Ayr Wellness (AYRWF)

Jonathan Sandelman Chief Executive Officer
Brad Asher Chief Financial Officer
Jennifer Drake Co-Chief Operating Officer
Matt Bottomley Canaccord Genuity
Andrew Semple Echelon Capital Markets
Matthew McGinley Needham & Company
Andrew Bond Jefferies
Scott Fortune ROTH Capital Partners
Russell Stanley Beacon Securities
Call transcript
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Welcome to the Ayr Wellness' First Quarter 2022 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 March 31, 2022.

As well, we remind you that adjusted EBITDA is a non-GAAP measure. March the measures GAAP discussion contained for quarter to disclosure 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.

Jonathan Sandelman

us. joining number a was the completing we last cycle regulatory way of through of CapEx, process for in all spoke, midst a the key you states. When Thank its in of major Ayr and working

progress investments on say just to are significant are the we've We fronts, that now these made beginning revenue pleased and stream will unlock to that these provide.

very May three for adult-use of XX, open. for are store our sales all And to stores. Bay at Massachusetts, a in June Jersey, We be our long-awaited pleased on in approved approved Back New was

Greater optimistic Boston location will its are in that Watertown follow steps. quickly We our

approved. and Ay. to our along has great from beginning by and QX, we QX, frontloaded facilities, significant team Though call. we outlined in our us a Our now assets cultivation see and to those investments, very four made hard little These investments this the with revenue that will the to And begin built worked and impact benefits margins we'll on anticipate are expenses point. facilities significant strides ramp revenue last earnings Ayr's in in have QX sales profitability and these on get as represent

the the we markets, re-brand Florida. reformulation The operate. November, in of we've drink our our over headwinds vapes, company XX great will of launch checks. markets or throughout so made new XX in assets, our Massachusetts, we Road Tripper, and business. has aid face brands, these Beyond introduced and growth, which Since [Ph] completed our most share beer we've in exciting days, gained the consistently and and brand Nevada, of across in refreshed in and year-over-year macro product as progress doing of portfolio, re-brands, maintained XX-plus releases experienced and next Ayr specific [Levia's major in has the such without national stimulus more of XX% brands XX launches in Entourage drops] revenue

of per are product our Because across Our flower established date-driven we building while markets with focus categories. are BDSA. one and price products that grown and our Massachusetts number on customers in it adult-use brand it's our days resonate with points early Nevada we portfolio, great brands and consumer-centric insights exceptionally, for different still

be largest cultivation flower On to the to the have high-quality that was producer it at process. aimed scale, of we be side, always understood going while we a always

been. in with We ever a strains, of bank the country of are combining edge cultivation it's facilities are flower currently footprint. to is say genetics, our and includes an brands, like following. online they genetic offerings more. flower a [LIT] and rotating with consistently customers flower and genetics Kynd keep to for delight our operations deserve and what coming build back customers through and we will the some unique And best that our the want, our fresh approach to the our to the best This our we platform of quality cutting consistently and customers loyal bringing across is this our provide which pleased [Ph] We're building

call our Brad We over I brands. now Officer, in Asher. quality, to invest will to invest Financial in our continue and Chief our will the hand

Brad Asher

represented sales, $XX.X XX% million, an QX of million and $XXX.X Jon. Thanks, or quarter-over-quarter. flat year-over-year of increase

markets many data, decrease and of discussed experience by in pressure the As third-party corroborated size. overall with our in to pricing a peers quarter, resulting continued our in market

these BDSA is increased rate sales hold to In which share Nevada, but of quarter-over-quarter. in or states. base, X% able for same-store to in sequential all-time share gain at a patent in meaning a had market, we to we market states, these at example, the in high. lesser each For decrease expanding our In continues sales their Florida, an according growth market our were

wholesale an in the despite million, environment of market quarter. every we The year-over-year. The of $X.X by sequentially, adjusted X% $XX.X in QX, decrease in sequential $X.X adjusted from QX increase a the sales an competitive the XX.X$ XX.X%, driven margins of of was X% adjusted nearly largely in side, QX. by On profit EBITDA, EBITDA, during driven of increased million, increase gross represented in down gross million. decrease adjusted

As north line gross with we with Adjusted of started which QX effect our to QX still base compounding indicated in price call, XX%, earnings remained peers. of last margin the compression. our lower pricing in due is

