MRMD - Earnings call 3 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Jen, and I will be your conference operator today. At this time, I'd like to welcome everyone to the MariMed Inc., Third Quarter 2023 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions). (Operator turn to now line the will Mr. over I Investor begin the West, Vice to of President Steve conference. Relations,

Steve West

morning, Good everyone, Earnings and Third MariMed's Quarter welcome XXXX Call. to

from contains Chief our Joining meetings. website. Officer, as materially and of our This statements. Factors and or and these archived forward-looking by met forward-looking Business Any forward-looking you today, be Rene Levine, statements section him are risks of and me Head of on of Risk our are management's call required results law. assume Most we and XX-K Relations our Rene today Gulliver, subject our earnings to to our statements reflect will Tim Operating website release, uncertainties.A Chief events no various our conference know differ Shaw, of is risks Development. obligation of the which discussion contained Officer on and are Jon calls expectations unless and update in these Executive on Actual Investor may having various some them available

non-GAAP will located measures, section we our Investors on certain supplemental our financial and to refer in the which are slides website. of earnings release Additionally, reconciled our

call is tentatively XXXX, at the X Finally, our quarter XXXX, to morning March X, to call the over of the XXXX Jon. earnings closed will be A.M.I issued analyst fourth now after on our scheduled release markets and X, March be turn held will

Jon Levine

our consecutive our businesses quarter, remain me dispensaries since that We quickly Maryland the had some revenue fourth which XXth maturity. the track of well generate cash of last highlight the growth, flow Steve, and EBITDA as growth the earnings for to towards achievements result and reported adjusted operating positive key ramping year.Let we for everyone. on positive of new consecutive core quarter our in you, call. another was strong to wholesale morning, Massachusetts pleased in MariMed good and as I'm the report strong

began we Maryland in X. adult July on sales First,

strong. As have very sales expected, been

were Our Annapolis use. dispensary sales are trending they more Xx before adult what than

Annapolis second behind fact, Metropolis on is trajectory a dispensary Illinois revenue-producing be location. our In our our dispensary to largest

wholesale are the Maryland. we facility stabilizing third opened flower through sales excited aggressively which the limited end cultivation be supply, are the dispensary Illinois. While in of potential.Subsequent more the I long-term addressing we in of to continued due expansion for cannot results accelerate, to our fifth quarter, to Hagerstown, Maryland's

is counts to own actively and our Our that new in across dispensary we do manage, XXth five so. Case which double or our we Illinois, Thrive room have still dispensary states to are in dispensary we seeking

Additionally, announce processing occupancy received I'm to Vernon, new facility of our Mount the Illinois. thrilled in for certificate we that

of We Department Agriculture of shortly. we are awaiting receipt cannabis which the products, to expect begin approval from manufacturing

residents have years, retailers Illinois, our team finally say three secured [Betty] wanted largest more I the has the For to operations and We're is back. than of early sales the commitments state. to from sales quickly in already ramping

the chains and begin call time that, update. the over for We season.With products selling turn through our Tim to operational holiday wholesale I retail expect his to for our in

Timothy Shaw

and Jon, morning, good you, Thank everyone.

Let review me our retail operational start business. my with

decreased to our third increased strong sequentially. of the quarter. continue most about retail Retail year-over-year during throughout We footprint X% post revenue and growth X%

up average our While was new store our check was growth, by retail driven traffic XX%, XX%. down

fourth and adult-use and competition pressures introducing openings. traffic boost strong Despite of of continued and regain quarter the year, grew new industry significant as we and recent in product primarily average sales consumer. to dispensary XX% impact are last the in according continue with These retail Casey declined experienced Clearly, Missouri. those the our the value X% sales BDSA of our consistent is this our economic new offset year-over-year, by to Maryland be with Massachusetts impact opened sequentially increased grew ramp its opening In pressures, to sequentially of which partially at to as Illinois, Annapolis XX% data. driven of check. implementation due lost dispensary, a All retail more will dispensary.Additionally, products declines the sales. adult-use from well boost as the bundles

