Aurora Cannabis (ACB) Q3 2026 Earnings Transcript

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Date

Wednesday, Feb. 4, 2026 at 8 a.m. ET

Call participants

• Chief Executive Officer — Miguel Martin
• Chief Financial Officer — Simona King

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Takeaways

• Net revenue -- $94.2 million, up 7%, with global medical cannabis contributing a record $76.2 million and representing 81% of total net revenue.
• International medical revenue -- Increased 17%, driven by growth in Germany and new product launches in Poland.
• Adjusted gross margin -- Rose 100 basis points to 62% overall; medical cannabis segment margin remained high at 69%.
• Adjusted EBITDA -- $18.5 million, reflecting continued profitability focus.
• Adjusted net income -- $7.2 million, holding steady against the prior-year quarter's $7.4 million.
• Free cash flow -- $15.5 million, albeit down from $27.4 million last year due to a lower working capital recovery.
• Cash position -- $154 million in cash, cash equivalents, and short-term investments, with zero cannabis business-related debt reported.
• Consumer cannabis segment -- Net revenue declined 48% to $5.2 million, a result explicitly tied to strategic market exits and prioritization of medical channels.
• Plant propagation segment -- Revenue rose 27% to $11.3 million, but adjusted gross margin declined to 16% from 40% due to higher contract labor, utilities, and a $1.1 million inventory write-off.
• Adjusted SG&A -- Increased 14.5% to $35.8 million, reflecting higher professional fees and expanding headcount in Europe and Australia.
• Strategic actions -- Company will exit select lower-margin Canadian consumer cannabis markets and divest its controlling stake in the Bevo plant propagation business.
• At-the-market (ATM) equity program -- Established with flexibility to issue and sell up to $100 million in common shares for "strategic and accretive purposes," including cultivation expansion and potential M&A.
• Geographic revenue mix -- More than half of total net revenue generated outside Canada, showing growing international scale.
• Production profile -- Approximately 90% of annual manufacturing capacity from European and TGA GMP-certified facilities, a competitive barrier for most peers.
• Full-year guidance -- Global medical cannabis net revenue expected between $269 million and $281 million; consolidated adjusted EBITDA guided to $52 million to $57 million, a 5%-10% annual increase.

Summary

Aurora Cannabis (NASDAQ:ACB) prioritized higher-margin international medical cannabis markets with record segment revenue and a majority of net revenue now outside Canada, confirming ongoing strategic realignment. The company will further streamline operations by exiting select Canadian consumer markets and divesting its controlling interest in the lower-margin plant propagation business, reallocating resources for global medical cannabis growth and operational efficiency. Management established a $100 million at-the-market equity program, emphasizing a commitment to accretive use of capital and selective M&A pursuits.

• Management confirmed, "we generated positive free cash flow of $15.5 million and maintained our strong balance sheet with over $150 million in cash and the absence of cannabis business-related debt."
• Strategic guidance anticipates global medical cannabis net revenue of $269 million to $281 million and consolidated adjusted EBITDA growth of 5%-10%, positioning for further profitability improvement.
• Plant propagation operations will be deconsolidated in Q4, with future financial focus shifting away from discontinued lower-margin business lines.
• Company highlighted its certification in three major GMP facilities, a stringent regulatory advantage aimed at supporting growth throughout Europe, Australia, and new markets with established science-based frameworks.
• Australian and Polish business segments are undergoing product mix upgrades, which may temporarily pressure margins but are intended to accelerate premium-category growth and market share.

Industry glossary

• GMP (Good Manufacturing Practice): International quality-control certification required for pharmaceutical and regulated cannabis production, critical for market access in Europe and Australia.
• TGA (Therapeutic Goods Administration): The regulatory authority in Australia responsible for certifying medical cannabis manufacturing and products.
• ATM (At-the-market) equity program: A flexible financing structure allowing a company to sell shares directly into the market over time, rather than in a single offering, optimizing timing and pricing.

