Ladies and gentlemen, thank you for standing by, and Welcome to the Green Thumb Industries, Inc. Q4 2020 earnings call. At this time all participants are in a listen-only mode. After the speakers' presentation there will be a question and answer session. To ask your question during the session you will need to press star one on your telephone. We ask that you limit yourself to one question and one follow-up. If you're requiring further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Jennifer Dooley, Chief Strategy Officer. Thank you. Please go ahead, ma'am. Thanks, David. Good afternoon, and Welcome to Green Thumb's fourth quarter 2020 earnings call. I'm here today with Founder and Chief Executive Officer, Ben Kovler, and Chief Financial Officer, Anthony Georgiadis. Today's discussion in our quest to questions may include forward-looking statements, which are subject to various risks and uncertainties that can cause our actual results to differ materially from these statements. These risks and uncertainties are detailed in the company's reports filed with the United States Securities and Exchange Commission and Canadian securities regulators, including our quarterly report and annual report on Form 10-K, which we expect will be filed tomorrow. This report, along with today's earnings press release, can be found under the investors section of our website. Green Thumb assumes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. Throughout the discussion, GTI will refer to non-GAAP financial measures, including EBITDA and adjusted operating EBITDA. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures can be included in our earnings press release and SEC and SEDAR filings. Please note all financial information is provided in US dollars, unless otherwise indicated. Thanks, everyone, now here is Ben. Thanks, Jen. Good afternoon, thank you for joining our fourth quarter and year-end 2020 earnings call. What a year. While we've kicked off 2021 with incredible optimism, I'd be remiss not to acknowledge what a test 2020 was on so many fronts. The essential business designation of cannabis by local governments and communities across the country was a strong vote of confidence amidst great uncertainty. It said, cannabis is for the people. Cannabis job creation is meaningful, and communities benefit from cannabis tax dollars. 2020 was also a test of adaptability as Americans found new ways of living and learning, and businesses across the country, Green Thumb included, innovated rapidly to meet customer needs in a dynamic marketplace. From the first day of 2020 when we kicked off Illinois adult use, and nearly every day in between, our team was there for our customers when they needed us most. In 2020, we completed almost 4 million transactions. That's 4 million one-on-one consumer interactions. That's more than double 2019. We opened 11 new stores last year, plus several remodels and expansions. We acquired a third store in Connecticut and have already started 2021 with three new openings, making 54 stores open across the country. We are investing in new ways to strengthen our customer relationships that reinforce what consumers love about our products and retail experiences. We continue to build our team to support our growth, hiring throughout the pandemic with 1,300 people joining the team in 2020. All the while, our commitment to our communities remains steadfast. We have several active programs and partnerships. One example is the Dogwalkers Animal Rescue and Shelter Support, funded by purchases of Dogwalkers brand pre-rolls. We also have a program where we donate our first-day profits to community organizations with each new dispensary opening. We're thankful for the support of partners like Community Shelter Services in Erie, Pennsylvania, Florida Rights Restoration Coalition in Kendall, Florida, and most recently, Paramus Children's Health Foundation with our opening this week in New Jersey. We are privileged with the opportunity to have a seat at the table as a new industry unfolds. It is my special privilege to say 2020 was a very productive year that delivered outstanding results for our shareholders and more cannabis to more people across the country. Fourth quarter revenue increased 13% over third quarter to $177 million, and for the full year, reached $557 million, more than double 2019. For those of you on the call that we met along our roadshow in May of 2018, we estimated back then that our 2020 revenue would be just under $400 million. We are pleased with over $550 million. We delivered $22 million of positive GAAP net income in the quarter and achieved our second consecutive quarter of positive EPS, $0.11 in the fourth quarter, more than double Q3. Increased scale and operating leverage from expanding production capacity drove $66 million of adjusted operating EBITDA. That's 26% above third quarter. Stepping back, fourth quarter-to-fourth quarter, we grew revenue $100 million on the core business, or 134%, while we grew EBITDA $52 million, or nearly 5x. It's a pretty amazing situation year-over-year. We continue to make disciplined, high-return investments into the business. The outlook for U.S. cannabis remains strong. We are pleased to be riding the wave. We are still in the early innings of the great American cannabis growth story as the consumer, social, capital, and political landscapes line up for change. The political stage is set for action with a new administration that's committed to advancing comprehensive cannabis reform. In the capital markets, there was over $1 billion raised across U.S. operators in just January alone. At Green Thumb, we remain focused on driving down our cost of capital, and to start the year, we completed our U.S. IPO and sale of SEC-registered shares directly to U.S. investors. This is an important milestone, and we view it as one step closer to listing on a major U.S. exchange, giving us equal footing to our Canadian peers. We completed the financing without any fees, gross equals net, and $156 million goes straight to the balance sheet. This transaction was a big win for two reasons: our shareholders and the industry. For shareholders, it's dry powder for Green Thumb to invest and capitalize on high-return growth opportunities that drive shareholder value. For the industry, we see it as a leading indicator of strong institutional appetite for U.S. cannabis. There are a lot of ways to both grow and slice the pie simultaneously, we like our position as the green wave unfolds. We believe what is happening in Illinois, with over $1 billion in year one adult use sales and nearly $200 million of tax revenue, is actually a preview of what's to come across New England, the Southeast, and the Midwest. If you think about it, Illinois is just starting. In fact, our stat of the day is the state of Illinois collected more tax dollars from cannabis