Earnings call transcript Q4 2022

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Operator

Good afternoon. My name is JP, and I will be your conference operator today. At this time, I would like to welcome everyone to the Schwazze’s Fourth Quarter Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] Thank you.

Ms. begin may you Jobin your conference. Joanne

Joanne Jobin

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

We and Justin Officer; by Officer. are and being Executive Chief Dye, Nirup Hoffmaster, Forrest Chairman President; Chief Financial Krishnamurthy, hosted

will presentation, submitted questions on management link in the via website Investor Relations Following and web earnings found take their the Schwazze's press release.

future submitted risks which to remind forward-looking among remarks and uncertainties. to legislation operations and your position, of prepared operations. are of you and statements, and and results forward-looking to Management's like business strategy questions that also and statements contain would plans others, for and federal I Examples statements regulation subject may and financial future answers include, Schwazze's regarding state objectives

may to words continue, the cautioned from statements Investors forward-looking or time. actual could plan, expect, poised, events, by achievements relate preceded by results, become, performance that anticipate, forward-looking uncertainties or involve differ project, be they Schwazze. Schwazze cause may, potential as believe, those at risks may approximate, develop, to and build, statements that are anticipated all this expressions will, similar Such

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

before measure during the comparable non-GAAP of most Schwazze's reconciliation A available Schwazze filings in press financial in company's which public this discussed between the on GAAP described the In website. or can www.sec.gov fully found call non-GAAP at measures with call U.S. and Relations with addition, on viewed www.sedar.com measure Securities Investor Investor discuss today's website. other is information be earnings available made the Relations Exchange Schwazze's Also, be the Schwazze's release directly call. the financial during and Commission, more may can differences on

call the Chairman, over turn Dye. to like now Justin and to would I CEO

Justin Dye

who conclude business you our our I I with us Nirup before will thoughts. and CFO, overall Krishnamurthy, newly happy this would and review questions. presentation to review then and some for in then brief call details a And will appointed Hello, Hoffmaster, President, will to afternoon. year-end our over take the operational thank joining detail. our turning will provide afterwards results final financial Forrest we quarterly, be your provide

the Mexico I year-over-year, sales revenues total the by to recreational outperformed our year. that growing retail Colorado for increased over entered once and pleased am with XX% We medical XXXX, XX% New report successfully Schwazze again and market. market prior

tax also operations $XX.X We in from after XXXX. generated million flow of cash

I attention capital to market challenging ongoing our flow outperform Through in paying our and is which spending the hard of generate environment. our best share obligations. our to the with markets diligence, believe and by ongoing proud Schwazze and work, to rate continue markets to from we XX%, increasing free team, I hard industry of grow and taxes profitability Colorado our dedicated continue one continued in strongest despite cash worked after improvement, operations the extremely We've am we detail, debt an today. outperforming meeting our

our its in strategy experiences. Schwazze to in become most customer build to exceptional vision go and continues products, to on the admired providing market and operating deep company team deliver our trusted customer Our and loyalty states to cannabis industry brands, continues share. the execute

our our with high plans quality a wide building service for products assortment shareholders. our a is playbook powerhouse, winning of employees, Our long-term regional combination operating backed customers, customer exceptional by delivering a and of our

to turn to our us for take through the to XXXX. our would I now some accomplishments President, of Krishnamurthy, And call like over Nirup

Nirup Krishnamurthy

Justin. Thank you,

SAFE of the our broader Like economic country, highlights of fourth our year the by of industry of Banking the Mexico. we of dynamics to of highlights our revenue our delivered rest and the another quarter our review team annual impacts of in partners, and as New well navigate Let's performance. conditions the EBITDA as followed the in quarter continue these failure record in in growth. Despite bill, challenges, Colorado core and terms markets adjusted XXXX,

We of all work, hard and have experienced team all, and our dedicated I thank their excellence, our for would to commitment an operational most their team, like and enthusiasm, to of members customers.

