Welcome to the Ayr Wellness Inc. fourth quarter and full year 2022 earnings call. Joining us today are Ayr's President and CEO, David Goubert, and the company's CFO, Brad Asher. 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 and year ended December 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 discussion and analysis for the quarter and year ended December 31st, 2022. I will now turn the call over to Ayr's President and CEO, David Goubert. You may begin. Thanks, everyone, for joining today. I am excited to be participating in my first earnings call as CEO of Ayr, I would like to convey my appreciation for Jonathan Sandelman and our board for placing their trust in me to lead this organization and build upon its great foundation. I want to thank our team for strong results on our fourth quarter, beating expectations by growing our Adjusted EBITDA 20% sequentially, having a second straight quarter of being operationally cash flow positive, and increasing our same-store sales quarter-over-quarter. I also want to share my appreciation to our team for adjusting so quickly to new leadership, embracing new ideas and priorities, and already making tangible progress on the critical few initiatives that we've laid out to drive sustainable growth and improve the financial health of our company. I am excited by how much opportunity exists in front of us. Let me start by addressing a few of our key objectives. The first one is to grow cash from operations and consistently be in a strong capital position. The second one is to clearly position Ayr as a retailer of choice and a house of brands, setting ourselves up for stronger growth and a more profitable future. Starting with cash flow, our goal is to generate positive cash flow from operations in 2023. This is a core component of looking after the financial health of our business. We are focused on growing into our balance sheet, and we are also focused on addressing the maturity of the December 2024 senior secured notes, which is a key focus for our business today. To improve profitability and cash flow from operations, we're executing our 2023 optimization plan, which includes four key components. The first one is higher sales, leading to much improved operating leverage. The second one is expense reduction, where we intend to achieve significant savings in 2023 through a recent right-sizing in our workforce and additional actions to reduce our SG&A and other operating costs. Achieving stronger margin is our third component. This will be achieved through internalization, SKU rationalization, purchasing and pricing optimizations, and an improved wholesale business. Lastly, our fourth component is unlocking working capital via better inventory management, including implementing a stronger supply chain organization, selling through existing inventory, and right-sizing our production in other supplied markets. This is why we've placed such an emphasis recently on prioritization, investing deeper into markets and activities that align with our core business goals while stepping back from those that do not. To that end, since our last conference call, we have already begun to execute on our plan with several key actions, including the termination of our acquisition of Dispensary 33 in Chicago, the proposed sale of our Arizona assets, investment into establishing a vertical footprint in Ohio, and continuing to build depth in Florida with new store openings. Moving now to our second key objective, we seek to establish ourselves further as a retailer of choice and a house of brands, focusing on three key assets: our loyal customer base, the high quality of our products, and the equity of our brands. Across our retail footprint, we're emphasizing customer acquisition, retention, and frequency with the intention of building strong customer relationships and gaining their long-term loyalty. At the same time, we're making significant changes behind the scenes that are just as impactful. This includes organizational changes across the organization to align our teams to our key priorities, recruiting key talent to complement our existing teams, and where appropriate, bringing in expert third parties to support our strategy, as well as initiating a review and rationalization of our CPG brand portfolio. This is designed to allow us to better leverage the benefits of being both a retailer and a house of brands, where a loyal customer base can fuel the growth of our brands, and powerful brands can help drive customers into our stores. Florida is a great example to see this approach in action. We've invested in acquiring customers and are working on developing more meaningful relationship with them via our improved menu and stronger customer experience. This is illustrated by an 88% year-on-year increase in transactions from Q4 2021 to Q4 2022, significantly outpacing the 28% growth in store count. We've brought in new customers, captured significant share in a priority market, and maintained strong margin through low-cost production. The relationships we're building and the loyalty we're developing with them will allow us to optimize pricing over time and increase our customers' lifetime value. Now, zooming out for a moment, we're happy to report that Ayr continued to generate solid transaction growth throughout its footprint in Q4 2022, where the total number of transactions were up 9% quarter-over-quarter. While top-line revenue doesn't fully reflect this due to continued pricing pressure in some markets, this increase in number of transactions confirms Ayr ability to continue to scale. We are winning customers, introducing them to Ayr's portfolio of brands, and giving ourselves the opportunity to build loyalty, leading to sustainable and healthy growth in future quarters and years. I'll now turn the call over to our CFO, Brad Asher, to walk us