Q2 2025 Green Thumb Industries Inc Earnings Call

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On today's call management will provide prepared remarks, and then we will open up the call for your questions to ask a question Analyst May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the key and to withdraw your question.

Speaker #2: Good afternoon. the Green Thumb Industries call will be starting momentarily. Thank you.

<unk>. Please press Star then two please note this event is being recorded.

Speaker #3: After we're done, about five minutes to, iron out our core evaluation. Options.

I would now like to turn the conference over to Shay cap lease.

Director of communications for Green thumb. Please go ahead.

Speaker #4: Yeah. We're, we're online.

Thank you Debbie good afternoon and welcome to.

<unk> second quarter 2025 earnings call I'm here today, with founder and CEO of <unk> Colbert, President, Anthony Giordano, and Chief Financial Officer, Matt Foster.

Speaker #3: No problem. I'd love to.

Today's discussion and responses to questions may include forward looking statements, which are subject to various risks and uncertainties.

Could cause our actual results to differ materially from these statements.

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.

Its report along with today's earnings release can be found under the investors section of our website.

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 to the most directly comparable GAAP measures is included in our earnings press release, and SEC and SEDAR clause filings. Please note that all financial information is provided in U S dollars unless otherwise indicated.

Thanks, everyone and now here's Ben.

Thank you Chad good afternoon, everyone and thank you for joining our second quarter 2025 conference call.

On a macro level THC demand and consumption remain at all time highs.

Our brands, including rhythm dog walkers, and Incredibles are showing real strength, along with record awareness as we increase their brand power and introduced the brand lifestyle more Americans.

However.

Lack of clarity on policy every confusion and lack of institutional investment is made the sector challenging.

You would think that an industry is doing more than $35 billion in sales in 2025 that is fueled entirely by domestic demand in.

Employing more than 420000 Americans full time and part.

It isn't goods cultivated exclusively in the United States, we received more low from Washington, Canada.

Cannabis companies are about as close as you can get to Trumps America first agenda.

Green thumb continues to actively advocate for federal regulatory change and with this president anything is possible.

So as you've heard me say many times our approach has been to turn off the noise and focus on what we can control.

Our second quarter performance reflects that our entire team is on the same page in doing just that and delivering strong results. Despite the persistent price compression across certain key markets.

Q2 revenue was 293 million% to 5% gain over the comparable period.

And EBITDA was $83 million or 28% of revenue in our second quarter cash flow from operations was $56 million.

Speaker #4: Have you been ready to start the call?

Of note. We also bought back five 6 million shares for $24 million, which is an average cost of $4 28 per share.

Speaker #2: We are ready to start the call. Good day and welcome to Green Thumb Industries' second quarter 2025 earnings call. All participants will be in listen-only mode.

By now most of you know the foundational values that have been our north star since we started green thumb 10 years ago.

Speaker #2: Should ou need assistance, please signal a conference specialist by pressing the star key followed by zero. On today's call, management will provide prepared remarks and then we will open up the call for your questions.

<unk> is king high conviction capital allocation strong balance sheet and outstanding execution.

Along the way, we built an amazing portfolio of brands rhythm Incredibles people dog walkers Ross.

Speaker #2: To ask a question, analysts may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key.

We believe we've only scratched the surface of their opportunity. So for now our main focus continues to be unlocking the potential of our brand currency in the market and that plan is well underway.

Speaker #2: And to withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Shay Caplice, Director of Communications for Green Thumb.

First we have a deep understanding of the consumer relationship to candidates and we are successfully leveraging that insight to connect consumers to our brands through experiences that foster connection create buzz build loyalty and strengthen our market position.

Speaker #2: Please go ahead.

In Q2, we kicked off our three city series of the rhythm bug balls with events in New York, Philadelphia and Chicago.

Speaker #5: Thank you, Debbie. Good afternoon and welcome to Green Thumb's second quarter 2025 earnings call. I'm here today with founder and CEO, Ben Kovler, president, Anthony Georgiadis, and chief financial officer, Matt Faulkner.

For the fifth year in a row, but ball celebrates the candidates professionals, who fuel the industry every day, while showcasing what it really means to live the rhythm lifestyle.

Speaker #5: Today's discussions 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.

You have a huge thanks to our team for all the hard work they put in to bring these events to life.

Next up is the mirrors, what I'm on the line on September six and seven.

It gets us selling fast for our third annual music Festival presented by rhythm alongside partners, including rise dispensaries and senior read a THC margaritas.

Speaker #5: These risks and uncertainties are detailed in the earnings press release issued today along with the reports filed with the United States Securities and Exchange Commission and Canadian Securities Regulators.

The festival features onsite candidates consumption in a star studded lineup, including Damian and Stephen Marley de La Soul, Humphries Mcgee and more.

Speaker #5: Including our most recent annual report filed on Form 10K. This report, along with today's earnings release, can be found under the Investors section of our website.

Second we strongly believe in the future of THC drinks, especially as alcohol consumption continues to decline.

Speaker #5: 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.

To strengthen our position in this category Greenfield became a major investor in Agra by Corporation, and we are supporting growth for senior read a THC Margarita is by securing distribution of top retailers, establishing notable partnerships and events presence and driving awareness in our direct to consumer channels.

Speaker #5: Throughout discussion, Green non-GAAP financial measures, including EBITDA and adjusted EBITDA. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in our earnings press release and SEC and CEDAR Plus filings.

We are now supporting antibodies next step to further expand its presence in the drink category by licensing rhythm THC beverages to Agra by bringing the rhythm lifestyle to more Americans and a new fast acting format.

Speaker #5: Please note that all financial information is provided in US dollars unless otherwise indicated. Thanks, everyone, and now here's Ben.

Rhythm beverages coming to both formulations designed to match your mood rhythm sativa fuels your day with the uplifting blend of THC and naturally sourced caffeine delivering a smooth energizing boost and rhythm Kush of your online with a calming makes a THC CBD and other goodies crafted to relax the body.

Speaker #6: Thank you, Shay. Good afternoon, everyone, and thank you for joining our second quarter 2025 conference call. On a macro level, THC demand and consumption remain at all-time highs.

Speaker #6: Our brands, including Rhythm, Dog Walkers, and Incredibles, are showing real strength, along with record awareness, as we increase their brand power and introduce brand lifestyle to more Americans.

Without crowding the mind.

Bold truth hit shelves in mid July in Illinois, and New Jersey, and direct to consumers via rhythm drinks dot com and for those of you on the phone now for the next 24 hours. If you use the cold drink rhythm 25 on the site you get a 25% discount on your first order and a big Thank you Fernando.

Speaker #6: However, lack of clarity on policy and confusion and lack institutional investment has made the sector challenging. You would ink that an industry doing more than 35 billion dollars in sales in 2025 that is fueled entirely by domestic demand employing more than 420,000 Americans full-time and producing goods cultivated exclusively in the United States would receive more love from Washington.

We've got the opportunity to share rhythm traced with attendees that bump all Chicago and they were a homerun.

We look forward to introducing rhythm beverages to more markets in the coming months and having them available at the Miracle I'm on the line. This September.

Finally, we will continue to innovate with our brands for meaningful partnerships and carefully manage our balance sheet, which gives us the flexibility to be opportunistic, especially in this capital constrained environment.

Speaker #6: Cannabis companies are about as close as you can get to Trump's America First agenda. Green Thumb continues to actively advocate for federal regulatory change and with this president, anything is possible.

We have the best team in the business to continue moving our plan forward and we thank them all for their hard work next I'll turn the call over to Anthony to review operations Anthony.

Speaker #6: So as you've heard me say many times, our approach has been to tune out the noise and focus on what we can control. Our second quarter performance reflects that our entire team is on the same page and doing just that.

Thanks, Ben as you just heard the team delivered another strong quarter generating $293 million of revenue.

<unk> 3 million in EBITDA, a 5% sequential increase in topline growth let.

Speaker #6: And delivering strong results despite persistent price compression across certain key markets. Due to revenue was $293 million a 5% gain over the comparable period.

Let me walk you through a few key developments from Q2, where we're focused at the back half of the year.

First capex, we invested $19 million of capital during the quarter retail investments included store relocations renovations and openings in Pennsylvania, Minnesota, Ohio and Florida.

Speaker #6: Adjusted EBITDA was $83 million or 28% of revenue and our second quarter cash flow from operations was $56 million. Of note, we also bought back $5.6 million shares for $24 million which is an average cost of $4.28 per share.

On the wholesale side, we made selective investments with a focus on expanding capacity and efficiency.

We still anticipate full year capex to approximate $80 million, our threshold for new spending remains high and we will continue to be.

Speaker #6: By now, most of you know the foundational values that have been our North Star since we started Green Thumb 10 years ago. Cash is king.

