CURLF - Earnings call transcript Q3 2020

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Operator

Good afternoon, and welcome to Curaleaf Holdings' Third Quarter 2020 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Vice President of Finance and IR, Daniel Foley. Please go ahead.

Daniel Foley

you. Thank and Holdings' everyone conference quarter to call. welcome afternoon, third Curaleaf XXXX Good by Chairman; Operating Jordan, Executive I'm Boris Today, joined Executive Carlotti, Financial Bayern, Neil Mike Officer; President; Joe Davidson, and Chief Officer; Chief Officer. Joe Chief Lusardi, release a fiscal September we XXXX. results ended our press today, for announcing Earlier XX, issued the quarter release press and our on SEDAR. on filed the under The website available is section Investor Relations

certain goals, These as the material that expressed involve or include call risks successful integration and that forecast conclusion assumptions this by of in not a in and begin, on applied statements a future we as the drawing conference should forward-looking I plans, differ within of be Before results forward-looking comments were in will of to could today's call including We their that law. factors to relied United new predictions the date to you of would or such future speak of statements. subject making and actual a forward-looking on statements, the remind cause otherwise, statements are and of which forecasts uncertainties or statements assumptions, States update estimates, meaning those acquisitions whether from any applicable Canadian events. laws, upon as result like securities to the projections, outcomes undertake no or information, events required or as by revise except obligation and forward-looking materially nature only

found SEDAR Canadian Company's and and Exchange. the can statements assumptions risk basis the forming of information filings be forward-looking Additional and on Securities the and material the factors press releases the factors about in

turn and standardized IFRS to Curaleaf have managed release. in indicated. call, revenue, that the of U.S. prescribed that, may I'd that definitions EBITDA information dollars forma Please to will such by conference found earnings meaning measures all like which revenue, not non-IFRS adjusted pro today's With the Executive Boris During to be refer note Chairman, financial otherwise unless our Jordan. do as any press call in over is provided

Boris Jordan

customers thank and support innovative I mission We leadership report on deliver variety Thanks, and this improve revenue products unprecedented and to record our lives stellar revenue, our these members, position Curaleaf's and everyone, to our thank with our with forma shareholders of take team continue we seriously a our EBITDA. managed another unwavering of patients we times. their through moment want to the that Dan. pro I is quarter take also to Good customers customers promise. for access and pleased but afternoon, adjusted all am communities very of posting our joining Curaleaf the to of to patients and serve. trusted a safe and you team delivered and for all members, us. for

I and Before I to quarter recent and succession on Curaleaf. third cannabis expected record provide impact today views plan and our its our election announced the results, CEO the a on comment want we of the deeper industry overview to

expansion. nationwide publicly led been has vertically over years. to on issued to and in thank a Joe state closely release cannabis period and U.S. in I the Jersey X, effective of Directors January the a want Board January an year in a is in of is a his five Curaleaf the and will today, the of be past his Joe Curaleaf's single Vice New from capacity industry Curaleaf XXXX. growth through operator traded, of significant has multi-state a Joe pioneer Curaleaf's the He integrated unprecedented we his over of of numerous transition leadership driving will year-end several license remain Board X, listing elevated through Joe that most personally the force CEO included Chairman to one Executive and Curaleaf Joe Lusardi as capital our transition. that for an has Bayern XXXX. concurrent largest press strong raises, transformative including period cannabis Joe several in in on Lusardi As to leadership ensure Lusardi new and Grassroots. of best Curaleaf state of company effective teams President, oversaw growth Canada, past Joe the as Select pure on world. continue our with role closing the the detailed been Officer Executive recently, new in working in the Bayern cannabis earnings Chief building to awards, play announced operator with acquisitions

of With now myself the an as play process, to CEO is Joe to complete the of of day-to-day On CEO new and for Executive of time Vice Board. the role Board's company's on Chairman role considerable will from of and strategy Bayern congratulate to part I'd as integration transition Board, the and CEO. long-term forward. the integral his continue skills like behalf both succession and right Joe leverage planning role his largely successful these assets powerful as the vision going Joe in regular

top many to XX know industry goods Over has Joe various He you investor and the companies. have of past experience leadership at over executive gotten years few consumer-packaged events. in of months,

growth at adapt operational turnaround instrumental in and into spent the Curaleaf, Curaleaf XX-plus of Cadbury of company Water Grassroots. years and topline quadrupled the Select exceptional brand, the driving CPG considerable has of and been and Group, nearly several transformation navigate also overall COVID-XX. for singularly helping has the leading fueling revenue a to confectionary position sales, to job in responsible global and the Pepper the Snapple include of integrations focused a done Dr. billion Joe challenges creation us an VOSS As he Prior growth He's a large President, scale excellence $X achievements that for into leader. profitability been and businesses. of His

the election states a be inflection cannabis acceptance voters adult-use and efficiency CPG-focused landslide make from marketing, business will results, evolving the which we business for year. his and the model, Curaleaf all history. As forefront Curaleaf and and ideal of undeniable about The we in advocating experience And CEO out Governors spoken the Pennsylvania technology, Arizona next witnessing now and adult-use brands process focuses is clearly at the tremendous New moment a building, nationwide. New across an use XXXX on platform soon our and the industry Connecticut, information Jersey has for point him our for been beginning. green this bipartisan of driving are have Curaleaf seriously are national I've called talking believe and cannabis. legalization mainstream and in of expanded brand York,

for as has and this to a XXXX widely to Our invest year to outstanding capitalize Curaleaf expect and strategy unwavering we been of a on strategically national growth result. trend, be

Unlike we we available the have strategy. the long country. to technology in importantly, the in believe notably most will distribution gone industry us More game, the pioneers a brands investing growth are where a who on focus widely continue before and national media play strategy sectors, and other our right is in most the

a touch platform You that millions cannot create here we brands Curaleaf. and building what national is of national new customers at are and without

a Curaleaf deals year-over-year behind and our for million up our improve that record synergies incremental scale. sequentially our adjusted XX% of terrific sequentially. we This major XXX% up EBITDA and margins Moving we is and managed XX% With year-over-year quarter financial XXX% continue on us, with of revenue and results. $XX realize expect another yet will to $XXX million to as

simplify In With revenue. we the closing we XXXX, of will forma report IFRS financial be our quarter to our the in quarter will provide fourth total only pro thus which current reporting. greatly acquisitions, the revenue last expect

remains of hand Our three. with cash sheet balance end $XX.X approximately quarter healthy million of at on the

the credit related resources from liquidity capitalize balance the next of Grassroots operations, as to several of sheet transaction generation In and We and over mid-December, on as up growth to $XX put dispositions giving our on to adult-use close in million XXXX. uniquely markets. expected strong a expect by $XX short, positions new to take to $XX asset which facility, opportunities approximately strength with raise company to from months, transformative and million coupled to our expected Curaleaf strategy advantage place well hugely million ample proceeds to execute in revolving the cash

