Good day and welcome to the Green Thumb Industries First Quarter 2025 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. On today's call, management will provide prepared remarks, and then we will open the call up to your questions. To ask a question, analysts may press star then one on your touch-tone telephone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Shay Caplice, Director of Communications for Green Thumb. Please go ahead. Thank you, Bethy. Good afternoon and welcome to Green Thumb's first quarter 2025 earnings call. I'm here today with Founder and CEO Ben Kovler, President Anthony Georgiadis, and Chief Financial Officer Matt Faulkner. Today's discussions and responses to questions may include forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from those statements. These risks and uncertainties are detailed in the earnings press release issued today, along with the reports filed with the U.S. Securities and Exchange Commission and Canadian securities regulators, including our most recent annual report filed on Form 10-K. This report, along with today's earnings 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, Green Thumb will refer to non-GAAP financial measures, including EBITDA and adjusted EBITDA. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in our earnings press release and SEC and CDAR plus filings. Please note that all financial information is provided in U.S. dollars unless otherwise indicated. Thanks, everyone. Now, here's Ben. Thank you, Shay. Good afternoon, everyone, and thank you for joining our First Quarter 2025 conference call. While we only talked a short while ago on our Fourth Quarter conference call, it certainly feels like a lot has changed. The macro uncertainty created by the tariffs has ripple effects in many places, and there's an elevated sense of angst for businesses and consumers. In addition, we have the early clues where the current federal government is leading on traditional cannabis reform. Despite the tariff fears, demand for THC remains at an all-time high, while pricing pressure persists in many markets. As we have discussed before, when pricing is down 20%, our team must deliver 25% more units to break even. You can't escape that math, so I want to give a major shout-out to our team who managed to beat last year's strong first quarter revenue even in this environment. First Quarter 2025 revenue came in at $280 million, about $4 million greater than the comparable period last year. Adjusted EBITDA was $85 million, or 31% of revenue, and our first quarter cash flow from operations was $74 million. As we've said repeatedly, we built our business to succeed regardless of federal change. From what I can see, that change is not on the agenda for the Trump administration. The DEA has historically not been friendly to cannabis, and the nominee to head up the agency, Terry Cole, was pretty cagey about rescheduling at his recent congressional hearing. Of course, there's always a chance for change, and this administration probably increases the odds of a left-field event, but we certainly can't bet on that. We can bet on our balance sheet. I believe we will continue to succeed even with an apparent deck of cards stacked against us. When the cards are stacked against you, you can either resign to death or choose a different path, an alternative reality which includes success. We've chosen the latter, and therefore we are continuing to evolve as we change our game. We are forging new paths that can realize the value we have created while staying true to our mission. Fortunately, we have the capital resources and a strong balance sheet that we believe will support our long-term plan over the next four years and beyond. What keeps us focused is how we can optimize the long-term opportunity related to consumers. For example, alcohol has long vied for space in consumers' wallets, but the tide of Americans' preferences is clearly turning. Hangovers might be temporary, but alcohol's lingering impact on health is not. Consumers are taking note. Alcohol consumption is declining, especially among younger adult consumers. This gives us a long runway for future engagement as THC drinks gain momentum. The THC beverage category is in its early stages of mainstream popularity, and we are bullish on its opportunity as a legal product and are encouraged by both the data on the ground and our position in the space. Our job right now is to continue connecting our top-rated brands like Rhythm, Incredibles, Bebo, and Dog Walkers to satisfying and exciting customer experiences. For example, a few weeks ago, we kicked off our Rhythm Bud Ball Summer Series in New York City for the first time. Bud Ball celebrates the hard work and contributions of cannabis professionals while showcasing the Rhythm lifestyle. We are looking forward to sharing that connection between cannabis and music to more Americans across the country as our brand continues to pop up at mainstream music and lifestyle events this summer and beyond. Bud Ball Philly is next week featuring musical guests, Philadelphia's own The Roots. Hope to see many of you at that event. Our team has worked long and hard to construct a foundational distinction for Green Thumb. That includes we have