TerrAscend (TSNDF) 6 Nov 242024 Q3 Earnings call transcript

Good afternoon. My name is Ina, and I will be your conference operator today. At this time, I would like to welcome everyone to TerrAscend's Third Quarter 2024 Financial Results Conference Call.

Joining us for today's call is Jason Wild, Executive Chairman; Ziad Ghanem, President and Chief Executive Officer; and Keith Stauffer, Chief Financial Officer.

Our remarks today include forward-looking statements, including statements with respect to the company's outlook, including the company's expected financial results for the fourth quarter of 2024, and estimates and assumptions relating thereto and the company's expectations regarding its new market opportunities such as Ohio, the likelihood and benefits of the company's tax refund claims for past years, the expectations regarding regulatory reform and the potential benefits thereof. Each forward-looking statement discussed in today's call is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. should timing or events by performance. timing statements, reported the from differ such and as and results considered the predicted results results of of may certain materially forward-looking an Actual indication be future not or implied

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

evening, for Good us. you everyone, and thank joining

markets, despite the third Jersey. during positions solid quarter Our macroeconomic position key the remained share challenging share in #X maintain including core leadership environment. business a in our market New We market

continuing XX.X% margin million, $XX.X million. of and revenue profit net reported we $XX.X quarter, adjusted from EBITDA of the of operations For gross

continuing quarter flow marked fifth of positive flow. third of cash quarter positive from consecutive our the ninth and XXXX quarter consecutive our cash free of operations Importantly,

organic both pursuit of includes aggressive growth and strategy M&A. Our

with a differentiated For approach of invest We position deals. expansion in past TerrAscend's puts and best and minimal believe valuations geographies targeted that competitive have pursuit discussed active assets in greenfield tension. the quarters, our possible us several we attractive the opportunities transformational to at

We are through a the to a of definitive the today of announced signing high-performing have pleased agreement dispensary. Ohio enter to market acquisition the

We have state. Midwest a is for adult days as use. of is the good in example and priority about us, Ohio the the state into a our entry is This being sixth our early spoken implementing first acquisition

is retail footprint intention in by a Our Maryland. we as in assemble leading stores high-quality acquiring did Ohio to just

choose markets will expansion to presence, conversations. With said, to Ohio existing us leverage in We we is Ohio want continue enter disciplined our operating our to M&A chase have profitability To the are geographies, our to and any we be deals. clear, into do to to we remain ongoing other our region across on SG&A, other deploy our Michigan compared approach I that leader. market X independently. goal Building being each states infrastructure everybody our Midwest in these capital. that and exception. many no remind higher new to a allow of In be not driving

a been has sheet priority. balance our strengthening M&A, to addition In

TerrAscend's upcoming transactions loan proposed third the in us gives on regulatory material This by perspective, the maturing we DEA August expansion concerning debt flexibility hearing rescheduling the with of financing. Also, cannabis. oral the for nor demonstrating debt U.S. closed we our remain value. Court and always pursue development. up Attorney During now Boies encouraged until state-regulated confidence on them $XX General to the against XXXX. From for XXXX enhancing seeks $XXX cannabis announced buyback we This welcome no plans. in a shareholder December in our to late other U.S. to X has stock no arguments lawsuit penalties. financing court or and This million, matures of David appeal First geographic program legal quarter, is have attractive our scheduled quickly. In businesses. non-dilutive prepayment hold million not does equal our very Circuit are for warrants our the which this contains an oral M&A consistent the We Garland, arguments the future first-ever August, in treatment commitment hold Appeals that a The

have volume strengthened believe potential and business, expansion restrictions the our so core Since we equity do August, solid opportunities in our blackout greenfield open is of outside continue to the market, and horizon, opportunistically reform periods. the prescribed and on we Given daily balance purchased cannabis stock undervalued. we'll sheet, within

future. With I New are states, material growth in growth no and we very with value. geographies. As to will Ziad has we that, call over turn These now well levers, maturing believe shareholder, provide update the key details very position each discuss us about. an equity progress compelling greenfield Jersey, coupled Pennsylvania, Maryland Ziad debt markets. we the and levers that more excited across next key opportunity our our largest organic several ample I'll provide these to In as for the our our of the have years, for Z?