five not dispensaries The are too opened from XXXX, has and course, as acquisitions Mexico. presence to but XX, listed accomplishments company's seven completed on XXXX XX increased Mexico to company dispensaries December and the one through in manufacturing in these stores New our XX and facilities this of now operating New XX numerous financials release. which acquisitions, two call, All related six they're cultivation of one XXXX, and retail press in company go in by and In new our XX the to Colorado Colorado. in in

Collins opened the southern town attractive markets continue of they all-green agreement and rolled customers Garden currently in serve. XXXX, new in the plans. New quarter Greenleaf the Carlsbad The located definitive a in platform other we Mexico not in and acquire out locations e-commerce customers. to we retail one signed roll of locations our custom for We and two to whose enhanced our first City, We in in out New Albuquerque Colorado, do Fort Mexico, two

previously successfully pre-roll New licensing Mexico. premium have joints announced now rates agreement Lowell Colorado and launched in and line We with Farms of their our dispensaries to have

are In we which brand Schwazze addition, Day Weed. called EDW, Every a introducing stands for

own quarter second our launched a in customers. core markets full be your being product both joint first brand The flower, half-ounce, the for our will roll under this in

the our house needs multi-year brands strategy designed demand customers our and meet about to excited of are We in growing of markets.

cannabis selling our in as XXXX, Alamogordo, Mexico key presence last We On and in Schwazze of year recreational Park, medical Sunland markets, cities quarter Carlsbad. six XXXX. New including stores Southern such increase These Ruidoso, New the and April X, and in stores in two New Mexico. opened and commenced new both Mexico more first Albuquerque

We stores will here throughout coverage additional we now plans are areas operating customers. state to serve be do as playbook adding open incorporated have focused well to on the where currently reaping our rewards; and not the

improve scheduling year along spending. positive debt efforts, expect with and focused lower operations as management, lean and retail our can obligation internal also after ensure of and with are lower goods from tax along efficient costs our practices cost applying these our we drive operations to further to production we by as inventory we We're cash and margins flow at efficient being on our operating will playbook CapEx this dispensaries from our our our meeting that through facilities

in remain that which pressure to terms sold, would markets. on you turn revenues. a like top affected conditions in Colorado rewarded of I volumes in briefly line pricing, and to which We particular ensure material unit in on retail XXXX, our have Now been have saw view been to results. in these our give our our as decline focused steady in led company wholesale pricing two a with

conditions. adult-use New steady overall XXXX, results expect well in in since We these the has program. the we pricing drive the of pressure to been continue Mexico, now the to launch are positioned In market but

quality store the April, However, the dispensaries, again, our playbook than in product since has doubled our operating customers on first number pressure has Greenleaf our that of sales. assortment putting combined our for level choice But licenses high meant more state. retail with

revenue representing combined same $XX.X the million, for year, $XX.X Our quarter the to million XX% increase. quarter compared totaled in last a

were was was Average for Mexico IDs Average Here up Colorado X.X%. XX.X%, basket XXX,XXX, and Two-year and up basket and key Customer size down XX% Colorado down X% down retail year-over-year. visits XXX,XXX, two-year XX.X%. XX.X%. New were stacked up year-over-year. were IDs IDs $XX.XX, New was quarterly are that stacked $XX.XX, visits operations. Mexico and XX% customer by by some statistics were IDs The one-year up our were were for down and one-year for X%

Here up included Colorado are and were comparable basket ID Mexico retail down XXXX New the following: Average statistics and were Mexico ID Colorado, for sales one-year New the two-year and statistics in operations. for our X.X%. Colorado Mexico, were Average to two-year year-over-year XX.XX XX.X% XX.X% and XX.X%, or compared were Customer were down XXXX In or or sales XX.X%. size X.XXX XX.XX visits up X.X%. basket sales size down was ID were and customer down up XX.X%. New one-year X.X%. XXX,XXX Retail or was sales up visits million ID

in We to XX%, again by previously we pleased once a remarkable at that and consider time. Colorado the are as this you particular, of report state by noted industry outpace the Colorado when challenges faced achievement the

