MRMD - Earnings call transcript Q4 2023

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Operator

Good morning. My name is Lara, and I will be your conference operator today. At this time, I would like to welcome everyone to the MariMed Inc. Fourth Quarter 2023 Financial Results Conference Call. [Operator Instructions]

the to turn now will line Mr. over I Investor begin the West, Vice to of President Steve conference. Relations,

Steve West

morning, Good everyone, Call. Full and Fourth MariMed's Quarter welcome and XXXX Year to Earnings

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

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

the scheduled X, Finally, be earnings analyst tentatively issued be call to and closed release tentatively X, the XXXX XXXX markets is at daily our X:XX scheduled after on on our May is held May first morning quarter of XXXX, to a.m.

turn Jon. now the to will call over I

Jon Levine

business strong wholesale Steve, towards maturity. you, core ramping was which year, the as another Maryland report and in our result as had our well Thank good revenue dispensary MariMed morning, to everyone. and pleased that new of growth Massachusetts I'm in

Xth MariMed the year. better double-digit strength. the growth a track cannabis Xth continued significant revenue of of and positive reported regulatory and year, for record that and has financial perform adjusted results We equal overall am Even full EBITDA growth top we year. delays operating positive than terms construction our flow proven faced for consecutive company positive consecutive though control, line beyond reported quarter Xth aware any we consecutive and industry other the cash to ours. generated XXth We in to I consecutive for the not of

me state and wholesale our Beverly. during began in the Let Quincy, a Annapolis Xth new acquired key highlight year. the dispensary sales with opened opening in dispensary significant Ohio. Ermont, doubling Tiffin, and operations. July, of our In commenced than its more we vertical leading a Maryland, in of a operation operator In revenue in our to in few quickly Massachusetts, dispensary increase We our achievements we in a adult-use

our dispensary opened Illinois, Casey. we in Xth In

became launched of And facility we other importantly, vertical opening Betty's with More the our our Eddies reintroduced Vernon. we market. the and into processing in brands new finally, Mt.

from year We contribution of and our are looking all for XXXX beyond. in assets new full

new significantly what in and resulted financing notable in deals equity XX-year with X headlines to approximately recently as was our debt in dilution is securing flow a year which dollars us XXXX most No transaction Other in ours. This of the expense, refinanced cannabis as made share deal our We industry. will shareholders. look interest a attractive companies was package at the maturity. X% saves with millions in favorable most achievement the Perhaps arguably $XX million interest issued. cannabis increase that cash financing

achieved. you debt of into when exceeded all-in baked significantly However, the cost consider the transactions, those dilution we what

momentum into year new assets, the XXXX. biggest continued to respect has our While with opening

at this operations scale in back wholesale commence We January. Illinois

just week, of throughout Bubby's Eddies, are launched very Betty's state. launched widely now will be including remainder Vibations the space the our Our brands, and InHouse last InHouse and soon. Baked, accessible Gummies

Prince George's in located of in our acquisition dispensary Maryland, pending the announced we today, County. And second

the next it receipt of the have recap. open Illinois, permanent That it and our weeks. dispensary our for location We in few hope Casey, in concludes to certificate also announced occupancy and XXXX of run

With our that, XXXX. operational for and update call outlook to for will I turn over Tim the

Timothy Shaw

morning, Jon. Thank Good you, everyone.

with our plan. and of operations start quick our Let me XXXX a recap results then into jump XXXX

million, Maryland was grew offset versus of XX% to in both Illinois which XXXX. store X% to growth, sales First, more of decline overall sales Massachusetts increased which increased past about year, XX%. and and average strong we lower reported experienced by Illinois decline the costs led sales in has competition dispensary in average retail an check. $XX.X due a than per which

pleased are in retail business we challenges with of despite our Overall, our Illinois. growth

Our Maryland primarily reported we XXXX. driven This year big organic of continue expect versus adult-use which story in XX% wholesale. which was We the growth to through increased in and by of was growth revenue $XX Massachusetts, million, XXXX.

is wins, and brand suite including big new brand Heritage. which amazing led This prices we the is an InHouse our Nature's and Illinois affordable our demand front, second significant quality at the for off our InHouse of well. as strong marketing a value largest several following of Massachusetts to to now had products behind start Maryland. almost brand products, growth On in cult-like for