through the Q4 and full year 2022 financials. Thanks, David, and congratulations. I'm excited to be working closely with you in your new role. Full year sales of $465.6 million represents an increase from $108 million, or 30% from 2021. Approximately half of the increase was driven by growth in Florida, led by substantial improvements in cultivation and the expansion of our Florida retail footprint, ending the year with 53 stores compared to just 31 at the beginning of 2021. Additional drivers of growth came from the adult use conversion in New Jersey and a full year contribution from our Pennsylvania footprint, which was just coming online during the course of 2021. This is partially offset by the impact of price compression and the tightening of the wholesale market, which had an outsized impact in Massachusetts, Nevada, and Arizona. Fourth quarter sales increased $5 million or 4% sequentially from $124.6 million, primarily driven by retail growth in Florida and New Jersey, with the balance of our other markets relatively flat on retail and down slightly on wholesale. Overall retail transaction count increased 9% quarter-over-quarter, which was partially offset by a decrease in basket size of 3% on average. From a same-store sales perspective, sequential sales increased 3% in stores that have been open for at least 12 months. Full year gross profit was $190 million, and a gross margin was 41%, compared to $138 million and 39% in 2021. Full year adjusted gross profit was $248.5 million, and adjusted gross margin was 53% compared to $207 million and 58% in 2021. The 500 basis point decrease in adjusted gross margin year-over-year was primarily due to the impact of price compression, which started over the course of 2021 and accelerated in 2022. This was partially offset by shifting more of our products through our retail channel, which increased full year retail sales from internal product from 44% to 57% of retail sales. Fourth quarter adjusted gross profit was $70.5 million, with adjusted gross margin of 57%, the highest since Q4 of 2021, and at least 450 basis points higher than any other quarter in 2022. 89% of revenue came from retail sales during the quarter, with a further shift of internal product sold to our retail channel, accounting for a record 65% of retail sales, which is 900 basis points above the previous high realized in the prior quarter. Absent Florida, which requires vertical integration by state law, our internal brands represent just 47% of Q4 retail sales. Internalization percentage has been consistently building each quarter during 2022. While the fourth quarter represents a significant increase to this metric, we do not feel this represents a ceiling and expect this to continue to increase throughout 2023 as we continue to improve the quality and distribution of our internal brand portfolio. Based on the current market conditions, including the impact of price compression, the company incurred a non-cash goodwill impairment charge $149 million, reducing the carrying value of goodwill across all reporting units. This led to a full year loss from operations of $243 million compared to $56 million in 2021. Full year Adjusted EBITDA of $86.8 million represents a decrease of 11% from 2021. Fourth quarter Adjusted EBITDA of $26 million represents sequential increase of 20%, exceeding our guidance of 10% sequential growth, with Adjusted EBITDA increasing sequentially in each quarter during the year. Adjusted EBITDA as a percentage of sales represents 21% in Q4, relative to 18% for the first three quarters of the year. Assuming there continues to be modest price compression from current levels, we anticipate Adjusted EBITDA margins expanding to approximately 25% in the second half of 2023, driven by cost saving measures, ramping sales, and overall improvement in optimization. The company is hyper-focused on cost savings, with every business decision being viewed through the lens of a cost-benefit analysis. Moving to the balance sheet, we ended the year with a cash balance of $80.6 million, which was a decrease of 20% from the prior quarter. The decrease was driven by the timing of debt amortization and interest payments in Q4. Operating cash flow was positive at $500K, representing the second quarter in a row with positive operating cash flow and marking a significant improvement over the first half of the year. We expect further improvements through 2023 and expect to have positive operating cash flow for the full year, although there may be quarterly swings through the lumpy nature of working capital outflows such as tax payments. We anticipate limited uses of cash for both CapEx and M&A during 2023. While cash used from investing activities, primarily CapEx and acquisitions, totaled over $286 million over the past two years, we expect no greater than $30 million for CapEx in 2023 for strategic high ROI projects, including increasing our Florida store count and continuing to invest in Florida cultivation improvements. In addition, we anticipate cash used for financing activities will be at least partially offset by our pipeline of real estate financing opportunities. Maximizing cash is a company-wide priority, as evidenced by the recent announcements around Illinois and Arizona, which in aggregate are expected on closing to represent an additional $32 million in cash to our balance sheet. Looking ahead, the company expects sales and Adjusted EBITDA in Q1 of 2023 to be in line with Q4 of 2022. We anticipate further ramping in revenue, Adjusted EBITDA and cash flow in following quarters as the actions David outlined in our 2023 optimization plan demonstrate their impact. We continue to be optimistic about the future of our industry and the countless opportunities and catalysts embedded within our footprint, including our recent partnership wins in Connecticut and