Greetings, and welcome to the Aurora Cannabis Inc. First Quarter 2022 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, Tuesday, November 9, 2021. I would now like to turn the conference over to your host, Ananth Krishnan, Vice President, Corporate Development and Investor Relations. Please go ahead.

Thank you, Betsy, and thank you all for joining us. With me today are Aurora's CEO, Miguel Martin; and CFO, Glen Ibbott. After the market closed today, Aurora issued a news release announcing our financial results for the first quarter of fiscal '22. The release, accompanying financial statements and MD&A are available on our IR website and via SEDAR and EDGAR. In addition, you can find a supplemental information deck on our IR website. Listeners are also reminded that certain matters discussed in today's conference call could constitute forward-looking statements, which are subject to risks and uncertainties related to our future financial or business performance. Actual results could differ materially from those anticipated in these forward-looking statements and the risk factors that may affect actual results are detailed in our annual information form and other periodic filings and registration statements. These documents may be accessed via SEDAR and EDGAR. Following prepared remarks by Miguel and Glen, we will conduct a question-and-answer session. For retail investors, we have compiled questions submitted to us prior to the call. [Operator Instructions] With that, I would like to turn the call over to Miguel. Please go ahead.

Thank you, Ananth. We are pleased that our track record of strategic and financial progress from fiscal 2021 has carried into the first quarter of fiscal 2022 and in our efforts to build shareholder value or gain momentum. Our transformation plan is on track, and we continue to expect to achieve adjusted EBITDA profitability sometime in the first half of fiscal 2023. We focus on 4 areas to achieve this goal. First, we're the #1 Canadian LP in global medical cannabis revenue with leading margins of over 60%. This is nearly double what the industry generates in adult rec. It's our competitive advantage, and it's why we're allocating further resources to the Canadian, European and Israeli medical markets. Long term, we see medical continuing to expand globally, and we strongly believe the leader in medical will be the key beneficiary of recreational cannabis when legalized. Second is redesign the company to create a more efficient and effective enterprise. A big part of this is expense reduction. We've already achieved run rate savings of approximately $33 million from our [ announced ] plan in September, which puts us on target to achieve $60 million to $80 million in cost savings without impacting planned growth investments. Third is our strong balance sheet and improved cash burn of only $16.6 million this quarter. This not only supports our organic growth, but also provides us with the means to evaluate M&A opportunities. To be clear, if and when we make an acquisition, it will be accretive with managerial talent we don't currently possess and align with our premiumization strategy. Fourth, our Science and Innovation business unit. This business unit is focused on launching a strong pipeline of new releases globally to leverage our intellectual property in genetics and biosynthesis. But first, let's briefly discuss…

Thanks, Miguel, and good afternoon, everyone. I appreciate you all joining us today. I will now review our Q1 2022 financials, which I believe show both the distinctive strengths of our business and our progress on our business transformation program. Let me point out a few of the highlights. We have one of the stronger balance sheets amongst Canadian LPs. This consists of approximately $424 million in cash, no term debt and access to $1 billion through a shelf prospectus, including a $300 million [ US ATL ]. Our capacity to raise capital is available to us as financial firepower to be used for strategic and accretive M&A opportunities. Our cash flow also continues to substantially improve year-over-year. In Q1, cash use was $16.6 million, down from $142.8 million in the comparable period a year ago. We have plenty of cash to fund our operations as we move towards profitability and positive free cash flow. Our core medical businesses continued to deliver overall growth and a normalized gross margin in the 60% range with 64% in Q1 2022. This strong margin profile has held steady over the past few quarters and is an important gross profit driver that both distinguishes us from our competitors and is critical to reaching positive EBITDA. Of course, our SG&A is also a fraction of what it used to be in prior years. And upon continued execution of our business transformation plan will be coming down further. At a summary level, our Q1 results benefited from our broad diversification across international medical, domestic medical and adult recreational segments. Overall, Q1 net cannabis revenue was $60.1 million, 10% higher than last quarter. Our medical cannabis segment continues to excel, generating $41 million in sales and a gross margin of 64%. Medical represents about 68% of our…

