ITHUF - Earnings call transcript Q1 2019 | iAnthus Capital Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the iAnthus Q1 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. Instructions for the question-and-answer session will be provided following the listen-only portion of this call.

Before beginning formal remarks, iAnthus would like to remind listeners that today's discussion may contain forward-looking statements that reflects current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. to forward-looking undertake required. except not does update statements any as iAnthus like today's XXXX. May that remind is I'd everyone on call to being recorded XX,

will Ford, to go call turn of ahead. iAnthus. Please I Hadley now the CEO over

Hadley Ford

presentation. of you have dialing to for Pat, Julius, first With our hear you phone the EVP exciting in me But very CFO; very some on the Beth much, the our had Ops; comments will our to thoughts. over this Thank making thank quarter. all Strategy and first about of just morning, about I our I Chief later before Julius Officer be I a talk it couple turn in to quarter,

today United In in a States, the choice. have cannabis we

to We about be choose and one. X.Xx and We goods happen? can have at -- branded revenue. we we make we trade .Xx Xx to trade be of sellers iAnthus to states. chose that trade at farmers to can choose have be be revenue at can how XX do licenses or choose revenue. We retailers the Xx to We in and And last

it's business brands It's only a national national no to contract with on U.S tough no media, manufacturers XXXX it's use to The a market basis. law way to is today's in federal-aid, there's social product create advertise, clearly tough the model. against distribution, there's

in of a build bricks customers front to product mortar So a in store. to brand have be and we physically

We have locations in great in cities to a that matter. presence have strong retail

product other need our stores -- are them to we brands. channels need to customers And -- to use they make customers customers open those there, take need inviting to our We learn that customers come then with brands and available them our can our about and we when to are make delivery, every stores delight products cannabis. need to we ordering we those we in have states while retailers, every our and together to our make our stores, into state our we have better the We’ve delight where and the we we pull to of If great beyond ability operations the whatever to own in our all we in is team. want consistent, to that are need state. to other online with make reach replicate happen, be because and to in, allowed the have

So we stores additional and our than more have a where name. THC that to own. beyond open plan carry today? with customers for on We’ve that stores XX XXX underway. brands are We brands XX ask by We’ve another CBD THC

brands chains. carried stores We have by national including CBD in thousand over a well-known

creating We to delighting for have customers and and over shareholders is just employees dedicated every the XX,XXX beginning. wealth our day, XXX our this

well now. we're rating Yes, quarter we in of over the first annualized had and revenue $XXX run million right million $XX

talking does about by success that Why block This will We cities creation that beginning. allow dollars Because an acceptance the excited and awareness of a opportunity. a Brooklyn, building where brand, Vegas, need with national are matter? the you companies Las so enough iAnthus on This iconic scale. is of revenue. to will is in the presence. are markets you right Miami, national of these and if brands the a want national happen. why we're like industry is key being billions this to A the have just

are reach of over we XX well CBD with and brands total. states in THC the states a our Currently, in XX

across and the our our to United This type need to THC we're billion We are is X,XXX begins retail brands caring own estimated partners then in awareness wholesale competing for This brand able vibrant you XXXX. exposure over sales to of build leverage of CBD the over brand legal in $XX stores today. States and model awareness.

get specific, have we key I'm strategy always around our we this. experience, different many step six to in announced you sure retail customers retail of is questions are retail that by month we earlier is you cannabis why unification is with the a of do very store One this if the saw the call this names? delight excited a the on name,

provide award-winning can great stores both Our pioneer delivered will feel environment comfortable, in and through be pioneering learning the and cannabis. on build will Health Maryland where experience stores the Arizona and dedicated curious For about products the the an that of best retail Life welcoming very and a

And in frequently for see Mass, products. is asked stores in an these when and for Nevada, XX% products XX% XX% XX% Its MPX name and Arizona, customers more brands. they competing stores, will into XX% Maryland. penetrated in of in MPX and sells over by go brand award-winning our like than Mayflower the

to example health model and as develop delivered ago for urban that over Beth that strict of carried a retail real outfitters ensure to had well and their had an and manufacturer brand a customer the saw partners operating pain They United and opportunity the kind to we're For contract products it develop support years vision began they leadership an such manufactured relief spa, Another in of women, retail the XL is else her partners with directly brand of and have spell thousand QA/QC stores and could States. done currently geared pioneered fine brand a needs. in and CBD products under towards what They Life. four were team not CBD beauty in met anyone by they and disappointed. They before the

product leadership customer the vapes, But have a for our your Our Stock team CBD if can't you have extracts, do shown knows brand awards proven industry. products and to and retail shelves how experience won stores. are our in a empty. branding. this endemic We've and in are this outs

be You to to deliver. need able

adding grow capacity Florida. which in over XXX,XXX bring York, type sales. able Our production over we're in our to Arizona, over in to and of capacity is deliver New feet doubling full of million our New the meet sales added markets Maryland and our us use of addressable will $X.X the capacity serve currently $XXX support This Massachusetts, retail and such in ability XXXX expand square doubling as in future capacity XXXX product toward market as as retail much billion billion $X they will by adult in move Jersey in we near demand of key help as and capacity in

