SHWZ - Earnings call transcript Q2 2024 | Medicine Man Technologies, Inc.

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Operator

Good afternoon. My name is Joe, and I will be your conference operator today. At this time, I would like to welcome everyone to Schwazze's Second Quarter 2024 Conference Call. [Operator Instructions] Following their prepared remarks, management will take questions submitted via the web link found on Schwazze's Investor Relations website and in the earnings press release. Please also note that today's conference call is being recorded.

to of conference with Investor like company's to Elevate now Head external Relations, would hand over the the IR. I Sean Mansouri, go please ahead. Sir,

Sean Mansouri

Thank Schwazze's welcome Conference you. everyone, XXXX Call. Quarter Earnings to Good afternoon, Second and

open me with Chief Officer Interim then prepared Justin Chairman remarks, and Forrest The Board. will and Executive of Officer; and on the the the Financial company Joining Q&A. are Dye, Hoffmaster, call call for Chief will we begin

statements remarks and statements and remind may include to you plans of regulation, may Investors the those by prepared develop, results financial future and relate believe, performance submitted project, continue, which anticipated plan, as that like actual differ events, Schwazze's Such forward-looking legislation to would cautioned or time. questions at and may, and are by answers or for operations. management's to that that risks position contain are I your expect, results, subject uncertainties. achievements statements statements, from this Schwazze's forward-looking will, and regarding they be preceded strategy forward-looking to future to statements expressions forward-looking risks and Examples business similar uncertainties involve could may Schwazze. cause Schwazze anticipate, become, words all

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

and at Commission, with fully company's on more or www.sec.gov which Relations on the described can information U.S. other public addition, reviewed In filings website. in Investor sedar.com the or be is Exchange Securities Schwazze's

Schwazze's can the Relations earnings today's most in measure during website. of comparable directly Also, available made before measures during GAAP differences press and discussed non-GAAP A this available measures reconciliation may discuss non-GAAP Investor be and the Schwazze's call with between call financial the call. found financial Schwazze release the on

turn Justin remarks. over the now Chairman the for opening the company's Board, I'll to call of Dye,

Justin?

Justin Dye

everyone. of Thank joining for quarter discuss Thank you you, results our good the and and financial to XXXX. second operating Sean, us afternoon, for

cannabis assess we actively its two is U.S. competitive the share landscape, markets. gaining Schwazze As of market most in

Our brand remain on the needs focus and dynamic New principle best consistently products to consumers' and in offering has assortment Colorado and always customer has we distinguished preferences. choice been promise This and of the as exceptional centered will Mexico understanding Schwazze retail as on of our our high-quality of both delivered service. consumers' adapting with

were importance there of quarter adult-use focused Colorado, unique retention. on and driving of customer and the licenses underscoring In end, differentiated as experience acquisition a delivering active customer XXX

hard off. is Our paying work

a results on playbook to and and the continuing Colorado these As quarter-over-quarter a markets. and of win to the strength basis, are both team, thrive market in we're on challenging these we've outperformed testament and year-over-year our operating focused

the we new to positive trend this openings a net we net We in store and from growth the believe in of operating playbook negative regulatory body strategy, per the growth quarter in state's half state state's These store reinforced unit commitment new led economics market enforcement compliance Colorado, win this reduction have accelerating second shifting to Mexico, continue, continue has increase New by and year. in in Like the latter checks. increasing exceed for licenses of actions, In in eventually of quarter. team of new license right cannabis closures inspectors to the the to its many XX plus X. sequential market. to to sales the anticipate number the and The the operators,

team for dedication. appreciation my Before we success. positioned like entire Despite Schwazze long-term many I'd face, for their Forrest, the to to has and to their Schwazze commitment handing convey excellence unwavering to over the it hurdles him

team have in execute we the our on that confident place I'm objectives growth to right ahead. and profitability

Forrest, over to you.

