Welcome to the AYR Wellness Q1 2022 Earnings Call. Joining us today are AYR's CEO, Jonathan Sandelman, the company's CFO, 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's discussion and analysis for the quarter ended March 31st, 2022. 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 contained in AYR's management's discussion and analysis for the quarter ended March 31st, 2022. I will now turn the call over to AYR's CEO, Jonathan Sandelman. Thank you all for joining us. When we last spoke, AYR was in the midst of completing a major cycle of CapEx and working its way through the regulatory process in a number of key states. We are pleased to say that we've made significant progress on these fronts and are now just beginning to unlock the revenue stream that these investments will provide. We are very pleased to be approved for adult use sales in New Jersey at all three of our stores. In Massachusetts, our long-awaited Back Bay store was approved on May 12th for a June open. We are optimistic that our Greater Boston Watertown location will follow quickly in its steps. Our team has worked hard and made great strides to get us to this point. These investments, along with our four cultivation facilities, represent significant expenses front-loaded by AYR, and we'll begin to see the revenue benefits from those investments now that the facilities are built and approved. Though these assets will have very little impact on sales and margins in Q2, we anticipate a significant ramp in AYR's revenue and profitability beginning in Q3 and Q4, as we outlined on our last earnings call. Beyond these specific assets, we've made great progress throughout our business. AYR has experienced 90% year-over-year revenue growth, doing so in the face of macro headwinds and without the aid of stimulus checks. The company has consistently gained or maintained share in most of the major markets in which we operate. Since we introduced our refreshed brand portfolio in November, we've completed 20-plus launches of our 10 national brands across our markets and will launch 50 more brands, rebrands, and new product releases over the next 90 days, such as Road Tripper in Nevada, an exciting reformulation and rebrand of Entourage Vapes in Massachusetts, and LEVIA's via Drink Drops in Florida. Our flower brands are number one in our established adult use markets of Nevada and Massachusetts per BDSA because we focus on great products grown exceptionally. While it's still early days for our brand portfolio, we are building it with data-driven, consumer-centric insights that resonate with our customers across different price points and product categories. On the cultivation side, while we've always aimed to be the largest producer of a high-quality flower at scale, we understood that it was always going to be a process. We are currently bringing online some of the best cultivation facilities in the country across our footprint, and we are pleased to say that the quality of our flower is the best it's ever been. We're combining this with an approach to genetics, which includes building a bank of unique and cutting-edge strains and consistently rotating genetics through our operations to keep our offerings fresh and our customers coming back for more. This is what our flower customers want, and we will provide flower brands like Kynd and LIT with the genetic platform they deserve to consistently delight our customers and build a loyal following. We will continue to invest in our quality and invest in our brands. I will now hand the call over to our Chief Financial Officer, Brad Asher. Thanks, John. Q1 sales of $111.2 million represents an increase of $52.8 million, or 90% year-over-year and flat quarter-over-quarter. As discussed by our peers and corroborated with third-party data, many of our markets continued to experience pricing pressure during the quarter, resulting in a decrease in overall market size. For these states, we had a sequential decrease in sales, but at a lesser rate than the market, meaning we were able to hold or gain market share in each of these states. In Nevada, for example, our market share according to BDSA is at an all-time high. In Florida, which continues to see growth in their expanding patient base, our same-store sales increased 5% quarter-over-quarter. On the wholesale side, we increased sales 5% sequentially, driven by an increase in nearly every market despite the competitive environment during the quarter. Q1 Adjusted EBITDA of $19.5 million represents an increase of 6% year-over-year. The sequential decrease in Adjusted EBITDA of $6.7 million was largely driven by a decrease in adjusted gross profit of $5.4 million. The adjusted gross margins in Q1 of 52.1%, down from 56.7% in Q4. As indicated in our last earnings call, we started Q1 with lower base pricing due to the compounding effect of Q4 price compression. Adjusted gross margins still remain north of 50%, which is in line with our peers. We expect a similar level of gross margin next quarter, with opportunity for upside in the second half, driven by increased internal sourcing and economies of scale from our cultivation facilities coming online. This lower gross margin phase, we have largely been able to offset increases to wages and supplies by recognizing improvements to our yields, as well as