Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to the Glass House Brands Fourth Quarter and Full Year 2022 Investor Call. I would now like to turn the conference over to Mr. John Brebeck, Glass House Brands Vice President of Investor Relations. Please go ahead, sir. Thank you, JP. I'd like to welcome everyone to the Glass House Brands fourth quarter 2022 conference call for the three-month period ending December 31st, 2022. Listeners are reminded that certain matters discussed in today's conference call or answers that may be given to questions asked could constitute forward-looking statements that are subject to the risks and uncertainties relating to Glass House Brands' future financial or business performance. Actual results could differ materially from those anticipated in those forward-looking statements. The risk factors that may affect results are detailed in Glass House Brands periodic filings and registration statements. These documents may be accessed via the SEDAR database. I'd like to remind everyone that this call is being recorded today, Monday, March 13th, 2023. I would now like to introduce Mr. Kyle Kazan, Co-founder, Chairman, and Chief Executive Officer of Glass House Brands. Kyle, over to you. Thank you, Jon. Good afternoon, everyone, and thank you for joining us for today's call. I'd like to give a special hello to my teammates at Glass House Brands who make great things happen seven days a week. The longtime investors who trust us when we funded our startup operations through a series of private equity funds, and investors who joined after Glass House went public. We thank you all for your trust and commitment. 2022 was a year of tremendous progress for Glass House Brands, and I'm incredibly proud of our team. Over the past several quarters, we've demonstrated the enormous potential of our marquee asset, the SoCal Greenhouse, that is 5.5 million sq ft in size, with 841,000 sq ft currently dedicated to flowering and 420,000 sq ft dedicated to nursery operations that support all three of our farms as well as third-party clone and team sales. This farm puts us firmly in the pole position to be the leader, not just in California, the mecca of cannabis, but the entire U.S., enabling us to consistently produce top-quality cannabis in a highly efficient, low cost, and profitable manner. Almost two weeks ago, we announced the intent to turn on an additional greenhouse at our SoCal farm, capable of producing 250,000 pounds of biomass annually when fully operational. Given that our current annual capacity across all three farms is approximately 300,000 pounds, this would represent a more than 80% increase in production capability. Before we turned on phase one of our SoCal farm, we were frequently asked if we thought the new output would crash pricing, and if we could produce quality flower consistently at that scale. In the third quarter, our first full quarter of production at SoCal, we produced and sold almost 75,000 pounds, supplying all of our own CPG brands, as well as third-party brands and clients throughout the state. Pricing, which had collapsed in the third quarter of 2021, well before we brought on the SoCal capacity, remained so low during this period that it was destructive to almost all cultivators in the state. Even so, the third quarter demonstrated, and the fourth quarter reinforced the competitive power of the SoCal farm, powering a rise in our gross margin for wholesale biomass to 43% in the fourth quarter, up from 36% in the third quarter. This was up from an adjusted 5% in the second quarter before start-up costs from the phase one expansion at the SoCal farm. Our decision to expand capacity at this time is motivated by supply-demand fundamentals, cultivation licensing trends, our production cost, and of course, pricing. Using 250,000 pounds of biomass at an average sales price of $275 per pound adds $68,750,000 of gross revenue. When multiplied by the gross margin from the fourth quarter of 43%, it equals $30 million in additional gross margin dollars. We estimate that it will cost approximately $10 million to fund this expansion. We are considering a number of options to fund it. Given the scale of the expansion and the margins the SoCal farm is producing, we expect to be able to complete the funding rapidly with little to no dilution to common shareholders and to pay the funds back quickly. You can imagine, my interests are aligned with the common shareholders and I'm sensitive to dilution. We don't know of any other company in the California cannabis industry that can turn on an idle cultivation asset in the current market environment and expect it to produce an attractive ROI. We can. As a co-founder and a major shareholder in this company, this more than anything is what makes me excited about the future of Glass House. It is especially gratifying to see current market conditions validate our build for the long-term strategy. Since the time we brought the SoCal farm online, my fellow co-founder, Graham Farrar, has consistently observed that we have been able to sell every pound we've produced. As we closed out 2022 and moved into 2023, demand for our biomass continued to accelerate to a point where we sell our product much faster than we can grow it, as evidenced by our very low inventory on hand. We frequently finish weeks with inventory that represents less than one week of wholesale biomass sales and are increasingly getting calls from brands and buyers who have seen their traditional sources of supply unable to satisfy their needs. With the unusually stormy weather conditions experienced in California over the past two months, supply has been constrained even further. Meanwhile, we have seen a sustained and steady rise in pricing since prices bottomed in July and August. As recently as late last year, discussions of wholesale flower pricing rising above $600 seemed optimistic. Yet this February, 47% of our flowers sold for $600 or more, versus less than 1% in the fourth quarter. We now estimate that our average selling price per biomass in the first quarter of 2023 will be $275 a pound, up from $236 a pound in the fourth quarter of 2022, and $204 in the third quarter of 2022. Since we announced our plan to move ahead with further expansion of production at the SoCal farm, the most common question investors have asked is, prices may be rebounding now, but what if they start falling again? Thanks to our record low cost of production in the fourth quarter of $127 a pound, even if prices fall, we'll be well-positioned to have a positive gross margin in wholesale biomass under almost any scenario. With our low-cost structure, we can weather price swings even when others can't. We are focused on maintaining the highest quality flower with the lowest cost structure in the industry to maximize our cash flow over the long term, and we believe that the events of the past two years have validated this approach. Since the beginning of July 2022 through the end of February, the number of cultivation licenses in the state of California has dropped by over 1,200, which we estimate is an 11.7 million sq ft or a 13% decrease in acreage under cultivation. After we bring on an additional 1 million sq ft of greenhouse footprint in late 2023, we will still only have a cannabis cultivation greenhouse footprint of 1.7 million sq ft at the SoCal farm. To put this in perspective, more than two whole SoCal farms could