Q1 2026 Green Thumb Industries Inc Earnings Call

May 6, 2026

Speaker #2: Good day, and thank you for standing by. Welcome to the Green Thumb Industries First Quarter 2026 earnings call. At this time, all participants are on a listen-only mode.

Operator: Good day. Thank you for standing by. Welcome to the Green Thumb Industries Inc. Q1 2026 Earnings Call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question and answer session. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today. Shay Caplice, please proceed.

Operator: Good day. Thank you for standing by. Welcome to the Green Thumb Industries Q1 2026 Earnings Call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question and answer session. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today. Shay Caplice, please proceed.

Speaker #2: After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone.

Speaker #2: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised today's conference is being recorded.

Speaker #2: I would now like to end the conference over to your speaker today, Shay Caplice, please proceed.

Speaker #3: Thank you, Kevin. Good afternoon, and welcome to Green Thumb's First Quarter 2026 earnings call. I'm here today with founder and CEO, Ben Kovler, president, Anthony Georgiadis, and chief financial officer, Matt Faulkner.

Shay Caplice: Thank you, Kevin. Good afternoon, and welcome to Green Thumb's First Quarter 2026 Earnings Call. I'm here today with Founder and CEO, Ben Kovler; President, Anthony Georgiadis; and Chief Financial Officer, Matt Faulkner. 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. 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, including our most recent annual report filed on Form 10-K. This 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.

Shay Caplice: Thank you, Kevin. Good afternoon, and welcome to Green Thumb's Q1 2026 Earnings Call. I'm here today with Founder and CEO, Ben Kovler; President, Anthony Georgiadis; and Chief Financial Officer, Matt Faulkner. 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. 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, including our most recent annual report filed on Form 10-K. This report, along with today's earnings release, can be found under the Investors section of our website.

Speaker #3: 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.

Speaker #3: 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 including our most recent annual report filed on Form 10-K.

Speaker #3: This 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.

Shay Caplice: 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, normalized 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+ filings. Please note that all financial information is provided in US dollars unless otherwise indicated. Thanks, everyone. Now, here is Ben.

Speaker #3: Throughout the discussion, Green Thumb will refer to non-GAAP financial measures, including EBITDA, normalized 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.

Shay Caplice: Throughout the discussion, Green Thumb will refer to non-GAAP financial measures, including EBITDA, normalized 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 plus filings. Please note that all financial information is provided in US dollars unless otherwise indicated. Thanks, everyone. Now, here is Ben.

Speaker #3: Please note that all financial information is provided in US dollars unless otherwise indicated. Thanks, everyone, and now here's Ben.

Speaker #2: Thank you, Shay. Good afternoon, everyone, and thank you for joining our First Quarter 2026 conference call. We are glad to be back today and it's pretty good timing.

Ben Kovler: Thank you, Shay. Good afternoon, everyone, thank you for joining our Q1 2026 Conference Call. We are glad to be back today, it's pretty good timing. In April, we published our 2025 Green Thumb annual report, including our letter to shareholders, which was centered around the theme that chance favors only the prepared mind. Over the last few weeks, we have seen that play out in real time. We have built Green Thumb to be prepared, to listen to the consumer, and to act with discipline when opportunities arise. For those of you that might be new to the Green Thumb story, this is how Green Thumb has operated since the beginning: protecting the balance sheet, staying disciplined, and building trusted, quality brands that resonate with the consumer, including RYTHM, Dogwalkers, incredibles, Beboe, Good Green, &Shine, and Doctor Solomon's.

Speaker #2: In April, we published our 2025 Green Thumb annual report, including our letter to shareholders, which was centered around the theme that chance favors only the prepared mind.

Speaker #2: Over the last few weeks, we have seen that play out in real time. We have built Green Thumb to be prepared, to listen to the consumer, and to act with discipline when opportunities arise.

Speaker #2: For those of you that might be new to the Green Thumb story, this is how Green Thumb has operated since the beginning, protecting the balance sheet, staying disciplined, and building trusted, quality brands that resonate with the consumer, including rhythm, dog walkers, incredibles, Bibo, Good Green, and Shine, and Dr. Solomons.

Speaker #2: We focus on execution while letting our actions speak. Versus chest pounding or making empty promises. But our best asset, which is not even on the balance sheet, is our people.

Ben Kovler: We focus on execution while letting our actions speak versus chest-pounding or making empty promises. Our best asset, which is not even on the balance sheet, is our people. We are a people-first organization, and our team of nearly 5,000 dedicated professionals is the best in the business. Over the years, we have made meaningful investments in our dispensaries, production capabilities, and infrastructure, and today, our retail footprint spans 14 markets and 114 stores. We have built a business that generates cash, withstands pressure, and delivers well-being to millions of Americans every year through our RISE dispensaries and leading brands. Green Thumb started 2026 with a strong Q1, building on the momentum we carried out of 2025.

Speaker #2: We are a people-first organization and our team of nearly 5,000 dedicated professionals is the best in the business. Over the years, we have made meaningful investments in our dispensaries, production capabilities, and infrastructure, and today our retail footprint spans 14 markets and 114 stores.

Speaker #2: We have built a business that generates cash, withstands pressure, and delivers well-being to millions of Americans every year through our Rise Dispensaries and Leading Brands.

Speaker #2: Green Thumb started 2026 with a strong first quarter, building on the momentum we carried out of 2025. First quarter revenue was $300 million, up 7.5% from the prior year period, compared to approximately a 1% decline in the broader industry.

Ben Kovler: Q1 revenue was $300 million, up 7.5% from the prior year period, compared to approximately a 1% decline in the broader industry. Normalized EBITDA was $93.5 million, or 31.2% of revenue. Cash flow from operations was $76 million, and we ended the quarter with a record for Green Thumb of over $344 million in cash on the balance sheet. In addition, we spent about $80 million buying back about 13.4 million shares so far this year. We are pleased with these results, especially in a constrained environment and during a quarter typically affected by seasonal declines. The headline here remains the same: Green Thumb continues to execute well. As THC demand continues to rise, consumers are becoming more sophisticated about the category.

Speaker #2: Normalized EBITDA was 93.5 million or 31.2% of revenue, cash flow from operations was $76 million, and we ended the quarter with a record for Green Thumb of over $344 million in cash on the balance sheet.

Speaker #2: In addition, we spent about $80 million buying back about 13.4 million shares so far this year. We are pleased with these results, especially in a constrained environment and during a quarter typically affected by seasonal declines.

Speaker #2: The headline here remains the same: Green Thumb continues to execute well. As THC demand continues to rise, consumers are becoming more sophisticated about the category.

Speaker #2: They know what they like, they know what works, and they are coming back into the brands they trust. That is where Green Thumb continues to win.

