VRNOF - Earnings call transcript Q2 2022

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Operator

Good day, and thank you for standing by. Welcome to the Verano Holdings Corp Second Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] During today's call, there will be a question-and-answer session and instructions will be provided at that time. I'll now turn the conference over to Julianna Paterra. ahead. go Please

Julianna Paterra

Chief or and our quarter ended all by everyone. in to audited, related well Brett Welcome comparisons not Archos, Chief periods Aaron Thank Officer Controller. Investment earnings good included this All results conference company's are were and been based estimates for second as the process. to Summerer, prepared Founder; the are XXXX financial and XXXX reviewed the Executive Rick today on Officer; the call. Verano's and prior June Chief Miles, Tarapchak, XX, you, statement closed as second completion have Officer release quarter morning, company's preliminary, and Financial Corporate prior I'm George joined of financial to

the outlook current due we forward involve looking expectations. of US uncertainties that in results, by Actual XX, and business statements statements our During will make such and the other actual within meaning our ended or on for are statements. business quarter developments differ company's may which industry in achievements June assumptions and unknown XXXX. to those differ known management's Laws, factors cause forward-looking and our discuss based and performance of the and the call, on and events Canadian applicable could Edgar, risks, including statements results implied to the uncertainties looking risks forward materially considerably from or filings mentioned this and Such Securities MD&A

and of also the ongoing of standardized will to as defined GAAP, meaning these results Management isolation do release reconciliation which in a available and today's measures supplemental most have are the comparable non-GAAP are throughout EBITDA, @investors.verano.com, free any for measures performance, understanding measures. that measures enhance measures. beliefs, or GAAP considered flow. such we useful discussion, non-GAAP as and should non-GAAP not includes by our substitute in company's to cash are earnings addition, the but GAAP In adjusted EBITDA financial be financial refer prescribed from the These to to press not

is unless dollars will call Please all otherwise go Lastly, noted. now US ahead. turn George. to currency I over the in

George Archos

thank we financial Summerer and pleased lastly, high call operator second a to in in and open I how the new questions. Then for our today. the top continue level space CFO, am and Brett the a start, morning extremely your will Corporate review joining provide quarter our results I will long-term XXXX with Good overview company us drive profitability. business. To accomplished you more answer we and growth to position up what in detail as Rick the Tarapchak to of the and will Controller, we quarter,

of is the comment audited which restatements, moving Before state our checks financial want through on I still I to Baker quality Tilly. controlled begin, pending with

comfortable the with numbers with them today. are we However, enough you to share

on of $XXX Illinois. transitioned XX% in was year-over-year gains sales market Jersey as New strong share million, XX% quarter-over-quarter. increase adult mainly the driven an Top financials, we of in in with revenue As mentioned, the numbers we share though generated change, to and the subject solid of are final want these everything possible. quarter to transparency, our but the Julianna by line to growth in use increasing eyes, name XXst are and state and Starting April in

highlighted increased by quarter, performance main in our an While over investments Jersey, focus this was we to retail were included where This headcount in both company and a was anticipated added ahead XXX This staff pleased to significant on on in position absorb locations, markets to appropriately with in the increase the year. demand. cultivation employees expected New a of growth. the focus we top-line key the

the of made also in We significant New facilities one investments in making our footprint. most Jersey efficient automation,

we as position one XX and staffed staffing that including in West Pennsylvania. we in stores addition, adult ahead two Also up levels Virginia, more anticipated We've Florida, transition. XX end In in quarter, we of Massachusetts increased facility the in first since online Nevada the our continue of opened Connecticut ourselves use rooms state as in bring and we to our cultivation facilities.

these growth we continue help business contributed the that throughout to the While anticipated quarter, the the believe investments SG&A the remainder actions fuel for will higher in than to of fully these year.

detail light accounting, on office as touch produce financial will only back on, analysis, but impressive still up I and significant macroeconomic as well to our investments headwinds, operations, This and not I legal EBITDA to given of which as is whole. adjusted strong more in of also securities we practice. planning in continue we later this addition In our industry In in capabilities. beef challenging a environment the believe given all margin through a these XX%, investments, includes

business. the dynamic have growing we also believe and time to adapt the as our have that and top ability and and We in to a the benchmark the have We recognize the tier space. opportunities operator, in enhanced we accept again, we efficiencies space time firmly rapidly in demonstrated focus highly

