Welcome to the Ayr Wellness Inc. first quarter 2023 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 assumptions and risks as described in the company's management discussion and analysis for the first quarter ended March 31st, 2023. As well, we remind you that Adjusted EBITDA is a non-GAAP measure. We refer you to the reconciliation to GAAP measures and other disclosures concerning non-GAAP measures contained in Ayr's management discussion and analysis for the quarter ended March 31st, 2023. I will now turn the call over to Ayr's President and CEO, David Goubert. Please go ahead. Good morning, everyone, and thank you for joining the call today. I continue to be impressed by the strong foundation we have built at Ayr and what I've seen our team accomplish in my short tenure here. We have already begun to make progress on our operational and financial goals as evidenced by quarter-over-quarter revenue growing by 3% and Adjusted EBITDA growing by 9%, and posting our third straight quarter of positive cash flow from operations. From a year-over-year perspective, we grew revenue by 18% and Adjusted EBITDA over 60%. I am pleased to report that our Adjusted EBITDA margin reached 22.4% this quarter against 21.1% in Q4 on our way to our target of 25% by end of 2023. I am happy to share that last week we announced an agreement to provide significant liquidity improvement for next handful of years via amendments to contingent consideration for the acquisition of GSD New Jersey and Sira Naturals, as well as resolving what otherwise would have been a potentially significant near-term dilution event for our shareholders related to our acquisition of GSD New Jersey. The agreements align with our goal of maximizing the financial health of the company and allow Ayr to remain flexible as we continue to scale and optimize the business. Moving to our operations, we remain laser-focused on improving the short-term financial health of the company through our 2023 optimization plan, while at the same time driving long-term revenue growth and developing our key assets, which we are calling our Grow Forward Plan. I'd like to highlight the key elements of both our 2023 optimization plan and our Grow Forward Plan during our call today. The optimization plan, which outlines how we intend to drive short-term financial performance and cash improvement, includes four key elements. Sales growth, which is expected to lead to improved operating leverage, stronger margins, cost reduction, and unlocking working capital with better inventory management. I'll talk more a bit later about the first element, sales growth, as we review our state-by-state performance, but I'm glad to report that we grew sales 3% sequentially in Q1 during a largely soft quarter throughout the U.S. cannabis industry. The second objective in our 2023 optimization plan is to improve gross margin across our footprint by enhancing our internalization rate, optimizing pricing and purchasing, reducing discounts, and creating better connectivity between our supply chain, retail, purchasing, and wholesale functions. A great example of these initiatives is in Nevada and Pennsylvania, where these key initiatives are already resulting in meaningful improvements to financial performance. In Nevada, for example, this was reflected by an 8% quarter-over-quarter improvement in adjusted gross profit dollar and 29% quarter-over-quarter improvement in Adjusted EBITDA dollars despite flat sequential revenue. In Pennsylvania, despite top line decreasing low single digits quarter-over-quarter, we grew our Adjusted EBITDA by almost 20%. These initiatives are benefiting from our new organization structure, where our market GMs have a 360-degree view on all state operations, boosting connectivity between different functional areas of the business. The third objective of our plan, continually working to reduce SG&A and other operating costs while deploying significantly reduced CapEx spend to the tune of $30 million for calendar 2023. We took several actions in the first quarter, including a right sizing of our capacity and optimization of our workforce and better leveraging our national platform to drive efficiencies and cost reduction. quarter-over-quarter, Adjusted SG&A as a percentage of sales has dropped from 37.1%- 33.1%. This only reflects the partial benefit from the cost-saving initiatives implemented in Q1. We expect to see further improvement in SG&A margin throughout 2023. The last of our four key objectives in our 2023 optimization plan is to unlock working capital through better inventory management. We are actively reversing the trend of inventory and working capital build that we saw over the last few years, as reflected by a $3 million inventory reduction quarter-over-quarter. As we shared in our last call, considering the lead time in our industry, these actions take time to bring results, and we anticipate further reduction of inventory levels, particularly as a percentage of sales throughout the year as we continue to execute our plan. Better inventory management is expected to lead to more cash on hand and improve cash flows. Moving now to our Grow Forward Plan. Over the past few months, we have introduced to our teams and started implementing our Grow Forward Plan, a collection of