BMMJ - Earnings call transcript Q4 2021

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Operator

Good morning, ladies and gentleman, and welcome to Body and Mind Conference Call. [Operator Instructions] This call is being recorded on Friday, November 19, 2021. At this time, I would like to turn the conference over to Graham Farrell. Please go ahead.

Graham Farrell

Thank you, operator. everyone fourth and quarter welcome year XXXX and and end conference afternoon, to Mind’s Body fiscal Good call.

and operating and We join are quarter and discussion financial ended Body with XXXX, and recent highlights of us you both XXXX and Mind’s a today. This July goals fiscal delighted call beyond. will fourth to year results for have some along our the XX, cover for of

question-and-answer session. the Chief Following a and our Hoffman. along Trip conference will led Chief be Shim; up remarks, Executive company’s Operating Officer, Financial Mills; Mind’s call prepared call The by we open Michael with and will the Officer, Chief Dong today to Body Officer,

some of statements conference with forward-looking may this begin statements. the be formal call we would our that like I on Before everyone remarks, to remind

those The not matters may statements other or the projections statements forward-looking go but factors, projected Forward-looking certain Michael differ include, involve filings. call Please to to will detail limited risks in Michael. actual intentions. to now due any our I financial in objectives, or necessarily uncertainties. over statements in significantly are discussed from of hand which company’s company’s Mills. variety the expectations These results plans, may of a ahead, suggested are or and SEC

Michael Mills

our this discussing very at to Body taking Thanks update and year the made look for progress XX, much, XXXX. forward we’ve year Graham. on and Thanks time ending for the an we July Mind, fiscal

Chief The year for Mind. Mike Operating and Hoffman, Chief transformative mentioned on Officer; Officer. Body Mills, have the last our CEO; Shim, Graham call, Trip been and myself, As we has Dong our Financial

$X into call. our into grow, and detail commenced the our go on seen licenses. operational Trip facilities, I’ll the new we’ve more on we’ve later in opened Michigan operations new advanced market our achievements expansion let current billion As

revenue XXX% year over really We’re million, our which record a $XX.X XXXX consolidated XX, of for XXXX. ending the to of year $X.XX is increase July report pleased million fiscal revenue

strong In assets, addition our from growth to and consolidated our a a with very we QX posted developing increase optimizing our revenue being revenue with good of Throughout strong XX% growth, efficiently on QX continually focused QX to operations stewards of quarter-over-quarter sequential we $X.XX million. expansion, year-over-year in capital.

translates focus XXXX. sheet strong to our Our balance for fiscal

grew Our million total million. assets from $XX.XX $XX.X to

million Our debt to million our as grew $XX.XX result largely $X.XX financing. a total from of tranche million, liabilities of our first taking $XX.X

We million. million operations million from positive our Our $X.XX total $XX.XX and total with our and roughly the to to $X.XX in million to assets continue to $X.XX foundation current ended grew million. And company on flow from a grow. of strong $X.X cash QX liabilities grew current the cash combination puts cash

roughly end no share shares the XXX at the with have and XX, outstanding common fiscal one class of convertible only year July We debt million XXXX.

key margin. fiscal for for look from we in performance One margin last XX% in operational of year. the components the significantly increased The changes gross XX% to past is year is gross

start we improvement staff hiring We preoperational vertical. and significant started on margin Keep of a drain continue the getting operations across through as on. both on periods, as results mind operations, new to the margin move focus there’s expense in fairly financial

quickly that able flow new have we However, typically shown very positive. cash we’re to operations turn

from improvement and We and operations. net trend a in flow positive also see income positive cash

between $X.X at loss quarterly Our $X.XX a cannabis there million. five transactions. times, that times companies the XXXX year note fiscal issue losses year significant a which was was most was roughly fiscal prior sales to $X.XX fiscal that to income loss last the for over And showed smaller our and shares million. improvement Like We’ve On sales been sales. was XXXX at fiscal shrinking million, on at net trailing year XXXX last multiple $XXX,XXX our last a loss million our of over result revaluing X.X a $X.X the net year. year and cannabis quarter loss significantly for the QX the impacted seven which closing out largest companies times impairment, X.X with by puts payment fairly basis of us and of

run adjusted with at EBITDA a adjusted putting rate. has shown and at basis a that puts multiple also adjusted Our EBITDA. trend us result solid million, just million similar over with QX $X EBITDA $X.XX times us QX a a strong of million $X.XX a EBITDA seven adjusted On

the all operations either our As are future. we optimize to on continue

the engaged that interesting on step around federal legislation initiatives be both and been operations. refreshing both go use. about Republican too to and discussions medical to again, open her we’ve We’ve that in far. in passed deeper the our enter Safe representative have appeared – Arkansas the Nancy we by proposal there’s in open. past From good The states what now and regulatory competing stretched Ohio, recent opportunity cannabis well representative, new legalization taken The may as operations one they been us legalization bill Mace as we’re a ballot from very where state states amend as always perspective, in in programming. seeing for the looking of in overstretched state to a legalization initiative license approved at Republicans. recent House opportunities and to the legalization Mace interesting and We’re opportunities selective and is have opportunities we’re And Democrats proposed past is Ohio has limited Act

by Seth Sarah the On and fantastic. the topic of recent about use, being Silverman are Rogan open ads cannabis

initiative them the you haven’t and after your a actually by to Cannabis ads. watch. Council, the you’ll representative great minute to want They’re call a If U.S. watched seen take you

legislation, to state acceptance various challenging our advances levels Trip happen both at towards but over call to advances So operations. Chief across it never state I’d Operating was outline our local the guess faster. to will to pace like turn Hoffman, our with the cannabis seen federal and and and have what Officer

