Q1 2026 Grown Rogue International Inc Earnings Call

May 12, 2026

Operator: Ladies and gentlemen, I would like to welcome everyone to Grown Rogue International Inc.'s Q1 2026 Results Call. As a reminder, during the course of this conference call, Grown Rogue management may make forward-looking statements based on current expectations, estimates, and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks are described in the Risk Factors section of the company's filings and other public disclosure materials. Any forward-looking statements made on this call speak only as of today. Grown Rogue undertakes no obligation to update or revise them in the future, except as required by law. During today's call, we will also refer to certain non-GAAP measures, including EBITDA and adjusted EBITDA.

Speaker #1: Decent gentleman. I would like to welcome everyone to Growing Rogues International, Inc.'s first quarter 2026 results call. As a reminder, during the course of this conference call, Growing Rogues management may make forward-looking statements based on current expectations, estimates, and assumptions.

Speaker #1: These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks are described in the risk factors section of the company's filings and other public disclosure materials.

Speaker #1: Any forward-looking statements made on these calls speak only as of today, and Growing Rogues undertakes no obligation to update or revise them in the future, except as required by law.

Speaker #1: During today's call, we will also refer to certain non-CAP measures including EBITDA and adjusted EBITDA. These measures do not standardize meanings under CAP and may not be comparable to similarly titled measures used by other companies.

Operator: These measures do not have standardized meanings under GAAP and may not be comparable to similarly titled measures used by other companies. Grown Rogue believes these measures provide useful supplemental information to investors, but they should not be considered a substitute for non-GAAP measures. A reconciliation to the most directly comparable GAAP measures is included in the press release issued earlier today. After the speakers remark, there will be a question and answer session. If you wish to ask a question during this session, please press star one. With that, I'll turn the call over to Obie Strickler, Chief Executive Officer of Grown Rogue. Obie, please go ahead.

Speaker #1: Growing Rogues believes these measures provide useful supplemental information to investors. That they should not be considered a substitute for non-GAAP measures. A reconciliation to the most directly comparable GAAP measures is included in the press release issued earlier today.

Speaker #1: After the speaker's remarks, there will be a question-and-answer session. If you wish to ask a question during this session, please press bar 1. With that, I'll turn the call over to Obi Strickler, Chief Executive Officer of Growing Rogues.

Speaker #1: Obi, please go ahead.

Speaker #2: All right. Thank you very much, and thanks everyone for joining today. Today's going to sound a lot like the update we gave about a month ago both because it wasn't that long ago and also because we've been head down kind of executing our growth plans with phase two in New Jersey, the activation of our new project in Illinois, and the construction in Minnesota.

Obie Strickler: All right. Thank you very much. Thanks everyone for joining today. Today's gonna sound a lot like the update we gave about 1 month ago, both because it wasn't that long ago, and also 'cause we've been head down kinda, you know, executing our growth plans with phase II in New Jersey, the activation of our new project in Illinois and the construction in Minnesota. One topic I did wanna talk about, and I'd be remiss not to spend a bit of time, is the recent DOJ announcement on 23 April. You know, you've heard us talk, and as we've noted previously regarding, you know, federal regulatory environment, we stay educated with a willingness to make appropriate pivots.

Speaker #2: One topic I did want to talk about, and I'd be remiss not to spend a bit of time, is the recent DOJ announcement on April 23rd.

Speaker #2: You've heard us talk, and as we've noted previously, regarding federal regulatory environment. We stay educated with a willingness to make appropriate pivots. But as we stated for years, our focus is to continue building a business that's resilient and successful regardless of what happens with the federal legalization and the framework that's coming about.

Obie Strickler: As we stated for years, our focus is to continue building a business that's resilient and successful regardless of what happens with the federal legalization and the framework that's, you know, coming about. Like many in the industry, we're super excited about the prospects of these announcements and, you know, trying to make sure we stay calibrated to specific opportunities that arise for us to capitalize on these shifting landscapes. For us, we really like our existing business and our growth plan. You're not gonna see us make any, you know, big bet-the-company pivots or spend heavily on, you know, speculative paths while, you know, uncertainty still remains quite high. That said, we're from Oregon, and we've long daydreamed about leaning into kind of the Oregon outdoor roots and having access to interstate commerce.

Speaker #2: Like many in the industry, we're super excited about the prospects of these announcements and trying to make sure we stay calibrated to specific opportunities that arise for us to capitalize on these shifting landscapes.

Speaker #2: For us, we really like our existing business and our growth plan. And you're not going to see us make any big bet-the-company pivots or spend heavily on speculative paths while uncertainty still remains quite high.

Speaker #2: That said, we're from Oregon, and we've long daydreamed about leaning into kind of the Oregon outdoor roots and having access to interstate commerce. So after the recent announcement, we obviously spent a bit of time educating ourselves around the opportunity, talking to different folks, and what we don't anticipate interstate commerce coming anytime soon.

Obie Strickler: After the recent announcement, we obviously spent a bit of time educating ourselves around the opportunity, talking to different folks. While we don't anticipate interstate commerce coming anytime soon, you know, we're definitely taking some measured actions around this, mostly because the cost and then the time suck is gonna be pretty low. Last week we submitted and received medical licensure in Oregon. As some of you may or may not know, we already have medical licenses in the state of Michigan. Now the next step is we're working through, again, since the cost of the DEA registration is low, of registering our state-sanctioned medical licenses just to make sure that we're, you know, have the ability and can maintain the optionality, you know, as these kind of, you know, rules and different things kind of evolve.

Speaker #2: We're definitely taking some measured actions around this, mostly because the cost and then the time suck is going to be pretty low. So last week, we submitted and received medical licensure in Oregon, and as some of you may or may not know, we already have medical licenses in the state of Michigan.

Speaker #2: So now the next step is we're working through, again, since the cost of the DEA registration is low, of registering our state-sanctioned medical licenses, just to make sure that we're have the ability and can maintain the optionality as these kind of rules and different things kind of evolve.

Speaker #2: One of the benefits of being in Oregon and we anticipate and are confident the state of Oregon will be a cooperative partner. At these past kind of emerges credible.

Obie Strickler: One of the benefits of being in Oregon, and we anticipate and are confident the state of Oregon will be a cooperative partner if these paths kind of emerge as credible. For those of you that may or may not know, and as a reminder, you know, Oregon passed kind of pioneering legislation, I think back in 2019, Senate Bill 582, effectively, you know, designating and allowing Oregon to enter into interstate cannabis commerce pacts or agreements with other states. That was, you know, of course, contingent upon changes to federal law, which is now maybe coming to fruition. Enough on kind of the, you know, speculative stuff and, you know, again, our goal and our time is best spent making sure we execute upon the pretty demonstrable growth plans that are right in front of us.

Speaker #2: And for those of you that may or may not know, and as a reminder, Oregon passed kind of pioneering legislation I think back in 2019, Senate Bill 582, effectively designating and allowing Oregon to enter into interstate cannabis commerce pacts or agreements with other states.

Speaker #2: That was, of course, contingent upon changes to federal law, which is now maybe coming to fruition. But enough on kind of the speculative stuff and, again, our goal and our time is best spent making sure we execute upon the pretty demonstrable growth plans that are right in front of us.

Speaker #2: Core message to leave everyone with today is that our business and projects remain on track. We've been talking about this for six months. We've talked about it in the last call, just a month ago.

Obie Strickler: Core message to leave everyone with today is that our business and projects remain on track. You know, we've been talking about this for 6 months. We've talked about it on the last call just 1 month ago, and all that stuff stays on schedule and on track. In New Jersey, we'll be harvesting the first flower room that we built, this is flower room 5, later this month as part of our phase II expansion, and still expect to have the rest of our flower rooms fully completed at this facility by the end of the year. Right now we're in the midst of a small power upgrade, that will support those 3 remaining flower rooms. Yeah, looking forward to getting that done and having that facility fully constructed, in 2026.

Speaker #2: And all that stuff stays on schedule and on track. In New Jersey, we'll be harvesting the first flower room that we built. This is Flower Room 5 later this month as part of our phase two expansion.

Speaker #2: And still expect to have the rest of our flower rooms fully completed at this facility by the end of the year. Right now, we're in the midst of a small power upgrade.

Speaker #2: That will support those three remaining flower rooms. And yeah, looking forward to getting that done and having that facility fully constructed in 2026. In Illinois, which is in Dwight, we are continuing to work on kind of the modest infrastructure improvements.

Obie Strickler: In Illinois, which is in Dwight, we are continuing to work on, you know, kind of the modest infrastructure improvements. As you remember, we took over a fully operational and built-out facility, and then obviously working with local and state governments to get the occupancy approvals we need to, you know, move plants into the building. Anticipate this being completed this quarter, so still on track with what we originally thought and, you know, just continue to work aggressively to get that done. Technically, you know, we're definitely ready, team's ready, you know, all the systems are in place. Really it's just into regulatory timing and approvals, and as we know, sometimes that cannot go, you know, directly according to plan. So far, everything in working with them has been very positive.