Full Conference Call Transcript

Miguel Martin: Thanks, Kevin. Our quarterly performance reflects our strong competitive position in the rapidly expanding global medical cannabis market and continued commitment to profitable and sustainable growth. This success is supported by proven commercial execution and purposeful investments in science, technology, and talent. Additionally, our dedicated focus on improving patient and strengthening physician engagement has contributed significantly to these results. Let's begin with a brief review of the quarter. In fiscal Q3, first, net revenue increased 7%, driven by a record 12% growth in global medical cannabis revenue, including a 17% increase internationally. Notably, more than half of our total net revenue was generated outside of Canada.

Second, adjusted gross margin rose 100 basis points to 62%, where we benefited from strong medical cannabis margins of 69%, which was the result of sustained growth in our higher-margin international markets. Third, profitability held strong, with adjusted EBITDA of $18.5 million and adjusted net income of $7.2 million. And finally, we generated positive free cash flow of $15.5 million and maintained our strong balance sheet with over $150 million in cash and the absence of cannabis business-related debt. Unlike most peers, we have focused on medical cannabis as the most promising industry segment for nearly a decade. We have therefore deployed considerable resources and investments, providing us with the following competitive advantages.

We are one of Canada's largest global medical cannabis companies. We are Canada's leading exporter of medical cannabis. And finally, we are a market leader in the three biggest nationally legal medical cannabis markets outside of Canada. Notably, about 90% of our annual manufacturing capacity is produced within Aurora's European and TGA GMP-certified facilities and is subject to very stringent international standards. These standards are only increasing, significantly limiting the number of market participants. There is a limited number of cannabis companies like Aurora that have regulatory certifications for their manufacturing facilities that permit shipments directly to European and Australian markets. Aurora manufactures most of its own products and distributes them compliantly and profitably.

This advantage helps to ensure consistency of supply around the world, critical to both prescribers and patients, and achieves lower manufacturing costs through higher yields, potency improvements, and other operational efficiencies. As this industry evolves, maintaining our momentum in global medical cannabis requires an even greater commitment. This entails dedicating our full attention to solidifying and growing our leadership position. Following a strategic review, we have identified the following actions. First, we will begin exiting select markets within the lower Canadian consumer cannabis segment, enabling us to further prioritize allocating products and resources to our higher-margin global medical cannabis business.

Since consumer cannabis carries higher sales and marketing expenses than medical, this will benefit adjusted SG&A and consolidated adjusted gross margins in the coming quarters. While we expect some one-time costs that will impact cash flow in fiscal Q4, once the initiative is complete, we anticipate higher adjusted EBITDA contributions thereafter. Second, in relation to our plant propagation business, we are divesting our lower-margin plant propagation operations by selling our controlling stake in Bevo to its other principal shareholders. Combined, these actions will allow us to allocate capital more effectively, deliver enhanced profitability, streamline our operations, and improve execution quality. On a related note, today, we filed a prospectus supplement establishing a new at-the-market equity program.

The ATM provides us the flexibility to issue and sell up to $100 million of common shares from time to time at our discretion. The company intends to use proceeds raised under the ATM program, if any, for strategic and accretive purposes only, including for increased cultivation capacity and potential M&A. With that, let's now dive into our individual medical cannabis markets. Germany is the largest individual medical cannabis market in Europe and remains closely watched across the region due to its outsized influence on neighboring countries. More than half of EU member countries have already integrated medical cannabis into healthcare, including reimbursement, which leads towards greater international alignment on regulatory approaches.

This provides an obvious advantage for compliant EU GMP-certified companies like Aurora. The German market is still growing and was the primary driver of our double-digit growth in international revenue. According to German regulatory data, imports reached 72 metric tons in 2024 and are estimated to have more than doubled in 2025. Our successful commercial execution and strong reputation among wholesalers, distributors, and pharmacists have enabled us to continue to gain share in this rapidly growing market. We have consistently maintained a broad selection of core and premium products for the German market. However, more recently, we enhanced our offerings by introducing a new medical cannabis brand that prioritizes affordability and expands patient options without compromising quality standards.