Cannabis Beverages During specifically, High Baked took National while Awards took named Maryland, And Cup category, Heritage category. and the Edible Times brands X Solvent first Cake Bubby's Vibations Brownie the took Eddies Chocolate Bites place the place category. Non-Gummies In XXXX. was end Favorite the year, Heritage in at place won second in Nature's Resin competition. RSO in the Betty's and and second Sherb of Nature's won favorite our the Edibles: Live the Edibles: Concentrates

success be at continued cannot of pleased and brands the the We our amazing both local with level. national more

and in up our our on assets Ohio, XXXX, For operations focus be will Massachusetts, Illinois. ramping new

We facility in in our and the kitchen completing Maryland. in new Missouri of will cultivation processing on cultivation our expansion construction Illinois, also focus

on a cannabis, brand that Brands sales, with and product am marketing have and slate products of of that development the focus brands builders confident plans industry. new we delivering XXXX I are Our full the want. the best the future consumers in best

increased strategies. other reach with existing of We through brands targeted promotional and strong our advertising, media will continue proven digital driving partnerships visibility

XXXX, of celebration anniversary following: and include Betty's the of brand chews In our Betty's campaigns marketing Eddies. of Betty's XXth the our half recently the we For as launched Bubbly fruit first part

Just this biggest the Betty's Bedtime Away combine our week, the Ache Ache for of launch and will top-selling sleep product followed Betty's Away that and year, pain our of SKUs, Eddies, up best PM. X with This management. we

And in offering. Beachtime May, time we bring back Betty's our Limited will

For Bubby's had. which Baked, bread, a we plan new ever bread I've best banana taking easily to banana launch the is

new For technology flavors onset. provide Vibations, a we formulated launched several with just to quicker new

Vibations, sacrificing includes and Double And of X a for of my an [ lineup you or Pina Heritage, new Duos until a mix, Colada drink into ] you Nature's robust have which launches huge haven't different If we amazing. launched plans just campaigns. ounce tried try product that it's marketing We quarter strains wait new flavored quality. couples aromas jar without flower Fresh single the eighth any a of baby,

timbers, fast-growing single also smoked mini to gram, with tiny a sitting. pre-rolls, which category gram are X pre-roll travel will contains in meant enter that We the X a be pack each of

the located Live Park the I'm mega will exclusive in with Music to Concert Grand Boston. thrilled announce is to Nation's for be Fenway Heritage this cannabis Finally, GIANT sponsorship brand our in Starting world. exclusive next Grand Live month, the music Club MGM club MGM top Nation. Nature's

on-site marketing the for a promotional Live a as tickets for on plan landmark MariMed, purposes. and have cannabis adds visibility, sponsorship include ticketing a and that will Nation, Live comprehensive whole. It's We industry brand site Nation's

I about could opportunity the with flower brand not forward such to leading to be more platform. our partner culture excited a

sales will the I of update you the We're We planned coming campaigns the marketing year, and the truly more products, office. which within buzz big is this for year a many our have lighting rest taking brands off months. team The and on excitement marketing on high. up and

review. over review. will to Steve call the now my I financial for turn concludes That operational our

Steve West

with Tim. would like our you, financial our Thank targets. results, year with overview then to start XXXX a financial full XXXX I brief of conclude

approximately XXXX million, $XXX year up year-over-year. which was million full and our midpoint Our the full was of year XX% of range $XXX was $XXX to guidance million revenue

our growth in was strength driven channels. revenue and Our retail by both wholesale

guidance above non-GAAP XX%. our XXXX full year year full was margin XX.X%, adjusted gross also of Our

consolidation Our gross XXX and versus pricing losing costs approximately fees declined input margin margin due Kind higher with points pressure. of XXXX to the basis XXX% Therapeutics,

EBITDA adjusted in associated with adjusted and million. up new decline XXXX our ramping full million gross investments of below and was $XX openings due $XX the year-over-year slightly primarily year incurred range decline, margin facilities. increased of capabilities, was our asset EBITDA a million, $XX and decline losses million This versus to year the labor $XX operating full EBITDA Our new which our to guidance was adjusted XXXX

equivalents, of XXXX flow. cash sheet the balance with year-end increased of to million Turning balance and which We $XX.X million. ended $X.X and XX% versus our XXXX cash cash