X,XXX amortization, on This a expect as decreased result the managing of we the recent online. is with Tahoe million second-half been quarter, dollars to QX, depreciation Levia and or well from the of gross sourcing our by driven our board economies headcount adjusting upside sequentially acquisitions. labor which optimizing we a $X opportunity In KPIs. operating next lower cultivation continue fine-tune across After leveraging non-cash realizing of roughly wages coming X,XXX and in inclusive integration level by of as to quarter. internal recognizing basis. increases supplies increased headcount We scale to for and similar In the to facilities by margin from gross to such and the employees, offset margin for phase, is compensation, of charges, the our during closely yields, as have and largely stock-based expenses efficiencies X.X% acquisition sequentially of utilization able decreased improvements data-based as by this

last As of call, retail New milestones such growth, referenced in Massachusetts and to significant our Jersey. sales with SG&A correlated as we be in highly adult-use increases further anticipate any in

cash tax on million leaving the balance of subsequently CapEx, CapEx operating million Levia, Tahoe with activities tax the CapEx to roughly flow outstanding financing our at real to to remaining investments of of in million of date, driven After be paid sources of financing we the the Ayr's X.XXX%, linked the are in quarter-end, aggregate which proceeds an payable uses portfolio, in half ended cash the Natural's of blended on QX during our during with remaining cash to million. of portion operational financing Moving roughly to rate million our spent and million, $XX.X of the interested are represents the assets. liquidity during the sheet, from M&A, the based to portfolio, $XXX interest industry-leading of leaving either Year-to-date, these quarter real CapEx include paid including the second next for approximately with projects, estate million QX. in closed the was $XX all $X totals by Other be quarter demonstrating real our $XX.X to 'XX monetization payments, of for the closed capital with represents a which this early Hydro, we And earnout. cash a X.X%, PA in Included in $XX.X self-funding valuable our options estate obligations, April. over million million of course This our opportunity million cash near quarter. on high-quality has business, balance payment approximately are of of $XX.X which was the $XX.X the unlocked represents is quarter $XX further to rate over estate used X.XX%. at strengthen the completion, of position. which financing principle property just mortgage loan largely the capital relating owned significant million another The on final paid year. earnouts estimated first the $XX properties. portfolio which or X.X%, of $XX of $XX.X This of our currently plus represents strong subsequent And for prime million, loan and 'XX.

of these evaluations and Our our a sheet. excellent position. ways cannabis shareholders. management the on value markets, company and as we team discipline and broader maintaining geopolitical equity our cash volatility and Board impacted, to evaluate significant Particularly financial remain uncertainties regularly given to recent with our see balance capital in financings And the the focused sources optimize

on Drake, to Co-Chief our Officer. structure the continue balance pass optimizing efficiency our will including capital and sheet, our will focus now Operating call Jennifer We to deployment. I cost in over

Jennifer Drake

of progress the New to in central great Jon have Jersey, months adult-use we'll the Northeast, where Jersey highlighting the had the have conversion three of location our and some have Brad. and which and opinion, our week, the In wait. Boston, Jersey ago. some in by In has want the can the and were best-located states Thanks, call, Somerville since region start these Massachusetts New Watertown, two a eminent, dispensaries which important only And last in were population you adult-use in people. because I we'd operating and the million X.X New our which of regulatory stores. approved of adult-use thing follow, of Back of to why each dispensaries both is Bay conversion worth Jersey, this location, to Massachusetts we are between the mentioned of these only approvals most three five New in

So, our so in Apple to wait to it for was were the best location open wait And customer be because you possible. approval that's next much in very Jersey worth to Boston. in want the the drives region Store those we traffic. Bay the the is stores Back New made in to reason location think We central

