Good afternoon , and welcome to the Rubicon Organics Inc. 2025 Annual General and Special Meeting Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, July 31, 2025. I would now like to turn the conference over to Len Boggio, Chair of the Board. Please go ahead.
Hello, good morning and good afternoon, everyone. My name is Len Boggio. I'm the Chair of the Board of Directors of the company. Pursuant to the Articles of the Company, I'll be acting as the Chair of the formal meeting, and at the end of the meeting, we will be turning this over to the CEO of our company, Margaret Brodie, for questions and responses. With your approval, I will appoint Calum Clayton to act as Secretary for this meeting. Unless anyone objects, no objections here. With your approval, I will ask Arif Shajahan of Odyssey Trust Company to act as scrutineer of the meeting. Seeing no objections, I would also like to introduce the other members of the Board of Directors, who are at the meeting just now. Doris Bitz and Margaret Brodie.
There may be other directors available by phone or available online, but I can't see you, so I can't introduce you just now. Would the Secretary please assure us that the annual general and special meeting has been properly called?
I have before me an affidavit of a representative of Odyssey Trust Company attesting that the notice calling this Annual General and Special Meeting together with the information circular and form of proxy was delivered in accordance with the Business Corporations Act, British Columbia and applicable securities laws. Therefore, the Chair, this Annual General and Special Meeting has been properly called.
Thank you. I'm advised that according to the preliminary report of the scrutineer, a quorum is present, and the scrutineer's report will be read later when it has been compiled in detail. I now declare that the Annual General and Special Meeting is regularly called and properly constituted for the transaction of business. Before commencing with the business of the meeting, I'd like to ask the Secretary to explain the voting procedures to be followed at this meeting.
There is one class of shares in the company, common shares without par value, which are entitled to vote. The holders of common shares are entitled to one vote for each common share held. Voting will generally be by the show of hands. Each holder of common shares entitled to be present is entitled to vote. The Articles of the Company allow any person present who is entitled to vote in person or by proxy to request a poll, in which case voting will be by ballot with each shareholder or proxy holder having one vote per share. The Chair can also request that a poll by ballot be taken on a resolution. Proxy votes will only be counted on a poll by ballot. Those of you who have filled proxies will receive ballots if a poll is requested or required.
Thank you. The next item of business is the presentation of the Auditor Financial Statements of the Company and report of the auditors thereon for the fiscal year ended December 31, 2024. A copy of the Auditor Financial Statements and Auditor's Report are available from the Secretary. Accordingly, unless someone specifically requests, the Auditor's Report will not be read to the meeting. Unless there are questions arising from the Auditor Financial Statements and Auditor's Report, I shall consider them received by the shareholders as submitted to this meeting. Seeing no hands up for questions, I'll continue. It's now in order to proceed with fixing the number of directors to serve on the Company's Board for the upcoming year. There are currently eight directors standing for election this year, and therefore the Company wishes to fix the number of directors at eight for the ensuing year.
I ask for a motion to fix the number of directors at eight. Is there any discussion on the motion? Seeing no hands, all those in favor, please signify by raising their hand. Opposed, if any, carried. It is now in order to proceed with the election of directors for the upcoming year. The information circular, which was mailed to the shareholders, contains the names of and information about management's nominees to the Board of Directors. There are eight positions to be filled, each for a one-year term until the next annual meeting of shareholders. It is proposed that a separate ordinary resolution be passed, electing Margaret Brodie, John Pigott, Michael Detlefsen, Doris Bitz, Len Boggio, Ian Gordon, Karen Proud, and Jesse McConnell as directors of the Company and to hold office in accordance with the Articles of the Company.
