SHWZ - Earnings call transcript Q4 2021 | Medicine Man Technologies, Inc.

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Operator

Good afternoon. My name is Sylvie and I will be your conference operator today. At this time, I would like to welcome everyone to the Schwazze Fourth Quarter Conference Call. [Operator Instructions] I now would like to turn the conference over to Joanne Jobin, Investor Relations Officer. Please go ahead.

Joanne Jobin

the XXXX to webcast call welcome Schwazze. for and year conference end and Greetings

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

via management include Examples Investors prepared among words answers will, take could, Investor presentation, which believe, and expressions position, Schwazze intend, remarks website the accept, actual statements, also and forward-looking statements I project, in your to expect, a should, as submitted this press and of subject and all estimate, to risks state are business found you like forward-looking their Following and vision time. to Schwazze forward-looking and Relations questions operations. contain submitted that remind anticipate, financial on they and as statements at and strategy performance results enable, the will and questions federal Schwazze’s are release. uncertainties. regulation Schwazze’s would earnings others, and potential, to results, plans link that regarding those forward-looking events, and of that may are objective, uncertainties differ legislation objectives anticipated position, or achievements determine, for future by statement. such management’s related from similar cautioned are The to risks may future involve statements operations cause

differ materially the Schwazze’s XX, in call in and factors could this ended Investor XX-K performance available that achievements cause is concerning Form for website information to earnings results, the Relations Additional on XXXX. available December release events, Schwazze’s available and before year made or

GAAP may at during public be the non-GAAP more the financial during of disclosed fully addition, Exchange Securities call. on or measure over Investor Also, the with comparable today’s measures Schwazze made In XX-K filings directly now call call XXXX. company’s Chairman, in turn CEO viewed available non-GAAP with measure and release, on Commission, Schwazze the can Investor the financial ended the for before in XX reconciliation Justin website. Form earnings December U.S. which Schwazze’s Relations website the between information most the to press like described A and in found to differences discuss I and would available and the is Schwazze’s Relations call Dye. year be can this www.sec.gov the other

Justin Dye

Hello to this business a first us which thoughts. happy to playbook. Huber be take team with presentation In continued and year some your then afternoon. questions. truly in Nancy will our continued XXXX, would for update conclude this thank the of our joining results operating year financial our and our strong year a detail our We and final continued our review provide I I to execute business end results CFO, deliver you transformational operating will before quarter into

transaction two equipment. dispensary leadership we owner cannabis urban regional February, manufacturing along of the the acquired Our & indoor building XX differentiated both cultivation for and equity March acquisition we Associates, Brow under Greenleaf of to and in Health company’s tomorrow, of April Canadian square cannabis XX,XXX remain The multi-state and Colorado. operator the the assets X completed Associates. March, development announced Mexico stock XX, commenced future. a medical feet under the asset, cultivation expected Denver, we year, foot dispensaries Fields, including with location. includes our documents from New the & X Pear for this adult-use became of Along a and Mexico includes the February We also assets New we our This in acquire recreational is and Kitchen growth XXXX cultivation common operator a to assets located plans NEO, remain and trading on unique adult-use that Emerald Falter-Hahn operating Alex X of cannabis indoor Laboratories, we newly our On quarter cultivation included Elemental SHWZ Glendale, allows currently a when in facility New are strong retail proposed a Denver-based XX formed the Colorado. as of XXXX. X announced X Wellness all X,XXX In well as LLC, located in Schwazze of The which transaction growth. officially and enthusiastic In following formed of XXXX, closing Manitou and shares or transactions. dispensaries, state Inc. trading team X, business On we square profitable also sales Steve definitive a expanding and X Urban that poised exchange about Reynold New to has the cannabis the us based Greenleaf give operating, of & These building commence our Ontario. on In Toronto, confidence licensed Greenleaf schedule. LLC. Mexico as approved the LLC We factors the facilities, medical leadership status, signed Jacob both Mexico President, MSO first Tier Division White, we with announced Springs the symbol of

acquisition expansion we which Smoking Robert VP prime a additional the announced Key adding of technologies. Chain; assets roles We In information our Drift, of support of Cultivation. dispensary Metro at Denver acquisition located the Supply Dave of January, late cultivation Manufacturing included to the Piziali of area. of assets the a the In significant members as VP Greater also located December and in corner manufacturing, we on Gun, two and consists Colorado. of retail cannabis the dispensaries Kaufman announced within of announced in key we Schwazze are as XXXX, Boulder,

