Q4 2024 Green Thumb Industries Inc Earnings Call
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Speaker Change: I would now like to turn the conference over to shake hands with director of Communications for Green Thumb. Please go ahead.
[music].
Speaker Change: Thank you Betsy and good afternoon, and welcome to Green thumb fourth quarter and full year 2024 earnings call I'm here today, with founder and CEO of Banco Blur, President Anthony George <unk>, and Chief Financial Officer, Matt Faulkner.
Speaker Change: Today's discussion and responses to questions may include forward looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements.
Speaker Change: These risks and uncertainties are detailed in the earnings press release issued today, along with our reports filed with the United States Securities and Exchange Commission and Canadian Security regulators, including our most recent annual report filed on Form 10-K.
Speaker Change: This report along with today's earnings release can be found under the investors section of our website.
Speaker Change: Green thumb assumes no obligation to update or revise any forward looking statements to reflect events or circumstances that may arise. After the date of this call.
Throughout the discussion Green thumb will refer to non-GAAP financial measures, including EBITDA and adjusted EBITDA, a reconciliation of non-GAAP financial measures. The most directly comparable GAAP measure is included in our earnings press release and at D C and SEDAR filings.
Speaker Change: Please note that all financial information is provided in U S dollars unless otherwise indicated.
Speaker Change: Thanks, everyone and now here's Ben.
Speaker Change: Good.
Speaker Change: Good afternoon, everyone and thank you for joining our fourth quarter year end 2024 conference call.
Speaker Change: And an interesting start to the new year as the New administration takes office in D C.
Speaker Change: There were high hopes for federal word warmonger button, but did not materialized despite favorable conditions for change to Canada's regulations.
Good day, and welcome to the Green thumb industries fourth quarter and full year 'twenty 'twenty four earnings conference call and webcast.
Speaker Change: With the New administration probes recent pigs are not inciting optimism for <unk>.
All participants will be in a listen only mode.
Speaker Change: Progress.
Speaker Change: Correct.
Speaker Change: See demand is on the rise hitting record highs.
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Speaker Change: We've said from the beginning though we have set ourselves up to succeed regardless of what does or does not happen at a federal level.
On today's call management will provide prepared remarks, and then we'll open up the call to your questions.
Our North Star continues to be the American consumer.
To ask a question analysts May press Star then one on your Touchtone phone.
Speaker Change: 2023, studying 2023 study saw that nearly 43 million Americans reported THC consumption in the last 30 days, which is a new high and it makes the S curve of adoption begin to go vertical.
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Speaker Change: These trends are the lifeblood of our business and the reason we know candidates in America is big and getting bigger.
Speaker Change: I would now like to turn the conference over to Shay Caitlin director of communications for grant them.
Speaker Change: Please go ahead.
Speaker Change: Despite the out of touch D E and their goal of limiting access to wellbeing for American and our veterans.
Speaker Change: Thank you Betsy and good afternoon, and welcome to Green thumb fourth quarter all year in 2024 earnings call I'm here today with founder and CEO of Banco were President Anthony Giordano Chief Financial Officer.
Speaker Change: D. A is clearly asleep at the wheel.
Speaker Change: But the green thumb team is wide-awake focus on the factors, we can control to grow our business over the long term and tuning out the noise.
Speaker Change: Today's discussion and responses to questions may include forward looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements.
Speaker Change: A quick note on the math of pricing pressure.
Speaker Change: Remember that pricing is down 20%. The team has delivered 25% more units to breakeven and that map is tremendously powerful.
Speaker Change: These risks and uncertainties are detailed in the earnings press release issued today, along with our reports filed with the United States Securities and Exchange Commission.
Speaker Change: So with that backdrop and in the face of pricing pressure the green thumb team.
Speaker Change: Continued to deliver.
Speaker Change: Indian security regulators, including our most recent annual report filed on Form 10-K.
Speaker Change: No. We're looking at the stock price, which is hovering at a 52 week low but in the fourth quarter, we achieved record revenue of $294 million record adjusted EBITDA of $98 million, I think 33% margin and our full year 2024 cash flow from operations was $195 million after paying.
Speaker Change: This report along with today's earnings release can be found under the investors section of our website.
Speaker Change: Green thumb assumes no obligation to update or revise any forward looking statements to reflect events or circumstances that may arise after the date on that.
Speaker Change: Paying $131 million in taxes.
Speaker Change: These numbers are quite an accomplishment, which I credit our team and senior leadership.
Speaker Change: Throughout the discussion green thumb will refer to non-GAAP financial measures, including EBITDA and adjusted EBITDA.
Speaker Change: I have been fortunate to work alongside an incredibly smart and loyal team with leaders who have been together for many years and that consistency and longevity matters, we win because of the team and we believe in the direction dreamed of is heading in a bright future ahead for several reasons first our focus on cash flow and disciplined.
Speaker Change: A reconciliation of non-GAAP financial measures. The most directly comparable GAAP measure is included in our earnings press release, and SEC and SEDAR filings.
Speaker Change: Please note that all financial information is provided in U S dollars unless otherwise indicated.
Speaker Change: Thanks, everyone and now.
Hello allocation has been critical to executing our strategy, our cash flow and balance sheet allow us to sleep well.
Jay: Thanks Jay.
Speaker Change: Good afternoon, everyone and thank you for joining our fourth quarter year end 2024 conference call.
Speaker Change: We ended 2024 with a strong balance sheet that gives us the optionality to maximize shareholder return through thoughtful capex.
Speaker Change: And an interesting start to the new year as the New administration takes office in D C.
Share repurchase programs and strategic M&A in 2024, we engineer to the historic industry first $150 million syndicated bank loan.
Speaker Change: There were high hopes for federal word warmonger button that did not materialize despite favorable conditions for a change to cannabis regulations.
Speaker Change: It's helped us retire $225 million senior secured debt that was due in April 2025.
Speaker Change: With the New administration from recent pigs are not inciting optimism for progress.
Speaker Change: With new financing in place, we de Levered, our balance sheet maintained our cash interest expense and added duration. Another five years to execute our growth plan.
Speaker Change: Yes, you see demand is on the rise hitting record highs.
Speaker Change: As we've said from the beginning though we have set ourselves up to succeed regardless of what does or does not happen at a federal level, our north star continues to be the American consumer.
Speaker Change: The interesting reality that is only $150 million of leverage all of it was just 370 million of EBITDA.
Speaker Change: Second.
Speaker Change: Our ability to innovate and evolve rapidly to seize the opportunity in a dynamic environment.
Speaker Change: In 2023 study 2023 study saw that nearly 43 million Americans reported THC consumption in the last 30 days, which is a new high and makes the S curve of adoption begin to go vertical.
Speaker Change: Today's most successful companies are masters at reinvention can see both disruption and do trends emerging simultaneously they move quickly to capitalize on opportunities while others are dangerously complacent.
Speaker Change: These trends are the lifeblood of our business and the reason we know cannabis in America is big and getting bigger despite the out of touch D E and their goal of limiting access to wellbeing for Americans and our veterans.
Speaker Change: We have tried to model green thumb in that way as we do not want to be the ostrich, let's stick our heads in the sand and Miss something.
Speaker Change: Instead, we focus on what is best for the American consumer because after all we are the American consumer.
Speaker Change: The DEA is clearly asleep at the wheel.
Speaker Change: As consumers, we clearly see the trends that can propel greenbaum forward and we're positioning ourselves to benefit.
Speaker Change: But the green thumb team Wide-awake focused on the factors, we can control to grow our business over the long term and tuning out the noise.
Speaker Change: The changes in alcohol consumption versus Canada was consumption are too dramatic to ignore.
Speaker Change: A quick note on the map pricing pressure.
