MRMD - Earnings call transcript Q1 2024

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Operator

Good morning. My name is Alan, and I will be your conference operator today. At this time, I would like to welcome everyone to the MariMed Inc.

First Quarter 2024 Financial Results Conference Call. [Operator Instructions] I will now turn the line over to Mr. of to President the Vice West, Investor begin Relations, conference. Steve ahead. go Please

Steve West

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

various today are Officer. events may these Relations This website our or Levine, will be our results and are contains subject our Officer; statements risks call Crandall, forward-looking me Investor on Ryan Revenue Shaw, and Officer; Chief from forward-looking Chief Chief differ our and to materially archived Tim uncertainties. and Operating Joining Executive Jon statements. Actual

discussion of required these we website. and expectations of law. by available XX-K, some the management's Risk risks today, unless our in A which assume is no Factors Any on our reflect of contained forward-looking obligation statements section to of as them is update

financial release. are certain will in reconciled to earnings Additionally, we refer measures, which non-GAAP our

Finally, to quarter X:XX morning August call will scheduled turn held to call release be closed the a.m. now is XXXX, be issued is and our tentatively on XXXX Jon. XXXX at markets analyst August X, to our scheduled X, the second I earnings tentatively of over after the

Jon Levine

you, Thank morning, Good everyone. Steve.

state we including discretionary same retail to spending we lower not factors not According retail, significantly and sales markets. on the with the we the the to wholesale where as quarter competition, the quarter tremendous say than in At am am our the shared which industry time, growth hurt faster headset are grow wholesale our entire targets the financial data, we With our operate, every our in were increased pleased I'm business, The the first outperformed industry, seasonality. strategic satisfied. to I books, highlights of At that we in now in continue and plan our immune all on annual pleased such I call. track but last macro was Illinois. competition of to our in undoubtedly

industry overall growth in and the both wholesale outpaced channels. again, MariMed, retail in revenue terms aggregate, In of

this quickly scale past highlight me achievements at commenced the We key Illinois. quarter. Let wholesale a operations few of in

are state ramping products now well. branded Our accessible sales throughout and are widely the

Additionally, in the the expect announced the year. of dispensary quarter, this adult-use we the Casey, our we Maryland, later dispensary open after end transfer to Illinois. we And in acquired license second of which

of Moving fee. forward, reflect on we management will P&L financials XXX% our versus the

years, the recap. very first concludes to to update. a continue off are start call over With to us XXXX quarter laid for due we Ryan, the We of the I our in is benefits first and that, to turn That for future. should our reap fast the call past foreseeable joining the his groundwork for we couple who sales earnings over

Ryan Crandall

you, earnings start I'd and a first recap Jon, to I'm results. of quarter good excited quick today's like in Thank call. part to morning, take everyone. with

business. increase the country. As marketing Jon I growth said, quarter consecutive business. across be this our teams of wholesale believe $XX.X represents at wholesale the our In operation year-over-year. sales, continued which QX, our million, and of XX% say of in revenue we people year-over-year story least an jollied I'm fifth fantastic the strongly we of to have proud big of the very I but continues the best we as Maryland growth. reported to expand XX% lightly, quarter of don't our

room winners now in dispensaries. products brands a the where Illinois, in We and Betty's, that are in available all feedback Initial grow with our off have Illinois are Bubby's great start gotten to market. to InHouse XXX indicates

and of competition year-over-year high-quality executing trend time bucking growth. great pressure Massachusetts sixth with the when share, Our in business its market increased a the are products. persists, wholesale continues reporting to pricing teams quarter and take we brands At and consecutive

our Massachusetts, in of of by growth which XXXX. side Maryland sales business, noted We adult declined and first the we significant retail quarter in $XX.X driven QX, dispensaries, reported X% the of use versus million, On new respectively. and

guided, in as sales by Illinois. this was same-store offset However, we growth

his close, team turn thank first shout great in I operations Shaw for your and the Tim our a Tim and every is out I Tim, to of putting our that, professionalism, call contagious for The to and sets team over company. his the for will With a position want to a overall I tone his Before level day. give company of quarter. enthusiasm you, win passion to team for update. and

