Welcome to the Ayr Wellness Second Quarter 2021 Earnings Call. Brad Asher and the company's Co-Chief Operating Officer, Jennifer Drake. The company will discuss forward-looking matters on this call, including targets for revenues and adjusted EBITDA. This forward-looking information is subject to the assumptions and risks as described in the company's management discussion and analysis for the quarter ended June 30th, 2021. As well, we remind you that adjusted EBITDA is a non-GAAP measure. We refer you to the reconciliation to GAAP measures and other disclosure concerning non-GAAP measures in 2021. I will now turn the call over to Ayr CEO, Jonathan Sandelman. Please go ahead. Thank you, and good morning, everyone. We continue to go through our transformative time in our business. Those of you who have heard me speak over the last past quarters have heard me say again and again that our goal is to be the largest producer of high-quality flower in the U.S. Everything we have done as a company throughout Q2 has focused on investing in our operations to ensure that our goal becomes reality, and it is working. In Florida, because of the improvement of our cultivation and our biomass output, we have moved from number seven at the time of closing to number four today in total flower output and increased our strains from 2 to 12. This has allowed us to open new stores at a rapid clip and greatly expanded our presence in what is quickly becoming a massive market. I told you on our last earnings call that we expect the value of our Florida operations soon to be larger than our entire market cap today, and I feel even more confident in that statement given our recent success. Our quality offerings and brands are resonating with the consumers in each of the markets we operate. Our wholesale presence has increased by 3x, and our flower and other products can be found in over 280 retail locations, including 57 of our own stores. Just one year ago, our product had tremendous growth in one year alone, and we have announced a handful of exciting planned acquisitions, including the top-selling cannabis-infused beverage, LEVIA. As a premier U.S. cannabis company, we believe that everything starts with the plant. Everything we do at Ayr starts with the plant because in all CPG businesses, everything starts with the quality of the product being sold. Every product we produce starts with the quality of the plant we grow. That is why we've made it our mission to be the largest-scale producer of high-quality cannabis flower in the United States. Why is that important? The cannabis industry is only going to get more competitive. We believe the cannabis consumer is discerning and will increasingly recognize quality. You may be able to fool this consumer, it's what's inside the box. Success in the cannabis industry will increasingly be determined by what's inside the box. Being the largest-scale producer of high-quality cannabis in the United States uniquely positions Ayr to be the leading cannabis CPG company in the United States. As we build out our national brand footprint, we're building our brands around what's inside the box. We're delivering quality to consumers with great value. We're delivering affordable luxury. This is what many of the best non-cannabis CPG brands are built on, the brands that have real staying power. The focus of the Ayr brand going forward will be Kynd Flower, Origyn Extracts, and LEVIA, our newest proposed acquisition. We are putting significant investments and marketing talent behind these brands nationally. I've always said when the time was right, we would unify our retail brands. Now that we have moved from two states in 2020 to eight states, it is time. It aligns with our vision and our mission and our belief that everything starts with the plant, and that the commitment to the plant has to be the foundation of the leading cannabis CPG company. It doesn't happen overnight. It's incredibly important to think big and to get it right. I've been talking more and more about our plans here recently. We will begin rebranding all of our retail stores to Ayr during the second half of the year. We will continue to think big in terms of footprint and products and branding. We will continue to deliver on those big plans. With that, I'll pass the call over to our CFO, Brad Asher, to walk through our financial results. Good morning. As Jon mentioned, we are proud of the record results and significant growth in Q2, where sales increased to $91.3 million, representing an increase of 222% over prior year and 56% over prior quarter. This was driven by contributions from recent acquisitions as well as organic growth. The contribution from M&A expansion included 204% growth in quarter, both the store count and daily average sales grew by roughly 20%. 825% growth in Arizona, driven by a full quarter of contribution relative to the eight days in Q1. 