mid to long-term initiatives aimed at driving strong revenue growth during the second half of 2023 and beyond, and developing our key assets, which aside from our team of talented individuals, includes our loyal customer base, our powerful brand, and the quality of our products. Some of these initiatives are already driving improved results, as reflected by the modest quarter-over-quarter revenue growth despite broader industry softness. The majority of the benefits will materialize in the second half of 2023 and thereafter. The Grow Forward Plan includes rationalizing our brand portfolio and building equity in our CPG brands, developing our customer algorithm and upgrading our retail expertise and customer experience to drive loyalty and improving product quality. The combination of these initiatives is designed to further cement Ayr as a retailer of choice and a house of brands across each of our markets over the medium to long term. To execute this plan, we've been highly focused on team and talent, building a team that can deliver on our key objectives. I am very pleased to share that we now have a new company leadership organization fully in place, where we are pairing functional leaders with P&L owner in our individual markets to provide a 360-degree review focused on the health and growth of the company. To that end, I am pleased to announce some key new hires and promotions across the organization. Andy Cho, our Chief Digital and Marketing Officer, is focused on building a digital ecosystem around the customer journey, driving customer acquisition, retention, and loyalty, as well as building our CPG brands portfolio. Kenny Stoll, our Chief Supply Chain Officer, is leading our efforts across operations to run lean and efficient while prioritizing demand planning and product quality. Alex Gonzalez-Burke, our VP of Retail Performance, is charged with improving the customer experience and driving customer loyalty through a continually improving retail channel with the goal of ultimately driving higher revenue per customer. We appointed four regional general managers via internal and external sources who will have full P&L ownership across their respective markets. We realized multiple internal promotions and new hires across key departments, including retail excellence, client development, and supply chain, among others. Although it has only been a couple of months since our last conference call, I am proud of how our team is gelling together, the early progress made, and everyone's commitment to our 2023 optimization plan and our Grow Forward Plan. I'll now turn the call over to Brad to walk us through the financials for the first quarter of 2023. Brad? Thanks, David. As a reminder, we closed on the sale of our Arizona assets in March 27th, with the P&L activity for the quarter netted against the loss from discontinued operations. Therefore, I will be speaking to results from continuing operations, which have Arizona stripped out of both the current period and comparative period. Q1 sales, $117.7 million, represents an increase of $3.4 million or 3% compared to prior quarter sales of $114.3 million, slightly favorable to our guidance of flat revenue quarter-over-quarter. Sequential increase was primarily driven by improvement in our wholesale business, growing from 10% of sales to 12% of sales, along with further gradual improvement in retail, with retail transactions increasing approximately 4% quarter-over-quarter. Same-store sales for stores open greater than 12 months were roughly flat quarter-over-quarter. On a year-over-year basis, Q1 sales represents an increase of $18.2 million or 18% compared to $99.5 million last year, with the increase primarily driven by retail growth in Florida and New Jersey. Q1 gross profit was $48.3 million compared to $53 million in the prior quarter. Q1 Adjusted Gross Profit, a non-GAAP measure, was $65.3 million, representing a sequential decrease of $1.3 million or just under 2%. Q1 Adjusted Gross Margin of 55.5% is in line with our expectations for the quarter of maintaining in the mid-fifty percent range and was the result of a mix of both price stabilization and minor price compression in select markets. Margin pressure associated with inventory reduction efforts, most notably in Massachusetts, was partially offset by a further increase of internal branded retail sales, which reached 69% in Q1, up from 66% in Q4. Absent Florida, that same metric increased from 47%-51% sequentially. Q1 adjusted gross profit represents an increase of $13.3 million or 26% versus last year, driven by the increase in sales as well as optimization efforts and the ongoing shift to internal branded retail products. Loss from continuing operations was $21.7 million in Q1, which is consistent with prior year. Q1 Adjusted EBITDA of $26.3 million represents a sequential increase of $2.2 million or 9%, ahead of our guidance to be flat quarter-over-quarter. Adjusted EBITDA as a percentage of sales increased 130 basis points to 22.4% in Q1, relevant to 21.1% in prior quarter. The sequential improvement was largely due to cost saving measures, resulting in a decrease of adjusted SG&A expense and non-GAAP measure from $42.4 million in Q4 to $38.9 million in Q1. As David mentioned, adjusted SG&A as a percentage of