SHWZ - Earnings call transcript Q3 2021 | Medicine Man Technologies, Inc.

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Operator

Good afternoon, my name is Pam and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Schwazze Third Quarter Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a live question-and-answer session. I’d now like to turn the conference over to Joanne Jobin, Investor Relations Officer. ahead. go Please

Joanne Jobin

to webcast welcome quarter conference XXXX Greetings Schwazze. the and for call and third

We by Officer. being and are hosted Nancy Executive and Huber, Officer; Chief Chief Financial Justin Dye, Chairman

uncertainties submitted subject submitted Following management and management's position, are time. on Investor statements, believe, such anticipate, to results like as and risks release. website their determine, estimate, Relations prepared involve this to questions answers uncertainties. forward-looking are they're those The that intend, from could, all differ press web in and which earnings expressions statements. would forward-looking enable, potential, will by questions remarks Schwazze's the may presentation, except, will, and may I and similar cause link that contain via Schwazze to take are should, remind at found project, statements your cautioned objective, actual the related anticipated Investors Schwazze to also that to forward-looking vision you risks words

Additional XX-K ended available Form in for its quarter information earnings XX-Q to XXXX. differ XXth, ended the Schwazze's on could is that Form release and the XXst, on XXXX the year the December and results September for cause factors

website. CEO filing over are would described call more Relations In Justin Commission, addition, other now remarks U.S. the in with Schwazze's like Chairman, turn to Securities can viewed I fully the Dye. at Investor on company's public be the to which Exchange and and www.sec.gov or

Justin Dye

thoughts. The I to results would this will before to is happy conclude operating momentum, take our business our Huber, and update, strong joining operating detail, continues Hello, review some our presentation be playbook your and with then a thank financial quarter CFO, you afternoon. questions. demonstrate final our effective. proving I provide business us We will for second Nancy in

and poised dynamic our enthusiastic Schwazze for factors that confidence remain a growth building differentiated we're plans and growth. schedule, business future. we're Our about These on at us give profitable

includes of company of equipment. quarter with and acres as cultivation XX cultivation outdoor closing the third to facilities greenhouse premium Growers, the Buds the company's significant well of for the Star into acquisition XXXX, dispensaries, land indoor During house provide hoop as directly production announced and which and cannabis is Southern first Colorado its cultivation, which capacity, our high-end of manufacturing and will extraction purchase This facility. PurpleBee's biomass move

expected LLC, located also Buds We launched delivery acquire later XX,XXX year. in the asset and services Star signed agreement building the We another which Aurora phase cultivation second Denver, includes foot X, equipment. in Brow of home indoor with to a an delivery this assets cultivation for square

totaled year through were compared the due Average to size up sales quarters year increased basket to $XX.XX, XX was prior operating $XX.X quarter year, increased that during last we million Star for of During Customer generated in last quarter, the flow to XXXX. COVID to ownership representing three company's of dispensaries the when million quarter year. to adjusted representing $X.X first the $X.X prior $XX.X X.X% X.X%. of during also and the $X.X The operating to prior Same-store million of XX.X% impact. the down cycling assets million of positive EBITDA the million, to $X.X our this revenue. up take I'm Buds for same a from by cash compared million flow visits to $X.X cash revenue increase. XXX% million, pleased XXX,XXX period compared the report

XXXX. X,XXX,XXX, were prior up year. April year-to-date our includes now This However stores X.X% acquired in over data X Organics visits Mesa of

completing since steadily upwards that quarter-over-quarter, report to trending pleased are are We readings our acquisitions. these

approximately generate XX% and XX% retail, from from will wholesale products. of quarter This revenue our

and LCG demonstrates next efficiencies in wholesale few to product locations. our continue encouraged strong and our retail, effectively two acquisitions discussing our we're the plans Brow X. growth partnering implementation year revenue another operating to by continue retail with Along growth playbook, our record the XX.X%. EBITDA expect the and to been and over increase we've production distillate contribute with information. our by sales to our attended that held at able Summit led side Due results, manufacturing with due retail manufacturing and Wholesale At system decisions approximately We reviewing of MRP identical quarters breaking we for growth product aligning planning, of market across our XX.X%, represent by Colorado we better recent product and COVID ability PurpleBee's the business and vendor real-time as to opportunities. by We categories, suppliers dispensaries. had to quarter. In results sales with costing also our make we be first division, our in outpace Colorado from improving impact our we September, XX implemented reviewing across reported market assortment Analytics adjusted with which believe BDS stack our results PurpleBee's

