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Trulieve Cannabis (TCNNF)

Participants
Kim Rivers Chief Executive Officer
Lynn Ricci Director of Investor Relations for Trulieve
Alex D'Amico Chief Financial Officer
Derek Dley Canaccord Genuity
Russell Stanley Beacon Securities
Andrew Partheniou Stifel GMP
Matt McGinley Needham
Aaron Grey Alliance Global Partners
Vivien Azer Cowen
Camilo Lyon BTIG
Eric DesLauriers Craig-Hallum Capital Group
Pablo Nunez Cantor Fitzgerald
Kenric Tyghe ATB Capital Markets
Nick Anderson Ross Capital Partners
Call transcript
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Operator

Good morning, ladies and gentlemen, and welcome to the Trulieve Cannabis Corporation Second Quarter 2021 financial results conference call. My name is Sarah, and I will be your conference operator today.

As a reminder, this conference call is being recorded. And I'd like to introduce your host for today's conference Ms. Lynn Ricci, Director of Investor Relations for Trulieve.

begin. may You

Lynn Ricci

morning, joining Good gentlemen. thank And Thanks, ladies for us. you Sarah. and

call are On Executive me, with the today Alex Chief Officer, Kim D'Amico, Financial Officer. and Chief Rivers,

call call parties. uncertainties statements remarks, those to or individuals: media, will this get prepared Harvest. make shareholders, are in could results our differ I to related reports being the periodic and And are call like that Please and statements we of the the factors that results would but during transaction benefit recorded of our from Following for with started? open other the materially uncertainties, the from remember that our will not these and Company's for our to statements described we actual that fact Exchange we today's with subject is Commission. and interested filed forward-looking to constitute risks, note forecast. historical other questions, and Securities of completion investors, Including our the historical cause risks statements the

voluntarily information, may otherwise, as Company statements, update required as to law. forward-looking from the revise so no or commitment the Although to time, it or result, a whether future these time events, new undertakes do by except

non-GAAP for discuss in SEC available is not our as comparable of as and a non-GAAP During Form Accounting can found section to these or measures current an the earnings that Principles report Accepted to GAAP Generally results financial of in be press reconciliation [Indiscernible] be measures the to A the Relations That furnished these the most we We calculated website. measures refer considered management financial GAAP. X-K prepared Investor our with our will today on to exhibit the release. U.S. directly certain These in is in isolation or call, measures. also that accordance substitute measures accordance in are not generally financial GAAP. should with

the offer at be provide business Lastly, insight responses not the or may may into advised the our metrics continue to quarter we to morning of prepared website, Please questions, we quarterly our release we that in XXXX. details second these our results of our in press for This A may reported greater Trulieve.com. future. Relations or may results. of Investor on found additional times comments of section copy provide or earnings our to the your dynamics be

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

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

Kim Rivers

its and West representing State revenues approximately win Company in and with positioning And million Lynn. in a here the and everyone. an is Company for the customers the crossing start morning, first medical Virginia, EBITDA XXX XX becoming XX to served, to half-million cannabis consensus, time achieving Georgia, of mark It profitability, operator a first in planting Thanks, quarters Xth adjusted of good exciting at number enter consecutive XX%. Achieving with of records of Trulieve. margin the approximately of EBITDA we an million exceeded

Company. any generated These Harvest are a increase, voted be QX public regulatory the would closing shareholders revenue of towards the been as which to step results, million QX the transformational performance, increase demonstrates will Harvest second-quarter growth. On Trulieve reviews quarter-over-quarter a strongest performance continued will next for and QX reflects would of the the Cannabis now acquisition The XXX.X we Trulieve. back XXX.X combined a combined Yesterday, support basis, Company. our adjusted and EBITDA in and potential and have XX% revenues strong XX% basis, the transaction, event On one XXth, quarter. million, the for combined August be Harvest's the on represented reporting Harvest on of and on of an reported U.S. fully have of strong demonstrates results an focused our approvals.

organization in today, of almost to stores Florida. together basis, million capacity have competitor, into addition, footprint expansion substantial Florida. stores represents increased Trulieve with that supplementing with our a closest notably, Northeast we our U.S. transaction the the southwest a solidifies exciting slowed leading Maryland, their market evolution In X The combined regional as feet support our position in competitor, and well Most and over Pennsylvania, Harvest our of exceeding million as very our an closest those on XX%. be in our would stores, way. located XXX our hubs more down outside on in operator the Harvest cultivation, strategy. a deal the Arizona, true at XX hub of in in presence next and In hub square with hub execute of a additions The we transform more Neither announcement. step This has square would XX% since stand with will as order footprint as scale to our real Company feet cultivation May over Southeast will than by which

look announcement, open some of for the our increased applications. the has store by including Harvest stores in strongest Congratulations in they win and efficiency to as Arizona. operational on store profitability. excellent stores, respective remain the focused of to to Since half forward the tuck-in the strong time back deals, Mesa, the quarter. continue deal We footprint opening year and our delivering markets, We at continued complete XX May on outlined in the their of XXth performance Harvest

growth To from just grown celebrating Trulieve, approximately had our and was footprint store store Florida thousand. to country, XXth, original increased the patient square XX our XX,XXX of profitable from to our cultivation dispensary a in name those XXX across our over stores during XXX,XXX, Sales We've five July in than And also quarter feet our trajectory when from first country. incredible the today, The employees anniversary we expanded first second years. square accomplished here few, million employees a under XXXX. base Tallahassee to for revenue X,XXX approximately first our we to across on more opened feet XX the just five-year X.X from meaningful over Quincy, grown

when we during of billion or In sales first six selling months in months X.X X.X more milligrams milligrams XXX of our were XXXX. XXXX times XXXX, the operations looking oil, X B, million to first at oil approximately compared in of compared to addition, milligrams with a of X.X

in of vaporize ounces XX sold ounces XXXX to we in approximately more flower, XXX or as our cuts times compared flower XX XXXX. thousand thousand For

will exciting one, our generational to in an our bringing And a across us. have next an national ability we us of opportunity front We chapter and leverage diversify believe scale this of adult-use be trajectory combined morning, and enter to to more platform And Georgia speaking to into have additional I on accelerate this mind. come, come. more markets my our growth recreational

of its one recently intent Trulieve to Georgia Class announced, only State in notified award we available the us X two of licenses State. production of As the

As the with in and authorized XX an already. the open with the State. addition XX,XXX registry process, license It the success applicants, around in in will over hub. Xth Georgia speaks dispensaries location competing truly competitive State to licensing be growing, to also so across five was is State quickly products, a highly a The to manufacture This patients we Southeast nation, volumes. populated most cannabis with our ideal grow us oil is and allow

of development State our city thoughtfully South partners, prepared the to provide for states, bring the production like communities, and of closely to Adel, and hundreds other to selected city, north and stakeholders, we'll a rounding community to Working to Trulieve investments as community. We ground new Georgia. minority in of Much patients and operation. promising the Georgia are the positioned site much-needed thrilled and enter workforce jobs break the our be rapidly neighboring Adel majority to with relief in other are meaningful

more beneficial Greater Centers like We education the the with well Georgia of also Georgia Development Technical Development Black established Workforce Supplier like as have small School diverse Council Medicine, Wiregrass Health Institute, of higher and and organizations and like businesses. partnerships as the Commerce, of dozens Chamber Minority institutions

already a in panhandle, here the we number proximity job Georgia in our State. broadening to of Given creation our forward and residents, we close the look employ

cultivation in in Our our Florida, patients expected and in aggressively our growth continue explosive. quickly, been to In add capacity space. the of patient we dispensaries each continued our home new year. month ahead patient stay of the into far That has state over ability Georgia this Florida. XXX,XXX our growth in to by Florida With so demonstrated been add operations execution to has build to act

patients need. on commitment to of We approximately State, additions. currently while evidenced of the of serving represents average, XX Florida, Our every XX% by is in XX% the our providing, patient our which have medicine dispensary the over dispensaries across the dispensaries needs