While increased competition in Germany has led to some price pressure, mainly affecting the value segment as new players enter and grow, our core and premium products, which represent most of our sales volume, have remained largely unaffected in terms of baseline pricing. The German government is considering modifications to the current telehealth framework related to cannabis descheduling, but it is still unclear how developments will unfold. We want to ensure that reasonable access to high-quality medical cannabis for the general public is maintained. But should changes be implemented within telehealth, we will adapt just as we did in Poland. We are currently doubling production at our manufacturing site in Germany.

Increasing scale will facilitate yield improvements and operational efficiencies, allowing this facility to mirror the performance of our Canadian sites based upon the same industry-leading genetics and product consistency. In addition to the planned operational improvements, our German site joins our Canadian facilities that were recently GMP certified for another three years. This consistent supply of GMP-manufactured product is vital as we prepare for further growth in Germany and adjacent regulated markets. Australia remains our largest international medical cannabis market, where we currently hold the number two share in what could become a $1 billion opportunity, according to the Pennington Institute.

Notably, most sales in Australia, both for MedRelief Australia, which we fully acquired two years ago, and for the market overall, are concentrated in value-priced products. This differs significantly from our other national medical cannabis markets, where our portfolio is anchored in core and premium offerings with stronger margins. We are actively working to shift our Australian sales mix towards the same world-class core and premium products we offer globally and expand patient access, including through additional distribution agreements. The Australian market is particularly attractive and positively impacting patient outcomes, as it offers one of the broadest product format ranges outside of North America, enabling us to fully leverage our diverse portfolio beyond flower and oils.

While we are confident in our ability to successfully elevate the product mix, we are working through some anticipated near-term pressure on both sales and gross profit during the transition. In Poland, through continued collaboration and effective commercial execution, we gained market share and held the number one position in calendar year 2025. We are widely regarded as a key partner advancing medical cannabis in the country and are benefiting from increased annual import limits, which further supports our continued growth potential, including in fiscal Q3. The market has certainly evolved, but we have successfully navigated the shift in prescriptions from telehealth platforms to clinics while maintaining solid relationships with the regulatory authorities.

In our view, we are well-positioned to maintain this leadership position in Poland thanks to our very skilled team engaging with all the key stakeholders and our broadening product portfolio of high-quality medical cannabis products. We recently expanded our product portfolio with the launch of a third proprietary cultivar in Poland, following market success in Canada, Germany, and Australia. These new cultivars are grown and manufactured in our GMP-certified facilities, using premium hang drying and curing techniques to ensure consistently high-quality standards. In the UK, we primarily operate in the premium and super-premium segments, where there is less competition. But an influx of value products in the market resulted in lower year-over-year sales during fiscal Q3.

Our strategy is focused on expanding our distribution and clinic relationships through new partnerships, a critical step to onboarding and connecting with patients. Turning to Canada, we remain a strong leader in medical cannabis. Net revenue grew year over year during fiscal Q3 to a new record, and we gained market share, a key point of differentiation for us in a competitive market. Our priorities are enhancing our online marketplace, product innovation, and assortment, and ensuring a high-quality patient experience, especially for our valued veteran patients. In summary, we are reallocating and directing our resources to focus primarily on the global medical cannabis market, where we excel and see runway for growth.

This involves gradually scaling back our Canadian consumer cannabis operations and selling our controlling interests in our plant propagation business. We believe this approach will improve our operational efficiency, unlock greater opportunities in both our existing markets and new countries, and drive sustainable revenue growth and profitability. Let me now turn the call over to Simona for a detailed financial review of fiscal Q3, followed by an outlook session.