an incredible portfolio of highly regarded products and brands and the innovative drive that attracts great and like-minded partners. We have a relentless team who shows up every day with a genuine commitment and love of the plant. We have a set of very productive assets and a strong position in states where the launch of adult use sales is coming soon, like Minnesota, Virginia, and Pennsylvania. Our ability to generate cash and maintain a strong balance sheet gives us the financial flexibility to build on our track record of high conviction capital allocation. Finally, we have a seasoned and visionary group of leaders who look to the horizon and a team that is dedicated to both our success and our mission. Every day is day one when you play to win, and you win by keeping your head down and executing every day. With that, I'll turn the call over to Anthony. Anthony? Thanks, Ben. You just heard the headline numbers. After a record-setting 2024, our team rolled right into the new year without missing much of the beat, generating $280 million in revenue and $85 million in EBITDA in the first quarter. That's a strong start and reflects our team's hard work and execution mindset. Let's take a moment to walk through some of the key developments of the quarter and what we expect as the year unfolds. First, expansion. In the first quarter, we invested $30 million in CapEx, opening new stores in Florida and Nevada, and continuing to invest into our wholesale footprint in New Jersey and Connecticut. Over the course of 2025, we expect to open, relocate, or remodel between 10-12 stores. We're also making selective investments in our CPG infrastructure, all with an eye toward improving capacity and efficiency. All in, we expect capital spending for the year to approximate $80 million, about flat with last year. Second, product innovation. Our branded innovation teams are doing a nice job staying ahead of the consumer. We've been scaling our Rhythm Remix pre-rolls, which launched in Illinois last year, and we're excited about the rollout of our Rhythm Liquid Diamond baseline. We've also refreshed our Good Green brand with a new look to better meet the needs of value-conscious consumers. Innovation is a moving target, and our team recognizes its power given the velocity of the industry and consumer trends. Third, CPG market share. Retail competition continues to heat up with more stores opening in many of our markets. Our strategic response has been to build a strong, resilient CPG business. In key markets like Illinois, New Jersey, Pennsylvania, and Maryland, our branded products continue to climb the rankings, led by the strength of Rhythm Premium Flower. Brand loyalty isn't something you can manufacture overnight. It comes from consistency, quality, and trust, and we're working hard to earn and re-earn that trust every day. Fourth, adult use opportunities. Given the somewhat limited near-term growth prospects across our marketplace, the company remains focused on its adult use opportunities in Minnesota, Pennsylvania, and Virginia. Minnesota is expected to launch adult use sales later this year, and we plan to be ready. We're also investing time and effort in Pennsylvania and Virginia, advocating for responsible adult use legislation. We've learned over the years that patience and persistence are helpful traits in the political game. Fifth, tariffs. At the moment, there's no clear picture on what tariffs might mean for our business. will know more as policy takes shape, but in the meantime, our procurement and supply chain teams are doing what they can to insulate our operations and minimize financial impact. Last, our outlook for 2025. As we look ahead, our expectations on regulatory reform remain grounded in reality. We said before that we do not expect sweeping federal reform anytime soon, and nothing we have seen recently has changed that view. We all listened to the same DEA hearing you did, and we remain confused by the industry's false sense of optimism. At the same time, we are continuing to see pricing pressure in several of our markets: supply-demand imbalances, new competition, unregulated products being sold to temps, and the consumer who is watching their wallet are all contributing factors. We have tools to manage this: operational efficiency, brand strength, and scale among them. We also recognize these tools have limits. Despite these concerns and overall industry malaise, we remain confident in the following: one, our team. Results do not happen by accident. We have built a culture that rewards merit, challenges assumptions, and puts in the work. That is not always glamorous, but it is what moves the needle over the long term. Two, our balance sheet. Throughout our journey, many questioned our conservative financial approach. We are not moving fast enough was the line we often heard in the early days, but at Green Thumb, we understand the power of compounding hard work, thoughtful strategy, and disciplined financial management. Our collective decisions along the way and the compounded impact of those decisions have provided the company with the financial flexibility to spend in the markets and categories where the greatest opportunity exists today. We cannot understate the