fit into the acreage that has fallen out of production since the start of July of last year. If you pause to think about that for a moment, perhaps you'll better understand why, as leader of this company, I will look at all measures possible to increase our capacity as soon as possible, take into account the funds, senior management, and skilled labor resources at our disposal. While from some perspectives, it would be tempting to turn on the whole facility at once, we will move as fast as we reasonably can take into account all factors necessary. Coach John Wooden's famous saying aptly applies to my thinking here, "Be quick, but don't hurry." The power of our economic model is underappreciated, in my view. So far, we have spent $93 million in cash to purchase the property and another $33 million in CapEx for a total cash outlay of $126 million. Now, consider that in the fourth quarter of 2022, the gross profit on our wholesale biomass business was $6.7 million, or nearly $27 million if we annualize this number with no seasonal adjustment. This $27 million would represent a 21% cash-on-cash return on the $126 million we have already invested in the property. Since the $93 million is a sunk cost, the cash-on-cash return should dramatically increase as we turn on the 80% of the farm, which is not yet growing cannabis. The key takeaway is that we have a proven, highly leverageable asset capable of generating asymmetric rates of return as we scale. At full capacity, simply extrapolating our fourth quarter results would produce annual gross profit in excess of $150 million, that presumes prices stay at fourth quarter levels, which are below current market levels, in my opinion, the pricing is still destructive. Therefore, we are confident that our returns will increase dramatically as cannabis production from our SoCal farm increases. If one considers the recent increase in pricing, returns would be amplified considerably. One can only imagine using California's pricing as the national standard, which in my view is inevitable. While industry conditions remain challenging, the trends we've been seeing over the past few months make me optimistic about the outlook for 2023. The lack of action by the U.S. Congress at the end of 2022 was a disappointment for the entire U.S. cannabis industry. It gives us the continued benefit of a landscape with the majority of capital sources sidelined. The sale of cannabis is now legal in 39 states and D.C. for medicinal purposes, and in 21 states for recreational use. In a recent article, the Cannabis Times projected that four more states are likely to approve rec use in 2023, and an additional three states may also approve. Cannabis legal reform has always been led by the states. We are closely watching state-level efforts to legalize interstate trade in cannabis. For example, top officials from the California Department of Cannabis Control sent an eight-page letter to the Office of Attorney General Rob Bonta on January 27th, laying out the legal argument for how California could sidestep federal obstacles if state officials decide to allow exports of cannabis across state lines. We are strongly in favor of such efforts and believe Mr. Bonta's decision will be favorable. That said, we focus on what we can control, and until the government catches up to the will of its electorate, we will act strategically and take advantage of the benefits of federal recalcitrance. I am pleased with our fourth-quarter results and am proud of our team as Glass House hit or exceeded our fourth-quarter guidance. We hit a new record in the fourth quarter with revenues of $32.2 million above the top end of our guidance of $30 million-$32 million. Fourth-quarter revenues were up 75% versus a year ago and 14% above the third quarter. Cost per equivalent dry pound of production fell to a record low, which was 24% lower year-over-year and a 5% reduction from the third quarter to $127 per pound versus guidance of $135 per pound. Gross margin reached 32% in the fourth quarter, in line with our guidance from the third-quarter results call, while fourth-quarter biomass production rose 153% versus last year to over 75,000 pounds and also above third-quarter levels in only our second full quarter of operations at the SoCal farm. Wholesale biomass revenues accounted for over 48% of total revenue and was up 140% year-over-year and 12% sequentially to $15.6 million. Average selling price in the fourth quarter, $236 a pound, which is up 29% versus a year ago and up 16% compared to the third quarter. This enabled an expansion in wholesale biomass gross margin to 43% in the fourth quarter, 7 percentage points higher than the third quarter. Retail was the biggest contributor to growth in the fourth quarter versus the third quarter, as we benefited from a full quarter of results at the four dispensaries we acquired during the third quarter. We also opened up a new Farmacy location in Isla Vista late in December and expect this to be a strong performer going forward, given its high desirable location near University of California, Santa Barbara. In early January, we opened the new Farmacy location in Santa Ynez. Both stores are in single-licensed municipalities in line with our strategy of operating in limited licensed locations, and these two stores have already created a buzz in a market which has otherwise been characterized by lackluster performance. Our retail business was a strong contributor to revenue growth in the fourth quarter as retail sales grew 106% year-over-year and 64% quarter-on-quarter to $10.6 million. We generated strong margins, 42% in the fourth quarter, up from 41% in the third quarter. CPG results in the fourth quarter fell 11% quarter-on-quarter to $6 million, with a negative 15% gross margin. However, trade sales, which are sales into dispensaries and are therefore a more immediate metric for evaluating the health of our brands, increased 6% quarter-on-quarter. This illustrates that we've created positive momentum in this business in recent months. As you may recall, our CPG business started the year with the two weakest quarters we've experienced in the past two years. Inflation was already hitting consumer spending hard starting at the end of the first quarter, and the problem was compounded by the fact that we did not manage our inventory levels effectively and did not have the right strains on the shelves to satisfy customer demand, leading to the need to heavily discount product in the second quarter. For the entire first half, we saw revenues of only $8.9 million, down 25% year-over-year. We fixed the inventory and strain issues moving into the second half. Currently, 90% of inventory is less than three months old, compared to 60% of inventory over three months old and 40% over six months old in April of last year. The financial impact has been tangible, as evidenced by the decrease in discounting from 35% in the second quarter to only 17% in the second half of the year. CPG sales bounced back in the second half, up 55% over the first half and up 1% year-on-year. Keep in mind that we added PLUS products to our CPG portfolio in May, so the PLUS 1% year-over-year performance speaks to the difficult operating environment in 2023, as well as better alignment of our CPG business to consumer needs and market trends. The operating environment for brands and even dispensaries is extremely difficult, as can be observed from the