 Welcome, everyone, to the Halo Collective Company Update Call. There's a designated investor that will be asking questions we've gathered and compiled over the past week. Before I get into that, I have a little bit of information to read. In addition to myself, your speaker is on today's call for the students to co-founder and CEO of Halo Collective and Pittsburgh CEO of Aconda. Before we begin, I would like to remind listeners that certain statements made during this conference call presentation may constitute forward-looking information and forward-looking statements within the meaning of applicable securities laws. These statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Halo Collective and its subsidiary entities or the industry in which it operates, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this conference call presentation, such statements use words such as may, will, expect, believe, plan, and other similar terminology and include, among other statements regarding expected operating results, future growth, anticipated capital expenditures, corporate strategy, and proposed acquisitions. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date hereof. Important factors that could cause Halo's actual results and financial conditions to differ materially from those indicated in the forward-looking statements include, among others, economic and financial conditions, the ongoing impact of COVID-19 strategic actions, including acquisitions and dispositions, and Halo's success in integrating acquired businesses. These risk factors are discussed in detail under the heading Risk Factors in Halo's Annual Information Form dated March 31, 2021, and Halo's Additional Disclosure Documents filed on CDAR. New risk factors may arise from time to time, and it is not possible for management to predict all of those risk factors, where the extent to which any factor or combination of factors may cause actual results, performance, or achievements to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Although the forward-looking statements contained in this presentation are based on what management believes to be reasonable assumptions, Halo cannot assure investors that actual results will be consistent with the forward-looking statements. The company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, other than as required under securities legislation. And so, without further ado, I will now introduce and turn the presentation, the question and answer session, over to our investor, Sunny Labanat. Hi, everyone. I don't see a video here. Is there any chance to... Hopefully, you see us. I see you. Oh, there we are. Excellent. Cool. Perfect. Hi. How are you? How's everything going there? It is... it's ethnic, huh? We just got into Louisa's apartment in Johannesburg. We were in Mapatang at the site about, what, three, four hours ago. Had to drive across the Lesotho South African border, get to Blue Fontaine, and then hop a little puddle jumper here, and then take the train from the airport down to Sandleton and get a key to Louisa's apartment and start looking at these questions for you guys. Now, we appreciate you taking the time out to address a collective of different communities from all over the internet regarding, you know, a unified list of questions, so we appreciate that. Without further ado, I'll start with some of the questions here. Karen, how have the last three weeks in London been for you? And can you provide any updates regarding Ken Martin? Well, I'm going to speak with Tage on this, but we have, and, you know, just to step back, and I think we said this in the press releases, that if you look at Halo, there are really three distinctive businesses, right? So, you have a recreational business based in the United States. You have these assets in Canada that operate recreationally, legally, you know, but they can go either way. And then you have a medical business in the rest of the world, in effect, right? And that medical business is a completely different business in the way you distribute and sell from the recreational business. And we underwent an extensive search, executive search, and we came upon Tage. And ironically, I'd met him once before at an event in London. We had breakfast once. And we were down to, interestingly, two candidates, and I called Bruce Linton, and he called me back within a few minutes. I missed his call, and then I called him back. And he highly recommended Tage, given his, both his investment banking background, his experience in building up the canopy business, and then his experience at Chiron. So, I went to London, really, to onboard Tage, in part, and also to learn, get schooled in the international business myself. And now we're here in Africa, and I've spent the better part of a week just working at Buffalo. Spent a couple of nights in Louisiana's family compound out in the village. And, you know, and Tage, you can take it from here and just introduce yourself and tell everyone about Akanda and what the vision is, and, you know, where it's going. Absolutely. Thanks, Kieran. Well, firstly, thank you for everyone for your time and gathering here. It's been a great welcoming to come into the Halo family as the CEO of Akanda. There's been a huge outpouring of support from my network within the industry, my network in capital markets, which includes both the banks and investors, and, you know, when you make a big move like this from being a regional head at a company to being CEO of a company, it comes with a lot more responsibility. And I'm more than ready for this and excited to take on what's going to be, I think, a very unique play in the international space. We're going to be building a scalable, ethically sourced medical cannabis play that will leverage all the strengths of Lesotho, integrate it into our current international infrastructure like CanMart and deliver what will be excellent brands, the trusted brands that we have relationships with from our Halo heritage at a great price point. And in the market in Europe where you have really a nascent market like the UK and a market that's just taking off in Germany, you still have a lack of consistency, supply, quality, variety. And so this is where we can really bridge the gap with all of our knowledge of strain selection, strain hunting, and deliver it to the patients in the international market. I'm no stranger to bringing new products into Europe. I've done it from scratch with my previous company in both the UK and Germany. I oversaw a 40 to 50 million euro top-line business, a canopy growth that stands multiple countries across Europe. And I think it's time to do it again, but this time with an asset which I think will be unbeatable in terms of its cost positioning and its ability to generate quality