MedMen Enterprises (MMNFQ) 15 Oct 202020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the MedMen Fourth Quarter Fiscal 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Zeeshan Hyder, CFO. you. Thank sir. ahead, go Please

today, then you. Good joined Tim Today, am prepared welcome On to the your questions. a the and statements SEDAR. afternoon, announcing filed our CEO, and MD&A, available on remarks, press provide by Earlier Web fourth year-end site fiscal on financial will and we COO, with call, everyone. The results. will our Tom issued company's open and XXXX press release today's call quarter I management release, along are Thank we Lynch; Bossidy. and

to to or factors were Before and or in we their a forward-looking from or begin, you the uncertainties that and assumptions, comments expressed those results I'd conclusion include forecasts, which the goals, like assumptions on such will today's material by forward-looking could and cause a projections, statements, statements, making actual remind call certain drawing differ are materially and risks forecast the statements. to estimates, in involve nature outcomes applied that in subject

operations relate and things, the our financial as the conference operational as These not relied funding. of and to, should other sources be our of forward-looking stores future MedMen, upon factories, predictions of the to among as and events. expectations, for business speak statements our only expectations statements and date plans Forward-looking new of of call, and future

Securities on of today company's available forming and which provided basis Securities with earlier the assumptions and Additional and United by filed and the reports earnings was the company's statements under Commission, information company's the and Exchange including release, about material the profile is factors issued Canadian the SEDAR. the forward-looking press risk are factors Regulators, States

press SG&A, any MedMen call corporate by meaning the prescribed adjusted contained otherwise are MD&A. note, have such standardized to indicated. today. today's provided release all non-GAAP GAAP Please measures is defined During not release EBITDA, the financial will as refer unless in press Reconciliations we issued and EBITDA, which dollars in earlier that information GAAP, and earnings certain do are our measures U.S. in to conference

I'd to Tom. to over Now turn the like with that, call

Thank this you everyone joining afternoon. us for

our On a into dive fiscal and and first company's preview then operational the deep of we'll take a review fiscal including XXXX, turnaround today, the year into the fourth discuss the performance XXXX. financial lease with quarter, call progress, quarter of initiatives, for our

challenging healthy. we ongoing Before quarter, facing. want We jumping we everyone time staying and safe is and performance a the hope pandemic into our for understand are the address we has been to this

Our and priority here at MedMen our customers, of has safety been ensuring the patients. employees,

offices. We corporate experience provide for CDC in and as guidelines cultivation a our safe and to our as production retail safe facilities follow a stores, well continue in those all environment to

allowing to We are grateful regulators state to for to continue local serve and us our customers and patients.

increase Now XXXX, driven fiscal looking to the was million $XX California, increase in XX% The report million $XX.X Illinois. or that in XX% XXXX for a year. sales I'm previous and $XXX.X performance, growth a increase in from a delivered fiscal by revenue at million record pleased our we a

in and damage For $XX.X result call. the in in discuss early first the stores this to seen has looting the mainly further which of generated fourth employee We'll decrease of the a further sequential safety as quarter, million detail June. as in COVID-XX portion we revenue, of result company financial was a the and our precautions

transparency, and highest near-term; main a team our to company in of a deliver markets accountability, redefining across company back Board management at rebuilding for as that year and retailer; areas: with three transition us potential governance. have fiscal the XXXX, returns Directors Looking best-in-class the for the this and next, the first, the is focus reevaluating third, on the

work While all past there three our year. done, to during fronts progress significant and the executed fiscal on we've be plan is turnaround made on

business terms continue the the our clear our legacy We in estimates. focus, to performance, Florida of industry, where but retail as In not and brand leading our such new Illinois in retailer. evidenced we'd we making markets are like as of our believe it have we've Nevada, a that cannabis also in by and California we outperformed internal only markets

two loyalty our recorded XXXX, transactions. members, over fiscal During XXX,XXX million we surpassed and program

experience serve and retail events assortment, whether revenue, better also service, Over on COVID-XX the while in-store, despite be delivery, product our impact better customer we've retail our infrastructure and past curbside. months stores, had the corporate and profitability enhancing six rebuilt we've our options, it other through to retail improved or significantly purchasing