COVID We share periods the labor due have markets factors, maintained waiting shortages our of materials. nationwide for permitting, market and construction face increased of in tight building to

over very build fortunate to have We the Florida. in been a years Company

performance Our I dedication nurtured each Solevo making achieving Connecticut welcoming Pennsylvania with rates retention the authentic store patients operator would in has area, our QX numbers PurePenn products, to the look to of XXX% the of metropolitan touch of continue has And to activity. to Massachusetts, the been markets. quality let opening commencing we've flurry wholesaled the northeast our the during of strong operations. production in customer we strong safe, me in use, with doors Purepenn forward us continuing Expanding number a the of with connections flower and market this earned up Philadelphia X% to the in Virginia, coupled and on and State, We to and performance X our hub, the West of sales. to wholesale experience. there strong Pennsylvania, operations where was only briefly highlight outperformance like adult those

Pennsylvania continues its to grow to more Our doubled capacity thousand Processing square and feet. has McKeesport recently than Cultivation and XX facility

for the We us are high-quality share. flowers to State, positioning more market bringing increased

As to always be in is goal Florida, number one. our

West announced Shops is family. the first state in on national key the Keystone Shops executed Greater ground remain closed get also to Trulieve Keystone immediately the to a acquisition the is July. plants area we in of three previously and excited and Virginia, adds in rapid about in Philadelphia State. a expansion. Pennsylvania a dispensaries of we early were piece build-out the cultivation our We In

and we out now, to access in with medical ramping and continue moving before look Xst opening dispensary forward to our State our building grow, are sites. providing teams, year-end. and dispensary to Patients cannabis We first the forward our

of legalize Connecticut use. adult bill to a signed and you As June aware, many are

given and opportunities. only begin the will adult operations legislation. allow a to production we of EES (ph) provisions Bristol existing us ribbon-cutting the Our new and us Not State in take operations this North the began grandfathering our store brand great our patients (ph) in June We we has will to the to it sometime launches also cultivation Hanson State, with the look insight but forward block dispensary sales in able advantage of in and will Saturday we Wister in And with into new the be brands Massachusetts in our XXXX, when party. our dispensaries pursue opening in store.

will the to launching day, the and to food largest quickly have branching into consumers Framingham, the second-largest We will relationships looking build in majority state, store in to with communities. in which in be forward the our a to our wholesale closing as and community tables way looking street the and We're and store operations. opening trucks, Massachusetts, these Worcester forward we'll in start the meet is music, the we're partner area. for city of base also new be and

quickly with the wholesale goal scaling of matching up Pennsylvania. outperformance our to in are We

strategy the brands will wholesale Trulieve in spread to Our allow us Massachusetts.

in strains. creativity, recently Florida, Sweet lines. new is which flexion, brands, cultivar product ham chocolate gummies, we've lease our a of Talk, introduced and for small-batch is flower Momentum favorite term released for from of and premium edible Speaking which pan line our wellness, unique

more center of the carriers a the mind, states. results. call over store our to best Quarter these the With potential brands motivation let Trulieve Canada to own Alex me to cannabis in on for turn variety to customers serve Second our details opportunity Canaccord to around a unlocked the that, their live of brands options through offer consumer With for spectrum these in life.

Alex D'Amico

Kim. you, And everyone. Thank good morning,

year external continued has year will Our expansion, as Sarbanes-Oxley well the such the into of internal integration; This and the throughout for to and so our remainder on our do and Readiness. across initiatives, span focus in XXXX. of execution, the priorities as as strategic first half continue centered preparation

We expanding West Pennsylvania, in are footprint in of our excited Georgia. operations Massachusetts, about ramping Virginia, and launching in and course, our

to recently on for ensuring anticipated s the of be We and transformational acquisition exciting integration combined highly focused for believe enter look closed stage strategic As we the industry. both companies capabilities year, year setting vision our and the second the organizations the an acquisitions and the we successful Harvest half We of of the forward the major for the both integration and Harvest. will ahead. remain leveraging of supporting

we As an million, first Kim the of of covered the $XXX.X had sequentially of over in increase at a XX% the record call, of the $XXX.X top achieved revenue revenue million quarter.

markets, X approximately XX% of quarterly tight and XXXX, the an Company in pricing quarter macroeconomic than Our higher of The first million profit achieved impressive a QX growth million was margin a XXXX. would or or million, $XX.X been XX%. gross events $XXX.X revenue the have gross compared related in XX% to gross $XXX.X XX% labor Absent of to the the quarter year-over-year. margin

in first are core of the our line plans Our half operations margins year. in the in with our

shared can fluctuate inventory of to all quarter, that In largest had margin few product at goods points finished flow-through we the QX from by the benefited volume and either our quarter. As the past, basis regard, finishing a direction markets quarter end hand have we of on ever in we the in depending with mix. a in in gross quarter on this

leveraging necessary on our margins strategically we QX, customer led bases markets. in capitalize X% reduction approximate core the set During prices. of to market maintain increased to in The in and leverage when our discounts to ability quarter. an our scale And

the labor markets, inventory we of the in primarily demand by than quarter of higher timing a approximately goods. finished lower work processing our result, a a in process, of flow-through a ending Contributing impact the X% impacted was with available in quarter. rate goods As QX, this candidates, cost The through margins with and centers. moved in amount tight dynamic outstripping experienced which carried product in at faster to finished we which

of this know, you and companies to Trulieve, specific industries. As not is a spending number

an our hiring and look have to reductions in ramped forward by QX. and We X% in quarter. of improvement pickup markets approximate back cultivation production These adjusted responded the in initiatives the new as offset accordingly half our and were

general, to not is in we now deprecation specific ramping Similar in our or the infrastructure as will I period earn-out XX% to new XX% through a the As SG&A enter Second advance Quarter, in time or downward period, XXXX. in $XX.X there margin quarter compared full of we West million are Virginia, the pressure expenses. integration, of expenses in and the a reminder, or have revenue. incurring turn as we in XXXX. Massachusetts now markets to to revenue and of million expenses Pennsylvania First excluding amortization, were vertical $XX.X Quarter gross without on in process,

ramp We in expect and the we to increases the efforts Pennsylvania back of in are year half as prepared Harvest. welcome integration

