Trulieve Cannabis (TCNNF)

Lynn Ricci Director, Investor Relations
Kim Rivers Chief Executive Officer
Mohan Srinivasan Chief Financial Officer
Robert Fagan Stifel GMP
Pablo Zuanic Cantor Fitzgerald
Matt McGinley Needham
Andrew Semple Echelon
Jason Zandberg PI Financial
Russell Stanley Beacon Securities
Derek Dley Canaccord
Call transcript
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Good day, ladies and gentlemen. And welcome to the Trulieve Cannabis Corporation Fourth Quarter 2019 Results Conference Call. My name is Marcella, and I will be your conference operator today.

As a reminder, this conference call is being recorded.

I would now like to introduce your host for today’s conference, Ms. Investor Trulieve. of Director Ricci, Relations for Lynn

You may begin.

Lynn Ricci

fourth and thank discuss With you Marcella. Cannabis results Good Officer; joining me And Mohan ladies morning, Corporation’s Trulieve Rivers, for to Thanks, today for are end Chief gentlemen. us Srinivasan, corporate Chief highlights and Officer. Kim quarter year and Executive XXXX. financial and today Financial

will Following the call remarks, we open prepared our questions. to

benefit our would I being we to investors, differ that today’s of the started, factors and from is and statements Please the may forward-looking risks, Before call interested recorded for to other number materially those forward-looking that media note like of involve shareholders, discussions individuals, parties. get cause a could include statements. results uncertainties that other remember today that actual

furnished and factors our included are today’s any of today making XX, XXXX, the considered information. in risk and no and quarter update and December were to in These press of release statements. assumptions obligation ended applied in connection we forward-looking as material in factors made MD&A that call. on this the call only for with Certain we earnings assume speak this Statements forward-looking

non-IFRS financial remarks IFRS and measures Trulieve. are unlikely measures prepared reference measures financial be transparency by by required financial be to to provided measures should order this our considered greater morning not Any to provide Also, presented other in financial non-IFRS regarding non-IFRS an companies. comparable alternative to

well release. performance all further end non-IFRS December call Please demonstrated company’s is profitability that as as that to for the directly our IFRS the believe comparable of We on XXXX, table note non-IFRS MD&A dollars. the our Any are using most financial ended metrics. earnings references quarter measures U.S. referenced dollar press at and are in reconciled the this to measures the in XX,

may filed SEDAR. be for of trulieve.com A news Relations Investor financial accessed XXXX. MD&A section reported were copy quarter through and our morning, release, on This also statements the our of and the we fourth website year end and

In our addition, conference of will call available on webcast today’s a be website.

I Kim Rivers. Now, our turn to over call will CEO, the

Kim Rivers

Lynn, you for Thank Thanks, morning, good joining and everyone. us.

with are listening in all a online the distancing. well phone I we wish social practice manner, all to distributed as speaking want We during on is healthy everyone and today time. this you everyone and staying hope

is year end business our cover to were update, share and to hurting We as markets COVID-XX. gain I a operate status medical stay-at-home like have Before in Trulieve issued orders. I essential provide dealing results with we you would with how marijuana

across in and States our U.S. actions speak deemed we cannabis essential to country the are acceptance important gaining perceptions and those the shifting

We fortunate and to are essential by in not the ways impacted deemed in directly an as COVID-XX therefore be crisis. some industry

different affected being are ways. in we However,

spent go-to-market incredible this fluid we although, way very the us. seen hours From of man is on investment enormity we our to landscape. And teams and an by some to address benefit, the lost the and short-term not situation have uncertain

environments to crisis to severe business. and system, country, Gap] work our healthcare impact COVID-XX industries, The our a [Audio transact causing other is

Let me changes more of significant you. outline the for some

act events a spacing were deep procedures, lobbies encourage with first licence contracted to remediation cleaning dispensary’s limits to social Our new healthy. and ensuring our implement our chair We patients conduct were safe, and our distancing. a dispensary cleaning retail our clean to in contractor protect facilities by across and

store address compromised that hours for are special patient segment. special to our the addition, In needs aside of immune set patients

dedicated such only technology use fresh curbside and how new a look took to best scheduling of pickup, better hubs, as and and we Trulieve alerts. pickup during that at is we noticeable interactions stores delivery approach offerings could launched programmes, this for time. most Probably We pilot making mobile

and employees as implementing temperature busy been our employees early as our our to provide such updating beginning employees safe, facilities, and March. our in checks to moved protect all keep procedures resources we’ve workplaces added Internally, to policies well. for additional to We entering quickly facilities

in accelerated expected on needs, employee our and Our volume. absences. of workforce meet anticipation in as these also in centre to We’ve and balancing hiring potential as increases known call online teams chat focused deliveries well

We changes made sourcing. to immediate and production our

We’re have for available taking ensure of advantage increasing production we weeks goods of our oil stores. inventory to inventory by our eight finished

also and suppliers and secondary needed. if have partnerships insights with good We have sourced suppliers

provides our from company, risk. control supplier As supply chain a vertically shelter integrated cannabis visibility

the increased And increasing finally, fleet as by XX to needs made in state. our leased we delivery for investments, over vehicles prepare such delivery

were increase take to have actions U.S. from patients we similar This that seen patterns before our an as completed, business hit. experienced followed hold in the started demand hurricanes in These while COVID-XX behaviour

pre- growth week XX% achieving Florida’s Analyzing oil XX% environment XX% in during XXth, the average to average by growth increased up the period. weekly same oil by starting the demand and XX% these ended in post-COVID approximately in compared outperformed weekly to COVID. versus March Trulieve competition and flower flower in leading

We to heightened and this us meet due us four yielded XX% share oil share approximately inventory available robust hand XX% on readily flower This the last via oil flower demand has and were to period. able our during this week to supply chain.

