Q1 2022 Greenrose Holding Company Inc Earnings Call

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Good afternoon everyone and thank you for participating in today's conference call to discuss the Green Rolls Holding Company's financial results for the first quarter ended March 31, 2022.

And good afternoon, everyone and thank you for participating in today's conference call to discuss the green roles holding company's financial results for the first quarter ended March 31 2022.

Joining us today are Greenrose's CEO , Mickey Harley, the company's CFO , Scott Cohen, and the company's president, Paul Weimer.

Joining us today are green roles as CEO Micky Harley the company's CFO , Scott Cowen and company's President Paul Weimer.

Before I introduce Mickey, I'd like to remind you that during today's call, including the question and answer session, statements that are not historical facts, including any projections or guidance, statements regarding future events or future financial performance or statements of intent or belief are forward looking statements and are covered by the Safe Harbor disclaimers contained in today's press release and the company's public filings with the SEC.

Before I introduce Mickey I'd like to remind you that during today's call, including the question and answer session statements that are not historical facts, including any projections or guidance statements regarding future events or future financial performance or statements of intent or belief are forward looking statements and all.

Covered by the Safe Harbor disclaimers contained in today's press release, and the company's public filings with the SEC.

Actual outcomes and results may differ materially from what is expressed in or implied by these forward-looking statements.

Actual outcomes and results may differ materially from what is expressed in or implied by these forward looking statements.

Specifically, please refer to the company's Form 10Q for the quarter ended March 31, 2022, which was filed prior to this call, as well as other filings made by Greenrose with the FCC from time to time.

Specifically, please refer to the company's Form 10-Q for the quarter ended March 31, 2022, which was filed prior to this call as well as other filings made by green roles with the SEC from time to time.

These filings identify factors that could cause results to differ materially from those forward-liking statements.

These filings identify factors that could cause results to differ materially from those forward looking statements.

Please also note that during this call, management will be disclosing adjusted EVADA. This is a non-GAAP financial measure as defined by SEC Regulation G.

Please also note that during this call management will be disclosing adjusted EBITDA. This is a non-GAAP financial measure as defined by FCC regulation G.

a reconciliation of this non- GAAP financial measure to the most directly comparable gap measure and a statement disclosing the reasons why company management believes that adjusted EBITDA provides useful information to investors regarding the company's financial condition and results of operations is included in today's press release that is posted on the company's website. With that, I will turn the call

A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP measure and a statement disclosing the reasons why company management believes that adjusted EBITDA provides useful information to investors regarding the company's financial condition and results of operations.

As included in today's press release that is posted on the company's website with that I will turn the call over to Mickey.

Thank you operator and good afternoon everyone. It is a pleasure to speak with all of you today on our first earnings call as a de-spacked public operating company.

Thank you operator, and good afternoon, everyone. It.

It is a pleasure to speak with all of you today on our first earnings call as a dispatch public operating company. We are proud to have entered 2022 with our completed acquisitions of two high quality cultivation operations central plant in Connecticut and to harvest in Arizona.

We are proud to have entered 2022 with our completed acquisitions of two high quality cultivation operations, TheraPlant in Connecticut and True Harvest in Arizona.

Even in these early days for our company, we are already making progress with strengthening our position in these two emerging recreational state markets.

Even in these early days for our company, we are already making progress with strengthening our position in these two emerging recreational state markets. We have worked diligently to build our inventory levels in Connecticut, and optimize our production capacity at our operations in both states, but before we discuss our progress in greater detail.

We have worked diligently to build our inventory levels in Connecticut and optimize our production capacity at our operations in both states.

But before we discuss our progress in greater detail, I'd like to provide a brief overview of our story and how we got to where we are today for the benefit of new listeners on the call.

I'd like to provide a brief overview of our story and how we got to where we are today for the benefit of new listen listeners on the call.

The Greenrose Holding Company is an early-stage cannabis multi-state operator, with our cultivation operations in Connecticut and Arizona, forming a foundation to grow our plants.