share price performance of our brand and retail-centric peers in the California market. Burdened with high taxes and a weakened consumer, there are very few retail chains that are profitable, and many have severely weakened balance sheets. Investors should take the current brand rankings published by any third-party research firm with a grain of salt, as many dispensaries are not paying their bills on time, and all branded players are facing a daily decision of whether or not to sell to dispensaries that have a compromised ability to pay. Furthermore, the worst is likely yet to come. Due to changes in California state law implemented in January of this year, dispensaries are now liable to pay the excise tax that was once paid to the state by the distributors. Dispensaries using the cash from the excise tax as working capital instead of preparing a reserve will face a reckoning when the taxes come due. To illustrate, based on data from a distributor, roughly 35% of their retail customers are currently on some degree of credit hold, and at times this year, the number was up to 85% of retail accounts which were on hold. Yes, 85%. Many brands may find it increasingly difficult to get paid for product, and these same brands are fighting for shelf space with no ability to raise product prices while getting squeezed by rising wholesale biomass prices. At some point, the merry-go-round will have to stop and some players will be forced to exit the market, as has been happening on the cultivation side. For our part, we work closely with our distributor and are comfortable with their decision not to blindly play the market share game. While we may take a hit in the market share rankings, I am steadfast in my decision to focus only on the retailers who can pay their bills. Due to our vertically integrated model, our CPG business has a leg up on many of its peers as we sell biomass to our brand at our cost, which, as discussed earlier, is well below current wholesale prices. There are many positive signs of success in our branded business. First, we relaunched our PLUS edibles in the fourth quarter with a new SKU mix, improved flavor formulations, and bold new packaging. Customer and bud tender response has been tremendous. We look forward to what this brand can do in the coming quarters. The introduction of the Allswell line of attractively priced flower and edible products has provided a boost for both our flower and edibles businesses. For example, according to the Headset data, Glass House Farms flower market share bottomed in August and September and has been gradually trending up since then, ending the year at 2.1% in the month of December. Allswell steadily climbed the ranks within flower brands and finished December with a 0.5% share of the market, providing a nice bump to Glass House Brands' overall share of the very large flower market. We are cautiously optimistic about the outlook for all three of our marquee brands, Glass House Farms, PLUS, and Allswell 2023. From a fundraising standpoint, we completed the Series B preferred round, closing on the $7 million of the final $70 million of the $50 million issue in early December. In total, the Series B round brought in $26.5 million of new capital. Due to strong investor demand, we raised another $4.7 million of capital from a Series C preferred round, which closed in late December. We feel very good about our financial position and expect to achieve free cash flow-positive operations, excluding expansion CapEx for the SoCal farm during the second quarter of 2023, if we expand using capital in the second quarter. This is one quarter earlier than our guidance from our third-quarter call. Given the recent bank run on Silicon Valley Bank, I'd like to say a few words about our banking relationship. We welcome Sunday's joint statement by the Department of the Treasury, Federal Reserve, and FDIC, in which they pledged to fully protect all depositors in both Silicon Valley Bank of Santa Clara, California, and Signature Bank of New York, New York. This will allow business to operate and prevent contagion from spreading to other banks. Over the weekend, we spoke with senior management at East West Bank, the bank where we hold our deposits, and we will take this opportunity to communicate why we feel very secure working with them. Some key excerpts are: East West deposit base is very granular, with over 500,000 deposit accounts and an average account size of under $100,000. Deposits are well diversified across all 120 brick-and-mortar branches and office locations. Their top 10 depositors account for only 3% of total deposits. They have no exposure to cryptocurrency. The bank earned $1.1 billion in 2022, and expects 2023 to be better. Their Q4 2022 ROA was 2.08% versus 0.74% for large banks and 1.30% for regional smaller banks. In summary, 2022 was a year in which we delivered on key strategic priorities and created a strong foundation for future growth. Our fourth quarter results, like the third quarter, demonstrate the durable competitive advantage of our model, which combines innovation and operational excellence at tremendous scale, enabling us to harvest high-quality sun-grown cannabis in high volumes at the lowest possible cost. In 2023, we expect to see a major inflection in our financial performance, including continued growth along with sharply improving profitability and cash flows, all of which should drive significant value for our shareholders. We are thankful for our decision to build a vertically integrated company so that we could accelerate in areas experiencing opportunities and brake in areas of distress. That optionality in a brand-new industry is a key driver of our success. Before I hand over to Mark, I'd like to extend a warm invitation to all shareholders to join Glass House Brands Investor Sesh 2023, where investors can tour our unicorn greenhouse facility, ask questions directly to Graham and I, along with the rest of our talented C-suite, and join our annual general shareholder meeting. There will be exclusive merchandise and Glass House Brands products, food, and an investor relations booth. Last year's event was the highlight of our corporate calendar and was attended by more than 150 people. I look forward to welcoming our shareholders to the event again this year. It will be held on Friday, June 23rd at 9:00 A.M. Our transparency by personally meeting and providing tours to our investors is reflected in our company name and is another area of pride. Please join us in Southern California if you can. I'll turn the call over to Mark Vendetti, our Chief Financial Officer, to discuss our financial results for the quarter in detail. Following which, Co-founder and President, Graham Farrar, Mark, and myself will take your questions. Mark. Thanks, Kyle. Good afternoon, everyone. As a reminder, the results I will be sharing today are preliminary. They can be found in our financial statements and MD&A, which are reported in U.S. dollars and prepared in U.S. GAAP. We expect these documents to be filed by March 31st. Total revenue for the fourth quarter of 2022 was $32.2 million, above the high end of our revised Q4 guidance of $31 million-$32 million. This represented 75% growth versus last year and a 14% increase versus the third quarter, driven by continued gains in wholesale as well as a significant increase in retail. This was the second full quarter of production at our SoCal