Second CPG market share as we discussed.

Last quarter, we continue to lean into markets and verticals, where we see room to grow since.

Speaker #6: High conviction, capital allocation, strong balance sheet, and outstanding execution. Along the way, we built an amazing portfolio of brands, Rhythm, Incredibles, Bebo, Dog Walkers, Rise, and we believe we've scratched the surface of their opportunity.

Since the start of the year, we've grown our CPG market share in key states, including Illinois, Pennsylvania, and New Jersey.

While the foundation of our brand strategy remains rhythm premium flower, we are encouraged by our share gains within the pre roll and bag categories.

Speaker #6: So for now, our main focus continues to be unlocking the potential of our brand currency in the market and that plan is well underway.

This will remain a strategic focus for us going forward.

Third don't use opportunities.

Speaker #6: First, we have a deep understanding of the consumer relationship to cannabis and we are successfully leveraging that insight to connect consumers to our brands through experiences that foster connection, create buzz, build loyalty, and strengthen our market position.

The company remains focused on its adult use opportunities in Minnesota, Pennsylvania and Virginia.

<unk> is expected to launch adult use sales this fall and our team is ready.

In parallel we are active in Pennsylvania, and Virginia educating decision makers in the various adult use frameworks that have experienced success and failure.

Speaker #6: In Q2, we kicked off our three-city series of Rhythm bug balls with events in New York, Philadelphia, and Chicago. For the fifth year in a row, Bug Ball celebrates the cannabis professionals who fuel the industry every day while showcasing what it really means to live the Rhythm lifestyle.

We remain cautiously optimistic that either in Virginia, or Pennsylvania past adult use legislation in the next 12 months.

Last near term outlook overall, we remain cautious about the near term outlook for our business in the industry.

Speaker #6: I want to give a huge thanks to our team for all the hard work they put in to bring these events to life. Next up is the miracle of Mundelein on September 6th and 7th.

The challenges. We previously highlighted include systemic price compression I thought.

Speaker #6: Tickets are selling fast for our third annual music festival presented by Rhythm alongside partners including Rise Dispensaries and Seniorita THC Margaritas. The festival features on-site cannabis consumption and a star-studded lineup including Damian and Steven Marley, De La Soul, Humphreys McGee, and more.

Wholesale and retail largely due to increased competition in oversupply.

Regulatory uncertainty whereby regs surrounding had been canvas make it very difficult to allocate capital with a long term lens.

Macroeconomic pressure with consumers feeling the squeeze amid widening wealth disparity.

While the outlook on rescheduling has improved rescheduling alone does not address the systemic challenges.

Speaker #6: Second, we strongly believe in the future of THC drinks, especially as alcohol consumption continues to decline. To strengthen our position in this category, Green Thumb became a major investor in Agrify Corporation and we are supporting growth for its Seniorita THC Margaritas by securing distribution at top retailers and establishing notable partnerships and event presence and driving awareness in our direct-to-consumer channels.

To combat these pressures we are doubling down on the fundamentals operational discipline brand strength scale, and a well capitalized balance sheet.

Our strategy is simple quicker.

Putting the consumer at the center of everything we do.

Do you see demand in the U S not only growing its diversifying and new formats and channels for consumption rapidly emerge.

Speaker #6: We are now supporting Agrify's next step to further expand its presence in drink category by licensing Rhythm THC beverages to Agrify, bringing the Rhythm lifestyle to more Americans in a new fast-acting format.

Over the long term, we're confident in both our team and our approach we.

We believe we're well positioned to navigate near term headwinds, while staying in lock step with the evolving U S. Consumer when he was increasingly discovering the many ways THC can enhance their lives.

Speaker #6: Rhythm beverages come in two bold formulations designed to match your mood. Rhythm's Sativa fuels your day with an uplifting blend of THC and naturally sourced caffeine.

Before I close a quick reminder, our third Miracle in Monday wind takes place September six and seven.

Speaker #6: Delivering a smooth, energizing boost. And Rhythm Kush helps you unwind with a calming mix of THC, CBD, and other goodies crafted to relax the body without clouding the mind.

This two day ground breaking music festival is held at our Monday minded window, a dispensary and allows for open candidates consumption.

It's going to be a vibe and hope to see you there.

I'll turn the call over to Matt to review our financial results.

Speaker #6: Both drinks hit shelves in mid-July in Illinois and New Jersey, and direct-to-consumers via Rhythmdrinks.com. And for those of you on the phone now for the next 24 hours, you use the code DRINKRHYTHM25 on the site, you'll get a 25% discount on your first order and a big thank you from Anthony.

Thanks, Anthony and Hello, everyone.

The second quarter, we delivered over $293 million in revenue, a 5% increase compared to the prior year period.

Revenue was driven by increased consumer packaged goods sales.

Overall retail revenue was up slightly versus the second quarter of 2024 due to new stores offset by significant pricing pressures across all markets.

Speaker #6: We had the opportunity to share Rhythm drinks with attendees at Bug Ball Chicago and they were a home run. We look forward to introducing Rhythm beverages to more markets in coming months and having them available at the Miracle of Mundelein this September.

Second quarter 2025 comparable sales for stores open at least 12 months decreased 4% versus the prior year period on a base of 91 stores due to continued price compression.

Speaker #6: Finally, we will continue to innovate with our brands for meaningful partnerships and carefully manage our balance sheet, which gives us the flexibility to be opportunistic especially in this capital constraint

Consumer packaged goods net revenue for the second quarter 2025 increased 17% versus the prior year period, driven by continued growth in New York and the addition of adult use sales in Ohio.

Speaker #6: environment. We

Speaker #6: business to continue moving our plan forward. And we thank them all for their hard

Speaker #6: work. Next, I'll turn

Looking forward, we expect third quarter sequential revenue to be flat to down low single digits, assuming the launch of adult use of Minnesota does not occur in the third quarter.

Speaker #6: the call over to Anthony to

Speaker #6: review operations.

Speaker #6: Anthony?

Speaker #7: Thanks, Ben. As you sheet, which gives us the

Speaker #7: just heard, the team delivered flexibility to be

Speaker #7: another strong quarter

Speaker #7: generating $293 million in

Speaker #7: venue and

Speaker #7: $83 million in

Speaker #7: EBITDA. A 5% sequential

Gross profit for the third quarter was $146 million or 50% of revenue down from 151 million or 54% of revenue year over year. The decrease in gross profit was primarily driven by price compression.

Speaker #7: increase in top line moving our plan

Speaker #7: growth. Let me walk you

Speaker #7: a few key developments from

Speaker #7: Q2 and where we're focused in work.

Speaker #7: back half of the

Speaker #7: ar. First,

Speaker #7: CapEx. We invested

Speaker #7: $19 million in capital during

Turning to the Opex selling general administrative expenses for the second quarter were $107 million or 36% of revenue compared to 97 million or 34% of revenue for the second quarter last year.

Speaker #7: Retail investments included

Speaker #7: store relocations,

Speaker #7: renovations, and

Speaker #7: openings in

Speaker #7: Pennsylvania, Minnesota,

Speaker #7: Ohio, and

Speaker #7: Florida. On the wholesale side,

Speaker #7: we made selective investments

Speaker #7: with a focus on expanding

The increased total expenses was primarily attributable to an increase in comp and benefit expenses.

Speaker #7: capacity and

Speaker #7: efficiency. While we

Speaker #7: still anticipate full-year

Speaker #7: million, our

Speaker #7: threshold for new spending remains Retail investments included store

SG&A, excluding depreciation amortization and onetime transaction costs and stock based comp, which we referred to it as normalized operating costs approximated 74 million compared to $67 million in the second quarter of last year.

Speaker #7: high and we'll continue

Speaker #7: be. Second, CPG

Speaker #7: market share. As

Speaker #7: we discussed last quarter, we

Speaker #7: continue to lean into markets and verticals where we see

Speaker #7: room to grow.

Speaker #7: Since the start of the year, we've grown our

Speaker #7: CPG market share in

The increase year over year is mainly attributed to the 14th incremental retail stores, along with increased cash based compensation incentives.

Speaker #7: key states including

Speaker #7: Illinois, Pennsylvania, and

Speaker #7: New Jersey. While

Speaker #7: foundation of our brand threshold for new spending remains

Speaker #7: strategy remains Rhythm Premium Flour, we are

Speaker #7: encouraged by our share gains

The company incurred a net loss of 1 million or <unk> per basic and diluted share down from net income of $21 million or <unk> <unk> per basic and diluted share in the prior year due to the $12 million loss in assets it exclude.

Speaker #7: within the pre-roll and bake

Speaker #7: categories.