Each of the nominees has previously consented in writing to act as a director. As no advance notice of any other nominations have been given to the Company in accordance with Article 11.3 of the Articles of the Company, there are no other nominations, and I ask for a motion that nominations be closed. Thank you. Any discussion on the motion? Seeing no hands, all those in favor of the motion, please signify by raising their hand. Opposed, if any, that motion is carried. I would ask that these shareholders signify their vote on the following by raising their hand. All those in favor of the appointment of Doris Bitz, please raise your hand. Opposed, if any, carried. All those in favor of the appointment of Len Boggio, I hold my breath during this. Withheld, if any, carried.
All those in favor of the appointment of Margaret Brodie, withheld, if any, carried. All those in favor of the appointment of Michael Detlefsen, withheld, if any, carried. All those in favor of the appointment of Ian Gordon, withheld, if any, carried. All those in favor of the appointment of Jesse McConnell, withheld, if any, carried. All those in favor of the appointment of John Pigott, withheld, if any, carried. All those in favor of the appointment of Karen Proud, withheld, if any, carried. I declare that Doris Bitz, Len Boggio, Margaret Brodie, Michael Detlefsen, Ian Gordon, Jesse McConnell, John Pigott, and Karen Proud have been elected as directors of the company for the ensuing year to hold office until the next annual meeting of the company or until their successors are elected or appointed. The next item of business is the appointment of the Auditor of the Company.
It is proposed that PricewaterhouseCoopers LLP be reappointed as the Auditor of the Company to hold office for the ensuing year until the close of the next annual meeting of the shareholders of the company and that the Board of Directors be authorized to set their remuneration. I would ask for a motion with respect to the reappointment of PricewaterhouseCoopers as the Auditor of the Company. Is there any discussion on the motion? All those in favor, please raise your hand. Opposed, if any, carried. Next item of business is to consider and if thought appropriate, pass an ordinary resolution to approve an amendment to the Omnibus Equity Incentive Plan of the Company, as more particularly described in the Information Circular of the Company dated June 27, 2025.
I would ask for a motion with respect to the approval of the amendment to the Omnibus Equity Incentive Plan, as more particularly described in the Information Circular. Is there any discussion on the motion? All those in favor, please signify by raising their hand. Opposed, if any, carried. Prior to the scrutineer's report, I need to step back for just a moment. I think when I asked for, in connection with the election of Doris Bitz, the question I asked was, were there any opposed? I think the question should have been, were there any withheld? And so all those in favor, if I could step back to that one again, please. For the motion for the election of the directors, all those in favor of the appointment of Doris Bitz, please raise your hand. Withheld, if any, please raise your hand. No withhelds. Thank you very much.
I didn't want to pass that. It does have a correctly recorded. The scrutineer's report I have here, and with your permission, I'll read. There were a total of zero shareholders personally present. There are three shareholders personally present, but by the proxies, there were 39 shareholders present. Securities represented by registered shareholders, there were none. Securities represented by management proxies, 31,130,021. Total securities represented at the meeting, 31,130,021, or 46.34% of our total outstanding voting securities of 67,175,771. I adopt the scrutineer's report and declare accordingly that the quorum was present and ask now if there is any other business to come before the meeting. If not, all the business for this annual general and special meeting was called has now been completed.
Before concluding the meeting, I would like to thank Janis Risbin for her hard work for the company over the past five years as her Chief Financial Officer. Today is her last official day with the company, and we do appreciate that effort overall this time, and we wish you very well in your next endeavors. Before the motion to conclude, to announce that following this meeting, there is a consent resolution signed or being prepared for those directors to nominate Doris Bitz as our new Chairperson, and she'll commence that job immediately following the conclusion of the meeting. Thank you, Doris. I ask for a motion to conclude the formal priorities of the meeting.
I move that this meeting be concluded.
Thank you. All those in favor, please signify by raising your hand. Good. I declare this Annual General and Special Meeting of the company concluded. Thank you for your attendance and your continued support. I would like to turn this over now to Margaret Brodie. Bye, ma'am. You have that.