Particularly last people, of the and business investment to our infrastructure, quality our sales our highlights our expect is began The decrease the make in created brand, many we realize when look in our to base. in those of us of efficiency, economies strong beginning our relationship. margins turn lower percentage anticipate we about these we to SG&A want ahead this and structure. the assets We of margin some as Before for contribute EBITDA now that as in customer support on expansion. talk making assets take year that we consistent we to calls, to scale technology, QX for for quarters. that investments when moment investments a An the year. SG&A and get asset our revenue processes, second-half of QX our have you of continue and in been expansion a recent from including investments I are in QX especially of by to flower we processes foundation

spend a we reasonable chosen dollars, a these much our have forward continuing not earning SG&A power to stronger could pace While believe at puts some to we invest position. of in

aligned in the for extremely and our are long this shareholders. We haul with

and progress our and We management quarter last been and call milestones earnings in set underpin expectations good third and we $X out the making revenue have on revenue this analysis, rate assets EBITDA the then million and EBITDA fourth that of QX based run return QX million XXXX discussion run quarters. on $XXX discussed the last which a rate of on we as reminder in in

Now to let's other our market. about in continue talk challenging buck the developments of we In Nevada, business. trend

total first you've market an heard decreased addressable Nevada all-time the At As hit quarter. same retail in in QX. others, share the time, the in our high from

will one that summer including and Entourage, with been position part the been market in of flower show has months is the last to we Tripper. for better in new We our product STiX, starting the Nevada, launches improvements to Haze, brand Road XX the continue Arizona where Kynd bolster making. the number have flower the over

great better. which and quality mix in of will environment even In Massachusetts expect best the because to wholesale challenging generation. foot this harvest. Output And improvement. fact, wholesale facilities we dial-in largely the the opportunity first come Now despite built. channel. from see we stores its subsequent this in a our facility retail adult-use drive and sales expect drive the first no from wholesale The with see we've in-store our facility share we EBITDA have retail, receiving more cultivation generation are new that we XX,XXX more one online, that's we both square been was two QX our maintaining as medical we yield having cultivation partners And only flowers and harvest, business feedback who our largely yet. to even in of be is product facility for and month revenue is

stores opening Our to received and customers next quarter footprint about in of approval we for massively. conversion. we looking call, ramping. those opening are share now the Massachusetts adult-use of on doors few our call, with we in June planning region we are to New to are in underserved stores. those Indiana, how western will of stores quarter Jersey, Pennsylvania our are an next for ninth weeks. the quarter ramping. Pennsylvania. Across Florida this to forward line Central grow record eight revenue thrilled to University hold on the the talking been our state. of the we QX our underserved was on Jersey in about home continue is are adult-use store areas next be Indiana the about this where state most open adult-use have will continues change us. Massachusetts, like finally, to we that's Pennsylvania how And footprint, and an our be And City In And to has part the another And talking top to And update

we were driven as store a by at XX selection selling We growth this ago are selling of stores our the offerings year double biomass month. of expanded and

We've seeing come We're to yields least positive recent the two added will had, from in improve. really online. that stores April, back-half photos We've March, before to flower for of harvest out quality the show improvement and and the the takes cured cultivation, to least investor flower Florida to with trends up in get we of And been in beautiful deck QX end some more are year. and bottom more where line. some a through tested the to the growth, prospects gone cultivation cannabis for remember improved plans Jon to exceptional. stores and demand growing The right, continue remember all the can are that industry, it We show at at planning Gainesville. of that open and the begin long-term we've think final us investments up incredibly it's in pass take work second-half our to uniformly And May; It feel hard to that to ramps we growth through back an slower ready a we've important at be as contributing now remarks. Ayr. in continues I'll slightly to period while to the for the not is our busy discussed. up for time into time. an and We it business into quarter

Jonathan Sandelman

business. cycle our that exciting stages final Ayr investments, we you dedication months last their CapEx what patience, continued operators, regulatory the and by the strong about you manage. and improve getting our as the sides we thank and this of challenging for we've for team businesses now approvals, we've on we're look completing we're XX its that of all being known And for next phase the and and finally these year. But undergone good the excited the our for, and been second-half for hard build over The back being a power through the to capital of We that your growth turning has been as nearly construction time of and stewards we of realizes work thank future. to forward our being over


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

Matt Bottomley

good yes, -- you everyone. thank the everyone, morning morning, questions. for Thanks Good taking

here. for the change to with through will news any face for color flowing on Just the side margins. any your if where obviously, three, But from retail going from strategy? in licensing seems the other continually last there to in well anticipate, the wholesale to Back Massachusetts, there versus there I be Can four be quarters of you seems in which give the product wholesale lot pressures QX positive is a read-throughs a medium-to-longer-term more Bay on Massachusetts recent MSOs things of all the in market the first bode location.