farm. The result was a 150% increase in output versus last year. Wholesale biomass revenues approached $16 million, an increase of 140% year-on-year and 12% quarter-on-quarter. Growth in retail reflected our expanding store base, including a full quarter of operations for the four dispensaries we acquired during the third quarter. We sold over 66,000 pounds in the fourth quarter, down slightly from the third quarter, which is consistent with our prior guidance, up 184% versus the same period last year. Importantly, we delivered a 43% gross margin in wholesale during the fourth quarter, a 7 percentage point improvement from the third quarter, despite very difficult market conditions underscoring the tremendous power of our scale and focus on operational excellence. Over the past six months since we started producing at our SoCal farm, our wholesale gross margin has improved significantly, going from an adjusted 5% in the second quarter to 43% we just reported for Q4. Prices on a blended basis, price per pound blended across flower, smalls, and trims reached $236 per pound, up 16% versus the third quarter. Our cost per equivalent dried pound of production continued to trend lower, was down 5% versus the third quarter to $127. As a reminder, the cultivation tax was eliminated effective July 1st, 2022. For ease of comparison and to ensure consistency, I've removed the impact of cultivation tax on both revenue and cost of sales from prior periods. Data from Headset shows the retail environment for the California market remained challenging in the fourth quarter, with the total market down 8% versus Q4 last year. Flower sales declined 18% year-on-year, while pre-rolls substantially outperformed the market, rising 5%. Flower plus pre-rolls combined was down 12% year-over-year in Q4. Vape and edibles were both flat year-over-year, continuing to outperform the overall market. On a sequential basis, overall California market sales fell 1% Q4. In addition to challenging industry dynamics, we feel the fourth quarter continued to be negatively impacted by macro factors, particularly inflation pressuring consumer behavior. Moving on to retail for the fourth quarter. Our retail footprint consisted of four Farmacy dispensaries, including three that have been open all of 2021 and one in Isla Vista that opened in mid-December, plus the four dispensaries that we acquired during Q3, including The Pottery and the three Natural Healing Center locations. Fourth quarter retail sales of nearly $11 million were up 106% year-over-year and 64% sequentially, primarily reflecting a full quarter contribution from the acquired locations, along with a couple of weeks' results from the recent opening in Isla Vista. Altogether, these five new stores contributed $6 million in sales during the quarter. On a same-store sales basis, total Q4 revenues reached $4.6 million, down 11% year-over-year and 3% sequentially. This is slightly behind the overall cannabis market trends in the state. Looking forward, 2023 retail sales should continue to show strong year-over-year growth as we get a full calendar year's contribution from Isla Vista Farmacy and nearly a full year's contribution from Farmacy Santa Ynez, which opened in early January. Furthermore, we expect to open the NHC Turlock location during the second quarter, bringing our total number of operating dispensaries to 10. Turning to our CPG business, fourth quarter sales were $6 million, down 24% sequentially and 11% year-on-year. Over half of the sequential decline was the result of the initial Plus order in the third quarter to build inventory at our distributor when we moved Plus to it. This resulted in about a $0.9 million decline in Q4 compared to Q3. Although we have been able to reduce the level of discounting relative to the front half of the year, it still remains high, with discounts as a percent of gross sales at 19% Q4. The level of discounting was driven by the relaunch of PLUS edibles and the introduction of Allswell. In addition, we are seeing declines on Glass House Farms, driven in part by declines in the flower segment of the market. Moving to gross margin, where we continue to be very pleased with our progress. Please note we began reporting our gross margin by business line in the first quarter of 2022. Gross margin in the fourth quarter of 2022 was $10.2 million or 32% of revenue versus $8.7 million or 31% of revenue in the third quarter of 2022. This is the highest gross margin% since Q2 2021, the last quarter before wholesale prices began their large decline. In the second half of 2022, which were the first two quarters of SoCal phase one commercial operation, Glass House gross profit from wholesale biomass sales were almost $12 million, exceeding the previous 10 quarters combined. Gross margin of 43% for our wholesale biomass business was the highest since Q2 of 2021, when the average selling price was $341 per pound, or 44% above fourth quarter of 2022. As discussed earlier, the margin improvement was driven by record low cost of production combined with an average selling price increase in Q4 versus Q3 of 16%. Retail gross margin was another positive in the fourth quarter as it improved 1 percentage point sequentially to 42%, reflecting the higher margins from the acquired Natural Healing Center stores. In CPG, gross margin was -15% versus +14% Q3. The gross margin was negatively impacted by the relaunch of PLUS as there was a write-off of inventory relating to old PLUS product and incremental manufacturing expense related to the startup costing $800,000 during the quarter. In addition, we have been aggressively promoting the Allswell brand to increase distribution. For the front half of 2023, we expect CPG gross margins to improve to the high single-digit range but remain challenged. General and admin expenses were $13.9 million for the fourth quarter, compared to $11.5 million in Q3. The $2.5 million increase was primarily attributable to growth of our retail footprint, which increased SG&A by $1.1 million, higher stock-based compensation expense of $0.8 million, bad debt of $0.4 million related to PLUS receivables moved from their distributor prior to the acquisition to our distributor, and higher expenses related to cannabis business licenses. Sales and marketing expenses were $0.9 million, up 7% to Q3 2022, driven entirely by our growing retail footprint. It is worth noting here that Q4 2022 marketing expenses fell 27% year-over-year, despite the 75% growth in our top line versus Q4 of last year. Professional fees were $1.9 million, down $1 million or 34% from Q3 2022, driven by a reduction in legal fees. Depreciation and amortization in Q4 2022 was $3.4 million, which was flat to Q3. We define adjusted EBITDA as earnings before interest, taxes, depreciation, and amortization, adjusted for transaction costs, restructuring costs, share-based compensation, and other non-cash operating costs. Adjusted EBITDA slightly improved versus Q3 as a result of higher sales and gross margin. Please note the adjusted EBITDA results do not exclude the incremental costs associated with the PLUS relaunch or the bad debt expense associated with the PLUS distributor move. We ended the quarter with $14.1 million in cash, including $3 million of restricted cash, which compares to $17.5 million of cash at the end of Q3 2022. Cash used in operations was $9.2 million, which was $1 million worse than Q3. Within the quarter, the