Thank you for standing by. This is the conference operator. Welcome to the Vext Science First Quarter 2025 Financial Results Conference Call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one, on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then zero. I would now like to turn the conference over to Priyan Chakraborty. Please go ahead. Thanks, Operator. Good morning, everyone, and thank you for joining us today. Vext's First Quarter 2025 Financial Results were released earlier this morning. The press release, financial statements, and MD&A are available on SEDAR+ as well as on the Vext website at vexscience.com. We would like to remind listeners that portions of today's discussion include forward-looking statements and that forward-looking statements are included in today's filings. There can be no assurance that these forward-looking statements will prove to be accurate or that management's expectations or estimates for future developments, circumstances, or results contained therein will materialize. Risks and uncertainties that could affect future developments, circumstances, or results are detailed in the MD&A and Vext's other public filings that are made available on SEDAR+, and we encourage listeners to read those risk factors in conjunction with today's call. As a result of these risks and uncertainties, the developments, circumstances, or results predicted in forward-looking statements may differ materially from actual developments, circumstances, or results. This call also includes non-IFRS financial information, and such non-IFRS financial measures are subject to the disclosure and reconciliation included in our press release disseminated earlier today, as well as the MD&A. Forward-looking statements made during this conference call are made as of the date of this call. Vext disclaims any intention or obligation to update or revise such information except as required by applicable law. Vext financial statements are presented in U.S. dollars, and the results discussed during this call are in US dollars. I will now pass the call over to Eric Offenberger, CEO of Vext. Thanks, Priyan. Good morning, everybody, and thank you for joining our First Quarter 2025 Financial Results Conference Call. I'm joined today by Trevor Smith, Vext's CFO. I am pleased with Vext's performance in the first quarter of 2025. Our results validate the strategy we've been executing over the past several quarters, one that prioritizes operational discipline, capital efficiency, and a focus on free cash flow generation. During our Q4 update, we indicated that the business had reached a turning point. Our Q1 results confirmed that shift with momentum building in Ohio and translating into stronger financial performance. We generated exceptional growth in Quarter One, with revenue increasing to $11.6 million, thanks to our continued strength in the Ohio market. Even more importantly, we generated robust operating cash flow of $3.1 million, a significant achievement that nearly matches our entire operating cash flow for 2024 as our momentum picked up in the fourth quarter. Our cash flow margin exceeded 26%, placing us among the top cash flow producers across U.S. public multi-state cannabis operators, including several significantly larger companies based on all reported financial metrics we've analyzed. Cash flow margin is a key operating metric for Vext and one we expect to continue to be a leader in amongst U.S. cannabis operators for the foreseeable future. Many MSOs are vertically integrated. That alone is not a point of differentiation. However, Vext model is designed from the ground up with retail at the forefront, with upstream cultivation and manufacturing optimized to get products onto our own shelves efficiently. This ensures we are not exposed to long-term developable wholesale markets and gives us far greater control over scaling and margins. Turning first to Ohio, Ohio continues to be a high-potential market for us and one where we are executing well. In Q1, the state reported $256 million in adult-use sales, up 7% sequentially. While Ohio demand remains strong, the adult-use market is experiencing pricing compression similar to trends observed in more mature markets like Arizona. With consumers increasingly price-sensitive, operators must remain disciplined on margins and optimize product mix. This is exactly as we've outlined to the investment community over several quarters. It happens in every market. It's economics 101, and it's why we see wholesale as only a very short-term opportunity at market entry as retail has scaled. Our disciplined retail-first strategy is resonating with consumers and producing strong unit economics. Vext consolidated retail sales in Ohio grew by 7% in the first quarter of 2025 compared to the fourth quarter of 2024, underpinned by continued momentum at existing locations and the successful relocation of our Jackson dispensary in February. This new centrally located facility doubled our retail and inventory capacity and introduced a drive-through feature, enhancing both customer experience and throughput. These results