chain our needed, in production, shift be business position for large to in advantageous us up employees X,XXX and as on power felt Our changes our to address workforce how dynamics. ability set purchasing patient to conduct market approximately come. and interactions an we in our will time trained supply ramifications The easily some requirements leverage of quickly can that ramp for changes

during help thinking gain efficiencies across I’m to about increase analytics with business confident, critical us crisis, our we’re business. investments this along will making however, holistic that the strategic and our

time built. COVID-XX, and uncertainty we are navigating strong we with leveraging turbulent There this to but continues be have the foundation

stronger committed situation than the serving ingenuity truly Our business inspiring. COVID, ever. amazing organization for and rising preparing has up adapting positions work been as emerge done and a team our They’ve to to some patients our us that from

both as operationally. strong well turning and year results. Now our experienced end as Trulieve a to exceptional financially, fourth quarter

revenues same year. the for $XX.X quarter, a increase XX% sequential fourth quarter-over-quarter million last of which represents quarter increase Our over and XXX% were the

of year we $XXX.X basis, revenues expectations, as our as well achieved full street’s exceeding a On consensus. the million,

to happy another note year revenue on record are and quarter. end a deliver We the high

adjusted compared EBITDA basis, or performance EBITDA fourth completing second a to $XX.X the Trulieve’s $XX third or our year was Trulieve. full million $XXX.X in million or On million on profitability a full year XX%, the for XX% consistent XX% quarter quarter. a of was

continues profitability us differentiator to the in remains an industry Trulieve. apart Our leading for and important set

of by Florida an important was our introduction XXXX smokable the last in business. Results were driven flower year for spring.

Florida the in remaining you’ll of year. the have extremely remember mix followed XX% fast, last for year, balance ramped over up For those of who you the range the product us of our

These achieved by success. and technology investing efficiencies introducing Operational efficiencies contributed also platforms implementing new programs. in to were automation, our

best our brand We team which leadership we by Trulievers ideas, also delivering our bench added maintain of brought to products the within and to quality to This new and Board serves innovative and experiences. into authentic our loyalty and Directors, build And the increase executive strength customer bringing mix. procedures high position. our practices both our all to continue customer

profitability shift up shaping in brought insight our MSO’s progress, the across a Act making to Canadian also With markets. -- was and year industry. decoupling U.S. our inventory proposed XXXX then the our the a very capital Safe market from fall peers, their for important many of Banking be

opportunities reevaluate patients companies expansion will capital We approach with strategies. Lack attractive M&A disciplined our us many capital strategy coming caused of the many to decline access expansion we watched Trulieve to months. to present in the their our anticipate and as markets the

gas [Audio still market we and back began out Gap] to XXXX and foot invest Florida Despite market half other We Trulieve for capital on in in excited our rich and in year [Audio the our we in upset in XXXX competitors Gap]. our kept pulling future shape good the and here of financial robust areas, were Florida. about the of the

end, Florida employee Florida of at year-end our report. all XX.X% or cannabis year according the count stood jobs At Leafly to related X,XXX

enjoying Florida’s of to employer and has employees country largest our U.S. of over Gaston the employer that the not in the their of makes Florida solid believe approximately the We we continues dispensaries Trulieve X,XXX believe state we largest MSO XX% as generating us employer is we our general, in in of market understand XX% the the of only cannabis incredible a with with be QX, team market share ahead. currently in and what and a headcount market are end current but outperform County, as largest to It’s share. the growth

ahead a intend answer opening in patient stores open backyard strategic solid of will either the XXXX. to populations to locations we can requests of this a dominate continually high plan and we XXXX, recreational or secure we locations rate the and In expected where market. in deliveries, market call service Florida’s

the completing the out North In you Trulieve and give to Let states dispensary with Phase cultivation Hampton. first build our Massachusetts, me on out completion update of X build a other a in close we nearing quick are presence.

However, and the we postponed to COVID-XX construction crisis, executing our limited Due currently visibility has Massachusetts reduced regard have plans. inspections. to on with activity has CCC

timeline We reassess resume. our will once inspections

to new the In Connecticut, branding a we on with the just opening customer they acquisition that of understood to complete to seamless state. and relied dispensary ensure was number location. Bristol amid in also this changing transition not the We patients Trulieve the experience our waited recently rebranded a dispensaries

at XX end, performance in is customer in place. market we We dispensaries year Despite to this able focus believe were on and nine share. happy maintain being our growing Connecticut to the an great outsize with team from based

an for the recreational the be for watching are to We catalyst open which state. important up, will market

dispensary festivals location, rebranding in process and cetera. In has same California the our new store, be where tested we The the to et we’ll Plaza. store the been like California products R&D an within Palm footprint treated moving a store time year, of Springs, we’re experimental on based of as also

everything curated reducing and increased, of medical as had hybrid the our model of shelves improved we We Coast success. Coast of knowledge under more for the of has the a assortment, presentation based West the is add The products sun of and East the on believe your employees to SKUs field less to and revenue we which number the product performance products.

call our you talk I retention, are a detail to our business dominating market metrics a you in square end the through ways, in me share. In sales about same-store a and payback good are time store, these is in offer metrics. good bit light. believe be A per walk I’ll too seen retail performance. think more customer and pure dispensary for cannabis to order our per not foot. and a revenue for metrics many we beyond can to our which Let year more little retail now little retail about

out, build inventory, a In for to Florida, our in less business advantages. just new for we assumptions margin. achieved expensive indoor payback in for grow two CapEx and each store part store cash is store This years. the by period Florida under support Doing scale in includes

operations So other period the not in be this may same payback as states.