Speaker Change: We have all discuss the potential harmful effects of alcohol before and on January 3rd the surgeon General advise the public on the now established link of alcohol in cancer.
Speaker Change: Remember if pricing is down 20% the team has to deliver 25% more units to breakeven and that math is tremendously powerful.
Speaker Change: It's no surprise alcohol consumption rates continued to decline, especially with younger generations. Meanwhile, we are seeing more consumers turn to cannabis products as an alternative.
Speaker Change: So with that backdrop and in the base of pricing pressure the green thumb team.
Speaker Change: Continued to deliver.
Speaker Change: No. We're looking at the stock price, which is hovering at 52 week low but in the fourth quarter, we achieved record revenue of $294 million record adjusted EBITDA of $98 million, I think 33% margin and our full year 2024 cash flow from operations was $195 million after paying.
Speaker Change: Recently, we invested in aggravate the owner of senior Rita The award winning best tasting THC beverage on the market.
Speaker Change: We've been in the th D beverage space for years, and bringing senior read into the portfolio of brands is a great example of how we were able to act quickly when something makes sense like THC beverages.
Speaker Change: Paying a $131 billion of taxes.
Speaker Change: We are excited about our investment in aggregate as we believe tens of millions of Americans will become THC consumers in the coming years, who are not today.
Speaker Change: These numbers are quite an accomplishment, which I credit our team and senior leadership.
Speaker Change: I have been fortunate to work alongside an incredibly smart and loyal team with leaders who have been together for many years and that consistency and longevity matters, we win because of the team and we believe in the direction Green thumb is heading in a bright future ahead for several reasons first our focus on cash flow and disciplined.
Speaker Change: One example to reach many of these new consumers is the incredible a partnership with Magnolia bakery.
Speaker Change: Not only can we sell these products at dispensaries around the country, but we sell the same products made from pump on Incredibles website and buy local delivery in 23 markets across the United States through door Dash.
Speaker Change: Hello allocation has been critical to executing our strategy, our cash flow and balance sheet allow us to sleep well.
Speaker Change: E Commerce and home delivery are changing the game by offering new convenient ways for customers to access products and allowing our brands to reach new markets and consumers.
Speaker Change: We ended 2024 with a strong balance sheet that gives us the optionality to maximize shareholder return through thoughtful capex.
Speaker Change: Turning to our traditional offerings rhythm continues to be the premier choice for cannabis consumers across the country and we are always looking for ways to bring the premium cannabis brand to more consumers.
Speaker Change: Share repurchase programs and strategic M&A in 2024, we engineered in a historic industry first $150 million syndicated bank loan.
Speaker Change: We launched a first of its kind partnership with Chicago's will now music venue, the salt shifted to showcase the rhythm lifestyle.
Speaker Change: It helped US retired 225 billion in senior secured debt that was due in April 2020, but.
Speaker Change: With new financing in place, we de Levered, our balance sheet maintained our cash interest expense and added duration. Another five years to execute our growth plan.
Speaker Change: But then your host around 150 music shows a year of drawing over 600000 people. In addition to showcasing the rhythm brand. The partnership includes our new onsite retail experience right that soldier, which offers THC products from vivo Incredibles and senior retail in addition, senior reaches the venues exclusive.
Speaker Change: The interesting reality that is only $150 million of leverage all of it was just $370 million of EBITDA.
Speaker Change: Second.
Speaker Change: Our ability to innovate and evolve rapidly to seize the opportunity.
Speaker Change: <unk> environment.
Speaker Change: THC beverage available for purchase at all then you bars.
Speaker Change: Most successful companies are masters of reinvention, seabolt disruption of new trend emerging simultaneously.
Speaker Change: So you can legally buy the best tasting tea drink on the market in Chicago recently awarded best music venue.
Speaker Change: Move quickly to capitalize on opportunities, while others are dangerously complacent.
Speaker Change: We are excited to continue exploring the potential of similar concepts to connect even more consumers to our brands through a unique experience and quality products.
Speaker Change: We have tried to model green thumb in that way as we do not want to be the ostrich stick our heads in the sand and Miss something.
Speaker Change: Instead, we focus on what is best for the American consumer because after all we are the American consumer.
Speaker Change: Lastly.
Speaker Change: Let's talk about something we all have in common sleep.
Speaker Change: According to the recent Harris poll, 71% of adults 21, and over which they slept better.
Speaker Change: As consumers, we clearly see the trends that can propel it read them forward and we're positioning ourselves to benefit.
Speaker Change: Survey also highlights the popularity of cannabis infused edibles as a sleep aid our incredible Skus Barry line is among the nation's best selling canvas product for sleep, because we know that when your Skus you win.
Speaker Change: The changes in alcohol consumption versus cannabis consumption are too dramatic to ignore it.
Speaker Change: I'll discuss the potential harmful effects of alcohol a war and on January 3rd the surgeon General advise the public on the now established weight of alcohol in cancer.
Speaker Change: It has been a very busy and productive year over here at Green thumb, thanks to each and every one of our 4800 plus amazing team members, who show up every day to work hard and share their passion for the plant. We are right on target doing what we said we would do maximize the assets we have in place to generate long term value for our stakeholders.
Speaker Change: No surprise alcohol consumption rates continuing to decline, especially with younger generations. Meanwhile, we are seeing more consumers turn to cannabis products as an alternative.
Speaker Change: Recently, we invested in agro by the owner of senior Rita The award winning best tasting THC beverage on the market.
Speaker Change: Now I'm going to turn the call over to Anthony to cover our operations Anthony.
Speaker Change: We've been in the th D beverage space for years, and bringing senior read it into the portfolio of brands is a great example of how we were able to act quickly when something makes sense like THC beverages.
Anthony: Thanks, Dan as you just heard despite facing significant challenges our team delivered another exceptionally strong quarter closing out a record setting year for green Dot.
Speaker Change: We are excited about our investment in Agra by as we believe tens of millions of Americans will become THC consumers in the coming years, who are not today.
Anthony: But to highlight some of the key achievements from both the quarter and the year.
Anthony: Expansion.
Anthony: Q4, the company opened three new stores in Florida, Minnesota and Nevada.
Speaker Change: One example to reach many of these new consumers as the Incredibles partnership with Magnolia bakery, not only can we sell these products at dispensaries around the country, but we sell the same product made some help on the incredibles website and buy local delivery in 23 markets across the United States through door Dash.
Anthony: Throughout 2024, we invested $80 million in Capex opening 10, new stores and bringing our total store count to 101 by year end.
Anthony: We also made additional wholesale investments, New Jersey, Virginia, Connecticut, and Florida markets with significant growth potential.
Speaker Change: E Commerce and home delivery are changing the game by offering new convenient ways for customers to access products and allowing our brands to reach new markets and consumers.
Brand performance, our award winning brands, including rhythm dog walkers Incredibles in vivo continued to perform exceptionally well.
Speaker Change: Turning to our traditional offerings rhythm continues to be the premier choice for cannabis consumers across the country and we are always looking for ways to bring the premium cannabis brand to more consumers.
Anthony: We are particularly proud of our market share gains in Ohio, Florida, Illinois, New Jersey, Maryland, Minnesota, and Pennsylvania are.
Anthony: Our commitment to operational excellence product quality and innovation.
We launched a first of its kind partnership with Chicago now music venue, the salt shed to showcase the rhythm lifestyle.
Anthony: Combined with our focus on the consumer has led to improvements in distribution and brand performance.
Speaker Change: But then your host around 150 music shows a year drawing over 600000 people. In addition to showcasing the rhythm brand. The partnership includes our new onsite retail experience right that salt shed, which offers THC products from BMO Incredibles and senior leader. In addition, senior research the venues exclusive.