reflect more than just market tailwinds. They are a result of operational execution and strategic investment. I'm very proud of the team's efforts, which have led to our stores increasingly meeting or exceeding the state average. Third-party wholesale in Ohio increased by 92% in quarter one, 2025, compared to quarter four, 2024. As I have previously outlined, while wholesale is not a core focus, Ohio's regulations for manufacturing and cultivation create short-term opportunities, and we are positioned to benefit from that growth. To restate our strategy, we remain centered on retail. In Arizona, approximately 90% of revenue is generated through our retail operations, and we expect Ohio to follow a similar trajectory, with retail being the dominant revenue driver, potentially as early as 2026. Shortly after the quarter ended, we completed the acquisition of two dispensaries from Big Fern, adding retail locations in Athens and Jeffersonville. Sales at these locations grew 18% sequentially in Quarter 1, even before consolidation, and we expect to consolidate them starting in Quarter 2. With these additions, our Ohio retail footprint has doubled to four locations, and construction is underway on a fifth store in Portsmouth, expected to open in the second quarter. Our capital-light model allows us to build out efficiently, both in terms of cost and speed, enabling us to bring stores online quickly and begin generating cash flow almost immediately. This approach drives attractive returns on capital and gives us a meaningful advantage as we scale. With full vertical integration and a clear path to expanding our retail presence to the state maximum of eight stores, we expect Ohio to remain a key growth engine for Vext, driving revenue, margin, expansion, and cash flow over the long term as we continue to drive same-store economics and efficiencies across our platform, just as we have done in Arizona. Turning to Arizona performance now. The Arizona market remains pressured, with total first quarter 2025 sales down 13% over the prior year according to state data. Against this backdrop, Vext's Arizona sales only declined 8.5% over the prior year, leading to further market share gains. Our strategy in Arizona has been to drive traffic to our two dispensaries through targeted marketing campaigns while maintaining strict cost controls across retail, manufacturing, and cultivation operations. This was supported by continued improvements at our Eloy cultivation facility, where average yield and potency now exceed industry averages. While we continue to see the Arizona market returning to stability, consistent growth over the long term, and would like to expand our retail footprint further, this isn't a near-term priority. Pricing expectations remain misaligned with current market realities. We expect more creative opportunities to emerge as weaker operators exit the market, and we'll evaluate them as they arise. In closing, Vext is operating from a position of strength. We've built a stable, scalable platform in two key markets, each with different growth profiles but solid fundamentals. With a solid capital structure, consistent cash flow, and clear visibility into near-term growth, we're positioned to expand in Ohio while systematically reducing debt. Rather than chasing brands or overbuilding infrastructure, we are executing a focused retail strategy to deliver strong unit economics and sustainable returns. Establishing Vext as one of the most operationally efficient and strategically disciplined operators in the industry, even when compared to others who are significantly larger in size. For the remainder of our year, our priorities are clear. We expect to begin consolidated reporting of the two Big Fern locations in Q2. In Ohio, we are focused on accelerating growth by expanding our retail footprint and serving both medical and adult use customers. In Arizona, we will continue to optimize operations to preserve margin and drive efficiencies. Across the business, we remain committed to generating free cash flow, strengthening the balance sheet, and creating long-term value for our shareholders. In recent years, the US cannabis industry has been driven more by narratives than by performance, with many operators pursuing rapid growth through expensive, unsustainable financing. However, in the long run, it will be disciplined execution, prudent capital allocation, and cash flow that will ultimately distinguish the winners from the rest. With that, over to Trevor for a quick review of the financials. Trevor? Thanks very much, Eric. 2025 is off to a strong start. In the first quarter, we generated revenue of $11.6 million, up 38% year- over- year. This performance was primarily driven by sustained growth in adult-use sales in Ohio, which continued to offset market headwinds in Arizona. As additional Vext dispensaries come online during the year, we expect Ohio to remain a key catalyst for top-line growth. From an Adjusted EBITDA standpoint, this was our strongest quarter in over two years. Adjusted EBITDA was $3.4 million, building on the $3.2 million generated in Q4. Our