TerrAscend (TSNDF) 10 Aug 232023 Q2 Earnings call transcript

Ladies and Gentlemen please standby, your conference will begin in a couple of moments. Please do not disconnect your lines.

Your patience is appreciated. Good afternoon. My name is Michelle, and I will be your conference operator today. would Earnings welcome Call. I Second to time, XXXX Quarter this like everyone to TerrAscend's At

the differ and matters. and Financial Joining statement from Wild, and to statements, President materially cause and Officer; financial benefits Executive Each results and for guidance should regarding including its future be Chairman; Ziad is Stauffer, expectations us indication today's that results call the to the implied Ghanem, performance. and events actual call statements from or in with those for subject company's Chief projected predicted, an operational and and of the results could uncertainties include remarks of the forward-looking company's today Officer. Our results listing discussed is respect not reported Jason Keith such forward-looking in Chief timing company's certain year XXXX forward-looking Exchange estimates and of opportunities, by differ the today's the such Toronto and may outlook, fiscal assumptions to risks other its materially on considered relating Stock Actual thereto, as statements, market or statements. Executive timing

and time, Factors to date, non-GAAP financial regarding we'll go the release, forward-looking www.sec.gov., at these Commission, today's which the available from measures Please would statements. website. included undertake appears the Mr. information to company I and present SEC company's in like on are Relations in as SEC this in measures. on and statements press or the www.terrascend.com. The filed which call website makes Jason the to Investor under any Mr. Additional A Wild. you to obligation both ahead, we other the Wild. the introduce now earnings at during XX-K the Also site our time speak with find of and of of no on the only SEC, or Securities GAAP heading factors today's Form or is reconciliation revise call, non-GAAP Risk GAAP update company's Exchange can these with and filings that

thank for Today's A year a company team. the of joining Good ago, success legislative afternoon, our major work for are we and hard on regardless last to the initiative our position momentum of a reform. everyone, and to embarked quarters results several testament over the us. you

Over significantly have substantially, the improved debt margins, quarters, sheet, last we our expense. our lowered paid down materially transformed our balance interest our several and

dispensaries assets flow We have operating and Ford Maryland, divested consecutive the Stock acquired Toronto positive achieved successfully noncore cash listed quarters, in on for multiple Exchange.

an second in improved XX.X% over the XX.X% XX.X% of last X XX.X% and and the to Gross All to of increase in XX% the quarter internal forecast. results half growth, of revenue while occurred accomplishments of in Today, for our industry-leading year-over-year. Our X.X% sequentially in from we drove of seventh million growth quarter 'XX second year-over-year sequentially. QX exceeded first the $XX.X up sequential QX. quarter, these generating margins now QX reported in consecutive our have also quarters we revenue

least from $X.X have least at also XXXX confidence of operations. As and consecutive guidance, growth million in fourth we issued the XX% a in revenue degree high in evidenced adjusted delivering the half cash revenue second the year. XX% net our million $XXX year-over-year We positive achieved EBITDA EBITDA, respectively, in by our year of representing in continuing for guidance adjusted flow of of and of quarter full from for million We recently quarter. at operations, $XX

now continued We this lot Maryland, got integrated our vertically benefit as quarter. a expect we significant done the in as in growth well really other revenue profitability realize as in our execution and geographies. We operations of

[ the the become a specifics. of successfully to rating this step for reached tell ] strategy in already Adult-Use our some on at which run market just me you in key X, cap Let in July with $X billion. We a X leader about dispensary Starting time state, Maryland. is

down was great for identify terms. positive the for $XX higher in laser-focused locations on on already on able placements cash rate of at million debt. We our stores July, difficult sheet interest Canadian incredibly for TSX. months. On sale insured with have we debt, attractive lower environment, quickly last transact raising in to the for paid team over million reducing of an rate significantly flow interest and balance bank, perspective, lowering closed million, expense, the an of Xth XX profitable and From private Our XX.X completed CAD FDIC extremely executed facility listed driving the $XX capital and a been loan million interest a $XX we

investors. Our us and provide institutional was greater TSX thesis our time, our over capital original with help to would decrease retail cost that listing a broader of of group and access

