MRMD - Earnings call transcript Q2 2024

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Operator

Good morning. My name is Jen, and I will be your conference operator today. At this time, I would like to welcome everyone to the MariMed Second Quarter 2024 Financial Results Conference Call [Operator Instructions]

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

Steve West

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

Joining Chief Levin, Ryan Jon me are today our Chief Officer. Crandall, Revenue Executive our and Officer;

and on This management's some is unless be Any materially discussion various from to and or our our risks contains risks statements differ these forward-looking reflect forward-looking as XX-K forward-looking subject in website. Investor results call on may statements. our archived of Relations update are will law. these Factors and of and events of today, the Actual section A available obligation statements website to we required expectations of no Risk assume uncertainties. by them

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

quarter held tentatively call Finally, of the after X, XXXX be issued on is be market analyst November and at our a.m. earnings to to in release the scheduled scheduled close November X:XX morning X tentatively our is third

call I will now turn over to Jon. the

Jon Levine

Thank everyone. you, morning, and Steve, good

both to a targets. we report and Most in. I'm importantly, to have let's very dive discuss, to We on was strong, growth our sequentially. XXXX pleased track Revenue deliver financial remain so year-over-year lot

a core another basis. in tremendous on wholesale growth, Our had business sales all markets. of showed we our year-over-year quarter double-digit seventh growth of transaction our had Retail and sequential strong consecutive quarter

our life talk let's in about the Now cycle. margins. of MariMed phase growth remains

versus about will points quarter. And our improvement last investments where XXX pay we in to Illinois. margin improved basis and we gross XXX versus long-term Our seeing and as basis margins points year retail in already last continue scale off are Maryland Illinois,

among all This and the are in though, cash retail creative programs term, were sectors, on extending Despite compounded marketing headwinds, hours grow cannabis. in consumer things. we these by able second in short other was drag these revenue weaknesses and a store persisted to investing when the including In investments margin quarter flow.

it I bears said but before, it repeating. have

cycles. right reporting until began other completed on few I from investment a is growth increased their margin There wasn't MSOs day and began during will their that that MariMed, come assets it and certain without the carry expansion are We their flow. they cash they their where am debt were balance sheets. coming to mature our years significant ago and payers

transfer review of the some Now which in end In key quarter. Casey, license financials. dispensary roll me since their us first allowed let the of up achievements of the Illinois, we the the announced to

receiving InHouse cultivation the to on are Nature's brand in state of start our Heritage verge will facility approval flower at This We to finally state. into us the our Vernon. and Mt. launch allow

the We in expect begin of quarter to flower first selling XXXX. our

to which expect In Hagerstown. open closed adult of Also acquisition began on Maryland, newly Maryland, we operations dispensary, cultivation our we we second facility in in our soon. in the expanded

flower producers As had with X This our yield, are The one state. grow largest plan making of to rooms already they another we in beautiful of bring until all online will effectively room the is X each filled plants. the of week today, new us the flower double online.

expect be in first to shelves We our on QX. harvest

close adult finally, our in our commencement approval processing begin announced And in to we approval. to as operations at In we the final regulatory adult-use sales final Quincy we'll Ohio sales receiving for received dispensary Massachusetts, July. In we commence Missouri, of are kitchen. soon

assets got that, me summarize, tracking to soon. revenue and to turn additional over and guidance, let With discussions. his new online We're coming sales to Ryan some continues with our So grow. for we've marketing

Ryan Crandall

everyone. morning, good and Jon, Thanks,

both was the our be and teams that it growth prouder revenue Our wholesale sequential retail, in made big of not happen. story and I quarter for the could

growing well, extremely million. X% to did wholesale Our sequentially $XX.X

quarter consecutive at eighth of growth Additionally, XX% this wholesale. year-over-year least the in marked