Turning operational to outlook. our

capacity key first markets double supply demand half is New of states constraints XXXX, Florida, expected continues nearly to supply. Massachusetts, of where Jersey the we full-scale substantially in reach and across Arizona, cultivation Maryland, – to to will of expansion exceed available Illinois, new key Our capacity Pennsylvania, be and in

as additional in Taking into dispensaries forma pro as approximately also $XXX markets we expect Arizona, such New revenue high to quarter. note and roll key Select’s products another fourth We $XXX finish account, the managed the and million Jersey, into continue year the revenue new markets. introduce of well of and existing million Pennsylvania, Florida, as generate above in out on will and to

quarter a $XXX current Adding We are and the the on potential XXXX expecting million based Arizona we anticipate the one under through of a further significant New these further dollar states leading is every to and a business new growth with adult-use landscape. and in our enter XXXX Jersey robust with of of belt will follow multi-billion the states to for presence MSL Each suit neighboring already our accelerate only them. is opportunity, growth. Curaleaf and

journey. revenue remained will across a quarter Given of these to the now industry building our Canada’s regulated to Bayern. on our new There's growth This footprint those earnings turn years this get the expectations hard we and any work timing opportunities. us better to last in industry's closing, for opportunities, the as states and footprint more moment. more on only dollar the for it's in deploying and showtime. in a exciting and await provide for I adult-use clarity now consumers U.S. indeed the legalized. fourth are our will spent lot We've position as we better XXXX future of capital call prospects over by call. these and to behind Joe and few multi-billion the the to of beginning, In prepare on us, magnitude of we unmatched enter these that launch other green, unmatched the market states, it's is be is The exposure going

Joseph Bayern

Thanks, Boris and good afternoon, everyone.

a years. the now those opportunity. yet I've national contributing take want grow help to business right turnaround the us lead the differentiated to growth in projects, and brands an know Boris moment team been cannabis incredible professional tremendous Boris’ address loyalty opportunity providing of mission plan consumption. to say or opportunities pale in our to over challenging of clarity Consumer easily the the way next members to echo With cannabis only and for will but billion to diligent can to consumption XX% stage growth our U.S. XX on to legal amazing our in That's honestly with consumers could to for with years have great around to $XXX Boris, XX-plus efforts of Product of leveraging personal customers the a spread focus rest and billion deepest on I create tireless Curaleaf the also team steadfast the to an remain the in work horrible in of transformation but estimated and X% And By continue truly and some size over been excited footprint, and Joe experience Curaleaf and I in patients cannabis advancing of and past to to compelling but still behind most As company, our a around truly to in cannabis. and ahead I'm are through emerge to segment and I level, the confidence uniquely which positioned a our of this. is prevent the together, and the great the comparison past the said, build have our we continue it's to decade. exciting virus. fortunate U.S. products incredibly the experiences today, of industry. spent early pave see past this category, sentiment get using express X% work our this to unparalleled $XX to consumer not we before my of working product the the year. XX% roughly and development and to engaged science the population I industry gratitude large

people simple. that and in incredibly As role continues our in improve way Americans. the am consumer how believe towards offer to now cannabis to that of Curaleaf I over cannabis of top position, of world, Joe have of I the staying the addressing and My can brands the the relatively the we needs not only leading in the world's I company love the CEO companies. focused recognized products nationally help lives these acceptance moving of is we play products To meet create assume consumers. of our be focus opportunity to By on one call customer's needs the the millions turn proud forward but Lusardi. paving will mainstream priorities,

Joseph Lusardi

excited I you my Thanks, as Chairman Joe, and leader new with the in your role part] to Vice to congratulations am work to new we continue as [securely cannabis. in as Board on Executive the of CEO. continue role as

prepared I for years. last five Boris and thank his remarks, my mentorship to cover over want I Before trust the

confident of come have I support see you team good many and work founders insights will it's of in all and to has third been but continuing it's I future. forward something events to time I'd hand analysts mission. now industry over like thank built historic, that of Joe, listening, last want an day some at into you years an to have We incredible with the our to know and to every truly look to the To employees, work quarter. business the to when too strategic our in conferences smashing and many from operational five reins. make continue investors success. that been dive you. name the I'm The and a our management to to journey, this honor

leading an canopy acquired a to retail XX unparalleled share in around according opportunity in ninth vape in to and Select part These double in of a market. to grow significant the sales two having Right Curaleaf about we in and store open strong state and to generated the the capture yield footprint revenue is market that a We adult-use billion share medical breadth combined we our New growth a XXXX. $X adult-use will BDS our and Curaleaf the expect Analytics, I'll assets of investments nearly depth Phoenix. XXXX, adult-use currently largest us our will we have growth. impending be Already start In us across of the by metro and the presence to the Our big of across give According of top significant investments our total in believe sales. expansion already to one cannabis BDS. cultivation projected country. of with number the the our Jersey, will marijuana second in complete existing XXXX expansion, Arizona. every assets XX has state on is Arizona is nearly conservatively to in the April, start demand billion talking markets. to story meet position existing capitalize a strong of medical market. $XX in

the a than of is state X.Xx Jersey population more million New of residents, Colorado. X nearly

over BDS $X year to compared New will million for around to billion of Jersey this sales generate $XXX according Colorado.

we and the of billion has exceed illicit annual rapidly doubling sales coming easily conversion of strategy, our market one Curaleaf tax years. and rational number in in $X market currently sales, capacity. will are its the occur the the production adult-use Given in we share anticipation believe

three state dispensaries XXXX. In and addition, largest expect of and maximum with a to in in XX new third QX QX open allowance us growth in in current licenses. we give location the capability will a of XXXX This of Bordentown the a dispensary only

We are the in Garden investing heavily State.

on growth be $X registered continues to cannabis. potential Over the current plus expectations. And program for and tax month. a as has XX,XXX Florida grow the regulated in to new we patients growth In billion Florida, and the creating We trends, per based be are medical XXXX. will massive a market fuel program revenue jobs cycle beyond

we XX expand next located We as have dispensaries XXXX. campus, be are from currently the early facility stores and We mid-October, our will investing have will across capacity year. XX will we to our opened at heavily the least in be additional market our cultivation have harvest state adding indoor new the which by share we and in cultivation cultivation grows. first In on [Mordor]

supply our thrive the to As business believe continues continue we will our in sunshine state. improve, chain to

on Moving Massachusetts. to

pleased out wholesale gives our COVID-XX acquired at to any operator to recently $X.X indoor to of Webster uniquely closures in Massachusetts fully-built in adult-use facility. the Benchmarks, cultivation market. our see dispensaries, the We nation our capitalize relating some billion. annualized are with Massachusetts, leading capacity capacity We indoor the believe with QX prices sales cultivation leading-edge ATGs statewide to We operational increased is Curaleaf Cannabis temporary over continues state. the [indiscernible] see Curaleaf September the to highest and positioned to we wholesale according which recently of and combined cultivation largest have indoor a facility, in

with sales the around our and a wholesale and the of capacity cultivation gained of markets. know, indoor immediately prices nation in in is the presence Following an in We opportunity fastest fifth huge. has most will billion state. first to its out based we to extremely be the Grassroots, on Illinois, here cannabis $X Illinois, be has highest current year populous you gotten nation we Pennsylvania strong currently expanding in strong acquisitions acquired Illinois and the according in sixth the again adult-use start our will and The growing as and two a facility off fully-built it market Benchmarks. Cannabis trends. states

is to Illinois acquiring and operator the for X% impressive come affiliated to Based number permitted. location in state's growth XXX,XXX with and Grassroots we a state. now operational immediately licenses, and assets. Pennsylvania in open fully-built be on number through a we out ramp single Grassroots and player right three maximum soon three its over these to is open on continuing nine market license the has of Pennsylvania of has adult-use to for patients, and dispensaries After dispensaries the licenses final this and In Curaleaf Grassroots population. in XXth indoor our capacity look expanding retail cultivation facility, seriously nine with dispensaries additional leader development. we'll the has group expected addition, state with equally of positioned the is an registered Pennsylvania additional clinical in line nearly currently and the rapidly demonstrated number registered forward Curaleaf operational dispensaries July, considering legislation capacity. in Grassroots operational the can became more a potential cultivation six well

Although our potential I states remarks, North Based adult-use my or Vermont. state I'm only Maryland, Connecticut, currently New strengths represent alone, example a Dakota, but the market for highlighting have in about of six in long prepared these much time would in of more we The licensed catalyst XX is, another on to spend payoff. could a playing as single our and each million one changing Curaleaf. residents of strategy game New the number This highlighting is operations, York, share game a for with York markets.