choose business both we compliance in Morgan their recent CoWIN from pursuant will marijuana listing, investors from if and listing to TSX would based foreign. upon no to those the internal invest. weeks, refrain policies, clearing their Stanley, their know way have impediments unit, at in be others issue. of custody, longer firms us in to ultimately to have fact, our continued investors or institutional in TerrAscend rate Pershing MRB the their asked York multiple U.S. block shares removed U.S. about may formal I'm opined a security policy. While happy that Bank related investing New custodial still are that list, in high and we stock institutional didn't inbounds Prior we a had of report recent solve In calls already when that But days. And that

gone coming from of we these regulatory to without much securities. included reform. slow noteworthy. is to In the One has other list speed several this change notice, listed indexed been the has is of big substantial removal months. Moving capital is the where of these do be that industry While of on an And benefit we think block expect a removals deal. a in listing the in indices TSX TSX amount to excruciatingly the

operate position growth on further With to regime. and parties unsustainable lack delays are made, federal the of to plan destiny ongoing banking, have under we While support keep in the to own all despite reform. to reform tax our of control we executing continue consistent not The our safe we both a on from fundamental regulatory in progress assumption business. be us a indications from the and cash-generating point will

trend Any In only reform fact, be our states additive of This would business have the the in be the open team to of have rates we given a of continue we lot highest that over strong all excited our built. In has of wide business. progress last that one number virtually to we map. and about. conclusion, progress made lineup this currently, across expect proud and growth growth to our facets of have months industry substantial and

I'll call to Ziad? Now markets. provide our Ziad the over turn across to an update key

pride you, everyone. I will what deeper and QX. your share Thank in state-by-state I we in hello, now Jason, operation. accomplished Jason, down into our drill

begin most currently largest and New our Let's Jersey, is profitable market. with which

maintain by top and and BDSA recent second including we product a a position edibles margins the quarter, strong stability key we concentrates. In where received initiatives, launched We a the of we the in market vape, into driven categories, product channel positions positive improvements data, including state. hold options flower various X this and dominant in position have of amortization goods. May, the already yield share and reduction mix, the is say improved and vegan in supported in very from consumers. cost taste, love market, product. top They by Wana Our during and This the reaction they

relationship help further market We to what share are very seen so with will Wana gains we've in drive pleased and expect with far our edibles.

social own an bill is existing governor's bill, Jersey's pending currently equity X New of signature. the up Regarding dispensaries. to to allows operators additional that This XX%

the These determine active our XXXX dispensaries, billion having and right been time Official in have in state-of-the-art completed to of manufacturing points We rate state. Complementing in partners. Now the on a roughly these having entered growth from the TerrAscend retail Since of believe to accretive we X the market. will the first at $X facility in July in Maryland converted gone rate just a revenue of revenue Maryland, $XX presence of year, in at of We market medical this to of our will current are top X we month state substantial completed X, launch of which position implementation Adult-Use sales beginning retail what under annually, run drive and X. July roughly retail. in on for to the the million. Now the down Adult-Use. in to on data for that were run on beginning acquisition state medical anticipate cultivation Maryland. dispensaries growing in just cash flow dispensaries share market preparation the X for with share the be Hagerstown, Adult-Use the conversations we year on amongst with Adult-Use,

and We by of offering high-quality selection a our brands, wholesale also complete Gage, Tree, are solid Wana. experiencing growth Kind Cookies

in a the of depth operational in and wholesale are have improve Maryland across supplying strong this margins and Maryland, the we we've XXXX, to continuing place further We the currently are experienced plans state, retail medical Currently, has billion-dollar to turning of nearly we we the vast improve our in for and the brands sales state states operators comparable half. Between Since longer. of and foot, facility stable that Pennsylvania, our the the to operations the both distribution. in wholesale. continually majority breadth potency our to the market doors XXX Hagerstown to $X.X been With increased during the volumes in of our and absorption at billion. square for levels and ratios much in at Yield per believe retail first size remained at been facilities sequentially bud-to-trim quality. market. Moving in year, now improving high half THC harvest over other operational expect leading of have facility, have are our one trend second early

on the the Adult-Use regulatory towards path progress seeing are in We state.

operation have represents we in the be we by for X% sequential drive run that driven revenue lean will during the were assured, Adult-Use. the Jersey growth extremely an retail we half large for the environment Michigan, state. Turning continue second we We of and expect ready pleased just, us, I under quarter, year. growth. are In Rest monitoring will have Pennsylvania as meantime, to substantial opportunity New the to a the the to same-store with as to growth clarity the for am more mainly and in Maryland. footprint

we in Oxford. quarter, the opened our Michigan During XXth store

gains We are further plan drive the in state. share on to our market executing

state a effective. the price which to maintained significant to our proven in premium due be brand have We average strategy, to sales the has

go to further plan the vertically, new of For clear of expanded further the EBITDA. of have second production, products, year, we mix reduced to and positive and broader introduce gross half margin cost driving a a and leading all