Speaker #2: As you remember, we took over a fully operational and built-out facility. And then obviously working with local and state governments to get the occupancy approvals we need to move plants into the building.

Speaker #2: Anticipate this being completed this quarter. So still on track with what we originally thought. And just continue to work aggressively to get that done technically.

Speaker #2: We're definitely ready. Team's ready. All the systems are in place. And really, it's just into regulatory timing and approvals and everything else sometimes that cannot go directly according to plan.

Speaker #2: But so far, everything in working with them has been very positive. Minnesota is an active construction and still targeting occupancy and plants in the building.

Obie Strickler: Minnesota is in active construction and still targeting occupancy and plants in the building in late Q3. Team is obviously working diligently across technical planning. You know, Mark, our VP of Construction, you know, obviously leading the construction process down there with, you know, all the different aspects that go into getting a facility up and operational. If you had time to look at the press release, you'll notice that we modestly increased our revenue guidance for the year, mostly tied to the fact that we entered the year with some heightened uncertainty with respect to performance in Michigan, with the implementation of that new punitive wholesale tax. We're pleased with how we've been, you know, seeing the market respond in, you know, March, April, and May.

Speaker #2: In late Q3, team is obviously working diligently across technical planning, mark our VAP construction, obviously leading the construction process down there with all the different aspects that go into getting a facility up and operational.

Speaker #2: If you had time to look at the press release, you'll notice that we modestly increased our revenue guidance for the year. Mostly tied to the fact that we entered the year with some heightened uncertainty with respect to performance in Michigan, with the implementation of that new punitive wholesale tax and we're pleased with how we've been seeing the market respond in March, April, and May, January was a little goofy with kind of the big December as people were trying to get in front of that tax.

Speaker #2: But very pleased with how we're seeing Michigan kind of evolve and you saw in some of our KPIs just the yield improvements and just the efficiency that's happening in that state.

Obie Strickler: January was a little goofy with kind of the big December as people were trying to get in front of that tax. Very pleased with how we're seeing Michigan kind of evolve. You know, you saw in some of our KPIs just the, you know, yield improvements and just the efficiency that's happening in that state. I'd also like to, you know, kind of verbally add on this call, and, you know, we didn't put it in the print, that we strongly believe we'll be at the higher end of our adjusted EBITDA guidance. Again, after that, leave that unchanged. We look to get our, you know, new rooms productive in New Jersey and also, you know, finalize our, you know, Illinois regulatory approval, you know, over coming weeks and months. Obviously this is a big lift for the team this year.

Speaker #2: I'd also like to kind of verbally add on this call, and we didn't put it in the print, that we strongly believe we'll be at the higher end of our adjusted EBITDA guidance.

Speaker #2: But again, up to that, leave that unchanged. We look to get our new rooms productive in New Jersey. And also finalize our Illinois regulatory approval over coming weeks and months.

Speaker #2: Obviously, this is a big lift for the team this year. We talked historically a lot about how many projects we could take on in a year.

Speaker #2: And this year, we're doing a couple of them. And I'm sure the team will be glad to tell all of you, but I won't let them get enough sleep until we have plants in the building in Illinois and Minnesota.

Speaker #2: That being said, when I talked about on the last call as kind of the entry and the opener, the caliber of the team we had, the drive, intensity, passion, actually doesn't require much poking from me.

Obie Strickler: You know, we've talked historically a lot about, you know, how many projects we can take on in a year, and this year we're doing a couple of them. You know, I'm sure the team will be glad to tell you that I won't let them get enough sleep until we have plants in the building in Illinois and Minnesota. That being said, what I talked about on the last call as kind of the entry and the opener, you know, the caliber of the team we have, the drive, intensity, passion actually doesn't require much focus from me. It's just truly a blessing, and I think about this every day. They're such a motivated team, you know, focused on achieving our goals collectively. Some more general updates.

Speaker #2: It's just truly a blessing. And I think about this every day. It's such a motivated team, focused on achieving our goals collectively. Some more general updates.

Speaker #2: We're a Flower Ford business, and we continue to look at ways to stay true to that. We're also providing new products to our little customers.

Speaker #2: Recent launch of vape carts in Oregon is a testament to that. Strain-specific products, so we can provide the same kind of rope flower, which is a different experience.

Speaker #2: Very excited about what that's going. And the first kind of iterations of market and consumer feedback has been very strong. And we're starting to scale that kind of business segment up a little bit in Oregon.

Obie Strickler: You know, we're a flower-forward business, and we continue to look at ways to stay true to that, while also providing new products to our little customers. Recent launch of Baked Carts in Oregon is a testament to that. Strain-specific products, so we can provide the same kind of Grown Rogue flower with just a different experience. Very excited about where that's going. You know, the first kind of iterations of market and consumer feedback's been very strong, and we're starting to, you know, scale that kind of business segment up a little bit in Oregon. While we're doing new products in the Grown Rogue way, you know, measured and disciplined, you know, developing quality, product fit, you know, and market demand before we scale aggressively. Again, feedback has just been exceptional, so, you know, very excited about that.

Speaker #2: While we're doing new products in the growing roadway, measured in discipline, developing quality product fit and market demand before we scale aggressively. Again, feedback has just been exceptional.

Speaker #2: So very excited about that. And then also kind of the we have social and across multiple states now. And then hearing some of the feedback from consumers in the other markets after seeing that launch of vapes in Oregon, asking for those products.

Speaker #2: And so starting to see kind of where the brand's going and kind of some of that just consumer loyalty that we're building. Continue to invest in the brand and take our high-quality, low-cost foundation and ensure the brand matches kind of our core foundation of high-quality, low-cost flower production.

Obie Strickler: Kind of the, you know, we have like social and, you know, across multiple states now, then hearing some of the feedback from consumers in the other markets after seeing that launch of vapes in Oregon, you know, asking for those products. Starting to see kind of, you know, where the brand's going and kind of some of that, you know, just consumer loyalty that we're building. Continuing to invest in the brand and, you know, take our high quality, low cost foundation and ensure, you know, the brand matches kind of our core foundation of, you know, high quality, low cost, you know, flower production. Particularly proud, and you guys will see this in the KPIs, of the 97% packet sales number in Jersey this quarter.

Speaker #2: Particularly proud when you guys will see this in the KPIs of the 97% package sales number in Jersey this quarter. We might expect a little bit of that to move around as we bring on more capacity.

Speaker #2: But really kind of confirming the ability of our brand to hit the consumer kind of demand in that state. And it's very exciting kind of number for us.

Speaker #2: We've been under price pressure in Oregon and Michigan for quite some time. And not to jinx us with any kind of ourselves internally or whatnot.

Speaker #2: And it's only a few months of data. But we are starting to see some early signs of pricing recovery in Oregon. And we've been through several of these cycles and these mature markets.

Speaker #2: I think this is the third one we've seen in Oregon. And kind of an interesting anecdote is when we started growing rogue, I was the person in Metric.

Obie Strickler: You know, we might expect a little bit of that to move around as we bring on more capacity, but really kind of confirming, like, the ability of our brand to hit the consumer kind of demand in that state, and it's a very exciting kind of number for us. You know, we've been under price pressure in Oregon and Michigan for quite some time, and not to jinx us with any kind of, you know, ourselves internally or whatnot, and it's only a few months of data, but we are starting to see some early signs of pricing recovery in Oregon. We've been through several of these cycles in these mature markets. I think this is the third one we've seen in Oregon. Kind of an interesting anecdote is, you know, when we started Grown Rogue, like I was the person in Metrc.

Speaker #2: It was literally my cell phone that gave to the state for licensing. And so I'm still in all of the state databases, metric manifests, things like that.

Speaker #2: Yes, I know I need to change that. But for years, as a boy wanted to change, avoid, it actually acts as a very interesting signal to market conditions.

Speaker #2: As I get all the random outreach from people in the market, coupled with thousands of spam calls a day just getting us not that many.

Speaker #2: But spam calls definitely suck. But what you see is during times of supply and pricing pressure, what I did is the inbound texts or calls from people asking us if we will buy their product.

Speaker #2: Since we have wholesale licenses in the state and we're well regarded in this jurisdiction. But you get the opposite. During supply waning and pricing recovery.

Obie Strickler: It was literally my cell phone that I gave to the state for licensing. I'm still on all of, like, the state databases, Metrc manifests, things like that. Yes, I know I need to change that. For years, like as, you know, A Void, one of the chains, A Void, it actually acts as a very interesting signal to market conditions. As I get all the random outreach from people in the market, you know, coupled with thousands of spam calls a day. Just kidding, it's not that many. Spam calls definitely suck. What you see is during times of supply and pricing pressure, what I get is the inbound texts or calls from people asking us if we will buy their product, since we have, you know, wholesale licenses in the state and we're well-regarded in, you know, this jurisdiction.