Ohio, as well as the prospect of adult use conversion in three of our markets. To position ourselves to capture growth from these upcoming catalysts, we're prioritizing the financial health of the company by looking to make the right decisions on capital allocation, including M&A, CapEx, and cost savings, which are expected to further strengthen our balance sheet and capital position. With that, I'll now turn the call back to David. Thanks, Brad. I'm excited to be working so closely with you as well. Let's quickly look at each of our markets. Looking ahead, we see many reasons for optimism, both in more mature and newer markets. Back to Florida. We're focused on four key things: continuing to grow our store footprint, increasing same-store sales in our existing store network, preparing for adult use, and rebranding our stores to AYR Cannabis Dispensary over the summer. We will leverage that opportunity to build even deeper relationships with our customers to establish further their loyalty. Moving to Nevada. Nevada is a key market for us, where we continue to gain market share and plan to invest further in our talent, menus, and customer experience in our stores. Brad touched upon our Q4 growth in New Jersey. While we're excited to see the results, we're focused on growing further in 2023 within our existing footprint. Next, in Massachusetts. Our results in Q4 in retail and wholesale did not live up to our expectations. We are course correcting and expect growth in 2023. In Pennsylvania, our focus is strengthening the integration between our supply chain, retail, and wholesale operations to prepare for adult use. In Connecticut, Ayr and its operating partner have won a cultivation license that also provides us with two retail licenses. While this is more of a 2024 story, this is a brand-new adult use market that we're excited about. Finally, Ohio is a particularly exciting state for Ayr. It represents some of our strongest growth potential over the coming years and is another market where we can build meaningful depth and market share. Our 58,000 sq ft cultivation facility just came online in recent weeks, and we recently announced the option to acquire two dispensary licenses to begin establishing our vertical presence in the state. To close, I'd like to thank every member of our Ayr team who demonstrate their commitment to the plant, to our customers and patients, and to our business every single day. We're excited by the foundation we have in place, and we look forward to further optimization and building upon it in a sustainable way. As we demonstrated in Arizona, there are times when we may choose to reprioritize for the long-term health of our business. Looking ahead, we have no further divestment plans, and instead we see much more opportunity to invest deeper in our core markets and future markets that align with our vision to build more meaningful scale and depth. We are very optimistic that the optimization investments we're making today, along with our intense focus on building financial health, will pay off in Ayr solidifying itself as a force within the cannabis industry over the coming years. To end, I am proud to have the opportunity to lead a company whose true purpose is to be a force for good. Throughout my first four months with Ayr, I've been humbled to witness every day how our teams embody and rally around our purpose. Thank you. We will now begin the analyst question-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. Analysts are asked to limit themselves to one question and then return to the queue if they would like to ask more. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question comes from Andrew Semple with Echelon. Please go ahead. Hi there. Good morning. Congrats on the Q4 results and also congrats to you, David, on your recent appointment. Just wanna return to the gross margins in the fourth quarter. You know, nice to see the pretty big step up in quarter-over-quarter improvement there. I guess I just wanna get a sense of how you're feeling about the gross margins at the consolidated level going forward. It would seem to appear that you see further room for expansion. Is that fair to assume? Then maybe kind of walk through again kinda where you see the biggest drivers behind that. Hey, Andrew. Thanks. It's Brad. In terms of gross margins, I think, you know, there's definitely puts and takes. We've been incurring strong pressure on margins over the past 12 to 18 months and really needing an equally strong response in order to maintain those gross margins over the course of the year. The pressure includes price compression, cost inflation, and to some extent, you know, the impact of inventory depletion. We've been able to offset that pressure, I think, rather well with internalization, which I spoke about during the prepared remarks. We launched a national brand portfolio last year, basically taking national branded sales from 0% to over 50% for retail sales. It was a big win for us. It showed up in the margins. Really allows us to leverage our vertical and intentional footprint. I think also we've been successful in offsetting that pressure with optimization. That's another offset, both pricing and cost optimization, as well as improving yields. In terms of where we see margins going for 2023, you know, we expect to continue to incur that pressure. You know, with more pressure on the pipes, we'll continue to our plumbing efforts that we've been doing. Overall, I think we expect to maintain that mid 50% gross margin over the course of the year. Might be some ebbs and flows on a quarterly basis, but overall, that's where we think the average will be. Thanks, Andrew. Just to add to Brad's comments, increasing margin for us is one of the key elements of our optimization plan. We think we have opportunities to be working on that through what we need