EBITDA. add calculating As a adjusted back in integration reminder, typically we costs and transaction

by quarter. million million earnings $X.XX Net for quarter. the first fully the million operating Our compared the $XX.X over for an $XX.X for was income EPS generated a income intangibles be We from to the diluted go-forward aggressive mind integration the in ramps on flow-through to The value basis. from CapEx and net Keep and transaction that increases, and acquisitions. increased inventory of will of in income fair deprecation compensation, amortization share-based acquisitions $XX.X of first quarter, was per in share the increase quarter earned on million, costs. $XX.X our impacted

there EPS. While these is to adjusted on a back get EBITDA, added downward impact

reported net to measure, into depreciation, other amortization, We step-up help from business. valuable from to operating our non-cash performance. and and income now report EBITDA expenses, our tax, acquisitions, of acquisition We EBITDA. COVID-related Adjusted insight Turning a assess adjusted EBITDA, adjusted believe Adjusted non-GAAP interest, as costs, investors excludes performance fair compensation, the it inventory share-based income. value of transaction EBITDA expenses, provides

a would dynamics compared second adjusted first-half quarter, quarter flow reflective XXXX, margin half have balance the EBITDA XX%, the first we quarter For guidance. expectations the million, XX% adjusted our XX%, of of $XX.X the is through but macroeconomic bolstered impacts, taxes. XXXX, This by We of margin earlier In from discussed for quarter with of the in and $XX.X the or the the is was federal of million paid in or Absent million, line where first exceeded approximately million, to we with and quarter. EBITDA operations year. for the cash $XX ended cash approximately been the $XXX.X plan.

As flow from second impacted cash a payments. tax by in reminder, quarter double operations the is typically

we flows basis, few million the cash such, invested year-to-date through As where a $XX.X on end quarter. the a we operations of second generated from

in opportunities, the Our to operate. total over to and million had inventory. $XXX.X Company-wide of quarter expansion we strong month, a end and in the compares of CapEx foundation second XXXX. $XX line spends in cash the inventory growth markets, inclusive us QX per the $XXX.X to was allows At where have go for on million with organic built at the of quarter, quickly we the of This the leverage all of end to capitalize position states plan. we just deeper averaged million

their the We year, experiencing investments stores up organization We facility that ground on to Southeast I depth in we to us out the note building shown functions of and prepare in adapt market be to as changing patient support lot to and like we're Georgia, the past invest our throughout expansion recognize a have and West our quickly the Harvest expect previously and continue continuing in integration Marcum on look flexibility same as of organization. in capitalize and July. companies. us will new to closing, all tailwinds. note as experience to U.S. the expansion positive to Marcum be out as ready forward that over will the future Marcum in ramp like accelerated would closing hubs is (ph), allowing over the served our the I move teams auditors, of see build and With planted markets. proud XXXX of also for add our call will capitalize take breaking efforts across I new I'm Northeast our and growth to acquisition. the opportunities. and and in profile, and We to trends and and want conditions would welcome the we particularly In to investments continue acquisition that, there throughout strength audit on we our at national the ramping year. our reflects that initial Virginia, in turn we to And and cultivation We back to and reporting a well, our with we'll previous Kim. XXXX MNP facilities and cultivation to combined CapEx market. auditors, anticipation that in thank our MNP substantial announced efforts Harvest

Kim Rivers

Thanks, Alex.

experienced growth startup. last have small we the over years. a As We've Company, tremendous developed a from five

most nurseryman a lawyer Sounded earlier, story recovering work, publicly this of in hard is our by leaders scene the as strategic But traded disciplined, a addition Through beginning. truly forethought, is U.S. the multi-state execution, skilled and and to operator one financial our said profitable just industry. the I in

an cannabis supportive are voices country at SAFE industry. of Banking the create Harvest across stronger. growth and positioned completion to level, future of draft for with about growth, down, not as And plus uniquely cannabis. I the story leverage is today, much with in the to leaders from future the on horizon, on what changes us Trulieve the The this We operating shareholder the and tremendous getting the to and move and to clear so Thank forward people's well-positioned joining scale building vision, the regardless for prepared this are slowing this the decriminalize are backdrop, And happens The at a execution, readiness onward. unmatched opportunity country. the recent with act strategic Cannabis at political today. American a path-forward signals business the and Together, value. the define federal Trulieve you financially always in acquisition movement neither and cry say, of states is the execute midst With of change. and administration coming. we're to politicians and marijuana Cannabis

Lynn Ricci

to now can up open Operator, it questions. we

Operator

Thank you.

begin We question-and-answer the Instructions]. now will [Operator session

from ahead. Our Derek first Genuity. question go with Canaccord Please Dley comes

Derek Dley

this up regarding Yes. everybody. side, Did Kim, Good quarter. Hi. speculated competitors pricing premium and previous in skew pretty I morning, widely there by so pricing or comment was were the strong or that across a value it change I towards some mean, aggressive just a you on there this some your mix, more It side this on quarter, wanted Congrats just made product pricing. aggressive follow the the was than of more all categories? to tactics quarters.

Kim Rivers

Yeah, from increased competitors. our strategically, portfolio, thanks, product of and very the over some of in we of terms long-term. and about Derek. we thoughtful the say would Certainly, and think and approach short. I approach how brand pricing very we that, how And saw integrity we brand are -- aggressive course, we how

really nor would our look were match, we cetera. more demand. were able of though, course certainly we course products really also analyze off a so, I thoughtful discounts, to had this terms level not, we and these a and exercise where across of good and did become, skew did great example, and we is one was for XX% for were week-long view of that we product margin to that on want our we to What us, responding how think And didn't to in portfolio, depth; pressures. be two,

-- a product of value the category in and in on premium both we -- quarter. basis. see we that those really categories on if not previous Sell-through basis, same value talk in saw large percentage sorry, approximately saw from we in about from you the to terms In -- -- premium, swings interesting a from mix, the did it's

That the So about remains are to see barbell true. that's certainly remained continuing stable. effects quarter-over-quarter. talking that We been we've

would in just categories terms over that of that numbers of I for speaks what about -- think week, XX% ever share flower, oil also, seeing our the quarter, day are both record is with had I in had value the We premium themselves And right? in flower in we sales. And say our both strength remains last the true. and in we market strongest that and day a strength market

maintaining maintaining So nothing are did, more as strength like a of front, what we We tried are mentioned, Florida. -- market to, needed I state but the think on have our think share to that of they felt buy as near integrity. do long-term I our brands discount couple they points certainly competitors the unsuccessfully, quite frankly, in

Derek Dley

if stores, No, have is particular. that of actually you that guess terms your it is, truly markets makes X, more wholesale, in obviously, could or you still out sense. robust? what how and your plan your products what about when you mix, in And And in truly-branded versus in is a one target markets strong seeing that terms a it's two-part of think Pennsylvania, Massachusetts prices called just I mentioned X, products? big are I and we are just question. But own the X brand cultivar those undersupply of where wholesale third-party quite within the

Kim Rivers

Yes.