Jennifer Drake

question, Thanks Matt. for the

keep Massachusetts I important market. mind of really think the in structure it's to the

That's said, to it's will Bay our first ability our going month, own for retail which to location up business, margins; next strategy our change only It's and be our Back biomass stores medical pivot our we've improve going all, two adult-use own hugely our we wholesale. when to we of to going had First store. open until and as between revenue. improve

we're about and about which Somerville the and will excited So, that, really Watertown future. follow, in

There want XX with the many live. way changing Boston; change open all in about market the The are you it Greater wholesale take changing; have XX other in the has more dispensaries. to is important and point is And business be wholesale lives so to as over particular is that changing in that extremely stores I the population the backbone the structure key. of first. well-grown have That quality to the what market, quality a side, next where way and times, people And market that important great the XX% we that is flower be product, in are great as first. quality Boston. make product entire brand XX want in months. changing wholesale the want our and to And the because want. with also So, will is market respect take that thing product it's people the XX which to people brands to dynamic And have it. people supply-demand the product the the state, Massachusetts of it's being the of most XXX your that will One and said in to genetics is is

Matt Bottomley

you optionality specifically, to you it, what regulatory good commission to announcement up other going market limited a demand. that and up kind for second-half to in is be a in just dispensaries see start, adult-use all contributor anticipate And can't retail guys to Jersey, out? given give of terms specific I three Got it how expectations is while that the in of there the but have give any or indication stores to going the expect, I we that. But to appreciate of it's footprint, you XX speaking, do this how sector here? obviously this Jersey imagine imagine New that. But you of, or is that just to But just New the know those also congrats your I more me, likely for ramp numbers, rolling get pretty -- big on share. now so can step broadly the more I growth now allow are so think, function on locations week, pivoting incredible only you what about how more of and that next are earlier this operational, market question will year, one little XXX

Jennifer Drake

an focus. in [act thing people the board. the Northern ratio own the But -- focus impressive. focus growth stores market thing for there the we a Obviously, of big the that is the an customers the products to locations we're we stores, million going the our going in have though first I the for medical, population it have Central us our as it's people really to important going will us the best that to impressive for opening always of business, side And Central our still customers think to sure opportunity the Obviously, Central Jersey stores of dispensaries that we Well, And Northern that in five extremely X.X the other been and and it's with that focus I it's of on] Jersey. operational be will in that. Jersey. on million Jersey, future. variety in want. five be of of in really supply It's to best as and Massachusetts, in for exceptional us And be three three part making pretty our biggest we're incredible it's focused stores our and right now to have on be time, I stress to excited market region, be wholesale is driver X.X the it's our think as it's pretty and Jersey, -- in us. excellent that's grow. We're is versus big similar three country. is to adult-use, that'll been our almost stores can, that be [Ph] to we're providing profit focused just five their on that across

Matt Bottomley

thanks so Okay, much.


Semple Andrew The next ahead. with question from Capital Please Markets. go Echelon comes

Andrew Semple

Congrats good there, Hi QX morning. on results. the

Jennifer Drake

Thanks, Andrew.

Andrew Semple

I'll sales also First just that supply to have available of steps New is and state that adult-use here, sales, product may you of of month? for on question day start of Jersey. your brands second-half, product the continue expand expanded shift on cultivation What in launching adult-use And of the generated could one ensure change formats coming own taken consumers adequate formats once facility may which in on year? be how you and you're the this brand and in you online to

Jennifer Drake

Thanks for question. Sure. the

earlier, have we open So, to locations in -- of our simultaneously, approvals Jersey as stores amongst three was secured we just alluded are all for And our New we've -- which we New great. unique in the had believe such we so reasons our because And that would demand. Jersey. it's generate the stores to wait, probably and of where would well-located ATCs one give are to

gangbuster result, biomass large sell would adult-use beginning a to able a [indiscernible] market amounts that adult-use the have As state. be X,XXX be that anticipating market, of into of in Over pounds currently. to we the it stockpiled

We which come our per a is online, supply agreements our additional month, a for pounds our thousand per few but will about generate biomass have per facility, And XXX month. we existing facility, to new almost pounds pounds pounds, month. thousand from of generate a hundred own also

supply, us, that very greater even So, been with our comfortable have generate have our we actually going state such we know stores demand. probably just than than certainly greater because feel the -- asked to are even and guidelines