and hello, everyone. Jason, you, Thank

BDSA, hear state we market share the markets. TerrAscend in performed state of maintained this in how key by me September Starting with Jersey, state quarter New Let according position the year. the for our through to #X

the in positions our our and revenue sequentially and time new first QX, stores. X despite vaped, hold openings and in X positive value experience revenue testament who of we in New QX, This in continued retail for quarter-over-quarter. our edibles increased Wholesale was competition. sequential our due in to growth down brand. top growth concentrates we categories. Back In the retail door Importantly, to quarters trend year-over-year the that proximity our customers to returned with close Jersey a brands is retail flower, loyalty

the position recent order quality, hit high focusing and maintain playbook the market in average wholesale executing as all-time declined established to points of an of by entered on the the same during brands. distribution new #X innovation have strength We years, brands state we our While quarter, intend market. in the our size share

up existing profitability. legislation further to take state, the continue in operators our expand stakes additional our to additional increase we leadership would enables give to footprint Lastly, lead on margins improved opportunities scale in to and This explore diversity us retail X dispensary. to and that under

are We progress opportunities, share with several attractive appropriate. making and when we'll details further

Going forward, to market grow. Jersey New we the expect and to evolve continue

increased This expanding are offer to innovate us in that capabilities came online any XXXX. stores. In our this meet by We capacity million a XX% on will our us needs plan enable and additional the and year, rate a potential provide sophisticated $XX broader extended additional enabled to run operational consumer supply product early and and of to sequentially, is earlier evolving facility be to more Boonton in with annualized growing. now wholesale expansion and portfolio Maryland, revenue a

enabled We margin X are has QX. dispensaries, improvement gross virtually in has in added pleased Maryland also started of end with from margin This Since XX%. Retail XX% this result, considering nearly the to from verticality nearly that stable in XXXX. further X in revenue capacity especially remained in our increase QX. XXXX, us we gross to enabling thereby doubled

in through cultivation the an over a virtually to of by capacity built TerrAscend. increase facility, first increase in margins state-of-the-art outdated to for in have manufacturing facility. story the the as provide believe highest-performing additional of a our to success demand retail a quickly While X we acquisition growth market $XX is among expected QX retail Hagerstown Maryland, dispensaries been each of Maryland, X and revenue at in are nearly scaled meet year, wholesale our have of order we locations X online comes are first BDSA a half rooms grow growth and integrate We In the the share cultivation verticalized year. we investing entered in XXXX. In continued fully to then state. and the rate, XXXX plan XXXX, facility able with target which operational million we have next market X retail a our does footprint through accelerated cultivation We an QX. Maryland in cultivation in from additional to for not dispensary, XX% outlook acquisition run little

We in same in now strategy the Maryland expectations with and our have New implemented Jersey Ohio.

quarter. was steady to Turning another Pennsylvania. now QX

grew year-over-year, brand. per performance While expansion our year-over-year, brand retail value-oriented revenue our and productivity Legend Wholesale declined driven Valhalla strong of our XX% the store with by revenue healthy. remains category into XX% edibles the

is to state Pennsylvania be billion-plus to as XXXX lever a state expect significant turn will grow year. With billion state medical-only to to a for a We $X from the next by expected us BDSA. in $XX according XXXX that market the a adult-use growth are million, use optimistic population of $X.X adult we

and stated investment. no have we our already at additional need manufacturing previously, we cultivation out fully with for As built large-scale facility are

implementation. And healthy improve bring have as on to remains to in be from place drive gross our we to mark XX retail have margin in to gross establish the finally, needed and priorities in a Michigan, and solid operational to efficiency in At margin locations order expand. We response near unused have year-to-date. in to constant: which present, will plans adult-use currently ready focus, this Due XX% Michigan. capacity remained foundation

entering operational we to the effectively Ohio. As Midwest our This announced have expenses. we opportunity to states footprint to scale we allows in new more our just expect like us by Michigan, leverage the previously, operating said in neighboring