who its very to but advantage have be else great, were is differentiated unless his distribution their in happen. the this hot Everything quarter. our has team join that from as we're building can Calvesbert in copied. new van a to during CMO, of people. The the long-term led That's [ph] More at Europe All stock Quicksilver excited nothing at company someone for to his makes happens a develop is in effort side ever he why only billion he $X career, slept $X brand sales help Monster Xx of up Energy recently start marketing took drive lifestyle tenure. billion and us the the brands Neil this

exact is someone and for and knows This lunch have is brands the time. who work drive that with the you. billions of of person revenue set in also team his van dollars to how will how a To ability, work skill of develop right exact right the knows lifestyle at a and that sleeping can pail type to by carry that

are public. to built We be

of market research the largest coverage, float, liquidity the best a the the as most cap. have We percentage

no shareholders. were to for who We're work have with aligned We up day about to you. worry capital management focus multi-voting convoluted with. public our wake structure have one every aligned is We you with

do it some handover after will and I point, to through over this comments. the at of talk Q&A quarter the Julius, back to come your onto you I'll

Julius Kalcevich

Thank Hadley. Good and morning, you. joining. Thank everyone thank for you, you

with to the transformational transaction the MPX the was passed cannabis that closed my that and the first the QX. Bioceutical's Act the largest oversight. everyone walk to Hart-Scott-Rodino our first knowledge transaction of for This in the I would sector. only through like to acquisition antitrust results, closed successfully public to Before U.S It's deal I transaction has and financial sector public in in state U.S our date

October are the XXXX, of company in February closed is first combined. consolidated. was the announced MPX's QX, summer in will partially this on work back results And transaction the The the were quarter in fully started be results of In XXXX, the XXXX.

For was QX. which million, $X.X up XXX% XXXX, is of quarter from revenue first our reported the

Our full MPX. months includes QX the iAnthus and revenue results of reported two from the legacy

the pro is states which full the Mexico. addition revenue, of a forma comparative MPX of from XXXX. forma our release, of XX% the which Table Arizona, of detailed CBD if and the $XX.X in Colorado press they announced number, impact million forma more Life of as in the QX pro revenues accurate For our to grown managed was in the and quarter transaction is This quarter. the a pro quarter, revenue has includes were as consolidated transaction Our X reflection basis, On beginning New of for our closed

operations Mexico, includes been to MPX million we’ve $X.X legacy iAnthus approximately relates simply reporting revenue operations licensed There's under needed in IFRS revenue, are that no unable in which operations, million contract managed we Managed where to relates and revenue, and/or to and of our $X.X Of consolidate operations IFRS. are million approximately Colorado management we is standards. an to change the reclassify to standard. managed revenue to reporting incorporated to licensed New operations the MPX managed IFRS due in Southwest, it which $X.X

at to $X.X like also for pro forma preannounce April coming million would the month. which is revenue I our

Our remainder setting strong in a foundation that the QX and sense continued April April revenue for to give to to have our sequential a good be QX from should you XXXX. growth of QX are

a was approximately QX, revenue $X month. our million monthly During average

During in and it QX $X.X it a April $X million. million was approximately brought month

ahead. our revenues a still rate million April catalyst waiting growth $XXX with put at Our current significant run

Moving to profit. gross

MPX quarter X, the adjustments gross of due detail one-time gross Our in $X.X for given our We’ve adjusted profit to million acquisition. Table profit $XXX,XXX. the provided fair was around value

comparative XX%, margin believe to for an calculation peers. our Our gross with adjusted MSO be QX apples-to-apples which was we

expenses share-based directly these were expenses million operating the MPX of compensation and which our related recorded we the quarter, after cash $X.X for depreciation $XX.X of adjusting million Within of $XX.X to acquisition. and company million for classified expenses, the of expenses amortization.

I to to doubled we're we than due and walk we the through MPX XX% lines as and some quickly other our in more and the million you eliminate This size area Quarter-over-quarter that common $X.X merging be our how G&A to synergize to by [indiscernible] overheads. expense our want iAnthus between efficiencies an will business to continue companies. increased QX. the will we of of be vendors on in focused of QX expenses synergies continuing as

and workforce XXX% salaries increased our to by benefits $X.X employee expanded October million, even though between by over the XX% Our to present-day.

involved expenses the by despite of of marketing restructuring were Our to dispensary MPX in million, fee. two our launch fact merging XX% $X.X the and professional brand expenses unified entities legal entities, we complex increased former the

loss EBITDA our to per And Details Our statement, $X.X of X Table loss press of out share. lastly, the which was in was laid for income the million, our for net adjusted for quarter million. equates are release. loss also quarter $XX.X net a $X.XX our

approximately support of million During CapEx the deployed $XX we in operations. our quarter, of

As exercise current $XX cash balance million. XXXX, million of represents of increase the proceeds over XX, of and also to potential $XXX amounted total company year-end. million that or options from to XXX% is almost been $XXX by approximately the This The $XXX company's assets company. of million. issued over has March warrants the receive an have The

continue will be plans and million is further company closed believe in at financing which and discuss beneficial The estate debt fund minimize to asset also and their $XX to base real expansion $X.XX. The a of March fixed debentures $XX debentures Our the we the alternative dilution. of million million on we and as within sources X, $XX resulted in approximately issuance X.X $X.XX of are warrant warrants at bear price price convertible exercise of respectively. and XX% XX convertible which financing through issuance of May coverage, million,