Speaker #7: This will remain a strategic continue to lean into markets and

Speaker #7: focus for us going

Speaker #7: forward.

Speaker #7: company remains focused on its adult use opportunities in

Speaker #7: Minnesota, the foundation of our brand Pennsylvania, and

Excluding this loss net income would have been $11 million or <unk> <unk> per share.

Speaker #7: Minnesota is expected to

Speaker #7: ready. In

Adjusted EBITDA, which excludes noncash stock based compensation and other non operating cost was $83 million down from $94 million for the second quarter of 2024.

Speaker #7: parallel, we are active in

Speaker #7: Pennsylvania and

Speaker #7: Virginia educating decision

Speaker #7: makers on the various adult use

Speaker #7: frameworks that have

Speaker #7: experienced success and

Speaker #7: failure.

Speaker #7: We remain cautiously adult use opportunities in

Part of the decline is due to the shift in long term incentives to a larger cash portion, which impacted SG&A and adjusted EBITDA.

Speaker #7: optimistic that either Minnesota,

Speaker #7: Virginia or Pennsylvania

Speaker #7: will pass adult use

Speaker #7: legislation in the next 12

Speaker #7: Last, near-term outlook.

We expect to continue to experience pricing challenges that will keep margins and adjusted EBITDA to below 30% in the coming quarters.

Speaker #7: Overall, we remain cautious about the

Speaker #7: near-term outlook for our

Speaker #7: ustry. The challenges we

Speaker #7: previously highlighted

Speaker #7: include systemic price

Wins in the second quarter with a strong balance sheet, including cash of $177 million and working capital of 226 million.

Speaker #7: compression, at both

Speaker #7: wholesale and retail,

Speaker #7: largely due to increased

Speaker #7: competition and

Speaker #7: -supply. Regulatory uncertainty,

Hello from operations for the quarter came in at $56 million.

Speaker #7: whereby regs surrounding hemp and

Speaker #7: cannabis make it very difficult

In conclusion, we're pleased with our team's performance so far in 2025 and appreciate their ongoing commitment and contributions to green thumb.

Speaker #7: to allocate capital with a

Speaker #7: The macroeconomic pressure, with

Speaker #7: consumers feeling the

Speaker #7: squeeze amid widening

Speaker #7: wealth compression, at both disparity. And while the outlook on

Together, we remain committed to driving long term growth, while ensuring prudent capital allocation and cost efficiency.

Speaker #7: improved, rescheduling alone

Speaker #7: does not address these

Speaker #7: systemic

Speaker #7: challenges. To combat these pressures,

With that I'll kick it back to Beth.

Speaker #7: are doubling down on the

Thanks, Matt as we move into our second decade of operations. We are proud of what our team has built and the dedication and commitment they bring to work every day.

Speaker #7: fundamentals.

Speaker #7: Operational discipline,

Speaker #7: brand strength,

Speaker #7: scale, and a

Speaker #7: well-capitalized balance

Speaker #7: sheet. Our strategy is squeeze amid widening

Speaker #7: simple. Put the

I firmly believe that our team is our biggest differentiator and our greatest asset.

Speaker #7: consumer at the center of

Speaker #7: everything we

Speaker #7: do. THC

Speaker #7: demand in the US is not only

Speaker #7: growing, it's systemic

And I want to thank everyone for their hard work, we are optimistic and energized about the opportunity ahead.

Speaker #7: diversifying as new formats

Speaker #7: emerge. Over the long term,

Speaker #7: we're confident in both our team and

That said, we will take a pause and holding quarterly conference calls Green.

Speaker #7: our approach.

Speaker #7: to navigate near-term headwinds while staying in

Green thumb as long term focused on creating value given the obstacles to wider investor support that we have repeatedly discussed.

Speaker #7: US consumer.

Speaker #7: THC can enhance their

Speaker #7: lives. Before I diversifying as new formats

We see the market is not focused on and does not recognize the fundamentals of the business quarter to quarter.

Speaker #7: Our third miracle in Mundelein takes place

I think this is a practical and realistic decision and importantly will be back when the timing is right.

Speaker #7: 7th. This two-day

Speaker #7: groundbreaking music festival

Speaker #7: is held at our Mundelein,

Speaker #7: allows for open

In the meantime, we will continue to fully communicated to our quarterly press releases securities filings and other announcements.

Speaker #7: cannabis consumption. US consumer.

Speaker #7: It's going to be a vibe and we

Speaker #7: ope to see you there.

Speaker #7: results.

We will continue to provide robust reason disclosures and our team will continue to be available for analysts and investors as requested for Nam noted, we're working hard to build long term value for our shareholders. Thank you all and now I'll pass the call back to operators.

Speaker #3: Thanks, Madeline takes place

Speaker #3: everyone. In the second quarter, we

Speaker #3: delivered over $293

Speaker #3: million in revenue, a 5% increase compared to the

Speaker #3: prior year

Speaker #3: period. Revenue was driven by

Speaker #3: increased consumer packaged

Speaker #3: goods sales.

Speaker #3: Overall, retail revenue was

Speaker #3: up slightly versus the second

To the operator for questions.

Speaker #3: quarter of 2024 to Matt to review our financial due to new

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.

Speaker #3: Revenue was driven by decreased 4% increased consumer packaged versus the prior year goods sales. period on a base of Overall, retail revenue was 91 stores due to up slightly versus the second continued price quarter of 2024 compression.

If you are using a speakerphone. Please pick up your handset before pressing the keys if at any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two at this time, we will pause momentarily to assemble our roster.

Speaker #3: due to new Consumer packaged goods net revenue for the stores offset by second quarter of significant pricing pressures 2025 increased 17% versus the prior year period, driven by continued across all markets.

The first question comes from Pablo <unk> from <unk> and Associates. Please go ahead.

Speaker #3: period on a base of Looking 91 stores due to forward, we expect third quarter sequential continued price revenue to be flat to compression. Consumer packaged down low single ods net revenue for the digits assuming the launch of second quarter of adult use in Minnesota 2025 does not occur in increased 17% the third versus the prior year quarter.

Good afternoon, everyone. This is rahul on for Pablo we have two questions. So first.

We have can you talk about any changes you have made in Minnesota regarding cultivation capacity product assortment expansion store relocations or refurbishing and the second one would be are you gaining wholesale share in New York State. If yes could you give any color in terms of distribution.

Speaker #3: Looking million or 54% forward, we expect of revenue third quarter sequential year over year. The revenue to be flat to decrease in gross profit was down low single primarily driven by price digits assuming the launch of compression.

Speaker #3: adult use in Minnesota Turning the opex, selling does not occur in general administrative expenses for the third the second quarter were $107 million or 36% of revenue, compared to $97 million quarter.

<unk> penetration and products and brands sold.

Speaker #3: The primarily attributable to an decrease in gross profit was increase in comp and primarily driven by price efits compression. Turning the opex, selling expenses.

Sure.

Really good questions examine here at all I'll take them both.

Speaker #3: general and administrative expenses for SG&A the second quarter were excluded depreciation, amortization, one-time $107 million or transaction costs, and 36% of revenue compared stock-based comps.

The first answer on Minnesota is.

Yes.

We've done all of the things you've kind of mentioned.

We have expanded capacity that was completed last year, we have renovated as well as relocating some stores to comp gives them ready.

Speaker #3: increase in comp and The increase year over year is mainly benefits attributed to the 14 incremental retail expenses. SG&A stores along with explained depreciation, increased cash-based amortization, one-time compensation transaction costs, and incentives.

Conversion.

But I mentioned in my prepared remarks was.

We expect to take place this fall and then we have increased our.

In fact, we are brand offerings.

Additional SKU registration so we did all our work in advance.

And since then we've been focused on staffing and training and were ready for <unk> for the game, we start in Minnesota.

Speaker #3: stores along with increased cash-based income would have been $11 compensation million or $0.05 per incentives. The company share. incurred a net loss of $1 Adjusted EBITDA, which million or 1 cent per excludes non-cash basic and diluted stock-based compensation and other share, down from net income of non-operating costs, was $21 million or $83 million 9 cents per basic and down from $94 million for diluted share in the the second quarter of prior year, due to 2024.

In New York.

We've seen a lot of we've seen nice growth on the CPG side of the business retail is safe.

A bit of a hit where stores have opened up.

Speaker #3: the $12 million loss on Part asset sales. of the decline is due to the shift in long-term Excluding this loss, net incentives to a larger cash income would have been $11 portion, which million or 5 cents per impacted SG&A and share.

The data for New York is a bit murky. However, we can see is that we're confident is is through our own lands, which is.

How many stores were shipping to what our total sales and what's the total amount of biomass the CPG channel.

Fortunately all three of those shrunk through up into the right.

