Loading...
Docoh

Trulieve Cannabis (TCNNF)

Participants
Christine Hersey Director of Investor Relations
Kim Rivers Chief Executive Officer
Alex D’Amico Chief Financial Officer
Steve White President
Derek Dley Canaccord Genuity
Matt McGinley Needham & Company
Camilo Lyon BTIG
Owen Bennett Jefferies
Spencer Hanus Wolf Research
Andrew Partheniou Stifel GMP
Russell Stanley Beacon Securities
Victor Ma Cowen & Company
Kenric Tyghe AltaCorp Capital
Scott Fortune ROTH Capital Partners
Aaron Grey Alliance Global Partners
Eric DesLauriers Craig-Hallum Capital Group
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good morning, everyone, and welcome to the Trulieve Cannabis Corporation First Quarter 2022 Financial Results Conference Call. My name is Andrew, and I will be your conference Operator today.

As a reminder, this conference call is being recorded. [Operator Instructions] I would now like to introduce your host for today’s conference, Christine Hersey, Director of Investor Relations for Trulieve.

You may begin.

Christine Hersey

you. Thank thank us. and for you morning joining Good

During Alex deliver D’Amico, Kim Rivers, for prepared Officer; and Chief Executive Trulieve. outlook Chief and on financial today’s the call, remarks performance Financial Officer, will

will we will President, available remarks, prepared be their open call Steve also to questions. answer the to White, questions. Following

XXXX. or described the to and this from including with our As and and and on subject ended our are forecast, these of including during are materially XX, for Commission, other Annual Company’s the that historical the cause in call risks differ uncertainties uncertainties could factors reminder, XX-K Item results Exchange Factors historical a made year Form facts our not filings actual statements the Risk to that statements Report results XA, Company’s constitute Statements, from the Securities risks, Forward-Looking December

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

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

greater advised future. morning, the we quarterly or business may of of version and our an may Please remarks be not be results section continue dynamics over be CEO, into metrics www.trulieve.com. press of accompanying may we our we offer An XXXX. Relations found these to turn during earnings website that additional to PowerPoint today’s now first results. times our This or Please the reported at ahead. Lastly, may our in go questions, website available the call on conference to insight Investor call our provide your the later provide quarter archived the A responses copy I presentation our of prepared on of today. to or details Kim Rivers. will will release our for

Kim Rivers

you give Christine morning, and today. a and we good are but apologize everyone, my it going thank Thanks, I to here. for about shot joining us voice,

quarter top We in flow. to delivering results grew the are report GAAP in March operating growth, record momentum results line first Throughout strongest positive cash and improvement thrilled with the with line margin quarter trends. historical

great on year the this we we make plan. continue to to as start our Following strategic progress execute

organization phase optimizing Our team the of further on focused growth. assets for platform is our and our positioning next across laser

is Trulieve cash capitalize to in our strong of flexibility the to advantage well and incredibly to the ahead. on our highly in take opportunities I’m expenditures our ability conditions. adjust balance sheet, environment and capital current confident Given strategy generation positioned market

year-over-year results. of quarter XX% to Trulieve sequentially. Turning up million, X% first and now our first revenue record quarter XXX achieved

channels. organic to First quarter and both revenue growth growth was wholesale in retail primarily attributable

XXX to consecutive was our gross million, was XX% GAAP compared quarter gross Adjusted quarter. or XXth adjusted XX%. as quarter, First XX% EBITDA XX% representing and was margin profitable margin last margin

cash. quarter $XXX cash the First XX with flow million, in operating was quarter we exited and million

Arizona, with locations platform market grew Florida leading Pennsylvania. in retail positions and Our XXX to

over revenue for and and units on further XX%, performance we transactions respectively. and holiday, enjoying The the on were to time retail and in compared mark our out illustrated turned processing tremendous four demand last product XX%, first sequentially strong door million approximately prior month spike Distribution new around events, with untapped and We with supported to by lines benefits numerous occasion to quarter record XX% underscores The scale celebrate the X.X of The by the across DJs network launches, markets XXXX, potential food increased cannabis buildings. of achieved up million Black and units. our feet the Friday year-over-year X/XX, the production community this XX% square in trucks limited cultivation strains our During industry. is XX% depth record by and wholesale and offer X/XX capacity. including wrapped results promotions. the on buster

occasion great always, delivering the service. team our rose customer to As

strategy Our experiences designed positioning success in fantastic X/XX are how accommodate reinforces to our and demand. flexibility on while having day, sharp every the and traffic provide to increases

inventory All channel. greater to sales revenue and contributed cornerstone fourth And due to Florida in our to despite quarter, selecting in the to sequential attributable branded availability was quarter depth markets. Strong strong new were of the greater results. products. Lower launches, compared products of for and the Florida Pennsylvania. increase factors. recall now a first Turning improved promotional the products results premium Xth, stronger several differentiated driven February growth revenue Pennsylvania, to combination product first activity, performance on quarter by wholesale of of In

progress we our outlined fourth with our across call, Year-to-date, plans made have the plan. affiliates. to During optimize assets and in operations accordance we quarter streamline

and including our working premium pending we branded have to mix approvals. regulatory concentrates, launched Throughout expand to meet products We segments. vapes and product better suite production been adding We in new are branded XXXX, customer demand. order and in value flower refine branded new products

Arizona, our operations to we affiliated products Pennsylvania remain on internal on and our are capacity In of retail optimize track. to across sales efforts increase throughout chain Our footprint. augmenting our focused optimizing supply

capacity, the indoor automation. lighting interchanged acquired and We facilities some add technologies additional have to started added extraction additional and and cultivation of

in seeing capacity the increase we to coming quarters, in efficiency addition better in So anticipate near-term.

to chain. continue supply XXXX, move we we As through optimize our will

progress plan, further markets. demonstrate on execute attractive our results quarter scale we as depth building and and First

is Our focus leadership invest out our and Trulieve unrivaled conviction that on always investment. strategy criteria opportunities high to undeniable. markets has in this noise tuned success stringent meet with to the for heavily

macro and the quarter we current in cash generation are at from operating cash cash end million expenditures managing actively XXX and our environment, with Given assets.