product. So that's really the message I want to send here. It's price and quality ratio that I think is really going to be unmatched if we develop it the right way. Okay, great. I have a question actually regarding buffalo operations. How much product and revenue do you expect to generate from buffalo in 2021 and 2022? So 2021 this year, we were literally their counting product that's vaulted, trimmed up, ready to go. Anywhere, let's say between $2,000 to $500,000, I would say this year, we'll pull down the autos towards the end of this year. So let's say $2,000 to $500,000 in that range this year. Next year, and you know, we've sort of come up with a completely, how do I say this, a little bit more aggressive way of going about it, now having spent time with Tage. And part of what we have to do this year is, and what we've done is identified those strains that are between 20% to 25% that are award winning, that we can grow in the soil consistently. And we have to put them in a three, depending if it's Australia, three to six months, what known as stability testing. So those are the strains that we're going to grow next year. So that was the big part of this year was identifying what we're going to grow next year. And so for instance, Holy Grail by DNA is hitting around 25. You can't hit over 25, otherwise you have to go to oil. You know, the Tange is hitting around 20 in that range. So that's going to be really critical. So we've got our production strains down. Now the question is that, you know, within our fence, within our six hectares, how do we utilize it? So what we're doing is we're actually doing the exact same strategy that we're doing at Bar X, with the exception that under the Lysuzo licenses we have to be under shade cloth. So what we're doing is we're laying down most of that six hectares, as we're doing at Bar X, with beds, you know, with soil, drip irrigation, in a shade cloth grow, which is sort of the classic way of doing it. We're installing the Cravo, so we're installing our first Cravo as well. And then we're taking our barn, that big barn you've seen, and we're converting it into the most massive drying, GACP drying machine that you'll see. So we're double stacking it actually, and to be able to take on all that product. And Tange said something funny where he almost had a heart attack when he realized how much product that would produce. So Andreas is planning on two cycles. He's planning on a flower, an autoflower cycle, and then what we call a boutique strain cycle now that we have our strains identified. But next year, the output, you know, Andreas' target, again, this is his target, is he wants 20 million grams of output. Tage had a heart attack when he heard that and said, oh my God, that's almost as much as Germany took down this year. And that's just on six hectares. And then, you know, we have a longer-term vision where we want to do 20 acres of greenhouse. Yes, 20 acres of Dutch greenhouse. We recently brought on one of Tage's colleagues from Canopy, Anthony Lacombe, who's like a greenhouse. He's actually Dutch, living in Ottawa, but he's a greenhouse expert. And so part of the vision I think over the next couple of years is going to be, you know, getting the solar power, getting a dam, working with the government, working in the special economic zone there. The other thing I've learned from Tage, a couple of things I've learned from him, is in the States, we sort of separate flower into A, Bs, and Cs. In Europe, A's, Bs, and Cs all sell at A rates. So you have a mixed bag and your shake or what they call granulated product is your trip. There's a lot of room in Europe and what's really key about Tage and what value he has is he's going to build out that network, right? And so this year, our strains are nailed. Say we get somewhere between, say, two to 500,000, two on the low end, 500,000 on the high end. Next year, we haven't put the projections together, but next year is going to be a big year for us. And remember our first crop, remember everything's opposite. So our first autofower crop will come down in January. So as long as we have the stability testing nailed, everything done, then we can immediately start to move that product. Yeah, look, I think that's a fair assessment. For me, this trip was about learning the setup, understanding the quality, and seeing how we're conforming with a pharmaceutical standard market. I mean, that's really the key here. We're bridging the gap with recreational west coast know-how, which is incredibly versatile and produces very high quality buds. I've seen it myself and I can compare that to anything that I've seen in the European markets that stands out in terms of quality, but we do have to marry it with those pharmaceutical regulations. So that includes things like stability data and then also registering the product. So that timing can be variable. So we're mapping that out to determine how that turns into sales. And then at the same time, we're going to be figuring out exactly how we phase in the sales. So ahead of actually having products registered for sale in the German market as a pharmaceutical, for example, we'll probably be looking at this B2B business first. So selling a flower for extraction and other B2B purposes. And then we'll get to that sort of end market where we'll probably do a mix of entering the wholesale market and or finding sales and marketing partners. I mean, really, we want to drive returns. That's the focus here. This is about looking at returns and making profitable long-term business arrangements. And I mean, given our positioning, I think we have the ability to do that. I was able to do that at a much higher cost base in other markets. Okay. Well, what are your expectations and achievable margin from products being exported by Buffalo? That's so I'll tell you where the market's at right now. If we were not to, if we were to move product B2B in Lesotho, what we're hearing is for our flower. I remember that's A's, B's, and C's combined. It's about $2 a gram. Let's say $50 to be conservative to $2 a gram. If we're looking at the granulated, they were saying about $200 to $308 kilo, right? So, I mean, the pricing on the A's, B's, and C's are right in line with what we see in North America for high quality greenhouse almost. But remember, B's, it drops in the Americas. Let's say you sell your A's for $1,000, just an example. Your B's, you'd sell for maybe $400 here. Your A B's and your C's, you may be sell for a little bit less, or your smalls as we call them. And then in terms of fully loaded costs, we're still sort of playing around with it, depending on how you load it. But it's probably around, to produce all of it, is probably around $50 to, let's say, to be the most conservative $0.70 a gram. Okay, excellent. I