Michigan. remain operating focused in we In addition, state-level on our optimizing expenses

remain now fundamentals turn quarter, to the multiple our during and the for great solid provide a operating after disciplined cash next With would summary, to In years and flow call remained several for the business. I organic strong. free outlook positive levers, to update. financial the we a third material quarter, like quarter over future our strategy, Keith a and of have M&A business debt maturity no growth consistent

$XX.X reference compared million The retail with for Jersey dollars. everyone. million Pennsylvania, stated quarter Michigan. the results in driven QX. decrease This in already filed that of XX% in $XX.X this third XX.X% going second SEC, Michigan, Thanks, Ziad. revenue SEDAR+ to on the growth U.S. Good expenses margins New Maryland, of mainly wholesale margin was have XXXX XX.X% declines Jersey the throughout in was wholesale today remained to I'll trend have compared are for quarter. for New to the been I in third in both were Maryland. Gross today and in Net second for due XX.X% and revenue evening, in profit quarter was XXXX G&A positive that and totaled million This will revenue partially third of quarter compared the million $XX.X revenue be and improvements by QX in the in relatively quarter. $XX.X results over year and by to stable offset all while

in in the of impact related totaling XX.X% XXXX million items flat in in third derivative expense the $XX.X onetime fair a $X.X was onetime QX a the decline operations debt quarter. was a in quarter in of the reduction X stock-based which a $X.X loss or of debt from noncash stock-based reversal in and $X The to in debt of compensation increase in well accounting $XX accounting as revenue change extinguishment was loss million, a million of quarter-over-quarter. liabilities. Adjusted EBITDA continuing QX. Net QX, lower as was of from loss $XX.X Excluding of continuing a loss lease revenue. million of EBITDA compared or a items on include I this to items, XX.X% compensation for loss million well quarter expenses driven operations of and revenue accounting second by bad value driven These as include that onetime year. a sequential as the our compared change G&A refinancing net by adjusted were bad from as in The expense a for expense just sequential million gain net $XX.X $X.X quarter termination million mentioned, of several million second recent on third of for a reversal to on for QX,

representing positive This consecutive quarter, consecutive provided cash our our and by sheet XXXX, as flow. $XX.X as XX. free $XX.X compared flow balance continuing from $X.X fifth equivalents, to leading quarter June positive XX, spending represented free million of flow. million Cash negligible cash, cash million, in restricted continuing the to Net operations cash of to positive cash million. September was CapEx including was $X.X quarter of were of Turning flow cash ninth and the cash operations. of

million During loan of million to for secured minority and Also the the debt X-year through a to interest New closed our prepayment quarter, bearing $X paid non-dilutive Jersey XX.XX% our $X.X and during higher year. million, rate $XXX recent quarter, XXXX, excluding The of distributed refinancing. a used the net proceeds of was term retired on down we partners a later of no loan this debt maturing debt, we senior were proceeds in off pay duration maturing with this with of gross existing coupon which August penalties.