at has its and a best throughout to growth Over that strategy the thoughtfully about how We're over each open the to many Tim focus accelerated get value California, on footprint the company we're deeper business. assets, to of and revised company in each deals to six how into to around the Illinois, as look planning the months taking are of for we the non-core specifics months, crafting market. view the drive will strategy excited geographic country. its and and are we markets, next divestiture narrow marquee on which stores such locations XX Through efforts the termination M&A a license higher the Nevada, ROI of certain Florida. past

to third lead turnaround into group the the the area, management world-class a that put through chapter at and have Board the next of individuals of of together and Directors, Looking say we company to growth. I'm proud

began execution empowered company culture destination place be leaders, will my players that In talent the exceptional corporate apparent existing that core focused place, future. management, on believe in already time day-to-day our I on a have key heard are strategy. business, after same Improving and having the many at of and became of work began company terms will are leaders people me of with values opportunities, and we and making communities we've positive fundamentals help lead MedMen of in. growth who ensuring new focus in our continued we've participate it into MedMen internal we have some in our Shortly fortunately a that the to establishing that brought retail those that and employees to evaluated impact we

significantly government and who Salesforce, Cameron and company's has of basis, built Over Christoff, within CEO investor add world-class tremendous we've Errol such to Smith, performance. to background of impact was food our will companies Harrington, has will President positive the the its executive the Tea who have who spokespeople as Niki multiple We the industry. and strategy in and the value also a financial Mel Uber, companies policy board in Directors, and and former our past and Coffee cannabis Foods; following formation in at & six in the Schweizer, early-stage Google; an Al a Board Whole of believe but Bean for added the only previously in in enhanced months, not Leaf; board members; in industry also excellent Elias, improved The as social cannabis whole, addition and be ongoing lead MedMen's helping instrumental management beverage;

build laid update wanted call. and of and I the brand turnaround achieve the that earnings company to on last were the Bossidy a through brought focus into we foundation by the a call, MedMen profitability, goal areas. guide March continuing this I our the to on in to also turnaround portion board for in is operations our Tim plan. on while the resources the jumping give brief plan of our to finance the key and The Before growth year

initiatives area trying The was approximately on since the on dig to the a million this too At was taking first our plan than first infrastructure free the communications into had internal we've our growth was step been achieve once. its impact was our company's be two efficiency rebuilding things to revenue footprint. operations SG&A cash evaluate and the with to at its came in over cost of company cutting the a cost year, and flow factors company's corporate are which The which retail has significantly focus and related as positive operational tax, the departments. of cash to months, levers flow our able $XXX achieve result corporate after higher retail achieved. Despite opportunities among many priority peers and peak, next

spend feel is we large past couple made expected we've reductions the profile. months, SG&A improving which of retail sizable of cash corporate drivers flow the a reasonable next footprint on XX two corporate our spend, approximately number, corporate based with meaningful the years. in profitability Over more reducing that prior of the of company's Achieving over one-third

through our spend which from million through eliminating with and However burn cash here and in REIT's was made QX the the contributed Key we relationships $XXX California partnerships pursuing operations distracting million third Treehouse Capital the burn manufacturing me We have a with cultivation in in fiscal QX. progress for Possibly reduced full in and was QX fiscal July. Nevada, Partners. support approximately $XX significant with our to big driver have cash on priority announced associated

partners past of vision have been large debt equity Over and our could turnaround and our and company constructive not the the supportive months more six for the plan.

the came rent over to in of belief modifying and to our flexibility. interest have capital the covenants business. executed the and million also addition certain in partners key agreements months, Further landlords support long-term the for XX providing of value divert lenders together company additional $XX In capital, the in while next evidence our

with in We are able execute amount we've how much of such a pleased time. to been short

expect urgency We the and the We and health take the our company very methodically patience also this Partners understand we us improve shareholders responsibility while which Capital seriously around. turn appreciate the in the to of business.

in to is we're tremendous we timeline to we evolving necessary turnarounds management time years and the to constantly doing the can restructuring, growth that of making face aren't I prospects. that just industry team my the achieve the accelerate significant can these profitability. everything Given The thing cannabis say I'll changes in with last to take know execute,

more the have ever strength the of MedMen beliefs story. than growth view a and this We to brand as continue company in

this still I best highlights. next we'll operational With continue Officer Chief to chapter, share our to I'll as country that, stores forward for of and the to to updates they hand Bossidy, yet Operating the around it Some look to our continuing to develop. Tim open. is over lead company