Thanks, Glen. Before we go to Q&A, let me leave you with these final thoughts. We are very pleased that our transformation plan is on track, and it's important to note that the foundation of that plan is medical cannabis where we expect continued revenue growth with very high margins. Aurora remains the #1 Canadian LP by medical cannabis revenues globally, and we've been able to differentiate ourselves in Canada through investment in our proprietary end-to-end patient infrastructure, which create barriers to entry in a sticky insured patient base. We expect to be a market leader as jurisdictions around the world continue to open up. Our #1 position in Medical also paves the way for success in global adult recreational cannabis. As medical-only jurisdictions evolve, our most recent proof point is in Netherlands, but others will surely follow. Our regulatory compliance, testing and commitment to science, make Aurora the ideal partner in both medical and rec over the next decade. As far as adult rec in Canada, we believe the market is in the process of bottoming and we are encouraged that our premiumization strategy is gaining traction. We also expect continued innovation in our product pipeline, supported by our Science and Innovation program. Most importantly, any softness related to the discount segment will impede our ability to reach profitability. To that point, we've already achieved $33 million run rate cost savings, but more on the way. This positions us to achieve EBITDA profitability in the first half of fiscal 2023, and our team is aligned and energized to get there. Thanks for your time today. We're excited about the secular opportunity that continues to be very significant. We look forward to updating you on our progress. Before we take questions from our analysts, I will turn the call over to Ananth to ask a few questions from our retail shareholders who were invited to submit questions ahead of today's call. Ananth, Please go ahead.

Thanks, Miguel. Let's begin their questions. The first one here is the following. When do you expect to enter the U.S. market?

So Ananth, it's a great question. First and foremost, know that we are spending a lot of time focused on the U.S. and paying attention to the U.S. I personally have over 25 years working in the U.S. with the FDA, ATF, DEA and have a very keen sort of perspective on this topic. What I will say is that our strategy of being thoughtful and being patient has clearly paid off. If you look at assets in the U.S., they have declined in overall value by 60% to 70%. And so taking our time from a valuation standpoint clearly has been the right play. And secondly, the Biden administration has been consistent, medical first plus decriminalization. And so with that, we expect that the #1 Canadian medical company and one of the largest Canadian LPs medically globally will have something to say about that. So when you think about our overall goal of EBITDA profitability, we're not going to put that into risk by looking for a nontraditional investment. That being said, with the right opportunity, we have the balance sheet and financial flexibility to be opportunistic when we see the right transaction. And so as we go forward with that, we'll continue to keep an eye on it. We understand the news of this week and what's been put forth. And obviously, we'll pay attention. But I'll leave you with this. The work that we do in Germany, the Netherlands, the U.K. and Israel, all around the world in excellence, in a regulatory compliant framework is what best positions us to be successful in the U.S.

Great. Thanks, Miguel. Our next question is; can you tell us more about your upcoming product launches and new innovation initiatives.

Absolutely. So first and foremost, as a company that has a globally diversified business, we get benefits out of innovation, out of our scientific progress, both in the medical business, but also in the rec business, which is probably more of the gist of your question. If you look at our full year 2022 innovation calendar, includes over 80 new SKUs. In Q4 full year '21, we delivered 25 compelling new products to the market, followed by another 22 SKUs in Q1 of 2021. And this has clearly been our most significant and successful innovation push since legalization. Those innovation SKUs are doing extremely well. And right now they're driving almost 40% of our wholesale revenue, reflecting really strong customer and consumer interest. Those SKUs are heavily skewed towards new flower rotations that are powered by our genetics breeding facility that I mentioned previously as well as new concentrate and edible SKUs that have been driven by historical investments in new capabilities and competencies. Beyond that, we're also seeing great value in limited runs and seasonal offerings. And this winter we'll be offering a [indiscernible] for the holiday season under our drip rain that we think will be received very well. And we're also introducing hash for the first time, which we've re-launched under the Whistler branding with new packaging and price points and are planning on releasing a whole new lineup of rotational genetics that come from our Coast facility. So overall, there's a big focus on innovation. We get benefit out of it, both in our rec medical businesses, and we see it as a key component of our premiumization strategy.

Perfect. And our third and final question from the retail shareholders is; which international markets do you view as the most important for the business? And how are you planning on staying ahead of the competition in those markets?