plans. institutional We significant extraction purchase Star the manufacturing Biosciences made initiatives launched at announcement Southern We hoop raise of Our and early research provides transformative Schwazze outdoor to occurred of greenhouse Colorado X expansion XXXX, This and purchase facility. company’s of in that Buds. the the into when introduced to of for equipment. announcement XXXX. announced agreeing May Growers, time. the rebannering December and a new with production raise the $XX most in the debt company dispensaries and transitioning during development Schwazze closed service we our important look to year Star also delivery acres the completed high to dispensaries New service facilities million the major assets convertible as expand M&A August, cannabis move subsidiary, the ways well Schwazze the provides of residences was jurisdictions and and Purplebee’s Schwazze Buds regional product acquisition which house of Aurora, retail cultivation, of our X into investors directly operator to land to the Star of Buds biomass capacity our indoor, into approved. home includes status. XX is and which July, In cultivation commenced This premium and first Mesa as for end in Organics City as we cultivation dispensaries continuing Mexico Colorado other remaining into acquisition of LLC our are to a delivery And also In we

dispensaries as acquisition report, Directors as and execution. premium this XXXX, acquired by X XX placed our has well since cultivation April on X summarize, Board the of To leadership Mexico. a see cannabis our in or Schwazze manufacturing can you dispensaries team, facilities to planned brand Emerald As our of announced we dispensaries vape assets house Fields we to continue and Purplebee’s New the of Colorado, retail and of the Greenleaf Most all also in brands state our importantly, Colorado. expand continue build our with and successfully across

for that for approximately increased compared the representing XXXX. Now retail, retail X.X% the $XX includes $XX.XX, XXX% Year-over-year customer were XX.X% basket that to and we XXXX from before X.X%. increased up identicals square XX.X%. size revenue from our totaled $XXX.X million generate Year-over-year, XX% we Since in to of continue period year, expect year sales the in pro XXXX, up of show million completing capability, X,XXX,XXX,XXX, forma branding $XX.X our additional during to adjusted revenue XX% footage in compared we commence the to average was increase. to our which flower identical visits XXXX. revenue, performance The same acquisitions, last Recorded our to year company’s representing in dispensaries end a wholesale. million EBITDA have an ‘XX grow acquisition

attended have the from manufacturing contribution add been year. how recreational efficiencies grow our playbook, aligning represent the by at our to and impact of grow to growth vendors contribute and X-year growth add able the to to Mexico. encouraged cycle our we continue are our segment to operating EBITDA expect to information. In and by our implementation market Colorado locations. ability we we continue product at as retail better as assortment as for in effectively opportunities business as cost results with retail to for the continue to XX we XX.X%. At count dispensary retail manufacturing market believe New ours. categories, packages Through the We our from retail, by XXXX, in strong retail continue numbers outpace sales and MRP BDS discussing and and IDs our due in half first suppliers product decisions In to September, revenue well summit our COVID-XX Along the partnering our product division, we our be system the Analytics dispensaries. of plans adjusted our production growth planning we reviewing making demonstrates we reported and implemented reviewing vendor that and our with which real-time we stacked first XX.X%, We to Colorado held Purplebee’s with across will our results, across approximately improving stimulus with COVID-XX

to Colorado. Mexico market that opening the we slower anticipate growth offset be in in adult-use will year. growth in this the market of New So, anticipate challenging some Colorado We of

we to Colorado in with Mexico. experience management mentioned continue respective their will teams, all Colorado, critical areas Mexico New strengthen drive acquisitions execution we As to great And and unnecessary and come earlier, to support in fields. horsepower New growth, add our

center playbook plan part We retail in also to our wholesale as a expansion. add distribution Colorado of

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

may pass like House act it Senate. them we it pass next skeptical remain or will the this the or week Although looks again

reform Act continue pass both look adult-use more we will parties continue as note, and customers invest or and states Act to communities. or On perhaps cannabis. positive laws to legalize and a the all SAFE that something either our the legal at cannabis Bare expect continue financial in to in medical We similar reinvest and and Banking

federal changes poised to state necessary. are our and will and closely any As always, changes monitor make industry are we any impact would that that

are we and started delivery to service We home approved. as looking is suburb Aurora recently of Colorado delivery to jurisdictions have other expand products this Denver, into

Turning to to a as cultivation, we of states. areas cannabis will industry dispensaries continue we the other retail evaluate the additional the manufacturing, future, and in across now are regional operator, in opportunities

current provides to our announcements reached regarding made synergy accretive acquisitions acquisition expansion partners. products growth Our or potential, intentions attractive Any real agreements potential criteria revenue includes once growth brands locations prices opportunities, with EBITDA attractive be retail estate. definitive profitability prospective are we with with that have and for shareholders, additional and good will

bust us build profitable me early sophisticated opportunity state it targets already of that geographies are acquire of and to to and to provides as the the we home and our weathered believe reiterate platform boom out have represent the Colorado our industry. also Let that attractive cycle continues with

turns New turn medical-only the review. discussion medical April into financial will entry by and our I’d And adult-use as over continue state now, exciting from provide to Our additional like opportunities recreational to Mexico to to Nancy X.