Ben Kovler: They know what they like, they know what works, and they are coming back into the brands they trust. That is where Green Thumb continues to win. According to BDSA, which is the nation's leading data source for the cannabis industry, our products led key categories in 2025 and continue to lead in 2026. RYTHM is the number 1 flower brand nationally. RYTHM's Animal Face is the number 1 flower SKU nationally, and Dogwalkers is the number 1 uninfused pre-roll in the United States. Our products are reaching consumers across categories, price points, and occasions, and that brand strength is real. It gives us durability and reinforces what we have always believed, which is that quality products, trusted brands, and consistent execution win with consumers.

Speaker #2: According to BDSA, which is the nation's leading data source for the cannabis industry, our products led key categories in 2025 and continue to lead in 2026.

Speaker #2: Rhythm is the number one flower brand nationally. Rhythm's animal face is the number one flower skew nationally, and dog walkers is the number one uninfused pre-roll in the United States.

Speaker #2: Our products are reaching consumers across categories, price points, and occasions. And that brand strength is real. It gives us durability and reinforces what we have always believed, which is that quality, products, trusted brands, and consistent execution win with consumers.

Speaker #2: As we look beyond Q1, there are four key areas to know about Green Thumb, and we believe each position us to drive long-term value.

Ben Kovler: As we look beyond Q1, there are four key areas to know about Green Thumb, and we believe each position us to drive long-term value. These are future growth, disciplined capital allocation, our strategic investment in RYTHM Inc, and federal rescheduling. First, let's talk about the state growth opportunities. On 1 April, Green Thumb was conditionally awarded a license to operate in the state of Texas. We are watching the state closely to determine the right approach, and while operations would still be a few years out, the license gives us meaningful opportunity in the nation's second most populated state. We have a history of winning when we enter markets this way, and we think Texas will be no different for Green Thumb shareholders. We foresee growth in Pennsylvania, Minnesota, and Virginia, each for different reasons, and Anthony will talk through those shortly.

Speaker #2: These are future growth, disciplined capital allocation, our strategic investment in rhythm, Inc., and federal rescheduling. First, let's talk about the state growth opportunities. On April 1st, Green Thumb was conditionally awarded a license to operate in the state of Texas.

Speaker #2: We are watching the state closely to determine the right approach, and while operations would still be a few years out, the license gives us meaningful opportunity in the nation's second most populated state.

Speaker #2: We have a history of winning when we enter markets this way, and we think Texas will be no different for Green Thumb shareholders. We foresee growth in Pennsylvania, Minnesota, and Virginia, each for different reasons, and Anthony will talk through those shortly.

Speaker #2: For both medical and adult use markets, we have capital in the right places, and we believe we are set up for success and growth as these markets develop.

Ben Kovler: For both medical and adult use markets, we have capital in the right places, and we believe we are set up for success and growth as these markets develop. Second key area for us is disciplined capital allocation. We have a history of prudent capital allocation, that's resulted in the strong balance sheet we have today, that as I said, has over $300 million of cash and less than $200 million of debt. That balance sheet gives us flexibility, which we believe is a significant advantage in this industry. In April, our board authorized an additional $100 million for our share repurchase program, bringing the total authorization to $150 million.

Speaker #2: The second key area for us is disciplined capital allocation. We have a history of prudent capital allocation, and that's resulted in the strong balance sheet we have today. As I said, we have over $300 million of cash and less than $200 million of debt.

Speaker #2: That balance sheet gives us flexibility, which we believe is a significant advantage in this industry. In April, our board authorized an additional $100 million for our share repurchase program, bringing the total authorization to $150 million.

Speaker #2: Since initiating our share repurchase program at the end of 2023, we have repurchased approximately 29 million shares, for roughly $200 million, which is equivalent to about 12 or 13 percent of the company.

Ben Kovler: Since initiating our share repurchase program at the end of 2023, we have repurchased approximately 29 million shares for roughly $200 million, which is equivalent to about 12% or 13% of the company, meaning all of us own a larger piece, 12% or 13% larger to be exact, of the Green Thumb pie. On the M&A front, we've had a history of creating value and not overreaching. The current environment has us cautious, so while we are not looking for transformational deals, we remain open to the right opportunities. The industry is capital constrained, and we have cash, so we are listening and evaluating opportunities that come our way. As always, we will stay disciplined and focused on deals that make strategic sense and strengthen our position. Our third area is RYTHM Inc.

Speaker #2: Meaning all of us own a larger piece, 12 or 13 percent larger to be exact, of the Green Thumb pie. On the M&A front, we've had a history of creating value and not overreaching.

Speaker #2: The current environment has us cautious, so while we are not looking for transformational deals, we remain open to the right opportunities. The industry is capital constrained, and we have cash, so we are listening and evaluating opportunities that come our way.

Speaker #2: As always, we will stay disciplined and focus on deals that make strategic sense and strengthen our position. Our third area is rhythm, Inc. Green Thumb is a significant shareholder of Rhythm, Inc., which is a NASDAQ-listed company.

Ben Kovler: Green Thumb is a significant shareholder of RYTHM Inc, which is a NASDAQ-listed company. We view RYTHM as a strategic asset. RYTHM owns the brand intellectual property for the products Green Thumb manufactures and sells, including RYTHM, incredibles, Dogwalkers, and Beboe. RYTHM and Green Thumb have a licensing structure in place to utilize the brand IP in state-regulated markets, and we believe that structure gives Green Thumb a noteworthy advantage and future optionality. RYTHM benefits from predictable licensing revenue tied to its brand IP, as well as a growing beverage business that includes Señorita THC Margaritas, RYTHM Beverages, and its first non-alcoholic THC spirit, 1777 by Señorita, which just launched last week. Even as a potential federal hemp ban looms, RYTHM's beverage business continues to reflect strong consumer demand for THC. Americans want safe, trusted THC in accessible locations.

Speaker #2: We view Rhythm as a strategic asset. Rhythm owns the brand intellectual property for the products Green Thumb manufactures and sells, including Rhythm, Incredibles, dog walkers, and Bibo.

Speaker #2: Rhythm and Green Thumb have a licensing structure in place to utilize the brand IP in state-regulated markets, and we believe that structure gives Green Thumb a noteworthy advantage and future optionality.

Speaker #2: Rhythm benefits from predictable licensing revenue tied to its brand IP, as well as a growing beverage business that includes Señiorita THC margaritas, Rhythm beverages, and its first non-alcoholic THC spirit, 1777 by Señiorita, which just launched last week.

Speaker #2: Even as a potential federal hemp ban looms, Rhythm's beverage business continues to reflect strong consumer demand for THC. Americans want safe, trusted THC in accessible locations.

Speaker #2: Rhythm is bringing that to life through distribution and convenience at grocery stores like Circle K and Target. And through partnerships with arenas and venues like Chicago's United Center.