opportunity, we interesting, as regulatory achieve of certainly the what that's have to it is regimes I market-to-market. say. course, know, just or like those on lies from the mean, to given do of all absolutely to attempting commented where think challenges on. we we're it's other therein But are brand how the folks I So that continuity challenging and checkerboard really across country

of that interesting that across launch the with Massachusetts. have in will be and It's press already Massachusetts, true of also to in will those we launch brands recent And and these course Pennsylvania brands that launched. release so, in country, the looking core be

collection, in full there you across additional bit party. the to flower. products And onboarding note we're category in done is again, now capacity opening -- of focusing catalog in Cultivar of shelf this premium now. with Wister, market cultivar we're available or oil successfully got we've a suite there. that should We'll particularly the excited Saturday. we've well. able we're And additional that come little In for we our in at since been additional strong for me that in because put Pennsylvania, And of so on different Pennsylvania, the It's Massachusetts, layer and be our going sales in there. that they I very underway the a there The those plug-in plus in available is great big to also well. block key I brand launch other in products growing. state. wholesaling that to full as higher affinity the join story, flower if was a grand new purchased we're and And buying us. area, additional quick you're fun that as and not in in that And opportunity lot having category. already were a see oil had higher-end mentioned we Massachusetts the believe, course, share with diversity really really course, a In back-half successful Pennsylvania, of of heard in looking the having increase, that about example, projects up reputation market brands will expansion the of What really through of with the Collection of on year the some Company a of products call,

think we'll do we on don't -- segments well important and products customers believe premium that it's to away card anytime as also integrated, Harvest none. top brands -- flower to again, available that's their in once the to don't calling excited what have cultivar certainly, quality across plan have and and calling both out we where that flower. that expertise we operate And we of I We we of especially so, to as oil, soon the -- think to that be going brands portfolio the be both states in get so can high-end, plan very product And roll collection can. believe into second about branded will derivative that integrating your in those for really card have is in portfolio doing we some really that our We're that platform. our products, combined that

Derek Dley

That's great. the color. the best. appreciate I All

Kim Rivers

Thanks.

Operator

next Our go from Securities. Beacon comes with Russell ahead. Please question Stanley

Russell Stanley

congrats and morning on quarter. Good the

First around great just shareholder question, the and Harvest yesterday. transaction the to obviously, approval see

filings February indicated of end one next about think by close I February, anticipated service of the year. an recent --

Just in thoughts that to done And timeline, which you most do to might time wondering consuming, see -- a that's get a are whether we especially think your COVID approvals approvals the conservative it likely prove which as world. earlier?

Kim Rivers

the see do each sure we We all, don't through approvals call, in. I very one on in the have get tell regulators our mentioned It's however, of timing. regulatory that to excited every state's of any to in Yeah. major very are of operating focused -- place transaction we that of difficult certainly, We're on we single the down to Thanks, closed. of to have markets closing. markets getting those the you Russ. focused. Company. absolutely can strength process successful required course, make pin have roadblocks go the communication with of exacting that all exact very any will all of be are had each one very course, definitely I as combined We about regulatory to And that in

of a that right That's process part of know, is through that in Harvest and you going in selling an is of many Harvest process. transaction is now. Florida quarterbacking As the auction Florida the license

are more on than positive. though. that they couple others. transfer. involved front And a that some longer the Again, is there markets take steps momentum just in Positive Florida So

we're forward. move it. on are may So we're how can mentioned, of as how all of you quickly -- -- and able to to quickly how working assure impact those And on We're that second that. we get diligently of this I as wave sure to and get as -- of of it's focused COVID, not or possible. closed all kind with approvals we it, intention deal very our may not the you course, is

Russell Stanley

on depending late Jersey could [Indiscernible] early ask. New year, That's know great. question. expected you that. for market all-use Thanks a it's I who if And favorites, I their ball but either maybe obviously to next, this open just crystal

neighboring discuss to reluctant Just legislature it. wondering or so with opposed even has Pennsylvania far been

that the dollars stake. on wondering what are there is front? thoughts Just movement tax some potential Obviously, for your on at

thoughts there So great. would the Thanks. on be possibilities any

Kim Rivers

Yeah.

is a market I've it's good certainly guess for as as as Your Russ. us. mine, Pennsylvania, mentioned, mean, key probably I

call [Indiscernible] area. is will, -- proper, dollars or to if dispensaries you on another just invest there. Philadelphia it continuing in are X We We truly opened another closed

very are in a can it with are footprint looking Pennsylvania we on really combining bullish for significant footprint And also today. market, forward to portfolio. be a stands We as our that Harvest as

said, continue invest to I like going And so, to and there. we're

comes. advantage believe that future, that when to of of if. position a to So a the well it's we We'll take certainly, to -- a has adult to of time It's not and in and of matter take in we'll switchover we be the believe lot matter when, that do of a growth be Pennsylvania are not a a pole growth. poised if. matter of that advantage a ahead or East it's ensure matter of at we working diligently sometime

Russell Stanley

congrats color. great Thanks That's again. and

Kim Rivers

Thank Russ. you,

Operator

Partheniou GMP, go from please with Next Stifel ahead. question comes Andrew

Andrew Partheniou

taking Thanks my for questions and quarter. congrats morning. on Good great the

Kim Rivers

thanks. Andrew, Hey

Andrew Partheniou

and Maybe around had and you starting Pennsylvania some comments previous off question on that. continuing with

you in tapped share But market just It also with capture was the And movement guys expansion your state our that's quarter we a really some big headset that wondering, pretty mainly that an mentioned state. in category extracts. in could flower? when Obviously, in attractive for that on jives see yet. on haven't you that data. You you had

be You we expansion or incremental was bolster mainly talked future your come could next still cycle, expansion afterwards be about plans thinking doubling expansion state. some this expecting in extract the with flower movement first offering around we to here and flower some about, should then Should recently? capacity that also of in your on

Kim Rivers

coming expansion is flower The Yeah. now. through

the not you -- you that that we now. come numbers. through tell coming reality, So through begin I should see to can should as in in is

a there mentioned, is, been demand well of as think has it lot So And around you very received. flower.

so to more that to And push gonna channel. continue right we're push, through

to And for right both. have always one thing there a think be I is we cognizant. demand

-- great So decisions strength So is been look, here put And a of a six what we're But to about which right? it's a -- problem it's all of certainly, and it's in category. in terms lot certainly category. what as but I've through pretty of has is months. have, great seeing making don't to I is that that beginning said, And volume more that and consistently focus for know, a gosh, flower to ours, -- get happen. to strategic

Andrew Partheniou

with a much overall back, gears good you, just given opportunity about thinking and grown for taken a Maybe strategy. switching extracts. step that really incremental That's so you've

of You couple done guys tuck-ins. have a

is large the wins. still license which at But you're organic got You've Harvest obviously looking transaction, transformational.

already markets be of Georgia, beyond beginning want kind how about you do like program. what about thinking medical have think at looks Just of, want targeting? you to now, Obviously, Florida its be the what guys you to

thoughts around would just that be helpful. So

Kim Rivers

I and Actually, of started looks Florida many it Georgia to state it excited and to I'd I like a as folks very are in CBD then when program as end-of-life license, then was it about or so Florida first really a maybe don't and better try. a CBD we Yeah. a very, us only And space. Florida, to think and Georgia. little it familiar limited to bit Trulieve remember our very, awarded mean, in when very was started. license very moved similar that And

program. the that They great And a are market Georgia already, so strong has that as in it XX,XXX a already Georgia -- over it in have up. -- as registered to I was and over be mentioned, patients develops been time. going building really it's have program, patients

at last to and And leverage the And on to we we in other look it evaluate other at based strategic our lens. focused dominance markets expertise We continue And our look hubs as course, focused the we look then And very can of to And structure to true to optimize have on through which ability and very at strategy, a of Certainly, relates then can the been continuing markets. to licensing focus game-changer of synergies Southeast. that's executing that ability very leverage an our as the then, course, very, Northeast, we build on in an with to remain also on in course, well. begin hub continued our our -- Harvest, hub the going over we then we of that as We think year. programs. individual we've we that how on about focused be markets. of profile southeast, around terms a and the be

so particular of have as there right? not and around quickly. what organic sight space think when a But remains I that as certainly criteria, that our of out do position that do we've getting be think done leadership and and are a ability it's are -- think And which lose then doing we and certainly realized we about maybe to there And opportunities think winning, a growth. folks be. markets and to an but yet execute we take that [Indiscernible], some of is successfully well in we There to and there particular wide execute well. of. that to in us, have a we the environment, that executing lot from immediately there through plan It's around -- modeling Because especially past be expansion, lot factors lot winning, just we again, absolutely, as application

Andrew Partheniou

queue. detailed I'll again, and So that answer. much for back get Congrats, in

Kim Rivers

Okay. Thanks.