We will continue adequate the evaluate focus primary supporting across on and with assets retail industry a the manufacturing expansion. additional with opportunities expansion cultivation cannabis to

to accretive will a have that intentions well-branded have Our ours criteria base, once Any be compliment and for compliment we material and regarding bottom acquisitions our announcements potential synergies. products dispensaries made include agreements. customer line with that loyal footprint the reached definitive expansion

discussing been core our away openly this on resources business. loss disposition is shift we our to Lastly, late the move business, this concentrate consulting made This away as year-end. completely decision year and the have from to reflected we and a at from overall business our

continue to like financial I'd our to review. newly appointed now Forrest Hoffmaster CFO, And the our to turn discussion over

Forrest Hoffmaster

Nirup. you, Thank

results financial end I'll the and review for quarter XXXX. fourth our year

again, XX% from to revenue as our year. the third same XX%. Once and of Adjusted was revenues same $XX.X million compared the to $XX.X EBITDA positive fourth $XX.X obligations. million increase operations increase quarter year, while year-over-year cash debt we $XX.X quarter period quarter quarter the $X.X XX% was million, related revenue compared flow million for $X.X As last quarterly compared for mentioned million year-over-year and of of generated of of XX% than after for the lower million QX tax XXXX $XX.X million, to earlier, of increased third last seasonally revenues and

over year segment the of XX% in in six entry Mexico. New Much million to year-over-year XXXX. be by retail affected an price For of compared revenue and compression. Colorado million revenues with in and new $XXX.X in December to market Mexico driven revenue we openings XXXX Wholesale continued revenue, increase the growth acquisitions achieved our by was in ended $XXX.X store New supply XX, our

services power goods to of XXXX, due for of subsequent million stores is rate $XX.X vertical cost $XX.X retail increase new integration XX%. efficiencies, New million This XXXX. six increase ended primarily improvement of million of to the and buying an acquisition Mexico from and $XX.X opening and or result company's compared in volume the is playbook. year representing Total was the approximately the The

gross compared $XX the to XX% $XX.X or XX% revenue or As of XXXX. million profit during period revenue million in of total a total to result, increased same

certain Operating ended and expenses administrative to the and million predominately largely XXXX $XX.X increase one-time associated activity $XX.X our charges for overhead XXXX, to associated due related increase for into of of selling, wholesale markets. to This representing attributable goodwill $XX.X the year the with New $X compared impairment general an was expenses market, million. touching with cultivation million increased and totaled non-plant businesses acquisition entry increased million serving to the broader expenses Mexico of

for $X.X strategic obligations and of XXXX. move XXXX one-time with $XX.X expenses by $X.X our compared Other This assets segment. consulting our related cash of full-time to of debt and interest mostly the were in business other core non-cash driven was attention largely income million as our associated part million our to disposition to discontinuation shift a million of

related result, of of impairment Schwazze XXXX, expense $XX.X of to disposition interest assets. charge, for largely net ended the generated the loss million net year a $XX.X million As a and compared income to

period and and million, from related press costs one-time income EBITDA adjusted raising $XX release same is and was capital table representing amortization. XX% for compared the in EBITDA $XX.X see financial our million expenses, of for depreciation for year. compensation adjusted and derived the and acquisition operating Adjusted revenue to and Please details. non-cash merger last XX% costs, This

already tax generated our year after CapEx ended to equivalent from XXXX obligations ended and As $XX.X $X.X compared in mentioned cash million with and positive and for debt cash XXXX of million spending. operations We flow for we cash the year the million. meeting $XX.X

recent integrate optimistic and and we M&A acquired our we can performance remain that successfully companies and continue our position, current plans. cash Given expansion

now I'd questions-and-answers. to like will call you turn to Justin, it for back open the Thank to today, time your who

Justin Dye

Nirup. and Forrest you, Thank

Before we Q&A, I support, and open the would encouragement continued like call in Schwazze. to and you all your to thank interest

questions. your the take question, to submit. portion our click website you. please Relations on of and Investor the on Thank happy be now a would ask To link We

Joanne Jobin

portion of Jobin, Thank the Good I'll moderating for today. Joanne IRO Schwazze, name and is everyone. My be I Q&A call you, Justin. and am the afternoon, the

New acquisition is; to first The That seems question performing? on a question how be is Mexico everybody's big the mind.