XX, X.X diluted loan shares and MPX iAnthus warrants legacy conversion. April fully satisfy, On share X.X holders for to issued count. OID Current million that remaining million eligible were

securities. shares and is XXX common count XX which shares, million million includes diluted Class current share XX XXX.X diluted A shares, approximately Our fully million million

emphasize Now iAnthus my Massachusetts, nine to New to purpose operational revenue states our of with in already the market in of brand form enable the turning has over two states that generating that just being of awareness California at like have the five to Nevada that operations point. Jersey this build mainly exceptions I is those iAnthus's infrastructure states, Arizona and operations. five These built scaled been Maryland, and leadership. Florida, to comments. basis would

I'm QX being Boston location sales focused Massachusetts, our this are able from cannabis for working the to for recreational to on also In and process Worcester, products successfully we In open the have medical completed to public with our Boston In on announce and agreement our along. remain that move received sell we recreational control city our we’ve the license agreed the to to commission of host hearing gear. host community flagship in pleased Lowell, facility from for already signature agreement. are community location. a provisional yesterday continue awaiting medical and We’ve dispensary

in XX Worcester sell pending the regulatory half and and open within to moving regulatory regard in dispensaries, to XXXX, state. We’ve areas. wholesale Lowell to anticipate the process, continued our other full We authorization. second Despite we with of currently steam ahead the slow-moving to develop are dispensaries program

month reported $X the over retail we alone In wholesale of million fact, and sales. during

facility call of cultivation recorded per I really XX,XXX gram. stands feet. QX only XX,XXX to amongst want believe out, that indoor Holliston $X.XX feet a on own average despite in square Another growers during the statistic this of U.S cost square number its of an footprints that cash our I

We which will square is also that XX,XXX Fall drive within step are and in these in located River. feet Mass, cultivation efficiencies facility

[ph] of going another will are best very the we cultivation for leaders for dispensaries market to as wholesale which early network square In of on in the July, will within XX confident. the dispensaries opening within three next state. in products Florida, XX,XXX we’ve of days. over feet make with retail comments MPX Massachusetts, It's three planned my position feel two customers. the open efforts us give The footage. Concluding locations one June, Their open of six

significant milligrams delivery building which I Marijuana Florida its Office XX terms days. products use, that mentioned, will and made based the ranked all the the and open a the XX market dispensaries been remainder and that data are are in company XXXX, always on dispensary Florida been next third sales of position traction. leading that We've operators focused dispensary. of we're in the help have sales opening of THC confront per and that reports gaining on available strong Our of locations our three initial have is that the of in statewide by Medical just in communicated Of which sold publicly

continued to build We’ve footage. locations and and In we believe dispensaries, our leases serve that our fully prime out well. stock locations these order square will we've secured as to cultivation

feet operational, is the today, of XX,XXX end feet As up at we of have from XXX,XXX square which April. square

will as Our and has indoor cultivation been lower well lower cost space enabled, cultivation environment expense as as cost -- both quality the that as efficiency. cultivation drive well

Maryland, open XX to that In in active dispensaries three facility state. we’ve over dispensaries supply an processing the in

and Our undergoing upgrade Production processing capabilities double. equipment. both is in footprint facility an will

will enable -- Maryland also which continued will of penetration We the market.

of We the establish premier wholesalers the within upgraded state. resin to are in cured and production the one Nevada Our these also been in which produce and as has will Arizona. some product currently of live lines, further launches iAnthus believe bestsellers MPX product that retailers

strongly dispensaries Average Nevada, dispensaries Arizona in continue in per offerings In the XXX% to wholesale in and size orders month approximately April. by our be have zones XXXX. company's in QX market Nevada increased both XX received since and XX% region, Arizona of and in QX Southwest XX wholesale specifically

extract cannabis this edibles, to the ruled patients the in and of Court in Just waxes favor such medical use industry marijuana who cartridges, vape week choose Supreme Arizona as tinctures.

resin in the brain support The of stages is medical reflects product state to line a retail clients. also the is the Arizona patients X-X developing the most about both the products. continued of for informed to company launch the a portion continue ruling The to product within significant fighter with these one the a will market live and cultivators of concentrate new to that form renowned Extracts access and final marketed be the and collaboration the wholesale will development. market market in use court's overwhelming company's keep

Island. York, of company state. the Nevada XXXX year. other its dispensaries the development the should in Island's be end the development a of completion forward And year. ran residents also dispensary and clarity by targeting third to The quarter have company the will in XXX,XXX of to Staten move only for fourth This dispensaries this serving licensed are In awaits difficulty] further and leased programs two signed the of opened and Staten and located open XXXX three We of the with New [technical within quickly wins the dispensaries just on continue first states. our quarter two down the of the both recreational eagerly as medical dispensary

well regulatory were Jersey, eventual state. that prospects underway and to monitor plans as with an optimistic With within developments the build recreational other operations fruition, are recreational to to see Similar the remain regards disappointed to but we come and New expanded continue to did we short-term operators, our to our not program. finance to of medical

also iAnthus Colorado, we're for signed on notes national Polis acquisition closing brand the in consolidate in a the U.S., provide excited to In final in Life, CBD the concluding to we CBD is recent And as to targeting Life. close public of bill company the a some well. pathway Governor steps will iAnthus see by were CBD top June. For early in of that For lastly, and state our operations its ranked that was