mean, that's just being very conservative. And to just kind of connect that to where wholesale prices are in, say, the German markets, we're talking anywhere from between $3 to $4.50 a gram. So, obviously we're going to have to work out some of the freight costs and interchange costs and potential tolling, but there's plenty of margin to play with in that. Yeah, and when I'm talking those numbers, I'm talking landed costs in Europe. So, you know, like Tage and a lot of these Colombian players and other players have thrown around numbers of $0.20 a gram. Yeah, I mean, you could say that it's $0.20 a gram. But by the time you test it, by the time you prep it, by the time you irradiate it, by the time you get it to Europe, you know, it's going to be, it's going to be $0.50 to $0.75. So that, you know, that $0.20 number, right? And yeah, our trimming cost is $10 a pound for really high, good high, I mean, high finished trim product here, which I would love to have back in California or Oregon where it's more like $120. I'll quickly touch, I just want to quickly ask about GACP and what's left to do, and then we'll circle actually to back to America and talk about California and Oregon sales. But what's left in GACP? Well, you know what was left was really confusion. So just so everyone understands is GACP and, you know, just to, you know, to educate the investor base. GACP is when you go to GMP, you basically have a medical authority come and inspect you for five days, right? So you work with a consulting firm and then the medical authority comes and inspects the government comes and say it be at the German government or be at the Maltese government or whichever government you want to work with, they'll come and they'll inspect you for five days and they'll certify you for certain GMP processes, okay? GACP works a little differently where effectively a consulting firm is going to tell us and designate us as GACP. But there is no, there's a governing body for GACP that gives you the GACP standards, but the independent consulting firms with the exception of Holland, which has a quote unquote standard. But, you know, I'll leave it at that. That basically says that, look, we've audited your practices, we've audited everything and you're certified to be GACP. And we think that that certification will come latest within the next two weeks, conservatively, right? But what does that mean really? It really, honestly, you know, it means that from our perspective, we're running a tight ship. But what it means is still any customer who comes down is still going to have to come down and inspect us, right? So it's the same thing is that all it means is that we've had a consulting firm in an accreditation and now we have the designation. But still to sell product, the customer is going to have to come down and validate the processes. If the GACP is an input into GMP. Excellent. So that gives some clarity to investors on how that process works. Let's slide back over to America and let's talk about your recent strategic partnership with elegance brands. Have you tasted any of the products? So of course, now this is this is funny. I was at an event in Vegas. Actually, Katie was with me and Chad and elegant sponsored the event. And he had, they had their Voco and their sway. So the Voco is the, let me remember it's a vodka drink and sway is the sort of energy hard seltzer drink. And so the, I've tasted both Voco and sway. Katie, you've tasted them obviously because you're sitting on that board, right? Yes, I've tasted them. I mean, they're good products. They're formulated well. So that's a good question. That's a fair question. And then, and then I see the next questions. What is the justification for saying beverage sales will be at a run rate of $1 million by year end? Okay. And that's our tariff. I'll have a bit of a, I'll just give some context to that on Twitter. You mentioned that and investors are wondering since there's not much info available on elegance is 2020 financials. How do you plan to achieve $1 million a month run rate by the year end? So you've got to understand, all right, so this probably wasn't clear. So elegance is in mainline distribution. So they have this gorilla hemp product. They have, they have their hard seltzer. They have their vodka. They have their vodka soda, you know, drink that's flavored. And that is in a distribution and they're in liquor distribution. And I think they're the official drink of the Phoenix sons and the San Diego Padres and someone popped. I forgot who it was. Lee or one of the investors said that up. They saw them as a sponsor of the US Open as well. So they're in the traditional liquor business. We probably are not going to use their brands in our THC channel. Okay. So what they're providing us with is the technology and know how. Right. To be able to do that. In return. We thought, and it was really Philip who's not on this call. He had eye surgery just recently this week. That the share swap would be a good idea because they're going public on the NIO. And the discount at which we got it to relative to where he thought the public offering would be. And where the last sale price of the shares were to a bona fide third party investor was a good transaction to sort of put that asset on our books. But operationally, they have a complete turnkey unit. But it's aluminum can and we're debating whether we go into glass bottles versus aluminum cans, which is just the end of the project. And that unit we're going to put down in California before the end of the year. It's a turnkey unit. They come up with the formulations. They've researched the market, but they don't have the licensing. So we put that, we put the beverage unit in and then at that point we begin to sell and distribute product. Right. I don't know where the guys are at because as I said, I've been in Europe. Katie could probably fill us in. And then with the million dollar run rate, Katie can back that up with BDS data. Okay. So a quick question, just a follow up on elegance before we move on. From a cultural standpoint, how do you envision those beverages to be consumed? Would you be expected to drink a single can in an evening or is it multiple cans? What kind of costs are we looking at for these products and profit margins? Okay. Katie can talk to that more, talk more to it. But from what I gather, the way the beverage market has gone is it's not like, let's say, the hush style syrups that we make or the syrups that we make. This is more of a light product, which is say 5 ml over a complete can, nano emulsified. So it's a seltzer that's 5 ml. So it's sort of sip and gives you a light feeling as opposed to a heavy feeling of the, you know, of the product. But Katie, why don't you elaborate on that? Because it's