Well, Ananth, yes, that's a great question. I think everybody has been so focused on the U.S. that people forget that there's a huge world out there with positive cannabis legislation and regulations evolving. We've talked about Germany. We've talked about U.K. We've talked about key markets like Australia. But the reality is these are really big markets with huge opportunities. But each and every market has these core conditions, highly regulatory, be compliant, significant hurdles in everything from manufacturing to packaging, the sales and marketing. So we see huge potential in our ability, and we've seen great success historically. But there are a couple of -- several core markets that we're really excited about, and I mentioned some of those on the call. Israel was a large driver for us in Q1. And we continue now the bulk sales that we'll have with our partner, Cantek, to continue. Also, our partnership with one of the most forward regulatory agencies, the IMCA under the leadership of Yuval Landschaft has been really important. And we think the investments and work we've done with Yuval and his team definitely will pay dividends globally. We've also announced our entry in the Netherlands yesterday, which we expect to be significant, about a $2.8 billion market in the future. And in terms of European Medical, which is set to become about a $5 billion market by 2025, we're really excited about our leadership in a couple of key areas. The #1 supplier of flower in Germany is of September, almost a 35 share, growing share of the oils market, and we've doubled that share since September. We also believe we're the #1 in the U.K. dry flower business where we had an exceptional quarter. And as we've mentioned, we're the exclusive flower supplier, 3 of the 9 tenders in the French medical cannabis pilot program. And as to what sets us apart from the competition, our consistent regulatory expertise, science, testing and compliance have been recognized all around the world as our ability and a real differentiator in our ability to succeed in those key markets. We're not going to rest on our laurels, and we're aiming to maintain and grow our market share as these markets develop. And we know that the expertise and experiences that we have there will play well all around the world and including the U.S.

That's great. Thanks, Miguel. So that's the end of the retail shareholder questions. Operator, I'll turn it over to you for questions from the analysts.

[Operator Instructions] The first question today comes from Vivien Azer with Cowen.

I wanted -- as important as the medical business is, and we've talked a lot about it on prior quarters, I actually wanted to focus on your consumer business in Canada because the mix shift is apparent and it's certainly a positive evolution of your portfolio. And then in looking at the Hifyre data, it looks like you're having some similar success and sequential market share gains for your portfolio. So Miguel, one question, but 2 parts. The first is, as you look at the components of your market share gains, and perhaps you can comment through the end of October since we've already closed out that month. Which was the bigger driver, San Raf or Whistler? And then as a follow-up to that, how do you think about these third-party craft brands sitting in and driving not just top line growth, but also not being dilutive to your margins?

You're welcome. So Viv, if you look overall in the Canadian rec business, just a couple of points. One is we're only 3 years into it, and it's a bit of an irrational market. Most of the market share gains from competitors are coming from the large pack size, which is really a value play. And as we've talked about, we're focused on premium. So as an example, the discount 28 gram, which in some cases might even have a negative margin in certain provinces, people are chasing because of excess inventories and a bunch of other things. We're exiting that. When you look at Quebec, we see extremely strong response. So specifically to answer your question, we're seeing most of our premium growth in San Raf. And this was a strategy we announced about a year ago, and you're definitely seeing others follow it. If you want to have really large market shares, I just don't think it's a profitable strategy in the short term. This market will rationalize a bit. The other thing, as you talked about Hifyre data and clearly, syndicated data is evolving and is getting better, but it's just not there yet in a way that maybe others would look to say in the U.S. of IRI, Nielsen or in tobacco like [ MSA ]. And so while we look at Hifyre data, it's only 50% coverage in Ontario. It's only 30% to 40% coverage in A.B., B.C. and Saskatchewan. And there really is little coverage in the SQDC where we see a lot of our overall business. So I don't think it's the end all to be all. At the end of the day, there are places where you can make money in Canadian rec premium aspects, in some of those premium categories definitely are that, we're focused on that. And I think for those that are really of their hard set or looking at overall market share, I just don't think there's a direct correlation between overall market share. So we're going to stay focused on San Raf and Whistler. We've seen great response there of our new cultivars. We also then can take some of those assets and put it into medical. And I do think if you look at Colorado and California, as an example, you do see premium categories start to evolve and really articulate. I got to believe that we're going to see that in Canada. It's just not there yet. So we're not going to chase down the rabbit hole with lower margins, particularly in the discount category.