also respective and David Director, Eric We necessary horsepower to acquisitions. come areas support and in President to our critical Director the Barnes, management Robert growth Pizzoli FP&A, our Cultivation, fields, drive of Schwazze, All and Kaufman, and Controller, will with Ashley additions team great to Senior McQueen. to Vice delighted of to following their President I'm experience Vice [ph], announce our strengthen continue add leadership team. of Manufacturing,

federal to but of state the lot there no the continues or government regarding on any be acts. changes legislation, of for laws cannabis discussion a and movement significant As

Safe reinvest in communities. to laws expect continue We all our with continue to pass customers our invest financial in parties to we work order so and that can will cannabis that the Act, and our Banking in reform

We've general as are changes recently any see started other Colorado, report jurisdictions Colorado cannabis, we that tax to the any home into would of the poised we state that as and impact closely can delivery to state federal voted monitor a recent looking service industry sign will suburb expand election are always, in support the and Aurora, public. changes and to by which our increase delivery We down is approved. for As a products of Denver, necessary. positive make on cannabis

approximately Now in XX.X% fits through Analytics market by sold during of decline cannabis Colorado $XXX cycling represented directly BDS million for product We the past estimates, Based driven same a in year-over-year adult growth compared where general medical that year. to let's decline last $XXX cannabis move was quarter, quarter. Schwazze COVID million the in. the use and Colorado for quarter on slight recorded believe into Colorado's recent

the can outpace market to which state However, this share I'm pleased hyper and that XX.X%, to includes growth where year-over-year demonstrate we market by in we capture to that outpaced the have Schwazze stores measurement report industry. continue

areas the of manufacturing additional to in we future, to and in but industry evaluate Turning Colorado, cannabis not in the just states across cultivation, continue other as opportunities dispensaries, well. the

averages, following; we've attractive services Our expansion exceeds that to be growth the additional shareholders, potential products and attractive Due Colorado's to locations. partners. synergy current criteria opportunities, includes definitive with growth reached acquisitions or profitability acquisition in prices and will provides made once tensions revenue potential that regarding EBITDA with prospective for agreements the are accretive our announcements

opportunity targets geography to us and of state to also review. turn provides the it reiterate to cycle are now, our continues Nancy, acquire represent And profitable, we sophisticated with platform, the build I'd Colorado the cannabis boom like our home our believe of attractive over me industry. to Let and that third to that as have already bust to quarter weathered discussion the continue and early financial out

Nancy Huber

XXXX. results XX the Justin. our review quarter ended And I'd September financial you, Thank for now like to

the mentioned Justin million how quarter, just a the changed million and our for at reporting As the align represents $XX.X top manage total presentation, XXXX, the revenue we segment of period reminder to in of an XXX%. increase same was in business to and that performance. approximately evaluate with we $X.X compared first Also,

