GTII.CN - Earnings call transcript Q3 2022 | Green Thumb Industries Inc.

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Operator

Good afternoon, and welcome to Green Thumb's Third Quarter 2022 Earnings Conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the conclusion of formal remarks.

During the question-and-answer session, we would ask for limit for one question per person.

As a reminder, a live audio webcast of the call is available on the Investor Relations section of Green Thumb's website and will be archived for replay. everyone call remind being to like that, is today's recorded. I'd over now Weaver, turn will to the I Communications. call Shannon Internal Director of go Please ahead.

Shannon Weaver

dollars Please measures filing. EBITDA. note reconciliation operating SEC earnings all otherwise our adjusted Ben. can Green measures information after to discussion, These statements. financial quarter Thanks, could release, or today, these and unless and and EBITDA Ben is will from earnings are of risks reports forward-looking Thumb This materially Canadian be Kovler, differ statements that morning to Green including Chief XXXX earnings section statements, Financial in here indicated. Securities reflect Thanks, the no which welcome now, Investors issued SEDAR results here's detailed most Georgiadis. of and Throughout call. including Securities financial this cause to are questions with release XXXX non-GAAP provided Today's or filed date and any refer Green States the may Anthony third non-GAAP update arise XX-K. A the report and forward-looking annual directly financial the may along risks assumes discussion along today CEO, measures, Good in included Exchange United various today's GAAP to I'm circumstances to earnings actual uncertainties Thumb subject everyone. and uncertainties Betsy. Founder to our our and our Commission to Officer, report with revise under website. that the events and U.S. found regulators, call. Form responses and with in filed the comparable of press press and obligations the And is Thumb's release to with on include

Ben Kovler

$XXX in thank Green and the Thumb operating EBITDA joining quarter the Adjusted We reported you $XX even positive X% Thank everyone, the to year-over-year of for our uncertainty. sequentially results, and had adjusted inflation million greater consecutive net quarter. Revenue rising Shannon. quarter-over-quarter $XXX XX% or and for year-to-date. and income third revenue for XX% record GAAP X% revenue Good million economic and face million. afternoon of quarter, operating conference call. EBITDA increased to grew Xth

under our cash Finally, We operations year-to-date. million and performance. these one will crystal and these control no a feel has when results cannabis the legal million solid with $XX it flow and finish good in new this how impact about demand consumer from much we ball spending, think challenges, the healthy. for That was will come particularly I remains Despite inflation on positioned said, for $XX to year consumer industry. are quarter

according increased year-over-year to for consumers. there unit While We in indicator a markets, is this certain price growth XX% is compression BDSA. essential clear purchase American cannabis believe that is an

loyalty with I've X% As a branded Rhythm like build Thumb pre-rolls. strong packaged which Dogwalkers products year-over-year. categories, is over and growth like other Green continues its brand beer, domestic CPG and to consumer continues goods business said declined index to before, Flower cannabis

operating are highly in we Finally, attractive states.

six launch should strong launch results Xst seeing similar which the in like months. to Rhode are look and December We forward expected is in Connecticut, which use New and new adult Jersey momentum to Island, use markets in adult next on

future. of Virginia for we billion the Green over use. Obviously, and the states X% those XX% for over positioned adult New proud and In but we with $X.X quarter, on which that X% U.S. come industry. Cannabis industry In when growth Thumb generated York is rate in that equates sales contrast, $XX in quarter-over-quarter. addition, out, of X% are online the year-over-year is the achievement, year-over-year both third run Green billion, to grew Zooming of well Thumb quarter-over-quarter growth are and focused a

by The spending, as passage as the laying order growth for the Biden our disciplined Senator industry-leading and positive old to capital news hard this work. recent We Act, creative of foundation commitment executive for Schumer Safe partnerships the potential earlier week are demonstrated alluded to and good industry. are our

that. the to as We Thumb's overtime. a sheet. third which downside more stakeholders quarter. on Market protecting actually K, give continue about We believe XX, operate and demand We example to upside, the XXXX. that grew our continue cash that balance planning the Circle flow prime noise staying of recently can our with the in worrying to and will global healthy a agreement all downside cannabis and value runway for our debt announced degree our opportunity for important focused Even a focused April for we skepticism extended all of create us the against taxes is cash risk, means is store innovative and with on of marketplace, equally in Green retailer, keeps paid us of partnership actually the with just convenience