With resources and this we of have the execute the our flexibility closing plans. growth deal, financial to

We until a of have On August late no repurchase million program. $XX XXXX. material stock XX, obligations announced maturing commencement debt we

$XXX,XXX, the the quarter, for program. shares available we remaining of repurchase million third with price During under repurchased an XXX,XXX aggregate $X.XX

like would and acknowledge I TerrAscend we an take company. the Finally, to moment to recently our implementation ERP completed as a entire multiyear team system a thank across of

know, as continued that both as by that always with more overcome. decision-making challenges effective will and foundation M&A, completing have resilience organically come. and implementation. We demonstrated productivity, come and with the improved The very challenge years cost lower successfully a TerrAscend most ERP any endurance to through financial implementations to IT for As well always this team solid enable and obstacles now we and growth, many demonstrate

plans. consecutive we to to lower our mid-single Looking delivered of flow. ability and cash by operator flat optionality quarter-over-quarter. In relatively sheet adjusted positive which consecutive fifth took during expenses to another expect remarks. portion to and refinance the further at debt call. This sharing we execute our down without the strengthen our of business next significant flexibility, our summary, quarter quarter the refinancing or forward quarter EBITDA to results. on actions We flow from third believe for our further and operations flat digits ahead us cash be like prepared progress balance dilution concludes G&A turn period prepayment solid to revenue represents it look free margins, with now our continuing our We over of rates to quarterly to We gross QX, positive stable lower growth sequentially, in I'd ninth our questions. to penalties, a financial back our provides of

[Operator Instructions] Capital the ATB Your Frederico Markets. of from first line Gomes question comes from

trading First obviously today, question on all-time share We at saw buyback. of close down terms in to the sector multiples. entire bottom

but allocation, do M&A how now? right I valuation other think New How you about in So of have view guess, also your that not buyback, mind, options we considering only should your Jersey, some Ohio, capital Michigan, you cetera? the et

We ago optionality We another a established This program sort that few our to the belt. of that give our is to in and Frederico. Thanks, think ourselves Jason. a the as even ourselves downdraft value, flowing the months -- is tool I or Sure. is and but stock are definitely give tool opportunities we're use other through is operators to also -- to cash. It weighing significant environment well. today's private in that prices after those against prices, of definitely our compelling sort

similar our to for to So look the it do we'll but cash, deal continue opportunistic to opportunities are best Ohio. for deals announced we to uses be seeing definitely good today we enter to and that use the

for to ones market markets are that, guidance your your the which to color terms think sequentially. to be guess, Obviously but do wholesale in think in Can Maryland, in flat talk doing of up, you for really expectations, behind terms are markets, be other well which some you in of in down? down. but ones revenue I the the you appreciate then going on decline And assumption I QX, about the mid-single-digit Perfect. all going

for you that talk could QX? your about in of terms guidance So

include long Ziad. approve. we're get does announced is in it that not sure what -- numbers Ohio take would to this QX guidance just the today want have Fred, because I for or just how I that we we to attention the your start. can not

So hopefully, faster. it's

on seasonality state a that at and we state brings on we of have When revenue. we look in lot holidays the Now we quarter gross each X the by performance break between down same growth that's in margin why and exist. it, and the few -- levers performance, our expect state. Maryland, usually we both

cautious felt our our this but make and all we the butts but pressure exceed we sure is is taking also And is consideration, Pennsylvania steady and seeing New will the in is in guess, flattish it estimate. some Jersey we to give to seeing so prepared steady. pricing it. slightly to our be margin we is hell on right described we bust that down wanted gross we'll that pressure, retail remarks,

next the Lauriers comes question Eric And line from Des the of from Craig-Hallum.

Two in for Boonton expansions the me and Hagerstown. on in

I innovation perhaps on that guess, that have some you I capabilities be Boon, mentioned be. expecting might to don't First what capabilities, wondering could able I to, new those think with expand that expansion have. was you if currently on you new you're

can I Keith. and is with in. can Ziad this anything start Eric, Sure. add that

are approved regards so especially different product of in there and formats concentrate. like with the to other now lot a product are formats So that edibles state,

pretty have a that broad we're ourselves position. #X array more able already what's we're sell recently. market, that to we of become readying which So products us But the available into for just market share gives

