Q4 2024 Green Thumb Industries Inc Earnings Call
Ladies and gentlemen, thank you for your patients the green thumb call will begin shortly.
[music].
Good day, and welcome to the Green thumb industries fourth quarter and full year 2024 earnings conference call and webcast.
All participants will be in a listen only mode.
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On today's call management will provide prepared remarks, and then we'll open up the call to your questions.
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I would now like to turn the conference over to Shay Caitlin Director of Communications for Greif Com. Please go ahead.
Speaker Change: Thank you Betsy and good afternoon, and welcome to the Green thumb fourth quarter and full year 2024 earnings call I'm here today, with founder and CEO, Ben Kobler, President, Anthony Georgiadis, and Chief Financial Officer.
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 Securities regulators, including our most recent annual report filed on Form 10-K.
Speaker Change: And your board along with today's earnings release can be found under the investors section of our website.
Greenbaum: Greenbaum assumes no obligation to update or revise any forward looking statements to reflect events or circumstances that may arise after the date on that.
Greenbaum: Throughout the discussion green thumb will refer to non-GAAP financial measures, including EBITDA and adjusted EBITDA.
Greenbaum: 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.
Greenbaum: Please note that all financial information is provided in U S dollars unless otherwise indicated.
Greenbaum: Thanks, everyone and now.
Jay: Thanks Jay.
Jay: Good afternoon, everyone and thank you for joining our fourth quarter year end 2024 conference call.
Jay: Been an interesting start to the new year as the New administration takes office in D C.
Jay: There were high holds for federal reform under binding that did not materialize despite favorable conditions for a change to cannabis regulations.
Jay: With the New administration trumps recent pigs are not inciting optimism for progress.
Jay: Do you see demand is on the rise hitting record highs as well.
Jay: We said from the beginning though we have set ourselves up to succeed regardless of what does or does not happen at a federal level.
Jay: Our North Star continues to be the American consumer.
Jay: 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.
Jay: These trends are the lifeblood of our business and the reason we know cannabis in America is big and getting bigger.
Jay: Despite the out of touch D E and their goal of limiting access to wellbeing for Americans and our veterans.
Jay: DDA is clearly asleep at the wheel.
Jay: 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.
Jay: A quick note on the map pricing pressure remember that pricing is down 20%. The team has delivered 25% more units to breakeven and that math is tremendously powerful.
Jay: So with that backdrop and in the base of pricing pressure the green thumb team.
Jay: <unk> deliver.
Jay: You would not know what 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.
Jay: Paying $131 billion in taxes.
Jay: These numbers are quite an accomplishment, which I credit our team and senior leadership.
Jay: I've 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.
Jay: Capital allocation has been critical to executing our strategy, our cash flow and balance sheet allow us to sleep well.
Jay: We ended 2024 with a strong balance sheet that gives us the optionality to maximize shareholder return through thoughtful capex.
Jay: Share repurchase programs and strategic M&A in 2024, we engineered in a historic industry first $150 million syndicated bank loan.
Jay: It helped US retired 225 billion in senior secured debt that was due in April 2020, but.
Jay: 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.
Jay: The interesting reality that is only $150 million of leverage all of it was just $370 million of EBITDA.
Jay: Second our ability to innovate and evolve rapidly to seize the opportunity in a dynamic environment.
Jay: Today's most successful companies are masters of reinvention seabolt disruption of new trend emerging simultaneously they move quickly to capitalize on opportunities while others are dangerously complacent.
Jay: 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.
Jay: Instead, we focus on what is best for the American consumer because after all we are the American consumer.
Jay: As consumers, we clearly see the trends that can propel it read them forward and we're positioning ourselves to benefit.
Jay: The changes in alcohol consumption versus Canada consumption are too dramatic to ignore.
Jay: We've all discussed 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.
Jay: 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.
Jay: Recently, we invested in aggravate the owner of senior Rita The award winning best tasting THC beverage on the market.
Jay: 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.
Jay: We are excited about our investment in aggravate as we believe tens of millions of Americans will become THC consumers in the coming years, who are not today.
Jay: 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 products made from help on Incredibles website and buy local delivery in 23 markets across the United States through door Dash.
Jay: 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.
Jay: 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.