And more were our we and sales of dispensaries. in doubled Illinois, markets. I'm The with now drivers where versus standout our say sequential the to main XXX products was X distribution we increased reported dispensary velocity than available our all in the over growth pleased first quarter,

long We have Vibations InHouse coming trying enough well, to that too. but a for Betty's been and We see in the are back Illinois products would return be of really selling is the win, our and market consumers more. to knew Bubby's, Eddies

take to its growth. The also consecutive reporting sales. and Massachusetts quarter unit seventh In of continues of and wholesale to business Massachusetts, continue lead power our Maryland our to market increased grow. to edible dollar products continues year-over-year share, branded

the to the just according Betty's Massachusetts. fact, In state became Eddies in BDSA, of #X edible

reported growth of And operations year-over-year cultivation in will we recent with the continue double-digit grow. commencement consecutive expect expanded newly quarter. the the for to our business Maryland facility, sixth

sales. retail to Moving

X% with The Our stores. sequentially revenue loyalty transaction million. strong driving through sales and helped network own leveraging our products. improving The brands growth channels wholesale consistent program all investments store grew new hours, training, having of innovation and around key X% existing is in drive sequential to of $XX.X our in expanding accessibility excellent both to growth and retail potentially

other brand I'm #X Vibations speaks is The that market dominant I share in Betty's is on let's Maryland. brand mentioned the earlier good power talk brand Well, and baked both Massachusetts. for Bubby's Betty's in #X the beverage Maryland. is #X in items. Maryland about in itself. And Massachusetts ranking, subject the #X of is our our now while of and

in we replicate the together Heritage X with with Nature's have East Coast. crosshairs successes on in our Our podium markets the branded of market award-winning on Flower, the as Illinois intent country, larger cannabis in leader to MariMed our has edibles, the the and

year am growth tuned. Before revenue are to guidance, opportunities that of we we the have could ahead closing, of half the but that the accelerate say upside further, tracking excited want I revenue how even I and stay second still in

With I his Steve for call the that, turn review. to over financial

Steve West

Thank you, Ryan.

driven and revenue. lower year-over-year, which XX% by quarter second robust in partially by revenue business, Our wholesale increased growth other retail million, our was offset $XX.X

costs, gross versus costs non-GAAP was of adjusted which XX.X%, margin declined new the ramp-up quarter assets input higher due labor This and spoke second QX was earlier. margin with Jon about adjusted our to 'XX gross that Our our primarily associated XX.X%.

Our year-over-year reported million. compared our during $X.X $X.X adjusted in adjusted higher down with adjusted EBITDA margin 'XX change operating The the quarter EBITDA due was lower of our to million and expenses of EBITDA associated gross QX growth initiatives. was to

cash cash balance increased on acquisitions decline due ended Turning cash the year-end equivalents, balance with to of second sheet This a the We to of versus cash was million our and cash expenditures $XX.X XXXX million. quarter and $XX.X and inventory. flow.

inventory up ramping our new our quarter, last due to discussed assets. As increased

of same inventory reported we the the our X.XXx, percentage sales, for was a As as quarter. first

capital, strength be continues which working million. $XX.X a Our was company the to for

flow cash $X.X operating burn of compared For of from the operations cash million $X.X million in year-to-date, year. to last we as period the reported same

same on year-to-date for $X.X $X.X last the period we Additionally, to million compared CapEx million spent year.

to our XXXX moving Now outlook.

night, X% last to $XX EBITDA review. reported in concludes we X% X% adjusted our financial growth X% our targets growth, and That As full maintaining are approximately to year revenue financial XXXX of million CapEx.

his over I will to call concluding Jon remarks. turn now for the back

Jon Levine

our We've confident about future. our Steve. hyper-focused I'm strategic path towards plan, and Thank taking the we're implementing you, growth on remained