Nancy Huber

Justin. I now our results Thank XXXX. for year the to would you, like financial ended review

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

reporting dispensaries X added in consulting as July Nutrients Smoking other, Success and March Buds remember Tomato we Gun December. includes Big are in and and We which in includes and and well MIPS as cultivation, February by wholesale, retail, this now includes Growers dispensaries revenue year other which which areas. in Star Southern Colorado X revenue small of and from Also,

the year, year million ended million also the of $XX.X the of of our by from previous million am to goods a growth Other an related year, and cash totaled revenue operating distillate their the So and representing acquisitions the and generated $XX.X by period a same sales year. that Colorado. $X.XX or to per the previous XXXX. acquisition our acquisition We to Retail year, share wholesale. for derivative million last same operating to earnings and same acquisition. products of financing. through million selling, $XXX.X expenses our increased primarily employment and The dates. $X.X compared an and the consolidated common increased in million million acquisition, operating X,XXX% by to contribution by for compared for period increase year report cash $X.X to profit retail to XX.X% to of Star the XXXX. salaries, results include since XX.X%, $XX.X and and increase to increase dispensaries to per of compared representing liability and for million for million million the net Net $XX.X we of flow million to retail loss of from I increase costs. due playbook. in for $X.XX with of in were depreciation the XXXX, year from $XX.X in to of convertible continued debt Buds representing those as for driven non-cash the which loss raising a million revenue from the of $XX.X due implementation is expenses benefits continued for for year, in Gross a year. to pleased Total expenses $XX.X margin administrative percentage and market. up profit XX.X% $X.X to point the one-time was from a period be Total for strength $XX.X shareholders period the and our $X.X were cost of to sales same the of million driven approach representing were to income purchasing during basic previous loss the facilities million $XX.X the in the million increased positive $X.X approximately compared compared compensation and derived share EBITDA the adjusted and $X.X year merger and $XX.X XXXX, to operations due attributed related million consulting equivalents. during during of increased Adjusted for revenue higher services $XX.X cash This last were amortization. Gross increased products was same Wholesale were or million compared general from year capital to related driven cultivation basic XXX% the focus away XX% year primarily $XX.X million, primarily period income and costs driven a sales costs sales expenses, million,

are the transactions Turning guidance, closed. that company now excludes but outlook to the XXXX, not for is which announced, providing

we and million. annualized integrate be adjusted are optimistic today. is turn from synergize in and $XXX continue to million $XXX our Justin and back $XX who open for questions answers. million $XX And Our The we guidance approximately QX M&A will you your XXXX expansion acquisitions plans. will to now company projecting as to year EBITDA recent QX the like Thank and is another to call revenue time I’d our to pivotal projected XXXX run-rate million XXXX

Justin Dye

team, growth Emerald Success our support, of Greenleaf. thank team, I’d to Big Schwazze. gardens, Star team encouragement Schwazze at specifically cultivation entire Fields all our the of like entire and behalf in for members thank the I’d your fourth Nutrients, Buds, you our team continued On at Purplebee’s, frontline like interest Tomato, but to and

loyalty ask customers would take for Relations questions. We you. happy their be to As portion submit. please Investor click and and support. website are the question, we grateful Thank To now a the on our always our your for on link of

Joanne Jobin

XXXX, total options questions give total available total voting Thank first I from cash us to And is raises Q&A employee any team would and by you, for the today. without be your Schwazze. could financings navigate Krishnamurthy, behalf please today warrants Justin on shares you. class, your us question to having And a outstanding in outstanding and at capital outstanding of the your other stock take rundown us will My XX-K. the Officer, is position, fully debt, you Jobin. Also Operating here am also joining outstanding Thank name given who other be and will audience. submitted moderating diluted Joanne IRO Nancy. year the This end? on help filed is, I Chief through Nirup our