Anthony: Ohio launch our successful adult use launching Ohio was a major highlight the cross functional collaboration between our retail CPG and corporate teams was inspired and the results were even more exciting.
Anthony: Green thumb branded products have quickly become the market leader in Ohio.
Anthony: Dog-walker set to launch there at some point this year, we're confident about our prospects in the Buckeye state for 2025.
Speaker Change: Casey beverage available for purchase at all of the new bars. So you can legally buy the best tasting THC drain on the market in Chicago recently awarded best music venue.
Anthony: Team execution.
Anthony: Finally, our team executed nearly flawlessly throughout the year on.
Speaker Change: We are excited to continue exploring the potential of similar concepts to connect even more consumers to our brands through a unique experience and quality products.
Anthony: On the CPG side. In addition to brand performance, we operationalized to large scale facilities in Virginia, and New Jersey.
Anthony: We made substantial investments to upgrade and expand our cultivation extraction and production capabilities.
Speaker Change: Lee.
Lee: Let's talk about something we all have in common sleep.
Lee: According to the recent Harris poll, 71% of adults 21, and over which they slept better.
Anthony: In retail we invested into our Omnichannel offering launched a new consumer facing website and began a comprehensive review of our physical asset infrastructure, including store locations that will guide a large part of our 2025 retail capex spend.
Lee: Survey also highlights the popularity of cannabis infused edibles as a sleep aid our incredible <unk> Barry line is among the nation's best selling cannabis products for sleep, because we know that when you snooze you win.
Anthony: Two months into 2025 and in many ways it feels like deja vu in the cannabis industry.
Speaker Change: It has been a very busy and productive year over here at Green thumb, thanks to each and every one of our 4800 plus amazing team members, who show up every day and work hard and share their passion for the plant. We are right on target doing what we said we would do maximize the assets we have in place to generate long term value for our stakeholders.
Anthony: One we remain skeptical about the timing of any significance better reform.
Anthony: As a reminder, we've been left at the altar. The past two years first mistake banking in 2023, and then with rescheduling last year.
Anthony: At the moment, it's hard to think anything anything will fundamentally change given the new administration's appointees, who seem to be descendants of the just say no campaign, the eighties and early nineties.
Speaker Change: Now I'm going to turn the call over to Anthony to cover our operations Anthony.
Anthony Giordano: Thanks, Dan as you just heard despite facing significant challenges our team delivered another exceptionally strong quarter closing out a record setting year for green Dot.
Two we anticipate continued price erosion in many of our markets combination of supply demand imbalances competition from unregulated Indoor farm Bill compliant products and the current state of the consumer we just to believe that pricing and margins will remain under pressure throughout 2025.
Speaker Change: Let's highlight some of the key achievements from both the quarter and the year.
Anthony Giordano: Expansion.
Anthony Giordano: Therefore, the company opened three new stores in Florida, Minnesota and Nevada.
Anthony Giordano: Throughout 2024, we invested $80 million in Capex opening 10, new stores and bringing our total store count to 101 by year end.
Anthony: Despite these concerns we are confident in the following <unk>.
Anthony: First in our team's ability to navigate these regulatory and price related challenges.
Anthony Giordano: We also made additional wholesale investments in New Jersey, Virginia, Connecticut, and Florida markets with significant growth potential.
Anthony: Second consumer demand for THC.
Anthony: Although it's difficult to measure aggregate cannabis consumption with the proliferation of Farmville compliant products.
Anthony Giordano: Great performance, our award winning brands, putting rhythm dog walkers Incredibles in vivo continue to perform exceptionally well.
Anthony: Deniable that had demand for THC in the U S is both robust and growing a.
Anthony Giordano: We are particularly proud of our market share gains in Ohio, Florida, Illinois, New Jersey, Maryland, Minnesota, and Pennsylvania, our commitment to operational excellence product quality and innovation.
Anthony: Couple this with the recent negative press and declining alcohol consumption and the setup is there for THC to take center stage with the U S consumer for the next decade.
Anthony: Looking ahead to 2025, our overall capital plan is expected to closely align with the $80 million. We spent in 2024.
Anthony Giordano: Combined with our focus on the consumer has led to improvements in distribution and brand performance.
Anthony: The majority of our 2025 retail spend will be directed to renovations and relocations across Minnesota, Virginia, Ohio, and Pennsylvania, as well as a select number of new store openings in Nevada, Ohio and Florida.
Anthony Giordano: Ohio launch our successful adult use launching Ohio was a major highlight the cross functional collaboration between our retail CPG and corporate teams was inspired and the results were even more exciting.
Anthony Giordano: <unk> branded products had quickly become the market leader in Ohio, and with Dog-walker set to launch there at some point this year, we're confident about our prospects in the Buckeye state for 2025.
Anthony: Additionally, we intend to continue making targeted investments in our wholesale business via additional cultivation capacity and automation initiatives.
Anthony Giordano: Team execution finally, our team executed nearly flawlessly throughout the year on.
Anthony: In terms of strategy within CPG, we plan to continue to invest into our New Jersey, New York and Connecticut facilities.
Anthony Giordano: On the CPG side. In addition to brand performance, we operationalized to large scale facilities in Virginia, and New Jersey and.
Anthony: Innovate and expand our brand and product portfolios.
Anthony: Leverage strategic partnerships to build to build visibility and grow share with new audiences.
Anthony Giordano: We made substantial investments to upgrade and expand our cultivation extraction and production capabilities.
Anthony: Focus on driving operational efficiency and product quality.
Anthony Giordano: In retail we invested into our Omnichannel offering launched a new consumer facing website and began a comprehensive review of our physical asset infrastructure, including store locations that we've got a large part of our 2025 retail capex steps.
Anthony: In retail we plan to continue to invest into our rise retail brands.
Anthony: Further refine our omnichannel business and strategy and push ourselves to optimize the consumer experience with a focus on where and when consumers shop for canvas.
Anthony: Additionally, we have already started our prep work for the launch of adult use sales in Minnesota, which is expected to commence before year end.
Anthony Giordano: Two months into 2025 and in many ways it feels like deja vu with the cannabis industry.
Anthony Giordano: One we remain skeptical about the timing of any significant better reform.
Anthony: Our success in executing these strategies will be determined by our relentless focus on the consumer.
Anthony Giordano: As a reminder, we've been left at the altar. The past few years first mistake banking in 2023, and then with rescheduling last year.
Anthony: Our ability to strengthen our competitive market positions, our commitment to investing capital in projects that maximize shareholder returns.
Anthony Giordano: At the moment, it's hard to think anything anything will fundamentally change given the new administration's appointees, who seem to be descendants of the chest. They know campaign, the eighties and early nineties.
Anthony: And our ongoing investment in our team who are the foundation of our organization and central to everything we do.
Anthony: With that I'll turn the call over to Matthew to review our financial results.
Matthew: Thanks, Anthony Hello, everyone.
Anthony Giordano: Two we anticipate continued price erosion in many of our markets combination of supply demand imbalances competition from unregulated Indoor farm Bill compliant products and the current state of the consumer leads us to believe that pricing and margins will remain under pressure throughout 2025.
Matthew: In the fourth quarter, we delivered over $294 million in revenue, a 6% increase compared to the prior year period.
Matthew: Revenue was primarily driven by increased consumer package goods sales.
Matthew: Overall retail revenue increased 1% versus the fourth quarter of 2023, reflecting continued growth in existing markets, New York, Florida, and Maryland. The addition of adult use sales in Ohio, and the opening of 10, new incremental buys dispensaries since the prior year period.
Anthony Giordano: Despite these concerns we are confident in the following <unk>.
Anthony Giordano: First in our team's ability to navigate these regulatory price related challenges.
