Earnings call transcript Q4 2022

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Operator

Good afternoon, and welcome to Green Thumb's Fourth Quarter and Full Year 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 go Weaver, turn will to ahead. the Please I Communications. call Shannon of Vice President

Shannon Weaver

Thank Georgiadis here today Green Founder and welcome full you, Kovler; XXXX Financial with morning President, Officer, Ben quarter Faulkner. Anthony year I'm fourth Chief and to call. earnings CEO, Betsy. Good and Thumb's and Matt

XXXX results This to reflect statements Form could the obligations release, assumes questions in and arise include issued after forward-looking uncertainties actual subject filed and responses to cause section States reports are the today's our that the uncertainties earnings to and Thumb may along with differ or today, regulators, annual report these forward-looking various discussion circumstances be with the our revise from and Securities Canadian of the XX-K. to Today's which call. found risks under that risks release this of no date may materially statements. United to events update can our or Exchange statements, Investors and including filed on with earnings These along Green report website. Securities any press detailed are Commission

SEC measures Throughout GAAP EBITDA is the financial most unless included financial SEDAR otherwise non-GAAP US is dollars Thumb our EBITDA. Please and to A provided of filing. financial comparable measures, information indicated. refer in and press non-GAAP discussion, Green will including reconciliation operating note the and in release adjusted measures directly all earnings to

now, And Ben. here's everyone. Thanks,

Ben Kovler

yearend XXXX joining for thank and afternoon conference quarter Good Shannon. Thank and fourth you everyone, call. our

the so and comments. of get discuss I'll with Anthony started. will into new Matt for the dive I'll state today's We and our current of then off let's of final and an All assumed the have has will overview CFO. industry. right, financials Anthony operations. with the close Matt on some results role is our evolved call, now President format observations some that our lead the

year in good across the inflationary years XXXX of hit cannabis, in the feel We consumers billion companies highest environment interest challenges full of about million access continues $XXX operating adjusted especially XXXX, high and other with we of in new million and sales capital, million economy. posting revenue the results concern that face pocketbook, the XX Like respectively. further that loom EBITDA industries, at a EBITDA $X.XX in operating over quarter in rates to recession to about squeeze our with $XXX adjusted fourth $XX and

as and X%, new Even Green Green for Thumb represents in we reached so, growth, but not category a differentiator in an was milestone XXXX which income billion was revenue. XX statement just it revenue increase XX% in year-over-year, a XXXX is nearly Thumb. crossed This $X

ending our the We cash. of are operations both of position from paying cash almost flow in full of $XXX of year of nearly million, are also net million cash which million and proud $XXX government year $XXX

On that $XX a million the for charge, the Additionally, our which charge million million of our maturity impairment reported fourth income to this basis, to million and $XX more million loss million XXXX. of quarter income GAAP net $XX related year. our $XXX cover been X% quarter of business XXXX, for $XX both fourth year, for included in Without the debt, impairment Nevada in $XX will detail. net Matt would've at the April we the extended and net a of senior we in

and cannabis out also around to The are easy and of I in days industry real. our compression waning. want that are price margins concerns point very fat money

the cost high slip. margins and rates dollars tax punitive run and digest people of As capital, out

politicians as are operators, fewer the that including the more leave is will a not of in with are ironic industry talking less. folks, not operators washout and more. about midst We This

indicator cash unit us to the The demand, there consumer us growth in margins has an changes that given a we of XXE of given debt American a the not is pressure [ph], year-over-year we for the show is on basis This squeezed XX%, pricing. growth cannabis marginal to purchase the that for which essential zoom player, for unit best out, continues flow spot is see like-for-like massive pricing consumers. but if

decision we know we now, Green every is cash dollar It guides that probably you of spend. make By Thumb. king and every

meaningful federal restrictions, creating executing having our growth and and to [ph] is sustainable a critical strategy value balance no for relief banking Given our absolutely stakeholders. on strong XXXE sheet

million years, double the in employee deduct dispensary during return, cannabis or business dip irony the state. collected billion the policy of glimpse three our income Yet start-ups and Over a dollars. some cannot $X wages federal social and Give that rent past new in we equity tax Illinois $XXX solid in over tax time, at same and have on tax. their by tax current state you Illinois Illinois a dispensary paid