Ben Kovler: RYTHM is bringing that to life through distribution in convenience and grocery stores like Circle K and Target, through partnerships with arenas and venues like Chicago's United Center. Finally, federal rescheduling. As medical represents approximately 50% of our business, we are encouraged by the recent movement in the rescheduling process, which moved medical cannabis from Schedule I to Schedule III of the Controlled Substances Act. For the first time in more than 55 years, the federal government took a meaningful and positive step by formally recognizing the medical value of cannabis, something our team, patients, and clinicians all over the country have known for years. The rescheduling process created a pathway for Green Thumb to submit applications to register with the DEA for certain state-licensed medical cannabis operations.

Speaker #2: And finally, federal rescheduling. As medical represents approximately 50% of our business, we are encouraged by the recent movement in the rescheduling process, which moved medical cannabis from Schedule I to Schedule III of the Controlled Substances Act.

Speaker #2: For the first time in more than 55 years, the federal government took a meaningful and positive step by formally recognizing the medical value of cannabis, something our team, patients, and clinicians all over the country have known for years.

Speaker #2: The rescheduling process created a pathway for Green Thumb to submit applications to register with the DEA for certain state licensed medical cannabis operations. We submitted last week, and we will continue to monitor for additional guidance.

Ben Kovler: We submitted last week. We will continue to monitor for additional guidance. While rescheduling is not legalization, it is a significant and welcome step in the right direction. We are hopeful the rest of cannabis will be rescheduled later this year. We believe the federal change that started this year marks the beginning of a broader reform and normalization for this industry. Fortunately, our preparation has positioned Green Thumb well for what comes next. Before I close, I want to remind everyone that our Green Thumb Annual Shareholder Meeting is coming up on 16 June. If anyone happens to be in Chicago, we will have a live reception at Garcia's in the West Loop following the meeting at 3:30 PM Central. We would love to see you there. Now, I'll turn the call over to Anthony.

Speaker #2: While rescheduling is not legalization, it is a significant and welcome step in the right direction, and we are hopeful the rest of cannabis will be rescheduled later this year.

Speaker #2: We believe the federal change that started this year marks the beginning of a broader reform and normalization for this industry. Fortunately, our preparation has positioned Green Thumb well for what comes next.

Speaker #2: Before I close, I want to remind everyone that our Green Thumb annual shareholder meeting is coming up on June 16th. If anyone happens to be in Chicago, we will have a live reception at Garcia's in the West Loop following the meeting at 3:30 PM Central, and we would love to see you there.

Speaker #2: Now, I'll turn the call over to Anthony.

Speaker #1: Thanks, Ben. As you just heard, the team delivered an exceptionally strong first quarter. Generating $300 million of revenue, and $94 million in normalized EBITDA.

Anthony Georgiadis: Thanks, Ben. As you just heard, the team delivered an exceptionally strong Q1, generating $300 million in revenue and $94 million in normalized EBITDA, representing 7% year-over-year top-line growth. While the quarter was anchored by strong results in Minnesota, we saw a solid operating performance across a number of key markets, including Ohio, Maryland, Virginia, Illinois, New York, and New Jersey. Let me walk through some of the highlights from the quarter and share where we're focused for the balance of the year. First, CapEx. We invested $19 million in capital during Q1. Retail CapEx included store relocations and development in Pennsylvania, Ohio, and Florida. On the wholesale side, we made a variety of infrastructure investments focused on capacity expansion and automation. Consistent with last year, we anticipate full-year CapEx to approximate $80 million, though that figure could shift depending on Virginia's adult use legislation.

Speaker #1: Representing 7% year-over-year top-line growth. While the quarter was anchored by strong results in Minnesota, we saw solid operating performance across a number of key markets, including Ohio, Maryland, Virginia, Illinois, New York, and New Jersey.

Speaker #1: Let me walk through some of the highlights from the quarter and share where we're focused for the balance of the year. First, CapEx. We invested $19 million in capital during Q1.

Speaker #1: Retail CapEx included store relocations and development, and Pennsylvania, Ohio, and Florida. On the wholesale side, we made a variety of infrastructure investments focused on capacity expansion and automation.

Anthony Georgiadis: On the wholesale side, we made a variety of infrastructure investments focused on capacity expansion and automation. Consistent with last year, we anticipate full-year CapEx to approximate $80 million, though that figure could shift depending on Virginia's adult use legislation. Second, CPG market share. As discussed on previous calls, we continue to lean into key markets and product verticals where we see opportunity. Since last year, we've grown our CPG market share in essentially every market.

Speaker #1: Consistent with last year, we anticipate full-year CapEx to approximate $80 million. Though that figure could shift depending on Virginia's adult use legislation. Second, CPG market share.

Anthony Georgiadis: Second, CPG market share. As discussed on previous calls, we continue to lean into key markets and product verticals where we see opportunity. Since last year, we've grown our CPG market share in essentially every market. Most notable are the share gains in Illinois, Pennsylvania, Ohio, Maryland, and Minnesota, where we have taken the number one share position in each state. While RYTHM Flower continues to act as the tip of our spear, our team, patients, and consumers understand the meaning of fire in, fire out. Third, adult use opportunities. We remain focused on optimizing our adult use opportunities in Minnesota, Pennsylvania, and Virginia. Despite strong performance in Minnesota, which launched its adult use program in September of last year, the market itself remains supply-constrained. Unfortunately, the current regulatory structure is artificially limiting our ability to get additional supply into the adult use market.

Speaker #1: As discussed on previous calls, we continue to lean into key markets and product verticals where we see opportunity. Since last year, we've grown our CPG market share in essentially every market.

Speaker #1: Most notable are the share gains in Illinois, Pennsylvania, Ohio, Maryland, and Minnesota, where we have taken the number one share position in each state.

Anthony Georgiadis: Most notable are the share gains in Illinois, Pennsylvania, Ohio, Maryland, and Minnesota, where we have taken the number one share position in each state. While RYTHM Flower continues to act as the tip of our spear, our team, patients, and consumers understand the meaning of fire in, fire out. Third, adult use opportunities. We remain focused on optimizing our adult use opportunities in Minnesota, Pennsylvania, and Virginia. Despite strong performance in Minnesota, which launched its adult use program in September of last year, the market itself remains supply-constrained. Unfortunately, the current regulatory structure is artificially limiting our ability to get additional supply into the adult use market.

Speaker #1: While Rhythm Flower continues to act as the tip of our spear, our team, patients, and consumers understand the meaning of fire in, fire out.

Speaker #1: Third, adult use opportunities. We remain focused on optimizing our adult use opportunities in Minnesota, Pennsylvania, and Virginia. Despite strong performance in Minnesota, which launched its adult use program in September of last year, the market itself remains supply constrained.

Speaker #1: Unfortunately, the current regulatory structure is artificially limiting our ability to get additional supply into the adult use market. We are hopeful that we can resolve some of these issues before year-end.