Trip Hoffman

I’d sales of we that you, to fiscal an Mike. operate. fiscal going Nevada, by update Being are our for and provide XX%. our with canopy for past five states new operational new now half past also canopy history the about the like through approval, menu. the during the year by Thank each year we full wholesale introduced which into the strains December an reductions in of from location first wholesale an license XXXX, converting of the about our provides of flower in and Also allows In increase received BXB we we in XXXX, In our the completed of construction delivery products of of for March and for we flour our distribution overhead capacity. completed XXXX, reflecting approximate XX% increase flour the space cost additional space utilization December prior XXXX, operations. canopy production

production business permit we completed. XXXX, a was And and consolidation processing October square to construction BaM on the September the of a full of Ohio closed subsidiaries about BaM. June the to branded ship subsidiary we medical facility in were of transfer of the Body received transaction of of NMG along able construction first medical And then the was XXXX, to the into recently XXXX, the In XXXX, Ohio, financials. In X,XXX dispensary rebranded XXXX, dispensary same of the from August XXX% that the the of Moving operational we wholly time, and owned and Clubhouse of in At the completed to In feet processing with began license owned to of of Ohio production began we Mind activities. products facility May Body transfer licenses capacity. Mind. the market. medical of we

BaM we second Moving delivery distribution have ShowGrow the Long to license from August had of full XXXX, owned in consolidation at allowed delivery began curbside California, XXX% methods financials. operations. ShowGrow California. also online transfer process half for by XXX% California. finally a licenses we those of company second dispensary in brand local we of approvals May manufacturing service with from to the subsidiary. we The San both completed began held ShowGrow services of And Beach Diego January, receive the the then In Beach approval into in dispensary. XXXX, the order which XXXX, us Long and home that purchase subsidiary, In the XXXX, home BaM dispensaries in we In began license for owned terminated state agreement dispensary. are of for the we XXXX, and manufacturing a our in And quarter we

XXXX, the getting we In next Lottery development harvest QX for Mind Best dispensary Dispensary local provide of And we process phases. production, a from Michigan, our recorded XXXX. space Arkansas. developed of the that then facility submitted of the Licensed began to state and we a cultivation balance dispensary for in at Michigan, securing medical we feet X the in finally licenses this two leases of for purchase square August production award we Body half dispensary adult into to Justice cultivation we and expansion January, we half were square be provisionary production In and just open XXXX, activities early began underway the in Memphis that finally began In feet XXXX, and that in in XXXX. services X. And applications operational In cultivation. December, began grant first in Muskegon, delivery cultivation. market of and cultivation then setting of West cultivation that’s new will began with cultivation, from we XXXX, by September by of Muskegon In received business about Arkansas home for cultivation cultivation and on and XX,XXX building XXXX, Manistee, XXXX XXXX, of in into we and and state soon. operations October, in sorry, either for – X,XXX plans Social vertical square facility. up production permit Phase November In or online ArkXXX.com. locations. of construction The of April month, the receive in XXXX, Illinois, feet for dispensary. our participated to production, that setup Moving medical up of the methods. for the XX,XXX Michigan. we of Phase to And with will allow use for in first began in the In XXXX, Equity October, we license In Manistee in order month received second XXXX, of XXXX,

winning and has agreements management For for which received adult two dispensaries. Chicago lottery in place, loan region use and in that with convertible lottery, Mind area entities numbers greater from the Body on from open to like outstanding up Illinois pending order are These remain granted by a actions questions. that, State for a state legal judge we’d with while concluded. licenses the of the And

Operator

go Please Intro-Act. your you. [Operator And be from first Tony at Instructions] will ahead. Thank question Bowers

Tony Bowers

out Yes. closing Mike, Trip. Hi, Nice momentum year. the

You’ve are obviously got of that various six in stages states development. now

to Your is permitted. which strategy, where where and the territory parts be portfolio put matrix think vertically see together. It you the you be filling like I is that eventual may so to looks impact margins that’s And how do integrated of first from across doing? in the proven be the Michigan normalized whole able you’ll – different where your all success on