closely managing labor utilization by leveraging database KPIs. After adjusting for non-cash charges such as stock-based compensation, depreciation, and amortization, operating expenses decreased by $2 million, or roughly 4.5% sequentially on a dollars basis. This is the result of optimizing headcount and realizing efficiencies across the board as we continue to fine-tune the integration of our recent acquisitions. In Q1, headcount decreased sequentially from 2,380 to 2,240 employees, which is inclusive of the acquisition of Levia and Tahoe during the quarter. As referenced on our last call, we anticipate any further increases in SG&A to be highly correlated with significant milestones of sales growth, such as adult use retail in Massachusetts and New Jersey. Moving on to the balance sheet, we ended the quarter with a cash balance of $78.7 million, with $33.2 million spent on CapEx over Q1. This represents payment of roughly half the outstanding CapEx for remaining projects, all of which are either operational or near completion, leaving approximately $37 million of remaining CapEx to be paid over the course of the year. $21 million of cash used in operating activities during the quarter was largely driven by the $23.5 million of tax payments, leaving just $7 million relating to our 2021 tax obligations, which was subsequently paid in early April. Other uses of cash flow during the quarter include $22.7 million paid for M&A, including Tahoe Hydro, Levia, and the PA Natural final earn out. The next earn outs are estimated to be payable in Q2 of 2023, and the cash portion of these is roughly $20 million. Included in financing sources of cash are the proceeds from the $26.2 million mortgage loan at 4.625%, which closed during the quarter. After self-funding our CapEx investments to date, our real estate portfolio represents a significant opportunity for liquidity to further strengthen our capital position. This loan represents the first monetization of our real estate portfolio, which totals approximately $180 million of owned properties. Subsequent to quarter end, we closed the financing on another property with principal of $25.8 million and interest based on prime rate plus 1.5%, currently at 5.5%, demonstrating the strong financing options for AYR's high-quality assets. Year to date, this represents the second financing linked to our real estate portfolio, which in the aggregate, has unlocked $52 million of valuable capital in our business with an industry-leading blended interest rate of 5.06%. Our board and management team regularly evaluate ways to optimize our balance sheet, and we see these financings as excellent sources of value to our company and our shareholders. Particularly given the recent geopolitical uncertainties and the volatility in the broader capital markets with cannabis equity valuations impacted, we remain focused on financial discipline and maintaining a significant cash position. We will continue to focus on optimizing our balance sheet, including efficiency in our cost structure and capital deployment. I'll now pass the call over to Jennifer Drake, our Co-Chief Operating Officer. Thanks, Brad. John mentioned some of the great regulatory progress we've had since our last call two months ago, and I want to start by highlighting why these approvals were worth the wait. In Massachusetts and New Jersey, we'll have some of the best-located dispensaries in the Northeast between Back Bay and Watertown in Boston, which are both imminent, the Somerville conversion to adult use to follow, and the adult use conversion of our New Jersey locations, which were approved this week, and where we three of the only five operating dispensaries in the central region of New Jersey, which has a population of 3.4 million people. In our opinion, location is the most important thing in Massachusetts and New Jersey, because in each of these states, you can only have three adult use stores. You want those stores to be in the best locations possible. We think it was worth the wait for approval to open next to the Apple store in the Back Bay in Boston, and that the very reason we were made to wait in New Jersey is because our central region locations drive so much customer traffic. Before we get to some of the business highlights that many of you look for on these calls, I want to take a moment to talk about margin structure. The foundation for the assets that we are now beginning to turn on is created by consistent investments, including investments in our people, our technology infrastructure, our processes, especially those processes that support flower quality and efficiency, our brands, and our customer relationships. EBITDA margins have been lower for us in recent quarters, particularly in Q1, as we continue to make SG&A investments ahead of our expansion, an investment we began making in the second half of last year. We anticipate SG&A as a percentage of sales to decrease in Q3 and Q4 of this year when our expansion assets contribute to revenue. When we realize the economies of scale we expect from our strong asset base. While we could have chosen not to spend some of these SG&A dollars, we believe continuing to invest at a reasonable pace puts our forward earnings power in a much stronger position. We're in this for the long haul and extremely aligned with