FFNTF - Earnings call transcript Q2 2022

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Operator

Good afternoon, and welcome to 4Front Ventures' Second Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, all lines have been placed on mute to prevent any background noise. After the prepared remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to your host, 4Front Ventures' Chief Executive Officer, Leo Gontmakher. sir. ahead, go Please

Leo Gontmakher

you. Thank

risks during Chowscano; Wooten. Interim and milestones give achieved call into XXXX. Ray year begin Operations, the deeper CFO, quarter. Adams; Thut; of Mills; we active our QX call color early trends hand reminder, results management during the update looking on providing this a Factors the materially Jake half start before number course our expectations actual of may Executive results section what to outlined the Landgraf; an and make on forward-looking in call, differ a of with a may to based top expectations. Brandon and are conference uncertainties statements that and quick results Andrew cause of President, statements level provide Safe should factors. Company's any be look These on Finance, and forward-looking Vice I'll President in operational in-store As of from to I'm filings subject of Any Keith ahead, and today's by future. in are our who President, moving Andrew for I'll that and as current these a disclosures Risk are Officer, thesis revise joined the over light review to the have management undertake call the is second Please the presented our forward-looking note and strategy does Harbor, will California before then materials. outlook of the any today's today Investment any of Chief in our on considered of statements not EVP the Karl obligation we

and high-quality, where implementing excellence will we our At We available those thesis. with production in large any cornerstone State, we that guided Michigan. for a will operational California, capabilities by follow-ups. adult-use replicating markets be are After Washington are by XFront, Massachusetts, perfecting session high-margin simple in like the entire our team question-and-answer Illinois, management SOPs conclude

is is manufacturing low spot at that the package Our of cannabis goods the in scale. belief sweet cost, production consumer cannabis high-quality supply chain

CPG any of XFront more case, benefit and this ingredients, decline cannabis [freedom]. cost as our become in the margins with As to company, stands

here couldn't this more our As we sit be in for company how we industry. today, excited positioned emerging is

scaled the to we the investments in or product growth expectations Our additional automation leverage poised board Illinois, above We customer we are of revenues our footprint retail as in state-of-the-art years. the to are our our as geographic quality existing we accelerate Massachusetts. company improvements. continue or next across we with within of and operations with at innovation performing believe counts, trajectory raise triple three the the the over and our are meaningfully approach, this to poised California, manufacturing and quadruple processing Through facilities bar

playing Our is out in thesis real-time.

and California. While midway we we industry's have business particularly not the opportunity. deterred in in our point have our The strides in second enormous challenges acceleration as cannabis have of third an Massachusetts seen the markets growth quarter, great in reach we made this trends quarter, the unique confidence in

their to and and despite system states lumpy shifting products cannabis to state demand revenues. from consistency branded efficiencies other manufacturing existing U.S. facilities, strengthen our $XXX can state nobody an maximize our the can customers capital continue as else and that operators and tax markets honorous state-licensed in our and in U.S. match. conviction to facing markets positioning that markets look scale rollouts, inconsistent unique serves gray and fact, is are that trend companies obstacles The eliciting savings safety the automation the in In landscape. only and many and tax we With billion should drive cannabis

cultivating increasingly we control see do We at to significantly and Manufacturing we cannabis what perfecting our remain we cut This nimble and the strategy and resulted industry product what While products we will and ultimately in in of can best. this incremental focused reform are has lineups enhancing deserve. us pressures the high-quality on they in benefiting year. customers product most scale optimistic, with one diverse while further pricing points against quality. price honing a our variety costs and insulating

advancing As of significant incredibly of continues to state. partners seeing in a attractive are the the ramp busy we sales set In opportunity businesses. a during overseeing number grow operations existing a our team, QX, we of potential and and discussions our confidence have as been strategically management growth in we the seeing strategy with California, expansion in and an are

we Direct reminder, and our are and in locations. California: award-winning manufacturing; third-party product a acquisitions; a four-part proven and strategy of brand sales opening retail pursuing suite; processing As of select