In state-level doing further infrastructure top. line. at apart by ranks Maryland when market we any Michigan profitability. In and expand way, productive grow With refocused Walgreens, to weeks many the our forward the will the we the constraints these efforts leverage if TerrAscend so, on successful at finish second out look and of M&A, quarter and of imposed with in years those time share, details quarters. multiple our sharing we This at I XX recent and deals to was the our have get of right opportunities my

confidence the thank would dedication hard team time resilience, getting the I it of of the that, right, plan. ahead like stubborn For for to and on the the and work,

second Our revenue straightforward. and is study half our week. last of the expectations We adjusted preannounced the year growth EBITDA for

margin in drivers delivered we gross like states, multiple our and have solid growth QX. we expect performance to across We revenue continue

the Regarding of I operating improvement at to the expect expenses Keith, financial expenses, like we second call update. operating to XX% in provide around would of a to turn with over half year, QX continuous targeted the revenue.

totaled The of QX, acquisition adult-use decline and of to are first period and a margin year-over-year. quarter, Ziad. filed that New was market already dynamics quarter and the and million in Thanks, over the by by New and offset quarter in a XXX period compared Jersey XX.X% was growth AMMD by reference in XX% our the Michigan, Net Jersey. results The million afternoon, U.S. year-over-year year, in representing year, Michigan, 'XX growth organic growth period the in to in million and in million quarter-over-quarter. year-over-year have growth. decline declines The results acquisition everyone. $XX.X growth point PA I'll X.X% versus during I QX. driven million the Good and the XX.X%, improvement QX today in to quarter quarter representing AMMD to sales first was growth improvement for million This sequential in stated of $XX for Maryland. sequentially million PA, same the in for on quarter second growth in X% full in growth for EDGAR, Maryland same was and The last today driven representing New improvement revenue during last XX.X% the basis the driven year, $XX.X be flat Jersey, point second million $XX $XX.X $XX $XX increased compared will Gross year-over-year from sales representing a all going by offset California. Wholesale dollars. basis follows year-over-year. million a last QX during XXX growth in sequentially sales the both been growth quarter was by XX% sequential a $XX.X and previous Retail that and same-store same SEDAR $XX.X revenue in

have Canada, changing on we in results.In our Michigan, playbook In over expand We taking of 'XX, working. in money-losing part operations state. the in of been our the business. been we've dynamics market second seeing optimized gross past and executing is the we In now are Pennsylvania of to in that a closed these the quarters, of margins, outcome we the our it and our response number actions half non-retail to actions

the optimizations we we the of in launch on expenses first finally, onetime costs, $X.X were gross has of included listing administrative And in $XX.X and These ramp-up for our of and M&A in to expansion of with of the quarter been quarter. which items, to compared the include of fees in transaction Maryland, G&A for further continue costs. identify business. where the delivered capital-raising workhorse, on Jersey to quarter July facility, business margin million, state, million stock-based very our impacted profile already and compensation. top by even second Adult-Use to numbers X. General gross healthy healthy that were related the TSX New Maryland, $XX.X expenses margins related our prior that costs million the acquisitions legal Hagerstown the

these driven of growth other and half costs costs other in continue dispensary up by a our AMMD QX, G&A of the full on acquisition investments quarter modestly to Excluding our quarter-over-quarter, second initiatives. During in we expenses onetime plan underlying Maryland and line year, organically. onetime the expenses were the in to modest hold the operating