Jay: We launched the first of its kind partnership with Chicago now music venue, the salt shed to showcase the rhythm lifestyle.
Jay: But then your host about 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.
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.
Jay: 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.
Jay: Lee.
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: 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 cannabis products for sleep, because we know that when you snooze you win.
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.
Speaker Change: Now I'm going to turn the call over to Anthony to cover our operations Anthony.
Anthony Georgiadis: 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.
Anthony Georgiadis: But to highlight some of the key achievements from both the quarter and the year.
Anthony Georgiadis: Expansion.
Anthony Georgiadis: Therefore, the company opened three new stores in Florida, Minnesota and Nevada.
Anthony Georgiadis: <unk> 'twenty 'twenty four we invested 80 million in Capex opening 10, new stores and bringing our total store count to 101 by year end.
Anthony Georgiadis: We also made additional wholesale investments in New Jersey, Virginia, Connecticut, and Florida markets with significant growth potential.
Anthony Georgiadis: Spring performance, our award winning brands, including rhythm dog walkers, Incredibles and be bolt continued to perform exceptionally well.
Anthony Georgiadis: 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 Georgiadis: Combined with our focus on the consumer has led to improvements in distribution and brand performance.
Anthony Georgiadis: 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 green.
Anthony Georgiadis: Green thumb 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 Georgiadis: Team execution finally, our team executed nearly flawlessly throughout the year.
On the CPG side. In addition to brand performance, we operationalized to large scale facilities in Virginia in New Jersey, It made substantial investments to upgrade and expand our cultivation extraction and production capabilities.
Anthony Georgiadis: 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 Georgiadis: Two months into 2025 and in many ways it feels like deja vu with in the cannabis industry.
Anthony Georgiadis: One we remain skeptical about the timing of any significant better reform.
Anthony Georgiadis: 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 Georgiadis: 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 Georgiadis: 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.
Anthony Georgiadis: Despite these concerns we are confident in the following <unk>.
Anthony Georgiadis: First in our team's ability to navigate these regulatory price related challenges.
Anthony Georgiadis: Second consumer demand for THC.
Anthony Georgiadis: Although it's difficult to measure aggregate cannabis consumption with the proliferation of farm Bill compliant products.
Anthony Georgiadis: Undeniable that the demand for THC in the U S is both robust and growing a.
Anthony Georgiadis: 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 Georgiadis: Looking ahead to 2025, our overall capital plan is expected to closely align with the $80 million. We spent in 2024.
Anthony Georgiadis: 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, and Nevada, Ohio and Florida.
Anthony Georgiadis: Additionally, we intend to continue making targeted investments in our wholesale business, yeah, additional cultivation capacity and automation initiatives.
Anthony Georgiadis: In terms of strategy within CPG, we plan to continue to invest into our New Jersey, New York and Connecticut facilities.
Anthony Georgiadis: Innovate and expand our brand and product portfolios.
Anthony Georgiadis: Leverage strategic partnerships to build to build visibility and grow share with new audiences.
Anthony Georgiadis: Focus on driving operational efficiency and product quality.
Anthony Georgiadis: In retail we plan to continue to invest into our rise retail brand.
Anthony Georgiadis: 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 campus.
Anthony Georgiadis: 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.
Anthony Georgiadis: Our success in executing these strategies will be determined by our relentless focus on the consumer.
Anthony Georgiadis: Our ability to strengthen our competitive market positions, our commitment to investing capital in projects that maximize shareholder returns.
Anthony Georgiadis: And our ongoing investment in our team who are the foundation of our organization and central to everything we do.
Anthony Georgiadis: That I will turn the call over to Matthew to review our financial results.
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: It 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.
<unk> of adult use sales in Ohio, and the opening of 10, new incremental rise dispensaries since the prior year period.
Matthew: The increase was mostly offset by continued price compression in many of our markets.
Matthew: Fourth quarter 2020 for comparable sales for stores open at least 12 months decreased two 6% versus the prior year.
Matthew: Base of 84 stores due to continued pricing pressures.
Matthew: The tour packaged 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: Looking forward, we expect first quarter sequential revenue to be down mid single digits as we anticipate seasonality in pricing demands.
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: Operational efficiencies as well as lower priced on retail inventory helped to offset price compression in many markets.
Matthew: Turning to Opex selling general administrative expenses for the fourth quarter were $101 million or 34% of revenue.