sales improved from 37.1% in Q4 to 33.1% in Q1. Q1 adjusted EBITDA represents an increase of $10.3 million or 64% year-over-year. As a percentage of sales, adjusted EBITDA increased year-over-year from 16.1%- 22.4%, driven by the expansion in adjusted gross margins as well as the reduction in adjusted SG&A. We anticipate EBITDA adjustments in future quarters will fall back in line with prior year trends, as nearly half of adjustments within EBITDA other in Q1 came from one-time severance payments. Moving to the balance sheet. We ended the quarter with a cash balance of $96.5 million, which is a sequential increase of $19.7 million or 26%. The increase was driven by the net proceeds of $18 million from the Arizona sale and $10 million from the closing of a real estate financing transaction, which were partially offset by repayments of debt principal and CapEx totaling approximately $14 million in aggregate. The real estate financing transaction was an upsizing of an existing mortgage with a community bank, which originally closed in Q1 of last year with a fixed interest rate of 4.625% and proceeds of $26.2 million. The upsizing represents another $10 million of proceeds with a fixed interest rate of 8%, with this interest rate applied only to the incremental proceeds. Operating cash flow from continuing operations was a positive $8.6 million, partially due to the work on inventory optimization, contributing $3.3 million to operating cash flow. This represents the third quarter in a row with positive operating cash flow. We expect further improvements through 2023 and expect to have positive operating cash flow for the full year. There may be quarterly swings due to the nonlinear trend of working capital outflows such as tax payments. As David referenced at the top of the call, we are pleased to announce the amendment of contingent consideration relating to both the GSD New Jersey and Sira Naturals acquisitions. We think this is a great outcome for all stakeholders as it both defers approximately $28 million of cash pay obligations through 2024 and avoids a material amount of equity dilution. As it relates to the GSD New Jersey earn out amendment, we also entered a contingent deferral of seller notes issued to the GSD New Jersey sellers rep at the time of acquisition, which would defer another $27.65 million of maturities for two years. The total two-year deferral achieved to date between the promissory notes and Sira earn out amounts to approximately $55 million in the aggregate and preserves significant cash on the balance sheet, which is the company's top priority. In addition, we announced last week that we have engaged Moelis & Company to advise us on seeking further extensions of our debt maturities. Looking ahead to the second quarter, we expect sales and Adjusted EBITDA to grow at a similar sequential growth rate as they did in Q1. We expect to further ramp revenue and Adjusted EBITDA in the second half of the year and generate positive cash from operations for calendar year 2023. With that, I'll now turn the call back to David. Thanks, Brad. We strongly believe in the states where we operate and anticipate growth of revenue and or Adjusted gross profit dollars in each of them this year. Let's take a quick look at each of our markets. In Florida, we continue to focus on four key objectives. First, continuing to grow our store footprint. We have already opened a total of seven stores this year, and we plan to open another 10 stores before year-end, bringing our total footprint to 70 stores across the state. Increasing same-store sales in our existing store network through improved product quality, paired with a better utilization of our pricing structure. Preparing for the eventuality of adult use in the state and rebranding our stores to AYR Cannabis Dispensary over the summer, which we kicked off last week with our first communications to our customer base. In Nevada, a key market for us, we continue to maintain outsized market share and plan to invest further in our talent, category management, and the customer experience in our stores. We have leaned into our purchasing power in the state, which has produced lower input costs, and we are leaning heavily on data insights to create a more effective promotional structure. This strategy has already led to tangible benefits to our financial performance in Q1, and we expect further upside in Nevada as we improve our retail performance as well as our cultivation and production capabilities. In New Jersey, we saw slight revenue and gross profit improvements in Q1. We expect growth to accelerate in the coming quarters with the expansion of our Eatontown store at the end of May, which will increase occupancy of the store from 22- 162 people and nearly three times the number of POSs, as well as strong retail performance in Woodbridge and Union. In Massachusetts, we put a lot of emphasis in Q1 on rightsizing our capacity, selling through our older inventory, which impacted gross margin, and improving our wholesale presence. Moving forward through our new GM structure, we're strengthening the connectivity between wholesale, purchasing, retail, and production and are investing heavily in increasing customer traffic to our retail locations. In Pennsylvania, while our top line decreased