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AUXLY REPORTS Q1 2022 FINANCIAL RESULTS

AUXLY REPORTS Q1 2022 FINANCIAL RESULTS
PR Newswire
TORONTO, May 16, 2022

TORONTO, May 16, 2022 /PRNewswire/ – Auxly Cannabis Group Inc. (TSX: XLY) (OTCQX: CBWTF) (“Auxly” or the “Company”) today released its financial results for the three months …

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AUXLY REPORTS Q1 2022 FINANCIAL RESULTS

PR Newswire

TORONTO, May 16, 2022 /PRNewswire/ - Auxly Cannabis Group Inc. (TSX: XLY) (OTCQX: CBWTF) ("Auxly" or the "Company") today released its financial results for the three months ended March 31, 2022. These filings and additional information regarding Auxly are available for review on SEDAR at www.sedar.com

Q1 2022 Highlights
  • 147% increase in net sales compared to Q1 in 2021 - recorded net revenues of $22.6M for the three months ended March 31, 2022;
  • SG&A of $12.8M in Q1 2022 decreased slightly quarter-over-quarter with the full quarter consolidation of Auxly Leamington;
  • Adjusted EBITDA improved year-over-year by approximately 14%;
  • Continue to hold the #1 LP position in Cannabis 2.0 sales nationally;
  • Back Forty remains the #1 vape brand in the country and became the #4 flower brand nationally in the quarter;
  • Maintained its position as one of the top 5 LPs in Canada in total cannabis sales with 6.9% market share;
  • With growing competition in vapes, the largest 2.0 product category, Auxly continued to hold the #1 LP position in national sales with 20% market share;
  • Successfully launched 10 new SKUs into the market in the quarter, including solventless live rosin vapes, new infused pre-roll strains and the first-to-market Live Rosin Chew all under Kolab Project brand;
  • Recorded non-cash impairment of approximately $25.7M related to the closure of Auxly Annapolis and Auxly Annapolis OG cultivation facilities.
Q1 Highlights

(000's)

March 31, 2022

March 31, 2021

Change

Percentage Change

Total net revenues

22,626

9,166

13,460

147%






Net income/(loss)*

(39,846)

(10,494)

(29,352)

-280%






Net income/(loss) from continuing operations*

(39,846)

(10,316)

(29,530)

-286%

Adjusted EBITDA**

(5,622)

(6,540)

918

14%

Weighted average shares outstanding

847,603,874

714,041,130

133,562,744

19%













(000's)

March 31, 2022

December 31, 2021

Change

Percentage Change

Cash and equivalents

$       16,295

$      14,754

$       1,541

10%






Total assets

$     417,460

$    450,422

$    (32,962)

-7%






Debt***

$     175,577

$    168,809

$       6,768

4%

*Attributable to shareholders of the Company

** Adjusted EBITDA is a Non-IFRS financial measure.  Refer to the Non-GAAP Measures section in the MD&A for definitions

***Debt is a supplementary financial measure.  Refer to the Non-GAAP Measures section in the MD&A for definitions


Hugo Alves, CEO of Auxly, commented: "Amid intense and growing competition and seasonal buying trends in the Canadian cannabis market, Auxly continued to see strength in sales, increasing revenues 147% year-over-year.  Though this quarter presented some ongoing supply chain and operational challenges preventing us from meeting consumer demands for our branded cannabis products, we believe we have taken the necessary steps to correct these issues for the coming quarters, allowing us to increase fill rates and continue with our exciting new product launches throughout the year.  We continue to lead the market in cannabis 2.0 products and remain focused on building to leadership in dried flower and pre-rolls and improving our business to achieve our goal of reaching adjusted EBITDA profitability." 

Results of Operations

(000's)
For the three months ended: 

March 31, 2022

March 31, 2021

CONTINUING OPERATIONS

Revenues



Revenue from sales of cannabis products

$  33,204

$  12,152

Excise taxes

(10,578)

(2,986)

Total Net Revenues

22,626

9,166




Cost of Sales



Costs of finished cannabis inventory sold

17,522

6,848

Biological asset impairment

Inventory gain/impairment

                              704

4,878

-

230

Gross profit excluding fair value items

(478)

2,088




Unrealized fair value gain / (loss) on biological transformation

6,473

255

Realized fair value gain/(loss) on inventory

(2,325)

1

Gross profit

3,670

2,344




Expenses



Selling, general, and administrative expenses

12,842

9,205

Depreciation and amortization

4,600

2,432

Interest expense

5,080

4,601

Total expenses

22,522

16,238




Other incomes / (losses)



Fair value gain/(loss) for financial instruments accounted under FVTPL       

-

116

Interest and other income

85

416

Impairment of long‐term assets

(12,884)

-

Impairment of intangible assets and goodwill

(10,789)

-

Gain/(loss) on settlement of assets and liabilities and other expenses

-

4,068

Share of gain/(loss) on investment in joint venture

-

(459)

Foreign exchange gain/(loss)

(361)

(608)

Total other income/(loss)

(23,949)

3,533




Net loss before income tax

(42,801)

(10,361)

Income tax recovery

2,955

39

Net Loss from continuing operations

Net income/(loss) from discontinued operations

$   (39,846)

-

$   (10,322)

(178)

Net income/(loss)

$   (39,846)

$   (10,500)




Net income/(loss) attributable to shareholders of the Company

$   (39,846)

$   (10,494)

Net loss attributable to non‐controlling interest

$              -

$            (6)




Adjusted EBITDA

$     (5,622)

$     (6,540)

From continuing operations

From discontinued operations 

                $       (0.05)

                                   -

                    $       (0.01)

                                       -

Net income/(loss) per common share (basic and diluted)

Weighted average shares outstanding (basic and diluted

                $       (0.05)

              847,603,874

                     $       (0.01)

                   714,041,130

Net Revenue

For the three months ended March 31, 2022, net revenues were $22.6 million as compared to $9.2 million during the same period in 2021, an improvement of 147%. Revenue in the first quarter of 2022 was comprised of approximately 61% in Cannabis 2.0 Product sales, with the remainder from Cannabis 1.0 Product sales. Net revenues improved as a result of the Company's expansion into Cannabis 1.0 Products and continued leadership in Cannabis 2.0 Products. Consistent with prior periods, as the Company does not participate in the Quebec market, approximately 85% of cannabis sales during the first quarter of 2022originated from sales to British Columbia, Alberta and Ontario.

Gross Profit

Auxly realized a gross profit of $3.7 million resulting in a 16% Gross Profit Margin1 for the quarter ended March 31, 2022, compared to $2.3 million (26%) during the same period in 2021. Gross profits were impacted by the biological assets and inventory impairments of $5.0 million associated with the closure of the Auxly Annapolis and Auxly Annapolis OG facilities as announced on February 7, 2022. Cost of Finished Cannabis Inventory Sold Margin1 was 23%, 2% lower than the same period of 2021, however 3% greater than the fourth quarter of 2021, inclusive of the impact of Auxly Leamington.

Following the acquisition of Auxly Leamington, the Company recognizes gross profit or loss from Auxly Leamington only as product is sold to the Company's customers after being further processed by Auxly Ottawa or Auxly Charlottetown. During the first quarter of 2022, the Company realized approximately $1.5 million of additional gross profit from the sale of finished cannabis inventory sold. Prior to the acquisition of Auxly Leamington in November 2021, the net earnings of Auxly Leamington were recorded in other income and expenses on an equity basis in proportion to the Company's ownership in the joint venture.

Biological and inventory impairments of $0.7 million and $4.9 million respectively were attributable to the closure of the Auxly Annapolis and Auxly Annapolis OG facilities. 

Unrealized fair value gains and losses on biological assets and realized fair value gains and losses on inventory in the first quarter of 2022 primarily relate to Auxly Leamington. In 2021, prior to the acquisition, Auxly Leamington was accounted for under the equity method.

__________________________________

1

Gross Profit Margin and Cost of Finished Cannabis Inventory Sold Margin are supplemental financial measures – See "Non-GAAP Measures" in the MD&A.

Total Expenses

Selling, general and administrative expenses ("SG&A") are comprised of wages and benefits, office and administrative, professional fees, business development, share-based payments, and selling expenses. SG&A expenses were $12.8 million during the first quarter of 2022, slightly lower than the fourth quarter of 2021 with the full quarter consolidation of Auxly Leamington, and $3.6 million higher than the first quarter of 2021.

Wages and benefits were $5.7 million during the first quarter of 2022, approximately $1.5 million higher than the same period of 2021, primarily from workforce additions to support Cannabis 1.0 Product sales and in support of higher revenues, and the addition of the Auxly Leamington workforce of approximately $0.5 million.

Office and administrative expenses were $3.6 million during the current quarter, increasing by $0.5 million compared to the same period in 2021. The increased expenditures primarily relate to the addition of Auxly Leamington of approximately $0.7 million.

Auxly's professional fees were $0.4 million during the first quarter of 2022, which was consistent with 2021. Professional fees incurred during the period primarily related to accounting fees, regulatory matters, reporting issuer fees, and legal fees associated with certain corporate activities.

Business development expenses were $0.1 million for the three months ended March 31, 2022, as compared to $Nil during the same period in 2021. These expenses have been nominal during the COVID-19 pandemic and primarily relate to acquisition, business development and travel related expenses. 

Share-based compensation was $0.2 million for the three months ended March 31, 2022, which was consistent with the same period in 2021. The expense is a function of the number of option grants, the weighted average aging of the grants and the share price at the time of grant.

Selling expenses were $2.9 million for the three months ended March 31, 2022, an increase of $1.6 million over the same period in 2021, as a result of cannabis sales activities comprised of brokerage fees earned by Kindred, Health Canada fees related to higher revenues, and increased marketing initiatives for Cannabis Products.

Depreciation and amortization expenses were $4.6 million for the period ended March 31, 2022, $2.2 million greater than the same period of 2021. The increase in expense during the current period is primarily related to additional capital expenditures and inclusion of Auxly Leamington representing approximately $0.7 million.

Interest expenses were $5.1 million in the three months ended March 31, 2022, an increase of $0.5 million over the same period in 2021 primarily as a result of the inclusion of Auxly Leamington, which accounted for approximately $0.9 million. Interest expense includes accretion on the convertible debentures and interest paid in kind on the $123 million Imperial Brands Debenture. Interest payable in cash was approximately $1.4 million for the current quarter.

Total Other Incomes and Losses

Total other incomes and losses for the quarter were a $23.9 million loss as compared to a gain of $3.5 million during the same period in 2021.

The impairment of long-term assets of $12.9 million and intangible assets and goodwill of $10.8 million respectively in the first quarter of 2022 relates to the closure of the Auxly Annapolis and Auxly Annapolis OG facilities where the carrying value exceeds the fair value less cost to sell.

Gains and losses on settlement of assets and liabilities and other expenses in the prior year quarter were primarily associated with a gain on the settlement of a $5.8 million liability associated with a non-monetary product exchange with another licensed producer.

The share of loss on investment in joint venture of $0.5 million represents the Company's proportionate share of Auxly Leamington's earnings prior to its acquisition in November 2021, which results are presently consolidated into the Company's financial statements.

Auxly is exposed to foreign exchange fluctuations from the U.S. dollar to CAD dollar exchange rate primarily related to inventory, capital purchases and Inverell net assets. During the period ended March 31, 2022, the Company reported a foreign exchange loss of $0.4 million as compared to a loss of $0.6 million during the same period of 2021.

Net Income and Loss

Net losses attributable to shareholders of the Company were $39.8 million for the three months ended March 31, 2022, representing a net loss of $0.05 per share on a basic and diluted basis. The loss of $29.4 million relative to the same period in 2021 was primarily related to the net impact of approximately $25.7 million related to the closure of the Auxly Annapolis and Auxly Annapolis OG facilities during the period and a gain on the settlement of assets and liabilities and other expenses of $4 million in 2021.

Adjusted EBITDA

Adjusted EBITDA of negative $5.6 million during the three months ended March 31, 2022 was $0.9 million better than the same period in 2021, primarily related to higher gross profits before fair value adjustments and impairment charges, partially offset by higher SG&A.

Discontinued Operations

On May 27, 2021, the Company announced that it had reached an agreement to sell KGK to Myconic Capital Corp. (now Wellbeing Digital Sciences Inc.) ("Wellbeing"), and on June 2, 2021, completed the sale of KGK to Wellbeing. As a result of the sale, results from operations and cash flows from KGK have been presented as discontinued operations, as applicable, on a retrospective basis.

Outlook

In 2022, Auxly remains committed to building on its success as a Canadian market leader. The Company plans to drive organic growth through continued innovation, increased brand traction, and ubiquitous distribution, while prioritizing operational efficiencies and profitability. The Company's high-level objectives for 2022 are:

  • Improve revenue and Gross Profit Margin to achieve positive Adjusted EBITDA
    • Auxly's key priority in 2022 is to achieve Adjusted EBITDA profitability by continuing to grow top line revenue while enhancing Gross Profit Margins through leveraging the increasing flower output from its Auxly Leamington facility, focused and differentiated brand and product offerings, increased depth and breadth of distribution, and cost optimization through investments in automation to increase production capabilities and efficiency and continuous improvement initiatives.
  • Win with consumers and increase brand traction
    • The Company will continue to be deeply committed to understanding its targeted consumers and developing products and brands that help them live happier lives.  Driven by deep consumer insights the Company will continue to evolve its brand portfolio to earn and keep the trust and loyalty of its customers and consumers and be the choice of consumers in-store. Auxly will service the evolving preferences of its consumers by delivering new and innovative branded products to market and ensuring that its consumers can access those products broadly and reliably.

The Company is pleased with its first quarter results, with seasonality having had less of an impact on revenue as compared to the same period in 2021. However, it did encounter operational challenges throughout the quarter, such as lower winter yields at Auxly Leamington and hardware and packaging shortages due to supply chain disruptions.  The Company believes that those challenges are largely behind it, and is very encouraged by yield and overall product quality improvements that it has seen at Auxly Leamington, which it believes will better equip Auxly to meet the demand for its flower and pre-roll products.

The Company has and will continue to put its consumers first by addressing their evolving needs and preferences through its industry leading, insight-driven innovation pipeline. During the first quarter of 2022, Auxly successfully launched 10 of the anticipated 60 new SKUs planned to be launched throughout the year, to strong early results and consumer acclaim. Auxly continues to prioritize investing in innovations for key growth categories, while maintaining its standards for producing the high-quality products that are contributing to its growing consumer awareness and brand equity.

Finally, the Company remains focused on cost control and margin enhancement through continued process improvements and investments in automation.  While its first quarter SG&A now includes a full quarter of Auxly Leamington expenses for the first time, the Company was still able to maintain flat SG&A compared to the previous quarter and also continue to make improvements to Adjusted EBITDA.  The Company remains confident in its second quarter sales outlook and in its ability to achieve Adjusted EBITDA profitability in 2022.

Non- GAAP Measures

Please see the Company's MD&A dated March 30, 2022, under "Non-GAAP Measures" for a further description of the following financial and supplementary financial measures.

Financial Measures
EBITDA and Adjusted EBITDA

These are non-GAAP measures used in the cannabis industry and by the Company to assess operating performance removing the impacts and volatility of non-cash and other adjustments. The definition may differ by issuer. The Adjusted EBITDA reconciliation is as follows:

(000's)

Q1/22

Q4/21

Q3/21

Q2/21

Q1/21

Q4/20

Q3/20

Q2/20

Net loss from continuing operations

$   (39,846)

$   (18,376)

$   (13,527)

$   (3,685)

$   (10,322)

$   (26,012)

$   (17,655)

$   (30,466)

Interest expense

5,080

4,348

3,932

4,787

4,601

3,814

3,651

3,339

Interest income 

(85)

(308)

(436)

(431)

(416)

310

(381)

(345)

Income tax recovery 

(2955)

-

-

(4,291)

(39)

(24)

(90)

(567)

Depreciation and amortization 









   Included in cost of sales 

1,913

689

386

326

141

208

267

176

Depreciation and amortization 









   Included in expenses 

4,600

5,678

2,223

2,174

2,432

2,328

2,076

2,688

EBITDA 

(31,293)

(7,969)

(7,422)

(1,120)

(3,603)

(19,376)

(12,132)

(25,175)










Impairment of biological assets 

704

-

-

-

-

-

-

-

Impairment of inventory 

4,878

2,194

716

124

230

1,763

(312)

668

Unrealized fair value loss/(gain) on









    biological transformation 

(6,473)

(1,462)

(352)

(315)

(255)

(215)

(172)

(201)

Realized fair value loss/(gain) on 









    Inventory 

2,325

904

1

1

(1)

-

(2)

15

Share-based compensation 









Fair value loss/(gain) for financial 

203

212

55

960

206

472

1,178

1,282

    Instruments accounted under









    FVTPL

-

408

(223)

(75)

(116)

(262)

34

4,521

Impairment of long-term assets

12,884

-

60

11,366

-

1,784

(144)

4,506

Impairment of intangible assets and









    Goodwill 

10,789

-

-

-

-

-

-

-

(Gain)/loss on settlement of assets, 









    Liabilities and disposals 

-

815

(1,396)

(16,995)

(4,068)

6,042

3,453

2,020

Share of loss on investment in joint 









    Venture 

-

(1,387)

3,095

2,494

459

4,412

1,214

996

Foreign exchange loss/(gain) 

361

242

(633)

571

608

749

466

1,056










Adjusted EBITDA 

$   (5,622)

$   (6,043)

$   (6,099)

$   (2,989)

$   (6,540)

$   (4,631)

$   (6,417)

$   (10,312)

Supplementary Financial Measures

Gross Profit Margin

"Gross Profit Margin" is defined as gross profit divided by revenue. Gross profit margin is a supplementary financial measure.

Cost of Finished Cannabis Inventory Sold Margin

"Cost of Finished Cannabis Inventory Sold Margin" is a supplementary financial measure and is defined as Cost of Finished Cannabis Inventory Sold divided by revenue.

ON BEHALF OF THE BOARD

"Hugo Alves" CEO

About Auxly Cannabis Group Inc. (TSX: XLY)

Auxly is a leading Canadian cannabis company dedicated to bringing innovative, effective, and high-quality cannabis products to the wellness and adult-use markets. Auxly's experienced team of industry first-movers and enterprising visionaries have secured a diversified supply of raw cannabis, strong clinical, scientific and operating capabilities and leading research and development infrastructure in order to create trusted products and brands in an expanding global market. 

Learn more at www.auxly.com and stay up to date at Twitter: @AuxlyGroup; Instagram: @auxlygroup; Facebook: @auxlygroup; LinkedIn: company/auxlygroup/.

Notice Regarding Forward Looking Information:   

This news release contains certain "forward-looking information" within the meaning of applicable Canadian securities law. Forward-looking information is frequently characterized by words such as "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or information that certain events or conditions "may" or "will" occur. This information is only a prediction. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking information throughout this news release. Forward-looking information includes, but is not limited to: the proposed operation of Auxly, its subsidiaries and partners; the intention to grow the business, operations and existing and potential activities of Auxly; proposed timelines for the build-out, licencing and commercialization of the Company's facilities and projects; the Company's response to the COVID-19 pandemic; the impact of the COVID-19 pandemic on the Company's current and future operations; the Company's execution of its innovative product development, commercialization strategy and expansion plans; the Company's intention to introduce innovative new cannabis products to the market and the timing thereof; the anticipated benefits of the Company's partnerships, research and development initiatives and other commercial arrangements; the anticipated benefits of the Company's acquisition of Auxly Leamington; the expectation and timing of future revenues and of positive Adjusted EBITDA; expectations regarding the Company's expansion of sales, operations and investment into foreign jurisdictions; future legislative and regulatory developments involving cannabis and cannabis products; the timing and outcomes of regulatory or intellectual property decisions; the relevance of Auxly's subsidiaries' current and proposed products with provincial purchasers and consumers; consumer preferences; political change; competition and other risks affecting the Company in particular and the cannabis industry generally.

A number of factors could cause actual results to differ materially from a conclusion, forecast or projection contained in the forward-looking information in this release including, but not limited to, whether: the Company will be able to execute on its business strategy; Auxly's subsidiaries and partners are able to obtain and maintain the necessary governmental and regulatory authorizations to conduct business; the Company is able to successfully manage the integration of its various business units with its own; there are not materially more closures or lockdowns related to the COVID‐19 pandemic; the Company's subsidiaries and partners obtain and maintain all necessary governmental and regulatory permits and approvals for the operation of their facilities and the development of cannabis products, and whether such permits and approvals can be obtained in a timely manner; the Company will be able to successfully integrate Auxly Leamington's operations with its own, and whether the expected benefits of the acquisition materialize in the manner expected, or at all; the Company will be able to successfully launch new product formats and enter into new markets; there is acceptance and demand for current and future Company products by consumers and provincial purchasers; the Company will be able to increase revenues and achieve positive Adjusted EBITDA; and general economic, financial market, legislative, regulatory, competitive and political conditions in which the Company and its subsidiaries and partners operate will remain the same. Additional risk factors are disclosed in the annual information form of the Company for the financial year ended December 31, 2021 dated March 30, 2022.

New factors emerge from time to time, and it is not possible for management to predict all of those factors or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information. The forward-looking information in this release is based on information currently available and what management believes are reasonable assumptions. Forward-looking information speaks only to such assumptions as of the date of this release. In addition, this release may contain forward-looking information attributed to third party industry sources, the accuracy of which has not been verified by the Company. The forward-looking information is being provided for the purposes of assisting the reader in understanding the Company's financial performance, financial position and cash flows as at and for periods ended on certain dates and to present information about management's current expectations and plans relating to the future, and the reader is cautioned that such forward-looking information may not be appropriate for any other purpose. Readers should not place undue reliance on forward-looking information contained in this release.

The forward-looking information contained in this release is expressly qualified by the foregoing cautionary statements and is made as of the date of this release. Except as may be required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.

Neither Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release.

View original content to download multimedia:https://www.prnewswire.com/news-releases/auxly-reports-q1-2022-financial-results-301547723.html

SOURCE Auxly Cannabis Group Inc.

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The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several months we've pointed out that there has  been zero job creation for native-born workers since the summer of 2018...

... and that since Joe Biden was sworn into office, most of the post-pandemic job gains the administration continuously brags about have gone foreign-born (read immigrants, mostly illegal ones) workers.

And while the left might find this data almost as verboten as FBI crime statistics - as it directly supports the so-called "great replacement theory" we're not supposed to discuss - it also coincides with record numbers of illegal crossings into the United States under Biden.

In short, the Biden administration opened the floodgates, 10 million illegal immigrants poured into the country, and most of the post-pandemic "jobs recovery" went to foreign-born workers, of which illegal immigrants represent the largest chunk.

Asylum seekers from Venezuela await work permits on June 28, 2023 (via the Chicago Tribune)

'But Tyler, illegal immigrants can't possibly work in the United States whilst awaiting their asylum hearings,' one might hear from the peanut gallery. On the contrary: ever since Biden reversed a key aspect of Trump's labor policies, all illegal immigrants - even those awaiting deportation proceedings - have been given carte blanche to work while awaiting said proceedings for up to five years...

... something which even Elon Musk was shocked to learn.

Which leads us to another question: recall that the primary concern for the Biden admin for much of 2022 and 2023 was soaring prices, i.e., relentless inflation in general, and rising wages in particular, which in turn prompted even Goldman to admit two years ago that the diabolical wage-price spiral had been unleashed in the US (diabolical, because nothing absent a major economic shock, read recession or depression, can short-circuit it once it is in place).

Well, there is one other thing that can break the wage-price spiral loop: a flood of ultra-cheap illegal immigrant workers. But don't take our word for it: here is Fed Chair Jerome Powell himself during his February 60 Minutes interview:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that's largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed's job. The immigration policy of the United States is really important and really much under discussion right now, and that's none of our business. We don't set immigration policy. We don't comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that's what's been happening.

Translation: Immigrants work hard, and Americans are lazy. But much more importantly, since illegal immigrants will work for any pay, and since Biden's Department of Homeland Security, via its Citizenship and Immigration Services Agency, has made it so illegal immigrants can work in the US perfectly legally for up to 5 years (if not more), one can argue that the flood of illegals through the southern border has been the primary reason why inflation - or rather mostly wage inflation, that all too critical component of the wage-price spiral  - has moderated in in the past year, when the US labor market suddenly found itself flooded with millions of perfectly eligible workers, who just also happen to be illegal immigrants and thus have zero wage bargaining options.

None of this is to suggest that the relentless flood of immigrants into the US is not also driven by voting and census concerns - something Elon Musk has been pounding the table on in recent weeks, and has gone so far to call it "the biggest corruption of American democracy in the 21st century", but in retrospect, one can also argue that the only modest success the Biden admin has had in the past year - namely bringing inflation down from a torrid 9% annual rate to "only" 3% - has also been due to the millions of illegals he's imported into the country.

We would be remiss if we didn't also note that this so often carries catastrophic short-term consequences for the social fabric of the country (the Laken Riley fiasco being only the latest example), not to mention the far more dire long-term consequences for the future of the US - chief among them the trillions of dollars in debt the US will need to incur to pay for all those new illegal immigrants Democrat voters and low-paid workers. This is on top of the labor revolution that will kick in once AI leads to mass layoffs among high-paying, white-collar jobs, after which all those newly laid off native-born workers hoping to trade down to lower paying (if available) jobs will discover that hardened criminals from Honduras or Guatemala have already taken them, all thanks to Joe Biden.

Tyler Durden Sun, 03/10/2024 - 19:15

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‘I couldn’t stand the pain’: the Turkish holiday resort that’s become an emergency dental centre for Britons who can’t get treated at home

The crisis in NHS dentistry is driving increasing numbers abroad for treatment. Here are some of their stories.

This clinic in the Turkish resort of Antalya is the official 'dental sponsor' of the Miss England competition. Diana Ibanez-Tirado, Author provided

It’s a hot summer day in the Turkish city of Antalya, a Mediterranean resort with golden beaches, deep blue sea and vibrant nightlife. The pool area of the all-inclusive resort is crammed with British people on sun loungers – but they aren’t here for a holiday. This hotel is linked to a dental clinic that organises treatment packages, and most of these guests are here to see a dentist.

From Norwich, two women talk about gums and injections. A man from Wales holds a tissue close to his mouth and spits blood – he has just had two molars extracted.

The dental clinic organises everything for these dental “tourists” throughout their treatment, which typically lasts from three to 15 days. The stories I hear of what has caused them to travel to Turkey are strikingly similar: all have struggled to secure dental treatment at home on the NHS.

“The hotel is nice and some days I go to the beach,” says Susan*, a hairdresser in her mid-30s from Norwich. “But really, we aren’t tourists like in a proper holiday. We come here because we have no choice. I couldn’t stand the pain.”

Seaside beach resort with mountains in the distance
The Turkish Mediterranean resort of Antalya. Akimov Konstantin/Shutterstock

This is Susan’s second visit to Antalya. She explains that her ordeal started two years earlier:

I went to an NHS dentist who told me I had gum disease … She did some cleaning to my teeth and gums but it got worse. When I ate, my teeth were moving … the gums were bleeding and it was very painful. I called to say I was in pain but the clinic was not accepting NHS patients any more.

The only option the dentist offered Susan was to register as a private patient:

I asked how much. They said £50 for x-rays and then if the gum disease got worse, £300 or so for extraction. Four of them were moving – imagine: £1,200 for losing your teeth! Without teeth I’d lose my clients, but I didn’t have the money. I’m a single mum. I called my mum and cried.

Susan’s mother told her about a friend of hers who had been to Turkey for treatment, then together they found a suitable clinic:

The prices are so much cheaper! Tooth extraction, x-rays, consultations – it all comes included. The flight and hotel for seven days cost the same as losing four teeth in Norwich … I had my lower teeth removed here six months ago, now I’ve got implants … £2,800 for everything – hotel, transfer, treatments. I only paid the flights separately.

In the UK, roughly half the adult population suffers from periodontitis – inflammation of the gums caused by plaque bacteria that can lead to irreversible loss of gums, teeth, and bone. Regular reviews by a dentist or hygienist are required to manage this condition. But nine out of ten dental practices cannot offer NHS appointments to new adult patients, while eight in ten are not accepting new child patients.

Some UK dentists argue that Britons who travel abroad for treatment do so mainly for cosmetic procedures. They warn that dental tourism is dangerous, and that if their treatment goes wrong, dentists in the UK will be unable to help because they don’t want to be responsible for further damage. Susan shrugs this off:

Dentists in England say: ‘If you go to Turkey, we won’t touch you [afterwards].’ But I don’t worry because there are no appointments at home anyway. They couldn’t help in the first place, and this is why we are in Turkey.

‘How can we pay all this money?’

As a social anthropologist, I travelled to Turkey a number of times in 2023 to investigate the crisis of NHS dentistry, and the journeys abroad that UK patients are increasingly making as a result. I have relatives in Istanbul and have been researching migration and trading patterns in Turkey’s largest city since 2016.

In August 2023, I visited the resort in Antalya, nearly 400 miles south of Istanbul. As well as Susan, I met a group from a village in Wales who said there was no provision of NHS dentistry back home. They had organised a two-week trip to Turkey: the 12-strong group included a middle-aged couple with two sons in their early 20s, and two couples who were pensioners. By going together, Anya tells me, they could support each other through their different treatments:

I’ve had many cavities since I was little … Before, you could see a dentist regularly – you didn’t even think about it. If you had pain or wanted a regular visit, you phoned and you went … That was in the 1990s, when I went to the dentist maybe every year.

Anya says that once she had children, her family and work commitments meant she had no time to go to the dentist. Then, years later, she started having serious toothache:

Every time I chewed something, it hurt. I ate soups and soft food, and I also lost weight … Even drinking was painful – tea: pain, cold water: pain. I was taking paracetamol all the time! I went to the dentist to fix all this, but there were no appointments.

Anya was told she would have to wait months, or find a dentist elsewhere:

A private clinic gave me a list of things I needed done. Oh my God, almost £6,000. My husband went too – same story. How can we pay all this money? So we decided to come to Turkey. Some people we know had been here, and others in the village wanted to come too. We’ve brought our sons too – they also need to be checked and fixed. Our whole family could be fixed for less than £6,000.

By the time they travelled, Anya’s dental problems had turned into a dental emergency. She says she could not live with the pain anymore, and was relying on paracetamol.

In 2023, about 6 million adults in the UK experienced protracted pain (lasting more than two weeks) caused by toothache. Unintentional paracetamol overdose due to dental pain is a significant cause of admissions to acute medical units. If left untreated, tooth infections can spread to other parts of the body and cause life-threatening complications – and on rare occasions, death.

In February 2024, police were called to manage hundreds of people queuing outside a newly opened dental clinic in Bristol, all hoping to be registered or seen by an NHS dentist. One in ten Britons have admitted to performing “DIY dentistry”, of which 20% did so because they could not find a timely appointment. This includes people pulling out their teeth with pliers and using superglue to repair their teeth.

In the 1990s, dentistry was almost entirely provided through NHS services, with only around 500 solely private dentists registered. Today, NHS dentist numbers in England are at their lowest level in a decade, with 23,577 dentists registered to perform NHS work in 2022-23, down 695 on the previous year. Furthermore, the precise division of NHS and private work that each dentist provides is not measured.

The COVID pandemic created longer waiting lists for NHS treatment in an already stretched public service. In Bridlington, Yorkshire, people are now reportedly having to wait eight-to-nine years to get an NHS dental appointment with the only remaining NHS dentist in the town.

In his book Patients of the State (2012), Argentine sociologist Javier Auyero describes the “indignities of waiting”. It is the poor who are mostly forced to wait, he writes. Queues for state benefits and public services constitute a tangible form of power over the marginalised. There is an ethnic dimension to this story, too. Data suggests that in the UK, patients less likely to be effective in booking an NHS dental appointment are non-white ethnic groups and Gypsy or Irish travellers, and that it is particularly challenging for refugees and asylum-seekers to access dental care.


This article is part of Conversation Insights
The Insights team generates long-form journalism derived from interdisciplinary research. The team is working with academics from different backgrounds who have been engaged in projects aimed at tackling societal and scientific challenges.


In 2022, I experienced my own dental emergency. An infected tooth was causing me debilitating pain, and needed root canal treatment. I was advised this would cost £71 on the NHS, plus £307 for a follow-up crown – but that I would have to wait months for an appointment. The pain became excruciating – I could not sleep, let alone wait for months. In the same clinic, privately, I was quoted £1,300 for the treatment (more than half my monthly income at the time), or £295 for a tooth extraction.

I did not want to lose my tooth because of lack of money. So I bought a flight to Istanbul immediately for the price of the extraction in the UK, and my tooth was treated with root canal therapy by a private dentist there for £80. Including the costs of travelling, the total was a third of what I was quoted to be treated privately in the UK. Two years on, my treated tooth hasn’t given me any more problems.

A better quality of life

Not everyone is in Antalya for emergency procedures. The pensioners from Wales had contacted numerous clinics they found on the internet, comparing prices, treatments and hotel packages at least a year in advance, in a carefully planned trip to get dental implants – artificial replacements for tooth roots that help support dentures, crowns and bridges.

Street view of a dental clinic in Antalya, Turkey
Dental clinic in Antalya, Turkey. Diana Ibanez-Tirado, CC BY-NC-ND

In Turkey, all the dentists I speak to (most of whom cater mainly for foreigners, including UK nationals) consider implants not a cosmetic or luxurious treatment, but a development in dentistry that gives patients who are able to have the procedure a much better quality of life. This procedure is not available on the NHS for most of the UK population, and the patients I meet in Turkey could not afford implants in private clinics back home.

Paul is in Antalya to replace his dentures, which have become uncomfortable and irritating to his gums, with implants. He says he couldn’t find an appointment to see an NHS dentist. His wife Sonia went through a similar procedure the year before and is very satisfied with the results, telling me: “Why have dentures that you need to put in a glass overnight, in the old style? If you can have implants, I say, you’re better off having them.”

Most of the dental tourists I meet in Antalya are white British: this city, known as the Turkish Riviera, has developed an entire economy catering to English-speaking tourists. In 2023, more than 1.3 million people visited the city from the UK, up almost 15% on the previous year.


Read more: NHS dentistry is in crisis – are overseas dentists the answer?


In contrast, the Britons I meet in Istanbul are predominantly from a non-white ethnic background. Omar, a pensioner of Pakistani origin in his early 70s, has come here after waiting “half a year” for an NHS appointment to fix the dental bridge that is causing him pain. Omar’s son had been previously for a hair transplant, and was offered a free dental checkup by the same clinic, so he suggested it to his father. Having worked as a driver for a manufacturing company for two decades in Birmingham, Omar says he feels disappointed to have contributed to the British economy for so long, only to be “let down” by the NHS:

At home, I must wait and wait and wait to get a bridge – and then I had many problems with it. I couldn’t eat because the bridge was uncomfortable and I was in pain, but there were no appointments on the NHS. I asked a private dentist and they recommended implants, but they are far too expensive [in the UK]. I started losing weight, which is not a bad thing at the beginning, but then I was worrying because I couldn’t chew and eat well and was losing more weight … Here in Istanbul, I got dental implants – US$500 each, problem solved! In England, each implant is maybe £2,000 or £3,000.

In the waiting area of another clinic in Istanbul, I meet Mariam, a British woman of Iraqi background in her late 40s, who is making her second visit to the dentist here. Initially, she needed root canal therapy after experiencing severe pain for weeks. Having been quoted £1,200 in a private clinic in outer London, Mariam decided to fly to Istanbul instead, where she was quoted £150 by a dentist she knew through her large family. Even considering the cost of the flight, Mariam says the decision was obvious:

Dentists in England are so expensive and NHS appointments so difficult to find. It’s awful there, isn’t it? Dentists there blamed me for my rotten teeth. They say it’s my fault: I don’t clean or I ate sugar, or this or that. I grew up in a village in Iraq and didn’t go to the dentist – we were very poor. Then we left because of war, so we didn’t go to a dentist … When I arrived in London more than 20 years ago, I didn’t speak English, so I still didn’t go to the dentist … I think when you move from one place to another, you don’t go to the dentist unless you are in real, real pain.

In Istanbul, Mariam has opted not only for the urgent root canal treatment but also a longer and more complex treatment suggested by her consultant, who she says is a renowned doctor from Syria. This will include several extractions and implants of back and front teeth, and when I ask what she thinks of achieving a “Hollywood smile”, Mariam says:

Who doesn’t want a nice smile? I didn’t come here to be a model. I came because I was in pain, but I know this doctor is the best for implants, and my front teeth were rotten anyway.

Dentists in the UK warn about the risks of “overtreatment” abroad, but Mariam appears confident that this is her opportunity to solve all her oral health problems. Two of her sisters have already been through a similar treatment, so they all trust this doctor.

Alt text
An Istanbul clinic founded by Afghan dentists has a message for its UK customers. Diana Ibanez-Tirado, CC BY-NC-ND

The UK’s ‘dental deserts’

To get a fuller understanding of the NHS dental crisis, I’ve also conducted 20 interviews in the UK with people who have travelled or were considering travelling abroad for dental treatment.

Joan, a 50-year-old woman from Exeter, tells me she considered going to Turkey and could have afforded it, but that her back and knee problems meant she could not brave the trip. She has lost all her lower front teeth due to gum disease and, when I meet her, has been waiting 13 months for an NHS dental appointment. Joan tells me she is living in “shame”, unable to smile.

In the UK, areas with extremely limited provision of NHS dental services – known as as “dental deserts” – include densely populated urban areas such as Portsmouth and Greater Manchester, as well as many rural and coastal areas.

In Felixstowe, the last dentist taking NHS patients went private in 2023, despite the efforts of the activist group Toothless in Suffolk to secure better access to NHS dentists in the area. It’s a similar story in Ripon, Yorkshire, and in Dumfries & Galloway, Scotland, where nearly 25,000 patients have been de-registered from NHS dentists since 2021.

Data shows that 2 million adults must travel at least 40 miles within the UK to access dental care. Branding travel for dental care as “tourism” carries the risk of disguising the elements of duress under which patients move to restore their oral health – nationally and internationally. It also hides the immobility of those who cannot undertake such journeys.

The 90-year-old woman in Dumfries & Galloway who now faces travelling for hours by bus to see an NHS dentist can hardly be considered “tourism” – nor the Ukrainian war refugees who travelled back from West Sussex and Norwich to Ukraine, rather than face the long wait to see an NHS dentist.

Many people I have spoken to cannot afford the cost of transport to attend dental appointments two hours away – or they have care responsibilities that make it impossible. Instead, they are forced to wait in pain, in the hope of one day securing an appointment closer to home.

Billboard advertising a dental clinic in Turkey
Dental clinics have mushroomed in recent years in Turkey, thanks to the influx of foreign patients seeking a wide range of treatments. Diana Ibanez-Tirado, CC BY-NC-ND

‘Your crisis is our business’

The indignities of waiting in the UK are having a big impact on the lives of some local and foreign dentists in Turkey. Some neighbourhoods are rapidly changing as dental and other health clinics, usually in luxurious multi-storey glass buildings, mushroom. In the office of one large Istanbul medical complex with sections for hair transplants and dentistry (plus one linked to a hospital for more extensive cosmetic surgery), its Turkish owner and main investor tells me:

Your crisis is our business, but this is a bazaar. There are good clinics and bad clinics, and unfortunately sometimes foreign patients do not know which one to choose. But for us, the business is very good.

This clinic only caters to foreign patients. The owner, an architect by profession who also developed medical clinics in Brazil, describes how COVID had a major impact on his business:

When in Europe you had COVID lockdowns, Turkey allowed foreigners to come. Many people came for ‘medical tourism’ – we had many patients for cosmetic surgery and hair transplants. And that was when the dental business started, because our patients couldn’t see a dentist in Germany or England. Then more and more patients started to come for dental treatments, especially from the UK and Ireland. For them, it’s very, very cheap here.

The reasons include the value of the Turkish lira relative to the British pound, the low cost of labour, the increasing competition among Turkish clinics, and the sheer motivation of dentists here. While most dentists catering to foreign patients are from Turkey, others have arrived seeking refuge from war and violence in Syria, Iraq, Afghanistan, Iran and beyond. They work diligently to rebuild their lives, careers and lost wealth.

Regardless of their origin, all dentists in Turkey must be registered and certified. Hamed, a Syrian dentist and co-owner of a new clinic in Istanbul catering to European and North American patients, tells me:

I know that you say ‘Syrian’ and people think ‘migrant’, ‘refugee’, and maybe think ‘how can this dentist be good?’ – but Syria, before the war, had very good doctors and dentists. Many of us came to Turkey and now I have a Turkish passport. I had to pass the exams to practise dentistry here – I study hard. The exams are in Turkish and they are difficult, so you cannot say that Syrian doctors are stupid.

Hamed talks excitedly about the latest technology that is coming to his profession: “There are always new materials and techniques, and we cannot stop learning.” He is about to travel to Paris to an international conference:

I can say my techniques are very advanced … I bet I put more implants and do more bone grafting and surgeries every week than any dentist you know in England. A good dentist is about practice and hand skills and experience. I work hard, very hard, because more and more patients are arriving to my clinic, because in England they don’t find dentists.

Dental equipment in a Turkish treatment room
Dentists in Turkey boast of using the latest technology. Diana Ibanez-Tirado, CC BY-NC-ND

While there is no official data about the number of people travelling from the UK to Turkey for dental treatment, investors and dentists I speak to consider that numbers are rocketing. From all over the world, Turkey received 1.2 million visitors for “medical tourism” in 2022, an increase of 308% on the previous year. Of these, about 250,000 patients went for dentistry. One of the most renowned dental clinics in Istanbul had only 15 British patients in 2019, but that number increased to 2,200 in 2023 and is expected to reach 5,500 in 2024.

Like all forms of medical care, dental treatments carry risks. Most clinics in Turkey offer a ten-year guarantee for treatments and a printed clinical history of procedures carried out, so patients can show this to their local dentists and continue their regular annual care in the UK. Dental treatments, checkups and maintaining a good oral health is a life-time process, not a one-off event.

Many UK patients, however, are caught between a rock and a hard place – criticised for going abroad, yet unable to get affordable dental care in the UK before and after their return. The British Dental Association has called for more action to inform these patients about the risks of getting treated overseas – and has warned UK dentists about the legal implications of treating these patients on their return. But this does not address the difficulties faced by British patients who are being forced to go abroad in search of affordable, often urgent dental care.

A global emergency

The World Health Organization states that the explosion of oral disease around the world is a result of the “negligent attitude” that governments, policymakers and insurance companies have towards including oral healthcare under the umbrella of universal healthcare. It as if the health of our teeth and mouth is optional; somehow less important than treatment to the rest of our body. Yet complications from untreated tooth decay can lead to hospitalisation.

The main causes of oral health diseases are untreated tooth decay, severe gum disease, toothlessness, and cancers of the lip and oral cavity. Cases grew during the pandemic, when little or no attention was paid to oral health. Meanwhile, the global cosmetic dentistry market is predicted to continue growing at an annual rate of 13% for the rest of this decade, confirming the strong relationship between socioeconomic status and access to oral healthcare.

In the UK since 2018, there have been more than 218,000 admissions to hospital for rotting teeth, of which more than 100,000 were children. Some 40% of children in the UK have not seen a dentist in the past 12 months. The role of dentists in prevention of tooth decay and its complications, and in the early detection of mouth cancer, is vital. While there is a 90% survival rate for mouth cancer if spotted early, the lack of access to dental appointments is causing cases to go undetected.

The reasons for the crisis in NHS dentistry are complex, but include: the real-term cuts in funding to NHS dentistry; the challenges of recruitment and retention of dentists in rural and coastal areas; pay inequalities facing dental nurses, most of them women, who are being badly hit by the cost of living crisis; and, in England, the 2006 Dental Contract that does not remunerate dentists in a way that encourages them to continue seeing NHS patients.

The UK is suffering a mass exodus of the public dentistry workforce, with workers leaving the profession entirely or shifting to the private sector, where payments and life-work balance are better, bureaucracy is reduced, and prospects for career development look much better. A survey of general dental practitioners found that around half have reduced their NHS work since the pandemic – with 43% saying they were likely to go fully private, and 42% considering a career change or taking early retirement.

Reversing the UK’s dental crisis requires more commitment to substantial reform and funding than the “recovery plan” announced by Victoria Atkins, the secretary of state for health and social care, on February 7.

The stories I have gathered show that people travelling abroad for dental treatment don’t see themselves as “tourists” or vanity-driven consumers of the “Hollywood smile”. Rather, they have been forced by the crisis in NHS dentistry to seek out a service 1,500 miles away in Turkey that should be a basic, affordable right for all, on their own doorstep.

*Names in this article have been changed to protect the anonymity of the interviewees.


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Diana Ibanez Tirado receives funding from the School of Global Studies, University of Sussex.

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