Anthony Giordano: Second consumer demand for THC.
Matthew: The increase was mostly offset by continued price compression in many of our markets.
Anthony Giordano: Although it is difficult to measure aggregate cannabis consumption with the proliferation of farm Bill compliant products.
Matthew: Fourth quarter 2020 for comparable sales for stores open at least 12 months decreased two 6% versus the prior year.
Anthony Giordano: Undeniable that the demand for THC in the U S is both robust and growing a.
Anthony Giordano: Couple this with the recent negative press and declining alcohol consumption and the <unk>.
Matthew: Base of 84 stores due to continued pricing pressures.
Anthony Giordano: Setup is there for THC to take center stage with the U S consumer for the next decade.
Matthew: Tour package goods net revenue for the fourth quarter of 2024 increased 22% versus the prior year period, driven by continued growth in existing markets, New York, and New Jersey, and the addition of adult use sales in Ohio.
Anthony Giordano: Looking ahead to 2025, our overall capital plan is expected to closely align with the $80 million. We spent in 2024.
Anthony Giordano: The majority of our 2025 retail spend will be directed to renovations and relocations across Minnesota, Virginia, Ohio, and Pennsylvania, as well as a select number of new store openings in Nevada, Ohio and Florida.
Matthew: Looking forward, we expect first quarter sequential revenue to be down mid single digits, as we anticipate seasonality and pricing declines.
Matthew: Gross profit for the fourth quarter was 158 million or 54% of revenue up from $143 million or 51% of revenue year over year.
Anthony Giordano: Additionally, we intend to continue making targeted investments in our wholesale business, yeah, additional cultivation capacity and automation initiatives.
Matthew: Operational efficiencies as well as lower pricing on retail inventory helped to offset price compression in many markets.
Anthony Giordano: In terms of strategy within CPG, we plan to continue to invest into our New Jersey, New York and Connecticut facilities.
Matthew: Turning to Opex, selling general and administrative expenses for the fourth quarter were $101 million or 34% of revenue compared to 92 million or 33% of revenue for the fourth quarter of last year.
Anthony Giordano: Innovate and expand our brand and product portfolios.
Anthony Giordano: Leverage strategic partnerships to build to build visibility and grow share with new audiences.
Matthew: Total expenses increased primarily due to increased compensation costs, SG&A, excluding depreciation amortization and onetime transaction costs and stock based comp.
Anthony Giordano: Focus on driving operational efficiency and product quality.
Anthony Giordano: In retail we plan to continue to invest into our rise retail brands.
We refer to as normalized operating costs approximated $71 million compared to $61 million in the fourth quarter of last year.
Anthony Giordano: Further refine our omnichannel business and strategy and push ourselves to optimize the consumer experience with a focus on where and when consumers shop for canvas.
Matthew: The increase year over year is mainly attributed to the 10 incremental retail store.
Anthony Giordano: Additionally, we have already started our prep work for the launch of adult use sales in Minnesota, which is expected to commence before year at.
Matthew: The company generated net income of 13 million or four cents per diluted share up from net income of $3 million or <unk> <unk> per diluted share in the prior year period.
Anthony Giordano: Our success in executing these strategies will be determined by our relentless focus on the consumer.
Matthew: Adjusted EBITDA, which excludes noncash stock based compensation and other non operating cost was $98 million up from 91 million for the fourth quarter of 2023.
Anthony Giordano: Our ability to strengthen our competitive market positions, our commitment to investing capital in projects that maximize shareholder returns.
Anthony Giordano: And our ongoing investment in our team who are the foundation of our organization and central to everything we do.
Matthew: Along with continued pricing challenges that will pressure margins in the coming quarters, we plan to continue to invest in our brands, which will weigh upon SG&A.
Anthony Giordano: That I will turn the call over to Matthew to review our financial results.
Matthew: This in turn will push adjusted EBITDA below our longstanding 30% target.
Matthew: Thanks, Anthony and Hello, everyone.
Matthew: In the fourth quarter, we delivered over $294 million in revenue, a 6% increase compared to the prior year period.
Matthew: We entered the fourth part of the strong balance sheet, including cash of $172 million and working capital of 239 million.
Matthew: It was primarily driven by increased consumer package goods sales.
Matthew: Cash flow from operations for the year came in at $191 million after paying $131 million in income taxes.
Matthew: Overall retail revenue increased 1% versus the fourth quarter of 2023, reflecting continued growth in existing markets, New York, Florida, and Maryland the.
Matthew: In conclusion, we are pleased with our team's outstanding performance in 2024, and appreciate their ongoing commitment and contributions to Greenville.
Matthew: <unk> of adult use sales in Ohio, and the opening of 10, new incremental rise dispensaries since the prior year period.
Matthew: Together, we remain committed to driving long term growth onshore and prudent capital allocation and cost efficiency.
Matthew: The increase was mostly offset by continued price compression in many of our markets.
Matthew: We also appreciate the trust and confidence of our shareholders and look forward to providing further updates on our next call.
Matthew: Fourth quarter 2020 for comparable sales for stores open at least 12 months decreased two 6% versus the prior year.
Matthew: With that I'll open the call to your questions operator.
Matthew: Base of 84 stores due to continued pricing pressures.
Matthew: We will now begin the question and answer session.
Matthew: The tour package goods net revenue for the fourth quarter 2024 increased 22% versus the prior year period, driven by continued growth in existing markets, New York, and New Jersey, and the addition of adult use sales in Ohio.
Matthew: To ask a question you May Press Star then one on your Touchtone phone.
Matthew: If you are using a speakerphone please pick up your handset before pressing the keys.
Matthew: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Matthew: Looking forward, we expect first quarter sequential revenue to be down mid single digits as we anticipate seasonality in pricing demands.
Matthew: We ask that you please limit yourself to one question.
Matthew: Gross profit for the fourth quarter was 158 million or 54% of revenue up from $143 million or 51% of revenue year over year.
Matthew: At this time of a pause momentarily to assemble our roster.
Speaker Change: The first question today comes from Matt Bottomley with Canaccord Genuity. Please go ahead.
Matthew: Operational efficiencies as well as lower priced on retail inventory helped to offset price compression in many markets.
Matt Bottomley: Good evening, everyone. Thanks for the question I was just wondering if you can provide a little more color in and whatever.
Matthew: Turning to Opex selling general administrative expenses for the fourth quarter were $101 million or 34% of revenue.
Speaker Change: You're in a level of detail you can't at this point with respect to the distribution model or the potential for increasing hemp derived THC products. So you've had some of your peers, whether U S. Even some of the Canada that have kind of started to to maybe crawl before they they walk in that space and it's something that you guys have alluded to it.
Matthew: Paired with $92 million or 33% of revenue for the fourth quarter last year.
Matthew: Total expenses increased primarily due to increased compensation costs, SG&A, excluding depreciation amortization and onetime transaction costs and stock based comp, which we referred to as normalized operating costs approximated $71 million compared to $61 million in the fourth quarter of last year.
Speaker Change: Already in your prepared remarks, but you know theres, obviously the circle K relationship in terms of what was originally planned in Florida, you mentioned Agra fire, a little bit and I'm. Just curious if you think you know this is something for maybe investors to be a little more cautious about or if you think the ability for growth in this sector through channels other than just the state by state.
Matthew: The increase year over year is mainly attributed to the incremental retail.
Matthew: The company generated net income of 13 million or four cents per diluted share up from net income of $3 million or one cents per diluted share in the prior year period.
Speaker Change: Traditional THC regulation. If this is something that maybe has some legs to it than that.
Matthew: Adjusted EBITDA, which excludes noncash stock based compensation and other non operating cost was $98 million up from 91 million for the fourth quarter of 2023.
Speaker Change: And years here.