first quarter 2025 Adjusted EBITDA margin of 29% was one of the highest reported by U.S. public multi-state cannabis operators, including several significantly larger companies. It is important to note that this margin was achieved despite carrying costs related to the two additional Ohio dispensaries we acquired on April 1, without yet being able to consolidate revenues from those same locations. As we begin to consolidate those additional dispensaries starting next quarter, we expect meaningful upside to both top-line and margin performance. Operating expenses remained flat compared to the same period last year, and we expect them to remain relatively stable going forward. As a percentage of revenue, operating expenses declined meaningfully, from 54% in Q1 2024 to 38% in Q1 2025. This improvement reflects a sharp focus on cost discipline, with lower SG&A expenses partially offset by amortization tied to our Ohio acquisitions. As new dispensaries are consolidated and we continue to generate solid results at existing stores, we expect to benefit from additional operating leverage. Coupled with relatively low maintenance capital requirements, this positions Vext well to generate significant free cash flow going forward. Cash flow from operations reached $3.1 million in the first quarter of 2025. This step change in cash flow, which began in Q4, demonstrates our improving financial performance. We expect this positive trajectory to continue through 2025 and into 2026. At Vext, we remain focused on directing our resources towards the markets where we see the strongest potential for long-term value creation. As part of that strategy, our wholly owned subsidiary, Vape in Kentucky, along with its local partner, has entered into an agreement to sell its medical cannabis processing license in Kentucky for gross proceeds of $880,000. The transaction, which is anticipated to close in Q2, will help strengthen our balance sheet and support the continued build-out of our Ohio retail footprint. Vext ended the quarter with $4.8 million in cash. With anticipated growth in both revenue and cash flow for the rest of the year, we do not anticipate any capital raises, whether for operational expenses or for the Ohio retail expansion plans. For the remainder of the year, our focus will remain on generating free cash flow, paying down debt, and positioning Vext for continued growth. Our vertically integrated model enables us to optimize price, preserve margins, and remain agile in the face of challenging market conditions, and we are confident that our disciplined approach will enable us to drive strong financial performance in 2025 and beyond. Thanks, everyone, for joining us for our first quarter 2025 financial results conference call. I'll now turn it over to the operator for your questions. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any key. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question today comes from Matt Bottomley with Canaccord Genuity. Please go ahead. Good morning, everyone. Thanks for the questions here and good stuff on the Ohio progression that we're seeing. I'm just wondering if you can unpack that a little more with respect to some of the dynamics that you have, given that the two states that you're in are quite different. We know that in Arizona, we'll get to the more typical seasonal lows when the weather gets hot in the coming quarters, but then again, solid progression in Ohio here. That on top of your exposure to what we're seeing in the Ohio pricing pressure, I mean, I appreciate the guidance that you're expecting continued overall consolidated top-line progression, but any noise or maybe peculiarities that you wanted to point out just in kind of forecasting this the rest of the year, given that some of these things move in opposite directions? Matt, thanks for the question. Trevor can elaborate a little bit more on the numbers side of it, but from a commercial standpoint, it's no different to us whether it's Arizona or Ohio. We have the same business philosophy and the same focus of what we're doing as far as running the business and the operation and the team we put in place. We participate in the market. We don't set it. We control our costs and the things that we can control, and the top line will start to take care of itself, and the margin profile remains relatively consistent because of the fact, as we've said, we don't necessarily think it's all brand-driven. We think it's more of supply-driven on a commodity basis, and what we put into the store, if we can control as much of it through our own footprint, our own production, then that gives us that protection we're seeking. We think the top line's relatively stable in Ohio right now on the resale price, and we think it'll stay that way. Got it. Maybe just further to that on the wholesale side of things in that market, it clearly has been a pretty good growth driver for everyone that's been there from the onset of adult use, but every market has its volatility once the supply-demand dynamics start to progress even further. Anything you can share with respect to the cadence