Simona King: Thank you, Miguel. We are encouraged by our fiscal Q3 results as reflected in our revenue growth, strong adjusted EBITDA, positive adjusted net income, and free cash flow. Time and again, we have demonstrated the soundness of a medical cannabis-first strategy, our consistent ability to deliver results aligned with our long-term objective. Let's review fiscal Q3 2026 compared to the prior year quarter and then discuss our outlook for the full year. First, net revenue of $94.2 million represented 7% growth, supported by record contributions from our global medical cannabis and plant propagation segment. Second, consolidated adjusted gross margin rose 100 basis points to 62%, while adjusted gross profit reached $55.6 million, a 6% increase.

Global medical cannabis held its robust 69% adjusted gross margin. Third, adjusted EBITDA was strong at $18.5 million, combined with adjusted net income of $7.2 million. Fourth, we generated positive free cash flow of $15.5 million. And finally, we ended the quarter with $154 million in cash, cash equivalents, and short-term investments and no cannabis business debt. In medical cannabis, net revenue rose 12% to $76.2 million, inclusive of 17% growth internationally. We benefited from increased distribution in Germany and new product offerings in Poland, which combined with continued strong contributions from Canadian Medical. Medical cannabis comprised 81% of net revenue, compared to 77% in the prior year, and approximately 95% of adjusted gross profit.

Adjusted gross margin for medical cannabis held strong at 69%, driven by high-margin international markets that benefited from sustainable cost reductions, high selling prices, and operational efficiencies, including sourcing for Europe from Canada. Consumer cannabis net revenue was $5.2 million, down 48% from $9.9 million. The year-over-year change was the expected result of the company's strategic shift to focus on portfolio optimization and the allocation of cannabis flower to the highest-margin business segments. Adjusted gross margins for consumer cannabis was 28%, compared to 26% due to sales of higher-margin products. People's plant propagation net revenue increased to $11.3 million, up 27% from $8.9 million in the prior year.

Adjusted gross margin for plant propagation revenue fell to 16% compared to 40%. The decrease was due to increased contract labor and utilities costs, as well as inventory write-offs of $1.1 million in the current quarter related to surplus plants. Consolidated adjusted SG&A increased 14.5% to $35.8 million. The year-over-year change relates to higher professional fees, as well as additional headcount and contract labor costs in Europe and Australia, that are supporting these growing higher-margin markets. Adjusted EBITDA was $18.5 million compared to $19.4 million in the prior year, with the decrease primarily related to lower adjusted gross profit in the planned propagation segment and an increase in adjusted SG&A.

Adjusted net income held relatively consistent at $7.2 million compared to $7.4 million in the prior year. Our balance sheet remains one of the strongest in the global cannabis industry, and our cannabis operations are completely debt-free. Free cash flow was $15.5 million compared to $27.4 million in the prior year quarter, reflecting a decrease in the working capital recovery of $9.2 million. Let me now provide some thoughts on what we expect for our fiscal year 2026 outlook, which ends on March 31. Annual global medical cannabis net revenue is expected to increase year over year to between $269 million and $281 million, driven primarily by 10% to 15% growth in the global medical cannabis segment.

Plant propagation revenue is expected to perform in line with traditional seasonal trends, as 65% to 75% of revenues are normally earned in the first half of a calendar year. Consolidated adjusted gross margins are expected to remain strong as we have benefited from favorable sales mix due to higher global medical cannabis revenue, along with operational efficiencies in our manufacturing sites. And finally, annual consolidated adjusted EBITDA is anticipated to increase year over year with an expected range of $52 million to $57 million, representing 5% to 10% annual growth. This expected growth is driven primarily by net revenue increases and industry-leading margin in the global medical cannabis business. Thank you for your time.

I'll now turn the call back to Miguel.

Miguel Martin: Thanks, Simona. Our primary objective is to grow our business by capitalizing on the rapidly evolving global medical cannabis opportunity, which is projected to surpass $9 billion, thereby maximizing shareholder returns. We have established a strong competitive position by first building deep regulatory and world-class genetic capabilities supported by an extensive network of GMP manufacturing facilities and then demonstrating consistent commercial execution excellence. This approach has enabled us to be a market leader with both healthcare providers and patients. Through our focused commitment to global medical cannabis, we will reinforce our market-leading presence in Canada, Europe, Australia, and New Zealand and expand into additional markets as opportunities arise.