low single-digit quarter-over-quarter, we focused our efforts on strengthening the integration between our supply chain, retail, purchasing, and wholesale operations to improve Adjusted EBITDA in the state by almost 20%. We are prepared for an expected adult use transition in the coming years. In Illinois, our focus remains on further optimizing our existing two locations. We see opportunity to potentially scale in the future, but it's not a key priority for 2023. We view Ohio as a state with some of our strongest growth potential and another market where we can build meaningful depth and market share. Our 58,000 sq ft cultivation facility is online, and we realized our first wholesale revenue at the end of Q1 with positive review from our customers regarding the quality of our flower. We are bringing rooms online in a phased and pragmatic approach. During the quarter, we announced the option to acquire two dispensary licenses in the state that are expected to come online in the second half of 2023 to build out our vertical presence ahead of adult use. Connecticut remains a 2024 story, and we're excited by the opportunity to build out and commence operations in this new adult use market. In closing, I'd like to thank our entire team for their continued commitment to the business and to our patients and customers. We are very confident in our asset base and our ability to maximize its output. We remain laser-focused on generating positive operating cash flow, improving the financial health of the company, and building for future growth, and we look forward to providing further updates on our progress during our upcoming conference calls. Thank you. We will now begin the analyst 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. Analysts are asked to limit themselves to one question and a follow-up, then return to the queue if they would like to ask more questions. To withdraw your question, please press star then two. The first question comes from Andrew Semple with Echelon Capital Markets. Please go ahead. Hi there. Good morning, and congrats on the Q1 results. First off, just wanna start with, I guess the impressive market share gains we've seen in Florida. Ayr's market share in that state are now approaching levels that would be consistent with your share of dispensaries open across the entire state. I guess, as your stores begin to approach the statewide average in terms of volume sold, do you still see more room for further market share improvements there? Or will there be a greater emphasis on recognizing higher margins and margin expansion from Florida in that state for the balance of the year? Hey, good morning, Andrew, and thanks for the question. We're excited by seeing the progress in Florida. I'd say to answer your question, I think Florida for us is obviously a key state and a key element of our growth. We see that growth, I would say through different aspects. One is continuing the increase of number of stores where we feel that we haven't mapped the state completely yet, neither in the medical market that is today or preparing for adult use. The second point to your question is that we feel that we have potential for organic growth in our existing stores. So far, we've done great progress from the quality of the products, great products, good progress from a menu and the diversity of products that we propose. We think that our pricing is not reflecting yet completely that quality and that diversity of products. We see a growth, I would say, both by increasing the number of stores, still working on that with another 10 this year and more in 2024, but also by continuing to increase on same-store growth. Great. Maybe my follow-up question will be exactly on that point. In terms of the growth that you expect in that space and if you were to compare, you know, what would be the bigger driver, the number of new stores or the same-store sales growth from existing store base, what do you think is the greater driver there for the balance of the year? Do you think it's roughly equally weighted? Yeah, I think it's actually both in the sense that opening new stores takes a bit of time to ramp up, considering that it's a medical market, so it's a bit different than an adult market in terms of how fast you can grow these new stores. It's a ramp up that we see throughout the year. I'd say that it's at least as much from existing stores growth as it is from new stores. Call it a 50/50. The next question comes from Matt Bottomley with Canaccord Genuity. Please go ahead. Good morning, everyone. Thanks for all the color on the granularity on the state-by-state comments. Just wanted to now pivot to New Jersey. I'm just wondering if you could provide any commentary. Obviously, it's been a tailwind for you guys, but if you look at, you know, branded market share, even though it's sort of on a sample basis that, you know, all the analysts kind of look at it still seems like you're at a low to mid, you know, market share percentage or single digit rather. Just wondering if any of that is intentional, just given your refocused, you know, nature on the balance sheet and some of the initiatives you've recently announced versus, you know, maybe starting a bit later in that market. Just trying to get a better feel for what the cadence