SHWZ - Earnings call transcript Q1 2022 | 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 Schwazze First Quarter Conference Call. Note that all lines have been placed on mute, if you are on the phone, to prevent any background noise. After the speakers' remarks, there will be a live question-and-answer session via the Web. Instructions]. [Operator to over like Joanne the turn would to conference Jobin. I ahead. go Please

Joanne Jobin

you. the for and to and Schwazze. first Thank welcome call XXXX Greetings, quarter conference webcast

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

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

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

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

Justin Dye

financial Huber us take update afternoon. first to Hello our review and quarterly with a detail then into would thank before in some I our provide which conclude will XXXX, of XXXX. for quarter will performance you results I CFO, our achieved Schwazze happy this a continued thoughts. remarkable joining be in Nancy the business and questions. We final your presentation

team Our the condition. our and our continues at products admired team human making nurture the providing this most becoming vision company difference by and in communities of that to improve experiences trusted a

and efficiency passion members and the teamwork. environment while Colorado market, our challenging for navigating the a for by distinguished Our brands And remain are added challenging and asset Schwazze and four in thank Mexico. in for New we to one growth building our plan plans as cannabis to determinant Since craftsmanship, in revenue members in our pandemic facilities, innovation, lingering in Colorado, the steadfast a driving in its manufacturing effects delivered faster of quarter one in XX entire long-term house growth would a network; driven on Colorado like remain to despite track. dispensaries team their flow New Mexico, than and five cultivation of operating four our well Despite retail industry, in of team as Mexico including cash and of that XXXX, market. grow New has all hard December operating commitment work, enthusiasm to XX our excellence. continuing positive I

operating Fields Kitchen when development with Falter-Hahn Elemental Associates, cultivation of and LLC, equity MSO MSO Associates. as Mexico included; XXrd, first regional the we NEO of based the LLC. Jacob assets Ontario. our brand, This X the the Springs which the X licensed four acquired two includes Dispensary symbol Canadian and a Toronto, adult-use during includes retail the & indoor we the a as and signed XXth, our Exchange, dispensaries Denver-based LLC, quarter & accomplishments On Division the from acquisition Reynold acquire also XXXX on a & Urban Denver, dispensaries, formed cultivation proposed Mexico building status, included February facilities, Manitou New the Greenleaf manufacturing the Emerald a February, on White, square transaction in stock We acquired documents we commenced indoor Health equipment. In leadership company's Alex both campus. in Urban cultivation, the cultivation both Our and formed the brand, three feet announced of Wellness, Greenleaf and cannabis President, newly Schwazze we Tier also strong SHWZ officially transaction and team exchange our & located the operator Colorado. March cannabis we Greenleaf of Glendale, to all Pear well The New Mexico for XX trading Colorado. one operating of In as and Steve assets assets with one Greenleaf Brow X,XXX in in of with common located became a the along under R. New asset Laboratories, Along owner March, definitive XX,XXX medical foot the stock square of Inc.

acquisition cannabis in roles the Schwazze of announced which included of Boulder, of and We Drift, Piziali we located are Colorado. as that and Dave support expansion our members within adding two Supply key Robert the Cultivation. VP additional January, significant Manufacturing at announced Kaufman information dispensaries also to as cultivation late Chain; technology. of assets of Key manufacturing, In consists we VP

adding Our communities. continue our local Most continue that decentralized and and build is we our build to plan develop brands of and efficiency responsiveness Colorado Purplebee's other system state Greenleaf customers with both dispensaries and New and importantly, Emerald agility, across and of our Mexico house Colorado the operating vape to dispensaries. the our brand fosters in to and dispensaries, expanding to Fields

we of Mexico. joints the in to and square With bring to Last batch a footage expect crafted in retail dispensaries our XXXX. our our line a to agreement statewide in flower cultivation Lowell of expansion with small pre-roll capability, we Lowell week, and New Farms licensing premium brands Colorado launch announced dispensaries both Smokes,