our shareholders. We've been making good progress on the 2022 milestones that underpin the Q4 run rate revenue and EBITDA expectations we discussed last quarter, set out in the last earnings call, and in our management's discussion and analysis, which as a reminder, were for $800 million of revenue and $250 million of run rate EBITDA in Q4 based on the assets we will turn on in the Q3 and Q4. Now let's talk about other developments in our business. In Nevada, we continue to buck the trend of challenging markets. As you've heard from others, the total addressable market in Nevada decreased in the Q1. At the same time, our retail share hit an all-time high in Q1. We will continue to bolster our position in Nevada, where Kynd Flower has been the number one flower brand in the market for the better part of the last 12 months, with new product launches over the summer, including Entourage, STiX, Haze, and Road Tripper. Arizona is starting to show the improvements that we've been making. Now that our 80,000 sq ft cultivation facility is online, generating its first sales this month in fact, we see opportunity for even more improvement. The new cultivation is one of the best facilities we've built, and we're receiving great feedback from wholesale partners who see the flower that's come from our first harvest. As we dial in the facility with subsequent harvests, we expect yields and quality to be even better. Outputs from this facility will drive our in-store product mix and our wholesale business, which we expect to drive both revenue and EBITDA generation. Massachusetts was a more challenging environment in Q1, largely because of the wholesale channel. In retail, we've largely been maintaining share despite having only two medical stores and no adult use retail, yet. Our Massachusetts footprint is about to change massively, and next quarter on this call, we'll be talking about our adult use openings and how those stores are ramping. In New Jersey, we are thrilled to have received the approval for adult use conversion. Central Jersey has been the most underserved region of the state, and we are looking forward to opening our doors to adult use customers in the next few weeks. Like Massachusetts, next quarter on this call, we will be talking about how those stores are ramping. Across our Pennsylvania footprint, we continue to hold share with our eight stores, and we are now planning to open our ninth Pennsylvania store in June in the city of Indiana, an underserved area in the western part of the state that's home to Indiana University of Pennsylvania. Finally, an update on Florida, where our top line continues to grow, and Q1 was another record revenue quarter for us. We're selling double the biomass we were selling a year ago, driven by our expanded selection of offerings and store growth at 47 stores as of this month. We're planning to open at least two more stores before the end of Q2, and with more to come through the back half of the year. We're seeing positive trends from our Florida cultivation, where flower quality and yields continue to improve. We've added some recent photos to the investor deck online. We've been growing some really beautiful flower in Gainesville. Remember that it takes at least a quarter for cultivation improvement to show up in the bottom line. The improved harvest we had in March will get cured and tested through April and show up in the stores in May. Plants take time. It continues to be an incredibly busy time for us at AYR. We can feel our hard work and our investments into the business ready to begin contributing to the second-half ramps that we've all discussed. While as an industry, we've gone through a period of slightly slower growth, we think it's important to remember that growth is not uniformly up and to the right, and that the long-term demand prospects for cannabis are exceptional. I'll now pass it back to John for final remarks. The CapEx cycle that we've undergone over the last 18 months has been a challenging and exciting time for our business. Now that we're nearly through the construction and completing the final stages of our regulatory approvals, we're excited about finally turning on the power of these investments and getting back to what we've been known for, being good stewards of capital and being strong operators that improve the businesses that we manage. We thank you all for your continued patience, and thank our team for their hard work and dedication as we build for the future. We look forward to you being by our sides as AYR realizes its next phase of growth over the second half of this year. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. In the interest of time, we kindly ask that you keep to one question and one follow-up. We will pause for a moment as callers join the queue. The first question comes from Matt Bottomley with Canaccord Genuity. Please go ahead. Good morning, everyone. Thank you. Yeah, good morning, everyone. Thanks for taking the questions. Just first on the recent positive news in Massachusetts there with your licensing for the Back Bay location. Can you give any other color on if there's going to be any, you know, medium to longer-term change in the retail versus wholesale strategy? I anticipate obviously, you know, a lot more product flowing through there, which would bode well for margins. You know, Massachusetts from the read-throughs in Q1 from all of the MSOs, you know, seems to be a market where the wholesale side of things seems to continually face pressures in the last, you know, three, four quarters here. Thanks for the question, Matt. I think it's really important to keep in mind the structure of the Massachusetts market. First of all, for our business, as we said, we've only had two medical stores up until, you know, next month when we open our Back Bay location, which will be our first adult use store. That's gonna hugely change our ability to pivot, our own strategy and our own biomass between retail and wholesale. It's gonna improve margins, it's going to improve revenue. So we're really excited about that and about Watertown, which will follow, and Somerville in the future. The way that our business is changing is also the way that the entire market structure will be changing as more stores open in Boston. As we've said so many times, 60% of the population lives in Greater Boston. It has about 10 dispensaries. There are 200 in the state, 10 of which are where all the people live. That is changing. It's changing over the next 12-18 months, and the supply-demand dynamic in the wholesale market will change with it. One other point I wanna make with respect to the Massachusetts market and in particular, the wholesale side, is that quality is key. The most important thing is to have a great product and have brands that people want. It's extremely important to have that great product because you want your product in the wholesale market to be what people take first. Quality genetics and quality well-grown flower is the backbone of being the product and the brand that people wanna take first. Got it. Appreciate that. Just one other question from me, pivoting to New Jersey. Congrats on that announcement earlier this week. You know, in terms of what you expect, obviously, you know, the step function growth in the second half of this year, I know New Jersey is gonna be likely a big contributor to that. Can you give any indication on how you anticipate that market rolling out? I imagine you can't give specific numbers, but you know, you guys have three dispensaries now out of, I think it's only about 17 that are adult use operational, so a good you know, optionality there for market share. What are also your expectations of how the regulatory commission is going to allow this sector to ramp up or the retail footprint more specifically? Just given that it is pretty limited to start, and I imagine those stores will all see incredible demand. Just broadly speaking, you know, how do we get up to kind of 100 locations or more in the next little while here? Well, I think the first thing we're focused on is our own business, similar to Massachusetts, making sure that our stores have the supply and the variety that customers want. We're really excited to be three of five operational stores in Central Jersey. Central Jersey is almost as big as Northern Jersey. It's 3.4 million people versus 3.6 million in Northern Jersey. As three of five stores, it's pretty impressive for us. The profits there for us are gonna be pretty impressive. Obviously the market is going to grow. Obviously, we're gonna be a big part of that. I think that the biggest driver of that growth will be other people opening their stores with time. It'll be an excellent market for us on the wholesale side in the future, but for right now, we're extremely focused on ATCs on providing the best products to our customers that we can. That's always been our focus. It's been our focus in medical, it will be our focus in adult use, and it's our focus across the board. I really think, though, it's so important to stress the exceptional locations that we have in Central Jersey. It's the best ratio of population to dispensaries in the country. We have three of five stores in that region, and it's just an incredible opportunity for us. Okay, thanks so much. The next question comes from Andrew Semple with Echelon Capital Markets. Please go ahead. Hi there. Good morning. Congrats on the Q1 results. First question here, I'll just continue on New Jersey. What steps have you taken to ensure adequate supply for the start of adult use sales in that state in the coming months? Could you also expand on which of your own brands and product formats may be available to consumers on day one of you launching adult use sales? How that shift of brands and formats may change once your expanded cultivation facility is online and generating product in the second half of this year. Sure. Thanks for the question. As we alluded to earlier, our locations in New Jersey are just great, and we've secured approvals for all of our three stores to open simultaneously, which was unique amongst the ATCs in New Jersey. We believe that it's probably one of the reasons we had to wait, because our stores are so well located and would generate such demand. As a result, we have stockpiled large amounts of biomass to be able to sell into the adult use market, anticipating that it would be, you know, a game-changer's beginning of the adult use market in that state. Over 3,000 lbs sit in our vaults currently. We have also supply agreements for almost 1,000 additional pounds per month. We generate our own biomass of