importance this optionality provides to our shareholders. Third, consumer trends. It's hard to ignore the big picture. Alcohol use is declining, and demand for THC is rising. We've long believed the demand for cannabis products would accelerate, and we're now seeing real evidence of that shift. With new product formats like THC beverages gaining traction, especially in traditionally conservative regions, we're increasingly bullish on long-term category growth. The tidal wave of demand that Ben has been talking about since the day I met him is big and getting bigger by the day. In terms of final thoughts, despite the noise, the competition, the regulatory policy hurdles, and many others, we're well positioned. We've got an incredibly talented team, a consumer who loves our products, and a growing market in the largest economy in the world. We love the setup and are humbled to have positioned ourselves to be in the center of it all. With that, I'll turn the call over to Matt. Thanks, Anthony, and a hello, everyone. In the first quarter, we delivered $280 million in revenue, a 1% increase compared to the prior year period. Revenue was driven by increased consumer packaged goods sales. Overall, retail revenue declined 3% versus the first quarter of 2024 due to significant pricing pressures across all markets. First quarter 2025 comparable sales for stores open at least 12 months increased 5% versus the prior year on a base of 90 stores due to continued pricing pressures. Consumer packaged goods net revenue for the first quarter 2025 increased 14% versus the prior year period, driven by continued growth in New York and the addition of adult use sales in Ohio. Looking forward, we expect second quarter sequential revenue to be flat due to the pricing environment. Gross profit for the first quarter was $143 million, or 51% of revenue, down from $145 million, or 53% of revenue year over year. The decrease in gross profit was primarily driven by price compression. Turning to OPEX, selling general administrative expenses for the fourth quarter were $101 million, or 36% of revenue, compared to $71 million, or 27% of revenue for the first quarter last year. The increase in total expenses was primarily attributed to a $16 million favorable fair value adjustment associated with the company's contingent consideration liability recorded during the prior year period. SG&A excluding depreciation, amortization, one-time transaction costs, and stock-based comp, which we refer to as normalized operating costs, approximated $69 million compared to $64 million in the first quarter of last year. The increase year over year is mainly attributed to the 11 incremental retail stores. The company generated net income of $8 million, or $0.04 per diluted share, down from net income of $31 million, or $0.13 per diluted share in the prior year period due to the fair value adjustment of contingent consideration last year during the quarter. Adjusted EBITDA, which excludes non-cash stock-based compensation and other non-operating costs, was $85 million, down from $91 million for the first quarter of 2024. We expect to experience continued pricing challenges that will pressure margins and adjust EBITDA to below 30% in the coming quarters. We ended the first quarter with a strong balance sheet, including cash of $211 million and working capital of $258 million. Cash flows from operations for the first quarter came in at $74 million. In conclusion, we are pleased with our team's performance so far in 2025 and appreciate their ongoing commitment and contribution to Green Thumb. Together, we remain committed to driving long-term growth while ensuring improved capital allocation and cost efficiency. We also appreciate the trust and confidence of our shareholders and look forward to providing further updates in our next call. With that, I will open the call to your questions. Operator? We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. We ask that you limit yourself to one question. At this time, we will pause momentarily to assemble our roster. The first question today comes from Aaron Grey with Alliance Global Partners. Please go ahead. Hi, good evening, and thank you very much for the question here. We'd like to take a high-level one in terms of capital allocation and how you're thinking about shareholder returns. You have a healthy balance sheet on pace for another year of strong cash flow generation. Just given the current stock price, how best to think about capital allocation and shareholder returns? You've utilized the buyback, but curious if the depressed stock price offers more opportunity to get more aggressive there, or if you're seeing some other opportunities, be it M&A or otherwise. Thank you very much. Yeah, hey, Aaron, Ben, I'll take that. I would say, look, we're trying to be opportunistic in terms of the stock buyback. I think the capital allocation sort of matrix is looking like OPEX and can we fund the business? Do we have enough money to cover the debt? That was the year-ago plan. Do we cover the CapEx and what's needed to invest in the business to grow? We're out there looking at M&A. Keep in mind, we made a pretty strategic investment in the fourth quarter last year and then funded that. We're out