5, $16 million of um cannabis sales. Uh in that $44 million, I have about uh probably $5 million of raw material and accessories. So when you backtrack that out, I have about 6 months of inventory on a run rate. That's the high end I want to be on. So why we're not we're we control the whole vertical, right? So we're going to be able to turn on rooms. We're watching our inventory number. We're the vape the vape is a huge project and it requires a lot of cannabis. So we're building our inventory for that. That's going to start depleting. We're going to increase our distribution and then once we see that inventory number go back to where we want like between the the sweet spot that we want to see it, we're going to open another room and another room and another room. So, we're able to control the growth. We're not going to open a room if we can't sell it. Worst case, we're going to sell be at $6 million free cash flow, but I'm confident with the product and everything that we're doing that we're going to be able to grow in lock step with demand. And that's important for us. We're not going to grow if we don't have the demand. and we're going to be able to create the demand. >> I'm sorry that's all the time we have, but uh please come see Nick after if you have more questions. Thank you very much.
Cannara (TSX-V: LOVE / OTCQB: LOVFF) Fireside Chat with Mathieu Martin, Rivemont MicroCap Fund
Summary
Transcript
Well, I'm very pleased to introduce our next presentation here at the Planet Micro Cap Showcase Toronto in partnership with Micro Cap Club. Up next is a presentation, a fireside chat with Canera Biotech. Caner. Oh my gosh. Wow. I'm I wish I could do a takeover, but it's Canera. And the person who's going to be hosting this uh fireside chat will be Matthew Martin from Reevmon Micro Fund. Thank thanks Bobby. Nice try. Thanks everyone for joining. Uh I'll start by disclosing that the Reefont MicroAP fund that I manage is a shareholder of Canera. Um so Nick, you know, let's get started with the quick, you know, one minute elevator pitch on Canera Biotech. >> There's just disclosures behind me like we have to go through. So no, thank you Matt's here for hosting and thank you Planet Micro for hosting us. Uh we're Canar Biotech. We're a licensed producer uh of cannabis based out of Quebec. Um we have two locations in Quebec. A 625,000 ft indoor facility uh what we call Farnham and a 1 million ft purpose-built hybrid indoor greenhouse. I know that was long to say, but it is uh bestin-class asset. We uh we actually purchased it from the Green Organic Dutchman back in 2021. uh it was built over $250 million. Uh we're going to go a little bit more detail in that, but what makes Canara who we are is we're actually profitable. We're cash flow positive. We're free cash flow positive. Um very few licensed producers are able to achieve that. Um we're on a run rate of 50,000 kilograms per year and we can actually double our capacity organically. So we have also one of the best-in-class uh capex profile um so we can invest organically within our infrastructure our owned assets and and double our growth and double uh from where we are today and um we're a premium focused on premium but also on the value pricing side of things. So uh that allows us to achieve our scale uh our assets allows us to achieve our scale and the pricing and value proposition of products allows us to achieve demand and uh we've been operating since uh 2019 and uh like I said we're we're very few of the profitable companies in Canadian cannabis. we have the profile to continue expand expanding and become uh one of the leading Canadian cannabis companies here. >> That's great. Great overview. Uh you know I always like to start with an overview of the team. So Nick, can you tell us more about yourself and uh you know your your role with the company because you know you wear multiple hats. >> Yeah, I'm not a traditional CFO. I'm CFO by profession. I studied, you know, I did my background in CA um uh CPA, sorry. And um I was in real estate before, but I woke up and felt like a job, right? And Canadian cannabis started to legalize in 2017 and uh I was an investor myself. Um emotional investor, so that's, you know, investing 101. Don't do that. But I was emotionally invested. Um, and I tr followed a bunch of these companies and you know, I guess it was a good thing that they lost a lot of my money. Uh, and I went on a vengeance plan to um, you know, build it myself. So, I'm that's where I really found uh, for me at least where my passion and work kind of merged together. I joined the company uh, April 2019, pretty much a week after they went public and got the financial statements out, built my finance team. We were 10 people. uh built my finance team and then you can imagine an accountant going into a grow you know growing that grow that starting up and giving bean beans the seeds and the genetics and telling what the grow team should grow and what product design should do and all that stuff and it was a challenge for me to get through the barriers but I kept pushing and I knew the vision and uh now today I'm the CFO so I can cost everything I do these events PR IR uh but I'm 100 I created created every single product in the company. Uh all the branding um I'm in charge of sales. So I I get to see from A to Zed of the company. Um and that's what I think is our compet one of our competitive advantages. Uh and I I'll go into our our