growth growth The is of a in a XXXX. from attracts US tremendous reached billion decade lot zero prospectors get and ago. cannabis quick $XX This virtually hopefuls. That rich industry kind of

believe Dogwalkers, amazing of success industry rhythm, boils capital believe For managing Beboe. products. a and to will variety Incredibles producing We eaten and in and get by folks in these the We down caught true reasons, bear. this

said we doing been would we do what since going public XXXX. We've in

of in rights long-term now of cannabis disciplined, and the through believers the and US vibrancy by wellbeing and most So industry. focused, viability true our hardworking,

the long For getting to traits consistently and look know these demonstrating us, those just forward we term. over you to to short

weather that fundamentals, to common a business. the consumer, the confident sense while running macro to our sustainable studying attention good paying and shape turbulence in by practicing are the company We is

especially for me worry the among Green drugs. by in strongly build black does opportunity participation What to fresh for the dimming wealth those Thumb is most brown on and has entrepreneurs. advocated promise the this for war impacted industry,

programs. there's some communities, consequences unintended generated license social led states have disappointment. With that a equity lot to hope those and instituted excitement This the been best but widespread of intentions, in many

you're penalty difficult operator, severely people as tax restricted licenses or a access with that social When to operate becomes retail very single supposed equity once helpless. pretty to are create cultivation the very industry an in [indiscernible] value, awarded real you capital The facility. and a have to were contend less with to licensed a to help it

the preparing new distribution. the hurdles We the in geared thrive formations communities benefit loudly operators of new product entrepreneurs buying a emerge, ahead. from existing fight would Until of everyone from believe more would a from and then, fight could these problems supportive those would solution business by for would options, Thumb government. good advocating and entrepreneurs have Consumers cohort continue programs towards to expand will Green federal organizations

as long change cannabis the but for voter voters forward festivals. would social It best federal hopeless, drive With why is and and representatives achieve form RISE legalization, equity attention safe almost it's think the to vote, constituents right increasing would participation way cannabis create across sponsor taking country we more and to but a headcounts and no especially some to now, to meaningful people Dispensaries to in well registering by look concerts out younger the of of premier project, new is dispensaries to nine as is voter pay at their you generations. favouring state closer That's results. of too programs XX banking, means Americans pass

can industry finish. next see entered runners and over we innings, size and decade, will We while a not marathon this look to the out an and in continue have that triple middle is all the

since XXXX. in confident place in have ingredients we the are We

in We the the assets it have the right We the creates. and plant, product the wellbeing states. team, right the right believe in respect

Now 'XX. XXXX what Anthony? over to our I'll expect turn in our call to newly about appointed the talk progress operational to Anthony, in and President

Anthony Georgiadis

everyone. joining. afternoon, for Good Thanks

favorite, with in the in largest we number million adjusted partner, ended throughout current Ben million outside $XXX is CapEx cash a mentioned, the control, model back a Green invested of record million solid EBITDA. our on our operating December $XXX with generated retail Uncle into the revenue Sam. completed rebranding notwithstanding our remaining We out the of for We XXXX. operating As XXX% We XXXX despite while taxes RISE our and in cash, concept. year business our We experiencing store Thumb. gross generated rolled throughout flow $XXX gear and financial we headwinds

the include Ohio, in adult-use projects of sales Pennsylvania, and expansion Maryland, Island capital CPG accomplishments of in Jersey. launching Other completion Rhode New and Florida the

a Incredibles variety from In such company of and the addition, strains, and gummies the drove Dogwalkers launching effect its Gumming. expansion flower Dogwalkers, brands market the through ratio rhythm, to additional the pack, based XX as Snoozzzeberry RYTHM address Incredibles Beboe of Beboe of the

and combined many We with experienced of respectable, supply financial while it as was lived we on a investment a hyperinflationary global chain banking costs through up at business environment that compression fundamental and drove Washington Yet, tough reform. as costs, price forensic was got markets. at capital left our in altar the well our crunch basic a both by year. We our operating performance

remain Unfortunately, challenges a as while macroeconomic us it will look we with the XXXX a ahead, and in for seems as consumer result.