Forrest Hoffmaster

Justin. Thanks,

to quarter gratitude the performance for efforts and The team the health most over Schwazze and sustainable diving our for solid and my to past foundation of drive business relentless what in the I'm and in of profitability. to growth X the enable proud achieved markets our customers I competitive our commitment of retail business built commitment their together extend our want entire the Before into we've continued year. exceptional results, that a and to will country, two believe us have long-term

our and all financial growth Colorado the strategy, our traffic quarter both of and enabling and expansion advance and quarterly understanding on To our positions and further Mexico. second while the progress share assortment in-stock our we us generating competitive experience, market solid store deepening drove unique sequential pricing our made our sharpen the in operating behavior are each strategy, metrics. offerings. in and loyalty enhance optimization markets, initiatives landscape efforts These to of our improve in increased across promotional in-store New We refine consumer growth retail and

of wholesale penetration catalog improved our wholesale in generated and growth we our In expansion business, both improving states margins. quarter-over-quarter second consecutive period while with

Colorado and environment, markets, with to with service the impactful and continue growth personalized loyalty retail more our into offerings. the Colorado. Moving we To starting experience in drive elevate competitive

the growth X% market declined in period. same result, that generated during XX% we a As a

acquisition, share We and will drive loyalty to state. continue improvements to in further the our responsiveness increase in retention customer

the Colorado XX% increased to penetration state. wholesale Our in of doors total in

is demonstrating consistent quarter. from reach quarter the in wholesale to after of efforts For XX% perspective, wholesale our expand of at team's January XX% penetration beginning sales March, and end up our the

longer closed in high underperforming As met our of threshold. X dispensaries we margin Colorado initiative, restructuring that our part no

Colorado operations. Big shuttered DC prioritize and non-plant touching also core closed our our the operation, We to wholesale efforts on our Tomato,

our streamlined office strategy. we support forward our strengthen to retail Additionally, corporate structure

evaluate for to term. continue sustainable assets our to growth position the will of over best profitability performance long We and the us

year-over-year state's X% The base was Mexico. were New in cannabis sales XX% X. store the to across gears quarter Switching up higher that

are our assortment optimize and at to strategy, promotional flower expand efforts experience customer an gaining tiers momentum. consistent all and pricing with in enhanced categories high-quality Our deliver all

grew revenue the X% of state's our compete state second challenging effectiveness share operating ability the environments. quarter, increasing in In in compared to playbook the to X%, the our and and sequentially demonstrating we team's

sequential seeing store improvements expect to are traffic year. and back We in the the this trend of half in continue

year From from to state, a at quarter of wholesale penetration X, XX% the end in of doors and beginning standpoint, XX% X. we grew of the in quarter XX% the up the total at

penetration revenue growth. account We wholesale increase also and XX% quarter saw new X greater driven by over

in Lowell offerings expanded In April. we our launch catalog, wholesale pre-rolls our of with the Farms

state. gummies sequential and growth. with further unit with look pleased XX% the Wana, expanding momentum we're our brand, to We're generated in catalog gaining forward customer-favorite our Additionally, this brand the

grand R. with banners, announced to serve opening and a new customer XX the We offering store, delivering we now state and the exceptional high-quality across service customers of wide promise between a Greenleaf we have of forward June, dispensary as Everest and New the recreational R. medical Greenleaf. X we under banner in brand In products the dispensaries this our Bernalillo. look assortment With on our Mexico. of Bernalillo, both of patients

In division's XX in closures the of front, regulatory to quarter XXXX, pleased saw Mexico net state store increased quarter the with are quarter X new XXXX. market. with On first of X, the control illicit XX in we enforcement cannabis the New openings efforts second against the the compared

As eventually back positive Justin new this to net mentioned, flipping stores negative trend the anticipate the of we will year. continue, in from half

the optimizing during cultivation quarter. to cultivation progress and manufacturing solid operations on Turning and our made manufacturing. We

and mentioned LED indoor wholesale we've improvement real-time align As will and before, data anticipate improve we a are Brow our to retail team yield. more closely new double-digit demand. demand To we in grow manufacturing our in with facility, inventory and our generate lights implemented leveraging grow we stores operations sales output, from which consumer

VP in of facility improve standpoint, leaders for opportunities we our operations, to through and margins. practices across a SKU best Cultivation facility brought and consistency improved From and support recently synergy rationalization support corporate uncover new cultivation operational a