307% growth in Pennsylvania, driven by the launch of the Revel flower brand, along with the commencement of our wholesale business in June. That resulted in $1.5 million of wholesale revenue in the first month of sales. We also achieved 158% growth in retail revenue, almost entirely from the same-store growth with our newest store in Gibsonia, contributing just nine days of sale in the period. In addition, total sales from our original footprint in Massachusetts and Nevada increased 8% quarter-over-quarter. Adjusted EBITDA for the quarter was $27.4 million, representing a 225% increase over prior year on an apples-to-apples basis, and a 49% increase over prior quarter. $34.2 million in prior quarter. We believe adjusted gross profit, a non-GAAP measure, provides valuable insight into our performance by excluding depreciation and amortization, interest, and startup costs, as well as the fair value step-up of inventory from acquisitions. Adjusted gross profit margins of 58% represents a 40 basis point sequential decrease from the prior quarter. This trend is expected as we enter new markets and make an investment in acquiring customers. During this period, we expect gross margins to persist in the mid-50% range as we wait for capacity. Represented 30% of sales, a sequential increase of 200 basis points from prior quarter. The increase was largely due to our continued investment in building out infrastructure, including the addition of over 400 employees, representing an approximate increase of 35% of our workforce during the quarter. While we expect operating expenses to increase on a dollar basis as we continue to expand our footprint, we expect SG&A as a percentage of sales to be consistent over the next few quarters until ultimately declining in 2022 as we build more leverage throughout the year. Lastly, we ended the quarter with $123.8 million of cash on hand, demonstrating a strong capital position to fund our growth initiatives. We continue to invest in the future earnings power of the business by building up inventory. This is in addition to the $38 million paid year to date in the form of cash consideration, deposits, and bridge financing relating to the M&A activities. Throughout this period of investment, we are maintaining a healthy balance sheet with positive working capital of $153 million when adjusted to remove any fair value markups of acquired inventory. This is relative to a negative working capital balance when performing the same calculation from the prior year period. Based on these Q2 results and the progress we see to date in Q3, we are targeting an estimated $100 million in revenue in Q3 with adjusted EBITDA flat sequentially over Q2. We remind you that these projections are subject to the assumptions and risks outlined in our Q2 MD&A. In closing, the finance department has gotten the onboarding of acquisitions down to a science with both the speed and precision of a pit stop, only without the luxury of stopping. By quickly implementing our tech stack and methodology, it allows us to provide key insights and analytics in the business early in the process. In addition, we continue to make enhancements to expand compliance, including the buildup of our Sarbanes-Oxley program, which will be a requirement as an SEC filer. As a reminder, last quarter was our first reporting in US GAAP as a U.S. filer. As such, we would like to announce that we've released a notice of change of auditor from MNP to the U.S.-based firm, Marcum, a top-tier firm with a substantial cannabis practice. We've enjoyed working with MNP, have no disagreements or unresolved issues, and would like to thank them for all their efforts. Hand it over to our Co-COO, Jennifer Drake. Thanks, Brad. This quarter, we want to overview our business a little differently, focusing on the major themes of cultivation and production, retail, wholesale, and branding. Jon already updated you on our branding initiatives, I'll start with cultivation. We have not been shy about our goal of being the largest scale producer of high-quality cannabis flower in the United States. We are a plant-obsessed company because the plant is the foundation of our ability to build strong brands. We continue to make major investments in our cultivation operations, facilities, and talent. Cultivation yields have improved over 50% since Ayr taking over the business, upping the quality and amount of flower available at our stores, plus allowing us to add more offerings to our product mix, all while we are adding more and more new stores. By the fall, in Florida, we expect to complete the construction of 20 acres of hoop houses at our Gainesville cultivation. These will add meaningfully to our biomass for flower, concentrates, and our newly launched edibles. Summing it all up with respect to Florida cultivation, when we bought the Liberty business five months ago, if there was flower available in the store, which was only three or four days a week, you'd be lucky to find more than a few strains to choose from. Today, we have flower consistently with more than a dozen strains available. Again, it all starts with the plant. In Pennsylvania, through the Revel and Seven Hills flower brands, both at our own stores and at wholesale. The feedback on our flower from Pennsylvania's patient community has been excellent. We've said before that Pennsylvania is a market deprived of quality flower, but we are quickly filling that void with our own cultivation. In Q2, we also had our first harvest from the smaller of our two Arizona cultivations. The larger 80,000 sq ft facility in Arizona will have construction completed in Q4. Next, state's premier producers of high-quality cannabis flower, what's really important about adding Tahoe Hydro to Ayr is that we are adding an incredible bank of genetics and intellectual property and an abundance of high-level cultivation talent that can be deployed throughout our national footprint. Rounding out our cultivation news, in Massachusetts, we are not resting on our laurels. We are charging forward with an additional 100,000 square foot cultivation and production facility to increase our cultivation capacity to the maximum allowed so that we can meet the demand growth we expect to see in our wholesale business as more and more adult use