than alcohol this February. The lines crossed. Illinois cannabis contributes more tax dollars than Illinois alcohol. More growth in Illinois cannabis than in Illinois alcohol ahead. Momentum in markets like Connecticut, New Jersey, New York, and Pennsylvania make sense because there are a lot of consumers who live there that want a lot of cannabis. As the details of these programs are worked out, we hope lessons from the Illinois adult use rollout are noted, especially regarding social equity licenses that still remain of issue. That is not good. The industry is in a place that it can enable new wealth and new opportunity for those that did not have access to it before. Green Thumb wants to help make that happen. At Green Thumb, we are actively studying, planning, and building our boat because, as I hope you can see by now, the tidal wave is real. We opened our first California store in Pasadena this month, giving us firsthand experience inside the country's pioneering cannabis market. Through a recently announced partnership, we're expanding access to California's number one cannabis beverage, Cann, by bringing it to Illinois this spring. This is an entirely familiar format, sparkling beverages, yet totally untapped in cannabis. We're excited to invest in the nation's leading cannabis beverage and to introduce a compelling alcohol alternative to tens of millions of Americans. The Green Thumb team loves the white space opportunities to connect with consumers with safer alternatives, such as an incredibles Snoozzzeberry instead of an Ambien, Dr. Solomon's Rescue Lotion instead of Icy Hot, a [audio distortion] of RYTHM Brownie Scout instead of an [audio distortion], a Beboe pastille instead of a wine hangover, and now a Cann instead of a White Claw. Above all, we have a solid foundation, a really fantastic team, excellent products, very high-quality flower, which really is the start of it all, and a proven track record of doing what we say we will do. There is no exact blueprint for how the world, the country, or the industry will evolve in a new post-COVID world, but the American consumer guides us, and the Green Thumb team remains as energized as ever to serve them. With that, I'll turn the call over to Anthony to dig into our financial results for the fourth quarter and full year. Anthony? Thanks, Ben. Good afternoon, everyone. As you just heard, we're incredibly proud of what the team accomplished in the fourth quarter and throughout 2020. In addition to generating record revenue and profitability, the team has shown tremendous grit. None of the accomplishments of the last year would have been possible without the hard work, dedication, and personal sacrifice of every member of the Green Thumb family. While the successes of 2020 were significant, we remain steadfast and focused as ever on the future. We'll get to that later. For now, let's have some fun with our numbers, starting with revenue. In 2019, the company generated $216 million in revenue. In 2020, $557 million. 2.5x growth in the middle of a pandemic certainly made for an interesting year. In Q4 alone, the company generated $177 million of revenue, a 13% increase over Q3 and $100 million greater than our Q4 2019 revenue. Given our limited M&A activity in 2020, nearly all of this growth was driven the old-fashioned way. We made more, and we sold more. For the quarter, gross CPG revenue grew by $23 million or 31% over Q3. On a net basis, accounting for intercompany revenue, our quarterly growth approximated $11 million or 25%. Over in retail, revenue increased $9 million or 8%, primarily driven by same-store sales growth. On a gross basis, our revenue split for the quarter was 55% retail, 45% CPG. On a net basis, 68% retail, 32% CPG. It's exciting to see the impact of our CapEx dollars at work as our CPG to retail revenue ratio continues to tilt towards CPG. As a reminder, the difference between gross and net is intercompany revenue, which approximated $42 million in Q4 and $30 million in Q3. The company's robust revenue performance is a result of the following. Number one, more legal consumption. Demand is big and growing. Two, quality product. Our goal from day one has been to produce and sell great cannabis products. Products that we ourselves would want to purchase. Last, execution. We cultivate, we manufacture, we retail. The fundamentals of this business are similar to any other. We push our team to consistently choose simple over complex. Turning to profitability, the company continues to perform, posting gross margins for the quarter and the year in the mid-50s. In fact, Q4 was a record of just under 57%. As I've said before, our intrinsic goal is to keep this very important metric at or above 50%. On the SG&A side, expense for the quarter approximated $53 million, or 30% of revenue. Excluding D&A and stock-based comp, normalized operating costs totaled $38 million compared with $34 million last quarter. While operating leverage didn't quite have the verticality as it did in previous quarters, we have made a conscious effort to deepen the company's bench in the face of regulatory change. Total other income for the quarter approximated $3.4 million, largely driven by the mark-to-market of our investment portfolio. Accounting for everything above, in Q4, the company generated over $65 million in adjusted operating EBITDA, close to 37% of revenue. It also produced just shy of $51 million in pre-tax income and $22 million in net income. This provided Green Thumb with its second consecutive quarter of positive EPS at $0.11 a share, a nice increase of the $0.04 we reported in Q3. For its fiscal year 2020, the company generated approximately $180 million in adjusted operating EBITDA, 6x more than the $28 million we generated in 2019. In summary, from 2019 to 2020, the company grew its revenue by 2.5x and its EBITDA by 6x. Pretty, pretty good. Turning to our balance sheet, we end the year with just under $84 million in cash and continue to keep a tight leash on the company's working capital, notwithstanding its tremendous growth. Subsequent to quarter end, we raised $156 million in additional equity capital. What's notable about the raise was first, it was self-conducted, meaning we did not use an intermediary, and it's been succinctly said, gross equals net. Second, the equity we sold was registered with the SEC. In early February, the SEC deemed our S-1 effective, a major accomplishment for the industry. On our public float, over 80% of our shares are freely traded. We continue to believe that liquidity breeds confidence. Net-net, we are extremely proud of our Q4 and 2020 financial results. During our last call, I indicated that 2021 would be a year where many things would change, yet many would stay the same. Simple principles such as leading with the consumer, focus-drive excellence, market optimization, prudent