CBD For Life over in X,XXX is available now stores nationwide.

premium will for were for Life for For rolling in product at and and CBD $XXX,XXX CBD line Results of approximately line $XXX,XXX. summer. For adult addition, April May over Life a month ends be In this the

to back you. Hadley,

Hadley Ford

At Julius. for open our would from questions it up Thank point, like you, this to investors. we

take time. them will the one put So please in we at and yourself line a

Operator

question that Securities. first GMP from Instructions] Fagan Robert [Operator Your comes

Robert Fagan

pro could for I QX? asset the hoping way insight challenging, bit I biological there is was guess, that number And EBITDA we a you know gains forma excluding for it's could the but quarter look [technical any pro at for numbers guys and us give my just Thanks or into forma including? questions. taking a I difficulty]

Julius Kalcevich

provided what Hey, be press terms full going of still mix quarter point around being and all that in consolidated, release, of maximum -- the providing around the with MPX Yes, legacy Robert. of in some we're we’ve Julius. given at of quarter what detail of provided complexity that. this kind the for It's beyond some to that’s beyond we’ve sort the the our

For QX, have breakdown we businesses able we or provide to the started MPX clarity and at costs. fully as going on obviously, with lot be what of to separate sort consolidated point, are that both a is, more to synergize of some those especially

Robert Fagan

contribution if in Well, that maybe think quarter to line or improved somewhat you on was worse? that what Okay. if the or with number a it quick have a their combination EBITDA pro reported margin for been the firm? forma the from Just maybe there follow of would understand trying gotten you

Julius Kalcevich

Sure.

right? term would up of EBITDA that of iAnthus profile. -- is the these EBITDA, Florida, have opposed in ramping So, the for month status yes which would which as which for improved business. to been on we the the those of a some of different missing Nevada, have -- and have operations, have such given just of longer or been some just couldn't still massively as are sort obviously dispensaries, operations which are of Longer instance so month sort operations, consolidate, with -- in improved some the January that of Arizona MPX, especially

include were quarter. have for month one improved to of So if MPX, it that of sort you EBITDA would

Robert Fagan

Okay. insight. helpful. Thanks for That’s that

then could how kind you kind pro what forma made to April's comments a much to of acceleration $XXX able than Just I million if into share roughly just forma now? be the and and sales of wonder you moving your pro that annualized accelerating be might of higher mark on right get picture number May. about to

Julius Kalcevich

Yes.

continue in April -- pleased strong. we’re that so So terms of very May results be to note to

the remain the tends And we're to obviously to optimistic around strong As months quarter April XXX. see in and that industry be closing at we dispensaries of this given be one in May of June. sort busiest pleased of look April dispenser at in -- to and continues

to aware It's obviously Florida state remainder see these and to So good of and a you’re think revenue catalysts of continue big year. I continue within especially mentioned, going going in Massachusetts. the QX of the drivers to some we've catalysts be of throughout you’re the that

comment, per in little reopen a As that bit in sort terms available we milligrams volume Florida, dispensary. have that all is I just to provided of sales dispensaries of of of publicly our THC

that continue vibrant generating are to as on that to focused grow going going you’re are and Florida. are doors, open really see revenue in We doors be to they we these

definitely significant in is XXXX. as to that there those across Life of be looks CBD specifically, to whether providing few remainder -- to excuse QX of growth going numbers are I going I So starting even mentioned to real think growth right, the show and me, areas they’re a well. that over just For sort QX then iAnthus May And to see like from April as April just for what also,

Robert Fagan

Last one I getting guys impressive are Great. wholesale trends the you states. encouraging. penetration across that color quite the appreciate and thought of amount very we for me are different Those is is,

that? getting wholesale, sales of that you’re team or could good how you Just is that a MPX and that that Is wondering about effort your we driving is -- how wondering, going product that that's have, driving penetration? forward? perhaps the like particularly, think the Mass strength Just brand

Hadley Ford

Sure.

Nevada, that with look Maryland, there is I brand very is those if has at a key in very, presence some MPX. continued that it three wholesale So in and Arizona, team backed out a of are there, up. states to team be there place the strong And

there's little own else operators now. shortages for year. is like are haven't of incredibly remainder as legacy, product, locations, dispensary. that's other for right I we're what’s a directly that coming through there well. And excited our that and the Mass In around Massachusetts, go And dispensary see within think also the are to this something but the everyone is that the reason see continuing we're the product so a that to case think it in happening sales We of I bit they our but enough like of continuing to our a quarter, that across they’re just dispensary to various and out We they networks. have the working our an state there's who market MSLs, within up that other scaled quickly there we become other person us looking state vibrant and

Robert Fagan

Good work. Great.

again. Okay, thanks

Hadley Ford

Thank you.