Timothy Shaw

And Not Rocky. on bad earnings behalf for morning, team, an on and you're Ryan. everyone ops Good of call, the thanks, everyone, welcome.

see We are on operations, as as continue operational focused production we've grow construction get to been go sales all In hyper quickly our to to we as excited forward. possible.

our track new on And full months as example, the cultivation operational in this Illinois processing short it is in December. our year. after operations processing For Missouri, in projects opened kitchen to as few facility in are since in Illinois Maryland a well be and facility

cultivation impact higher we our cultivation Maryland. a you facility on this in due in grant, short-term of the levels. Vibations system-wide both We XXXX, have sheet, increases the As balance through the will and of and likely to flower inventory to as processing contributed we Illinois complete may the evolution view facility noticed expansion Illinois inventory as further see ramping our higher and

Just us it few peers is past another their MSO of what during experienced our be maturities. for that to one in our growth to ahead years similar the means of what example very cycle,

completed also us led deliver of customers completed even an dispensaries the space into and experience added a we expansion sales. recreational dispensary increased will and help customer moved having new better Massachusetts, for Including Illinois, our begin. already our retail our and building to We in permanent sales Casey, has beautiful

happen to that expect We very soon.

coming am investment tell to road front, consistency exacting we meet who quality and On weeks keeps for all with That always I back train spent standards how I to award-winning team, detail our buy my Illinois people employees more. consumers attention new all and last the been production quality to of group our significant on travel production proud production to can't a of has the you basis stars markets. for the the brands, and the in in expect which our quarter

our great Award generating fact, Boston. Creating won recently awards in is is the the only half Cannabis Last awareness products and we producing X music and more battle. Ceremony. them landmark Leaf at brands month, a Maryland In the sponsorship other. kicked off Marketing

Nature's the iconic Heritage Blues. officially music the Hall and Cannabis the House sponsor is of MGM of exclusive

worked from been has time has first feedback with The the and either extremely the brand, [indiscernible] industry the initial venue and Cannabis positive.

marketing software retail makes journey consumers utilizing our has if strategic the sophisticated can overhaul and cannabis a marketing actually upsell efforts, a to our stores. in attract our We also just seen a completed to from purchase who We of customer our dispensaries.

Our tech marketing smarter our stack and getting efficient. spend more

that it. Our the into marketing and building props tech teams effort went for deserve huge

the market in has checks across of offset since are call And to to and been over imperative to results. With everyone unique markets. so, our and our we doing average to around, for able experienced our haven't find decline share. I less concludes a Virtually, immune continue traffic will Steve financial ways way our that to to But operational it. and scrappiness grow innovative we challenge. to pandemic, my drive to all transactions daily discretionary that dispensaries dollars increase we number we of turn it and And usual, found the review. like continue our the go is now

Steve West

you, Tim. Thank

was business. strong revenue XX% quarter growth wholesale was year-over-year, first which driven by Our million, in approximately our very $XX.X up and was

XX.X%. was margin gross adjusted non-GAAP quarter First

are We Our adjusted declined associated due 'XX adjusted pricing to reported million, our new higher gross margin margin versus increased which still EBITDA to facilities new and QX $X.X decline of primarily gross gross 'XX EBITDA. decline, year-over-year decline was our a pressure. for ramping. costs margins our and due asset The carrying versus openings labor with input costs was QX that

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

during million, million, a quarter Our $X.X we flow be CapEx, company for the working capital $X.X $XX.X was growth strength to million was cash as and MariMed positioning continues from company. a and essentially operations self-funded the in spent

Jon, our ended ratio color of the on passing inventory We inventory to higher a normal. financial sales to to with moving discussion. want quarter add targets Tim's and some Before the call to I than

lowest in industry MariMed levels discipline one the management. the of inventory inventory of our financial has and traditionally carried because focus on

wholesale to and build inventory should We as Illinois sales expect ratio sell facilities. expanded which new from naturally term, cultivation down we remain and relatively the the through this flower high, shorter come

outlook. Now moving to XXXX our

review. financial for reported in call will approximately night, remarks. year X% As maintaining EBITDA back X% CapEx. his financial adjusted revenue XXXX growth, concluding to to and X% full of Jon to million our turn now $XX targets concludes over last This are our growth we X% the we I

Jon Levine

Thanks, Steve.