We in in redirecting when retail not dispensaries. primarily business. are will our do operate and locations Eddies Betty's pleased These our wholesaling national initiatives areas with some we similar where also retail our traffic to Massachusetts face our we have tactically regain dispensaries branded pressures.Finally, us help from products, drive Overall, introducing competitive local. same dollars marketing initiatives to we in are helped share

revenue increased to which reported XX% as revenue, Massachusetts, We and maturity.Moving wholesale $XX.X to reporting new increased continue Maryland ramp wholesale. and in sequentially. year-over-year million XX% our Ohio We in dispensaries

the apple restless Eddies to dissatisfaction a will several the to chewable the in-house were need states status variety world-class of launched holidays.And of a team's extend disease. know the Foundation, with on has advances rare improvements with the onset are use We for our Massachusetts finally, this wholesale limited expansion customers.Our mistake, with sales time demonstration from recently and and of quo.Over Breast been marketing Heritage. in dedication record Breast These with focused primarily other was and we programs our Massachusetts our best our growing by launch taking at represent we are the of to have plan very in proven Beach the the we Heritage nicely. months, be dispensariesThis our Time July, partnership strain the I'm Panacea make next fact, but taste Betty's in a and front, not very include; proud pleased K and sneaker six education a and breast quarter hit October, consecutive flavors Away the champagne edition launching seventh of Keep in we profiles. we quarter These people high. the new a in loyalty only buzz A of time limited delight our In with Massachusetts Ache within improved business.On efforts cane in ginger Maryland on a products. to new strains very members products awareness, the in be December. our this revenue and convenient supports The launched business. of candy higher disposable the in distinct Duos new flavors our the which next we under could team momentum is efficacy, limited for versions We're Heritage, Eddies bread Nature's affected both Betty's we experiencing time small pink Vibations among supply exclusive partnered adult the fifth our one overall will which to A and huge two working the more sequentially and batch vape seasonal offers has millions beer is This We're in-house no in Keep cancer R&D with surprise seasonal growth campaigns available adding Nature's say, we and package. gummies of Maryland, that Fusion mix, marketing day letting Double page under as brand driven are We and our Nature's and our them consecutive drink generating be was pie also done, by wholesale loyalty industries, tablets, e-mail an packaging our

my product our out to will are initial the dispensary strains hour, over fact, clamoring concludes turn call drop.That sold Rene. In at our for I my and next the drop operational loyalty now good an Middleborough within the members to review. friend,

Rene Gulliver

brief Thank X% increase of I overview sequential financial you, increase. good a a $XX.X results. our which million would year-over-year XX% a everyone. with in represents quarter third Tim, and to start Revenue the totaled and quarter, morning, like

dispensaries the our decline attributable growth wholesale and operations in the costs driven was in comparable quarter, our supply operations.Moving margin These other by both was results have domestic This a gross As to factors our challenges. to number opening year-over-year XX% gross nature. our new discussed, including sequential which is a Tim both decline delays up period and driven macroeconomic non-GAAP to have and in global items versus due and resulted XXXX. retail input margin, in were and of chain our in factors,

experienced have and Illinois. in we competition addition, In Massachusetts increased

as OpEx top to our versus flat G&A line OpEx decrease fixed growth to continue as essentially of margin gross quarter. sales sales, increases online of And expect as the new and to due to expect This in million $X.X improve third going to non-GAAP XXXX. $XX.X $X.X was assets come ramp.Our were our initiatives. expenses a we to million the a costs. forward was quarter to marketing, in percentage planned percentage of our personnel, compared operating quarter leverages We and continue support strategic and as Non-GAAP second the increase increases million in

year's revenue $XX.X the previously Our the last up.Now to quarter second decreased adjusted prior quarter cash balance incur of sheet, million turning cash to quarter, third company compared require million third with costs $XX.X the mentioned the versus the of ramping which due $X.X to equivalents, $X.X was EBITDA quarter growth to in slightly million we to investments, our and which ended million. in balance

on outlook. last $XX.X capital year XXXX end on reporting million working track we compared million, $X.X flow.Moving consecutive million flow of from net remained for at cash the of positive quarter. Our and was our $XX.X at operations our financial fourth to strong remain Cash operating to