Operator

Next question comes Brett Hundley Global. from Seaport with

Brett Hundley

Hey, questions. Thanks good morning, for taking my guys.

Hadley Ford

morning, Good Brett.

Brett Hundley

want make of number, morning. I so that is missing sure Good million Julius, just to million that effectively I heard $X.X the revenue, you $X.X MPX correct? from that reported correctly, licensed

Julius Kalcevich

I classified We’ve Yes. yes, managed and believe X, Table under it's revenue.

have that So … would

Brett Hundley

Okay.

Julius Kalcevich

-- … legacy revenue. MPX been we would've that they auditors within looked conservative better managed the different our IFRS within approach IR how always believe our than we to financials, as point at we’ve working this with revenue. They a we reported had at and classified it's revenue that reported have the in auditors,

Brett Hundley

to further can for Thank maybe I that. on clarifying future give until And QX you wanting Perfect. color appreciate wait to financials.

that some and the can have and out in break us by update this helpful. end give think some If would the many to can around point MPX, legacy place As this -- might it network at time, be you you maybe you us in across across you stories try how and our information you sit related models year? might of of really

Julius Kalcevich

This that Sure. one. take I'll is Julius.

in. add to free feel fact In

case ramp-up clear to always our we’ve communicated the Brett, of the in Florida. in just around off, been market, already we've what first So,

then X mentioned, we’ve the another opening quickly I for open, year. targeted XX X we’ve and very As

some of XX in -- one out around openings the and the of QX, as opened there's be be loaded ones. Also terms in sort year, back half opening Staten going open, half second sort in to between year. of of are of key of QX be mentioned we’ve X going the that’s Massachusetts, there's obviously, to So, of the mentioned and those going the I the to will growth That’s York split half be the dispensaries. in another year. -- In backend the significant Island the of in back sort of that's X New

the side end by the end be get on not of is X MPX of of the the something Those year. plans MPX Nevada. yet. are that We’ve sort mentioned of side, the around On what year. full sort in the just to Nevada, open will outline the legacy or wins four by open license targeting NEW I've Jersey X we

will be detail we openings Jersey, sort but New I'm not at mentioned. -- timelines this around and else sure further if point. what providing that publicly add haven't I've in Pat, anything of We with to presented on

Pat Tiernan

No, you think covered well. it I

Brett Hundley

to just think part do that. might something I how and plan in Thanks business for the new regulations I law have with radar, up or going your swipe you potentially Jersey, appreciate see there effort doing medical through that end you where is want locations breaks more are that's Related new of waiting that it. more I is to language New is still through up mean, guys it part this thinking there? as the the again? vertical in integration mean, requirement. on one I to

Hadley Ford

Hadley. It's Hi.

platform Obviously, been New on usual some and ran recreational one an local of that the been politics having there's Murphy gets rollercoaster. Jersey the full has level. interesting at

we open. monitoring the lobbyists open We a of develops it. our are on to we have our which just to want So are stores in way but That's love year. We get course that with statewide we how basis. more the whatnot, stores see discussing over and an the would to will ability key

Brett Hundley

views adjustables. CBD, hearing going I me. CBD formulating Because adjustable as for to just guys related willing really I so retailers? of then approach there with last just with on Can And what in chances, others there? what but some to really But I'm FDA hearing this don’t plan first the the And take give too, forward the for to out you input some side give with the can has might through Beth then, your me retailers want I that one conversations speak. is Thank if you. today. and your be know your your Okay. us mixed the things Hadley, to you that to things? think know on appetite are wait we’re about sidelines

Hadley Ford

on perspective hand side over partners it will process. edible want because an and hand to are clearly then be will couple just business. I on that, saying. We've what the the Yes, she we you right FDA Beth, give what make to get over sure has I I we going it providing. are to of sure. But stay want there, a not the But done we your regulators through to anything to beyond seconds built Beth from some this of will of because

Elizabeth Stavola

would said. we hear I that been observations and in just marketplace. then I We’ve are all what what products. are we what Hadley some seeing There the in wait turns that your the are are but with picking say see until at nervous there's out would to absolutely from And conservative, want that retailers some are correct really FDA, not big the Yes, we about super very nervous edible echo FDA.

see get it some long won't edibles just going you I continue and monitor from from we that to would a favorable be ruling imagine we’re to out So if time FDA, coming us. before the

Brett Hundley

that summer this ask could aggressive to sorry thought I’m be this seemed me? could executive talking to one -- except that you to I follow-up. happen soon? you Do industry was just it by that Do

Elizabeth Stavola

That of end I guesstimate. my year. would say probably the be by would the

Brett Hundley

guys. Thanks Okay. so much,

Hadley Ford

you. Thank

Operator

Echelon Wealth. from question Pallotta Matthew with Next comes

Matthew Pallotta

are How doing? you guys. Hi,

Hadley Ford

doing? How Very Good. well. are you

Matthew Pallotta

Good. Thanks.

on just wholesale side touch yes, again the wanted of the So, business. I to

THC question hurdles about are of any of -- perhaps I are and keeping And that guys whatnot. or the from a more want seeing you’re are your and I not scaling side? maybe ramp seeing what quarters do process terms XXX up guys earlier stores know for sort for specific state short amount you naturally from you ahead stores being be bottlenecks believe dispensaries been quarter. in supply reported has that doing ask you targets guys set up states So last few someone a that guys guys you you XX have in and And that maybe in opening of others internal repeat May there that but of guys supply from to have in that into you, you’re any have if the that been in you -- to on you doors have own the like that’s have

Julius Kalcevich

Sure.