Good morning, everyone. I believe we should now be able to see the presentation online. You can't see me if you're listening in the ether, but we are present here in the room. Please bear with us if I'm gesturing to something and you miss it. I'm Margaret Brodie. I'm the CEO of Rubicon Organics, very proudly. Today, I'll share what Rubicon Organics has achieved over the past year, what's ahead, with our newly acquired facility in Hope, BC, and why Canadian cannabis deserves renewed attention. With a global shortage of legal cannabis and new markets opening up, premium producers are in short supply. Rubicon is proud to be Canada's leading house of premium brands, a title we've held consistently in what we believe is the most competitive and advanced cannabis market in the world.
Consistency defines Rubicon, not just in elevating consumer experiences and delivering on our brand promises, but also in executing against our commitments. For new investors, we offer a compelling value, low market cap, premium positioning, strong balance sheet, and near-term growth, especially with our expanded supply from Hope, BC. For long-term shareholders, we recognize the frustration of the sector's lack of interest in recent years. With Rubicon's continued profitability, Canadian companies showing strength, and global medical markets gaining traction, I believe our valuation is poised to shift. I'm going to share with you here our disclaimer, and I'd encourage you all to read it in your time. Before we begin, I want to share a short video with some brand background, new launches, and glimpses into our product.
Those of you on the line may not, we'll start it in just a second, but you may not be able to hear the music, and I do hope you can.
Our vision is to be the most trusted premium global leader in cannabis. We bring our vision to life, grounded in a mission to elevate experiences through trusted cannabis brands with industry-leading quality and world-class genetics, dedicated to quality and innovation, ensuring that every interaction with Rubicon reflects our commitment to excellence. We are building brands beyond shelf for the next 30 years. Rubicon is Canada's leading premium producer, holding around 6% of the national premium market share. We're headquartered here in Vancouver, BC, publicly listed on the TSXV and the OTCQX, and proud to operate as one of the few living soil cultivators in the country, a cornerstone of our super premium strategy. We hold unique IP and are now the world's largest scale certified organic cannabis company, backed by a robust genetics library.
Our operations span two premium facilities, an organic certified greenhouse in Delta, BC, and an indoor flower site in Hope, BC. Now, in our third year of profitability, our proven brands platform has launched category-defining products. In 2023, we were the first to the Canadian legal market with Live Rag and Edibles. In 2024, our national vape rollout achieved 55% national distribution in six months, winning both Vape of the Year and Best New Product of the Year. We've been recognized across the industry, a near sweep of the 2024 Kind Award, winning across vape, flower, hash, topical, and edibles. We were just recently in May named Standard Producer of the Year by the Grow Up Award. From cultivation to product innovation, quality is our competitive edge. We don't aim to be everything to everyone. We're focused on winning and premium.
In recent years, with broader cannabis markets remaining quiet and down, Rubicon stays focused and disciplined, laying foundations for what we see as the next wave of industry opportunity. With the acquisition of our new facility, we're investing in scale, quality, and future capacity to cement our position as the most trusted premium cannabis leader. Who are we? We have a few faces in the room here today. Our team has deep cannabis experience coupled with a long history of competitive CPG industries with an institutionally investable board. You will also see we just recently appointed an Interim CFO, Glen Ibbott. Glen is best known in the industry for his tenure as CFO of Aurora Cannabis from 2017 to 2024, where he played a pivotal role in the company's rapid growth, international expansion, and delivery of recurring EBITDA and cash flow.
His expertise comes at an important time for Rubicon as we scale new capacity and begin exploring new markets. I'd also like to mention the same is true of Doris Bitz and the experience that she's had in scaling businesses. As Len mentioned, after today's meeting and our announcement, Doris will be taking the mantle of Chair. We're very proud to have her here today and welcome her to that new role. Next is information on our most recently published numbers from Q1 2025. You can see the numbers and announcements. We have been busy. We delivered net revenue of $12.4 million, a 39% or $3.5 million increase year over year. Typically, Q1 is seasonally lower for us. We reported positive adjusted EBITDA of $700,000, marking a $1.1 million improvement compared to the same period in 2024.