Andrew Semple

Jen. Great. Thanks for that,

Massachusetts, Second in the fairly that question, is state shifting on wholesale quickly. dynamic

on And maybe in Just medical year-end as might could incremental want your be are proportion you well in confident the you still from update guys open find some adult-use if could team, stores color coming to all extend that own by market? incremental capacity whether stores the as you two absorb of that for an a home online capacity what state? provide that your open

Jennifer Drake

to about is the exceptionally about located. similar Jersey, our well comments they're one think of things the New I in stores Boston Well, important

for we've Boylston you that stores next to of facility Apple expectations been, you've Bay. the be generate. facility of mean, will mean, toured foot we Boston. those of the seen really, from of of in in the the traffic or been terms have incredible. terms It's location I been, our sales our conservative trail, terms in store in I So, to in foot you've trying Street for Prudential center the incredible Back the the across it's Bay Center the Back the an of But just

of on an but miles Watertown I to River. on six route. street. from beautiful Back main Charles the a but people a are well to It's what about our store, located as our are think lot got So, might like our Watertown, be actually, we otherwise it's our what two accessible the through as we extended big, have and big, both sales we Bay we business commuter it's from comes Boston, about store, Boston, we not huge been fourth It's until to facility if the cultivation It's both really who about probably buying because not think a more And capacity that of probably that that needs in third-party Back the meet are going facilities won't It's And sufficient parking in out right are only our Boston, facility. Central known cultivation to incredibly I is gases online sure dispensary. sides don't you've than from I'm that to, the probably for Bay. quarter, facility. first wholesale Central

up business. dispensary think some of non-vertically Akena, leftover start have especially think that stores, as also an amount we our especially lot online. two capacity come take for will dispensaries I between those some generate And to a to of integrated we're still wholesale, going the the and as incredible So, of

Andrew Semple

That's taking open, agree forward get Thanks I looking and Bay see into so that to questions. Back my to that great back color, excited queue. I'll for that. dispensary, one

Jennifer Drake

Thank you.


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

Matthew McGinley

versus by I gross probably simplistically volume issue which what Thank market investing longer ultimately to a of a you, have more economy I much margin a if your in the X.X of land? factors. factors I'm versus decline the factors issue factors like would rate compression, structural opening, driven much think specific of specific in hoping timing market where of is and gross gross ahead in points tail we margin the Ayr is guess price the markets those margin how the terms break drop that of is Ayr like how versus understand will

Jennifer Drake

which Sure, is But vertical the and But some get market increasing for of a few sales gross vertical, first quarter. I'd factors we'll get compression last price from the compression integration what additional again, you of points thanks that in majority business, really a of that first non-vertically Brad, the throughout over we're fact cultivation start and over then, hoping those say on integration our would I'm price add, down back majority compression that more predominantly way second-half. margin will question, to addition, some turn as vertical be some to QX, quarter. I in the margin integrated integrated And our bring come did of the those become Matt. be to to probably margin and improve vertically the important happening course we going comes that it these as from in as price over that points add? we some which to back to facilities, comes I'm note answer. are it's And margin to think Brad we'll the going will gross and will but the of we backfill points, able that able

Brad Asher

which correlated tough highly market is add compression I size. compression, in Yes, with price just would the

Those pricing over of XX% the decreasing. are BDSA adjusted margins expect remain is to year. size balance over market So, pressure, the but still states seeing XX% of we're gross and the the are

Jennifer Drake

line the with on side higher industry in the is of line think are industry. -- peers in Which I with

Matthew McGinley

the call Okay, in for is first in on through outflow, my question $XX revenue, flow the uses, of between the how second the for that quarter, cash current went the if flat quarter cash where to this into you to what you about loss, your remainder should and acquisition expect year? primary the your trend cash go the balances cash flow capital given CapEx, raise to, we the were million related cash first-half second operating needed