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

Mexico. we're Now, cannot pleased a revenue XXXX, medical that report retail selling both that sales of numbers for the we Mexico. but recreational hard New about word we're with On trends and far. in yet, we say X, New adult-use seeing cannabis as April can so We commenced

excellent in We in on near footprint report New the this future. revenue expect from established have an retail we category now growth Mexico and to

one million, the a Our company's quarter last same XXX% $XX.X one the compared QX and were compared totaled million, $XX.X unique for same report up revenue. period XXXX of down call. and million were the represented XXXX the X.X% quarter one quarter Average Nancy to when loss XX.X% reported year. quarter compared of number to billion for for adjusted to year. of XXXX. XXXX was were IDs was XXX,XXX will for $XX.XX, quarter for one compared basket for $XX.X or quarter same-store quarter $X.X $X.X $XX.X XX% million size one-year net retail XXXX. for greater revenue down and We to to to We're period X.X% compared one later last quarter to identicals a This XX% to comparing one down XXXX. of to XXXX loss an or the when at on one in were Recorded quarter discuss compared two-year stacked totaled quarter. net the increase XXXX Colorado quarter and EBITDA detail pleased X.X% in customer for one items sales that XXXX due of a XXXX. one The was this sales million quarter visits slightly

stacked quarter was X.X% down compared Average or one-year Recorded quarter X.X% quarter one for one XXXX were one same-store quarter compared quarter and $XX.XX, XXXX. down totaled XXXX quarter were identicals one comparing XXXX two-year XXXX. slightly to one quarter XXXX. quarter one basket IDs XX.X% customer XXX,XXX one and XXXX one XXXX size compared sales for to X.X% XXXX Mexico for to visits for negative were at and quarter to New one

We in industry achievement will is to sales we the state to and to remarkable this the macro stimulus time. spending, and quarter be first basket a faced macro challenges once cycle you attributed down Mexico believe both quarter-over-quarter to pleased continue year. this the consider the market XX.X%, when the We that New Colorado for which numbers half year and at that Colorado report challenging the anticipate for retail we of previous continue outpaced by COVID-XX events again were in growth the we're visits While for of Colorado by year. to customer the industry

Mexico the in expect market that help New we growth. will adult-use offset However, slower

in compare have publishes how in market working will For that we near Mexico. as service Therefore, in now, state do a such to Analytics not stats we be New BDS comparable on future. the performance that our

of our XX% from revenue quarter, generated retail. This approximately we

integrated expect dispensary In dispensaries Drift our in one, contribution We're in and end retail of will and vendor the product be to four to promote review operating effectively Buds be add Smoking the on remodeling to to a of four continue of acquisitions. manufacturing month. sales working product And the completed all count the the at time, Through the payroll Gun to We partners at continue retail we and our add by our with implementation process accounting from categories, contribute our aligning quarter which segment systems retail, two. growth to our to we remodeling grow we quarter across of locations. Mexico. have playbook, assortment the expect moved by also to efficiencies In the rebannering we end and we and recreational to acquisitions retail as system of single Schwazze's of Star New and our products. continue dispensaries and this our dispensaries,

government federal once significant state report and no acts. federal changes on cannabis that legislation, any of can the we movement again been or regarding laws there for has As the

pass Although Act will skeptical passed we the Senate. remain MORE again, House the they the in

and medical we will the adult-use a to similar, and federal meantime, And the In On that our timing Act monitor Act continue expect in states as changes and is and changes are something closely at or Banking continue or we and pass impact positive parties either SAFE to all We continue laws always, cannabis cannabis. both legal clear. state but perhaps make but financial reform any any in poised industry our look and the anything to MORE that customers more communities. necessary. would front, our legalize to will invest

cultivation, opportunities of will our in We to in industry others. continue manufacturing cannabis states areas additional and across and dispensaries evaluate the the home both

retail now, Our to reached to definitive with discussion Nancy made the partners. revenue acquisitions the applicable current opportunities, turn that for continue Any EBITDA will we've over intentions Huber locations. states averages, to and growth announcements attractive expansion accretive exceeds potential include And prospective that potential shareholders, to or once quality attractive financial regarding branded are synergy like criteria provides be our growth review. I'd high products agreements acquisition with our prices profitability

Nancy Huber

Thank review financial XXXX. our I'd quarter results for like of the now first to you, Justin.