My guess, because we'll have probably more detail on how that continues to evolve in the coming quarters, but so far we're pretty excited about the progress that we've seen in New York and Super excited about the rest of the year.

Speaker #3: When in the second quarter of Thumb. Together, we remain committed to the strong balance sheet, including cash of $177 driving long-term growth million and working while ensuring prudent capital of $226 capital allocation and million.

Got it thank you and can we add one more.

Okay.

Are you able to sell your adult nine drinks in your dispensaries.

Speaker #3: team's performance so far in

We're able to sell delta not drinks in our dispensaries, yes, as a finished goods manufacturing process has to be different by state. So it's not sourced from the same place, but at the same and the product.

Speaker #3: 2025 and appreciate their ongoing commitment operations, we are proud of what our

Speaker #3: and contributions to has built and the Green Thumb.

Speaker #3: growth while ensuring prudent

Speaker #3: capital allocation and

Speaker #3: cost

Speaker #3: efficiency. With that,

Got it perfect example of the real.

Speaker #3: I'll take it back to asset.

Conundrum in Canada today.

Speaker #1: Matt. As we move into our second decade of operations, we are proud of what our

The mix really no sense.

Got it thank you.

Speaker #1: has built and the

Sure.

Speaker #1: dedication and commitment they bring take a pause in

Speaker #1: to work every holding quarterly conference day. I

The next question is from Bill Kirk with Roth Capital Partners. Please go ahead.

Speaker #1: firmly believe that our team is

Speaker #1: differentiator and our

Speaker #1: greatest investor support that we

Speaker #1: asset. And I want to thank

Yes. This is Mike on for Bill. Thanks for taking the questions. Just one for me on New York and the zoning miscalculations there. It looks like over 100 locations may have to be moved in another 44 pending now don't comply.

Speaker #1: opportunity

Speaker #1: ahead.

Speaker #1: That said, we will take a pause in holding quarterly conference the timing is calls. Green Thumb is long-term focused

Wondering if you've heard anything incremental around what may happen to these locations and just your sense from the near term future of New York and how they'll kind of resolve this thank you.

Speaker #1: creating value and right.

Speaker #1: giving the obstacles to In the wider investor support that we

Speaker #1: have repeatedly

Speaker #1: discussed we see the

Speaker #1: recognize the fundamentals of the business quarter to quarter. I think this is a

Yeah.

Anthony here another good question.

Speaker #1: practical and realistic and our team will continue to be

It's murky right.

Speaker #1: decision and,

Speaker #1: importantly, we'll be back when

We saw the announcement kind of scratched our heads like everybody else. It sounds like there's a couple ways. This could evolve and play out one could be a legislative fix that would kind of solve the issue and so that folks would not have to do.

Speaker #1: the timing is requested.

Speaker #1: right. In the For

Speaker #1: meantime, we will continue now, know that we're working hard

Speaker #1: to fully communicate to to build long-term

Speaker #1: releases, securities

Speaker #1: filings, and other

Speaker #1: announcements. We

Speaker #1: will continue to provide questions.

Speaker #1: robust written disclosures We will now begin the and our team will continue to be available for analysts and

The other is we've heard that they've offered up some.

Speaker #1: investors as question and answer

Some sort of payment to compensate folks for the amount of work that they would get.

They're gonna have to embark upon to move their stores.

Speaker #1: value for our

Speaker #1: shareholders. Thank you all,

Speaker #1: and now I'll pass the call back to question has been addressed and you would operators for the operator for

Unfortunately, there's a comedy of errors in New York just kind of continues through this is just reflective of really what we've seen.

Speaker #1: questions.

Speaker #4: question and answer

With that rollout since since really.

Speaker #4: To ask a estion, you may press star, then one on your touchstone phone. If you are using a

Took place.

Fortunately for us none of our stores were impacted but.

Speaker #4: speakerphone, please pick up your

Our Hearts go out to those that are impacted because we know.

Speaker #4: If

Speaker #4: at any time your question has been addressed and you Zuanic like to withdraw your

We can only imagine kind of emotions when they got that notice you can state.

Speaker #4: press star, then two. At this time, Good afternoon, everyone.

Understood I appreciate the color.

Speaker #4: we will pause This momentarily to assemble

Sure. Thanks, Bob.

Okay.

The next question is from John Chapman with Alliance Global Partners. Please go ahead.

Speaker #4: Pablo

Speaker #4: Zuanic from Zuanic

Speaker #4: head.

Good afternoon. Thanks for the question. This is John on for Aaron Grey.

Speaker #5: Good afternoon, everyone. This

Speaker #5: is Rahul on for one would be, are you Pablo. We

Speaker #5: have two questions. So gaining wholesale

So I know you touched on in the prepared remarks on the <unk> licensing agreement, but could you provide smart color around the strategy you are looking to to deploy them.

Speaker #5: first, we share in New York State?

Speaker #5: have can you talk If yes, could you give

Speaker #5: about any changes you any color in terms

Speaker #5: regarding cultivation

Speaker #5: capacity, product assortment sold? expansion, store

Leveraging your Canada, France, the THC hemp market, allowing for potential national distribution has seen with rhythm.

Speaker #5: relocations, or Sure.

Speaker #5: one would be, are you

Speaker #5: gaining wholesale

Speaker #5: share in New York State?

<unk> beverages, and how are you aiming to approach this strategy given the federal legality uncertainty that remains.

Speaker #5: If yes, could you give any color in terms distribution, things that you kind of

Speaker #5: penetration, and mentioned.

Yeah. That's a great question, John It's Ben I'll take it I think it's insightful.

Speaker #1: Dr. Samson here and I'll

Look we think we build real brand since we now have an opportunity to operate with rhythm brand not constrained by schedule one schedule three or anything like that is fully illegal farmville compliant product and we can act that way.

Speaker #1: e them both. The first answer conversion.

Speaker #1: is

Speaker #1: yes. We've done all expect to take place this

Speaker #1: the things that you kind of

Speaker #1: mentioned. We have expanded capacity. increased

Speaker #1: That was completed last effectively our brand year. We have

And we plan to and we are there.

It's really just the beginning and it's really quite an exciting time, because the common denominator like the question a second ago as the other products. The same we know consumer demand, we know what consumers know how to make consumers feel really good with THC.

Speaker #1: for use

Speaker #1: conversion. That I mentioned in

Speaker #1: my prepared remarks Minnesota.

Speaker #1: was we expect to take place this In New fall. And then we

Speaker #1: effectively our brand

Speaker #1: offering through

Speaker #1: additional skew

And so now it's just the continuation of that so we're able to take advantage of these sort of capital market anomalies lower our cost of capital invest appropriately to build brands Americans love same strategy in the products that are now available in thousands literally thousands of locations overnight.

Speaker #1: registration. So we did all Retail has

Speaker #1: that work in taken a bit of a hit as more

Speaker #1: advance. And since then, we've been focused on stores have opened staffing and training and

Speaker #1: we're ready for the game to

Speaker #1: start in data for New York is a bit Minnesota. In New

Speaker #1: York,

Speaker #1: you know we've seen a lot of we've seen can see is that

Speaker #1: nice growth on the CPG we're confident in side of the

That has never before been possible in what was called marijuana that I don't even really know what that is anymore.

Speaker #1: Retail

Speaker #1: has taken a bit of a hit as more stores have opened channel? up. The

Because of how murky the rules are on the definitions.

Speaker #1: data for New York is a bit Unfortunately, all three of murky.

But we're all in on the investment.

Speaker #1: is through our own

And we love what's going on in the landscape, because we see consumers reaction to the product.

Speaker #1: Lens, which is evolving and becoming quarters. How many stores are we shipping to?

Speaker #1: total sales? And what's the

Amazingly positive.

Speaker #1: total amount of biomass excited about

Speaker #1: that we're moving from the progress that we've seen in New CPG channel?

So you're invited and everybody's divide it out to the Miracle I'm on the line coming up in a few weeks or any of our other events or onto the rhythm site to buy the drags and see what you think but we're excited.

Speaker #1: Unfortunately, all three of those charts are up and to the Got it.

Speaker #1: right. My Thank you. guess is we'll have

Speaker #1: detail on how that Sure. continues to

Speaker #1: evolve in the coming Are you

Great. Thanks.

Speaker #1: quarters. But so far, we're able to sell your

Level with wholesale it's continued to grow year over year, and putting analytics data indicates that.

Speaker #1: etty excited about the Delta 9 drinks progress that we've seen in New York and super

Speaker #1: excited about the rest of the in your

Performed well the past few quarters.

Speaker #5: Got it. Thank ou. And can we add Yes, as a finished

Speaker #5: one good, the manufacturing process

Is there maybe some more color on how much of this has been driven by expanded distribution and third party doors versus greater velocity in existing doors and maybe any other color you can provide on.