Tom. Thank you,

of prior Chief spent myself immerse introduction, in years strength company number Tom what company As together. turnarounds, on mentioned did Officer. retail what the back joining platform Tom Operating in as which was turnarounds an brand recognition I've admired call I've a the I retail to on a of it attracted MedMen, me previous the joined in to and cannabis and the I March exactly of MedMen and broad was built. the when

for value company that the is most external transition is as significant unlock challenges, and its the remain However, were exciting to as to from ahead platform I've and needed and shareholders. preventing turnarounds our unique key potential too sitting here I've from held full part brand where starting there plan roadblocks but a of Nothing and the of we're profitability. to occur tailwinds, significant it other despite this outcomes, was successful be why with been dissimilar of accountable to part retailer a will in macro realizing as for clear drive been turnaround a a a position difference with continue changes execution to towards successful strong and we on the of a

the of came retail came As we to repeat some markets manner when a customers. the Tom state. driving such has premier estate, cost to drive revenue left is here historically Yet had in as stores the goal effective ultimate real key company The in prioritization highest California, in believe it mentioned, and it a revenue we to of where table on particularly the have lot when profitability. MedMen

and were With places had March, in Some tourist the we're fully Las and a success areas had of services historically jumping stores respect POS several and months strength, consumers a highlighted like are national to Angeles past number traffic. that integrating base, an at drive tourism into we declining represent significant with the we number retail same best boost benefited cannabis transaction increase larger impact a these of shifting number awareness revenue, of with we systems for in a business. these the once traffic brand half for from conversion the platforms The testing saw there and traffic have Los of and shied point on our Vegas had Historically, improvement again, MedMen a listing into to services further, company to millions of to had initiatives put from of since COVID-XX we far but of indicator road patients, our sizes. boost a time to third-party customer store rethink away place down massive over these had have how bases. our amongst presence these

only delivery to has product expect was point, prided quality relative With negative and on product creation, to which traffic our but not we to assortment. with high average our impact locations differentiated options, had on our We increased our see always conversion. awareness our and while peers, below a also itself that pickup respect and MedMen felt particularly assortment, flower that on

Over the past California company. history sales a the with few strongest being we which number brands, August flower high-end in in leading resulted partnered months, in of of the particularly the

significant we also addition, In changes about how made to we've customers. think your marketing

the this and invested there historically true customer at the a amount company, resources of not connection. on well was considerable focus enough while a brand, building As time time, company and on MedMen the serves we've

past on to customer allocation about while learned our base. Over marketing extremely budget been to the we have assortment disciplined our we redefined several and months, changed

we an extremely donate access, close Buds budget Now, Loyalty personalized members our shopping to to has our charities. grow product targeted loyalty with to XXX,XXX priority will can members, points We're ability we provide which recommendations, and in and manner. program, relaunching

as program In California our more campaign reach before, soon we robust we're we're a listing to follow. a counts, in to physician access next and our localized Florida, In increase marketing customers addition, effectively. media to in hyper launched October, on real SMS digital shift a we relationship launching time third-party mentioned patient made In with to deepening and with marketing exclusives week give to with Florida customers a California sites. focus towards

up, a have over few While the we ramp-up traffic. have drive is and particularly in continue up California, we seen levels, basket to need conversion past not returned just to average our is pre-COVID revenue our significant we'll to months,

quarter our the managed team, went revenue was better that belief growing it company fiscal our is revenue and XXXX. and pandemic improves, is marketing environment confident management public, and customer highly drive sequentially continue since rescue. scaling we're a will As economic initiatives the improved continued assortment, to each in growth COVID, to controlled, ability as Prior experience during firm our and the improved

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months, million monthly hovering which or an savings the million to Over been $XX translates of $X.X payroll basis. past couple annualized XX%, around of approximately on we've

a operating grows, and continue normalizes believe leverage revenue. we'll revenue retail payroll and improve decrease As to as we see of percentage

within in several taking Concurrent include efforts, banking procurement a the for months, new processing several and positive delivery revamped retail more goals. better new discuss playbook with we've fees, like contracts vendor operate to retail four-wall grow decreasing I'd business update our achieve In some aggregate, an recreational improvements, the as and but are reduction spend also we'll we're the improvements tech based our limited better to foundation POS Creating after achieve next providing and to have a each will growth process we the undergoing our The plan market security session starting gains in which also the how to in time margins, payroll a with us industry. spend. to flow at a reporting, optimization, other profitability continued not addition the of restructure a market, in a in efforts our we stores build efficiency of to improve cash serve payment and each these to In for enhancements utilize hard to staffing, for years. which been progress number initiatives look economics footprint geographic detail. over enabled tax to markets. will our

across with for an stores number XX state have and on we of California, account. a stores As expansions store operational the currently update new