address individually, each share those market. Before California of the few I let observations me a on

products near-term, stay unsustainable time will over is in opportunistically severely products continue ancillary the and challenged. struggling we operations the and brands suffer us the tuck-in for the allow their pricing or state compete In prices to cost to capabilities with advantageous This First, selling time. both most over at the have discounted alive. operators are desire legacy as to economics. brands remains production, to low an effort capital Few in flower

space one-stop manufacturing on they dedicated actively to as and facility savings of achieve a products nobody shop shelf the such customers private but that third-party other is our quality, achieve to only Second, to beat Not retailers need costs, goal. label processing their trying fuel price. are allowing us percentage to expand and can

accounts services but one now, continues efforts, our the what existing basis. and no sense in into for the to momentum coming growth and the sales we deeper that our steady built, direct is look build. continue driving which also new penetration to they a we urgency see not products on cost We quality commerce maximize capital of pricing of to as weekly operators no facility cut in use add our have our replicate profitability. add as will only ensures The month-over-month right to California of Third, and is accounts

as Co, and back acquisition incredibly growth and buttress a suite, mode loved into force California acquisitions. confidence first high-quality to well Island were classic in our front, our model menu. April with having We sales a able production On of in in weeks, and has accretive the we ability has is seamlessly both flower bags. about Cannabis with our pre-rolls. as established it Island in of our our hits their us through integrate more selling our and been including products, their to matter branded infused mainstay the closed the folding in simple introducing into growth Since even California giving brand product received Island a flower brand fast sales flower

to popular more with bring come. their our in award-winning brand excited quarter, are Island, very to are own many consumers the Island brands this Along Massachusetts the our first successful than We expansions to brand California. of holding

Our $XXX,XXX vape Clear revenue Crystal the our growing sales in in products in portfolio have the for nearly fastest the crossed brand first monthly California and quarter. during become time

and [CBN to the top we in Our Marmas a continue that continue added SKU] and gain first to traction gummy performer became innovate month. recently its with Hi-Burst fruit chews

new offerings. explore to to our ways continue will further We diversify product

can a supply in actively And conditions we and and where tweaking and optimize multitude we knobs, the levers, we as are scale dictate. function and which adjust our dials we and automation chain portfolio and drive reviewing of in preferences growth. the sit future we a market of have As operate, to always results

forward in a Bloom reduction vape afternoon increasing to the sales in brands, vapes coming an We Farms include similar this hemp simultaneously Farms, soon consumers acquire while platform, manufacturing CBD a flower, are believe and with to agreement costs by We safe to tinctures. of bringing varieties Bloom successful integrating products for signed acquisitions products. popular to the Bloom suite also in completing have of and under achieve of pleased transaction will expect Bloom California and the form the the we to months. announce of company, and known concentrates, which products We announce look we cannabis XFront that enjoyable

partnerships leading five traded with delivery and have we even now the of side, operator. publicly leading leading national a a label region dispensary large several statewide the private operators the service including in retailers active On numerous relocations, state, with

now gummies, are comparably scaled distillate, profitable continuing the more pre-rolls, with name making are infused provide by it we to and and diamonds, vapes, cheaper for margins it and competitive you no We producing operators, significantly competitive packaging in to state. major these operations little

processing. on large opportunity strategic alignment have with strategic combined top like partners, retail retail and their pipeline in We material with revenue the space footprint, where secure we focus within there partners, toll where shelf is can growth strategic private robust a other label California

partnerships at we contracts, partnerships label and the at, California, runs establish price have that yet a these are Over we today's on beaten practice is in We partners believe start of in outside toll high former margin contract not some we this Private deals. small can private looking market. test XX% with and business of solid lines platform. XFront to processing reorders. California for and in but orders these future time, the This once batch not on deals label more typically move are yet are standard is gross business been switching supply to of costs least

our these partners minimizing over and maximizing churn many revenue we believe value of of land and while assets. we So the can expand with to time grow

before we our the for the We of expansion have see as flywheel as pipeline. view of end that and we we into our year expect to business. said progress the steady a California label through private And XXXX,

growth over cash positive we final in retail securing stages announce brand coming months. the We and hope opportunities are accretive expansions, the also through of which new flow to