dispensaries, especially those that don't have their own cultivation, are coming online in the state. Massachusetts is a great example. Flower, we will provide best-in-class products in whatever form factor our customers wish to consume. This is how you build a world-class CPG company in the cannabis space. On the production side, we have a saying in cannabis, "Quality in, quality out." If you grow great flower and match that with Ayr's best-in-class SOPs, you reap the benefits with production of top-of-the-line concentrates, vape cartridges, and edibles. This quarter, we saw some exciting developments in the expansion of our branded products. In Florida, Origyn Extracts and Big Pete's Cookies, our first edibles in the market from the kitchen we opened in Q2. Gummies will follow soon in Florida. Thanks to the success these trades, now Florida also, we expect to continue to bring this strong brand to our markets nationally. Since our Arizona cultivation and production facilities have come online, we've begun our first extraction and wholesaling activities in the state, including HAZE premium concentrates and LIT cannabis cartridges. In Nevada, our newly expanded production facility in Las Vegas has increased its capacity to manufacture extracted products for our growing wholesale business there. Finally, in our retail business, anyone who's followed Ayr knows that our established retail locations are some of the most productive in the country. In Nevada, our stores average revenue of $20 million a year per store, with sales as high as $10,000 per square foot in our most productive store. That is really good. It's industry-leading. This type of excellent retail expertise will have a massive impact on new stores we open, which we're doing now, to our best-in-class retail experience playbook as our stores mature. Our retail stores are an amazing asset to us as we build our national brand. They're a laboratory to help us understand our customer. They let us know real time with great data what the customer wants, whether that's micro-dosed gummies, or premium terpene-rich flower, or LEVIA cannabis-infused seltzer. With that, I'll hand it back to Jon. Thanks, Jen. The largest producer of high-quality flower at scale, and having the ability to create amazing brands that will lead the industry, we're excited to see our strategy playing out as planned and are encouraged by the strong results that we're seeing already. This top-line growth will continue with the addition of New Jersey and Illinois to our footprint and the accelerating investments we're putting behind our brands to drive market share at retail and wholesale. Given the success of our efforts to date, we are raising our 2022 revenue target to $800 million, with $300 million of adjusted EBITDA reflecting substantial investments in growth. We plan to accelerate investments in our Kynd, Origyn, and LEVIA brands and the strategic marketing and operational talent behind them. We've added talent across all levels, deepening our bench across the marketing, technology, and operational professionals, focused on driving scalable processes across our regional footprint. We are still in the early stages of growth in this industry, and we believe we are perfectly positioned to become a leading force in cannabis CPG, a market we think could easily top $100 billion in revenue over the next several years. As long as we have, we will reinvest in our business in branding, customers, capital projects, and M&A. This opportunity is in front of us, and we plan to seize it. We put out ambitious plans in 2020, and we delivered on what we said we would do. You will see us unveil some really exciting evolution of our Ayr brand soon. We continue to think big in terms of our footprint and our products and branding, and we intend to continue to deliver on those big plans. With that, I'll hand it over to the operator to open up for questions. Thank you. We will now begin the question and answer session. To join the question queue, you may press star. Using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. Our first question comes from Owen Bennett of Jefferies. Please go ahead. Traction there. There's been some sort of price competition there, and everyone's kind of putting a lot of it into more focus now. I just wanted to be speaking the kind of price evolution there, what sort of price you're selling your flower at, and those competitive dynamics. I just wanted to get your thoughts on why you decided to go for a beverage brand and how you see that segment evolving. Thank you, guys. Oh, it is. Jonathan. The first part of your question was scrambled, so I didn't hear it. I'll start with LEVIA, and then maybe you can repeat it. The way I've always thought about our strategy for cannabis, it was very simple, right? We thought about, like any other CPG company, who is the customer, what is the demographics, and what form factors would each demographic class like to enjoy their THC, right? We wanted to make sure we had a form factor for beverages, was a form factor we were lacking. We did have a product called CannaPunch, and today BDSA would say with LEVIA and CannaPunch, we have two of the top selling beverage brands in the U.S. We can't ignore what happens outside of cannabis, and we've seen the explosion of hard seltzer, right? It's now a $10 billion industry. As younger people want to drink something that's low calorie and provides a session experience. LEVIA is that product. It's a dominant product, 80% market share today in Massachusetts. It's only in one state. It's 0 cal. Future is not the