Nancy Huber

Thanks, Joanne.

outstanding. XX.X that to year shares an XX.X that. the shares today, So converted PIK subsequent end events stock there common subsequent issued includes shares. about million preferred of year the was and as XX-K million of as end per interest comment have the the is of have Remember, That we in we X% on

number there at on that quarter, XX.X our a are convert rate to little in every as and shares million XX debt So would convertible position those of is warrants the million those million the up outstanding then XX goes But now. bit by counted X.XX. conversion

and In of about year options, million of terms stack about over million are cash. a they a had our to little in invested end, we year. about them $X.XX just X.X from employees of price we $XXX.X And to at options $X million X.X of range and outstanding which have

has and of a the using cash Also, do cash the are X% that the debt, $XX have used pay. although for subsequent interest, convertible million remember, M&A approximately is are And we capital we We X% in for believe a well. events. are then discussed that we acquisitions million which as cash $XX projects again PIK positive generating

that X% interest. is there So added to being

Star will Buds debt the have with and so in other is million. $XX.X we noted $XX have more notes, note for go seller we I a seller we million million RGA $XX that As

you structure. think the at I gives capital information look that need to our all you

Joanne Jobin

next acquisitions how since many Buds? Thank The question, Star you.

Justin Dye

I dispensaries give think how do a a maybe a better be view. Just of kind many positioning to everybody we have would now?

and XX or as Mexico. very have If you of opportunities well as look in would New and say pipeline operators, acquired both dispensaries, at Colorado, New Colorado in new announced existing cannabis comment Mexico. of I new the campuses cultivation a store it, have and estate we we of seven manufacturing in facilities acquisitions real good two

businesses to acquire is continue And, for certainly we to with. and forward certainly Colorado well. that look now our New states focus main So, really continue nice Mexico look partner expanding We as and look New other look stay to and and disciplined at to we Thank in right at in region. the Mexico. But can you.

Joanne Jobin

you How state considering in is the impressive, now, That’s row that’s Thank again. quite outpacing down state? you, Justin. once do a keep the four quarters

Justin Dye

year Yes, sales and great. state for XX.X% the compare We versus which comment. we of. Appreciate you – the growth BDS outpaced for the cannabis are proud the reported actually by industry, identical we’re

going We’re working keep towards to that.

business year customers opening who drive executed supply think We’re we will retail have we then needs stand prepared solution. stores supply our And in quality this better our better, for excellent best what we execution and making later vendors to more playbook service. a we terrific chain looking highest, operating satisfy sure center productivity We’ve been chain to applying do. great standing the and the what to to is cultivation best knowledgeable drive drive that we and the assortment our the efficiencies efficiencies, are That’s to want products, are and in in playbook friendly, executed manufacturing, highest continue in for our really for in in or practices stores. quality of the the was distribution our

that. about So excited we’re

how costing our Purplebee’s better we which and we where to our our first really and We with and continuing in MRP September, at are customers that have we to suppliers industry Colorado us discussed to allows we’re In can production great telling implemented do we manufacturing top products, campus, top products, summit XX there, that and our had what we good at held the doing system, discussed together planning quality. categories in retail, and assortment brands grow, grow and values work want be us closer they review them. partners aligning vendor,

our store comps XX.X%. X-year ID, you sales If at same for stacked look were

years XX.X%, believe So if said such the XX.X% were our healthy X-year And last lots out really market the think represent of for which COVID market combine years. the with IDs employees parts the shortages. our state identicals is labor very we you of which some of seen issues. really we certain Colorado. as customers a them, as drop X off growth the that last we of over We’ve couple And of COVID, been there’s we’ve certainly with had in sophisticated displacement,

really through team of a I is think industry managing the set the in with sort of an the think job done circumstances So – unprecedented pandemic. I this has nice of

growing care we’re we’re our of taking So we’re to sales continue what proud on of doing, work customers.

generate side. to XX%, size If we our you retail look delivered XX% or wholesale. continue win we to wholesale basket increase retail of trend customer growth, and at rec And revenue revenue XX% and from our on in continue we with business, XX% with expect we to visits customers, New we And wholesale growth an see upward continue Mexico. continued the to from approximately,

New from calling today. we’re fact, In Mexico

At we excited tonight Mexico. here business midnight we’ve checking be being almost here the got in out entire team store. here. will the We’re New And customers will the be about in rec

us. So if or you’re see in the come Fe area Santa Cruces Albuquerque, of or Las

Joanne Jobin

question The multipart. Thank next Justin. you, it’s is,

average So your Do Can business? any I’ll home higher comment daily prices delivery you any rates what size, has business? to of why fuel transactions, impact for the delivery home growth you it detail Sequentially, on go provide sequentially. as basket the on the number declined? through had have revenue