Expert would as result Borgers. delayed to due in QX filing to of As our delay our announced Market you aware, order the their stock SEC our to compliant many we previous of XXXX. BF common against transitioned required work XX-Q from are the with be July, stems auditor, a OTC become This that for

order be the to dismiss Our subsequent to strategic Borgers to BF proved accounting SEC's charges. decision the prior SEC a move was given to the decision right which bolster rigor, our

We and Tilly, are as working Baker to possible. auditing diligently partner, complete with process new our efficiently as re-audit the quickly

related BF pursuing to all Borgers. We are fees recoveries also for

Associates restructuring to initiatives. $XX a Altmore million also agreement in Greenleaf November our our confidence addressing our us for and million as Reynold step for to from a a in extended future with We original debt lenders promissory debt This toward financial announced on their July maturities provides restructuring in note for the vision. we obligations. growth the $XX We appreciate execute and loan support flexibility February pivotal accomplishment XXXX & our as marks it us strategic strategic

quickly with in offset the retail increased results. from New pressure pricing along X unit X% Mexico. primarily to the X revenue driven licenses quarter on of Let's growth $XX.X touch revenue partially new quarter wholesale XXXX in stores on and our pricing Total proliferation financial by million by new lower

pricing was year. pressure $XX Gross gross total medical or profit The the as primarily million XX% to purchasing as $XX in last XX% state in million higher in was of Colorado. revenue for and greater to to in mix quarter the third-party New offerings compared due our revenue expand or mix margin aforementioned sales Mexico of the total well of decrease

million New the expenses by compared costs period increase associated and with Operating SG&A XXXX additional Mexico. in stores X million $XX.X to in second $XX.X primarily of with for the Colorado four-wall the quarter driven were the year-ago

impacted paper was to service review against by required Additionally, work fees order with quarter professional period SEC's to the BF X Borgers. prior comply nonrecurring related

to was Loss million compared from quarter last year. $X operations X XXXX $X.X million in from operations of income

XX% of operating and $X $XX.X million decrease compared to primarily Adjusted EBITDA margin XX% revenue gross lower of or by revenue year or last the driven higher expenses. with million was

$XXX.X XX, June June stood XX, $XX.X equivalents cash of cash XXXX. XXXX, as As of Total were debt and million. at million

we our retail retail, continue will across further our efficiencies manufacturing ahead, and strategy driving cultivation refine while to Looking assets. operating

second year, a us continued for stronger growth our operations positioning the of to solid profitability XXXX. in established Over have the and foundation, of levels past consistent our efforts half optimize

to like to I'd That remarks. will pass concludes call who now Q&A. prepared for it the Sean open our on

Sean Mansouri

in Justin you, Forrest, everyone, call. Thank you, conference and for thank and participating the

come call hours to have address the for we're weeks of live past and over going questions the issuing the since opening Before our results. that in via even e-mail Q&A, couple past

price? kick to Market doing the the Expert first when OTCQX? quarter and XX-Qs improve anticipate OTC ultimately, the company's So to off, you share are from things second do Forrest, And filing you and your Justin, to what uplisting

Justin Dye

you, Thank one. that Sean. take I'll Yes.

working expeditiously working year completing our get Baker fiscal that, includes As XXXX we're mentioned our Tilly, financial re-auditing our of new required. complete the Having out QX the was QX to our That's on statements rereview it the done. we've auditing This the that and call, firm, closing to hard and really said audits. control. we're sheet before of Unfortunately, rereviewing with balance XXXX process.

today, can ensure we a of the uncovered any As misstatements of months. working heightened material with and to coming we've file sense in not urgency

the we Once date to delinquency to the are process back about of is from will month which in the filings we application. no submit application OTC, expected with and the the to complete OTCQX, a take delayed uplift the longer

we the X not or doing the Exchange, rules we're team Now to with do we an allowed were NASDAQ said this. be the we the if having to making progress. Unfortunately, New of do best York waiver have able additional SEC, the to tied But lot that. Stock that, a can and OTC the we is to months would were on had