are believe and been thumb XXXX. well has since balance and of for our long-term our core Disposed ever, than Now management green success. in cash both sheet that more we flow shareholders are have components generation critical to founding DNA

At time, not and doom glue. is all the same

of generate Pennsylvania, flows, to grow number various even should in stores cash to Florida. catalysts in Nevada, positive and continue Virginia, improve. retail many have if a opening include markets Minnesota, our They of don't that We fundamentals of us and allow revenue healthy additional

for best Virginia, of infrastructure chain in of new Island. Continued strong Maryland. at and the momentum value end shared premium growth compete leverage the where in Flower the class in to sales commencement New Connecticut, potential and Rhode continue Strong we and indoor our Minnesota, adult to Jersey, demand Rhythm

diversity product well of the will efficiency quality. we continue ahead In value. our intend improving and expansion consumer product as within to substantial further on shelves year industry CPG, focus As we at rebrand, we retail, development through look of the operational leading our corporate of to our and portfolios, product execution on focus strategy, omnichannel depth of our and to balance overall keeping on innovation and as the

success Of hard all possible and will work be our and none incredible of dedication. their without course, our team

thrive, that role clear is team that and than investment playbook Number As the to the team, utilize to I, would to and star got levels the are work our continue outstanding continue need to and as president, of largely our I've it's inventory. especially order in sheet, our assumed to balance cash the of ever we us manage one, closely together here. total more

ones the improve operate Two, side magic and cash develop day. all maintain investments. make else. especially they the five, above flow business and Three, that the the CPG generation efficiency, business, capital all on our Four, of with expense each spending build and as continue and on are strict operating team every operational focus the discipline happen on the to

With his us that, Matt and contributor the in prior a our call be Ben, may success results, and CFO and going all for new XXXX to Matt together years. been to working XXXX, you, for review been I'll of over Matt new I turn of name and a to over Faulkner, public he's have our since while key the QX

So Matt. welcome

Matt Faulkner

first happy hello, Anthony seat. I'm be to the this time from everyone. Thanks talking to and you for

generated As the we to Ben company. achievement compared in year. major in This increase just over revenue a and represented $X the for XXXX, prior billion mentioned, XX% milestone a

of of $XXX Jersey legalization year. adult-use year-over-year generated acquisitions The New the from quarter made XXXX. increase increase fourth X.X% revenue was last quarter throughout a fourth revenue and over in sales primarily by reported driven We the million,

stores. our key branded open distribution products, traffic, expanded the contributors year-over-year Thumbs increased and and company's performance included openings and of three XX Green to retail the store new operating Other

fourth packaged revenue fourth XX.X% X.X% X.X% gross base increased versus profit Fourth the of revenue XX.X% million $XXX XX.X% the stores. X% retail the increased full XX.X% Consumer sales XX year. quarter of and quarter, million $XXX year. quarter for for last over quarter for XXXX fourth for of the revenue year full comparable Gross or or fourth was of to the on revenue the Overall, increased the prior compared versus year. and quarter a goods'

and $XXX the For XXXX. primarily million gross year inflationary compression or of XX.X% was decline factors. The profit price $XXX year gross was or and quarter XX.X% margin by in versus million the driven percent full in revenue for

XXXX. critical, compared Cost expense we was control our $XX the fourth those approximated the and refer normalized or selling, to SG&A XX.X% environment general these of administrative to $XX quarter of costs. year. evidence costs to $XX and in compared in the in comp, as $XX one-time current OpEx, revenue operating results million is of costs million million revenue depreciation, last this QX for million million amortization stock-based success XX.X% Turning quarter transaction managing or to and $XX for provide which excluding fourth and

for the cost an for in $X compared million the in last increase of XX.X% prior year. operating of sales revenue, to XX% year was reduction as for XX.X% a SG&A or Total of year, revenue $XXX year. translating year $XXX the million to million costs full percent XX.X% was the Normalized a from or

impairment result XXXX, as charge fourth of a trade also During the a a its This quarter of million impairment rebranding, a and the the the company related Nevada $XX of charge, $XX of $XX recorded million two business. non-cash name million goodwill rise to consisted write-off charges, of essence

and with This loss share million basic of $X.XX net or and $XX last per reported of year. compares The quarter. share basic per diluted $X.XX company diluted the during earnings generated

impairment $XX basic the million, non-cash adjusted share diluted were of for Excluding and the $X.XX per quarter. charge earnings