Operator

next with Matt comes from Needham. Our question McGinley please go ahead.

Matt McGinley

you. Thank

Can margin center the headwinds to prepared in In sounds thought back you're seeing would like the you that remarks, in factors labors, macro expand mentioned pricing quarter. you on gross what the it here? around improve You the labor is half. impacting the impacted here? this But it is inventory just rates being cost And that's structurally the that are why in change position year? higher, would actually labor your or availability inventory if of later

Alex D’Amico

processing process finished it in from so really goods. mainly dynamics state labor the what the experienced work in was we into centers, our the Matt, movement Hey,

Matt McGinley

And back why change half? would in the that

Alex D’Amico

We're in folks. more just trying Right. bring to

So we're labor in just And market. increasing hiring tight to bring people. then practices more

Kim Rivers

mean, what choosing our hey may industry, what there, perspective seen, attract in kind saw and wanna of Florida, home we've different appreciate manufacturing weren't sound we've the to working COVID receiving. which as that work reengage as our I that at approaches not workforce unemployment In not than and to seen that respects, other they've and that mean, and improvements previously have have federal been of have that make as we and of industries in benefits some look, already been a lot also take maybe a I not quite justifiable we don't I it's we that definitely lot a some -- particularly well Matt, around right. children bit of of to I they think And frankly, decided were speak and labor there of and some our understand a for made just this rest advantage that adjusted like from ability mean, who it that of to I North Yes, thought the reasons I North,-- -- we're can right got world. dynamics -- decisions. reasons, fix I in we're

and located our on had of -- on in Matt with state. So definitely see pressure, our that that, of we've particularly the processing area where center improvement but we already particular -- started was to

is And are facility were some, unique you the of Tampa frankly, can actually different is and another similar lot we a there that online So a us, quite this which position of had wage for that in a number reasons. improved In facility faced a production in Tampa. completely labor and position coming in and That we were month. market. opening think market labor area, tell we've proactively, a for also the again, not similar that not, I businesses to same also, geographic -- issues.

it where we're as So again, pulling having labor some as it relates relates diversification to from.

to come are to in reasons why believe; X, of we're QX X, that's going through seeing a pool going diversity and QX. we absolute into there certainly already labor So have and it, we're going a

Matt McGinley

milestones through look refinance debt. And think Harvest, to have trying for the it Thank to you your cash -- of closes. refine balance time, retire deal debt refine Do the what big that advance the on would that Whenever if cash of a amount portion is on to one of required any keep full to you this thoughts that what to like. if makes debt deals the you. sense or structure

Kim Rivers

Yes.

that to would you're if and specific on the Debt prior which to the impact some So true. of some specifics ratios think I Harvest took is again, to callouts to Harvest that And repositioned of the not that been triggered some there some what documents the if do to chose is But is actually an there deal only, were in before the closing, a deal. closing. have milestone referring that's or that action in around

in So think two And I those reflect. itself the documents deal of, right? speaks for kind details as that the of that terms things, are, different

of to are how that we think Company, in that pay combined able that restructuring going have and is a second of this to refinances you your and advantages is has. debt. downs course, true a And if we of certainly that -- question its I strategic a really Company? we is repositioned course, around what or what what I on combination positioned do we the strength significantly we do? also to is believe can as is flexibility debt better statements financial the that one transaction refinancing to the truly going and or than And be our and what Harvest be And then of as terms tell our choose will

always to we're shareholders, of intend is to make the so the course, goal Company, the interest both which of course, And fully our maximizing that and of do. sure we

it that more there for of be and But that the obviously You'll as a think more relates that dept. we details restructuring as will repositioning have to there. get visibility positive everyone on outcome we

Matt McGinley

Thank you very much.

Kim Rivers

Yup.

Operator

Partners. next question Please Alliance comes with go Aaron from Global Our Grey ahead.

Aaron Grey

for Thanks quarter. morning. on congrats the questions, and Good the Hi.

Kim Rivers

Thanks. Hey.

Aaron Grey

Kim, always me, program. for loyalty about you question first So talked

you're that potential get that on the market mentioned some progress to protect guys brand. and amid loyalty timing. on competition pricing of of the seeing, competition there, bolster tweaks quarters, commentary you. would that And you're had barriers revamp so to in to seeing of share maybe previous maybe, some Given this love you looking some Thank some that up you a program, the you're

Kim Rivers

Yes, sure.

guys all if near on -- -- And are personal, and have there including transparency here next specifically, -- been absolutely think loyalty to key we and for on additional our visibility you're is into really to on you systems an in make the going we've term. our programs, being a more which initiative to the again, segment going to backend, program, perspective, of you from start that things from will, able So and working see externally and us are strategic truly, more I of a kind year. some

So we're well. think, that we in throughout other CBD certainly and in, personal win your certainly seeing the I really believe general, and that gonna customer in cannabis trend folks get you with are have industries as that to

have we be just so to quite frankly easy been, a, loyalty And pretty as program opposed to a would do. got-together putting that together of, kind

tech and a very soon. working there. can been personal of systems you back-end that and about at that have targeted consumers. looked of and beginning in and have taken timeout look very our offerings I'm terms it to And very, very, what those we we're to on make glimpses extremely implementing are developing the really for so here excited able We

so that into been at we've really also capture into that meaningful a to website granular a will to the to impactful. that that going is loyalty has it be then level ability more feed upgrades focusing -- make can on we some that and systems, revamp. customer then complete data thing programs -- other lead The We're POS again, which, doing our into

think And So on to approach, were that this thoughtful. that do we validity. it's has I it focused it, critical we tearing, Aaron. tiered the for we within be But again way, on which I we right us are and think think some personal initially, working still to but want

solution it. for opposed So Is as the entry that to is that's an replicate stickiness also a barrier again, just someone to off-the-shelf to barrier of more

Aaron Grey

on That's It's for up back. side. Question you have Thanks nice so racking guys helpful. right. Massachusetts from me. wholesale close All Pennsylvania really the [Indiscernible]

the the provide wholesale maybe, Thank could, wholesale in maybe you coming and not how the to some in for into the quarter versus think near you. Harvest of or whether mix you curious Company color contributed fold. much excluding about Just terms retail how term, you

Kim Rivers

has We don't know don't would we know hear I it, segment report, don't currently, like report you that versus Aaron. we mentioned, for We us that Alex We out. Yeah. we retail. -- segment into all and wholesale that guys. report as to out way don't

And so, particularly, post-harvest. we more numbers, going looking what as at look I to can say meaningful. at, is on those particularly becomes of, we X.X be Trulieve kind how And it we're report as that

is be more absolutely how Florida, it wholesale will have at part of can, say course, would when contribution. right? out. the about to market-by-market. platform, you at talking of in allowed there wholesaling a obviously, to do. what Florida is begin large look part is there's Compared I of what break would know, and talking a compared as contributor. Florida, no again, and know when be whole, a we of mean, know, I we look you so -- also varies But as you we we about in obviously And of but in and market to with is Pennsylvania that I large significant I a Pennsylvania, mean, auditors mix, that of not balanced In post-Harvest as terms So -- if that appreciate rest current our you and you our Florida, Pennsylvania that,

Aaron Grey

in congrats again the and queue. back color Fair jump there on enough. I'll for Thanks the quarter.