absolute milligrams, but the bioavailability of those milligrams. Consumers are very focused on the THC grams per dollar. If your product doesn't have the science to back that up so that when they buy 5 milligrams, they actually get 5 milligrams, they'll go somewhere else. Lastly, 2 points. One is, we're very focused on the consumer that hasn't yet experienced cannabis. We think having or inviting people who have never tried cannabis before, but like that form factor into the cannabis world and cannabis experience. Last point, the way I thought about it, when CPG does finally make its strategic move into cannabis, for me, the easiest place to make that move, that decision, that strategic acquisition, is in the products they make every day. The products they know best. For me, the easiest move for CPG to enter the cannabis world would be in the beverage and the canned business. Who knows it better than big beer? They would be an obvious move. Okay. Very helpful. Yeah, the first question was on Florida. There's obviously a lot of talk around increased competition there and some pricing pressure. I just wanted to get your thoughts on kind of how that pricing environment has evolved. You're obviously getting a lot of impressive traction there. Are you having to kind of discount your own flower yourselves to drive a lot of those share gains? Actually, a monopolistic market, right? With one dominant player having over 50% of the market. I think what you've seen us do in our other markets, we enter the market with the highest quality products, again, with the highest quality flower, which produces all the derivative products that are also high quality. We price it value for the customer. We have seen that over and over again, that business plan. High quality products offered at the best value to our patients and our consumers build market share. Is the old days of Florida where one dominant player doesn't feel that it might have to compete? I can't speak to that because I'm not in those strategy sessions. We know what the playbook is. We know how to do retail, and we've been very successful at it. Okay. Thanks, Jonathan. Very helpful. Our next question comes from Matt McGinley of Needham. Please go ahead. Thank you. What's changed with your assumptions for EBITDA margin rate in 2022? Do you assume a lower gross profit rate, or are you assuming that G&A spend is higher than previously assumed? Moreover, how would the assumptions change for spending at the corporate level compared to productivity assumptions that you may have had on an individual asset level? Is this mainly increasing at the corporate level, or is there something changed with individual assets into 2022? I'll start this, and then I'll hand it over to Brad. I've said to my team over and over again, we're in an industry, as I said earlier in the call, that's growing over 100%. Okay? We're able to buy great companies. I believe this is a once in a lifetime opportunity. When I look at premium beverage brands, premium alcohol, that grows between 5% and 8% and trades at multiples of 25 and 30. To be able to buy premium brands in a CPG-like world, okay, that's growing over 100%, we are investing. We are building out our existing portfolio while continuing to acquire. There hasn't been a single asset that we bought, no matter what the headline multiple looks like, that we didn't think we can improve. In our modeling, we don't even think we're paying $5 and $6 as if then when we bought it. Yes, we are investing. We are building both in CapEx, in branding, to build out our national brands, to provide the large-scale cultivation and quality flower on a national basis that we talk about. That is reflected in the numbers. Brad, do you want to add to that? Yeah. To reiterate on your point on the investment period, I would say that it's going to increase over and gross margins improve as we bring cultivation capacity online, driving vertical integration, and start to get leverage out of our SG&A base as sales are growing. Okay, great. My second question is on the cash balances and cash flow. In looking at what you presently have in cash and what you'll need to spend in cash closing costs and CapEx, we need to assume you generate positive cash flow to fund that spend. Working capital investments obviously kept that negative in the first half. Do you expect to revert back to positive cash flow from operations, or might you need to raise capital to support this planned CapEx and cash closing costs related to M&A? Brad, do you want to take that? As each cultivation facility is coming online, we're definitely making an investment in cash. As those facilities are online, we definitely think operational cash flow will be positive going forward. We also know that the debt markets have been very receptive to us. We're also looking at the investments we're making in CapEx. We know that we have owned real estate and leasehold improvements, approximately in the $200 million range, without leverage. We know there's a lot of options available to us. Okay. Thank you very much. Our next question comes from Russell Stanley of Beacon Securities. Please go ahead. Good morning. Thanks for taking my question. Just around Florida, just following up there, understanding you're with 50 dispensaries in Florida. Just wondering, once the hoop houses are complete, what is your retail capacity at that point? How many dispensaries do you think you can support well? With the hoop houses, we think we get to roughly 65 stores. Great. That's really helpful. Russ, to be clear. Sorry. I'm sorry. To be clear, our goal