The not well improved of growth million, guided.While we which coming increased range XX% XXXX in trend, sales we the anticipated XXXX. $XX is $XX QX. to due top-line million of a combined million million CapEx the reasons than target we guidance above to end this $XX million construction the of lower these While operations previously guided range explained, our average, delays. as the down adjusted EBITDA of as high of with Revenue not reflects online margin dispensary Illinois view due the costs result, Non-GAAP the EBITDA primarily EBITDA XX%, did have million the previous expectations, $XXX ramps previously million $XXX to $XX and low into assets.As approximately down are more associated $XX million. $XX current our with follows. the lower gross to delayed new combination the to to stated. million, margins previously financial from of due a meet $XX in from openings remains targets as their originally delay subsequent wholesale our the Non-GAAP the end as revenue of industry operating implies of generating to

guidance remainder the to $XX million Jon processing financial be the of and for to expansion cultivation and back outlook. Illinois, now our facilities.That expect to my Missouri We turn and his spent of concludes in would concluding like XXXX review original will I call the Maryland, the complete remarks.

Jon Levine

Thank you, Rene.

progress the regulatory believe the industry, revenue most conservative greater to has increased As accelerate allowed sheets growth of has illustrate, continue MariMed industry.Looking delays has and competition. industry. execute I'm made, than construction plan. top-line outperform results growth we in despite balance truly will company faster still with we strategic our which continue the our ahead, the our pleased one our the to overall and the to us

growth As all explained, year. Rene top-line remained strong this our

which finally infrastructure, investments not will continue construction due sales, Our delays, ramping, and meet us These improvements of so associated assets carrying the input margin in personnel, costs macroeconomic will are growth to margins we and in the made allowing over and expectations regulatory, higher assets costs, new on said, lead XX several XXXX. to the our past months. quickly leverage did the to consumer.That new new building pressures growing assets, with

In and we our staging of leader.Last XXX needed determine were proud Services of XXXE our our and to We improving elimination thought our nudge that million to its responsibility take shortly be Health the financial that results, to XXXE the on seriously we Boston the focus let generated call stunt also Party. industry an We'll through growth with quarter, addition Department was initiative. recommendation deliver to THC to if our reschedule over cannabis of [media]impressions a history afterwards. Human for

[role]. tax in up of Schedule end I to a most X sports loved the us, I fan, know classification our post-season the saving companies, to mean millions cannabis of you other Texas payments.Before XXXE, die-hard The dollars the Rangers. wrap amazing come but tier a as call, Scrappy invested would built watching As the run years. these our not a far Rangers Like as competitor, have money and reminded few MariMed embraced them, we the -- has me world-class underdog of considered past Rangers, like team, top most we wisely, were the how

and investment for pieces all in The begin at the together We a have are a is put XXXX like thank ready couple every accelerated run. of heavy championship all beyond. revenue of champion to labors, in peers.Looking the again we substantially the months to poised for among improve to day. would XXXX, work our growth their in complete, helping of be terms these once ahead I ready away, organization which and and employees we and a our mission to profit our are achieve lives continued dedication is our reaping fruits to hard MariMed people

lives fact, our customers the employees with our lines patients past million the the to five over of improve In and XX have months, products.Operator, helped nearly for questions. open

Operator

Instructions). (Operator

Your first question Zuanic with come Pablo & Zuanic will Associates.