The greenhouse holding company is an early stage candidates multistate, operator, with our cultivation operations in Connecticut, and Arizona, forming a foundation to grow our platform. Our strategy is cultivation led as we work to deliver top quality flower at every price point in each market, we serve and ultimately become synonymous.

Our strategy is cultivation led as we work to deliver top quality flour at every price point in each market we serve. And ultimately to become synonymous with extraordinary cannabis products and services.

Ms with extraordinary cannabis products and services across our existing production footprint, we are working to optimize our growth capacity and processes to further support our existing wholesale relationships.

Across our existing production footprint, we are working to optimize our growth capacity and processes to further support our existing wholesale relations.

In each of our markets, we are also working to achieve vertical integration through pursuing opportunities to establish a retail presence.

In each of our markets. We are also working to achieve vertical integration through pursuing opportunities to establish a retail presence.

In Connecticut, we closed our acquisition of TheraPlat on November 26, 2021, marking the completion of our business combination and the establishment of our cultivation-sensitive operations.

In Connecticut, we closed our acquisition of Sarah plant on November 26, 2021, marking the completion of our business combination and the establishment of our cultivation Center operations.

We are leveraging the Theroplanet's strong wholesale presence and Connecticut's limited license structure to strengthen our positioning for the oncoming recreational mark.

We are leveraging seriplane strong wholesale presence and Connecticut's limited license structure to strengthen our positioning for the oncoming recreational market.

Terror Plant is currently the largest of the state's four licensed cultures.

It's that we're planning is currently the largest of the stage four licensed cultivators with a recently expanded 90000 square foot cultivation and processing facility.

with a recently expanded 98,000 square foot cultivation and processing facility.

Therroplanes products are currently sold at all of 18 of the kinetics is distinct licensed medical dispensaries with over 35 high quality flower strains and new products introduced on a weekly...

Separate planes products are sold currently sold at all of 18 of the Connecticut existing licensed medical dispensaries with over 35 high quality flower strains and new products introduced on a weekly basis.

From a financial perspective, our Theroclant operations generate solid cash flow and benefits from a stable market-wide pricing.

From a financial perspective, our thorough plant operate operations generate solid cash flow and benefit from a stable market wide pricing environment in.

In addition, we believe we'll continue to realize economies of scale as we ramp towards utilizing our full production capacity during the second quarter.

In addition, we believe will continue to realize economies of scale as you ramp towards utilizing our full production capacity during the second quarter.

However, within the state's current medical market, we've experienced headwinds from lower patient demand during the second half of 2021, and into the first quarter of this year, as well as increased competition stemming from the state's illicit mark.

However, within the states current medical market, we experienced headwinds from lower patient demand during the second half of 2021 and into the first quarter of this year as well as increased competition stemming from the states illicit market.

These headwinds impacted our revenue performance during the quarter, which came in softer than expected.

These headwinds impacted our revenue performance during the quarter, which came in softer than expected.

While we do not have strong visibility on how medical demand may evolve going forward, we are focused on maintaining our strong wholesale relationships with our dispensary partners throughout Connecticut and preparing to serve the state's recreational market once it and we are focused on maintaining our strong wholesale relationships with our dispensary partners throughout Connecticut and preparing to serve the state's recreational market once it

While we do not have strong visibility on how medical demand may evolve going forward. We are focused on maintaining our strong wholesale relationships with our dispensary partners throughout Connecticut, and preparing to serve the state's recreational market once it fully comes online.

Recreational cannabis sales in Connecticut are expected to begin later this year, after they officially receive state legislative approval on July 1, 2021.

Recreational cannabis sales in Connecticut are expected to begin later this year. After they officially received state legislative approval on July one 2021.

Though we currently expect recreational sales to begin the fourth quarter of this year, we are closely monitoring the state's regulatory approach towards activating these sales and working to strengthen our position for this expanded market. To this end, we have already completed a 30,000 square foot expansion at our current cultivation and processing facility, which increased our total available canopy by over 80% and gave us additional flexibility to address future growth in our customer base.