CEO, but for myself, being able to understand the business a to zed. Um and also from a finance side gives me that competitive advantage. Like I tell everyone, there's no why most companies failed in our industry is that there's no playbook, no amount of money. I couldn't write a $10 million check to somebody to give me the playbook of how to build a Canadian cannabis company from the scale, the operation, the grow to the actual uh products that we develop. >> And uh yeah, you I mean you you touched on the co's background as well. I think that's super interesting. So can you talk about the CEO and you know if there are any other key people that you want to highlight as well? >> Yeah, so I thank my lucky stars for finding Canara and finding a company where the CEO is the most hands-on CEO I've ever met probably in any industry, let alone the Canadian cannabis industry. So um Zohar Krivroat you know um wealthy investor businessman uh was focused on IT uh in his past life built several IT businesses sold them uh and then Canadian cannabis legalized as you know there was a huge green rush he saw that opportunity the business opportunity uh and he saw that no one was doing it in Quebec and Quebec is special because Quebec has the lowest cost of electricity and one of the lowest cost of labor in the country which so happens to be 70% of the cost of cultivating a gram of cannabis. Um so having the infrastructure in Quebec was extremely important for us. Zohor saw that saw the opportunity and founded Canara. Um bought the first Farnham facility, the 625,000T facility for $12 million from a partner Olbeck. and Nolan Beck is a key uh investor and one of our sits on our board um who started the project with us. It gave us the first $12 million to uh buy the the the Farnand facility and also uh that $250 million asset uh we bought it in 2021 for $27 million and that was a raise uh that was done by Alyc. So we have access to capital between the CEO and Alyc they own over 50% of the company and uh the because we're well connected in Montreal about seven family offices own the rest of the 30%. So there's about a 30% float, a trading float, public trading float. And um what's special about Zohar, like I was saying, is that he invested into Canadian cannabis. Like most companies, you hire at the beginning, you hired your master grower. You hired your your team to grow the cannabis, uh you know, pay the people to do the work. But unfortunately, there was there was no experience. There's no one that was able to grow at our scale, understand the plant at that time, 5 years ago. Now, it's a bit of a different story. We've learned, but 5 years ago, there was no one to do that. And Zohar saw that opportunity and and learned how to grow cannabis. And with our facility, we had 52 harvests in a year. Our our small facility, 52 harvests in a year. He outgrew any legacy grower that's been growing for the past 10 to 20 years, cuz you usually get about two to three harvests a year when you're doing it uh on the legacy side. So, uh, he went through a huge learning curve and today he is our master grower. He's the company built every SOP from the ground up. Uh, knows every single plant how it's supposed to grow. He enjoys it and we need that type of hands-on experience at the top um to be able to create a a consistent operation. Um, so I think that's our management team. We have Zohar on the ground uh running the grow the cultivation. We have myself who understands the finance. I understand um the the sales, the marketing and all that. And uh Zohar's brother is Avi Karat. He's our CTO and he's built our whole IT infrastructure. We grow automated other than harvesting the plant. There's there's manual labor tasks, but when we plant a plant for 3 to 4 months, no, there's one person that goes in the room and it's all automatically grown. We've created a proprietary IT system built around the way we grow and our facility and combined with that that's our man our executive leadership team. We have that experience at the top to excel at Canadian cannabis and that's what we're going to do. >> Awesome. Uh let's let's double click on the Valleyfield facility. You know you mentioned you started in FarnAM smaller footprint and then you got the opportunity to to acquire the the larger Valleyfield asset. Um, can you tell us more about uh, you know, how how that came about? >> Yeah, so Farn the facility right behind me, that's the initial facility, 625,000 ft². Uh, we carved out about 200,000 square ft of the facility for cannabis operation. The other 470,000 ft is leased out to long-term tenants, non-cannabis tenant. Uh, so we have a actually a public bit uh, bit mining company, Bit Farm, and a transport company. So that generates about $4 million of uh cash flow per year that we at the beginning were reinvesting and still reinvesting back in the business. Uh Farnham was the initial grow, but when we bought Valley Field, which I'll show you in the next slide, um we repurposed the amount of cultivation space that we needed at Farnham, Farnham became a hub uh for processing cannabis, packaging cannabis, and shipping out the cannabis because we had bought the Valley Field facility. Anyone that's come to see this facility knows that this is a worldass facility. There's not one facility in the world that's been built for cannabis that's been spent over $250 million in construction. We bought this when basically the facility was built and