EBITDA, stock-based was million operating costs, quarter operating XX.X% a revenue and non-cash year. of excludes XX.X% impairment sales the drove of the which for or for compared adjusted just in other last non-operating of EBITDA. million year-over-year revenue as persona $XX in I Improvement operating as compensation, costs charge or Adjusted to $XX increase fourth the the quarter described

The per year. for share $X.XX of net basic diluted company million income and the or generated $XX

or non-cash XX.X% revenue to the year. were XX.X% basic of adjusted diluted Excluding Adjusted $X.XX year. compared for $XXX charge was million $XX $XXX of the operating for or year million million, revenue earnings EBITDA last and share full of per impairment the

On of ended year working cash with of sheet capital the $XXX to balance including million compared front, liquidity the strong million $XXX million we and year. a $XXX last

these QX full to our In demand. and go summary, branded investing in future. choosing right the to distribution in facilities deeper look been wisely our We've about results forward product and expanding we to good markets markets, in and deliberate year feel consumer in thoughtful meet the

maintain our execution forward, and value As high our look to to CapEx we'll shareholders. maximize we allocation to continue focus on returns

Ben. I'll turn over to that, With the back call

Ben Kovler

very serve and to who Thumb highest of grow our the Matt. members cultivators dispensaries who Thank from quality In across Green you, grateful our closing, I'm customers patients our country. the thousands the to team incredible our team, entire flower and

In our by how combined efforts together, outstanding we and to culture. delivered is grow, the deliver creating report, social impact that of building the was The team to the in meaningful It's to dedication year, inaugural from we change results I published us our XXXX. plants struck report. This the to we glue customers. Green we holds produce, Thumb's products the wellbeing important

our on it. take hope website, find few a can our You to you and read we social impact minutes report

global Congress the complicated, divisive living role US uncertainty, Americans leadership anxiety. I business, on am of the deal future cannabis of market highly about regulated consumers, highly in the and cannabis and it, economic a a optimistic Green great Thumb's is a and also federal We're pressure demand while remains. from with

our of control. these All things are beyond

we Rhythm follow. the and will to your the what control, quality We Dogwalkers pre-rolls gummies. we Flower and will and we where dollars on rest how need can and of invest there concentrate focus and So Beboe

on are the of to if ship you focused cash while long-term returns keeping horizon. generation to eyes use remains may best prepared We what and right stakeholders. are capital cannabis the long-term to we navigate intensely our Come our value weather in opportunity it. and for fixed on XXXX, all immense, create it of The have deliver

for With the Operator? that, up we'll questions. open call

Operator

go [Operator with The first Matt ahead. Needham. question McGinley from today Please instructions] comes

Matt McGinley

Thank you.

but XXXX experiencing 'XX in that to lower in compression, achieve What the a be actions Illinois had additional or now I points gross and margin wholesale sustain than will be previously to gross of able more should can you margin take better, a what quarter? improve that price XX% seems we fourth a were here rapid that you or sustain that. few you quarter, this pace to the So below were rate you rate you hoped that know could assume

Anthony Georgiadis

take this question. Great Matt, one. Anthony. is I'll Hey, that

line every price, markets. of gross that what we're the quarter's down. into on we obviously Number some CPG one growing these Here's do I'll that have to Two, the we're price the impact the not immune we're margin say. likes one, still in of no business, go to see seeing scale a and different side while number

impact you what is when things data that, And makes somewhat the murky front. kind on that two of got happening we've price the