Pablo Zuanic

end Thank you, guidance Not particularly nine right? guidance, X%. XX.X. for a there? for to of -- be answer high bit quarter, on a everyone. the levers months That numerical quick that. X% fourth just terms means almost the here, plus to a Look, low based terms you XX.X to sales variance are but there. means too get to we're quite morning, What on That's the That's good just on the or at end In the mid-November. of in your in minus of

Rene Gulliver

Rene. hi for Pablo, it's the question. Thanks

seeing processing end Illinois of the we're operations hopefully, of anticipating, On that operation Maryland the Illinois, trend scale. be and if Like if online wholesale kind end, low upside. good low in in that operations QX, and comes the so the I uptick would we and the that's in retail, grow the think continues, mentioned, -- sorry we're

there that hoping hopefully through QX. production regulatory final approvals, of going out happens. we some we're and expect in to We're come So, have the

on upside that range. the that's So

Pablo Zuanic

then on And that you. just thank Okay, staying point.

Missouri you a the through the I your about in your at in What's assets think expansion you at these coming of something of end are quarter all the places. new talking first fourth Just terms all and remarks, what's and other the the expansion reminder, and end about. half? of to prepared plans in in come XXXX, mentioned still

XXXX. about the first in there remind half new Thank that assets to Just those of all through come should you.

Jon Levine

for thank the us, you Pablo, Morning, you for thank Yes. and joining question.

inspections some getting in in As expansion cultivation to of that just still our that be the having addition them and so trying that get Massachusetts, important Missouri. parts fifth our Then finishing it's up Again, the are early to and we're the still the the in of we as just that Illinois next weeks couple our for in be to to materials. growth a should our demand quick the And new sometime as up We opened construction dispensary to XXXX. get We demand. expansion said, in for Rene supplies saying, late on open had Maryland. QX. approvals to state. We It's of XXXX. as kitchen delays that able products our Hopefully, -- would was possible be growth, then help is state. center hope center just into opened Casey.In hope Missouri regulatory state early further at coming be least on in processing you processing delays, have to either in QX, and additional

Pablo Zuanic

thank just great, one. that's you. Yeah, last one And

Ohio, on in thinking about So, the in of terms how expanding terms M&A, based positive there adding are results stores? in particularly of you

Rene Gulliver

vertical Yeah, all Definitely. as to in be continue always a even for and stated now we're Pablo, along, we Rene. goal, We've state our Ohio it's and we more. state, we've opportunities And is take in. to liked look it every

Ohio the So, one as for as more. that know. We're well. allowed have we you retail in look opportunity We four do

us state position -- vertical in And said, ultimately. that search ongoing a so, like for to get I to we're opportunities

Operator

Semple next Wealth our And come Andrew question Echelon with Partners. will

Andrew Semple

morning. good you, thank Great,

asset just think through if and costs revenue margins, quarter improvements margin so, significant And resulted came with in do the but that we were revenues. which increased organization, costs a that the ramp-up offsetting First the you get if going some that that in any dynamic profile despite subsequent XXXX? would quarter? now, facilities Maryland. back into really impacted can across all were in without of Was and down in of this margins those saw quarters especially there you up have the Wondering utilization this on you the associated

Rene Gulliver

Illinois Yeah, there's some for dispensary sure, Ohio for processing. sure, the impact

costs So, those some did have that we of margin. the hit

those Yes. will so, come And back?

online expect come we've area mentioned, We some then like starting positive accretive operations the yes. the in and those processing obviously answer is As Ohio Illinois, those. from in would income

Andrew Semple

just Great. to needed of could leg And the for then have grow you to there few think infrastructure in the to start operational We growth? the place think will all that see thinking do about business? next spending be the operational quarters. additional next you investments continue somewhat. that for Or Do flatline you

Jon Levine

into for you hire We've of with question. of additional Illinois, the spent money over the -- growth to Missouri. a of thank in into Andrew, operation in all will we just piece and original thank But build some executive expand the people But with were still the for that's processing major mid-level. growth, our team need with Morning, Ohio the cultivation structure forecast. for we sorry hires we you the out as executive that and our as and But mid-level. joining, lot the on the it's

should So, coming expenses all flat little bit. even those a or down be

Andrew Semple

drifting And helpful. scaled down. into coming quickly on Is CapEx or that one XXXX? me, be the back that's reflecting last is guidance just would investments for that Great, just

Jon Levine

of materials completed. is That being the of fact the operations coming to in really due delay delay and the of

as dollars completions and XXXX, see go early. being those into spent those So, we I do

Andrew Semple

much. very you thank Great,

Operator

Water will next Tower Jesse with come question Redmond Your Research.