Speaker #2: And recently, we've been seeing more inbound requests looking for product availability. And we started to see this uptick of ASP, particularly towards the end of March.

Speaker #2: And definitely in through April. And again, while things change quickly in these markets and six weeks of kind of pricing recovery in the demonstrable way is it can change quick.

Speaker #2: If it continues, it's going to bode well very well for us what we're doing in Oregon. We also continue to augment our existing facilities with inexpensive upgrades and improvements.

Speaker #2: We have completely retrofitted all of Oregon with LEDs. Which is our lighting technology. And sorry, I just got distracted there for a second. These lights create a higher quality and more consistent product and just super excited to watch kind of the difference over the last couple of years.

Obie Strickler: You get the opposite, during supply waning and pricing recovery. Recently we've been seeing more inbound requests looking for product availability, and we're starting to see this like uptick of ASP, you know, particularly towards the end of March, and definitely in through April. Again, while things change quickly in these markets and, you know, six weeks of kind of pricing recovery, you know, in a demonstrable way is, you know, it can change quick. You know, if it continues, gonna bode well, very, very well for us what we're doing in Oregon. We also continue to augment our existing facilities with inexpensive upgrades and improvements. We have completely retrofitted all of Oregon with LEDs, which is our lighting technology. Sorry, I just got distracted there for a second.

Speaker #2: Improve yield, improve quality, improve consistency. And then as we talked about kind of over the last three or four months, we're also seeing some of the fruits of our small technology improvements that are really starting to drive yield.

Speaker #2: We trialed these in Oregon starting maybe, I don't know, 18 months ago just to go through our kind of R&D process. And then rolled out that concept in Michigan, the middle of last year, where you can see the yield improvements in the KPIs.

Speaker #2: I think we're averaging 82 grams a foot over the last couple of quarters. Which is a 20 to 30 percent plus improvement to kind of the historical yield kind of environment that growing roads operated in.

Speaker #2: Expect to have Michigan fully outfitted with this technology this year. And then we have ordered and are implementing and installing this in about half of the Oregon indoor business.

Speaker #2: Just as we continue to roll this out to keep driving quality, yield, and consistency. Across the organization. New Jersey is really starting to hit its stride with more consistent execution.

Obie Strickler: These lights create a higher quality and more consistent product and just, you know, super excited to watch kind of the difference over the last couple of years. You know, improved yield, improved quality, improved consistency. As we talked about kind of over the last, you know, 3 or 4 months, you know, we're also seeing some of the fruits of our small technology improvements that are really starting to drive yield. We trialed these in Oregon starting maybe 18 months ago, just to go through our kind of R&D process, and then rolled out that concept in Michigan the middle of last year, where, you know, you can see the yield improvements in the KPIs.

Speaker #2: With the completion of phase two we'll also be able to fully amortize our fixed costs against essentially twice the production capacity. So we expect to see some meaningful improvements in both yield and costs as we move through 26 and into 27.

Speaker #2: We also going back to brand and kind of how we're starting to interact with our that portion of our business. We had our first brand party earlier this month in had over 500 people attend.

Obie Strickler: I think we're averaging 82 grams a foot over the last couple of quarters, you know, which is a 20% to 30% plus improvement to kind of the historical yield kind of environment that Grown Rogue's operated in. Expect to have Michigan fully outfitted with this technology this year, and then we have ordered and are implementing and installing this in about half of the Oregon indoor business, just as we continue to roll this out to keep driving quality, yield, and consistency across the organization. New Jersey is really starting to hit its stride, you know, with more consistent execution. With the completion of phase II, you know, we'll also be able to fully amortize our fixed costs against, you know, essentially twice the production capacity.

Speaker #2: A couple of that on the back end at the same kind of I think it was MJ Unpacked. Growing road won a couple more awards in the state.

Speaker #2: We got first place for our Indica flower. And then second place for the non-infused pre-roll category in the market. And this is on back of the awards we won six or eight months ago at the Mistgrass competition.

Speaker #2: So just again, overall positive quarter. Excited about 26. And with that, I will pass it over to Josh. All right. Thanks, Odie. I have not all that much to add.

Speaker #2: This quarter has been much like OB referenced. We covered a lot about it last month. One anecdote that is fun to share and it dovetails to OB's comment around New Jersey here.

Speaker #2: In this ties into something that those that have heard me talk about brands and cannabis before. Reference is we had a handful of folks at that party actually getting growing road tattoos.

Obie Strickler: We expect to see some meaningful improvements in both yield and cost as we move through 2026 and into 2027. We also, you know, going back to brand and kind of how we're starting to interact with our, you know, that portion of our business, we had our first brand party earlier this month in New Jersey, and it was a huge success. I think we had over 500 people attend. Coupled that on the back end at the same kind of, I think it was MJ Unpacked, you know, Grown Rogue won a couple more awards in the state. We got first place for our indica flower, second place for the non-infused pre-roll category in the market.

Speaker #2: And my rule of thumb for cannabis brands is that you don't really know if you have a real brand in weed unless either. A, your product is being sold for a premium illegally in New York City.

Speaker #2: Bodegas. And actually, you get a little extra bonus points if it's counterfeit product from a branding standpoint. Or B, your fans put it in permanent ink on their body.

Speaker #2: So thought that was a fun anecdote for the fun anecdotes for the team. It was, I think, six folks. One of them being an employee.

Speaker #2: They probably don't count. But nonetheless. And I'd still suggest that growing rogue is very much a sales-driven culture more than a marketing-driven culture. But it's fun to see the growth and acceptance of the brand.

Obie Strickler: This is on back of the awards we won, I don't know, six or eight months ago up in this grass competition. You know, just again, overall positive quarter, excited about 2026. With that, I will pass it over to Josh.

Speaker #2: The roots and quality have always been there. And it's just great to see the greater recognition. I'll wrap up my very short comments by noting that I'm still spending a lot of time evaluating and pursuing distressed opportunities.

Josh Rosen: All right. Thanks, Obi. I have not all that much to add to this quarter. Much like Obi referenced, we covered a lot of ground last month. One anecdote that is fun to share, and it entails to Obi's comments around New Jersey here, and this ties into something that those that have heard me talk about brands and cannabis before, reference, is we had a handful of folks at that party actually get Grown Rogue tattoos.

Speaker #2: It's this work and networking that led to our Dwight Illinois opportunity. These opportunities are episodic. And very difficult to handicap with respect to timing and ultimately whether we can or want to get them to the finish line.

Speaker #2: The underlying theme is bringing our capabilities to underperforming or overbuilt infrastructure. And that by getting the efficiency and quality of cultivation right, we're able to fix the engine of the supply chain.

Speaker #2: We're great at what I think is the hardest part to get consistently right. And ultimately, we're in the enviable position of not needing to do anything.

Josh Rosen: My rule of thumb for cannabis brands is that you don't really know if you have a real brand in weed unless either, A, your products are being sold for a premium illegally in New York City or Vegas, and actually you get a little extra bonus points if it's counterfeit product from a branding standpoint, or B, your fans put it in permanent ink on their body. Thought that was a fun anecdote for the team. It was, I think, 6 folks, one of them being an employee, they don't count, but nonetheless. I still suggest that Grown Rogue is very much a sales-driven culture more than a marketing-driven culture, but it's fun to see the growth and acceptance of the brand.

Speaker #2: As our existing path is a strong one as it is. And with that, I will hand it over to Andrew. Thanks, Josh. We appreciate everyone's patience while we've navigated including most recently the refiling of all of our 2025 historical quarters under.

Speaker #2: Gap on Cedar, which was finalized back on April 30th. We'll also be providing restated trailing four quarters of adjusted EBITDA in the next version of our investor debt as well.

Speaker #2: These quarters were not audited. And there may be some accounting noise related to the conversion. So as we go through 2026, comparatives, we'll do our best to quantify anything causing any unusual comparisons.

Josh Rosen: The roots and quality have always been there, and it's just great to see the greater recognition. I'll wrap up my very short comments by noting that I'm still spending a lot of time evaluating and pursuing distressed opportunities. It's this work and networking that led to our Illinois opportunity. These opportunities are episodic and very difficult to handicap with respect to timing and ultimately whether we can or want to get them to the finish line. The underlying theme is bringing our capabilities to underperforming or overbuilt infrastructure, and that by getting the efficiency and quality of cultivation right, we're able to fix the end of the supply chain.

Speaker #2: Our team is excited to be done with what was a compressed first quarter filing timeline coming right after year-end as well as the quarterly restatements.

Speaker #2: And we're excited to move forward under normal calendar quarters under US GAAP in addition to all the support and growth we have with the initiatives Growing Rogue has on its plate this year.