$X.X revenues $X.X to to the million $XX.X compared to was QX due The was reported Justin in revenue the included state an of XXXX. million, XX% million. largely drop compared revenue quarter $XX,XXX retail of first million. for mentioned or top Total presentation, increase for As revenues revenue million pressure quarter oversupply to and wholesale to million increase and of other were the $XX.X $XX.X were in $XX.X at compared $XX.X of Wholesale pricing million operating an of sales in total $XX,XXX. distillate the Colorado, the compared of

to $X.X in the increased XXXX, retail and rate the we at acquisitions to of Much February to million of of higher our and in in dispensaries was Star dispensaries of of mid goods increase million In accounting acquisitions. million purchasing of a in New accounting. year. quarter representing in million which Buds sales the for $XX.X for first to XXXX March Mexico due $X.X this of Emerald of had quarter or reported purchase cost from to QX additional growth increase of accounting increased compared due than quarter as $XX.X goods totaled to declined to services purchase a revenue and Gross these cost Total of cost same first quarters. million and As XXXX, due $XX.X this made million due through And and goods to XX.X%. of five a of margin profit Gross we've February X compared XXXX, period additional million two year. January is in revenue last increased to added reminder, due The QX to of the late services for XX.X% Brow added Fields, the growth and revenue goods profit each $X.X we XX%. XXXX percentage Drift, compared cost for acquisitions. first This QX to of $X.X an XXXX.

$X.X for the gross increase our general $X well approach of and the expense to during XXXX. to consolidated was derivative service million increased of expenses our quarter from in purchase and administrative the various expenses QX million the and or XX.X% number $X.X million QX in of of continues employment reported convertible in net due to The due dispensaries senior to million QX playbook implementation other related $XX.X This acquisitions, to Although of sales payments in to in net an increase increased to and notes acquisition interest reflect product totaled liability in from related XX% and purchasing million vertical our represented expenses, was an XX.X%. for during to mostly as of salaries, This professional benefits New including as XXXX, margin result compared more million. increase $XX.X a non-cash costs, increase retail to network. to Operating increase due related due compared accounting, secured selling, XXXX representing our loans Mexico. retail fees XXXX. loss Other related $XX costs, an the the net positive of XX% totaled

XXXX. in period quarter Adjusted at quarter company our same table XX% and depreciation generated This The representing compensation costs, income QX the operating significant in non-cash of million last end of including compared amortization. experienced the to the As of adjusting financial cash costs. amortization and raise equivalents have well was if million, closing same depreciation from for million was activity. capital of substantive net EBITDA a $X are one-time a The of details. million, compared of do $X.X $XX.X $X.X acquisitions the See positive compensation costs the and move in news the million purchase totaling million million of as period includes the $X.X to the quarter quarter derivative operating cash for the $XX.X expenses, as the loss income of of and $XX.X merger results. $X.X acquisition the million compared for $X.X of $XX.X as forward, period adjusted income result acquisition targeting year. XXXX. net of for of liability we $X.X million and same factors for which we for The first recent related revenue for above, million $X.X non-cash our costs flow costs and This discussed associated includes XXXX. accounting million, and EBITDA cash to we certainly complicated is company and million and a not charges net $X.X loss derived of generated company release capital this non-cash our raising $X.X million, with And and related additional changes acquisition million operating reported loss for

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

Our from acquisitions annualized remains now your will for projected optimistic adjusted QX you as QX to year be our remains XXXX million. another it approximately synergize in to rate plans. projecting $XXX EBITDA to run million. And revenue company integrate Thank Justin. time. and and expansion is that XXXX And back M&A $XX XXXX and our we are unchanged, turn pivotal million The million I'll continue we $XXX $XX guidance recent

Justin Dye

would Thank building interest your you support, Web portion any and you, of We on now all Thank the committed of and I thank company for to a continued long-term Nancy. questions. building please competence. And you. be your to and in We're link to Relations encouragement take happy click want Schwazze. on profitable submit. terrific really our ask site the a To Investor question,