Over stores In portfolio currently and in nearly plan Jose California to our of state. is enhance XX in with and revamp to Emeryville, is complete, a Francisco, in Pasadena our our the Southern store months, California, we which new our location. best-performing store the San location, a new store next northern San which a in we plans have two open LAX expand

operationalizing we programs. rolling In existing counties to addition our continue and new are recreational monitor licenses, to out that cities

California one to forward the two-thirds cannabis. the drivers over brand still believe as largest will company reminder, top of a our of recreational expand California two be is continue cities state. for open not we the We throughout to revenue of As going

continue to pick Moving highest to to of remains revenue in operate especially the we entire back about of as up is Prior impact Nevada, three Vegas prospects tourism one over stores. our excited Paradise footprint, market. the COVID-XX, to our the starts stores and of

look the of ahead, those Las we the and fiscal potential is given state. fiscal work MedMen and year, the in store In Park Evanston our new Oak the our market retail extend had a well addressing we given country. grand the can of in our additional in for to and brand parts end performing Oak wholesale which experience profitability and portfolio previously we locations how to both the and continue the best As two market, the through in revenue to broader opportunities speaks Park add quarter, with licenses. store in of in other the evaluate fourth recreational Illinois, the supply we markets, in faced Southern our synergies issues operating California Vegas Vegas stores some at between will

can significant location to the opening, volume We've our on which expected our for meeting for licensing to expect being location. that the is be stores license various final occur meeting Fenway license conditions to we state. retail various We announced [technical occur market voted for to here in subject which to provisional Similarly, flagship Final Cannabis location of adult-use difficulty] XXXX. prior recreational favor for Massachusetts front. subject Park. announced proposed adult-use opening, we this In made Today, our progress Commission this final also Newton prior license a also us license the in is Our we August, is provisional Massachusetts. granting believe near location a conditions granted XXXX. in the locations Massachusetts in is Control

to commandment. having medical markets, excited we on Moving locations built be can largest believe especially footprint about in eighth of We've a to few state. Florida, the are over XX our grow gone through which the across our iterations Florida, out different we second

However, and location. useless in the issues due not historical down adequate to of cultivation made and have past each for to months locations a have handful patients. have over supply We six operating which of they better four currently had as the the to more supply consistent we performed facility, our have fill and temporarily closed decision stores extremely a manufacturing all did well

We positive are our which that and is working, driving job quality, fantastic a open outcomes is plant team use plan improving grow to proud shrink to is the this current are say stores. doing as yields

to be medical need manufacturing and as additional to integrated In Beach best-in-class cultivator, South operation stores We open team in doubled. York, market, other our yields supply to over slated ramp excellent we we to the has including These the best-in-class experience more four Utica. embraced as an cultivation on than have Miami cannabis our to store our location. the our Fifth now March east, to vertically have eight execution months, next continue retail have operate from is location, well a continues expand for our and Florida locations, our the that an our market, including XX here as Avenue New in patients, in plans we our and

the and will I hitting players had to result July, transactions. larger The and Tom revenue strategy As relatively to a with manufacturing partnerships partnerships able on provide been the recently forward. last landlord on all-time us our few well cultivation of highs in state, and COVID we've of pursue securing in We moving DHS announced is we vendor and Mustang. support perform mentioned, as update to a

Zeeshan. We amendments of finalizing close be to and assortment. to flow are our both it agreements and would Thank this ahead and improve are that we you, I'll be to we thought on where will cash turn initiative, additive we over

Thank you, Tim.

Before transition discuss let's we IFRS jump from the U.S. to financials, into our GAAP.