We should anticipated and will performance a the in cultivation future identify with from capabilities, cost significant positive [indiscernible] focus optimizing detriment always our be potential savings from profitability, a every of EBITDA. we have on SG&A. but evaluated Our growth the these growth. location of That to impact along recent as the were said, able not we believe our eliminate amount of retail to investments

We business three and are operations the reporting, viewing currently pillars; in financial allocation. capital

but to an not operational until the Verano will operating are to at side set we today, we have rest with speak standard. the on I will all first three financial areas expect We we to apply financial the will begin reporting. standard and reporting I on update

as our IFRS team converting amendments, is manage calls, auditor. with company to accounting a addition our debt and public, favorable As a to going a to equity lot closed, acquisitions say financing active new XX have go-public round, and we very to been one on raise to transitioning we've while previous from had two discussed including XX rapidly understatement. GAAP publicly-traded We since in an presence accelerated our

We resources funnel while financial our the to capabilities. streamline maintain to commitment have reporting and enhance team firm continued we a to

As experience from Holdings, as where divisions Tarapchak accounting past We as also processes served finance two was efficiency business of the out of Controller operations are to best-in-class involved capabilities Reynolds for of he we I we with Rick that our sure with to building perspective. want procedures. II-VI and viewed tune side highlighted, Chief this months, make from our and reporting updated financial where the our to and the will and have along Group fine few mirror recently that multi-billion served dollar been implementing from spinoffs. standards he Officer. our He continue holds Controller, as welcomed during We go-public Accounting of

served board of is Society. a and Officer of he Chief Accounting Illinois Navistar the Additionally, member CPA as

will explore work We and utmost we to community. measures the within continue also investor to the proactive instil implement confidence other as

to tax once We into a under us, indicative into focused restatements. feel The ultimate capital and the our the in further team. we will the this of With conversion the are in department our bolster resources inclusion the to continue deep initiated markets behind our some incentive QX US calculation. and led accounting stabilize goal added discoveries, these our dive provision for plan issues main prepare units footing resulted a equity This possible. restricted company restatements bandwidth to restatement which We the effort issued our of on stock GAAP financials. to with

cash had we this tax obligation recognize on increased our to While and COGS RSUs, higher expenses COGS, the related SG&A statements for resulted expense a actually flow to and no Verano. in impact had reduced

identified. procedures address the and resources issues We implemented additional have additional to added

are Rounding successfully tiered accessible Verano rolling yesterday, option proud value, a operations; we're efficiency where year quo, seen to has given every during team to creating our been have executive bringing improving our premium particularly we and agility high margin strength of to strong around we adapting vein opportunities been portfolio and and Essence the consumer for satisfied patients and dramatic hands value to in price out this focused the last market, of because busy over our upon offerings are few months with we economic for QX this Savvy, what adjusting spent environment Verano principally exercise out are. their the and get that improve several through Moving Despite status the we that rolled We consumers business, the the quarter, efficiently mid-tier am announced our the was looking of to I last team foundation. brand These include Well demand historically on base. we approach culture. seen ran we to levels changes. last earnings our simply wanting that over last and which our to at spectrum, months, changing quarter's more meet of last especially shifts to never the we've aspect ability address line the call. and levels, launch building on of in for the scrutinizing widen end preferences. have consumer a In quickly macroeconomic of out so changes to consumer consumers brand and aimed value demonstrating having the have the to proud they on able as discussed over us. already ensure

our brand margins the item, As will subtle anticipate Savvy offering. impact a of related lower price to be we a

offset efficiency However, country, including being the to the able of as we deploy impacts. we margin automation across measures, anticipate some

of to Jersey, few adult increased the our Basket versus adult some locations remains New sales. slightly even have in Moving our in that markets, happy we robust. sizes of demand weeks to used use first key are report

We have form measured state Skew one multiple factors. the of menus robust by across in the most

future to opportunities have capabilities position XXX,XXX to will demand ramped growing meet also continue state-of-the-art our the foot state. ourselves the for facility We up in growth square and at