Massachusetts. on Moving to

products production and to already has our the no focus always of its year of and offer capture techniques in small Tweak this and our industry-leading better part dramatically quality implementing store flower acquisition procedures The NECC yields. state improved and quality at supplemented market-leading to a We our to by share finding have QX of continue Holliston market Massachusetts improvements to ways facility growing product even our point. post company's bulk due pricing. on price in in to

have sell-through fact, as to and facilities we adding rates now incorporated locations our in well. our these across to meaningful great are on, the In Massachusetts Washington we wholesale at retail to When were and innovations. product due in we meet soften head Illinois, Holliston from pricing already new seeing them currently spring, and challenge prices the and process the able methodologies of are

to introducing of in on product our in flower Illinois, in volume. August. carried Due is recently from and momentum we flower quality process, sold to It this and obtained that see refinements notable off successfully the example, the relies facility. infused methodologies NECC For the Terp our and premium in other the during improvements shelves to able Budz XX% of sales two to our to fastest and Holliston the QX are improved for room Mini our line, out In of excellent us lot to they they make year. history flying from After QX pre-roll the jump become have have and line Massachusetts coming production growing more sales new made been have products drive we product quickly a Stix popular allowing Illinois, packs our shelves. we our continue quality

performance haven't We out and locations our yet. products continue see from rolled strong our even retail to two ancillary we

unrealized upside seeing are tremendous we So already.

wraps in an Madison near-term prepares in XXXX. as commence on focus in includes months Phase expanding operations or the our our facility construction Daddy coming Our retail footprint and cultivation I in Big and to plan production up increased

Andrew? added and remiss Hunt once California new approach These best long in again with that centered of Rob Lastly, as half Wimmer our first we've I welcome Adams our as and time to Senior line Chief Founder, respectively, that, editions Thut leadership performance. Ray fabulous alongside. to hand the I Management now Financial I'll and Keith the Board and the Management year. With our Patel. members made I to strengthen I'd team over closely Christ of Operations the in team new Team General for if In our and our CIO, Counsel. our as a are QX mention ensure Senior call look action XFront position didn't Island well look President and appointments for Vice Amit QX, the Executive be deeper growth. as to Officer; Landgraf as President into Brandon working Andrew forward appointments Mills, to Board, our

Andrew Thut

Leo. Thanks,

are we've As spot belief positioned that high-quality for low we XFront next growth the over result, by company our the in play XX witnessing what is production significant cannabis goods as as at will augmented scale. accretive months, and a chain of M&A. cannabis consumer a value discussed, in now leg the a strategic the cost precisely of lies and start packaged out sweet That's of the that

to maintaining lower to transactions continue as our sales XX% award-winning enter anticipated platform-wide locations leading net our ability gaining products or pricing retail as than outperform, and despite incumbents. California, many in portfolio In Our headwinds. of the demonstrating the much proven increased share cases, with market with we priced and are

we this for the We maintaining created healthy to in which pricing costs an and are very a while year margins, the of the in expect California on as pressures largest our comes other us. started And operators base of with inevitable in we competitor's and bear we leveraged happened. where over fixed brand dumping are doing and away are our California, the end. Because product is while improve problem from revenue grow to scaled share. zero largely our commoditization are operations market the leaning-in state, fact, bringing has the we market cost – are already taking world land building shifting in cannabis brand, production to low haven't

from up been The new pace pace of in even a XXXX XXXX end had June that's future. California grow, to continue some illicit are a factors, and that that all to are of the at this our and retail the signs regional and to significant expansion research find XXX June, in alone. California blistering conservative. quite make soon some industry on in the itself be currently our the a X,XXX finished mere a relief. commerce active A it that comes before tax, month will June, cultivation emerging cannabis quarter XX. in the as service states there of indicates neighboring of the to locations tailwinds. state repeal new usage, issued grows legal X,XXX statewide If As licenses combination groups the water the of license in XXX of crackdown at looked interstate Cali. would of of a the of retail including estimate about a record for licensed Recent all end in close, there the June continues hubs retail and with the X,XXX Prior licenses And end allows point or previous locations by at issuing locations proved is XXXX pace by previous encouraging