Joanne Jobin

is Also be audience. Nirup available of take am will also I joining team Operating and here our questions on Schwazze. who us Jobin. Officer, Nancy. to Q&A Joanne you, Krishnamurthy, My will the behalf And today is today. the be Justin moderating from I the for Thank Chief IRO name the

The keep first again. quarters the now, row is in That's we quite once do considering a how state submitted question is, down state? outpacing five impressive, Justin, the

Justin Dye

actually of Yes. to over outpaced share efficiencies supply chain. our you, proud continuing to the We're Joanne. with operating and the state And grow so playbook. market applying by at We look and great and driving on to retail we're to Thank XX%, build Purplebee's, production division, at we improve MRP visibility our system on if growth. costing continue implemented to planning which we us good decisions really And our make effectively manufacturing decisions. work you continuing gives

Summit estimated right grow outpace to our market to plans, and grow last and suppliers, placement. categories, review vendor for the Colorado Mexico. figured Colorado to continue in QX right In comps promotion, XX and 'XX have making two-year product with share. to our compared New to continue we how with shelf sure product their and year, right first stacked we XX%. two-year and we now Our business 'XX for September products was the we identicals Colorado out retail, And pricing reviewed market we the the stacked right have the

two-year good a healthy on So basis. growth that's

we was identicals, down soft the were soft that's X.X%. first in one-year Our temporary. We think XXXX, quarter. compare Colorado When and it versus you was

grow continue to we're We continue consistent plan. to that's share. to strategy very to Colorado, like market drive to in a We think with and and going our Colorado. going winning and We're consolidate there continue stay execute

on average visits driving to If promotions slightly, experience. new down with X.X%. at going traffic a basket work continue the size, Customer and look X.X%. we customer retail you great to and were products down interesting were We're

the the off look going We're to New growing see grow which comes into was that see Mexico, in one-year as basis there New slightly we two-year stacked April you that we're at -- in identical kicked If ID very XXXX comparison Xst a XX.X%, frankly, healthy. the Mexico. to we X.X%. And so down play, two-year in adult-use

IDs the had use stacked because we So cetera. lot a two-year effect, pandemic et we've of

A first quarter, cycling of this I up was pick to but we'll kind there a lot of we're tough it of half first the to market as the quarter. So I towards comparables. messy to was we've forward seen of looking think continue noise really momentum And continue think -- be soft year, part some And we're Colorado back see softening. year, half. the

the costs nice first cetera. business. had team, -- But quarter. continue the job from in quarter, proud a to of noisy we're in there acquisitions, And team So committed to of that's a I et think did the little we one-time the lot grow

Joanne Jobin

Thank Justin. you,

Are a than the New areas like there And question so chance Next will Mexico market? a can influx has with been sort of see tuck-in bring seeing a deal delivery the What the expected? up in is we market investment What more Is pipeline you into ramp looking to about model? see higher how the we far? it? Mexico. New

Justin Dye

it's as you Yes, really as April the Xst, a adult-use me look perspective at the well. adult-use be we even as in traffic the see Certainly -- strong than other border, basket kicking from sales state, on tend they very let been if still good growth But the off well parts seeing be state. border, parts in of the stronger other Texas of growing. have to

displaying the what I excited a I best service. to of merchandizing there's love really having I between more We the think think there, perfect in opportunity. And we We XX new I see And the lot XX about and working like a new but somewhere we're And there. to et stores there. stores, platform, R. see we're there. commit us XX we getting of could don't next retail want X it. organic Greenleaf But cetera store very product, have opportunity terrific on on product, opportunities lot to market say months. lot, in working I is So a that. and when

done think on on hand there. I we've continue that. really going job to of got chain. work then the a team's to we're working winning And nice the And a supply

and a cultivation, we very manufacturing, there. distribution, solid So have team

we're excited Mexico. about So really New

good to see there to the very We'll us about. bring new will us going to pick to that and acquisition us candidates right yes, the down that brands, give some continue be our I You're going and edge bring front. on work there. think organic give innovation do us thoughtful ones we're spots an capabilities And that and there's -- pick be

the happy So about with excited Mexico we're future. New and

Joanne Jobin

detail is a has fully County I Nirup. and this Thank think for you, provide Boulder Can the recovered? Justin. question you the situation on more situation