of some of these price declines on the wholesale, regardless of how material it is to you guys, just for our information? Yeah, you're seeing that, but again, it's not significant as it was when it originally started. I mean, it's kind of stabilized a little bit more of where the pricing's finding its equilibrium at this point in time. As more stores come online, I think you'll see some of that supply get balanced. As we talked two years ago and have continued to talk about as we made the investment in Ohio, we thought that structure fit really well for the benefit of the consumer and the benefit of the investor that that market really had it right. We don't see them changing, or at least not in the immediate, where that would make that analysis different. We think that the pricing has pretty much found its point on wholesale. You can get supply, so that's good. There's not a mismatch right now. Got it. Just last one for me on the Arizona market. Is there any visibility you have with respect to anything meaningful with respect to cultivation coming offline from some of your competitors? Sort of macro statement there. Also kind of peculiar, just on the M&A side of things in that state, and I guess it applies to others as well. We are four years off now of kind of the valuation highs, but we are hearing on all these calls that the phones are ringing when it comes to maybe strategic tuck-in of M&A when it comes to one stores or for some operators, small exposure in other states. It just seems like, particularly in the private sector, there is a stubbornness with respect to top-ticking where valuations used to be or certainly a lot higher than they are today. It has been some time now, so I am just wondering if you think there is anything in the near future where there is going to be a capitulation just given the lack of capital for a lot of these smaller players in a lot of markets. I think from our perspective, the brokers we talk to and that cultivation might come offline, but it seems to find somehow to come back online. There are still several for sale in Arizona. If you wanted to be a cultivator, you could do it. People still think that they can come in and grow better than somebody else and do it. We still do not see that. We see it as a distribution play. If you have the retail storefront, you can control it as long as you keep it balanced. As far as private operators, I think a lot of them might be getting tired of the day-to-day battle of the business. If they do not have the cultivation and the fixed cost overhead, then they are generating cash flow. Depending on if that is their primary source of income and livelihood, I think they are thinking they will wait it out. That is kind of what we have seen. We do think, and we have made that comment in our MD&A and stuff, that we do think that at some point in time, that might change and it might become accretive. We want our balance sheet and our financials to be in a position so that we can execute on that. Trevor might have some more color on that. I will let him give you a little bit on it. No, I think Eric nailed it. We're waiting on the deals to align with market realities, and we're waiting for capitulation to start occurring. We're optimistic it'll happen. Thief in the night comes to mind. I think once it starts, it'll really go, but we're just not quite there yet. Okay. Thanks, guys. I'll leave it there. The next question comes from Pablo Zuanic with Zuanic & Associates. Please go ahead. Thank you. Good morning, everyone. Maybe in the case of Ohio, if you can just remind us a little bit about what is left in terms of expansion and the monetary side of it in terms of capEx and payments that need to be made. Specifically, I'm talking in terms of production. I know you're trying to balance demand and supply, but is there anything else left in terms of expanding the production side of Ohio and how much is that going to cost? Then in terms of the retail side of things, after the Fort Smith store, what is left this year and what type of payments you will need to make, either in cash or deadline? Just a reminder of that, if you can spell it out in more detail, please. Thank you. Yeah. After the Fort Smith store, we can't announce where the other stores are at. At this point in time, we're still doing the stuff with the state of Ohio, but the pins are in the map. One's going to be in Columbus, one's going to be in the Cincinnati area, and the other one we're getting nailed down. We'll hit through the eighth. We anticipate having seven for sure open by the end of the year, given what we know at this point in time, and the eighth one possibly by the end of the year, early into 2026. As far as production capacity, the manufacturing, we have fairly unlimited ability there. On the cultivation side, we're considering what expansion looks like there and doing it in stages. The facility has the ability to expand, and we built it with the intent that it would be modular and we could expand as we need it. We are contemplating that right now with the idea that it would take us probably nine months to a year