DEA, reclassify to begin Let my me the Schedule a which shutout closing intends a with cannabis to controlled III substance. to big

have even for over bring companies. summer, cannabis to attention the the burden Tea past the on couple been XXXE years, We unfair to reenacting of all this advocating Party last Boston tax

appears We thrilled of horizon. XXXE are elimination that be the to on the

savings sheet it strengthening millions our For growth our and dollars in result tax further of to us annually, strategy. execute balance us, would giving in capital

most MariMed focused conservative this I'm strategic performance respect on, on still with we peers remained to quarter, continue revenue we MariMed's balance sheets one our our in Moving of industry. outpace has pleased and plan. the to with growth, the executing

to have in arguably access the lowest of capital the We cost industry.

soon ramping are maturing quarter company. associated revenue with and will assets start every growing and a profits new Our growing

in seeing positive having XXX fact, vertical points versus margins In already impact finally we improved as retail are there. the our fully become Illinois last basis gross year,

the and continue generation. investments report will capital core declining to to and growth growth lead our margin in of combination expansion and stronger revenue We increased state

Our awards national at a and brands local up both continue pile level. to

end is cannabis humble the all brands for is with are industry pound of about. pound, my powerful amazing in consumers there brand MariMed the is At company but other MariMed on no what has. the the biggest, that opinion, trust the planet day, portfolio the not

Eddies a selling are investment the for with they institutional space, high demand. in like all power will, corporate When our in looking markets. such We Nature's ideas. motivated down Heritage into walls force the have and brands finally regulatory sales will our Because come come Betty's investors and and

the with, will best will MariMed surely be best with but biggest will the line. I for believe I'm look growth investor of to the the brand confident, potential and front XXX% for the at partner that Some look long-term company,

analogies bright to in very you forced to of are MariMed, City, phase, even even listen I'd Well, is. you enjoying is the yes, They and ahead picture for like of our know still are swing. Oklahoma the playoff full future. days are If laying before, success I'm closely. watching use to best paint Minnesota, their Like NBA a calls MariMed Knicks a these foundation their very a growth them. in teams while all where

very I'm the yes, day. of to people for future that, So growth thank the MariMed like for lives I'd to foreseeable employees our helping you open improve every achieve bullish MariMed for maintain work questions. on dedication to their line and hard our future. may our to of Operator, the With mission the profile

Operator

[Operator Markets. Instructions] Alliance Aaron question Global of first Your comes from Grey

Remington Smith

Remi M&A Smith there. to regards Grey. for your strategy. acquisitions part key is on This Aaron My some landscape and in question We are bolt-on a know the of first

of So and curious to acquirer? the on closing a whether seeing target between valuation updates gap any you're

Jon Levine

can again, apologize, somebody you sorry, that I'm were interrupted speaking. just to I when you repeat

Remington Smith

you hear yes. me Yes, Can now?

Jon Levine

Yes.

Remington Smith

key know landscape. a that Okay. of to bolt-on your part acquisitions strategy. It's in We are regards M&A the

So and and a acquirer? seeing gap curious the you're target valuation between any of updates closing to whether

Jon Levine

is Thank we send more that competitive. best getting him. very much really we for The missed us joining much this tell Yes. and Aaron, Remi, market our you M&A morning,

closer. have is We're pricings down markets we're what We a still of a seen that the we sense There's better company lot but lot still to us deals to are seeing very negotiate ability shareholders. that make getting real a feel for our the valuations, as come some more high. and

Remington Smith

MSO Is you in there. SKU retailers Wholesale, the then Or the that question dominated Illinois. obviously, this kind you'd that a any regards the more market? specifically especially retailers of my second with state? Great. That's have been highlight point to looking there. very helped have diversification, helpful for there so quarter, for penetrate a given was out team, hero have that it's expansion And

Ryan Crandall

for is this Thanks Remi, the Yes. question. Ryan.

