MRMD - Earnings call transcript Q3 2024

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Operator

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

Third 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

Steve West

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

Joining Chief Executive Officer; Jon Officer. Levine, Pinho, Chief Crandall, are Operating Financial Ryan Chief Tim me Chief Shaw, Revenue and our Officer; today Mario Officer; our

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

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

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

will over for overview. third quarter to call now turn his Jon I the

Jon Levine

Thank They everyone. and both we Last revenue you, sequential included growth. year-over-year our quarterly and Steve, good reported morning, results. night,

flow. continued income to EBITDA and Additionally, operating cash and improved sequentially, generate net we positive

performance headwinds, we because industry to risk. those based and strategy we're While pose pleased with doing the quarter, our that particularly our headwinds our on navigate continue versus to still face macro I'm in well peers. confident

in business. Our revenue again gains double-digit once by wholesale were driven growth

slight income. in that to are revenue. every forces brands immune impact we saw distribution. industry, retail, continue in and among economic consumer to Like in a their best chain At not America, disposable the retail Our increase we other we are the decline

quarter. check, we While these transaction consecutive growth double-digit experienced for impacted eighth the our year-over-year forces average

in less, EBITDA actually sequential the customers took income base. steps our and Although improvement in adjusted our our margin spending customers increase experience improvement begun we've to saw only to but had keep net are the not anticipated. quarter. customer Further, we loyal We we

brands and our expanded we've into up, markets. existing new Wrapping

and Our just Everything place the than is to of signs for a for improved I'll It's sales anticipated. With time. little from Ryan grow, into revenue early that, as continues longer call over we're profitability we some new taking margins and discussed assets. marketing falling seeing and to discussion. turn

Ryan Crandall

it. Jon, grew both and of sequentially. Thanks, the again, each owns revenue for in of and reflect in industry everyone. Pound portfolios pound, morning, and good best the numbers wholesale Once one brand MariMed the states our year-over-year

This record up grew million, sequentially in a Our business. year-over-year consecutive growth wholesale XX% was wholesale business XX% which ninth $XX.X quarter to at our X% year-over-year. marks of the least

is of The Flower, shelves standout revenue, on grew remains Heritage a significant sequentially. early in without of Illinois Nature's already we that's sales be XX% Illinois, the where benefit wholesale should which XXXX. and source

are XX month market #X Betty's regaining just position of a become words, goal. months. Betty's, October. share XX that XXX In for long on the our top way edible other brand during As in very we shown has edibles Illinois you very established excited I'm the report has we know, relaunched the market anticipated a January. #X the ranked XXX achieving mature Betty's and to sights brands on had leapfrogged brands. with We've into we our toward edible in Betty's by success well to edible that Illinois and

where own we #X taking BDSA data, #X continued actually in the is According dominating of SKU. Maryland, we're Massachusetts, Maryland. now home in our Massachusetts to and the and absolutely share Betty's We edible market edible state

can't our proud fact, top our own X I tell how In X the the of spots am team. I we top of and Maryland in brands in XX. you

list. looking forward among where they're to Our that available, every in be adding sellers best edible we're the state to and brands Missouri continue to

to sales there for expect holidays. time start the in We

Our success and innovation, and buzz in that excitement consumers products We existing generate expansion making markets. differentiation through phenomenal consistency and been always the has quality want. continuous to rooted with new and

our last is portfolio. fastest-growing our our now Ache launched we year example, Eddies in SKU successfully that also Betty's For Illinois Away

to we team Breast awareness. marketing the continues Awareness so to brand Our Last veterans Boobies Loves many this our through annual in-house front And on them recognition relaunched housing some of Month. find to challenges help the of of in our innovative we campaign increase Veterans ways brand face. Betty's for under home month, Cancer help month, Day, initiated

strategic the are for move that These programs smart needle our business.

day mission every through More our of cannabis. improving helping importantly, people's on us lives they're deliver

call With will his Tim over operations for to the turn that, I review.

Timothy Shaw

Thank you, Ryan.

our some achievements. of Let me review key

Over X dealing time Vernon, Missouri begin with X months, facilities month. are that online, well last pleased I processing new Along impacted during XX that XX operations say this XX story. In the online team as building to my significant To now Mount will we're facility, Illinois, brought way, expanded came revenue-generating am and total, we timing. facilities, the in past cultivation Betty's, actively hurdles to inventory in-house of that our our that Bubby's include and vapes frame. our as growing chapter regulatory and dispensaries which opened month, we've has shipping our processing X gummies closing

complete, recent open in have the our growth early With our to Ohio. we begun heavy dispensary second of adult-use lift preparations cycle

our identifying always ultimately will margins. products, growth of we're us help expand and award-winning improvements to technologies distribution opportunities new looking that as hyper-focused increase Just also process we're for on

help invested and we've will packaging us time that example, save For money. both automation in