metric we quarter of traditionally our is comparing A in that to the the is with third fourth rate customer retail reveal retention quarter of and rate customer XX%. used loyalty customer XXXX, retention had

loyalty patterns tracking shopping through forward. previously of scoring customer a which action boomerang we analysis of but customer various We going tracked standard using start metric lifecycle, on this methodology, patients for instead stages reporting industry combined report will required retention the

monthly size aligned the spend year-over-year. a plays growth spend patient closely average Average customer active into lifetime loyalty patient second tracked basket value per metric in basis month. is but visits and that on and A is using reveals customer

shift across purchasing trends. look patient we seen a year-over-year, in purchases As we have pattern our

shifted year size XXXX, basket basket average $XXX. sizes smaller with At but to month, frequent active These of a Trulieve visited times store average visits. X.X per patients have an end trends more on

by had average of XXXX, an on $XXX. year-end month size with per of X.X As basket active visits patients we average

revenue positive overall So, size patient. per a smaller, although, net is basket it’s with the

demand makes per XXXX, of approximately active active $X,XXX $X,XXX QX As What patient XXXX, year our or to approximately spend price grown was this to see number patient prices is $X,XXX. last but in customer patient. not spend average average and not over or the per have increases, so in raised a has to loyalty, additional That QX due that as an we such year. is growth the great

store individual metric. an a at same-store traditional sales Truliever’s loyalty these use track we level, To

year, the For increased the same-store XXXX that and were XX both in sales XXXX XX%. entire locations for by opened

peak in our I mature, of to will patients for as served. these some will continues metric that start to their of this stores note reach business number

Our a number this feeling expectations patient are stores in start of by to which growth that growing comparison, there will spend. reflect will in be average offset that

open In of as year XXXX, $X,XXX days based This track total retailers. is revenue overall in and comparatively foot metric profitably. our retail footage XXXX, our indicators in other for these U.S. the Trulieve full dispensaries XX retail of revenue with performance. square approximately the December We our our performance puts of on square line growing per generated retail and typical and believe the impressive retail to metrics And the finally, are for this end metric square per world our foot. across world class business successfully key

experiences. our mouth and market what’s the is core customer mix loyalty quality delivery that continued share achieve Ultimately, helps within a approach level seeing our for that resonates and effect This we’re high us of of with innovation our word community. safe Truliever’s driving products, satisfaction authentic customer our values of the positive consistent of Truliever generates

on Trulieve Florida, not for are grab. remind I’ll success the to will our the and not brand. metrics brand curated promote land criteria have to planning be our assure we nurtured a successful, retail Expansion decisions make investments strong and financially these on the you is expand but calculated in beginning. our us that Building based strategically we we will that Trulieve only since

have and initiative evaluate opportunities states, new for strategic for focus continually applications While on organic we we also implemented in licenses acquisition we a growth.

flower. about, we will Mohan maintain pace for with speak demand cultivation As in facilities to indoor smokable increased strategically the our Florida

We scheduled greenhouses dry oil life. oil flower while demand, when in stable scalability is as become our costs, production oil convert reserves down We available particularly sale to our ramp can in supplement is that We manage ability maintaining to reap us not to our with easily from large, inventory. or The an sold oil from to harvest into shelf greenhouses. for production harvest tool match preserve cannabis up Florida. for important customer edibles our

you turn want I over eradicate are financial successful have the to that results, to we am all review following. I made the Before to as global offer effort COVID-XX. call commitment a Mohan In the to and to where the to be our a I our hopeful healthy meantime, safe our access create a in to they on they continuing this to against provide economy and provide strategy Truliever execute shareholders, the value. new to to to rely by medicine employees our can earn living workplaces will

uncertainty innovative growth the the country, our Despite plans and the the excited products on our remain about our business and horizon. across new of we strategy, teams,

XXXX, four for for As a focus -- our these roadmap XX in Trulieve is actions. on

and continue we fully and invest our market to One, in to intend Florida, will dominance. grow maintain

in will expansion Trulieve streams We us smart continue look processes licensed and offer to our for and into application explore markets. will new revenue accretive acquisitions new and broadening possibilities, participate that brand

continue to business, innovative our of address options stay building our maintain value. patients. shareholder variety sustainable a will in a focused commitment profitability to on our track to financially for assuring we wide And choice invest provide meaning disciplined deliver We being and we will and

I of however, additional just we’ll you added have has had assumptions as call, do, changed annual at to focus. gained COVID-XX this we underlying provided although, guidance for the clarity, layer guidance Lastly, outlined or uncertainty. of to a not updating in obtain on hoped as the into comfortable be this position XXXX feel consider a things time for and previously reiterating range come and We all

With Q&A. my open that, to and to call Mohan? before closing call Mohan the remarks over the add I’ll I turn

Mohan Srinivasan

good you, morning, and everybody. Thank Kim,

a in the access entered are companies, this who company’s the to many has economic fare to been with global across with financial cannabis and financial. XXXX that lack may and business the those as This this markets sectors not dedicated to us to capital Let’s building uncertainty marijuana strong faced recreational the move Trulieve a well and slowdown. particularly well XXXX with has Coronavirus served has caused foundation. market, are exposure we

As well the the on and plan. is execution most U.S. cash growth in profitable with public continue to of cannabis Trulieve our company positioned hand,

the quarter achieving revenue as the we well quarter increase end quarterly a exceeding increase sequential XX% Kim as had mentioned, as XXX% of our record $XX.X and last which covered, street’s Kim As XXXX, over strong estimates forecasts, same represents million, a over year. quarter internal for of a

the we For share earnings full achieved per diluted $X.XX. of year,

I for as production challenge from be me goods the here respect investors to to and Before highlight revenue, some that a expenses different methodology. GAAP cost the to you IFRS here continues less U.S. on move let accounting an of for in suppliers, process method this in third-party is