Justin?

Justin Dye

Joanne. Nirup, will Thanks you Yes. that take will – one? you please please

Nirup Krishnamurthy

very with know, XX X the April And program. we use in acquisition on we what adult New a the have all MIP Well been meaning will in that farms has for three you It Mexico last February tell New you a dispensaries, fantastic Xst closed with on recreational as been happened has acquisition Sure, And Justin. I on Mexico. went state us. of happy year. and

addition we areas key are In will added of acquired in the southern in stores especially the performance a around And of we all stores good to really state we six Mexico. the New stores since in XX Mexico. more of New our part seeing

have We share becoming Mexico. are over we market in customers maintained the seeing are for New stores quickly our first and our choice that very

traffic We and job His And Ken across in name in year. is appointed has and our of effectiveness playbook new have this a the implementing operating we the President state. promotional terrific part done customer first Diehl. driving he

are serve stores year, customers. really two happy the to quarter the the continue currently we of year, where we last we bringing added And in areas in fill in we expect other the and more and addition added to expect total we not we to to do grow XX. this six to And first locations so state

going as well expect can Thank it to. overall, it's they you. So as

Joanne Jobin

Thank you, Nirup.

Mexico the your Mexico revenues the of some we're New anticipate any those of New a lot Keeping surrounding and on your on of form questions Colorado dispensaries? considering impact you that in some areas are on states getting acquisition with Do border legalization. and regarding states

Nirup Krishnamurthy

which considering program legal already we you at I states Nevada, and Yes. Texas, Arizona, here, have know legal. if – don't medical we we is states the are which surrounding which have but are where look

at our do any short-term I the states. impact so sales And material in least not expect both to in these

Joanne Jobin

you. Thank Nirup. you, Thank

mentioned can other how the and launch EDW on been any us us question the Can you about activity, and partnership more with tell Lowell next Autograph is going? The and you you of – that Farms. has brand update your

Nirup Krishnamurthy

sell we on currently develop a products Sure, locations product to products. these Joanne. introduce Colorado are to serves in We embark that brand in we sell we sell own line do we states. terms platform have us or are strategy us XX pre-rolls, portfolio, that. our unique within retail of kind of starting using Today a for and This brand both we allows other a are footprint in that a our as to Purplebees, we and flower, multi-year to product vape operating starting strategy

launched production we as fashion. announced different into entered and in call in outside decided generate and So we happy Colorado the to Lowell both announce revenues partnership our we in demand. begin ramping-up Farms, to go we a In happy with last I'm our it demand more are that our the meet we Colorado and states with are network to have in actually to of with, to

has So footprint we'll our it demand April XXX. a and big month own the promotion been in internally next with solid, big be with – a for launching

in has we and production our really operations to ramping are meet Lowell the gone Colorado overall, Farms demand. the well So really

we way. in to stores We are footprint. it other our went starting Mexico, the we New in and New Mexico now outside expand launched In our

points point – demand the is Lowell this seeing are a product and – is higher for premium there Farms profile So margin product, the a in good at price and little we very the time. are because

or month the not month, it a end see your is pre-rolls in next our states, that make flower. anxious are a you launching two Colorado And where performs. is And are unique we today own roll your it's early available very in how ground essentially month. to that own marketplace and EDW, of on product we everyday in – this addition can weed In this product

We part And date. program, as happy go is to well. I really with mentioned pretty multi-year a are this expect to it and of we all before, so progress the

Joanne Jobin

Okay. Thank Nirup. you,

Okay.