$X.X working That our our flow strong capital operations XXXX. the remains million, spent from $XX.X at XXXX million capital in concludes $XX.X financial increased working and and end CapEx. million in versus XX% was we review. of Cash at XXXX Our

Before 'XX our driven targets, in targets financial to discussing by solely they as With growth a revenue note core financial want growth I of that within our partially are retail. existing XXXX to organic in on by X% offset decline are this based business, mind, our business. follows: our X%, wholesale

Maryland, increased average Massachusetts, growth declines We which being and in by are Ohio in offset continued Illinois, check. retail and expect declines be to in by competition impacted

will declined other by grew number sales increase XX%. in in seen the data, store public retail states increased December dispensaries significantly impact have average This dispensaries economics unit continue that to average negatively as to According in Illinois's per store XX% of as we count.

ramping assets. experience adjusted to non-GAAP higher to X% we targeting continue of growth are and new with X% up EBITDA costs associated We building as

XXXX, bringing in assets example, we start-up new million in online. For spent $X.X expenses,

assets we loss EBITDA $X assets More confident X will come EBITDA quarter these nearly new million. this the newest had increase these as our loss and are online both fourth to revenue in an of that mature. assets XXXX. our view We and EBITDA operate as short-term $X.X drag, Additionally, a million recently, of was

originally million and was regulatory targeting remarks. spent review I will the is XXXX the for the we we $XX delays. That to for the call are which his our Finally, financial of construction over remaining turn due CapEx Jon that approximately outlook. now for concludes construction current to concluding CapEx not and projected back projects,

Jon Levine

focused continue Thank we happen. That for executing the our continually We this very with value. confident revenue we respect peers to challenges remain continue We on outpace MariMed's performance, today to good our you, here shareholder focus to will Steve. and plan sit XXXX top initiatives our to we sit growth. have increased continued idle never I trend potential And significantly despite all review said, waiting with plan. generate strategic on industry things in face. I'm and we line pleased that

on the is We we charted point. course have are extremely confident

most MariMed industry. still conservative of the one has in sheet the balance

to access in lowest have We arguably industry. cut the capital the

quarter. every revenue more generating and ramping are assets new Our

report base growth core to which Massachusetts, and to to speaks that stronger continue in organic significantly Maryland We just outlook. me our our financial our and growth, of brings

was financial We have long XXXX built on our with prided time line. conservative conservatism targets ourselves We in no different. asset giving opening and

not steel fasteners. construction stainless However, as process. we the states delays experienced we certain There regulators were complete time could magnitude of materials, for electrical their in in such securing of to and approval basic boxes anticipate delays

discussed targets We largest analysts. providing with financial industry have our institutional and investors

dispensaries. amazing based existing projects received or I'd forward-looking within as on have to our and to significant incremental our no consideration targets Massachusetts and like advice. insight from Ohio adult-use valuable such everyone sales We provided Tiffin, with thank growth we Quincy, in groups, growth who support decided essentially After organic us businesses both provide

Make believe no help revenue-generating in plan, we presently important us our our mistake, will this to including incremental our these focus targets. business XXXX but better are developments. discussions them are If growth We our growth are update any these we projects completed, will not targets accordingly. opportunities crucial or to strategic on

target or that X% growth new Missouri, additional have the Maryland, to lines process in or mergers license the new kitchen of could other on in commencement our opening product approval adult-use These of to XX% additional Ohio, licenses revenue sales brands of in include and and We that in our significant second generate in new EBITDA. levers the win. we X% dispensary of an a and adult-use could top in an dispensary, acquisitions Quincy X%

we as on have We growth I for maintain the profitability we extremely future. future am table bullish the profile for MariMed revenue would. our to foreseeable just set continued growth and the of said

have We capital the opportunities. or capability we right for have to grow and acquisition low-cost to merger the access

our improve dedication growing for thank and With that, to I like would to day. MariMed of their employees family help the of our achieve people mission work lives every hard to

line Operator, you may open questions. the for

Operator

& Zuanic coming question from have Zuanic Associates. Pablo first of [Operator the our Instructions] line We from