Speaker Change: Sure. Thanks, Matt.
Speaker Change: It's been I can attempt to take that I'm not positive exactly the specific question, but look.
Matthew: Along with continued pricing challenges that will pressure margins in the coming quarters, we plan to continue to invest in our brands, which will weigh upon SG&A.
Speaker Change: The product is available via door dash. So if youre in 23 markets across the U S. You can get Incredibles chocolate bar, which is the best tasting chocolate cannabis barb arguably the best tasting chocolate bar around within an hour.
Matthew: In turn will push adjusted EBITDA below our longstanding 30% target.
Speaker Change: So for investors to not pay attention to that would be silly.
Matthew: We entered the fourth part of the strong balance sheet, including cash of 172 million and working capital of $239 million.
Speaker Change: I think if that was your question, we can deliver it with yourself vivo online, we're developing memberships and all sorts of things.
Matthew: Cash flow from operations for the year came in at $191 million after paying $131 million and income taxes.
Speaker Change: And basically the whole reason for this that's the output of people want the product, it's safe, they're demanding alternatives and market forces are coming true. So we are heavily focused on the demand in the consumer and making life better for the consumer.
Matthew: In conclusion, we are pleased with our team's outstanding performance in 2024, and appreciate their ongoing commitment and contributions to green dot.
Matthew: Together, we remain committed to driving long term growth, while ensuring prudent capital allocation and cost efficiency.
Speaker Change: That's what we're up so.
Speaker Change: You don't want to have to drive somewhere far away and go through our production in a parking lot and all kinds of things. There are many many easier ways. You can go to specs a b C. Biddings total wine and you can get the product there. So it's a pretty exciting time, if you're in the cannabis supply space and you understand the consumer.
Matthew: We also appreciate the trust and confidence of our shareholders and look forward to providing further updates in our next call.
Matthew: With that I'll open the call to your questions operator.
Matthew: We will now begin the question and answer session.
Speaker Change: Got it and I'm wondering if I could just ask quickly on the capex of $80 million that you guys mentioned, so obviously the sector overall is kind of starve for capital and if you look at some of the Capex projections with unions in within the industry. There are significantly lower than I think some of that is probably just a function of not others not having the capital to do it but just in terms of you know what.
Matthew: To ask a question you May Press Star then one on your Touchtone phone.
Matthew: If you are using a speakerphone please pick up your handset before pressing the keys.
Matthew: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Matthew: We ask that you please limit yourself to one question.
Speaker Change: Turn on investment.
Speaker Change: Dollars you know you guys are in pretty good shape from a cash flow yield perspective, and it's not really a commentary on whether that's too much relative to the size of your operations, but just given how limited it seems to be in the industry is that really just a function of others not having the capital given that your your sort of guided number as it is somewhat higher.
Matthew: At this time of a pause momentarily to assemble our roster.
Matthew: The first question today comes from Matt Bottomley with Canaccord Genuity. Please go ahead, yes, good evening, everyone and thanks for the question I'm. Just wondering if you can provide a little more color in and whatever you're in a level of detail you can't at this point with.
Speaker Change: Yeah, I mean look at the last few years I think we've been a massive majority of the capex in the business, which is propelling the business.
Matthew: Respect to the distribution model or the potential for increasing I'm, you know hemp derived THC products. So you've had some of your peers, whether you know you asked even some of the Canada that have kind of started to to maybe crawl before they they walk in that space and it's something that you guys have alluded to already in your prepared remarks, but you know theres, obviously the circle K <unk>.
Speaker Change: Because we got the right product that people want on the right brand. It's a full circle situation I do not understand what other companies are going to get the money to invest in their business, where they don't have the money to pay taxes or interest let alone invest in growth.
Speaker Change: So it's a real hasnt have not situation, it's pretty stark, it's pretty dire.
Matthew: <unk> ship in terms of what was originally planned in Florida, you mentioned Agra fire, a little bit and I'm. Just curious if you think you know this is something for maybe investors to be a little more cautious about or if you think the ability for growth in this sector through channels other than just the state by state you know traditional th deregulation you know if this is something that that maybe has some legs to it.
Speaker Change: And we're going to invest the money bottom up where we can get the returns with a long term focus on continuing to invest in the business that we have is really also spitting out cash and go play offense, while we defend what we have but you're totally right and you know what this is the staff we've been calling out for years. If you don't invest in your business you can't grow.
Matthew: And in the coming years here.
Speaker Change: And if you don't pay taxes, you become insolvent.
Speaker Change: Sure. Thanks, Matt.
Speaker Change: Okay. Thanks, guys I'll leave it there.
Speaker Change: Ben I can attempt to take that I'm not positive exactly the specific question, but look.
Speaker Change: The next question comes from Aaron Grey with Alliance Global partners.
Speaker Change: Product is available via door dash, so if youre in 23 markets across the U S. You can get and Incredibles chocolate bar, which is the best tasting chocolate cannabis barb arguably the best tasting chocolate bar around within an hour.
Speaker Change: Please go ahead.
Speaker Change: Good evening and thank you for the question.
Speaker Change: Just wanted to talk a bit about the margin profile I believe you mentioned that primark potential for it to fall below the long term of 30% you know temporarily had a very strong <unk>. Both in terms of gross margin as well as EBIT margins. So does that mean deeper as you've done a great job offsetting some of the broader pricing pressure you know as you look forward to 2025.
Speaker Change: So for investors to not pay attention to that would be silly.
Speaker Change: I think if that was your question.
Speaker Change: We can deliver it we can sell vivo online were dumping memberships and all sorts of things.
Speaker Change: And basically the whole reason for this that's the output of people want the product, it's safe, they're demanding alternatives and market forces are coming true. So we are heavily focused on the demand and the consumer and making life better for the consumer.
Speaker Change: Do you see potential with that pricing pressure to worsen given some of the troubles that your competitors have or you control.
Speaker Change: The opportunity to play offense. That's just regard had been to get more aggressive to drive growth, while others are struggling with their balance sheet may not have the ability to do so so any color there would be appreciated. Thank you.
Speaker Change: That's what we're up so you don't want to have to drive somewhere far away and go through our production in a parking lot and all kinds of things. There are many many easier ways. You can go to specs ABC Binney total wine and you can get the product there. So it's a pretty exciting time, if youre in the cannabis supply space and you understand the consumer.
Speaker Change: Yeah.
Speaker Change: Yes, thanks for the question Erin.
Speaker Change: So I think when you think about pricing pressure.
Speaker Change: Pressures.
We've seen double digit declines we're anticipating similar results for for 2025.
Speaker Change: Got it and I'm wondering if I could just ask quickly on the capex of $80 million that you guys mentioned, so obviously the sector overall is kind of starve for capital and if you look at some of the Capex projections, you know with onions and within the industry. There are significantly lower than I think some of that is probably just a function of not you know others not having the capital to do it but just in terms of you know where.
Speaker Change: And you know it.
Speaker Change: The industry is feeling the pressures.
Speaker Change: <unk> pretty much every state that.
Speaker Change: That we operate in where we're seeing.
Speaker Change: Similar trends as it clearly varies depending upon some of the markets, but we do expect that to continue and weigh on the topline, which is then going to have an impact on adjusted EBITDA as a percentage of it of the top line there so.
Speaker Change: Turn on investment of those dollars. You know you guys are in pretty good shape from a cash flow yield perspective, and it's not really a commentary on you know whether that's too much relative to the size of your operations, but you know just given how limited it seems to be in the industry is that really just a function of others not having the capital given that you know your your sort of guided number.
Speaker Change: Hard to predict where where it goes but we definitely have embraced ourselves for for continue crushed continued pricing pressures to happens in 2025.
Speaker Change: Or is it it's somewhat higher.