Nirup Krishnamurthy

I as everybody. quickly afternoon, Yes, impacted you know, the Good fire by in January. was Boulder it. County, can touch The upon

Our store are closed but has days, we opened since few was a business. and for in back

because to understanding, X,XXX there my has rebounded rebuilt. at yet, still Now the being way not is the least all traffic homes

expect And progress so to time front. as traffic on is over that made back being the we come

the of have, though fire. January since Our course, rebounded sales

Joanne Jobin

Colorado New the increase regulatory And to both levers on year's New Thank there? pull is what you performing an and environment Mexico? you, given can capacity that Nirup. this you please in Can provide update cultivation how for Mexico,

Nirup Krishnamurthy

that. take I'll

Joanne Jobin

Nirup, I'm sorry. Apologies.

Nirup Krishnamurthy

Okay.

New the chain, especially in Mexico, invested in we have cultivation. yes, in So supply

capacity. building are We

enough to in Justin capacity in capacity needs, we months. for expansion XX fulfill expect increase our XX mentioned We are -- to come earlier or two. we the supply our half quarter. as the over on, a to here the online over next And We in that supply believe third provide expect in significant positioned stores next and well year to our of terms the

are we the there. with happy progress So very

We a be footprint in are will the building across our states. art crown a facility, and state cultivation jewel of both it

far And six as working in last we from on as months. the growers standpoint. capacity two As from are those Colorado internal to acquired we an both concerned, expand growers wholesale the well, a and retail is there

our will quickly. our Our goal XX% is drive started we to get own stores. And flower of into on pretty that here

I to However, need choice our to that customer. just reemphasize the provide here to model is

will both of of and and it a that We selection always be our operating will from have model our wide always variety flower, And ours been has that. suppliers.

Joanne Jobin

I've while And Thank question Can the you give regarding more you. for expectations one what Nirup. Farms Lowell are more you, to color you're partnership? here, got

Nirup Krishnamurthy

and our Of other states. Lowell the New And be we premium Lowell week. And manufacturer that to course. partnership products. pre-rolls are comes when number signed and of in capability to our California offering really to We really us excited. last are and it provide both in the allows And to we performer Farms products is partnership Mexico. Colorado exclusive Farms one that excited

it will online. supply begin chain with Mexico New to with our and Colorado quickly up very initially We once with follow start comes

we So excited. are really

Joanne Jobin

way you that you to to of on that guidance. going noticed been Can Nancy report please? in back And Nirup. the you, over with We financial a now couple questions. that, Thank swing there revision a comment we're has

Nancy Huber

There's the COVID, number especially, cetera. way impact the hard predict. is timing the requests, year to responding a of very factors that; licensing are et states integration to This Yes. that

certain QX QX. So we competent they're QX progress numbers how to are from going very felt our to about about less but

and So acquisitions a we by to have the we've QX good this annualized anticipate run ongoing given why guidance so that's and have. idea that given of rates of we rate be current you where that on QX year

Joanne Jobin

Thank us large the you, loss one Nancy. you to be XXXX. QX seemed through It net more. compared Okay. Can for quarter? this And to walk quite

Nancy Huber

Yes.

that largest reiterate. is a of for $XX.X impact call, of charges, We had derivative the we'll quarter, to liability is this a charge million I associated marking $XX.X our negative impact $XX.X I'll positive the be on or which with loss And did and negative quarter the So convertible that P&L. million but non-cash million. will create that This this non-cash every or debt is of that a we have. to market