the company unfortunately didn't have enough money to plant a single plant of cannabis inside the facility. Uh so we were the lucky uh owners of it for $27 million. We bought it from [ __ ] uh the the banker that was on um that had uh security over the asset and BM [ __ ] then became our banker back in 2021. Uh Valleyfield, what's special about it? It has 600,000 square ft of greenhouse, hybrid greenhouse. Usually a greenhouse is one big open space. And when you're cultivating cannabis, we have an extremely unique agricultural plant that we're working with in tomatoes, potatoes, lettuce. You grow one genetic. You grow that for the rest of the business life and you, you know, you keep dialing and becoming more efficient and that's it. With cannabis, there's this concept of genetics and the customer actually wants genetic differentiation. So us as the grower, we have to find those genetics while cultivating. And each genetic grows different than the other. They require different light. They require different nutrients. They require different um um uh uh light and water. Uh so having a big open greenhouse where you can't control every single area of your greenhouse is detrimental to cannabis production. And that's why a lot of green houses got converted and then repurposed back to growing cucumbers and tomatoes. Valley Field is 600,000 ft. 24 rooms divided into 25,000 ft². So I have 25,000 square footers, 24 of them right next to each other. We bought it in 2022. We started with one room. Today we're at 12 rooms out of the 24. So we're exactly 50% um activated. Our target is a 100,000 kilograms per year, which is about $300 million of net revenue after I pay 30% to the government. Um, and we've we've set it. So, we've we're about on a run rate today. Uh, last year we posted or we're on a run rate because my my year end is August. We're at about 105 $110 million of net revenue and we just turned on our last rooms 11 and 12 at the end of July uh of this year. So, we're exactly right at that 50% check mark of um building out Valleyfield and we feel like we've derisked the operational aspect of it because we've proven out that we can turn on 12 rooms, we can grow quality cannabis and we can sell quality cannabis out of those 12 rooms and now over the next 3 to four years, we're going to do the same thing with the next 50%. >> Thank you. Um, I'm glad you touched on the the genetics because it's it's something that we we've spoken about with Margaret at Rubicon this morning as well. I think, you know, people tend to think cannabis is a commodity, but uh uh there are competitive advantages in this sector and I think genetics uh strong genetics program is one of them. I' I've seen that in the LPS that are winning right now in the market. Uh what else can you tell us about Canara's competitive advantages? >> Um yeah, genetics is absolutely important and a lot of companies fail to realize that. And the problem is is that genetics, you can't go out and buy genetics. You could, but they will never succeed in your facility. You actually have to test them within your facility in the way you grow. And when you make that decision, you're making a decision to forego revenue, forego profit because that pheno hunt, you're not going to be able to sell it. So you have to take commercially viable rooms and turn it into R&D and invest in the future. And a and that's a big decision to make, especially if you're trying to be profitable. Um, what else is there? So we have our our we have the management team that's, you know, knows from the top down cannabis. Uh we have state-of-the-art assets that we've acquired for 10 cents on the dollar. Um we're built in Quebec with the lowest cost of electricity and labor and um we're 600 employees strong uh today. Uh so we have a great team. Uh we have three brands. So all this revenue over hund00 million of revenue was generated over three brands that we created organically. And really it's two brands. My other brand is about 2 to 3% of our revenue right now. It's CBD brand. Um so really two brands make up most of our revenue and that's a unique feature in a comp in an licensed producer. Most LPs have many other brands. So, um I think that infrastructure of the assets, the people, uh the knowhow, the IP, all that really makes us and being in Quebec, uh and being in Quebec is really important also not only for the cost to grow, but selling being a preferred vendor to Quebec. Quebec is the only province in Canada where marketing is not allowed. We can't pay data fees to sell our product. the there's about a hundred stores. So that's about one store per 100,000 people in Quebec versus one store per 10,000 people here in Ontario. Um what makes Quebec special because of no marketing, no data fees, paying to shelf space is that the value proposition of your product, if your product actually sells or you have a really good value proposition and you sell it in Quebec, you will sell. you will make money and you'll make consistent revenue over and over again because it's hard to take market share away from a player that you can't buy shelf space. You can't market to the end consumer. And the Quebec consumer actually is a very loyal consumer once which is very different from any other cannabis consumer uh outside of Quebec. Once a can a Quebec consumer tries a product, they are more likely than other consumers to repeat purchase that product. So being in Quebec, we're uh number two