a different demo than let's say the hush demo. It's more of a windberry demo. Well, I think a lot of it too depends on this, you know, the jurisdiction you're launching in and what the regulations are around per container of milligrams of THC. But I know that in the way we're modeling it is, you know, one can with the number of milligrams possible. And I don't, and I agree with what Karen's saying, which is it's not, the goal is not to drink it. And in the same way, you know, for syrup, for example, there's a lot of THC there. It's not quite as much THC and it's supposed to be more as more of a balanced effect, but California and Oregon have different regulations. So, you know, we can certainly, I think it would probably take a follow up. We'd have to dive into the financial model that, you know, again, Phillip and his team that did due diligence and help put together the assessment and all of that. They could probably share that in some form to help back up those projections. But yes, it's not really the same format as the same product experience as the syrup that we have. It's definitely more of a, you know, 5, 10 milligram type thing per can. And then maybe in Oregon it allows for more potentially. But again, it's, we're not really going for that with the drinks. And where's the BDS numbers that retail sales sort of currently in California right now of these, what we call these light, these light, you know, seltzers so to speak, THC based seltzers? The BDS data comes out every month. I don't know that we've published a product update recently, but it's pretty easy for us. You know, what I can even do is during this call, we can quickly look at the most recent newsletter that came out. And more or less it shows that ingestibles, that's the area of the market that that's a growing area. It's a growing product segment. So there's increasing now, is it the largest? No, of course there's not as much demand for it as flower per se. But we can certainly, even within the context of this call, we really get a, you know, a sense of how large the segment is. Okay. Right. So where I came up with that is there's a company can right now that's out there that's growing pretty at a pretty substantial rate with just California distribution and they're over a million. And they've been growing at a fair clip. I think they're ticker C-A-N-N, but I'm not sure. And so where I came up with that number is saying that, look, if we can come in there and match them, given, you know, elegance's formulations, you know, their flavoring and all of that, that if the market keeps growing that we could probably achieve their one million number if we can get this unit up by September or October in California. So that's how I came up with the number one million. And Katie can tell you where they're at right now. Right. So that's where the category is probably this sort of light seltzer category is growing at a really fast clip. That's why we went for it. And we need more time. I know that you're over your growth with 110%. Right. So it's a big clip. Substantial. Let's talk about Oregon and California sales. With Phillips dating 50 million from current operations, 22 million from dispensary sales and an additional 3 million out of a fellow which we now know is a little bit less. Are there any changes to these revenue expectations given what you know now? I'll tell you what we're looking at. I'm just looking at the numbers. So where we're at right now is roughly in wholesale sales to dispensaries. We're at about roughly around give or take a hundred thousand, around four million is where we're at today. Right. What we're projecting in September is to be at about is to grow that business, just our core business right now to about 4.5 to 4.6 million. But that doesn't include flower shop, anything to do with elegans, anything to do with the rosin business that we've developed and other licensing deals we're doing right now. So we're in the middle of a bunch of other licensing deals and launching the Winbury products in California. So when you start taking all of that and putting it into place, the way I would look at it is that in the core business by September we should be at 6 million. Now we'll talk about the dispensaries later, the lady's looking at kicking one off every month and she was thinking that she would get the first one done by July which is now trapped to August. So she gets the first one down by August and let's say each of those dispensaries conservatively bring in let's say a million to a million and a half a month. Now you're starting to see about let's say one and a half, say three, three on six is nine. So now where do you find another two million is the question? And there you have a little bit from coming in from Buffalo. You have a little bit coming in from the Kushbar retail stores. There are about 300,000. So you can see 10 and now the question is where do you find the other million, one million? But yeah, I would say 10 to 11 is definitely attainable. We are a month behind on the dispensary launches. So yeah, I would say that I'd say 10 to 12 by September, October. Definitely. And Katie as we've said is physically moved to California. We brought Ryan Kunkalon who is a dominant operator in Washington as our vice chairman who's brought his team, a lot of his team members aboard that they've built great dispensaries up in Washington if you guys have not been to any of his dispensaries up there. They're very, very good. And they're the basis now of I believe high times dispensaries in California. So yeah, I definitely see that range of 10 to 12 being attainable and a lot of it's driven by the dispensaries and getting the dispensaries up. Great. And based on your projections, which months do you expect to reach profitability if those revenue numbers stay on track? That's a complicated question in the sense that what we expect is the operating, we expect that all of our units will be contributing operating profit before public company costs within by that September timeframe, September-October timeframe. The issue is going to be how do those public company costs carve up as effectively now you have right now a conda coming online, you have halo tech coming online and so that's something we're going to have to revisit. But to the core halo business where all the revenue is being driven a conda and halo tech if anything what they do is they relieve public company operating costs to a certain extent, right? Because right now for instance, we're carrying substantial costs for a conda where their business model is very different meaning that where personally I see a lot more upside in the medical markets abroad now that I've been here that I see in the US markets but I see a longer time horizon. With halo tech I see that being a