before you would see anything. We are contemplating that and looking at the market, but we will do it like we did in Arizona. We will go slow with it. If you guys remember, in Arizona, we only built out half of a building, closed the facility, and sold it so that we keep that balance. We are projecting it, and that is really an area that Trevor monitors and oversees a lot. Got it. In terms of payments, is there anything left for the Fort Smith store? What are we talking about for the other three stores in terms of spend, whether, again, it is debt notes or cash that you are paying for? Nothing left on acquisition. So no licensing payments, nothing. All that happened on April 1. In terms of build-out, we'll call it 30% of the way through the $4 million guidance we gave on expansion capEx previously. So that's underway. We really appreciate our construction partner out there. Worked with them for a long time and have no reason to believe there'll be any delays or significant overruns. Got it. Can you talk, I don't know if you can break down a bit more the performance of the Ohio stores in terms of, based on your numbers, how do they perform compared with the state average? I think you mentioned your retail, your two stores grew 7%, but the ones that you are consolidating now were up 18%. Why that difference in performance? If you can just give more color. Thank you. Yeah. Right now, three of the four stores perform at state average or right within that band that we would consider acceptable. The fourth store is really more isolated or off. It's in Jeffersonville, which is doing the large LG Honda battery plant. We think that as that comes online and we potentially get some ability to sign and stuff along those lines, that store will pick up. That's what we consider to be more of a rural store. From our perspective, three of the four are performing where we want to see them. The fourth one has got a great team. It's got a good location and everything. We just can't attract through letting people know where it's at. It's right off of a highway. If we could sign it, that would be a little bit better, but we're not concerned about it at this point in time. Just one more in Ohio. I know we keep waiting for the state to come out with the final adult use rules. Where are we with that, or we don't still have good visibility in terms of what the rules will be and when it happens? That's a good question. I'll give you what the in-house counsel told us yesterday at the board meeting. He said that there are three pieces of legislation moving through the Ohio legislature on this stuff. Two of them are very similar, and the third one has some nuances and stuff along those lines. We still do not have visibility yet of when they're going to enact something or accomplish anything. As we've always talked about this, Pablo, that's beyond our control. We can just monitor. We're just staying focused on what we can control and what we can do in the business and making sure we go to work every day, open up, take care of the customers, manage the inventory. Just the basics is what we're focused on. When that comes in, it does not look like anything's going to hurt us. There's some stuff on the hemp side that's positive out there, but again, doesn't really impact us on a day-to-day basis. Got it. Thank you. The next question comes from Andrew Semple with Ventum Financial. Please go ahead. Thank you. And congrats on the solid Q1 results here. First question would just be going to some comments on the prepared remarks. You noted a big increase in wholesale in Ohio this quarter. I'm also piecing that together with margins a bit lower than the prior few quarters. We had inventory down a fair bit Q1Q. Would it be fair to say that you're cleaning up some inventory balances in Ohio? And if that is the case, is that activity done now? Yeah. I think that's a fair statement. Inventory turnover rate is a very important metric for us. It's how we've managed to maintain cash flow in Arizona despite declining headwinds. Ohio is going to have the exact same expectations. We start on making sure the yields are right, and we make sure we turn it correctly. To some extent, the Ohio wholesale is taking advantage of market timing and opportunity, but it's also the lever to get rid of the overproduction or at least the excess production from the improved metrics in advance of the new retails coming online. Got it. That's helpful. Just on operating costs this quarter, that's the lowest we've seen on operating costs in several quarters. Did you take any actions with respect to that? How are you feeling about being able to hold operating costs at where we saw them in Q1 levels? How should we be thinking about that for the remainder of the year? I think you should think really, Andrew, of how we operate the business. From my perspective, I never like to do any reductions in force, and I never really have. We manage that consistently day in and day out. What's happening is the process and the models that we've built allow for expansion and to do it relatively fast and relatively economic. We run pretty