You've got trading folks down. that are

less And at cannabis, of have literally true of quarter where that So compression down. same They're buying they're brand level. time, they buying less quality they're light but kind are effectively an priced that may you were price to the you be a a ago. still have not eighth up same than expensive products the trading called

we that's the So, to things the look the be going watching of we're one pretty year, of as ahead closely. to rest

doing business it what a did only we combat of here and the fourth to isn't we kind the and within the are that We lever have gross one, within few margins. margin watch Number things quarter. to you saw

obviously closely we're line. SG&A So watching the

hard We cash the look continue we CPG the the the on get side -- are verticality to business, to marks of the At more that we're day at at the though, day, and end to do that end that of there's also efficient it's within can operationally on if working of the we're flow. seeing us, for front. see all our about we more

that is the of margin that, toolbox impact. we're So tools while, utilizing we've component gross to other got kind minimize of a in the

Operator

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

Matthew Baker

Pablo. on This is Matthew Baker for

remind view, we new may it what XXXX. to first December? was were drop capacity worsening. in seems wondering since in up prices stabilizing -- store quite our wondering prices explains our if And then ramp our retail of the you want coming we and steep sudden in where question, From Thank For early you. it's or secondly, have us through you could I if know in Illinois

Anthony Georgiadis

one. Anthony. is this Matt, that take right, All I'll

Illinois, impact to So, price not kind that some of we're but alluding you're in seeing the to. extent

One of we're don't repeat that's the border markets. be we've of in second obviously going, the things may nothing seen Can stores but be use that some that extreme your as as generally it's happening Missouri lot with is other seeing compression, impacting you a while question? there, could speaking,

Matthew Baker

XXXX? Yeah, remind or us up of in just through capacity store you where could wondering you have ramp new if coming

Anthony Georgiadis

Oh, sure.

Okay.

which of a So that let's side, additional the markets, this we've have number this approximately really, a I and We've Nevada opening in got projects across then year goal capital and mid-teen following of prepared from last the stores got And retail remarks. start CPG on my side, into Florida. Minnesota, on the mentioned bled year. Virginia, year, Pennsylvania, it's

a that we'll we've new But in facility Virginia Minnesota. operationalizing got be

New turn tail facility year. this should near end Our on York the of

in We Connecticut. have Jersey then place taking small additional capacity have coming New a also in and online, we expansion

Operator

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

Eric Des Lauriers

and my for here on in is control. his cost Great. on strong Thank you taking questions the the question controls quarter. congrats My cost

operating percentage well. So and your inflationary you as in environment have called sales of of decreased absolute of growth your as asset terms out a pretty considering base and both of -- as the course the normalized expenses, growth materially the guys quite impressive

of further a know in efforts should coming around down OpEx? level you reached we CPG. Do feel we've around, these kind you've of 'XX? increasing normalized mentioned any some I new levels of of possibly expense Like -- think that base efficiency

of this base feel level you. normalized operating QX on sort of you Just expenses? wondering Thank how

Matt Faulkner

Sure. Eric. Matt. This Thanks that. take is for question, I can the

XX% with eye but and also balance continue, the normalized reference, cost saw keep on we close the that strategic as past years, for to time, short-term expect we same to targets at two a a to in objectives. profitability range long-term we plan spend So to a XX% the operating trend

can retail are we fixed maintain where feel of given we at you cost the base how operate you So, about only pretty can locations, much we that and there's so with good a but number floor that level. of hit,

Operator

Wolfe The comes Hanus next Please ahead. Research. with go Spencer question from

Spencer Hanus

in you can Good whole, out the a sales capacity question. to seeing you quarter afternoon. industry then back from step thinking increasingly about It catalyst ahead talk as capital looks you about think in just perspective? sales of and taking the And see you're bit become for a a XQ expectations, is date bit what some here taking to they but came I Thank a trends the guess exit a here stabilize, do when as constrained what for we the there? pricing and could market like

Matt Faulkner

Matt. is I there. can Thanks, Spencer. off start This

that QX the… expect digit. dip we revenues don't dip the we want seasonality by factor And -- mid to the mid-single we While provide from to the and QX is take a revenue guidance, Ben, you to know