Florida the market and U. the S. in medical know, largest starters. unique with annualized third what is still you a is only $X market. for an and of cannabis of interesting many billion sales market As It over is

there of may open. Florida no The dispensaries is on other is number cap about that unique license attribute holders the that

footprint XXth, Circle October medical our Florida on in we arrangements plan K. announced retail to leasing expand through we with As

to cannabis approximately want the branded to subject the retailer As approximately will learn approvals, rollout challenge The cannabis. access to cannabis Express can Express marijuana Convenience believe RISE Rhythm phase to identification change pre-rolls, XX.XXShine this new plan Circle Thumb patients including retail had a convenient medical RISE regulatory model and Florida Express of exclusive cannabis open dispensaries, more XX stores valid a forward medical in K a including RISE space RISE can currently while XXX flower, to step a game. card strong agreement, huge we Green medical is locations. Gummies dispensaries. first and routine Through expanded presence to selection opening test and medical of access products, and stores branded in since is And where Dogwalkers seven a our currently we've with vapes. Incredibles adjacent patients medical offer The Express the operates people XXXX in access. lease Florida, normalizing operate we

into Now, of be possible. they lot incredibles pack tank patients this will able and of trip up up same gas. preparation pick of or as Dogwalkers their agreement a to the A in went making forethought fill

near for example, in facility of cultivation will Ocala, which our RISE Express we For the products stores. are new supply completion Florida,

was advance to of expanding supply this retail investment like and in Florida's with the comply regulations, require critical footprint, future to company well make So Capital integrated and to our we for value long ready. have planning position our returns decisions so creation. this range allocation it production product

guidance received am a resolution, individuals it from clear Green want while all to Before we financials, Directors. recent situation our while we three I over turn find insight address departure for review I elected to we the the of I to scenes those Board Unfortunately, common call the the diverged. a quite could became company. it the the the leave and to for not ground to worked the grateful was Former Members. behind Thumb Anthony And opinions where find and

multiple businesses. Goldman, Executive we strong with look experience Seasoned CPG who experience. from Fortunately, board members in benefiting Jeff forward scale operated perspectives. great Board two and Richard And and has branded to have their new fresh Drexler, Financial considerable We Audit a

business are We of are excited to and operating board federally shareholder a team move the committed inherent and illegal goal a maximizing our challenges with forward of who understand value. to

interests. day and corporate is assure strong for governance work stakeholders priority aligned Finally, doing our out Green to it emphasize with good relevant is remains are I that the want important especially a their We that day team leadership company believe as hands a Thumb. to and top in to we in their

preparation continue U.S. to our members potential actively board recruit We in new listing. for

Now the to call Anthony to Anthony? I'll the review turn financials. over

Anthony Georgiadis

Thanks, everyone. Ben afternoon, good and

As net increase XXX revenue X million X revenue the top-line for the in was generating revenue as financial in million quarter both $X retail offset over increased million and adjusted quarter, by revenue. million, XX grew inter posted which million operating gross solid third results the you CPG just Total EBITDA. our of corresponding heard company net and previous company by

and quarter generated margins basis the company the gross XX.X% XX point approximate improvement of During over QX.

internal pressure retail the inflationary continued battle and production its in XX% its While to margins of above target. markets, allowed gross its verticality efficiency, price and increased wholesale many company negotiating, maintain compression company to procurement, slightly good the aggressive

many to particularly continue navigate to we challenging our pressures packaging base, see supply and inflationary cost relief labor. some we of market across compression started our have pricing chain in a inputs, and on While,