different I of couple think categories. across success we've a seen

set and our happening, aggressive reorders So has company, some has growth Betty's that returning received are been Baked. as of then has a taken really, gate see the with a there. And the right, really InHouse volume feel by that for that large unique product and market. the and we're seeing state It's to the in the Vapes out of obviously, reorders we gummies have market been of increase headroom Baked sell-through a the we upside good and win category, by been really and storm, market. Bubby's velocity well the well. as there's velocity. brand Bubby's And finally, of though the for lot

Remington Smith

And have That's last Great. helpful. question, my I then time. if

sales potential updates can the to June that? fall, Just start exposure that happen provide with or Ohio the in any in adult-use increase ahead in the state of and you your could

Jon Levine

a we to without that I Yes. of put complete the as looking are grow use the open benefiting to kind requirements. Ohio. going vertical market, M&A there a be get wait find the guidance can we're about into the more very the of having additional of store. the find some standstill full excited trying and more to mean, retail where Unfortunately, license But max. being of there second and to working more presently addition, about at with within to licenses store, of hard of state second to part purchase the But discussion, able out as become to in we're state that that we're we out have, we store that adult we really

Operator

of comes Your Andrew from Echelon Semple Markets. question next Capital

Andrew Semple

first just First particularly store development for there are lines? things? the to we Maryland, question facilities under hitting the previously an some on change here. been on to those Could Illinois, going have time that Massachusetts of cultivation be lines and time side communicated shelves, new when in of get Any update sales

Jon Levine

This all, Jon. much of first Andrew, for and is this thank joining you question. appreciate morning, very us the I

the regulatory to happy when As that be should get we that on lines will Massachusetts later putting more approvals, able of would today last agenda timing the earnings of we're year cautious end we being with that and to on we at about announced our time we announce for be I hopefully pass. were

to But we'll adult approval help Massachusetts. in another month, still, have you about regulatory full our here in have use

So you with can into run the approvals. delays the that see regulatory we

our both Our with market earlier we're Illinois, right year. on construction as target lines, build-outs call, on in I will the in and the sometime said the time and Maryland of this be Tim we cultivation later more wait able be this call a line but we earnings because in approvals, forward get will of our for we announcement an time to as we next put regulatory year. can't moving hopefully have to make later

Andrew Semple

of later when when hit some are expecting this sales facilities a maybe that be so, from you coming to if in And Great. on quarter Is That's just of bit heard attributable pricing the helpful. this some remarks faced online margin And of and new then these costs store With reverse? that it input prepared pressures. I margin this to some expecting the year, facilities was we the would pressure. reversal? shelves? of profile pressure are first that

Jon Levine

seeing Illinois our question. business with much. fully becoming there. in our margins I get as own better Thank very already do great Illinois, we're product mean, in retail the into you we Andrew, vertical

margins, our see tunnel and upfront So in operations year, businesses the other light yes. to the get drag will back ramping better get the each the costs we running. the the you is, and states, our this end and at see in margins of a up we answer where operations been line The on the revenue and as we we be. of these open up getting have should do start Later as

Andrew Semple

And XXX the points I basis would margin follow-on think those In ultimately your that's cultivation integrated improvements. in year-over-year. imagine I maybe think prepared on from is small step a full mentioned network? go. once quick could a Illinois How retail to much you stores if margin you where that, could, it lift expect and the your own with you I great. Illinois remarks, That's on just you see processing got

Jon Levine

the us. for point. a Well, That the starting is start is good XXX

a in Vibations, products both our we've of said, have margins the Ryan because where can't will of there. into to put the on and we see products full as bring on getting between not more on end at our Illinois margins -- number those will we As the improve margin continue I of market production we're really it timing Heritage, Tim Nature's state up. depends yet

Operator

comes Your next Research. question from William of McNarland TDR

William McNarland

Given share been share has to even of markets? regarding you commentary states. guys you to take your market Massachusetts in speak your competitive very in you believe to these significant grow Can in the like continuing and what growth setting Illinois, your it core market and in sounds you Maryland are some apart just outperforming

Ryan Crandall

Yes, it William. do first you, to attribute I would say Thank people. I the

every brands team on right? team we've I it's side on sales and company and side it's states, products a produced the secondly, state -- think best bench, our that. the that one side it's the things, a of of operations team of deep things. of about in the marketing operations excellent would got and the products, talented I And overall. So the benefits of things, the the sales, to of we've very these of on get in our say, people and a reap some folks we're

of think a secret tremendous So I and and it's outside great products sauce great don't brands people.