Justin Dye

process. markets are and me rush of that difference markets let still ramping is – the still limited are in really the this Yes, new kind between license gold

look such you what a at not to you a as So quarter and X.X% QX at when was and quarter, at When our year look we measure three ours. stack you X-year – sequentially, retail compare this look to view are was X.X%. look identical frankly, to you the at com very was in sequentially have XX.X%. market that When sophisticated mature it is done, identical at are

X.X% which sequential on basis to identical the as store basis growth, is store improving on and XX.X%. So good X-year an was

about And versus its market QX. and own you cyclicality. at unique you X% Colorado another grew is when it, look certainly we So have

the that So QX and Colorado behaves. and are how with the since quarters like which came online. It’s two best in rec been QX market the market tourism is

So you can see there certainly cyclicality in the business.

So product November, that’s quarter we the probably seeing on saw the saw right customers on with it. not inventory really side side, there in also sales slowing say saw that to fourth December, some way slowing, raw seen they and continue distillate. the to saw material held taking of had, we CPG wholesale recovery. a, in CPG then as I And had excess half retail distillate. Back strong. look the would we softening at very And particularly in the we the on we’re

it that’s sort and up how start to seeing things think temporary about the pick side growth think that, think of to I here. how to a we of then lag are really that. about that’s But

Joanne Jobin

Justin, as operations? vertical you company you, seek the is cultivation, Mexico New Thank caps to in grow addressing license how

Justin Dye

another great that’s Yes, question.

in licenses, you the state. well, have growing getting is license own is are there of New Mexico product licensees you well as a retail here that of And a number as there’s a have, So, its market. shortage as do

lack going products. of be of side that’s going of demand the to issues really things one is the to back, key hold So

it’s really So generated. supply

of we’re in Mexico, of to not see operators So have won’t they going and number New to product lot they’re sell. a a open

the we sort the off We’ll we’ve our the to growing to tonight to the really certainly you plenty New midnight. Mexico. product at in we’re And tip of issue licenses, forward rec thinking how of etcetera. New meet addressed things licensing Mexico, with so way in seeing a market. that you looking rec of But And supply here here about products got evolves fundamental there’s get we’re needs have but

about we our that So here for those patients are think with and the customers our and things here Greenleaf.

Joanne Jobin

Justin. you, Thank

Boulevard Next like question. site XXXX slated the retail a large looks opening? proposed dispensary. you Buds Can Star Colorado comment very on on a It for

Justin Dye

we our the that that. operator we’re a And a we’ll drawing of really one quality on Yes, excited was streets the ingress and that. Buds, about we’re into a opportunity, that’ll about will we will busiest And And bring to single That start quality. very our on the remodeling acquired the egress, hard we’re of in store that Star process and remodeling Denver. Star we’re merchandising convert in optimistic corner, hard great excited about our Buds service, and up that. be, be corner

that on look growth. come to we more seeing So and to forward that store

Joanne Jobin

Thank you, banners Buds Justin. dispensaries? topic, with same for And sticking Star Fields what Emerald is strategy the using with the versus as

Justin Dye

is customers, at have those Yes, shopping mix stores. I look you who at a when they think a they have slightly customer different look within when you

Colorado as tactics we’re service allow of different appeal to in and think will Emerald measure And there consumers. really Star and a to broader well we Fields going etcetera. Buds technology merchandising test us and as having retail set be So models to staffing sets will

to what’s our see obviously them the driving in with the right getting customers for we will getting looking efficiently and AV products of we terms – the on benefit right best service them some the So quickly, promotions. testing best value do give and the always right then out at

Buds we’re do prescriptive, Fields a run Colorado, going that both it to as to no be our appeal and count in are towards gives harm. have a to that overly an or we name audience we grow keep or best shoppers way whether an for best so to those decide We do not here is affinity those really continue it store existing going they us and we’ll Star in customer the of to Emerald the will to broader have brand and loyalty So be Colorado what’s

while we banner into may So or for keep perpetuity. it’s think a good. If we that

Joanne Jobin

you, Justin. Thank

with Next question follow the size spot? that and still will in of acquisition and or – sweet changed same be the M&N today’s criteria what And market environment? your structure pipeline, sorry, that what acquisitions will has