shorter time horizon but a completely different business mindset and I think Philip was looking at maybe I think two or three cents a share is what he was looking at analytically when we looked at that. So that's really a tricky question but if you combine everything and you have it all together Philip sees profitability all together by November, December time frame but it could accelerate depending on what we strategically do with certain assets over the next six months. Let's just quickly talk about that with the halo tech spin off has a record day been determined and how much will halo tech produce SG&A costs when halo tech spins off? So Philip actually has been working on it and record date has not I don't believe been determined yet. There's certain how do I say it I think the way Philip is looking at that business is he's looking at potential combinations with other businesses. So I don't think there's going to be a lot of SG&A relief there but I think there's going to be a lot of upside potential and the other thing that's interesting there is none of the businesses that Philip is looking at currently are 280 taxable. So like hypothetically say he's looking at a novel card business hypothetically he may be looking at this is purely hypothetically let's say testing businesses or other businesses that are smaller that can be that platform but he does have his steps out he does have his audits all being done and I you know honestly I can't tell you what his target is but if I was to sort of put a guess on it I would say end of Q3 early Q4. And are you still on track to reach that 11 million a month in revenue by September this year we're running down to six months left in a guidance of 75 million. That's what I just went over with you in detail right we built it up the waterfall right so if you get six million from if you get six million from your from the core business which is the recreational sales of cannabis products and related products to dispensaries you can get you get six million from that you get another three million from the dispensaries themselves that we're putting up there at very good locations then you got to find another two million right so buffalo as I said maybe let's say we can do three to let's say two to five hundred thousand you have three hundred thousand a month coming from push bar right so somewhere between that ten to twelve million dollar range you'd be at depending on how big of a hit the dispensaries are I mean the dispensaries are really really really critical right I mean that critical cog in the halo recreational North American business. Let's have a there's a question about the California dispensaries how far along in the licensing process is halo for the dispensaries in L.A. Katie you answer this because you live this every day yes absolutely so the third answer is that each dispensary is kind of its own unique it's its own unique kind of worms but starting with the one that is most likely to open that we believe will be open this summer we plan to be open this summer that is the westward location we will be closing on the transaction of acquiring that license as soon as the DCR approves the ownership change which again it's just a regulatory process we're not really allowing it to hold it up because we've actually have a rendering for it a very thorough rendering of every view inside outside we've already been developing the materials the security plans the actual architectural plans and our goal is to in the next week pull permits bid out the project and start construction in July so it's really that will be in a parallel path to all of the regulatory steps that need to be taken and so just to kind of recap there's no site change required because it's the site that was approved with the original application there's going to be an ownership transfer and then temporary approval at the local level that then leads to state license actually can submit both at the same time we can apply for state license and then once the state license is awarded we can apply for the local license to open and those are just kind of a stepwise process there now the Lancasham site that's the North Hollywood site that we've been working on for some time now we actually already have closed the transaction because we have the ownership was passed some time ago that we're the majority owners of that the issue there is that we're still locking down that site and actually we are essentially locked it down but the DCR is still going through its process to approve the site change that's something that again I actually was at an event the other day with an industry event in town and had the chance to hear the one of the managers over at DCR talk a little bit about what they're going through but they've lamented the fact that they've just been short staff they're actually closed on Fridays so to process all of the applications, paperwork ownership site and think about the number of social equity applicants that you know are awarded licenses it's just a tremendous amount of paperwork but we keep pushing through we're in touch with the licensing they call them basically the licensing analysts that work on each of the issue in each of the licenses and all the approvals associated with it and so that one again we think that's a matter of time before and really for the Franklin site too that's the West Hollywood site same thing there we are getting official approval of the site change and then we've already applied for the ownership transfer as well there so they're all kind of in a similar those last two are in a similar holding pattern but like I said with that first site that we do expect to get open this summer is the plans and we pull the permits and the rendering has the finishing touches and the general contractor is going to work we're going to quickly shift over the design team which includes the architect designer basically it's a working group of about four people at the moment and they're going to shift over and start designing those other two sites so they're in the pipeline and it's just going to be we just want to have it on rinse and repeat here and get all three open hopefully by the end of the year that's really the goal and I think but we definitely have our line of sight on that first one it'll be open we expect by August that's exciting so the critical thing there to understand is with Ryan Ryan and now Robin and Steven and the people he's bringing in you would have a heart and Mr. Greens and all the stores he's put up you know including the high time stores that I'm sure a lot of you know the history where Ryan sold have a heart outside of Washington to harvest and then harvest subsequently sold it to high times you know we have you know we have a team that's done this many times before