Hadley Ford

go oh, -- Julius ahead.

Julius Kalcevich

Yes. Okay.

I any impediments impediments, are we where state, in not like instance, Florida, states allowed. of think only terms see in for in the is truly So that wholesale

we So err and the sort that's in really of whether in Maryland, of that it's Nevada see I look -- to impediment case be think always I can there's that own we going stores I margin well greater want be through to the be [ph] will basis. Arizona our structurally around or on drive think to Massachusetts only put what obviously there's we or going wholesale obviously put as to overcome. we that we balance through want it to what stores, always wholesale. just versus a products selling Putting we some able our at own will solely

want you're I because his you in market, at it, go when be of blanket in a However, an as dispensaries. calculation brand interesting it's within brand I to want not we think to dispensary, your you want Hadley's just always the but people's to to comments building preamble that other echo look sort

you're product view to just there's going and not for I [indiscernible] going So, our see be own the dispensaries. solely think it to always

of sure that and dispensaries be We wholesale there out are in there Hope where going able over. especially to are that to populous answer. sort we're we place in markets make teams have to that work broadly,

Matthew Pallotta

$XX.X for forma basis, sure. the what and Okay, revenue, side? then pro can that through great. retail channels in on your Yes, sold out between wholesale a break Absolutely. on million was you And the

Julius Kalcevich

over a and timing little business the from light QX, more didn't we control will on. we're to previous bit That everything accounting is as that still accounting for was we and we that have my a that bit QX. full the firm similar comment, again for entire or will MPX, as for just given over both as Anything an the of not little It's QX, be have once quarter of for control to closing. shed quarter. presenting -- be business a iAnthus believe that split something So just sides operational perspective QX we able done have breakout I of between for will the a

providing kind QX think we that to able comfort to more be you. of in I much around have will detail

Matthew Pallotta

guys to new brands Okay. Awesome. Obviously, the And new are product Be details around brands out? you guys Brand then MPX you any plans just but do the core retail, the released looking roll that any you guys roll you on have have have on for press side brand? out do to

Hadley Ford

with the they’re haven't And MPX something product one spend time, to an strategy them them retail the brand, of those the people rolled to there, publicly out to learn, as become would Mayflower cohesive part educate of have be Life. about For We or store, want things brand. many yet. invite that those sets CBD product have while that the is That means And but cannabis. familiar we brand Clearly, in we be idea like different would sets. plans,

categories is what will undertaking looking the year. now through by out brands course market understand different the the is are pieces to and our and those different customers we So those the demanding within that at to and roll of we have Neil will listening

Matthew Pallotta

That’s it. I Okay. guys. great. appreciate Thanks,

Hadley Ford

Thank you.

Julius Kalcevich

Thank you.

Operator

Next from NCV question Alan comes Media. with Brochstein

Alan Brochstein

Hey, guys.

Hadley Ford

Alan, you? Alan. are how Hello,

Alan Brochstein

I have will I then good. and just be. it let I’m topic one

… So

Hadley Ford

resist. you? Could couldn’t You

Alan Brochstein

own competitor the supply. another augment most [ph] question Florida rest like admitted this is one just Florida At quick the of prior an in [ph] I terms not about No. a the minimally their week Because that. with saw drivers, of year. to the this It important of facility it's in earlier challenges I important competitors yesterday some sounds had announced your to time of greenhouse to same facility. one indoor

two before. state, of, in You I about one talked believe, guys indoor green have you’ve that the facilities

it are confident to like given how your side. real that the to are basically is able on How build you that you’re you question going be wholesale [ph]? my you’re stores state guys confident So retail allow confident -- sounds that doesn’t the

Hadley Ford

exist can't which one of failure, great and question. crop aren't you aware for You know, haven't those had It unless we you in that Florida Florida, issues is in Alan, absolutely that of the you is sell had. or a wholesale buy

the as had capacity indoor give acres can canopy tremendous to acres on be stacked well. have of of we tremendous we’ve that the kind square the XX amount and amount and XXX,XXX issues double One indoor us fact despite facility a feet we've and of XX a greenhouse of

One supply has specifically it's The problem its right? guess is and were to demand and third I have, think the into get equation of are have now issue. through the we all good such a power good some state. purposely problem peers of the that has patients -- But we the but fourth We’ve in with I and we have some strain, I the demanding been power and openings dealing see we expand the stores, supplies the problem issues issues. across a the retail first down quarter much of on slowed as competitors and And customers you it to our say, side curve the an flower quarter, into think we the and late people should is still need solved capacity. as the because products quarter in that. put is a

with power of the have a of piece local large building, Fortunately, we the open the power build the and of we on amounts expect very that to we large have going stores land energy help solved provider a all up shelves we and -- our very the product now forward.

Alan Brochstein

Okay.