for our to -- to that going more to some enhancements formats. an kitchen we of as we a biomass square and sellable distillate product there's produce second on So send flower investment site some expansion, expanded give that into think edibles to us of can ability to also to then of a piece part is already manufactured just And products. footage is more different yield manufacture different the have machines which Boonton with the for into Canopy the extraction like

of So New that's Jersey. what's kind happening in

I of rate. at then we broadly run just guess of kind more sort looked And it like were helpful. steady quarter, very a That's Awesome. speaking, last

to growth all, a perspective? that helpful. quantify As significant expansions of And these and be in if facility at these would Boonton how us at from able you're help you sort are look that Hagerstown,

you Hagerstown about the if about question, your Sure. as And Did maybe missed expansion Hagerstown. I ask asked you last well?

was overall capabilities on one Previous Boon, in and on now No. Boonton in Hagerstown. and question expansion just and and just innovation the impact the this

Got it. Yes.

a that frame in Maryland is in for QX. example think I good the So our performance of

you it a around in as we're And So gave there kind can sequentially. business now rating similar, XX% of on growth Maryland. at wholesale and transparency framed some we year our then we million run expect $XX

capacity that additional lot us grow continue, expansion go could our quarterly. With X adding we expect add to our clip at XX-plus another So that we in dispensaries. percent more possibly more give XX%, to will we're in that X Hagerstown, business, wholesale that vertical rooms just to where a

a of we gross margins business and already, grow And the We share more we Jersey, level And a sizable decent pretty but be, New growth preserve Jersey. of of have with that there. we grow go to potentially kind enhance think we quarter market can verticality and and hundreds New in have that for the New to can continue and then continue again, position it bit to #X frame $X organically, thousands there. Jersey, a our in million to there wholesale a would

Ziad. is This

have our margin. Back previous Just Keith out you able some in came market to one share that we currently, new X% drivers about XX% comes to started launch some to And New close has at New of market in real that sit New to Those at see it's Jersey verticality increased market whether of when we're your new look still to our where equipment Maryland, to what like not we space. XX%, X When expansion. the product start We'd from that when in verticality. competitors, stays the we that XX%. that to Maryland, somewhere and Jersey, were in share equipment you in share things in and to you we launched running the automation, it or the Jersey be have allowing form talked will he is Maryland, remember, automation, quarter. When XX% phase of this you described, from second extraction brands maintain same. in around our is if be gross the same driver look quantify Boonton that in, with question, Jersey. top the run we of But some us of the of and our market started we we share, MSOs but #X from only at factors the New X were from of that

share the the a for So pilot I'm expand of market. confident that us, exciting to will, protect to proud the it the made in really if spend, team, continue us an market in so of And you quarter, to innovation. more was that

comes Canaccord next Kang from of from line And your Genuity. question the Yewon

is year-over-year in quarter, behalf quarter. Matt And here the my the caused one half comment This performance that didn't quarter? the a which the the EBITDA just second this the drivers is Can provided on the Bottomley. for you It of Kang quite last calls Yewon hit miss on in guidance first of just on growth.

Sure.

clarify. on this we Maybe Keith. P&L. gave down So is to last and our slightly call was The verbal across the guidance just said that to flat we sequential guidance,

margins down sequential and were underlying by EBITDA decline. we points, revenue by sequentially, improved the was driven So quarter-over-quarter. was OpEx flat Gross our basis in It XX really quarter-over-quarter. expanded X%

EBITDA So the behind story that's performance. essentially the

Got the just over the here. second past top it. And It's line It's been declining. performance quarters. one few regarding my

growth, Pennsylvania New plans such M&A wondering recreational you Pennsylvania? could as have growth return on especially to color in be guess was and Ohio opportunities would markets new contingent I implementation. markets or that provide to I of resume Jersey core on any only So if Maryland and your you any growth just and

Yes.