June as held the by the of a the XX, longer of of as the more outstanding shares than XXXX, XX% voting a private of result qualification foreign company As issuer residents U.S. being met no company's

under We considered domestic U.S. a SEC. of are issuer now the the rules

statements in As with XXXX accordance such GAAP. financial are U.S. prepared audited for fiscal were

We initial addition, XXXX fiscal includes XX-XXG the amendment number amendment, MD&A. our In a XX, on and this financials week Form-XX we SEC we'll which XX, an which our an the XXXX, fiscal second XXXX, August XXXX financials filed included audited filed and GAAP. October Form to with on under one file

As of effective. XX, issuer will as our registration become domestic XXXX, October

are this to shareholders. GAAP and also We will U.S. about welcomed by the excited change be our believe

Let's dollars. now prior the quarters are call the in figures on all U.S. jump with Consistent financials. today's into

of wide is believe that progress. system to our our line as in of terms In economic performance the we I'll revenue, top addition, refer representation best

XX% our was on million measures from period specific compared XX% and discuss XXXX. Gross period. represents You System-wide find XX% $XX.X of revenue on million, full-year a revenue of the retail year. our quarter quarter can or same when fiscal impact California in writing financial of fourth profit MD&A $XX.X was $XX.X margin year for had COVID prior a the for information get financials. quarter million, which to and the in in million we these Southern down margin for $XX the our further the XXXX We'll fiscal in last fourth into

last XX% in and same calculating for of totaled cash year, the driven of totaled reduction million, decrease million and were general makes in expenses period note quarter. biological the corporate GAAP X% XX% were XX%, expenses, change GAAP reduction which decrease administrative period. of increase in to expenses, the U.S. decrease the expenses, in period a significant fourth the quarter accounting prior SG&A from It's expenses by $XX.X the million, previous or including from prior comparison particularly XX% and to For we changes overall $XX same our differences difficult. in the $XX.X XX% the quarter. from and year substantial the year, to profit there SG&A IFRS, treatment under were totaled treatment last under It's quarter. $XX.X full-year in important approximately gross from related compared significant that that to $XX.X quarter previous the from leases, $XX.X year were to a in primarily there The related third Within declined was compared given of Operating million which G&A note represents payroll. how margin the to to quarters gross We that a of which million profit XX% margin assets. important previous the estimate period, by operating XX% and million, based

entirety Turning we a fiscal numbers. compared adjusted same EBITDA in the in period to are over year, quarter $XX.X in quarter. our for million the their to adjusted yet million, initiatives as $XX.X undertook and overall loss million the XXXX which was in of the Several end company towards last $XX.X previous profitability, not reflected EBITDA

contributes our EBITDA of which For partnerships significantly in loss we adjusted over example, cultivation manufacturing our Nevada. and will estimate XX% cultivation to and California improved our through operation, be

and Nevada up in Let's tourism sequentially, totaled and business. drive down halt now primarily XX% by to Kinney excluding store respect take in of COVID-XX amount store to on steam substantial pandemic the from our temporary California. for pick Abbot stores revenue began Retail and at Las right to down driven LAX after stores traffic Coast. including revenue our and $XX.X soon retail of which year-over-year, Paradise saw tourist With stores come million, West from damage deeper our reduced the fourth a to Several Vegas and a traffic. in Arizona quarter resulting XX% California look like and a California COVID-XX, related the closures is

As in quarter. XX% fourth our a were over traffic early result, certain fiscal down in stores

open through down with While despite March eight Seaside, exception statuses operations mandate beginning We state in CDC based their ordinances guidelines and remained given reduced the to limit due while stores a modify end our open mid-May. get we closed we Nevada store of weeks to In California, essential and our at stores footprint retailers have local our the traffic. on California for in retail level traffic. retail of significantly our to

to created delivery pickup quickly As an example, conversion to the our to which for efficiency our were thanks occupancy the stores were out our of offset servicing impacts lines long people in-store by to had that of customers per limit curbside and used rolling able temporarily day some to technology improving and hundreds quarter, much of XX reduced our rates. team. We

top COVID-XX, looting of to the Aside we which markets U.S., within in retail close as down our we impacted for most a close of were took Beach. Downtown because that in damage, of certain believe Several weeks because California shut stores three including in forced to California and June. L.A., performing Venice early from in place stores Beverly the whole Hills. the also were

significant to of processing. our for we respect weeks. Tim close due California and as the our hit of million we by conservatively we Despite result the made with took looting, and payment a stores as full lost for supplies, at mentioned, perspective line payroll, top COVID-XX to operation the from three the estimate damages putting in Overall, All to over optimizing new progress, a systems least a in place that week. $X.X were revenue closed

despite and footprint As able positive on a to quarter. sales XX% a ability XXXX with our macro from fourth representing vendors, gross complete which QX With retail in adjusted fiscal at $XX.X our report impacted our the cost day EBITDA result quarter our QX as the to revenue, like we of comparable the initiatives call, retail that margin totaled also our increase achieve the factors of these we'd previous to of were million, preliminary a basis. this maintain

continue revenue believe revenue we to the we us, to and return to levels impacted while firmly We see the year. were in increase, our in pandemic calendar earlier the ability has seeing

across into revenue, various flow initiatives to well. surpassing seeing EBITDA in flow July, operational adjusted with over addition able all we are breakeven California stores adjusted hit cash In In XX%. were we as to XX%, approximately and at EBITDA translate cash the