there looking. I think in the buyback, it's sometimes a little bit tricky to look at. You've got to be a little careful in terms of the size. With our limits in terms of data liquidity and things like that, trying to see the bigger picture and take a little bit more of a longer term, meaning even if we buy up to the max in the open market, there could be a chance bigger blocks show up. There are larger blocks of stock out there that could come available for sale that we would be very interested in buying as a strategic asset for the business and the best interest of shareholders. There could be an opportunity to collect $0.75 when playing in one way only gets us a nickel or a dime. We certainly have a balance sheet. We are very comfortable with it. We are looking at it, and we are answering the phone a lot. I would say the M&A discussion has evolved. There are assets we are interested in where we're listening to what's out there, and we're watching what's happening. The capital markets are pretty bleak, and we know our cash is a unique asset, and that should help all of us, including our shareholders. Okay, great. Thanks for covering that, Ben. I'll jump back in the queue. Sure. The next question comes from Matt Bottomley with Canaccord Genuity. Please go ahead. Yeah, thanks very much. Good evening, everyone. Ben, maybe I'll just piggyback off of what you just sort of mentioned in your last couple of sentences. Do you have any more color on whether the mix is more geographic, innovative pipeline versus CPG? What types of things are out there? I think that there's obviously a pretty big advantage here given your balance sheet, that if there was something worthwhile doing, you guys are probably best situated to take advantage of that while everyone else is, I think, stuck with refis and some of the other things that are plaguing the sector right now. I think at least from the investors I talked to, a little more granularity on maybe the classifications of what M&A looks good to you would be helpful. Sure. It's a good question. Thanks, Matt. I agree. I'm just a little hesitant to give much detail. I would say we're sticking in the U.S. The phone rings a lot. We're not looking international, but we're interested. We're getting smarter on it, but that is not down the center of the plate for us. There's not a fancy amount of math going on. We don't want to inherit other people's big problems. We understand our business, and in the state we are in, we can get better, meaning we can increase our margin, we can get better. Pricing is coming down, way down. You mentioned things like the refi risk. We see material issues out there for players in the industry. We've been seeing it for a long time. It continues to actualize. We've written down numbers, and people were raising eyebrows at it. Now the numbers are coming in. We will see. It is nothing transformational. There is not some big company we are eyeing for some groundbreaking piece of news. I would say there is some of that. There are also deals that are forward-looking, where we think the industry is headed, that we can play around in. Sorry I cannot be more specific, but we are answering the phone. Any of the people you were talking to that are in dire straits, tell them to call if they think something makes sense for us. Okay. Thanks, Ben. Thank you, Matt. The next question comes from Federico Gomes with ATB Capital Markets. Please go ahead. Hi, good evening. Thanks for taking my question. Just a question on the same store sales decline of about 5% this quarter. I think that's a bit of an acceleration from what we've seen over the past two quarters. Curious if there's any specific state that may be driving that acceleration, or if it's more broad-based, and if there's anything here you can do to reverse that trend, any initiatives that you may have in place specific to retail that you think you can implement, or maybe there isn't much to do and just waiting for these markets to normalize. Yeah, Federico, Anthony here. I'll take that. Good question. Look, it's a combination of really two things. Number one, greater competition at retail. As stores open up, obviously, that's less of the pie. The pie just gets sliced into more pieces. The other component is that, and Matt mentioned it, it's prepared for markets, it's just the price erosion. Right? As we've seen pricing come down, while we've seen transactions and unit volumes go up, total net revenue has come under pressure. Holistically, those are two of the primary drivers. When you zoom out and look at it, if we wanted to get more granular in terms of the markets where we're really seeing it, Illinois and New Jersey are two that kind of stand out in terms of where we've seen a lot of new competition, as well as some relatively sizable prices within the last six to nine months. Thank you very much. This concludes our question and answer session. I would like to turn the conference back over to Ben for any closing remarks. Thanks, everybody, for joining. I think it's certainly a sign of the times on this call and the participation. We're here. We're working. We'll talk to you in 90 days. Thanks, everybody. The conference is now concluded. 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