capital allocation, investing in the team, and playing to win will remain our North Star. The only difference is we now have a well-stocked war chest. With that war chest, we not only plan to build a bigger boat, but an armada. In closing, I'll leave you with a quote from the Oracle of Omaha, 'Every decade or so, dark clouds will fill the economic skies, and it will briefly rain gold.' When downpours of that sort occur, it's imperative that we rush outdoors carrying washtubs, not teaspoons, and that is what we will do. In this 100-year storm we call Prohibition 2.0, we are going to bring other people along with us to take advantage of the greatest economic and cultural opportunity our generation has ever seen. Back to you, Ben. Thanks, Anthony. Those are dynamic comments from the CFO. I CFO. I appreciate it. This is our third year-end call since we went public in 2018. When I look back at what our team has accomplished in this short period of time, I am both humbled and grateful. We have built a very strong foundation to continue our growth trajectory, but that's only part of the Green Thumb story. Each day is a new day at Green Thumb. How might we expand access to well-being, serve our customers and communities better? How might we provide more opportunities for our team and manage capital more efficiently? I'm especially proud that our team continues to dedicate time to support our communities and one another during COVID and beyond. Given it's International Women's Month, I want to give a special shout-out to the women on the Green Thumb team on today, the greenest day of the year. For me personally, I feel lucky to be part of this team in this industry. We still have a lot to learn, and I expect and hope we'll continue to have a lot of fun learning it. From the consumer perspective, the cannabis industry product and access will only improve. That means 2021 is a new beginning for all of us. We wake up every day here energized by that idea. It's still day one. Operator, we'll now open up the line to take questions. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. We ask that you limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Your first question comes from the line of Matt McGinley with Needham. Your line is open. Thank you. My first question is on the CPG business. The sequential increase in revenue in this quarter was impressive, given that most of your production assets would have been operational for most of the third quarter. I think your big cultivation projects this year don't really become operational until later in the year. The question is, would the increases in production efficiency be enough to sustain your CPG revenue growth in the first half, or does that become more muted until later in the year? Hey, Matt, this is Anthony. I'll take that one. The team did an excellent job of bringing forward some of the future CPG revenue that we had projected. The construction projects ended early. We got the plants planted early, and then subsequently, we were able to get that revenue to flow through the P&L sooner than we initially anticipated. Obviously, we'll continue to focus on efficiencies, but that was one of the drivers of the growth that we saw for our quarter. Got it. On the CapEx, I didn't hear anything with regard to the CapEx plan for the year. I think you spent around $100 million in 2019, I'm not sure what the very end of the year was for this year, but it was around probably $110 million-$120 million. How does that look for next year and rather this year, and would you expect to use sale-leasebacks, or would that primarily come from the cash that you raised in cash from ops in 2021? Excellent question. Hey, Matt, it's Ben. I think you're right to focus on that because I think the spend is a leading indicator of what's to come, as we tried to sort of continue to preview over the last 18 months or so as we turned on some things in 2020. You're exactly right, $110 million- $120 million on the CapEx. You'll see that tomorrow with the filing of the K. I would say really in 2021, we're going to go bigger than 2020. It's a little hard to handicap exactly what's going to happen and where. We'll continue to try to be as transparent as possible. Source of funds to your question. It's a very interesting time to be thinking about cost of capital, and the sale and leaseback market and the expense of money and what that's looking like. It's a changing curve. It's not static. An asset for a long period of time at a fixed rate much higher that you no longer own is not as attractive when traditional mortgage is available. Debt rates, as we've talked about, are going down. Everything we look at is a lens of shareholder value, and we wouldn't spend more than we need to have the money we need to execute the plan. We're obsessed with driving down cost of capital, and we're pumped about 2021. Your next question comes from the line of Camilo Lyon with BTIG. Your line is open. Thanks. Good afternoon, everyone. Great job on the quarter. Thanks. 2020 was a fantastic year for your gross margin expansion. That really continued, obviously, here in the fourth quarter. Can you give us some insights into the key drivers of that margin expansion in the fourth quarter, and how would you think about those influencers into 2021, particularly on the pricing side and your expectations for that input? Hey Camilo, Anthony here. Look, yes, obviously, incredible year on the gross margin front. We saw a nice gross margin expansion. I think the biggest driver was operating leverage, particularly on the wholesale side of the business. The retail gross margin is relatively static, depending on the market, depending on the time. What you really saw, throughout the year was we grew into the facilities that we built out. As the teams effectively operated longer, we become more efficient. It's one of the things that we focus on daily is just continuous improvement. It's hard to have a crystal ball to see where that kind of goes in the future. Do I expect the margins to stay where they are? It's really tough to say, and that's why internally we really focus on keeping that number at or above 50%. If we can do that in the long term, we should win. That's really what we're focused on. As we look ahead, that's really the benchmark that we tie ourselves to. Got it. My second question is on the cultivation side. Really from understanding where you're at in New York and the build-out of the new facility that I think you broke ground on in Warwick, New York. Just an update on the progress of the New Jersey cultivation. I believe that you just started carrying some of your own RYTHM products in your stores. Any update on those two assets and their ability to start to supply your own stores would be fantastic. Hey Camilo. Ben here. Thanks for the question. It's a good question. I would say New York is very early