We look forward to providing updates on our progress and strategic direction as we advance. Operator, we are now ready to take questions.

Operator: Thank you. We will now be conducting a question and answer session. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Kenric Tighe with Canaccord Genuity. Please proceed with your question.

Kenric Tighe: Thank you, and good morning. Congrats on the quarter. I just wanted to follow up on the Select Market Exit in Canada. Now if we looked at a number on the print, you're looking at roughly a $20 million in revenues business on a go-forward. Could you sort of speak to what the run rate would look like on a select on the exit from those markets? And perhaps also where there's a point in time whether you could or would essentially fully exit consumer cannabis in Canada.

Miguel Martin: Yeah. Good morning, and thank you for the question. We are continuing to evaluate exactly what that looks like. I think what I can say, though, is that those decisions will be beneficial or accretive to our overall financial results. What we've seen is that the reallocation of our resources, particularly that finite high-quality flower, into the international market will make a significant difference in overall financials. And so, it's a bit of an evolution for us. The other point I guess I'd make is this isn't anything new. You've seen us continue to prioritize global medical cannabis over the last couple of years and done it very successfully as we've gone through.

And so we'll continue to be a bit flexible. Now your point about would we ever get out completely? I think that's something we continue to evaluate. We've been in rec cannabis or consumer cannabis in Canada since day one, and so we still have that touchpoint. But again, our focus is profitability and growth. And if that is a decision that looks like it's best suited to be exclusively on the medical cannabis side, it's something we would do.

Kenric Tighe: Great. Thank you, Miguel. And just a quick one with respect to Australia. The other premiumization strategy or sort of moving upmarket in Australia, how disruptive is that shift to your presence in the market? And what are your expectations around the timeline when we can sort of get a better handle on how this will play out and the benefits for that Australian business and what that Australian business will look like once you sort of high-graded your portfolio in the market?

Miguel Martin: Yeah. I don't think it—well, thank you for the question. I don't think it's disruptive at all. I mean, Australia really started out under a model they call a concession model and a value model for those patients. And as we talked about, it's quite a large and diverse market, and there is an expansion and an interest by both prescribing physicians and patients for a variety of products on the premium side. And as you well know, it's not just flower and oil. So we run globally a premium and core model. So it's not disruptive for us at all, and it's very accretive in terms of margins.

And so we know there's a lot of value flower available in Australia like other markets. Whether it's Germany, Poland, the UK, or Canada, our sweet spot is the genetics production and delivery of core premium medical cannabis products. And so, it sits right in the middle of all that. So I think it's consistent and not disruptive in any way.

Kenric Tighe: Great. Thank you. I'll get back in queue.

Miguel Martin: You got it. Thank you.

Operator: Our next question comes from Derek Lessard with TD Cowen. Please proceed with your question.

Derek Lessard: Probably past the acceptable time frame, but happy new year anyways, and a great start to it.

Miguel Martin: Happy New Year, Derek. And I think the snow makes that timing and that point relevant, but go ahead.

Derek Lessard: Yes. A couple of questions for me. Just maybe talk about the strategic decision to exit the plant propagation and sort of the timing around the expected close of the transaction.

Miguel Martin: Sure. I mean, again, focus and execution on global medical cannabis is what we've proven we're best at and where the most profitability is. I think consistent with the announcement we made on the consumer business, when we look at our resources and we look at the best use of our time and energy and focus, it really is in that area. And the investment in plant propagation, while interesting for a period of time, continued to evolve in a way that wasn't that. And so we saw a great opportunity in divesting that majority share to the shareholders that already exist there.

There are some economics that continue that allow us to participate in the success of that, including earnouts in the facilities that we've ended in. But when you look at investment and ROI of our time and resources, clearly, with high-growth markets such as Germany and Poland and the UK, it makes absolute sense for us to put all of our time and effort there. And I think if you look at the last quarter and you look at the last couple of years, when we focus on global medical cannabis, the results have always been positive.