Speaker Change: Yeah, I mean look at the last few years I think we've been a massive majority of the capex in the business, which is propelling the business because we've got the right product that people want on the right brand. It's a full circle situation I do not understand what other companies are going to get the money to invest in their business, where they don't have the money to pay taxes or interest.
Speaker Change: Okay, great. Thanks for detail that I'll jump back in the queue.
Speaker Change: Okay.
Speaker Change: The next question comes from Eric <unk> with Craig Hallum. Please go ahead.
Speaker Change: Alone invest in growth.
Speaker Change: It's a real haves and have not situation, it's pretty stark, it's pretty dire and we're going to invest the money bottom up where we can get the returns with a long term focus on continuing to invest in the business that we have that's really awesome spitting out cash and go play offense, while we defend what we have but you're totally right and you know what this is.
Eric: Great. Thanks for taking my questions and congrats on a very strong CPG growth overall.
Speaker Change: Overall efficiency management.
Speaker Change: And my question is on marketing expense increases.
Speaker Change: Makes sense.
Speaker Change: Your guys ability and willingness to sort of play offense. So as others are stepping back here I'm. Just wondering if you can expand a bit more on sort of your plans for marketing in 2025.
Staff, we've been calling out for years, if you don't invest in your business you can't grow and if you.
Speaker Change: You don't pay taxes, you become insolvent.
Speaker Change: Is this just kind of more advertising more dollars towards door dash and.
Speaker Change: Okay. Thanks, guys I'll leave it there.
Speaker Change: The next question comes from Aaron Grey with Alliance Global Partners. Please go ahead.
Speaker Change: And the like more partnerships just wondering if you could provide a bit more color I mean, it certainly seems like a winning strategy at this time and I was wondering if you have any more sure. Thank you.
Aaron Grey: Good evening and thank you for the question.
Speaker Change: Yeah, Hey, Eric it's been.
Aaron Grey: Just wanted to talk a bit about the margin profile I believe you mentioned you primark potential for it to fall.
Speaker Change: Sadly I you know I don't think we have much more to share not not crazy to go give you the plants I'd, rather you'll see it be impressed and surprised and excited books. The country is turning to weed, we need to show them with incredible way how to do it we need to educate and we need to do with people with influence, but people look up to and respect and show everybody that cannabis is.
Below the long term up 30% temporarily had a very strong <unk>. Both in terms of gross margin as well as EBIT margins. So just that in a bit deeper as you've done a great job of offsetting some of the broader pricing pressure you know as we look forward to 225 do you see potential with that pricing pressure to worsen given some of the troubles that your competitors have already petrol.
Speaker Change: Real and it's out there, it's healthy and it's a better way and lucky for US looking for our shareholders. We've got the balance sheet. We've got the cash and we're ready to go put it to work and we figured out how to work in this weird environment of how to get money out there and have it be clean and not painted and operated a cannabis non cannabis cannabis world, which is really quirky, but we're pretty.
Aaron Grey: We're seeing opportunities to play offense as disregarded then get more aggressive to drive growth, while others are struggling with their balance sheet may not have the ability to do so so any color there would be appreciated. Thank you.
Aaron Grey: Yes, thanks for the question Erin.
Speaker Change: So I think you know what do you think about pricing.
Speaker Change: Good at it so.
Speaker Change: So we're really really excited about what's ahead as we can drive major major awareness around the countries you know best cannabis brands and we're excited to get behind them.
Aaron Grey: <unk>.
Aaron Grey: We've seen double digit declines, where we're anticipating similar results for 2025.
Speaker Change: Great. Thanks for the color Congrats again.
Aaron Grey: You know it.
Speaker Change: Sure.
Aaron Grey: The industry is feeling the pressures across pretty much every state.
Federico: The next question comes from Federico go with Keybanc capital markets. Please go ahead.
Aaron Grey: We operate in where we're seeing.
Aaron Grey: Fuller trends it clearly varies depending upon some of the markets, but we do expect that to continue in any.
Federico: Hi, good evening and congrats on the quarter. Thanks for taking my question.
Federico: A question on Minnesota.
Federico: Given that I think that's the only states turning out on us this.
Aaron Grey: <unk> way on the top line, which is then going to have an impact.
Federico: This year could you remind us about your expectations for the size of that market the competitive environment. Once the adult use sales to start later this year.
Aaron Grey: <unk> EBITDA as a percentage of of the topline there so.
Hard to predict where where it goes but we definitely have embraced ourselves for continue crush continued pricing pressures to happens in 2025.
Federico: Yeah, Great question evident here.
Federico: Look I'll say that Crystal ball is not shown us a lot right now on Minnesota Zoo.
Federico: Out what you have here is you have a.
Federico: You have a medical market with two operators.
Speaker Change: Okay, great. Thanks for detail that I'll jump back in the queue.
Federico: You've got a population of 6 million plus.
Aaron Grey: Okay.
Federico: And you've got massive consumer demand for cannabis.
Aaron Grey: The next question comes from Eric <unk> with Craig Hallum. Please go ahead.
Federico: It's unclear how that market is going to unfold in terms of timing and structure. We're all kind of sitting here waiting we know the state is working hard on the rigs as we speak and working on the plan, but I will tell you right. Now. This one is very early for us and so in terms of the prep I'll just kind of tell you. Some of the prep work that we've done we're trying to get the stores ready for it.
Eric: Great. Thank you for taking my questions and congrats on the very strong CPG growth overall.
Aaron Grey: Overall efficiency management.
Aaron Grey: My question is on marketing expense increases.
Aaron Grey: Makes sense.
Speaker Change: Your guys' ability and willingness to sort of play offense. So as others are stepping back here I am just wondering if you could expand a bit more on sort of your plans for marketing in 2025 is this just kind of more advertising more dollars towards door dash and.
Federico: Monthly increase traffic and we've just continued to refine our product line and our product quality and the state to get ready for for adult use.
Speaker Change: Got great rhythm flower in there I'd say cross border, we've got some <unk> in the market. It's a hell of a hell of a market to be a patient in and we're excited for her.
Speaker Change: And the like more partnership just wondering if you could provide a bit more color I mean, it certainly seems like a winning strategy at this time and I was wondering if you have any more to share.
Federico: We don't need to start whenever that may be in 2025.
Federico: Thank you very much.
Speaker Change: Yeah, Hey, Eric It's Ben.
Speaker Change: Sadly I you know I don't think we have much more to share not not crazy to go give you. The plan. So I'd, rather you see it and be impressed and surprised and excited about what the country is turning to weed, we need to show them with incredible way how to do it we need to educate and we need to do it with people with influence if people look up to and respect and show everybody that cannabis is.
Speaker Change: The next question comes from Pablo Atlantic with Atlantic and Associates. Please go ahead.
Speaker Change: Thank you Anthony just going back to the same derivatives.
Speaker Change: Can you explain why are you doing the dreams outside of there being some geography.
Speaker Change: So maybe walls youre doing it abundantly through getting some on the deal with Magnolia bakery I'm just understanding the trends on Sunday logical co your money thing.
Speaker Change: Real and it's out there, it's healthy and it's a better way and lucky for US looking for our shareholders. We've got the balance sheet. We've got the cash and we're ready to go and put it to work and we figured out how to work in this weird environment of how to get money out there and have it be clean and not painted in operating a candidate as non cannabis cannabis world, which is really quirky, but we're pretty.
Speaker Change: <unk>.
Ben: Sure I mean, I can say that Pablo it's Ben.
Speaker Change: You know the landscape it is forming as we go we're trying to optimize every dollar for shareholders and we're keeping maximum flexibility.
Speaker Change: But fully legal business. It makes no sense not to do it on a NASDAQ listed company that can show how great. The growth is going to be.