the over bulk feeling market. growth net is already Leo over private prior price it's business in and our our of customers, We month three that XX% are already repeat average Massachusetts, month, the improving softness In monthly XXX July seeing counts of sales. and and customer in branded performing from already about so more month label has buying XX-day how end wholesale seeing our XX% sales XX% biomass of are we since despite our we average highest our customers This and retail more repeat while, average month each locations. the said, grown since March. are All QX, as XX-day great

team, to the into been assortment improve result rebounded freshen swiftly end product momentum QX. we shown quarter and of nicely has creative acted The be second and with a the management the promotions. nice business a quality, into As that

trends far, increased strong and into August. July has our Let has in me that few stats per day the those throw XXXX those and also the And In saw month highest average so for way, July, June highest far, out the all illustrate and of July last our so of XXXX a over continued accelerating help to we ticket August. transactions progress. flower into XX% continued by from noteworthy sales saw sales

itself is menus, still the Washington. very working are ever-improving a of is to adopted on progress our second our quality the our about optimistic we reiterate enter the flower stepwise success that in our I from we year. continued as process half the that model With of

We and what are isn't what analyzing always is accordingly. and adjusting selling

brand in underperforming the hard Pebbles we recently retired instance, candy For Massachusetts.

outperforming our component and sizable the shake to of recent While are Mini growth Budz quarter in in like most a the proving be SKUs months.

at we to cultivation a on improve production our in consumer iteration, adapting our shifting remains of In are our Illinois, and and Madison further We schedule. line. ever bottom demand construction each the real-time efficiency facility

the excited board, that are XXX to even coming construction presence. which quarter's These the the construction nominal online experiencing growth. challenges supply licenses but regarding room we some enormous retailers XX% stages penetration open point the our a teams can expand in approach the not is, of electrical wholesale XXX the expand over a further. we great Phase the Phase and have we great the project expected market completion on years. of me As final the our challenges XX, I of are in contingency power growth On facility, are addition of to our With or timing last of already into reiterate relationships on-time only we the We retail new phasing of I, identified on those have temporary I expanding We two growth year, of licenses retail With Illinois, QX and so expected coming it in market wholesale have to influence for those made this there within footprint call. to that needed. and Meanwhile, XX selling dispensaries for sustained scope for be as an options about event recent are promise year. in still Illinois. is let next holds to we we allowable come out of

between With about rated and Quickly XX online, XX coming the me production MSOs foot I to that million In can of achieving estimate and X,XXX box first cultivation square capacity other will for million a $XXX million were and in we the to checked. that out be doing a to retail locations scale they with the minute full Illinois, underscore complement a be revenue. Illinois retail growth large grow. run Illinois some of of $XXX Let about two eyeballing small QX, of story. in locations, take kind this Madison our

capabilities The adding second by additional box is retail. buttressing the capturing and our wholesale upside

have So started. state of just and in stay unrealized lot potential we as we're getting tuned a there the

for flat increase for quarter review X% for The was is the revenue XXXX representing and let sequentially. to portions as up QX. increased of up revenue XX%. year GAAP as Now XXXX year-over-year. California's Massachusetts the well. revenue adjusted last QX wholesale the the due up revenue X% Systemwide year, numbers and $XX.X from QX an was pro margin adjusted $XX.X in it and million, million, XX% of me over last X% from ramps growth wholesale $X.X EBITDA forma prior QX million, was of

Continued volume expected and drive EBITDA growth company's adjusted increased overhead. to material persist sales of without increases and productions as XXXX margins operations higher to through the