We positioned on we in timing are well to for expenditures term conditions capital expected short capital And based markets. and volatility weather throttle catalysts. can market

acquisitions access flexibility and the have be with market and within We investments opportunistic, strategic environment. to tighter the capital to

four our fourth number our customer through set products approach future. and Three, leadership call allocation. During regional focused outlined to and four earnings reinforce retail in March, the initiatives we through XXXX, on our priorities position for expanding the quarter Two, These Trulieve in and for four exceptional hubs strategic delivering experiences. and retail one, strategy. capital adhering to branded our channels, to distributing disciplined wholesale branded stage

brought delivering and assortment rewards frictionless convenient with innovative returns, an exceptional customer enhanced First, experiences and loyalty and transactions, retail are we product programs.

First while releases first live sugar their quarter for approach for offers tool garnering activations. ensuring the from realize hyper customers activities margins for specific Personalized this events, benefits outreach return products in included drive to customers marketing marketing preserving appreciation diamonds tough brand traffic for sell-through and us with quarter. product We customers, sell-through high rates and personalized products. is of specific preferred these rewards high matching and and an effective the live

expand to our Second, we strategy. through continuing regional are hubs

distribution of new presence deepen emerging network Cornerstone In quarter in three and outside to we of XX XX%, new investing to located are We quarter our Trulieve retail dispensaries. markets our dispensaries in eight locations first the in are with in XXX the markets. Florida. including of states, Pennsylvania the developing exited first while opened a we This total medical year, Florida. adding state XX

Maryland capacity premium expansion chain. added efforts Pennsylvania flower and indoor In West quarter, of ahead use. Virginia adult Florida added cultivation and Now capacity to in for our Arizona first turning capacity supply ramped in and we the continued in

scale depth the accordance leveraging for markets. are the meaningful in market into fully continue years, to markets, play to in when and In development future a growth. of our across with a opportunities new strategy, existing expect role expanding southeast hubs coming providing will like In strong Georgia. we foundation We regional opportunistic new the be we hubs and our

distributing retail are branded we Third, through products channels. and wholesale branded

wide portfolio price factors form at Our points. includes variety of appropriate across segments offered a product

to feedback. two Examples We market preferences. based In innovating single include value first evolving are eight. the buds, in response or serve primo quarter, on RSO, high size, new have products end continually tinctures, buds per one and several we launched edibles, which

successfully Differentiated specific velocity sell-through We launched and brand customer of speak and markets. very these of products. now that brand customers have to multiple are part with the for to portfolio meet We our an encouraged value. defined reinforcing long-term strategy brands building demand important products while brands a high across have are by

Massachusetts, Momenta quarter, demonstrating and brand Muse, During right launched By and products markets we Cultivar successfully Florida, offering building want, customers Collection, Flower, Roll branded the products One we that Maryland, capabilities. are West Pennsylvania true across Virginia. branded the first Modern including

and the providing including in the personal digest and launched recently Momenta we marathon local brand. product across to DeLisioso as for media brand building national of in of greater complement to access wellness with and outlets Ethan’s a him new and of April own Television for powerful we thrilled and Ethan health the using and Arizona, who we representing E-Online Show Family the Through provide and and his markets distribution Kush and covered and In and Momenta hubs, ABC in Boston As partnerships Survivor products pre-rolls broader we retail wellness brands. participation experience, the Trulieve help efforts our pre-rolls are True can Florida. exposure welcomed we continue evolving consistent branded of Marathon his brand authentic cannabis survivor as in an launch experience reach cancer and part March amazing ambassador News, our Momenta Khalifa his the winner finished customers even products have Regional program. support more sharing our brand advocate our journey and portfolio. and to mainstream Zohn, In to

branded its such the to last released connects DeLisi fantastic, profits portion responses it may Richard a brand forward as with familiar brand is folks know Wiz Richard history, further based pays bring and to in both in While is passion free of XXXX. the Florida amazing He DeLisi in us who served and instrumental DeLisioso donating the energy longest of to partners having working Rick. U.S. including inspiring by of prisoner and Early to been DeLisi founded cannabis some December of these DeLisioso XX-year was prisoners the project, son a serving and most DeLisi. Khalifa, senate. which nonviolent one by his industry is a be have The securing cannabis with XX-years not products releases nonprofits, community.

platform our branded of a equity. and factor to important an Our is key long-term customer retail contributing component building experience brand overall

During Overall to the rebranding the sold been first allocation. has quarter, to locations. our brand. in remain realized for rebranded and locations Pennsylvania, all approach initial we discipline performance to we of and stores completed units Fourth, most with retail revenue strong, that higher the committed Maryland Trulieve capital

We for defined assets have markets. a and well and established evaluating criteria strategy clear and