a few hundred pounds, 300 lbs per month from our existing facility. Our new facility, which is about to come online, will generate 1,000 lbs per month. We feel very comfortable with our supply and have been probably even greater than the state guidelines have asked us, certainly actually even greater than, just because we know that our stores are gonna generate such demand. Great. Thanks for that, Jen. Second question. On Massachusetts, the wholesale dynamic is shifting in that state fairly quickly. Just wanted updates from the AYR team, whether you guys are still confident you can find a home for all that incremental capacity coming online in the state. Maybe if you could provide some color on what proportion of that incremental capacity your own two adult use stores expect to be open by year-end might absorb as well as the medical stores open in that market. Well, I think one of the important things about our stores in Boston is similar to the comments about New Jersey. They're exceptionally well located. We've been trying to be conservative in terms of our expectations for those stores in terms of, you know, really in terms of the sales that we'll generate. But, I mean, you've seen the location for our Boylston Street facility in the Back Bay. I mean, it's an incredible facility next to the Apple store, across from the Prudential Center, in the center of all the foot traffic of the Back Bay of Boston. It's just incredible. As we think about what our needs are in that store, our candid guess is that we probably are gonna be buying more third party for that store than we otherwise might like to, until our expanded cultivation facility comes online in the Q4. Because we probably won't have sufficient capacity out of our first two cultivation facilities to really meet both our wholesale business and the sales through that Back Bay facility. I actually, I'm not sure if you've been to Watertown, but Watertown's only about 6 mi from the Back Bay. It's right on the Charles River. It's central Boston, probably not central Boston known to people who aren't from Boston, but it's on a main commuter route. It's an incredibly well located facility. It's got a huge parking lot accessible from both sides of the street, and it's a big, beautiful dispensary. We think that dispensary will also generate an incredible amount of business. Between those two stores, I think we're gonna take up a lot of our capacity, and still have some left over for wholesale, especially as some of the non-vertically integrated dispensaries start to come online. That's great color and agree that Back Bay dispensary. Excited to see that one open. Looking forward to that. Thanks for taking my questions. I'll get back into queue. Okay, thank you. The next question comes from Matt McGinley with Needham. Please go ahead. Thank you. If we simplistically break the gross margin decline into market factors like volume and price compression, which I think would probably have a longer tail versus the Ayr specific factors like investing ahead of markets opening, how much of that 4.5-point drop in gross margin rate was driven by those market factors versus the AYR specific factors? I guess what I'm hoping to understand is how much of the decline is more of a timing issue versus a structural issue in terms of where your gross margin will ultimately land. Sure. Thanks for that question, Matt. I'm gonna answer, and then I'm gonna turn it to Brad to add. I think it's important to note that our gross margin did come down a few points, probably the majority of which is market factors and price compression over the course of the Q1. In addition, as we become more vertically integrated throughout the business, which will really start happening, you know, predominantly in Q3 as we bring on some of these cultivation facilities, vertical integration will improve our gross margin again. We'll be able to get back some of those margin points that we're hoping to get back, lost to price compression over the Q1. I'd say the majority comes from price compression, and some additional comes from the fact that we are increasing sales in a non-vertically integrated way, and that vertical integration will backfill over the second half. Brad, what would you add? Yeah, I would just add that price compression, we see that highly correlated with compression in the market size. If the BDSA market size is decreasing, those are the states we're seeing pricing pressure. We're still over 50% on adjusted gross margins and expect to remain over 50% for the balance of the year. Which I think is in line with, you know, industry peers or on the higher side of the industry. Great. My second question is on the cash usage. Between the operating cash flow loss, the CapEx, the acquisition related outflow, you went through about $75 million in cash in the Q1. Given the call for flat first half revenue, how should we expect that cash flow to trend into the Q2, where your current cash balance is, and what will your primary go-to if you needed to raise capital for the remainder of this year? Our cash spend for 2022 has always been expected to be front-loaded for two reasons. First, our CapEx is front-loaded into the Q1. We spent half of the CapEx we're gonna spend for the whole year over Q1, and that's because you spend your CapEx when your assets are