Before deep strengthen his With will public I CFO, and which rigor introduce leadership, finance reporting operations. call Mario financial to concluding, compliance, stocks financial experience well that, Mario scale strategic navigate I'll rapidly His turn and to a drive evolving as invaluable operations is to financial review. of you the our equipped a continue and background governance. complexities he the in our to to new we for extensive our is over and our industry. With company want Mario Pinho. expertise brings his

Mario Pinho

earnings Last were Both night, everyone. business, and growth and revenue. other sequential lower morning, offset Thank you, third call. retail our we by my Tim. partially wholesale in by quarter robust Good driven year-on-year here and year-on-year reported increased which million, of I'm growth our $XX.X for excited to our revenue X.X% first be X.X% sequentially.

second We compared down a third The assets basis. reported to on was to last which million. our non-GAAP Maryland was $X.X was of The increased in XX.X%, growth sequential adjusted on gross costs with last input year-on-year versus as associated and Illinois, of gross as well to year's primarily third change lower the year-on-year of and reported and EBITDA Missouri. gross million strategic sequential initiatives. of year adjusted million, quarter due and We inflation $X.X to slightly in support new costs, decline margin margin our which increased start-up quarter quarter sequentially due our primarily of the XX.X% declined down versus $X.X spend labor margin and year-on-year

to margin. improvement was and due G&A expenses, were sequential EBITDA in marketing adjusted our The which growth by lower associated partially initiatives lower offset and gross expenses with higher

balance to quarter $X.X the cash the sheet and cash ended flow. and We equivalents. cash Turning with in million

new and our is in quarter. sales, driven higher the change and of than our Maryland. last This percentage a facilities was of X.XXx, Illinois expansion by and strategic plan our with start inventory aligned slightly cultivation expanded As

$XX.X $XX.X with quarter generally million. in capital was working the Our capital line our working million, of in second

initiatives capital Our supports invest in our stability. operational without growth ability to compromising position strong working

external operations, This highlights cash flow management million versus of sales the efforts increase in contribute last in improvement operational year. all growth, internal generated we generation. and $X.X financing our cash fund to same cost Year-to-date, XX% us effectiveness of million stronger reliance $X.X from our strengthen which and on balance a period the This operational reduce to further the flow enables overall cash sheet. projects improvements,

XXXX. expenditure fewer compared million to we period same year. a year-to-date million spent result On is $XX.X build-outs $XX.X lower for asset The of front, the the CapEx spend last versus capital

Now turning our XXXX. outlook to for

not initial assets awaiting regulatory from include targets approvals. did Our revenue

While now and which combination impacted and gross higher-than-expected all incurred they both regulatory construction of to our margins. they costs EBITDA delays, preopening a are due open,

well we're wholesale in wholesale a seeing On business. as margin Illinois Maryland and our retail positive our note, operations in improvements as strong

We night is follows: as financial will up $XX X%. to up these growth, X% to to time. drive reported. to our expected as to With profitability X% previously now million that, And continue revenue XX% flat confident last million X% from EBITDA be from be Adjusted X%, now CapEx expected growth reported. of are $XX targets down revenue growth updated to over is XX% compared to XXXX approximately year to new announced are assets supporting full previously

That concludes concluding his remarks. to will it I over our financial Jon now for turn review.

Jon Levine

welcome Thanks, Mario, and aboard.

brands. heard of our the momentum and You've sales growth continued our about

And well. as the branded facilities, should the make year Today, are expansion we're we vertically be completed mistake, company. even Next and as industry's we integrated performing our better Tim discussed. no strongest products building finally of

have in. the proven owning they're many top-selling in record state track a We of of every products

expanding our of as as growth product many markets ahead to heart and possible. XXXX to looking complete, nearly The XXXX we're With is strategy distribution beyond. our

including Illinois continued expanded operations of several financial and EBITDA full and growth, our have a to We Massachusetts, from catalysts new Maryland, drive year results revenue and in Missouri.