Operator

Pablo from Zuanic comes Zuanic Associates. question next Your Instructions] [Operator of &

Pablo Zuanic

going think now? talking Can different just about first XXXX. a quick the Jon, stance be early that to you are about people for may implementation the take for retroactive Some provisioning whether believe you taxes a in you're right They refunds. question talk asking regarding to way rescheduling. about

to also in that touch related with And of there's thinking you have can U.S. Are exchanges exchanges? way you -- them that, in there quick you advent any thoughts potential with the communication talk rescheduling. that. out about getting Just the of type saying terms with may the of are you're about people

Jon Levine

us. to hear Pablo, Thank joining for from you. great you

the stance rescheduling that has our XXXE. always been how aggressive issue, far on XXXE As very been as the we dealt and we've with

with groups have that they groups all to to are many findings attorney We and different with review tax the of meeting us. discuss

reap year, always make that -- we're we'll than and right as use once about We're XXXE even be already rescheduling, will the a millions rescheduling It extended to So to have. with approach reviewing of the we fact this very able aggressive happens, be sorry, and be it's excited on a the save a the more the time won't that to for forward. dollars factor go benefits usual, able be and business the growth. whether

to markets hopeful the credit hearing still the have question change the does legal tricky task XXXE. still exchanges, I'm but card on it is market. U.S. a conversation the legal and we in that investors little don't mentality, of about the in more we Your markets, both tough not be that's a have institutional the will the The that, into level, rescheduling uplift coming markets you'll bit and a investors big but it make will terms the it to more are a that transaction see federal

Pablo Zuanic

Understood. just moving And on then on, congratulations, wholesale performance. course, the of

the right? gummies had more I launched the capacity maybe especially it, have year-on-year, back way cadence, were in talk for question have still You coming through. Illinois, Going XX% a you to you left, understand growth increases capacity quarter, later the the about about but

to XX% say, much quarter. the running And to how try Maryland, fully kitchen full it Illinois, more can and I me you the in in if what, more? for that seems wasn't Massachusetts, up So quantify capacity, particularly

So of launches. the just in on brand thoughts terms Yes. that some

Ryan Crandall

would capacity that of I still launch in that grow, production to our already capacity, in launched there's for that of as existing growth Yes. within brands from Pablo, question. both you brands a a have to have as can, thank amount are we well yet good that additional the say the state.

there's say a of good would of I growth out capacity existing capacity today. amount So our

Jon Levine

Maryland still reached I'd in in the we Jon. haven't it's Pablo, Massachusetts. They and just capacity coming still add maximum And that have capacity. both like to

We'll Missouri coming Ryan Plus, this on. the able expand do we new later each have coming those. products said, As sometime at have capacity of we be year. to

Pablo Zuanic

to of having that on the stickier and moving they you Massachusetts, is save Right. encouraging And so recreational their course, some medical I'm What stores extent. add to with customer exaggerated medical to you you card, that's in success Or then adult will their retail by the there. side purchases, of of for of maybe that? retailers things. get a people? But to are the hearing money, your big given being services other case the that consumer clients that? tax doing lot one be great of between and difference just can being Are to a some Are able

Ryan Crandall

specifically of folks get that think would I say that state. of opportunity go on around is and card community of to always -- it the us. we're Pablo. with side an adult-use rec Quincy market in underserved are being encouraging in stores It's you, medical lot capable for Thank the the their not That lot store, we said, large the stores. a a not

draw we're a store. delivery services able be to as So that we going population, of think out both as in-store well large to

Operator

There you this this for Ladies and today's are concludes may participation, disconnect. time. no call. Thank questions further now at conference and you your gentlemen,

MariMed (MRMD) 9 May 242024 Q1 Earnings call transcript