million the onetime adjustments the as the to in breakeven. During million facility XX, X dispensary $X.X loss that completed non-GAAP sale primarily Michigan. Free the cash our for the including by flow partially XX.X% quarter. quarter. the $XX.X were rate for growth XX% excluding interest XX cash cash was -- placements debt, integrate that rate payments of prime I quarter from was gross the XX structures private provided consideration we an million, plus cash a of operations $XX.X on Cash increase from balance a our an insured represents the paid at quarter store exit X around quarter acquisitions in second second new will a restricted XX, USD press expenses, totaling million, 'XX. of of 'XX, tax This sheet. generating operations. million was $XX.X a quarter. measure down Adjusted we underlying was in continuing a from in first at openings closed and Canada improved in $XX.X spending were was loss 'XX $XX.X million compared quarter, FDIC relating and the for higher proceeds the of operations June X.XX%, release, bank million, to completed loan income EBITDA consecutive $XX.X continuing March for was X excluding our million outlined. Turning CapEx and the No to offset positive quarter We a nearly to million a quarter-over-quarter margin 'XX. net continuing quarter, stock-based $XX $X.X made of second and to $XX fourth flow of in The a prime quarter. GAAP revenue, for XX.X% margin year gross of million with made from the million, closed and driven compared the of by second during our positive D&A by the first the Cash operations August at announced full million X G&A cash and expense net margin, compared comp. sales as Maryland $X.X representing our year of payments In in cash, the higher for in acquisitions, Maryland expectations to of expect quarter. million we for $XX equivalents,

of least year-over-year full operations adjusted continuing operations. revenue $XX XX% We net of continuing for of from million and least expect EBITDA representing revenue at adjusted XX% from growth and net in year. $XXX EBITDA the in at million

We levers our across have growth states. multiple

at also quarters mark for And with terms are expect momentum expenses, position lineup to includes we our growth. favorable over revenue. To exit our at continue delivered are the We making material all growth strong in QX. around come this executing and X our the more the performance plans the to a we in demonstrated flow, positive we year have transforming balance capital our on half. of regarding consecutive progress revenue solid expect to the few sheet in X access second summarize, to growth ability industry, top-tier to strategic solid sequential demonstrated revenue operating momentum in and quarters support while quarters with states, cash of we our XX% eclipsing growth through past reduction consecutive and margins gross This industry like solid margin gross XX% of of With debt. well-positioned a our and of operating

We on or are geographies are complementary also number of in we the opportunities operations, pipeline forward through to prepared now turn we attractive year. the to concludes the growing existing either well where rest facilities. placed in operator I'd our the to to of of rest with our look capitalize assets M&A on current providing We expected have progress it over questions. updates our like the to This as remarks. the year this for on

you, [Operator please, for question-and-answer will now question. Thank first moment, your gentlemen, session. Instructions] we Ladies begin One and the sir.

Your Andrew first Stifel. question will come at from Partheniou

questions good my for quarter Hi, on good evening. taking Thanks and here. congrats the

Just rec in a color between on to then a and basis over trend start how flow quarter, a July of sure Could lumpy little at I I if or seems from a you wanted which industry. positive expectations. there bit in a assuming and catalyst housekeeping first more expect next to that you about from talk it question, cash to X. Hagerstown, Just you've this bit the is operations refund QX, in working cash, little think looking a up which even it read correctly, did this more the more not And I of unusual capital, bit a QX, bit the but bit off ahead little in it maybe and stabilizing in the quarters? tax little inventory you in is receive manage QX I'm also you one of on bit had a Thanks. there, Is X X? built saw a little harvest that it's of little

That's the last And get receive first the so we Sure, did year. back a Keith. overpaying XXXX. refund to we Yes, took in on since of refund. refund final in October filing Andrew,hi did the it a it's a from part, while

So correct. that is

And is second One Adult-Use the on our color we a -- actually couple and Jersey. You read well, correctly. can And there. ourselves drivers working we what in Maryland getting jump Ziad to one, on to of New that question you we've as it's the capital, part mentioned a on the that buildpre been regarding the maybe break then in to surprise there are to second in yields positive of just build more continue where records that. thing provide

back question. given And quarter. So or back that normalized, saw product QX. all so then here, actually and us that in primarily your QX that New with inventory I part a way in come has Jersey be third another. buildup through through through flip we'll both fresh and more second Maryland QX related of impact answers The fluctuation major working second a in should And not the the would we capital will that say, is one

agree everything. The Andrew, me team to the improvement to only XX% highlight ]. XX-plus Ziad. Jersey add a yesterday [ of thing the ABA with on I a is harvest had to light this this is I inventory, Yes. wanted New or some more with Keith, on that yield give percent color last informed

this, In were to we addition have few online QX. that delayed QX in coming a to stores friendly that got

to Jersey all So a ] QX. this ABA New got in fresh the of that built extra home in inventory inventory, to had and inventory -- are go [

on for continuing Jersey. And maybe then Thanks that. New

You've fresh this product. got

new opened could You be the in wholesale New sounds some outlook which on have customers. positive like Jersey. mentioned you're new that stores It