Speaker #2: I also want to highlight that our trailing KPI metrics, specifically our cost per pound metric, has been recast properly to remove sales admin and packaging costs in an effort to express the most comparable metric of cost to sort our product across all of our markets, which normalizes significant differences related to the sorting and packaging process.

Josh Rosen: We're great at what I think is the hardest part to get consistently right, and ultimately we're in the enviable position of not needing to do anything, as our existing path is a strong one as it is. With that, I will hand it over to Andrew.

Speaker #2: We had a modest cleanup of that metric from our previous disclosure. Finally, I'd like to speak briefly to how we're treating the new 24% excise tax in Michigan.

Andrew Marchington: Thanks, Josh. We appreciate everyone's patience while we've navigated all of the GAAP cumulative requirements, including most recently the refiling of all of our 2025 historical quarters under GAAP on SEDAR, which was finalized back on 30 April. We'll also be providing restated trailing four quarters of adjusted EBITDA in the next version of our investor deck as well. These quarters weren't audited, and there may be some accounting licensure that did the conversion. As we go through 2026 comparatives, we'll do our best to quantify anything causing any unusual comparisons. Our team is excited to be done with what was a compressed Q1 filing timeline coming right after year-end as well as the quarterly restatements.

Speaker #2: This tax only applies to adult use sales. So the full 24% burden isn't felt by our operation. In conformity with most of our peers in Michigan, we've chosen to invoice out the excise tax effectively passing through to the customer in the invoice.

Speaker #2: However, as you could expect, there is some negotiation that forced to reduce our underlying price on the cannabis to compensate. Hence, our ASP and KPIs isn't exactly comparative to historical periods.

Speaker #2: Due to the fact that they're oftentimes we're splitting the baby with the customer in terms of who's taking on the burden of the tax.

Speaker #2: But we are ultimately required to pay this excise tax to the state. And therefore, our overall profitability was impacted in the first quarter margin will be lower on a comparative basis moving forward as we deal with paying this tax.

Andrew Marchington: We're excited to move forward under normal calendar quarters under US GAAP in addition to all the support and growth we have with the initiatives Grown Rogue has on its plate this year. I also wanna highlight that our trailing KPI metrics, specifically our cost per pound metric, has been recast to properly remove sales admin and packaging costs in an effort to express the most comparable metric of cost to sort our products across all of our markets, which normalizes significant differences related to the sorting and packaging process. We had a modest cleanup of that metric from our previous disclosure. Finally, I'd like to speak briefly to how we're treating the new 24% excise tax in Michigan. This tax only applies to adult-use sales, so the full 24% burden isn't felt by our operation.

Speaker #2: With that all, pass it back to OB.

Speaker #1: Great. Thanks, guys. At this point, we'd love to open it up to questions.

Speaker #3: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by 1 on your touchstone phone.

Speaker #3: You will hear a prompt at your hand has been raised. Should you wish to decline from the voting process, press the pound or star key followed by 2.

Speaker #3: If you are using a speakerphone, please lift the handset before pressing entry. One moment, please, for your first question. Again, as a reminder, if you wish to ask a question, please press bar 1 on your touchstone phone.

Andrew Marchington: In conformity with most of our peers in Michigan, we've chosen to invoice out the excise tax, effectively passing through to the customer in the invoice. However, as you could expect, there is some negotiation that goes on there with customers, and often we're forced to reduce our underlying price on the cannabis to compensate.

Andrew Marchington: Our ASP and KPIs isn't exactly comparative to historical periods due to the fact that they're, you know, oftentimes we're splitting the baby with the customer in terms of who's taking on the burden of the tax. We are ultimately required to pay this excise tax to the state. Therefore, our overall profitability was impacted in Q1. Margin will be lower on a comparative basis moving forward as we deal with paying this tax. With that, I'll pass it back to Obie.

Speaker #3: Your first question comes from the line of Jerry Dereviani? Please go ahead.

Speaker #4: Hey, guys. Great quarter as they say. Could you guys I noticed you guys talked about a little bit of CapEx that you guys put in.

Obie Strickler: Great. Thanks, guys. At this point, we'd love to open it up to questions.

Speaker #4: For technology from Michigan and going to Oregon, can you give a little bit of color on kind of like what the magnitude of CapEx spend is and then the kind of returns that you guys are getting off of it?

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the voting process, press the pound or star key followed by 2. If you are using a speakerphone, please lift the handset before pressing any key. One moment please for your first question. Again, as a reminder, if you wish to ask a question, please press star 1 on your touchtone phone. Your first question comes from the line of Jerry Derevyanny. Please go ahead.

Speaker #4: It would be interesting to get that as a data point.

Speaker #1: Yeah. Good question, Jerry. The magnitude of the CapEx is measured in low $100,000. Across each facility, I think we spent 60-ish to get half of Oregon, maybe a little bit more than half outfitted.

Speaker #1: So call it less than $150,000 to kind of get this technology improvement installed. And we think it should have a 20 to 30 percent yield increase as just like a bottom line improvement.

Speaker #1: That does not include more consistent product, better quality, as you get from some of these improvements, especially the LEDs going up top, which is not part of the technology improvement.

Speaker #1: And so just a better experience for our customer. But you take 20, 30 percent amortized that over the production footprint that we have in place, and you're talking to material improvement in pounds produced.

Speaker #1: I mean, if we're doing 1,000 pounds a month in Oregon, maybe a little bit more, 20, 30 percent, you're adding 2 to 300 pounds a month.

Speaker #1: And so our team estimated that we turn on investment on that is measured in a couple of cycles or a couple of harvests once you get those installed.

Jerry Derevyanny: Hey, guys. Great quarter, as they say. I noticed you guys talked about a little bit of CapEx that you guys put in, you know, for technology from Michigan and, you know, going to Oregon. Can you give a little bit of color on kinda like what the magnitude of CapEx spend is and then the kind of returns that you guys are getting off of it? It would be interesting to get that as a data point.

Speaker #1: So it's probably been I was talking to the team about this arguably the most interesting technological improvement I've seen in cannabis in my career in terms of just low cost, high return.

Speaker #1: It's pretty awesome.

Speaker #2: Great. Yeah. And OB, if I could add one quick comment. Jerry, before, just to I think just kind of an anecdote that goes along ways on this because in true Growing Rogue fashion, we're able to use equipment a good portion of the time.

Speaker #2: Or at least purchased, but not fully implemented. Equipment a good portion of the time. And then the other side of it, because this is part of the internal dialogue, is there's the implicit return that you have from using this improvements in the mature markets.

Obie Strickler: Yeah, good question, Jerry. The magnitude of the CapEx is measured in $low hundred thousand, you know, across each facility. You know, I think we spent 60-ish to get half of Oregon, maybe a little bit more than half outfitted. Call it, you know, less than $150,000 to kind of get this technology improvement installed. We think it should have a 20% to 30% yield increase as just, like, a bottom-line, like, improvement. That does not include, you know, more consistent product, you know, better quality as you get from some of these improvements, especially the LEDs going up top, which is not part of the technology improvement. Just a better experience for our customer.

Speaker #2: But also getting the reps tying in these practices and adapting into the new markets as they come online is also part of this equation over time in terms of just doing this work.

Speaker #2: And because it's so cost-effective on the front end, it also has that secondary benefit as we go forward.

Speaker #1: Yeah. We'd like to roll this out across the portfolio. I mean, there is changes to your growing practices, not to get too technical, but with added production, you get different watering rates so your fertigation prepared for that.

Speaker #1: Is your mechanical system set up for that? The way you manage the plants is going to be different. So you got to train your team a little bit.

Speaker #1: And so we always talk about there's 50 levers in cannabis that you play with when you're doing production properly. And you can never change just one.

Obie Strickler: You know, you take 20%, 30%, you know, amortize that over the production footprint that we have in place, and you're talking material improvements in pounds produced. I mean, if we're doing 1,000 pounds a month in Oregon, maybe a little bit more, 20% to 30%, you're adding 200 to 300 pounds a month. Our team estimated the return on investment on that is measured in, you know, like, a couple cycles or a couple harvests, once you get those installed. It's, it's probably, and I was talking to the team about this, arguably the most interesting technological improvement I've seen in cannabis in my career in terms of just low cost, high return. It's pretty awesome.

Speaker #1: You got to move all the levers a little bit to kind of just get back to that kind of excellent kind of output and performance that we expect.

Speaker #2: Can you give any kind of early indications on how the vape launch is going and if you could talk about what margins look like there?

Speaker #2: I'm not sure if you guys are in-housing it or tolling it. And then if you guys what you guys need to see out at Oregon to push that product into Michigan and to other markets.

Speaker #1: Yeah. I don't have great margin data on it. I mean, we're using and a lot of companies do this, but we're doing it on the Growing Rogue fashion.

Jerry Derevyanny: Great.