Neptune, XX In two We've to and month. to our from Jersey earlier addition, the Shore within roll Boardwalk. our the are excitement flower. this a month. that such plans is launch thrilled for had partners Shore a location values Verano gain in with selling location Park Pennsylvania, product launched state. continue the Illinois, of dispensary strong the we to and approximately share line earlier generated we this landmarks, footprint the Asbury as we out product Jersey In This dispensary miles line popular and throughout market the consumers our began And full brand

basis I is we to out spectrum. gained as roll quarter-over-quarter Our points additional value namesake of beginning and XXX the only market products across the continue brand share think this

equity customers. wholesale also valued and awarded the are forward becoming recently retail looking XXX We licensees, social to new dispensaries opening

external despite macroeconomic to market. excited Overall, our are new portfolio to performing introduce We pressures. Illinois consumers supplying further our well in is brands

companies in large, CPG seen environment, our but to adapt ability very and You've we established non-cannabis believe in struggling this succeed.

related board. Of course, across not but Cannabis, solely are these the applicable to pressures are

continue are watch We very to trends we'll consumer carefully. but cautiously optimistic,

to discuss Lastly, our I capital allocation want strategy.

Our to has shareholders been way in possible. goal efficient most always return value remains to and the

opportunities largely we on projects, adult having Pennsylvania legislation. approach initial investment have ensure the expenditure right quarter, projection through We second our any deemed state us spent internal as we are all are continue time. Florida, at ROIs, in in assessing capital to employ and front high decisions that of Year-to-date $XX on given million and level the this use constantly making to point we in

ROI. at to and the strategy our will alongside too of any growth, we environments strive always risk never for We but ahead agility growth invest when, legislative if ahead change, change far them. However, has diluting of of been

million some have to greatest Specifically, adjusting million ago than use in We now states. months programs ensure the cultivation were where to and we launch expansion our using for demand the take previously million of Maryland, to $XXX CapEx next million. range we to projecting expansion we few capital plans these of and therefore Pennsylvania, in in phase the and Changes at and are consumer longer retail preferences likely caused impact $XXX will its guided believe we to improvement timing the modify of $XXX now adult and estimate $XXX are Florida year a with spend effect. to us that to also

maintenance CapEx low. Given the age sites, very of and our operation is business

expect this spend $XX than less We to million year.

what but of we be we one carry based evaluation on is we're tax what solely could higher spending, income payable recognize the We of also capital Our that balances. saving. not

cost lengthen of other are to for not our strategy of cadence. available and these the strategy part Verano payment unique However, capital interest is to The debt. allocation significantly below The and large been companies. cost our has utilized tax US penalties of is amongst

We but sale balance to limited options, to tap backs. continue into to have multiple not opportunities including higher lease this unfavorable to cost down, bring

high unfavorable to the We debt. a company given agreements, this have avoided very chosen of Therefore path. these have avoid we cost

conversions of cash our metric one year a understand industry, the we what deferring payable, about operations flow XXXX for from have fully investors by look highest in based taxes ran We on and at are to GAAP should believe EBITDA numbers. XX% to the industry. which fair full debt EBITDA leverage liabilities, we taxes, gross the lease To within accomplishing

average, If for carry EBITDA cash of payable still the comparison in have conversion you the the industry. tax rates premium, one we in we the account the industry income on flows line highest to to

still under we levered we do as consider what even debt our the source appropriate In we amount pseudo payables That is are debt, feel carry peers. of the addition, of inclusive payable, said for business. we versus the our a taxes of which

had on the Without the throughout take into specifics, light what only move facility lenders year. next with sparing continue potential our productive of next to the mindset waves and always we have the we in have very conversations delving facility when the to need We required. to

to proud and I year. detail reporting, that and pains of to this of operating of right Before final half Brett, highlighted; our thoughts we to before I a some the we all I've we'll the want of this moving Notwithstanding very of company first go confident with resilience team commitment have turn on are best-in-class respect in direction. it business. year, now to into a items across pillars some will to the over over joint I Verano our Brett effort it the in the of more as never-ending the turning financial experienced remainder the of am few I over reiterate give

