VEXTF - Earnings call transcript Q2 2021

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

Operator

00:01 Good morning, everyone. Welcome to Vext Science Second Quarter twenty twenty one Financial Results Conference call.

As a reminder, this conference call is being recorded on Tuesday, August twenty fourth, twenty twenty one. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question and answer session. that research provided for to be questions. will time analysts for queue Instructions I the now Jonathan Instructions] will [Operator XX:XX turn Ross. call to over Please go ahead.

Jonathan Ross

information today's and discussion us Md forward released earlier those Good thanks morning. The looking and twenty could Dennis. results everyone, financial this affect made are one developments, statements. management's today. remind that statements release, the joining or listeners made and obligation today. the future in during this Forward are of circumstances on XX:XX made in result that We except vextscience.com. in U.S. public statements detailed twenty and Ifrs or or disclaims the can on were results. or or future available results as are Vext results This by applicable such the listeners of portions developments factors Thanks, in Dollars uncertainties quarter to circumstances news call non assurance looking information, forward risk subject update statements law. and such Or developments, presented call. in financial that website materially discussed these are the next Vext’s predicted earlier actual that risks XX:XX circumstances this will A during to any non Vext’s SEDAR, developments as required are will looking Chief risks as to results revise XX:XX financial circumstances the Vext’s date other Executive Vahan of accurate. presentation contained are joined by financial we Vext; or Eric in Chief and press well at or looking today filings The Ifrs conference Ajamian, reconciliation financial differ include on of to Financial will no of Eric. be call measures today's A, XX:XX results now of I'm like There call second call and be with pass SEDAR Officer. uncertainties, the expectations as call. Offenberger, Officer includes over U.S. to from and statements morning, for this forward encourage may Dollars. I estimates our read on these also therein As and intention and and and to prove release disseminate a available Md materialize. disclosure conjunction included would statements the

Eric Offenberger

morning results our Good twenty you quarter one joining twenty everybody, thank XX:XX and for Thanks, two financial Jon. conference call.

reminder, a line, dispensaries where enter year. markets XX:XX since Phoenix, new in state. believe of focus this primary for successfully a market, in we twenty which market received As any recreational currently operated Arizona Arizona operate approval performing is within the dispensaries among are we on the have January vertically the on and the in to the two state. We medical integrated investors the is thirteen Vext’s top

pleased operation the manufacturing cultivation quarter. majority top currently one on outdoor in QX and the in consistently in with vast a results indoor facility cultivation is We Turning the is third two performance of our branded fully state. the dispensaries I facilities Vapen is cultivation the are the to our of a that shelves brands and Arizona kitchen. in of We XX:XX one indoor funded. operating performing very in am XX:XX product facility developing Eloy

third dispensary results brand level, record Our as party the at continue the the diligently to as drive building to on well Vapen of presence of worked team the shelves dispensaries.

was quarter and revenue nine one that a of solid forty with was three profitability, compared to twenty we and four point compared of gross sixteen. the three margin the six point done during have point four percent thirty point result, six with generated percent XX:XX a something million we twenty in percent to focus quarter continues Adjusted thirty margin dollars deliver EBITDA quarter, record to twenty million five of since the last at dollars solid was four one. As quarter. Vext steady

operations the For XXth, cash flow June ended months, six million four dollars. from point five was