These we Looking executing have at Quincy, earlier, we include growth use further the initiatives accelerate Ryan still Mass to in of remainder adult are as said margin and revenue our sales XXXX, expansion. Maryland commencing we dispensaries, license operations Ohio And [inaudible]. Ohio dispensary have our opening Tiffon, will second adult a use and wholesale in in future. in that out in second and the remember, dispensary build future

we Delaware be partner, will growth legislation, to key our out, Delaware. a complete as into recent passage Delaware. With we're First this market pillar First excited about should XXXX. adult-use State has Compassion MariMed of further FSC the Looking and We sales #X share of in commence believe in adult would fall. State be That result our plan integrate and financial strategic this huge sometime able

There elephant the to inappropriate to in of many agitants want now feel, I are price. but I call. talk this our them most stock room, how are describe the for about

say angry. respect the can how cleanest I'm with market how but valuing disappointed, word can't feel believe inefficient frustrated and best including or to ours. You stocks, is is I the I cannabis describe I could

example. value more That receive for announcement, from Arizona than cannabis including Verano and Arizona in you their nearly million? morning is total In consideration. the Do they'll market Verano a is company's how announced acquiring issue week underlying Virginia only The cap affecting market every the It's other total cannabis words, cannabis company, assets. businesses. in of on of the a consideration, assets cannabis of that great projector, million properly Virginia the and that was cannabis deal ours. $XXX cap of $XX reflect the example their realize thoughts last for don't was an great half

to keep continue market, So in we have future company. that strong, and the have to focus most capital to will grindstone conservative make We can't industry, control make balance stock access relationship. our nose since cannabis the building and we Bank on us strategic the will of a one through sense. Needham acquisitions allow we to This economic sheets the cheap profitable our still and

robust targets the our place and the to ingredients rewarded in point, long-term stock normalcy, that To we're fuel our growth sense should are higher of price. pipeline we performance market have be some acting assuming of with with starts a finally that All analyzing.

don't our industry. point I company know revenue will the simple In at growth of this reason as initiatives The cannabis short, investing executive ask Board long-term time. our future profitable of the bullish stock is why that, some the institute Directors the you best use believe a I'm of still program. in and team ever and repurchase about capital is and Hearing of the

Financial like our Before so Mario about Chief excited Pinho. say I'm to Officer, closing, I'd new

past great Joining accelerate been the help reins He's valuable growth. for with of and with the scenes experience officially leader the us CFO behind to the tomorrow. Mario a take working will our company, extensive has and month

excited More guy to our importantly, perfectly for get culture. Mario you is know who into to I'm a him. fits great

all team. out you. great long-term we and our growth thank plan. And I'd personally like to patience investors MariMed to challenging prove vigilance your us for and our do as better our for finally, to Thank their

the best the in You're business.

you for Operator, line the questions. open may

Operator

gentlemen, question Ventum will Your session. from Andrew is the we Instructions] now Ladies and from first begin question-and-answer Financial. [Operator Semple

Andrew Semple

up And first second at performing in First Quincy facility. your recent in there? newly just question rooms opened performed congrats across would your Are My typical to Is expectations? weeks few of and the new store many cultivation. grill the the number of Quincy the on the How your also key on assets be markets that of achievements the be of up has of that operations just would Maryland during those here that living all, part to weeks. merit standard? operational first Maryland on

Jon Levine

excited off-site rooms so questions. about grow asking is so on. for you flower within thank our great. out, the strong they you're are rooms rest much look coming some of Hagerstown, a newly The of very really schedule that of that of out each the rooms the each environments Great the [inaudible] built the Andrew, there. assets. up The and best opened have good. The week on happy at opening came we'll filling I'm The that we're those rooms. that cycle we've of end grow full we're

at bullish hopefully Quincy, slow we're beginning, with and on continue Quincy that week, that. little that see in we're opened going store every And every We're use. finally day increase adult we've excited the opened very and we to asset and but up. seen was a it, It the to

as we'll that improvement I know there, as we're get think see even go more people to we that forward.