Speaker Change: Good at it.
Speaker Change: So we're really really excited about what's ahead as we can drive major major awareness around the countries you know best cannabis brands, we're excited to get behind them.
Speaker Change: In this country with THC.
Speaker Change: Why do it in the Canadian company, where really no institutional investors have the ability to buy the stock.
Speaker Change: Great. Thanks for the color Congrats again.
Speaker Change: Sure.
Speaker Change: And so we're trying to be optimistic opportunistic for shareholders. We see this as a massive opportunity for green thumb holders.
Speaker Change: The next question comes from Frederico go with Keybanc capital markets. Please go ahead.
Speaker Change: <unk> not yet fully understood market.
Speaker Change: Hi, good evening, yeah, congrats on the quarter. Thanks for taking my question.
Speaker Change: Soon we will be more understood. So we think we're in the right places ahead of time and a good spot to be for shareholders.
Speaker Change: Just a question on Minnesota.
Speaker Change: Given that I think that's the only states target.
Speaker Change: But on that point I mean, the opportunity where it is him edibles or hidden things is just as good or do you think that one is better than the other.
Speaker Change: This year could you remind us about.
Speaker Change: Your expectations for the size of that market the competitive environment. Once the adult use sales to start later this year.
Speaker Change: Dependence.
Aaron Grey: Yeah, Great question Anthony here.
Speaker Change: It depends it depends on the cash it depends on a on a lot of things that happened. We think both are material opportunities billions and billions of dollars of opportunities.
Speaker Change: Look I'll say the Crystal ball is not showing us a lot right now on Minnesota.
Aaron Grey: Zoom out what you have here is you have a.
Speaker Change: To quantify those has a lot of ifs, but it's something that's gonna go from zero to a billions we want to be there.
Speaker Change: You have a medical market with two operators.
Aaron Grey: You've got a population of 6 million plus.
Speaker Change: One is already well off it started at the other isn't.
Aaron Grey: And you've got massive consumer demand for cannabis.
Speaker Change: Got it. Thank you just a follow up of course, congrats on the 20% growth in wholesale.
Aaron Grey: It's unclear how that market is going to unfold in terms of timing and structure. You know, we're all kind of sitting here waiting we know the state is working hard on the rigs as we speak and working on the plan, but I'll tell you right. Now. This one is very murky for us and so in terms of the prep I'll just kind of tell you. Some of the prep work that we've done we try and get the stores ready for her.
Speaker Change: It's amazing in the current environment.
Speaker Change: Specifically regarding New York right, we're seeing a number of new stores open.
Speaker Change: Maybe more you know a yard risk there just talk about how youre managing that it seems like nobody appears to New York did not expand on time so.
Speaker Change: I mean, the greater opportunity, but I'm, just trying to understand how youre managing that leads to another a new store opening I think it was 200 now so maybe weaker customer survey of how do you manage that.
Aaron Grey: Increased traffic and we've just continued to refine our product line and our product quality and the state to get ready for for adult use.
Aaron Grey: Great rhythm flowers that are I'd say across the board we've got some some one but as in the market. It's a hell of a hell of a market to be a patient and in depth. We're excited for for Dolby used to start whenever that may be in 2025.
Speaker Change: Yeah problem, yet another really good question.
Speaker Change: I mean look we're we're becoming tremendously excited about New York.
Speaker Change: We started to see some real kind of real growth starting in the back half of last year, you were starting to really invest into it.
Speaker Change: Thank you very much.
Speaker Change: Anecdotally, we're hearing that our flower as some of the top of the state not a lot of folks are indoor capacity.
Pablo: The next question comes from Pablo with Atlantic with Atlantic and Associates. Please go ahead.
Speaker Change: The competitive advantage that we're really leaning on as we speak.
Speaker Change: Thank you Anthony just going back to the same derivatives.
Speaker Change: Looking ahead, we've got we've got big plans for New York in 'twenty five and beyond.
Speaker Change: Can you explain why are you doing the drinks outside or in some geography.
Speaker Change: We're going to build this thing from the ground up it's going to take some time and I would say you know were just going to do it in a methodical process, where we just look for incremental gain month after month quarter after quarter week after week.
Speaker Change: They gave some edibles youre doing it abundantly through getting some on the deal with Magnolia bakery I'm just to understand that I'm trying to understand the logic of how you're monitoring things.
Speaker Change: It's the same playbook, we ran in other states and we're pretty excited about the possibilities given the population and tourism in that state.
Speaker Change: Sure I mean, I can take that Pablo it's Ben.
Speaker Change: You know the landscape is forming as we go we're trying to optimize every dollar for shareholders and we're keeping maximum flexibility.
Speaker Change: That's great. Thank you I've got Ben if you don't mind I'm going to add one more I mean, obviously you have to plan based on what you can control I understand that but compared to some of your peers. I mean, just sound a little more negative on the reform front I mean, some people are talking about you know promises made promises kept that was social.
Speaker Change: But in a fully legal business as it makes no sense not to do it on a NASDAQ listed company that can show how great. The growth is going to be in.
Speaker Change: In this country with THC.
Speaker Change: Why do it in a Canadian company, where really no institutional investors have the ability to buy the stock.
Pleased by where the precedent other people are very excited to Kennedy junior being the HHS Secretary, maybe just help me connect that disconnect right. I mean other people that are quite positive you sounded a little more magazine.
Speaker Change: And so we're trying to be optimistic opportunistic for shareholders. We see this as a massive opportunity for green thumb holders and a not yet fully understood market.
Speaker Change: Okay.
Speaker Change: I mean, Pablo we've seen things differently than our peers for a long time I think it shows up in the balance sheet and the cash flow and net income.
Speaker Change: Soon we will be more understood.
Speaker Change: So we think we're in the right place ahead of time and a good spot to be for shareholders.
Speaker Change: We are not optimistic on changes from D. C looked at the appointees that look at Kennedy's.
Speaker Change: Yeah.
Speaker Change: But on that point I mean, the opportunity where it is kept edibles or hidden things is just as good or do you think that one is better than the other.
Speaker Change: Total 180.
Speaker Change: So instead, we're gonna play offense, exactly where we can control and the massive growth markets, where nobody else is.
Speaker Change: Dependence.
Speaker Change: It depends it depends on the cash it depends on the on a lot of things that happened. We think both are material opportunities billions and billions of dollars of opportunities.
Speaker Change: So it's exactly where you want to play I mean, it's the setup if you zoom out and look back of exactly the right time to go very aggressive into a market.
Speaker Change: To quantify those has a lot of it yes.
Speaker Change: We are flushed with cash we are spitting out cash and everybody is scared.
Speaker Change: That's going to go from zero to a billions we want to be there.
Speaker Change: One is already well off it started at the other isn't.
Speaker Change: So we're not we love the product we love the brands and we think the people in D. C are out to lunch, we think the DEA is corrupt and misguided and out to lunch. So you know, it's not a popular opinion controversial, but it guides, how we allocate dollars helps us understand who the consumers and allows us to win so being on.
Speaker Change: Got it thank you.
Speaker Change: Follow up of course, congrats on the 20% growth in wholesale.
Speaker Change: That's amazing in the current environment.
Speaker Change: Specifically regarding New York right, we're seeing you know new stores open.
Speaker Change: The more you know a yard risk there just talk about how youre managing that it seems like nobody appears to New York did not expand on time so.
Speaker Change: On an island away from our peers welcome over here no problem.
Speaker Change: Got it thank you and congrats again.
Speaker Change: I mean, it's great opportunity, but I'm just trying to understand how you're monitoring the leads to another a new store opening I think 200 now so maybe weaker customers. So how do you manage that thanks.
Speaker Change: Thank you.