think strategy. versus So down how when business our we we growth M&A here's levers, core of break our

stores our internally, reason it our stores. that stores our which Jersey. we we'll we've XXX-plus were I why stores, And levers, growth include in around where confident seen around have wholesale open growth, described we're see and that retail the So because I that think retail New

exist. opening retail. in went area of to on our MSOs and start stores most now of flat where absorbed opening are back those supplying the stores, outside have We different trade our growing. We to We the are stores impact that

is will by the improvement opening. lever, those that we because expansion described impacted dividing the the a that will and growth we're continue between new in X wholesale X improvement we've retail and Keith In benefit in new rooms Maryland, then wholesale from the previous seen our So will rooms verticality not come as of strengthen expect be and wholesale business. PA, That's major margin as internally. that our to a continues continue we optimistic dispensaries be will we're growth our spreading state it a to recreational, gross that medical to but flattish turned in for growing us. brand lever it XXXX, with other to in the this be and program,

So you'll see the same trend.

the the same you'll and fundamentals the see levers. growth gross You'll and those see on protection margin on

confidence learned at verticality. We we quickly, Ohio a without optionality one by that the go comparing any other and gain comparing go to intention X state, acquire growth a our to with decided and we especially we strategy, or the going built comparing Our announced retail. cannot stores, Ohio, Level new that in excitement we Ohio. We're can time stores, verticality. retail. if time, supply this you is go point, store then can already but allow the me Level the and comes we pace vertical and we state's to continue M&A our explain happy increase at it's and longer, if conversation, just we've the had And not has in with X, justification you a but have recreational, on demand, any assumption license us when to quickly relationship quickly we add the the by today border enter data taken just into acquisition, why that was of at the with versus to Because

more company, major have lever we've that times for Those but share happening, are about can ongoing. but accretive and us the with already will can't So take again, work more fundamentals, we lot and top little the other to I really QX, But we growth deals same about a share one impacting a companies. about not of is them, multiple Those Jersey, that New would conversations to because deeper the mentioned never environment, bigger continue we is those of at of with be multiple to in is with will transformative change the and of we still time, believe, also great the QX times. deals. are our diligently bit on only political New We Jersey, at in M&A continues from pace. We the a the environment things love talked conversations reform a one in cannabis being bring us. the environment, What going but stopped. time, will that missed

the have about it part I've in X opportunity opportunity owned -- diversely of the have additional remarks, stores. and prepared we We be to talked my

and and for Jersey And a potential advanced that why interest for reasons that bring in are confident stable in can our business, the we conversations and wholesale we great are We great the our some of our retail stores have bring potential additional cases, Jersey, one this stores we in of under expansion New lot from are that businesses and operators in. is we New our expansion in will not only for business.

Securities. from of the next line Noel Your Clarus comes Instructions] [Operator question from Atkinson

to Congrats on expanding Ohio. into see. It's great

talking follow-up a what about. Ziad from Just was

of acquisition there still that something near the opportunities is mom-and-pop to So other hoping term? sort on you're Like in get Ohio? are guys in you active done

which mom-and-pop we definitely of at is pay what are to can of Absolutely. active we that like single No, We we've risk come realization dispensaries the looking to buy attractive we looking mom-and-pops. opposed cultivation, -- along much that not more the as feel not those multiples were those come Level with operators at, especially the that having Level to is Xs. X major since came with realization the there's a -- that we've to some

turns and of So dispensary acquisition to more came not to as getting with pretty a dispensary along I'd in you on. Thank people maybe which dispensary. as opposed are dispensary. thing this location conference Ohio la is of any to logged it high a opted many soon. it's sort it, very the did that by state of call, to a deck. what rec store dispensaries were in of coming If to have the of surrounded Maryland, a couldn't at have ask definitely is to cap on There We a slide to several within that that Level anytime a strategy, stores towns get X I see when out, amazing. we bit look that One some there's we shows it much to the X looking point but of looking that more believe cap which And you like carte that in and on the sort online slide that dispensaries, do and before the pearls the that congratulations to XX-mile into terms radius those. XX similar is out performers. is comes no located, no, building really miles of for string don't buying for where we other down X being it

