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We-- when I was brought in, I was asked by the board to make sure that Canopy is a multiyear development tale with a course to profitability, right? So for me, job one was to ensure that we had the suitable outcome appearing of our manufacturing assets and also not have many vacant coverings or SKU stocking out at retail in Canada.

I asked to boost high quality to make sure that we can boost customer pull over time, and also that includes the THC part, as well as the team has responded well, however it takes a while for that to pull-through at retail. So you're not also necessarily seeing the results of the job that we've done on rack, at a retail yet.

That job is still in progress. And as Mike discussed, we want to have some points to speak about on our following revenues phone call. And also so-- and then finally, I likewise asked them to not build inventory to ensure that we could have more eye-catching gross margins if we placed more throughput through our plants, however we would simply be building supply.

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I think from right here is where-- we have some job to do. And Mike, I 'd like you to possibly walk via a construct in your mind from where we ended in the quarter from a General Practitioner standpoint up to up to our margin target.-- Principal Financial Policeman Yeah, I assume really looking at the 7% gross margin reported in the quarter, I think it's easy to bifurcate out in between volume influence on reduced manufacturing volume versus extraordinary activities that return to execution.

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And also when you change for that and look totally at what must have happened for the quarter just based on those impacts, that brought us to around 17% or 18% margin for the quarter - heavy duty outdoor canopy. And we assume that's a good proxy of what to expect over the next quarter or so.

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The other thing that dragged our margin down is really simply executional items. So obtaining our pack days right, so that we can deliver product with adequate life span prior to it goes to the province. There were some manufacturing obstacles in regards to getting the phasing of production lined up as if allowed us to attend to appropriate rack life.

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And also that's where the intricacy of our operation enters play, and this is where the SKU rationalization is actually supplying us with a much less complex framework to run our supply chain off of. So my view is when you look at the supply chain in Smiths Falls, we clearly have a large-scale center (heavy duty outdoor canopy).

-- BMO Capital Markets-- Expert Thanks. Extremely practical. Your next question originates from Andrew Carter from Stifel. Please proceed.-- Stifel Financial Corp.-- Analyst Good early morning. I just wanted to ask in kind of going after the amendment with Acreage. I value the prospective reduction in dilution for Canopy as well as the disadvantage protection here.

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market, listed below your type of 10% to 15%. I guess offered the rate of interest by Canopy in seeking various other options along very little work done to day by Property, could you assist us comprehend the incremental dedication below of a minimum of $87.5 million versus sort of letting this contract run its training course and possibly having full versatility to pursue various other choices? Many thanks.

They have an actually strong plan to remedy those imperfections, as well as we feel respectable regarding that strategy. I 'd additionally state, Andrew, that the initial purchase left very little shake space in terms of outs. Therefore it had anonymous not been as basic as allowing it play out and strolling away (entry door awnings). It was truly the obstacle for us as well as for the Property group was to truly recraft an offer that would certainly provide the optimum-- the highest possibility of success since the various other circumstance where they they kind of hopped along wasn't palatable to Property as well as their shareholders or Cover and our shareholders.

upon permissibility which incidentally I believe, is coming faster than plainly, people thought it would maybe a year ago. And also we're already seeing the benefit of having our brands in the U.S. market, and also I can't wait to obtain our 2.0 products in the market. So I think it was I assume it was the method to produce a real triumph out of the initial arrangement that we had with Property.

-- Analyst Thanks. I'll pass it on. Your following inquiry comes from Bryan Spillane from Bank of America. Please go ahead.-- Financial Institution of America Merrill Lynch-- Expert Hey. Greetings everybody.-- Ceo Hey Bryan.-- Bank of America Merrill Lynch-- Expert I intended to follow-up on Vivien's concern earlier practically worth as well as prices - fixed awning.

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So taking share from the illegal market? As well as then just how much of that pop over to this web-site may be countered from a profession below the more value-added product right into the value segment? So I'm simply try to obtain an understanding of just what that compromise could be in between gaining share but likewise possibly it cannibalizing your existing business?-- Ceo Yeah, so like it's an unusual industry when you believe about that.

I think we're just saying we're taking share of the value market that already exists. I also assume that we're in our early stage as an industry, Bryan, in regards to trading customers up as well as speaking to them concerning the distinctions in-- this isn't-- there's been ez up pyramid canopy a great deal of conversation on the cannabis room concerning does it finish up being an asset company? Well, this isn't-- we're not getting car parts here.

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