During may of divested both future Massachusetts, and acquired choose assets redundant our assets Florida, appropriate. as of divest across in part non-revenue the this in in cultivation assets performance additional platform, quarter, a continually of harvest and evaluate as which transaction. we the We were to the generating location

to expand invest growth. distribution reposition capacity, we to continue for will and we and prepare to markets support operations, assets future streamline in As add infrastructure and fortify our

us capital X% the senior capital secured Our in terms. and sufficient to In and has track and second industry XXXX. January, profitability notes to Trulieve strategic affords fund capital access of totaling leading closed tranche allocation our discipline plans growth we record million. of XX growth initiatives

the our strong opportunities financial us will market balance our economic to position to industry. We capital by factors capitalize access impacting macro discipline expect uniquely on and sheet, created

building company in are leading We emerging a industry. an

approach are development As a proactive decision-making. strategic always, and we taking to

have We of financial of in a long changes market ahead conditions. outperformance and positioning track record

first I we articulated in progress year. signaled, to Year-to-date, reach more our realize Alex the goals improve performance expect plan the call hold. we and turn on over our to of details cannabis. this previously take is that, track define future to are poised we we made As as our on Trulieve great and With will quarter. for to ready initiatives

Alex D’Amico

Kim and morning, everyone. you, Thank good

$XXX.X million harvest We are this quarter Record of year-over-year, tremendous the during compared momentum the carrying have and since closing first first XXXX. we of XX% progress quarter $XXX.X million forward. made revenue transaction increased to

margin Trulieve XXX ended increased quarter feet with dispensaries, owns locations, dispensary fourth and May gross XX% $XXX.X or the of compared First supported of gross X% up of quarter XXXX. or $XXX.X value capacity. sequentially quarter step sequentially million was profit processing revenue the first over quarter as during GAAP gross the or cultivation XX% impact to of fourth to In compared of operates million by reduced. XXth improved reported inventory as million million significantly charges during fair quarter. $XXX.X of the were the first Trulieve margin square four XXX

and $XXX.X of or transaction XX%. gross million non-recurring the charges, gross quarter profit Excluding of adjusted margin was related impact adjusted first

We expect to and inventory continue on and depending gross margin through. product quarter-to-quarter mix will fluctuate flow market

the to million, fourth million, now or revenue quarter first or Turning $XXX.X XX% of in XX% during compared the expenses. to SG&A SG&A were expenses XXXX. quarter of $XXX

million of and integration included primarily with related acquisition. the associated charges transaction quarter harvest First $XX.X expenses approximately

of or million $XX.X was SG&A quarter first charges these XX% Excluding revenue.

depreciation are expect million and in over revenue. and quarterly ahead Depreciation amortization in net amortization the of in includes useful quarter XXXX. will loss for depreciation increased SG&A first investments the million fixed to the to expense Harvest of continue as compared we assets. $XX.X recurring assets fluctuations fourth million to million, the $XX $XX.X intangibles transaction. the invest increases of quarter we fourth Net growth, of of the in amortization expenses and associated expense underlying $XX.X life for to and quarter $XX.X for of quarter, was XXXX. million expense made amortization with This loss of future As first during Depreciation compared the nature be

million associated divestiture a with and generating impairments cultivation in assets loss of due closure million $XX.X net $X.X asset non-revenue the of loss redundant included quarter of to First a the location. duplicative

million. charges, quarter $X.X non-recurring first Excluding would net been income have

$X.XX, per to per XXXX compared quarter $X.XX in XXXX. the quarter loss First share was of loss share fourth of

$X.XX. charges, first per have quarter earnings would been non-recurring Excluding share

will the XXXX to transaction expect improvement impact expected We charges with throughout integration related continue progresses. EPS and reported year as

now adjusted Turning to EBITDA.

EBITDA to For the XX% of million $XXX.X during first quarter compared was or XX% quarter the or adjusted million fourth of XXXX, XXXX. $XXX.X

on We we execute our strategic improve as expect EBITDA adjusted to and assets plan. optimize

to our on Moving balance and flow. cash sheet

quarter, senior $XXX debt. first quarter the X% ended in cash million. second a closed secured $XXX in totaling the During $XX first of million We we with notes, and tranche million

First quarter cash was flow operating million. $XX.X

the ahead, Looking second by payments quarter be the we flow timing cash tax quarter. impacted will during expect of two

improvements flow. cash cycle to are realize and managing the actively conversion We cash expect further operating in

expenditures solid Our million. strong cash of generation strategic our chain of the XXXX foundation totaled comprised and and supply investments financial were profile in to first quarter The assets. support provide Capital initiatives. in retail a $XX.X majority of expenditures

have highlighted, our conditions. opportunities advantage the Kim As arise that we to flexibility on adjust of tremendous market investments to take timing based of

billion $X.X $XXX performance for and and on $X.X Turning XXXX. EBITDA. outlook XXXX and our now to billion year-to-date, Based current are we in guidance to adjusted expectations guidance of our to million in reiterating $XXX revenue million

signaled, previously have we anticipate As throughout growth we this non-linear year.

relatively first quarter revenue XXXX. compared second flat, in anticipate XXXX to strong quarter of be will performance March, of Following we the

thus supply capacity, the XXXX, in report we I’m with performance summary, expect of far. we track of half focused proud and we in building operational a made to I’m team execution of on period our keep so have of our excellence. time. how of I’m year. and the back the and stronger pleased the up exiting have to In and timing Given far short ramping progress chain investments very record excited come

assets, for significant as And future we We over further that, I prepare will Kim. ahead have the with optimize growth. to back runway call organization to turn our our

Kim Rivers

Thanks Alex.

progress Everyday early innings are we said have being U.S. more I’m before, accepted. by cannabis. cannabis made. increasingly becomes still the for widely I As encouraged in

than stronger. products are year regulated success X/XX the the we widespread well point, look for grow industry, demand the to tipping no This cannabis of continues holiday. an further beyond As

the the and own common We groundswell sides with the on are entering to and for is are advancements to both aisle. firsthand support initiative use interest continue momentum support cannabis. popularity of in significant legislation, cannabis seeing ballot, adult and desire reform. expanded Maryland This advance we a November highlights markets new and allow our paradigm increasingly as increased are At seeing for the use access from adult level, we acceptance. mainstream state need an build in Federal At to of growing Pennsylvania. constituents Within level, sense the discourse