company made $3.9 million of payments for income taxes at the state and federal level that didn't occur in Q3. During the quarter, we also extended additional credit terms to our distributor, which reduced operating cash flow by $1.5 million and incurred roughly $0.8 million of expenses associated with the PLUS relaunch. Capital spending was $4.1 million in Q4 compared to $3.2 million in Q3. An additional $2.5 million of CapEx, which was not forecast, was needed at Camarillo to move the project forward toward completion, and the remainder was spent to complete the majority of the store builds out for the Isla Vista and Santa Ana dispensary. The company raised another $12.5 million in capital in the fourth quarter for a total of $31 million new capital raised in the Series B and Series C preferred stock offerings combined. This was offset by $1.1 million paid into preferred dividends. The Series B offering was fully subscribed at $50 million and closed in early December, raising $26.5 million in new capital. In addition, due to excess investor demand, we raised $4.7 million of additional capital from selling Series C preferred shares, which are junior to Series B but with otherwise identical terms. The proceeds from recent financings further strengthened our balance sheet, helping us to fund operations until we generate positive free cash flow in the second quarter. Please note our Series B and Series C preferred equity is broken out on the balance sheet separately. At the end of the quarter, the total was $56.5 million, slightly higher than the total $54.7 million nominal amount of the two issues as it includes accrued dividends through the end of the quarter. Shareholder equity fell by $9.1 million, primarily as a result of the $9.8 million net loss in the quarter. On to the outlook for 2023. Based on the strength of fourth quarter results and current trends, we remain confident in the trajectory of our business and that our ending cash of $14.1 million provides sufficient liquidity to execute our business strategy and deliver against our free cash flow goals. Because of the confidence we have in our business, we paid our 2021 federal and state taxes of $3.9 million in Q4 and believe we are among a handful of cannabis companies that have been consistently paying their tax liabilities. With the new dispensary CapEx complete and additional CapEx spent at the SoCal farm during Q4, the cash burn related to CapEx spending will drop significantly in 2023. With that as background, we are providing the following guidance for 2023. First and most importantly, we are accelerating our cash flow guidance of positive free cash flow, excluding expansion CapEx at the SoCal farm from the third quarter of 2023 to the second quarter of 2023. We also expect to achieve positive adjusted EBITDA in Q2 and maintain it for the remainder of the year. We are being aided by the improved wholesale pricing we are seeing in Q1 and assume it will remain steady for the balance of the year. For the first quarter, we expect revenue to be between $27 million and $29 million. This is approximately 100% increase for revenue versus Q1 2022 and a 13% sequential decline versus Q4 2023. The decline is being driven by the seasonal reduction in production of biomass due to lower sunlight levels in Q1 relative to Q4 and our assumption CPG sales will decline up to 20% due to the continued difficult retail environment and shipping holds being placed on non-paying retailers. Our average selling price for wholesale biomass is assumed at $275 per pound based on trends through the early part of March. We expect gross margins to improve slightly from Q4 levels of 32% despite the lower seasonal production in cultivation and our Q1 2023 cost of production at $200 a pound based on 45,000 pounds of biomass production. Please note Q1 is seasonally our highest cost quarter of the year. The $200 per pound is 16% reduction from Q1 2022 and 45,000 pounds produced is 169% increase versus Q1 2022. In addition, we expect adjusted EBITDA to improve from Q4 but to be slightly negative. Our ending cash balance for Q123 is forecast to be $12.5 million. We are maintaining our revenue guidance of $160 million for 2023 but shifting sales between segments. As a result of the higher pricing in biomass wholesale and slightly higher production, we are increasing wholesale revenue from $60 million to $85 million. We expect the average selling price to increase from Q1 through the remainder of the year as the mix of flower produced during the year increases with the average price to $300 per pound for the fiscal year. Recall, our lowest percent of flower produced occurs in the first quarter of the year and increases as the weather improves during the second half of the year. Offsetting the increase, we are reducing CPG revenue to $25 million from $35 million, which takes into account the difficult retail landscape we have discussed during the call. We expect we will be dealing with significant retailer distress and continued high levels of retail account shipping holds during the year. In addition, we are reducing our retail guidance to $50 million from $65 million as a result of the change in how excise tax is collected and the difficult retail market. Effective January 1st, 2023, retailers are now responsible for collecting and remitting excise tax to the state. This duty previously belonged to the distributors. With this change, the cost of inventory to retailers is reduced by the amount of the excise tax. As a result, it is no longer included in the revenue that is charged to consumers but is charged to consumers as a tax. This does not change the total gross margin dollars collected, reduces inventory costs and revenue by the same amount and results in a higher gross margin by about 10 percentage points. Finally, for the fiscal year, we expect to produce 310,000 pounds of biomass, with a cost of production below $130 per pound for the fiscal year. We had originally provided annual guidance for our three farms of 270,000 pounds of biomass, with the additional experience, we're now comfortable with increasing our output. This represents an increase of 62% versus 2022 production, a reduction in cost of 9% based on $130 per pound for the fiscal year. In the second half of 2023, we anticipate the cost of production will be below $110 per pound. This will be the first time period we lap SoCal production from 2022. Our projected cost of production is a 15% decrease versus the same period in 2022. We are making good progress toward our long-term target of $100 per pound. One final note on guidance. The additional greenhouse capacity Kyle discussed is not included in any of the guidance provided. With that, I will turn the call back to Kyle. Thanks, Mark. I would like to take this opportunity to update you on our latest efforts to push for the release of those serving prison time for non-violent cannabis convictions in both state and federal prison. We were thrilled by the announcement on February 3rd that Mission Green, led by criminal justice advocate Weldon Angelos, helped to secure the release of Luke Scarmazzo from prison. Luke served almost 15 years of a 22-year federal sentence for lawfully operating a state-compliant medical cannabis dispensary from 2004 to 2006 in Modesto, California. In granting compassionate release to Scarmazzo, U.S. District Court Judge Dale A. Drozd cited extraordinary and compelling