change our are on we for and for prospects very We bullish the prepared beyond. happening are industry, in the sea XXXX and

Turning to Select.

cost supply launching Our and product Select Select consistently markets, brand factors new chain within form with resonates goal suite value integrating the intensely and create is in Select Curaleaf’s on innovative proposition synergies introducing been To offerings. We've unchanged. vast its through production a that product infrastructure. national by realizing Select lifestyle to in-demand new focused of consumers

continue gains average we introduced legacy coast-to-coast sales where Select we’ve Select’s Illinois, expect prior in businesses, average only we for the in can expand Year-to-date, total a available has and out generated the without see to the presence, to As And higher we have incremental almost million making our states. XXX. we and two started and that in including past per of sold branded Select higher sold. Select $XX aggregate dispensaries additional have XX entire existing U.S. cannibalization. over we Select already units We XX initiative to platform, a across to proves states. XX. revenue revenue year Curaleaf wholesale new periods see This now have part we across states, of roll Curaleaf in products with states nine licenses week when compared where now months, In our were to in as Pennsylvania Ohio,

look our our pleased We we through cultivation our been will I summary, vision. we of over coming XXXX. without we're to extraordinarily temporary an nearly as a ahead the that now is, with with and experienced we doubt, Despite retail we Select believe We've that poised exclusive in In the year we brand and distributed in situation best beyond once capacity managed pandemic am move on and generation. Curaleaf have positioned the busy in growth a outlets well our delivering single in weather to double and X,XXX QX, progress industry is nationwide. XXXX this and shutdown kind MSO a industry see

I'll to the Now call turn our Carlotti financials. review over Mike to

Michael Carlotti

$X.X included the impacted million with to delivering Grassroots related growth, that both quarter sequential our of Thanks, sixth EBITDA the and adjusted Once Jersey, close strong Connecticut. at creation revenue third Florida, record revenue Joe. posted to note we adjusted by revenue. Grassroots quarterly our EBITDA, one-time driven one-time also costs The of million, primarily our again, drive in managed strong value and results growth contributed York, New The as we XX, of to we strong July revenue to $XX.X Grassroots margins. will New important for corporate acquisition-related on consecutive quarter posted synergies of legal a generating addition unrealized $X Massachusetts, million to transaction and of on We extraordinary and fees associated focused believe million costs cost growth and remain of year-over-year primarily long-term $XX.X Grassroots is shareholders. It record acquisition. fees that

startup to markets. decline of in fourth related quarter. In included charges $X.X One-time expected licensing one-time million to are costs addition, the costs significantly primarily and

impacted as the closed costs the we third when Additionally, being now overhead quarter, are transaction, we that synergies. Grassroots harvested corporate inherited but certain

Grassroots from full early synergies expect cost in We achieve to XXXX.

prior in XX% The basis increased of cannabis and as margins gross quarter XXX year. facilities due several operating primarily from states. company's to nearly to of the processing the to Our was compared capacity higher the the increase points third cultivation sales

Total on our previous expand to to for continue while This which investment and gross trend from of processing revenue continue cultivation cannabis we our net it by well acquisition This was for September versus be sale the record $XXX.X to longer fourfold well year-over-year revenue attributed cycle our as driven and notably anticipated expect and Ohio important provided of as record of to year New fluctuate strong we and guidance that closed million new due growth mentioned across managed can XXX% meet based July managed was gross bring both from to $XX.X quarter-to-quarter close will As and It's upward, XX% margin last facilities online. was the Illinois, calls, $XX.X expect ATG the strong margins all our million up Pro to operations was QX sales acquisition, on million our we The $XXX.X with intensity Grassroots Over assets XX% quarter million third delivered of operations the last Massachusetts ramp time, licenses growth continued as investments to Maryland Arizona, third to million rebound core. $XXX.X in as getting guidance. $XX.X In maximum during the year the QX the revenue we core states, as growth in Grassroots and third in fluctuation over on higher XX held quarter of for approved, managed this a between occurred QX as our their than in of EBITDA quarter, more license compared by and period of capital our requirements forma sequentially the business IFRS driven X, of Grassroots. several than XXXX. with the of the assumes and in York range. revenue of the above contribution including and in and moderate quarter, record sequentially. quarter to million operations quarter investments to in which to continue of in note revenue largely previously to a quarter. and represented a up line over delta and New Florida, XX% recorded adjusted the this Grassroots. July managed up partial partial third as XXX% primarily of sequentially, over and We of scaling XX. organic revenue benefit Jersey, increase the and in

declined well and retail retail than $X.X $XXX.X Management the more revenue quarter tripled $XX.X million fee previous to addition XXXX million acquisition-related to and the quarter third of York. and late Curaleaf Nevada to Maine the new as compared of Florida, addition quarter year. Our to Acres the Arrow, of in as Massachusetts, in and growth wholesale Grassroots, in New The Arizona, in BlueKudu, impact million the acquisitions the period during $XX.X XXXX. to in wholly-owned of as Therapy due due The growth organic conversion entities. third to Organic two the New Select, store wholesale and to and Arizona comparable managed dispensaries to quarter versus previously million the in to revenue in in due primarily the prior openings was the increase due consolidated year entities of Jersey, income

Our operating XX XXXX. XXXX XX, was combined September of and from XX, September on retail XX up dispensaries it as footprint

across XX% million XXX prior we a quarter for was The compared basis million SG&A the primarily or points and today, the $XX.X of the was compared quarter. prior quarter million dispensaries in quarter. quarter million period $XX.X the was for prior $XX.X approximately of million due of million charges, of as increase and decrease to for one-time Grassroots charges. $XX.X in the the operate the in XX prior the Adjusted XX As $XX.X managed revenues, to one-time year addition to of to as compared $XX.X SG&A states.

identify to operating synergies additional in Grassroots, and scale decline continue as resulting of continue leverage. significant to particularly As we cost revenue percentage savings operations, we from a overall our to SG&A expect

of with the to associated measure was related Net with best increase our quarter, million acquisitive of startup $X.X loss amortization, non-cash of as as fees net in the XXXX. to integration costs. to compared quarter related for to income $X.X impact primarily driven million million the is it attributable the the one-time million Curaleaf by excludes taxes of as quarter associated well extraordinary and During of tax charges third stock-based in Due was comp still the closing EBITDA and deferred third the of and biological and costs biological $XX.X assets, adjusted depreciation assets. performance the to believe expense the Grassroots of we our a items, Holdings increased loss as $XX.X nature, transaction

We a reconciliation adjusted net our EBITDA loss press in release. have provided to of

Moving the to on balance sheet.