SG&A year normalize from well a decrease million, driven reductions focus closely approximated side, based time by monitoring SG&A transaction $X one the stock largely excluding as million On QX. and to comp, costs earlier spent. amortization, continued on made a corporate depreciation, This in the was various as decrease $XX

confirm current with the strategic targets keep its business and share, income, company long-term with balance its along to $X.XX macroeconomic SG&A diluted the from EBITDA business. the per earnings Given XX% our expense, close per company eye target ninth short-term quarter generated Net profitability a intends margin our uncertainty, million in $XX SG&A share to consecutive objectives remains. positive million of the or net on to $X.X and other

over with QX. $XXX ended million Turning to our increase of balance cash, company sheet, slight quarter a the the

cash inventory equals in paying daily combined third and year-to-date. healthy of a plus in result created hard and in Strong company taxes the generated by math one Sam year-to-date, The with cash $XX work on million performance $XX balance $XX million amount operating managing of our levels focus million while the the has all is team. tremendous love. Our million of $XX one a a cash shareholders type operating three our QX flow Uncle quarter our

as make capital cash $XXX company York, Jersey, to shareholders. and million Virginia invested the Year-to-date, Minnesota. in bullish New CapEx have that meaningful our investments Florida, we we in $XX gross cash QX, on in continue will remain and drive investments CapEx New invested returns During gross our million substantial for

capital to our continuing managing allocate family to As while balance into Green we our XXXX entire we season look make the thanks, head and day. Thumb In can't magic enough ahead markets, every sheet. anticipate conservatively say they as certain the about happen we to closing, of we

ever with unpredictable a an As industry changing navigate environment. complex rules, a highly team, continue economic and competition, aggressive we to

However, remain Star, our through we on dedication, focused true the North hard work and consumer.

that our odds, We all and ability in craft to holiday our will by success the think consumer. be with resonate our to brands experiences ones look the wonderful forward everyone products, Ben. to hope embrace that New has a you and to you, create Year. continue with their loved season with and defined all We above speaking retail Back

Ben Kovler

U.S. result. the the of you, market proud there resilient Thank future leadership some cannabis I'm be closing, about Anthony. will position very optimistic and Thumb's industry. but in more we’ll the as Green and a bumps In in Sure, smarter be then the of road, always

Our very our ability. that staying has to stakeholders been game and strength. play end true our and best executing we to the it of investors know always means what us to strategy to our that to we are and stand And to us who It's important for.

exuberance resisted growth First, the growth’s of we sake. have for always

fortify looming as recession, us of which opportunity. a to strong back balance downturn optionality the focus proud can and give coming as the well on approach we us to sheets prudent maintaining our With into a act are are one, in

returns in putting we capital overtime. that Second, generate strong the believe markets will in

partnership continue As to I we without the have could Circle capital K forward-looking that's not mentioned do. will what and earlier, investment happened

mission. helps. in Third, in insulation portfolio diversified expanding to believe that's a of a well-being. access We certain cannabis markets. some provide volatility why happening built That's as Fourth, we from near-term your embrace have means improve diversification to states

by Dispensaries served to a as encourage Voter still capitol President cannabis recent up is policy quarter, who reform. and in there voters to sponsor the support decline. executive right premier HeadCount’s polls, informing to of direction, voters Biden's step while registering This RISE order Project hill is And roll big Cannabis a the a

at continue will questions. And part finally, to proud in policy restorative appreciate this we With flower we'll justice. our to we we every embrace support be are work craft reform and the the Operator? that, and for opportunity. call effort do open important believe We brands, to we up our of and cannabis

Operator

question today Vivian from ahead. Azer Cowen. go Instructions] Your first Please with [Operator comes

Vivian Azer

very you I a surprisingly, Canada selling any much you in a lot CEOs, What you on of got them for? and like, evening. would Hi. it you lot helpful. have guys expand revenue about Circle so Circle financial of and so We guys anything? inbounds K. in a you. announcement, Are sensitive. rent? Thank of this is recognize responsible talked not Circle on with through of your But are actualizing can through cannabis detail spend? interesting partnership [C-Gas] for good probably are there that incremental the many K it possibility Is K on responsible you be sharing Just competitively relationship CapEx Is all the involved? Thank kind paying particular,

Ben Kovler

Vivien. This Not than much can we the question. Ben. we said. you have Thanks, say for Sure. what is Thank already more

we of subject I landlord Florida, that's standard to And have to we this its with are say. think of sort to valid can entrance, rent. adjacent state of RISE Florida. Dispensaries regulations locations all a patients separate the relationship it's in ID the store, normal And about are convenience tenant the and need as is the and in paying a state all

of We the going, we momentum world here, crawl, XXXX. and the are and the approach. thinking a this ahead where progressive in but counterparty what's about is walk, And look I are pleased think excited the to with forward run it's is