We received our GACP certification for our Delta facility to allow us to execute on our inaugural shipment to Poland, international shipment in mid-March, and we entered into an agreement to acquire the new facility in Hope, BC, expanding our annual production capacity by about 40%. I can't yet report our Q2 numbers, but I can report that we successfully closed a non-brokered financing, which we upsized by 50% to $4.5 million due to strong demand, despite significant volatility in capital markets at the time. We appointed a new CFO, as mentioned, and we just at the end of June launched our all-in-one vape product into market. Here is a snapshot of our financial picture at March 31. As I said, we delivered a year-over-year increase in net revenue and improved gross profit and adjusted EBITDA.
In looking back to 2024, we delivered $50 million in net revenue and $5 million in adjusted EBITDA, taking into account one-time ERP costs of around $1 million. Our working capital position continues to be strong, and at March 31, we had approximately $20 million in working capital following the successful refinancing of our debt in Q4 of 2024. Our financing would close in Q2, so we've not included in these working capital numbers. I should mention on the debt, very proud to say that we did close debt at 6.75%, which really is industry-leading in the cannabis sector. Very proud of that. We delivered our strong results through our three flagship brands: Simply Bare Organic, our super premium brand for the discerning consumer; 1964 , our premium offering for consumers transitioning from the legacy market; Wildflower, our wellness-focused brand, leading in topical; and I'll speak shortly to Homestead.
In a market where packaging opacity has eroded consumer trust, our consistent best-in-class quality has built confidence in our brand. Our brand platform is built on premium flower, recognized by Flower of the Year wins in both 2022 and 2024. This reputation has become a launchpad for growth and a few highlights I'll share with you. We're winning with budtenders. For two years running, Simply Bare Organic and 1964 have ranked in the top five most recommended brands in independent surveys. We claimed the number one premium edibles position nationally, with 27% market share, becoming the fifth largest edible supplier from within a year of launch. Our vape launch in mid-2024 was the fastest in the company's history, and as I mentioned, had 55% distribution in the key markets within six months of launch.
In Q4, which was basically four months after launch, we had 13% market share and number two position in resin vapes in Canada. We won Vape of the Year and Best New Product of the Year with that launch. Quality input drives quality output. Our vape success was rooted in the launching of our two best-loved strains from the 1964 flower portfolio, demonstrating again the link between consistent premium quality flower. Wildflower continues to lead. Our top SKU holds the number one position in the Canadian topical market, with premium pricing and a lean SKU lineup relative to our competitors. Apologies, I moved the slide forward. Wildflower also proves that quality wins. Homestead competes within a brand ecosystem in our ecosystem by monetizing aged or off-spec products that don't quite meet the standard, but are still a very good product.
It supports our quality-first strategy and turns into our brands of Simply Bare and 1964 . As true CPG brands emerge, our consumer-loved, budtender-recommended portfolio powers successful launches and sustainable growth. You can see here the growth that we've been able to gain in Canada since the same period last year. Our brands are experiencing double-digit growth in BC, Ontario, and Alberta. We have some work yet to do in Quebec. This is all without using our balance sheet to drive growth, but through contract arrangements. Rubicon has demonstrated a proven ability to capture market share in both new and existing segments. The vape and edible categories are highly competitive, yet our execution of new product releases underscores the strength and quality of our brand.
This ability to swiftly bring products to market while maintaining exceptional quality has been a key driver in capturing market share and reinforcing our leadership in premium cannabis. When we deliver on our brand promise, it fuels a powerful cycle of repurchase. Firstly, it begins with trial, then repurchase, and then recommendation, reinforcing our position as a trusted cannabis brand leader. Canada's legal market is still in its early stages. While we've seen impressive growth, we're still only scratching the surface. New consumers are entering the legal market regularly. It's estimated somewhere between 20% and 40% of cannabis buyers are still purchasing in the legacy market, many in both markets. As a new generation of consumers enter, we do expect them to purchase legal cannabis as their norm. We're seeing demand grow internationally.