So calculation. the has What derivative the up. in what opposite you see on have that significant liability in liability when go we'll happens price a the prices effect. stock the up, QX of P&L, to based happened impact may And direction, If which negative year. goes swings is, stock goes is that this our opposite

down So the of of go to if the liability the a next impact stock prices positive it go have will to end from the one quarter P&L. the but quarter, end down will

forecast over course quarter. some things are very So that's to of adjusted the -- reason what because is a of the part of why forecast hard we EBITDA income versus net these

million cash acquisitions related costs In costs and amortization of $X.X non-cash with that's $X.X acquisitions. capital million Again, we that a then and addition of purchase And then had with $X.X non-cash million was million, associated related is and accounting. million. million $X.X kind depreciation which of actual there compensation to of the $X and $XX.X of associated raisings,

So large that helps there hopefully why loss. was explain a such

In addition expense to $X.X that we had interest of million.

does well. through weren't midway you And of an quarter. until remember, acquisitions about that closed have the if effect the many So as

we didn't offset So to expense. have interest that income

move muddy forward, significant acquisition activity, of kind if have to we positive don't waters. we're operating again, the As we income targeting

Joanne Jobin

that? sales, to that can you you question expected is And Nancy. many the answer can businesses be that is how Justin, is for to or one important now impact speak you, most the sales? Thank and seems impacting to Perhaps, inflation

Justin Dye

the and rate Fed. on of the from we're think to coast I gasoline going troubling $X It's continue to continue we see a is watch the situation. to where to gallon see increases

going Certainly, et as we're put to seeing we're economy. we forward. continue on pressure that's cetera. move inflation have some think watch general in commodities, to that the I So to pressure And going to

of economy the look at you in terms the strong cetera. is If still jobs, economy, et

there. is held a on to part mixed reasons up keep have we're translates watching see our bit cannabis for have news of disposable well. And our to certainly big reasons. The products. little into how It's and at it's But very adult-use So going we're sector customers' eye a look medical to that. for good going the has income lives number our that a of and to

continue on we watching that watching moves optimistic. products. and inflation remain But We're certainly products and And of the the in goods. watching we our with inputs, inflation We're trained to of certainly cost price Fed to as got So do promote through. numbers what's happening team's watch terms that. we our how it on to

there will come. be more So to

I now. have think to dynamic We're and going continue it. evaluate to it's fairly watch right to

Joanne Jobin

Justin. you, Thank

Another the question, can Nancy? how Justin oversupply? Where And you do playing situation pricing pressure of the do stand or see today? whole this and speak out you over the rest we to year?

Nancy Huber

on speak I wholesale, So don't have pressure in to that? we some distillate do going Why still pricing pricing.

We a not terms there, have see positive but started in of to effects little of bit significant. movement

in orders bounce back that area have We though. seen

price flushed issue. wholesale of out pressure that in kind are continuing we've But volume we the So seeing area.

Joanne Jobin

Okay.

New inventory. Mexico a increase Next anticipation Is large question. Apparently reason? adult-use in this another or somebody of noticed in

Nancy Huber

New well number of a was sheet. Mexico as had added inventory of all balance quarter. buy in to in fact anticipation So dispensaries our inventory acquisitions. our position in this with as overall, the Mexico in we adult-use. inventory those did And such, acquisitions And ourselves to of some increased We as New

of long we just might heavier in but that inventory practically having significant So term, significant little than acquisitions. the number. on that plan area was addition a The impact bit the we the wasn't have in the probably

Joanne Jobin

you debt? to This possible in even do current Will be looking Okay. in the XXXX the or is raise always that up. Are Thank question comes future? you, these potentially Nancy. refinance another a

Nancy Huber

possible. Anything's whether and looking We our we are better. at constantly debt determining can do

we So cash make depending our have if that would potentially sheet a have we with balance acquisitions investors, or acquisition we Today, might on on something equity do at we would impact an positive acquisitions interest themselves, felt right now. rate to if lower on But and what we looking with have opportunity the certainly look cash couldn't that. hand again, it. have we to the we're that long present do our term we as at we doing have make

Joanne Jobin

Nancy. you, Thank

for Here's Nirup. question a

you that sales products you going you how to expect your vertical operations, with can forward? are grower fully and discuss impact Now this