is not to be solely at 65 stores. You're asking a question with the assets we have in place. To be very clear, we're not looking to be anything less than one of the largest players in the state. That's great. Understood. That's what I was looking for, is just understanding how much runway you have in Florida before needing to invest again in additional CapEx. Maybe just moving one question around Massachusetts. Russ, one other point. We have 400 acres on this property. There's lots of additional capacity. Understood. Just around the LEVIA transaction, you're already really strong on wholesale and in that overlap. Is there on the retail front, is there opportunity for some cross-pollination here? Are there shelves that LEVIA is on that you're not on yet, and vice versa? Are there opportunities in that regard? Yes, there's definitely opportunities to distribute together on the wholesale side. A, just efficiently, we're in more stores than they are today, we can help with the distribution of their products. They're in some stores we're not in, they have good relationships. Equally as important as we mentioned, it's the technology of the emulsion that's really interesting here. Again, you're going to hear me start talking more of Boomer's real value, right? That's what we do on the retail side. High quality at a fair price. If you define fair price solely about price per gram without talking about bioavailability, if your milligrams are five and your emulsion only produce 30% bioavailability, you're selling one and a half grams of THC. As we start to educate the market around the science, the consumer will start demanding products that actually do what they advertise. I think that's very far beyond beverages, tinctures, gummies. Anywhere where we're infusing products, this quick onset, which is extremely important to the new consumer. 15-minute onset allows people to gauge whether they should have a second can or not. For many people, consumers who haven't tried cannabis, their biggest issue is that I've heard bad stories of people consuming too much. Rapid onset is important, and that's why you're going to hear Ayr talk about it, because it's a real edge for us. Excellent. That's great color. Thank you. I'll get back in the queue. Our next question comes from Scott Fortune of ROTH Capital Partners. Please go ahead. Good morning. Thanks for the questions. Real quick, I want to talk about bridging to the $800 million revenue guidance you have in 2022. I assume that's the addition of LEVIA here and the Illinois acquisition. Can you step us through kind of the increase from 725 to 800? What are you kind of factoring in into that revenue guidance? Brad? We talked about on the beginning of the call how we're making an investment to really bring forward a lot of the growth rate in this business. I think it's really just accelerating the growth. I would refer you back to those MD&A assumptions to walk through state by state how to bridge from 2021 to 2022.. Got it. I appreciate that. Secondly, in Nevada, obviously Nevada is opening up lounges as they come on board. LEVIA would probably roll out very well in there. Kind of what's the timing on Nevada cultivation there, and then what's any color on Nevada as far as the tourism there and the third quarter, kind of the progress on third quarter with Nevada's growth going forward here? There was a lot of questions in there. Can you just start with the first one so we can address it? Yeah, sorry. Nevada's bringing on board the lounges. From a regulation standpoint, I assume LEVIA would play well into that as far as, is that part of the kind of discussion here of acquiring LEVIA to roll right into different states and how do you look at that expansion in different states? Just color on Nevada, how that's trending with tourism coming back there in the third quarter? Okay, two points. I think all the analysts on this call have heard us before say we're the locals provider of cannabis in the market. That's why our business held up so well through COVID. Strategy is to be the leading national brand in beverages, like I outlined. LEVIA will go to every state we're in, where the state allows us to sell an infused drink. Is that part of how quickly can ramp up or is Nevada one of the keys that you're looking at for now for especially lounges? We didn't see the consumer taste shift in the CPG world. That's where the consumer is today. He and she are into session drinking. That's on a national basis. Consumer today is not drinking hard seltzer in the lounges in Nevada. They're drinking it everywhere. Look at the explosion. I mean, it went from three years ago to relatively nothing to $10 billion industry. We think there's national demand. As I said, this product will be manufactured and distributed nationally wherever we have our footprint. Can we roll and selling well up there, how is Pennsylvania trending as well as kind of getting up to the same levels as Massachusetts, or filling up? Can you kind of step through on progression? Again, you're coming in a bit scrambled. I might turn this over to someone else who might have heard you better. As we talked about on the call, on our first harvest, again, entering new markets with our edge, which is our cultivation and high-quality flower, the product sold out first harvest into the wholesale market within days. The reviews were extraordinary. We're just going to continue what we do in every state and put in our boxes. Again, what we say at Ayr, it's not the box, but what's inside the box. We never underestimate the consumer. The consumer knows, we'll