other in around with that. radiuses starting the we're outs our to year. us finding within Maybe those strategy looking and this dispensaries like are that, diamonds deals Ohio, And opportunity in is state moats were it acquire best opt of Maryland that gave into things we or Maryland just landing these this of do is that and into, the well but to that ones situated, last rough that like on XX the Keith, patient first to the add back very deliberate taking the we're same and and we some how here sort very in to and feel XX-mile have the them one,

can get news least the is absolutely. as to is at X. Yes, X Maryland this to dispensaries with opposed And -- good we

Right.

question. second Okay. And then

today. downdraft from Florida TerrAscend's not sector is that going said, as guys What stock in you interest market? of there's went the the looking But so there the now, more in much TerrAscend's constrained competitors everything for I pretty in else be ride. maybe to in So Florida, active or terms considering exit along weaker cash the in imagine you market the you some to with got along caught

Yes.

to like been were we have of We've sort don't definitely have deal but we deal. a So a of we obviously, yesterday's looking disappointing. bad either but vote very revenue very pointed used exposure results you the of a win. we voting was to because definitely good wanted as a wait amount done whole, otherwise, large The or the results felt that for in any a out, -- Florida. have while, sector to see going to always as the for were There could sector Florida

So because or rec we're not different hopefully operators We've in multiple now over currently sort the of last will grateful there's much enter to state, that the year the and we trigger. prices different around so, in and the been -- state we on horizon. didn't with are we've to pull meeting the the -- is going but dig look be been because

And from your the from line Semple next Financial. Ventum question of comes Andrew

bit at a was fair this light quarter. CapEx So

note the and expenditures some You you maybe did deployed? quantify maybe capital coming associated management timing projects Could that next with might year. of when those up the cash be

Good Andrew, question. Keith. it's Sure.

we that previous We So mean, -- QX project we in Hagerstown completed in anything QX. yes, really was have I a mentioned earlier. had didn't happening

So that was us. behind

that projects over the those next payment in we've these on about, of the Maryland, Jersey months the streams will phase we're talked so. for or come X and New Hagerstown next X that Now focusing

quarter total. next So million $X be to just the $X million and call in there'll it a X quarters,

So at about the months. over $X million $X to the we're course looking total in for million projects X of like

There's expense Could you see to find business. you're that? maybe also outlook savings Great. That's magnitude some comments about the reduction it probably relates able as to where helpful be quantify helpful. for quarter-over-quarter. the expecting within to understand And you're cost for some And QX? that then to room any

It's Andrew. Keith again. Yes,

So we vigilant prescribed. within being we're expenses, and about stay that we that ranges operating constantly so we've ensuring -- that with are our --

at term. really XX% be in is revenue as OpEx of goal percent the immediate of kind a to Our

about So not QX, minus we we're it really to somewhere to committing that's million terms the of and in goal. that XXXX think But right that can of in but we now, being overall building plus save term, in range, the plan. guidepost, short how really aggressive give we're a kind our just or in our

and zero-based involving with and expect, it all things by line to budgeting it organization, of item, of So looking as that responsible. operating again, that internal type make an really manage an need program healthy PMO a as in efforts, structure. staffing allocated going we're doing managing, to the our business, even Because, easy it's sure being through and we just we to far you line kind the kind not have core whole we organization-wide that a have business the approach item would expense

to wanted grow have continue wholesale it increase an to protect decided to including the and Andrew, business, to grow continue perspective, continue or our that From to our around OpEx with QX, I business state. add. we to spend to just OpEx