three same average MIPS, We wholesale and includes general during $X.X compared $X.XX are wholesale a from revenue. during revenues one-time The costs, wholesale Adjusted to from months be million and by third services $X.X income of for XX XXXX. operating related from cash and Big the over million, increase purchasing due sales basic were flow The operations up revenue positive ended revenue company the operating amortization. year, raising million year. and the compensation $XX.X margin on approximately the and loss million, during a and cash selling, retail period the addition Buds and and Total capital $X.X company's XXXX during was $XX $XX.X retail the period of and other and profit the to as driven expenses to the Nutrients, share expenses to of revenue includes of September increased quarter and of the third reporting from cash the in XXXX. attributed QX the Success net and last Total the $X.XX representing approach revenue. XX.X%, the implementation same net in end sales from as $X.X million, had includes The previous equivalents acquisition wholesale derived a and due million our of of increase million and of completion other to revenue retail from also quarter which were March million, we EBITDA This $X.X the quarter, led QX period $X.X XXXX of million, in three operations. million Star compared third is quarter weighted was consolidated operating non-cash adjusting strength at $X.X quarter $X of $XX.X retail same first for the is Other million, during in $X.X salaries of $XX.X per XX.X% compared retail the The million pleased sales earnings XX.X% or XXXX. $X.X a were representing acquisition and of dispensaries, or profit cash in million The segment, PurpleBee's our the during Gross flow from XXXX. I'm for increase million quarters which of consulting operating expenses, higher the a share our on in period million. for the for Tomato compared million to areas. $X.X Cultivation, Buds $X.X basic to percentage that of depreciation report from in now to administrative approximately adjusted were dispensaries. continued was XX.X% the income and and by and million costs increased the average, quarter to expenses small same loss $XX.X generated per $X.X the to Gross the were playbook. which EBITDA million acquisition, XXXX. sales increased to XXXX. increased XXXX. by million third weighted goods of Star to wholesale in improved from was and quarter and cost This up during merger

the $XX integration proceeding of today. Turning two expansion revenue due which and not for remainder closed. you from $XX guidance but now transactions million $XXX million. we for XXXX, The have Thank above continued time to to acquisitions our your EBITDA of company the annual to continued to-date, outlook remainder the of reported multiple is is million that remains which with narrowed to excludes $XXX plans, adjusted our announced results optimistic expectations. XXXX the dispensary are million for the Annual the guidance companies now projected year

to call turn will to like I'd Justin, Now questions-and-answers. the back open to who

Justin Dye

Relations all website and in link question, to interest a click continued our be take Schwazze. on questions. of support, on We would happy and you please portion for the now ask please Investor submit. To Thank encouragement the your your

Joanne Jobin

you the Thank moderating and will the And name have a today. Q&A behalf And I IRO to Nancy. us three I’m you, the Joanne submitted is Schwazze, is for of on Jobin, question who joined team Justin today. and question. thank My actually everyone first the be part

acquisition two? Gun first is While potential that it out Gun. sizable So out or more What we revenue, regarding in the dispensaries the to new part. it at And are that there involves announcement Justin? any put to the XX of there today I'm the one nice see start time bring dispensaries, does a going addition size? rather could with Smoking acquisitions Smoking bring than

Justin Dye

do in yes, Gun the Nancy, Joanne. you, you, count very opportunity. market multiple pipeline, of signed taking that and We continue average is very, including disciplined for opportunities those It With other announcement, Smoking we Smoking these We're about great completed, we Gun are think that. a our feel the dispensary certainly in good pay be going very but our sorry. is excited negotiated, And stores. Yeah. are a XX, aggressive course will metro and to that to remain acquisition be announced. in to explore store outpace And, the done. dispensary us. deals corner think be We to we'll to about there we time what good location the Denver we very takes -- today's Colorado. get will for in Thank acquire It acquisitions. Thank

Joanne Jobin

Also, is you, the how progressing? Thank integration Justin. recent the of acquisitions

Justin Dye

Yeah, are the well. going quite integrations

together If we processes. Star you very, roles, look at efficiencies. for we're we We're driving great promotions our for putting well reporting, our as are common buying very responsibilities, to products customers. if metric and We well on merchandising a look Buds, exciting at plans running offer all and you our starting on common to and getting we're of platform sale, ERP work that And and of PurpleBee's, our on centralized integrated stores, where can doing point built system. business the then as

of we're on So good ahead the team's doing side, job. a the integration schedule

Joanne Jobin

Thank you, Justin.

Finally, supply dispensaries to cultivation able its percentage of Nancy? margins? will company acquisitions? that impact will recent how the And be what the product from

Justin Dye

I’ll you go Yeah ahead – give Nancy.

Nancy Huber

Thanks, Joe.

in that margins SCG that is there we out So see to just we've January the finished see and the that our impact first anticipate we'll there well our we in the talked margins We the impact so harvest we're as going probably at point. houses harvest think hoop building of in about, process to QX.