circumstances in support of his ruling, including the fact that the legal landscape around federal enforcement has changed in California in the same time since many of the alleged offenses were committed. Drozd also acknowledged the issue of sentencing disparity with similar cases, along with numerous other factors that support his decision, including time served, good behavior, employment, volunteer work, and educational pursuits during his imprisonment, job offers, family support, and lack of danger to the community. This was long overdue for Luke and his family, and also for Weldon, who had made getting Luke released a personal mission after meeting while serving cannabis prison sentences together. Luke's story is truly an inspiration to many of us in the cannabis industry, but mostly we are just happy to see him come home to spend time with his family and to have the freedom to enjoy life's mundane pleasures, such as eating at Pizza Hut and choosing amongst the thousands of items available at his neighborhood grocery store, instead of being limited to the unappetizing menu at the prison mess hall. While President Biden's Department of Justice did not help in Luke's release, the opportunity is immediate to do the right thing and live up to his promise to both pardon the prisoners with simple pen strokes and decriminalize this plant. People are still going to prison in the United States, and we must end the duality of the law where many profit, including many of you who are listening to this call, and others suffer, including those that are sitting in prison. The majority of Americans want the war on cannabis to end. I plan on continuing to speak out as much as possible to hold President Biden to his promise and will continue to proudly serve as a board member of Mission Green. Please consider calling or emailing the President, demanding he release all those serving prison time for non-violent cannabis convictions immediately as his staff tracks the inbounds. Every call and email helps in the mission. With that, let me turn it back to the operator for your questions, everyone. Thank you. Ladies and gentlemen, we will now conduct a question and answer session. If you have a question, please press star followed by the number one on your touch tone phone. You will hear a one-tone prompt acknowledging your request. Your first question comes from the line of Bobby Burleson from Canaccord. Your line is now open. Hi, Glass House team. Congratulations on awesome results and a great outlook. Thank you. Yeah. Just, you know, sorry about the background noise, if you guys hear anything. just curious, you know, there's obviously, you know, an extinction event that continues to unfold in cultivation. You guys are there to kind of benefit longer term, and we're seeing it now even. What do you think the lag is for what we might see in retail, and then maybe even with some of the other CPG that you guys compete against where you know, you might be able to come in and start taking share, but with confidence that, you know, you won't get paid, et cetera? Bobby, one, nice to hear your voice. Hope you're doing well. Those are great questions. You know, when it comes to as investors and even as us running the business, timing is always the most difficult thing to predict. Happily, since we're vertically integrated, as I mentioned, we can accelerate where there's big opportunity, which right now is in wholesale. We can sort of tap on the brakes so that, you know, we're not in the business of giving away our cannabis. Meaning that if this, you know, we deliver to a store and they can't pay, that's, you know, unfortunately revenue lost. I would tell you, I think 2023 is gonna be a shakeout year here in California. I would hope that we start seeing kind of the upswing by the end of the year. You know, we'll have to see. Some of that's gonna depend on what the state does. If retail decides not to pay their excise tax and there's no ramifications, then I would say my timeframe would have to be delayed. Some of this is gonna be, you know, third-party control that we have to watch. Understood. Yeah. Bobby, just maybe to add to that. Yeah, go ahead. Just one note, right, as a reminder that California in today's climate is still a $5 billion legal cannabis market, right? We, you know, totally agree with everything Kyle said, that we think it's gonna be a shakeout. You know, for context, there's 77,000 places that you can buy a cocktail. In California, there's 1,000 places that you can buy a joint, right? Of those, 400 or so are actually paying on time. If you play it all the way to the extreme, right, everyone goes away except for one group, that group sells $5 billion worth of cannabis, right? Obviously that's not gonna happen. Could it be 10? Could it be 15? Could it be 20? Quite possibly. It's still, you know, that $5 billion pie is gonna be divided up, you know, 20 people left, and they're all selling $250 million a year of licensed cannabis. It's a pretty good market. I think, again, as you know, Kyle mentioned, the ability for us to be in all those markets and pull the levers to go where the opportunities are, you know, and whether that's retail expansion when that time comes, CPG expansion, wholesale expansion, right? Like you think back, it wasn't that long ago, that people were looking at us like we were insane for talking about bringing more capacity into the cultivation side of the market. Now that, you know, there's a shifting perspective on that. Likewise for retail and for CPG, the time isn't to start investing when the opportunity is in front of you, it's when you think it's coming, and that's what we're working hard to be really good at. Understood. Thank you for that additional color there. Curious on the flower dynamics just in the market. Is that, you know, I think 18% decline you guys talked about, is that because if that segment's more exposed to maybe some of the fire sale activity that might be happening with cultivators that are going under? Is it just, you know, a matter of time till that kind of rights itself? Or do you see something more long-term that's happening in terms of consumer preferences? I don't, I don't think consumption's changing materially. I think what you're seeing is that cultivation was on the forefront of that kind of, you know, that rationalization, right? We've long said that we thought prices were destructively low, meaning that the pricing was at a level that was unsustainable for, you know, frankly, maybe everyone kind of but us, and that that was eventually going to reconcile itself. I think what you're seeing is that you're seeing that, you know, the capacity leave, right? Those licenses are actually their annual licenses here in California, so they're a lagging indicator on what's actually leaving. For example, in February, 51% of the licenses that were scheduled to renew in February didn't, right? That doesn't mean they quit stocks in February, like Cresco when they closed down their greenhouse in California, I think they quit in April. Their license didn't actually expire until December, right? There's a lot of that kind of capacity that's leaving because, you know, frankly, people don't keep growing a crop that's worth less than it costs them to grow it. I think we're not seeing a change in consumption. We're seeing a change in supply, and you're gonna see the market kind of re-rationalize until, you know, cost