v3.26.3
Note 25 - Segment Reporting
 3 Months Ended
Aug. 31, 2026
Notes to Financial Statements  
Segment Reporting [Text Block]

Note 25. Segment reporting

 

Our Company’s Chief Operating Decision Maker (“CODM”) is the Chairman of the Board of Directors and Chief Executive Officer. The CODM uses segment gross profit for the purpose of resource allocation, assessment of segment performance against determined targets, and in deciding whether to implement cost saving targets. The Company operates in four segments. 1) cannabis operations, which encompasses the production, distribution, sale, co-manufacturing and advisory services of both medical and adult-use cannabis, 2) beverage operations, which encompasses the production, marketing and sale of beverage products, 3) distribution operations, which encompasses the purchase and resale of pharmaceuticals products to customers, and 4) wellness products, which encompasses wellness and better-for-you foods and beverages. This structure is in line with how our CODM assesses our performance and allocates resources.

 

Operating segments have not been aggregated and no asset information is provided for the segments because the Company’s CODM does not receive asset information by segment on a regular basis.

 

The following tables reconcile the Company’s segment gross profit to consolidated U.S. GAAP results:

 

  

For the three months ended

 
  

August 31,

  

August 31,

 
  

2026

  

2025

 

Beverage

        

Net beverage revenue

 $101,496  $55,739 

Beverage costs

  59,489   34,413 

Beverage gross profit

  42,007   21,326 

Cannabis

        

Net cannabis revenue

  56,109   64,511 

Cannabis costs

  34,087   41,241 

Cannabis gross profit

  22,022   23,270 

Distribution

        

Distribution revenue

  84,266   74,007 

Distribution costs

  75,143   66,008 

Distribution gross profit

  9,123   7,999 

Wellness

        

Wellness revenue

  15,276   15,244 

Wellness costs

  10,919   10,370 

Wellness gross profit

  4,357   4,874 

Total

        

Total revenue

  257,147   209,501 

Total costs

  179,638   152,032 

Total gross profit

 $77,509  $57,469 

 

Segment costs are comprised of cost of goods sold, which include product costs, production-related salaries and an allocation of overhead costs. 

 

The following table reconciles the total segment gross profit to the Company’s consolidated totals:

 

  

For the three months ended

 
  

August 31,

  

August 31,

 
  

2026

  

2025

 

Gross profit

 $77,509  $57,469 

Operating expenses:

        

General and administrative

  57,608   41,053 

Selling

  13,593   12,923 

Amortization

  6,500   3,929 

Marketing and promotion

  15,736   10,155 

Research and development

  89   41 

Change in fair value of contingent consideration

  —   (15,000)

Litigation costs, net of recoveries

  787   1,007 

Restructuring costs

  2,447   869 

Transaction costs, net

  4,802   400 

Total operating expenses

  101,562   55,377 

Operating income (loss)

  (24,053)  2,092 

Interest expense, net

  (6,480)  (6,696)

Non-operating income (expense), net

  (7,773)  3,832 

Loss before income taxes

  (38,306)  (772)

Income tax expense (recovery), net

  1,725   (2,285)

Net income (loss)

 $(40,031) $1,513 

 

Channels of Cannabis revenue were as follows:

 

  

For the three months ended

 
  

August 31,

  

August 31,

 
  

2026

  

2025

 

Revenue from Canadian medical cannabis

 $4,717  $6,146 

Revenue from Canadian adult-use cannabis

  53,564   64,067 

Revenue from wholesale cannabis

  673   4,155 

Revenue from international cannabis

  16,237   13,367 

Less excise taxes

  (19,082)  (23,224)

Total

 $56,109  $64,511 

 

Geographic net revenue:

 

  

For the three months ended

 
  

August 31,

  

August 31,

 
  

2026

  

2025

 

USA

 $58,326  $63,961 

Canada

  48,432   58,167 

EMEA

  145,522   85,253 

Rest of World

  4,867   2,120 

Total

 $257,147  $209,501 

 

Geographic capital assets:

 

  August 31,  May 31, 
  2026  2026 

USA

 $205,546  $207,592 

Canada

  237,582   245,799 

EMEA

  197,861   202,598 

Rest of World

  24,934   24,236 

Total

 $665,923  $680,225 

 

Major customers are defined as customers that are materially significant to the Company’s annual revenues. For the three months ended August 31, 2026 and 2025, there were no major customers representing a material contribution to our quarterly revenues.