The next question comes from Pablo Zuanic with Cantor Fitzgerald.

I'm going to focus on the export business. You talked about the stickiness, right, compliance, your science, your innovation. But can you just discuss more the cost side of things? I mean, your -- my understanding is you're shipping in Europe from Denmark, right. We hear other producers that claim to be low cost and that they could enter Europe. I'm sure it's not as simple as that. But just talk more about stickiness because the idea that compliance -- being compliant with the regulatory framework in those countries is a key competitive advantage makes me wonder whether others could easily emulate that and just break in with lower cost and maybe more distribution than you have. If you can expand on that, please.

Sure, I'll be happy to, Pablo. So it's absolutely an advantage and you have -- take a look at Germany. The reality is the standard in Germany is you have to have within a 10% deviation on the core components, particularly potency. That's a really hard thing to do. And so you have to have a pretty advanced facility in order to be able to consistently meet that. That had a big role in us gaining almost 1/3 of the entire flower business. So that would be one example. The second example would be Israel. I talked about the IMCA, and Yuval Landschaft's leadership. They have the highest standards of anyone in the world and include about 44 pesticides that no one else has even tested for. So it's not only having CUMCS certification, which is a pretty unique certification beyond EU GMP, but also your ability to test, package, ship and have all of that has made a significant difference in Israel. I don't think even though that there are places around the world where you can produce cannabis cheaper, that the overall certification, reporting, consistency of production and entering those markets make that as viable. I mean, remember, we're talking about medical patients. We're not talking just about recs. Medical patients and their clinicians and their physicians will find an item that they like. They want it to be of the highest possible quality and consistently available to them. And so that is the same situation over and over and over. And there's a reason why the same companies are being successful in Germany, U.K., France, Netherlands, Israel and it's about compliance, regulatory forward, all of that infrastructure that you need. And while -- and maybe in the short-term, there's a little bit that you can do on low-cost products, is not there. And I will say also that this is a place where like-minded companies agree. And so while we may be competing against some of the larger other LPs, we all agree that having a proper regulatory framework and adherence to compliance measures make sense. So there's no disagreement on that. So there's absolutely a high bar to get in. It makes a huge difference, and it's obviously the reason why we've done so well in some of these key markets. You mentioned shipping costs. Yes, we do ship from our Denmark facility, and in some cases, particularly with Israel, we ship from Canada. It's not insignificant, but it's not a prohibitive cost because in many cases, you're shipping bulk and getting into finished goods in market.

The next question comes from Michael Lavery with Piper Sandler.

Actually, I just want to go back to the rec business as well. And just to understand some of the context and outlook and specifically, with San Raf and Whistler, in particular, having 29% sequential growth and all of medical, even with the international boost from Israel, being up, I think, 17% sequentially. It was clearly a really strong performer in the quarter. You've made it very, very clear, your emphasis on the medical side. So I guess just how to think about this? Is it just that you can walk and chew gum or was there some more one-off things driving that, that aren't as sustainable? Can you just give us a sense of, is rec really just a question of premiumizing and that you can do that and it's the focus within that piece? Or is it just a little bit more lumpy and medical is really the focus?

Well, I think, Michael, right now, clearly, if you look at margins and you look at overall profit opportunities globally, it's medical. So margins in the mid-60s really sticky, meeting all the infrastructure, high hurdles to get in, all the compliance stuff I mentioned internationally, medical takes a unique skill set, and that's one that we have. I think on rec, it really -- right now, you have to remember that in Canada, we're only 3 years into this experiment. And in the discount arena, which is a decent part of the overall business, it really is a commodity. And so pricing is really driving all of those major decisions. And so we're just not going to chase that at the expense of profitability. In the premium categories, new differentiated and innovative really matters. And so those unique cultivars make a big difference. And we see that articulate itself with Whistler and San Raf. The benefit of our system is we also can take those same products and put it into the medical business. And so you'd find Whistler products, which we've now put into our medical channel doing exceedingly well with our patients. You see the same thing with San Raf products. So there are efficiencies. So the point of chewing gum and walking at the same time is clearly an opportunity to get benefits out of both. But I think if you're laser-focused on profitability and sustainability, you're going to focus on those areas that are more consistent, which are right now is medical. Now we're not taking our eye off of rec. I just think rightsizing and doing it an appropriate way and also finding areas where they're more asset light. The genetics business that we've invested in historically is wonderfully accretive. Biosynthetics and other aspects of genetics, we think will be really important in a global environment as people are looking for that. So I think as we weighed out our strategy, we're right on track where we want to be steady as we go. And I think over time, the rec business in Canada will become more rational. And in that, the efficiencies that companies like us will have will come more to bear. But right now those that are chasing the discount business, I think they're in for a little bit of more of a rocky road, but the premium business is rational. And for those that say that the rec business is broken, I would ask them to take a good look at Colorado and California, which appear to be about 18 months ahead of Canada, and you are seeing good success not only in margin-accretive categories, but in premium brands.