Derek Lessard: Absolutely. Makes sense, Miguel. And maybe just one for Simona. Appreciate the additional full guidance on the year. How should we think about the plant propagation contribution to EBITDA, I guess, for the full year and maybe for Q4?

Simona King: Yeah. And as we continue to finalize the closing conditions and implications to our financials as a result of this divestiture, we will have a better sense of the pro forma in Q4. We will no longer be consolidating the financial results of the Bevo business, so it will be treated as discontinued operations. That will be the treatment going forward. And so I would say the focus really should be on thinking through the implications to the global medical cannabis business and continuing to model and think about Q4 and the future around the strength of that business. So it really is focusing on the global medical side.

Derek Lessard: Okay. And then maybe one last one. I'll sneak one in, switching gears back to global medical. You pointed to Poland as one of the contributors to growth, which is great to see. Just maybe talk about how you've been navigating the pressure there or if anything has changed since last quarter. I think when you guys pointed to additional pressure given the changes in the regs there related to restrictions around the online consultations.

Miguel Martin: Yeah. I mean, I think it's a great question. So, these regulatory frameworks are evolving, albeit with a pretty specific scientific underpinning. We saw the change in Poland, you mentioned, and what it required really was to lean back on a strong system. Product development, product registration, distribution, and specifically, having a way to be able to connect the patients through clinics. And we were very quickly able to do that. I think really built on the background of the strength of the medications and the reputation that we had, having physicians and patients want to get those products. And so we navigated quickly. Obviously, our results reflect that.

That's why we're encouraged by what's happening in Germany with what may land there that we'll be able to do a similar execution. So these regs continue to evolve. You have to be agile, but I think having tremendous relationships with them, we have a very strong GR organization, a very strong regulatory team. And so we are able to work with the regulators as things evolve, and we think that's a strength of ours.

Derek Lessard: Yeah. Great job, everybody, and congrats again on the quarter.

Miguel Martin: Thank you so much, Derek. We appreciate it.

Operator: Okay. Our next question comes from Bill Kirk with Roth Capital Partners. Please proceed with your question.

Bill Kirk: A point of clarity first. I have year-to-date global medical cannabis at $211 million. The full-year guide is February to February. Are those numbers comparable? Because even the high ends would imply quarter-over-quarter deceleration in Q4. And the low end would imply a big deceleration. So I guess the clarity point, am I looking at those numbers comparably?

Simona King: Yeah. So let me jump in on that one. So the guidance that we provided is the full revenue for the company, which is inclusive of Bevo in there. And so with this announcement today around the divestiture of our stake in Bevo, that's what we will be working through is the pro forma impact of that in Q4. So, it's continuing to focus on them as we think about the implications for Q4 with those results being removed and shown as discontinued operations. It's really focusing on the medical cannabis, global cannabis revenues, and trending those out. So keeping in mind that the full guidance was reflective of the total revenue.

Bill Kirk: Okay. Okay. Because in the press release, it says annual global medical cannabis is expected to be $269 million to $281 million.

Simona King: So yes. A policy. Yes. Global medical cannabis is $211 million. Right?

Bill Kirk: Yes. Yes. Just to clarify that, that is correct. Global medical cannabis. And so, yes, we expect a strong quarter in Q4.

Bill Kirk: Wouldn't that be implied $58 million to $70 million in global medical cannabis? And I think you just did over $75 million. So I think I'm looking at something wrong because that would imply a big deceleration in Q4 global medical cannabis from March, February, January.

Simona King: Yeah. Yeah. Yes. We do expect the ranges that we've provided in the expectations in the release to be in line with where we're projecting the full year to come in at.

Bill Kirk: Okay. And then the follow-up would be why do you expect the deceleration in April?

Simona King: So at this point, we're really focusing on the full-year guidance and the ranges that we provided, which we believe will be in line with where we're trending. Taking into account, there could be some headwinds in some of the markets. So, again, highlighting that this is a record result for us on a full-year basis.