and a lot of action to come there. It's a day-to-day news cycle there. At the highest of high levels, New York has a lot of people that live there in a very immature, early medical market. Astronomically so. We're thinking long term. We're not thinking next quarter or even next year. We're building a business of 2023, 2024, 2025 for U.S. cannabis. I think we're excited about where that's headed. New Jersey, you're exactly right. We've had &Shine on the shelf. It's a medical-only market right now. As the rules come out and get formed, we're excited to be able to launch RYTHM, which is a higher quality premium product. It's great for the patients. As we have more of it, we'll be able to get it all around the state, and really hopefully satisfy those that are interested in premium cannabis flower, because that's what we're about. I think we do a pretty good job. We're going to let the consumer tell us. In terms of just the scale there, it's never enough, and New Jersey's going to be tight on supply for a while. We have some. We will have a little more, and then we'll have a little more. It's a dense market up there in northern New Jersey for us, but we've found a way to invest capital into a facility that can produce the kind of flower we need, and other products, as we've talked about, particularly under rec. Even though the rules aren't fully out, I don't want to jump the gun. We think there will be expanded access of different form factors of product. We're excited to be in that market. Thanks, guys. Thanks for the help. Good luck. Sure. Thank you. Your next question comes from the line of Vivien Azer with Cowen. Your line is open. Hi. Thanks very much for the question. My first is on Cann. Recognizing that the beverage category broadly is still nascent in the U.S., I was hoping that you could kind of articulate the rollout plan. You called out Illinois and beyond when you announced the agreement. Should we expect to see beverages in Illinois and other states in 2021? As well, can you potentially articulate how we should think about the P&L impact? Thanks. Sure. To the last question on that, I don't think it's going to make a P&L impact. I think it's going to make a consumer impact. This is a new form factor in a new market that is 99%+ off-prem. The alcohol space off premises. Slowly the U.S. will really evolve. Beyond means the East Coast markets that are adult use, where we can target this product. Certainly New Jersey, we don't have the rules yet, so I don't want to overpromise, and other markets out there. We're excited about bringing the product to Chicago, to the Midwest, to a lot of curious cannabis consumers, or soon to be consumers. We're unsure exactly. The concept that simply said is sharing a gummy with a friend is not as familiar as sharing a awesome sparkling beverage that just tastes so refreshing in the sun that you want a few of them, and then you're not overconsuming. The key factor here on this form factor and dosage is a non-overconsume setup. We're going to go slow. In fact, it's a crawl, walk, run, and the supply chain is new. The size of the market is new. We'll be watching and studying because we want to come with the best brand and a product that's differentiated, that has huge momentum, gives everybody that tries it seems to love it. Yeah. That sounds great. It's a very attractive product indeed. My follow-up question is on your same-store sales growth, which looks to have decelerated sequentially. It was very high in the third quarter, so some deceleration is not necessarily unexpected. If you could expand on that, please, I'd appreciate it. Thanks. Yeah. Did you say decelerated? Yeah. I believe your same-store sales growth was 18% last quarter on a 42 store base, and this quarter it was six on 48. Yeah, like 65%, 60%. Yeah, I wouldn't read much into that. It's a bigger base, more is coming onto the base. Certainly, as you anticipate and if you're modeling, you have first quarter Illinois lapping Illinois. You do not have the step up that you did on a big base like last year. Just anticipating how this works, the boxes are good. There's a lot of demand for the product. Again, the best leading indicator is the state data, that it's pretty transparent on a state by state basis. It's pretty unique to see the penetration level into the markets where we can invest capital, feels pretty good. Great. Thank you. Sure. Thanks. Your next question comes from the line of Eric Des Lauriers with Craig-Hallum Capital. Your line is open. Great. Thanks for taking my questions, and congrats on yet another very impressive quarter. Given the siloed nature of state markets and the active M&A environment in this space, integration is a vital, yet often overlooked aspect of the industry. I know integration is something that you guys have always been focused on with your One GTI strategy. Recently we've been seeing and hearing reviews of improving flower quality from RYTHM. Obviously investors are seeing continual improvement in your financial results. Can you talk a bit more about your One GTI strategy? How do you seek to drive continual improvement at GTI? Whether it's financials or product quality, and how you expect that to maintain your leadership position going forward here. Thanks, Eric. Yes, Ben, I appreciate the kind words and seeing the year build some momentum on the RYTHM Flower system, being able to make the growth team pretty excited and the whole team. That's what this is all about. It's the two things you said, the team and what the team can deliver for the consumer, which is the product, and that product delivers the experience. If we can deliver that experience everywhere, we get consistency and elevate it, we win. We believe in the product. We think that it can offer well-being to consumers across America, and we're sticking to the playbook. Anthony said, "When in doubt, choose simple." We're learning, we're focusing, we're refining. We do not have it right. We do not know the perfect mix. We're in a unique position and if we get some of the product right, good things tend to happen because it's all about the consumer and that experience. Hopefully that answers your question. Yeah. That was definitely helpful. Thanks for that. Then just as a follow-up, from an investor point of view, we've certainly seen the impact of depth over breadth within markets. You guys have clearly demonstrated some leading capital allocation skill. Can you talk about any insights that you guys have gained over the past months or years? How your capital allocation strategy has potentially evolved? Then with these two large raises year to date, and now reports of SAFE banking being reintroduced tomorrow, how might that capital allocation strategy change with increased access to capital markets? Yeah, I mean, the short answer is no change, same game. I mean, we're investing on behalf of