Nirup Krishnamurthy

fully in to there there Mexico, business make New integrated. innovative fully and provide And the our aim customers as we vertically are vertically over shop attractive for We us. the capabilities our develop we bought integrated. Well, to it is products

we are working forward. significantly. integrated being to course, so. six In into the we acquired improves two months Of introduce from growers margins there going Colorado, product stores And actively in our just vertically our last or

offering want, bring Now, products drive also us what it sales allows will flower, to that customers of view customers store. and the do to highest own our it And branded they our help us is with here again, create quality. into with

now. So our XX% of to XX% products to And getting of as are long-term is our produced internally goal have we started -- our goal. XX% our

where we are. So that's

Joanne Jobin

have you to revenues improvements seen Nancy? be in you The this continue continue you you, Do product margins Thank Nirup. can trend? impressive. think and

Nancy Huber

operating our and to on lot little we're like Colorado playbook we're as And more our environment. in our acquisitions. execute verticalization of Nirup just all about, bit in planning a So continuing talked creating a

we So there because margins improve to of that. hope see

Mexico that we're use than see hand, that New become in we promote. market we the we a to On in to the to Mexico. going margin might margins may take of continue we we available versus the to opposite line bottom little see in eroding add much evaluate might other effect New bit And as the then how what products

So increases or in we margins. will that bottom the of expect we into But improvements it whether and to put significant depend see margins, is sure we're the leery not much gross drive projecting actually because on very and revenue situation. line actually to very in our have uncertain that been we use promote

Joanne Jobin

into All When state your a right, can you expand status? regional go Thank third you, let's expect to back we which Justin. year super Nancy. entry to or as see

Justin Dye

I we that get every conversation. think and analyst every quarter question

shareholders as did were employees of one-time in we We're always to and lot built well as up a long-term make And of some well a a And costs costs. things confident are quarter that XXXX we we're comments. But with really very of me customers we I the projected. non-cash, foundation. just think interested the bunch Let a charges And year had few cetera, our derivative with to exit set for one-time for associated we et the of ourselves M&A the the messy that. this. were -- rest and going that as about

that's good the part think news. of I So

and of our sheet million for we do going we're is in to news business other grow us that go the war chest And $XX that. balance invest the is a and outgrow The got markets. to on to cash good

this New within investments always we obviously we to of so about in setting can we've all going Mexico. Colorado we're thing and that up the have money. leverage opportunity there and those our we So And lot grow thoughtful a be But we're made. spend win to states how

to that into the continue see get we before going you're So next to state.

are process. built stay building to great the So team driving innovating and members in customers' single products -- we're day. and new about committed we new exceeding that and cannabis We're improvement on every going that's to really expectations a services and passionate have company

all translates fuel going nearly think organization that in this future. philosophy, to people the is well X,XXX a that I in across of us values those So

looks at down chose in in launching these terms done well, us our other we to what line have opportunity having cartridge the partner with Lowell Farms excited launching one is them success number vape a of that So we California. new of will very Purplebee's They that I'm look lot great our And but really launched and we chose and we've states future and the which brand like brands in market. about has brand, within road, products a states.

be brands are And that way dispensaries. innovative great to. the want those So we're branded to thing with within we products going new this building we'll sell our

down on focused really dispensary house headed. we're first retail I'm we're efficient the now, to that's operations. states excited what doing chain a supply focus Right about and and driving brands on Other are road. going So we're where building of and then

us from the serve and So day well. follow to as going it's so we've one, going to continue we're to process said

Joanne Jobin

And about put again. you One Wall, it? dispensaries near the we Mexico regarding part adult they're you, concerted learn is or any these making the I'm the to rec that Texas Thank going you New opening? together, call New questions now effort you expecting Justin. were border what are New or And two not Mexico opening did as Mexico-Texas to buying

Justin Dye

there. of a learned that say would couple I things we

new sales that's with a learned and and I a department distribution, partnering cannabis lot. think I think overseeing we've new state a

they I think but understaffed like nice I other think a of did a job, number they are departments.

nice team So think our job the state done things has time. take a local with I always and jurisdictions. partnering And