Justin Dye

imperative it will that’s, us. solve strategic these a Yes, will, for

hopefully our going to on retail that price more free an footprint sense side, to our of state of think we’ll shareholders. us, drive So that’s way and same more a buy we’re Mexico, about cover flow we for that. that continue to we’ll those in businesses are And generate that’s generating New make the and to thing will for taxes, important pay appropriate the Colorado, store the EBITDA, after cash

there at more on down product retail will well, fuel you’ll going get So road then try may side, biomass focus, we manufacturing there growing our as investing but the retail some well. as us and our distillate our principal be business, opportunities the we’re to to to continue to really and look be into see as brand principally

Joanne Jobin

you, you it you the model, evolving? like seeing still Can sounds expect to delivery the maybe New and and do Justin, are And you discuss seeing that opportunities? are challenges Thank Aurora Mexico? bring that – you

Nirup Krishnamurthy

that. take I’ll Yes,

implemented on higher in are online from traffic size an delivery delivery. a last Aurora significantly we delivery ordering our is we So, kind consumer year, and for standpoint. and basket in-store And than seeing decent of basket

and of proving So customer good in and both service. beneficial in that regard, terms top margins it is line

counties, Denver. And as in questioner, the figuring that evolving. process out the is expand asked across actively question is to we other So And place. a said who and at including capability are it have established the person how that as we looking

Joanne Jobin

Thank you, Nirup.

less or Mexico retail same Next the better than in Colorado prices prices? question, New the are

Nirup Krishnamurthy

on Colorado far will with, starting of because will scarcity pricing a that tomorrow, pricing being side, drive pricing side. the higher as Mexico more number outstrips begin in CPG suppliers the we To market based. in And rec the a retail growth very supply. than with well both Colorado as is go expect of of very, is mature as large demand demand, we market simply supply. So New marketplace, in be The

And so way. years, we by not New it’s there get while Mexico happen, over expect to going to the many

Joanne Jobin

New serving you rec And states? of still prepared Mexico, Thank the other more medical influx you, how Nirup. visitors well are one while expect from a Do you for market? on large

Nirup Krishnamurthy

worked have team ready in very, on starting X. here closed very our tomorrow. diligently then, New since stores XX his get recreational and to sales Steve we the on Yes, team acquisition February for And the Mexico

stores remaining We not ensure at some have Enable the medical side. time. adjustments that and same to made inconvenienced significant recreational patients from remodeled the the traffic to of six four the are

operating bring customers forward are here. mentioned And we’re see to recreation is, that great addition the we set into Colorado customer in to best the have And as highest job customers. our and So customers in of the yes, products really same and to Justin to have love our New looking would our that playbook eagerly serving quality and medical we service. we Mexico

Joanne Jobin

tell Thank roughly below Can an what you, you It in quite please with X QX Nirup. guidance Congratulations year. that do appears this to gave to? eventful results. you us QX on came you the X shortfall million attribute

Nancy Huber

one. pick that I’ll See,

who decrease saw And in they little a those in we to we December, decrease shelves. slight cycling see saw retail, and bit So of inventory our up retail sales that than COVID was bounce as December wholesale were seen People think But, did times in built figured their on high performance anticipation what Things November in a decrease inventory a I more compared because we out the we little a lot have our had have a and soft bit consumer anticipated. in products. November business in anticipated. back. difficult of we in also the a

and But forward QX, has anticipate those numbers moving numbers well. taken So bit little back those as now seeing there. those longer are come for decreased we to bounce in It a back.

we be said, that stuff. the but in will half some we Mexico believe of more do offset Justin bit As this challenging cope will the first New a that anticipate COVID Colorado, launch year in in cycling of little that

Joanne Jobin

Nancy. you, Thank

states continue super-regional, As will becoming to on we focusing adjacent be nationwide? a you we what states or be expansion? possible thinking about for target And should

Justin Dye

question. we’re certainly on we for the to you focused And that to on thank very to going Well, the west, obviously, share that, have gone in close Mexico. here market record to we’re drive in keep say New one we Colorado. It’s, continue

a certainly for the on time, So building other that there leader. states. or down market of we’ve business being road. the region, and of be we we lot attractive we’re two like work this the really are But period can got in best next to a And, focused these states here may do may