As these new markets come online, there is a significant supply shortage, in particular for quality, and it will take some time for countries to get their supply online. We're not seeing that influx of capital that we saw in the early days of Canada, so there's not net new quality facilities being built largely around the world, and we see that means that asset value will increase in the coming years. Canada, we believe, also will be the home of quality into the international markets, certainly for the time being. In the total market environment, Rubicon's leading position in Canada, plus our recent facility acquisition, means we are well positioned to capitalize on this demand in the premium segment. In addition, cannabis is accreted to Canada's GDP, a fun fact that I enjoy, and is not impacted by the same trade and tariff wars that other industries are.
Export consumers are not reliant on the U.S. We cannot export to the U.S., and unbeknownst to many Canadians, we add more to Canada's GDP than the daily spend. That's me. Rubicon is planning to grow our business. In the last three years, our revenues have outpaced industry growth, and we expect that to continue. Through the Hope acquisition, we expect to increase our supply capacity by over 40%. This, combined with our long-term third-party supply agreements, will help us to meet growing demand. Our edibles portfolio continues to grow rapidly with 185% year-over-year growth since launching our live raw and edibles. With respect to the vape category, we're increasing our offering as we now have nine SKUs in market when there were only two launched last summer. We started out with the traditional cartridge format and have just launched the all-in-one, which is now Canada's fastest growing market category.
We expect to continue to see strong growth in vapes, where it's grown from about 16% of market to closer to 18%, but in more advanced markets in the U.S., it's closer to 25%, 30%. In addition, we've got our leading genetic strategy. We are here to lead trends and not follow. We have released several high-performing flower strains, and they are in market. You saw some of them in the video at the beginning. We have a lot more to come, and we're very excited about that. As we mentioned, Rubicon has also received its GACP certification at the Delta facility and sent its first shipment internationally. Our plan with international is test and learn in 2025.
We need to get the Hope facility online to have more supply before we undertake what we expect will be a similar crawl, walk, run strategy that was previously executed in both flower, then topical, then edibles, and then vape. For those unfamiliar with the product, here I've put the all-in-one, and there's an image of the new Comatose vape that is out in market. As we said, we've launched with just one vape. We expect to have four in market at the end of the year. This is very exciting. An image of our new facility in Hope, BC. You may have followed our stories. You know, as I said, we have built our revenue through co-manufacturing, and this is our first move into an additional facility for Rubicon Organics to control our supply. This is our big project in 2025, and the acquisition just closed in June.
We are now awaiting licensing from Health Canada, but this acquisition is extremely timely given the now evident global supply shortage, in particular in premium cannabis. The Delta facility is already producing some of Canada's best premium cannabis, and we're the only scaled premium organic operator in the country. Hope provides us the opportunity to satisfy more demand, and it brings incremental 4,500 kg of production capacity into our business for just $4.5 million, plus around we expect to spend about $2 million in incremental CapEx. Given that the low-end estimate would be that it would cost $12 million to build that today, excluding the cannabis equipment included, this is an incredibly strategic purchase for us. We will fully own the facility, all its real estate, which allows us to have a stronger balance sheet and further optionality.
The Hope site was first licensed and was the first licensed facility in BC, which I think is kind of fitting that Rubicon owns it now. It's located only an hour and a half from our existing operation in Delta. This proximity allows us to leverage our experienced professionals, get the team up and running quickly. Once licensed, we expect it's going to take 12 months- 18 months to really optimize it, but we do expect to have revenue in 2026 from this facility. This expansion helps us to meet unmet demand. We're capacity constrained in Canada, and this could open up international channels in the industry. To the past, present, and future, the Canadian cannabis market is experiencing the long-awaited shakeout, accelerated by non-competitive operators choosing to move their businesses internationally to wholesale sales, really moving away from brand.