Anthony Georgiadis: We are hopeful that we can resolve some of these issues before year-end. In Virginia, we remain active in working with legislators and Governor Spanberger on an adult use bill. After two consecutive gubernatorial vetoes, we're hopeful this is the year the Commonwealth finally gets it done. In Pennsylvania, despite broad bipartisan recognition of the positive economic impact adult use would have, the path to getting a bill over the finish line by the end of 2026 remains murky. We continue to push. Last, 2026 outlook. Overall, we remain cautiously optimistic about the near-term outlook for our business and the broader industry. We continue to navigate the following headwinds. Price compression, largely driven by oversupply and increased competition. Consumer discretionary spending pressure from years of elevated inflation and current high gas prices.

Speaker #1: In Virginia, we remain active in working with legislators and governors' spam burger on an adult use bill. After two consecutive gubernatorial vetos, we're hopeful this is the year the Commonwealth finally gets it done.

Speaker #1: In Pennsylvania, despite broad bipartisan recognition of the positive economic impact adult use would have, the path to getting a bill over the finish line by the end of 2026 remains murky.

Speaker #1: We continue to push. Last, 2026 outlook. Overall, we remain cautiously optimistic about the industry. We continue to navigate the following headwinds. Price compression. Largely driven by oversupply and increased competition, consumer discretionary spending pressure from years of elevated inflation and current high gas prices, and regulatory uncertainty.

Anthony Georgiadis: Regulatory uncertainty, particularly around the closure of the Farm Bill loophole, making it difficult to allocate capital with a long-term lens. In response to these pressures, we're doubling down on the fundamentals: operational discipline, brand strength, scale, and a strong balance sheet. THC demand is growing globally, with new product formats and channels rapidly emerging. With millions of people turning to THC to enhance their daily lives and support their wellness journey, our strategy is simple: put the consumer at the center of everything we do. Before I hand it over to Matt, a few words on what's coming this summer. Consistent with previous years, we're bringing back the RYTHM Bud Ball series. Bud Ball has become one of our favorite ways to celebrate the cannabis community, bringing together music, culture, cannabis, and the RYTHM lifestyle.

Speaker #1: Particularly around the closure of the Farm Bill loophole making it difficult to allocate capital with a long-term lens. In response to these pressures, we're doubling down on the fundamentals.

Speaker #1: Operational discipline, brand strength, scale, and a strong balance sheet. THC demand is growing globally, with new product formats and channels rapidly emerging. With millions of people turning to THC to enhance their daily lives and support their wellness journey, our strategy is simple.

Speaker #1: Put the consumer at the center of everything we do. Before I hand it over to Matt, a few words on what's coming this summer.

Speaker #1: Consistent with previous years, we're bringing back the Rhythm Bud Ball series. Bud Ball has become one of our favorite ways to celebrate the cannabis community.

Speaker #1: Bringing together music, culture, cannabis, and the Rhythm lifestyle. This summer's lineup includes New York, on June 10th; Chicago, on July 15th; and Philadelphia, on August 26th.

Anthony Georgiadis: This summer's lineup includes New York on 10 June, Chicago on 15 July, and Philadelphia on 26 August. The headliners for all three are something else, and we hope to see you there. In closing, a huge thank you to our entire Green Thumb team. We experienced our best Q1 on record, and Q2 is off to a strong start with an incredible 420. None of this happens without the best team in the business. To those out there listening, the mission continues. Today is still day one for all of us. With that, I'll turn the call over to Matt to walk through our financial results.

Speaker #1: The headliners for all three are Something Else, and we hope to see you there. In closing, a huge thank you to our entire Green Thumb team.

Speaker #1: We experienced our best Q1 on record and Q2 is off to a strong start with an incredible 420. None of this happens without the best team in the business.

Speaker #1: To those out there listening, the mission continues. Today is still day one for all of us. With that, I'll turn the call over to Matt to walk through our financial results.

Speaker #2: Thanks, Anthony, and hello, everyone. As Ben and Anthony outlined, we had another strong quarter to start 2026. From a top-line perspective, revenue increased 7% year-over-year, driven in large part due to adult use sales launch in Minnesota, along with net CPG growth and new store contributions.

Matt Faulkner: Thanks, Anthony, and hello, everyone. As Ben and Anthony outlined, we had another strong quarter to start 2026. From a top-line perspective, revenue increased 7% year over year, driven in large part due to adult use sales launch in Minnesota, along with net CPG growth and new store contributions. Pricing pressures continue to weigh on the top line, even as we see solid demand. Looking forward, we expect Q2 sequential revenue to be flat to down slightly due to the pricing environment. Gross profit for Q1 was $144 million or 48% of revenue, compared to $143 million or 51% of revenue year over year. The decrease in gross margin was primarily driven by licensing fees incurred in the current period.

Speaker #2: Pricing pressures continue to weigh on the top line, even as we see solid demand. Looking forward, we expect second-quarter sequential revenue to be flat to down slightly due to the pricing environment.

Speaker #2: Gross profit for the first quarter was $144 million or 48% of revenue compared to $143 million or 51% of revenue year-over-year. The decrease in gross margin was primarily driven by licensing fees incurred in the current period.

Speaker #2: Turning to OpEx, selling general administrative expenses for the first quarter were $103 million or 34% of revenue compared to $101 million or 36% of revenue for the first quarter last year.

Matt Faulkner: Turning to OpEx, Selling, General, and Administrative expenses for Q1 were $103 million or 34% of revenue, compared to $101 million or 36% of revenue for Q1 last year. The increase in total expenses was primarily attributable to overall compensation costs, along with increased costs associated with the opening, acquiring, and operation of retail stores. SG&A, excluding depreciation, amortization, one-time transaction costs, and stock-based comp, which we refer to as normalized operating costs, approximated $73 million compared to $69 million in Q1 of last year. The increase year-over-year is mainly attributed to the 11 incremental retail stores. Our normalized EBITDA of $93.5 million increased 10% year-over-year to 31.2%, even as we absorb pricing pressures along with some inflationary impacts.

Speaker #2: The increase in total expenses was primarily attributable to overall compensation costs along with increased costs associated with the opening, acquiring, and operation of retail stores.

Speaker #2: SG&A excluding depreciation, amortization, one-time transaction costs, and stock-based comp, which we refer to as normalized operating costs, approximated $73 million compared to $69 million in the first quarter of last year.

Speaker #2: The increase year-over-year is mainly attributed to the 11 incremental retail stores. Our normalized EBITDA of $93.5 million increased 10% year-over-year to $31.2%. Even as we absorb pricing pressures along the some inflationary impacts.

Speaker #2: The strong flow-through reflects cost discipline, and operating leverage as we scale. On the bottom line, we deliver gap net income of $15.4 million or 7 cents per diluted share.