Ben Kovler

to up on capacity have It's comes and what depends we're we're it really when seeing Massachusetts putting to able in what coming a decision. Hey capital markets it's there. states stabilizing, you're the experienced, see And we're they've starting or experienced where off on and market. capital on and into how other Sure. hone looking capital pricing the Spencer, places Ben, out it where at, starts is bottom with like which and what obviously

the we tumbling which oversupply. think creates the deflation lot we're in which where I of price in, creates out money more really look markets is some is But these in what And markets the penalties, have we a of spreads, in, data where up. rates interest there's confidence capital coming they're a people are of really of new both lack XXX, given XXX or digesting lot in, supply, spending a are of lot tax

which and early we're confidence. not more than higher, some studying bottom, the we're would us gives say we is were. cost of call but So capital data to I Too worried the

stabilizing. that's think I So

Operator

with next Andrew comes from Partheniou question please Stifel, go The ahead.

Andrew Partheniou

I evening. inventory. have and about bit and management the cash generation two on your follow capital namely from a taking Thanks last Good working and a thinking a of the quarter. little questions for question, question and, congrats part on great my this

turnover? levels Do source in Just your talk inventory feel you and, being wondering of can XXXX? see big as about if to and how cash you your a do this you

compression? second any operate that about risk inventories? price markets part just risk? which Cognizant if really be you more than do you monetizing in. not you most you so of source could that the their And Do or at were about mentioned you might more other see you're companies worried And that a environment before think that be for pricing. new the And are

Ben Kovler

first that, Andrew. of part the take I'll

look good our inventory we we level, when feel our about pretty at level. So, inventory

inventory a While inventory of we ours. And last in is monetizing from retail up significant year, we're not position. the between of good CPG a concern that still mix our is and feel inventory

We continue to turn the inventory at a consistent future. pace the and we expect to see that in

Matt Faulkner

the we Andrew, around down? kind happening I'll relative Massachusetts. what's and in And as and push good. it in kind XXXX, world take pricing kind second to in Nevada, further question of it of relates felt pretty We of the could Pennsylvania, to levels Look, felt us just it inventory that

where three have those a I over think a in time. it greater all of supplies of you just period the in situation built And cases, had was demand that up

PA year, stabilized. this like it's seems For

seeing Florida that a think Massachusetts I unclear. think of the just that driver what is in there's of also little described. you we're some Nevada, has I activity bit So a

a I we're is down price think there's lot bit of a now compression resizing. there of kind and a seeing there's of the over-building, little

coming, inventory. Maryland, and places look some hopefully some that absorb like elevated we have our up, place look adult should portfolio, could market use a at where coming, positive a you when it catalyst pop across So inventory that right? we levels, but of that's probably where other you with Fortunately, have

think the that last markets happen number some years, of over totally widespread but it's as kind of I as Connecticut a as compression? several that West a We've the price some it us so, not if markets other limited that few well we have the within were as it and but of further Could watching fortunately drive we're markets. to in close. operational seen certainly Coast launched for

Operator

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

Aaron Grey

and look Constrained for relative going capture, provide make with about continued managing adjustments? some how might between at and that to Are detail Could amid whether brand premium good you price down current your the now some looking Hi, comfortable you on pressure? Some and you're value pricing and right evening with differ your shared mix brands. color amid thanks trade gaps [indiscernible] pricing the forward, question. from potentially or getting the you. Thank the you Wallet,

Ben Kovler

Ben. value some can on short high Flower. various coming And lot best of the end, in on we the premium. offerings think in take we Yeah, continue of to We next end do it. think say price. and can months have We there have with, like that that improve, drive high is to the better reserve upgrade know on happening whether I we of the thanks our we over sort answer. like Aaron. Hey, see XX would it's have continue the, rhythms flower you'll game We the what where we we things limited I'll and time or it's a room is to positioning the we're say to we six at, and the to, a

price. flower in vape pre-rolls, the very a what decisions kind on consumer, to similar the happening it's data then analysis, and next in we unbelievable love to concentrate, drive what basis green time, of exactly its and the the the where package with to a daily how studying we're into like what's consumer all and good have see it and parlay Now use the whether category next we we on Shine, we Ann you this in and mentioned, sell or category we opportunity continue have edibles. to And category, to biggest that understanding proprietary is