Pablo Zuanic

if teens, what of what which, on X% if quite retail would the number. robust right, wholesale, calculated again, processing unpack side So to of in you the a sales that can, would nothing had you increase that's the the so XX% be roughly supply us, going growth I be if said guidance when You in it's Illinois, the in for count X% Congratulations capacity can the right? call percentage-wise, mid-teens, unpack cultivation, growth XXXX, But you to and I in a terms very Look, that's in remind you're question that wholesale, in lift. mean in big if I like wholesale, we things, high space. there, right? down, will growth means total impressive

more remind 'XX, unpack If also thing whether we processing mid-teens, if The can then there's in if you right that how imply will the and estimate high-teens. cultivation average, wholesale Maryland I'm 'XX confirm And versus a us you any terms in expansion bit quantify much Massachusetts? with on have have in same can do that and expansion, and wholesale a follow-up. my more I guidance just of up

Jon Levine

to you expansion the and Illinois our be call in from again, additional open. on questions. X% good which the Those the this projections about hear facility, really bringing of X% morning. Great of the thank The increased for very store and the were Maryland is in cultivation you growth retail Illinois plus will coming to joining additional

last delayed Illinois, the November, open have last year of So we to that in week was I mean, it hopeful and December. in were to

So sometime we're of full we'll running be flower year bringing a this center on of plus at whole processing year. looking midyear the the in

will on to be that of we'd be XXXX be there, sorry, midyear XXXX, that cultivation. the the from in and XXXX us already if which supposed those delays Again into of very top state, flower with addition, the So will states were up the more have that sometime of But that point first delays the that generate and construction that when final to wholesale getting speed in construction in that materials yes, running. of more growth could those our we delayed capacity in excited biggest XXXX done which able additional. won't late then Maryland X gains from up. us be -- parts we in we in operation than in help until double the will open harvest in coming growing Again, then getting those approvals licenses and and

delays of to business. important very Those types are growing the

growth the Maryland have to additional for on So that's those of coming pieces before in that X% transactions the but going growing existing fact so that X% this more have the year, are business growth. lot existing board, we is we a to still just be

see continuing retail out mobility. XXXX. increased upward Massachusetts, on and we've that as of that pushing still we so you our our meet demand, can said, our stores as have increased to possible, in came as are we're growth still product in also much And expanded growth the we kitchen and We'll

So growth all to part have that be of X%, will come. the still to but that the the we are those -- then to opportunities X% things over X%, X%

Pablo Zuanic

know from would possible. I'm first, Yes. what thinking you already it's the that possible, -- store to And probability, rank about try the can that, first come. happens I in -- of then know around of the it's with you is course, benefiting talk Kitchen, in to follow-on store that's sight soon. trying predict think new what the know terms Quincy know line the terms what's I'm but to Any a if but of it's Maryland But you don't thank rec. of then hard I just if to on I if that's so do then guidance, probabilities, Tiffin suppose, can quantify you again, But going I and store close and Missouri rec I and Massachusetts to acquired, don't happen you. if

Jon Levine

opportunities of projections license, new half Missouri to had first has these Missouri first, going a of is of mark. great reason in we can't one biggest because license that out reason these change coming Yes, the in address. the part is Pablo, said, put didn't the give to Maryland just hopefully, the it the see regulatory the I that out come guidance, which is get But Quincy to the is a could is, That's question we trying that Massachusetts see figure that's news other I put date. do taken really on, have always our years to we you year. sometime. the that of I as feel projects the good in

It to to of caused our in address our what's to request have took for questions. location, us get Missouri from which great to over going And us Ohio, to these go watching for XX that are delay Those pull projections. months adult-use. all on a that's when why is change still going

instead putting had ideas, up we grow it And delays back getting because construction is license in we until we the more decrease our a of having better and of in as governments processing do go retail increase local come delay to can final forecast them have system. as or of of to the past this and we usually versus year

something line on as we're to a we're it. So to put hopeful be they going, can't able announce just time