So we currently expect recreational sales to begin in the fourth quarter of this year. We are closely monitoring the state regulatory approach towards activating the sales and working to strengthen our position for this expanded market to this end we have already completed a 30000 square foot expansion at a current cultivation and processing facility.

<unk>, which increased our total available canopy by over 80% and gave us additional flexibility to address future growth in our customer base.

In fact, we have already completed a population of all the rooms, and we expect our last two rooms to complete their first harvest in early June to strengthen our inventory.

In fact, we have already completed a population of all the rooms, and we expect our last two rooms to complete their first harvest in early June to strengthen our inventory levels.

While the new regulatory standards around recreational sales allow the state to grant additional non vertical cultivation licenses in the near future. We anticipate that the current limited number of licensed cultivators will create supply constraints around high quality flower once recreational sales commence.

While the new regulatory standards around recreational sales allow the state to grant additional non-vertical co-pavation licenses in the near future, we anticipate that the current limited number of license co-pavators will create supply constraints around high-quality flour once recreational sales command.

We believe therapists mature cultivation operations, strong wholesale presence, and recently expanded grow capacity will place us in a prime position to address this need in the market and continue increasing our overall Connecticut market.

We believe therapy.

Mature cultivation operations strong wholesale presence and recently expanded grow capacity will place us in a prime position to address this need in the market and continue increasing our overall, Connecticut market share.

In Arizona, we completed our asset acquisition of True Horrors on December 31, 2021, establishing our strong cultivation presence in the state and marking our entrance into a robust, early stage recreational mark.

In Arizona, we completed our asset acquisition have to harvest on December 31, 2021 established establishing a strong cultivation presence in the state and marking our entrance into a robust early stage recreational market.

True Harvest is one of the largest indoor cultivators in the state. With a 76,000 square foot cultivation and processing facility run by the Shango cultivation team, producing among other things, Shango branded products.

Two harvest is one of the largest indoor cultivation in the state with a 76000 square foot cultivation and processing facility run by the shango cultivation team producing among other things shango branded products.

Further as one of the first wholesale operations in Arizona, True Horvuss has developed a long-standing relationship with the strengtharies throughout the state.

Further as one of the first wholesale operations in Arizona, two harvests has developed a longstanding relationships with dispensaries throughout the state.

We currently sell shingle branded products to approximately 60% of our zone as existing retail stores and medical dispensaries. And aim to continue growing our wholesale presence even further.

We currently sell shingle branded products to approximately 60% of Arizona is existing retail stores and medical dispensaries and aim to continue growing our wholesale presence even further.

We sell shango branded products under license in Arizona. And these award winning products have a strong following among Arizona consumers. Having secured the number one and number two place in the 2021 Arizona Cannabis Cup in the concentrate and flower categories, we expect a

We sell shingles branded products under license in Arizona, and these award winning products have a strong following among Arizona consumers, having secured the number one and number two player in the 2021, Arizona cannabis cup into concentrate in flower categories, respectively.

or high quality products compete at the top shelf in the state market, which has helped us negate potential impacts from the ample competition and pricing softness that have emerged in other product quality categories below that point.

Our high quality products compete at the top shelf and the state market, which has helped us negate potential impacts from the ample competition and pricing softness that have emerged in other product quality categories below that point.

While we do not have perfect visibility on how potential pricing pressures may evolve over time, especially amid broader industry volatility, we believe our commitment to and reputation for quality in this market positions us to effectively weather any potential impacts in the long term.

While we do not have perfect visibility on how potential pricing pressures may evolve overtime, especially mid broader industry volatility, we believe our commitment to our reputation for quality in this market positions us to effectively weather any potential impacts in the long term.

Following a statewide commencement of recreational cannabis sales in January of last year, Arizona recorded approximately $1 4 billion in combined medical and recreation sales in 2021, highlighting the growing market opportunity for two harbors as we work to optimize our own Kennedy.