Kim Rivers

Thanks, Aaron.

Operator

please question Azer comes with next ahead. Your from go Vivien Cowen,

Vivien Azer

I changed the are appreciated last today. COVID commentary things currently Hi. that your over X I that dynamic, but Florida Good Thank around exist new dynamics things weeks. quite in to the recognize really Kim, you. morning. have six

curious I stores, through basket comment Delta traffic average customer of at could in your that's how impacting if comment evolution So because you foot outbreak. the on was and any any on all

Kim Rivers

Sure.

that obviously that that kind lock-ins in it's declined. So foot we really deliveries haven't would COVID. we've all. interesting, we So monitoring don't of been in have -- been seen what it pickup an Vivien, general. necessarily the and since previously nor see because know year, Florida I which between is we've about at and changes, in Right? traffic something XX-XX people Not specifically, seen in with and a from beginning not of basket, the that unusual, are been at that's Florida split different staying constant saw -- I been average home has And has

so to one saw XXXX in Now, shift the we'll be Before or dramatically, that happen almost of things about, I it was and rest we pickups of increased was. walk-ins, Round watch -- of all walk-in call deliveries we'll delivery shift between that XX% hit XX%. increase walk-in that, a COVID had And the was was XX%. pickups, continue to mean, that XX% about share and coven that right? in literally was overnight, we delivery. to our pickup. to of down and know, with And of XX% XX%. business right? We you then COVID X, Xst to had XX% sudden,

increase we've terms seen that pickup store is X. COVID of also pressure that a pickup the rapid can that's optimize for folks really stuck. us our But our make so are it online minutes. we was some implemented of great efficiency and and great being how on that technology And business stick really in five to in and Round there shift in we out So really really pick-up and walk-in thing relates it big because to business, able stores. goal solutions store is I terms a scenario, business throughput, so of check-in in as that mean, and which a

walk-in, been see that of or So walk-in without to how the if but optimized, when that's percentage it or will changes. interesting be business, that

weeks, this the course, And We've and have in certainly, protocols spent reimplemented to special as round Florida. a we this will we've a Now back every over we heat are, have other to decline. week as hour reimplemented as site and up. a start cleanings, hopeful, and that in those this compromised. starts reimplemented I five But we then re-upped masking. our meantime continue of COVID sanitizing we've for all employees. last see we'll dispensaries. We've that registered be our for distancing, done, School come the what back know continues an flattening things do to We've

of course mind top of it So and for everyone. is

Vivien Azer

much so that Absolutely. Thank caller. for you detailed

Thanks. your all up near-term heightened acquisitions? change presumably the least you're following about thinking that does expanding costs. terms One store the a But at your the at landscape to real of improve pickup, around mix estate footprint you that change Florida new stickiness, high-velocity Just of in competitors with by throughput way you're tick then, geographic that in able if think does maintaining called specifically? of up, XX% about out, how in acquisition like competitive your

Kim Rivers

store, Look, Yeah. markets. I our we the results that have in very footprint we're and cannibalization as And that comfortable given. can seeing at look of retail very feel we we're that's are very constantly still massive is it consistent, look evaluating We're which regularly. for we openings, a with averaging closely. course to $X that -- very it's model a dynamic we million that say all model still So well that not and something relates and as it's right? new we store like

very in maybe the developed strong. the to on we've our significant competitors a a to pipeline, period position productivity what very, that and -- we've been that X in than so is that come months for a of long the very strong. on systems a is So period year well we a which have in a -- market store are just It's of different our add I continuing as suspect We're puts at us remained and today. basis our continuing store And processes of fact to to Florida, time pipeline but to as a new this market pipeline is terms time. you that out, execute would pipeline just Florida of retail over bit in robust seeing

Our some XXXX. in cases in were properties back identified that

to that remained any constant in last or we So in over seen haven't five pressures us significant increases that dramatic -- times the area. and additional also years, that lead

more have COVID. times been in a staff lead permitting it and backups longer some those There permitting again ground-up seen still offices a have our bottlenecks example, cases, are a I because of in as there stores, really stores renovations. certainly lot right? have from going for that's our working They're are just most to relates through mean, which perspective we materials, what on not our lot of Now stores,-- all to still of build. of of not those on the building some availability is our been backend, us affect like, that

We of nothing that's There's -- boom also in so. front. but housing all we've us on lot the certainly has forth has retail over happened know stopping And true served, those last that for set there the a the that goals our been meeting a that activity in year areas there. department again, that of that

Vivien Azer

Understood. very Thank much. you

Operator

go Please Our next question comes from Camilo ahead. Lyon with BTIG.

Camilo Lyon

And on -- progression Good morning, I flower, to you've margin these first started maybe to everyone. you. help I wanted on us if on if could now, be ask going you're but unfold, you vertical. just that provide you're would ramp that. stores. Philadelphia and profile Thank Pennsylvania. you some closed wanted to stores, given should nice now be think your selling north should in just that they're market's area how state, get Philly more could that to about three margin assume a going there that context

Kim Rivers

Yes.

that too. to -- continue Pennsylvania going a Pennsylvania a while also, to continue have presence right? And to -- [Indiscernible] continue strong in we're mentioned that's to ago, market little and mixed have continue to think hope to little a I a and I wholesale us, bit going is going very for as be to

Keystone are and now haven't -- our also existing margin be quite to additional XXXX And also pick vertical move cultivation stores as be more wholesale facilities of position in and will be there certainly while So in we could that keep as we Solevo share frankly to market our there we up a continue up mind Shops expanding processing our move to well. and going into want

environment, in say, going are. very we XXX% vertical and the right, what it's it's you dynamics mind customers. also vertical quite That's just to be And that and I'll to Pennsylvania. keep market will wholesale you're course, in a the going of so. margin And to a not have And that a scenario. not in not that listen foremost, the first important on

going be So, but there, in yes, some certainly may have wholesale new also additional are well you channel increase as improvement to our there again, there.

industry. think, have And sure, here, checked, at to So last we relates doing the the believe, XX% I it whole. as to will again, as we're we're I'm all good. I margin time look just in a okay be to I a across pretty to margins continue, industry-leading board position level-set And