Pablo Zuanic

I of Again, sense, Understood. the That course. if congratulations. lot I'll can. blew makes of a one, last

more acquisitions, same Maryland. What's rec. via is more about Ohio competitive, I terms priority? stores rec, say one to would in the in to course, become M&A probably of mean, Maryland already your add Ohio going In room thing or go of there's to and is and

priority but of it Ohio maybe of right thinking A or something should be view way. or not Maryland a I'm in in the an point else M&A, than missing terms bigger equal, from So about

Jon Levine

No, have get frame wait the of X more get important on. license. right. would to you not to license Maryland because one our Ohio Pablo, possible which areas, would fully time we'll you're coming absolutely within first state of to I is besides Missouri piece a the and definitely the with adult I quick one an be are vertical getting mean, ones that say the dispensary become but of Ohio, as as or Ohio

applications into did still we're We're Maryland, of So and yes, paying are attention to other New they right some state processing having in trying retail focus, the go in apply is to and grow from so Missouri of in be Ohio as We that the come be we Texas now expand and Ohio fully put when But Ohio applications. to will additional they new and that we can to looking online. in states state a than probably vertical going adult-use. other get my York. --

Operator

Water from comes line question next Redmond of Our from Research. Tower the Jesse

Jesse Redmond

wondering because, not last led I the talk on being Jon, elements about your was that being delayed are there I you sense able decision that frustrating more and could expectations meet set. if little some year initial you a the was control outside guidance. the can ultimately that bit a bit of that to

get those of maybe maybe able kind still good seems much doesn't where your as it conservative approach, regulators curious that dependent to to meet to So as more head some perspective but some offer deadlines. guidance, found like way these was? on to a I you still transparency, just the guidance Is on some offers make a numbers. more be

Jon Levine

elsewhere. frustrations, over do an not call. Yes, But real in business seen trying when I mean, an type you're thought Jesse,thank never a been trying more I have well to to the And those as ventures, years. real just I'd much that build such the you that out give started joining I and exist, world, get I've but cannabis know estate get. electrical like to delays who have in And to very XX of electrical yes, center, would seen anything you amazing this items panel panel. for the love some take estate from the guidance you processing would for cultivation explanation. months construction have I construction again have my to X it's And

caused in materials, and we was for and we delays what "Hey, know us in being adjustments late conservative processing centers caused at we though still to it And say, hope look So we're the originally things and be building X from but even lot running. it have months the a looked we and conservative, do need Illinois what we need more to would XXXX. the well thought construction from But take be a even regulatory know that not Maryland just being out delayed. definitely we we what you those in over projected cultivation of could and from to is pull these out what that delayed delays

increase in report our regulatory retail, years. and growth projecting delays this every the may we've not get double-digit that that with complete approval year-over-year project the the had. our operation I already that in the we that we've we we're looking what to early will But decided us at from completed both help so be that in shows double-digit take will for and we manufacturing feel So the continued which only expansion regulatory going for out of in that licenses to other year. as far construction will XXXX, We year XXXX to growth and increase continued

that better we So were what do. I help explain hope to trying

Jesse Redmond

And just Yes, question. a that's follow-up great.

looked to it are last Massachusetts prices seeing like flower So data, year. significantly in get up

I a think, by was in strong XX%, down that increase about saw what I unit volumes. being offset

you're wholesale the to curious terms seeing on what perspective Just pricing in competition also of and more in Massachusetts side. retail on get

Timothy Shaw

take can this one. I

Jon Levine

ahead, Go Tim.

Timothy Shaw

catching the and pricing. seems and hit high the state we like fray, continued of brand most premium more beyond. the become flower And Nature's second that InHouse above It popular Heritage popular Massachusetts. stay the as a has will correct. And up floor where in a to we've in brought our is Yes, that's InHouse you've brand seen keeping

to the those a there and revenues sales the looks this as So Nature's plateau. capture Heritage more volume and getting more where hold flower, And because it a see get able keep to is hope continue of to high brand value. we to be continue and as stable, to higher stable we're and out premium that InHouse,

Jesse Redmond

Tim, the Any on new retail side? perspective,

Timothy Shaw

the to a as as stores be On side, of seem much there rush retail many is it opening. doesn't --