once financial Additionally, in Compassion adult-use we from consolidate commences. First to expect Delaware Date results

strong will of profitability rescheduling combined possibility, cash reduction our flow. budget elimination of and with still of the with a the increase cannabis Finally, subsequent further XXXE CapEx

about of could cap only from last MariMed's the of past part Eddie's X/X valuation cannabis want the alone my nearly depressed virtually million conservative market traditional call of revenue comps, opening is story. discussion with be questions, of the Before no a Using And the for in I over the months. we've our debt. Xx current to the cap revisit XX valuation very about reported small that's Betty's stocks. $XXX market quarter and

with passing Just in how many are exposure like X, MariMed state, especially underscores our ours. balance cannabis want today, of has and only those stock peers. Florida's valuations no assets Amendment to not strong absurd sheet that everyone my understand point. strong unlike

further. has while our hit valuation a actually week, this entire widened taken So sector our gap

it great While disappointed stock, that the I M&A a of presents also remain our I opportunity. recognize depressed with valuation

to at they and arise. acquisitions them. to cheapest some we're the Our will us And of access strong make capital strategic looking balance me, believe sheet enable as

acquisition the than we is plan while iron more to and Our strike pipeline hot. robust is ever,

customers that their every the like thank our may their patients our to With I'd shareholders all of line support our I'd lives and the open employees for MariMed to for dedication you improve day. Operator, to and said, like thank for questions. personally

Operator

first coming Zuanic [Operator from question Zuanic be will from Pablo Associates. Instructions] Our

Pablo Zuanic

congratulations I Can own you Betty's the In case, states? licensed operations If XX in including comps your now all Missouri. is, some your right? states they think are Wana, you But in look a Betty's. where other mean, just Look, of at how like I the you about on expanding Betty's? states, questions. the I do wholesale think business, of how the first, particularly you about about talk growth few licensing in think

Missouri? So up you that? M&A kitchens growth as you do the markets? Bettys', to think organically of how in right to like accelerate more maybe retail think states new wait Or without do aggressively enter set having about for or now? you how try you right stick Do you in about Betty's cultivation Do new about So talk than you're now. to just expanding you where the

Jon Levine

Pablo, it's question. morning, the for this the thank you call joining Thank and Jon. you for

we that in presently. licensing, are we're not all, of First in states other licensing

much at We work partners We to partner for grow additional the we're expand through Rhode Puerto good is in finding partners we're those brands to years. the looking those there the a other get or to a yet always agreements. But purchase Rico. difficult licensing. same We a Island, you opportunities growing way with, time, more have of through for find to in to but into of because But are were left not just Maine. we're that licensing licensing states in out few states trying there

and the right into in just take our It's finding licensing go Betty's, the just every about not They're brands. go state So the take top states we off ability plate. wonderful to. not partner. is all more to finding all brands of It's that additional

Pablo Zuanic

talking then about And just right. evaluation. That's

XXX% I of Canopy comps they believe current it the cap. you company. growth, talk be could looking $XXX about Xx at? a obviously, what almost for think what that for than we have million was mean, you're one, that mentioned type maybe your I paid you less I to Betty's think market

of just thoughts in some Betty's. you're So terms valuing how

Jon Levine

brands. or up retail at in that over revenue million sales $XX I mean million Betty's for to that the we look a that, over we presently And million. other you that, take same when our look Betty's states of feel and X like conservative much at we're the of $XXX only any puts that how just is valuation viewing very our $XXX

add value you potential even the higher. next growth states XX all in XX goes If that over other the to and months, the

Pablo Zuanic

filing in are someone us you going like make are of quantify flow for reminder benefit -- on you also doing? without some us that your refunds of If away? for stance Look, current companies stance. XXXE, of benefits? your terms just are and on mean prior moving cash I can of can other reference Just cash remind if -- also the in provisioning you XXXE, if XXXE years and forward a the goes factoring of it reminder a remind

Jon Levine

I the Yes. very tax stance mean, aggressive wholesale more exact XXXE never our returns. and that We're the been we also how fact we've do than given but dollars, with we've is our retail.

of away, millions and on dollars side. cash benefit would But we love a flow see us go additional the for to of give would we bit So additional XXXE growth. that little that have more

Pablo Zuanic

prices X stance more I'm wrong, more you've wrong, proactive in that right, me you're and current -- it than compared aggressive more When but if share depressed it landscape, are the maybe past. or mentioned other yours. just me about M&A talked if including sounded calls, again, But Look, correct I'm correct taking you but to question. in the M&A, sounds in a

they sense -- with that sell use in weaker lower out lowered people there willing or to less even is the is think the very and might just current explain some why currency were prices people out guess before buy, there. -- do context for you easier prices, So tough now that me that be some they're so to to and with willing to and do not would I just it there? Just it environment, to in you

Jon Levine

who a a growing In are are in great is cycle, competitors a Pablo, their maxes and where to you, have a money of of still to borrow eyes, lower looking than that growth our lot unlike met in we balance valuations most. And versus question. have real now the reputation by as on down rates offering of that just our of much at valuation at ability overpriced few hopeful to the going to year. we're our we're and the way were these Today, we it's each value to spending our the ability our damage overspending. that used a coming of and we're Thank we lot right deals that through states. prices deals, strong good in and lot and have real are sheet weren't resources But next we continue grow, the to we we're able close