Speaker #5: more? Are

Speaker #1: Sure.

Speaker #5: ou able to sell sourced from the same place, but it's your Delta 9 drinks in your

Speaker #5: dispensaries?

Speaker #1: drinks in our

A third party credit risk is a risk of spend.

Speaker #1: dispensaries? Yes, as a finished good, the manufacturing process has to be different

Recently called out by some of your peers.

Speaker #1: by state. So it's Sure.

Speaker #1: not sourced from the same place, but it's the same end The next

Yeah, another really good question.

Speaker #1: product. A perfect

You know the vast majority of the CPG grocery scene has been true third party doors.

Speaker #1: example of the real conundrum in cannabis Yeah, today. That makes

Speaker #1: really no sense.

We already had healthy Berta county kind of coming into the year.

Speaker #1: Sure.

And so we really didn't have a lot of kind of room to grow that Bert a county within a number of markets. So really focused on on third parties really leaning into a number of kind of key T States right I talked about in my prepared remarks, two nice share gains in Illinois, Pennsylvania, and New Jersey, We've added a lot of new doors, and New York and it's something that.

Speaker #4: The next

Speaker #4: question is from Bill Kirk with Roth I'm just wondering if you've heard anything Capital Partners.

Speaker #6: Thanks for taking the

Speaker #6: estions. Just one for me on announcement.

Speaker #6: It looks like

Speaker #6: over 100 locations may have to be moved and another 44 pending now don't comply. I'm just wondering if you've heard anything incremental around what may happen to these out.

As the.

As the retail business has softened its an area that we've really focused and the other thing that we're constantly kind of tracking as the velocity and how fast kind of skus returning both within our doors as well as third party.

Speaker #6: locations and just your sense for the near-term future of New York and how

Speaker #6: they'll kind of resolve this. Thank One could be a ou.

Speaker #1: Anthony here, another good

Speaker #1: estion. It's murky,

Speaker #1: We've, you

And so what we're seeing is that the velocity is also increasing which is which is super exciting because we know that's the way we can continue to kind of drive the business forward. So.

Speaker #1: know, we saw the

Speaker #1: It sounds like there's a

Speaker #1: couple of ways this could evolve and play out. One could be a legislative fix that we kind of solve the issue and so that folks would not have to just reflective of really move.

Team has done a really nice job and pumped to see what they can do in the back half of the year.

Great. Thanks for the questions.

Speaker #1: compensate folks for the amount of

The next question is from.

Speaker #1: would that they're going to have to embark upon to move their stores. You know, unfortunately, the comedy of errors in New York just kind of continues.

Brenna.

Clinton with ATB capital markets. Please go ahead.

Speaker #1: this is just reflective of really what we've seen with that Sure.

Perfect. Thank you and thanks for taking our questions just kind of curious on your thoughts on that.

Speaker #1: it really, you ow, took place. Fortunately for us, none of ur stores are impacted, but you ow our hearts do go out to Thanks, those that are impacted because

And like what we're seeing in the market with some companies going under and restructuring.

Sure I'll take that thanks Bruce.

Speaker #1: we Bill.

You know always remains interesting I think the headline is we're being measured we're opportunistic but several bankruptcies restructurings or whatever words, you want to use means theres massive sale of assets going on.

Speaker #1: otions when they got that Good afternoon.

Speaker #1: notice from the state. Thanks for the

Speaker #6: I appreciate

Speaker #6: the Aaron color.

As equity values are gone.

Speaker #5: Thanks.

Speaker #4: The next question is from deploy?

And so we are being as opportunistic as we can at the same time not wanted to inherit other problems.

Speaker #4: John Chapman with Leveraging your Alliance Global Partners. Please go

Speaker #4: ahead.

Our static tax issues dealing with folks things like that.

Do not look for us to do a transformational deal we're being more surgical strategic on what can help us where we can measure the ROI I keep in mind, our business trades at a very low multiple so we're not likely to do a deal at a higher multiple and it's hard to trust the whole multiple and find a deal that will work. So we're very active but you know it's hard to get things over the line.

Speaker #7: the prepared remarks on the

Speaker #7: Agrify licensing

Speaker #7: agreement, but could you provide some

Speaker #7: more color around the strategy you're oking to deploy? Leveraging Schedule 3, your cannabis brands for the THC hemp market, allowing for potential national distribution as seen with rhythm hemp THC

Speaker #7: beverages. And how are you aiming to approach this strategy given the federal legality uncertainty that remains?

Difficult industry, but we're here and.

We're talking to folks.

I understand so kind of as a follow up to that one cigarette with regards to your capital allocation priorities. What would you say the top three priorities are for the extra cash on hand, and its expansion into international markets potential.

Speaker #1: John. It's Ben. I'll take it. I think it's

Speaker #1: insightful. Look, we think we've built real

Speaker #1: brands. And we now have an portunity to are.

Speaker #1: not constrained by Schedule 1, Schedule

Speaker #1: 3, or anything like that. It's fully legal. It's Farm We Bill compliant product. And we can act that

Sure I can tell you that its Ben again.

Speaker #1: way. And

We're watching international we're studying it we're gonna go back and listen to the conference call is going on now to learn more.

Speaker #1: beginning, and it's really quite an

Speaker #1: exciting time because the common denominator, like the products that are now available in estion a second ago, is the end product the same? We know consumer

And I still think our capital it's hard for me to get my head all the way around the return on invested capital you know overseas. We think we're building brands Americans Love and eventually that's going to create material value for shareholders and we see that happening in Europe, and we think it will happen in other places, but today, that's not high on the list.

Speaker #1: demand. We know what consumers thousands, literally want. We know how to make consumers feel

Speaker #1: it's just the continuation of

Speaker #1: So we're able to take

Speaker #1: American Bluff, same

Speaker #1: strategy. In the products that are now available in thousands, literally thousands of locations overnight, there's never before been possible in what was called marijuana.

Uses of capital are you always have enough cash on hand to be able to sleep very well, we understand our debt, we love our balance sheet.

And we're investing in the facilities, we're investing in growth, we're investing as Anthony talked about in Minnesota, New York and other places. We're ahead of the adult use market in a couple of states as they come hopefully Virginia.

Speaker #1: even really know what that is

Speaker #1: anymore. Because of how murky the rules cited. are and the definitions. But

Speaker #1: we're all in on the investment. Great.

Speaker #1: And we love what's going on in landscape because we see consumers' reaction to the product. And it's amazingly Thanks. positive. So if you're invited and everybody's invited out to the

And then we have.

Funds looking for strategic M&A that could make sense.

But we're we're okay sleeping with a lot of cash excess cash.

Speaker #1: Miracle in Madeline coming up in a few weeks, or any of our other And high events or onto the rhythm site, to buy the

Okay perfect. Thank you very much that's all for me I'll jump back in the queue.

Speaker #1: drinks and see what you think. level, with wholesale, But we're

Thank you.

The next question is from Andrew simple with Bentham financial Please go ahead.

Speaker #6: level, with wholesale, it's continued to grow. Year over year. And putting analytics data in the case

Good evening, Thanks for taking my question here.

Speaker #6: is performed well. The past few quarters, is there maybe some more been recently called out by some color on how much

Just a single question, but I'm going to leave it pretty broad imagine the world will look a bit different for the cannabis industry.

Speaker #6: of this has been driven by expanded distribution and third-party doors of your versus greater velocity in existing doors?

Circle up for a detailed earnings call here.

Speaker #6: And maybe any further color you can provide peers?

Speaker #6: And maybe any further color you can provide peers? on third-party credit risk as AR risk has been recently called out Yeah, another really good by some of your

Hoping that you could leave us with a two to three year Road map.

To the extent that it's possible to do so in an ever evolving cannabis industry.

In short.

What are some of your most important strategic objectives for the next few years.

Speaker #1: Yeah, another really od estion. You

So that.

Speaker #1: has been through third-party

We have the checklist of things.

Speaker #1: doors. You know, we already had healthy verticality kind of coming into the Jersey.

Things to evaluate the business on as investors and analysts.

Over the next over the next few years here.

Speaker #1: grow that verticality within the number of markets.

Speaker #1: And so really focused on third parties. And really leaning focused.

Where do you where.

Where are the strategic priorities for the business.

Speaker #1: into a number of kind The other thing that we're key states, right? I talked about it in my prepared remarks

Great I can take that it's a good question, maybe Alaska I don't have anybody else in the queue, but I'll.

Speaker #1: Pennsylvania, New Jersey. We've

I'd say the headline answer to that is what is the power of our brands wherever they exist who knows about them and what do they mean.

Speaker #1: softened, it's an area that we've

What do I mean, what is the awareness factor what is our pricing power.