Operator

The next question Wolfe Research. from with Spencer Hanus comes

Spencer Hanus

wanted into Or we constraints next think industry, seeing more pricing about thinking you I pricing head the XQ And then that increasing just have minute, then we'll how do industry to are we're on start to we year? focus for into with that? see and expansions? across still to you wait So do a as rational capacity the on capital on

Anthony Georgiadis

started entire great of anyone's a to see the of in year. our guess. of compression if What slowdown experience candidly, that we Where question. the we to kind Spencer, because guess, level that we of we like in price a the like, remarks, a across the prepared compression not XXXX question. approach things from Anthony earlier here. said, experiencing to I'll starting we're really it, goes I same base. in about Look, candidly, one market take the It's don't here, have is the diversified ball, the crystal anyone's looks business just kind it

the markets really to obviously, that's to the capacity a the to really But with market over capital tightening discussion. and on it's seen, CapEx, market next market terms on of impact, say, available it, XX of XX impact dollars capital which months. to difficult Again, this corresponding essentially comes In pricing. call we've less show should up for the that kind down really that several

it today kind we market what really think true time. at the we're challenges to that point market TBD, show market. business of is, comes just again, So, to impact back experiencing up within certainly But will the capital that the some that

Operator

next with Needham. McGinley from Matt comes The question

Matt McGinley

this segment definitely the was your that operators on So Or net having that of quarter? quarter now second something to perspective this is actually is comment flow more I that through P&L third something pricing, guess many quarter? vertically Was else result. markets? price you other key wholesale with wholesale it's in that or should Jersey that help New in and good the in becoming stabilize? that in positive think primarily did weakness that was wholesale and more beginning you your I And that in pricing helps integrated of revenue is solid is wholesale is compression something comments and helped flat made that a markets, that offsetting the Or derivative a looking on

Anthony Georgiadis

the of New wholesale but Jersey So side we this of was quite of in terms grind. overall, experienced helped, business, kind what a on the

of that story. New the all excellent But within I just in We market. the not team did was opportunities taking job presented of market. driven during advantage net. an Jersey wasn't think gross flat a increase really a this themselves kind in prepared a $X it specific the But it one the was million of all and by kind of kind remarks, mentioned

it question? I've second just Your straight. got make repeating Do you sure to mind just it

Matt McGinley

second margin -- better. actually derivative make are what Is around guess the pricing I or on kind saying little I the bit or impact had that in that game either that or a understand stabilize of quarter? I third you your want to will positive sure look you're and top-line a doing positive better pricing

Anthony Georgiadis

were look, It's quarter. the was compression wholesale game. over to this you unit to. kind I didn't -- and I think pricing just we even a less big We of I producing slowdown benefit QX, units. drive mean, revenue relative in able of QX growth the in QX that really certainly to by selling alluded experience help didn't mean pricing impact we experienced more a in The but from kind the slightly

Operator

Craig-Hallum from with comes Lauriers question Des next The Capital Group. Eric

Eric Des Lauriers

you on the important solid about my Thanks as preparing Ben, here. upside. just that congrats results as for the taking for And the worrying is mentioned downside question.

think just some us some bit? how incredibly And examples here. apparent increasingly prescient expand Maybe how you've you CapEx on your in informing that's that of, I past? of implemented and today? Could decisions a become that Thanks. perhaps comment is give philosophy that will the then

Ben Kovler

worries. Appreciate Thanks, paranoid, Good Sure. question. we the one. we’re Look, Eric. are

so of full be is we although prepared thinking optimistic to the we're we're like the instead upside, just for worst. and And constantly half glass people an

And so where it's come up come all what it's place, too especially cash we not amount up know, expanded don't of getting come up control. we it don't bank on M&A come has our in in it's strategy, We and to, healthy up much a keeping debt. what in we've the over can't

particular and than you is long any of too takes late more cost start always think. the So market and

bet everything demand on in thing the product. So on the come, the biggest we the just hard confidence it's is -- to have we

we And tend because wrong, make incredibly kind likes, on on to always the going else got honest to we we've an other that that everybody brands worry make of ahead and or I ahead I we We the about think inverted of just here inverse do? But that questions can I that what's ask DC. invert we what be we win. say that complex create how are often with kind are be unique got a to several expect in simple sleep happening do about the we're in unexpected, problem, we this then is in because you edge go okay, things. that I distribution, it's out everything handicap game. You we what wrong, hard a we we're of not think focus think generates it's market not go relationship, that. think would It's problems, XX states to stories to products different well which worried environment unique federal think that, Those could about analyze of of

hope hope for a and the worst the best, strategy. So, really prepare for isn't

So a helps that hopefully, little bit.