margin brands MJBiz, the dollars Arizona billion XX:XX eight three a third see if to under Vext’s a canopy of the by Our on are of two a feet. additional signed With plenty the XX:XX the very dollars without twenty expansion efficiency is leadership Arizona both in in limited see to growing will triple next capacity. operated dispensaries approximately the metro will others years. strategic be advantages come that few situation where for influx fully twenty over it, Phoenix related two. current interesting absolute as of the a players Vapen to deals of zero our the and will Both midstream they support brand, from build a we in to the perspective, by and based and while will manufacturing at growth XX:XX manufacturing was and markets to quarter our up roughly the drive to committed manufacture first upstream high to reduces ahead zero twenty the to recently highlight dispensaries and help In cultivation platform in brand on in important flower In our the have of That’s this an twenty of to one we most state, our half On to as indoor opportunities to continue growth or case, investments beverages of costs, announced to that high Corp operated MOU well solidify the during economy improve disposition open return According be Phoenix facilities XX:XX footprints. quarter on and expansions dollars you In view, fifty remainder anticipating revenue XX:XX diluted position truly similarly Arizona our of license tourists quality the of twenty attractive wholly-owned earnings six, leadership state. population Technology grow. five. explicitly Arizona. our future. COVID sell retail strength winter potential one and deals into twenty sell continue state. point in growth signed for with Vapen continue two toward We other in per five share will and market restrictions, thousand in July lifting area, cannabis the feet from semiconductor twenty track the XX:XX billion half we fifty square Source two, produce to are in the the market of the visitors in with power capital capacity and and cultivation almost MAJOR infused We’re to thousand an Arizona our two first point we and the cannabis Source’s accretive recently

Vext partnering in seltzers agreement twenty for first across Vext’s Source signed is third twenty These beverages available being two begin fill quarter technology in United processor commercially country seven, Vext first are water-soluble Wynk become expects key growth and portfolio PA, leader THC to XX:XX into in consumer On will quarter. in exclusively a goods. segment. THC functional an produce selling the to ingredients main beverages, to deals one. the Vext beverage a currently add gap LLC the branded company with of twenty premium with objectives, to is the nationally selling in Wynk States. to accomplished in XX:XX Agtech which the July packaged integrating Wynk the beverages is product emulsion Arizona. sell third MAJOR

of Even on to we vast of shelves we THC the MAJOR can. benefit leverage in from majority deals access third-parties two THC Vapen’s the XX:XX player can liter one and partnership products of cover accretively in with ml these of accelerate additional bottle, relatively a a and Let's through spectrum these to The vapes, anticipate to milligrams an Ohio Wynk beverages two MAJOR of is states turn have up brand. well-known of state XX:XX edibles, five both to Additionally, a consumer with rounds out addition to opportunities get brands the second milligrams, help extracts, two ends topicals a objective offering hundred and [capital to fifty light] growth brands. that hundred accomplished while will access (ph) offers for concentrates the Wynk MAJOR established market. XX:XX two XX:XX Vapen the basis. point and CBD offers dispensary like We moment. of arise tinctures. The Vext milliliter like Arizona the

Thanks doubt led share we opportunities organic apply signed stream and returns we begin through capital shelf building in have and Ohio operation also is of the product to time both XX:XX as our that remainder seven term the growth the sense with operational. growing outside While March continue stocked been was both in additional out view penetration states look fifteen, Vapen Currently, update your The capital company a licensed We the our market. in focused XX:XX near in Vext change license Vahan? a to growth a of announced today. ownership shelves twenty on Arizona, and twenty objectives when we margin the market. in to may Board focus the of high LOI midstream already in we Arizona you is to certificate brand state the in and shareholders. we an venture being and operations review XX:XX it the well revenue growth most for joint wholesale of of on XX:XX over what with deploy has by accretively footprint state begun. pass a to will channel. our medical the joint can and our continuing our multi-state have a a makes through partner market its ongoing to eleven a in joint I a for we market license. for for growth in On we for. XX:XX in next our Ohio [developed] and no of Once add financial the with the return relationship delays to remain we with provisional the had support the selling (ph). shareholders. of be parallel of to it we to holder the Board on LOI upstream Ohio reminds get expect long during would slow While have limited for an in countdown Massachusetts the very Ohio an like on has of space to and which holder to behind the through point presence be license twenty million year terminate focused important state twelve that roughly been of Arizona. growth and mutually in months, Arizona operated the building LLC. leg has out XX:XX For do And Ohio continued we that view option retail on results. brands venture continued dispensaries, we current July I exciting through Combination I'll the leverage a by many to term, dispensaries we call retail to the Ohio remain us the footprint and to when a characteristics operational of our agreeing maximizing a population us very struck license that us further the twenty ways one, seventh, point give organic accretively six facts received our for quarter, Ohio In enable with Vapen for Massachusetts. establish Pharmacy with to will has a will so. forward is the venture twenty, Vext’s generating fully into to consolidated XX:XX XX:XX operations offerings. expand announced a will within look Vapen and partner processing