continue to do that strategy through Pennsylvania. What we're seeing is the consumer reacted extremely well to that, to those two new brands that hit the market. The rest of the question got scrambled, so if someone else on our team heard it, maybe they can answer the other parts of it. I think the main point was that our wholesale is doing extremely well in Pennsylvania. As you said, John, we're selling out everything we make, similar to what we do in Massachusetts. We expect it to be a super strong market. Thanks. I appreciate the detail. I'll jump back in the queue. Thanks, Scott. Our next question comes from Andrew Semple of Echelon Capital Markets. Please go ahead. Good morning, congrats on the Q2 results. My first question here, just wanted to clarify on the Q3 guidance. I just want to be clear on the point that there's no New Jersey contribution expected in Q3 anymore within the $100 million revenue figure. Is that correct? Brad? Jonathan Sandelman, do you want me to take that one? Sure. Andrew, we're currently expecting, anticipating that we will still close in Q3. I think any problems with our application. We are expecting a little bit of contribution in Q3. That's included in the guidance, sorry? Yes. Okay, thanks. My second question, it seems like the expectations for CapEx in Ohio seem to have moved a bit higher quarter-over-quarter. I believe it was $25 million for that market in the Q1 press release. It looks like $37 million in the latest update. I'm just wondering if that's reflecting your team perhaps moving a little bit more aggressively in that market. Could you just comment on your plans again for Ohio and perhaps the timing of when those facilities come online? Misunderstood state, right? It has 12 million-13 million people. It's virtually the same size as Pennsylvania within 1 million population. Our strategy there is to build out the max facility that the law allows. We mean to be a significant player in that market. Just to remind everyone about our strategy, we never enter a market unless we think two things. We can be vertically integrated and be a significant player. I am very focused on Ohio, the various opportunities. There's another round of licensing that are coming. That's great color. Thanks. Just a final one, if I may. You obviously entered your eighth state recently in Illinois. Just given your comments there, John, that you like to go big in markets, and certainly you demonstrated that in the past, is it safe to assume that's a state where you continue to look to expand your footprint? Thank you. I can only repeat what I've just said is part two, and be a significant player. We don't feel we can build a brand that would resonate in our consumers' minds and with their wallet unless we're a significant player. More importantly, that we're controlling the biomass. That's our edge. We're never going to be in a market where we can't. Got you. That's great color. Appreciate your insights. Thank you. Our next question comes from Matt Bottomley of Canaccord. Please go ahead. Good morning, all. Again, congrats on the strong quarter here. Just wanted to do another follow-up on a previous question on the Q3 outlook. Appreciate the commentary that there could be a little bit of New Jersey contribution in there on the close. Are there any other, I guess, goalposts or categories that can be disclosed a little more with respect to new store openings? I think you have dozens of new store openings, and how that might relate to what you're expecting into Q3 specifically on the top line. Let me address the stores and then Brad can address the second part. We've recently said we've opened our 39th store in Florida. We're planning on being at 50 by the end of the year. That's 11 just in that state alone, right? We've also talked about our strategy of being vertically integrated in every state we go into because we want to control the biomass, the quality of the flower, what goes inside the box. We lastly said, if we can't or do not believe we'd be a significant player in each state. I think that gives you at least our vision, our strategy. 11 we're public on. The rest is our strategy that we think we'll execute on. Brad, any other commentary on that? Yeah, just in terms of bridging to Q3, I'd say there's three main drivers. One is the small contribution from New Jersey, which we referenced. Two is three months of Pennsylvania wholesale—w e talked about the one month of sales we had this quarter. Three is continued growth in Florida from new store openings. Okay. Appreciate that. Then just a second question for me. I think this one might be for Jen. Obviously, we get a lot of good data coming out from the Florida market weekly, volume-based. Just wondering if there's any metrics you can give. We can kind of see how large the state revenues is, and we know how many dispensaries there are. We have an idea of sort of average contribution per store. I'm just curious how your three stores are performing, and then how we should think about the mix between wholesale penetration in that market with the infrastructure you have, and obviously the infrastructure you're building out, versus that retail exposure as we model out Arizona into the next couple quarters here. Yeah. Thanks for that, Andrew. I think what we said is we've seen good growth in our retail stores at 50% from pre-acquisition, pre-adult use. We're very pleased with that. We expect to bring our spot in Massachusetts several years ago and really improve the retail experience there by bringing in some of that great retail playbook from Nevada. Arizona is