Andrew Semple

helpful. That's Great.

of Second question where in a you to would growth as we today, in would temporary recover. be would margins commentary should beginning what timing the the that helpful to drag phase have that continues are the expecting we Though MariMed be sense margins. here invest understand of expect growth. on when sort it to I maybe on some be just

we question second my see XXXX is margin story? the in the Or of will So expansion that be, some there half? would more

Jon Levine

another our front-loading online. months and up revenue additional to question, those as and we start opening one ramp Jon Andrew, Hagerstown that X The of will offset you our of assets margins thank but it's we're carrying. I those Illinois come to the seeing have It in improved margins again. create be with margin improve start assets also before facility. was production Great about for seeing been we will and the it.

are seeing XXX% production at facility production We're as ramping our margins. those decreases, was and with time this the And of factors, we're improvement see coming still able hopeful sales, very continue Our earlier, even our there. X. retail and we're And to and tough to to as product seeing we're [inaudible] said full our everybody is sell has in there but has margin margins in been been as footprint, the our not a and showing up. we're reporting, X in, all improve I already of economic increases

very bullish year. increase in half on our So the we're margins later to of trying the

Andrew Semple

And maybe quick if more one Great. may. one, I

which a from just back an is important faring demand market and have both dynamics how update a wholesale quick MariMed, Just on to to standpoint. pricing Massachusetts, state, go maybe that for in been

Ryan Crandall

We're We're is are Massachusetts, which This and our very Andrew. very market-leading would innovate difficult to the leading Sure, Ryan. very, continuing in the market. say well in the brands is I faring way. a products brands our market.

that's quarter and throw down the resting We're buying continuing not the resonating And them. shown customers it's And on folks our laurels. products, quarter. to after field. we're So our ball the with

of So that. we're very proud

to every product continuing continuing process. refine we're great we're and to teams, create great ops our day, sell salespeople, product and that Our

team very wholesale bullish trend. doing well follow as the market. the and I'm same I in And that what think will we're as on So Maryland mass Illinois

Operator

Your Zuanic next question is from from Zuanic. Pablo

Pablo Zuanic

on for Steve quarter. Ryan. Congratulations one is Look, or the this maybe

talked seems see we're not expansion believe Maryland some Just the we in But Ohio that I anything to not Illinois half guidance. factored. think I little let's store the guidance, the try there early supposed to included right? was things and rec me in is everyone, flower XXXX. were behind production earlier to guidance expected lines, Maryland it second coming same factoring are than schedule? second to by I that was I be believe bit. Along store, you and that's in production the a It unpack just Quincy rec, think 'XX. reminder about

just and pieces remind guidance. little you bit if a the us the can unpack Just of

Jon Levine

can more And Pablo, happy we bit thank specific. that a the little you and you great for asked joining that I'm questions. be

guidance, Our and on Hagerstown actually original that. with we're facility was in our time

in So be the guidance. that the part will of that ramp-up was

of Quincy with Quincy, QX a going end. to we of any We with not correct. any And have being came going just guidance this you're at adjustments. our effect the cautious we how until so do when not quarter handle tough markets, to Quincy on is better to after that time make in increase the have were to we're

was until will We are be QX That late flower, not sorry, Vernon and due Illinois, reasons. Mount coming of our with probably that grow XXXX. of in delay to many

be fact are and overall we to those our I that seeing also look in bullish hit. also be items because But is margins on at guidance of retail will very we're that in, said other of the like increases the still like coming we Hagerstown increasing, the able the Quincy that earlier, will will Illinois but

guidance So time. this we're still very at bullish our on

Pablo Zuanic

on That's question. right. it. staying tracking also same And of you're And ahead again, the

yet in -- When not story confirmed The it guidance. the that's that was exact the second I second Maryland, think store? open part generating of to you don't to the revenue from expect start Or do date.