XX, largely million the of for cash we one-time $XX.X our higher related million private third hand. of of to was $XX.X QX due partially million from to $XX million quarter the Cash to proceeds quarter $XX.X net the quarter a million to July cash capital and cash Grassroots. operations to this was flow $XX.X operational during from and Ohio $X.X $XX.X expenses, the in second XXXX, harvest. As transfer There million $XXX.X QX, better $XX.X quarter. for offset expenditure Grown XXXX the and Therapies acquired, expenditures, in in third the due use of by decreased Cash of million Also license $XX.X cash acquisition taxes cash are and of million million from of aid to to capacity, REIT cash operations. $XX.X position from cash efficiencies This were increased impacted the million September primarily payments a a inventories quarter of paid in quarter, pieces of on of from so the placement. of following due negatively modeling moving in somewhat the million bridge lot had is

continue inventory We Select certain sell-out in to product build states in as New incremental avoid meet York to such to key Florida, and demand.

improve operations the quarter. flow cash our from expect We third to from materially

quarter estimated in acquisitions materially to is and payments have of Looking of be in acquisition XXXX. fourth all payments another closed. Milestone million second due quarter lower due ahead, expected outstanding estimated are $X.X be the acquisition to million, $X.X the cash our

we payments, acquisition these cash remaining. additional no Beyond have commitments

to one-time fourth is expect We also synergies additional quarter the synergies and integration well. benefit the forward. our going operations cost we as in decline from the benefit materially expect Once to permanently complete, Grassroots to

Moving on to guidance.

assets the did held million $X to ATG approximately recently of we pro which to consolidate IFRS revenue in net expect $XXX a quarter forma managed approximately million about should quarter that accounting full not $XXX revenue for Fourth below sale. of million, assets the eight $X quarter fourth and the managed million revenue We includes days of of Grassroots quarter. for generate be acquired revenue

As Boris XXXX expect belt. million under $XXX with exit we already approximately mentioned, to our

synergies additional early absorption from expect and adjusted drive integrations We margin EBITDA XXXX. increased starting in cost to fixed improved

September X.X operator the fully in back shares includes retail the the placement. growth turn million as strong XX. the unweighted in as as outstanding With line of from new high placement, Weighted capacity from the margin very Overall, the see Post-close were in of Grassroots transaction expecting additional We call issued This million. revenues of incremental shares well to expect shares adult-use diluted growth also Grassroots and states. XXXX. in and our approximately to million outstanding revenue and fully stores, the $XXX.X for private XXX.X are a states, margin questions. amount to was diluted in improvement XXX.X shares open July strong private I'll we average revenue issued that, million

Operator

We will Matt now session. Our with [Operator Please Instructions] from go ahead. the first begin question Needham. question-and-answer McGinley comes

Matthew McGinley

Great. Thank you.

your best Joe on to is the first spending. Joe capital wishes Firstly, and in feature congrats My to old question new endeavors. the

into cultivation and about should and into balances and cash place, potential that the getting asset of put sufficient but year? we how the You into the the walked You dollar doubling spend that fund is in us pace next a around what think revolver mentioned sales the take that? And outline through XXXX, XXXX? growth should to

Joseph Lusardi

take do Mike, that? you to want

Michael Carlotti

sure. Yes,

in So ended yes, cash. with $XX.X we million

capital at should in up start to close We million few expect we'll in. and so to probably of expenditures, early respect coming XXXX, have QX $XX go bit QX with cash in CapEx $XX thereafter. to a already similar and probably assets in remain them, that million decline levels HMS, which of to then announced have sales. including Also we a We've

flow with forward. the liquidity comfortable cash position credit feel perspective, revolving going the asset from operations, cash a and from sales So and current well facility our cash as our we certainly as with

Matthew McGinley

Mike, dollar yet? XXXX in Do you any would have sense, the what that spend of be

Michael Carlotti

How much CapEx in XXXX?

Matthew McGinley

Correct.

Michael Carlotti

but we It'll in probably XXXX, on our up QX end where to similar about that be we'll talk more call.

Matthew McGinley

Okay. Great. Thank you very much.

Operator

Zuanic The next Pablo Cantor ahead. with Please from is go Fitzgerald. question

Pablo Zuanic

the type in I think caps leverage but industry, canopy, Number of are asking anyway. guess you and of and one, for stores. of level, picture the is states largest Boris, bit at I I big have right? maximum I the level you. Thank three the only a maybe questions I the cultivation calls, Massachusetts square logic but example, of then worst store mean, they're these on the being two too that most if that's the X,XXX worth feet that how scale? understand actually have

stores you’re that Thanks. So here? am I But scale states or not most have missing first. maybe if retail cultivation, and again, caps leverage answer on that to able what

Boris Jordan

it's question, I So think – a good Pablo.

think lot a these demand dramatically. growing first is lack a all, product. of of There's massive I of the still of states, supply that

but years. canopy by to York, allowed in restrictions, other largest state, a New although our which no wholesale the stores, has be player amount the issued imagine on the store dispensaries no Massachusetts market But you over for be by to also they that licenses large. state, can by dispensaries the going with all next unlimited instance, rec you only one stores we're we licenses have instance, increased are the is like huge the three moment which puts had as that Massachusetts. allowed the restriction growing and for Massachusetts, the have by three you few in medical amount but that states of opportunity, capability restrictions. have have In why of going for There's us maximum states, the can, and at not with grower way, that So to like we at adult-use, an to can obviously

become wholesaler integration in as to we products stores the we forget the We largest So the sell want Select. but we as to we want that's operations. capture order And can, our to able vertical to many margin. possible those to have why be be to don't able can to bought

already almost to build though there California Massachusetts. in the amount we're is new it March with grown to allowed instance, the moment it at the there going in capacity by be finished we'll So looks second – should as quarter. market. the is adult-use of and goes for the as quite we're substantially limits harvesting second It And Obviously completed seeing opportunity biggest market after we've York, early out Jersey, be we be facility. New New cultivation no for February, for huge the think adult-use. In

are the the want continue we there, to and players. So the market in already we to the wholesaler largest wholesale all

we want on brands. the through I'm Curaleaf go products these wholesaler, be medical want what as stores not everybody's of to state. to going states is leading the our our provider seeing want a states you're what to open only to and So future is But is, largest we in own were stores, that think products to adult-use, be we not but shelves the our and up, as every be move from multiple I permitting

that's we're And your so scaling. what Is and doing that's question? what we're that answers

Pablo Zuanic

Thank And course. you. follow-up. one quick just of Yes,

four Canadian news you, you, companies I STATES Senate. the over is so to it's may I obvious. and to side. there? obvious Thanks. for I So But it's not Again, the find am this so me competing away, I maybe CPG. to, to talk but either there. yourselves, lot maybe obvious permissibility U.S. what to the there's in is another MSOs obvious I this Act to Because of guess right? control people Senator for lot but a four for hypotheticals it's years, actually a lot a know I be the not talk delayed to Republicans you Can of or the still is assets tell like have missing great that years don't on fact be investment with people of that keep the If you

Boris Jordan

honest, of blown out I'm proportion. not be whole Listen, thing I Yes. been this – has to think Canadian

government market. is the have if fact into companies and even U.S. have Canadian we what why the is is if on we even And and think no the the U.S. Act, the position think exchanges guess, – in going entrance U.S. U.S. I limit they liquidity trade Act, or no entrance to MORE move move that international there's everybody them. don't around because I excited, I the I they market. is, But so to to the STATES the understand

a to can comfortable we very going mole bit of there's compete. think there that even market. isn't, U.S. And I the a feel we be around if

less operations continue people taken to get continue of time to We to brands to years have – for up we're up it going even believe MSOs years, in cannabis facilities and our we market, to the is cannabis As out and I'm be to fully to policy, limits time move existing the to cultivation to get a I've said United will the bunch to are build has. if times, if street, position the market. many at why into dealer infrastructure, just not which biggest take deregulated at on other going the least continue the and bad that companies companies. a throwing going we drug substantial our tax about believe obsolete. a as the not two to about And is lead the of much But the our not other is which industry amount a I invest concerned competitor Well, has Curaleaf to illegal money four of that that am cannabis proliferation build States.

not the in states. our used where operations projects of in a working would have on can cultivation any kind on major be have format creating you company, between that brand sales systems We where new limitations

very sure into cannabis dollar making very, used we in can be current move dollar the that situation deregulated spent focused we're that forward so a every on And or a either market. as is

Pablo Zuanic

you. Thank Understood.