to work on from a supply chain standpoint, from what we need to work on from a rationalization of our SKUs. I would say as you heard in the overall comments, we're very focused on acquiring new customers, building retention and frequency with them, which will lead to loyalty. As you work on loyalty of your customers, that actually gives us more opportunity to work on pricing and promotions at the same time. Excited with the results that we've been sharing for Q-four from a margin standpoint. To Brad's point, we think that we'll continue to see internal improvements of that, while at the same time we will see some continued pressure from the pricing. Great. That's helpful. Then if I could turn to the CapEx outlook for the year, I think it was targeted at trying to keep that under $30 million for 2023. Could you maybe just break out the states that would be receiving the biggest investments for the year ahead? Then how do you expect that to play out in terms of financial performance in 2023 and 2024 as those investments come online? Look, I mean, the goalposts have moved on, you know, CapEx today and how we re-review that in terms of the ROI and the payback period. Right now, I'd say two-thirds of that amount is Florida. You know, the addition of roughly 20 stores over the course of the year and improved cultivation and manufacturing output, that's making up, you know, roughly 20 of that 30. Thank you and I'll get back in the queue. Before we proceed with the next question, please be reminded to limit yourself to one question and then return to the queue if you want to ask more. Our next question comes from Russell Stanley with Beacon Securities. Please go ahead. Good morning, and thanks for taking my question. Wanted to ask about one of your earlier comments around plans to focus on managing working capital and specifically, inventory management. Wondering what your target is for inventory turns and how long it might take you to get there. Thank you. Thanks, Russell. Yes, to your point, managing inventory and working capital through that is actually a key focus for us and a key objective in 2023. It takes different actions to make that happen, and one of these actions is the one that happened early February in rightsizing our workforce in the states where we were not right sized, I would say, for the volume, both retail and wholesale that we foresee in those states. Then there are other actions from an overall supply chain optimization that support getting us to the right level from an inventory standpoint. Obviously, working on inventory and supply chain takes time. We will see the improvements in 2023, but it's gonna take a couple of quarters before we can really see that, from a working capital standpoint. The actions are happening. In some states we already see the impact of it. In some other states, because of lead times, it's gonna take a bit longer, but we expect that to see the most impact during the second half of 2023. Our next question comes from Kenric Tyghe with ATB Capital Markets. Please go ahead. Thank you and good morning. In your prepared remarks, you called out the 88% transaction increase year-over-year in Florida. I wonder if you could provide some insight on the sequential increase, Q4 on Q3, and then also perhaps on your average basket in the state, if you could give some indication there of not just how it trended, but what the drivers of that average basket were. You know, specifically thinking the trade-offs of premium, versus, you know, the value trade down, et cetera. Thank you. You know, looking at the sequential increase in transactions, it was roughly 20% in Florida. We mentioned that overall average ticket dropped by about 3% across our footprint. You know, that was consistent for Florida as well. I think when you're looking at the volumes published in Florida, there's an opportunity for us to better, say, reconcile those volumes to sales. That's, you know, a key priority for us in terms of optimizing pricing, introducing our brands and better premium brands into the space. We look at the volume and traffic that we have in our stores today as an asset, converting, you know, some of that volume to our premium brand is definitely an opportunity going forward. Our next question comes from Matt McGinley with Needham & Company. Please go ahead. Thank you. You noted a continued focus on reducing G&A expense in 2023 as part of your optimization plan. I had your G&A dollars, excluding stock-based comp and one-time items at around $40 million in the fourth quarter. How should we expect that baseline in terms of dollars to change? With the 25% EBITDA margin goal that you noted for the back half, it sounded like with that prior comment you made with gross margin being in the mid-50s, that most of that is gonna come from G&A reduction and not necessarily from gross margin gains. Can you just kind of help us, you know, understand what takes you from that 20-ish to around 25 into the back half of the year? Yeah. We can get more into the granular details of that offline, but, you know, generally speaking, you see G&A leveling off at the Q4 level with cost savings offsetting any new cost to support expanding store count and growing sales. Adjusted SG&A, which is approximately 35% tax of the year, will be closer to the 30% range to exit 2023. A lot of that leverage, the expansion Adjusted EBITDA margin is coming from the leverage through SG&A. Yeah. to your point from on the second half of the question on the margin, I'd say as we shared, we expect margins to remain pretty much at the Q4 levels. The reason for that is that we know we have and we're working on the improvements from margin standpoint. We're also taking the cautious approach that there likely is going to still be in 2023 price pressure overall in the market. We want to take that approach of considering