right now with a 13% market share. We're uh seventh nationally. Uh so Quebec is about 50% of our revenues. The other 50% comes from uh the rest of uh the rest of Canada. We're in Ontario. We're in Alberta uh and BC. We do a little business in Saskatchewan and Manitoba, but we're really trying to do a slow and focused measured approach to our distribution growing and scaling in Quebec. Uh, one other thing that just happened is Quebec is launching vapes uh, in November. Vapes usually represents 15 to 20% of a province revenue. Vapes was illegal till November in Quebec. Uh, so there's there's an ability to add 15 to 20% additional revenue in that market where we hold 13%. And uh, we got accepted five of the 25 SKs that are going to be available for vapes. So we have a huge uh, shelf space uh, of vapes. Uh so that's going to be a really uh interesting catalyst for us going into uh November. And uh I think uh that's that's that's what makes Canara, you know, that's that's all our competitive advantages and what makes Canary successful. >> That's a pretty long list of competitive advantages. I I like that. Um I'd like to talk a little bit more about brand loyalty. I mean I I'm curious like is there something special about the Quebec cons customer that you know why are they more loyal to brands and are you seeing brand loyalty emerging also in the other provinces? >> So it's interesting I I don't know I don't know exactly there's no study to say why the consumers like that. It's it's very from from what I've seen uh in the market. I think uh because of the restrictions in marketing in Quebec uh and prior to when when when it wasn't legalized, Quebec was always the last one to get the different genetics and like the supply wasn't huge in Quebec. Um once we legalize and the marketing, I think the lack of marketing and the lack of consultation from the buntender, when you go into a store, a retail store in in Quebec and SQDC and you say, "Can you recommend me a product? What do you need? I I want to feel like this. the uh representative cannot recommend a product. They can show you a list of products and then you would have to make that decision. So if you don't have that information, you're probably more like more opt to go with what you're used to, right? So I think that's probably the major reason. Um which is amazing for for a company like us uh where we're established in Quebec and we're building that brand loyalty and I think brand loyalty exists. It's hard to build, but if you're have a great product, consistent product, and you're at the forefront of innovation from genetics to product development, consumers will want your brand. Um, we have a uh an online shop where we sell our clothing, branded clothing, and branded accessories, and we're probably the only LP that actually sells this product, right? Uh we sell anywhere between $30 to $50,000 a month of this type of product. Uh so this just continues to build that brand uh presence. Um and then we just got to continue executing. What's most important is being the forefront leader in innovation, genetics and product development. Can >> can you give people a bit of a snapshot on you know financial performance? what's what's the track record because I think you have a very strong financial profile and also maybe touch on the growth runway going forward like where do you see growth opportunities for Canara? >> Yeah, so our latest quarter is Q3 that was May of 2025. We just completed our August of 2025 which is our year end. Uh that's only going to be disclosed in November of 2025. So I can show you um Q3 and the previous but Q3 we were on a run rate of $27 million of net revenue. That's after paying 32% to the to the government. So gross revenue is about 20 uh 38 million 39 million. Um we have probably over the past two three quarters generated over 40%. We're at a 44% gross margin this quarter. Um, and if you look at the just my performance since the inception, um, and you can really see through my gross margin, the economies of scale as we turned on more rooms, as we grew our operation, you can see my gross margin getting better and better and better. There was a period in time, I think it was last year, cuz we're doing everything ourselves. Every little dial that we're we're changing in the grow. Um, we can improve my gross margin, right? Um, currently my plants on average yield about 80 grams per plant. As we improve our garden, improve the yield, we can get 95 grams per plant, 100, 120 grams per plant. That has a significant impact on my cost of goods sold. Back when we're learning, sometimes we're doing a dial where the R&D says, "Yeah, it's going to increase our yield." And then we go commercial or we try commercially and we actually get a decrease in yield. That happened last year, but we learned from it. We quickly, you could see a little margin dip. We quickly uh fixed the garden, reversed it, improved it, and now we're back uh on track. So, um financially, you can see we have a really great profile. We've been uh EBIT positive uh for 17 quarters, cash flow positive since 2022, net income positive since 2021. Um we're free cash flow, generating significant free cash flow on average is about5 to $6 million a quarter. And we're just reinvesting that into the business. We're reinvesting that into the business, continuing. We have another 50% to go. So, it's a very simple story. We're focused on Canada. We're not looking international. We're