Brett Summerer

We I'll quarter grant year. review financial the celebration stock compensation but the highlights accounted went public the options units detail correctly we XXXX, restricted of and calculating George. last for. wanted I of had second more to regarding the into Thanks were restatements. bit Today, options go from stock-based first a RSU or expense, a when When

However, associated with the RSUs not. expense was the

for proportionate majority of RSUs proportionate. peer total total that shares correctly XXX-to-X needed of RSU need the of for shares to issues did be To Foreign of $XXX,XXX a stated comp to so expense, a part bulk Simply Issuer As as impact, accounting by in we subordinate actually options number XXX. the of not was could and reminder, on When adjusted. to total we the shares basis, the number multiplied the subordinate maintain number be were consolidated Private were the grants breakdown stock-based previously recognized were in status. reviewed that XXXX, $XXX,XXX when accounted

COGS XXXX. in was decreased the of component will obligation QX not the 'XX be lower However, QX cost RSUs for resulting XXX. $XXX,XXX and This both remaining a by in 'XX The year. and XXXX tax and on of and to in for profit SG&A an goods needed multiplied impact sold have gross

impact, non-cash item While the EBITDA majority a for bulk it no the and SG&A impact had on absorbed is year. adjusted

review, this valuation opportunity for we using during direct took a opt Additionally, the issuance later for with share to of it price utilized the the more on align to grants. the methodology closing day valuation

did first the tax Once that our in decrease. uncovered the also quarter we effective We tax rate fixed, overstated XXXX. effective of rate

account we the acquisition to payable because end. made our payments restatement to Lastly, during quarter reflect books amount subsequent period, our consideration updated opened were

paid must upon consideration these specific out, Once or adjust of earn-outs have hurdles, been acquisition payments hurdle is some reached. we exact apparent periods payable such we estimate time once amount appropriately. those based that will until profitability As were

efforts and people focus on control and SAP parallel, to to capabilities George are internal at As review world-class shift processes past. so such our audit in and as our finance of our functions instead us the financial internal will new we mentioned, investing controller which allow expansion of Wdesk, technologies deploying continuing achieve profitability, as can such an reporting our future in to that while

$XXX XXXX up addition growth up New was led quarter the XX% to quarter XXXX sequentially, to million compared the in to by revenue dispensary second and on XX% financial, of Moving second Jersey, share XX% growth or $XX XX% million revenue of million for for the market revenue $XX quarter in Gross and was year. of compared to Florida Illinois. profit last period the or same

expenses Looking the $XXX revenue. a generated at or same XX% such or our of for depreciation SG&A amortization, and XX% as adjusted gross million exclusions revenue. in excluding the for we margin used $XXX adjusted EBITDA, were million quarter

of SG&A, expenses depreciation in made XX% along of which SG&A our However, to Sequentially, in hire be as we ahead think to $XX growth additions excluding and efforts increased about amortization corporate Illinois. revenue. we Jersey, with about earnouts, team would typically by million New

identified we also XX% some at few run, in cuts the was mentioned, million We or for adjusted level looking largely revenue the retail period George revenue within the million the had a of same $XX to As SG&A approximately XX% $XX give or million or are a and quarter and points. take XX% the for loss of $XX long quarter EBITDA year. for last net and of target second

was flow, and six CapEx Turning was XXXX the equivalence. $XX income million we first cash with from to quarter Cash retiring months $XX operations and tax second million after respectively. flow $XX balance the the for as cash majority million sheet cash quarter in ended first spend the payable. million the and six for $XX or months and

range of This the with As our York macro to George associated pending Minnesota and pace $XXX million acquisition. Growth to and between close matching million. New spend Goodness CapEx said trends investment we XXXX includes expect be overall projects now in the earlier, we of and are $XXX

subsequently million made quarter million have so $XX second payment the taxes paid a Regarding far $XX this within and payable, quarter. we

is George efficiently this assets. to sell tax deferred number liability month clarity As some keep the a around we event a also technology, and were that of to continue line about tax trailing earlier, XX manage The outstanding. incur only of source and capital all number attributed if true mentioned we manage our add taxable as represents income sold would license these balance our to liability. to majority we assets. generally to bulk acquired we like continue to cheap and a acquired month payable Essentially XX and I

that Lastly, acquisition $XX made the of I'll strong million million and financial to and payable standing confident extremely we payments support the consideration With in paid estimated continue rest allow best that, closing quickly pass QX to the $XX to George future will our company payments 'XX. it we've through cash our back further I'm down remarks some cash for for of of reinvestment growth.