So to been it's an think well. stores hard tell additional what's stores a our I seeing as increase still in have We're happening, state. doing we X are

I in So we're a good position. thing,

have to programs great continue continue marketing to programs, to loyalty We to stores. our keep the coming traffic

So, able this see and turn we'll Massachusetts we're pretty increase hopefully bullish adult-use excited end we'll the and into to Quincy that be by year, program. of retail in

Jon Levine

they're like on have that a that bordering we to the to reason the located. X there's stores. just of In of news been have dispensary pressure I still, I'd feeling where that I'd is we're struggling part because like Massachusetts than that our seeing lot that's of add that several about locations on the that. think and add states competition retail Jesse, more Massachusetts, increases the And still bad in the just in.

Operator

Semple Our comes line next from Echelon Andrew Markets. from question Capital of the

Andrew Semple

the QX And below programs than calculated considering are of main Clearly, outlook? QX material U.S. question, We've the something Is the MariMed culprit pretty that, many the printing other close issued $XXX much EBITDA doesn't annualized per guidance in operating if XXXX cash-based November costs similar on line. XXXX? year-over-year, I XXXX. in cannabis to that First anticipated. It despite appear million. came so, of up revenues peers million cap $XX faster seen margins in that that's expenses just that operating the and quarter implement market recurring in the $X in run million to is embedded for were for QX. cost-cutting or about given

Jon Levine

joining or quality cost call, associated that high be whether increases the and able delays our getting and -- revenue sure make they're have about maintain we staff because expensed almost our a you that Thank of Steve to that lot as production did there's approval cost the section produce had in to start-up sending said The facilities, regulatory. to very regulatory has and for construction start-up delays and to open, were and no to of inventory. question. those of in million, us consistency cost good million to having and our really a Those not be delays in brands people there $X.X the $X.X training that building his any having with it's QX

really those And that expenses delayed. and staffing appear to up. for bring So growth get did caught was we additional other on that

be having those the maintain So add to the staffing will cutbacks, level. costs of levels a in XXXX. we're lot to make able up Having to to we to without added made already get additional that have

will to people or Illinois still revenue, but We projection to give wanting add higher some up, we it hire the into starts good have expenses as just increases. a growth ramp upon based upon not based

Andrew Semple

to would I guidance. though relate those comments like helpful. That's the it. to Got

that could revenues guidance, to would last costs look adjusted contracting XXXX imply If you year-over-year. margins would the EBITDA higher, expect EBITDA EBITDA, to some X a up X% you're you tend margin X%, operating we to think to increases. When to X% for I year, potential hold pointing

some -- margin So the conservative half in back year? whether just that weighted you outlook? maybe or I'm how of as said, wondering just is you with Or I expansion being whether get, -- the think potentially you're

Jon Levine

in outlook, with costs going long but it cost on for we been ramp make takes new we're that we the has our cost also for the term a markets X We're a haven't to those that to the you the loss extra hurt the year, up up definitely into the ramp-up start-up carry where start that or it's and back have conservative of EBITDA that portion does big that and grow. but being get of time into costs

how probably later versus the we'll part we start. in XXXX, EBITDA improvements So in of see

Andrew Semple

Got it.

store finally, Okay. the guidance could would within you Quincy. in new and helpful. then are space if that to in Illinois, adult-use outlook? want clarify some be the items Massachusetts XXXX just cultivation that And the XXXX as Maryland of items That's the all those in confirm is I the Are just guidance.

Jon Levine

No.

things adult-use, of in just my processing are I What that expansion Quincy the in in store, getting with another the the the and growth is adult-use in on Maryland in earlier the is Maryland the not the space the XXXX, Quincy Ohio Missouri the coming license As XXXX. retail adult-use. dispensary in said second flower comments, announced are for bringing Ohio Kitchen, half we the of that the the not is included on additional center, in adult-use Illinois in guidance. guidance the the All doubling

things those any of us the this take the were not revenue and our they that that would upside but increases. are double-digit in additional the monies in of all forecast for over EBITDA year, So

Operator

no are this gentlemen, participating. Ladies today's concludes for at questions conference Thank you this There time. call. and further

disconnect. may You now

MariMed (MRMD) 7 Mar 242023 Q4 Earnings call transcript