We to are over going finance swing to now.

this is you cash for very a question EBITDA? much Forrest, and regarding flow

Forrest Hoffmaster

with year. and through on improved the and over $XX – bottom-line, adding EBITDA, acquisitions Finished much Yes. a strong had Joanne. year. so thank – EBITDA year in EBITDA efficient more million certainly the the with you year-over-year, XX%

year which $XX of million so is strong. last and tax acquisitions satisfying also year, over spending and flow ended we obligations. In terms debt with cash million, cash, or the and in on considerable $X at ended after $XX.X We're generating of end operating million existing year generated the CapEx the

Our balance at sheet big remains topic industry. us. strong. big This a obviously It's topic is a daily. for for looking the it We're

ways synergies that also to as they're accelerating we of improving operate integrations ample some the have pursue good the as liquidity, of support capital can and aggressively well the measures we future cost and working acquisitions. scale We takeout have through and strategy,

now we're the growth year of net So right the costs the delivering business. into for cash and while flow, acquisition yes, to continuing back positive reinvest on focused organic that driving

Joanne Jobin

Forrest. you, Thank

and continue more you little tease cost on what to cost systems? controls you're a bit about Can and little talk bit control in doing out your a

Forrest Hoffmaster

Sure. Thank you.

think I we team just of the in that have the strength start here should organization. I with the

manufacturing, levers Just in they how cannabis, deeply the operate and retail, environments. to – challenging know know know how where experiencing they they are

improvements really product customer then on business the a experience sure retail excellent from top bottom management. in an and retail that we're efficiencies manufacturing of focused passing and focused operating Making through to creating playbook efficiencies, solid just cost So all our on aspects and cost labor unit cultivation and retail the facilities.

sure expertise business. the sure lot then of on costs that working continuously the that in we're and SG&A passing and we're through, So making improving making improving there, a that

sale where going where where So our is more can we're and it, constantly looking at how using G&A we're we states supporting and or how both efficiencies. our find

accelerating. we're how lastly, then working on And just

them acquisitions, getting synergies mentioned to we think them creating I that make sure faster profitability and of the we're this need integration to I successful. earlier, future making the

Unidentified Analyst

debt And comment your now? how about right position Forrest, on a Thank you.

Forrest Hoffmaster

ratio Yes, continue working is position, of cash interest strong deploy out balance it to liquidity X.X, on obligations. our sheet, and to Again, X.X. operations. intention year, debt we're very from We're is mention capital, in improve debt-to-equity meet generating is to wisely liquidity aware debt-to-EBITDA cash the obligations and operating and strong our those principle

Unidentified Analyst

Thank you.

regarding Just lower payments to flow of you debt your one XXXX? large be be cash in more off paying Will using possibilities generation question to due the refinancing the some for debt. positive here

Forrest Hoffmaster

market now environment our that's to the know, plan. look and the financing. to Right Yes, we not for go as all necessarily

our So, generating obligations. operations cash sure flow and our whole we're making right from focus satisfying now is free

Unidentified Analyst

one Forrest the for XXXX. not guidance Okay. did question why more for And and provide regarding guidance year, you

Forrest Hoffmaster

Yes, it's mixed a to good question. we're approaches seeing I know this.

think us on certainly year, also is had managing control, we've that's what the side where performance quarter, of a for hitting I growing a of things, but value. long-term creating our in is, we've successful within strength the the focus our had successful business is

our that's whether M&A our So execution successful free business, and where or in right earnings. now, plan, cash attention going of not is to provide forward-looking we'll quarter core we're generating guidance flow, revisit second

Unidentified Analyst

you, Thank Forrest.

Let's Justin mix back bring in here. the

you are what going M&A activity talk plans your XXXX about the and in Justin, and forward? can

Justin Dye

asking Yes, you a thank the all answers These guys have me Appreciate question. Joe. you, and…

Unidentified Analyst

They're hogging your way.

Justin Dye

team quarter, The No. great to… congratulations a great year, had so

Unidentified Analyst

Absolutely.

Justin Dye

and and Forrest, think, and team. But, about and our with changed. investors we've lot whole talked the nothing a this Nancy has Nirup, I

Colorado, the focus new And as you, counties cities is operating grow recreational remind cities. well in just we within to still today, very a customers markets. continue fertile over counties to the landscape to a new to where XXX see and in occupy extending that there and here we well into as and serve the going dispensaries continue few. as state, we are to to coverage continue on We We're core

that going tremendous some there. opportunity is estate we're locations, opportunities So And there can frankly, a of some we good real we acquire. continue work see really to there develop to to new still out and

down expertise then merchandising customers have really Mexico. new are drive and stores products on our And leveraging around Mexico, shelf great New And value we're and granting choice very, valuable good a team with scale we're that for our size, to proud New really our retailing what with very products create the really great retailer is and pleased is the service. our of and that efficiencies to and to of become the there driving