Michael Mills

at I look we or typically can take ROI. is that. where capital allocation the Tony, really get of the we best way acquisitions

jurisdiction the the continues best move that’s choice or pricing really in cultivation like we’ll some to seen opportunity. very a up pricing the California between strong jurisdictions have the have Michigan, flower operating that given to a So setting pressure, state which like

that states the to go we’re looking deeper. respect with in, to we’re always So

we products well in that is And for a lead that facility. state. large dispensary in our are of the that us us. products great and get for think our the will state, It order the our in I that that sell Ohio really facility a opening state lets know into obviously in extracted a edibles processing popularity from processing brand that us having gives Nevada, step very

state. So I in think being Obviously, that’s touched towards step that you Michigan. first vertical a that on

have we that that that are When California, have we very manufacturing look announced we’re to move state and looking on quickly. full we a for vertical a have We facility working on. plan that at

the at bringing isn’t brand Moving jurisdiction that time, this our facility limited I’d in would license forward run moving that moving in into point state. probably something look manufacturing in California and really I towards. into cultivation our and dispensary at into necessarily a

that up. keeping We’re opening at close basis are and almost And states. then that daily states states eye acquisitions a the look we a in new on new in on in we’re also

Tony Bowers

the now past? financial And been opportunities at shy this in space. right for than level time You’ve Are now. this investors seen terms market have know you’ve interest. of willing always point the watching some in of you the I indication of markets pretty that of are right more sellers don’t seeing

Michael Mills

of some seems think they’ve a There sold a bit own for between assets XXXX. private neighbors and to owners be assets people worth still market. what always who or their their lag are There’s XXXX, for sold the who in that

there there think markets. deals that what’s attractive on in isn’t are and So with are out assets there I not going out the be accretive. that there’s that seller can private interior public every But necessarily certainly

Tony Bowers

with problems. already You’ve since a to cases, extraordinary momentum But stimulus spite chain was little consumer are What There’s fear stopped. business you had, respect results. in well, a consumer in quarter the been shown your in payments seeing have the books retailers of whole some the these health? cannabis supply bit fading after the that

Michael Mills

and out I vacation, you’re there during at look, huge went cannabis think goes some that going into think if and and there’s if spending, that Moody’s, I not of personal you’re their the was going a not pandemic, a out that that to to going dinner there additional cannabis cannabis around. I money Yes, the users And of in on just you’re not looks extra for purchases. sales uptick bit anybody think quite

there a So has tail a off. been bit of

from license are in jurisdictions. they’re them most relatively and of I think new limited our operations,

So ramping. they’re still

really think So think challenges up other don’t in we have do seen that – I same COVID. I the during But sort seen. overall of spend groups Canada’s that maybe we’ve the ratcheted

Tony Bowers

regulatory some Yes, no the for re-interest sector. hope regulatory productive to relief we in – people Well, question.

Michael Mills

some viewed at as I you point. and and around look rogue Colorado to And states. And you going they’ve really if the as this XX we’re more it states become legalizing of Yes. years, And some of can’t and medical adult if defacto earlier, federal has the these level, use in almost and early look never – mentioned conversations at they those been legalize back in I medical, a states that Nevada, a legalization states, believe are prevalent. were at

Tony Bowers

the Well done. momentum Keep going.

Michael Mills

Thanks very much, Tony.

Operator

question Capital. Thank at Mission you. be next Emily And from [Operator Instructions] Baker will

Emily Baker

could the Hi, congratulations the during you the that it and to it ask week on markets. might if Mike the give and Wanted has of all appears on since an stake over last new team if have of that and AUDACIOUS us weeks, moved momentum names? that update few rally the

Michael Mills

for And September seen AUDACIOUS. with did haven’t transactions everyone guess, X%, the They’re I That transactions. investment a typically roughly were Emily, I they a ownership. We on had in ended that backup anything investment those call. those. just dropped below strategic agreement Emily, XX% when called Australis AUDACIOUS private agreement at now

the see So those I typically in don’t market.

shareholding. you’d but on their Mind. from So I that, agreement to in for investor released the confirmation that really them I on comment significant think can’t was that AUDACIOUS suggest Body strategic the out and I would fairly to change probably reach for having want And

Emily Baker

Thanks Great. guys.

Michael Mills

Emily. Thanks,

Operator

would And Mills. the to back at call Mr. like you. Thank turn this over to time, I

Michael Mills

Thanks, Sylvie.

taking that very are opportunity much be jurisdictions illegal to jurisdictions the very and every conclusion, cannabis see call. open opening one close when into in And things for there keep new and for on new are focused within time of the as I about are entry, I quarter. at U.S. on states U.S. space, to you these. they think states states strategic We cannabis there up. new currently on is the look continue experienced the almost a I guess thank I So operators, incredible eye

accretive work license focusing create to I’d limited for limited and and success. of In work top customers products, push acquisitions our and patients winning licensed demonstrating to with our tireless conclusion, team strategy on on and is their initiatives. thank shelf operations, states, like Our winning acquisition licenses, development

are have you the ready expanding much team who and Mind continue understand the lean brand. your We Thank Body a cannabis and to for very business time.

Operator

for conclude please weekend. attending. do conference you ask that today. this disconnect Have your we this you, Ladies Thank and time, does good call again, thank lines. gentlemen, your Once At a sir. you for

Body and Mind (BMMJ) 19 Nov 212021 Q4 Earnings call transcript