In sales later Connecticut use year. and we anticipate adult as resolution expect year. We in mid this move Georgia, commence as forward a will potential with light to operations green early

contributing rapidly forefront and to industry development We this proud of be to expansion the the and evolving to changing at of are cannabis. access ever

work great done. We be much to have made but progress, remains

for annual The opportunity next uniquely advocate and again in promise go forecast to ready follow our lead to all expectations markets five-years, billion positioned is of this this profitability in it. continue cannabis to will XX the for deep in set over meet and tremendous change industry phenomenal. and at on strategy, industry We is double Trulieve The levels. reaching by U.S. sales growth are depends opportunity. almost XXXX. legal We like execution with the with

continue to the I say as going are tuning will staying to true say us you we We and out to onward. we do And do, for always form. joining noise today. Thank what

Christine Hersey

Steve questions. Kim White up call time, questions. D’Amico this the answer open available Operator, At will for please to any be Alex Rivers, and

Operator

question comes ahead. We question-and-answer now from with Canaccord [Operator Please The session. will the begin Derek Instructions] first Genuity. go Dley

Derek Dley

update asking and I progressing? really how can morning an just on is of off if on we integration start congrats results. wanted good the of another to set strong Hi get by Harvest

Kim Rivers

literally are we progress. unbelievable, when rebranded Florida, one It two well. and Harvest morning Pennsylvania, closed removed the and Derek. stores Yes. that the announcement. through I walk is deal in is our We five-months, in progressing take mean, deal we you a year think back, from you step Maryland. when we days integration pretty really The fact Good about and

Pennsylvania, XX operations Maryland, Massachusetts, all have a So portfolio total, integrated branded and products three new West launching stores we structure Florida, launched leadership product across Virginia, in a combined hubs. and hub

We have less gotten assets. non-contributing and rid efficient of

and increase evidence, which course streamlined margin company. have our SG&A in our We a of operations, decrease in is as new

markets We company smashed priorities. have strategic And records and added X/XX. supply on we chain combined on execute to across all set our

So, pretty is it going say I well. would

Derek Dley

agree Okay, I with would that.

just and a like comment of that sequential mentioned put gross again, perhaps or the the and mentioned, of margin in a some place notice you basis. margins higher? this took in you you materially up just driving movement quarter on processes So, or Can you big initiatives step have self harvest that on that margin integration

Alex D’Amico

I take execution and that was a as focus will Yes. I big there. Kim guess driver mentioned, on

It big wins shakeout this to the And our the this than see closer was step-up adjusted of primarily was was XXX $XX GAAP of One gross getting quarter related to million the inventory driven quarter. fair you impact. that less quarter and margin. grand our impact value this deal gross last by of And margin. margin

executing So, we execute we margin, our further we kudos channels. chain internal to and to as improvement improvement forward internal on the our inventory. then, that team area, Kim infrastructure that look and the on go as selling and supply through through product out pumping And building mentioned, in retail expected forward our by strategy,

Derek Dley

in of happened sorted shouldn’t is kind that And step-up be We sorry that shouldn’t one that expect for in now? there year. like of It this those later another inventory QX.

Alex D’Amico

is through. sold related Harvest inventory The Yes.

Derek Dley

Thanks Okay, perfect. again. congrats. Great

Operator

question Matt Needham. Please next ahead. McGinley comes The go from with

Matt McGinley

your were quarter-over-quarter. dropped dollars G&A quarter. and fairly But million compared the to G&A On about flat dollars $XX marketing sales Thank you. by your fourth

to will the Alex, will $XX second think like, is cost the that same to G&A about revenue said roughly So second as or in I had close quarter, to? total there was related you you quarter, additional question the given flat reductions have that million, into you Harvest will alluded be be a will which

Alex D’Amico

quarter dollars, as revenue, I this we always expect overtime. a regional out we grow of wheelhouse lessening revenue. the the is versus as XX% we On indicate, Yes. costs. hub mean, again, is as see basis, were build of margin, and XX% But percentage and adjusted of closer transaction hold we SG&A to area to a and our last traditional structure another we that percentage our an where as like integration

We the in the we as time. expect that where just about an to always incremental we and able do shining go good and optimizing we kind short we organization But, of apple of feel were period come along. organization are improvement as

Matt McGinley

to provide flow cash appreciate the helps Alex, And you integration. that I really flow ongoing table to some that the related reconciliation cash of identify that acquisition headwinds

not to the the we when in headwinds. assets will see question we you continue my relative see those what going would And those saw first cash headwinds where integrated, Harvest fully flow flow second or to So is won’t be cash forward will that what table in quarter, the quarter? when be I guess, expect to we

Alex D’Amico

side, improvement, Yes. see this think the ops. through $XX flows margin. and backs Always of $XX We million related in last deal million We just see time. it that impact. almost that continued in We obviously add unless to SG&A from had the flow cash time

there. So significant improvement

kind costs million continue lessening those you throughout the to like while from And see year, we as that those. our mentioned of operations $XX.X flow cash but forward in will We of basis, margin that And and back SG&A. to related the continue if getting to forward inline almost adjusted is $XX quarter on million. like we you remove look impacts those an deal

Kim Rivers

through million cash And from flow at context, operations. three year we first the for were XX quarters, and last

have So three to quarter if would single in quarters quarter. working the you, adjusted to to view, a are which of beat cash get take again, operating worth we we kind get very of diligently this flow

Matt McGinley

Okay, you. great. Thank

Operator

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

Camilo Lyon

morning, Good Thank everyone. you.