George Archos

call and not in to do wanted guidance is prudent Q&A, not realm the Before to the opening most this have year. though uncertainties, we built, that to reiterate business that touch confident the headwinds due out to guided achieve to a the and the feel the we macroeconomic the am I mature even outlook the past it's year, industries. of to I has remainder extremely margin XX% while the it impacted we have on for in which

at note; been operational and that we we on this However, perspective from from a continue financial we to premium believe versus stronger our have peers. a never leave I standpoint company. margin you as do an to want can a operate

strong. is sheet balance Our

continue reinvest Q&A. please and that sustainable to in growth. for company drive to strong is it the operator, up we flow cash Our open With long-term

Operator

with question first of instructions] [Operator Please ahead. Global from Gray go line Your Aaron Alliance the Partners. comes

Aaron Gray

for thank And the morning. good questions. Hi, you

amount better to days. be on to drove for early obviously growth question the there; stores first a one So touch good New sequential the of inventory the Jersey, of just in seemed want me,

inventory So on coming when have, let's in further stand where of terms give you still on. for Jersey you some New Neptune color how particularly right wholesale opportunities, now view you

review and be helpful. Thanks. So growth incremental would opportunities sales to for Jersey your overall outlook New

George Archos

Hey, good have morning, Pleasure today. Aaron. to you

for great us. Jersey's been New

we're inventory, supplied. as far As well

More multiple importantly, a weekly almost basis on factors. we're adding skews form additional in

long we're of gates. where Neptune. Obviously the So excited very comfortable with we about time out coming. was very strong a at. Very feel That

slowly. So we're it's today, comfortable delays from whirlwind been We where where to long the good gets see outlook to Jersey. state. to in out, opening regulatory We're at the -- wholesale stores side, in forward we're word the the and tour looking on very sales went We at where and a more we're in and retail side a as headed. continue increase we're

and overall supply can them very we products So with our positive. wholesale

Aaron Gray

color the start, past in as and you. kind I expansion, such CapEx we been there's for markets, quarters. second could some the lot own Illinois question there. It when in of during some vertical gave some been to from you of there PA talked for performance you pressure like of for had being about on terms comment of of stores cultivation previously integration Pennsylvania me, in some seems And know quarter. for inability then the overall, your kind there the sold you some a product rebound And allowing key as opportunity offering and that wholesale

in some just seen of terms talk peers, speak we've within your go-forward products might view Thank integration, in stores, maybe of own mid given, that targets in you you brands basis. of pricing more being your some and new of a their to, own pressure; targets terms own have, have stores sold their on you you. their, vertical how So percentage you can selling your might similar of or

George Archos

the side. familiar component XXX% the integration wholesale with very in Illinois, business. Vertical PA, launch Florida. having is it can much, an has the the important integration we have is capped Verano vertical business Obviously, where here. gone we're vertical well side and In vertical how on both very on of a

we're the there. opportunity So about excited

there which up QX out been here. seeing but a rolled but We us, we're for not QX, headwinds, in were incremental exciting. into wholesale only trench Essence nice growth, It's quarter, the some is Second brand. going

entire products, at across the always pretty to an different opportunity all us different the integration exciting the in allow different which vertical so have for premium short to vertical to markets. have price able order, We out on those to side. the just solid spectrum, at been be form have now us, We've coming factors to here multiple of which allow skews is Savvy points known in provide price points us

be for So good QX moving it us and QX. in could into

side, dropped that a that saw we we couple see as to markets we as reiterated CapEx we On in don't adult transition it. use CapEx the quickly

Florida, PA in that construction in when Finished a slowed So able we we'll it same does future we're that scale now see time the footprint down and right us thing, is by out But online pipeline, well we're account when we work that up there. when second continue and the to expansion our cultivation completing needed. building puts store we and for but to with there to there have the fit, in all pretty facility that phase able what's come good doing building. position to be quickly the set. be

the seeing accordingly. And almost we on basis. weekly whole, dollars our happening, need additional to evaluate market what's something that's there's we adjust economy quickly. there looking no but happening and business, within a what's at the a in spend as We're So only not

So the time's we're right. back cash and projects up a our kick flow it capitalized will with well when good

Aaron Gray

back Okay, great. for a jump the the in I'll lot Thanks detail. queue.