Jesse Redmond

Massachusetts. and question Good seems you you to margins. from coming morning, about mainly Illinois and quarter guys. like saw this gross talked pressure more It related I a primarily have that

to be a in competition? what's Or that go little you guess, do those can that need more down curious, driving of opening elaborate I bit strategy bit And strategy? counteract try then to to you maybe new a about to on if a and on little can price recoup the So might maybe two talk what little you stores some bit. that else driving fronts,

Rene Gulliver

Yeah. will some competition benefit of that average of a marketing And talked we're help number of our continue improvement certainly Thanks, target question. revenue that our an is no Jesse, initiatives, to and us he in it's outlined there's and the the other those thing.And Yeah, just Rene. some recoup ticket about, that up. bundling But Massachusetts. for we'll get of having question impact. Tim marketing, things types the It's some whether the that, do lost the in that seeing sort of of that things. and

that's of part story, the So margin right. though, only

also -- about seems are us talked everybody because We we're downplay the having these are to on we an to and seeing delays obviously don't that want be. pressures inflationary as impact those, certainly

those what of we down And on. head start are will in other that? profit.Now, some come to aiding factors is we we recoup What So sure. the competition inflation that's stuff outlined. when the of Tim hitting terms that control of obviously, do can Not gross type

Jesse Redmond

do in Illinois in to you equity much Mass. increase competition be to markets? the yeah, opened know see stores That's and those continuing opening in I helpful. there's social more more And stores there's

that So, the we evolving see see see, as you can is Do see stabilizing? accelerating? XXXX? you do into How a potentially head it you that trend you trend that

Timothy Shaw

online feather we around in our Tim. Thanks, are our of products been more in operations, the manufacturing Jesse, don't surrounding specific dispensaries with award-winning social specifically a have own the mean, equity our to our help bringing and some not dispensaries our the retail like and keep operations. our going at lot own Illinois. our licenses there of at market we'll demand offset Yeah, that Betty's is have that issued that minimal this a we brands our of to flood state capabilities areas where pent-up in have as facilities dispensaries and lot a I is Bringing and in have cap margins some

facilities, bottom bring help more back, So, line. with and our that will to believe we our truly transactions bring customers

Jesse Redmond

up running manufacturing and Illinois that And will edibles? getting And focus Betty's primarily first? on specifically

Timothy Shaw

our Bubby's start, lab Yeah, To has in both our Phase it's Not focused really X taken in just are trajectory and have focused kitchen we that Betty's, operations. great markets our on that's in. we where build.

Vibations Our also. drink mix

So, really state focused of products be kitchen, we're the to of those going our the getting out and Illinois. on across five high-margin

and traction, hit guys Our a operators products with willing for sales has streets our great shelves. lot and for big teams already actually the their and the of a smaller ready

So, we're excited.

Jesse Redmond

on And facility what Can timing -- us now, when remind terms guess last of might there. you a cultivation see Illinois. we the your harvest in question is of out of best the first on and

Timothy Shaw

things issues Phase our just about We're It's about harvest. us we're have first we think And our back. more X cultivation, month really held late that QX the the over completion been a any supply gear electrical and out for barring that from I on hump. chain, see with

Jesse Redmond

Okay, thank you very much.

Operator

it appears additional at further back remarks. [Operator I'll West, to there the Mr. questions closing turn or call any are time. Instructions].And you this no for

Steve West

for guys Thanks, joining us.

If in you have very MariMed any reach how know for you questions, are me. we business and at much. questions. I'm to IR open you Thank -- for

Operator

call. conference today's you for concludes attending. this And Thank

MariMed (MRMD) 9 Nov 232023 Q3 Earnings call transcript