GAAP, for assets are they biological sold. expenses until capitalized Under grow costs for be

these is that growing labor IFRS, well overhead. indirect we for under from expect policy nutrients accounting Because cost, our fluctuations and direct expense an as anything and grow we cost. quarter-to-quarter. include including input used per costs As expense Grow plants, typically as costs as soil, we

on less revenue. from for in the third-party Florida $XX.X expenses and Revenue a suppliers in and the in Connecticut and California XX% QX compares consolidated of $XX So, quarter quarter. costs This -- cost XXXX. basis, expenses million billion $XX.X production was production to or for of XX% or $XX.X totaled goods million million

revenue less XX% suppliers On $XX.X production XX%, a third-party with basis, $XXX full compared cost million revenue goods our or of expenses and from year of million XXXX. or in was

we For of comparison were we previously on at cost under would for account been GAAP, both discussed XXXX XXXX. as for capitalization basis, XX% we and a if full have to grow year

will I forms to cultivation costs, demand. to allowing pace us now growth, There our been cultivation. we to be production continue facilities parts as As keep continue increases will market and our turn of with to has cultivation

of X,XXX,XXX of greenhouse of feet cultivation our the combined of capacity X,XXX,XXX footprint reached of XXX,XXX and feet fourth indoor XX,XXX the cultivation square had facilities, reportable square kilograms At we square feet end quarter, annually. of cultivation

in quarter. completed cultivation indoor anticipated additional XX,XXX cultivation XX,XXX to square an square feet in the be Florida, we construction quarter, of completed with second first In the feet indoor of

our fair good to this total We includes quantity inventory be weeks Since into translate amount five XX discussion. inventory. a inventory of Just of may of this and as basis oil will million cultivation, value, on we’re weeks which a inventory, had $XXX segue a significant flower of discussing

recent Please can harvest the schedule us as have greenhouses are given cycle. of note strategically The necessary. in by levels influenced inventory down our from these harvest and a from greenhouses we that draw upon inventory harvests future oil supply that

of $XX.X of expenses, amounted sales costs quarter. Now, dispensary turning largely cover third fourth or and to revenue to or expenses. compared million will XX% the are These $XX.X first the million to XX% I in and related costs our in marketing quarter revenue,

in On a The year increase million, sales $XX.X category to accounted expense from QX quarter costs basis, related expenses full opened payroll to for new and of QX fourth first were fourth this openings up costs XXXX. seven of the to quarter, marketing stores for XX%. additional related in for plus quarter preparing due was the to primarily in costs for the that store --

of G&A revenue, X% million for related by was the $X.X fourth $X.X in opportunities was revenue to prior This quarter. market the compared X% the for quarter. or new expenses quarter increase or million driven of to primarily

was going be did understated. company not recertify G&A amount XXXX financial and XXXX. in an is in found and to statements. public XXXX in we On its in a that to million to our is expenses require from The prior $XX.X warrants has to expense related due refile non-cash stock or the in This $X.X disclosed decrease G&A impact expense currently with for was no versus immaterial a it that million million compensation understatement year-over-year conjunction year previously basis, $XX.X XXXX issued prior primarily year

a our of to expenses to is XXXX. one XX% XXXX compared in of expenses degree financial XX%, around were Overall, discipline Total keys profitability. keeping high in

was compared XXX%. required in XXXX. basis, was to operating change IFRS million year, for full fair was income of the year million accounting in net under $XX.X taking year-over-year million the a income the This a for $XXX standards million, value Net company increase assets account of $XX.X into in the On $XXX.X XXXX. biological versus

other effects EBITDA IFRS related insight going biological valuable of to expenses, our We interest, to tax, excludes reported, income, of for help and and RTO provides the We the net investors adjusted unsold report Adjusted profitability performance non-cash from assets non-cash adjusted operating accounting assets. EBITDA biological non measures expenses, as and costs assess a performance. into inventory, believe depreciation, income our EBITDA business. our

million the million the On in to an revenue of previous EBITDA or adjusted basis, by a XXXX sequential XX%. the quarter-to-quarter fourth quarter. of compared $XX XX% or adjusted of in was revenue, adjusted XX% EBITDA quarter Our of increased EBITDA $XX.X

and EBITDA of new unsold and and new Please and on inventory note as that Massachusetts, levels XXX% adjusted adjusted or facilities inventory XX%. we like believe depending over selling around brought we marketing year full dispensary basis, are where grow states an be as capitalization openings costs was costs the biological cost increase can assets new fluctuates $XXX.X will varies as online, enter normalized structure On for a vary, of XXXX. our EBITDA million

including this change taxes, the in to for biological rate net turning of the tax percentage as assets, Now was profit, XX% a gross value effective quarter. our of fair

For fiscal the it to year XXXX. XX%, XXXX, XX% compared was for

taxes in on in that our taxes a we advisers. reminder, XXXX tax a calculating on tax explaining then based a of stable measure began as with second more better rates, discussions the of percentage before quarter is and our this based manner income belief of effective As this starting

sheet. balance our to now Moving

by was end $XX strengthened end QX. cash billion $XX balance was completing the of nearly of million the our of fourth of million. activities primarily XXXX. XXXX, our quarter an during $XX This balance financing from result As sheet transactions of increase the further or These

made we note our payments obligations. debt addition, In all on interest and

EBITDA mentioned, Finally, $XXX as reaffirming adjusted to range the of million anticipated with approximately million $XXX are million year, to million XX%. guidance for $XXX or $XXX XXXX to of we XX% Kim our

financial leveraging discipline, exercise our to scale. while We will continue

successful about in the topline good for delivered feel year-over-year We us. In business. growth our a XXX% up we was momentum and closing, XXXX year very

this remarks. over for closing to Kim now hand I’ll Kim?

Kim Rivers

for we financial one discipline to the in the and the few place bring demonstrate the values is for our Medical our contributors. patients, in the the to initiatives quality maintain strategy we safety have for discipline financial is products our is be through Trulieve we of We believe economy of employees put direction. cannabis we recognition new market, Mohan. and Thanks the and core powerful deliver shareholder this can gaining and strategic value. us. one right we fully economic We engines

and We will sustainably to responsibly, continue profitably. grow our business

remiss personally this would folks didn’t our that from opportunity if quality employees Trulievers plants be I facilities on and our leading to in thank take shelves, and brand dispensary I to deliver And production work retail ambassadors. high employees, to heavily the daily to cultivation the we who depend grow our for and produce be industry the products experience so our and closely with customer ultimate our

And to corporate at this the are approaches in business. we best industry appreciate how have all stepped everyone and of employees practices together Trulieve and say, growing course, brought has leading We implemented up, I onward. customer a and as executive who one time, our team as always

next Thank quarter. We you on our you us look progress again forward for today. updating to joining


line question [Operator Robert the first Instructions] GMP. from comes Fagan Your of Stifel from

open. Your is line

Robert Fagan

fantastic on congrats quarter and here. guys, Hi, a

Kim Rivers

Hi, Rob.