about to turn on, and our assets are about to turn on. We're at the end of the building phase, we're paying our construction bills, and we're turning on our assets now and into the Q3. Half of our CapEx has already been spent for the year. In addition, we paid our taxes. We paid taxes in the Q1 and then finished paying in April. We don't have a large tax deferred tax liability on our balance sheet, unlike others in the industry. That was the other major use of cash over the Q1. Those two uses of cash, which were the lion's share of the cash use, are now done and will not be repeated throughout the year. The next question comes from Andrew Bond with Jefferies. Please go ahead. Hi, good morning. Andrew Bond on the line for Owen Bennett. Thank you for taking our questions. First wanted to touch on the pricing risk that you lay out in the MD&A around your run rate guidance by the end of 2022, specifically the assumption that retail and wholesale prices remain relatively stable at current levels. We're seeing some data that overall market prices in some of your core markets are generally still under pressure, maybe showing some flatness in at least Arizona and Nevada in the last month or so. Can you give any incremental color on your outlook around these pricing in your core markets, maybe specifically Pennsylvania and Massachusetts, where there seems to be a bit more pressure? And what levers you might have at your disposal to still hit those targets if pressures persist? Thank you. In terms of the pricing depression, we talked about how Q4 had a compounding effect. Each month we saw a few percentage points decrease in pricing. Q1 was an entire quarter at the lower price point. As of right now, that price depression that we saw in Q4, especially in wholesale, has stabilized through Q1. It hasn't recovered yet, but it has stabilized. That's the assumption that we have running through the remainder of the year. That's what we've seen in the Q1. I guess as we sit here at, you know, kind of the end of May, how is that tracking relative to your expectations into the Q2 as a follow-up? Thank you. Aside from the few days around 4/20, I'd say it is tracking. Great. Thank you. Moving on to the brand portfolio. Obviously, you've made some pretty substantial progress expanding those 10 core brands into new states and more, you know, 50 new launches I think you said to come. Some of your larger MSO competitors have a much smaller brand portfolio. Some do go with a wider approach. Can you discuss kind of your overall brand strategy, big picture, how these 10 brands fit together for you within that? And then whether that has to do kind of with an overall specific form factor, different cannabis consumer segments or otherwise. Thank you. Sure. Our brand portfolio is really constructed so that we have an offering for an offering across form factors and price points for all consumers. Our power brands address the key form factors of flower, concentrate, our Levia beverages and vapes. We have a broader range of core offerings which can hit more of the accessible price points. Those are 10 brands that are national and go across all of our geographies, very focused on meeting the customer exactly where they are for every customer. They've been specifically designed and specifically created such that as we bring them into new markets, we can hit the markets exactly as the consumer in that market wants to address cannabis. A Nevada customer is different to a Massachusetts customer, is different to a Florida customer. We think it's really important to have a brand portfolio that can pivot to the market in which the portfolio sits. The next question comes from Scott Fortune with ROTH Capital Partners. Please go ahead. Good morning, and thank you. Good morning. Thank you for the questions. Just another follow-up now on Florida and looking at that state. Can you provide a little more progress, kind of update, on state-level metrics, on the store-level metrics you have, where you come from and the upside left to continue to drive that, the sales in those 47 locations you currently have now. How does these, you know, you mentioned opening up new brands, Entourage, Kynd premium, and how does that affect, you know, kind of Florida margin profile, for that or is that helping offset pricing? Can you just speak to kind of the progress and the upside you have continuing in Florida going forward here? Sure. Thanks, Scott. As we open more and more stores, that's one of the main drivers of increased revenue in the Florida market. We're at 47 stores today, and we'll be at 49 by the end of this quarter, and we'll open additional in the second half of this year. That store growth is really driving our revenue. As you know, one of the key things for us in Florida has been growing more and better flower in our Gainesville facility so that we can feed our stores with even more product. That's been the gating factor, the limiting factor for us in Florida. We've made tons of progress on it. I think you were actually thinking of coming and visiting in our Florida facility today, actually. We'll get you there, we'll get you there soon. Seeing the progress in that facility is just really an impressive and really encouraging precursor to the additional excellent product that we're gonna be pushing to our stores. I