Following its statewide commencement of recreational cannabis sales in January of last year, Arizona recorded approximately 1.4 billion in combined medical and recreation sales in 2021, highlighting the growing market opportunity for true harvest as we work to optimize our own cannabis.

We have already activated two out of our four planned additional grow rooms with the third and fourth incremental grow rooms expected to be operational by the second half of 2022.

We have already activated two out of our four planned additional grow rooms, with the third and fourth incremental grow rooms expected to be operational by the second half of 2022.

This will be a total of eight operational rail rooms by the second half of this year. And we are already in the planning stages for our ninth-intensive rooms to increase our capacity even for us.

This will go a total of eight operational grow rooms by the second half of this year and we are already in the planning stages for our ninth and 10th rooms to increase our capacity even further.

I will note that construction on most recent growth rooms can't be rarely impacted our production processes and inventory levels at true harvest during the first quarter. As we experience some interruptions to our usual production.

I will note that construction on most our most recent grow rooms temporarily impacted our production processes and inventory levels at two harbors during the first quarter as we experienced some interruptions to our usual production cycle.

These resulted in a softer-than-expected revenue performance during the first quarter. Further, we expect to resume our operational efficiency and commence restoring our product inventory levels during Q2 as we complete construction on our eighth growth.

These resulted in a softer than expected revenue performance during the first quarter further we expect to resume our operational efficiency and commenced restoring our product inventory levels. During Q2, as we complete construction on our eighth grow.

Within the Arizona market overall, the supply of high end flower products has been constrained amid the rampant growth of the recreational market. Similar to what we are anticipating later this year in Connecticut.

Within the Arizona market overall, the supply high in flower products has been constrained amid the rapid growth of the recreational market similar to what we are anticipating later this year in Connecticut, We believe our expanded capacity and production efficiency in conjunction with the strong customer following for two harbors shingle branded products.

We believe our expanded capacity and production efficiency in conjunction with the strong customer following for two Harvest Shangri-La branded products.

will allow us to meet this demand and continue growing our presence in the state.

It will allow us to meet this demand and continue growing our presence in the state our president Paul Weimer will be on later in the call to describe our growth and expansion opportunities in greater detail from the retail opportunities. We are seeing in Connecticut, Arizona to the additional regions. We are targeting for growth at present I would like to reiterate that were.

Our president, Paul Weimer, will be on later in the call to describe our growth and expansion opportunities in greater detail. From the retail opportunities we are seeing in Connecticut and Arizona, to the additional regions we are targeting for growth.

At present, I'd like to reiterate that we're building the foundation of our multi-state operations around two robust, efficient cultivation operations that are positioned to benefit from the implementation of a recreational market in Connecticut and continued growth in a nascent recreational market in Arizona, while continuing to deliver top quality products for which TheraPlant and True Harvest are known.

<unk> the foundation of our multistate operations around too robust efficient cultivation operations that are positioned to benefit from the implement implementation of a recreational market in Connecticut and continued growth in a nascent recreational market in Arizona, while continuing to deliver top quality products for which there are planned.

Through harvest unknown lead.

Leading with cultivation allows us to focus on enhancing our capacity and operational efficiencies to serve our rapidly expanding of dressable market in each state.

Leading with cultivation allows us to focus on enhancing our capacity and operational efficiencies to serve a rapid rapidly expanding addressable market in each state.

While we are still in the early stages of ramping our operations and solidifying our multi-state platform, I'm proud to be collaborating with such talented leadership and cultivation teams at True Harvest and at Therapy.

While we are still in the early stages of ramping our operations and solidifying our multistate platform I am proud to be collaborating with such talented leadership and cultivation teams at true harvest and a thermal plant.

In the year ahead, we are working to build upon these brand-secretly advantages and ultimately deepen their presence within their respective mark.

In the year ahead, we are working to build upon these brands.

Vantages and ultimately deepen their presence within their respective markets.

We believe there are plenty of growth opportunities to capture in these marches in the near term, and that we are building a strong foundation from which to pursue additional expansion opportunities as they arise in continuous march.