The next question comes from Andrew Carter with Stifel.

I wanted to ask about the Canadian Medical business. I think it was down 8% year-over-year. So I know that there are some patients that are sticky, the government reimbursement, some that are more fluid. But could you kind of give us a sense of where that business should stabilize and you should see that start to grow from either market share or patient growth standpoint?

Sure, I'd be happy, Andrew, and thank you for the question. So I'll kick it off and then let Glen come in on the back side of it. But right now, we're seeing a little bit of interaction, as Glen mentioned, between the rec business and the Medical business. I think it's mostly in those that aren't receiving reimbursement, most evidenced by the fact that we grew share, yet you saw a little bit of a decline. It's hard to say what the steady state is. We're hearing some positive news about unions and different groups that will be bringing cannabis on. Right now it's only about 1% of the adult population in Canada is connected to that system. So we do see an opportunity to not only see [indiscernible] grow a little bit as things normalize, but also continue to grow share. Glen?

Yes, thanks. Quarter-over-quarter, the sales to the reimbursement groups, in veterans in particular, was absolutely consistent. I think there was $3,000 difference quarter-to-quarter. So it continues to be very strong. A little of the decline that you talked about are, well, all of the decline is in some of those non-reimbursement patients. So we -- as Miguel mentioned, there are groups out there that we have targeted. We continue to work towards kind of really into contracts in that way. We're also launching a number of products and innovations that we believe will appeal to our existing patient population, particularly the reimbursement ones. So you might have seen something launched, I think, in the last couple of days as the [ PAC ] system, a nice bundle for veteran patients, [indiscernible] and great pricing to continue to reward and engage those that are -- really important patients for us. So we think we can get more out of the current patient population and then continue to look for some of those stepwise changes in bringing in associations and unions.

The next question comes from John Zamparo with CIBC.

I was hoping you could help us better understand how you expect the Netherlands market will play out. And generally, Miguel, you prefer medical-only markets. But it sounds like you're excited about the Netherlands transitioning to rec. I would say your performance globally has been better in medical markets than in consumer. So is the reason for excitement on the Dutch system that it seems like its limited license with barriers to entry? And can you talk about your confidence in why it will stay that way over the long term?

John, it's a great question. So I had the pleasure of being out there and spending time with our teams, spending time in the market and more importantly spending time with our partner, which is the Growery. I mean, as I think everyone knows, this is -- the cannabis experiment in the Netherlands is 50 years in the making. The reality today is it's a very sort of formal and legalized structure for the coffee shops, the over 600 retail outlets, but the production parts has been sort of a black hole. The government particularly wants to clean that up and create much more of a legal market. So I get excited when there's financial incentives. There are only 10 licensees in this experiment, and we're one of them. And we're excited about the partner that we have. Clearly, there are going to be advantages for those 10 at a time in which we expect this goes legal. All the economic incentives line up. And yes, we do like a medical-only market given our expertise and given sort of how we've gone about it. But I believe that medical is a step towards rec. When you have a strong relationship with the regulators, you can understand the marketplace, you have a sense of what product portfolios are doing well. It gives you a significant advantage. This is a massive market. We've talked about it being when it all goes potentially even as big as Canada and there's going to be a clear advantage for those that participate early. So for that reason, we're excited about it. We clearly have a lot of infrastructure in that part of the world and success. And so I clearly believe that countries like this success begets success in a lot of different ways. And so this is an example, I think, of where we are bullish and the opportunity to have it, participate both in the medical and rec business. And so more to follow on that, but this is really 1 of only 10 licensees. We've got one of them. We've got a great partner. It's a big, big market and all the incentives from the government, the regulators, the retail owners all line up well here, and so we think we're in a good spot.