Our solid balance quarters sheet shape. leaving in the

hand long-term due come due costs for was XX, – sequentially of which million here. investment anticipated with associated of we until XXXX, doesn't had balance of integration closing, debt, million and of our to set phase X.X stage down of $XX.X the we $X related about looked As Cash XXXX. Island next inventories, and June we cash party growth as an May and on

and to continue access our very results. ability capital, produce unique We about longstanding market to position, partners, good additional feel our to given

flex. our our to strategy, execute on continues we thesis As

SOPs markets We skills growing into and actively brands, and and are continuously improving successfully. products best-in-class our introducing

me in which adding new product my to developed a varieties new having than and products on more and SKUs are monthly point. dozen brings a launched alone, QX final We basis,

model not course, be to larger has to we our right while larger always so. to become open opportunity to a part enterprise, are By been will goal the a we do of how compromise of it's operates company. best, Our design,

remain commentary will our partner perfecting we it over value ideal also With time our the heavily for merger of our builds value and a low-cost We of barriers manufacturing I'll we that, Everything to be today are in company shareholder turn proving in and again. invested production Leo Q&A. grows our efficiency continued turn back creation scale. the marketplace the before by position doing and while to and to it automation of us as final some standard thesis

Leo Gontmakher

market production believe goods. our represent something an If the significant in We creation sweet we $XXX adjusted via confident is opportunity we growth and current million every high-quality low-cost, Thanks, and and for a up, we $XXX for can reiterate revenue found we in value earn. capture we Andrew. packaged cannabis that EBITDA, are of the outsized drive assets million sustained our consumer share spot belief of

We success to we a of the most the cannabis ourselves and exciting continued be share can't to the piece we and landscape proving our move markets major some in wait in of are country cannabis forward. as

proud I'm that turn next our the the excited of dedication and sustained that, great to at the consumers about a now value model user scale, XX to Q&A. experience the terrific I'm are paving with and shareholders. We in the over always, our our incredibly brands for the open their growth a convinced as lines I'll price. providing to of demonstrate our robust team call power long-term operator will the for for way at With and months

Operator

Mir question ahead. you, of Ladies Thank question-and-answer begin come go we Shaan Canaccord. Your session. first now Instructions] will from Please and the will [Operator sir. gentlemen,

Andrew Thut

are How doing? Shaan. Hey, you

Shaan Mir

How Good. are doing? you guys

Leo Gontmakher

I'm summer. of doing well. days Dog

Shaan Mir

my a the just be quite bit. for quarter by on margin notable It I it quarter here, movement quick the as first sequentially was question. could taking was down and you amount. Congratulations gross hoping Yes. I'll but the this one, though looks you thank a unpack

So at the onboarding isn't part this as the due yet. of which facility, assume California least I'd that scale to in

pains likely there's So growing some there.

or this sequential the the new it kind should thinking baseline this here? Is increases? impacted you So margin quarter from we how anything you provide do going anticipate on about be could if just and there's what that of

Andrew Thut

and team are this our Keith Adams new I'll this Yes. can turn Perfect. one. tag CFO, our of Wooten, on? over Finance you to Jake Keith, EVP

Keith Adams

Keith Shaan, Hi, mute. on was Adams. I Sorry.

was pricing pressure where but of yields on of higher acquisition to the margin we cost but improving we'll margin Island, at talked higher back the across with and of automation, states, overhead. As start it bringing before about, as pressure fixed spending we also see we get increased the more to operations was absorb you stated, scale, on part the that

seen again, or so we the resume And better. to previously you've expect what margins to

Shaan Mir

And next Thank question. my just operation. on then Okay. Illinois It's the you.

facility? you So establish sort in Illinois, And store on the licenses new wondering to started announced new any are then of if back. new efforts they how some of you to brands that opening could the licensees XXX compare weeks those just just you was what or those your for dispensary and of timing I will or in a cadence get out already operators. think store the front reaching anticipate the add, if Madison of few relationships bringing underway kind to to of you that

Just wave could on openings in preparing you're how anything that you provide of for Illinois? this new store