Speaker Change: The next question comes from Bill Kirk with Roth Capital Partners. Please go ahead.
Pablo: Yeah, Pablo Yeah, another really good question.
Bill Kirk: Good evening, everybody, then I would love to take a step back and rather than try to handicap those regulatory scenarios could you spend maybe a couple of minutes on what your dream federal scenario, among those reasonable possibilities would be because the way I see it operationally the existing scheduling setup seems to suit you quite well you can see it in the results.
Speaker Change: I mean look we're we're becoming tremendously excited about New York.
Speaker Change: We started to see some real kind of real growth starting in the back half of last year, you were starting to really invest into it.
Speaker Change: Anecdotally, we're hearing that our flower as some of the top of the state not a lot of folks who are indoor capacity. So it's kind of a competitive advantage that we're really leaning on as we speak.
Speaker Change: However.
Speaker Change: The capital markets perspective, you don't get credit for full credit for it. So some change there would obviously be welcomed so what is or what would be your ideal best federal treatment for green thumb balancing those considerations.
Speaker Change: But looking ahead, we've got we've got big plans for New York in 'twenty five and beyond.
Speaker Change: We're going to build this thing from the ground up it's going to take some time and I would say you know were just going to do it in a methodical process, where we just look for incremental gain month after month quarter after quarter week after week.
Bill Kirk: It's a great question. Thanks, Bill you know I think.
Bill Kirk: Youre right I don't know I mean, my candid answer I don't mean to be flipping as I just don't spend a lot of time dreaming I mean, it's like look at the car to got to play the game that's out there. So we understand farm bill being closed.
Speaker Change: The same playbook, we ran in other states and we're pretty excited about.
Speaker Change: But the possibilities given the population and tourism in that state.
Speaker Change: Think that this product that is dangerous for kids should be regulated.
That's great. Thank you don't got Ben if you don't mind I'm going to add one more I mean, obviously you've got to plan based on what you can control I understand that but compared to some of your peers. I mean, just sound a little more negative on the reform front I mean, some people are talking about you know promises made promises kept.
Bill Kirk: Obviously.
Bill Kirk: And so we go with a common sense approach bottom up on every single thing.
Bill Kirk: Go in and try to change the scheduling the tax regime, and you know out of Canada's branch to the federal government and figure out a federal surcharge tax and handle all of it.
Speaker Change: Social.
Speaker Change: Tweets by.
Speaker Change: By the precedent.
Bill Kirk: It's not employees can we spend a lot of time in the dream scenario, it's sort of like what's in front of us safe banking or not.
Speaker Change: Other people everybody excited Kennedy junior being the HHS Secretary, maybe just help me connect that disconnect right. I mean other people that are quite positive you sound a little more negative.
Bill Kirk: Bill or not.
Bill Kirk: Reschedule D schedule I mean remember that discussion like obviously this thing should be rescheduled obviously.
Speaker Change: I mean, Pablo we've seen things differently than our peers for a long time I think it shows up in the balance sheet and the cash flow and net income and we are not optimistic on changes from D. C looks at the appointees that look at Kennedy.
Bill Kirk: And obviously the product should be available for U S. Veterans that are the ultimate moment choosing to kill themselves every day without access to candidates I mean, just common sense approach with little empathy.
Speaker Change: Total 180 <unk>.
Not 100 of acronyms in D. C to figure out you know who's going to regulate or what so I think it's a very good question, but pushing on a string and you know playing in Fantasyland is not our game, we understand we want the product available for consumers that want it and that's our ultimate so we want when people are going out everywhere, they're drinking beer over they can smoke cigarettes safely outside of Israel to smoke a joint buyer.
Speaker Change: So instead, we're gonna play offense, exactly where we can control and the massive growth markets, where nobody else is so it's exactly where you want to play I mean, it's the setup and zoom out and look back of exactly the right time to go very aggressive into a market we.
Speaker Change: We are flushed with cash we are spitting out cash and everybody is scared.
Bill Kirk: Joining.
Bill Kirk: Biocatalyst drink and be able to consume because we think that's a better America. That's a better tomorrow. That's more wellbeing last hangover is less fights less problems. The evidence shows that it's just going to take the country. Several more years, if not a decade.
Speaker Change: So no we're not.
Speaker Change: Love the product, we love the brands and we think the people in D. C are out to lunch, we think the DEA is corrupt and misguided and out to lunch. So you know, it's not a popular opinion controversial, but it guides, how we allocate dollars helps us understand who the consumers and allows us to win so being on an island away from our peers is welcome.
Speaker Change: Thank you I like I like that answer and good luck.
Bill Kirk: Thank you.
Speaker Change: This concludes our question and answer session I would like to turn the conference back over for any closing remarks.
Speaker Change: Over here no problem.
Speaker Change: Got it thank you and congrats again.
Speaker Change: Thank you.
Speaker Change: So thanks, it's been at over to senior eat or drink dot com by these strengths check them, a guarantee you're going to like them, but you don't send me an email Coca Cola 25 for 25% off on a big order send pictures posted we got a lot of good things going on here. Thanks for joining and we'll talk to you guys in 90 days.
Speaker Change: The next question comes from Bill Kirk with Roth Capital Partners. Please go ahead.
Bill Kirk: Good evening, everybody, then I would love to take a step back and rather than try to handicap those regulatory scenarios could you spend maybe a couple of minutes on what your dream federal scenario, among those reasonable possibilities would be because the way I see it operationally the existing scheduling setup seems to suit you quite well you can see it in the results.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: However.
Speaker Change: The capital markets perspective, you don't get credit for full credit for it. So some change there would obviously be welcomed so what is or what would be your ideal best federal treatment for green thumb balancing those considerations.
Speaker Change: It's a great question. Thanks Bill.
Speaker Change: Youre right I don't know I mean, my candid answer I don't mean to be flipping as I just don't spend a lot of time dreaming I mean, it's like look at the cards got played the game that's out there. So we understand farm bill being closed we.
Speaker Change: Think that this product that is dangerous for kids should be regulated.
Speaker Change: Obviously.
Speaker Change: And so we go with a common sense approach bottom up on every single thing to go in and try to change the scheduling the tax regime and you know out of Canada's branch to the federal government and figure out a federal surcharge tax and handle all like.
Speaker Change: Employees can we spend a lot of time in the dream scenario is sort of like what's in front of us safe banking or not farm bill or not really.
Speaker Change: Schedule the schedule I mean remember that discussion like obviously this thing should be rescheduled.
Speaker Change: Obviously.
Speaker Change: And obviously the product should be available for U S. Veterans that are the ultimate moment choosing to kill themselves every day without access to candidates I mean, just common sense approach with little empathy not 100 acronyms in D. C to figure out you know who's gonna regulator, what so I think it's a very good question, but pushing on it.
Speaker Change: Training and you know playing in Fantasyland is not our game, we understand we want the product available for consumers that want it and that's our ultimate so we want when people are going out everywhere, they're drinking a beer or where they can smoke cigarettes safely outside that you're able to smoking joined by joined.
Speaker Change: Cannabis drink and be able to consume because we think that's a better America. That's a better tomorrow. That's bore wellbeing last hangovers less fights less problems. The evidence shows that it's just going to take the country. Several more years, if not a decade.
Speaker Change: Thank you I like I like that answer and good luck.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: This concludes our question and answer session.
Speaker Change: Like to turn the conference back over for any closing remarks.
Speaker Change: So thanks, it's been head over to senior eat or drink dot com by these strengths check them out I guarantee you're going to like them, but you don't send me an email Coca Cola 25, or 25% off on a big order send pictures posted we got a lot of good things going on here. Thanks for joining and we'll talk to you guys in 90 days.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Yeah.
Speaker Change: [music].