Expert such shareholder, share forced look, entirely are control. our was the of myself share more that factors Capital. and believe the I circumstances the to auditor our think OTC as affected pressure than we movement has with news real-time have displeased impeding get which we adversely and our relisted frankly, largest of And one's as Dye have share are no prior believe I to it's liquidity. temporary. recent illiquidity price. our selling upward is Regarding the due an that will actively complete working liquidity, good Market stock we audit and just, is function as There volatility a also with price price, We're getting out OTCQX, Schwazze's we'll for the more the of pricing to the price drive a The and

via we in in on a Further, we this haven't once to Relations do months. back that, We the along been to up with main the we're We'll back position plan be do country the on investor getting investors roadshows. our in later again. with few which to multiple across Investor on prospective meet ramp expect exchange, road last participating conferences year, non-deal the

well of it track, that. We in improving have weathered a will challenging the two performance. an value exceptional and competitive markets. run. storm a really coming company. out show It's our from regulatory very financial We're that fundamentals We've our We're in business back the on up standpoint of

there looking meeting going So you we're we're and and our the the future about to forward of investors company. talking many months to come, be current, in with out past certainly to

I forward look So that. to

Sean Mansouri

completed? Have should the could Or color we And additional of Justin. efforts the initiative optimization future? Thanks, been phases restructuring strategy? on further either the you anticipate provide all of in

Forrest Hoffmaster

the what efforts that Yes, and not think completed we yet we the as effort ahead we needed as go Mexico. quarter to all quarter leading path reflection span first more continue phases. have all, restructuring This ours should forward plan we have our part and just particular of and can just of efficiently. to to this I And more of as yes, a take we just ongoing was attention to of I an Sean, in look company, whole Colorado on do one. retailer narrow X, New in X, move becoming cannabis the

X evaluate meets evaluated In and more those we quarter stores as ended assets frequently. quarterly and each We to script a retail our continue in about handful X. retail our we'll on the Colorado internal up Mexico during operations, our mentioned, closing of of to moving talked ensure this expectations. And just one New basis in a forward

last especially bring new see For hired probably in we I the Mexico, cultivation largest chain made leadership But and in our general. to manufacturing, synergies to year. that we we acquisitions opportunity, get just particular this the the this supply for where from as continue New is cohesion to internal area,

greater bringing across issues with the us about the in alignment deal and We and consumer overproduction sure at we're the so don't are to that right the that the growing the right producing asking so hear things, we for. right and wholesale tier much customer of demand, time industry retail, you making is

will then SKU working to that stuff So just more enable assets, supply productively utilize grow rightsize chain, optimize assets, right capital. us and rationalization, further consolidate the

full and in agreements. we In wholesale to licensing X, attention development operations, quarter our turned private third-party label

the of You and success making the saw in were little SKUs we heard largely our that just a purchasing about penetration some growing states, in bit in. both catalog a look and we at

decision And so the was original supplies mostly end It which making grow nutrients we and non-plant Tomato, ended was to noncore, touching, asset. up Big the to close consumer.

based of Denver. So we operation out closed that

New starting to distribution more holding, And up then there in Mexico, market, It's release we're the of inventory, working that than the up create we're and change. have And logistics to efficient capacity it in but to up simplify we capital some free load that work and working rather there ended immature to help our closing Colorado in capacity with a we tying DC. improve April. more on logistics a vendors center

resources part a forward to from As full support and these attention changes, look we of the focus hard where corporate office retail a streamlined we just and at were strategy. office on structure took our standpoint

part big to of date the So were a our margin. efforts gross

a pull as we a think roughly Right XX% looking I million. now, drive further over increase points few I walked annualized from savings of we $X improved that XXX numbers just changes still to efficiencies, at on mentioned. we're X. I have basis these And to EBITDA, quarter through,

Sean Mansouri

What closures in in Colorado Colorado? revenue expand Great. you And QX? on on either the impact retail the X could was store of

Forrest Hoffmaster

to to though the X% in I even close those outpaced closings $X.X it X. we It's the though, million out, pulled do Yes. quarter about want out, market still growth with stores. sequential point that of with we

our measures, market call, fewer how think that I of and is even with the stores, grew just though dropped I our to making the part measures year-over-year, operations decision So close a them. capital state hard at share and ended XX% met in again, so profitability at early up those the return looking the X mentioned

Sean Mansouri

that And the the impact gross could margin Understood. year-over-year you through led us walk decline? to

Forrest Hoffmaster

Yes, of course.