Initially, the Canadian market had inconsistency, low-quality products, and an overly broad distribution approach. Many consumers did return to the legacy market. However, the landscape is changing, and there are three large themes emerging. Firstly, there's been a significant improvement in product quality, but there's still a large gap between value and premium segments and a large amount of inconsistency experienced by the consumer from many brands. Secondly, provinces are streamlining SKU counts and based on operator reliability and rate of sale, making it harder to get products on shelf and stay on shelf. Most recently, Ontario Cannabis Store announced further SKU reductions from 5,200 to 4,500 by the end of the year. If you are not a brand on shelf today, it will be more and more challenging for you to get on.
Lastly, consumers are growing more consistent in their choices as brand promises start to emerge, offering them trust of value for money. Looking to the future, we see increased barriers to entry getting more difficult to get on shelf, and we see our brand strategically positioned to thrive in this environment. Our brand's strength, consumer affinity, and high supplier ratings ensure we will remain competitive and relevant. This is the time, as I said, when brands are being built that are going to be on shelves for the next 30 years. The cannabis industry has followed the classic hype curve: initial highs, a challenging lull, and now an emergence of clear winners as the market matures. The past three years have been marked by intense competition and relentless pricing pressures, but we believe domestic pricing has now stabilized and in fact gone up in many cases.
We can see that as evidenced through the wholesale market. Market dynamics are shifting, with demand outpacing supply, setting the stage for a deeper, more sustained resurgence both domestically and internationally. We do expect that's going to be lumpy, in particular from the international market. Wholesale prices have risen from their lows, and we continue to receive strong demand for our products in both markets. We expect the next 18 months- 24 months to be a period of continued growth for us, in particular after we get the Hope, BC facility up and running and commercialized. The market is changing. Many smaller craft and premium companies are struggling to maintain a consistent national sales space or have pivoted right out of the Canadian market and removed their brands into the international market. That leaves an ability for us to be on shelf.
As SKU rationalization continues, only brands with strong, consistent supply chains will stay on shelf. We are uniquely positioned in Canada, owning our own premium supply, holding premium brands, and with a national route to market. You can see here our market information. We are tightly held with around 43% insider ownership. We have 67 million shares outstanding, and the trading since our offering in April has stayed around $0.44 where we did that offering. I believe we are a seal of a deal. It's also my view that we are strategically, and the cannabis industry is strategically positioned as brands emerge to achieve higher valuation models, more typically seen in analogous industries like CPG. You can also gain external perspectives on Rubicon Organics from Neal Gilmer at Haywood Securities and Pablo Zuanic at Zuanic Associates. We can share their contact details for those interested.
We are driving growth as Canada's leading house of premium brands. We have built a platform for what is next. We are well positioned for that growth. We have demonstrated it consistently in the last few years, even without incremental facility. Now we have that facility. We have delivered three years of EBITDA profitability with strong sales growth and operating cost discipline. Our balance sheet is in order, and we have refinanced for long-term debt at a competitive rate of around 6.75%. We have leading trusted premium brands. We have invested in R&D, and we have world-class genetics, and we have a solid and experienced team. Cannabis is in a global supply shortage, and Rubicon Organics is Canada's premium leader who is elevating experiences and building trusted cannabis brands with industry-leading quality and genetics.
We're investing today to accelerate future growth, leveraging our strong position, proven know-how, and balance sheet to build enduring brands designed to be on shelf for Canadians for many years. I would like to open up the line to questions in the room. Unfortunately, I don't believe we can take them from the phone, but does anybody have any questions? I answered them all in the presentation. I know it's July 31, and people probably want to get out to their cottages and cabins, but if you're on the line and you have any questions, I would encourage you to follow up with me directly. Reach out to IR at rubiconorganics.com. This presentation will be available on our website, and please look out for our results that are coming on August 18. We will be having our press conference. It's not yet formally announced, but I do believe that is the date.
We're very interested to see how this Canadian market emerges, and we believe we are in the winner's pool, have a unique offering out there. Feel free to reach out. Thank you.