lean. We have a lot of internal systems and data models that just basically operate based on the business. For us to add these additional dispensaries in Ohio is not going to cost us anything on the support side or on the production side. It's just going to be what we have to staff the store with, the direct labor. We watch variable versus fixed quite a bit and just basic stuff. I've always kind of told my team, "Look, if I ever have to come to you about a staff reduction, then you haven't really been doing your job," because that's kind of how we look at it. We watch that. It's just now the revenues get picked up for what we had to put in as the base, as Trevor kept telling everybody is we're spending now a little bit getting ahead of those stores opening or Ohio going to adult use. You're just seeing that now accelerate. Great. Maybe one more, if I may. Gross margins have been pretty volatile in between quarters here. Trevor, I know you mentioned in your prepared remarks that you are expecting margins to move higher with the consolidation of the two additional Ohio stores. Do you have a level where you think that margins might settle in at? Would you be able to share that with us today? It's up to a little bit. Look, we also have no uncertain tax liabilities on our balance sheet. We have one of the best cash flow margins in the industry, and we have one of the worst gross margins in the industry. For us, gross margin isn't really happening in the traditional sense given the tax regime and tax limitations. As we have more stores and as we're able to recognize more of the Ohio cultivation output as retail revenue as opposed to wholesale revenue, you'll see some margin improvement. Okay. Thanks for taking my questions. I'll get back into Q. The next question comes from Paul Penney with Partner Capital Group. Please go ahead. Good morning, gents. Great quarter. Can you guys disclose your gain on your Kentucky operation sale, and are we comfortable going forward to stay with the dual-state focus in Arizona and Ohio? Yeah. The gain on Kentucky, we're still working through those numbers, Paul. We don't think it's going to be anything material or significant from that standpoint. Cash, obviously, is significant, but as far as a book gain, no, don't really see that. I wouldn't anticipate that. As far as staying on that footprint, yeah, for everything we see in front of us today, we don't have anything pending. That said, we're focused on Ohio growth and everything. If some opportunity presents itself and you have a balance sheet that will allow you to do those types of things, sure, we're going to take advantage of that and be opportunistic. Again, it's more of what we're seeing, what we're hearing, what we're listening to, and keeping everybody focused on, "Let's get those stores open in Ohio. Let's pay down some of the debt. Let's adjust the balance sheet accordingly and continue to finance responsibly and for the long term. We just think balance sheet at the end of the day. A good balance sheet's going to win this game. When there's opportunities, if you got a good balance sheet, you can participate in them. If you don't, it doesn't work unless you're going to go raise equity. Good luck raising equity if your balance sheet's not good. That's how we see it. Very simple. Great. Going back to Arizona, any tangible implications of late for the recent state regulatory crackdown on hemp-derived products? Specifically, can you disclose what your average basket size is today and how that compares to previous quarters? I'll let Trevor take the basket size. He probably knows. I think it's slightly down, but not as much as it historically was versus where it dropped. As far as the hemp side and that, it's too early to tell. I know Total Wine's taken beverages out of their store, and we haven't really heard anything. I do know that there was something that the court ruled on the other day that was favorable where they're supporting the attorney general's position. We think it's going to be a positive. You still have the black market to deal with and all of that. Overcapacity is the biggest challenge in Arizona. Again, we're fortunate. We have really great team members. They know what they're doing. We have good store locations. From the promotion, marketing, operations, they execute. The Ohio team's doing the same thing. We couldn't be happier with the whole team. Great. And then this one, debt paydown for the quarter and plans going forward? That's with Trevor. Yeah. I'll take you back to the financial statements for exact status of each of the loans. I will call out the standby facility. I'm happy to make that final payment next week. That'll be gone on schedule. We're going to continue to pay things off as they come due. As the additional cash flow comes in from the Ohio ramp-up, it's a build-out Ohio retail or pay down debt. Those are the two areas we're hyper-focused on. As we indicated last quarter, we're going to continue to execute on in 2025. Great. Congrats, guys. Good job. This concludes the question and answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.