So – we're winning, we're very are we're taking important. do and customers to opening the stores coming that's business us, and with quickly and

We to us continue fill and states. two So runway the you're going to those within lots need those we see to still lots on M&A actively, see in states. to

perspective product product of about And need great different you, that. categories [indiscernible], states we're as goal number that in with that retail in for new we've retail with Nirup all a is be one our discussed highlighted products those solve bringing to from in the we're that excited brands And great a customers. with

you're to our do size continue wholesale to building to their and work accessible retail that when a formula, scale So going products with retailers and brands there behind us to powerhouse and for winning leverage product is to out making to as those customers, continue getting see other customers well. that them offer

our on to our wholesale determination, working sort interesting region to like lots being But and continue we on operator. side. a we our opportunities in product regional focus We're there. there. going We'll the other having finding capital keep as on we're keep for of focusing really that landscape eyes here focus on So of retail, up and states, the

been. we've tell can I standpoint, acquisition the you ever we're than busier From

On our really are the brands great And and using and up we're front, cash how M&A discerning there. we're capital. there being [indiscernible] very some in

to So at continue we're going to that. look

and looking I to executing strategy other from states at our that in think you'll about of the to I in we I that opportunities So for gross where margin, we're states won't the And the and think both think and water, wrench continue year. up seeing volume. last our almost the as efficiencies we the drive the a down And in road. can well. of And terms X.X% next we'll continue is you're the plan. we we're platform toe out sticking margin once these very again, look can one bullish state down number road And in dip be the our

see and more you opportunities. those types going more of to of So, are

Unidentified Analyst

with picture, we the the you is a M&A is on the Thank in you, keeping next buyout five in works? years? be do on And Justin. or And where there which a there activity, looking works in at buyout the three the get, the to looking horizon, always the be bigger expect could question to that

Justin Dye

this since and take think June been we've I customers business the to that set been in in and – invested out of branched into and we have of this many we Well, in in and really management team executives Mexico. win care of here, XXXX, out New Colorado, and then

We that in ourselves a have position we wanted put to.

flow So which and us if free on down we're the be have to cash to cash when need us chest that. allows the to put it to in balance war unbelievable some able generating operations, do from do use want us where we debt And allows when to have to for acquisitions creates to us. pay ability that, allows a more and flexibility cash we to sheet,

into the institutional of different a to something couple allow would the of those listed investor have us within states, to base. tap us to shareholders continue that or much grow exchanges, even be we opportunity have markets which for able provision, perhaps the or be population our wait something we're larger do along the get into two larger to tap whether or into what where NASDAQ or we in and could capital to acquire road, lines to be down it state perhaps a So, that or retail doing, and is safe banking allow another

our So didn't we've challenged is markets safe after cannabis December. got banking equity of in right now running for the number optionality, shareholders. which sidelines Certainly the a good with pass investors with cannabis, are for

shape. We're So we're in great in great shape.

control a threw capital our vacuum, there's the companies don't. on of to as so to right think speak, And have, very, out very lot debt we and that And strong. now, come come equity I this of out going the side. and that will we're we We destiny this

terms is thing share more good medical the we're I these our we've resonating wholesale customers, be and customers. is see is and And what in of our I appreciated think retail price. – and got of our quickly our with the our big we'll with happen lots think customers, And customers we'll and choices patients, doing thing things

And we're flow them as we're we free flexibility. and have growing, with generating winning lot and of we're a as long cash really

a We're Ken we're really So the very business. I team's a very, has running the leading excited Nirup operations, Colorado, of good think a team. M&A Forrest on running proud job Diehl, of to board, team's Lodge and the New done Collin have the running side, the setting heck that's that's leading job. done on well, wholesale really Mexico,

up think I So set we're really well.