that the efforts that we're making from the margin will at least offset pricing contraction that we may see in these markets. Our next question comes from Scott Fortune with Roth MKM. Please go ahead. Yeah. Good morning. Thanks for the color. I know, David, you're really focused on the retail side and improvements there, but can you unpack and kind of help us understand retail sales, the positioning of the portfolio? Obviously a lot of focus on the premium side to offset the pricing pressure. What are you seeing from the consumer, you know, the trading down from the mid-level to the value offering of products? And within your full portfolio, how do you fully optimize your retail stores with your portfolio moving forward? And just kind of follow up on that with the retail side, you know, what levers or what are you doing to increase the retention? You put a lot of focus on loyalty. Are there new spends that you're focused on increasing the customer acquisition and loyalty side of that? Just curious from that standpoint, so. Thanks, Scott. Well, I love your question and your focus on retail and how we're gonna increase that loyalty of our customers. To answer your question, I would say that as we acquire more customers, as we really focus the team, and I'll tell you some of the ways of doing that, as we really focus the team on increasing that retention and increasing the frequency of customers. Overall, what matters is how much they spend per year. It's really their customer lifetime value that we're going after here. As we're focusing on that, we can actually better capture the sales that they're gonna have with us. The key focus from a retail standpoint, I would probably split that into four key categories from an effort standpoint from a same store. The first one is a focus on talent, retail talent and the training and development of our retail talent. The second focus is gonna be on what I call retail operations and retail performance, which is very much about how do we organize our stores, how do we make sure that our teams are very clear about what we're doing. The third one, which is a great, I think, opportunity, is around client engagement, and client development, which is how do we work with the clients not only when they are physically present in the stores, but also when they are not, and how do we communicate with them on that front. The fourth one, which is going to be a key focus for us as well, is really improving developing of marketing activation locally and working on how do we increase awareness and connection with our customers. As we do all that, we will, at the same time, be working on our brands and a better definition of the good, better, best around our brands so that we can have the right value proposition for our customers and the right quality. Through the actions on optimizing the retail excellence in our stores, while at the same time working on developing powerful brands that have the right level of quality for each of these brands, we will be able to cater to different segmentation of customers. To your point, there are some customers that will be more geared towards value proposition and products and others that would be more on the premium. It's really through focusing on building that loyalty with customers, understanding better our customers, and having that retail excellence, then we can make all this work and increase our organic growth in our existing network. Once again, if you have a question, please press star then one. Our next question comes from Matt Bottomley with Canaccord Genuity. Please go ahead. Good morning, everyone. Thanks for all the color and the prepared remarks at the beginning. I just wanted to pivot back to the balance sheet, just given where sector valuations are and just growth headwinds. I get a lot of inbounds on capital structure and where sort of all the MSOs are. You know, given that, you know, you're sitting with about, you know, $400 million-$500 million of gross debt, and a big chunk of that coming due by the end of 2024, where do you see sort of the cushions or the, you know, potential incremental access to capital or ways to sort of pivot around, you know, keeping, you know, the balance sheet in good shape, just given the fact that, you know, we have seen now two, three, four quarters of pretty flat growth from an organic basis? I'm just wondering where you sort of see the opportunities and challenges from a, you know, a higher level with respect to where your capital position is at this time. Yeah. Thanks, Matt. Well, we didn't want to ignore that very important point, and that's why we had that in our overall remarks saying that we're very focused on that, on the senior secured notes and the rest of these elements. Obviously we're not in a position right now that we can share more than that, but clearly wanted to pass the message that it's a clear focus on the team and something that we're very much aware of and working on. At the same time, more to answer to your other parts of the question about what are we doing in the meantime, I think that the growth that we anticipate over the different quarters in 2023 from a revenue and EBITDA standpoint, and at the same time, a very clear focus on our cash flow and being operating cash flow positive, is gonna support at the same time the efforts that we will be doing on the balance sheet. Not much more unfortunately that we can share at this point, as you can understand, but that's really a two-pronged approach. One being continuing to increase revenue and increase EBITDA and being a positive operating cash flow position while we're working at the same time on these key balance sheet elements. This concludes the question and answer session, as well as today's Ayr Wellness conference call. You may disconnect your line. Thank you for participating and have a pleasant day.