Andrew Thut

want just to Leo start? you Leo, Karl, one? that take do you want to and

Leo Gontmakher

process some these first of kick and ear slow gauge Absolutely. a I'll a been on national to stores best We're getting ground our here. the take when locations opening. doing to at the open can level can to try these on to keep be we will the Illinois. retail Sure. It's a a local in

going to provide can the grow buyers stores we that hard as as retailers, full next, significant around, Daddy as ground new contact many new as with and online, we once make team, and the to just come they of Big wholesale on constantly wholesale, far we're definitely product the contact going confidence to that shelf sales are Our regulatory, the I how potential as say full with in we're possible. sure to are available quick all open really the with get missed Karl the open information come have there comes that stores anything the suite to and things locations tenders there? packages but we as on to bud feel it's up over very tell confident this or year the comes is that

Karl Chowscano

just Yes. Not really. I'll it. add to

to for this plus of towards way what actively infrastructure the in arrangements turn we very upon confident or outlets look market able we turn fair has so are we been we're acquisitions and/or to in can flexibility actively shelf the the off relationships we open have retail the built – have through time, the not in pursuing the We to going at looking Madison amount only space that but also Illinois like. a our on own as facilities, to new designed, order are which have point we're in terms great end where we of the year, wholesale with have looks Madison. of region But to canopy depending be acquire in

Shaan Mir

Appreciate the there. you. And color the I'll Thank it now. pass congrats on on again, quarter.

Andrew Thut

you. Thank

Leo Gontmakher

Thank you.

Operator

come Securities. will question next Colin of Your Instructions] George from [Operator Haywood Please ahead. go

Andrew Thut

How Colin. Hey, are you doing?

Colin George

Good. How are you guys?

Leo Gontmakher

summer. I'm We're Busy well. doing doing well.

Colin George

million it about that by the since was asking post in a flat quarter. on the a gross at busy was one-time normalized drag sales were relatively behalf of on Just the it Or quarter, and some trying the there EBITDA in EBITDA out flat. earnings looks of I coming down gross I'm quarter? might profit If it Neal questions that what it's gross a the could in out into levels of is been I'm this to and get cost margin SG&A better relatively that the would've items be back a market on here. during $X the busy here. came a here] period. a looking of a basis, just want to profit second week Yes. for It's us roughly Yes. like [for dollar Are dive backed have that been bit idea a of it of OpEx? during the

Andrew Thut

Keith?

Keith Adams

we're both that Yes, and Yes. the as costs I'll Island you with integration activity other and just the financing jump M&A acquisition said, and doing. transaction had of some one-time in. we

spending, when increase out normalize you start were and the the – So think also. we'll margin EBITDA of back to adjusted back where again the we out EBITDA hopefully we to gross those in where before

Colin George

Okay.

impacting pretty on the flat those been one-time level? So level margin of then SG&A some quarter-over-quarter with now would've goods gross is quarter, in and right normalized costs of much cost in the the the

Keith Adams

gross us margin too. operation and will And the the help yields significantly getting Yes. the in higher getting scale specifically in the California

So…

Colin George

Yes. Makes sense.

Just trying to reconcile you. back down number. to that Thank That's EBITDA helpful.

Keith Adams

Sure.

Colin George

cultivation essentially more facilities already? And I’m in the a good acquisition. acquiring? for you they the guys your sounds diving Is state or there. and more in nice just like one portfolio some are the that brand to then It Do outdoor another maybe that Bloom just have the add IP brand it anything bit into me, like

Andrew Thut

to to it turn answer Ray, want and that Landgraf to over question. Ray I'll Leo start? you

Ray Landgraf

Sure. Hi, to meet Great you. Colin.

Colin George

meet well. as to Good you

Ray Landgraf

asset The deal. forward an folding to portfolio team Bloom equipment, here that acquisition the in addition some Bloom, And to some coming picking in look assets next and we're on into of the months. some staff, the is

Colin George

Thanks. Yes. Okay.

attached So maybe facility for pass just one me before is last to that. some there sort the I of then line. And I guess

Ray Landgraf

attached are it. There fixed facilities overhead no to or

Colin George

are facilities no There attached to it?