we to go. more So got We are. we're upside where we comfortable think with

Operator

question next ahead. comes go from Sandler. Lavery Please The Michael Piper with

Michael Lavery

Hey It's, has been pricing the, Good driving Michael. the, moves. you. evening. that the It's demand supply Thank Clear. the, and the clear

you've little tunnel, you stand the a light the a got driven that bit a be of equity. is maybe least a ideally brand maybe at by out more can the relative of happening? consistently some brands see Some better line. You've far How oversupply, to of but the that, little end got little at from others faint away it'd that

takes carry I more So for weight. for, know what for, to really don't that it

Ben Kovler

in in It's national been -- Incredibles keep you're a the entire in handful idea seeing this Thanks with of national of Flower of best Sure. The sector. industry nascent really We're, stage, and mind Rhythm decade. Michael. is new. under other right? a we're a marketing -- around or it's sort names maybe And distribution brands is brand national the

is able to it able that, to platform we're through a that basis, state that. think see pricing a micro And trust through we build to, really is just to by which to what So, on take brand state power, continues grow. that and

tell in that three years I and the we time develops marketing, it's brand going price, and but in So see with and it, out any which that other the buying national they consumer know to standards work, is stuff over ability the where relationship we've drives that is west the not don't because can't places. you, are the the just what pre-roll people in what seen

invest They if going you kind and trimmed. of have look to we And what for over there. well with the what, happen basic why at the know time, they so I key that The with get, from they're what They consumer. work to see been things us continue the trust and in of to others watching that it's know trying in Dogwalkers, is to failed promise best you've brands. think didn't some able not improve and is

term. more and up in equity spent think be the I the developed revisit show scale I, we'll we, brands But that. than brand medium next over dollars on that'll So to more

Operator

next Fortune ahead. from comes Please capital. ROTH The question go with Scott

Scott Fortune

from bit? the side more pricing legal and offset pricing at little are the continuing the Can to value the, unpack GTI, Good compression to illicit for we're what bit shift your groups year afternoon. of this mentioned side Real a side the lift. here. the the looking Thanks of, just consumer of compression that is color drive really to country seeing that you throughout throughout little a demand seeing volume you're comparison helping provide that quick, XX% Especially or growth consumer penetrate questions. you demand, consumer demographics

Ben Kovler

so muffled, were to just sure I a Hey, You we little Scott, it synthesize right. you just question mind want little bit? maybe that make a heard

Scott Fortune

out unpack volume I with called that has on year. Yeah, the to wanted XX% been BDSA for just the,

think of volume gets legal coming side, the the, for new for consumer from a You enlisted the from the here. just kind the, consumers shift to unpack that's the side side

Anthony Georgiadis

a same price? third something you, you a that's your that would a market? good, at very think of a can is there's, a you the by number act controlled that why party it tested for more untested, why you to if unregulated a, an lab product by put price has go is reality It's that's like the consumer, very would and bank markets, when question. a a and I compress depends continued yeah, least Look, the good Oh, environment. to think these store buy I as within much

the there's think definitely license conversion I into the So, legacy market from from or state the markets. unregulated

The other factor of that here factors kind macroeconomic whole other of are is up host there's showing here. a

what prevalent, are Pennsylvania, they our least impacts for Illinois most it's And within call mid-Atlantic then driven the and really, are markets some we're in that really of again, are the stores, by, macroeconomic it it the where kind states. that, happening at country, where the and it of

from months XX in months. it the more the on their this they generally lot guess than conversion think illegal the three I biggest phone members driver more time, to term cannabis family everybody is At marketplace. last also the So I think kind there's the widespread just acceptance. same in XX of a call did has previous is probably that to ever though the My heard

So basis, I some the enter regular our growth. new also continuing think obviously to on driving patients there and of a are new stores that's consumers

Operator

The comes ahead. next from go [ph] CTIG. with John question Please

Unidentified Analyst

environment the was Minnesota? optimism spending And some there pretty there planned previously Pennsylvania out come pessimistic or you week. news the in hadn't expansion. There's pretty similarly, over any there month changes any is that up question surprised and expansion that kind last One has other Virginia been about come that of to out last guys. state of of states, Hey then kind guys? the of Are mainly for so the