Josh Rosen: Yeah, Obie, if I could add one quick comment, Jerry, before. Just that I think there's kind of a anecdote that goes along this a long way from this because in true Grown Rogue fashion, we're able to use used equipment a good portion of the time, or at least purchase but not fully implemented equipment a good portion of the time. The other side of it, because this is part of the internal dialogue, is, you know, there's the implicit return that you have from using this, using these improvements in the mature markets, but also getting the reps tying in these practices and adapting into, you know, the new markets as they come online is also part of this equation over time in terms of just, you know, doing this work.

Speaker #1: We're outsourcing the production of the cured resin product. Again, it's strain-specific. We don't have that infrastructure in-house. And we may or may not decide to build C1, D1s for processing.

Speaker #1: So using a third-party manufacturer, we launched very, very lightly. I think we had and we think of things in pounds, but like 10 pounds of vape carts.

Speaker #1: What does that translate into a gram per cart or a half gram? Call it 20,000 cartridges or something like that. And we did that because, again, we wanted to define that there's a market before we invest heavily in packaging infrastructure, all of those types of things.

Speaker #1: So we've done the product up. It gets made into the oil. It gets loaded at this third-party manufacturer. And then the cartridges get sent back to us where it goes into our packaging.

Josh Rosen: Because it's so cost-effective on the front end, you know, it also has that secondary benefit as we go forward.

Speaker #1: Our team does that. And then our sales team is obviously distributing it. And the initial response was fantastic. And so I think the first order was call it this 20,000 carts, we'll probably double that in this next order that's going to come up.

Obie Strickler: You know, we expect to, you know, roll this out across the portfolio. I mean, there is changes to your growing practices. Not to get too technical, but, you know, with added production, you get different watering rates. So get fertigation prepared for that. You know, is your mechanical system set up for that? The way you manage the plants is gonna be different, so you gotta train your team a little bit. We always talk about, you know, there's 50 levers in cannabis that you play with when you're doing, you know, production properly, and you can never change just one. You know, you gotta move all the levers a little bit to kind of just get back to that kind of excellent kind of output and, you know, performance that we expect.

Speaker #1: With the goal of establishing a six-figure kind of business in the vape cart space inside of looking at rolling this out into the other markets.

Speaker #1: There's some early discussions going on in Michigan, again, with a third-party contractor. But we're patient when it comes to these things. We don't want to rush it.

Speaker #1: We want to make sure the quality specs are there. When you're relying upon third-party contractors, you also want to make sure that they're going to meet your standards.

Speaker #1: And so you got the reliability that our customers have come to depend upon us for. And then also sustainability of that. You don't want to go in and out of the market with products.

Speaker #1: And so you want to make sure you've got a manufacturer that can kind of meet your demand requirements. And so doing it in Oregon, the Growing Rogue way, having discussions in Michigan, because, again, the response has been so good here and we were getting feedback from customers in other states saying, "Hey, when are you going to have that product for us in Michigan?

Jerry Derevyanny: Can you give any kind of early indications on how the vape launch is going? You know, if you could talk about what margins look like there? I'm not sure if you guys are in-housing it or tolling it? Then if you guys what do you guys need to see out of Oregon to push that product into Michigan and to other markets?

Speaker #1: We love your flour. We love your pre-rolls. We'd love to have your flour in a different form factor." And then in early discussions in New Jersey, thinking about how we just continue to expand our product portfolio into these markets and attract existing and new customers into what Growing Rogue's offering.

Obie Strickler: Yeah. I don't have great margin data on it. I mean, we're using, you know, and a lot of companies do this, but we're doing it in the Grown Rogue fashion, where we're outsourcing the production of the cured resin product. Again, it's strain-specific. We don't have that infrastructure in-house, and we may or may not decide to build like C1D1s for processing. Using a third-party manufacturer, we launched very, very lightly. We had, you know, we think of things in pounds, but like 10 pounds of Baked Carts. You know, what does that translate into a gram per cart or a half gram? You know, call it 20,000 cartridges or something like that.

Speaker #2: Okay. Great. Thank you. Appreciate it.

Speaker #1: Yeah. Of course. Thank you for the questions.

Speaker #3: Thank you. Your next question comes from the line of Aaron, Abel Hyde from Mindset Capital. Please go ahead.

Speaker #4: Hey, guys. Thank you for just sharing all the very clear concise data. I had a question specifically when I look at the A-Flower yield in New Jersey.

Speaker #4: And I compare them to Oregon or Michigan. It's lower. Is there any reason why is it just the first starting of New Jersey? Or do you need to be fully built out to get a higher quality of flour out of New Jersey?

Obie Strickler: We did that because, again, we wanted to define that there's a market before we invest heavily in packaging infrastructure, you know, all of those types of things. We set the product up, it gets, you know, made into the oil, it gets loaded at this third-party manufacturer, and then the cartridges get sent back to us, where it goes into our packaging. You know, our team does that, our sales team is obviously distributing it. The initial response was fantastic. I think, you know, the first order was, call it this 20,000 carts. We'll probably double that, you know, in this next order that's gonna come up. With the goal of establishing, you know, a 6-figure kind of business in the Baked Cart, you know, space inside of Oregon. You know, a couple of things.

Speaker #4: Is there any reason why that wouldn't eventually be where Oregon and Michigan are?

Speaker #1: There is no reason why it should not get standards. Obviously, deploying our system into new markets is a process, right? You got to get a team trained.

Speaker #1: You got to make sure your genetics are spot on, that you understand your facility. And so we like the improvements we're seeing there. I would say my expectation is by the end of this year, as you get there was staffing challenges in Jersey, which everyone faces there because the badging process takes so long.

Obie Strickler: We are looking at rolling this out into the other markets. There's some early discussions going on in Michigan, again, with a third-party contractor. You know, we're patient when it comes to these things. We don't want to rush it. We want to make sure the quality specs are there. When you're relying upon third-party contractors, you also want to make sure that they're going to meet your standards. You have the reliability that our customers have, you know, come to depend upon us for. Sustainability of that. You don't want to go in and out of the market with products. You want to make sure you've got a, you know, manufacturer that can kind of meet your demand requirements. You know, doing it in Oregon, the Grown Rogue way.

Speaker #1: There were times when we'd have two months between hiring someone and then being able to come into the facility. And so little things like that, just create tiny kind of gaps with how you care for your plants and things like that, which drive the yield.

Speaker #1: But yeah, there's no reason why we're not going to hit those numbers. And our expectation kind of internally is by the end of this year, we should be kind of getting closer to that 65, 70 grams a square foot of total production with A10 of ratios in the 45 to 50 gram kind of a square foot range.

Obie Strickler: Having discussions in Michigan, you know, because again, the response has been so good here, and we are getting, you know, feedback, you know, from customers in other states saying, Hey, when are you gonna have that product for us in Michigan? We love your flower. We love your pre-rolls. We'd love to have your flower in a different form factor. In early discussions in New Jersey, you know, thinking about how we just continue to, you know, expand our product portfolio, you know, into these markets and, you know, attract, you know, existing and, you know, new customers into what Grown Rogue is offering.

Speaker #1: And so that's the expectation and kind of markets that don't have that technology improvements. And confident that Jersey will get there if we kind of navigate and kind of fine-tune everything in 2026.

Speaker #4: And when I compare Michigan to Oregon, I see the technology improvements you've made in Michigan. Gets a greater flour yield per gram, but it doesn't seem like the A-Flower yield is that different.

Speaker #4: Can you explain just the nuance of that? Or will that do you expect the A-Flower to go up eventually in Michigan?

Jerry Derevyanny: Okay, great. Thank you. Appreciate it.

Obie Strickler: Yeah, of course. Thank you for the questions.

Operator: Thank you. Your next question comes from the line of Aaron Edelheit from Mindset Capital. Please go ahead.

Speaker #1: I'd want to look at the KPIs going back a little bit, but I think in Oregon, we've always had a slightly better A-Flower kind of ratio.

Speaker #1: That's home base. That's where our best talent is, which is what we pulled a bunch of that talent out. But the team behind them was ready to step into it.

Aaron Edelheit: Hey, guys. Thank you for just sharing all the very clear, concise data. I had a question specifically when I look at the A flower yield in New Jersey, and I compare them to Oregon or Michigan, it's lower. Is it just the first starting of New Jersey, or do you need to be fully built out to get a higher quality of flower out of New Jersey? Is there any reason why that wouldn't eventually be where Oregon and Michigan are?

Speaker #1: So I'd want to look at the kind of gradational period over the last call it two years. But I think you see a material increase in total yield that maybe skews a little bit more towards B-Flower.

Speaker #1: But we've seen a pretty strong kind of return on both that side. So I think what you're seeing in Oregon is just a better outcome of A-Flower production.

Speaker #1: And as we install this new technology there, I think we'll see that grow with the overall yield improvements.

Speaker #4: Gotcha. And then in terms of Minnesota, your I mean, I saw your update and your comments. You start planting Q3, sales sounds like January, or so.