Joanne Jobin

Thank you, the Smoking you for Gun Nancy. LLC assets operations the acquisition? more provide on color and Justin? Would

Justin Dye

Joe, for call Thanks, thanks. name waiting I'm the Yeah, you to out.

don't… I So

Joanne Jobin

little be more I'll a the proactive calling. on name

Justin Dye

okay. That’s

that about great We a products and number floor Smoking how about standpoint, excited remodel to Gun. there's a the got of store excited our of merchandising customers we'll employees care and taking exciting a location. plans Buds to playbook Star get remodel those we're cetera We've more opportunity our believe bring to to the So from excited team and add and sales et to bring there. them

Joanne Jobin

you, Justin. Thank

see expected? we decline? to this as additional declined revenue retail Can add question, Next some the Was color that Nancy? you sequentially.

Nancy Huber

as quarter-to-quarter. small the we declined it from that Yeah, there, pretty There's COVID amounts year. Thanks. seasonality fact very last were some big a number well cycling the as impact

wholesale get would bit as we fact not was combination we than big, thought up ways probably little the we that. pretty grow good the our doing percentage have that sale, growth targets, revenue the feel successful a in wise, had But we made and so percentage we So to bigger a about to we did. with that we of were

Joanne Jobin

Do beyond footage within anticipate the reported next Thank Biosciences square PBS a greater X,XXX square Nancy. and requiring Nancy? the you, presently? Schwazze buildout of two quarters feet you

Nancy Huber

great a That's thanks. Yeah, question.

progress at additional early group of adequate that current the to stages are We'll exploration, footage We need be very the add feel in of the to really square really determine whether the next continue to towards year. next going look we bioscience quarters. end and couple footage over the and is the square makes

Joanne Jobin

Thank you, Nancy.

question a home be that one or three questions near-term? in Justin? initial delivery? here's format. the returns in two What big Now, business again, can were from How is, the

Justin Dye

Yeah. our think is omni delivery -- to channel big We a certainly strategy. going of part is be

and ahead within store, next served they pickup or or a based a serve as the order want So occasion. they to to whether upon same want be the them consumer day those whether want to We whether certainly four meet want they delivery. customers walls to shop of wants curbside day for

to of we set majority let is the see of they with guide part. it And We're a and portion. so investment. the be want But implementation dictate match think customer that. want so and think certainly to they we're significant our business, us And to to certainly be how I our what with key served. first it that will a a will good. deliveries. think I So far, our be happy being of delivery but going going don't resources will We the customer

receiving bud I customer. very are of and service our the doing job care happy our customers of tenders the they're are nice a that taking and with think drivers

Joanne Jobin

Thank Justin. you,

that QX. of Nancy? stronger equal an question, or against part Does Next implies typical that guidance seasonality? updated go top-line

Nancy Huber

our are on or to It's there. stronger significantly on and And just the based we long, that businesses thanks, dispensary by. But for we Yeah, both Again, guidance. have right, go different. we QX in Colorado QX have and Joe. owned they'll equal rely again, range, not usually think we wholesale haven't although history that slightly retail be to

which into So is we selling ahead. sometimes the market, we it's just are wholesale retail not see, buying

Joanne Jobin

the And seeing M&A you at are challenges who MSOs in Nancy. you, of Justin? Colorado? Thank looking question, this from increasingly part final additional are

Justin Dye

great Colorado it's state announcements. to the we that place Yeah, question. We Well, number positive is to seen Colorado. some and a to MSOs great getting coming with of some have think recent business, do attention certainly that proves a

you're the value think it looking at. on depends segment of the chain really that I

don't Some and cultivation a other like some and bought make that of companies bought well. like our some our had for have and dispensary that'll requires and choices MSOs strategy. And like building continue focus bought think and the assets requires acquisitions execute. other to Colorado We I certainly a from strategy. would deter as discipline, these coming that I a would in. of it's expect in who have our in the into strategy. as combination. some going And ability come that's bought they have general, think But in that I talking think And I we you we've think set to us Colorado to tell our profitability We farms, as thing good grow business. inroads our to and acquisition And with know our They have are, they pipeline. relationships we're like we our we we our companies out the we independence buying play

Joanne Jobin

Thank you, Justin.