investments, just piece, That of our we've to the the pricing sure really we quarters, our tiers or all response customers ahead assortment stayed due So within the over big to XX% the New this couple that that options with we tier. all to pricing are say in making the sure I gave down at stayed more way same basis about talked and and so decline the then, drive of competitive largely value the roughly year-over-year Colorado. the in those premium we the making and in into continued traffic last was would to market, retail point time, Mexico was quarter in expanding stores in

of So that retail decline pricing. again, most was

As that of X.X% And that's added from of quarter 'XX around half the and and the north we the of sales DC rate Akimbo our third-party little grew the X then part mix margins [ in ] New because in Mexico. grew REC medical about a assortment, acquisition, margin of we mix. we X%, cost in of to

Sean Mansouri

maybe on update future and your road offerings us could an give current wholesale map? product And Great. you

Forrest Hoffmaster

team Yes, XX% both in hard hitting the New in states Mexico. absolutely. XX% saw Really Colorado and proud Mexico. wholesale to of increase the in ground We penetration in New

due towards to And our part expansion. in due way our new part that's goal. on accounts, well we're in catalog So to

categories where products. took that private-label part within third-party early or at open we restructuring, products we a either the stage could hard each introduce the our at I looked catalogs and look As as mentioned, opportunities of of

Farms largely and a then the category. growth the in in healthy market Wana pre-roll Lowell the to the New introduction in growth we due So saw Mexico,

what declined really And growth. otherwise, catalog ahead. So stores excited seeing then in moving And year-over-year, just wholesale, in continuing due largely pricing to to steady on business our over the about we're pursue but Colorado, there. XXX to side bulk New pretty Mexico, close

but third new quarter about have little delivering we're myself, are do out the there. some what third excited and bit think quarter, rather the to talk We results a to the about going is in ahead items coming save team of those get than I

come to more So there.

Sean Mansouri

growth go-forward the expand Okay. Justin. And this probably Can one creation? is drive for geared next overall on to plan value you and

Justin Dye

course. of what our is, discuss driving on, to taking value, working customers. most time of driving driving frankly, we're care I'm units, that. Yes, the share of framed it. spending more This happy and is shareholder market We

have key points. We X basically of kind

supply that Within the the developing strain sell in-house, rationalizing margin brands consumer wholesale is brands through facility energy-efficient these of so facility integration, portfolio and optimizing to to at very been agreements we're rationalization we yields implementing maximize our and lights have value supply Brow to other also number looking beneficial at us. organization, new bringing within be that certainly that LED one more chain, would so our an chain, driving vertical and example, retailers demand, licensing other can states with efficiency

So there's strategy an a that. plan comprehensive execution and against

value. really merchandising. We've and retail two to looking growth further and started designed and several Number efforts drive at is identified

management supplier process, that looking with looking products, executes New the and and to and continuous be and at not Mexico, of those selling and understanding products, Colorado are to companies. and customers; competitive key products consumer product First, looking at looking margin at against; to really loyalty to at discontinue the assortment to item units that pricing of both our revenue with at products a what the we're at the larger look and pricing to best, sizes, that deeply drive do, continue we're the working we vendors needs contribute and selling, as certainly focused partners looking it's looking Both form looking in functions system are. our promote, promotions, at at different gross team drive our on needs, value category for are of a that's dollars new

of amount some new benefit at loyalty to benefits. And our consumers, brands if spending And looking that, then overt seeing want to close and implementing our getting three, doing we're at shop you we're associated at an time our so principally. look very number program they'd with

walls comprehensive four a of trainings. four, the Within we've bud tender number implemented store,

requirements the want stores, that a to through and getting bringing only so We them well have one hunt but lead needs, things the to consumers really a not could our to finding creating voice bring they as to some of new what products can is of educated, we're that excitement. customer and the new also wants, trying treasure bit sort

product with customers market lot of how them a take our treat knowledge around and and So in them care service. treating to best

and and at looked this community its program, a advertise. really implemented which we've new to marketing challenged is five, Number in sector ability market

by of, think, and our kind know the these cracked let being into involvement really local for do these drive quality to well service and as and the working the folks them of things regards really we've to the with for of local cities products, MSAs really partner the customers. neighborhoods, and neighborhood community So I getting with let great neighborhood able code as our community them to to quality know

markets, of of not So testing I'm going measuring a lot happy We're a it. lot shows I'm of but efforts with in progress. different really it to get different all into and that.