Bill Kirk: Okay. Thank you. And then one last one for me. The adjusted gross margin in the wholesale business, I think it was 35% in the quarter. It's been higher than the consumer cannabis segment for a while. Why would the wholesale gross margin be higher than the consumer segment gross margin?

Miguel Martin: Well, for a couple of reasons. One is that the consumer business, not only for us but for others, is tight. And when you look at fully loaded where you sort of end up in that market, you end up with those types of margins. I mean, I think you've seen it in the industry. It's not just us. The wholesale business is pretty good. I mean, it's obviously not as good as when you distribute and sell it yourself. And so I think it's just indicative of what it is. The other aspect of the wholesale business is those products that we sell are not readily available all over the world because of some of the regulatory requirements.

So I think it's inherent to what you're seeing overall. And like I said, it's not just us on the consumer side.

Bill Kirk: Thank you. Appreciate it.

Miguel Martin: You got it. Thank you, Bill.

Operator: Our next question comes from Brenner Cunnington with ATB Capital Markets. Please proceed with your question.

Brenner Cunnington: Hey, good morning, and congrats on the results this quarter. Just looking at the ATM, so you mentioned the funds for this could go to M&A, and we're just kind of wondering, like, are there any potential assets that you might be interested in? Is it potentially, like, cultivation capacity expansion opportunities? Or any other top goals for the funds raised from this?

Miguel Martin: Yeah. And thanks for the question and the comment. You know, the over $150 million in cash and then you add this, it really allows us to be opportunistic. Clearly, as you've seen from our announcement, our focus and really what we excel at is around that global medical cannabis point. And there are many aspects to it. Clearly, cultivation of GMP flower and products for the international market are always an area of interest for us. Beyond M&A, we've invested over $40 million internally in significant capacity and quality upgrades in our existing facilities, which has helped us receive that GMP certification for another three years at three of them.

So cultivation, as you mentioned, is always of interest to us. But there are other aspects to global medical cannabis that have the potential as well, whether that's on the distribution side or the clinic side or other aspects. So it's really to be opportunistic, and we intend to use that clearly not for operations, but for accretive aspects, including M&A. And so, I would say it would be consistent with what we're focusing on, but the exact aspects of it and what it might be, we're not in a position to say yet, but we'll obviously update folks as that becomes more specific.

Brenner Cunnington: Okay. Perfect. Fair enough. And then just looking at the exit from a lot of the consumer cannabis in Canada, what type of SG&A savings might we see from this?

Miguel Martin: Yeah. I mean, we're continuing to evaluate that. I would say you'll see some of that reporting as you see the full year and then into Q4. We definitely think it's going to be a benefit. Though the other aspect, beyond the SG&A savings, is taking those inputs, as you heard from the previous question, and putting them into higher-margin markets. So the differential between the margins of, say, our consumer business and international markets is significant. And you've seen where the overall margin landed.

So I think more to follow on what it is you heard from Simona's comments about the benefits that we believe financially that will provide us, and we look forward to sharing that with you once they sort of work their way through.

Brenner Cunnington: Perfect. And then if I could just sneak in one little last one. So on the international market, just out of curiosity, are there any other international markets that you may be looking at?

Miguel Martin: I mean, we look at all of them as they come online. We're in 12 countries today. We've got a regulatory team and a product registration process that has allowed us to enter every market that's come online. Typically, we like to have markets that have a science-based regulatory profile, which we're starting to see in Europe. So the latest new markets that are bringing medical cannabis on, places like Switzerland, Austria, France, and some others, we are working to bring our products into those markets. But we're very excited about potential developments in other new countries such as, say, Ukraine and Turkey.

And again, we've been very successful because of our stringent regulatory requirements and GMP products to be able to enter them as they come online. So we continue to see global growth. I know there's a lot of interest in the US. But we've seen the growth in medical cannabis regulations and overall systems throughout Europe and in other parts of the world. And so we'll be there as they come online, and I think we've demonstrated we can be successful, not only launching but also sustaining our business in those markets.