And We’re stay, number very most we to of. said, and we one got were in after do we’re going good which Colorado it, done we’ve we’re by our revenue, today, proud recent going that to acquisitions we’ve Colorado. in competitors

with So New like able synergies to we around to etcetera. customers. and taking care we focused it’s on being travel, between west there, stay we’re going best And Mexico. people easier move similar have to But continue practices, in to and here drive to our of the plans share business

will to buying profitable was better think continue for and we there have, synergies, unit synergies in scale, growth, efficiently, the flowing, and those and that create you’re more our acquisitions, well to side. we’re chain on we’ve deals and we we supply announced to. around disciplined work on that already, stores as remain So reflected and more practices, say opportunities would question see provided to I synergies have more that I guidance more I as add businesses can better, going have to using that that best will make believe certainly And a will we think more going continue operating the are size cash which we synergies going good the is, and

on we’re I of focused think New Mexico that’s line. So, sort punch and Colorado, the

Joanne Jobin

Thank you, Justin.

lot a on potential of buyouts getting are takeovers. We questions or

on comment just can you that? maybe So

Justin Dye

Care. a we Cresco that’s and on do has Columbia the not etcetera fair comment announced Obviously, be market are. transaction my Counsel deals advised where question. me potential was or Well, there a General between To any in big –

MSO the We we’ve that But and from really to I’ll how landscape from what back beginning. to works. the monitor watch and said come continue

company customers brands. building to innovates takes the are products and We and in launching on chain, of really drive become focused here, having efficient and and care supply really continues and a that that very superior very, margin great drive grow sales

Dallas great very, create really investors to we’re treat on. that’s that, a do So we’re the well. going going And very And in be that valuable. at. do we states we’re if we’re to it’s what going focused company And it’s to to going

a we business reward highest is great Our them. what for make returns and we’re and sure that and doing. That’s investors shareholders job here our for to the in build drive the company

if So would is there we’ll keep continue that open the our down we make to build opportunities our business. sure we’re certainly road, eyes to shareholders. And this taking of care

Joanne Jobin

Justin. you, Thank

sounds this been For correct? like additional not it the acquisitions acquisitions and closed, guidance that been any not include the announced. not XXXX Is that clarification, have have does

Nancy Huber

closed. acquisitions is that correct. have that based just on It’s we Yes,

So It include for year, events, if would the Mexico look again, agreement for but closed. at the Emerald a you and we with, we we have Brow. have Drift, in include doesn’t subsequent which urban, XX-K, New those things announced, we this it example, closed definitive example, Fields, haven’t

that’s kind look at to of that. the So, way

Justin Dye

extent the what more we grow flow, acquisitions So to there, that accretive are those additive to cash revenue means the extent be upside. would out put that we have have we and to – and which

Joanne Jobin

or after operating Thank we can for cash that? flow you, million free $XX the think you EBITDA range Justin. CapEx How million translating recurring maintenance a $XX about provide to to guidance should

Nancy Huber

but million operating year the the Yes, breaks across capital cash that, that provided be that haven’t I say I worth doing flow, $XX any about will give on out over of board. and improvement guidance do because we the of we kind really can’t you

store openings, we circled as improvements. in flow center well, a as opening take bit being Mexico that little capabilities we’ve as year. New we We longer and will earlier a new distribution manufacturing of will in be the are have talked Colorado year refreshes, about some not probably the which a but kind doing well in Colorado And throughout store and little assessing in and in new as well

Joanne Jobin

Thank you, Nancy.

few is better the and you as a to the attention price, not share on Would to rationale Justin, what market comment? questions Please. paying Schwazze. we’re why the to getting is quite like

Justin Dye

I’ll more look it had in grew X-year. now the $XX the probably you at revenue. as about $XXX optimistic in one we million frame In from fact that, to million business ‘XX, million roughly $XX if within a business, in that, our

from to employees So employees very, the XXX businesses XXX quickly. X-year. We’ve ramped grown very in

after cash CapEx. positive EBITDA, generating we’re net taxes generating generating after flow positive free So income, we’re we’re

is, we’re works. really make that great So we’re the matter everyone model company, think share, fundamentals. that, Colorado. customers, of side, supply care fact of we’re I strategy to seeing believe, outpacing We’ve good unique market with chain building working more And the on efficient, think why partners of we’ve a a taking got the got I I that’s and

delivering be execution execution. optimistic and and we my set. that known board’s why and about from an Mexico, perspective, want focus our that’s about the think I New And it’s to as we’re results we company, and perspective