Operator

Please go with comes ROTH Scott question of Fortune Capital from next Your Partners. ahead. line the

Scott Fortune

the good and Yeah, here. thanks morning questions for

many and you be been kind of of term introducing you positioning Can as and core here, look When you affects as expect along provide in reserve a brands new rolled brand essence. Savvy, do with verticalization the here? like focus of in into kind relative forward You've your many initiatives? just and fully value-oriented -- it out active you markets margins little on the of kind mentioned longer the Verano's national on color very to, there like of offerings to the the gross footprint on full

George Archos

you Pleasure today. here Scott. morning, to good First, have again

far kind question. full As of rollout, as it's loaded a

has it. brand So skews multiple within each

waves. So it'll out be rolling in

So flower, then it'll come edibles, out vapes, with etcetera. then

happened it multiple markets. So, essence that launch in has

And even fit. something a we rolling markets as said well, everywhere though we we're of always scale won't as that in past, Savvy we've that is in see out immediately. Something it out the go handful this

markets, launch we'll skews. have we'll available continue by they'll it and multiple continue the throughout additional year will So in year QX but more skews to next to lot go a

well look our those as what's platform. we again, as not our what's what's at vertical So with and to, we'll increase continue market every happening, integration wholesale popular, to products

Scott Fortune

And different at down going here, the initiatives, the on seeing then those from that quick, Yeah, I spin, look bit down do but last you a costs can and here? environment how operational drive you've challenging appreciate that margin margin the a operations, looking standpoint on the side, at of in couple savings to the can little you profile you the based a profile, of you quarters, obviously forward the as there, continue color costs kind different provide little the that different but with from real these bit kind line investments a color. you little bring more macro made slow automation

George Archos

the Virginia, [Audio up. some quarter and throughout and profile gap] in efficiencies come side, here very We that So explainable. of see wholesale bit this a easily had Massachusetts cultivation West took little a year. the we'll The half hit margin of it's Nevada back

Operator

Russell Your next comes line with question ahead. go from the Stanley Beacon of Please Securities.

Russell Stanley

year how are or the a about two at Good taking business, think margins thinking margin looking rest three 'XX basis, made EBITDA maybe on you comments of your to margins thanks midterm with 'XX, that in you've rest forties your George, that around that the investments but understanding of beyond the in the you morning, for this for my EBITDA question. achievable are and targets do point the please?

UnidentifiedCompany Representative

line. Jacob is I Georgia. This lost the Hey, there, got I think [ph], on backup

Russell Stanley

the I Should repeat question?

George Archos

difficulties you operator. with call. can the confirm Can Hey here? some hear you us We technical had that

Operator

Yes, hear we can you.

George Archos

where we And right. off? did All leave

Operator

a have I'll Russell. Russell Beacon you We get question. please, that, repeat asking with Securities Stanley to

Russell Stanley

I margins was George, in around for there. EBITDA clear calling thanks. heard your comments and, Sure up 'XX loud and you

people and Just a think are are basis, those so back wondering achievable given in office investments if midterm achievable still forth. made forties, or and the the low if on you you've

George Archos

So out it's on and in be We're not all we're not with going margin prudent that to the economy right it's that achievable. things the not now, saying profile we're facing putting with today. just saying things

So to the right going profile exact to continue and a going accordingly. I run business the we're margin continue now, one our back to we're for be but bit best-in-class of think off to performers,

Russell Stanley

of the And course use tempered, adult understand I saw your for a there. expectations recently initiative have and one of Florida, launched we where legalization guess, is of markets

It you've if thoughts like of are your we're it, on initiative Just right. got wondering reading what limited passage. sounds the it's optimism and odd there

So just that. you what on color provide wondering can

George Archos

It's check. going reality can't things in It's on optimism. limited the that control. we world today There not are just