Matt Faulkner: The strong flow through reflects cost discipline and operating leverage as we scale. On the bottom line, we delivered GAAP net income of $15.4 million, or $0.07 per diluted share. This compares to $8.3 million or $0.04 per share in the prior year. Turning to the balance sheet, we ended Q1 with $345 million in cash after generating $76 million in operating cash flow. Our cash balance and positive cash flow distinguish us in the industry. We remain committed to maintaining this financial flexibility so we can invest opportunistically in growth while managing risk. To echo Ben's closing statements, we are excited about the road ahead in 2026 and beyond. The constructive regulatory changes, strong consumer demand, and our unique positioning provided us confidence in our ability to deliver sustainable, profitable growth.

Speaker #2: This compares to 8.3 million or 4 cents per share in the prior year. Turning to the balance sheet, we ended Q1 with $345 million in cash after generating $76 million in operating cash flow.

Speaker #2: Our cash balance and positive cash flow distinguish us in the industry. We remain committed to maintaining this financial flexibility so we can invest opportunistically in growth while managing risk.

Speaker #2: To echo Ben's closing statements, we are excited about the road ahead in 2026 and beyond. The constructive regulatory changes, strong consumer demand, and our unique positioning provided us confidence in our ability to deliver sustainable, profitable growth.

Matt Faulkner: To echo Ben's closing statements, we are excited about the road ahead in 2026 and beyond. The constructive regulatory changes, strong consumer demand, and our unique positioning provided us confidence in our ability to deliver sustainable, profitable growth. We have built this business to thrive in any operating environment. With that, I'll turn the call over to the operator for questions.

Speaker #2: We have built this business to thrive in any operating environment. With that, I'll turn the call over to the operator for questions.

Matt Faulkner: We have built this business to thrive in any operating environment. With that, I'll turn the call over to the operator for questions.

Operator: We'll pause for a moment while we compile our Q&A roster. Our first question comes from Aaron Grey with AGP. Your line is open.

Speaker #3: Of yourself from the queue, please press star 11 again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Aaron Gray with AGP.

Operator: We'll pause for a moment while we compile our Q&A roster. Our first question comes from Aaron Grey with AGP. Your line is open.

Speaker #3: Your line is open.

Speaker #4: Hi, good evening. Thank you for the questions and great to have you guys back on. So I guess first question for me, just want to dive a little bit deeper in terms of how we're thinking about GTI and Rhythm.

Aaron Grey: Hi, good evening. Thank you for the questions and great to have you guys back on. I guess first question from me, just wanna dive a little bit deeper in terms of how we're thinking about, you know, GTI and RYTHM. Maybe first how you're thinking about, you know, some of the capital allocation strategies, specifically talking about the new license agreement that was signed as of 1 April. That about doubled the runway implied in Q1 that you guys just had. Just how should we think about, you know, some of the methodology there in terms of like shift between, you know, GTI or RYTHM in the near term.

Speaker #4: And maybe first, maybe how you're thinking about some of the capital allocation strategy specifically, talking about the new license agreement that was signed, I believe, April 1st.

Speaker #4: That about doubled the run rate implied in first quarter that you guys just had. So how should we think about some of the methodology there in terms of shift between GTI or Rhythm in the near term?

Speaker #4: And then a longer term, just how we think about some of the optionality that you alluded to with Rhythm, particularly if some of the impacts on the 0.4 milligram limit for hemp dried THC beverage comes to effect in November.

Aaron Grey: Longer term, just how we think about some of the optionality that you alluded to, you know, with RYTHM, particularly, you know, if, some of the impacts on the 0.4 milligram limit, for hemp-derived THC beverage comes to effect in November. Thank you.

Speaker #4: Thank you.

Speaker #2: Yeah, thanks, Aaron. This is Ben. I'll take that. Good to hear from you. From the Green Thumb perspective, we think the investment in Rhythm provides a ton of optionality like you mentioned.

Ben Kovler: Yeah. Thanks, Aaron. This is Ben. I'll take that. Good to hear from you. From the Green Thumb perspective, we think the investment in RYTHM provides a ton of optionality, like you mentioned. We've gotten very familiar with the listing standards, I would say that's what drove the licensing agreement adjustment. That really nets to the same amount of money, we really don't view that as a material change at all. Wanting to be fully compliant with the NASDAQ remains very important. From the Green Thumb perspective, we really like the investment. We're not sure what the future holds for the full regulations of the country. There's a lot of change going on now. Having a ton of these tools on our belt is a huge advantage for the business and for our shareholders.

Speaker #2: We've gotten very familiar with the listing standards and I would say that's what drove the licensing agreement adjustment. But that really nets to the same amount of money.

Speaker #2: So we really don't view that as a material change at all. But wanting to be fully compliant with the NASDAQ remains very important. And from the Green Thumb perspective, we really like the investment.

Speaker #2: We're not sure what the future holds for the full regulations in the country. There's a lot of change going on now. But having a ton of these tools on our belt, it's a huge advantage for the business and for our shareholders.

Ben Kovler: We're not sure what the future holds for the full regulations of the country. There's a lot of change going on now. Having a ton of these tools on our belt is a huge advantage for the business and for our shareholders. That's really how we look at it. Despite, you know, what may happen out there, we have a lot of ways to attack it. The common denominator in the whole thing is consumer demand for THC. That's what we're building the business to optimize and how we get there, which step exactly happens when is very hard to handicap, and that's never been our area of expertise.

Anthony Georgiadis: That's really how we look at it. Despite, you know, what may happen out there, we have a lot of ways to attack it. The common denominator in the whole thing is consumer demand for THC. That's what we're building the business to optimize and how we get there, which step exactly happens when is very hard to handicap, and that's never been our area of expertise.

Speaker #2: And so that's really how we look at it, despite what may happen out there. We have a lot of ways to attack it. The common denominator in the whole thing is consumer demand for THC.

Speaker #2: So that's what we're building the business to optimize and how we get there and which step exactly happens when is very hard to handicap.

Speaker #2: And that's never been our area of expertise.

Speaker #4: Okay, great. Thanks for the call there, Ben. Second question for me, just on Texas. Congrats on getting the conditional license there. I just want to think about how you're thinking about the market there, given you've already seen what happened in Florida.

Aaron Grey: Okay, great. Thanks for the color there, Ben. Second question from me just on Texas. Congrats on getting the conditional license there. I just wanted to think about how you're thinking about the market there, you know, given you've already seen what happened in Florida. You know, we believe Texas could potentially set up, you know, somewhat similarly. How do you think about CapEx investments and early mover advantage in a market where you can build a lot of scale as your regulations are currently set up? Thank you.

Speaker #4: We believe Texas could potentially set up somewhat similarly. So how do you think about CapEx investments and early mover advantage in a market where you can build a lot of scale as a regulations are currently set up?