Next question, analyst the fraction of a sector. interest price and your Justin? in comparable more more the Schwazze share trading in been get generate PR plans and What are companies publicly coverage in same has at other traded stock? to to movement

Justin Dye

number really said, in We've we've introduce retail analyst and done tell Yeah, some We've seen do the started going to uptick share to we've story we've we're continue to and meetings, Schwazze a price. the that. conferences, in investor as our to other number a larger and investors. of of to been

in we're we're focused building a think I going capital, versus good really our to build, a stewards investors very continue of We're be story, tell work think share capital and to to profitable execution. to for markets going And continue markets company. us building we're will on doing company, on to great that growing reward in that. the I being the going and

Joanne Jobin

Justin. you, Thank

three That's Next quite row question, keep state how state? XX%. considering outpacing is overall down do in a the quarters you around now, the impressive,

Justin?

Justin Dye

Yeah, that's a great question.

really I discussion. think this is important

So retail state the the grew comps XX.X%, if versus year are at they're so sales comps, behind our two you We XX.X%. outpaced the for -- outpaced if The X% stat by it, we that ran two stat state years at considerable. you look grew XX.X% quarter. look our XX.X%. we And

cetera by the coming products that on market supply we're efficiencies in the plan with blueprint, manufacturers, to doing. we attribute So our that of up merchandising, chain running And and working really partner et operating on with beating innovative dispensaries, good I our XX.X%.

one companies the we're come, some lot for right making working category products, product well. to more hard each the got a we’ve work do. respective we management, as got And to of more partnering dispensaries. So, assortment our great sure right with on We're

proud and growing hope very, last that's that team. very So a And year continues. think year, year, the that's top a we're by we done that think I'm of cycling really the on bump I next COVID well the I fact job going of impressive from to

Joanne Jobin

Justin. you, Thank

for number why over mentioned Justin? growth are using one You you year example? growth, year that two numbers,

Justin Dye

last to products. as flour, you year, alternatives spend Well, consumed the if such had consumer, less the really more There at income. large more look were look their consume at comp it, you we discretionary them for consumer a

a very from cycling comparable large we're year. last So numbers

share, the the think our And on the I we want working work we're customer, voice that that. and to really operators think pay really our best to continue I So retail market And retail work continuing in love of grow we're to sales, to working that's one hard dividends. continue fact the I to the to going and continue on work merchandising, on be team state. it doing, and to that attribute the of merchandising tributes

Joanne Jobin

look Where's coming company to to more that And financially? does Thank you a from? the Do acquisitions? plan you, much? like so, have do plan Does raise? funding Justin. If the how what

Nancy Huber

Thanks, Joe.

did agreement as the So as Altmore our of had cash part acquisition, SCG $XX have the $X of to And the the as we part plus of with take million us additional original them. end of bank down in committed million we QX. debt of

the So some acquisitions, look dilutive. all have the shareholders effective, as And debt, use debt. bigger our that's That we at sense one funds we for cost most We'll makes time. equity least for the at do acquisitions. we're most options available convertible then evaluating

we at So specific we to we kind evaluating commit of of of But raise. M&A alternatives as are can't opportunities. sorts look all kind any

Joanne Jobin

impressive. you Nancy? margins revenues Nancy. and this in be we've product continue improvements Do trend? you, think continues to The seen Thank can you

Nancy Huber

Yeah.

to we So to believe we improve the vertically continue we as margins. have integrate, our opportunity

margins our improve. in as our cultivation the question we and add as plan, So to fact we expect previous to do had suggested,

hand, other the see could some pricing pressure. On we

to our gives pricing to pressure continuing have on and us we're are combined plan. purchasing that our keep margins So better. they work some as opportunity experience or And still

compressing As the offer offer -- of variety reviews in that of in number the store. the across in Justin but said, quite every number don't same the store, we're the process we're we we in doing products product and the process,

number stores, selection. margins from of Buds, help product a to better you we're But a Star well. taking walk products able to of all the you're availability what therefore more going So our pricing narrowing get with consistent into our is as vendors consistent and our example, wide find purchasing, in very we're when by for still more

we at as manufacturing So through then, for or margins packaged well, products own could improved looking other at offering looking continuing side offer additional well. as with acquisitions, goods see integration we're all in other products. the of We're opportunity which And does that. our

Joanne Jobin

you, Nancy. Thank

of again have question your products, on the some flower-oriented? Justin? other vape, some or your products. some towards best-selling are consumers best-selling Here's What of Are trends changed Or still oils, products? chemicals?