of, what you can sell it for is above the marginal cost of production for enough producers to supply the demand in the market. I think, you know, we're seeing that in cultivation. I think that's gonna pass through, and you're gonna see it in CPG when there, you know, there's a lot of brands that were based off of the assumption that you could buy sub cost, sub production cost flower to be in. That is eventually gonna go away because it's not sustainable, and you're gonna see those brands- Sure Y ou know, basically squeezed on both sides. Cost of Goods as well as, retailers paying, and we think that'll open the doors up for us a bit. Sure. Okay, great. Then just last one, quickly. In terms of the kind of price assumptions you guys have baked into your outlook, you know, at what point in the year do you think we can revisit what's happening in the wholesale market and see how conservative those assumptions are? It feels like there's a rebound in pricing. If you take into account seasonality and other things you guys might know about the supply demand, you know, dynamic, should we be looking at, you know, sometime early summer to maybe see whether or not that's conservative? Well, why don't we hand that to Mark? I think, you know, what we've seen really since July is every month, cultivation licenses Have left the market, and they actually accelerated in February. Just, you know, kind of halfway through March, they're still leaving the market. I do not think we'll see any downward pricing on pressure for the next few months as we continue to expect people to leave. As long as new licenses don't come back, I think pricing will maintain at least where it's gotten to now. Maybe in the third quarter, we see a little downward pressure as we start to see some incremental capacity come back into the market due to seasonality. Again, I think right now it's tied really to what's going on with licenses. As long as new licenses don't come back in, I think we're fine. If they continue to go down, we may see continued upward pricing movement. I don't know, Graham, if you have something more to add. Yeah. I think, I think that's pretty spot on. Maybe, you know, it's a question, Bobby, that we've gotten, quite a bit, right? I think we're happy with the current price action, and we think it's gonna, you know, kind of persist in this range for a while. I, you know, I would also, you know, maybe talk about how we kind of view this, just a little bit, right? Which is that we didn't have a crystal ball. We didn't know when or the time or the magnitude, but this is essentially playing out the way that we kind of expected it to at some point, right? I think our belief is that we've got an understanding of the California market in a way that most other operators who aren't, you know, living and breathing this every day, can't have. You know, Kyle and I were both born here and raised in California. I've been in this market for 25 years. California has a lot of upside, but it's definitely not a market for tourists. I think what we've been going through over the last couple of years, taking our medicine, right, is something that we think the rest of the country is gonna go through, in some cases already have started to go through. You know, the future of the rest of the country looks a lot like California. You know, it's often referred to as commoditization. I think a better name for it is probably normalization. You know, there's not a lot of crops out there that are $3,000 a pound, we don't think that those kinds of numbers are the right long-term, you know, balance point. It's part of the reason for our focus on cost. We also don't think it's normal for crops to be grown in unsuitable climates and warehouses with, you know, fossil fuel, is to replace the sunshine and the ocean breeze, right? We believe that cannabis comes from California. Growing plants where they like to grow is an unbeatable combination. Best quality, best price for consumers, lowest impact on the environment, right? I mean, we hear about stuff that in other good and maybe not so good weed that in other markets cost $75 an eighth. It blows our mind because we can get, you know. If only there was a place where great cannabis with good prices existed, Republic of California. You know, that's where we think these are gonna come from. Fundamentally, actually, this is, you know, from Andrew Carnegie, a podcast that Aaron turned us on to, is the most interesting thing is how efficiently, and this is his quote, "And how well you make something." That's more interesting than how much money you made because the money you make is a temporary result, where the cost and the quality is a permanent result. There's really only two things that matter, cost and quality. Our goal is to be not particularly wrapped up in the prices at any particular moment, but to be so far to the left-hand side of the cost curve and so high up on the quality that we're in an intersection that's very hard to compete with in any cost environment. You know, I think I see probably three cycles that this is gonna go through. The lean times, low prices that we've been going through, it's painful for us, it's fatal for others. Expansion, which is, you know, maybe what we're getting ready to enter, where you see price stabilization, we'll expand to take over territory left by others. Then, you know, I don't know, the fun times when prices appreciate and we're able to kind of leverage that low-cost basis to fortify gains and into new categories. That's gonna go over and over again. You know, I think Kyle and my goal, you know, or all of our goal at Glass House is to make the most consumed cannabis on the planet, and we think that combination of the best quality at the lowest cost, anywhere, and then when the time is right to turn the dial in a way no other operator can on the scale side is really the winning formula for us. Great. Thank you. Appreciate it. Your next question comes from the line of Jon DeCourcey from BTIG. Your line is now open. All, congratulations again. First question is just to touch on the expansion project that you guys announced a couple weeks ago. Can you give a little bit more color on timing of that expansion project and, you know, when should that really contribute to results next year? Thanks for the call or the question, Jon. I would say, you know, the main reason why I want to throw out the numbers we're seeing so that the market could see what that project looks like and how much revenue and gross margin it's gonna throw off. Right now we're exploring a number of different ways to do it. I would tell you that our plans are to have plants in the ground or in the greenhouse by the end of the year. We would say that we'd like to get this rolling within the next couple of months, if that gives you some insight. And Jon, the guidance we provided does not have any of this in the numbers. With the timing Kyle mentioned, the ability to impact revenue in 2023 is very low likelihood and most likely would be, you know, Q1 of 2024. It really will depend when we break ground. The good news is the greenhouse we're focused on and is very much like the greenhouse we're already in. From that perspective, we understand the environment and we, you know how to, you know, build it out and retrofit it pretty quickly. From kind of getting to the construction planting phase to, you know, full contribution and similar cost of