Speaker #4: Thank you.

Speaker #2: Yeah, Aaron, Anthony here. I'll take that one. Yeah, look, big win by the team. We're extremely excited. At the same time, we are cautiously optimistic.

Anthony Georgiadis: Yeah. Anthony here, I'll take that one. Look, big win by the team. We're extremely excited. At the same time, you know, we are, we're cautiously optimistic. You know, there's a lot of hemp being sold in Texas as we speak. Right now, when you look at the business that the incumbent operators are doing, it's paltry relative to the amount of business that's being done on the hemp side. In order for us to really have a lot of excitement about the Texas market, we're gonna have to see some of the regulations that have already passed kind of stick. Because at this point, you know, it's hard for us to go ahead and make big capital decisions when it seems like there's already consumer access.

Speaker #2: There is a there's a lot of hemp being sold in Texas as we speak. And right now, when you look at the business that the incumbent operators are doing, it's poetry relative to the amount of business that's being done on the hemp side.

Speaker #2: So in order for us to really have a lot of excitement about the Texas market, we're going to have to see some of the regulations that have already passed kind of stick because at this point, if it's hard for us to go ahead and make big capital decisions when it seems like there's already consumer access.

Anthony Georgiadis: You know, using a different kind of regulatory set would be difficult for us to compete with, you know, given the confines of the state regs at the moment. You know, we're in the spot where we're gonna cautiously kind of watch and see how the hemp regs evolve. At the same time, study the market, work on our playbook, and get ready to play ball if and when the hemp regs kind of move in a direction that we think they need to.

Speaker #2: Using a different kind of regulatory set would be difficult for us to compete with given kind of the confines of the state regs at the moment.

Speaker #2: So we're in the spot where we're going to cautiously kind of watch and see how the hemp regs evolve. And at the same time, study the market.

Speaker #2: Work on our playbook and get ready to play ball if and when the hemp regs kind of move in the direction that we think they need to.

Speaker #4: Great. Appreciate the detail. I'll go ahead and jump back in the queue.

Aaron Grey: Great. Appreciate the detail. I'll go and jump back in the queue.

Speaker #2: Thanks, Aaron.

Ben Kovler: Thanks, Aaron.

Speaker #3: One moment for our next question. Our next question comes from Bill Kirk with Roth Capital Partners. Your line is open.

Operator: One moment for our next question. Our next question comes from Bill Kirk with Roth Capital Partners. Your line is open.

Speaker #5: Hey, good evening, everybody. So Ben, a few quarters ago, I asked you what your preferred regulatory outcomes would look like. So this time around, I want to ask how have the developments over the last few months compared to what you would have considered ideal back in the summer of 2025?

Bill Kirk: Hey, good evening, everybody. Ben, a few quarters ago, I asked you, what your preferred regulatory outcomes would look like. This time around, I wanna ask.

Bill Kirk: Hey, good evening, everybody. Ben, a few quarters ago, I asked you, what your preferred regulatory outcomes would look like. This time around, I wanna ask. How have the developments over the last few months compared to what you would have considered ideal back in the summer of 2025?

Bill Kirk: How have the developments over the last few months compared to what you would have considered ideal back in the summer of 2025?

Ben Kovler: Good question. I wish I could remember what I told you as my ideal situation. Look, federal government acknowledging that this product has medical qualities is a welcomed, refreshing step. It's sort of about time. You know, as Joe Rogan talks about, the policy that happened on the Controlled Substances Act was a racist policy out of the Nixon administration to make this product illegal. It never should have happened. It's impossible to say this is not a huge positive step of a material nature. How it goes in the details, the bifurcation of medical and adult use that's happening at the federal level, we didn't see that exactly coming the way it did, but that doesn't surprise us. Look at every single state. I think every single state that has adult use started as medical, it's certainly not a surprise.

Speaker #2: Good question. I wish I could remember what I told you. As my ideal situation. But look, the federal government acknowledging that this product has medical qualities is a welcomed refreshing step in sort of about time as Joe Rogan talked about the policy that happened on the controlled substance act was a racist policy out of the Nixon administration.

Speaker #2: To make this product illegal, it never should have happened. So it's impossible to say this is not a huge positive step of a material nature.

Speaker #2: How it goes in the details, the bifurcation of medical and adult use that's happening at the federal level, we didn't see that exactly coming the way it did.

Speaker #2: But that doesn't surprise us. Look at every single state—I think every single state that has adult use started as medical. So it's certainly not a surprise.

Ben Kovler: Look at every single state. I think every single state that has adult use started as medical, it's certainly not a surprise. We like the clarity of direction from the Treasury. That's pretty good. We like that certainty around what's gonna happen with the cash. We'll see. The process remains to unfold later this year, and I think we could tell you at the end of the year, as all cannabis gets rescheduled, that feels pretty good.

Speaker #2: We like the clarity of direction from the Treasury. That's pretty good. We like that certainty around what's going to happen with the cash. And we'll see.

Ben Kovler: We like the clarity of direction from the Treasury. That's pretty good. We like that certainty around what's gonna happen with the cash. We'll see. The process remains to unfold later this year, and I think we could tell you at the end of the year, as all cannabis gets rescheduled, that feels pretty good.

Speaker #2: The process remains to unfold later this year. And I think we could tell you at the end of the year as all cannabis gets rescheduled, that feels pretty good.

Speaker #5: Awesome. And then on the cash side, on buybacks, you're active in OneQ. You've been active since the quarter closed. But I guess now the question is with the movement from the federal government, how do you think about share repurchases going forward versus putting cash or more cash behind some of your new best business ideas that may be emerging from the newer regulations?

Bill Kirk: Awesome. On the cash side, on buybacks, you were active in Q1, you've been active since the quarter closed. I guess now the question is, with the movement from the federal government, how do you think about share repurchases going forward versus putting cash or more cash behind some of your new best business ideas that may be emerging from the newer regulations?

Ben Kovler: Yeah. Very good, great question. Insightful, and you're right. We're extremely price sensitive on the buyback and size. You can see we bought back a lot of stock at a very low price. We like that. If that opportunity comes, we still have appetite. Given what's happening in the country, internationally and otherwise, there could be good opportunities. We're not dying to go spend all the money we have. We're in a very fortunate position. We understand that, we respect it, and we're sort of letting the cards come to us, and we'll see what happens. There are very attractive investment opportunities. This country is not saturated on the THC consumption. I mean, just look at what's happening at the liquor stores. Look at what's happening at Target, at Circle K, at the United Center.

Speaker #2: Yeah, great question. Insightful. And you're right. So we're extremely price-sensitive on the buyback and size. So you can see we bought back a lot of stock at a very low price.

Speaker #2: We like that. That opportunity comes. We still have appetite. But given what's happening in the country, internationally, and otherwise, there could be good opportunities.