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.
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.
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.
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.
Matthew: In turn will push adjusted EBITDA below our longstanding 30% target.
Matthew: We entered the fourth part of the strong balance sheet, including cash of 172 million and working capital of 239 million.
Matthew: Cash flow from operations for the year came in at $191 million after paying $131 million and income taxes.
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.
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.
Speaker Change: We will now begin the question and answer session.
Matthew: To ask a question you May Press Star then one on your Touchtone phone.
Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: We ask that you please limit yourself to one question.
Speaker Change: 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.
Speaker Change: Hey, everyone. 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 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 in Canada that have kind of.
Speaker Change: You know 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 relationship in terms of you know 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.
Speaker Change: 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 maybe has some legs to it are in in the coming years here.
Speaker Change: Sure. Thanks Pat.
Speaker Change: It's been I can attempt to take that I'm not positive exactly the specific question, but look.
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: So for investors to not pay attention to that would be silly.
Speaker Change: I think if that was your question 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: 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. Binney total wine and you can get the product there. So it's a pretty exciting time in your in the cannabis supply space and you understand the consumer.
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 within your 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: Turn on investment of those dollars. You know you guys are in pretty good shape from a cash flow yield perspective, and it's 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: 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 got the right product that people want on the right brand like I'd say 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: 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 is 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.
Speaker Change: Staff, we've been calling out for years, if you don't invest in your business you can't grow and.
Speaker Change: And if you don't pay taxes you'd become insolvent.
Speaker Change: Okay. Thanks, actually I'll leave it there.
Speaker Change: The next question comes from Aaron Grey with Alliance Global partners.
Speaker Change: Please go ahead.
Speaker Change: Good evening and thank you for the question I just.
Speaker Change: I just wanted to talk a bit about the margin profile I believe you mentioned you primark potential for it to.
Speaker Change: Oh no.
Speaker Change: So 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 offsetting some of the broader pricing pressure 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 picked cool.
Speaker Change: Bring opportunities to play offense, that's disregard had been to get more aggressive to drive growth while others are.
Speaker Change: And with their balance sheet may not have the ability to do so so any color there would be appreciated. Thank you.
Speaker Change: Yes, thanks for the question Erin.
Speaker Change: So I think you know what do you think about pricing.
Speaker Change: <unk>.
Speaker Change: We've seen double digit declines, where we're anticipating similar results for 2025.
Speaker Change: And you know it.
Speaker Change: The industry is feeling the pressures across pretty much every state that we operate in where we're seeing a.
Speaker Change: Similar trends it clearly varies depending upon some of the the market, but we do expect that to continue.
Speaker Change: And weigh on the top line, which is then going to have an impact on adjusted EBITDA as a percentage of of the top line there. So.
Speaker Change: Hard to predict where where it goes but we definitely have embraced ourselves for continue crushed continued pricing pressures to happens in 2025.
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.
Eric: Great. Thanks for taking my questions and congrats on the very strong CPG growth overall.
Speaker Change: Overall efficiency management.
Speaker Change: 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 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.
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. Thank you.
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 but 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.
Speaker Change: Real and it's out there, it's healthy and it's a better way and lucky for US both to you for our shareholders, who 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 and operated a candidate as non cannabis cannabis world, which is really quirky, but we're pretty.
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 country's best cannabis brands and we're excited to get behind them.
Speaker Change: Great. Thanks for the color Congrats again.
Speaker Change: Sure.
Speaker Change: The next question comes from Frederico go with Keybanc capital markets. Please go ahead.
Frederico: Hi, good evening, yeah, congrats on the quarter. Thanks for taking my question.
Speaker Change: Just a question on Minnesota.
Frederico: Given that I think that's the only states target.
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.
Anthony Georgiadis: Yeah, Great question Anthony here.
Speaker Change: Look I'll say that Crystal ball is not showing us a lot right now on Minnesota Zoom out what you have here is you have a.
Speaker Change: You have a medical market with two operators.
Speaker Change: You've got a population of 6 million plus.
Speaker Change: And you've got massive consumer demand for cannabis.
Speaker Change:
Speaker Change: 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 will 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 hopefully increased traffic.
Speaker Change: And we've just continued to refine our product line and our product quality in the state that you're ready for for adult use.