really encourage everyone to grab the most recent investor deck off of the website, go to the Florida tab and look at some of the flower that we've grown there so far this year. It's really very impressive. As that goes feed through our stores, we'll be able to drive higher volume and more premium pricing as we are able to provide our customers with a more premium product. I'll just add in terms of that correlation of market size and pricing, we are seeing the market size expanding in Florida, and that's holding true on the pricing side as well. How, just follow up on that, how do you see the margins in Florida as you bring on these premium pricing there for you? Are we gonna expect to see a little bit increase there, or that's stabilized by the promotional activity that's going on from pricing side? No, we're really excited about being able to provide these premium products, this premium flower at more premium prices. I think we've talked about this before that, when we first took over Liberty, we really weren't able to hit the premium end of the market from a pricing standpoint because we didn't have the supply that supported that premium pricing. With the improvements in our cultivation, we really do. It allows us also to introduce some of our premium brands into Florida. Our Kynd flower, our Sticks, pre-rolls, these brands, in addition to the improved product, will allow us to improve margins in Florida. Perfect. Real quick, an update in Nevada. I know you're consolidating the cultivation side of there. You're hitting new highs on the retail side. You've done a real good job in the stock market there, but how do you look at that retail footprint, or kind of added cultivations? Is that gonna be more going towards the wholesale? I know you're all store right now, but how do you look at that mix retail versus maybe moving to more wholesale in Nevada going forward here with more cultivation through the consolidation coming on board? Yeah. We're very opportunistic about the way we think about pivoting between retail and wholesale in Nevada. With the acquisition of Tahoe Hydro, we do, you're absolutely right, have additional capacity on the cultivation side. That capacity is excellent premium, allows us to access, you know, those vertical and vertically integrated premium pricing within our stores, as well as premium pricing in the wholesale market. We can just be opportunistic about where we want to direct that capacity depending on the ebbs and flows of the market. I mean, Tahoe Hydro flower, Tahoe Hydro grown flower sells for $3,000 a pound in the wholesale market. It's incredible. It's very, very high quality, and we're super excited. We're super excited about it for Nevada, but beyond that, the genetics and the kind of human capital talent that has come out of that acquisition have been incredible across the cultivation footprint of our business. It's one of the biggest reasons those pictures in the deck of Florida look as good as they do. The next question comes from Russell Stanley with Beacon Securities. Please go ahead. Good morning, and thank you for taking my questions. First, just following up on Florida, given the cultivation improvements that you've made and intend to continue making. How many stores do you think you'd be able to support by the end of this year? I know you plan to add stores in H2. Just trying to get an understanding as to how many you'd be able to support from a cultivation standpoint as we finish this year off. Thanks, Russ. With respect to our cultivation, you know, we look at it and our retail footprint in Florida, we look at it kind of two ways. First of all, I think we've talked about this a lot, it's really important to us to have the best located dispensaries in Florida. We are consistently looking at new locations, trying to find the best locations in each town, and we do that work ahead of opening stores. We probably have a line of sight to 80+ locations in the state, but we look at it from a cost-benefit analysis in terms of how we want to open them and what the timing looks like. In terms of our expectations for the rest of this year, we think maybe we'll get 55 or 60 stores open. Again, we'll continually look at the cost-benefit analysis of every location, and it's really important for us to have the best footprint. In terms of, I think your question was specifically, can we support those? Absolutely. That's the whole point of our cultivation improvements and our goals in cultivation in Florida is grow as much great weed as we can so that we can open as many stores as we can. Great. Thanks. Maybe my follow-up just around the mortgage financings. Congrats on tapping that unused balance sheet power. Just wondering, thinking midterm, where would you like your leverage level to be on a debt EBITDA basis? We're really pleased with those deals. Those were multi-year relationships and, you know, those, I think, were the best opportunities to monetize our real estate portfolio. The ratio is something that we're constantly evaluating as our business is coming online into Q4. It's something we'll evaluate for other opportunities with real estate-based lending. Right now we're really pleased with the two deals that we've just closed. This concludes the question and answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.