Speaker #2: So we're not dying to go spend all the money we have. We're in a very fortunate position. We understand that. We respect it. And we're sort of letting the cards come to us.

Speaker #2: And we'll see what happens. But there are very attractive investment opportunities. This country is not saturated on the THC consumption. I mean, just look at what's happening at the liquor stores.

Speaker #2: Look at what's happening at Target, at Circle K, at the United Center. That doesn't make anybody bullish on THC consumption in this country for a decade out.

Ben Kovler: If that doesn't make anybody bullish on THC consumption in this country for a decade out, study the data more, because it's really off the charts. The country is not consuming alcohol the way it used to, and the generation that does consume alcohol is only getting older and older. It's a very macro positive investment that we're doing, we wanna have the cash. We don't wanna spend it all and then have to wait it out or, God forbid, have to borrow more money or something like that while things are a little tight. We like the balance sheet we wanna maintain, but the nice thing is the business produces money we can keep refilling the coffers. Good question.

Speaker #2: Study the data more. Because it's really off the charts. The country is not consuming alcohol the way it used to. And the generation that does consume alcohol is only getting older and older.

Speaker #2: So it's a very macro positive investment that we're doing. So we want to have the cash. We don't want to spend it all and then have to wait it out or God forbid have to borrow more money or something like that while things are a little tight.

Speaker #2: So we like the balance sheet. We want to maintain. But the nice thing is the business produces money so we can keep refilling the coffers.

Speaker #2: Good question.

Speaker #5: Excellent. I appreciate both the I appreciate that both those answers. I'll jump back in the queue.

Bill Kirk: Excellent. I appreciate both those answers. I'll jump back in the queue.

Speaker #2: Sure. Thanks.

Ben Kovler: Sure. Thanks.

Speaker #3: One moment for our next question. Our next question comes from Federico Gomes with ATB Capital Markets. Your line is open.

Operator: One moment for our next question. Our next question comes from Frederico Gomes with ATB Capital Markets. Your line is open.

Speaker #4: Hi guys. Congrats on the great quarter here. First question on the intoxicating hemp then. That is expected to become effective later this year. How do you think that impacts the regulated cannabis industry specifically?

Frederico Gomes: Hi, guys. Congrats on a great quarter here. First question on the intoxicating hemp ban that is expected to become effective later this year. How do you think that impacts the regulated cannabis industry, specifically, I guess, the price compression dynamic that we see across several markets? Thanks.

Speaker #4: I guess the price compression dynamic that we see across several markets. Thanks.

Ben Kovler: I can take that. It's Ben. Anthony may follow up a little here. If hemp goes away, it'll be good for RISE same store sales. We think a lot of product that should be regulated through the state system is being sold as hemp. If it's properly regulated, it should be strong for business, it should be strong for pricing. We're seeing some pockets of might be the beginning of flattening or some strength as hemp gets regulated away. It should be very good for the Green Thumb Industries business.

Speaker #2: I can take that. It's Ben. Anthony may follow up a little here. If hemp goes away, it'll be good for rye, same-store sales. We think a lot of product that should be regulated through the state system is being sold as hemp.

Speaker #2: So if it's properly regulated, it should be strong for business. It should be strong for pricing. We're seeing some pockets of what might be the beginning of flattening or some strength as hemp gets regulated away.

Speaker #2: And so it should be very good for the Green Thumb business.

Frederico Gomes: Great. Thanks for that. Then second question on the, I guess following this, medical rescheduling, it seems like international exports could become possible. If that is the case, is that something that you look at or are interested in pursuing the future?

Speaker #4: Great, thanks for that. And then the second question on the— I guess, following this medical rescheduling, it seems like international exports could become possible.

Speaker #4: If that is the case, is that something that you look at or are interested in pursuing in the future?

Speaker #2: Hey, Federico. Anthony here. Certainly. I mean, look, we love to run the business on optionality. Now, one of the things we'd have to look at is where do we have excess capacity?

Ben Kovler: Hey, Frederico, Anthony here. Certainly. I mean, look, you know, we love to run the business on optionality. One of the things we'd have to look at is where do we have excess capacity. You know, there's only a few select markets where that's currently the case. You know, look, one of the things we wanna do is continue to build our brands, and obviously Europe is a place where we'd like to do that at some point in time. Like everything else, we look at all the opportunities available to us and that one, if it does, if the regs do play out in a way that allows us to do that, it's certainly something we're gonna look at pretty extensively.

Anthony Georgiadis: Hey, Frederico, Anthony here. Certainly. I mean, look, you know, we love to run the business on optionality. One of the things we'd have to look at is where do we have excess capacity. You know, there's only a few select markets where that's currently the case. You know, look, one of the things we wanna do is continue to build our brands, and obviously Europe is a place where we'd like to do that at some point in time. Like everything else, we look at all the opportunities available to us and that one, if it does, if the regs do play out in a way that allows us to do that, it's certainly something we're gonna look at pretty extensively.

Speaker #2: There's only a few select markets where that's currently the case. But look, one of the things we want to do is continue to build our brands.

Speaker #2: And obviously, Europe is a place where we'd like to do that at some point in time. So like everything else, we look at all the opportunities available to us.

Speaker #2: And that one, if it does if the regs do play out in a way that allows us to do that, it's certainly something we're going to look at pretty extensively.

Speaker #4: Thank you very much.

Frederico Gomes: Thank you very much.

Speaker #3: Thank you. One moment for our next question. Our next question comes from Pablo. Is there anything with Zoetica Associates? Your line is open.

Operator: Thank you. One moment for our next question. Our next question comes from Pablo Zuanic with Zuanic & Associates. Your line is open.

Speaker #6: Thank you, and good afternoon, everyone. Ben or Anthony, I know you said rescheduling is not legalization. You may want to expand on that because other people have said that pretty much it is legalizing medical.

Pablo Zuanic: Thank you. Good afternoon, everyone. Ben or Anthony, I know you said rescheduling is not legalization. You may want to expand on that because other people have said that pretty much it is legalizing medical, if you wanna clarify that comment. More important than that, in your opinion, registering your business at the federal level with the DEA, what are the implications of that and what doors will that open, if any?

Speaker #6: If you want to clarify that comment. But more important than that, in your opinion, registering your business at the federal level with the DEA?

Speaker #6: What are the implications of that? And what doors will that open? If any?

Ben Kovler: Hey, Pablo, it's Ben. Second part first. The, the true answer on the DEA is we don't know. There's not a lot of guidance out here, but it's a step in the right direction. We're going through the process and we're in communications. We, you know, we're having a lot of conversations. This process is unfolding for everybody. It's pretty clear the president wanted to get it done and got done. It doesn't mean every single thing is known. We're, we're fine with that uncertainty. We're watching like everybody else. Reschedule is not full legalization because cannabis is not legal. You have medical cannabis legal. We don't fully understand how that works in the Controlled Substances Act framework when it's about the substance. It's not full legalization. It might be legalization of some of the product.