shareholders to create great returns, and we think brands distributed at scale is how to win with great brands that resonate with consumers. We can build those brands across the market. We sit at the same table, we have the same conversation. There could be an extra zero, it could be a different state. We have a team that can handle it now. Not that we're perfect, but it's a different kind of game when you sit and reallocate your capital and drive into returns that you can believe and spend. We've been at this six, seven years. We've made plenty of mistakes, and we try not to make the same mistake twice, and if we do, we make it less expensive. That's what we're up to, and it continues to be invest $1, create $2. It's a growth business at a cheap price, so it's like a $0.50 $2. We're pumped about the game, but we're not going to change it. Here we are with a lot of cash that came at the right price, and the industry is dynamic, and there are tens of millions of consumers across the country that are curious, that are interested. We just want to be part of the experience of opening this up for folks as they have alternatives. Your next question comes from the line of Pablo Zuanic with Cantor Fitzgerald. Your line is open. Thank you. Ben, it's a bit of a maybe philosophical question, there's more and more MSOs providing guidance and some of them with a lot of detail. Is that something you're thinking of doing, or you don't see value for you guys to do that? Thanks. Thanks, Pablo. We've been out and around and hearing the trends and watching people talk about pro formas and then deals break, has guidance been helpful for you and the investment community? It's very hard to handicap when these things open and how they go. We're trying to be as transparent as possible about the business and where there's growth, and really what's happening. I'd say the best leading indicator of the business and really the best guidance is to spend as transparent as possible about that, because that's going to drive the business in a market that's high level, where there's more demand than supply. If that evolves, what that CapEx is doing to fortify the moat, drive down the marginal cost of production, and continue to lead the business. I'm not sure which kind of guidance to give you based on which markets, and I couldn't tell you what month New Jersey turns on, how that works, or what's going to happen when Illinois is going to get out of its own way and issue 75 new licenses. I wish I did. That would be fun, but we have to play with the facts we have, and share them as we talk. That's fair. Then just a second one. Other companies are talking about making contingency plans or having contingency plans, for the onset of interstate trade in the future. I know, again, that's very hard to predict if that will ever happen and when it will happen. How does that color your plans for expanding capacity in New York, New Jersey, or Pennsylvania? It does not at all, and you just go after the opportunity in those states pretty much state by state? Thanks. Thanks. It's certainly a factor at the table. We're focused on allocating capital to build the brands, and we study the map a lot. We're watching what's happening. We do not think interstate is coming tomorrow. I would be surprised. I think the business would be in great shape if it did. I think the thing that many miss with this question, which comes up all the time, is what else would be happening in the game if that were to occur. That's an interesting thought exercise on a whiteboard for folks. Not simply just interstate. We are about building the brands with consumers and anticipating what we don't know, even though we don't know what we don't know. If everything we know is what we know we love, what's going on? Therefore, we'll continue to wait. As Anthony says to the team all the time, expect the unexpected. Is that the way to play it or not? This week alone, look what's happening with New York, look what's potentially happening in Congress in D.C. There is action. We said in the remarks, we're prepared for it. We can change what's happening, and we're set up well. Got it. Thank you. Sure. Thanks, Pablo. Your next question comes from the line of Howard Penney with Hedgeye. Your line is open. Hey, thanks very much for the question. I'm not sure how to ask this question, but take a state where you're building cultivation. How many years does it take to get your dollar return on that investment? I ask that in the context of interstate commerce, and if it's five years down the road where we have gotten payback on those assets you're putting in the ground. Thanks. Yeah, fast enough that we're not worried. We're spending the money we're spending to make sure that whatever happens, we're going to be good. Just a core answer, because that's what I thought a lot. Zooming out, between permitting and getting set up, and we talked about at the highest level, six months to build and six months to grow. Could be six, eight, 10 months, depending on which jurisdiction, or sooner. Plants can't be sped up or slowed down. They are what they are as we unroll that. Then you can make some assumptions on prices based on the market to figure out the returns, and the yields. It's an attractive enough investment where we're not worried about what'll happen if we can simply, as I've said many times, execute. I think we continue to execute well. There's always room for improvement, but if we execute with the dollars, the returns are great. Like fantastic. If I'm raising the cash at 1x, right? The dollar is a dollar. Then investing it for the EBITDA that that dollar creates and trading at a multiple of you make it up, creates a lot of shareholder value, which is exactly what we're up to, which is why, to Matt's question, the CapEx is the situation. Then it's why, because of the demand curve, and it's around and around we go, and the consumer loves the product. That's the whole deal here. If I could just ask another one, how important is a capital markets component to the SAFE Act? I appreciate the access to the financial system and all that SAFE brings it, but there's another element that I think is also important. Just curious how important that is. I think you said, and Howard, someone shared it maybe, how important the capital markets to the SAFE Banking Act? A capital markets aspect to it, yeah. Besides just access to banking in the financial systems, there's a capital markets component that allows you to switch exchanges. There's upside. The way we run the business is sort of an optionality machine, right? We're fine with the way it is now, and if things get better, it'll be better. If the cost of capital goes from where it was in the rearview mirror, which was a double-digit rate with warrants or these facilities backed at double-digit rates to where it's going to be very soon, which