Operator

question Partners. next Aaron Alliance Global comes from The Grey with

Aaron Grey

So bit little wanted the verticalization. here a kick to on more

little spoke there your of selling own on a in the You bit progress terms into store.

on third-party strong, Just know say have might you business? how you that an want wholesale to impact some spoke been Looks the unit of saw. of to much there growth pretty you

do verticalization? where feel feel sort outside of room there Thank of brands some And of your might more in like within is feel So it today of for participants your in the We go some store? then terms market the you comfortable do stand to be yourself? you. more broader you own how

Anthony Georgiadis

question. I'll take Hey, one, Aaron. another here. Anthony that good

goods their able feet. we So, things move need one of concept to your I retail. of being brands lot which your The though own here, able is of say look, owntwo on to the be mean, stand own around a to

not the if do that gravitate value real over either towards showing but will or up a consumer time for can of stop there's period the products other differentiation. You time,

base to our able against So, that products seen pound across perform out our in pound fortunately, kind we've there. the of other are what store brands for is

us. one have kind mean I lean take part not just that's what focused And things continue of of on. to the we kind we're the of just it on in of or are opportunities we Whether incessantly so given verticality, a to is, to

dynamics are markets is those So supply The different. every within demand materially market different.

of top so to a opposed bottoms kind really market to basis. kind it's how we And down up of do thinking as market optimize, us on

just hope kind to question, game. market kind answers within And but of really optimize respective comes we So market down position the our a again, target. to that just it of each

Operator

Please comes The Andrew with next Jefferies. from ahead. Bond go question

Andrew Bond

on Bond Andrew question. Owen all. for for line the taking Evening, our Thanks Bennett.

thoughts a operations maybe by thoughts moment, specifically their U.S. actions on Canopy on back So Toronto through by for recent officials. to recent your to consolidate from the TSX based appearing I from uplisting, touching comments Stock structure quarterly and plant taken wanted permissible get Exchange stepping delivery this to on a so the ring-fenced be your

Thumb and your to the a able is for to Just this mean similar Thank developments structure uplift might puts permissible, thoughts hear for case MSOs? this what if this interested around would is and the these be, explore to TSX? Green might what be uplisting So potential very to you. recent and takes

Ben Kovler

Thanks, on Andrew. question and I'll It's on Good topic Ben here. I mind everybody's been think the that Yes. has it. to speak

I a years. listing been on direct for our several think mind has

SEC, and companies compliant zoom one I with back stay the GAAP S-X registered filing think up, first of the there. and we out financials we’re and through early

focused on to are in directly current that and on be the exchange. list a able best landscape eventually building U.S. We assume the will we business

in in ways. But understand objective the of We say listing and of out ours. changes would different sort are of continue kinds the to I that study remains an what's structural there, happening U.S.

structures that explore prioritization to to in somewhere, new boxes. We Don't have checking think we us focused to ideas. get likely order are happen order very it's to and do always creative on we sort in legal list of to are those make but for open

looking are what our I listing remains believe North studying, the of future. in U.S. And We said. I sort and is the direct Star but

what planning that's are So we for.

Operator

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

Pablo Zuanic

color you of only new And to I the same be Anthony, drivers the members. if personally any in the particularly mean, about common, in give that agrees October, practice Ben, in stores capacity fourth November, through talked thing, regarding can you fourth I about what the key think talk color terms just for and have on states? And you that's Thank it's the constitutes quarter? is, coming quarter, CapEx. personal terms not the know new you. December the you misconduct. in can mean, resignation for will about in talked one of very thank that policies right? You release but of misconduct. -- would the company's to I one that three to I the press question, everyone related Board thing disagreement say as the

I can then. some don't you So know if color on you. that Anthony, Thank can you give But if answer my first. question

Anthony Georgiadis

Sure.