Speaker #2: Hey, Pablo. It's Ben. Second part first. The true answer on the DEA is we don't know. There's not a lot of guidance out here, but it's a step in the right direction.

Speaker #2: And so we're going through the process. And we're in communications. We're having a lot of conversations. But this process is unfolding for everybody. It's pretty clear the president wanted to get it done.

Speaker #2: It got done. And it doesn't mean every single thing is known. But we're fine with that uncertainty. So we're watching like everybody else. Rescheduling is not full legalization because cannabis is not legal.

Speaker #2: You have medical cannabis legal. We don't fully understand how that works in the controlled substance act framework when it's about the substance. So it's not full legalization.

Ben Kovler: It's not full legalization. It might be legalization of some of the product. What we think it does and kind of the most important and for you and for us is it brings in a lot of new institutional investors. We think this opens up a new world of investors to come examine the space, because there is federal clarity on what's going to happen, and we think this process will unfold, starting to be new conversations. People are getting interested studying the space, that makes it very interesting.

Speaker #2: It might be legalization of some of the product. But what we think it does, and kind of the most important for you and for us, is it brings in a lot of new institutional investors.

Ben Kovler: What we think it does and kind of the most important and for you and for us is it brings in a lot of new institutional investors. We think this opens up a new world of investors to come examine the space, because there is federal clarity on what's going to happen, and we think this process will unfold, starting to be new conversations. People are getting interested studying the space, that makes it very interesting.

Speaker #2: We think this opens up a new world of investors to come examine the space, because there is federal clarity on what's going to happen.

Speaker #2: And we think this process will unfold. Starting to be new conversations. People are getting interested, studying the space. And so that makes it very interesting.

Speaker #6: Thank you. And then just to follow up, you talked about M&A, but nothing transformative more tacky, I suppose. But can you talk about what gaps you would be looking to fill?

Pablo Zuanic: Thank you. Then just to follow up, you talked about M&A but nothing transformative, more tuck in, I suppose. Can you talk about what gaps you would be looking to fill? Then, look, if I may add a third one, I understand the advantage of having RYTHM Inc. and the future optionality that you talk about. Given everything that's going on, doesn't that add extra complexity for investors, especially if you may be able to uplist the MSO based business eventually? I'm not pushing back on RYTHM Inc., but I'm just saying it could be an advantage but also a disadvantage. Thanks.

Speaker #6: And then look, if I may add a third one, I understand the advantage of having Rhythm Inc. and the future optionality that you talk about.

Speaker #6: But given everything that's going on, doesn't that add extra complexity for investors? Especially if you may be able to uplist the MSO-based business eventually.

Speaker #6: I'm not pushing back on Rhythm Inc., but I'm just saying it could be an advantage, but also a disadvantage. Thanks. That's it from me.

Speaker #2: Yeah, you're right. We'll have to see. We like the optionality of there. It may add some complexity to the conversation, but it's better to be in the game than waiting on the outside hoping to be let in and then have to begin in what could be a year or three-year process.

Ben Kovler: Yeah, you're right. We'll have to see. We like the optionality of there. It may add some complexities to the conversation, but it's better to be in the game than waiting on the outside, hoping to be let in and then have to begin in what could be a year or three-year process. We think we have a leg up, but we'll have to see how all that unfolds. What was the first part of your question? I forgot for a second.

Speaker #2: So we think we have a leg up, but we'll have to see how all that unfolds. And what was the first part of your question?

Speaker #2: I forgot for a second. Oh, the M&A. Yeah, yeah. Yeah, I'll take that, Pablo. Look, we're constantly looking at kind of each of the states and where there might be opportunities within each state market.

Pablo Zuanic: Just.

Ben Kovler: Oh, the M&A.

Pablo Zuanic: Right.

Ben Kovler: Yeah, yeah.

Anthony Georgiadis: Yeah. I'll take that, Pablo. Look, you know, we're constantly looking at kind of each of the states and where there might be opportunities within each state market, and that's really where we're kind of focusing our time and effort and where we're seeing kind of opportunities that make sense for us. You know, that's really just, you know, a way for us to, in some markets, get a little bit more vertical, get some incremental kind of retail exposure. On the fringe, just continue to kind of fill out the business, you know, within a view of these state markets where we still have, you know, opportunities to continue to grow share.

Speaker #2: And that's really where we're kind of focusing our time and effort and where we're seeing kind of opportunities that make sense for us. So that's really just a way for us to, in some markets, get a little bit more vertical, get some incremental kind of retail exposure.

Speaker #2: But on the fringe, just continue to kind of fill out the business within a few of these state markets where we still have opportunities to continue to grow share.

Speaker #6: That's good. Thank you.

Pablo Zuanic: That's good. Thank you.

Speaker #3: Thank you. One moment for our next question. Our next question comes from Stephan T with OilPac Capital. Your line is open.

Operator: Thank you. One moment for our next question. Our next question comes from Stefan T. with Orpac Capital. Your line's open.

Speaker #4: Hi. My question was about section 280(e) tax code, which was just answered. So thank you. And thanks for your industry leadership and looking forward to seeing you in Texas.

Stefan T.: Hi. My question was about Section 280E tax code, which was just answered. Thank you, and thanks for your industry leadership, and looking forward to seeing you in Texas.

[Analyst 1]: Hi. My question was about Section 280E tax code, which was just answered. Thank you, and thanks for your industry leadership, and looking forward to seeing you in Texas.

Speaker #2: We'll see you down there. Thanks, Stephan.

Ben Kovler: We'll see you down there. Thanks, Stefan.

Operator: One moment for our next question. Our next question comes from Jeffrey Asher with Asher Inc. Your line is open.

Speaker #3: One moment for our next question. Our next question comes from Jeffrey Asher with Asher Inc. Your line is open.

Jeffrey Asher: Oh, I have no question. Sorry about that.

[Analyst 2]: Oh, I have no question. Sorry about that.

Speaker #6: Oh, I have no question. Sorry about that.

Speaker #3: Okay. And I'm not showing any further questions at this time. I'd like to end the call back over to Ben Kovler for any further remarks.

Operator: Okay. I'm not showing any further questions at this time. I'd like to turn the call back over to Ben Kovler for any further remarks.

Speaker #2: Thanks, everybody, for joining us. We're available for questions should you have any follow-up. We hope everybody has a nice beginning of the summer. And maybe we'll see you at some of the Bud Balls.

Ben Kovler: Thanks, everybody, for joining us. We're available for questions should you have any follow-up. We hope everybody has a nice beginning to the summer, and maybe we'll see you at some of the Bud Balls. Thank you very much.

Speaker #2: Thank you very much.

Operator: Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.