Speaker Change: Great rhythm flours, there I'd say you know cross border, 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 in a doubt we're excited for for Dolby used to start whenever that may be in 2025.
Speaker Change: Thank you very much.
Pablo <unk>: The next question comes from Pablo <unk> 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 drawings outside or in some geography.
Speaker Change: They gave some variables you are doing it abundantly through getting some on the deal with Magnolia bakery I'm, just understanding that I'm trying to understand the logic of how you're monitoring things.
Speaker Change: Sure I mean, I can take that Paolo 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: But in a 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 in.
Speaker Change: In this country with THC.
Speaker Change: Why do it in the Canadian companies, where really no institutional investors have the ability to buy the stock.
Speaker Change: And so we're trying to be optimistic opportunistic for shareholder who see this as a massive opportunity for green thumb holders and a not yet fully understood market Ah.
Speaker Change: Soon we'll be more understood. So we think we're in the right place ahead of time and a good spot to be for shareholders.
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: It depends.
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: To quantify those has a lot of it yes.
Speaker Change: That's going to go from zero to a billions, we wont be there.
Speaker Change: One is already well off it started at the other isn't.
Got it. Thank you then just to 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 it on our new stores opened.
Speaker Change: Maybe more you know a yard risk there just talk about how youre managing that it seems like a lot of your peers in New York did not expand on time so.
Speaker Change: I mean, the great opportunity, but I'm just trying to understand how you're monitoring the leads to another a new store opening I think it was 200 now suddenly be weaker customers tell them, how do you manage that thanks.
Speaker Change: Yeah, no problem yeah, another really good question.
Speaker Change: I mean look we're worried I mean tremendously excited about New York.
Speaker Change: Starting 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: 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 game.
Speaker Change: After month quarter after quarter week after week.
Speaker Change: Same playbook, we ran in other states and we're pretty excited about the possibilities given the depopulation and tourism in that state.
Speaker Change: That's great. Thank you I've got Ben if you might want 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 thinking about you know promises made promises kept the tooth social tweet.
Speaker Change: Tweets by by the precedent.
Speaker Change: People are pretty excited the old Kennedy Junior beans, HHS Secretary, maybe just help me connect that disconnect right. I mean other people that are quite positive you sounded a little more negative.
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: We are not optimistic on changes from D. C looked at the appointees that look at Kennedy's.
Speaker Change: Total 180 <unk>.
Speaker Change: So instead, what we're gonna play often is exactly where we can control into faster growth markets, where nobody else is so it's exactly where you want to play I mean, it's the set up and zoom out and look back of exactly the right time to go very aggressive into a market.
Speaker Change: We are flushed with cash we're spitting out cash and everybody is scared.
Speaker Change: So we're not we loved 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 consumer is it allows us to win so being.
Speaker Change: On an island away from our peers is welcome over here no problem.
Speaker Change: Got it thank you and congrats again.
Speaker Change: Thank you.
The next question comes from Bill Kirk with Roth Capital Partners. Please go ahead.
Bill Kirk: Good evening, everybody and 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.
However.
Bill Kirk: 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.
Bill Kirk: It's a great question. Thanks Bill.
Bill Kirk: You're right I don't know I mean, my Canada answer I don't mean to be flipping aside just don't spend a lot of time dreaming I mean, it's like look at the cards got to play the game that's out there. So we understand farm bill being closed.
Bill Kirk: Think that this product that is dangerous for kids should be regulated.
Bill Kirk: Obviously.
Bill Kirk: 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 in.
Bill Kirk: Canada's branch to the federal government and figure out a federal surcharge tax and handle all like.
Bill Kirk: It is not a place that we spend a lot of time in that dream scenario, it's sort of like what's in front of us safe banking or not farm bill or not.
Bill Kirk: Reschedule these schedule I mean remember that discussion like obviously this thing should be rescheduled obviously.
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.
Bill Kirk: Not 100 of 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 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 are drinking a beer or where they can smoke cigarettes safely outside that you're able to smoke joined by.
Bill Kirk: Joined.
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: Thank you I like I like that answer and good luck.
Bill Kirk: Thank you.
Bill Kirk: Yeah.
Speaker Change: This concludes our question and answer session I would 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 drinks check them out I 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 conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].