Operator

The next Capital question with is go from ROTH ahead. Please Partners. Scott Fortune

Scott Fortune

then going there? you rollout Good and the I'm afternoon. Select improvement but stores forward sourcing the what's uptake margin taking in of about of Thanks the of if there, And call. going on not Select that internal Can the sure growth due the down? kind taking talked step kind that's for quarter-over-quarter to are you through of the

Boris Jordan

to stores. But just question. answer stores, I'm have we going have Joe Select. by let saying Curaleaf only start out I'll So We don't that branded

strategy a we of keeping and our brand just acquire rebranded So Curaleaf, stores of the also under into have all of Curaleaf. stores we that are old

lose the those of product seeing as to We're want in little similar Curaleaf don't come achieving vertical, be margin to portion not down we're type obviously operations, operations, operations, we've very, we bit will is still So the different having country. will but getting products Curaleaf start vertical transaction our we where Curaleaf cultivation largely in the don't Joe, distribution, from margins present because states you it Select is XXXX, think expand is very own we Select four states a market. potentially States. the full so profitable sold that do margin under know where a And but had the only in Select now it. a XX retail, I margin around that’s still whereas do. in we're – some still our those have we’re pressure Curaleaf Select product the closed Curaleaf present we Select have product in in part the through as a margins, a where states substantial very product California, on is mono-branding margins, vertical Select. always whether them. states we're but captures those But strategy. we wholesale And always the there'll rectify in you to retail potentially today, our is margin. for of of of largely in wholesale in Select Curaleaf February. building And large said Like and But the closer to so

Joseph Lusardi

ground build – just I say some covered you’ve other a lot think to I'll Boris, Yes. the of concepts. on but there of

of we've footprint And as now category. built markets market as in through our into of states, first quarter XX that it XXXX. really our rolling around we by be actually is each and think, launch lot over we a optimism incrementality to what us we're in existing I the of our in Select all said, this, expect Boris gives

and just that vape So new overall our It's the the growing business. us. category we're it's into category users existing seeing bringing for cannibalizing not actually

gives So have I something a available us And think really our for excited being I we're on about on think before, a I to Pablo of in lot markets – obviously build we XX just And Select. think, left national XXXX. progress runway that footprint. mentioned

And users and so new we bringing And be create by believe created brands into products trust. category. to to is that long-term going do to our value to able that that, be they we need

attractive households long-term being U.S. is really somewhere to to we're level so X% category X% that's is building our value brand into we of real I think other we're to XX% U.S. and the awareness, what converting a of new create growth growth think that's products meet going base. to people to is happen consumers to that to to the going meets we market illicit is needs. order And the cornerstone But needs brands going category, strategy, come in marketplace. to Yes, where brand and people is of going existing the coming the legal building that from. grow and need the they attract the those into in of And our their trust could trust market the population penetration we're about the because real in the around that the from products building shift the the

Curaleaf. for the overarching So strategy that's

is So why and earlier the individual specific we With of don't point, there moving dispensaries now, to said, a in we're out into the really all revenue brands. targets I important you Select out it's reinforce X,XXX building markets that that Curaleaf. on Boris' our across talk tell But can U.S. that Select about that's over

try available and and direct-to-consumer. to that other product dispensaries our of number channel purpose our are eventually distribution in to every create other for we omni-channel whole us. make in – that's the dispensaries to has. the or sure products any the And by limited that's consumer whole third-party our is where dispensaries to not like brands we're be Curaleaf company available whether So We want

Select, and So really about we’re the but so we're progress again, with far very early optimistic XXXX. on about excited

Michael Carlotti

York. Yes. Massachusetts, Curaleaf $XX sales Connecticut, million with New addition that because Maine, And in We Ohio, just on say November, that. added substantial Pennsylvania. that occurred in products and we've of the a a have on the Select call of for QX to and did Illinois, October and little markets of In bit Florida, occurring almost add of portion

nice obviously as chain. lift Select growing is in its introducing markets, from into a core Select Curaleaf the but well we're the So in markets seeing

Scott Fortune

we mentioned kind color. follow-up quick I EBITDA Can type expectations. on then just one margin the can And appreciate we for see the focus you me What of improvement is side? of the side up margin? margins? kind you on Cura’s and out as What's for getting a of look to there Grassroots the those similar delta to Curaleaf’s the timeline get EBITDA to margins

Michael Carlotti

of too Yes. I margins ours. mean, Grassroots EBITDA are not far off

that expect they in in as will particularly within and ramp Curaleaf the they continue quarter We cultivation to margins up by Illinois Pennsylvania next two, to Select get adding stores. or and

to we So we as realize of increase into costs. we the margins continue scale business our further and our expect EBITDA fixed to absorption as XXXX, head

continued rest the would improved company. QX, offset expect ATG, of EBITDA I somewhat QX for we margins the similar I be by margins to think as to absorb throughout

Scott Fortune

in guys. the I appreciate Thanks back jump it. I'll queue.

Operator

with Bottomley Please Genuity. from is Canaccord The Matt ahead. next question go

Matt Bottomley

the on years. done job evening, Congas And the on last five congrats, Joe, Good guys. quarter. in you've a where

Joseph Lusardi

Matt. Thanks,

Matt Bottomley

to to yes. pivot Just wanted maybe –

wanted Just two ballot New node of the Jersey, states Arizona election. pivot obviously, to so in to and the

market Arizona, the one see that, like that dynamics been XXX you each guys really have been on that. any think overview been for seems an time, commentary doing there's or have I'm to thought there's in a why already. most And would any communication And of that considering this higher the And in in a explaining to on more come. like some there. us you timing. peers only, market XXX from if But I there's at fast give respect consolidation I can this Just yet results that that with just think, cap market in as I would maybe or how Jersey, of what active license your state that's not released it hasn't have that New degree look might maybe then there's wondering

that's curious And few if if So there's what I'm been consistent any updates just the you've any heard? – here? last with weeks in

Boris Jordan

right Arizona cover problem be price. me with is let quickly. now, to So Arizona honest The

manage because So and of the assets medical spend, it. it recreational from come we to business tend what hot is they realize actually states go these to They generally go in. until how as run adult-use, found prices sky for difficult to and people

for at there's high Arizona We've licenses. very So couple deals put a moment, price that's paid I'll were I'll competitors the licenses. we competitors. example. an of you bid bid a but give that very, think on by And We M&A. of those bought those you licenses. think expectations of of recently some recently, damper one happen the I our on seen And tell us half what They that for I on

for can So – months see three bid ago. we you and how maybe

them So you are footprint. through gone have can to prices see with Arizona. pretty We our feel get comfortable high very paying how to very, prices And roof. people the

our said ninth opening the I XXth coming second in As as Joe – then said, but one we're up store, quarter. the

some more that in very very, that over active a want the proceeds will rational where and to of fact number And to detail, being are like New around approach and And Select and conversations on going. think really is densely on tell it. program state We've state obviously, particularly I the probably the much you that in stuff populated we have get our In that we've we the going. lots we haggling can in the to built be into the companies state communicating place those that. where tell go the Jersey, build don't high compliment all brand, involved. that. next that program some back launched right obviously We you sometime can are taking was from that's position they're I tax two And to there's regulators. areas, and relationships the but the Phoenix, been the we’re very with that I in very have year. early in we feel in of get forth as likely now. think we very strong So and We cultivation on

Matt Bottomley

Great. Very size numbers preferences, there guys give seeing same-store color Is attractive is what you're seen but maybe really helpful. COVID. different, every every we've obviously, And basket Or almost just other since any metrics? you one the onset more state for market in is, can me. of on in pretty consumer

So just wondering where a stores that? that, that's any trending? for open you dynamics something year can say, give let's like been if for have or And

Michael Carlotti

patient being XX% we I so in future. the mean, up provided was in sales, we our haven't quarter-over-quarter. increased but per will the historically growth month average to look likely per said, patient same-store quarter But and do X% that spend

Matt Bottomley

Okay. Thanks a lot.

Operator

The ahead. next Cowen. go Please Azer from question with is Vivien

Vivien Azer

Joe. well outgoing evening, Good Joe as incoming as Thanks. to Hi. and congratulations

incoming a question for please. Joe, So you

Coke, brands interesting portfolio think KBP, our covering necessary ready-to-drink more really that running think the philosophically non-alcoholic suggests out inadequate and I'd the two like, are experience you to in background course, hear and Pepsi build brands. about to it's of a and Certainly, than Your I portfolios. beverages, how love of

hear Thanks. there. impressions love So I'd to your

Joseph Bayern

Yes.

industry and major segment market the segmented today segment. Lifestyle into and and my think of stages early cannabis perspective the I the we’re two of segments Wellness of at is the Health broadly is development consumers,

lifestyle a have on Select wellness our brand brand. segments. our two major strategy obviously we and health focused and is today So Curaleaf brand those is

market in resonate there'll So differently product will brands consumer and consumers and happen I consumer segmentation as meet in market, time any matures, of the that other with think different different over does this consumers. needs the like it market be

see portfolio itself fundamentally that But So I emerge is really think and today, over the two I into broken time segments. brand market might our develop.

focused of very segments our we're portfolio. on through in so And brands those each different

Vivien Azer

course, a remained more in has little Reasonable Pennsylvania a adult-use, constructive the historically of please, the control. proponent assembly commentary the like around And been controlled for bit remarks, seems the I that during that governor point. vocal expected seems sticking than a follow-up given perhaps been state has was it Understood. enough. like Wolf Republican had state prepared recognize, legislature have Republican it the at but I would

Thank you commentary constructive there. I'd could your just appreciate So if expand on it. you.

Joseph Lusardi

Yes. Vivien, Pennsylvanian I'll just Joe is this with – to Lusardi. regard –

quickly, on pressure massive and get going New to adult-use that think it's pass it operational because an fairly Jersey program they're going to Pennsylvania. I put

So very revenue, the that frankly, we will appreciate and be in controlled that ignore is to going it's can Republican to we a prevail. but ultimately hard like legislature, other tax any market expect

right from Curaleaf across Philadelphia, the border a You're aware that downtown minutes Philly. has dispensary from XX

XX across think And growing. and that those of huge that to border other delay adult-use, bridge the are side beneficiary does Pennsylvania frankly a to while out, right it the stand we people Jersey. I with to just And New because figures so be Pennsylvania on when truck of go stores the it going will be

the to we're hedged take and our from I advantage opportunities well of they So come. well prepared think perspective, as

Vivien Azer

much. you very Thank Understood.

Operator

Kreindler Please The question with ahead. Graeme next is Eight Capital. go from

Graeme Kreindler

afternoon, Boris about in catalyst election. Or to at mean, for point? big these for you pathway and remarks thank I surprised a looking have I of it, be could questions. now that we the to some larger we of here build expand the potentially Thanks. we next just for look the the should XXXX elections be potentially mid-term pass coming some so Boris, on to between to respect taking earlier Good really of level, with the be you to regulatory and and here? Hi. your question wanted out way had for have the my developments federal More I

Boris Jordan

result thing Presidential need election the have final is government. and to numerous haven’t called various U.S. the a been the we and which do Senate We So get that officially Presidential Congressional do the by I think agencies to election. first on that to need races, still election, the in including

final the hypothetical majority to very, very have to everyone that if Joe very, the we’re – Democrats certainly, going we take case president, now predict, the to result for in and going is I House a so a going that we have a for to Biden Republicans narrow I need as narrow pushing that be we're pretty very Senate. majority mean, think it's before and it's the think easier I And in but

we for think I probably going saying we're get the that what Act. feel very comfortable first time to the that is STATES

under to ability [indiscernible] Trump's If new in Canada So some and what to remembers Sessions the Jeff That can't from memo on was can therefore removed we're in department. concession a the to revoked get President do. on Cole DoJ, a had was treasury we're guidance going act guidance first treasury the year get their banking guidance banking. bank memo and they going gave of memo and treasury which presidency the get everybody

So the I to come Heroes I likely Republicans Act around, will it an get separately issue were either Democrats it’s migration pretty it's both that. come and the their bipartisan a the of to year we're and after think going new in that's over the to head – issue get – next president. and And and think that the Democrats

think that. I we'll So get

you and state. that in lot But be but think but that be I think that would Act – to I I scheduling, But expect get on I and second there it the from there's coming I will being happen between have do be that a insertion STATES do think especially Act, he's STATES Act. Going don't be full of the of think STATES Senate, Republican because initiatives, McConnell's likely think next be away I that think is McConnell there a activity, if don't beyond pressure going marijuana the a to administration. right the could or STATES to the had of with the push a all Act. part could of to is get not lot going that, compromise we the probably the I

a From that next full until I could half. you maybe. think that be whoever think the administration, I legalization, get don't

from it. to back in Senate market. have harbor operation House we're the the back a and the would I little could safe at again, we’ve anything bring banking the ball bit. So seen a would now. group of transition step a way because hearing very are We way don't we're pretty cannabis a law. broad that some be approach of large don't sort capital. But huge that right already there. down the We think a developing. We're of And of we allow that it's the crystal into or And happen. our seeing cannabis what we put looking pushing have issues. didn't that’s participate And In the in that's language, that Washington, roll But the would investors – has for have it also which cost Curaleaf,

our have So the at that's really ball. a crystal but don't moment, perspective we

Graeme Kreindler

I Okay. one that here. question other And to And Joe just understood. I I then appreciate insight. follow-up to Bayern. wanted

your within country experience added the Just scratch. at with have your across the you the you've similar have cannabis new and a for going there some the complexity, I'd an transition to from transitioned no approach first be appreciate throughout happens. Do track approach that respect And, or to really is your TPG layer is is record apply and you basic of Thank matter to insight what brands to look there and very what principles building brands to done into building and you industry role much. approach through that career? as what you your Curaleaf? really

Joseph Bayern

Yes.

relate of in the drinks I that consumer is about to the for, of brand what think consumers specifically, a authenticity and other able needs building a you be any of cannabis brand the they do which whether stands is talking the the to company product, essence products. – to of or the the have what same, represents, representation, brand the the way or meet and that brand you're very have to you through soft quality the

There because successful. evolved. competitors. that on focused is at that's meet And some do hurdles and cannabis we So the I do very think better and products all going in very we're structural of actually to that specifically can needs be cannabis the similar those are how obviously the consumers has were than very our of component if U.S. our we're that, industry we Curaleaf, of think developing

need of So those products not of that brand. national not The we where obviously is think a the through state Not things outlets then have understand challenging. industry, very being our consumer the meet and somewhat but being understand with products as brand needs who different, by needs a consumers to a structurally across being is, is There able are is the supply in communication for similar, building which challenge. develop bit to are chain communicate essence some needs a other lines a are those met challenge. able to is I ship people that to

very, that's So very similar.

Graeme Kreindler

that. Understood. Okay. you appreciate much. Thank very I

Operator

The Alliance Please go Grey next ahead. question Global is from Aaron with Partners.

Aaron Grey

Congrats on Hi. the the quarter thanks for and questions.

Florida. on is me for one First

have You mentioned cultivation some expansion there. you planned

ramping some and within to edibles now of plant up you. terms rollout commentary on state. wanted any that the Just have in of and commentary the then that on also available get been made of degree and it's that you Thank

Joseph Lusardi

completed as product of Yes. November. foot new in literally flower indoor first out late And XX,XXX just I facility. just will remarks, prepared we here square We completed our the hit Sure. harvest that shelves said – the my in

QX the our flower to we're up We'll a market. the for quality bringing indoor lot definitely So with that online in in capacity high again indoor doubling demand of early product be format. keep

opening I feed adding curve, trying to into continue expect we that going lot a which think, be and of to stores, so we're in to in Florida, And capacity to addition our increase. to demand

headed. Florida it’s direction So and I'm feeling very that the good about

Joseph Bayern

Yes.

product of today. – the sublingual is a may on the we as But in calls far have had gummies we’ve so to our We it tablet. gel other follow in sublingual that imminent. you the discussed As market we rules a recall talked Florida, existing actually call launch goes, gel on

the really couple should Within products weeks, compelling have and and in they're the think marketplace next be to we of unique. we a going

far technology the emulsion different goes using that are We into gummy. as as the

very that's nanoemulsion that traditional a with have technology consumers with a we're going be gummy. traditional that in shortly. we're in Florida gummy we're and onset following to traditional experience So And up very different going And marketplace. fast creating launching to for the a

especially innovation market, innovation the all in robust couple very of over pipeline a about And coming of Florida across of Florida XX weeks. next have very excited in and we we're states. the some So the to

Aaron Grey

would then the And format, been Thanks. aligned more vape vape, the product given the historically, particularly haven't Great. and of Select, be question second had around specifically on which acquisition category.

the We’re we illnesses removed a vape a in and seen little the scares of from year fall bit had XXXX.

where product just and seeing evolving? kind right terms terms towards of market consumer in that what and curious marketplace of format, it you're in today you the how So see adoption of vape share Thanks. overall lies category, the in now

Joseph Bayern

off that could Joe vape and past and perspective my give XX seeing scare. can and coming I has We're responded over the add in. vape back market rebounded Yes. months the the of

generally just recognize people high quality. tested that think products the weren't I that an weren't that and was market illicit issue,

illicit legal testing as potential that get our believe difference which products the further the is and I quality market. test consumers you that quality the that there's market, understand really as get market and we growth just between evidence and don't in you think the So in marketplace illicit

been that's favorable. very So

the more educated a in technologies. general are the category little think we're in I we're aware different of we're what vape it, seeing that bit consumers becoming is seeing actually seeing and

able live Elite to cartridge, driving having in new penetration So distillate deliver like and it's just not plain as Live is into being simple users as market the a bringing or for products product resin Select, new category.

is the looking for more and market think But looking is still bit products. the of you're little out of there products for better still entrance educated sophisticated which bifurcation in a they of are higher are who there's shop for quality I So kind category, a basically a price. distillate and new what consumers, seeing on

of simple. lineup be across segments is So full able products both our Select a creating with and pretty meet want that We needs. Curaleaf consumers sure have to that each those to products of we're will and those resonate make strategy to

Aaron Grey

All right. you. Great. Thank

Operator

Gilmer ahead. Haywood Neal question is go from with next Securities. The Please

Neal Gilmer

afternoon. Good Yes.

of Can expect mentioned Illinois. Pennsylvania importantly on touch to respect I more on and revenue? you when of towards and to magnitude guess in sort being prepared complete you a you and them contribute want give color to expansions remarks able be the Just to with couple your more of those any expansions

Joseph Lusardi

Grassroots the Pennsylvania, The indoor completed Yes. In Sure. summer. their expansion facility. of over

on registrant six clinical their our of the because program. bringing Grassroots has well. is foot registrant ability license, licenses. also open stores with square can XX are the to as Curaleaf facility a We under XX,XXX Curaleaf open clinical

we their quarter have to into Grassroots as a QX. Curaleaf both existing this as recently of speak, Grassroots and at expect foot fit Illinois, amount completed just respect XXXX. we the of we With that So capacity and come square head we'll significant into line on XX,XXX be facility out and is late to planted harvesting and

fully-built And so square in we that to out that expect construction. get facility greenhouse of foot XX,XXX an is benefit the plus approximately

well. So we're capacity in as adding of Illinois lot a

into slowing shows in intend feed Pennsylvania significant year. of and As next we growth you to see those no down and know and so signs both the capacity demand markets additional Illinois

Neal Gilmer

very Great. Okay. much. Thanks

Operator

is Stifel next Andrew from GMP. Partheniou The Please ahead. with go question

Andrew Partheniou

here two a for there's Thanks on going little a It Maybe building bit. brand questions. follow-on dynamics just seems like on. taking my

to of that people the have from to the which, the be one spoke cannabis. second is, you United XX% I try Bayern, other competitor Boris as think thing, taking share now. mentioned, number in and First, which right market, the States the illicit to yet seems And

of more long-term? little extent are to the types think right on To would I that the it the both adopted there So give more that consumers. also XX% to imagine possible, to of near-term bit different different is be that that? to Is speak you could and strategies of market color a is Americans illicit is able

Joseph Bayern

Yes.

I think across we're to think is At horizons always develop looking strategies. it. a that way good Curaleaf, multiple time to about our growth

And so we're different time really looking at three horizons.

with – demand trying most we're As really to competing we're today, we keep cases, in right. talked about up

So existing we're continue building of couple going next that's we out capacity demand, to and with into keep our think years. to the up

As conversion if not over market the a people opportunity couple available. on they're to legal I want legal that. yet. probably illicit availability that somewhere from will will dynamics. purchase a pricing there, if I certainly people, a we'll illicit different a think naturally to be of think part based do of on will think versus be, of if they to market comparison market. the the time market, they legal happen that going would have defined And market to – make There's choose bias quite there’s the see in that's choice. buy One they that, But to a product, We that products have on the

entrant illicit are we give market comes our with which to to and thing to in products second isn't people if the develop. getting And easy going the they're that any flower, exchange. is they better going quality market But point. other perspective quality feel products to higher of of product it's product able like competitor, illicit be just better need the The competitive only a longer-term, about think is like conversion in the switch creating I that

of new We’re create technology blends consumers. where lot resource and time working spending formulas and about we or on working which together different our cannabinoids more live energy as around, meet on talked different terpenes the of and new products, needs devices, we're will to a specifically and on blending

or cannabinoids splitting help or weight and the energy. some So that with of like loss CBN out THCV sleep

today, to the into are the within just able it the needs feeling of big can't product the barriers. to not just development, that is I and offer of the I barriers category, that have understand part the think catalyst So users And consumption flower remove illicit and effects move to is assortment meets product the is in to existing of going products that's our it of the our that category, the product we industry, It's think industry sophisticated as people we today. be part broadly bring people we And be around in for To existing those that up about to more to market get and been a new what necessarily we'll of are have biggest want part over. stigma with. keep is that focused part THC.

in plant to product more our want chronic use products, use we're different how in sophisticated for we behind getting they're as we feel the and like high but create want product the will people to can to the don't who start things science off pain, development getting like the So THC.

be different a to products need we that. So able we at people, be night. need want for that people to product need meet We needs who of sleep the create will to to able

really getting the can makes plant to the needs what of And focus primary across consumers behind just different landscape. this of because the able is to that being is understanding a about optimistic each that's really looking states plant lead meet ours for So formulate meet really different many it's is consumer consumer really, – we're the just us product science a need. future sure what that so about and then making

Andrew Partheniou

Thank you. That's very very helpful, answer. thoughtful

a a But happened lot prices in that the There's on Northeast. that quite seeing phenomenon markets focus been West rising. hasn't Coast, wildfires bid Just the a switching Wholesale has are been we're have this while. records the on of year. gears, the in

little can cycles? there that if last, would wholesale a namely or about there's given demand. supply bit growth on impact how there's And positive negative limited on may wondering perhaps you Just dynamic think, outdoor given I its on versus And any presence? – wildfires, if talk the your Select, long that