We December Pablo, kind show new target have there. with than up The to the completed that XXXX. in balance of in good going coming other quarter But we throughout We really So juice the date the could early most is of in going in is that think capacity year, and question. expansion part live terms don't fourth new to Island and have of only the start of Rhode the then next stores potentially online. that adult-use. X facilities much is thing pop-up

tailwind lot moment. a within that we not got So at the of the business

Ben Kovler

is I'll second This answer your Ben. question.

thanks did. for glad you asking. So I'm

can Former really reasons expand resignation tough Directors their for I in gave So the on and letter me is to what the it's say publicly that.

say, that's industry. it unique financial the performance, a tough you company's of stated, the do do have emphasized, cannabis we and business and the I as can is financial nothing the reasons controls. What very like operations, our the even or had in know, think about nothing statements to nothing I to support performance, financial with

for manage not in federally of is and industry. nothing in were of management day particularly cannabis aligned fundamentally common, the know, you really management perspective, not From operating Former fundamental. not on And as a relating it's aspects to and risks everyone. Directors an some And It's core So we remains our aligned space. illegal having common. board every my

prior to say appreciate as governance the and remarks insights do remains I the business prepared So corporate finally And a focused we're said my as strong top they but the forward. -- want moving brought I experience and their tenure, and as really in to question, I priority. on

listing. to board in potential continue preparation for recruit actively We U.S. new our members

Operator

Partheniou next The question with Andrew from comes Stifel.

Andrew Partheniou

Congrats could. How collaboration and have on came quarter, to on on you it? and I'm you And Florida wondering, just on Maybe seeing you see, of Couche-Tard the other long that agreement. we congrats in if companies how as really common businesses? this particular, ladder conveniences jurisdiction? continuing been well the about could versus if be? in Couche-Tard talk deal working Alimentation aspect Why did between there's any GTI choose as both if operator could any kind both a other the

Ben Kovler

I'll I'll share can. I take that what

so for Couche-Tard. And speak can't I

So foray down & of takes call. is said that path That it as across everyday think us every is thought like it. as counterparty to the a consumers to This been I drum first about not we've while that's kind cannabis it. leads in us cannabis how life. the they banging strategy and us arrangement done we a easily into spectrum can in accessible strategizing consumer, this, They've across seen supply progressive We've an to be our any and and Fire a cannabis. me a arrangement, for thinking conference country in how and and their been for this Flower, partnership, speak leads to landlord about We've means of seen more going well-being, But and anything thought the tenant, and the American planning across like how I chain. that. do we've is you've everyday American their the

we learn have making dozen head in XX of sure XXXX. get right. test here. aligned and very a down that with what So or we about that We're we're very We're coming stores and phase excited in executing

and Thumb continued drive to the time. would and we better more this look a as are open Green approved that. you'll over those how those those like what when ready or and on we that we and just arrangement. experience what thinking is sense, think continue trust similar to consumer will see emerge inspected, think from comments common I So like no the with do going. to There answers more them when they're are are anything That's get we

Operator

The Sandler. next with Michael from comes question Piper Lavery

Michael Lavery

the and I by just to just it you ticket that? you at consumers? is and the maybe increases of driven gains lift the sure to or this can helping share consumer, of Or kind price from terms volume But XX% is of see and measure. primarily with in unpack -- you those much behind compression wanted could it's it what's hard all per some traffic? if -- Just illicit trade? is least really understand I'm how seeing Are penetrating drivers

Ben Kovler

in. and growth Good question, Mike, know. a if prepared there stat, you're is in to, start I Thumb jump I Anthony is Jump will referring The this think not don't I'll industry right? the in, BDSA maybe said my Green XX% I is data, remarks Ben. what unit

Michael Lavery

that, Yeah, that. about sorry understood

Ben Kovler

so we recession I viable real essential as that for we share like is American cannabis sees and from their a what resistant. the is, of really, said what being market. consumer And talked We take as about well-being, it's

think holds that I true.