QX, it's that built Just a an displays around have example, accounts it's for whether corner wholesale to in and whether Tree, give Kind different and others. we XXX XX around Legend brand, mini our you shows

the to of store we the that quality now brand, visuals our that brand, can consumers wholesale in with they our that married to see have account. every the time that to relationship come customer the So have

has also that OpEx. of So included some the

qualitative we and able some were this. some, to But that just about. continue we talked the while to some Keith $X invested we So back, save color of million versus balance it

comes your Regan question of from next And Michael line the Excelsior. from

applications through be -- have does to you hoops the for you're that of you you also more? can what really timing, to Ohio to I have exact approved? you but and have would before sort I the announce get for this multiple process? in don't timing understand guess, the Can us jump know of acquisitions, help sort -- know And hoping So approved you

Ziad. is this Mike,

that treatment a and pro-business, counsel, department, pro-fair learned heard work Ohio Here's has Ohio, what the regulators patients good about The from trusted a or we source, their a from our will businesses counsels to that and from learned, with the is built regulators. we have leader, pro-cannabis, customers. very is practice and external that have that result regulators big, really small for in and in

makes the regulators exactly but into has Executive it past, in what what been one us he was sued dig past. Once about state, hey, long reputation in of the they It's length here's ever the been more Chairman than except hard sued see MSO good the how in approval. and trouble learned the that get never in will and he's paid we take, pharmacist Founder he our time to where us a reputation So the that, the feel new as for. where is got or and a

that's in a and of myself team, and the leader -- as track record So then compliance. also pharmacist, being Keith, a

check X, first by and but week credibility, to dug much second, who back third or then be know because they learned So be come are. X when we longest will in fourth they and other, time the could Maryland or the a they into our quicker already they the and

we X around take, regulators, meet So to to I them to it's we long tell will bust who hopefully. are, tell you it how the X my but butt go weeks, think

And won't hold other up. And holds would The there's queued the is limit [Audio where nothing be that a Gap] I'd only is it license up other thing add approvals.

Jason, still there? you

Yes, I'm sorry.

any as we'll finished would one I we need think the I acquisition that where under by another I sequential speaking. as them we're was way cap. approval saying by just be in where it's they not get up to had up dispensary don't held X long think dispensary -- held approve

sounds to like just also It you. Got getting know it's it.

may to some you're Ohio? guess the verticality, great saying or guess market to know X, have cultivation you're if some That's but you'd hear. And X hopefully, don't don't X, at you day It I I ever you then kind X. than of the in I do. one, good need better have good cultivation So want for you're accelerate. point you verticality, need even for for to ever, on

Yes, Mike. Ziad.

spending and the data using So because and New into demand had pretty looking without that is We pretty to go we we go that the going time that knowledge in without BDSA higher cannot learned all learned and the the supply. we and thought assumed having initially, cultivation we modeling that actually Ohio we can production from be than Maryland we after at state the cultivation. in Jersey, and quickly quickly

So that's we're entering. how

some with in are good we then the of the market is high in state protect are supply also, of buying them that and similar store, strategic Maryland, to multistate a network weaker big the in states, we Ohio. can we are stores accounts with group being that state, have they cultivators the are retail those that instead volume, bomber that to So in stores other volume, states. picking that can other we we what leader a a gross build operator, high existing in stores, exist can we we of us stores deals in By that having some a of are negotiate that did of use margin. And the use believe some them them

improve coming is gross will that we So [indiscernible] that in. margin, being

to X we stores, we as X, Level most whether X the this, eventually independent As we bring we'll as at stores continue we those will can X cultivation, in stores. But X, add are of look conversation has or even far can X if X room that them or we building with growth. bring X grow, X X Level have operators, eventually only or

how to think to we get market with so seeing far, determined how become we that are we're we saw and there in on open have we're And build Ohio. leader pretty doing we're So will is what it. The strategy doing a we this business. we only what can

further are call to Wild There the [Operator this time. no now Instructions] will questions hand any I Mr. for closing at back remarks.

joining the in Thank you the look months. call year-end at us call. Thank to We you fourth today seeing quarter you. for on coming all our results

concludes participating. This Thank today's for you call.

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