Sounds good.

Hadley Ford

go Pat, yes. [Multiple speakers] ahead,

Pat Tiernan

excited our this to should But site infrastructure timeframe. quadrupling now, review review capacity was solution summer. work, we at just while by have summer our were the around we plant do some to just flowering be keep results nearly we end numbers running and the of us Florida I going doing of Yes, which augment the was I throwing some week build-out and really the will the still get the was latest yesterday, have normal total through that. I the quadrupling, power in lean

So the we're prior issues challenges but to going but some that Hadley the issues we're infrastructure address period. during the completely to into correctly. some wired pretty whole to make confident we still summer, sites just sure be the heading confident, It's very of mentioned have because to

Alan Brochstein

for Thanks a it Thanks. me. Great. lot. That’s

Operator

Next question with Mir comes from Genuity. Shaan Canaccord

Shaan Mir

my taking thanks the Good and quarter, morning, on guys for congrats question. and

may was Just we this to that on touching, balance the this, think that for just of get of I dropped some kind April be call to of I the get $X.X how how know modeling forward. you of mentioned but pro have the and be there, wanted on should up. I the an looking at idea I we clarity I just million kind that touching missed going Mayflower up number, year? what wanted my forma step step should earlier, magnitude of that

Julius Kalcevich

Good April been April beyond we're in getting already Shaan. just whether of out has providing terms Hey, May, in in morning. sort Yes, what and ways so some detail. even QX of

at to be of but those Obviously, big continues going the not we the wrapping I are as So I see a a open the of just was those largest strong. recreational stores within fourth the to Also regulatory open of the those Florida or especially [technical open best the Boston first other difficulty] timing April But catalysts, to as city be continued either months up mentioned year. drivers. year. was we around sort we May then just any of sort regulatory sort fluke strong. and that that It's we three has thing. get one the within we're Those the locations are I to be big are always, May within mentioned, half state. of back just ones also or And April to point. within stores to one drivers one perspective. wasn't be specific providing It some will these is as believe in mentioned, those as big be numbers obviously That’s with which excited quite time city not are of April around of Massachusetts, in one the opening this state. should before, the from allow the largest driver. that, stores of May a second first strong. busiest

we driven. determine get regulatory this more [technical difficulty] lot a that of quarter obviously them what’s other remainder to just we timelines, for lot look from the those But continues call on That’s the managing of as we now, going a quarter We of point. as like. the are are three then I especially going to of terms some months think of full what to sort the business going well. year clarity, finish the in have And off to at

Shaan Mir

Sure.

know kind On step the the about know how their of the numbers. it's and a dispensaries talks up, a because Holliston now facility just you’re right, that use in adult legislation open getting I right you'd XXXX adult one to competitors I adult bit that or Worcester use approval if or sorry, talking you headwind, the little don’t that achieving -- in is well, with I’m And you want of Massachusetts this of regulations your lot side, Lowell Massachusetts, location are brought mentioned and of dispensaries use. a as been saying been

getting sort in of meaningful kind contribution on just of so the year? or the just And are you in facilities any expecting licensing XXXX, those

Hadley Ford

Yes.

and perspective of the states. echo some my of sort the talking I in from I about updates So operational when kind of this was

be one in the the of robust XXXX. Massachusetts around state is U.S., that that view most is Our XXXX, whether to going

have preparing for time. for been long a it We

brand the have [ph] a had to we a facility as over to off on we flip was be first that Worcester, brand Lowell and that iAnthus to the those quarter, amazing dispensaries are market the recreational there are is and that that. out going And retail on want selling prepared out to prices. believe side get low around cash open product, at or biomass $X.XX amazing churning we there, a the since a at beginning MPX wholesale January focused wholesale of then the of we're on basis, for out it continue this the well or we we for now cultivation cultivation opened right and as basis point Holliston in We this cost on made I whether whether

We are going the have to products.

We before we brand state, point, dispensaries. to because I made are even going selling Lowell have as we're already and awareness opened within XX to as Worcester well the the

going We think We are our there. getting brand our that’s out name to in service well.

of within wholesale state. proving whether on retail the we haven't in any or side, ourselves time on wasted the that So it's terms

Shaan Mir

one Perfect. for And just last the me.

months back know eight twofold. Just stepping the increasing opened that mentioned dispensaries call, some you'd the last be Hadley the of and then in that by seven commentary last had I that to earnings clip from you

openings to there I where wanted this dispensary of those bulk get are idea the So openings, if that idea coming was of just kind I’m I inflection when happen? of an quarter think point an from. two And would of correct.