Speaker #4: Do you I've heard reports that people are contracting in advance that we've done due diligence checks, that there's stores just very short of flour.

Obie Strickler: There is no reason why it should not get to Oregon and Michigan standards. You know, obviously, you know, deploying our system into new markets, you know, is it's a process, right? You got to get a team trained, you got to make sure, you know, your genetics are spot on, that you understand your facility. We like the improvements we're seeing there. You know, I would say my expectation is by the end of this year, as you get, you know, there's staffing challenges in Jersey, which everyone faces there because the badging process takes so long. Like, there were times when we'd have 2 months between hiring someone and then being able to come into the facility.

Speaker #4: Do you have any commentary or just how you're thinking on it sounds like it'll be a very different kind of entry into the market than New Jersey.

Speaker #4: But do you have any thoughts on how you plan to turn that on or will you is there a potential to have kind of off-take agreements or contracts for people because the market's so short?

Speaker #4: Any commentary on Minnesota would be helpful.

Speaker #1: Yeah. I think all of the above. We're very excited about Minnesota. I saw something today saying that there's now close to 100 dispensaries or retail that are opened in that state.

Obie Strickler: You know, little things like that just, you know, create, you know, timing kind of gaps with how you care for your plants and things like that with striving yield. Yeah, there's no reason why we're not going to hit those numbers, and our expectation kind of internally is, you know, by the end of this year, we should be kind of getting closer to, you know, that 65, 70 grams of square foot on total production with, you know, A kind of ratios in the 45 to 50 gram, you know, kind of a square foot range. That's the expectation in kind of markets that don't have that technology improvement, and confident that Jersey will get there, you know, as we kind of navigate some, you know, kind of fine-tune everything along the process.

Speaker #1: So you're seeing the retail turn on. There's obviously still very little product. We've had a few interactions with some of the retailers but we don't want to get ahead of ourselves.

Speaker #1: And so part of the planning for a new state is not only construction and technical and market launch, but it's also the team, right?

Speaker #1: And so we're making a lot of changes we're going and we talked about this last call. Just the benefit and value of our team is our GM from Oregon has been with us for years, was our sales director to start that's now immediately hired in 2021.

Speaker #1: He's going to move to Minnesota. He's going to be out there next week. He's starting to do some due diligence in the market, starting to kind of understand what that landscape looks like.

Speaker #1: And I think over the next month or two as we prepare for PCO, which is the occupancy and getting the state licensure, and knowing when our plants come in, you've got a couple of months before they'll be ready for sale.

Aaron Edelheit: When I compare Michigan to Oregon, I see the technology improvements you've made in Michigan gets a greater flower yield per gram, but it doesn't seem like the A flower yield is that different. Can you explain just the nuance of that? Do you expect the A flower to go up eventually in Michigan?

Speaker #1: Starting to have those conversations, building relationships with the retailers, and we'll know a lot more over the next couple, two, three months as we get prepared for actual physical product to be sold.

Speaker #1: But again, all signs point towards a very kind of product-constrained marketplace and as we know, there's not a lot of capital in the space right now.

Speaker #1: And so we're not seeing big growth come online the way they built their regulatory structure is somewhat restricted for kind of the more well-capitalized, larger companies in the space because there's limited retail kind of access.

Obie Strickler: I think I'd want to look at the KPIs going back a little bit, but I think in Oregon, we've always had a slightly better A flower kind of ratio. Like, that's home base. That's where our best talent is, which is why we pulled a bunch of that talent out, but the team behind them was ready to step into it. I'd want to look at the kind of, you know, the gradational period over the last, you know, call it 2 years. I think you see a material increase in total yield that maybe skews a little bit more towards A flower. We've seen a pretty strong kind of, you know, return on both that side. I think what you're seeing in Oregon is just a better outcome of A flower production.

Speaker #1: So we're excited and confident that we'll be one of the first kind of independent scale operators in that state. With a high-quality product that we can give to the customers there and help kickstart that market.

Speaker #1: So yeah, super excited about it.

Speaker #4: And I can you is there any chance that you could also launch a vape product in Minnesota? Or would you need to partner with someone?

Speaker #4: How do you think about that with the early success in Oregon and that it's such a new market in Minnesota and potentially grabbing market share?

Obie Strickler: You know, as we install this new technology there, I think we'll see that grow with the overall yield improvements.

Speaker #4: Do you have any thoughts on potentially or how aggressive or you might be in launching a non-flower, like a vape product? In Minnesota?

Aaron Edelheit: Gotcha. In terms of Minnesota, I mean, I saw your update and your comments. You start planning Q3 sales, sounds like January or so. I've heard reports that people are, like, contracting in advance, that, you know, we've done due diligence checks. There's stores just very short of flower. Do you have any commentary or just how you're thinking on? It sounds like it'll be a very different kind of entry into the market than New Jersey. Do you have any thoughts on how you plan to turn that on? Is there a potential to have kind of like off-take agreements or contracts from people because the market's so short? Any commentary on Minnesota would be helpful.

Speaker #1: I haven't given it a ton of thought because our focus, again, is on the core business. Our license does not allow for manufacturing. In Oregon, we have all the licenses wholesale cultivation, processing, in Michigan, we just have cultivation, which is why we're using the third party.

Speaker #1: But in Michigan, you can take the product back and then self-distribute. In Jersey, for instance, you can't do that. We have a manufacturing license there that's not active.

Speaker #1: And so when you outsource it to someone to make the product, you actually physically can't take it into your vault. So there's a little bit more logistics.

Speaker #1: And I think the same answer in Minnesota. We'll look for the right partners. We've had some discussions with manufacturing license holders that maybe thinking about co-locating inside of our building and if people remember, we got a 109, 110,000 square feet.

Speaker #1: Obviously, that's because we have a 30,000 square foot canopy potential there, which is about double what we have in most of our markets and so the opportunity for increased flower production is really high.

Obie Strickler: Yeah. I think all of the above. You know, we're very excited about Minnesota. I saw something today saying that there's now close to 100 dispensaries or retail that are opened in that state. We're seeing the retail turn on. There's obviously still very little product. We've had a few interactions with some of the retailers, but we don't wanna get ahead of ourselves. You know, part of the planning for a new state is not only construction and technical and, you know, market launch, but it's also the team, right? You know, we're making a lot of the changes. And again, we talked about this last call, you know, just the benefit and value of our team. As our GM from Oregon, who's been with us for years, was our sales director to start.

Speaker #1: But we'll definitely be looking at that. And you're hitting the right points, which is as we learned in Jersey, you can build the brand, you can get that market share.

Speaker #1: But being early is important, right? You establish kind of that pole position and that presence from day one. And we're very excited about being kind of that position in New Jersey or in Minnesota.

Speaker #1: And it becomes part of that and we find the right manufacturer, yes, we would absolutely be considering that. But again, not to distract from the core business, right?

Speaker #1: That would be a just say in addition to, but nothing that's going to distract from getting the building constructed, plants in, flower coming out, and focus on that core kind of business dynamic for growth.

Obie Strickler: That's now we hired him in 2021. He's gonna move to Minnesota. He's gonna be out there next week. He's starting to do some due diligence in the market, starting to kind of understand, like, you know, what that landscape looks like. I think over the next, you know, month or two as we prepare for, you know, the TCO, which is, you know, the occupancy and getting the state licensure, you know, knowing when our plants come in, you got a couple months before they'll be ready for sale. Starting to have those conversations, building relationships with the retailers. We'll know a lot more over the next couple, 2, 3 months as we get prepared for actual physical product to be sold. Again, all signs point towards, you know, a very kind of product-constrained marketplace.

Speaker #4: Thanks so much.

Speaker #2: Thank you. Your next question comes to the line of Ryan Park. Please go ahead.

Speaker #5: Hey, guys. Congrats on the progress. Just got one for you. In the event you could ship out of state, with your outdoor from Oregon, just wondering what your game plan would be if you have one and what capacity you think you could have?

Speaker #5: Etc.?

Speaker #1: Oh, yeah, I'm happy to address your yeah, you want to take that one? Go down the speculative route? Yes. I mean, truly, I mean, on this topic, it really depends on the counterparty side of the equation in terms of what states and/or countries would allow for said export.

Obie Strickler: As we know, there's not a lot of capital in the space right now. You know, we're not seeing big growers come online. The way they built their regulatory structure is somewhat restricted for kind of the more well-capitalized larger companies in the space because there's limited retail kind of access. We're excited and confident that, you know, we'll be one of the first kind of independent scale operators in that state, with a high-quality product that we can give to the customers there and, you know, help kickstart that market. Yeah, super excited about it.

Speaker #1: And so it's from my vantage point and our vantage point when we've talked about it internally, we're really comfortable confident in our ability to develop the rails.