like an Florida from have margin pressures pricing takes So looks in gross It the perspective and to or played out the appear margin puts provide a this of that. we gross that going margin. confirm performance, how year, in in what on may level? if out color Any those wanted to in the worth are as see topic, out the continue you QX stabilized. level operating have calling been on balance maybe for back could quarter some pricing to stable off how should just should you gross up QX expect actually And saw to play the to build should of things but of we maybe then quarter-on-quarter,

Alex D’Amico

Yes.

one was gross closer quarter the the and margin. big gross margin that of again, wins getting So GAAP adjusted in

expected less this for So standard We X%, And is for flux mix. past expected pickups us, high quarter-over-quarter. third-party is discounts and in in promo [vape on in And improvement, saw an flow off in X/XX. QX your quarter-to-quarter adjusted a we offset than basis, coming an through the that was normal the as and have period. wholesale that cap] business mentioned is our sales, partially And inventory product have market by delta the then we Pennsylvania. into leading particularly increase product in (Ph)

Kim Rivers

And vape the to guys around across there. by you in our still give segment bit home noise some a But markets, don’t state was we situation know, the had obviously, Yes. significant we on quarter little color Florida, improvement you of kind in of Pennsylvania, just state. and there recall of

the have pivot, down margin did market. great team growth bit. more to wholesale which they did top-line But to are brought course we a of So a in we pivoting there, that and achieve - pivoted able job and

so the But branded of in was products but in - was other as team markets the well really as see QX. through in half, we Again, see good incremental go terms see there more coming that of throughout retail But terms certainly we signaled, increase what it the we and some branded have call. So as then right opportunity year. that to pick through, front able and ahead. pull up again, we off half in back to

Camilo Lyon

component. a if think could we how on and ask are then scaling that you about how And should - initiative? of that about think the wholesale it. Got progression maybe Arizona, I question What

Kim Rivers

Yes. branded I mean, been have new I that primary think pretty is retail. through the brand product that goal we clear

first going just of products So and production retail through to like many to locations. of products in markets our sell those to our Arizona, be our in of is priority increase internal that other

need to Arizona, in we increase opportunity have We that.

while the would in - really maybe is in late until, year, So, even into on wholesale come is it it board, I XXXX doesn’t again, play say Arizona. the

Arizona early volume that get of our So just need branded some suite those And then to products. opportunity are through. chain producing is in indicators supply it primary the through push our efforts get get we online, think of retail to good. more those We branded

Camilo Lyon

rest you. quarter. Perfect. with Good Thank luck the of the

Kim Rivers

Thanks.

Operator

question comes go Owen from of ahead. next Bennett Please Jefferies. The

Owen Bennett

morning guys. well recreational my on portfolio the just correctly, these August. Florida, question If and first Massachusetts, are far now to these with of than what are any of are seeing I Virginia. these Thank brands, early sort you curious just where trial so in you trends perhaps you. hear purchases and better brand states any they I’m is sort of any heard Maryland, that Good West PA others. announced repeat in and performing

Kim Rivers

Yes.

higher XX%, thus sell-through. you I words sell-through cases will that in XX it, vis-à-vis launches of In tell far. launch, more XX% I than, within we in other sell-throughs on So, from first legacy call week I seeing cases are call launches, products. brand hour our great it would most feedback the will some

premium particularly of adoption as things as brand, on side brands, is We in Muse which as well our sell-through our well, Collection the hydrocarbon brand. our Cultivar are significant Flower seeing in premium

those So brands are of both of exceptionally news great doing well, course us. for which is

protection As to customer premium try has significant margin. which around base, of grow continue and course that we

Owen Bennett

obviously hemp New Great. follow-up, or obtaining running just Jersey about familiar, you and Jersey New possible you maybe be looking and license? could up us York something year, the thinking licenses I some Thanks. the at like organically, a you hoping prior York, give Are one could it one with and And looking of now, New are details could this obtaining how even on albeit New in you York, New you was maybe operators. Thanks. for M&A hemp to do operators

Kim Rivers

launch we think what went enthusiasm of certainly I is Jersey is in the expect look, that recreational, market absolutely we to a year we saw have pivot mean, around thus that type and last would same seen line the New in is responses that see it I and reminiscent with Yes. activity excitement in the recreational. far, the when very encouraging, to Arizona, of

So it is encouraging.

it so we And pressure We in additional it terms to recreational to as has also in coming got there recreational. a markets love neighboring We of which and course, sales. see love look others, Pennsylvania of excitement energy. we for we to see recreational because Northeast Maryland, love initiative been the in opportunity also such on around puts progress the and the see there have

and at to the selection, Jersey, about, be New continues think perspective. to how it continue supply capacity going our Pennsylvania significant as setup in a watch take regulatory and a And we it serve again and ability as to we look and supply to product market through chain when it that think I really additional from the Northeast. is retail positioning the interesting great relates as again, our channels. cetera, of significant online et served, of We be in and to catalysts to maturity chain come

Owen Bennett

Kim, thanks is very Well that helpful.

Operator

go question The Please comes next ahead. from.

Spencer Hanus

Great. Thank you.

your I talked new out and share operators ramp in Florida competitive then discounting as many market. you guess, are environment or Florida? seen any prioritize, the take how building competitors in you your thinking of using have a to about a disability stores One profitability of there, about down

Kim Rivers

Sure.

we So the get of volume, data Florida. all ability quality products the we ability speak shared revenue. signaled I OMMU of not our quality is to themselves in to think for state revenue revenue continues in And the to bolstered that as terms by to increased our high into out our numbers this Florida continue get our market, our prepared course of remarks. the of was premium get quarter-over-quarter by to know, high and represents and profitability continue innovate as quarter It in but

that promotional bullish less it And quarter, We had we not said Florida our to in actually I basis, patients down we market a XX% continue peers. on again on over to of a to which share X,XXX is and market in continue products is week, of all to over can continues be Florida, flower we terms close in quarter-over-quarter, and in and invest to slowing be per store, very a on And think store sold. with don’t for per be oil Florida. continue lead that are the Last growing. again, we in program XX% so joining and

Spencer Hanus

crop is how then about with that in That bit how planning Got you opened about XQ? the stores and from your are XXXX relocations momentum could in it. And And are thinking sales for talk the do XXXX? little the you helpful. to you trended a that

Kim Rivers

part I’m you first Spencer? that sorry, repeat can question, of the

Spencer Hanus

you sales that the the you do how same-store quarter? the relocations Just any those trended you on how And are about about to Could are then acceleration - talk Yes. there? your sales changes your thinking and first momentum in making portfolio?

Kim Rivers

absolutely. Yes, Thanks.

annual particularly we a sales an at this again, which given, same-store here I point. on have portfolio combined a year, given, on data basis, is So out think relevant

can say that Florida a per store to However, I basis strong. in our sales on be continue

expected continue continue of getting is relocation a relocated in it those we I relocations. in ton on stores to repositioning results sense of and improvement as call noted we and to positive initial positive forward four on will in as makes planning The six and are of retail, we performance mentioned, to that are basis. again have Florida, strong stores year-end out As with invest stores our we and a of to up that and we move due

Spencer Hanus

Great. Thank you.

Operator

with from go Stifel GMP. The next ahead. Andrew question Partheniou Please comes

Andrew Partheniou

for a balance Thank sheet. flow cash Hi premium market conditions my on and you Current newfound a strong congrats questions taking great arguably - on quarter. good past a with and morning.

of advantage being useful? of Any are discuss you would your color chain opportunistic be take valuation now. what You this that on to and geography, right supply kind timing, on you Could outlook areas seeing of and mentioned opportunities M&A environment.

Steve White

Sure.

before have where trade. when repeating opportunities it that said a are M&A we for evaluate sustainable looking a we profitable bears it we business, and we are not So building and

So hasn’t our changed. criteria

overall still the fit or are plan. with looking We alignment strategic at our

pricing, the but are changes not does recently the affect evaluating price with the it What have timing. assets, our we conditions. Affects the We team, in criteria. seen and market most

still the the some continue will conditions we opportunities we go into that markets markets. be deeper current and So find that to additional going given we of opportunistic. hopeful are our existing to are additional to business market And in expand

Andrew Partheniou

launches focused you value traffic volumes Is useful? versus be mentioned doing? color more down seeing terms Could provide in the have quality question consumer Are is the that. are that of next for been on value, on on your foot seeing And or premium you health from initial Any what trading color you any of premium you How successful. purchases? Thanks the consumer. their would sizes, of any to on transactions maybe the basket the consumer?

Kim Rivers

Sure.

not there within the to really, and markets cases, divergence markets certain it not, So, areas between as and certain there vis-à-vis even are same, relates customers geographies in others. some is is demographics or all

differently. our we a got a catalysts we all start-up got business got more some depending on an is each that bit of markets consumers have about So is makeup. markets have it little What that, interesting. of here markets markets, mature similarly markets, seeing as those is we differences so aside. positioning this to that, have talk different different we in have are our of their extrapolate makes and phases difficult markets, of growth specific are we top that behave what and is within they one across On To question have each extent we we because that pressures of ahead

In increase Frank, we most pattern in of buying, to in side. seeing on of opposite quite So to terms are growth experience a others, seeing premium product continued are a states, but of segments additional on we growth, along growth the we continue that in be the said, on being again, growth markets premium in value. some areas and barbell our with value

for wants right innovating speak of certainly particular It remains us those customers the it mix, to ensure both that, very are in got this becomes to transaction-by-transaction, be have lost we a products terms products, important our is who specifically and to on to go a make and job pricing going into right or that make our very the talk products we important how location. on and reality understand, when that go is level, what purchase. into but high customer and distributing So to customer segmentation is specific sure the the see shelves to they interesting we are that business store when to shelves to is on the what is that they customer-by-customer basis. that it And

Andrew Partheniou

back Thank queue. for taking get questions. I in the my will

Operator

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

Russell Stanley

congrats on Good and the morning quarter.

Georgia remarks. the mentioned You prepared briefly during

market is Just regulatory game plan it state, with can big how And for playing ton on obviously potential. a of your I I given you wondering, guess, delays out. you envision, battles, legal guess or elaborate this a the

Kim Rivers

Sure.

As you a have of we it ‘‘win Georgia. you win kind to way’’. is at of playbook signaled, is we don’t, kind as in new, part you lawsuit can love if nothing if and point of launch a that this hope relates don’t position cannabis, This our license it license, a that that the you

the terms at point. by encouraged moved quickly are process to that is think ALJ move specific We so been arena and of will this streamlined that and we that, the now that has fact more which in much deadlines,

forward. said, And very do green in setup the are we And encouraged believe getting also next actually, the see in from get some will that resolved days. we We several by setup, that be ways Florida that, and being that months. over market are similarly, we the that to very the move early information here in was that that similar, better final will again, than we light

behavior is haven’t the lawmakers there nothing that on there strong there move, that for an a improvement by saw continual there require tremendous conversations moves again, before. growth that that think past we legislative we this appetite is and path, that is among and session, think program. of we based will the And we certainly seen legislature, incremental some ahead. So, It but

Russell Stanley

could I lot of have throttle maybe you markets. or you noted, have got more to think just I Thanks on different down in one a there for and if that flexibility CapEx, up

if I wondering at has changed spend markets, it easing gas markets in your wondering, if the by if changed on, be missed year, if Just the stepping up which for might on any? has allocation and total apologies which be outlook there. your market also and might you But all,

Alex D’Amico

Yes.

our the same. think I philosophy remains

core our is our As CapEx out our chain we say of your end in building the infrastructure. markets, majority and about supply

later. plans dial As to year year back conditions it. market come and portion of our good year this Kim we was last that of good also and set a mind and beyond. or for CapEx for tremendous noted, Keep year in online that QX span we CapEx a flexibility if And have to for from will portion call our this next

also and invest the necessary. we is The to of timing catalysts. ahead important, mind, keep to So continue to extremely assess have that we out market build dial then back And as we in that of new markets. capability if of will

Russell Stanley

No the it queue. is great. color. for Thank get I you will into back

Operator

Vivien Cowen go from & Please Company. Next question comes Azer with ahead.

Victor Ma

Azer Vivien questions. is This on actually thank Victor Ma you the for and

I to in bank and you margin all, promo quarter-over-quarter, attention quantify So pro-activity XQ you. you categories? or Florida you higher promo was. spend Also quarter? account but first can of can offer size mentioned over to basket the the decrease used before spend with was drive to maybe on know the color drive of more Thank

Kim Rivers

Yes.

we and have So think details markets. going specific said not I market said or are to as have segment by give as we I on repeatedly,

and to on understanding by able activity, again customer speaking that, we the are a of discounts, execution. you quarter different - marketing, is tell within cycle it quarter-to-quarter, which strategic in QX whether our and driven specific always our is and what see different, we line can we us. focused again I different promotional terms to again that the signal what by in is However, strategic it drive with the customer year being QX, for is activities with very highest

designated segment. are and designed average ticket. to average drive a in particular promotions Other to designed are certain a drive or absorption an So, product particular of

excited size targeting a again have we is one is with strategic speaking be not to specific and I’m So, to about very capabilities it to how certain really, all. But and that, customers, are we we in fits categories. the how are what be

So, we have quarter, Florida. this CDP a deployed platform in

and for single wins quarters We we really refine amount out is we to the are are every level nationally and leg the the that take about actionable and day data us, that it. of of ability accumulate into excited really store that to at roll next journey going this this our over massive coming

Victor Ma

the shake out question. of licensing. follow-up your total with kind on where And Great. sales offer I color. also Thanks full-year? commentary generated then it for from XX-Q you for same X% through wholesale kind maybe Can and headed year will the just that the about of to directional where know of Thanks. the you is this disclosed

Alex D’Amico

asking are wholesale You outlook? about

Victor Ma

Yes.

Alex D’Amico

supply channel infrastructure our our and further acquired Again, so in building support strategy. out developing that are especially, our particularly or and wholesale chain, at we market that we look

throughout look year that well. ramp as the to for we So,

Kim Rivers

specific in vape activity this Yes. To Pennsylvania quarter I a as though, Pennsylvania particular, to there signaled. in into there. recall was again the the shift retail mean, I vis-à-vis be wholesale additional due

So, Pennsylvania wholesale a you in maybe Pennsylvania was of higher bit a likely activity quarter this the number little see vis-à-vis could in future.

Operator

next The Capital Markets. with ATC ahead. question from Tyghe comes Kenric go Please

Kenric Tyghe

absolute promotional Both related capability capabilities of initiatives to trying heard your I comments in how terms. sort a But establish, much on are loyalty of Kim, are differentiator you. promotional capability on your how today? today, just could I’m smarter sort versus more Thank relative overall of your call good And promotional. or you and efficient much perhaps morning. much just the and how market. highlight loyalty and in peers that is out the

Kim Rivers

I night to were specific ourselves say today, and and offers that, where our ability is Kenrix, utilize ourselves. here are very where specific always and mean, year customers we Yes. say, is for at And would data, look to back our of competitor first I Trulieve a to we ago we types again we day. using targeted run just when at

but concentrate has extract then he back information, of ability did also promotional historical usable, to activity a it customer, you okay, for necessarily customer’s quite So, might to strains. and user. us drive to in preferences and frankly, not say, know be certain then His and crumble, we that capabilities types a every buys able of then a is is capabilities And targeted a enjoys have to understand to those now. out before to have develop He ability those to basket is that develop towards, activities. a now we these but categories. you flower our we shatter Kenric reach that And campaign as and way these our comprised to

with we example, those as And that customers in them they again, as appreciate of include single for and which to first within one. our offer XXX% for launch, that to in live So we out and drop, solidified actually we And them customers specific to launch. make are, sell-through invited resulted diamond understanding specific their and know also reservation it who we our a going extended product a that top preferences. them tier are launches, XX-hours such

Kenric Tyghe

Thanks.

focus. new quick premium So are sort introductions just all keep you more you the and a ready to dialed Onto that I and up. But of do follow-up. explaining some if real might have product

of to how case more or success to you this So if market Pennsylvania market maintain cadence a your do sooner competitors? sooner to relevant can versus better your is your sort more of market more you and it directed believe of and getting much more versus tears simply than is introductions And product perhaps sooner? how is

Kim Rivers

makes look, anything, Yes. certainly we a - I sense. and are follow we don’t everything are mean, think strategy I I mean, of not, we

is, It good, we very where along depends best to we So good, again, that, and better We I for best us. and I segmented like better can, again, a think demand pricing. products it better that guess where it strategy. on is have see targeted market your definition, for developing

of we and in the had off will, three come segmentation better the out round those the good round into you now, two the from the the inhalation late levels across category, category, if three, example, in of will with offerings kind in re three Pennsylvania, kind to those out, Health yesterday it strategy will our best in in Department day, brands product a products. vape in category which press, vape in this is hot an approvals As of

again our offerings. currently SKUs and in look, based and XXX we manufacture only has products. incredible innovate are the has got launching But scale do that team we our And capabilities. to it over product R&D capabilities, Florida inefficiencies understand and of Not come strategic continuing we years, been with terms run or we but in been these efficiencies that have and so have all our I mean, specific with what we takes development

strategic that to And launch early the And a and so we understanding launching being of are in from perspective. are be able do launch what able should margin terms predict what we that what markets. to which of in highly product products on

got market to and bringing have is So years. core our in the on have we I that bring many, organization. our for think a been an And that of many products products incredible competitors fact market competency jump we effectively to

Kenric Tyghe

will get back queue. I Kim, Thanks and in congrats

Operator

next The ROTH go with Capital. Scott comes from ahead. Fortune Please question

Scott Fortune

be a seasonality regard here Good on color for stabilization the is thanks that in out second the and thanks and promotional up activity. Real you like will A into caller Thanks. in you the morning provide the But you consumer and what little for playing would here little questions. Pennsylvania quick more demand that seeing the west? there states helpful. usually picks seeing are the quarter what are can how more and and quarter second that on more with that to color the side on other pricing

Kim Rivers

Sure.

the which in remarks, softer normal typically January this in in mean, than is percentage said then more the in we March, um, way. by bit the, past I a we on had and we our and bit February increased in have we basis. little a pull-through pull-through March absolute see in prepared had We are As market, March. saw the pull-through always March. activity an in

stable, would the We gave is, for vis-à-vis mean, entire to look, say It We I around the the one records set platform an of Friday, those part for fantastic to continuing and another trends days And, specificity the Black day. quarter. was always across two X/XX. highest see a I through are break inline which rival beginning us sales.

products our far good combined are seen ability that, push very, in this was line to more be feel our so segmentation would again, ability to brands. And are. rational I I with year-over-year. very really, our speaks innovate that of to with have quarter is, think platform. through the I with to I things that feel say of the think where our about it to But strategic again, good about ability continue trends the and think, strength and we and continue our promotions we quality So it of to We we kind is,

Scott Fortune

makes, of a I branded as a you quick, there, percentage? kind Okay. third-party is you here? of, retail appreciate it. of brands I is Is long kind optimized think of And how do look as have as your at range house what and in own stores mentioned own your into brands of you looking there optimizing, there target stores retail or the your the wholesale real But, you know Florida, far kind states at it a expectation outside the as that call. as wholesale brands

Kim Rivers

of we going Not is a some factors. a market allow markets That in look, markets limited is mean, depend. lot product some retail I question. regulatory it regulatory Sure. availability It is have got have depend of on because to limited restraints. very we all for, got going specific concern, in markets to

at continuing very future, through least product will we also, sense. retail. branded general clear segmentation, course this lack wholesale bolster, we due So, the have year going think foreseeable makes of that that branded where that to is will lead a And I are our for with to question. again, we of always, expect and markets strategically But been be to end

Scott Fortune

jump queue. will I Thanks. back in the

Kim Rivers

Thanks.

Operator

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

Aaron Grey

question. one keep Hi. to I just Thanks the for it will here.

Connecticut, on in York, looking New at terms Jersey, Bristol know you some but dispensary. of New just get how So you you are on color I the where Connecticut, have

at about adult any vertical some state. venture to you equity, maybe of wanted other social even joint or the I commentary the expanding other get, in operators know terms the maybe to especially talked to Just have use utilizing that or of add vertical. the in market exposure in to their maybe opportunities looking get how of dispensaries terms market, are getting

adult current how besides at are and you your you. opportunity Connecticut the use So, dispensary? looking Thank Bristle own

Kim Rivers

Yes, Aaron.

top to we use We of to Connecticut we there that The Connecticut, love expand be are team expansion there outperforms some you for our in are the that performing quite to there, state. we some have So mentioned, one and as consistently, in we plans have in in a excited the been the into are, position dispensary have location dispensaries well. as and time. adult at arena as physical

process underway. And As everyone, regulators anxiously application results of the I have get on of as us realizes that market more are that the will there process. back think results. in to is awaiting And terms we an we come to

Aaron Grey

Thank great. you. Alright,

Operator

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

Eric DesLauriers

Alright, will to it keep just one taking my thanks as for well. question. I

Florida an in mix of premium in mentioned you improved So products QX.

of you side? of competition Just this the response value Was of just more touch Is in kind this would on be Was great. if involved part been color to demand wondering dynamics the on always Just increased of kind of a you. this some of Thank that could poll there. any the plan? driven? kind

Kim Rivers

Yes.

that, as Florida before, to our I ourselves. particularly competition, it said note think biggest in is I important from comes

been extraction, was to those that a has base hydrocarbon through to capabilities form see been private that And as what demand able products have for hydrocarbon our - and it product again, we made growing to an through additional successful factors our launch we of customers. channel. us We expand response bring that it has steadily. sense year in last from profile incredibly had as, So customer

on increased of so, very also customer very, part preferences. see being we to also, in that large And is that their terms base a continue buying Florida course, side, buying of said, the flower of the

sense differentiator, scale products the primo and made which product got again, important the the is available the I we us. scale, product of we offer lineup. then to for the those the without sacrificing have And so And rest think have

preferences and response in by was it customers. as whitespace we demand a really, market, our saw So Florida the to what

Eric DesLauriers

Well it is the great to hear. Thank color. for you

Operator

to question-and-answer like remarks. the This closing session. turn to would concludes over Christine Hersey back our for I conference

Christine Hersey

everyone today. time you, for your Thank

and analyst and presentation have be will forward look additional Thank webcast great time. again all June. Trulieve sharing event hosting at We in details to day. on that an We you a

Operator

The concluded. attending has now for Thank today’s conference you presentation.

now You disconnect. may