is given that, you know, there is a bit of ground to cover between you guys and some of the market leaders there. Just given, you know, the attractiveness from what I understand of the assets that you have there, I'm just curious what your anticipation is for any potential catch up in the, you know, later part of this year? Yeah. Thanks, Matt. really appreciate the question. Yes, agree with you that while we see a slight growth in Q1 versus Q4 and continuing improvement in New Jersey, I don't think that we're yet where we should be in terms of market share and volume in New Jersey. There's clear actions that are happening as we speak. I mean, the most, the one that will happen the closest from now is actually the expansion of Eatontown. We have a store in Eatontown where we're very limited from a space standpoint and number of customers that we can accommodate at the same time, and by the end of the month will expand. Today, it's a store that can accommodate only 22 people, and by the end of May, it will accommodate over 160 people, for example. That's gonna be a clear unlock. At the same time, the two other stores named Woodbridge and Union. Woodbridge, we bring stronger talent. We have a store director just started an improvement from a retail performance standpoint. Union is probably the store that where we still are pushing on marketing efforts to get more awareness about our store in the market. Clear that New Jersey is improving quarter-over-quarter, but I think that we should expect an acceleration of that improvement in the second half of the year considering the actions that are happening as we speak. Got it. Appreciate that. My other question is just on the cash flow profile. you know, solid for Q1, but as you noted, there'll be some volatility probably on cash and timing of cash tax payments. That's anticipated for all MSOs in Q2 to largely be a double payment. I'm just curious for you guys, have you know, thought about or are planning to, you know, take advantage of what some MSOs are doing with that sort of 18-month lag on paying the federal part of taxes? Is that something that's being baked into your forecasts for finishing the year overall with the free cash flow profile, and anything, you know, related to that sort of strategic way of looking at it, given that everyone's kind of looking for creative ways to access additional capital? Yes. Thanks, Matt. In terms of taxes, right, we're fully paid in for 2021. We expect to pay 2022 over the course of this year. I don't wanna comment too much on our overall tax strategy, but I'll say that we typically pay on a one-year lag. We've been fully paid in for 2021 and expect to end this year with our tax liability primarily relating to operations from this year, 2023. Just to add on that big picture, what we're seeing is that we don't need to change the strategy that we have on the frequency of payments and tax considering the, where we plan on landing from a cash standpoint at the end of 2023. At this point, it's not a strategy that we need to think about changing considering the cash position that we're in. The next question comes from Matt McGinley with Needham. Please go ahead. Thank you. You stated that better inventory management will be a working capital unlock this year. What would you like to get to in terms of inventory days or dollars at steady state? Do you think that you'll be able to get to that, whatever that target is, by the end of this year, or is that something that could bleed over into next? Yeah, thanks for the question. I think that we will continue to see improvements from an inventory standpoint. I mean, where you look at best in class in the industry, versus where we are, I think I still have quite significant progress to make from an inventory standpoint. I'm not gonna give a dollar amount here, but when you look at the inventory that we have at the end of this quarter, I would say that we still expect significant decrease in the inventory and even more if we're looking at what the inventory looks like as a percentage of sales as we increase sales in the second half of the year. Expect improvement from a dollar standpoint and even more improvement from inventory as a percentage of sales. For the SG&A, Brad, I think Brad noted an expectation that you'll see SG&A improvements through year-end. Do you expect to see improvement in the rate of, you know, off of the rate in top line growth here, or do you think you can shrink G&A dollars while still growing the top line? Yeah. If you look at everything on a, you know, relative or a proportionate basis. What we said before is that we're expecting SG&A to, you know, in 2023 exit the year around 30% as a percentage of sales. We're at 33% today. How much of that will come in absolute dollars versus leverage on the sales front will, you know, depend on how operations scale through the year, but we're gonna get there one way or another to that 30% rate. The next question comes from Scott Fortune with ROTH MKM. Please go ahead. Yeah, good morning, and thanks for the questions. You mentioned in your remarks on the retail side, kind of continuing to move up your own brand, selling into your own store, retail store, obviously is different in Florida. Looking at the other states, do you still have room or