September. even and in expect We August better results

our breakeven within achieve EBITDA transform As a narrowing ability line have with we of focus. sight now our business adjusted our result to of retail we fiscal XXXX, a companywide to our into the operations clear which down of are expecting

Moving balance in retail the additional capital-raising due to a year number combination the on securing credit the including million end, a of transactions $XX a license, $XX we $XX expanding to were proceeds a sheet, cash of in convertible subsequent we million equivalents. quarter to the with sale and financing million through and proceeds. existing There ended announced and facilities, cash of

with table cash work lenders holders business the to our A positive. flow permanently as well. quick our on free continue large and in capitalize equity We hand cap to hand through note

shares, on of last as which convertible and XXX.X shares subordinate redeemable basis. voting Given into Friday, an are approximately million million XXX.X one-to-one multi-class voting shares structure, additional subordinate we our a had

the go-forward As along very a the as longer of next I prepared locked of the are a about through am will no there wrap the as within over up, XXXX. past rest gone more To in positioned focus fiscal are to and optimistic excited reach company cannabis which retail also legacy is up overhang. with profitability and our that still while there with work well lot we to additional growth and and We've the revamped year, a remarks, shares team, XX U.S. to eliminates team on capital, leader this business, the months, a month, the renewed be the management return do retail

the questions. now open to We your Operator? will up call

Please first Genuity. from [Operator go Instructions] Matt comes ahead. Your Bottomley question Canaccord from

here. Afternoon, everyone. Thanks for taking the questions

currently. it about talking may pretty near-term so of in million start to wanted the like Just you have off it that just capital cash here, given $XX allocation be looks is about tight,

as what go is different in of just retail sheet potentially place seems of the just the know more comfort keeping the opportunistic and up in positive XXXX given be state I'm lot but current getting like have a right prime some just to of operations some opening and the near-term your mentioned but where sort balance balance in end, of call initiatives, these in quarters initiatives color on, subsequent just period in going actually you sheet Massachusetts, tighter capital seems tighter Obviously, be of going and some this the I is Florida, current the and on of stores on is, challenge, prepared four execute it state now? remarks the forward. to or what on it's plan like you a the just factoring could these any you'll plan that in somewhat mentioned it just things on of as growth guys other curious given possible, So

for Thanks Tom. the question, is Matt, good question. Yes, this

that the fact markets that we the getting and You working how should indication the growth that identified is actually trajectory about about about on and an our of strategy of we're mentioning business. we're the really take specific a even we've statement some as feel

with god like is, store, simply fundamentals traffic willing, the all the now. the now in story. this there, the there within We essentially which business macro story of going it's four not were walls space, a are the on feel Our of

Our is conversion is increasing. it's size -- outstanding, basket

are that All look and there, would to operator key they're up, at the traditional and improve. of metrics continue lining I a as they

So, a is our story story. traffic

mentioned take that note spend will understand, everyone discussed over period for our the briefly the really very has nothing, hope of, next gone that should we this, One is obvious just that things we folks that marketing reasons in of down I to that right.

the potentially spending is to significant marketing my idea at the was best-in-class, going not an right, consumers and So, necessarily of was seat do. not from that dollars into I operating operation I that seat, occupy, disappointing something

turn, to to and that going so federal everything get obviously that is growth now again that So going traffic. We about all -- we're start and have still that fix, when going simply house abide some described we're these short-term, in to we're you help. ready very we've significantly driving starting could and We're state that we've that's to and that are we -- see going is, municipal we're the to the restrictions and to order, we we back need. on plans by, to talk our speaking We, in abide to we really and assumption right. but the need funded, consumers that pulled that deploy self

be that and healthy address, about what that that? may our we're Tim, anything long-term, a a to these you goals be add short-term need needed may talking there maybe funds self to that's there want but discussion, are. company So initiatives, to

Thanks, Tom.