We believe there are plenty of growth opportunities to capture in these markets in the near term and that we are building a strong foundation from which to pursue additional expansion opportunities as they arise in contiguous markets.

We will have more to stay on these strategic objectives later in the call. But first, I'd like to turn the call over to our chief financial officer, Scott Cohen, to review our first quarter financial results. Scott, over to you.

We will have more to say on these strategic objectives later in the call, but first I'd like to turn the call over to our Chief Financial Officer, Scott going to review, our first quarter financial results Scott over to you.

Thank you, McKee. Turn to our financial results. Lebanon in the first quarter of 2022 increased 15% to 8.2 million compared to 7.2 million, and the year ago for her. The increase primarily reflects incremental revenue contributions from true harvest compared to the prior year and the prior period, which only included contributions from the hour plant.

Thank you Mickey tank to our financial results revenue in the first quarter of 2022 increased 15% to $8 2 million compared to seven 2 million in the year ago quarter. The increase primarily reflects incremental revenue contributions from true harvest compared to the prior year period, the prior year period, which only included.

Contributions from therapy.

As Mickey mentioned, our true harvest revenues were impacted by construction-related production interruptions during the facility's recent grow room expansion.

As Micky mentioned are true harvest revenues were impacted by construction related production interruptions during the facility's recent grillroom expansions, while third plant revenues reflects headwinds from the slowing demand trends among licensed patients think connecticut's medical markets during the second half of the year.

While thoroughplant revenues reflect headwinds from the strong demand trends among licensed patients in Connecticut's medical markets, they're in the second half of the year, as well as increased competition from the illicit market in particular.

As well as increased competition from the illicit market in particular.

Cost of goods sold net for the first quarter of 2022 was $6.4 million compared to $2.7 million in last year's quarter.

Cost of goods sold net for the first quarter of 2022 was $6 4 million compared to $2 7 million in last year's quarter.

This increased primarily reflects a significant adjustment from purchase account and considerations and the fair value step up of the inventory of 2.1 million.

This increase primarily reflects a significant adjustment from purchase accounting considerations and the fair value step up of inventory of $2 1 million.

and costs associated with ramping up our expanded production capacity at both thoroughplant and true.

And costs associated with ramping up our expanded production capacity at both airplane and true harvest.

We also included, we also incurred additional start-up costs really through initial planting and production processes in their friends.

We also included we also incurred additional startup costs related to initial planting and production processes entire plants new production facility.

While broader supply chain interruptions and inflation impacts have affected our industry, as they have in many other industries globally, we've taken proactive steps to mitigate this at both true harvest and therapeutic by increasing our inventory stock to the extent possible amid our internal production interruptions in Arizona. We continue to closely monitor any potentially near and long-term impacts related to these macroeconomics.

While broader supply chain interruptions and inflation impact have affected our industry as they have in many other industries globally, we've taken proactive steps to mitigate the boat shoe harvest data point by increasing our inventory stock to the extent possible amid our internal production interruptions in Arizona, we continue to closely monitor any potential year end.

<unk> term impacts really the macro at these macroeconomic concerns.

gross profit in the first quarter of 2022 was 1.8 million compared to 4.5 million in the year ago quarter. The fluctuation of gross margin of 22.4% compared to 62.3% was Q122.

Gross profit in the first quarter of 2022 was $1 8 million compared to $4 5 million in the year ago quarter.

Gross margin of 22, 4% compared to 62, 3% in Q1 2021.

This decrease primarily reflects the aforementioned purchase accounting considerations in the fair value step-up of inventory, which negatively impacted gross profit by 2.1 million and gross margin negatively by 26%.

This decrease primarily reflects the aforementioned purchase accounting considerations in the fair value step up of inventory, which negatively impacted gross profit by $2 1 million and gross margin negatively by 26%.

The decrease also reflects increased costs associated with ramping our production capacity, as well as softer expected revenue performance during the quarter.

The decrease also reflects increased costs.

Associated with ramping our production capacity as well as softer expected revenue performance during the quarter.