are you starting to kind of peak out in kind of your own brands in your own stores, and what's gonna drive that retail forward margins from that standpoint? Yeah, I'll take the first part of the question. Thanks, Scott. I'll take the first part of the question on the internalization and our own brand in our stores, and Brad may complement the question on the last part of your question. If you look at the internalization outside of Florida. Including Florida, we're at 69% internalization now versus 66% in Q4. We keep improving on the overall internalization. If I remove Florida from that, we were at 47% in Q4, and we're now at 51%. That means that the improvement is not linked to only the increase of Florida in the mix. It's very much the improvement that's happening in every state in term of internalization. Now to your question, I'd say we're only at 51%. Here, again, we think that we're not at the level of best in class, and we have another, probably close to 10%, potential of internalization. The other thing that's happening as we speak, but will take some time to pay off, is really the rationalization of our brand portfolio. Moving down from the 12 brands today to four brands in the future, which will give us a chance to actually invest further in those four brands versus the 12 brands. Probably both in our stores and from a wholesale standpoint, support the growth of the internalization in our stores and of the wholesale at the same time. Good improvements, but I think we still have room to grow from an internalization standpoint. Yeah. In terms of the margin impact, you know, internalization is one of the key drivers of margin expansion. I'd say along with optimization of pricing and cost and continuous improvement in yields and productivity. So far those, you know, good guys on margins have been able to offset the pressure we've been facing in terms of cost inflation or price compression and also the pressure we're facing on inventory depletion efforts. So far in Q1, we were successful in offsetting that, maintaining mid 50% margins. We expect to continue to offset that through the course of the year. I appreciate that color. And then a follow-up. You mentioned obviously, you spent, you know, CapEx on the first quarter, kind of hitting your target. I think it was around $30 million for the year. Just kind of step us through kind of the additional CapEx. I know you wanna add another 10 stores in Florida, but where will the additional CapEx come for the rest of the year focused on retail versus production capacity? Just kind of lay out the pipeline you have for CapEx. Yeah. Thanks for the question. As you said, the CapEx spend in Q1 is very much in line with the guidance that we've given for 2023, meaning that we've spent $7 million CapEx, $7.2 million CapEx in Q1, and we've guided to about $30 million CapEx for the whole year 2023. We think that that's the right level of CapEx for 2023, and that will allow us to make the investments that we need in Florida, mainly on the new stores that we have to open in Florida and some works that we need to do in our cultivation facility. And also start preparing for adult use, and I would say the capacity needed for 2025 and beyond. feeling good about the path that we're having and being very much aligned with the guidance of $30 million this year of CapEx, mainly spent in stores, Florida plus Ohio and a few other places like New Jersey expansion, as I was mentioning before, and then preparing for the future for Florida at the same time. The next question comes from Russell Stanley with Beacon Securities. Please go ahead. Good morning, and thank you for taking my question. Just wanted to follow up on Florida and your retail expansion there, given your optimism you expressed around adult use. Wondering if you plan or considering relocations of existing stores. We know you're obviously starting off in the rebranding. Wondering if a number of your legacy stores, you know, might be worth moving or relocating given the evolution of the market as you said. Well, yeah. Thanks for the question. I mean, you know, in retail, what you say is location is king, right? It's number one priority is location, number two location, number three location. To your point, we are looking at are we in the right locations in the stores that we have today. That said, I would tell you that it might be the case for a handful of stores in the future, but the majority of the CapEx is very much on the expansion by adding stores. We feel that there's parts of the state that we're not mapping completely right today and where we feel that we have opportunity for growth. I don't want to give exact numbers, but I would say from a CapEx standpoint, it would be a 90% on new stores, 10% on relocation of stores. Great. For my follow-up, just sticking with retail, and moving to Massachusetts, I guess, can you elaborate, I guess, on what on the efforts made to drive awareness and traffic to those adult use stores and what level of success you're seeing, where you think you are with respect to your expectations? Thank you. Yeah. Still absolutely not where we should be from a retail standpoint in our four locations in Massachusetts. Hence the significant efforts that we're putting right now from an increase of transactions