Brenner Cunnington: Understood. Thank you so much for the color. I'll jump back in the queue.

Miguel Martin: Thank you very much.

Operator: Our next question comes from Pablo Zuanic with Zuanic and Associates. Please proceed with your question.

Pablo Zuanic: Thank you, and good morning, everyone. Miguel, I also want to discuss supply chain, but just first one question on the US. In your opinion, if we get rescheduling as it's been announced, would that allow you to enter the US market? Are we thinking we're going to have a federal legalization of medical cannabis? Will Aurora be able to participate given its expertise? Or the rescheduling doesn't necessarily mean federally legalizing medical cannabis. What's your opinion on that?

Miguel Martin: It's early days, Pablo, and good morning. First and foremost, what the Trump administration announced is very consistent with what we've said is important. Medical cannabis first, a strong regulatory approach. And we think that lines up beautifully for a company like Aurora that operates in regulated markets all around the world. As it's been laid out, we haven't seen any of the final details of what a schedule one to schedule three would look like. It does not allow a Canadian company traded on the Nasdaq to directly go into that market. It does expand research. It does start to open the door for some variety of different things. But we'll have to see what the details look like.

But it is a step in the right direction, and we're very encouraged by that. But again, it was a very strong medical message. That photo op in the White House with doctors and folks from the medical community really reinforces what we've always believed, which is this will be a medical-first opportunity, which is why we think Aurora is so well-positioned when we get there.

Pablo Zuanic: Thank you. Look. And regarding supply chain, it's a bit of a two-part question in terms of understanding what you have right now and then how you're thinking about acquisitions. In terms of what you have right now, for example, you said in the call that most of the products that you sell are own or products, not in your facilities, but does that mean 51%, 90%? If you can give some color in terms of how much you're buying from third parties, that would help. A reminder of what you have in terms of your current facilities, and looking back, lessons from the Aurora Sky facility. So that part of the question is what you have now.

In terms of buying cultivation capacity, are we talking about indoor versus greenhouse? Are we talking about small little craft growers? Are we talking about just Canadian or maybe other countries? Any color in that sense would help. Thank you.

Miguel Martin: Sure. So the majority—I'm not going to give you a number, but it's closer to 100 than it is to 50—of the products that we sell internationally, we produce, distribute, and sell ourselves. A really important dynamic for everybody to understand is the GMP flower dynamic. That standard is getting more challenging. It is difficult. And once you get that certification, which you need to have, say, Germany, the fastest-growing market in Europe, you have it for three years. So we've got three of our largest facilities just received that certification, which is very exciting. And so GMP, premium flower, those prices continue to be solid and, in some cases, go up. And is our focus.

In terms of facilities and potential acquisition, we have the benefit of having one of the largest genetic facilities in the world, a facility called Aurora Coast off the West Coast of Canada. Those genetics that are created there that we use ourselves and also sell to others have been successful both in indoor, which is our primary method of current growing, as well as with greenhouses, which many of our customers use those genetics. So both work, and you can get GMP certification in both. We obviously have a long history in indoor, but that doesn't mean that we are bound to it.

I will say Canada continues to be the best place to grow high-quality premium GMP flower in the world. And we're proud of that. And we continue to see great opportunities to ship it. So it's a big competitive advantage for us to be able to grow that much flower, be one of Canada's, if not the largest, one of the largest exporters of GMP flower. And that's a core part of why we've been successful and will be successful going forward.

Pablo Zuanic: Thank you.

Miguel Martin: You're very welcome.

Operator: We have reached the end of our question and answer session. There are no more further questions at this time. I would now like to turn the floor back over to Miguel Martin for closing comments.

Miguel Martin: Thank you very much. We're very excited about this quarter and, more importantly, excited about the future of Aurora Cannabis, and we're thrilled to share some color with you here today. We'll continue to update you. We hope everyone is safe and well. All the best.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

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