look been from more lost of other like seems not the it's outlook. There's for bit fees. a private paying the mixed what's license in when one On like layoffs, operators, a -- regulatory happening a it seems it you at state operator and

bit of it a a that's first conversion. seems for unusual So rec just state little year in its

bit about are what you little the driving do what the more year? more outlook, about and for So could stores opening half a talk your What's of you think seeing? optimistic second guys you

have competitors some were an perfect place track we regulator. I'm and shows stage have the we on and focus at fine, about some of few of not this Andrew, still of I'll proud events data compliance took hold we compliant, the relationship where with Yes, the record, in were culture that I'll excellent a competitors with the the start Events built TerrAscend. talking us. compliance. that so

set the compliance From of we the gross of New integral around target to an is goals. that year Jersey -- talked for XX% margin. side. half those business the the second So the side, be We about our OpEx on that's part

Jersey to New in improve. continues margin gross Our

Our production still XX% previous and our from the are And price to that we in the decrease we the market that discount avoidance have I quarter. in described, continues commanding did cost flower of increase and of play flower to yield the not due to do. premium of that yield any that quality

So on and all this, strategy, price our our of demand driving and equity cost the our is brand what's products production, stability our optimism.

Yes. And I such -- ] only slight is would recently into. where [ yields. there hitting the potential that backlog we're that other high-quality more And ace say that it the in place flower processing our we products had in and into only inventory, fully higher the a not turn bottleneck we're getting we've

we we end towards when talking construction we the issue. starting capacity we've year. with of that the spend be that We still year. additional believe a good we without plan the add increases, undertaking getting extra it's money assuming got extra -- canopy flower with up themselves. demand And yield having will in to well sustain a all extra of can and the that, supply of still they the We that CapEx, perspective. that on We what expansion these that been have about So but ended from excess we're the spent we got our yield that end towards

our additional that bring is the those us who right decide partner who and X... is -- negotiate in to continue -- we for as to Especially

about forgot Absolutely. that. Oh, I

to there's that we're there opportunities allow we banner, of could And could speaking will really to is they been to could be thing Apothecarium about excited some under we've additional of that potential in X up terms be -- the other equity the The is some exciting partners social be XX% own few bill really weeks. us even stores. last to some diverse signed the -- about an and over

in Appreciate queue. get that back the color. I'll

Andrew. Thanks,

Lauriers at Your Please question go will Capital. next from ahead. come Eric Des Craig-Hallum

quarter question Great, taking on Michigan. on is questions strong the you thank and you. for my My congrats here. Thank

expand compressed, Just you made dynamics wondering market, of is have most most by the that you given very if competitive. the been could price here. on some turnaround it the I've the impressed guys among in among

standpoint, a confidence can could your are And think compression. my like from looking or the to it comfort investors So product who provide industry's now who premium and validation the I space looking seems strong for navigate strategy. of at price investors

could expand Michigan? implemented on states, you may that And be if us you. if that wondering in some in other Thank Michigan. could in the changes drive may understand in profitability of to be and you've playbook increase that what to unique I'm what then you repeatable So help

Eric. Yes. Thanks,

that You're right. I around strategy. agree fully premium

matter average pound over a As in of our average the premium fact, Michigan commanded the price XX% per today in state.

from replicable I'll what me sea X you what's states, just states, through other sales. So give doing going from only not walk starting minutes, to in -- and but we are in our all

cultivation. our with starting So

exciting to of the to Michigan managed leading cost extremely level to is get per footage. that per pack pound. it a gram when square yield is have And We comes with

we margin. We utilizing products. is have started our with that and helping definitely are the So launching facility, new manufacturing

that XX for the in first has acquiring new super The have to X did contributed loyal not We in launched our Legend in with exceeded of XX expectation that loyalty have are brand customers Michigan combination sensitive has days close In and months, between cannibalize we it while and that internal loyal, to our continue divided into XX -- and customers, we super and X super XX, times us more Michigan strategy XX% loyal visited we those than of premium our of customers. loyal. the is today, be have are brand who that seeing more strong.