product And our in programs, at and at and looking bringing front looking of at out create our refreshing then number shopper new products, fleet shelving, of of six things store is classic, that looking stores footprint, excitement. new get in our just aesthetics, some refresh really kind

number of the so list execute, the is a So busy. on team are those to initiatives

we're driving to with very X move scorecards to create those go needle the hard So and value. points

Sean Mansouri

that came Q&A. via for Operator, questions to Justin. the of Great. in Very live helpful, over review concludes you That e-mail. the

Operator

At question, with from Russell Beacon take [Operator come this we Stanley our time, Securities. first will will Instructions] which

Justin Dye

we Russ, hear can't on, if you. you're

Russell Stanley

hear me Sorry, you can now?

Justin Dye

you We Russ. Got can. now,

Russell Stanley

Okay.

team footprint respect wondering and those in the With that, and they're refreshing, footprint how additional Or the Justin. you number given Might closures? happy operating? you both X you've see sites about in Colorado, feel closed around I'm markets the wondering, retail Sorry the essentially your retail are you sites have to point there with in we terms now. how of that just six about

Justin Dye

Forrest position I really stores, right we feel the with about When now. at frequently quite that. good and talk look network you of our

based a we to growth, doing have store stores. where what process profitability, every need on optimize be We quarterly to we evaluate those

the So going that's what to as process look immediate of We a do continuous have. opportunities in on will store have sort working a in to evaluation better street themselves if location that. to have et continue. that's are any opportunity in we've that, closures new to future. curb move an see like we going team new estate don't real better continue think at stores And that the got We and appeal, permit we to market, traffic, a look we will we I for continue opportunities a better cetera, for locations. to

Russell Stanley

penetration be I Wondering Maybe I can penetration in year-to-date. your the know, if out, be or moving year you'd on within, what to could, targets each wholesale, a to to you like just market? talk don't in for increase congrats months and if where might X

Forrest Hoffmaster

a as with or hit internal of QX to And XX%. as deals, offerings in wanting at team product little the guess more licensing touch increase catalog bit. can we online is question. just Again, we probably growth coming the good states, private-label it seeing bit the that see is good a growth yes, those optimistic accelerated very that some exclusive catalog both third-party Russ, feel with now, in right But we in I our push have pretty up both well and Mexico. ourselves we'll to My end optimistic new target targets. New think

Russell Stanley

to hop sticking same Great. in product Tough the I'm last stores wholesale, at just question much the launch additional Maybe you're doors, over prioritizing share both doors. Mexico, once, directions number shelf me I with sounds growth and getting grabbing wondering on or putting well to there. time. how new one Lowell of gone in great queue, but of on new the the before existing emphasis for go in it for has wondering example, on at you're like beachheads, how thinking

Forrest Hoffmaster

percentage, specificity Yes. particularly the some Mexico. in shelf I we're more just shelf would without that we're for given the New space, on churn seeing say, looking of

we where relationships accounts there. of our products goal that's our life create focus working is. customer given just to the is preference with and that And have and expand So strong the from to shifts, cycle

Russell Stanley

That's queue. great. in hop the back I'll

Forrest Hoffmaster

making within we're if to on demographic looking sure the psychographic opportunity customer gives consumer preferences at us the particular up on catalog just that I how and follow take -- that, in that and can advantage about catalog, a terms up to Can we're little bit not see the on worth catalog. we is an that? seeing space think one openings the remiss shelf a If it I'd things or based in of I market, follow is still be I of talking white of within mentioning the

guess and we can from catalog within categories at it But all that we build share, a across speaks tiers market a to catalog in So I where shelf Russ. more look your all category. that robust standpoint,

Operator

will with from next question Joe Our Gomes NOBLE Capital. come

Joseph Gomes

after center start trying just a to or of ago get and going back look X it a and determination years so, to on. understanding just that not quickly. and so came how And that opened that closed. trying that even of feel better was it's we now or we X a all synergies now we're understanding. great thing better to was little cycle, on lower get to and distribution kinds the cost fully If on out to probably and lead years to and was I'm going

Forrest Hoffmaster

Yes.