Jennifer Drake

been spend reasons. loaded So, our for two as XXXX always to for front expected be cash

to our end construction CapEx building first CapEx And our the spent into on. First, third And turn assets frontloaded we're bills, the spend of our into half the we're the over now of year spend because assets turning that's phase, is to going quarter. and at are you we're for about your on are We on QX. your about when whole and CapEx the where paying to quarter. turn assets our the

of for year. So, already CapEx spent our half been the has

we major the of are not large use cash of paid be which first and that now paid finished in our We taxes. then others quarter the year. in We was the and used will And don't the of over paying done, sheet balance our on have Those unlike Lion's were April. tax tax the addition, a taxes in In quarter. repeated share cash, cash other throughout first the the industry. deferred two liability uses


Please from Bond The next ahead. go question Jefferies. comes with Andrew

Andrew Bond

line in Hi, Bond Thank taking good you for our for the questions. morning, Owen Bennett. Andrew

on the XXXX. touch in wanted guidance run first, the by that around out you I to rate So, end risks of pricing the your lay MD&A

month seeing current Nevada so pressure, flatness still data your prices under some retail in that stable prices of generally in are we're relatively levels, and core markets Specifically, maybe that wholesale remain Arizona the some or and the at least overall so. some assumption and showing last market at

specifically color have pressure, disposal at incremental Massachusetts, your targets pricing bit your what any might a markets? to levers Pennsylvania hit Thank if those you give you and on there Maybe be can core still where you. outlook and these seems in around to pressures persist? So, your more

Brad Asher

at was So, QX in month, of how percentage compounding terms we had a lower few point. each entire price pricing. talked saw point to pricing in an a decrease we about quarter the that compression, QX effect

of QX, right price has in in saw QX. that that stabilized as now, So, especially we through impression wholesale

it but So, has it stabilized. hasn't yet, recovered

remainder the we've That's quarter. in through that assumption the what year. of running that's seen the So, the we first have

Andrew Bond

May, at the we quarter So, a of of follow-up? you. here into as to Thank that relative tracking as I kind is expectations the guess, your end how sit second

Brad Asher

few for the tracking. Aside 'XX, from around say is I'd days it

Andrew Bond

to And pretty then, brand to thank XX new progress, some core come. brands And said you. substantial made obviously, those into new the XX States. on think I you you've Great, expanding launches, portfolio, more moving then,

your And do has different discuss approach, that of a can that. big wider these XX for some brand an overall a have kind do of form smaller whether then, Thank of factor, consumer your how within specific to you. you larger or strategy, go brands cannabis picture with you So, fit together otherwise? brand some portfolio, overall MSO kind with much competitors segments

Jennifer Drake

so offering and offering, is Sure, have we our an price an across brand portfolio for that constructed, form so all consumers. factors really points

them for the the can exactly are the address that bring exactly accessible specifically the meeting Our power Levia to such we our brands are wants been address -- and as concentrate, that XX very range offerings, focused across go our market we core customer price all and they customer. a consumer And cannabis. hit are of they've the of beverages, and And vape. geographies form more specifically we can markets, every flower, hit brands very, key that created which designed national Those of where in been are points. into have they've market new broader of on as specifically factors

a different customer, a is in have to portfolio customer And the the Nevada we really portfolio Massachusetts can pivot customer. market that a brand important to sits. which to it's So, is Florida a think different to


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

Scott Fortune

affect continuing just upside the currently locations mentioned sales another brands have? you and you profile that? thank and on have Florida come offset of to does of for the at morning, looking Can thank pricing? upside state -- questions. store Good level and you XX that and now forward Where the Kynd you helping the on Florida, that follow-up up progress you And How a for just morning, Florida margin speak and Or, how you kind drive you have? Entourage, those continue progress to and the new does in here? little and going the you. metrics can update more that you the level Good from to the left that is state, provide metrics kind opening Premium,

Jennifer Drake

Scott. Thanks, Sure.