He disconnected. has Okay.

So our next question…

Kim Rivers



…will come of from Zuanic Pablo the from Fitzgerald. Cantor line

line is Your open.

Pablo Zuanic

as you a you the morning, help? realized year, guidance you a quarter terms a fourth you second saw growth questions. everyone. hence about some fourth quarter? be Kim, year, assumption Massachusetts, margin two quarter. California, large comment going are but part about related to I a growth the in Thanks. there XX% Would Connecticut quarter. XXXX, the the did also in acceleration characterize confirmed And the will for XX% question you the that color Thank would versus in you Good of XX% that for down, where come margins implies Is and revenues saw first you. can the full sequential EBITDA about of it

Kim Rivers

Thanks, Pablo.

question, your this from and would the the say data illustrated a of answer OMMU week-over-week Department on that and Health is you in certainly to basis. I first we see all seen that, have So the

QX, have we can so So in affirmatively. certainly I growth seen answer question that increased

think to as the with say, up. the repeatedly based I we to we number EBITDA contribution to second The does fluctuate of answer And for able on hope that year to your with and second that keep from respect margin factors. be that tend number a to EBITDA would -- Florida, heavy that question

However, factors EBITDA again, there to that are many, that contribute line. many

Pablo Zuanic

in Thank That’s between sequential is there the that it. more data? did just quarter, Okay. quarter, in can you regarding price if in Why help? give I you would change at flower the in market I they December disconnect decelerate? and sequential have understand brought I you. just in due third for X% sequential quarter. of dated you terms trying to growth data volumes, December. competition now the the to Was fourth When quarter anything there must apparently for ask you XX% mix, after then your a I’m bit quick the that some OMMU fourth follow-up revenue and growth OMMU volume know growth [ph] deliver have XX% that’s Can at a the color XX% the about fourth look quarter and

Kim Rivers

Yeah. more little that we’ve thanks this for said I think, mind, QX And question. the and keep to a promotional. No. does tend past, be Pablo, bit in the in

that of activities year. QX couple happened You a every have in

The typical the be course, up holidays and and December, to we is in leading that to Black overly philosophy going first then, Friday were promotional. in not of is which November are that

you’ll is, say, of all would promotional the from that quarters see the out us. quarter fourth However, most of I

own likely But So into that of up flower and their we it got flower, sure I’m a kind way flower and go again and do of building there keep not that model. little number. have bit a that in tiers on different products was and that different on of mind everyone’s then price points

$XX $XX, pre also -- Xth little our $XX, it’s lower. So priced also is by bit while product, the which rolls have it we mini and is have on then a shelves, we

that to within category category customer speak that flower different is So the different products there segments.

Pablo Zuanic

Thank it? you. Got

Kim Rivers



from of line comes next Needham. Matt the Your McGinley question from

line open. is Your

Matt McGinley

you. Thank

think first given I we in we kind last present on should quarter into about philosophically quarter up how think into change question what my or going and forward is a compared of approach first going promotional question. or the and the that, oil loyalty how at environment the that follow present to fourth Does what’s cadence discounts that the the saw in all environment, on in promotion you year?

Kim Rivers

Yeah. Thanks. and QX. Thanks, same follow we that pattern for this followed year. We and going the Matt. change last into again said, It will it us I like will typical is always

certainly, going just year QX, coming into we typically and and on the refocused heavy environment wellness promotions, off on So of end as we’ve promotional January, December. slowdown of in

you promotional have that will think I that activity can slowed. So those that expect QX that moving into

And mind, keep any probably, had course, I then we to a of think, it’s very in of going planned. XXX, XXXs do us, have, different be

And will be through still we’re of course, But, wanting little encourage that appropriately still around with not XXX. how bit to at to celebratory our locations. coupled realities a environment keep our as of so and there and a large best working any to and crowds

So through now. that we’re working

And to add it’s conscious in sense at and that I to are work little to in out price be sensitive in still the folks tell will philosophical something are who point. of of environment, there a maybe normalcy, this a this debate folks current quite balancing to you respect wanting but bit bit a of with progress, terms more work internally is we wanting

products But balance. but sure we’re them, quality high that also and that a premium value to introducing having still making again, attached have

in to highlight we approach up you’ll coming to just think, normal. XXX is more QX, do But want QX. I us do you a for I and have in that balanced or So, which see normalized

Matt McGinley

of how wanted what guess, source a that become should keep for stores? Does you goods you’ve Great. about should eight inventory the we that, of in growth of inventory said is infer that capital cash your And working the compared we fund finished continue probably think XXXX in we will the balances inventory balances to fourth Mohan to quarter? or that, expect around there the the composition I weeks I to now your saw this of in in business? the inventory, on investment think

Mohan Srinivasan

question. that you Thank for

oil inventory. if and at flower we process So, weeks up. XX that And inventory, inventory of eight have weeks, gone our in look of work primarily probably, said our inventory has we you

this address wanted into built inventory reserves. oil biomass marketplace order convert oil to for in is also we what we So and the our to needed

believe for in open which a are that seven inventory opened planning we more we coming we XXXX. So like the grow stores we up, lot December are stores, we in need stores basically as to new and

inventory So to depending and any fluctuate the opening how be and supply is anything line. inventory levels there on much in the going also the store will else we if is anticipate hiccup required

we how is manage that inventory. So our

Kim Rivers

it’s as we’ve really that on quick Matt. to again highlight reminder touch this I script, just think to Really in but and Hey, on the so here. important it tried a and

harvested Our footprint, QX. very over XXXX which in greenhouse is just finished of Q and back the we cultivation the large, half up -- half back of

supply all on that we oil those we’re our as completed as decision us drawing then to down have it draw a year, to remainder down basically the available have whether none on harvest, all to from on inventory able we to make the year. that Now replant throughout depending not the that of how of footprint or to which that that oil part quickly inventory we’ll throughout be of

be puts optimize indoor then for able strategic an concentrate to low as that our what products. and cost did of because So product again then yield the to so as able XXXX for quality could some square we we our strategic high decision a which make of we we to footage that throughout was flower, we the believe, that a to our quality to the to and in how high would and advantage, well have footprint when comparative basis baseline us that indoor footprint wanted understand for utilize yield be to full plant biomass that, that that course

can greenhouse at footprint most we twice year. a that plant So

have planting that we again, into we’re in very, So, decision from to to year, the that for and Yeah, available move last we the certainly, we’ll scenario, one finished year. to as be our us. clear replant I right mean, of and then, this fall making very be thankful now, COVID