are when are of our one our amount front about I piece and that to add or add things in us use opportunities small is that canopy to the how think CapEx, eight built Florida Florida the plans and exciting complete footprint. especially in stores in already relatively are, we to to dislocation our out have a scheme of within we are important talk of the substantially

So our continues there another CapEx then to to portion as we of turned and down team finished growth without and we've with also a execute store Emeryville do back is with grow -- little be no the actually a can additional youth spend, substantially canopy job pipeline a and got big fantastic location. that reminder on our as our

spending lot to we pipeline ability without about continue that dollars. drive our do a growth good additional So feel of CapEx to

the million bids me, right potential for in then understood, now to the and subsequent on just in for about come follow-up Great, period market had on climate retail What's so end disposition. you know one a election sector of healthy your I upcoming rather. on the assets next and potential the there's or a valuations some July, been whole given of have over catalysts -- excitement the since lot in pretty $XX

maybe So more there. is like ballot certain initiatives attractive is there these I been know been more have conversations on Arizona, some there of states, quite states, it's assets? other with interest, more and in more activity,

portfolio in your be versus of different these when materially maybe your you'll of last you things, we last some reported your when non-core capital spoke overall if time and So prospecting just quarter. able to extract that's out of

we will market this assets, but Tom Zeeshan, go-forward calls be no always as we definitely And feel and and but There's feel has -- we identified that will, is say we that? portfolio always, stream steady us the question, on interest the while the and strengthened strategy, add is and environment Tim inbound assets and we are question again. the we've core the Yes, We'll honestly, anything yes, calls, to not what weekly the you'd actively articulated piece. like key, attracted across really I that opportunistic there's of that and and in of listen the a to number high. we've no or for is the to are

the would add to profitable Tom, they've at in markets. if in I look a product of the difficulty] held that, evaluations, thing [technical on public Yes, focus only what's light pretty steady toward seeing is you shift highly even

multi-state. footprints So, a maybe go cash license that will asset producing out if you trade an over that that's have premium a or

kind in we the have question we not So, to drop sales directly, answer in private same have of market. as broader your off the seen

Right.

Okay. Thanks everyone.

Matt. Thanks,

Azer from from ahead. Please go comes next Vivien Cowen. Your question

Thanks the Hi. question. for

revenues, you terms in drivers transparency terms the sequential of little recent the bit in Can appreciate more the Thanks. a the that's that key helpful. of unpack So quarterly growth? of

don't you that, and lead in. I'll Tim, with jump why

Yes, absolutely.

point We've, a past, same-store the about -- standpoint I made very initial to and be testing, disciplined our we jumping we one, of we're mentioned some with as So, of while strongly one really we initiative mentioned marketing especially advertising prior obviously budget, is about and some not party but opportunities listing far going third feel a our we've for that key of things and believe customers. off for to the with us MedMen partnerships. lot initial extraordinary spend earlier, growth is, pipeline the a in in was these return there, these decision sales is initial on the from of that that partner being services, seen millions of a

drive here next we SMS eye versus and but through what So through and out listing through marketing we've on fantastic serve we've you think email as And even broad keep the email, and shied long-term that, in and an basis has level from, looked is we substantial which patients, do we'll to customers through seen California, a say the to again, these to this expect with here communicated can the within big the awareness engagement that up there's two services partner we through SMS via we marketing. of is other for of our and our prefer weeks especially to, fine-tune piece with company list SMS be what historically launching would I another be something, away open though so, in substantial had reach a lot our with those.

together conversion standpoint, drive better, from open but So I better. here, to with and the ADS up same-store top feel seen have of those of pieces to have the of funnel, ability pipeline that We the starting really growth are we to also come fact seen think the that the sort get get we both the a combination just future from sales.

roughly me, rate delivery around a run just and believe metric around, guys XQ, and fiscal you in it offered for helpful, look that, follow-up like I California-specific one $XX last What That's can you that million does please? quarter some revenues. color if for answer was

ahead, Zeeshan. Yes, go

in Tim's stayed hit, we to of were and basis we're out since direct of as a Yes, delayed well. operations of on, kind On combined we early before. the had where adjusted markets revenue, to are now some the where that with shutdown on and are we way delivery we're delivery where of think sales of initiatives is kind which a of with COVID we have because curbside over now pretty couple few the we've back going of these point, weeks rolling terms of consistent kind delivery kind up. before, of to an that were and next COVID There's impact