Jon Levine

exact and but about open guess able final the week really next Again, being we're hoping the close to But now. all have that's are don't right few very to inspection just fact be sometime we're we for next work store. weeks. open to able second the that Well, in that we excited date,

when That guidance. our will stores part open. not be Again, a adjustment of those get QX we was that

Pablo Zuanic

more performance to segment, of mentioned, think mean concentrated And great in flower go? California, If edibles we look that, Maryland. more there be I far quite fragmented Massachusetts, market. can other a a by category. case How that obviously, Just on we of tend as to the I edibles. flower, moving markets, mean, as a in at you what

other your a that But the terms market to brand, compared to states have of of would and #X. strength So yes, lot grow you're in room #X, of share.

on don't give reasonable if any specifically What expand? you along I know can thoughts So lines, is those edibles.

some I'm market states. again, not in of But asking you plus have guide brands share. share on XX% to edibles some these

with think, you're X%, Here, I X%. #X,

So Or of terms wishful of grow share? you room a that's lot thinking. just would in to there have

Ryan Crandall

for for is thinking. several the brands currently you're categories much are we believe And what the top I categories, you we We at the our the although is ceiling of thank high. we're saying ceiling the think these Pablo, than sit. question. of think Yes, higher where on exactly we

we why dispensaries. why brands the that's all across innovate. continue we to to continue So our That's drive

We're category -- looking looking and not to that to store. a build product a get or in the We're look want we single full space for single looking a for SKU shelf We out full everywhere. we're coverage.

add the us are make going So potential. we're sense, our and that have to high are doing going categories growth today, not you're we to sitting play that on that see additional all We're in hands. going to categories

think us. So all future the things are in I very exciting for

Pablo Zuanic

well. seen just generally are are per in know the what's here, And tough that up of you pressures, came one Massachusetts, to perspective. you but complaining stated question know an revenue more before, share price you the store, gaining and a I of economic want then market last. market lot behind I a In diluting more of don't stores case peers your doing as quite from terms But if that. color give about

Jon Levine

testament the mean it's I the people products. I and team, along the Pablo. brands a Sure, the and think with to

with developing out recipe the products, success. work, it's are the the I and whether the attention paying that folks But are that and folks great a work these to So facility, pressure, marketing the doing the the production dealing needs. that for day that's selling every pricing are think in there products consumer doing brands folks creating are

of tip the company-wide sales it's of spear. at But proud it. all we're and very So the folks a the certainly,

Pablo Zuanic

well Missouri. -- because do edibles high to other you one how of in could it's in performance But that hopes have I states, think Missouri, reasonable in And obviously, last your of regarding that I One is or sight clear thing mean, What's of not of also. the you the start can selling actually in approval? other is transaction is done? one there line terms and thing where

Jon Levine

no we're -- Mario, Mario. just

Pablo, the able agreement Missouri next we week next up Sorry. service just we're which or into quarter. and open in to for get in Missouri, the sometime brands then the managed in waiting approval to our should have be X, the we'll

the final be very the not far We're Missouri. state the first get not we approves XXX% we'll too revenue we're the will So excited but get revenue, but you. off, able until to at about transfer. Thank management

Operator

Your Research. from from is Instructions] GDR next William [Operator McFarland question

William McFarland

a color on such you you have An the why you an bit, but know financial it stock touched do feel the price between any there's and progress? additional extreme as disconnect

Jon Levine

The stock of looking price, I just X I you gave use, can look mean, assets sold than just their assets deal, cannabis was I you're the companies all the the all word of guess, I they just it angriest, the That as for shows market are, kind ours. example including today. how value Verano just said, that I'm of I their off you nicest cap. cannabis these when undervalued greater and at

If where this need don't undervalued attention, is companies be we at that bad you revenue are we market deserve our cash or share people to just to start and our market so paying balance flow, for value how is. our cannabis sheet most today. look This our and with cap our

Operator

There no at further this are questions time.

proceed. may You

Jon Levine

you for Have but price, the Thank we're doing for good here sending message QX. And I day. and our we're out thank hope hope you, how joining share good QX you're call. that support. understand just about I again appreciate you I a your you not our everybody.

Operator

for Thank conference and now gentlemen, Ladies the all you. ended. Thank joining. you has

may lines. disconnect You all your

MariMed (MRMD) 8 Aug 242024 Q2 Earnings call transcript