Joanne Jobin

right. Thank you. All

P&L? comment We are to and One almost you soon. Forrest. at more wrapping on or very on further hour. the is top Nirup up of be the Can your impairment it the We're This going question. for of goodwill the impact

Nirup Krishnamurthy

as to system a operations, is which part kind decisions cultivation. needed, business to our Big on of and our and which consulting our businesses, is for at on Joanne, Tomato made balance write you the our we core that focus guess and is I the we decided one on of our looked chime on And businesses. can non-core the as success of if sheet to all really on I'll take we Okay, Forrest, our goodwill, focus our that core in was nutrients take business, business, business, basically less more supply going essentially downs forward

main is see results. So for the our the that impairments in essentially you'll reason

EBITDA just fine. P&L not material our did impact or on have it a So was

sheet a and is exercise it net balance I a income of more think adjustment.

Joanne Jobin

do to Forrest, have add? anything you

Forrest Hoffmaster

I of No, sales I think in when that just retail was retail were total. overall think it at the segment about operations, you look at XX%

to with areas of harder. opportunity look this the that to looked the be just at was And some so of other where were a little the business needed at we

think cultivation side all happening so I area. And market. manufacturing the just wholesale It's our is And Big of we're of reflective and Tomato to the Nutrients cultivation Success turning the retail attention business. overall non-cannabis what's the in

ahead future move at said, a And sheet area that as Nirup our with to off reflects took right the it look just and so practice operations. that balance yes, clear the

Joanne Jobin

Thank here, cannabis and it of to Colorado quickly of you, and your give current cannabis pressure color going can the going? And online few view the it's and I'm about questions a some where market Colorado in the a getting market and the questions wrap gentleman it's before take Forrest. lot on we We're just been under perhaps up.

Nirup Krishnamurthy

market, affected other has Colorado side, Okay, I'll the obviously mentioned pricing seeing take retail In both in that. prepared on remarks in pricing the wholesale a is I pressure as which competitors.

of you year-over-year bulk was to we've volume. due that So due last not had year in a to see pricing that. shortfall match revenue our will to And and

have selling rates are sell in terms strong we units sold. So, been of very our through

it to primarily of flower come down market. so oversupply the And is in

And what bunch a down. is cultivation of number shut come The has seeing are last in farms starting of to licenses recently few so though down are X% the that months. we

but take high several we supply, pretty the of steady believe got I do the market's the go most – going once we kind the to and I and through is as of – over the to to for cycle of it's strong period this out. come next through think healthy years. where Colorado we expect is And to We back volumes flush the bounce out over to system. back a and going that to of market this long-term the inventory think But back this year get going I just market. some time, flushes And going think time I come in out of market sort a it's take to

the and it. flowers So out said coming this while also published rates long-term back. And These that's a steady seeing believe see bit. continuing the way starting are I by rates, are at the on having pressure year market we I market that the see state to little we look I

Joanne Jobin

Thank you. All right.

all have So the today. that's we about to today, for questions have time or we answer

We are the of at the top hour.

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

Justin Dye

I team our and Yes, thank I would do. members. shareholders, of our customers, all

done really proud last is care of great in business Colorado taking industry Now the tough of very, members. being we sure both this compliant conditions I'm really the top go. think retailing which mind a in year important really the has industry team and tough safety compliance as cannabis making patients the our New really industry. job is we very that navigating requires of our for is at had Colorado, the [indiscernible] stay in for And in system good in advancing really team And and team. We is of the states, year and a today we Mexico entire there customer built

just there'll appreciate And in the hanging think some meantime, there. a for and capital until in tough us. remain retain market perhaps shape good be standpoint But It's in times with a and that. to thrive us, regulation And we're I time from federal team, to everybody we'll shareholders ahead continue get appreciate we future I great help. of optimistic our and

facilitating, and you thanks So of talking for we'll to a Jo and look Thanks thank forward you soon. lot. with all

Joanne Jobin

everyone you quarterly And Thank again, once for you, the Justin, Forrest. everyone and remind would to I the website. afternoon like that this Schwazze for Nirup available webcast thank us Schwazze webcast. and thank this is joining on you,

Medicine Man (SHWZ) 29 Mar 232022 Q4 Earnings call transcript