is single digit, where the credit is probably investment grade. Again, we have to pay more, but it's still single digit, and then it's going to go even lower. The people that have access to lower cost of capital can't put it inside of our moat. We're very comfortable with the current setup. We love that we lead the industry with the lowest cost of capital. That's really the way to win over several cycles in several different industries. If it changes and this passes and the things and the nuance, you know probably better than I do how the sausage was made and the details, which we do not have a lot of edge in, when we do have edge in is optimizing with the facts on the table. If capital markets open up and SAFE, we're in a leading position to list on a U.S. exchange. We're SEC registered and we've sold stock to US GAAP, we're here, we got credit. It's not my call. It's not Anthony's call. We're playing the system and we're just putting ourselves in a position, like I said, an optionality maximization machine, that's what we're doing. Appreciate your time. Thank you. Thanks, Howard. Your next question comes from the line of Michael Lavery with Piper Sandler. Your line is open. Good afternoon. Thank you. Michael Can you give us an update on your strategy in California? You've obviously just opened a store there. Just maybe some of what your enthusiasm is in terms of seeing that market improve or what its outlook is, and just help us kind of understand what to expect looking ahead. Sure. If I had to summarize the California strategy in one word, I would say it's learning. We're there to get smarter. I said before, in many ways, California is the best way to lose money in cannabis. I say that affectionately to all the people that have lost money there, but it's a tough sell. I don't want to swim upstream or sit at the hardest poker table or anything like that. I like I like when the odds are in our favor. There's a lot to learn, there's a lot of respect for what's happened out there and who the players are and what goes on. It would be foolish of us to ignore. I don't need to allocate a lot of money if we don't think it can turn into more. I think product, you said pioneering in the prepared remarks, innovation, which happens kind of everywhere, branding, consumer trends, whether it's cannabis or otherwise, are really important to doing. We liked what we're doing there in order to position ourselves, like I mentioned in the last question, with optionality. It's really the whole strategy everywhere is optionality. We think we're in a pretty good position there to watch, learn, get better, and at the right time, take advantage for shareholders if it makes sense. Okay, that's helpful. Just on the consumer, can you give a sense of how much you're seeing learning behind the brand equity, which brands maybe stand out more than others, or anything that helps you in markets that are new, or you've got wholesale in California, but just maybe pushing that further, or how to think about the traction behind the brands and how sticky it can be? Yeah. There's broadly brands in the country. The same exact thing we've been saying, that it's an honest, consistent product. Before you get into marketing campaign and the colors and everything, there's a few people able to do it. I think there was a national launch here recently. Availability. Simply having a consistent product available, it's a monstrous feat. That's how you can build a brand. Then it can do it. If one day, like somebody said a while ago, the Sprite is orange, it's not really going to work so well. We just need to be consistent and available. We think we're onto something to connect to the consumer who is the user of the product and the use case, form factor, happy, healthy, comfortable in the bed. That's the game. It's not more complicated than that. The consumers are everybody you're around, I'm around, multi-generational, suburban, rural, urban, and from all walks of life who are curious about an alternative for this. That's what we do. We can then get pretty instant feedback on what brands are working and what might not resonate. We can tell right away, consumers are loving RYTHM Brownie Scout. Like winner. They are loving Incredibles. Winner. We can tell that. We know that that's happening. We know people don't sleep very well. We know Snoozzzeberry gives a better night's sleep. We don't have FDA studies. Things are beginning to unfold broadly. We're offering well-being and an alternative and a consistent brand. That's kind of like what America has been about for a long time, the land of the brand, for 120 years or so. We're happy to play right into that and offer an alternative for the consumer that really drives the economy, which is really going to drive this decade growth story. That's great color. Thanks so much. Sure. Next question comes from the line of Aaron Grey with Alliance Global Partners. Your line's open. Hi, good evening, and thanks for the questions, and congrats on the quarter. Thank you. Just quickly, I know you guys aren't giving guidance, but just to kind of give us a better sense in terms of maybe some store openings you guys might have planned over the next couple quarters. I know you still have some stores you could open up in states like Pennsylvania, California, you have two more. Florida, you could open up some more, as well as Illinois. Just if you can give us any sense in terms of planned store openings you might have, I think that'd be helpful. Thanks. Sure. Thanks, Aaron. Sure. We can give you a little more color there. 54 open today, three that have opened this year. Stepping back, 2019, we said 15-20, we did 20. In 2020, we opened 11 with some remodels. The remodels can really drive business. Obviously, if you go same site for medical and adult use, it's effectively a new store, but it's a remodel. We don't add it to the count. I mentioned the acquisition in Connecticut. 