General administrative expenses of the first quarter of 2022 were 5 million compared to 1.4 million in the prior year quarter. This increase was primarily due to incremental cost contributions from true harvest, and additional corporate expenses of being a public operating company relative to the prior period, which again only included expenses for that.

General and administrative expenses for the first quarter of 2022 5 million compared to $1 4 million in the prior year quarter.

This increase was primarily due to incremental cost contributions from shoe harvest and additional corporate expenses of being a public the operating company relative to the prior period, which again only included expenses from power plants.

Net loss in the first quarter of 2022 is 14.6 million compared to a net income of 2.8 million in the year of a quarter. This is primarily attributable to revenue impacts of the production of the true harvest and the demand had been the genetic market I mentioned earlier. As well as increased interest expense of 6.6 million, purchase accounting fair value inventory step up of 2.1 and intangible amurization of 4 million.

Net loss in the first quarter of 2022 was $14 6 million compared to a net income of $2 8 million in the year ago quarter. This was primarily attributable to revenue impact from the production interruption to two harbors and the demand in the Connecticut market.

I mentioned earlier as well as increased interest expense of $6 6 million purchase accounting fair value inventory.

Step up of $2, one and intangible amortization of 4 million.

Adjusted even up for the first quarter of 2022 was 0.1 million compared to 4.1 million in the year of the quarter. The decrease is primarily driven by the lower level of gross profit we generated during the quarter, as well as expenses related to ramping up our expanded production capacity at Fairpline.

Adjusted EBITDA for the first quarter of $2022 1 million compared to what point 1 million in the year ago quarter. The decrease was primarily driven by the lower level of gross profit we generated during the quarter as well as expenses related to ramping up our expanded production capacity at that plant through partners.

Castle expenditures for the first quarter of 2022 are 0.4 million compared to 1.4 million in the year of the quals.

Capital expenditures for the first quarter of $2022 4 million compared to $1 4 million in the year ago quarter.

The decreased primarily represents the completion of construction on their appliance for the basic expansion, which concluded at the end of 2020.

The decrease primarily represents the completion of construction on several clients cultivation expansion, which concluded at the end of 2021.

While we expect some incremental tap actually to completing this next phase of our interim build out at shoe harvest, as well as purchasing some additional processing equipment at shoe harvest, we expect to operate in a more maintenance level quarterly one right after we complete our blow.

While we expect some incremental capex related to completing the next phase of work will build out actually harvest as well as purchasing some additional processing equipment issue harvest, we expect to operate at a more maintenance level quarterly run rate. After we complete our global rooms, actually harvests and begin restoring more normalized operations thereafter.

actue harvest and begin restoring more normalized operations there at

At March 31st, 2022, cash and equivalent cash equivalents and bindings were restricted cash, totaled 3.5 million compared to 9.1 million at December 31st, 2020.

At March 31, 2022, cash and equivalent and cash equivalents combined with restricted cash totaled $3 5 million compared to $9 1 million at December 31, 2021.

The decrease was primarily attributable to acquisition of expenses and debts.

Decrease was primarily attributable to acquisition related expenses and debt service.

Finally, we have revised our full year 2022 financial outlook through the ongoing demand headwinds within Connecticut's medical market and the impact of construction related production into options at Shuhar.

Finally, we have revised our full year 2022 financial outlook due to ongoing demand headwinds, we think it's medical market and the impact of construction related production interruptions actual harvest.

We now expect revenue to range between 100 million to 120 million, with net income expected to range between a net loss of approximately 5 million to a net income of approximately 1.0.

We now expect revenue to range between 100 to 120 billion with net income expected to range between a net loss of approximately $5 million to a net income of approximately $1 million, excluding any fair value adjustments to financial instruments and transaction related expenses and.

excluding any fair value adjustment to financial instruments and transactions, actually.

In addition, a Justin EBITON 2020-22 is expected to range within 65 and 75.

In addition, adjusted EBITDA in 2022 is expected to range between 65, and 75 million as a reminder.