So more to share people. have that having we and said all of take that, with that

over lot got we’ll over in not will have virtual road and handful up since three not shows month, with on coming really and next the been retail be here investors, more the next next conferences. of shows. we’ve a sharing conferences We’ve institutional We the done person, to COVID. for road here We’ve different X we’re months a road be that of traveling investors, at starting

in sets us gets also to It that, more retail things going story. in does important, it for listed being more public and trade – I also attuned it’s – us doing easier that’s and investors our I think the couple I think Canada and it be So to to think stock. a up institutions

So, into there OTC but are NEO they really trading get can’t or on in stocks, the trade platforms that can’t can exchange.

will think think at to and our I numbers operate all trade are And discount doing that to good sure to are speak things capital message are a and sure out are are sheet. to we about trade the we pay is I we what future for our to not, is I and we think and of and and those going other make steep continue where really operators delivered they making balance for And cost So, a as goal they have – themselves. markets get we it’s that to all think dividends pretty our continue us. will capital incremental we lowering got and

I So, see lot a we are things. think to going good of positive

and us really sophisticated fast look free is, EBITDA great share hard operating And think at revenue markets. there we really like growth, growth, market have profile, taking you with I and from that think, companies I to look the I have flow think momentum. cash got

a where to focused more but team. I really more everyone I lot lot positioned. a making work great things our like is to a and think We do I this on So we got company. are on, things love And

Joanne Jobin

was detail Justin. you, app? to able whose you Thank available to app public? a Are the It appears first major cannabis idea Star phone to operator Buds app the cell create Buds Star that was

Justin Dye

question great would I be it a that’s – of for. My have Buds. that don’t Star founders the don’t I cannot. is I an answer guess

Joanne Jobin

Okay, thank you.

up. going we So wrap to are

great I on We have a And concerns on think guidance? for executing question. it’s most what wrap the XXXX you to one one up more

Justin Dye

We look, always think think – closely. I think the side. watch watch base We from we you visits. the We I you – always demand basket. watch risk I have, customer watch very this have on

got Our continue do to sell and goal to is And lives make products to people’s solve that. problems have better. great we to

side. store the We the have level wholesale do got at to that on

with work them. be in and continue working really products have distillate We customers high-quality other to giving consistent problems got with solving our to whether it really them and closely

has side, are going distillate the certainly to evolves think softness demand certainly part watch pricing of and mentioned really, the Colorado – going forward. on QX back wholesale how pricing wholesale I come certainly, We we So for down. has

confident. are we the pretty the feel for the but feels We the fourth team can guidance I quarter. – that, like watching So meet beat

some is out and control things have done That’s there build a quarter don’t because from went view. licensing we We that, timing standpoint. that we why fourth a to

it that really think we building. a it’s And in you you full the the are cleaner view. a sense – annual I gives size or than sigh company a view gives of

can I that. about worry So,

to shelves, have of sure end care making great of and sure that. team are customers. making on going we in expand with The taking stay and to dramatically. front think great of volume great we got to do is are products hard And going that to on stock, New we associates we are sure I with in taking care – top work really believe patients we have the members really making Mexico, to customers

New on, chain gives we things up to plans it on Colorado synergies, between staffed to share staying and optimism. supply me practices that of lot making of So, be sure the I and we that got contingency good lot Mexico are but side. we lot need a best a see can Those going of the work have

Joanne Jobin

you, Thank Justin.

wrap before are to final the up We call today. to And we going have ask like you I’d now. remarks any you end if

Justin Dye

packaged us basically been us customers the goods at side partying I Certainly, thank with and have vendors, shopping the on working just the want Schwazze. Yes, with investors. would shot the really to want I want to thank flower members thank to stepped terrific thank and leave up to all on think I partners following. I our side. I board. I thank – the to who we the want I is our team members. for all team to thank want our want But have

I company think with have a good momentum. we really operating good created

We perspective. revenue are a from that seeing

that seeing perspective. an from are We EBITDA

We are free cash flow. generating

are We see with we new perspective, we And from positive new going building innovate. we solutions share. important. vendors the But to working – in per company. like importantly, really are the are on have got you that’s financial us going that’s really more innovation a products, on And I continue to our earnings and

will come to see out stuff conference think you look more I are us next going of So to a of to our forward and call. lot good we and

Joanne Jobin

joining thank that webcast. year website. Nirup. and for and Schwazze Once everyone This you this fourth end would today. ends call again, like for on you, Nancy remind quarter to the you, is our and webcast I Thank the thank available Justin Schwazze

Operator

and you disconnect now may Ladies your you. Thank gentlemen, lines.

Medicine Man (SHWZ) 1 Apr 222021 Q4 Earnings call transcript