2021, three opens so far this year, like Pasadena, Paramus, and one in Pennsylvania. There are more in the pipeline, actually. I'm not giving guidance, but in the line here, we could get one, maybe two more open this quarter or April. We got Cookies in the pipeline. That's a second quarter situation in Vegas. Look, people are going to come back to Vegas if you believe the flight numbers now and vaccine penetration and tourism and things like that. We're pumped about that. There's more to go. You mentioned a few of the states. There's a third store in New Jersey. There's another store in Illinois, Pennsylvania, Nevada. It's like where we're not maxed, we're going, and where we have access to product, we're opening a store to serve the consumer. All right, great. Thanks. Appreciate that color. Second one for me. I know you guys talked about some investments you made in the management bench. You had a little bit less SG&A leverage this quarter than you had some prior. Just want to get a better sense of where you feel you are today in terms of additional investments being on the SG&A side and how to expect maybe incremental SG&A as you go forward, because obviously you guys have pretty frothy EBITDA margins. You mentioned some of your expectations on the gross margin side, so would love to get your perspective on in terms of where you feel like you stand on the SG&A side. Thanks. Hey, Aaron, this is Anthony. Good question. You're exactly right, but we're going to continue to invest in the team, and it's across the board at all levels, right? One of the things that we're doing now is we are better capitalized. We have a solid business that's producing nice cash flow, is we now have the luxury to look ahead 12 to 24 months and really see what's coming and prepare for it. Learn from the mistakes where, candidly, we may not have been as well-staffed as we could have been, that would've allowed us to take greater advantage of an opportunity within the market. In terms of where margins will go in terms of the SG&A line, again, it's really hard to say. I would expect that the gross SG&A number will continue to grow, and then how fast it grows, we'll sit back and we'll throttle it up or down depending on how quickly we anticipate kind of future revenue being to pan out. That's one of the things that we do on a regular basis, is just make sure that we're constantly level setting and stepping on the gas or hitting the brakes on an as-needed basis. All right, great. Thanks. Your next question comes from the line of Andrew Partheniou with GMP. Your line is open. Thanks for taking my questions and congrats on another great quarter. Thanks, Andrew. Maybe just talking about the production expansions that you guys said you pulled forward in Q4. Obviously you guys are not going to give guidance, but could you talk a little bit about what states those were in? For 2021, what would your priorities be both near term and maybe in the second half of the year in terms of production expansions on a state basis? Sure. Thanks, Andrew. Ben, I could start. I would say, if you look at a map, which I'm doing, and you look east of the Mississippi, you got a lot of people and a lot of markets that are under-penetrated. Where our licenses are with first mover and access to consumers, where it's medical, and it's potentially going to adult use, where it's already adult use, and that's where we'll put our dollars. Give you the state names, I mean, it's not that hard to see where we are, but Illinois, Ohio, Pennsylvania, New Jersey, Maryland, Connecticut, New York, Massachusetts. I mean, it's every single state east of the Mississippi where we're operating in currently, and we're very focused on what else is happening around the country. We're not too head down, to miss something. Maybe just switching gears, I think stimulus checks are going to be in people's pockets soon. Last year we saw that that could have triggered increased spending on cannabis. How should we think about it this time around? There's potentially more supply in the market now that things have progressed since last year. At the same time, there's a little bit of a reopening or reducing of restrictions. How should we think about how consumers might be spending their stimulus checks in the near term? Yeah. I mean, literally it's as simple as they're going to buy more weed. It's nice that the markets have more supply because business is so well. All right. Well, that seems pretty straightforward. Thanks for that. No problem. Your next question comes from the line of Graeme Kreindler with Eight Capital. Your line is open. Hi, good afternoon and thank you for taking my question. Just to follow up on that previous question there, the dynamics between stimulus checks and states reopening, some others easing the restrictions. I'm just wondering, layering that on with some commentary from peers about we're seeing some seasonality or potential for some seasonality within the industry, some patterns there. I'm wondering what that looks like, how all those forces are acting against one another with respect to what it's looked like for you guys in Q1 to date. Thank you very much. Yeah. I mean, 2020 was a strong year. The first quarter, like we sort of talked about, we were able to pull forward the consumer trends that, hard for me to really say. February had a lot of snow. Nobody can miss that. You got to just look at what happened in the country. I can't really comment on any sort of trend. We think demand is strong, getting stronger. Basically, what I would strongly encourage you to do, or anybody really, is just look at the state revenue by state and then the population and understand what's going on there. We're bullish. Understood. Thank you. Your next question comes from the line of Scott Fortune with ROTH Capital Partners. Your line is open. Thanks for the questions. Wanted to go back to your whiteboard there, Ben, or thoughts on third-party brand strategy. You seem to be adding leaders in the brand space with Cookies and the recent Cann. Can you provide a little more color on your partnerships or kind of the strategy there and big-picture long-term to partner with or JV with kind of some of the larger CPG brands out there potentially? Sure. Thanks, Scott. Yeah, we're really just studying the consumer and what's resonating and want to be around and learning all the time from who's having success and what's going on. It's a mixture of building our own, learning from what's out there, expanding the portfolio, different form factors, to build buy position every day, and that sort of thing. At the core is consumers are going to resonate with a product that is branded. It's the most simple thing to say, but it really is an important idea that drives us, that's been part of the business thesis since 2014. Got it. Just a little quick color on Florida, to expand there, you're seeing more supply competition coming on board. I know you're not allocating much down there. Do you see it as an important state, even though you haven't allocated much there? How do you look at Florida? Yeah. 20 million people is very important. We like the market a lot. In a world where there was limited high cost of capital, it didn't make a lot of sense. Similar argument you may have heard with MUD\WTR. Got it. Thank you. Thanks, Scott. Your next question comes from the line of Andrew Semple with Echelon Capital Markets. Your line is open. Good afternoon, everyone, and congrats on yet another solid quarter. Thanks, Andrew. Given the bigger war chest as you guys put it, I'd like to get your updated commentary on M&A. Has there been any change to the criteria you will employ going forward, or any states that are now standing out that maybe haven't in the past? Are you seeing any meaningful movement on private market