I think that? Florida on color would probably any but player be major there, a just

Hadley Ford

want handle you Julius, to that? Yes,

Julius Kalcevich

reiterate, head will year. imminent. all continue a to I really X estate I made as locations. We there that secured that Yes, Florida the start of the are point it four have dispensary had half to XX, in in make mentioned, peers. secured And is I some so We just as leases. still be had another to locations there's open versus and signed the mentioned, that to going want prime and are those in we real before, I of around also back our

Obviously, first to one. around to is we inflection be in the the in going year. Massachusetts. New would So QX. couple that Jersey. spoke you’re about see I the half just back a Beth going Nevada say answered already that’s point of in There

locations ground confident very it work is securing terms in whether definitely we Florida, the within sort whether in State, of about of this in Mass. year, York in So very, of whether we've done that New but second feel half the

Shaan Mir

Okay, perfect. questions quarter. the my congratulations Thanks taking and on again for

Hadley Ford

you. Thank

Operator

with William Kessner Andrew from O'Neil. comes question Next

Andrew Kessner

ramp-up, your follow-up like what of a you THC do a since you product sold terms Florida, better of any had once of it have guys state given in sales thoughts or at your most about Hi. might To looks this production? the doesn't performing mix yet. store. perhaps that per have you sense more production report point, Do you normalized what than peers taking include flower of question. the on are But Thanks milligrams weekly the the percentage be from are to flower ongoing for

Hadley Ford

me you want to take do that? Julius, So,

Julius Kalcevich

yours. All

Hadley Ford

Yes.

because were want we’ve had in We I capacity. big in of to to we've the that pre-rolled to the side, on about say, made caution and foray. a market first So, flower I'm the what limitations

capacity in challenges infrastructure months given our of the flower, is However, before. somewhat we specifically limited mentioned the next couple that for

is we're of seeing I with little it's be in states XX%. is consistent in XX% range to to where That what So going think available. sort a or XX% May over that other

offering social and anticipation. in the we're buzz the It's been media. response. out very would so points the price a there, is my hit It we're good with that and quality be And that seeing a a

be over we’re in However, our next flower months prior couple on we But of comment can the doing in we the fact from it is will everything tapered built-in side. summer, that over the products and demand of that challenged confident to patients the summer now our release [indiscernible] that created end in meet the the the period that very I through sort the we’ve feel our ability out to of crank require.

Andrew Kessner

at That’s Thanks. market state's New yesterday the for And medical competitors about talk least. of full you your a near-term helpful. the York? extension or Okay. about One bit adult your than of rather of expressed lot outlook the hopes can a market then an optimism for in use potential your a

guys best you any as next perhaps far would in or So year a thoughts you out in allowed the state what scenario of for too? play on things the expansion and terms possibly Do store [ph] how have around cap products for company. that over be as the case

Hadley Ford

or talk about that want to you like JK, you me it? to talk about

Julius Kalcevich

and comments. you on in can don’t why some Well, then specific add I dive

regulatory, of some around the speak developing. can how You you see

Hadley Ford

most of at states like political the just becomes it the Yes, local level.

of I think, still like would see than it's is -- we last. Within in, [indiscernible] rather but voters participate that use we little York, possible, unclear. most to New in cannabis any more a the of clearly access to sort states the bit

issues from limited of I has equity address number existed are and just of a allowed that social to the perspective been needs has industry One that. that the think players the

state to provides have a Clearly, currently, the lot think I to that dispensaries need politicians that amount limited you’ve of the in the when consequences. unintended address number we that. the of

So is our time. view over

those because a relationships into plays going in a ownership and program. strategy. than right to to provider that those. going distribution, be It's big it and more a have We think going would of have full You’re you to carry have markets currently is and [indiscernible] probably products benefits and open to our actually to inclusion, like we’re retail lot retail need broad we stores broad good retail all be that

things -- look we and every we of anticipates. end we just answer your At take state will longer we’re see. We always So are day, the we familiar question? than from That these that a monitor, everyone bit have little the in. conversations.

Andrew Kessner

does. that that’s for Yes, all me. And

So you luck. good guys and thank

Operator

I And over call Hadley time, Ford. the at this turn to will

Hadley Ford

today Thank Great. for you you dialing all and in listen. thank very much to

progress how the wrap up. as the was through course couple over made of listening a I I Just first as things earnings, the struck go Julius year. I was quarter just in last much we've

back to or of just go quarter even just had de minimis year-ago a third back go XXXX, you the revenue. really If we

ramp have over aggressively all years grow I think have on we've business the and as the peers many come last in aware, for company more really our of we many you're been XX to many, and quite months. company the had than

the in much think we month and had a now it's I third revenue of a $XXX,XXX quarter than different less story.

it. Within in over $X.X million April, was the of right revenue. thick of it are We

assets to XXX of we've growth to quickly of start shown million maintain customers. million growth over of I from to and And of that delighting last efficiently the manage and think in very discipline $XX more employees year of XX can grow go $XXX the we can our or type from think quickly. and $XX million assets I go we grow importantly to at

for you. so your that. that three that. a we said a crazy it markets to operator. stock up our and we operate great, support. people testament drive of U.S do day, every go great, we first folks and retail develop great raising to public. is capital within thought going We showing We We to have We now companies years here. could what work merge that we're team to We've that, acquire We were the say. appreciate We told with footprint, use pioneered are we the public the trust the our think we for said ago. People that going presence. to done that. MSO were wonderful I and going get to we're We to do did we be We we able are and we

CSE, undervalued for very much the ITHUF are your We you support IAN you your iAnthus. much on on on and time. both. the for Thank trust. very OTC Thank

Operator

concludes today’s call. this conference And

disconnect. You may now

iAnthus Capital (ITHUF) 31 May 192019 Q1 Earnings call transcript