Joseph Lusardi

you my could well. Joe give I'll Boris, guess Yes. perspective and I in chime as

seeing structural the that mean, I I I marketplace and think some taking pretty the there's think again, supply as wildfires. marketplace, was some in where And it’s out seeing is California. indication wholesale we're chain California. we're the more said, part is demand be great. an of increased might in think in California changes robust that marketplace pricing in that There the which of market in you rational in the a just of I because supply

wholesale to I the into in XXXX, healthy balance a think there's market going but So be of through not going only XXXX.

we've that contracts. forward on lucky impacted because For in some not enough that we're us, greatly locked by we’re

supply in more rational aggressively with different California, And perspective the do are is work markets of in cultivators lucky have we’re trying to to to pretty of things that. one chain. different a enough that So we do

supply have some into but not the XXXX. forward locked – XXXX, we've contracts bought So only and we balance up of for

good shape California. So we’re in in

wholesale a there don't pricing major on marketplace see of So is that I on because see awhile think we'll increased demand. the we going for the But dynamic impact in to increased a Select. continue

Andrew Partheniou

and again. Thanks congrats for that

Joseph Lusardi

you. Thank

Operator

question next The Glenn Ladenburg go Please is with from ahead. Mattson Thalmann.

Glenn Mattson

my been that of Most I asked, more Yes. have a Hi. just I'll questions already in but chime with couple had.

curious, rather level after you've of they've But new that So good even sure acquisition, some large really else. find seen understanding. I'm some and closed lot closed before out on everything work acquisition, Grassroots, it's there’s a there's of a this done operators

curious or guess I So if it's surprised under there's umbrella? anything you just your that now that positively I'm negatively

Joseph Lusardi

again. I’ll give Joe This perspective. you my is

the XX-plus the of bit this think were we as smoothest was a Broadly markets of think were done the of last lot I I complimentary I've that not for I think a is And really, seen. ever a years, Grassroots, and overlap. I that for speaking, we integration one responsible of in. and over the they One of was things very the I've said basis we’re There that businesses. was little in these

we our I So both we the that us, companies. put the cost a I is in strategic IT And complimentary very And gave XX aside which and integrating understood our think was synergy. egos door think the we and the days need organizations initiatives get at well. of track with. to a I within We're the to accomplished to initiative first these just very did on that we with deliver of begin There We trying our well. front to and transition on two went integrate target. target think ourselves pretty two companies

other. So I We're went think broadly always speaking, it learning very, smoothly. very from each

– have been think have opinion. that's really hasn't be that we doing we in each the keystones that we're and collaborative something respect so to of is the marketplace, I other's one things one our is of done to

brands initiatives do mission of that new we're over looking Curaleaf think I I they So about like on has of trying because to to from to before. we're no pretty kind over been something or receptive most everybody's realize, Grassroots. bring think at done technologies things one And a the

think excited of we level so about and collaboration. very is high I a everybody have that And

of a to we brands, think think in be is there's a I only unprecedented which us, huge passion great front about help great amount forge not industry, compelling. and company to the is really an create of very but which able opportunity

things So these that's certainly when helps occur. the out of some cut friction typically

Glenn Mattson

the think on for worried your state popping states any shutdowns you are there Is pandemic for things that – Yes. control? as your or getting just it That's that. production are potential side, don't enter is – are or you a some bit or up of cultivation Great. or should then I about we months. winter Are have little it radar Thanks. me. that about? the a retail, we would areas there I'll whether follow-up with, And is but screen of intensifying on guys be either level that as Thanks for any concern know, anything level

Joseph Lusardi

Yes. major. concerning, think I managing of got really through that's We've pandemic protocols to be good I a we're and job operate really a and pandemic. able Nothing the as we've great in the obviously to going done this numbers place are think but company

So issue. I terribly one don't we're any about concerned think particular

Joseph Bayern

that. just would I to add And

have to and people that manage this way. think a it and through able a manage in I we've seen been professional through responsible

continue And more able efficiently the service whatever occur. think So to can to and react us I to more the safely. will that our quickly market we've be perspective our is to model proven our change to legislators conditions with we work fact customers

procedures staffing and Joe said, behind consumers. But done now We've us. as needs to to So we've got meet got had a this models done place. place. it's be in in it we our able We've work place models of We've of new the in delivery lot to. year. got Unfortunately, we've

into leverage So those going to next procedures couple the we'll months. just of continue have to

Operator

from The Securities. Beacon Please with ahead. next is question go Stanley Russell

Russell Stanley

and have another that medical has Jersey. resolved and to that of view what I that how at licenses your still gets round resolved New in just I might on Hello, are taking for order. issued, that or is process be relates open There's and been I'm just or for it to to out? wondering you. were – need that be court by thoughts does been And that order and this and think the market has by thanks question. one my point, that what and to how how stopped paused adult-use play Thank your that

Joseph Lusardi

needs move Jersey I is reality penetration forward. expect future the New we adult-use be very market that to at to low mean, Russell, it The use, as believe Yes. the other we markets. don't the in a to we're medicinal considerably for to well. still resolved relative for grow

think to everybody quickly, I getting on legislature, creating and optimistic really going state is the medical getting the we're so cannabis that's very and happen. the think going the you're in program focused adult-use tax And but going to the feeling see revenue, expand, governor the very jobs, I so

Operator

Capital the Des Eric is question Craig-Hallum with from ahead. And Group. go Please Lauriers last

Eric Des Lauriers

on for quarter. questions All right. congrats strong my guys taking and Thanks Great. a

So markets. you platform? specifics reach across it's and great, take matter to just especially your cultivation a unified guys across platform? of best upgrading all sense take be a integration Curaleaf and done a how unified the practices undertaking acquisition or state long would is given impressive to and have and Thanks. training some date, you to equipment big how them of whether really Could processing acquisitions us might give plan retail I fragmented know integrate you Any personnel implement a that a and

Joseph Lusardi

track a to deals is get our I've years, how everybody in Sure. we've and but brands, lost core integrate which five done I acquire the Curaleaf, many and on procedures. mean, that think I is competency really last of of to our

in are deals work already progress most going And get a that's made And so tremendous into the Clearly, it team what XXXX, Joe lot the we've the next We've and year. of synergies that we've bear going working think And done year. to significant companies. going that those to we’re think already. I been really to on Grassroots you're and benefit I with see really come this done. the have of Select

around in every going I and is SOPs chain course, and continue market in cannabis having but to we retailing, branding, our supply topline. lot packaging I a learned Of we're think margins that to unified cultivation, feeling different, manufacturing, up very and as think you're terms good see we've the expand so of the grow that down XXXX,

Operator

concludes would turn to Foley This back like our to session. question-and-answer the over closing for I Daniel remarks. conference

Daniel Foley

these upcoming events, those including Partners, you, Partners Gary. to in Conference health today. joining Cowen the and Capital at ongoing virtually. XXXX all like still Due Conference; all Annual December. of conferences Deer and Valley you around & Thank Boston listening Preparation join MKM efforts us Conference; Thank at you for Road conferences Company's We would ROTH Third to us The be to COVID, Consumer Ahead, held will for invite

our encourage forward latest don't you participation these safe have the you under results our section the look events we of year. new We our then on XXXX events, to and speaking conference with information visit and Investor year-end happy year and If and season events. holiday we a after everyone. you the to fourth well website links new a Stay these to webcast and call. to regularly Relations speak on happy quarter until at For

Operator

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

disconnect. now may You

Curaleaf (CURLF) 18 Nov 202020 Q3 Earnings call transcript