I'm going to add just a couple of comments. So as Miguel said, 50 years in the making, this is an established market. So there's not sort of guess work on how big the market will be. There's a number of cities that are required, all the coffee shops and most of these are required to participate in this trial. And one of the things I like is this is right on strategy for us. I mean, it is, we'll call it premium margins, premium pricing. So this is typical pricing, international pricing and markets for us. So it's a very compelling opportunity, and we're excited to be -- we think one of the leading companies involved there.

The next question comes from Tamy Chen with BMO.

The 29% sequential increase of sales in your premium consumer brands, I mean, that's pretty impressive. But can you help us understand, like is this growth from activating more store funds to carry our new cultivars? Or, I guess, some of this growth in new orders because these products are seeing good consumer traction. And I'm also just curious like when do you expect to actually be in a state of sequential growth in your consumer segment? Because I know the decline of daily special sort of puts an offset to your premium strategy.

You are welcome, Tamy. Thanks for the question. I'll take the first part and let Glen take the sequential quarters. So I would say that there's -- as with all things with the consumer product, there are probably 4 primary reasons why we're seeing growth. First and foremost, the products are better. So if you look at the uniqueness of the attributes, if you look at the potency, if you look at the genetics and those new cultivars and what we're seeing on San Raf across the board are better. Takes longer than I would like for this reset to take hold. But so the overall proposition, I would say, is more compelling. Secondly, you correctly brought up distribution. We've partnered with what I consider to be the best and largest broker in Canada that has national coverage. Southern Glazer does a wonderful job for us. And every month, we're able to touch about 90% of the volume, which allows these new brands to get in. Third is, as you know, navigating the provincial buyers is hard. And so the fact that these new cultivars are differentiated, unique, higher potency has given us a higher success rate of getting them through that process, which particularly in Ontario, I think it's a challenge and you hear from everyone. And I think, lastly, the overall sort of consistency and as we see new being the most important thing that people are buying, the steady sort of rollout of these and seeing that not only in flower, but other brands, has started to bring some of the shine back to San Raf, particularly with budtender and store owners. And so we're going to continue to roll this out. We're really pleased with the coverage, so to speak, of our genetics. You're going to see everything from continued new cultivars and new genetics from San Raf and Whistler, but you're also going to see a lot of seasonals and you're going to see what we call collaborations. The North 40, for those that are familiar with [indiscernible] that company, they are one of the preeminent [ craft ] growers. And for him to select Farm Gas and to be so positive about it and do so well, speaks to our ability to produce cutting-edge genetics. And I think for a lot of people that thought that big cannabis can't grow great, niche, high-quality flower, I think that's a testament that we absolutely can and will. Glen, do you want to pick up on the run rate from quarter-over-quarter?

Yes. Sure. Tamy, we were up in most provinces, a good 50% or more in Alberta, B.C. and Quebec is a strong point for us, for sure. I think 33% of our consumer revenue came out of Quebec in Q1. Ontario has been not the crack, obviously. And I think we've put a great foot forward with the recent product call and the innovation that Miguel was talking about, I think is the route forward there. So I expect that as Miguel has outlined it, it's a continuing challenge in the consumer market. But the innovation that we've been putting forward and the success that we've seen with that innovation to date, I think, is positioning us well to get this back on track over the next little while. And again, I think Ontario is the key for us because we are seeing the pickup in the other provinces where we've been able to get the product into market. Quebec, for instance, is interesting in that if you're selling it in Quebec, it's in all of the stores. And it's all also -- there's not as many LPs in Quebec, it's just a different market and there's certain constraints and only certain LPs can operate in Quebec effectively. So great market for us. San Raf has been there since the beginning and has a great reputation. So when we put -- when we renew the brand with new cultivars and especially the type of cultivars we put in there, we see the pickup and we see the response, you see it in social media and things like that. So that's the route forward for sure.