Speaker #1: ally focused. The other

Speaker #1: thing that we're constantly kind of tracking Great.

Speaker #1: is the velocity. And how fast kind Thanks for the of the SKUs are turning both within our doors as well as third party. And so what we're seeing is that the

Heads up against anybody else, what's that distribution look like and how are we doing.

Headlines here would be what's the balance sheet.

Speaker #1: velocity is also increasing, which is which is super exciting because we know that's the way we question. can continue to kind of drive the business forward.

We've got a balance sheet is in a precarious position things did not go well. So we want to keep the balance sheet well under control rainy day situation feel really good about what we're doing and I think the third checking would be and again, we're gonna have annual meetings and were available for anybody asking the questions and we invite everybody to come to the annual meeting and how the team do.

Speaker #1: job and pumped to see what they can do in

Speaker #1: back half of the ar.

Speaker #6: questions.

Speaker #4: The next question is and from

You know the secret to our success is the team I've mentioned that over time, we really believe in it we're investing in the team and keeping the team together, there's obviously going to be changes over time, but making sure that people are working liking where they were having a good time and enjoying what we're up to remains key to what we do so brands balance sheet.

Speaker #4: Brianna Cummington restructuring.

Speaker #8: Perfect. Thank

Speaker #8: you. And thanks for ing our questions. Just curious on your thoughts on like what 're seeing in the markets with some companies going under and on.

Speaker #8: restructuring.

Speaker #1: Sure. I'll take that. Thanks, Bree. As equity values are 's

<unk>.

Speaker #1: Ben. You gone.

Yeah.

That's great. That's helpful I'll turn the call back over thank you.

Speaker #1: know, always remains And so

Speaker #1: interesting. I think we are being as the headline is we're being measured,

Speaker #1: 're opportunistic, but several opportunistic as we can

Sure.

Speaker #1: bankruptcies, restructurings, or at the same time not wanting to atever words you want to use means

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

Speaker #1: there's massive sale of assets going inherit other on. As equity

Speaker #1: values are gone. problems.

Speaker #1: And so we are being as opportunistic as we Understanding can at the same time not

Thanks, everybody and those who have been with US 29 conference calls in a row. We appreciate that few of you are out there we noticed that we like it and we will be live at the annual meeting coming up in June, but Florida that.

Speaker #1: wanting to inherit other tax issues.

Speaker #1: understanding tax issues, dealing with folks, things like

Speaker #1: that. You know, do Keep in mind, our not look for us to do

Speaker #1: a transformational business trades at a very low deal. We're being more

Speaker #1: surgical, strategic on what multiple.

Everybody is sort of an interesting fall enjoy the rest of your summer. Thank you.

Speaker #1: help us, where we can measure the ROI. Keep in So we're not likely to mind, our business trades at a very

Speaker #1: low multiple. So we're do a deal at a higher

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

Speaker #1: likely to do a deal at a multiple.

Speaker #1: higher multiple. And it's hard And it's hard to trust

Speaker #1: to trust the low multiple the low multiple and find a and find a deal that'll

Speaker #1: . So we're very deal that'll work.

Speaker #1: active, but I, you know, it's

Speaker #1: at the difficult

Speaker #1: industry. But we're here. And you

Speaker #1: And you know, we're talking to ow, we're talking to

Speaker #1: folks.

Speaker #8: Understood. And so kind of as a follow-up to that, I with regards to your capital

Speaker #8: the top three priorities are for the excess cash on hand? And is

Speaker #8: expansion to international

Speaker #8: markets a

Speaker #8: potential?

Speaker #1: I can take that.

Speaker #1: It's Ben, again. You know, we're ching international. We're I still think our studying it. We're going to go back and listen to the ference call that's going on now to learn

Speaker #1: more. And I still think capital is hard for me to

Speaker #1: our capital is hard get my head all the way around the

Speaker #1: for me to get my head all the way return on invested capital. around the return on invested

Speaker #1: capital. You know,

Speaker #1: overseas. We think we're

Speaker #1: Bluff, and eventually that's going to create, you know, material value for shareholders. And we see that happening in

Speaker #1: Europe. And we think it'll happen in other places. But today, that's not high on the list. Use of the But today, that's not high on the capital are, you know, always have enough cash

Speaker #1: on hand to be able to sleep very list.

Speaker #1: well. We understand our debt. We love our balance

Speaker #1: sheet. And we're esting in the facilities. We're investing in growth. We're esting as Anthony talked about in

Speaker #1: places. We're ahead of the

Speaker #1: adult use markets in a couple of states as

Speaker #1: they come and hopefully Okay. Virginia. And

Speaker #1: then we Perfect.

Speaker #1: have funds looking for strategic M&A that could make Thank you very much.

Speaker #1: sense. But That's all for we're okay sleeping with a lot

Speaker #1: cash, excess e.

Speaker #1: cash.

Speaker #8: Perfect. Thanks very much. That's all for me. I'll jump back in the The next queue.

Speaker #4: from Andrew

Speaker #4: Semple with Bentham Financial. roadmap to the Please go ahead.

Speaker #9: here.

Speaker #9: Just a single question, but I'm going to leave it pretty broad. I imagine the world will look a bit different for the cannabis industry next time we circle up for a GTI earnings strategic objectives for the call here.

Speaker #9: So

Speaker #9: I was hoping that you could leave us with a two to three-year have a checklist roadmap to the extent that it's possible to do so

Speaker #9: in the never-evolving of things to cannabis

Speaker #9: industry. In short, valuate the business on you know, what are some

Speaker #9: of your most as investors and important strategic

Speaker #9: objectives for the next few

Speaker #9: So that, you ow, we have a checklist of

Speaker #9: things to evaluate the business? business on as investors and Great. I can take that. It's a good question. Maybe the last. I don't know if anybody else is in the queue, but you know analysts.

Speaker #9: here, where do you Who knows about them and what do they mean? And what do they where are the mean? You know, what is the strategic priorities for the awareness factor?

Speaker #1: I can take that. It's a good

Speaker #1: Where do

Speaker #1: exist? Who knows about them what do they mean? And what do they mean, you ow, what is the awareness factor? What is our pricing power?

Speaker #1: Heads up against anybody else, what's that distribution look like? And how are we doing? Headline two would be what's the balance sheet? If we've got a balance sheet that's in a precarious position, things did not go well.

Speaker #1: So we want to keep the

Speaker #1: balance sheet well under control, rainy day situation, feel really good about what we're where they work, having a ing. And I think the third check-in would be, and in, we're going to have annual meetings and 're available for anybody to ask any questions.

Speaker #1: everybody to come to the annual

Speaker #1: Is how's the team

Speaker #1: our success is the team. I've

Speaker #1: ioned that over time. Sure. We really believe in it. We're esting in the team. And keeping the team

Speaker #1: together, there's obviously going to The this concludes our changes over time. But making sure that people are working, liking where they work,

Speaker #1: having a good time, and enjoying what we're to, remains key to what we do. estion and answer So brands, balance sheet,

Speaker #1: team.

Speaker #9: great. That's helpful. I'll turn the Thanks, call back over.

Speaker #9: Thank everybody.

Speaker #9: you. Those of you that have been with

Speaker #1: Sure. us 29 conference calls in a

Speaker #4: concludes our question and answer session. I would like to turn the

Speaker #4: remarks.

Speaker #1: Thanks, everybody.

Speaker #1: with us 29 conference today's calls in a row. We appreciate that. Two of you are out there. We noticed that. We like it. And

Speaker #1: we will be live at the presentation.

Speaker #1: annual meeting coming up in You may now June. Look forward to that. Buckle up, everybody. It should be an esting fall. Enjoy the rest of your summer.

Speaker #1: Thank you.

Speaker #3: stores offset by results. Thanks, Anthony. And hello, significant pricing pressures everyone. From the second quarter, we across all delivered over $293 markets. The second quarter million in revenue, a 2025 comfortable 5% increase compared to the sales for stores open at prior year least 12 months period.

Speaker #3: growth in New York, and the addition of adult use The second quarter 2025 comfortable sales for stores open at least 12 months decreased 4% sales in versus the prior year Ohio.

Speaker #3: Gross period, driven by continued profits for the third quarter was growth in New York, and the $146 million or addition of adult use 50% of revenue, sales in down from $151 Ohio.

Speaker #3: In Q2 2025, revenue was 34% compared to the same quarter last gross year. The profit for the third quarter was $146 million, or 50% of revenue, down from $151 million, or 54% of revenue. Increased total expenses were reported year over year.

Speaker #3: Which we to $97 million refer to as normalized or 34% of revenue operating costs, for the second quarter last year. The increased total expenses was approximated $74 million compared to $67 primarily attributable to an million in the second quarter of last year.

Speaker #3: The company stock-based comp, which we incurred a net loss of $1 refer to as normalized million or $0.01 per operating costs, basic and diluted approximated $74 share down from net income of million compared to $67 $21 million or million in the second quarter of $0.09 per basic and last year.

Speaker #3: diluted share in the The increase year over year is mainly prior year due to attributed to the 14 $12 million loss on incremental retail asset sales.

Speaker #3: adjusted Adjusted EBITDA, which EBITDA. We expect to excludes non-cash continue to stock-based compensations and other experience pricing challenges that will non-operating costs, was keep margins and $83 million adjusted EBITDA to down from $94 million for below 30% in the coming the second quarter of 2024.

Speaker #3: quarters. We entered the second quarter with a Part of the decline is due to strong balance sheet including cash of $177 the shift in long-term incentives to a larger cash million and working portion, which capital of $226 impacted SG&A and million.

Speaker #3: Cash flow adjusted from operations for the quarter came EBITDA. We expect in at $56 to continue to million. In experience pricing challenges that conclusion, we're pleased with our team's will keep margins and performance so far in adjusted EBITDA to 2025 and below 30% in the coming appreciate their ongoing commitment and contributions to Green quarters.

Speaker #3: cost Cash flow efficiency. With that, from operations for the quarter came in at $56 I'll kick it back to million. In Ben.

Speaker #6: Thanks,

Speaker #6: Matt. As we move into conclusion, we're pleased with our our second decade of

Speaker #6: dedication and commitment they bring to

Speaker #6: work every Together, we remain committed to day. I

Speaker #6: firmly believe that our team is driving long-term

Speaker #6: our biggest

Speaker #6: differentiator and our

Speaker #6: greatest

Speaker #6: And I want to thank everyone for their hard

Speaker #6: work. We are optimistic Ben.

Speaker #6: and energized about the Thanks, opportunity

Speaker #6: ahead. That said, we will

Speaker #6: calls. Green

Speaker #6: Thumb is long-term focused

Speaker #6: on creating value, our biggest giving the obstacles to wider

Speaker #6: repeatedly

Speaker #6: discussed, we see the

Speaker #6: market is not focused on and does not everyone for their hard

Speaker #6: recognize the fundamentals of the work.

Speaker #6: business quarter to We are quarter. I think this is a practical and realistic

Speaker #6: decision and, optimistic and energized about the

Speaker #6: importantly, we'll be back when

Speaker #6: meantime, we will continue to fully communicate through our

Speaker #6: quarterly press

Speaker #6: releases, securities

Speaker #6: filings, and other announcements. We will market is not focused

Speaker #6: continue to provide on and does not robust written disclosures

Speaker #6: available for analysts and

Speaker #6: investors as

Speaker #6: value for our

Speaker #6: shareholders. Thank you all, and now our quarterly press 'll pass the call back to

Speaker #6: operators to the operator

Speaker #6: for

Speaker #2: session. To ask a

Speaker #2: estion, you may requested.

Speaker #2: press star, then one on For your touchstone phone. If you are

Speaker #2: using a speakerphone, please pick up your now, know that we're working hard handset before pressing

Speaker #2: the key. If to build long-term

Speaker #2: at any time your

Speaker #2: like to withdraw your question, please We will now begin the

Speaker #2: press star, then

Speaker #2: two. At this time, we will pause momentarily to assemble our session.

Speaker #2: roster. The

Speaker #2: first question comes

Speaker #2: from handset before

Speaker #2: Pablo pressing the keys.

Speaker #2: and Associates.

Speaker #2: Please go head. question, please

Speaker #8: is Rahul on for

Speaker #8: Pablo. We have two questions. our So first, we

Speaker #8: have can you talk roster.

Speaker #8: about any changes you have The first question

Speaker #8: made in Minnesota comes from regarding cultivation

Speaker #8: capacity product

Speaker #8: assortment

Speaker #8: expansion store & Associates.

Speaker #8: relocations or Please go

Speaker #8: refurbishing? And the second

Speaker #8: distribution and

Speaker #8: penetration and products and brands have made in Minnesota

Speaker #9: Both

Speaker #9: really good questions. This is Anthony here and I'll e them refurbishings?

Speaker #9: both. The first answer on And the second Minnesota

Speaker #9: is

Speaker #9: yes. We've done all the

Speaker #9: We have

Speaker #9: expanded capacity. That was completed last products and brands year. We have

Speaker #9: renovated as well as sold?

Speaker #9: relocated some stores to kind of get Sure.

Speaker #9: them ready for Both really good questions.

Speaker #9: That I mentioned in my

Speaker #9: prepared remarks on Minnesota was we

Speaker #9: fall.

Speaker #9: offering through

Speaker #9: additional SKU registration. renovated as well as So we did all that work in

Speaker #9: advance. And since then, we've been focused on relocated some stores to kind of

Speaker #9: staffing and training. And we're give them ready ady for the game to start

Speaker #9: in

Speaker #9: York, you

Speaker #9: know we've seen a lot of we've seen have increased

Speaker #9: nice growth on the CPG side

Speaker #9: of the business.

Speaker #9: up. The

Speaker #9: murky. However, what

Speaker #9: is through our own lens,

Speaker #9: which is how many stores are we shipping to? What are total sales? And what's the total amount of biomass that we're moving from the CPG business.

Speaker #9: those charts are up and to the

Speaker #9: right. My guess is we'll have However, what we can see probably more

Speaker #9: detail on how that is that we're confident in continues to

Speaker #9: But so far, we're pretty

Speaker #9: York and super

Speaker #9: excited about the rest of the year.

Speaker #8: And can we add one

Speaker #8: more? probably more

Speaker #8: dispensary?

Speaker #9: Are year. able to sell Delta 9 drinks in our dispensaries?

Speaker #8: has to be different by

Speaker #8: state. So it's not

Speaker #8: the same end product. Got it.

Speaker #9: Perfect example Are we able to sell Delta 9 of the real conundrum in Canada today. That makes really no sense.

Speaker #8: Got it. Thank

Speaker #8: ou.

Speaker #2: question is from Bill Got it. Kirk with Roth Capital Partners. Please go ahead.

Speaker #10: this is Nick on for Bill. Thanks for ing the questions. Just one for me on New York and the zoning Got it.

Speaker #10: miscalculations there. It looks like over Thank 100 locations may have to

Speaker #10: be moved and another you. 44 pending now

Speaker #10: don't comply.

Speaker #10: incremental around what may

Speaker #10: happen to these locations and just your sense for the near-term Please go future of New York and how they'll

Speaker #10: ind of resolve this. Thank head. you.

Speaker #9: Yeah. You know, Anthony here, another good estion. It's murky, right? We've, you ow, we saw the

Speaker #9: We kind of scratched our

Speaker #9: ads like everybody New York and the zoning else. It sounds like there's a couple of

Speaker #9: ways this could evolve and play miscalculations there.

Speaker #9: legislative fix. That would kind of solve the issue and so that folks would not have Yeah, you know to move. The

Speaker #9: other is we've heard that they've offered

Speaker #9: up some sort of

Speaker #9: payment to compensate right?

Speaker #9: folks for the amount of work

Speaker #9: that they would that

Speaker #9: 're going to have to embark upon to move their announcement.

Speaker #9: stores. You know, unfortunately, We kind of scratched

Speaker #9: the comedy of errors in New York our heads like everybody

Speaker #9: just kind of continues. And this is else.

Speaker #9: what we've

Speaker #9: seen with that rollout since it ally, you know, took place. The other is

Speaker #9: Fortunately for us, none of our we've heard that they've offered stores are impacted,

Speaker #9: but you up some sort of ow our hearts do go out to

Speaker #9: ose that are impacted because we payment to

Speaker #9: know we can

Speaker #9: only imagine kind of the otion when they got that notice from work that they the

Speaker #9: state.

Speaker #10: Understood. I appreciate the And color.

Speaker #8: Thanks.

Speaker #2: The next question is from John Chapman with Alliance Global Partners. know Please go

Speaker #2: head. we can only imagine kind of the

Speaker #11: estion. This is John on for Understood.

Speaker #11: Gray. So I know you Sure. touched on in the prepared remarks on the Agrify

Speaker #11: licensing agreement, Thanks, but could you provide some

Speaker #11: More color around the bill strategy you're looking to...

Speaker #11: cannabis brands for the

Speaker #11: THC hemp market,

Speaker #11: allowing for potential Good afternoon.

Speaker #11: national distribution has Thanks for the Hemp THC

Speaker #11: beverages. And how are you aiming to question.

Speaker #11: approach this strategy This is John

Speaker #11: given the federal legality uncertainty that on for Aaron remains?