XXXX is far out. and away long a time So, is pretty implementation

So wisely. we're up looking we and a with a in economy want set make that strong the as what's sure spending for we're position just our very Florida. happening in And now whole, capital to at just now, we're right

of thing PA. water, the to back ready second power, work there, we're can plans a have which On up on The needed? the to we needed, done, back good need building turn well. but went to store same right. is site; the the all set of expand we We're to everything's also cultivation -- with have increased We've medical explanation pipeline pull very there, when ability that we why yield, with site able of very on part expansion, site is when some we side, the coming is up. needed, expansion be etcetera So quickly

Russell Stanley

great. Got in That's I'll queue. get Thanks. back it.

George Archos

Russ. it, Appreciate

Operator

ATB the Your go Capital Markets. of comes next from ahead. line Tyghe question with Kenric Please

Kenric Tyghe

bps. I where Thank how where Illinois, state called just much to we of insight in perhaps expect terms you there you to get that of good is also some you you morning. on share any and that sort to the today where how to track? not you would recovery be, room there levels could think share like back XXX a in provide are your and on, and were or on but you timelines George, Could some indication recovery

George Archos

the it needs before. to a basis, that's always plan with say. in strong should but coming qualities I a finally licenses It's online, importantly of hit this Illinois. the back slowly on greenhouse, expansion but took said share We've with more be. online where up coming a very online, inching monthly back or XXX kind We've with We the had

those we confident very to to everything licenses when these back in won't We well site. growth skews, Illinois. put strong here in the we'll wholesale be do in when the have right? we expect a able open that credibility, have but open, We way strong need pretty have we're come we exact stores numbers, out I

Kenric Tyghe

from your a New or there, George, electing then how headlines are thinking perhaps want hear in months Thank New of your Growth, yesterday, York evolution walk to but the York York one three competitors commentary Obviously and ago. on you. parts, timing a timing close today versus of and market, And six New of the of deal Goodness even away market back the the New lot that of about you on your moving to market just York the legalization dynamics.

George Archos

own York cultivation their stores. the makes the is assets positioned capacity, with very different viable We there decisions. well us. for a long and everyone still New think very market that We're Listen, term Yeah.

opportunity, excited for we're York something New and about good we're jewel really York was said a New We for asset, about deal Goodness cherry in the is That's us, look always is I've the only but that Growth but on us the of kind top. not that excited as So Minnesota. New at York. is market

to like them same strong Growth be doing able us, continues for ready way. execute else. still there. to We're everything it in So everywhere close we we view Goodness get the way do and a still Construction for with

Kenric Tyghe

queue. I'll in Cheers George. get thanks, back

Operator

go Your question line Matt Genuity. comes with ahead. from Please next Canaccord of Bottomley the

Matt Bottomley

know talked we've we sort is where pricing bit reported moment, has you're to this and in little of the so anecdotes We or pressures its on maybe from well. a give bit a pricing seen quarters us half there tracking that can been happening how your preferences retail the I and only stores of you that's Florida recent headwinds are market? any other with pivot to given wholesale about about portion doing morning, given Hope everyone. that the lot a what's respect been Good MSOs just with just of business, in markets. been but in theme that of have retail in standpoint consumer at the far, all a a if your

temperature within wanted Florida's environment. to on track of how get been doing another current sort this Just

George Archos

Thanks, markets. behind very more Savvy. here Essence reasoning to on launching us with products. going to more is to that's a what's seeing today now And economy other premium value-oriented similar the and Good Matt. we're question; basket acting what Basically in the change product, in size

-- we worried it's exists that categories. all we're something about. we're So in really market, necessarily Pricing about us. what for pressure every in competitive not different it's That's have but

all quicker which us, it's sure based year, in last a we're that competitive this For we little we're in about bit on economy. the and is talked just year happening price different what's making something the that moving points,

compete So efficient we're sure those we're it. excited making with to and able be price to points at different that