our that states, is about goal doing the those us past declared getting all are that the QX So EBITDA about of to positive. we some super across improvement confident are making are and feel in in that the we initiatives and Michigan driving being and

encouraging. loyal X-plus just days. And are here, on customers, stores into in them XX% XX% times visiting coming to in That's just that of about XX metric that very clarify Michigan, is the your customers of

that. I clarify So on just wanted to

correct. is That correct. is That

them The XX X measure are days. that are loyal and period. I've in any X are The buckets XX-day than more past. the loyal shared into we super in Xx Eric, super So loyal every to the XXx super XX and

So us and not retention seeing have the in what are new of that is Michigan X-month in our previous customers period. acquisition percentage as used that the we

those And on buckets. I'm focus pretty we that. yes, with happy So

great. of wondering in price then broadly question my quantify, last could experiencing That's the just Michigan. you are compressed as your pricing broadly, most other certainly you other not markets that not but And I'm Yes. may markets? on comment premium just be as necessarily here. mean comment I if

So pricing to may I pricing markets. assumethe is premium closer in would what considered other be average

So I'm to in your other and or that expect how average some X next, Is you remain the just a premium of fall current these over yours then something years? whatever, markets, this to where X expect just trend where wondering pricing more bit stable. and you down the sits to

any the here, Thank give just just you. to premium that of you be years great. If sense current would could us like how expect over current of you evolve handful that and

the Michigan. do Sure. I'd there's has discussed Michigan. stabilization Pennsylvania story to state. state I similar bottom, to love to can we it We by Pennsylvania pricing. consider to. have We hit And covered a and and

an similar XXX to be stabilization. our have tell. It it reduction recovery New be from but and Jersey young, to changed which, but about pound, equal continues at the high in believe exciting, stable [ too started to promising. to $X,XXX yet, I premium Michigan, the at continues It of seen our Pennsylvania premium Eric. in in early, too the when not pretty the outside that compare since on discounting our around pound we'll protecting is flower excited I'm pricing premium me, place and is call some in launch it's in we're compare it while Jersey Maryland $X,XXX happening price $X,XXX the that a to -- to [ will we're brand, own at ]. New taken have count the to the April. on the in Jersey, so we state, market. while keep I Abo New this quarter, per Maryland, actually is continues to state, that's can't that. a still Michigan it can compare it leading have Still In And state, is the We eye to can't time I brand Aba] this, of strong. a same I demand. to there me the to seeing pretty it's has and that pretty XXX wholesale,

so you thank color. much right, that All for

Yes, you. thank

ATB question Your at Capital Please ahead. come will Markets. go next from Frederico Gomes

questions. Congrats Thanks Hi, for on taking quarter. afternoon. my the

in there mentioned just X the First increase that the you. on sales seeing stabilized of you you question this see to about it's I Adult-Use million run rate about has you know or and Adult-Use. to growth medical you're $XX stores magnitude the that state, with just there, the before acquired, is at continue Maryland. sales curious point? I'm sales Thank whether

Ziad here. Yes. Thanks, Frederico,

So and you Keith, can info. I'll supplement maybe more start with

top from top not is -- perspective. So at we aggregate market feel the in share our a retail X among the that dispensary

it on X dispensaries fully are acquisition around strategy very and from with timing, the right very to cultivation vertical. beginning, in selecting go so well The performing starting overall our Our Maryland far then the Adult-Use. was

Our X assumption. good that of Adult-Use week we I to mention, in want keep on closed pretty so day in about that business our feel X, out us But mind, or doubled the assumes off Maryland launch. prelaunch far have and compare guidance dispensaries total those the post week launch. last makes was the that size Adult-Use All the to put that we you when we seen indications

So bringing opportunity. we realize want around shared with our a have we and and Keith, will will anything premium I Eric vertical, going the we accomplish else around that, of to brand, earlier flower that strategy still you our partners that in opportunity further big add.

No, that it. I covered think

And Frederico, does that answer question? your

Yes. perfect. you. Yes, that's Thank

Just a follow-up TSX on listing. here the

you that potentially involve transactions? and mentioned think So [indiscernible] help that could you investors also I'm conversations of whether is you play issues have have around those shares. could solved. But you. that the you that factor Is negotiations wondering the listing here Thank potential M&A some the a with been at that had helping

me use to that able listing. we even substantial a definitely TSX-listed when in you, Frederico, a to talking acquisition terms Maryland Thank believe helpful Peninsula And largest in aspects the our we're stock TSX the more of company we because listing. transaction, the it the terms to of that for It of TSX reminding have left targets. I acquisitions, out transaction, is was of and were amount of our because in positive

help So in it with we're already and continues picking it related a us and deals discussing to capital helped yes, it's up the parties. X top other state, essentially so as or the lower as to cost dispensary of

the be in Congrats I'll quarter. the on in again queue, thanks. back

Thanks, Frederico.