Speaker #9: Yeah, that's a great question, Gray.

Speaker #9: John. It's Ben. I don't So I know ink it and I think it's

Speaker #9: insightful. Look, we think we've built real you touched on in brands. And we now have an portunity to

Speaker #9: operate with the Rhythm brand not

Speaker #9: constrained by Schedule 1,

Speaker #9: or anything like that. It's fully al. It's Farm Bill Yeah, that's a great question, compliant product. And we can act that way. And we plan to.

Speaker #9: And we

Speaker #9: It's really just the beginning

Speaker #9: and it's really quite an exciting operate with the rhythm brand time because the common denominator, like the question a second ago, is the end product the same.

Speaker #9: know consumer demand.

Speaker #9: We know what consumers want. We

Speaker #9: ow how to make consumers feel really od with THC. And so now it's just the continuation of that. So we're able to take advantage plan to, and we these sort of capital market anomalies, lower our cost of

Speaker #9: capital, invest appropriately, to build brands, are.

Speaker #9: American blood, same It's really just the strategy. In the

Speaker #9: thousands of locations

Speaker #9: overnight, it has really good with never before been possible

Speaker #9: in what was called THC.

Speaker #9: marijuana. That I don't even And so now

Speaker #9: really know what that is

Speaker #9: anymore. Because of that.

Speaker #9: how murky the rules are and

Speaker #9: the definitions. But vantage of these sort of capital we're all in on the

Speaker #9: investment. And we market anomalies, lower our love what's going on in the

Speaker #9: landscape because we see consumers' reaction to the of capital, invest product. And it's

Speaker #9: amazingly appropriately to build brands, positive. So you're invited and

Speaker #9: ybody's invited out to the miracle in Mundelein coming up in a few

Speaker #9: weeks. Or any of our other events or onto the Rhythm That I don't site, to buy the drinks and see what you think. But we're

Speaker #10: it's continued to grow. Year over year. And putting analytics data in the case of performed well, the past few quarters. Is there maybe some more color on how much of this has been driven by expanded distribution and third-party doors versus

Speaker #10: greater velocity in the cited. ing doors?

Speaker #10: And maybe any other Great.

Speaker #10: color you can provide Thanks.

Speaker #10: color you can provide Thanks. on third-party credit risk And high as AR risk has

Speaker #9: estion. You know, the vast majority of the CPG growth we've seen has been through third-party doors. You know, we

Speaker #9: already had healthy verticality kind of coming into the year. And so we really didn't have a lot peers. of kind of room to grow that verticality within the number of markets.

Speaker #9: And so

Speaker #9: really focused on third parties. We're really leaning into a number of kind of key states, right? I talked about it know, the vast majority of the my prepared remarks to nice

Speaker #9: share gains in CPG growth we've seen Illinois, Pennsylvania, New

Speaker #9: We've added a

Speaker #9: of new doors in New York. year. And you know, it's

Speaker #9: ething that as the And so we really didn't have retail business,

Speaker #9: you know, has a lot of kind of room to softened, it's an area that we've really

Speaker #9: antly kind of tracking is the

Speaker #9: velocity. And how fast kind of to nice share gains in the user turning both within our

Speaker #9: doors as well as third-party. Illinois,

Speaker #9: And so what

Speaker #9: 're seeing is that the velocity is also increasing, which ed a lot of new doors to New is which is super exciting

Speaker #9: because we know that's the way we can York.

Speaker #9: continue to kind of drive the business And you know, forward.

Speaker #9: So the team's done 's something that as

Speaker #9: really nice job and the retail

Speaker #9: pumped to see what they can do in the back business, you know, has half of the

Speaker #9: ar.

Speaker #2: The next question is from Brenna Cummington with ATB Capital Markets. Please go head.

Speaker #12: Perfect. Thank So the

Speaker #12: you. And thanks for taking our team's done a really nice estions. Just

Speaker #12: curious on your thoughts on Great. M&A given like what we're seeing in

Speaker #12: markets with some Thanks for the companies going under

Speaker #9: Sure. I'll

Speaker #9: e that. Thanks, Bree. It's en. You know, always with remains interesting. I

Speaker #9: ink the headline ATB Capital Markets. is we're being measured. We're

Speaker #9: portunistic. But Please go several bankruptcies

Speaker #9: restructurings or whatever words you ant to use means there's head. massive sale of assets going

Speaker #9: Dealing with folks. Things like

Speaker #9: that. You know, do not look for us to do a transformational deal. We're being more surgical, strategic on what can help us, where we can measure the ROI.

Speaker #9: So

Speaker #9: we're very active, but

Speaker #9: I, you know, it's hard to get hard to get things over the line things over the line at the difficult industry. But we're here.

Speaker #9: folks.

Speaker #12: understand. So kind of as a

Speaker #12: follow-up to that, with regards to your capital allocation priorities, what would you say the top three priorities are for excess cash on hand? And is expansion to international markets a allocation priorities, what would you potential?

Speaker #9: I can take that. It's Ben,

Speaker #9: again. You know, we're ching international. We're studying it. We're going go back and listen to the conference call that's ing on now to learn more.

Speaker #9: And Sure.

Speaker #9: You know,

Speaker #9: overseas. We think we're building

Speaker #9: brands, Americans love, and

Speaker #9: eventually that's going to create, you ow, material value for building brands, American shareholders. And we see that happening in Europe. And we think 'll happen in other places.

Speaker #9: Use of the capital are, you know,

Speaker #9: ways have enough cash on hand to be able to sleep very well. We understand our debt. We love ur balance sheet. And we're investing in the facilities.

Speaker #9: growth. We're investing as

Speaker #9: Anthony talked about in Minnesota and New York and other places. We're ahead of the adult use markets in Minnesota and New York and other a couple of states as they come.

Speaker #9: Hopefully,

Speaker #9: Virginia. And then we have funds looking for strategic M&A that could make sense. But we're ay sleeping with a lot of cash, excess cash.

Speaker #12: I'll jump back to the queue.

Speaker #9: Thank you. Okay.

Speaker #2: question is from Andrew Simple with Bentham Financial. Please go Thank ahead.

Speaker #11: Good evening. Thanks for

Speaker #11: taking my question here. Hi, just a question, but I'm going ou. to leave it pretty broad. I imagine the world will look a bit different for the cannabis industry next time we circle up for

Speaker #11: a GTI earnings call here. So I was hoping The next question is that you could leave us with the two to three-year

Speaker #11: extent that it's possible to do so in the never-evolving cannabis Good

Speaker #11: industry. In short, you evening.

Speaker #11: know, what are some of your Thanks for taking my question most important

Speaker #11: next few years? So that you know we

Speaker #11: analysts. Over the

Speaker #11: next few

Speaker #11: years here, where do you where are the strategic priorities for the years?

Speaker #9: I would say the headline answer to that is, over the next few years, what is the power of our brands? Where do they exist?

Speaker #9: What is business?

Speaker #9: our pricing power? Heads up against anybody else. What's that distribution look like? And how are we Great. doing? Headline two would be, what's

Speaker #9: balance sheet?

Speaker #9: If we've got a balance sheet that's in a estion.

Speaker #9: carious position, things did not go well. So we want to keep the balance sheet Maybe last.

Speaker #9: well under control. Rainy day situation. Feel really good I don't know if about what we're doing. And I think the third

Speaker #9: check-in would be, and again, we're going to ybody else is in the queue,

Speaker #9: annual meetings and we're available for but you know, I would say the ybody to ask any questions.

Speaker #9: And we invite everybody to come to the headline answer to that is what is annual meeting. Is

Speaker #9: how's the team the power of our brands?

Speaker #9: doing? You know, the secret to our success is the team. I've mentioned that over time. We really believe in it. We're investing in the team.

Speaker #9: And keeping the team together is obviously going to be changes over time. But making sure that people are working, liking

Speaker #9: good time, and

Speaker #9: enjoying what we're up And we invite to. Remains key to what

Speaker #9: do. So

Speaker #9: brands, balance sheet, meeting.

Speaker #9: team.

Speaker #11: That's great. doing? That's

Speaker #11: helpful. I'll turn the call back over. Thank ou. You know, the secret to

Speaker #2: session. I would like to turn the conference back That's over to Ben Covler for any closing

Speaker #2: remarks.

Speaker #6: row. We appreciate that. A The this few of you are out there. We noticed that. We like it. and we will be live at the annual meeting coming in June.

Speaker #6: Look

Speaker #6: ward to that. Buckle up, ybody. It should be an interesting fall. Enjoy the rest of conference back over to your summer.

Speaker #6: Thank Ben Kovler for you.

Speaker #2: The conference any closing is now concluded.

Speaker #2: Thank you for attending