through customer awareness and driving traffic to those stores. I think the other thing that is key for us in Massachusetts as we look at the state is, yes, we have four stores, and we need to increase the volume and the business that we realize in these stores. At the same time, there's over 300 dispensaries in the state. A key focus at the same time for us in Massachusetts is very much on increasing our wholesale presence and our penetration in the 300 dispensaries. I would say Massachusetts is a story that has really two tails. One is very much on increasing that customer acquisition and driving traffic to our stores. Not at all yet there. To me, it's a second half of the year good guide. Clear focus on increasing our wholesale penetration in the 300+ dispensary in the state. The next question comes from Sonny Randhawa with Seaport. Please go ahead. Nice improvement on Adjusted EBITDA in Nevada and Pennsylvania. Just wanted to kind of parse out how much further do you think you can go there? How far is that Adjusted EBITDA figure from firm-wide? Just trying to think about it from the perspective of how much is low-hanging fruit? Because I guess Adjusted EBITDA, as the percentage go up, it gets harder and harder to make that adjustment. Yeah. Thanks. Hey, I'm still glad you're asking the question because, I'm really, really proud of what the teams have been achieving in those states. Nevada and Pennsylvania are states that overall as an industry, we hear they're steady Eddie and either flat or low single digit decrease from a revenue standpoint. We're doing okay from a revenue standpoint, that focus that the team has had on improving margin and improving Adjusted EBITDA in those states have been really impressive in Q1. They're continuing as we speak. I think it's been an effort that paid off by having clear owners of the state that have that 360-degree view and own, at the same time, retail, wholesale purchasing and can really play with the actors on making sure that we get the best pricing. We get the best mix, I would say, of internal brands and other products to offer to our customers. And again, really proud of seeing Nevada Adjusted EBITDA growing by 29%, Pennsylvania Adjusted EBITDA growing by almost 20%. I think that we will continue to see those improvements in the future, thanks to the team that we have in place and the way that we're working with that 360-degree view. The other thing I would add to that, sorry, is across the board, we're making efforts on making sure that we're looking at promotions and discounts the right way, avoiding stacking where it's not needed, and really getting to a better place from that pricing and level of promotions that we're doing. That's part of the things that have paid off clearly in Nevada and Pennsylvania. I guess for my follow-up on the wholesale side of the business, nice improvement there as well. Just wanted to see if you could call out some of the markets that led to that strength, and where do you foresee wholesale percentage increasing or going for the rest of the year? Yeah. Thanks for the question. I'd say from a wholesale standpoint, you really have two different things that are happening at the same time. There's one which is the overall improvement of our wholesale through a mix of local management and changing the leadership from a national standpoint. Overall, across the board, you see improvements through that. Then to be honest, in the first quarter, you also have the efforts that we're making from an inventory standpoint and getting to a good place in of inventory. That is especially true in Massachusetts, where Massachusetts, we reduced inventory by taking actions in all stores, but taking actions as well from a wholesale standpoint. I'd say, we achieved a 12% mix in Q1 from a wholesale standpoint, partially because of the improvements of wholesale, partially because of the efforts that happened specifically in Massachusetts. You should see, and we expect to see that mix growing over the coming quarters. It's not gonna be a steady growth. I think that, as we get better from an inventory standpoint in some states, some of it will not happen, I would say, as fast, as the growth will come very much from that healthy growth of wholesale. Plus, the coming online of Ohio, which we just started our wholesale business there. Go ahead. Thank you very much, and thanks to everyone for being with us this morning. As I shared in the remarks, I'm really excited and proud of the work that is being done by the team so far. We know that we have so much more ahead of us to continue to grow and grow in a very healthy way. I'm, again, very excited where we are, and the one thing that I would like to highlight even further is the place where we are from a team standpoint and an organization standpoint. It's pretty rare in a career, I've been managing companies for over 20 years, pretty rare in a career to be in a place where the leadership team is 100% the right leadership team to achieve the goals that we have and having a strategy that everybody's buying in. I'm excited by that, I'm excited by having a chance to share more in the coming quarters. Thank you. This concludes today's conference call. You may disconnect your line. Thank you for participating, and have a pleasant day.