XXX-day XX where the as over our months are. now well the this at the we chunks, I'm XX, So where where as right Joe, and is way seeing is market I going are think and what in and are heading looking we opportunities next

time the were making quarter it where that after needed that resources, to fighting put to We X So right all hot really, we acquisition sure and on a energy our really that pretty X, think of New and front. over in we now, there. Mexico, and remember you attend in I quarter sudden, fire got our

done quarter we've of very overall creating tender our strengthening there, deep market, effectively. are of staying both became then a training, very now sure the efforts, think And of make through the core in ultimately on it promotion those but pretty very not and retail unreasonable execution, I forward in those making bud of Colorado, strong there focus to retail more all of consider plan executed forward good that focused. X, in a the what X, states job but And pricing pricing really we but foundation I in position hindsight a quarter it was retail approaches we rebounded top just sure would that

And so pack Right customer creating those that in of to an up DC. taken sure less, free shelf market it. does center and and mothballing pick the It DC. take metrics in terms a you to distribution and open up have speed we working good off logistics still the make More table and sure making a are overall us We or we resources, up us Colorado very we'll help free the mature shuttering it now, with closed just take and and capital, It that of call or to logistics. have in-store experience. also distribution staff that and we're streamline all effort implementation. considerable to care allowed

or in it just in of the Colorado. retail our was long-term at the good retail-facing make so pay and we growth that the business. at ambitions for less, to sense given hindsight, did especially sense, have state moment, more to definitely us part of that It around And time the attention made great

Joseph Gomes

kind vacuum. been on to you're then promotion maybe in have done sharper that could you of -- bit And out pricing. reaction competitors What the it's you a there? the from not about a sharpening seen your pricing talked Obviously, touch and Okay. little you've putting you've

Forrest Hoffmaster

I in we right to think see continuing competitiveness, We're with couple above retailers. gram. that's a extraordinary. hold retail different continue a Nothing now pricing Mexico, of $X New price to especially see

$X.XX quarter. I It's $X.XX think was quarter. this it last

per still softening price bit a So softening the decline on in overall pricing quite on bit It's non-flower a is unit. flower.

response modest. the overall, So has been

XX markets many this different that precisely. have of though, We see metrics, What and couple respond behaviors more microclimates a X really we're on to Mexico, it talk within we state. a to as to mentioned psychographic demographic statewide doing, New it's and but different is with we this occasions, I've

looking across now markets. with the make the environment those of of So categories, do competitive to greater that address each sure pricing we in control the in just each we precision needs those across what unique and also consumer we're of is assortment markets that the at how meet

Joseph Gomes

a And avenue me. And I for retail obviously, talked Great. one for you has past, about been last you a M&A one guys. Okay. base. know the in big then the lot

M&A Just what what thoughts now market there? your of out are right the and wondering seeing kind on you're

Forrest Hoffmaster

Joe, looking not So of I'll our looking at couple the and quarters. high X, at and focus, main for now, scale, of a and speak open a to listening we're a the which big Obviously, are ensuring health since probably tracking certainly business, grow right hand level a markets. the he's scale, transformational to going core we're Justin at little has opportunities estate the on the more we we're road. this continue more been but the bit on down to are, opportunistic real to over yet growing over global X, strength But X next that that and see

Justin Dye

Joe, good question.

of Let you me perspective. kind give my

in simplification he's and brought too Mexico. and at Colorado with satisfaction, growth, New store hand fronts were to firm operations to couple simplifying thing to real think drive of brought take simplifying the had between going and level CEO, customer things, drive takes very we're supply of as chain. trying many He's that probably it what's different what a and I the we're as one regards We business. very, fighting Forrest the to to he do a stepped

going So simplifying great really to do very clear what discipline he's go goals. we're those brought around being around and

And some go the really, that. tilt. to put the then first to capital earn going of very do have that certainly in And cetera, do an on We've really And around in done we're we're X et clear moving he's the good months I the good progress upward to around and go path. think we're to think opportunities work new before year. initiatives. in made And down a growth right very new stores, job what finding you and forceful we being I

and with we look you we EBITDA going doing last If this build momentum that. people, to felt shared quarter quarter, he's as at versus we're to continue

to whether done larger. some brand-new to be and the whether operate to very, that's competitive deal assets play new be it's what create I continue tuck-in and and us something he to for think, competitor with we markets or doing have going offense small be there. store team a a nice very to, going those a job, So our you're acquisition opportunities, real and in some see or have continue And very retail challenging it us even estate a opportunities with

first. So sort first of things principles, it's

Joseph Gomes

back I'll Great. queue. get in

Justin Dye

Thanks, Joe.