Matt Bottomley

then my just is, related. Okay. Got question it. other is Illinois And

there or any these So -- when what a out curious up for pathway considerations the you things a requirement you the friction any with there what if those of is there's population grabs. a it's just fit becoming population longer have sort those up, I'm just could start what was these licensees And ramping of overall probably out of you XXX opening of just with new sake of the to think other if those of anticipating of for going or argument, sense you're no limited a that be bit that to -- stores? within stores, more up regulatory potential given of longer there. municipalities do

George Archos

on time years start I are A through or would different that of of are them not construction based they'll that know exactly don't by these It's entrance processes. first and opening to not zoning get some slowly next many anticipate throughout lot opening would the year. how I market. I and go and end start municipalities. viable that So to say easy

to think But don't other I participants. away. as help MSO long our as of some we're So here right it's going happen to

I again, end it. we think open for the probably seeing to XXX not really by slowly start QX, day year about openings, all think good and see one, wouldn't Again, through next market. I maybe QX year. want I some excited we're waves we'll

happen want I You Illinois overall. which up positive that's, going to to and open it'll them slowly, see for be think a what's

Operator

instructions] [Operator of Semple comes from go Andrew question line the Your with next Echelon Please Capital ahead. Markets.

Andrew Semple

thanks Good question. And taking for Hi my there. morning.

First quarter results? or, you've ask contribution was in one What step a the kind we additional overhead of proportion of that want first QX the a on to to a added see here, we partial of or business the that the of SG&A step just full the overhead sorry, did saw, was up quarter? kind up

George Archos

It's a majority days full vast quarter. a where couple but full it's it's not, quarter. There's

Andrew Semple

with I seen core the impact Verano then, profitability? these Okay, products signature great. is launch any terms impact of sort in store to have and in several you to having want And flower financial across at when ask, branded or just the What notable margins state of level demand launching products? you the markets, this performance

George Archos

and because for cultivation Savvy And especially in Essence price economy which here be seeing launch we're very the we've had had Verano and only before. is positive us ever although is we've positive us. pushed consumers, for a even efficient to exciting for again, been become We're having today. on results and why able on overall, these products our about to has it's strong the outcome to us, compete traditionally That's going products side. excited it's very really production with quicker. premium demand for not Launching Well,

will little that and but I bit get created, margin So, a a we automation of offset. efficiency see with of will think some hit, the

Andrew Semple

taking questions. my Great. Thanks for

George Archos

Have Appreciate day. it, a Andrew. good

Operator

Your Please with go line Cantor Fitzgerald. next question Swank the Pablo comes from of ahead.

Matthew Baker

days, for implies New those the the you you versus from sales questions. to June on state for double Jersey? about for cadence first April numbers far million Hi, $XX last XX the $XX XQ? Thank so our taking thoughts close Any about market in after million cadence of Can the Yesterday, the for versus daily XQ in which the Pablo. what first this Thank XXst to rec XX. talk reported days and is Matthew end Baker you. XX on sales

George Archos

New and think that its Like question. to the very borders. dollar going for you Thank strong market's with very it Matt. nine we earlier, Jersey's continue said at morning, most as million us strong a been and populations people market We look a likely to Good multi-billion we grow. for on

and positive online. stores come we New about Getting wholesale was excited very a we're think a Jersey. to there's that these new So open opportunity big for large us outcome as

us. the to think strong cadence we to going So for will and increase is be continue

Matthew Baker

be size versus How for on to New then stores whether store, color something stores and benchmark you do And Jersey in your besides think, can offerings per peers, up, or location, I any follow sales here SKU Thanks. you benchmark peers your services? compared general, would guess helpful. very like just

George Archos

parking store which each XXX,XXX to feet. counts comfortable of I'm put be and POS Also, the have, big all have very variety at traffic square giving us very good large facility deal that the to large in we stores the we throughput benchmarks because have stores. we for is skew is locations the large with a able Yeah, to are lots, located high

multiple varieties tinctures, concentrates, flower, of etcetera. We vapes, edibles, factors, have multiple form

on both integration business vertical the and comfortable we with wholesale the there, on So feel our side very side.

Matthew Baker

it. the Got for color. Thanks

George Archos

you. Thank

Operator

question-and-answer and concludes Thank Thank conference concludes session you. call. This for today's joining you the us.

your You lines. may disconnect now

Verano (VRNOF) 16 Aug 222022 Q2 Earnings call transcript