Justin Dye

still our Yeah, big business, almost it's XX%. flower is part of a

We see other continue to categories grow.

So if you and look still growth a is at continue cannabis so. stack, quickly, like part vapes, our also to But it's we're flower major edibles. of continuing will to seeing grow in business be

Joanne Jobin

Thank you, Justin.

Now, not Brow acquisition states? be in other fully plan but as much Justin? your you do with X, integrated and the you expand to Colorado, more business of how just SCG, into

Justin Dye

flower side, of we'd look our we if And to we said, long you as way then producing to like there. have produced about go stores of needs north for biomass. to at be like our be got own XX% biomass probably we'd Yeah, our XX% of in-house, so to a our

So I of to plenty have think assets. we announced our grow with room

capacity. in and for well lot our to assets, we're our expand that continue count grows we as and plant opportunities, as and opportunities and alight going new to a of three we So to evaluate new invest bringing methodology see those to productivity

partnering cultivation being and bear discipline we and able working the in the our strategy that from continues chain really on That's that's the and to working we products, a them that retail recipe. supply us. still at one, the similar we're still fruit launch we those we're with to continuing good forward, strategy So, and states. viewpoint extent and been efficiently on then would own hope look the Colorado, day being that That's to similar manufacturers while for and another on what carry state,

Joanne Jobin

the to the is you Thank three the think to last you, you in plan the the buyout this is Justin. of Justin? And five years? question for Could expect day. do company be? be What be will Where a going works? I in

Justin Dye

consumer industry day. like industry, this so learn and in You Every they it's change, their day such days, or continues change like. a is every things seven products preferences to the competitors what change fast-moving

same here those to we good that, strategy. capacity continue continue and But, are do business, New execute could growth becoming close drive customer stay we're options to to keep good is our focused. growth doing our to to and But down to will the working that's someone while as will with we're teams good goal will operations, companies very terrific what continues more I mean going what our returns from to, build been, market a that share. be standpoint, those with growing those very on and wholesale or our a that from will think York be way our or way all and combine And want we certainly shareholder-friendly, to the to Stock profitable, Exchange that that efficient, grow focus continue we I just really to options grow options, good Those stay contribute operate good have down forces a just we and those we think company. best the that road to performance with some on the And in So NASDAQ great we're been that's today. And consumer, to the very us federal that about position to customer company. going road. as management guide the legislation and we close we do and all are. to the more And consider things. can and to in could put things options could profitability and shareholder could profitability listing the And will the obviously,

Joanne Jobin

that that And Justin. Thank you, today. is of all we questions have the for

you remarks call final any today? end have Justin, we before the do

Justin Dye

our No, I to want customers, thank employees. to I just want thank our

for And I'm Our about grow work proud profitability, on plan. us. We've work just our those We've accomplishment. top to can. to that's continue business. team in very The But driving and on we're going believing to year's acquisition us. think and XX-months bump, continue a pandemic the to robust And, efficiencies to the to and last want for of members thank the of as double really in we continues and able very execute. hard we're more things a being for we're the job. I with to to got us path an on think we'll And doing announce team things excited got great track I next are our team I shareholders quite sticking works.

our thank next that, everybody to quarter look forward and we So with results.

Joanne Jobin

your Once and for you, you Thank Justin. today. everyone And thank you, consideration thank time again, Nancy.

have If feel third day, quarter directly Good ends This you to info@schwazze.com. at for Schwazze. the me further please conference call now free questions, submit them everyone. to do

Operator

Ladies this call you for you day. participating please disconnect great Have your your lines. and concludes ask and conference gentlemen, thank a We today. that for

Medicine Man (SHWZ) 16 Nov 212021 Q3 Earnings call transcript