valuations, given what we've seen in the public markets over the past couple of months? Sure. I'll take it, Ben. I think I might've just said it, but everything's on the table if it makes sense. We are studying everything going on, especially in the U.S. The bar for the capital remains very high. But there's a lot of dynamic pricing in capital and different things. How does this fit into the overall thesis? Does it help us distribute brand and scale? Who are the people? Somebody else mentioned integration, very underestimated skill and list in this industry. We're proud that we are with One GTI right now. So we're here, we're watching, and it's the exact same lens that I keep mentioning, which is it good for shareholders? Does it drive the thesis? Is it crazy exciting for us on several other proprietary matrices that we run. Great. Thanks for that. If I could maybe just go back to the partnership agreement with Cann. I just want to clarify, is cannabis beverages completely incremental to your existing product portfolio? Are you seeing anything on the ground that would suggest that consumers are going to respond favorably to this new format being introduced? Yeah. Two yeses. Totally incremental. I think it's really a new consumer entry, form factor, comfort, dosage. This is the glass of wine of cannabis replacement. This is the White Claw replacement. This is the weekend out and about. When the medical product business is different, we're talking about a different consumer, a different use case, and that sort of thing. I don't think we would be behind it as much as we are unless we thought that there was adoption and that there was interest and something was going to happen here. Great. Thanks again. Thanks, Andrew. The next question comes from the line of Glenn Mattson with Ladenburg Thalmann. Your line is open. Hi. Thanks for taking the questions, great quarter. Most of my questions have been asked at this point, so digging a little bit to the bottom of the well. Maybe, I would love an update, just the new store you've opened in California, being an Essence store. Can you just remind us what the strategy is for having multiple brands on the retail front? I can understand them on the CPG side, but kind of the high-level differences between the two stores and whether or not you'll consolidate those at some point. Yeah. We're proud of the best consumer experience. We've got Essence in Vegas. This was a license that had an application. Things in California are incredibly tricky. I'd say Pasadena was one of the more tricky stores to open that we've been a part of with 54. It's the same promise. We win the service and selection. We treat people extremely well. We make mistakes. We move on. We expect to win there. See what happens. Like I said, it's a learning thing. I couldn't tell you exactly what the path is going to be. We're excited. It's right on [audio distortion]. It's a good location in a market that doesn't have a lot of licenses, being Pasadena. A market where the consumer knows the product, the people it's honest. We're excited about the opportunity there. Great. If I remember correctly, I think you had a license for a consumption lounge as well. Any plans to move ahead with that? Anything on that front? You're correct, and still evaluating diligence, location. There's lots of challenges. Like I said, Pasadena was one of the trickier ones out there. I think in terms of on-prem, which is consumption lounge across the country. I think probably in a year from now, when we sit here in 2022, there will be more sites across more states. I think the first one's opening in Illinois, not ours, but I saw a headline earlier. I think that will continue to evolve, right? This is the unknown. This is the great American experiment. This is what we do. We invest and innovate, and I think on-prem consumption will exist. Great. Thanks, Ben. Sure thing. Your next question comes from the line of Matt Bottomley with Canaccord Genuity. Your line is open. Good evening, everyone. Congrats on the quarter. Just wanted to pivot back to New Jersey. One of the sort of inbound questions I get a lot from investors is sort of how to handicap or line up the rather limited licenses that are there already. About 12 operators there. Given the retail infrastructure versus the population is still quite modest, even from a medical alone standpoint. Can you give us any color on what you think the strategic considerations are to get off the ground running there? Is it having enough capacity built up in advance? Is it the actual locations of your retail versus your peers? Just trying to get some more color on that market, which everyone expects at some point in the next six to nine months here to open up. Sure, Matt. It's Anthony, I'll take that one. Look, I think it's all of the above, right? You've got a very dense state, surrounded by a lot of other markets. Certainly you need the product to open the store. At the same time, given that the medical program really didn't get off the ground with any real substance, and it took a lot of time. Cannabis is still a nascent story when you're sitting down with some of these local regulators. There's a lot of education that has to take place within these towns to make sure they understand kind of what we do and how we do it. In that regard, that's why I think you probably see the, I don't want to say slowness, but it's taking time for people to kind of operationalize their businesses. For us, it's a state that we're very focused on because, look, we see the density, we see the opportunity, and while it's a heavy lift to get things off the ground, we think long term, it's going to be a fabulous market. Just a follow-up then I guess on a market basis. One of the markets you guys aren't in that it wouldn't be material to your overall operations in isolation, but one that has a very favorable infrastructure is Arizona. Is that something you guys have considered? I know the multiples for some of these assets that have gone have been quite lofty, but again, a market that just sort of opened up for rec. Is that something you guys have actively been pursuing or a market you're interested in entering at any time soon? Hey, Matt, it's Ben. We've looked at it. We've studied it. We know the operators, good respect out there. I'll just show you the card. We think there are better places for us to put our capital, but if there's something super cheap and super great, and they need our brands and our products, and it's a great return on invested capital, you have our phone number. That's really the attitude around here. We think there are, for our business, who we are, what we're targeting, it's not at the top of the list. Okay, thanks all. Thanks, Matt. Thanks everybody for joining. We'll be back with the first quarter results in May. Have fun. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.