Operator

Next question coming Andrew for Semple from Ventum Financial. will be

Andrew Semple

QX Great. Congrats on results.

fourth First question kind the just honing fourth new guidance a halfway pretty The outlook step year in on in through here revised and would EBITDA just represent on meaningful still guidance. for today. up the We're be the the quarter. of quarter would the

earnings some seeing towards pretty that that ramp of sort you into current progress quarter Just coming whether expected with in and the online quarter. wondering are what visibility you meaningful fourth that the have assets is

Mario Pinho

Andrew, start-up the of guidance of question. news were past and the is a lot ones phase in the good for here. not it's the other assets, we're Thanks that our Yes, the your ones. for some Mario

our So is not going there to going the next into drag pretty year. into be on fourth margin quarter much

we should see be and we leverage now expansion in ramp our those So able new as assets them margins. up definitely to

Andrew Semple

your on share into management additional -- great be the behind is for of costs if quarter maybe just would much expectations this are better, forward. what maybe delve was which follow-up My that. operating detail that hear could see to some Glad Great. operating and you moving cost to

Mario Pinho

Yes.

still and So labor are costs our high. the is input product pretty on the reality side

lowering as talked well Tim about as bit looking strategies costs. our doing that packaging to at we're automation the a comes to introduce initiatives. it production we're when and other efficiencies So some

drive of our improvement looking and So sell-through improving going own mix at see our some our own a trying and channels. are product benefit to talked and definitely we'll our more into margin And from balanced there. about to Ryan stores distribution lot we're see forward. we where of plan what there. Also, product product offering that's is high-margin our our

Andrew Semple

Great. you're continue And manufacturing few as trend be up ramping next should How that over you facilities. inventory a then if a for maybe to was may, expect add quarters one cultivation we I me, on as to this quarter into final just would quarter? the capacity here fourth new bit the

Timothy Shaw

is all to we Tim. sales this We as increasing. go great Yes, out Andrew, to it and for anticipate question. Thanks so ammunition said, not the ramp up markets. tackle like these inventory you the leveling had

we're So excited.

top excited doing climb brands the where the spot. we're we've to launched, of are All to well, and

Operator

Jesse Next from in Tower Redmond coming line Research. will from Water be

Jesse Redmond

to that expand about for pretty enter difficult And markets may time, these balance sheet the a Jon, specifically during strong little this how I'm that a often? up compression in forward characteristics bit how industry. look evolve time price so what's market? the that Can to mentioned, your talk also flexibility specifically interested gives You comes of issue you you you a over you evaluate

Jon Levine

can. that building bigger. X trying medical market, that right as from we're be limited to Yes. states you those become build already Great states in many would vertical down Ohio, got our into morning. that Yes. in only a in, to we're growth, follow great to we've we When through we're use this to trying thank we're turning set on fully looking We've market the the in that at the Thank and to that little M&A at we're and adult that out looking markets up states going bit second, for for you, us going our concentrating a get growth trying joining working now are like that into on Jesse, additional dispensary question. of and

a market growth as the date, be Missouri in the but in We've license already to are -- additional to very in. at not are limited get and to where to state number strong and even an that to licenses at and continue areas licenses. we are buying of you Texas, to get vertical to that's there try looking add that York the try both and growth opportunities the we a fully around though it ability of into an would New a state applied price also apply to look maximum going that are really right at the continue be can or things We're

Jesse Redmond

fair whether what it's And about cultivation the I or preopening conversations, our or these times operational and control, you over for Jon, Can related waiting inspection last of waiting year X, piece for specifically from bit some are of felt lessons a you've frustration know at facility. to for of the your biggest specific things been delays challenges? from outside a talk learned you of equipment have

Jon Levine

into to through waiting them licenses that's over or great of start running Yes, of at businesses, acquisition growth flow more of that a in to turn time. able in done market a more buying to coming able licenses now through so point. the paper versus X And We've those come looking we're approvals prices of cash the we competitive line lot with day our competitors sooner. the we're realistic, won the be and

have the and it. means running, flow and are Going teams, expansion and but we and we for those buying to also licenses do to the can cash expand have wait we'll that up them,

Operator

McNarland line William in from be Next will question Research. TDR from coming

William McNarland

I margin Actually, my think you've covered them and well earlier improvements, M&A questions. the and in the questions pipeline were about

for doing thanks So that.

Steve West

Thanks, Bill.

Operator

questions you are There at conference. today's concludes further no time. this This for Thank attending. you. Thank

MariMed (MRMD) 7 Nov 242024 Q3 Earnings call transcript