So, stores, the as revenue Florida in increased the of market. one that's more we of open and more drivers main

So, we open we'll are at of XX second at by And be XX stores the in half today. And, quarter. we'll of this the end additional year. this

in the the driving and in can feed for key product. our has so flower really And revenue. us factor, facility we know, our Florida one of is growth with even that That's been for as in limiting better our us factor things the growing Florida. more store more stores you Gainesville that negating So,

of We tons on made progress it. have

stores, drive pricing our the were really we the that feed that to this and impressive a and today excellent will additional site. get we recent deck to to and encourage precursor are this And in there some of far volume the actually we flower I our be facility Florida facility It's pushing an encouraging visiting seeing Web goes very our there higher look able off as customers think to grab tab going really is impressive. so we Florida premium coming you investor actually. have our soon. really as of I But, the in to really product. stores. we and products the that But, progress of will more to at premium most thinking to year. you grown are Go with provide be more the able to everyone the

Brad Asher

that well. pricing the of pricing, expanding Florida, market the on I'll in seeing correlation as size true are that's side just market in terms and we holding of add size

Scott Fortune

that, premium pricing see And pricing stabilize Florida activities how follow-up you or promotional then, the as a bring side? little margins these up there expect on by on on coming you? the in increase from bit you Do you for there

Jennifer Drake

these prices. premium flowers really premium to at more are about provide products, able these premium we No, excited been

about we talked this we over think the market supply brands we allows improvements cultivation, also hit to some to standpoint didn't premium with have from us weren't I able took of do. of in supported pricing. Liberty because Florida. introduce really premium our before that really have into that the the when a we first end pricing we the it our And And premium that

will So, our us brands to Preroll, allow margins STiX improved in improve things product Kynd flower, these will -- our Florida. these addition in to the

Scott Fortune

consulting, real I And the cultivation an Perfect. having then, site in update are know quick you there. the Nevada,

job On really there. how in have market that are kind you side Is going forward in more you retail tough how store or you going do But, towards look at versus of you wholesale wholesale? You cultivation? highs. now. done to new moving retail But good that hitting off at that are footprint, added going maybe with onboard? consolidation coming more with cultivation to mix, retail right I look be Nevada know more here

Jennifer Drake

are the very think Yes, and we Nevada. and wholesale about way pivoting opportunistic, in also retail between we

premium out as those of integrated the you direct market. the that us biggest good of And Tahoe is -- to deck It's Tahoe high premium access That those to incredible. depending acquisition grown to for of of do. wholesale market. that well and on Nevada. look opportunistic pricing human it our cultivation business. be that, they and talent With acquisition Florida on super excited capacity flows kind the across capacity premium, capital genetic side. I that the just been the But in the It's ebbs $X,XXX capacity allows of the have footprint sells the pictures And wholesale about do, market. in flower very quality. are we It's Tahoe our has vertically incredible the one about Hydro reasons Hydro, excellent in Hydro mean right, of as we coming are absolutely pound additional as is as stores we beyond where pricing about a want we of $X,XXX flower the cultivation very, can the within


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

Russell Stanley

my thank Good you morning, taking for and questions.

think support you I add the you First given Florida by stores know just year? that and you be made kind in this you many will And the continue following of making, plan able end of how on to cultivation do each you've up stores too. to improvements

to understanding to you a as able as year Just we this trying from be to cultivation standpoint off? how finish many get an would support

Jennifer Drake

Thanks, Russ.

in two cultivation, retail respect -- Florida, with look So, our footprint look kind and we at we ways. our of in it at to it

for the to talked a of us have Florida. and I located First really dispensaries all important we think best this about lot, it's in

locations that at to consistently are opening do find new of And trying best looking the ahead each locations town. we in stores. we work So,

line a in we X plus from of terms like. look at the them of probably how cost-benefit want XX location we in timing it we have open So, looks to and what analysis But to the state.

of think point great we as that as cultivation we So, our whole can many again, or our it's in I for to And in as improvements analysis continuingly Florida XX cultivation cost-benefit for the absolutely, in year, the was is as of But of much -- really goals terms best at of so your expectations And get important can. maybe we question have And rest in support footprint. terms weed will look XX of we location. every the us we this open. stores think our specifically can grow and stores that's we those. open can we'll

Russell Stanley

my level the Great, And sheet where you maybe on congrats follow-up debt around just EBITDA mortgage balance wondering financing, be mid-term on that just leverage to power, unused thanks. to like would a thinking tapping basis?

Jonathan Sandelman

we're real portfolio. The deals. the [to constantly And evaluating. pleased relationships. were really opportunities best are with [Ph] something our think prioritize] were estate is We those I retail multi-year Those that those

something two we and have that online, we with real based our But will with into business now, are is other pleased QX, deals lending. opportunities coming the right closed. really for evaluate is As it just we estate


conference and session concludes the today's call. question-and-answer This

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