Speaker #1: Both from a self-production standpoint, but also we'll be born and raised in the top of the emerald triangle. The access to other outdoor there are a lot of quality producers in Southern Oregon.

Aaron Edelheit: Is there any chance that you could also launch a vape product in Minnesota, or would you need to partner with someone? How do you think about that with the early success in Oregon and that it's such a new market in Minnesota and potentially grabbing market share? Do you have any thoughts on potentially or how aggressive or you might be in launching a non-flower, like a vape product in Minnesota?

Speaker #1: And you've got a state that would like to see the industry go down this path over time. So our ability to navigate the distribution rails over time is something we're really comfortable that we could navigate.

Speaker #1: As we get clarity. So make up a for instance. For instance, if the state of Florida were to open up import DEA license to DEA license for the medical standpoint and we were able to partner with and if Florida runs today from the state standpoint, it's solely vertical, right?

Obie Strickler: Haven't given it a ton of thought because our focus, again, is on the core business. Our license does not allow for manufacturing. Like in Oregon, we have all the licenses, wholesale, cultivation, processing. In Michigan, we just have cultivation, you know, which is why we're using the third party. In Michigan, we can take the product back and then self-distribute. In Jersey, for instance, you can't do that. We have a manufacturing license there that's not active. When you outsource to someone to make the product, you actually physically can take it into your vault. There's a little bit more logistics. I think the same answer in Minnesota, you know, we'll look for the right partners. We've had some discussions with manufacturing license holders and maybe thinking about co-locating inside of our building.

Speaker #1: You can only sell what you can grow in your own facility with a few exceptions. If your supply constrained, etc. So that would be one very interesting state given how medical that state is or Pennsylvania is still a medical state.

Speaker #1: As an example where it's very clear and there's a lot of depth in the market potentially. But pure speculation, nothing we expect to happen, very, very soon, that's something that we pay very close attention to in our part of the conversations around.

Speaker #5: Right on. Thank you.

Speaker #1: Josh answered that because I would have said we're ready to ship 10 million pounds just kidding.

Speaker #5: Yeah, you are.

Speaker #1: But the other thing that's really important, we've talked about this, right? This is the multi-state strategy that we have, like getting into these markets, taking advantage it's not only for the current business when you don't have interstate, but they also create these hubs and I think people miss how important the consumer relationship is.

Obie Strickler: If people remember, we got 109, 110 thousand sq ft. Obviously, that's 'cause we have a 30,000 sq ft canopy potential there, which is about double what we have in most of our markets. The opportunity for increased flower production is really high. We'll definitely be looking at that, and you're hitting the right points, which is, you know, as we learned in Jersey, you know, you can build the brand, you can get that market share, but being early is important. You establish kind of that pole position and that presence from day one, we're very excited about being kind of that position in New Jersey or in Minnesota. If vape becomes part of that, can we find the right manufacturer? Yes. We would absolutely be considering that.

Speaker #1: Right? You don't just show up and all of a sudden be like, "Oh, I'm here. I've got all this weed and people are going to buy it." You have to build that brand.

Speaker #1: You have to build that customer loyalty. And so having these relationships with customers in Michigan, in New Jersey now seem to be in Illinois, seem to be in Minnesota.

Speaker #1: I think it sets us well up for that eventuality if it comes to bear. And so really excited about that kind of piece of business.

Speaker #1: But again, it's just building reputation and building customer loyalty and connection across multiple markets, so.

Obie Strickler: Again, not to distract from the core business, right? That would be just an addition to, but nothing that's gonna distract from getting the building constructed, plants in, flower coming out and, you know, focused on that core, you know, kind of business dynamic for Grown Rogue.

Speaker #5: Cool. That's all I got. Thank you.

Speaker #1: Thanks.

Speaker #2: Thank you. Your next question comes to the line of Christopher Smith from Teamsters. Please go ahead.

Speaker #5: I appreciate you taking the time to answer this question. So regarding the Dwight Illinois Cultivation Facility, is the company willing to work with the Teamsters Union in hopes of employing individuals who lost their job at that facility and working under farm again?

Aaron Edelheit: Thanks so much.

Operator: Thank you. Your next question comes from the line of Brian Park. Please go ahead.

[Analyst]: Hey, guys. Congrats on the progress. Just got one for you. In the event you could ship out of state with your outdoor from Oregon, just wondering what your game plan would be if you have one and what capacity you think you could have, et cetera?

Speaker #1: Yes, we are in current communication with plenty of the former farm again employees. A couple of them are on contract with us right now.

Speaker #1: Kind of providing continuity. And so definitely one of the big things that we saw as we entered into that opportunity was a lot of people lost their jobs.

Speaker #1: And we're excited about the chance to kind of bring jobs back to Dwight, including some of the people that were former employees at the former farm again facility.

Josh Rosen: Obie, I'm happy to address.

Obie Strickler: Yeah, you wanna take that one?

Josh Rosen: Go down the speculative route? Yes. I mean, truly, I mean, on this topic, it really depends on the counterparty side of the equation in terms of what states and/or countries would allow for said export. So it's, you know, from my vantage point and our vantage point, when we talked about it internally, we're really comfortable and confident in our ability to develop the rails, both from a self-production standpoint, but also, you know, Obie, born and raised in, you know, the top of the Emerald Triangle, the access to other outdoor, there are a lot of quality producers in Southern Oregon. You've got a state that, you know, would like to see the industry go down this path over time.

Speaker #5: Would you be willing to recognize the Teamsters Union as they were right about to recognize or ratify their first contract with farm again? Is that something the company would be willing to do?

Speaker #1: I'm not sure. We'd have to look at that. I'm not a I mean, we have a labor peace agreement in New Jersey. I'm not sure what the requirements are.

Speaker #1: And Illinois, but I'm sure you can get a hold of us and we can talk through something like that.

Speaker #5: Perfect. Thank you.

Speaker #1: Yeah. I think Chris along those lines, I mean, from our vantage point, we're drinking from the fire hose trying to get the facility back up and running on the regulatory side.

Josh Rosen: you know, our ability to navigate the distribution rails over time is something we're really comfortable that we could navigate as we get clarity. you know, make up a for instance. For instance, if the state of Florida were to open up import DEA license to DEA license from a medical standpoint, and we were able to partner with, and if, you know, the way Florida runs today from a state standpoint, it's solely vertical, right? You can only sell what you can grow in your own facility with a few exceptions, if you're supply constrained, et cetera. you know, that would be one, a very interesting state given how medical that state is, or Pennsylvania is still a medical state, as an example, where it's very clear and there, you know, there's a lot of depth in the market potentially.

Speaker #1: And as you can imagine, having visibility on when we can actually get plants back in the building is a gating factor for even when we can more fully employ folks as well.

Speaker #1: So we're still kind of all systems ago just trying to get operational and jobs back.

Speaker #5: Yes. No, perfect. And in that time when you guys are looking for it, when you guys are ready, we're here to help in any way whether that's through the leads of the people we had there.

Speaker #5: So thank you for answering that question. I'll definitely reach out for further conversations.

Speaker #1: Great. Thank you.

Speaker #2: Thank you. Your next question comes from the line of Darius Robinson from Farmington. Please go ahead.

Speaker #4: Hi, yes. I had a few different questions. One involves do you guys plan on adopting all the different licenses that farm again had? Are you going to be looking at bringing up the kitchen again or how quickly do you plan on doing C1, D1 extractions if you do plan on doing them?

Josh Rosen: Pure speculation, nothing we expect to happen very, very soon, but something that we paid very close attention to and are part of the conversations around.

[Analyst]: Right on. Thank you.

Obie Strickler: It's good Josh answered that because I would have said we're ready to ship 10 million pounds. Just kidding.

[Analyst]: Yeah, you are.

Speaker #1: Yeah. We did not take over farm again's existing license. So the license we have at Dwight is a craft grower license. Which has manufacturing capabilities.

Obie Strickler: The other thing that's really important, we've talked about this, right? This is the multi-state strategy that we have, like getting into these markets, taking advantage. It's not only for the current business when you don't have interstate, but they also create these hubs. I think people miss how important the consumer relationship is, right? You don't just show up and all of a sudden be like, "Oh, I'm here. I've got all this weed, and people are gonna buy it." Like, you have to build that brand. You have to build that customer loyalty. So, you know, having these relationships with customers in, you know, Michigan, in New Jersey now, soon to be in Illinois, soon to be in Minnesota, I think it sets us well up for that eventuality if it comes to, you know, comes to bear.

Speaker #1: We do plan on having extraction because there's a full lab built out of that facility. It's one of the benefits of that one. As it relates to individual products, that's something our team is working through.

Speaker #1: Infused pre-rolls, vape cards, edibles, things like that. But yeah, so we're looking at all those things. But again, Josh said it so eloquently. Core for us right now is getting the regulatory approval, getting plants in the ground because all that stuff comes post having plants in the building and getting your first harvest where you get a flower for sale or the subsequent biomass trim that can turn into kind of those value-added products.