We February, of have always try think approved. some to I communities closed didn't border dispensaries acquisition nice nice well truer there. state get so within The in we have performance. we sort the a you'll quarter customer the timing really see wanted one-time of both we is think getting as is things for coming has the of answer But the So where The through that obviously And to closed some offset sooner. terms to we in other we opportunities state. the in charges. see second across base income of serve and state. something can dispensaries Texas We as number of in needs mid really the on a like picture the

that notch build those and to us organic or and that. lease opening we'll service also see there and are really And we stores to top we're products going and offer great stores, leverage stores square you're open So acquisitions. existing build new footage where

on well. is work on going the our number us that be one do continue to that our mission. And both and work And competition. going use distance that's to in and great Mexico. going So we're you'll sheet We But New goal going see And provide between shareholders. do creating Colorado to to we're continue for continue to the that. states. us we're to as to been and balance that's to hard And our to think returns

Joanne Jobin

Star opened dispensary? than Nirup? you, appears Colorado describe some the in Can planned. attractive Buds to have this earlier Justin. facility elements of Denver Thank on Boulevard of you

Nirup Krishnamurthy

course. of Yes,

intersection elements, That attractive the few. our store for with located very Colorado a shop quite a convenient on customers us. Boulevard is it In and to come terms in of is in very, there's and busy very

will that's the footprint. a months location under in we're store take one. already have a doing is And our customers. work it store But begun to it's that few what is we two That Star for So opened the has large creating number banner. Buds Number complete. flagship a and

driving their options there. products. see picking drive-thru people We up have we and also And through

yet So the And to about there's that talk a is lot store. to that best location, come. about

are So very that happy spot. very, we with

Joanne Jobin

you, Thank Nirup.

great Here's a question.

any and large of Given cash the current sheet price cash share a buyback? share positive the flows, balance and Nancy? chance

Justin Dye

Joanne, I'll take that. This is Justin.

Joanne Jobin

Apologies.

Justin Dye

okay. that's No,

share, the of terms best in is building invest capital business. served to probably think In we our continue the to

be that's are our I going investors we think there. just And think the what to returns expect. better So

no plans have at time. for we So buyback share this

Joanne Jobin

wrap five to three we be? a Justin. you, in works? Could Where to do today last is years? question up, buyout for expect the for And before Thank in what company the you the plan be

Justin Dye

regional Well, on that's innovation building that And do you'll like that across a capital. create we new and be we and the brands, great very predicated think to disciplined focused house watch company team building drive and multiple want, brands how us with of continue in be efficiencies, invest really and we're and states. and good of on stewards we'll acquisitions, products operate are we're I that business strong see members proud said, and operating of customers that a and sticky, really demand products,

of the going we're we're So that doing. same more do to

to disciplines building continuing uniqueness footprint our returns, investing with see in same you'll around think for good the the grow capital, our and managing I business.

us I see more could being to what in doing, So certainly and of states. we're come more but more

Joanne Jobin

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

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

Justin Dye

cultivation leadership and our and about and company and difference. we enthusiasm want of a team Directors stores to the the making certainly excellent. people continuing facilities them. our passion the got just team into driving shareholders, what for contagious. Board get to and to just and And in to we're to excited people, their honor doing. so do and be and that's we've about and members how good to manufacturing a I thank thrill our our company. all an excited work with really It's us see exciting are great go It is our customers think expect And purpose And

continue going for very to on support, what in everybody's our and what ahead their And we're we've company. us. think follow want them thank And laid certainly to doing. we're I out and to proud process they're appreciate work of I of the interest

you. to want today. time Thank their thank I everybody for So

Joanne Jobin

and everyone. to you, site. participating is joining available a Nancy like Thank first would this webcast. on Web good for I today. the remind thank everyone day, Nirup, that webcast again, Schwazze quarter Justin, for Schwazze and you, Once you Have thank the

Operator

and you. does your Thank Ladies gentlemen, conclude indeed call. conference this

You now your may disconnect lines.

Medicine Man (SHWZ) 17 May 222022 Q1 Earnings call transcript