aids the to buy might you continue life. get for bit it's makes So that wild from get of going along insights instead daily dollars, sense, a see it that it's experience to the talked for to premium what those lot a your to of price less lines, lower of doesn't question about us, on because been lot do for I buying a consumer in it but value little positive think half a we your lot not trends product seem leave aids, a

form and begin lot and we a we consumer understand happening. what's confidence as base of XX/XX so factors, behold, have to in low and those understand the growth. unit XX% And And

consumption think leading think and easier growth it a from as don't going markets, where for states happening as in of massive your experiences unpack growing, in are consumption also coming peel share and New I growth is little in And seeing repurchases, and is standalone, on, as have states position gain on we to the ingrained think markets believe that American we a is new back state but their things. there, are convenience what's look in new those that of make I are So you individual certain lives. combination at the up a that on-prem coming XX% for store. and lot illegal, others of you I and better this Jersey bring to down, not you consumers, consumer

Operator

Capital. The next with Scott from comes ROTH question Fortune

Scott Fortune

a then future? just Kind TDI the Are guideline quick, York in talk the U.S. with timing, discussions and listings and exchanges the out of illicit York to seeing new more of of thriving And helpful? becoming kind optimizing up more And the be Real Cole market like there's had market want Are there, to New talk or the what's it to Memo potential slow pathway California kind a of on expectations want FinCEN established you there. concern to follow kind And about regulations where New retail is that'd to seeing market market of for sense want about rule with in overcome say plus, than you potentially market. up changes Europe you AML going just right that the the what’s or there? past? of to on – just exchanges listings? I I coming be out? up them,

Ben Kovler

good tax United it's well-being, about communities need of States. ago. lot And questions. the also get about an saw is we that opioids, and saw other month package listing, this we a we've you growth of a think industry a everyday bringing economic revenue. Biden in I A the On Senator we Sure, of couple think sorts I a week, This sleep This little things. talked talked hits that comments is Schumer's stimulus jobs, thanks Scott. closer, needs

a So in of unclear. little a other But for need capital makes access what's the the entrants bit rates, newcomers. actually lot strong access, happening rate non-paralyzing especially in at especially capital a industry the rising force that's to this is the there be How here no must is industry There it happens, sense. details, environment. there particular, to and new in for or is no

a as the which banking produce engage is small part So us very stimulate access to favorable we're in we of loans to structures order investment. positive down, of and created capital to to our listening in go capital something happen and has but interest as sort U.S. business and capital some that system, on to positive new we've interest, of machine here can the on stimulate a

next There end lot going and are Rhythm plus, the head like the we indoor premium we important want part as of execute. the of but something like in consume there election to towards are like the to we will year. of all were Obviously, On to is state down a that. Flower. the New see York, is million lot story, that, and and noise, the of a is XX So week's who SAFE same table people phrase action. is what something looks There

controlling We focused what doing are can are we on very control. what and we

are in employees. community. love So Warwick. facility the We world-class love We building we the

We are excited.

forward We sort doing of are looking that. to

the situation are It's clarity out confusing regulators. for from We a waiting there.

to have rules, how conversation be are about the constructive structure trying how and the how will asset work. timing the and an We

a is mind, say, licensed be the 'XX think hemp California Keep has there medical of XXXX. I are. a all issues, later, lot will we California just it's passed New York in little New And in there York and ahead to okay. growers. years

a have yesterday on. going or interesting requirements thereof. go. of We we lack going saw is be a news There as some learning testing on lot to We lot

and and us facilities, building of cannabis experience shareholders, have making for this high-quality we our getting lot products a going. had Fortunately

our it XXXX So I and be state sooner produce think starts We to going head that's one will are think consumption that day open not like I is invested If a playbook. but We strong think and would a a high of in be say we return to and though. of capital execute. We down will to get I XXXX. size, half path storage center second State real for everywhere had it the unique else, in bet, going on planned. Dogwalkers. we quality the flower, Green the Thumb, in lot grow

So 'XX are about York. pumped we New in

Operator

question with Partners. Randhawa go Research Please from ahead. Seaport Sonny The comes next

Sonny Randhawa

pretty a Minnesota. is those to some Virginia the and patient edibles new Hey, for some directly the of markets have How also markets in and requirements new on they And great. full in guys that think related of was I new Virginia Is or color question some are I I that growth ramping? ramp we me for saw color decent ramping could QX? to a patient and additional with quarter my on medical relative give growth other just I think good as Minnesota, taking on were of quarter. guess both you Thanks hoping of how you congrats QX. as tracking in terms they

Anthony Georgiadis

here. Anthony Sunny, Yes.