We've there, put for that delivery. thing only curbside a margin of a is and put would lot focus I place. a for to the those And in for add pickup and efficiency that for sure and pieces lot in us there was effort we making us of was

we're piece people come. ready now awareness the that driving now make step to here the is to that to platform it's the So traffic of next that for this sure

heard. but clarify on was what last I so Got my just one, to on it, and that just same know I all we the page we're said that

but able You because strategy, were little to peers lot of perhaps slower, don't want incremental that were judicious, more seems it did to deploy a that the like more analysis bit say was to quickly. need -- around pretty perhaps for your I how there it a

that of a significant standpoint Yes, make now didn't some would we you very think think without of were think we commentary margin you've around a we're that from both experience without are the able we that margin a provide are we to reflected to might with the industry, technological and the seen we is where now transition to be that able lot where there feel seeing I seeing be dilution, drive standpoint, I customer scale so from impact able elsewhere. very same positive but efficiency seamlessly a and we --

you. Helpful, thank

ahead. Fortune next ROTH Capital Scott [Operator from comes go question Partners. from Instructions] The Please

and to follow-up the what of you get here? for kind it I going kind foot there could a kind more question. and Nevada from on market, back pre-COVID the forward breakeven, color just tourism now provide standpoint or will taking a at, of will kind focus of to to where afternoon, thanks of little take you're the without expected on traffic the Good

Go ahead, Tim.

months, So, traffic over nice markets, rebounded in few we've tourist recovery. the as a has those last seen

but in regulatory the XX% think upwards I this tourism we're the fall. be the rebound spring definitely felt that continues of then XX% to those earlier but So, to update markets I obviously that will and in traffic everyone progress, first those we impact, from of impact a this with to able we mean, markets, impact nice seeing as

foot again same guys now, here they're of the prior lot of get levels Southern all you it lot similar have more get to to California from a the open but but California, like to there, room Okay, to pre-COVID in at driving in that a kind mentioned and have traffic then it stores traffic start back standpoint? were sounds of you

ahead, Go Go Tim. ahead.

from where gets where traffic at not for what that us, put prior history, flower we around happy being is that where those company's with to the not normalizing through with environment, nice stores and in Buds some as traffic look better the an rolling with pickup. our to we of are sales are where a see then we'll customer nearly look with, for and to as at be assortment in what and now, more mean, drive really should the our I and example, here in to Yes, a we're targeted levels that feel we offerings, the we've that to at forward they we connection drive seen, and traffic pieces as we it's highest August the ability was to now the that our just absolutely. program COVID, from month really we're achieving numbers stores. was again, place, assortment we issue a so think continuing the The things we

on comes and I other the and you've I been kind Florida, supply just as of adequate build to of board Got as for for that for four year now, soon what going question there, supply you in know up rest the into timeline you're as step XXXX operate, of of stores fully the that, waiting guess? and wrapping one kind kind this right it, of out stores kind last me your for and only can operating

Yes, absolutely.

way the able ramp our XX over that months eight that stores next now is substantially looking complete, supply. at are turn we're to be the it on we'll as we So,

adding stores comes So, next a see aboard supply gradual it? you over based on months XX ramping, the those as

to strength open, the a stores. those the the customer so that's stores or positive of chains and that our is were wasn't we at far it key supply really number exactly, patient stretched had to Exactly, experience of and underpinning a grow here too

to any our as would The repeat not patients and store at on have and is in bare, that's come a to be when we're deserve, fairly store be turn where going gets level come plan so, You the we on enough it's to shelves that of to mistakes. supply that able the those opened.

So, stores, once it have on gradual. we those everything the be will soon turned those on. when fill as won't because at be get to supply to It that's continue stores turning as

Okay, thanks for the color.

Absolutely.

further are I at over questions turn call time. the the There will to no presenters. this back

the even on and as time presentation. very we'd We're like facing level, taking ahead we listen be, you the versus challenges and to we the process based experience would thought remain this. we're be a where the report, we we're but in Well, companies argue tell we'd the our terms appreciate pandemic and of thought restructuring can I all optimistic certainly where from of macro where in the us restructuring everyone would my on to we that within

again, and forward we tremendously very communicating of way. very, So, this step going remain a the we is We exciting to optimistic. think interesting and that with you every growth look story forward,

we your So forward with look again, soon. again and to speaking attention, you thanks for

for Ladies call. participating. and you gentlemen, this concludes conference Thank today's

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