Ray Landgraf

fixed or facilities No overhead, no.

Colin George

Okay. Thank you.

Sorry, broke there. I up

or deferred in impact periods further me that taxes now. Was last that was sector been last over topical during the little might the cash or Okay. then And one flow there for any paid the just kind out there into of the getting has right bit. the pretty just cashes quarter

Keith Adams

we is is liability against tax This the being payment at against QX the this time. a payment – made one rest deferred of We Keith. a made a and

Colin George

Okay.

Keith Adams

over liability yes, well, $X a paid over quarter. cash federal Massachusetts $X.X little out a taxes being to and the cash quantify that so million $X in as million in million a taxes in little just And tax

Colin George

I'll taking Okay. for the the That's quarter on Thanks. again the and for me. here. my line. thanks Congrats all pass questions questions

Andrew Thut

Appreciate it. a Thanks lot.

Operator

go Your ahead. Howard Please of Penney from next question Hedgeye. comes

Andrew Thut

Hey, Howard.

Howard Penney

are you? How Andrew. Hey,

Andrew Thut

man. you? How good I'm are

Howard Penney

do I'm I I capital. – the for you dispensaries? to of you what you your much to suite maybe speak could think manufacturing what doing in to get might capital you could take know wondering are full to you said I was Illinois you it access you have facility. to well. think for hoping then – And you might speak take was Thanks. complete if how it needs the that to get

Andrew Thut

Madison into the is will year. we – financed as have build-out, the some the and end on on that move here Madison Karl, Well, well, equipment the fully are so on we we financing of the by IIP dispensary, –

So for. that accounted is all

where new a that deals small small a license those of to license cash of are stock acquisitions, retail at stock. we're of Howard, use or terms we of looking locations or amount and bit lot maybe a be In likely little

very So upside in our are given industry the growth the something and given stock operational is and – in partners what interested opportunities. is are acquisition capabilities our level our they people view company our of that

do all M&A we we stock. think we year. So the we when acquisitions to going for is highly confident And currency move end accretive main the be that are the can of of here into as

Howard Penney

can If Okay. this… ask I

Andrew Thut

question, your answer Howard? I Did

Howard Penney

Yes.

you. Thank did. You

Andrew Thut

Okay.

Howard Penney

And like in guess, different way. if but ask again, actually the a question the could I I of kind same

get require now. there, you got you I your any capital think, I triple Leo, or your said could correctly, write to you – no down. I've If revenues words And the that you revenue clarify under quadruple base. triple additional quadruple so doesn't existing with so those is could that or could asset them didn't

Andrew Thut

in jump Did No. there? someone

in Howard, feet And retail desire California acquiring, are about at – are involved our be always moving. our we're to very Illinois. We as desirous be very getting We've in retailer. looking and a in vocal been to

are our instruments, point at extent a going cash also partners positive we're California flow of very about flip do free And is And through think much. the that where good we be we capital, are fall. as generative feeling flow we cash to expand to leave we we QX. very but business some need ready this And in to so don't ability need available think to additional the cash our we we our that capital any debt

to So that lot a do this we of we in want have stuff business.

supportive needed. I think and level we're there and capital partners to they're board that our with on to are what achieve opportunistic achieve, as to trying and we're trying very be

Howard Penney

Perfect, Andrew. Thank you so much.

Andrew Thut

Sure.

Operator

remarks. no this back to further at There are the Leo for questions closing conference I'll time. Gontmakher turn

Leo Gontmakher

and forward up-to-date growing we of keeping to joining, our progress for on look you business. everyone Take Thanks, care. the

Andrew Thut

right. All everyone. Thanks,

Leo Gontmakher

all. Thanks

Operator

call thank you like for your lines. We conference would this for to participating Ladies concludes and please to and this gentlemen, your everyone afternoon. disconnect ask

4Front Ventures (FFNTF) 16 Aug 222022 Q2 Earnings call transcript