markets. a seeing going are when Illinois, it's patients initial of of of the on pretty Look, adjustments time are to tell medical base, steady tell obviously Pennsylvania, what's some about smaller access, first we saw how they team when Virginia the there. so that, some We kind sure, looks we we It's a basis. questions. on to bump. build. terms I'll on starting at good But their lift. markets earlier kind specifically, take through got going rolled in bullish a this nice at kind like obviously, a both excited the And of are can much point, get very Some monthly we of climb this definitely you

next construction year. of another got facility that the in should have We second half operationalize under

happen kind And more up, year. still to we that, another similar the month-over-month that, In hard kind to we're hard or two open are we that The in of legislation growth. working first did addition edible certainly allow open consumer, again, Minnesota, we market seeing stories of up. for that's The there that also from the should working pickup next an to realities are regulations where have of nice which so story. immediate in half is steady

additional trying to two We have up. we are got open stores

half again, we a and the markets of medical second those one that's kind have the where have currently expansion operationalize And seen of of it's We large essentially place in taking should and the we other are markets terms of off and where they in trajectory can -- timing. before programs to when of at when growth they based the the look point move started just effectively year.

plan think and is for come to in we big best in 'XX states, both Virginia the and really both Minnesota. So, yet

Sonny Randhawa

in follow-up two total Twin patients are that guess, and Minnesota. be think XX% stores those area, Cities Just two to I new the are Are the only going you the, in on stores? of market, have patients to new I

Anthony Georgiadis

Yes.

way kind stores So, breaking of to down of open populated have areas. highly we that's dense Minnesota But right. jurisdictions. are absolutely has that in still The unique two the a

working And hard pretty get we're to working, so those why that's team’s open.

Operator

Canaccord Genuity. Bottomley The Matt with next question comes from

Matt Bottomley

just a might more Just slight expansion on the margin. wondering, basis. on EBITDA I'm in adjusted the sequential but This be housekeeping,

number, but SG&A. that declined, had a there adjusted in basis So, bump had SG&A like you pretty it talked on face of looks the consolidated was the an on sizable

to non I'm that then about transactional, element non-recurring? are resignations, it's So just were the or follow-up consider I And or just the the if more if And opinion. difference there's and to then think But to sound had just know between cash thoughtful had federal operators, quick me. board which curious guys they're a asked things on you operational what I you there's industry, to to how this issue. all Ben, a then to not Pablo impacts press that a very -- that alluded in you mentioned, differences it's some how does It's of to schedule – non-operational. element one you

legal and operator, misconduct. impacts Although versus every state every albeit, MSO personal it

it any we're of that putting sort that I'm back and only you analysts commentary of asking getting it's there's other guys, just really all inbounds a -- topic clearly, because I So if -- on. I'm sure to are lot a

for any So thanks comments.

Anthony Georgiadis

So, good question.

a for out zoom Let's minute.

of So, million, that time noncash brought the that effectively one let's had that figures. quarter, down. gap was the with start number $XX were remeasurements, In SG&A some SG&A second -- value fair kind we there about

press remeasurement, closer add normalized amortization, out much Internally, quarter. of some SG&A, the strips the in got that the we comp, to backs is and XX.X value million was as saw third look that release, number strips back cash even depreciation you and that we just that, the was, So look that's why, you fair that XX at the look related at if grown is noncash based you're kind -- you then based at to the that Reality and out add if to normalize stock XX.X. looking at some well. you've that XX.X gap of number the

driven We the kind candidly most second were had SG&A we quarter And is again, starting was normalized excited And the $XX of earlier the that million of that this the really in of now to one we P&L. XX most a the some that third so, up for of really year within that by effectively million in the typing that about was show quarter. number and the quarter. -- did

We by we direct just I'll all it have to Former said. calls. and what can But at we you you we point to pretty than what speak commentary As tell question, no this -- been continue your inbound We as get say the further can't relates second here that we stand for can't and that that. far some are as we've Directors. understand

Operator

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

Ben Kovler

healthy soon. holiday everybody. thanks, season Thanks and February to I everybody us, in you wish early safe March you be to and joining numbers Sure, late for annual will back with and Betsy. a the talk

Operator

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

now You may disconnect.

Green Thumb Industries (GTBIF) 3 Nov 222022 Q3 Earnings call transcript