As a reminder, these projections assume an expected Q4 2022 start for recreational Canada sales in Canada.

Under these projections assume an expected Q4 2020 to start for recreational cannabis sales in Connecticut.

We will continue to focus on growing the business through enhancing our operations, building and maintaining stronghold cell relationships, shooting vertical integration opportunities, and providing high quality products in the communities we serve, and both Connecticut and Air.

We will continue to focus on growing the business through enhancing our operations building and maintaining strong wholesale relationships seeking vertical integration opportunities and providing high quality products and the communities we serve in both Connecticut and Arizona.

Supported by the operational foundation we've established as far, we believe we are well positioned to address the growing market opportunities in our existing states and pursue additional opportunities for growth in and around these markets. This concludes my prepared marks. I'll turn the call over to Paul.

Supported by the operational Foundation, we've established thus far we believe we are well positioned to address the growing market opportunities in our existing states and pursue additional opportunities for growth in and around these markets. This concludes my prepared remarks, I'll turn the call over to Paul.

Thank you Scott.

Thank you, Scott. As we progress further into 2022, we'll continue to build upon the platform we've established with Sarah Plenton True Arvus by deepening our presence in our current state markets and seeking additional expansion opportunities, both within our existing states and across other contiguous states as a track of opportunities arise.

As we progress further into 2022, we'll continue to build upon the platform. We've established with Seriplane true harvest by deepening our presence in our current state markets and seeking additional expansion opportunities.

Within our existing states and across other contiguous states as attractive opportunities arise.

In our existing state markets, we are comfortable with our current cultivation footprint as our growth capacity provides robust supply to our wholesale markets and has plenty of room for continued expansion. As Mickey mentioned earlier, our next step is to achieve vertical integration through building a retail presence. And there are multiple avenues we are evaluating to account.

And our existing state markets, we are comfortable with our current cultivation footprint as our grow capacity provides robust supply to a wholesale markets and has plenty of room for continued expansion as Micky mentioned earlier. Our next step is to achieve vertical integration through building a retail presence and there are multiple avenues we are.

Evaluating to accomplish this.

In addition to any available dispensary and licensed acquisition opportunities that arise in these states, both Connecticut and Arizona's regulatory structures allow operators to secure dispensary licenses through social equity partnership programs. These programs enable communities that have been disproportionately impacted by the war on drugs to pursue equitable ownership and employment opportunities within their respective states cannabis industry.

In addition to any available dispensary in license acquisition opportunities that arise in these states, both Connecticut, and Arizona regulatory structures allow operators to secure dispensary licenses through social equity partnership programs. These programs enable communities that have been disproportionately impacted by.

The war on drugs to pursue equitable ownership and employment opportunities within their respective states cannabis industries.

As we ramp our presence and operations in our existing states, we're actively seeking opportunities to partner with these applicants to support their communities and address the harm done by overly harsh drugs.

As we ramp our presence and operations in our existing states, we're actively seeking opportunities to partner with these applicants to support their communities and address the harm done by overly harsh drug laws.

In Connecticut, current cultivators will have the opportunity to open an unlimited number of recreational stores as a minority partner in a social equity license partner.

In Connecticut current cultivators will have the opportunity to open an unlimited number of recreational stores as a minority partner in a social equity license partnership.

In addition to the 12 general recreational dispensary licenses, they're expected to be rewarded this year.

In addition to the 12.

General recreational dispensary licenses that are expected to be rewarded this year.

We are currently working to participate in social equity license opportunities, and we will provide further updates as we advance this process and track how the space broader regulatory framework around recreational sales and licensing evolves over the coming months.

We are currently working to participate in social equity license opportunities and we will provide further updates as we advance this process and track how the state's broader regulatory framework around recreational sales and licensing evolves over the coming months.

I will also note that current medical dispensary operators in Connecticut have beginning have been given a license to open one additional dispensary under the new regulatory structure. As these operators pursue this opportunity and file the flip to recreational, we're benefiting from their plans strong wholesale relationships as our network of addressable dispensaries is poised to expand once recreational sales commence.

I will also note that current medical dispensary operators in Connecticut had begin it has been given a license to open one additional dispensary under the new regulatory structure.

As these operators pursue this opportunity and filed a flipped to recreational we're benefiting from thorough plan strong wholesale relationships as our network of addressable dispensaries is poised to expand once recreational sales commence.

In Arizona, we're seeking potential dispensary acquisitions and social equity partnerships to life as we begin the early stages of planning our retail expansion and state.

In Arizona, we're seeking potential dispensary acquisitions, and social equity partnerships, Hawaii as we begin the early stages of planning our retail expansion state.

With Arizona's total number of dispensaries capped at 169, the Fates Department of Health Services issued its final 26 social equity cannabis licenses on April 8.

With Arizona is total number of dispensaries capped at 169, the state's department of Health services issued its final twenty-six social equity cannabis licenses on April eight.

We will continue to monitor any further updates on the state's social equity structure and evaluate potential partnership opportunities as they arise.

We will continue to monitor any further updates on the state's social equity structure and evaluate potential partnership opportunities as they arise.

As we seek to further enhance our current footprint, we intend to target and evaluate opportunities in the west and northeastern U S.

As we seek to further enhance our current footprint, we intend to target and evaluate opportunities in the West and Northeastern US.

Particularly in contiguous states around the Connecticut and Arizona.

Particularly in contiguous states surrounding Connecticut and Arizona.

I'll deal targets include sizeable, vertically integrated operations in these incremental states.

I'll deal targets include sizable vertically integrated operations and these incremental states.

Having a vertically integrated foundation, place in Arizona, Connecticut, allows the compete for new licenses and pursue additional opportunities to acquire branded product leaders with a multi-state presence.

Having a vertically integrated foundation in place in Arizona, Connecticut will allow us to compete for new licenses and pursue additional opportunities to acquire branded product leaders with a multistate presence.

Over time we aimed to build a portfolio of high quality brands across our growing classes.

Over time, we aim to build a portfolio of high quality brands across our growing platform sub.

supplementing our current work to enhance the visibility and market share of the SharePoint and Shangle Brands in Connecticut and Arizona Respect.

Supplementing our current work to enhance the visibility and market share of the third plant in Shanghai brands in Connecticut, and Arizona, respectively.

While we've only just begun to ramp our operations and execute on our Gora strategy, our solid cultivation focus foundation and positioning within rapidly expanding early stage recreational markets provides us the necessary flexibility to build a robust multi-state platform.

While we've only just begun to ramp our operations and execute on our growth strategy, our solid cultivation focused foundation and positioning within rapidly expanding early stage recreational markets provides us the necessary flexibility to build a robust multi state platform.

We're grateful for the support of our shareholders and the dedication of our team as we strive to establish green roads as high quality multi-state cannabis operator at scale.

We're grateful for the support of our shareholders and the dedication of our team as we strive to establish green rose at high quality Multistate cannabis operator at scale.

We'll now open up the call for Q&A. I'll hand back to the operator.

We will now open up the call for Q&A I'll hand back to the operator.

Thank you to ask a question you will need to press star one on your Touchtone telephone to withdraw your question press the pound key.

Thank you. To ask a question, you will need to press star one on your touchtone telephone. To withdraw your question, press the pound key.

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Yeah.

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Okay.

There are no questions in queue. I like to turn the call back over to Mr. Harley for closing remarks, sir.

And as there are no questions in queue I'd like to turn the call back over to Mr. Harley for closing remarks, Sir.

Thank you, sir. I'd like to thank everyone that attended the call today. And we look forward to speaking with our investors and analysts when we report our second quarter result in August . Thank you.

Thank you Sir I'd like to thank everyone that attended the call today, and we look forward to speaking with our investors and analysts when we report our second quarter results in August . Thank you.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.

Ladies and gentlemen, this does conclude today's teleconference. You made this connect your lines at this time. Thank you for your participation.

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