even closer to Nevada, so it's an even easier thing to do. We're really optimistic on future growth from the retail in Arizona because as an adult use state very close to our folks in Nevada, we think we're going to be able to do really good things there. On the wholesale side, as I mentioned in the call, we have our first cultivation online in Arizona, and the bigger cultivation, that 80,000 square foot cultivation, which is really going to be the driver of our wholesale, is going to be finished construction at the end of this year. It will be coming online next year, and it's part of that $800 million revenue guidance that we've given for 2022. The big Arizona wholesale is next year. Got it, and appreciate that. On the Arizona side, would a large majority of what's being cultivated in the existing build be going to service your vertically integrated stores? Is it fair to say that's where most of it goes? in the mix. No, that's not true. Let me tell you. No. 80,000 sq ft will be enough biomass to both have a retail. You can't have 100% of your own product in your stores. The consumer does want choice. There's enough biomass to feed the appropriate amount of Ayr products, as well as have very significant wholesale business. Again, as 80,000 on a total of 90,000 sq ft by the fourth quarter of cultivation, we want to be a significant brand in each state we are in, and we're going to continue to execute on that strategy in every state we're in. Okay. Helpful. Thanks, all. Our next question comes from Greg Gibas of Northland Securities. Please go ahead. Hey. Good morning, Jonathan, Brad, and Jen. Thanks for taking the questions and congrats on the Q2 results. It's still kind of under 50% of the state average. What are you assuming the average dispensary in Florida gets to get to that $800 million revenue guidance? Brad? We're assuming that by the end of 2022, our stores move more in line with the state average per store, which is in the $3 million-$4 million range. Greg, you have to think about one thing. We're opening stores at a very quick pace right now, right? You think a store doesn't get up to its full maximum usefulness until at least 90 days in. By opening store revenue. Okay? That will normalize if the pace normalizes. If we continue on this steep trajectory of opening up stores and grabbing footprint, remember the reason why I moved into Florida, I got seriously concerned about being locked out. It was a land grab in my mind. My thought was, not every municipality will have 10 cannabis stores in it. It's highly unlikely. If we didn't do Liberty when we did it, as I said, it's highly likely you're going to be locked out of some of the best markets. I'm willing to let the average store drop while I continue on the pace of new store openings. When we're there with the appropriate footprint, you will see the average stores increase simply because our stores now have flower seven days a week. They now have 12 strains of flower instead of two. The quality of the flower is much higher. Quickly, we've increased productivity by 50%. July was the best numbers. You can't open your stores if your productivity is not there, if you don't put products in your stores that consumers can buy. The average will drop, and will stay below the average because we're going for that land grab. We understand if we don't do that now, as I said just seconds ago, you'll be locked out of the best markets. That's why we're opening stores faster than anyone in the state. Great. Yeah. Understood, Jonathan. Appreciate that. That's helpful. It was just kind of more learning about the assumptions that go into that $800 million, but that does make sense. Also, with 30% EBITDA margins today at the $100 million revenue, just kind of wondering, next year it's 37.5% implied in guidance. If we're looking at flat next quarter, do we think about just gradual improvement through year-end 2022, or is there anything we should really take into account on a quarterly basis? Yeah, I think it's exactly that, the former. It's going to be gradual. I think each quarter you'll see, starting in probably the second quarter of 2022, is when we start to open up and realize sales from our larger cultivation facilities. At that point, you're going to start to see leverage be realized in 2022 and gradual improvement each quarter from there on. Okay, great. Of Hedgeye. Please go ahead. Hey, thank you so much. I just want to follow up, Jon, on your beverage comment that you'll have LEVIA in every market. What does that look like? I know this question might be premature because you haven't closed on the acquisition yet, but will you be building production facilities, contract out to third parties? Just assuming that the capital spending numbers that you've given don't include any of that. Thanks. So thanks, Harry. It's a great question because it's the reason why LEVIA was so attractive. If you look at the explosion of beverages every time you go into a market today, the choice is incredible. It turns out, if you want to build a new beverage brand, capacity is constrained on the bottling lines, the third-party co-packers. Very difficult to get your brand produced. Is that these guys built their own assembly line, and they did it quickly, and they did it for very good value, very efficiently. We understood, besides great brand builders, great emulsion, they're also great builders. We will build our own assembly lines in every state that we go in so that we can control the quality and the cost. These guys have the experience. This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.