Anthony Georgiadis

Anthony. aware XXXX. all Virginia, of like going in to is are take again. I'll not Look, go Sure, does we're adult use. live one John, the this that Sales look obviously news

opening that medical patients The up well of to the general. as tell state of I'll However, do access continues, the program this, program is nice the registration you in evolve. a as process continues simplifying job really for what and

we about the expansion but We coming, do use this better lot an Obviously have was at it, there. is the day, adult expansion. if feel a end of a phased

plan then year. So, to that of more got capacity end ready two and the open now there and for market. increase between we've we the stores the the prepped it's built we existing such, in And to medical

really us a are then Pennsylvania, now The involved one on of that what direction other probably how closely. see right And bit go to more end that's we're is legislative Pennsylvania. along watching little opine with it's of markets, of We'll that. Pennsylvania, when. going lot I and the are probably session. Minnesota to kind a that through murky the evolves know further But Minnesota in that's and and

A Ben - Kovler

I John, to on the based chime hard capital year for headline. supply is political build a investment The to decisions chain take the the would political very only tricky. only -- thing thing I would Facilities us in landscape make is or

use So nothing year demand the think from to about our people going is are really in month, adjusts buy from we bullishness which on Virginia unclear. the which adult happening Virginia

coming straight, Minnesota of months, they from we demand Minnesota, we're those path not because bigger or bullish That Same and we're to than that's on pa thing bullish to we significantly where months but accordingly the bullish with demand all New is York and often, three on headlines we and in are net the consumers we're markets will be contrary Virginia, across PA understand going and XX is The are today. true. on XX country. or the think spent the

Operator

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

Matt Bottomley

Hey, good evening everyone.

tourism purchasing? in, frequency in they're and potential of Just what's it times wanted some there price market, in else? simply visit sort basket frequency any Las dynamics size? given in the Are of compression to is or go Is that changes there? ask of Vegas, on, how specifically, on or question the color other have you Are happening there on everywhere there just like of habits and, a many and people Nevada that headwinds on, of

little coast. make question, a in or a you on west releases And might broader non-core your at sense are you markets press your in just there other current some make think when portfolio, more? have to from just that streamline exposure in look peers XXXX asset some then them been as some There's particularly it done we're markets might as that of that, And back if environment. you of the now, the sense CapEx think pairing I'm curious your

Ben Kovler

hundreds tough had off I'll Matt, the was in first 'XX effectively year. XX% billion $X a Great. one. take 'XX. a mid-eight gone market, It Nevada Look, from in the it to

a places seen severe was, was we've us it that market. we saw for quickly. one relatively kind that happen So, Price the in things happened of price few of first erosion

in a was a think came COVID of unique. off fast is furious. of It are that that market a that unique kind which right bigger happening kind role and There things few is having tribes in heels it, play the the it and cross I of state state a that from is lot other then really impact The than if wouldn't state at lines to that I same the into there of of kind a this market. was kind surprised And at product time, of did license the understand continues be point. eroding California anyone market

question, you of want I don't terms Ben, the second know, In to.

Matt Faulkner

hit Yeah, sure it. Ben, can I

the prior of going the existing terms answer to one take? what's really that's to it's it markets, asking about questions of funny question In folks the

the as very out on balance think elsewhere. tight, the in you've industry is seen but us exit, are not I sheet, people like of money. our Literally it's cash people

are as as those tight the sort pricing that there least at down, a relief market stability survive. leaves, because exit in seen So that as was supply shut a can you've markets, people people better among very of for those operators

So the we're it. midst in of

We You are, be we're are. of not decisions calculated, afraid this don't surgical the to at. wrong. We've a thumb all we really consumers where leaving understand built and green this But portfolio and we're see manner, who channels upside sort until up we precise And driven the anywhere. the really distribution we're where like evaluating like we embedded It's portfolio. those constantly and in it in now.

So like I the you. like, question. I Thank

Operator

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

Ben Kovler

Thank look forward joining updating Thanks to you. us spring. Thank and you everybody for you. later this

Operator

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

You may now disconnect.

Green Thumb Industries (GTBIF) 28 Feb 232022 Q4 Earnings call transcript