Camilo Lyon

one isn't and Arizona and sort of practices could. a final since kind different competitive how one how gaining I Got have of Harvest that proportionality then if it. to there you you unearthed some On pressures you acquisition, would think And and have about from the just -- you're they go-to-market? just any in I closing. talked manage upon announced market you've And that also learnings

Kim Rivers

extremely seasonality about someone that you're It's know raised that's so I with to talking some is some hot market there to particularly recreational There born understands relates unexpected. completely you're that about is familiar who Florida. everyone you're the I was right now, a Arizona Arizona, there is as it and about market, and and about in talking Yeah. tourists, don't and you're that who talking Well, Arizona, when talking that seasonality consuming. folks think are

think position meaningful opportunity But -- as fruit wholesaler Arizona. which, there. bit a a in to course, think to about that and their a products get of believe Arizona, only would of Arizona, the expand bit think through do definitely that Q/Q side again, the that -- a both we platform, additional we've in opportunities about, retail, not say, that foremost, transparent in there's processing broader this, we normal. investment and we and we have in pretty owned capacity of cultivation absolutely I first business create to and as specifically. And some would and I lean-to, there opportunities margin there's there Across see just for low-hanging say there's talked you the also there do also that, the expansion and pretty been is we that brands think

I think begin are all exists the teams are executing forward and aligned. that looking opportunity to on That post-closing.

Camilo Lyon

much. Good so luck. Thanks

Kim Rivers

Thanks.

Operator

comes Please Craig-Hallum from question next Our Group. with Capital go Eric DesLauriers ahead.

Eric DesLauriers

Thanks for questions. taking Great. my

like integration focus on I'd with your some to Harvest. of So

important this integration highly difficult industry. obviously in So and both highly

have you with brands, have Moxie big systems, Trulieve, you strong and strong and You SOP loyalty. extraction investments have for now. Harvest strong developed your I both guys know example. made consumer ERP (ph), hydrocarbon

a And or you're maybe wondering, SOP attractive great strengths perspective. beyond So are there some color their I'm maybe your you're adopt which brands, SOPs can as in systems looking Harvest, provide then or facilities. to from looking you and to implement on footprint of systems

Just plans how color any those Thanks. on additional integration be might long the would great. maybe and take

Kim Rivers

I Sure. so I mean, finish optimizing, I'll maybe start with ever, know you ever don't that. that

am those I shake. recovering but of it, me. think and I to have that things forgive a -- one thing I one It's I'll help never lawyer. say, quite just But you can't you all just that

at looked methodology that applied combined best down who then has going has is the and on to a basis. is comes and it's And got will has and a go-forward be a the who out we that of working, who that being companies both ways It's forward. and best -- got that actually looking is the has looked methodology we plan absolutely, So that standpoint. new best protocols, an absolutely, it way not deal to we got what specific will systems, in cases, to am this new specific adopt be being is tell go. we integration a not at And that it's into lens. where, absolutely able doing -- close I from integration you area I can't at can through go may plans really until because it -- an I'm the have details we've adopt best-in-class that, been the sit SOPs. going is -- to some that's Trulieve, a that This share, around of

And to been very more is -- creating, I'll have advantage it's your then. exercise. question instructive that of think to energizing as forward details able a of the have call we're for you a our will keep in that meaningful a taking -- into a So post-closing. we I'll looking to I announcement. more you but the pocket have with again, I closing to in a maybe number if that really be to on opportunity be on dive and lot think lot after fronts and details. the share want continue you until it offer -- I'll that we really

Eric DesLauriers

regulators over the kind more would may this do. one sure if I not that how do extent on idea some Great, of you not Pennsylvania, limit be here. To post-acquisition are for you I'm dispensaries. both color you of, have like. guys production or will the at try, the integration either. that I'll looking received in guys facilities We'll I'm have look what have this. missed footprint some sure But

you Thanks. production to You just closes. kind on comment expect on your dispensary be acquisition that of what and count facility count

Kim Rivers

move tell as from material all comment Absolutely. you, closing we've being conversations before, every roadblocks the to our any can able what of outlined I results forward combine those and And And with each fantastic I going with we're favorable Yeah. And regulators conversations. that in deal. companies as in. not on that. said to do not market in we've to expect the had we of very I'm anticipate we our

Eric DesLauriers

you. Thank All right. enough. Fair

Kim Rivers

All right.

Operator

(ph) question next Cantor Pablo Our go. from Please with comes Fitzgerald. Nunez

Pablo Nunez

Just the Yeah, questions. already. know can you in on Kim, inpatient Florida? context or quick X perspective. growth I late it's slowdown comment

in being to X,XXX week added running cells think weeks I below three we're X,XXX a compared two to ago.

reason for I slowed X% on The but Thanks. right? I because color population was down of it Oklahoma penetration, X%, we significantly. some has that gave are Just -- getting to

Kim Rivers

interesting. regular We obviously that, Yeah, the Pablo, basis. and on at it's very looking we're look trends a at

as think so And XXXX were at are week That's in where just we saw what XXXX. I a we we now. patients reminder QX, about of a

was when the So there's and -- -- of height quite of COVID what shut down not. a slowed there we been in XXXX, doctor's frankly, bit were a at down offices

had related has as into of pent-up order was emergency some we demand now than have certainly a coming But it availability and obviously telemedicine I couple things. sure an -- under executive an X, week. every XXXX. of anything COVID was continued the numbers they that -- course, all other folks, there to order we X, that of not that this think speculation So don't that think is because print I expired.

period. doctor's you throughput the And the have the that their to telemedicine through And so believe, thing efficient offices. right? that able and physicians as I have with be patients you I other out more look to at the look they During think that more significantly to office, telemedicine, on get to time court, were allow did

reason Obviously, for particularly to its is So market it's call to sort we've again, though know going Xth I that monitor alarm, you strong patients don't to reasonable a I I I it and still existence. have normalized back week your though -- we were it to growth I market, extremely point, XXXX year don't continue some any so right? for that is where that of happening. for that, to complete on number would grow. continue a pretty think mean, know that reasons before, in see now of that want certainly to we're

something think But we growth, point yes, that's think exceptionally had which and high don't I So your I necessarily downplay. that QX in was QX.

Pablo Nunez

Thanks. also no that? you and start but Connecticut, the be market license. retail on you once maybe of missed then said the last elaborate retail the thought -- goes Can there only one you Reg, I here, in a there's only for you. Thank is I to you'd able the one, That's good. use And that production. grand have license grandfathering

Kim Rivers

production. for adequate will and Pablo. It licenses. released, that also allowing be before is Thanks, that retail operators requirements will, cultivation to be same there And have the the that Yeah. be retail if ways grandfathering for one achieved folks and is through our officially can X have of cultivation. you the to be there is recreational understanding allowed production will of

not much drafts any so have moment, final are becoming touch, through comfortable that, we expect very in regulations be we and to able the be to cultivation regulations I side and very do production of got things once -- So etc. participate that and to while able that in course, released, any will feel out the been and will certainly and are sites -- that at are on we We've there. we participating of some regulators there market. with identified,

Pablo Nunez

Thank good. you. That's

Operator

Kenric next go comes Capital with Markets. Our ahead. from question Tyghe ATB Please