Canaccord next question ahead. go Bottomley come will Matt Your at Genuity.Please from

again in the that for color the you other And curious Thanks, we're ones call geographies. specific would interest of just much the lows further then on than Maryland market. good acquisitions. tonight. Just color now M&A just in cash the again stick demand I you if your the shares, be you. might any seeing on for all evening. are with of And relative deeper the there's versus answered But I'm private that going right you to think not markets any more if but wondering geographies how on pretty M&A theme, that's mentioned some the all-time I'm to already What unfortunately if the landscape be wanted to the valuation once considering ask is helpful. in that at translating equity partially the and Thanks

Yes, absolutely.

add in, dispensaries to in we've in said We in to in way, as of front to beating caps New East that's to relates we're already the where front. opportunities as possible. The we do social we're, it separate very earlier, or Michigan, of and of then Jersey prioritizing the been had last as that's that with up can down who's the something listened and sort additional pavement contiguous bucket couple is knows, as where at in terms One new least the there's attractive states and hitting stuff the acquisitions at that they And that actually we're continuing be the -- other probability states in for because we trying can in, Michigan we targets way terms anybody operate and look and deeper X we've of higher on we past, many us opportunistic going we're different is several them. of that generally as it to of So meet buckets. is quarters as new are we're And say, pavement obviously, we're that do on going mentioned there. what to going and Also, that states. Jersey stuff still the on deeper rule going we front. equity Coast, several how unlimited go to that And in we've in another discussions like state. that's the coming, that's we own -- many engaged active terms to we're the described as a to east and it the in

on thing other bucket as something nothing third share but be transformational on deals. Obviously, that would that there's things -- looking is further share in it. we've at the The we we discussed about that front some have to haven't larger, more to much and And been the well. past, until that's that

and... Okay

And -- think the also asked you I a thought of similar -- that terms definitely private to transactions answered stock that multiple of But terms said private in as accept the of -- seeing we've of are seeing we're them I and would transactions significant I -- that's transactions, over sorry, similar terms and last you components portion at been high a in of them our are it. seen the a we remuneration. say case we in Yes few lowest Matt, willingness the months.

conversations list that. Got get indices just in anything you can some be mentioned one anything to you're you on now might it. there TSX. one And had or that the is me wish potential or all on of Appreciate quick you other Is then able expand for that? maybe specific a

might I'm main would some expand TSX as XXX indexed title not Obviously, that be main companies what sort had then well. index that larger even of us it, to requirements. the money the they their of right large now. the that ESG us That other exact are of and mentioned follows and knowing there's to be there indice. on driver, of forgot Nothing a under most or -- the the indexes TSX I but find But bigger for to the to and think, I is the index. large the TSX fruit that's going the one, embarrassed mean, some we've think we lower-hanging these people attractive indexes qualify to

Got it.

Okay, that. all thanks for

Thank you.

Please go Your question from will Clarus at Atkinson Securities. next come Noel ahead.

in comments QX. Like well guys. about everybody Hi, so doing else's

just again, off, now. up dispensaries active First right they're XX to, New in Jersey, I think,

this that competitive is -- you store the I store still, at in traffic stores? you all? Phillipsburg stores only -- you Are patterns seeing county. across Your that your patterns for Are changing the of what seeing consumer are increasing believe, number traffic at are

Yes. not. No, we're

stable. New basket performance is are size for Foot price stable. Jersey New Jersey traffic shared we Retail us, stable. and is As

I myself So it to Keith, accurate. and slowly that's say check

up. was it hope I and So,

Yes. is for that I'll us. Philipsburg, you -- a And add, since just since highlight you mentioned mentioned Frederic sorry

year, and our to sales inch surprise to April store actually growth So us country continues that growing. that since strongest continues in up in one the that's is the last of and

in the planted? secondly, Canopy Then much Okay. is of available in Great. Maryland, now facility how production your

Yes.