down to the milling of the cabinets down to what layouts work this is not something we have to reinvent I mean we have you know I would say arguably one of the best west coast dispensary operators in Ryan you know as you know as the person leading this charge with Katie and he's brought all his resources to bear so you know that is you know so I'm very comfortable you know again I give Katie lofty goals but I'm telling Katie look I want one up and running by August I want one up and running by September another one up and running by October and they're all killer locations especially westwood which is the first one you guys know LA well where the Mormon temple is on Santa Monica Boulevard you know where the McDonald's is on Santa Monica and westwood that intersection how busy it is it's smack right there it is triple A plus location and the other two are really killer locations as well and I think patience is a virtue here right you know because retail is about location and bringing Ryan on and you know being a little patient here you know as opposed to what I call a little short term pain for long term gain is really where we've been at with these dispensaries but it's really our focus when I leave Africa in the next six days I'm you know gonna you know kiss my kiss my kids up in Seattle and head down to LA Ryan's been spending a lot of time down there and it's a big focus and then we become we start forming that seed to sail sort of locust in California which is really critical to be able to compete with the bigger guys have you been able to identify opportunities to expand or build retail dispensary stores in Southern California and in the Bay Area so Ryan has so the concept there and Katie can talk about it more as clusters but I mean Ryan being who he is has been really active in bringing deals forward and just to be quite frank we're not the only game in town looking for these sorts of deals right and so there are larger MSOs looking for these sorts of deals so we have to be a little bit more nimbler and a little bit more aggressive than them in order to tie some of these up I think we have two right now Katie that we're talking with right we've you know we've lost beauty shows on a couple of them and you know the other thing we're looking for right now if anyone knows of it because I see there are a lot of people online is we're looking pre-ICO licenses in LA so that way we can form a cluster but what Ryan is saying and I think he's absolutely right he's saying Karen look you don't want to have five stores in Southern California in one store up in Manchester that just makes no sense so if you're going to go into the Bay Area we go in with a cluster if we go into now we have three in LA let's see if we can build out more we have a limitation so we need to do pre-ICO Katie anything to add no I think that's exactly right that's the overarching strategy and we're in discussions with two groups now that have couple more than a couple dispensaries whether they be licenses on various stages of operation and are discussing with them what a potential deal would look like and our intention is to move forward but at least one of them but of course the team has to do a lot of due diligence but we try to work on creative arrangements too where we can even keep on some of the acquisition team to do things like urn outs to make sure that you know the actual performance doesn't fall solely upon our shoulders so we try to work on creative solutions to get to an answer and again we still you know we this is an extremely important part of our strategy you know we would like to have as many dispensaries as we can especially building up a critical mass of cluster in Southern California and you know at that point then thinking about expanding to other key markets in the state let's talk about how these stores would potentially be supplied the California cultivation has Triangle received its licenses and can we expect build us to commence and sales for November this year Katie's running point on Triangle but you know what I'm seeing at Buffalo interestingly and with Anthony coming on, Lacombe coming on is I'm seeing a lot of parallels between Buffalo and Barrex or Triangle meaning we're taking from Jed his and Green Matter which is a monster grower right keep in mind Jed and Joe still own like I think up to 20% of connected or 15 to 100% I mean these guys are monster growers but we've taken some of their best practices and we're putting it under shade cloth here in Buffalo and Anthony really is being sent up to Barrex and Triangle to get those you know 20 acres 20 acres of greenhouses packed out and that's what we look at as a phase 2 here at Buffalo right is getting 20 acres up obviously that's going to take a year to two years no matter where you put them up and you know you're looking at just in power alone you're looking at 500 KDA you know so when you look at all of that there are a lot of parallels that we're seeing definitely between Africa and Triangle so that being said I'm going to turn it over to Katie and Katie can tell you exactly where the licensing stands because she's on it day to day sure no problem so essentially the county staff recommended approval of an early activation permit on June 20th that is the permit that we need to proceed to operations you know in a parallel path we've been applying and receiving state licenses but there is a seven day waiting period for neighbors to appeal the county's decision to grant the activation permit early activation permit so that of course will end very soon you know all indications point to receiving the early activation permit so hopefully at the beginning of next week we will have even more exciting news to update everyone on that that's really exciting Katie what about the state level to explain to them how crazy it's been at the state level well we've just you know the state the way the state licenses work is one per 1000 feet of canopy and obviously on 60 acres 80 70 80 acres of grow you're going to have hundreds hundreds of licenses and so we've applied you know obviously we applied for all of them and they've been granting them in tranches I don't know what the running total is right now you know we maybe have we're 50% of the way there but every day we get a couple more and so we you know we definitely think that at the same time that we're getting yearly activation permit more of the state licenses will come in and when all is said and done we're going to be able to you know the state license won't be the state licensing won't be a bottleneck they'll just kind of continue to trickle in as we get up to speed with the early activation great that gives a good insight to folks curious about how that's going to hang out let's talk about Canadian operations when will Halo close on the Krishpard dispensaries and you mentioned they're generating about 300,000 a month when are we looking at closing those yep they're going to close on July 1st so we just before this call I synced with our contact over there he and I have been working on the closing items together along with some of our other team members which is really run the gamut it's been very fun it's been great to integrate and meet some of the team members there and anyway long story short we have a couple more lease assignments to execute on our side and then all is ready to go we've been doing trial payrolls with the company we set up we do have them doing a management agreement for about a year so it takes a little bit of the you know pressure off of us to have all of our ducks in a row and they've been great partners so far but all of the systems are in place the inventory counts all of that all of it's taking place and all of it's set to close July 1st that's excellent I think that's some of the most exciting news folks we're waiting for so what's going to be interesting there is as opposed to doing things the way we've done them in the past where we go let's say from cultivation or manufacturing down through dispensaries in Canada our approach is going to be tactically the opposite like a PE firm so we're looking at a bunch of sort of little clusters of retail like this that are profitable that we can LBO where we don't have to use equity per se but we can LBO here on this one as you guys know Raj and company at Hytide are basically financing them and so what will be critical then is to get our products listed and this is where Tage kicks in again and in my mind and we're still sort of debating it is that really the Canadian business really belongs with a condom more than it belongs with Halo because Canada is part of that whole INCV that whole a lot of Canadians are exporting a hell of a lot of product to Europe right and so Canada is part of like that global cannabis economy that America just is not part of so it probably fits more in with Tage and that's the business him and we just brought Dallas on from I think it was Terrison so we brought people on to start looking at that business and again it's the same sort of concept in Canada that we have in Africa where you take trusted California brands and you start bringing them and you start bringing novel products that aren't in Canada right and sometimes we win and you know sometimes we've lost I mean with dab tabs it turned out to be like a flop in the western United States but it could turn out to be the golden ticket in the UK with the NHS with with dosability right so you never know and you mentioned that the Christmas are essentially finance they have enough cash right now so do they have enough cash the way the deal works and again you guys can look on CEDAR I'm sure it's all filed there is that we have to buy the initial inventory right but they manage it for us and if it operates at a deficit they fund the deficit to a certain degree isn't that the way it works Katie help me if I'm saying it right if I'm not please correct me sorry when I meet there for a second guys no I think that that's definitely the gist of it so again I mean not to get too far down in the weeds here but we can look up the particulars of the accounting but the intention is for it to be profitable and they are already profitable the stores after the expenses so great I'm going to take this back to Tesh this is a question regarding the possible a condo spin-off has there been any progress made in your strategic planning regarding a condo being listed on the LSE or NASDAQ we're exploring all strategic options right now and so for many reasons we can't comment exactly on things like spin-outs and keeping in mind the strict rules of the financial regulators that govern us but what we can say is that the assets fit neatly together in a package we've done all of our audits the right way and these types of things that set you up to becoming an independent company so we're going to do what's right for the shareholders and what creates the most value and it's going to be creating a business that generates great returns and creates that value excellent that's a great response I have a question regarding Malta what's happening with the letter of intent for purchasing med-can and how does that impact the $30 million off-take agreement that was signed okay so with med-can and Malta how do I say this in a tactful way Tasia's Rolodex is a lot deeper you know heading up in Europe and working at Canopy and Chiron and building up the businesses so Tage has his own vision of how he wants to go about entering the market Malta may be part of it but he has his own vision and so that is the plan how do I say it the plan with Tage is becoming a lot more sophisticated because quite frankly the medical business what I've learned over the last three weeks and taking a crash course from Tage is very very different and very very very different from the recreational business so what I have to tell you is that is that I think the issue for Tage is going to be how much we're going to be able to grow actually Tage what's your vision for a condom yeah so okay I think there's many ways to get your product to market and what's happening is now that the European market is starting to develop you're starting to see parts of the value chain develop into niches just like you would any other type of market so you've got your distributors your sales and marketing firms your growers and you don't necessarily need to tie it all up at once that's the right thing to do if there is a return map that makes sense then you do that but like I spent the last almost two years building a business which was AcidLite I was able to do brand licensing agreements and really be sort of like a Coca-Cola like on the formulations and outsource distribution and manufacturing now I'm coming at this from a really unique supply asset and so I can say that just over the past week I've had half a dozen important distribution partners reach out and it's really now just figuring out which is the best what makes sense for our product set who's going to position our product the best or do we do a mix up you know sort of build versus partner so I'm running all of those calculations now well you know sort of getting a feed under the table really understanding the assets it's hard to make deals when you don't really touch and feel everything and that's what we've been doing I mean we're here literally touching feeling, tasting that's the way to do it that's the way you have to do it I mean Chad we brought Chad with us who just stepped in from the airport himself we're going through bags we're grinding it up we're smoking it we're in it literally in the conference room working it the way we used to work it and Andreas and I have always had and Phillip as founders of all that has a philosophy is whatever you grow you're going to sell and you're going to sell a good margin and the key is to just grow it and growing it for Europe requires a little bit more stability a little bit more testing requires a little bit more of everything because it's pharmaceutical and Tage brings that and he brings that distribution I think the best analogy I could say is when you see those plants growing out in the field think like you're growing like atvills think about bringing it to the market the same way it's medicine it's having a certain amount of shelf life it's having a consistent API content so the active pharmaceutical ingredients THC and CBD that fall within a fairly narrow range in some ways it's a good thing for the patient at the end of the day you're expecting a certain outcome you're going to get it by following all these strict regulations and then when you have pharma grade regulations which ensure that you're getting safety checks all the sort of clean room stuff to make sure contaminants are extremely low I mean you know you're getting a much better product a much better experience than you would say the black market alternative and we're still way early days in Europe I mean the German market 250 million euros last year but the market sense is probably 10 times that if you look at just putting it on the same types of numbers as say Canada or states in the US Gorilla glue is the number one seller in Germany by the way number one I just want to chime in there quickly I mean to me it's definitely the way you're saying Tej in Europe but even in the US the data is out there consumption through legal channels is nowhere near where it can be once there's federal legalization so for each sector of our business there's just tremendous growth on the horizon regulations kind of continue to keep pace and make improvements but the reality is all of legal consumption flooding into all of consumption flooding into legal channels is just like a landslide effect for every part of our business great I have a couple questions left before we're down to our ending thoughts a question just a quick question from our group here can we get some clarity on which part is going to be a part of the Akonda basket or is that still up in the air it's up in the air it's up in the air let's move to operating efficiencies I hope it's part of the Akonda basket because I really want to zero in on Oregon California and let him he's the Canadian citizen he's the dual citizen not me so I'd rather put it in his basket than mine but it's fine I like but it is what it is let's just talk about operating efficiencies you mentioned earlier you're bringing in in-house counsel and security how much will the company be able to reduce in cost bringing in those in-house for the upcoming quarters well in Q2 you're going to probably see a pop in cost but by Q3 you'll start to bring it down so we brought three key functions in house we bought regulatory with Robin Francisco that Ryan brought in and she's dynamite I mean she did it for have a heart for the longest of times and as an independent consultant we brought in Steven Round to reduce our security and our and our safety costs and he's already how do I say it he's already paid for himself for a year and some of the stuff he's found which surprised us but now we're bringing security in house we're bringing safety more in house and then the third area as we brought Julie who was I think the number two general counsel at Yahoo or number three really seasoned as our general counsel who's trying to get all of that sort of under control as we grow now with the exceptions of Tasia's business is different but with the exception of the business that I focus on besides right now Oregon cultivation and California retail I think those are the two areas on our plates and right now are we going to go buy a license in New York no are we going to go buy a license in Virginia so I think you're going to start to see a lot of those costs that we've had to expense with the acquisitions we've made I think we're both I think we have all the products we need we cover all the major product lines you know we cover you know we're covering seed to sale so really what you're really going to see now is if anything we're pulling the trigger on more Oregon cultivation and we're pulling the trigger on on more California retail right internationally I can't really speak for Tage because he's just starting to formulate his strategy so you will start seeing that SG&A as a percentage of sales come down and so what I preach to everyone on the US side of the business is there are three things that have to happen your revenues have to go up your gross margin has to improve and your SG&A is a percentage of sales has to decrease and that's a metric we look at not month by month but week by week almost okay I'm getting the signal from Cody here for my last question from our collective batch here this is going to be about the stock price development there has been consistent sell-off in sizes of 2-4 million shares at a time and as you can publicly see there is frustration from some investors when continually acquiring companies via shares is Halo at a tipping point with equity-based acquisitions so what we want to do now is use the entire balance sheet to the extent we can so be it you know I think we already have a facility in place with leaf link which is something we've never done before we have that working capital facility in place which we pulled only once in a while but what we're trying to do now is like say for instance hypothetically we buy a large indoor grow and what we're going to try to do is finance the improvement or the construction of that grow through debt as long as we can get debt below our average cost of capital which I think Phillip thinks about 16% are there about so we're going to try to use more debt then we've grown up now with what we can actually start to use some debt and has the ATM been used at all during this what you'll find out if and when we've used the ATM during the second quarter report because it'll be in our second quarter report excellent I believe that wraps up all the questions from the community that we funneled into this nice type list for you Katie, Tej, Kiran, Cody, Beth thank you so much for carving this time out for us and putting us together and answering some concerns that the investors have I believe you answered them well and to your fullest capability and we look forward to the news flow that's going to be coming out Thanks for having us and we apologize for and we've all been on the go today we can understand thank you so much take care bye