Obie Strickler: You know, really excited about that kind of piece of our business, that again is just building reputation and building, you know, customer loyalty and connection, you know, across multiple markets. So.

Speaker #1: But yeah, absolutely excited about that part of the business here.

Speaker #4: Now, futuristically, and this could be at any timeline, do you guys plan on ever growing for other brands or sharing the license with another company?

[Analyst]: Cool. That's all I got. Thank you.

Obie Strickler: Thanks.

Operator: Thank you. Your next question comes from the line of Christopher Smith from Teamsters. Please go ahead.

Speaker #4: Are you trying to just keep it C craft and grown rogue brand? Are you going to be doing a lot of third-party extractions for other people or vice versa?

Christopher Smith: I appreciate you taking the time to answer this question. Regarding the Dwight, Illinois, cultivation facility, is the company willing to work with the Teamsters Union in hopes of employing individuals who lost their job at that facility when working under PharmaCann?

Speaker #1: Let me just take that one. Yeah, I've jumped in real quick. I mean, I think the obvious point at this juncture is it would be fairly speculative to be specific in terms of answering that.

Obie Strickler: Yes, we are in current communication with plenty of the former PharmaCann employees. You know, a couple of them are on contract with us right now that are kind of providing continuity. Definitely one of the big things that we saw as we entered into that, you know, opportunity was, you know, a lot of people lost their jobs. And, you know, we're excited about the chance to kind of bring jobs back to Dwight, including some of the people that were former employees, at the, you know, former PharmaCann facility.

Speaker #1: It's a little on the manufacturing good side. The answer has already answered it. Yes, we're moving in that direction. But this is a flower-forward business.

Speaker #1: That's the focus of the effort, particularly in grown rogue branded flower-forward business where we can. That being said, we are a profit-seeking enterprise, and we recognize there are some inherent challenges in just being a naked wholesaler in the state of Illinois the way that the market works today.

Speaker #1: And so where it is a benefit and we can be collaborative, we're pretty open-minded. And ultimately, really just want to build around our core competencies in terms of flower-forward and team-building from a culture standpoint.

Christopher Smith: Would you be willing to recognize the Teamsters Union as they were right about to ratify their first contract with PharmaCann? Is that something the company would be willing to do?

Obie Strickler: I'm not sure. We'd have to look at that. I mean, we have a labor peace agreement in New Jersey. I'm not sure what the requirements are in Illinois. You know, I'm sure you can get a hold of us, and we can talk through something like that.

Speaker #1: And so over time, what you're alluding to are things that we'd be open to from a conversation standpoint. But when you look at the next six months in front of this company, we are just laser-focused on standing up operations, getting quality flower through the door, in an efficient fashion, and getting into market.

Christopher Smith: Perfect. Thank you.

Josh Rosen: Yeah. You know, I think Chris, along those lines, I mean, from our vantage point, we're drinking from a fire hose trying to get the facility back up and running on the regulatory side. As you can imagine, having visibility on when we can actually get plants back in the building is a gating factor for even when we can, you know, more fully employ folks as well. We're, we're still, you know, kind of all systems go, just trying to get operational and jobs back.

Speaker #1: And so the rest of it gets pretty speculative when you get beyond that. But the team does broadly across the grown rogue team, we have a multitude of experience across the sector.

Speaker #1: So we have some in-house capabilities that we lean into, and obviously, we'd have to build in local market as we add.

Speaker #4: That's an excellent answer. So how do you guys plan on competing with the high prices in Illinois?

Christopher Smith: Yes. No, perfect. You know, in that time when you guys are looking for it, when you guys are ready, we're here to help in any way, whether that's, you know, through the leads of the people we had, you know, there. Thank you for answering that question. I'll definitely reach out, you know, for further conversations.

Speaker #1: I mean, if. Production of quality flower. I mean, that is the blueprint for us. And so I think you noted it. Inherent in the question, we think we spend most of our time focused on markets where we think we can bring that quality at an affordable price point.

Obie Strickler: Great. Thank you.

Operator: Thank you. Your next question comes from the line of Darius Robinson from PharmaCann. Please go ahead.

Darius Robinson: Hi. Yes. I had a few different questions. One involves, do you guys plan on adopting all the different licenses that PharmaCann had? Are you going to be looking at bringing up the kitchen again? How quickly do you plan on doing C1D1 extractions if you do plan on doing them?

Speaker #1: And we see opportunity for that in Illinois. And also, as Obi referenced, it's a craft cultivation license. So we're not coming into the market with 40,000 square feet of cultivation capacity.

Speaker #1: In fact, by regulatory constraints, we got to start with 5,000 square feet. And so we feel like entering that market in a prudent measured fashion is going to be a way that we can really start earning customer loyalty.

Obie Strickler: Yeah, we did not take over PharmaCann's existing license. The license we have at Dwight is a craft grower license, which has manufacturing capabilities. We do plan on having extraction because there's a full lab built out of that facility. It's one of the benefits of that one. As it relates to individual products, that's something our team is working through, you know, infused pre-rolls, Baked Carts, edibles, you know, things like that. Yeah, we're looking at all those things.

Speaker #4: Okay. Thank you. That's all I have.

Speaker #1: Thank you.

Speaker #2: Thank you. There are no further questions at this time. I will now turn the call over to Obi to please continue.

Speaker #1: Great. Everyone, thanks so much for joining and taking the time out of your days to hear about the business. And what we're trying to accomplish.

Obie Strickler: Again, you know, Josh said it so eloquently, like, core for us right now is getting the regulatory approval, getting plants in the ground, because all that stuff comes post, you know, having plants in the building and getting your first harvest where you have flower for sale or, you know, the subsequent biomass trim that can turn into kind of those value-add products. Yeah, absolutely, and excited about that part of the business, yeah.

Speaker #1: And so if you got any additional questions, feel free to reach out. But again, thanks everyone for coming and look forward to catching up here in a few months.

Speaker #1: And furthering the updates around our objectives for 2026. Thanks, everyone.

Darius Robinson: Now, futuristically, this could be at any timeline, do you guys plan on ever growing for other brands or sharing the license with another company? Are you trying to just keep it Seacraft and Grown Rogue brand? Are you gonna be doing a lot of third-party extractions for other people or vice versa?

Obie Strickler: If any, Josh, do you want to take that one?

Josh Rosen: To Obie's point, I'll jump in real quick. I mean, I think to Obie's point, you know, at this juncture, it's premature. It would be fairly speculative to be specific in terms of answering that. It's a little, you know, on the manufactured goods side, the answer, as Obie answered it, yes, we're moving in that direction. But this is a flower-forward business. That's the focus of the effort, particularly in Grown Rogue branded flower-forward business where we can. That being said, we are a, you know, a profit-seeking enterprise, and we recognize there are some inherent challenges in the, you know, just being a naked wholesaler in the state of Illinois, the way the market works today. You know, where it is a benefit and we can be collaborative, we're pretty open-minded.

Josh Rosen: You know, ultimately really just want to build around our core competencies in terms of, you know, flower-forward and team building from a culture standpoint. Over time, what you're alluding to are things that we would be open to from a conversation standpoint. When you look at the next 6 months in front of this company, like, we are just laser-focused on standing up operations, getting quality flower through that, through the door, in an efficient fashion and getting in the market. You know, the rest of it gets pretty speculative when you get beyond that. The team does, you know, broadly across the Grown Rogue team, we have, you know, a multitude of experience across the sector.

Josh Rosen: You know, we have some in-house capabilities that we lean into, and obviously we, you know, we'd have to build in the local market as we add.

Darius Robinson: That's an excellent answer. How do you guys plan on competing with the high prices in Illinois?

Josh Rosen: I mean, efficient production of quality, of quality flower. I mean, that is the, you know, that is the blueprint for us. I think you noted it, you know, inherent in the question. You know, we think we spend most of our time focused on markets where we think we can, you know, bring that quality at an affordable price point. We see opportunity for that in Illinois. Also, as Obie referenced, it's a craft grower license, so we're not coming into the market with, you know, 40,000 square feet of cultivation capacity. In fact, you know, by regulatory constraints, we've got to start with 5,000 square feet.

Josh Rosen: We feel like entering that market in a prudent, measured fashion is gonna be a way that we can really start earning customer loyalty.

Darius Robinson: Okay. Thank you. That's all I have.

Obie Strickler: Thank you.

Operator: Thank you. There are no further questions at this time. I will now turn the call over to Obie. Please continue.

Obie Strickler: Great. Everyone, thanks so much for joining and taking the time out of your days to, you know, hear about the business and, you know, what we're trying to accomplish. If you got any additional questions, feel free to reach out. Thanks everyone for coming and, you know, look forward to catching up here in a few months and, you know, furthering the updates around our objectives for 2026. Thanks, everyone.

Operator: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation.