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Ayr Wellness (AYRWF)

Participants
Jonathan Sandelman Chairman, President, CEO and Corporate Secretary
Brad Asher Chief Financial Officer
Jennifer Drake Co-Chief Operating Officer
Owen Bennett Jefferies
Matthew McGinley Needham
Russell Stanley Beacon Securities
Scott Fortune Roth Capital Partners
Andrew Semple Echelon Capital Markets
Matt Bottomley Canaccord
Greg Gibas Northland Securities
Howard Penney Hedgeye
Call transcript
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Operator

Welcome to the Ayr Wellness Second Quarter 2021 Earnings Call.

Joining us today are Ayr's CEO, Jonathan Sandelman, the company's CFO; Brad Asher; and the company's Co-Chief Operating Officer, Jennifer Drake. The company will discuss forward-looking matters on this call, including targets for revenues and adjusted EBITDA. This forward-looking information is subject to the assumptions and risks as described in the company's management discussion and analysis for the quarter ended June 30, 2021.

As well, we remind you that adjusted EBITDA is a non-GAAP measure. June the measures GAAP discussion contained for quarter to disclosures and and you the non-GAAP concerning in ended refer reconciliation measures to other analysis We XXXX. XX, Ayr's management turn now to Jonathan call I will the Ayr's over CEO, Sandelman. ahead. go Please

Jonathan Sandelman

good and everyone. morning, you, Thank

you in expect that last at flower than rapid allowed statement what #X open becoming from given greatly Florida This confident quickly on I our who to call the recent past that you largest quarters, QX done has market stores #X again me us again heard becomes the earnings continue we closing have Those output, cap increased to a presence go operations investing that our focused we time Everything the over entire is our a to cultivation quality we United Florida market. expanded soon have X to flower massive feel high and of our and is I reality and XX. the of more even told the is our through from States. heard user in We as and of larger have me to a value our our a at and moved strains operations in our business. In goal speak company our throughout new output of transformative of in have to be today, of working. is biomass total last clip ensure to it our be goal that time the because in today success. our say on in and improvement our

with offerings consumers quality in markets the each are we operate. resonating of brands Our and

three XXX own by our XX can found products be location, has and and retail our stores. in Our wholesale over flower other increased including times presence of

and we announced we including cannabis XXX had available is our exciting in and acquisitions, our of Just infused own. That handful in growth only products tremendous Levia. have ago, less of a were top-selling beverage, alone one seven stores, the than planned year year one

That As believe produce starts plant The with Why mission to all quality. flower starts quality high grow. producer why discerning do the starts we because we increasingly the company, starts and CPG the cannabis of we U.S. plant the a consumer important? we sold, that of is Everything competitive. to with cannabis plant. Ayr is with largest We and with is businesses the will is our the quality that only industry in States. cannabis at recognize quality believe premier every the product it being of the cannabis United the we've scale more product going made everything everything be in get

to uniquely scale the this what's positions in United quickly it a in quality the CPG able counts, company be Ayr of not the high Success with cannabis is in but box. fool it's by consumer once be increasingly States and that inside the may the pretty be box, what's will determined cannabis cannabis You they'll Being United industry the largest inside leading learn box to the box. States. producer the

footprint, out brands we're inside we box. our the what's As brands build national building our around

acquisition. was going Ayr that will with newest Levia focus [ph] brands the consumers brand are built cannabis We what our of delivering nine best brands of value. Extracts real to staying EPG great This quality Kynd delivering are Flower, Origyn forward We're be the the power. and many affordable have luxury. proposed The on,

talking from would with moved the right. of It during our while talent to states doesn't I said, marketing commitment we rebranding the offerings. think to everything have unify them has when have the the was putting CPG the I've retail here behind the year. significant continuing time. starts these complement that now nationally, time are always more half and eight two important the regional company. right and big that vision brands to with to It our cannabis foundation We recently plants and of been mission to our get will plant more leading about be XXXX and and we second happen incredibly retail investments and Ayr belief it's it that our to the all of aligns our in begin we and our it and is and plant with stores states brands to our overnight

big We will those will products call of I'll on to that, our Brad continue and CFO, big walk With results. plans. to branding terms continue we deliver to through the in Asher footprint think and our pass to and financial over

Brad Asher

morning. Good

in an XX% the and year are As XXX% results of increase and $XX.X was driven growth. in Jon from XX by to prior included by the increased recent in sales proud QX. days over quarter. M&A as quarter mentioned This representing well XXX% over contributions expansion relative record we driven QX a growth organic of contribution to Florida growth from million full as acquisitions, where The of prior significant contribution

by Pennsylvania to store contribution and growth XXX% QX, of eight the resulted the full a relative our the by in first of Revel daily XXX% and Arizona that During month business brands in of June with the this revenue average by commencement in in million driven r $X.X XX%, days wholesale in grew quarter, of roughly both the driven the sales. growth of in wholesale launch quarter along flower count sales

the sales retail growth achieved nine store in Gibsonia almost same-store just of period. our in newest in days from XXX% contributing growth entirely revenue with also We the

prior margins year footprint adjusted Nevada for quarter the the prior million excluding to into startup non-GAAP In a and profit up provides quarter. inventory $XX.X addition, interest on prior for costs, increase million, step gross we profit our year expected and fair XX% an XXX% over This represents trend in new million depreciation amortization, a quarter $XX.X by Adjusted is X% the markets representing increase in as gross sequential total and measure enter sales original believe Adjusted Adjusted increased customers. from as valuable and compared from XX% quarter-over-quarter. quarter. basis of in investment EBITDA prior was as acquiring performance acquisitions. increased and profit apples-to-apples points value $XX.X Massachusetts basis We million decrease of from XX $XX.X prior quarter. the gross to well and making in over our insight

come out in XX% the capital margins mid-XX% from infrastructure, the largely increase of employees sequential the quarter. prior to points addition in increase quarter. an During quarter SG&A investment during was in basis this representing of as continued the over approximate our for XXX projects workforce of to we online. sales, gross expenses including represented The to we increase range wait XX% persist our due period capacity of expect XXX extending of building

While in we next basis dollar be as more declining to expect we expect a ultimately footprint, build increase quarters operating over as the consistent we percentage our year. a as SG&A the to throughout on until expand XXXX of leverage we few expenses continue sales to

cash on initiatives. our ended we million fund hand, demonstrating growth capital $XXX.X position with Lastly, to the of a strong quarter

of $XX QX to This in invest financing in million and the of on activities. an of the to without although CapEx healthy to sheet from provide acquired QX, addition in process. cash owing this balance $XXX enhancements requirement the stop quickly to we continue investment early in filer. incrementing stack and analytics $XX capital a including date estimated of we assumptions that the when are year-to-date with deposits to of considerations, remove positive maintaining expand M&A our the you period a in and are the risks make period. of This In to I paid proud subject an are million sequentially of pit And be addition form to by the stopping, these value a business revenue bridge QX the Throughout power which I'm year-to-date. tech we inventory. $XX our MD&A. over calculation EBITDA program the but remind the QX is we've QX. progress in closing, flat end future a relative will with and outlined gotten investing to We saying precision the with projections in and all to We to and to million of acquisition allows It continue that luxury and same working and science capital speed the in compliance, negative on-boarding when earnings adjusted the business, and see prior of will the respectively year $XXX million SEC this working we our a date. fair by down department to finance is key building of in and Sarbanes-Oxley accounting of us these markups build inventory methodology. the as adjusted in balance accomplished Based has amounts both in the in million any up The performing results that milestone quarter insights out targeting

last first as filer. a As was in U.S. a our quarter reminder, reporting GAAP U.S.

all change that We've like of MNP, or announce firm no the with issues I'd disagreements would their a enjoyed of MNP Marcum, substantial with and cannabis a U.S. we've based thank like working firm efforts. we practice. for them notice auditor such, As a from release to to top-tier have to unresolved

addition, hand look Jennifer over working Marcum With we starting Co-COO, it In to I'll forward with with financials. our to our that, QX Drake.

Jennifer Drake

Thanks Brad.

wholesale Jon we on already themes on initiatives want through This to little branding retail, differently, business updated production, major the cultivation. branding. a flower our overview our and you focusing of and our cultivation quarter

goal United high largest been quality of not flower our have cannabis producer in the We of the scale being about States. shy

We foundation ability obsessed of a strong our is plant build plant are because the to brands. the company,

second impact add all cultivation, stores, add will and adding By concentrates talent. and which days to improved plant. more available. customers strains to the major dozen to new be flower product made cultivation more Again, only find available allowing quality complete quality plus already in really be of in And premier few stores. Hydroponics, announced at QX. Tahoe to of have improvements What's three offerings more and we the amount lucky consistently next to producers exciting flower. construction the upping We've also changes the Liberty with the continue earlier communities we door larger before, has Ayr Revel we our was us In to we over our in the we Pennsylvania choose the under previously sold important than the business, QX fall, harvest facility one all hoop feedback today, finished cannabis a Arizona State's Gainesville stores cultivation the are Nevada meaningfully of have flower about our in high it square Tahoe adding expect our had acquisition months noticing. when from. you'd our than facilities Cultivation cultivation. a our had more a flower, a foot Pennsylvania, completed are void strains of over cultivations. of Arizona newly will have our all from taking with high very week, in Florida, it XX% the we projects to excellent. these at ago, respect own and and filling Seven acres of in to at our at biomass prides yields the is brands, positive intellectual national adding we Florida level harvest and of not is on quality So cultivation available news, our this make XX,XXX mix, been XX in Summing said are footprint. quickly while and out operation, and of are Ayr Massachusetts our abundance an can with and since flower, investments for launched business on up flower their flowers five to talent first deployed our quarter, genetics our edibles. that both so an bought we from the the we our bank houses wholesale. Florida our incredible have But The market a or which more store four we've first that are and with own resting flower In cultivation property construction that two and starts Rounding our laurels. The patient in we and year we the smaller that Hills In cultivation Pennsylvania's throughout that of

we the maximum that We cultivation allowed, our cultivation more XXX,XXX to demand are with adult charging investing the coming can growth online This and and high class the our state. in and accomplish see flower dispensaries, a additional provide consume. square example to can Massachusetts use a their products in you the cultivation company don't cannabis so is to great in business growing form, cultivation factor forward have we more production we throughout customers especially whatever of what space. an we CPG best-in-class how the those foot meet quality build in to is that increase capacity will country. are world facility wholesale as By our in expect own wish

quality SOPs concentrates, On Ayr’s have and you the reap vape cartridges grow in we the cannabis, match side, quality you out, best-in-class saying great production production edibles. and benefits if top-of-the-line of flower with a in that with

follow in Thanks where the success Big quickly branded of Massachusetts as will we seen QX, our in of Florida. expansion Florida and This some State’s from quarter the also. in Pete’s products. Origyn we and to Origyn In the cookies, with saw the the selling Extracts Florida, soon gummies edibles in concentrates now established Extracts and market one first kitchen in opened itself developments it we've exciting our top

have bring to first expect and markets and has there. our our and Lit extracted to our wholesale the Nevada, cultivation brand concentrates Las our premium facilities for Since cartridges. Haze products including in production And business activities facility nationally. begun capacity newly cannabis wholesaling growing in manufacture We our expanded to our increased Vegas Arizona in state, this online, strong extraction we've to production continue come

Finally, in laboratory micro data a Florida back store. seltzer. retail acquisitions, With good. terpene-rich retail knows average stores productive anyone retail sales help mature. this high Nevada, doing our $XX,XXX build whether amazing from an year square And hand as the us for is are we turnaround, retail cannabis to customer some impact in now, dosed which It's that a as we really gummies of of industry asset understand to allowing established open retail million store locations retail are the pivot has our investing They In $XX And great in stores let our or best-in-class excellent to who stores playbook Ayr premium the most They our have followed our national on we're with leading. expertise of stores our us experience our most business, as country. as are our our our per our brands. new to massive us know foot it That in or type real-time to wants, flower, us productive will I'll and that what customer. infused Levia with Jon. customer that, revenue

Jonathan Sandelman

Jen. Thanks

encouraged as will ability playing out quality largest achieving can scale, that to you our best on Illinois brands focused the are strategy brands market high seeing being New are This and industry. with addition having lead we're the As our investments footprint goals of see, see at accelerating to the the wholesale. and we by of the planned and already. excited Jersey growth to the producer line will we top of and flower that laser share at and continue retail We're are create behind the amazing putting and strong our our drive to results

driving all across bench added and footprint. the technology million, talent levels, scalable $XXX adjusted growth. focused and operational raising on target in in our the our investments efforts marketing to across Given professionals, of success plan deepening regional date, brands are substantial processes and to investments We've behind with Levia strategic our XXXX revenue our reflecting talent EBITDA Kynd, them. of million accelerate to we Origyn the $XXX our operational We and across marketing,

in in years. stages We to perfectly a revenue the billion of market industry are are cannabis this we still growth early top force could CPG, think next several become we the in and easily in a positioned we $XXX over believe leading

and plan opportunity year-over-year, in it. delivered to would the we we and our customers, reinvest will in at and ambitious projects what do. branding, M&A. seize in as more capital of said and to on is long we in This us XXXX plans put out XXX% As we We have front business, we opportunity grow we more,

You soon. Ayr some our of us will evolution brand see exciting unveil really

for of footprint think We continue to big our branding, that, intend I'll deliver continue and open With we to those the questions. and in on our over to and terms products it hand to up big operator to plans.

Operator

of comes Owen Thank Please you. question [Operator Bennett go first ahead. from Instructions] Our Jefferies.

OwenBennett

Thank And the Levia [indiscernible]? then is the question second on deal.

just and beverage you that I is for today. why evolving? brand a obviously, guys. decided your small go you segment on cannabis to So, thoughts wanted see you, get Thank to relatively how beverage

Jonathan Sandelman

its Sandelman. Jon Owen

like first with became beverages each CannaPunch a class. for and to have We us Levia called we BDS did that were today have factor the we a ignore the hard form product It a of CannaPunch explosion factor lacking. our repeat now we outside have were it and The hear selling scrambled, was so other was you about demographic it. factors cannabis, is we then demographics? to Right? Levia I We've Right? very What part THC? any what strategy question who to we like simple. can of CPG And the sure demographic top with industry. form cannabis, wanted each customer? maybe beverage and happens the The I’ll would class United it's the two States. is way evident thought and it. the would of and form of didn't your brands thought billion make can't start seen And $XX enjoy their strategy, We what company, for in our about we've seltzer say

experience. in And dominant share session XX% It that to younger low milligrams. market today that's drink in zero is absolute but about dollar Its it's back X state. you'll and they me it's is get are Massachusetts the product. calories, very focused calorie, that product if people they'll doesn't the of Levia what X somewhere hear provides is that want session clear, X the only THC science in on something they else. one have a the product your go As talk it’s in milligrams, actually milligrams, up not to bioavailability and per future grams when buy milligrams. milligrams, Consumers those the a so

will cannabis having tried factor beverages, Last cannabis point experienced hasn’t a Lastly, for make that the day. move world the the two we're place world but very decision people and products class CPG beverage it, into acquisition, never inviting way move soft cannabis to who its is easiest the cannabis before, part its big for make to form they business, consumer cannabis, is The that enter move, in knows best. better make it me me CPG in in who've that thought the a the points. products think the cannabis on they product like does every because easiest focused be experience. drinks. One strategic about into national for yet we and that brand, I than world that and when the big the know can beer, finally And strategic a

distribution massive it bottling, would for be us and an obvious their With move.

Owen Bennett

lot talk your Florida discount the of your have that are pricing around and was flower yes, just been there increased But evolved first gains? to traction wanted impressive thoughts on those might helpful. kind to pricing get share [indiscernible] kind drive yourselves very on I that, you and pressure. having Okay, how given of on some of and obviously competition there there's question a

Jonathan Sandelman

XX% With market. over to a interesting enter market monopolistic that's essentially dominant So, been the a it's always one market. of having player Right?

it enter do with quality. high talked the what products, products which in highest the as with and price derivative value so are we think all highest began I customer. quality produces us for seen other we market offers the the the flower markets, our talked best I quality it that the you've about We that earlier, as about also

build business have and our that best again, the our over market share. consumers, at high products We plan, value that quality over seen patients offered and to

is. and provide playbook very to do for player value it’s what know that the to know we've I have we're of Florida not what at how going old speak compete, that’s retail it those that we we dominant successful doesn't and days do; do the I'm but the sessions, it, always feel just where -- So, We been strategy to consumer. might because can't one in

Owen Bennett

Okay, awesome, very helpful.

Operator

from of Our Matt McGinley comes next Needham. ahead. question go Please

Matthew McGinley

an Do you. how changed lower Thank the the EBITDA assumptions a for assumed? gross assumptions with than assume rate G&A profit are at XXXX? individual on What's corporate your something And Is you corporate may spend assets previously level? changed you at increasing margin higher assume is the in for you the changed asset moreover, or or level rate compared with productivity spending is individual had ’XX? to this mainly assumptions the into have level there

Jonathan Sandelman

Look to start in I'll team my earlier said as again, So, hand over over I've industry it I'll we're then I Brad. said the and this call, to XXX%. growing an in that's and over over

great brands at to X. or once brands believe, XX. this and and We that and X lifetime look is We're companies, beverage X% I a of a great in opportunity, multiples premium Okay? alcohol X% grows at I XX when premium buy at between multiples trades believe able of

brands in that investing. growing premium are over buy world, to able be are a like CPG XXX%, to So, we a

to we are hasn't a could think while building that improve. single our we we been looks acquire. continuing headline matter bought, the out like portfolio what that no There We didn't asset existing multiple

So, don’t when X paying we're think our modelling X. even and

is every when track acquired If at than you we look record it. bought better our asset we've

a flower to basis Brad, to want yes, both do and on in to brands, large and the about reflected is are build in in investing, the national provide we we branding talked scale that building, So that? CapEx, national that to quality add out cultivation you our we are numbers.

Brad Asher

on going ‘XX. just, I would point I reiterate to to that your it's increase Yes, investment would period, on say mean the over I

get sales sales growing. improve from both online, percentage basis I base capacity vertical margins we as of going gross out our bring perspective, and start as on our and integration SG&A to think thriving cultivation of are leverage see you're SG&A margins

Matthew McGinley

looking Working second fund need Okay cash and cash CapEx, to balances to in spend at flow is great. what in that need cost and from support kept expect you'll in generate you capital do have and to obviously cash half, that and raise negative flows this first to what presently the question to My cash need investments flow cash cash on spend. and closing or cash positive you operations M&A? assume but CapEx you planned might flow back the you to and positive to we capital revert -- costs related to

Jonathan Sandelman

Brad, take do to that? want you

Brad Asher

we Yes, facility building coming in we're investment is definitely definitely an inventory making online, -- as up each cash. we're as now right cultivation

As those definitely forward. be we positive flow will cash operational facilities think are online, going

leverage, have debt We're investments improvements, us. to there's at that so a and million lot estate, been know the receptive we're the that also available note very in to range of we leasehold making $XXX know also We have us. CapEx approximately own markets looking options we real

Matthew McGinley

you very Okay, thank much.

Operator

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

Russell Stanley

Hi, and my for thanks good morning, question. taking

understanding you've year you've with houses, the exiting of said Just dispensaries guidance in this think completion up around expected just there got fall Florida, XX and the following I you the hoop Florida. if

How at many hoop once well? retail wondering -- your do point? houses the think how support you are is Just can that capacity dispensaries you complete what

Jonathan Sandelman

houses, hoop think the stores. to With roughly we get we XX

Russell Stanley

helpful. And really that's… That's

Jonathan Sandelman

our clear be to to is sorry, XX not I'm be clear, be to at solely stores. goal us for But

What the been assets today. question, maximum is saying of just the stores? we asking have pleased you're number You're

Russell Stanley

Yes.

Jonathan Sandelman

clear, we're the Let not looking less me largest state. the one than be be to anything in players very of

Russell Stanley

That's before to CapEx. one just how Florida you runway question additional in and around… moving great, was for again I understanding, invest in just much understood what needing that's Maybe have is looking

Jonathan Sandelman

one acres other property. point, Russell, other we have XXX -- point one on this

Russell Stanley

lots additional of There's capacity, understood.

and Levia already sort think opportunities wholesale pollination Levia Are the little really that you on transactions, Are on regard? in wondering Are just complimentary? an here? there as overlap on for versa? of front? there how in I I'm or vice are cross share, Massachusetts, there you retail opportunity strong mentioned that that some yet where Is the, shelves there and you're on the how much there is around Just XX% is not

Jonathan Sandelman

definitely in they Yes, side, we're just there's opportunities than are stores today. wholesale on more distribute to efficiently the a together

help with stores of we the the here. have So some Again, but you're technology good to bioavailability. we of and it's can interesting distribution as important emotion not the talking we're start that's products. mentioned, relationships, equally in their more hear about in really they going They're as me

and You start gram if you consumers That's do And price about side, bringing the Right? fair can't solely per talk where And what at or a high second to new on we're XX-minute price. fair we products. about, real without to consumer the extremely advertise price quick is demanding are that's retail gauge science, onset, this infusing that you This important. important which quality bioavailability, I a value. we educate And not. beyond far should whether and anywhere applicable they people talking what the Jen have gummies, about think do define if actually you around to grams can bioavailability, XX% produce X, is talked they emotionally THC. allows onset as X.X very of tinctures, the is consumer products will you're milligrams market what technology selling are start beverages, the about

you're of talk cannabis, I've and us. stories onset to consumers why people, hear it's many Ayr consuming heard And that's that's who going much, their it's it, does why because issues those real bad away too that For about bioavailability with edge biggest issue for a important. is people haven't rapid tried

Russell Stanley

that's queue. Excellent, great color. Thank you. back get in the I'll

Operator

Capital Please Scott of from Fortune ahead. question ROTH Partners. go next Our comes

Scott Fortune

the kind through XXX to kind quick the to talk acquisition, that from bridging about Illinois Good questions. guidance? have addition are you XXXX, you one what in the I of guidance factoring but XXX, revenue assume increase Thanks you morning. for here Levia us the of Real step million $XXX can revenue the that in of into

Jonathan Sandelman

Brad?

Brad Asher

on assumptions XXX. Yes, the into beginning we're the refer talked you MD&A, of all how where investment a our our rate growth this about back lot to outlined lead forward in that bring to really But that really an we of making call I business. would the we've

accelerating would those assumptions to refer And how growth. from just to back I MD&A it's think so, to XXXX. you And to XXXX really the I bridge through walk state-by-state,

Scott Fortune

in for lounges Levia is Got on in as there? it. quarter roll opening quarter far color up and timing consolidated What's on come then And well the probably would Nevada's secondly third there, obviously out the that. then board, growth Nevada there. [ph]? as Nevada, the, with kind they Nevada, on tourism And very the cognition the Nevada what's of on in third progress coloring, as, the Thanks

Jonathan Sandelman

Can There there. of we lot with address the start was one, so it? can questions you first just a in

Scott Fortune

Levia to how Yes, Levia open quarter? on tourism in different Nevada, and regulation expansion acquiring that's that assume here do trending play is of third a color just of at you board the as, that bringing the I how in discussion sorry. in Nevada’s well states? as of far two kind on in lounges, part will look And to from different states, back with that, standpoint, the there coming

Jonathan Sandelman

points. two Okay,

up the national strategy Number COVID. the before like and think two the so call beverages, local's leading this Levia outlined. on be analysts say Levia’s in all our I through will cannabis have provider purchase to I why go, in That's us business is, market. held we're of heard the is brand well

drink. to we're allows an state to go state sell so, And Levia every the in, infused where will us

Scott Fortune

Difficulty] [Technical

Jonathan Sandelman

Look the today. buy the We where taste a in because it on the bought are That's session hard industry. world. specifically to drinking explosion. national Nevada that's basis. years from nothing they’re Consumer billion CPG into We three it consumer [Indiscernible] today to $XX went shift for at the the didn't is in and see mean everywhere. we it not I drinking seltzer relatively she drinking, he and the it bar, lounges is ago consumer lounges.

So there's think we demand. national

As I have product distributed said, nationally our manufactured be wherever and footprint. this we will

Scott Fortune

me Pennsylvania kind [indiscernible]? there? Pennsylvania [indiscernible] to is Massachusetts you as And [Indiscernible]. trending level quickly as up is, [indiscernible] I the are selling from How of same just as very well far real getting

Jonathan Sandelman

cultivation better, who with as the but someone to about call and scrambled. market again harvest, have days. we product you're And a edge rare entering might first Again, markets first were out the coming reviews flower, the extraordinary. on our you within talked which into our might harvest in quality the on sold bit high our is new wholesale this turn I heard over else

knows So state, well continue and never we're to a plant, the The our box, but at that we actually Again, We state, consumer the boxes. what's on put consumer. do in the just got do team the and what if new we're question through maybe will turn the not is, it. Pennsylvania. the the product that, every inside to in answer going scrambled, box. heard rest we The Ayr, we of strategy else it's say the what brands on that underestimate two focus focus consumer But our reacted to hit other so on what it, parts market. continue of extremely new that can seeing they to someone those the

Jennifer Drake

Pennsylvania. we in well we're to Massachusetts, wholesale be our everything it do main to Jon, the doing was similar extremely think super is expect we strong I a point so what market. you in And we said, as make, out selling So, that

Scott Fortune

I back queue. Thanks, the appreciate detail. I’ll jump in the

Jennifer Drake

Thanks, Scott.

Operator

Our Please next question ahead. Andrew Semple go of Capital Markets. Echelon comes from

Andrew Semple

the QX just congrats clarify to the and I New My point the here, QX on morning revenue clear QX the within guidance. on Jersey just first no figure. question to that results. there's in million expected dollar Is correct? contribution that on anymore $XXX want wanted I Good be

Jonathan Sandelman

Brad?

Jennifer Drake

to want do -- you one? Do Jon you that want me to take Jon me

Jonathan Sandelman

Sure.

Jennifer Drake

Andrew, So, in close that will still we we're expecting, currently anticipating QX.

were all any that problems but think at with there for waiting have approvals, application. are our no indication the we I we

QX. expecting in we of contribution bit So are little a

Andrew Semple

guidance, And the included in sorry?

Jennifer Drake

Yes.

Andrew Semple

could seems bit those second reflecting, the I'm like it seems My the you team in Ohio QX plans online? expectations the quarter-over-quarter. million $XX for in market? -- And on release. thanks. comment Looks just latest markets facilities CapEx more perhaps latest believe it in to a aggressively a little your like update. moved $XX have if of bit and again, for the wondering just that's come that most your million higher question, Ohio, the timing when in for Okay, that I press perhaps moving is

Jonathan Sandelman

a to within million misunderstood Right? Ohio people. look $XX virtually million as It's million we has a as million state. size It Pennsylvania population. So the $XX same at people,

So we the mean our strategy market. allows. there be facility law to that significant max is to build And in that a out player the

we Now, market strategy, our just we a and think things, unless be about two everyone to remind integrated, never enter be vertically we can significant a player.

large, am round and because And Ohio, licensing of coming. opportunities. And number there's very of various are we limited on licenses. market, the love There's so, it's focused another very that I the

Andrew Semple

color, great That's thanks.

your in past. there you your and one just big final may, you'd recently I you've the demonstrated to if like a in comments that entered Just go eighth given that state Jon, in certainly that Illinois obviously markets

to continue that's Thank So to expand assume state footprint? it a your look is you you. where to safe

Jonathan Sandelman

in only just a in go is consistent, and player. vertically to more can and we every that we're I player. resonate integrated significant importantly, market a our brand build is are we what unless feel So the can we We minds to with edge. our Biomass, a that be said, don't significant repeat our very that I've consumer’s And strategy be would that's controlling their wallet,

we're the in never products can't control our of we that where in going the putting So a box. market, we're be to quality

Andrew Semple

your you. color. great I Thank That's it. Got appreciate insights.

Operator

Please Our ahead. next comes Bottomley question Matt of Canaccord. from go

Matt Bottomley

on up good the morning just Hi, on previous QX strong a the to on follow wanted Again, outlook. quarter here. congrats I do another all. question

year. could on I the guess other, to bit contribution posts have by think or that be any to you there commentary close. can be respect you Jersey want Are appreciate little more XX the I the there a I to openings, categories the of new there a little So New in dozen close end open that a disclosed goal store of with or

QX or what QX expecting maybe relate just top you're QX the the store with starting So to into on specifically that expectations new how line? and openings, of might

Jonathan Sandelman

address and Let can then me part. address stores the the Brad second

said, XXth Florida. our recently store we've in opened we've So

integrated the the strategy control XX so and being our goes flower, biomass, can't, branding we player alone. we we every that's vertically quality about or the of we year, to we if Right? go a not the of on at the state, end of lastly planning the move by the significant are we've We being do the be XX state inside state into, also wouldn't just in said, with want box. talked state. because we relationship And that consumer, And in the can control believe what we'd each a into in

our we our gives rest that on. we'll Brad, least at we're that think think I strategy commentary on, execute public XX, So, our strategy. other the that? is vision, on you, any

Brad Asher

terms month New openings. wholesale, we contribution I'd in from there's just Yes, say store Pennsylvania three of drivers. in referenced. of about continued main QX, bridging sales which is this one Two is, quarter. we growth we had months Jersey, And three talked the to the is from One of Florida new then small three

Matt Bottomley

Okay, darn based, I to good a then question Arizona Obviously, volume progressing implementation. is second this for Jen. coming me, visibility that Florida might get good from appreciate that since well lot of And the but be I out be a data of seems just market. think a from that. weekly a very we market in market lot

you just how can are. dispensaries I'm wondering revenues kind is metric and see we any know, state can many there's you the of we give, there large know if how So

of you store. of average So an have idea per contribution sort

here? the three infrastructure next that and then in should exposure into And the between that think have, how building versus with as So the retail obviously infrastructure mix you we the performing? curious those we out, I'm you're are stores quarters how model just three out wholesale couple market Arizona about penetration store, your

Jennifer Drake

Yes, thanks Andrew. for that,

we're And we've the think of there able Arizona, focus experience Arizona of, to we've to bring closer the expect really use, ago future Ayr so years our as is, some good the Arizona we bought even so to brought same what our as easier kind our growth retail in retail pre-adult way it we from Nevada. XX% very thing that. by is in so very there. several that going be improved Nevada, seen really Massachusetts, playbook optimistic an because a Massachusetts the Nevada, we an I and do we to growth So on pre-acquisition, when first good said playbook stores to in even we're things bringing to great state pleased with retail to think from we're close from in to really it's do, retail adult-use

is in bigger have and this really going which On is side, year. as cultivation, to the construction the foot be mentioned driver our call, finished at going Arizona, that the of XX,XXX be the the online I in wholesale cultivation, cultivation wholesale we to of our end first square

So given of revenue coming and $XXX that be next it million we've will year for won't -- really XXXX. guidance online it part it's that

year. So that’s wholesale is Ayr the big next Arizona

Matt Bottomley

it that. Got and appreciate

what's to most on it build going would that's being vertically then of side the goes? fair it be where to large Arizona So the of say your integrated cultivated a stores, majority is existing in service

Jonathan Sandelman

will feet No, square a both biomass be XX,XXX it enough to retail. have will,

in product of You XXX% The can't your own your have stores. want consumer does choice.

fourth But of Arizona what I've the wholesale as well execute over continue brand by very have and we total and are think amount we're significant the cultivation. we want a about significant business. said we on biomass each strategy three XX,XXX, to state in as appropriate today, as quarter to that square every stores, there's have So and have XX,XXX to of in, in we're products, in in. Ayr again, enough to be feed we feet We going state over

Matt Bottomley

helpful. Thanks Okay, lot. a

Operator

of Our Please question comes next from Greg Northland go Securities. Gibas ahead.

Greg Gibas

to, is I revenue to get rate follow guidance? up questions state you Brad under If Jon, current the results. on on Florida gets still kind assuming taking in that the revenue QX dispensary morning, run are good Hey, congrats average. could XX% Thanks $XXX of the given the to it and million Florida, and for of average Jen. What the

Jonathan Sandelman

Brad?

Brad Asher

assuming in million that the state of million our stores with to in line average per are the is end which $X the range. by We store, $X XXXX, move more

Jonathan Sandelman

days in. get have XX maximum usefulness to one think So full least until store you thing, right? right very to at think pace But Greg, a opening about a quick doesn't at now, we're up its stores you

stores store revenue. by average So we driving we're the while understand opening per dropping

will you're stores move don't we cannabis of moving, of will highly as about It concerned got into then Remember, did locked highly was said that the thought if And if likely this Florida, when trajectory didn't my the best up at the we be being going and the Liberty and reason it. you grab I not So normalize pace My markets. moved unlikely. was normalizes, on in mind. footprint. I've pace It's grabbing municipality it, I calls, of out. on seriously continue opening we why to every if out have but XX land some it's in these stores, a do speed locked we're

anyone with there, door So by locked increase I pace drop, if best don't productivity open will of appropriate products willing best stores buy. see you we that's is said do if is now week, average of new the higher. average the then a our your understand consumers while the I going flower ago, of market. to July faster two, stores am productivity have drop seconds we're you'll don't we openings. we're now, put can XX not your opening But of seven when flower And stores in instead Liberty's because flower out you that why stores there grab, let numbers stores and much quality average they average, if can't than history. the the we're days I the your Quickly, in now stay land just have that we'll so the be as simply you in was states. of below store that for the the footprint, we've the because strings continue the on because And increased XX%. will

Greg Gibas

basis? guidance. end QX Also, of kind XX.X% of implied Brad, through with XX% or sense. should EBITDA maybe improvement wondering, understood, Jon. adjusted take $XXX I year just that year learning to that next next of, I And We're go with kind just looking about appreciate quarterly flat saying and we Do $XXX quarter. million, XXXX we a margins the assumptions and really revenue, account yes in That's more does helpful. in up Great, kind think just make kind anything that about into were flat at million gradual today into of EBITDA there you that. on is but

Brad Asher

Yes.

be starting think I it's the think XXXX when quarter to you're open there we going improvement facilities. XXXX each that up it's from second of to exactly I And and we see in that, gradual. start to you'll the going is former, probably realize on. point, gradual sales from cultivation see leverage quarter At start to larger our in each realized and quarter

Greg Gibas

Thanks, great. Okay, guys.

Operator

go question next Hedgeye. Penney of Howard Please Our ahead. comes from

Howard Penney

just I question in thank might comment to you I like? parties? just closed want market. that? up, include contract Levia have so that be every don't on look a you Hi, the that that much. follow Jon does you given acquisition on facilities, What you'll any of spending your capital Thanks. that as premature, you've numbers know production will the but this beverage assuming building third because And be yet,

Jonathan Sandelman

It's Howard. great one was reason the so question the it's a reasons, because Levia attractive. of Thanks it's why Sure.

time beverages, the So, if you into every go incredible. you look the is of a at choice today, market explosion

brand, new a at third-party your pass. So co-packers, out build to at beverage constrained is you the the bottling turns capacity difficult high on it a if very get lines produced want brand to

line assembly good it the of built it and other of these and that very own value, elements did guys very did was Levia deal efficiently. One the they so that for is attractive, quickly, their they

builders, quality in state emotion, to understood do that. they're control and we brand in, guys that costs these can our the go we own that lines builders. we every have assembly will so great besides And great and great we the build also the experience so, And

Howard Penney

much. appreciate that. I Thanks Awesome, so

Operator

This call. concludes today's conference

You and have Thank day. may a you disconnect for pleasant your lines. participating