Kenric Tyghe

good traction make margin on little and should gain that more promotion gross second because terms margin Typically, evolution price of outcomes you. they up a And a and in morning. great, possible about bit did expect, through don't then of just margin pricing. of the investments if if at would collateral those you the against damage that wearing it not competitors positioning. given potentially the incoming of we irrational when handicap, defending and works did end Kim, profile better rational discussion. sort [Indiscernible] aware. a snapback it range think activity, the doesn't, half. good Thank and but those the people reasonable job participating How that promotional quarters, gross you they the potential or there as or to of in and activity If to looking With for context, investments business brand it subsequent be be that lack poised a they Florida on

Kim Rivers

Great Yeah question. Kenric.

really kind in I think the that really, the I so of And to pick up in QX. we're back see -- started still And we're significant of interesting, again. that will still the -- we've increase still bit think saw that then starting discounting a I half of are we reprieve say -- you're seen a -- a little of it. It's that. pickup back to you now

almost from little it's a necessarily and it to evaluate by bit starting So they're way, the a then, pause like then again. to like going folks. you're And same see to not the always there's

maintaining QX. started been some start it's there. in I you certainly instantaneous those I you're you'll think notice move don't And points our I and play I think QX of Maintaining like effects So work we're we value know very is being them of interesting to and going do And but and in We I that we're more in that important that's should as couple course, into watch approach the dig say for it, a brand, you one, themselves But if that do top-line to of some QX; that than think are which it's strategic think said, to see terms how surgical course, into to short-term response into, -- gains. it. sure. sustainable a on very that want in to it an on grow watching right trying look, to see really our more you snapback. but we I I top-line, we to, evaluate force of us of very that the on see another I though, call competitiveness to think for that really something as the also earnings, I want in folks way. a -- intrinsic because and, out. back-office you think,

Kenric Tyghe

great that's question. in then And discussion No, close off in to terms of Kim. just my

mind? your to ability activity be Is level more tail which your newly will supply, your or supply this work high that the recreational recognizing would is noisy gives to pretty some is balance, the true newly could a well to all you markets oversupply. The piece it or a of continue opposite supply, promotional markets. material, relatively it markets, a number where is where either people's typically of characterization to do recreational fair short of markets, my mind the in other it to of But or tied in in established be activity Arizona, thinking across so there to to realistically a the and of in markets, sort have

Kim Rivers

need when think have. really that it's deep profiles have discounts I demand in market are has that the interesting also we that you folks to Absolutely. do this such a that

think right? lot there I to to about, that is moving, a preference, the consumer of Why the to to what's which And And one we quality relates as those value an it's are components the it quality. it's off question right? And, proposition? that of mean, is it we right value that right in important right other it ask components, why again, the question, this, -- so, is the the X really component at I speaks many product and proposition, is price. right something right? basic the the why course, having -- talked And speaks component are haven't there. the and is, shelf There a

to And our think so so, proposition the having into -- completely. consistent I the really and you bought way quality, that win. customer we is and term long and agree again, repeat that value Again, -- and is with who only

the proposition there's highest own. business. at short-term think each terms very I I to we value give to and good thoughtful very, think right way in available again, our respond want to to experience. really continue and how we their that quality just that's about we're ensure products the customers repeatable that produce But be think to the And a of

Kenric Tyghe

it there. I'll Just and [Indiscernible] congrats, leave

Kim Rivers

Thank you.

Operator

from ahead. comes question Scott next Ross with go Please Fortune Partners. Our Capital

Nick Anderson

the Congrats innovation on stepping (ph) This good side. in morning. Xst product question quarter. Nick comes My good is Scott. another Hey, for on

You edibles September. guys last launched

to and skews. looking develop powders, You're waxes, other

upcoming color you've launches, and Thanks. your like the product on so X.X on landscape kind what competitive looks looking been some Just what Florida. seen far what's of X.X out for on rolled the in

Kim Rivers

Yeah, absolutely.

a have currently. of full line edibles We

portfolio in have concentrates And also which line our those of products the for just months. that We mentioned. last whole a include least all you we've the products had at six

certainly there So categories. strong

That still about horizon. are in We're we're hearing of hydrocarbon in law. that out. keep rulemaking has excited on methodology waiting for cusp for come to extraction released. We and the been Florida to We very actual out just come the right on that it's being waiting Florida rules being approved

with facilities did So edibles, we, we etc. been, like approved, have inspected, full already just that of course, have

full have lineup to We excited that we're product launch. a

another line that of that hydrocarbon course, and we, that in partnership extraction mentioned well As high-end Through our -- there analyst market. PurePenn have Pennsylvania. does earlier, in product extremely

And Florida. in bring to that anxious so are we here expertise

allowable. is course, of addition, also hydrocarbon Arizona production In in

say catalog point truly course, concentrate to of will of on have I is up So and certainly as picked robust what you on more would that products.

us. category that for be to for looking we're so growth a And

for approval mention our product on solvent-less a that River, to a refined actually continue who us, And innovative waiting We brand concentrate other addition, our some We're products. an with is forward. of we're is innovate has on do overlooked, genetic also think category I'll recently product. In gets The growth cream products. launched Blue continued is is to which we should line-up our on I that And Company, across brand for the lot continuing innovation partner say do a partner other solventless which which sometimes to well. front, I a the do we that important thing believe front. moving us category extremely for on innovation, again, is national final

true, to with our And we think and Cultivar again, genetics mentioned strains, invest only on when Collection. level as the people heavily think that also national think a as with But we continue really profiles and things control think example, We exotic profiles products, certainly chain is our supply I landscape how portfolio. continue I genetics, it's evolve sustainability about and important is of, be commerce, into which the and the chain for change genetic for or feel to specific like might in one for interstate of parts of it's of to important specific products. which for those genetic supply may folks

feed Terrapin strains requirements Again, certain product that lines increased perspective. structure is into that that have by made from well formulations. as, specifically high-end mean that genetics have those are better particular And Flavonoid, we I what flower as developed. that a So for

focus work is it to genetic that to continue that So innovation, as and important relates to will us on something as is well. we

Nick Anderson

just me, your regarding really expansion, color. I specifically California. of then Coast from kind switching one West appreciate Great. And gears that more

for leverage a You opportunity? the have Arizona's Thanks. and to your in brand that become compelling dispensary to region. in What or happen market in equity of there more Harvest it potentially you then think to needs do change California

Kim Rivers

interesting, -- to happening in there. Certainly we're I what's thought scaled certainly and I that with meaningful on [Indiscernible] relates keeping supply and and production California and eye California think is absolutely. we're on real what's it chain Yeah, watching keeping we're going as an

solid supply and improving I true potentially mean, really and California market, true right? is I ability as in relates it's no with would a quality stable a through can, run where we any value. perspective anyway distribution we're what so our that our overburdened to we're we a and think a to can California, we chain, in to not that distribution. that in a I way. for different reliable get the good looking sense in get have that scale, tax state, opportunity it regulatory say business have and can again, from that's repeatable significantly as provide products. market the at makes customers and or

better it So we're And I on it. eye think looks a keeping did. California than close

Nick Anderson

I color. appreciate Great.

Kim Rivers

Yeah.

Operator

remark. to our the turn closing This like Ricci I to back any concludes session. would question-and-answer Lynn conference over for

Lynn Ricci

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

Operator

presentation. concluded. conference you now The is attending Thank today's for

disconnect. now may You