Operator

next with question come Hossain will our Mohammed Zuanic. And from

Mohammed Hossain

today. Pablo I'll how some about for debt representing your extended an matures have from option a to maturities. to you're know will additional you planning equity? I update November I pay XXXX. debt But refinancing on question your you February XXXX them? be Is issuing of or

Justin Dye

and The Yes. Altmore job very forced really to end of did of R. the and maturities of a able working case nice Great Greenleaf XXXX. team to in holders move November debt back those and leadership question. being the team close the with

the open company. of what's we're we how the and best of and We we're I'm improving, are front for some we'll a operations to will as later time debt us some to we're due year. on opportunities we we'll as And be and working But the But of And that. that. we'll about have to actively shareholder evaluate equity some that on what refinance down more well next the the share do working in move forward, We're debt. optimistic coming going as that find approach road. certainly,

Mohammed Hossain

another And I also question. have

the getting closure in to plans You about had you some And talked year Colorado. those in this past, in Have Colorado. changed? stores XXX

Justin Dye

have I plans don't think changed. those

certainly they think have I slowed.

to that they we're regulatory to shops working in we've work sure the really There's challenging had And think is, have some safer, not kids. for make then be done THC Mexico, selling done it's to there with landscape making you I that sure to working work slowed New think there. reason product Colorado. state try be if are to still down. products smoke we're illegal a look There's the at underage of I make with regulators, the tested,

market the and which the I been we're down, in market Mexico, gray that challenging to you tied So New would get and tell got has very black up working and we adding certainly really And in opportunity. before I on think have opportunity. still an Mexico. in certainly we lot we Colorado, same new But I still think of the stores New start tied that's a

I is I think from think elongated. a perspective, time frame our time

Mohammed Hossain

start provisions tax? the asking more one can be companies you have prior Will for other like years And update question, factoring tax XXXE and refunds XXXE? stance you your us for making on on without done

Forrest Hoffmaster

news Yes, make X. we we a overall are believe and beneficial impact our we flow broader filed. statement to We'll positive will plan file $XX cash we that then to are. flow to hoping returns. that But the amended rescheduling quarter yes, on have working And of free and cash on see to amended those very once roughly be million tend to returns us in our

Operator

today's portion that, with call I'd will we back live to for the any Justin of conclude like And remarks. Dye to over Q&A turn call. closing the

Justin Dye

of want all retail extremely various the in grateful Board, people. store and to thank all hard banners to members and for our we're too. want that. business support team the I the and Yes. I wholesale at our work thank Schwazze They

then very value, going. They're management the where drive through Our Board supporting working to with and working shareholder in pleased And smart. very team, prioritizing be needs they're what done I and to Forrest that's engaged we're management. and think is

your and vendors, markets. I'm moving last doing, patience. very us grow the they're a team, over adversity, have the challenges of what how needle us, they're the had certainly So our market they're I they're through to you about important the continue as X to EBITDA, find shareholders, thank how two to they're position how really they business improving in And the team to improving go how teams margins, to they're these proud simplifying share how are want in We our of just months. executing, thank revenue, lot that our partners shareholders, for

through been a we've So lot.

I here we've here. good a seeing at got think And way, the tunnel still and we're great to we think a the light in we going And value. a team think great is there's of keep create battling. to the end opportunity company

quarter come about good progress the real we and and as about forward well. we're to more balance be to taxes. as we come will And refinancing some of the this So to sheet, making think look there more next that quarter reporting

Thank you. appreciate So everybody.

Operator

for The conference attending today's has Thank you concluded. presentation. now

You lines. disconnect may your now

Medicine Man (SHWZ) 13 Aug 242024 Q2 Earnings call transcript