Matt McGinley

Right. Right.

very Thank Okay. helpful. you much. Very

Kim Rivers

Yeah. Thanks, Matt.


comes of from the question line next Robert Your GMP. Stifel from Fagan

open. is line Your

Robert Fagan

technical guys apologies… Very and sorry about difficulties I that

Kim Rivers

back. Welcome

Robert Fagan

I …if have…

Mohan Srinivasan

problem. No

Robert Fagan

there update somebody qualified give question the data, maybe that of little what but versus line, patience an given Is the a have indicator. one registered now? backlog us us with you go that? idea any here Can that’s more …overlapped good obscure. on in think growth about with a I else is a but States I’ll guys it’s

Kim Rivers

the do it. were, give are an we are have I processing many on that [Audio know do do Yeah. well order, telemedicine, any in cards call year a via the on reporting that Rob, there ago I of since as can And emergency and we times don’t increased the significantly believe we so see data is that whereby or state have can stopped renewing it, you what Gap] that folks who from the… just marketplace, so so we where which

Robert Fagan

could going on you asked guidance reconcile kind the me margins the with exited expect if profitability to is of EBITDA to someone to-date? guidance How do already, given guidance? you’ve here to But your the calling forgive XX% margin the the at mean, I this update be that you midpoint? aren’t And obviously it there your for of and reasonable now. but guys where year some again highest upside

Kim Rivers

Thanks, a have as and that this happy And on you And little, your to but maybe -- to answered know, we guidance restate certainly, think, through data while assumptions of we, we back Yeah. call. you. sort in, we can when we again, changes I be underlying were some validated update you dialing for Rob.

of for certainty implemented, of we of was being smokable with but year us data we had prior update flower, some a declined. update that guidance. couple or actually provide and could months lot a worth that we did, asks which to after And more around like there to certainty guidance course, guidance Last

loved would update can in that to as today. we a so, that to today, to And and position able hope but have reaffirm. but position do have not that environment, you been we’re do through We in be to we COVID strongly feel we guidance similarly, we the move

of in had margins XX% than EBITDA margin to greater have, we specifically. questions With the course, respect EBITDA Yes, XXXX.

I think lot beat margins, we’re can to based point, fluctuate of reaffirm, Mohan’s a guidance. hopeful point we’re that of he at definitely says but on factors, repeatedly that we EBITDA this always is going and can course, to that

Robert Fagan

Great. Okay.

gain what’s with I’m keep situation, share, quick could platform your that your you area a very Just and or in that your experience one, either advanced there? even thoughts likely given COVID market the delivery assuming help share

Kim Rivers

in pretty at versus our us market to as are the environment, phone in our we data Well, seeing reported, and the least we ability -- And certainly and you follow share carefully. the increase pre on as on in certainly we short-term. I COVID know the reported most of OMMU

And what I approximately But does. vehicles think needed. that broader to can it’s a added market question XX additional as as We the vehicles. we’ve add

demand and leveraging the are certainly, infrastructure logistics existing market business segment we, so team to our of our And that amplify dictates. existing as

Robert Fagan

the Very quarter Congrats on again. well. Thanks again.

Kim Rivers

All Rob. right. Thanks,

Mohan Srinivasan

Thanks, Rob.


next line of question Andrew Semple the comes from Your Echelon. from

Your line is open.

Andrew Semple

on Hi, great a quarter. everyone. Congrats

Kim Rivers

Thanks, Andrew.

Andrew Semple

Thank you.

is tapering to just wanted implemented since April into Florida ask, wondering seen order of Just to any I’m Xst. the one of have on effect? went you’ve stay-at-home states order a just if larger that demand noticeable

Kim Rivers

I appreciate No. Yeah. that.

So just update. to kind of

individually governments mayors prior a to was to county particular there bit allowing govern governor a of So, Xst and and April local their patchwork. the areas Florida, was so

Miami-Dade to Xst actually, I Xst, the at that Florida However, there prior statewide the say, and order orders that order. would were South into April the majority, April for Incorporated, that stay-at-home existing into

some down, again, frankly, OMMU a respect South this has and demand with we down there’s available And that Florida. have seen, is and population that all publicly and obviously, been, website. So think, in large information I up there’s been on to

kind it call when any right of growth stocking I little hurricane up mention mean to of lower back as saw prior a normalized rate saw as we that, sort of spike, was we to activity. I not and do sort mean should lower in trending bit pre a off lower then was XXXX. lower, a week, our up, say So, as I of in which before, kind of I

So the sort normalized spike saw we’re stay-at-home order, another we saw at back growth. normalized we and of go of kind sort then it to growth then of

available so decline of market. the can So along spikes far about rapid it’s any it I on OMMU how best seen being all the sort we it, been, characterize but in website. have not again guess, the growth data is I But curve

Andrew Semple

I appreciate your there. comments on thinking helpful very That’s it. my for

Kim Rivers


Andrew Semple

be new this outlook your in and so? approvals would environment to on opening What do the receiving regulatory dispensaries

Kim Rivers

hold. So, business began been touch the extremely imagine, we news COVID been our with is since as the you of is, can helpful in through regulators, great take our aspects have in they’ve that all crisis to

about to with are right move they with talks in been continue have inspections. and willing forward to now, talk with -- We them inspections, of as

to previous basically it’s from are store and So our to we respect with looking change continue no openings. plans