we're taking we're retaking all the cash flows that we've been generating right now, reinvesting to turn on more grow space and more distribution. Okay, let's uh open it up to any questions. >> As you go from the 12 to the 24 rooms, are you going to look internationally or do you think that you can do that much volume in Canada? >> So, the go the goal will be always to focus on Canada. international will be if I if I can't get to the 100,000 kilos um you know we might look at an international opportunity to help you know maybe 5% 10% of the business um but it's not going to be more than that we're we we we're a 13% market share in Quebec with vapes just coming and that's just going to scale and every time uh they have product calls we launch new products and we just see our products take like keep layering on to our revenue it's not like we're losing products for new products so Quebec is a a very good market for us that we just see continued growth. And then if I look at outside of Quebec, I'm only a two uh 2.9% market share when I'm seventh largest player, right? So I still have a lot of players above me um that I feel we make we have a better value proposition. It's just navigating, you know, the distribution channels and and getting our product onto the shelf. And we're going to do it in a slow and steady approach um to gain that shelf space. So, uh, talking to people at the weed store, um, it sounds like, at least in Ontario, tribal's been around for a while, whereas nugs is a relatively new product and Oh, no. No. >> It's just that we we we invested in tribal and we came with genetics and put the innovation and then and then I started putting innovation into nugs. So now nuts is starting to but nudge wants to launch the same product. >> Okay. So my my question was when I talked to people at the weed store, they were saying that like for the most part people are aware that it's the same parent company. Are you seeing like obviously the goal would be to grow your market share overall? Are you seeing people just move between products or are you like between your own products or are you actually growing market share by having those two different brands? >> Yeah, we we definitely grow market share. Um it's it's all about formats, right? So um in tribal we have a very specific formatting policy. We find genetics um their unique genetics to tribal and we put them under three and a half three- roll vapes infused pre-roll and concentrate. No other format that goes into there. Under nugs we we're a bit more playful. Um we have genetics that are specific to nugs and then on rotational basis we do large packs 14 28 gram packs on a rotational basis that rotates through all the different genetics that we have. So consumer usually they don't they they use the rotational to find the product. They save the the the money on finding the rotational product and then once they find the genetic that they like or they add to their roster then they go into tribal and start buying the three and a half, start buying the pre-rolls, uh the vapes and whatnot. Um yeah, I noticed your uh inventory uh increase uh uh to 44 uh million from a year ago about 33 billion. So I want to know how you sell your product through your own store or independent store. And then if you increase your uh farming uh unit from 12 to 24, how are you going to sell them? >> Yeah, great question. Um so we are uh we actually sell to the government. So we don't own any stores. uh the government, SQDC, Quebec government's the client, Ontario's the client, BC, Saskatchewan, it works like that. Um we're the growers, so we own we're not just a a a branded LP where we buy the cannabis and sit on it just to sell it. We actually grow the cannabis. Um and we always have to there's a cycle to grow. It's not like you can grow it in a month. It takes a 4 month process to grow the cannabis. And then once you harvest the cannabis, you have about six six months to eight months to sell. Um this quarter and going into Q3, like we're always expecting to grow. We need a healthy balance. Um on our if you look at our cost of goods sold, we're about 16 million, 15.5, $16 million of um cannabis sales. Uh in that $44 million, I have about uh probably $5 million of raw material and accessories. So when you backtrack that out, I have about 6 months of inventory on a run rate. That's the high end I want to be on. So why we're not we're we control the whole vertical, right? So we're going to be able to turn on rooms. We're watching our inventory number. We're the vape the vape is a huge project and it requires a lot of cannabis. So we're building our inventory for that. That's going to start depleting. We're going to increase our distribution and then once we see that inventory number go back to where we want like between the the sweet spot that we want to see it, we're going to open another room and another room and another room. So, we're able to control the growth. We're not going to open a room if we can't sell it. Worst case, we're going to sell be at $6 million free cash flow, but I'm confident with the product and everything that we're doing that we're going to be able to grow in lock step with demand. And that's important for us. We're not going to grow if we don't have the demand. and we're going to be able to create the demand. >> I'm sorry that's all the time we have, but uh please come see Nick after if you have more questions. Thank you very much.