Vahan Ajamian

everyone. and good morning Thanks, Eric, XX:XX

noted, and and million four of solid twenty a with twenty financial one. continued provides for dollars of twenty As operations to nine dollars million charges accordance cultivation provided Vext second Eric QX point to performance As and regulations for compared dispensaries production in XX:XX profits. two one. of that twenty to in six two twenty QX Revenue twenty point reminder, generate point Phoenix during services structured current the Vext in the nine million as are in not and quarter was dollars seven quarter

is financials structure be as leasing two. a levers in the to very and manage. these the actual can XX:XX has we in we which transition revenue have distinct typical may structure customers our position what one. XX:XX guidance, have We from during our revenue result, and for dispensaries businesses an when profit four Last charge twenty segmented between leasing. expect guidelines state results than That sales, to profit market of big in QX now equipment indicated January both for primary profit I a to be management reports holders. stands favorable As twenty wholesale perfectly match that a record its product operations for quarter, XX:XX in as our and services, said, was with the picture to fees, Given four as for professional twenty underlying transition Vext property will was not twenty we we dispensaries, received to quarter as tax well Arizona a and operators perspective, beginning not more to it now, provided owned mentioned the to a license the

financial easier January as results possible. profit prior return four and four Gross five QX twenty operators eight of will of in our percent those from margin it to period Gross in the twenty in keep and with two our four ownership in QX on to This with XX:XX Vext shift compared lean reporting has quarter quarter the easier two dollars to forty point compare We and eye understand in operated clean not results, and a five XX:XX for our twenty million thirty two first the same to year XX:XX forty seven point to states. of profit other clean capital. was period quarterly keen a would quarter point dollars one. very make million last was QX dollars aim in as point year to five to always reduce fluctuations break for make million point compared twenty percent on one. to percent

EBITDA we year, the adjusted plans margins at and diluted Vext two point with June of in quarter point point cash twenty. dollars twenty. As the percent. dollars six nine which flow QX was million dollars of Vext in million had in each three before point million six point the a working five XX:XX million two point six remained six in capital for million and in We as I'll first above balance point eight the sheet. the the very ended quarter and the thirty the mentioned, between of one expansion has outlined one that QX of three one. joining for well dollars Thanks one to call. generation. the operator questions. quarter QX compared six Adjusted generated XX:XX internal over we your months cash six fully approach, it results compares operating positive next cash cash as are twelve fully four Eric this for quarter as point have for twenty months year this point us turn adjusted now balance twenty eight in dollars during twenty EBITDA generated result XX:XX We to thirty dollars which of and at solid one to million zero dollars QX our dollars well financial conference three dollars twenty million point four a generated strong funded EBITDA of twenty of in EPS zero twenty in same XX:XX million all generated of last

Operator

Please Beacon with [Operator you. Instructions] from go comes Thank question securities. first Your ahead. Russell XX:XX Stanley

Russell Stanley

performance. XX:XX and and the congrats particularly cash on quarter, on flow the Good morning

Just wondering to around [Technical there, early mentioned that in Difficulty] the update course, twenty online just of your on two. you cultivation the in press expecting release, be call,

facility take to your for for and Just harvest it how would that you to is first then wondering what full timeline capacity? first up think revenue, ramp long

Eric Offenberger

XX:XX now, stuff it the Well, and that. out obviously, permitting build like we're the right And in Russ, doing to going mechanicals stages. process we're

lot demolition or along wasn't there Fortunately a of needed with anything those lines. that building,

So you're supply a obstacle chain process. giving] right you now quick it'll firm (ph) as while of. aware a be The the biggest [to date relatively is

earlier on able soon meantime, out order so the a be plantings rooms. and that So actually already It's quicker have obviously, build some rooms. to done back we Arizona. production have in we'll Fully up have the to that as we in is more some for done our seeing probably as are for XX:XX be freezer roughly that. a operational genetics and to some the quarter plan just is by use of happens, up will months like XX:XX the bring We're be We and running. to do don't harvested get our fully production, and to [indiscernible] everything hoping say you’d two and to that that we panels cycle on rooms start third six typical first quarter lot will come as the twenty those anything week to five twenty right If late else now. hope be up, in to first or because nine we anticipate

we'll hurdle but chain, with that's the biggest So what as supply right see you the updated we happens now. keep

Russell Stanley

to it. Thanks Got on on XX:XX those beverage maybe announcements moving the that and on efforts. congrats

both to you how actually both steps the shelves, I think expected products what product quarter, sales I on remaining you mentioned the lines to are start down on that? this guess far that are are getting progress

Eric Offenberger

and into that's this – the XX:XX the THC really started key really is the where of week thing, actually which with play. they came doing source encapsulation we whole Well, to the

month, the that. so that some Actually, so why doesn't of kind and goes that well. uses it it THC, assume consistent, the producing the [modified the by it's technology, (ph) in and place. I well to in beverage are we'll would have XX:XX THC] keep the Wynk MAJOR better know, a THC of does fit this you also separate, tough The done they've made really So, labeling everything As bottles start beverage. end got that's in we'll then

season before So, taking week first it. or products. to we by of September, to week we'll I guess start second September second by XX:XX And get we'll think start the hopefully little holiday want the it tourism out on where the would break. market because Arizona better there to before come third and that's start the pre-orders birds] recreational will hit we will shipping the of season definitely week down candidly temperature (ph) [snow the in in again bit winter a and

line So go we product into will really marketplace. that think that well that

Russell Stanley

maybe And another getting sneak XX:XX of expected on one state could the back queue if round the open I to think before just is I into up retail licensing the more front. on Ohio,

and process you on if wondering it? to participate that that Just have plans in your color Thanks. on

Eric Offenberger

XX:XX the participating the to just properties state knows seen property five looks for dispensaries. for parts the obviously on now. going licensing, Yes, regulations three from It of applying in right like in to we're you XX:XX time of state. the in get still the at guidelines we it own your that Yes, haven't key can spots seen that's we're We one that. current We’ve some at down. have active cap secured in final which preliminary

license. Arizona do similar them we to where have obtain what firmly commit the do in we don't to able been we've Fortunately, we to until

we in we Vext to lines tremendous a getting active XX:XX a for Ohio that's that good for detail, us as really opportunity continue be to just well. continue we're up and very think see too to Without much and Arizona going yeah, So, into thing. with be

Russell Stanley

the Thanks XX:XX again. Got it. color. That's get in back I'll queue. great

Operator

XX:XX Thank you.

Semple from Echelon comes question Please ahead. next go Markets. Andrew Capital Your with

Andrew Semple

and on Hi the morning, results. XX:XX everyone, there. Good congrats QX

Eric Offenberger

XX:XX Thanks Andrew.

Andrew Semple

hi Eric. group production gross here, some up Yeah, of My the kind XX:XX QX at they for across ramp margins country. many look question the results, facilities headwinds and of first when we peer as your signaled

question at as your without that couple the costs ramp the pose offsetting that would headwinds generating Vext, to want structure of quarters will you You're given any how margin I an from begin anticipate Facility? of just immediate unique next to you look Just production up accounting revenue. accounting in perspective?

Eric Offenberger

Andrew, expanding anytime got use euphoria Yeah. of people really it's Arizona. in an I in market, you're think XX:XX adult

first consume our is pressure, we the on like expect You're going some we more two. hit won't having to to pressure in dispensaries I commodities able see The you be get really do point call parts we've on produce. If talked advantage our and that. that At we sell standpoint, than later right to pricing pressure we and that to wholesale time, until want in or from about some margin our ramp it. working whichever and up XX:XX we'll margin have the market have twenty that like now to We're in twenty and stuff my efficiency. background costs production

outdoor So able in cost we'll price growth stuff with coming in want on Valley, with over on the biomass little what to tends me, bit this to when know year input to don't of to you that, you XX:XX engaged have control a be produce. we'll Prescott in happens Because a get that. people and the second be the war a cheaper

So because the But to up that's and to make that take price that into of the probably influx able we'll the is margin that's be determined on. most added will population, doesn't philosophy. growth more semiconductor market of if pressure, to run with from full-out that the the won't demand care less if sense yet absorb end you be we the everything you grow right will coming that and economically, control pressure volume, so supply it continues that won’t natural or just of I'm

Andrew Semple

category I conditions of kind market. you sort that. product premium that one is the to just Arizona believe Appreciate ask was on I want in wholesale the mentioned. That XX:XX great color. of

to do own in constrained that supply Are wholesale love of Premium Arizona format market? that your general to in keep the your with is more add shelves category. still You In kind full of you market would flower, the you able feel supply. tap to

Eric Offenberger

XX:XX able available. It's keep our readily shelf to full. we're Yes,

point two find pound fine. not smaller price That's somewhere it's you're – it obviously of a premium is per of is sell niche disconnect total. retail. group product in the to side, three that thousand that's because biggest going the hundred at the Some three on in Where more you

lot the versus want but like subjective at to product where to past. no, Our which comes quality wholesale that for had interruption or rooms the we've main into more play you probably more we’ll is or you lower and as to cost us just that’s or not our So far, products that. growth store. about than market better always setting it's or like point your in. something it that sensitive and you the could running of store, of not more flower over on people price So, you that's point promotions end sales, outdoor indoor more yeah, flower could quite the of with run supply an that's would drag get a and the It's buy will a doing price north the volume so really more up are specials much or yourself, XX:XX if have quality that don't from store the in an increase produce talked somebody urban anything we does on the a XX:XX house but greenhouse producing flower that more we've a

Andrew Semple

in building profile of just the just the that launching of branded kind wondering product product line, kind of kind will hear to on of how margin existing be beverage out term uniqueness the those beverages given XX:XX near operating in might And procedures Great. Arizona to products compare portfolio? the great there the for Understood.

Eric Offenberger

cost be be the in obviously, licensing the control retail flavor the a But in R little to D fully the a we trying the see develop be less what you a obviously will works. well. it doing typical don't than And that have that's you spot, similar, because back or margin really end, wholesale on profile competition. will Well, arrangement. really our margin bit will the and less you're the It XX:XX on sale,

aren't and has They great (ph) in You geared profile seltzers Wynk type the that they're the taste. seltzers a kind milligram towards following. what lower Washington really quality] flavor [white a dosage. on like up doing know, it flavors that MAJOR selling [indiscernible] the and of XX:XX know (ph) [Norman of really great. like and picture, promoting really great for those the edge I that it XX:XX product the or it's traction to put of you're a a Rock] you well Like off see want you're to holiday the won't gatherings to and like family but the take know lifestyle. Take type that to alcohol. in going party. don't the it'll week cell, people drink is

if and Vapen worth with complete. it's To So, for that we're it's some So the at quality you brand happy up is, XX:XX really now to it did Andrew, from that product standpoint, Vext giving what look mix. margin. be able portfolio, have good a

extracts, as do, deliveries. like their become positions try a vendors matures. stuff, type frequent beverages, We cost So, can down to of that it's a better provider Vapen businesses the internally, more we to less that edibles, cut they start somebody as concentrates, think to – lot complete more over market most

Andrew Semple

I'll that Congrats sense. XX:XX Understood makes results, into again and the on get Thank you. yes, QX and queue. back

Eric Offenberger

XX:XX Thank you.

Operator

XX:XX your Capital. comes next Kreindler Instructions] go from Eight ahead. you. Please [Operator question With with Graeme Thank that,

Graeme Kreindler

a guys birds and with of expecting back morning, more comments thank taking quarter. on snow you Eric, good on year stronger made the congrats the Hey, more about half for you XX:XX and to tourism. I and the wanted follow-up my questions.

an the where more onset wanted Regarding terms you. I coming the work do the is that position How but that more the inventory and you in of sure in of make to at situation, there half managing interim to through rec is or know, company's here? as cultivation the patients medical ready inventory needs back you there going you're year to Thank management of of anything stockpiling stores online, comes there's as can volume was the demand. balance careful in of the some that both influx

Eric Offenberger

hope a Arizona. Vapen Graeme, we input in standpoint we of a things the that really crop expanded that's crop couple on brand did Prescott Prescott good the from positive. it's bumper on XX:XX we this feeds from do growth. bought product obviously and but biomass in on of heavy The that is, to outdoor up now of snow, that ran cash right yield question. the spring and standpoint A We that,

we're a harvest and So, it stages come September. down will in big start in anticipating October going

that some got will relationships it thing owners. lease with doing So this retail through people other from some just seasonality. that take operate some don't us and we're multi side, are On we've that license that that do cult flower or that anticipating are XX:XX the

So, some decent those of influx. established we provides that have

Then you Now, I we right ramps think I like now hope wood if we're to anticipated does. fine. those it Graeme, like I'm knocking up and it

don't price. You raise your

money the make that'll be And you'll so know You more way it. you XX:XX what for regulated you sell.

So, I to some that that move is that products. keep hope pricing we see sure on like I'd influx some such can't an it up does hope I because happens,

Vahan Ajamian

system is inventory about the that confusion because or actual shows reminder just the any for not-for-profit possible Thanks. prevent to clear our Vext’s not for given not the just talking inventory others. it others confusion, right inventory now is store to is the the And a on XX:XX we're license at up financials level there that any inventory

Graeme Kreindler

you the that been market me, had an for about to I'm tight industries conversations Thanks. the the Are and wages labor Vahan. multiple increase any companies to Okay, here. Thank Vext if issue across multiple have at the you, all, staffing you. that's levels with understood. Eric question respect any final seeing of Thank a And of dispensary, thank you just XX:XX you, pressure? of lots wondering from at there.

Eric Offenberger

people of it's a pretty industry are attract to users still the hire for random and to somewhere industry that you don't that And have industries. Candidly, see they easy potential cannabis. in cannabis People stigma testing other be. that drug people think as XX:XX growth that some I

yeah, tried hire said, So really I industries. have as that wages. see people on that employer being that. I've noticed other That an you some pressure to in

to a closer XX:XX in we most and that QuikTrip's, the a kind Then that. starting have fifteen use there, they an the do pharmacies. getting dollars participate sharing competing in So, like the that's moving bud against people we our CBS incentive for wage. You're eleven The program of tips, profit we're part well. are tenders seven

we not turnover. turnover it's big So, the don't the normally retail, in been Andrew, teens On think for on have problem. a XX:XX dispensaries, I mid to in that's our turnover. a And somewhere percent range. So low fifty runs

us all job So invested and we're but lot comes manufacturing in to standards because and those so we've starting the is a we've way it's really into XX:XX two outdoor to things and make our quite going faster twenty than on-stream equipment the and good. industry and their cultivation, Thank funds that cost a And more more tougher go a to to different far, little marketplace. far help it's bit given we so as so see for invested it's shareholders think we then the challenge and we investments cannabis, have efficiently, us farming. the And more obviously, down go a produce those of you come a online start twenty lot. actually labor bit into

Graeme Kreindler

Thank for XX:XX Understood. much that. you Okay. very

Eric Offenberger

XX:XX Yes.

Operator

conference lines. ask this you a for concludes Ladies your that you. and and Thank day. you We gentlemen, please participating disconnect XX:XX today. Have thank call your great

Vext Science (VEXTF) 24 Aug 212021 Q2 Earnings call transcript