of what available is So is planted. XXX%

the have harvest the the fresh balanced a in that and and to state. a Phase we a the II demand and supply QX as growth second are in carefully make expand bringing in We to order we then sure in expanding that keep in state, online watch start completed with we up inventory QX. phase to the be have inventory, We

earlier I comments think And penetration New management sounds you're seemed like in that in for products. and wholesale Maryland terms we maybe bit prepared your then were demand a of along surprised it strong when to Jersey. seeing in Maryland the in And following a talking relative bit opportunity on about just your I based team the year and was that, cautious wholesale

the Do feeling you So maybe opportunity about see you Maryland better bigger early are Maryland the thinking in were wholesale? year? wholesale than days you about for of

year the actually fair started Maryland. a a X with state cautious we where was market almost Yes. being It it's of No, share. in description

brand we grew very performance, exited a we state. old trains We not have were had facility. was in had state. up the in We the state. all New but in our Jersey, like We facility. cultivation along it were building in the We confidence the We strategy, a state, in knew where new

in currently cautious the the helped to when initially. Yes, that supplying are yes, open are partner doors, maybe feel the presence was we second our and that history XX sale grow state And strategically penetration grow. the in to came doors. of that half It of in right the will to had bridge great forecasted like Maryland, the So a it we will get whole we to mentioned, that in continue who that We us new as based took business. the state step on Jana, to we or we we I've had continue in healthier. leveraging year continues

We I'm weeks, and pretty have obviously view QX in in be X optimistic.

much. Okay great. me. very all That's for Thanks

Sure.

from Mattson go at Glenn Ladenburg. come will question next Your Please ahead.

-- about and curious plan about for them -- not them? to if is any done generally other for that sales asset one you a or and -- Curious quarter. just Nice you've more California assets there's plan speaking, Coast the Canada of any talked question. now my in if East come? having a taking there for is about East major talked thanks there Coast presence, if maybe about still the Hi, an And Jason

this, market But California. like a around question start little I first us. smaller clarification just a would the part. California, California on the I'll as and for So as second with far is

San We have the stores Bay Area. in X and the Francisco

would margin that some in in a Michigan places? stabilize. healthy but more you supply strategy driver, we small don't We buying, any California, around the or established the and to anything what's from around learned more did California. than clear call that's learned the we part any younger mature was other really, any space, the exiting an around that how We business. relationship.So and a financial growth. an lot what vendors learned We second not R&D state place? have stores of around I from, California. the comparing small we share We to a referring that's down we on a gross we is Glenn, is and it Are don't as state, Canada have retail say described The future. I But California. But have a shutting the to of lot mature chain, around is

doesn't No, I it. that, there sales raising of just meant sound like terms in like any was planned other but asset if it capital for purposes other or anything

us lot It's answering, heard of look, at culture I everybody on that today, I'll and our think rate, conversations a sit -- would done Yes. will assure this pay start the by from lend to But private and and own to creditworthiness QX. I time, interest. terms directly, and and we've assets on that it money safety at heard lenders during drilled the performance analysts the directly lineup without just about continue and time, it state. what right the in they're having that's of there Jason right and us that we say are the it and right worried love the we to know who we money, that to I similar the we and due borrow company the we the the do we to at of will have and

future. do the we need So capital have assets any not for in sell to any

on any case think progress you best Can Jay, the front. to monitoring on you for to that more progress. Thank see you that the progress, detail color. -- on -- Pennsylvania could Great. And you some your about as and more hedge color legislative when what we talked just us give

the failure up would betting Yes, me setting what with accounting and Glenn, the do... for you're legislators on

caveat this get the just... no one stuff, that obviously, can With right, but

absolutely No, Yes. right. you're

on the Maryland move the are was New Common that first Jersey aisle. early are with lot Adult- of incentive both an bill would the a of the are July. Use state sense Adult-Use, to There being facts. there faster. of for And introduced place is and conversations Here in week taking say sides

will I state conversation to the governor are mentioned. that best my XX The program. believe And next to months say, during the If XX is few date budget, me the a there between dots when guess, ask me the leads that would so. you adult-use launch was its

X X years, So to say I would Glenn.

the for color. you Thank

Instructions] and no We gentlemen, further once Ladies the [Operator again, have from questions phone.

I Wild to any closing So remarks. conference the turn Jason for will back

share call again quarters, We last speaking Thank to today. all in you, hope you we joining you. progress with we've made that look excitement for for our in forward and the you the November share progress. Thank the to further we everybody, do earnings over several

like for and conference ask your lines. [Presentation] please would Ladies you all this your call and does thank to We conclude to gentlemen, disconnect for you participating afternoon. this