So you changes barring could any expect you’ll there. I announcements from -- think store opening some us

past, We for of a typically very opening will large have seen who celebratory store little may be in differently likely events. some and you openings the our they’re

handle platform do approach So, respect But the able we’re how pickup little that a need a the patient going to stores to things differently bit with those we be do to some to orders delivery to again and additional have differently. and launch demand we we’re handle seeing. that

down path. So to going that continue we’re

Andrew Semple


for patient turnover. trends one the me final a on Just for

very appreciate very overall. those impressive all, of metrics, much First

the per as your to large insights number Just the thoughts of or you the any patient wanted month? Do sharply? were on increase number to visits ask, that per so have jumps in what why patients of

Kim Rivers


I -- that flower there’s that think mix. I of couple with think in having a that shifting the that’s think to from line so things. in a market One, I oil

itself the frequent and So product that smaller lends per basket with itself I think sizes visits in mix to of more visit.

those flower available. for find flower of year was have frequently that as we purchases back would the those tend to that any shift. flower to So if And because, had have that say, are I to of primarily primary and smokable there, that making onboarding directly I tied last to coming, are come we buyers, obviously, the are I think we that do more what driver are probably folks and strains point driver one who new harvest

of added availability and formats strains. our adding we strains various to price as We’ve strains, available the all were well new strains to We categories. patients, also more for rotation that of frequent as so of across the greater portfolio have

goals, on the innovation. products and to added frankly, products that quite innovate to new continued have of shelves other a of course, and one of company of also, front it’s maintain our we’ve number pace to a we as addition, our In

come customer those new so stores to behavior our those pick back to up to And also products new products. drive

I there. drivers two be think So those potential the would

Andrew Semple

very you much. Thank

Kim Rivers

you. Thank welcome. You’re


from Your from Zandberg the next comes of line Financial. question PI Jason

open. Your line is

Jason Zandberg

on Hi, strong a delivery your answered, have there, again, Number should questions more get on congrats of been I detail some my maybe and fleet. fourth quarter.

total fleet this sales You mentioned is and sort you’ve XX vehicles. if of after your before or and -- size what significant Could COVID fleet a of that seen the the increased you’ve whether outbreak? share increase by can percentage you

Kim Rivers


-- So we’re our now XXX we we sit under the and vehicles at increased just right at fleet our XXX%. by -- orders Florida at increased have delivery across have

little So bit. it’s a just

Jason Zandberg

terms -- as Okay. terms it believe number this after Any then, insights increased what some you and some on size of stats just And COVID if mentioned even the terms? basket in of size. quarter. sort outbreak, great I of for Thanks. this in was round fourth well, into, stats, again, has that basket visits to, the was of

Kim Rivers

Yeah. pretty that carefully. metric We track

call days, we’ll be you the which can visits are decreased -- last expected. over it slightly, I And I our have can tell that, XX think so for --

basket so from sizes So again, then then, and have our but be that’s average, $XXX again, literally think, just number. expected so day X.X to like and I like a increased $XXX to to X.X point, XX And down on from X.XX. though,

Jason Zandberg

Great. Okay. Thanks very much.

Kim Rivers



Securities. Your line from next Stanley Beacon the from comes question Russell of

Your line is open.

Russell Stanley

and congratulations on morning Good quarter. the

Mohan Srinivasan

you. Thank

Kim Rivers

are Hi, you? How Russ.

Russell Stanley

Good. Thank you.

seeing just for COVID-XX, especially of a to people any Just pricing and around responding product you’re number peers you trends can products? if maybe tight a are question wondering comment given supply a how pricing, on from

Kim Rivers

from at all. stable. have -- peer been has And for remained relatively relatively not I really any -- and can us, pricing has has think our we price adjustments really, really group that I say seen major Yeah. been

I of harder up and course, days again, that a XX think, a who significant more itself, gone appears weeks a to there weeks, bit market are, over increase demand. that with I having other there last were market be some couple and are time keeping We had through folks know of a the of maybe do in the a and increases maintaining has couple

again, -- right I price I you’re ensure the that are decreases that itself that trying to so, when to lends stocked. And no adequately think shelves

would -- fruition highlights just ability oil aren’t prefer I fact made that oil with flower that some shelves. think, reserves the that and that in to to our really investments introduce coupled finding coming they we’ve indoor us to the what that giving our patients smokable are use the available Again, cultivation to on truly other

stores. new been it’s to for us our to time recruit So Trulievers an interesting

Russell Stanley

for and additions how expiry commentary add have locations locked comments thoughts just color. of many you around Thanks respect XXXX last But Great. that And with point? with my understand your you now. and around reiterating the at for dispensary around dispensaries, how your this in down latest cap many recent to might question are guidance any is the what on

Kim Rivers


working of we expiration and/or expected various that processes. And way glad and cap number the and we construction So to under course, of think in very their a see were that those to locations dispensary finalized. the that we’re through had have something of see that I LOI excited, we

me number, now And XXXX, see dispensaries we would. would exit our be but my would goal so a team course, round they they yeah, to expect to kick nice love XX me, of XX and for giving I, could is virtually

say, So, I that number. would that targeted XX we’re

Russell Stanley

Thank That’s you. Congrats color. again. Excellent. great

Kim Rivers

Thanks, Russ.

Mohan Srinivasan

Thank you.


Derek from next of Canaccord. the [Operator Dley from line question Instructions] comes Your

Your open. line is

Derek Dley

asked. wanted Hi. couple congratulations that on of on I’d to a a also just I questions really to quarter. Thanks have been strong Yeah. follow up and like echo

So, your a XXXX? new maybe since coming your forms newer have newer pipe on some have of Blue of some products things products? just commentary you just how Kim high these product at flower then products that Can fared for River? like may down the minis their for ideas and you talk the mentioned about And and you level or introduction, even

Kim Rivers

Sure. Absolutely.

products, as we’ve launched number I So of a mentioned. recently

of we’re for bring is the of to number market reasons excited a really One to products that TruPowder.

and So soluble. TruPowder water that’s is a products nano cannabinoid encapsulated

any So dissolves in it basically liquid.

to vape a the a onset it of is got onset. has And that more rapid similar time and

orally of very ingested product that well However, so received. it course, and been has

lists additional add, formulations right that to product. on working add some to to actually so options it’s now flavor and We’re flavor potentially potentially

have as allow that months, about for number In by we addition, other technology will a XX ingredient. technology that of which formulate a on to the way base us using that worked products technology

products from suite game about is our on we get a that color think department So it were really XXXX of once the for to we launch rules. additional changer we hoping us edibles in as edible potentially

rapid to product an able in being important format offer again, is received. rapid think very oral that -- and that so, And has onset we more been well

another -- I’ll that just Blue the River the THCa quickly And is highlight product product.

this So a product. solventless is

solventless, meaning As uses so cannabinoids are a heat that to the process reminder, products they and pressure and and non-chemical-based to primarily are all Blue River separate create concentrates. it

a THCa to And It’s not a be confused. similar, it’s pen. the add can so most you THCa a concentrate very is an so that inhalation product and also a it’s basically -- to it’s powder pure product

TruPowder, with We’re very careful just the I mentioned.

that and done as in loyal its been cold well. be also so as But has really we’ll products product the and customer them got like fan that It’s very very expected well doing base. with a product, well. shortly Blue really it’s a We’ve very River here of announcing terms following River that additional works loyal Blue it’s that in base,

Derek Dley

in on state? edibles, movement And there just eventual the on any that the approval of been commentary there has your regulatory edibles on

Kim Rivers

so then Derek, close were and COVID. we

our So is to delivery addressing we’ve related working cars, unfortunately when employees, the Including, been COVID. focused, processes the by way, in things great rapidly, needed obviously, they’ve approvals on fortunately, adding Health all adding facilities and of to procedures, rapidly us. or very with Department in changing

to to and required have rules edibles know XXXX, passing new were do have aside online. year-end we which before rules and with and early been testing also passed had packaging and they that any that, were regulations both been say forward that But put to moved precursors be came

can And through XXXX again, the So quickly we current that I drafted. have on. that we’ll told that’s that in can haven’t we get been I’ve hope environment rule assuming some that, seen rules at that been gives me point there’s it. a act

Derek Dley

That’s certainly encouraging. sounds

Just mix your you since XXth any a over quick the couple product if Have when higher worrying the notable more are you seen period with ones, a more weeks typically those transactions? can. sort of in seen as the, couple of or changes Have in we I guess, delivery I started about COVID. really March you level transaction you noticing size last a on basket with --

Kim Rivers


little So say respect I to just would to of have visibility amplification it’s that, or We’ve with difficult basically the what an on whether with trend have product what existed. been bit this COVID. as mix, not so has can for or a been is us, to seen without which previously

store higher on normal wouldn’t than I continues any most that right, increase, shifts that necessarily. seen been are store a reflected weekly and there delivery to flower -- I enter we So sizes in that’s again, size, traditionally, we numbers. say which those have for think, major yes, in We’ve basket see basket around, is And typically basket as is retailers. size

metric again, just said to that from days is all size in total deliveries we previously, across certainly, metric. last -- that over our XX basket So, driving the yes, your assisting deliveries has what as across XXX in -- is increases and And had point, a to XXX. reiterate to increased

Derek Dley

here just then And in stores one, add to terms capital here. XXXX. of Okay. you on in intend Appreciate allocation many your how last update

I about you, XXXX? sort what CapEx, Mohan, we of expectations give you free us then, and very you, flow to for in suppose. when think can this the on It’s profitability So secondarily, healthy back obviously, for are your CapEx industry of leading just maybe fortuitous situation balance, I here generation. on M&A. And a sort guys you Kim, cash mean, one’s more an update are very,

what about be you in talk or you’re at? potential M&A you that attractive would of terms can looking So what from states criteria for

Mohan Srinivasan

Sure. Thank question. you for your

Kim Rivers


Mohan Srinivasan

or? to want go you do ahead Kim,

Kim Rivers

Mohan, No. go No. okay. It’s ahead. okay. That’s

Mohan Srinivasan


So, CapEx per is million average month. $X roughly spend our about

all in account were be to into taken calculation. have opened the going that basically XXXX in which we dispensaries So

don’t still on We will we for -- leaseback reimburse left a forget transaction that are $XX basically have that sale line. approximately which million Holyoke, also

So of that will basically that. take care

we to have cash have So our a our believe is we position that business. enough also strong we and plan manage cash

continuing we on So CapEx. our are to spend

would answer that So be from part. my

Kim Rivers

sake land to that accretive M&A, remain we’ve criteria be about course, Mohan. just think that being Thanks, reiterate of grab with about in -- state. a being a same. that And for and respect outlined it’s a And to No. of the Derek, just M&A, needs not times it’s and the Yeah. not in of a I number state our first I’ll

simply although, for majority many appreciate, pass not of a opportunities at can frankly, We cash number rebuild did ran valuations look and discounted opportunity analysis, look through just through the individually a you that we opportunities. do of we did analysis, a flow the and as through, quite including we’re of when we it a run last we discounted, number we do looking metrics, because those year and of model and year the rebuild synergies apart at models, tear we

more the existing in come that that in number finding valuations line, environment, are we one. We that believe will

brand perspective the a and two, people the also Number of it’s a about perspective. from opportunity from quality

really team certainly something sure appreciate want us. to to and as do about the the also of opportunities, to we very important we or that’s think the equates focused the strength of team, our that that one that to that’s make transaction a understand So ability that and business five, and plus and integration three, on bandwidth make with very we’re one equaling, new existing four constraints

Derek Dley

much. the color. very you Appreciate Thank Terrific.

Mohan Srinivasan

you. Thank

Kim Rivers

Derek. Thanks,


Ricci to There back over no further call this are at turn I’ll remarks. Lynn questions for closing time.

Lynn Ricci

us look updating We to our forward you Have today. Thank next again great quarter. everyone. you on for joining a day progress


concludes conference This call. today’s

now may You disconnect.