The next question comes from Doug Miehm with RBC Capital Markets.

My question just has to do, you talked about the stickiness of the international medical business. And I'm just curious, the $16 million or so and with the large order coming out of the Israel during the quarter, is this sustainable? Or are we going to see a little volatility over the next several quarters? Or are we going to have a benefit from other countries offsetting maybe a decrease in Israel quarter-to-quarter?

Yes. So it's a great question. So certain markets are steadier than other markets; Germany, U.K. are steadier. When you see other markets, say, like Poland as an example, this last quarter, we saw a bit of a regulatory hitch for a lot of companies, including us, and that caused a delay in timing. Israel is a bit of an evolving market. So it's hard for us to say it's going to be steady. But when it's open, we do extremely well. So we don't really give guidance on Israel. Now to your point about other markets opening up, we always hope for that. You'll know about the big ones. So France is obviously in their process. We talked about the Netherlands. And so I can't give you an exact sort of guidance quarter-over-quarter there. But what I can tell you, though, is that it is the same conditions that either open or close the market. Can you meet the standards? What's happening with the overall product specs? What's going on with the packaging? What's happening with the testing? All of that is sort of consistent. So when you win, you win consistently. And while there are timing points or hiccups or whatever you want to describe it, we've done really well. We -- I think more so than almost anybody, when there are profit opportunities to be had, we're there. Israel is a really good example. I've spent time in Tel Aviv, I have incredible respect for Yuval Landschaft, who's the lead regulator with the IMCA. We were one of the first companies to be able to navigate that process and ship what we think is the largest amount of cannabis in Israel, 3 of the 9 flower tenders in France. And so I wish it was steadier and sort of more formulaic about us being able to project it out. But I think if you're bullish on the macro theory of global cannabis and you understand the high regulatory hurdles, and you understand that these regulators all talk to each other and there's a lot of interaction. You're going to see the same companies win time after time after time. And I absolutely believe the FDA is going to be running a similar process, and they're going to take a deep interest in what's happened with agencies such as the IMCA in Israel or Health Canada in Canada. Glen, anything you want to add?

Doug, the diversification of the country, so Miguel alluded to it. It's really important to have a basket of countries as they're all developing. Poland, for instance, where we sold almost nothing until last quarter, as we had to reregister our Danish production facility for shipments into Poland. And now we've got that registration and shipments into Poland restarted in October. But that -- so Poland down, but the U.K. was up 50% and Australia was up 50%. So for us, the diversified basket of international markets is important as they develop, to your point Doug, some will offset others as we grow. And it makes it a little bit more predictable, a little bit more consistent to have that portfolio.

The next question comes from Frederico Gomes with ATB Capital Markets.

I just want to go back to your investment in the Netherlands. When should we expect sales to start there? Just how long will it take for your partners there to start operating? And then in terms of margins there as well. I know you touched on the premium strategy there, but I imagine that those margins, they wouldn't be as good as your -- as your international medical shipments.

Glen, do you want to kick it off and then I'll…

Yes, I'll start. Yes. Thanks, Fred. Yes, it's a very -- listen, I'm really interested in this market. I think it's really cool to see a well-established market like that, that will actually have Aurora brands in the coffee shops when you go to Amsterdam or some of the cities that are participating there. So I look forward to that. We expect sales to start in calendar '23, so a little over a year from now. And in between now and then, the licensees, they're getting their final sort of approvals and building out their facilities in countries. So that's what's happening before. So it starts kind of beginning of calendar '23, we expect to see sales just after that. The margins are similar to the type of international margins. We see that the pricing, like most regulated markets, is fairly strong. And we expect to get healthy -- think about kind of medical like margins, which is why we're keenly interested in it. It's not a consumer market like you see in Canada or more of a premium. So that's how I think of margins and timing of the revenues.

This concludes our question-and-answer session. I would like to turn the conference back over to Miguel Martin for any closing remarks.

Well, I want to thank everybody, and I hope you and your families are safe this season. We're all excited about where we are as a company. Our transformation plan is on track. We look forward to sharing that success with you as we come in the upcoming quarters, and we appreciate everything that you do and covering Aurora. All the best. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.