production, is that, you know, a quarter, two quarters? What kind of lag are we thinking is kind of the norm there based on your prior build-out experience? I can take that one. I mean, typically I think the retrofit, you know, look in a couple quarters kind of duration to actually do the work and get the greenhouse ready, and then you gotta plant the crops, and then you gotta harvest them and process them and sell them. You know that add another three months or so kind of time for another quarter for that to happen. I do think that, you know, we won't start off, you know, perfect in there, but it's very different than the last, you know, when we did this the first time. You know, the nursery that we've had, we've already built that out to support the facility. We don't need to invest in their CapEx or really change the operation there. It's just a scale thing. The drying and curing rooms are built with the capacity to handle this. Again, we don't need to build that again. It's just gonna be slotting it into the operations that are already happening. You know, I think we'll be able to kind of put this in at a. It'll catch up to what is currently operating pretty quickly because it's really gonna be very similar, just at an increased scale. Hearing the improved pricing in the fourth quarter, have you guys handicapped it in any way the, you know, price improvement you guys achieved on the basis of better quality flower now in the cycle and better quality product that you're producing at the greenhouse versus, you know, just less competition in the market and just better pricing in general? You know, what's kind of the trade-off there? I think it's. Yeah, so obviously. Yeah. Go ahead, Kyle. Hey, I'd say it's a combination of both. Graham, go ahead. Yeah. No, I agree with Kyle a hundred percent. I was gonna say it's hard because there's not, you know, we don't have transparent markets and things like that. There's no Kelley Blue Book of cannabis out there. From what we can see, it's both. We're definitely, you know, the market is kind of rationalizing itself. Also from what we can see for the flower out there, we tend to trade towards the higher end of the price spectrum, which we attribute to our quality, consistency and an ability to deliver in a way that not everybody else can. Can you touch on the weather that everybody in Southern California has been having and California more broadly, and you know, what your expectation is that that's gonna do to some of the outdoor products that would otherwise come online in the spring and summer? I'm sorry, John. I can't hear. The rain is pounding us right now. Yeah. A 20-year rain. Graham, can you give them the 1% less light, 1% less yield discussion? Yeah, sure. You know, I think, towards the end of December, early January, you know, we've just had basically five weeks of continuous rain in California. You know, plus side is that we needed that water, so it's refilled reservoirs and snow packs across the state. That's the good side of it. The downside of it is it did significantly lower what's already the seasonally lowest light time of the year. As Kyle mentioned, you know, we are sun grown, so 1% more light is basically 1% more yield. It's a pretty linear line. That lack of light across the state, not just us of course, reduces yield. Now, the beautiful thing is we are a greenhouse, right? As opposed to a lot of folks out there, our plants never got rain on them. The wind never blew on them. Mud, you know, snow, et cetera, never fell on them. They were actually in a pretty great climate, just with less light than you would normally have. I think at this stage, we're probably gonna start seeing some reduction, particularly in the outdoor and full-term planting in NorCal. As this continues, you're hitting into the time where people would be planting for their, either June or October harvest. From what I'm hearing, that's presenting a roadblock to some, to some folks. You know, obviously what comes next, we don't know, but it looks like it's gonna continue to be pretty wet. For us, minor annoyance. For others, it can knock out an entire crop. It's again, part of the reason we enjoy the controlled environment agriculture that a greenhouse. We can dance with mother nature, but still supplement her and polish to get the best possible result without a lot of cost. To dance with mother nature. Thank you. Thanks, Jon. Your next question comes from the line of Aaron Edelheit from Mindset Capital. Your line is now open. Hey, guys. I wanted to ask a question about a quote I saw in your press release that I liked, which is that you're increasingly getting calls from brands and buyers who have seen their traditional sources of supply unable to satisfy their needs. I wondered if you could give just a little more color on that. In that you're basically just taking market share and more and more people are either deciding not to grow their own cannabis and choose you as a supplier. The way I've been thinking about it is you could basically be the contract supplier for many brands. I'm wondering if you could just give some more color to that comment. Aaron, I would tell you, number one, thanks for the question. It was almost like, hey, Mikey, he likes it that you liked something in our press release. We certainly appreciate that. You know, I will tell you, it's strange when you look at some of the different dynamics as part of that quote. I have people reaching out to me that I know that are. You know, someone on LinkedIn will be looking at me because they know Glass House, they know we grow, and they'll say, "I'll pay you if you can get Kyle to sell me some trim." Like, that has not happened ever. Right now, there is a massive supply-demand component that has now flipped, where there's just massive demand and not nearly enough supply. That's what I would say. I know Graham is closer to it, so I'll ask Graham to kind of get in a little bit deeper into it. I'm just telling you, Aaron, it is. I probably had six calls last week that were just out of the blue coming to me, and that doesn't usually happen. Yeah, I would say, echoing what Kyle said, you can at this point kind of maybe feel it in the market, right? I mean, there's people coming out of the woodwork that haven't heard from for years. We hear quite a bit of anecdotal information around suppliers up and down the state and even, you know, frankly, into other markets on the West Coast, Oregon and Washington, that inventories are low, there as well. You know, I think a handful of tangible, you know, examples that we could point to at this point. I mean, I know one new buyer that we picked up used to run a farm in Salinas. They closed down their farm. They wanna keep their brand going. They're down here, you know, shopping with us. I mean, obviously, our opinion is that we should be the we can grow at a higher quality at a lower cost than anybody else, we should be the supplier for all these brands and kind of enable that brand-heavy asset light transition. You know, there's some things that point to that starting to happen. We're certainly seeing folks that we've never heard from before that are knocking on the door and looking for supply, and there's frankly not a lot out there. You know, another piece that we mentioned in there, right, is with 2 million sq ft, roughly a footprint, we finish many, many weeks with almost bare shelves. That's, you know, that's we haven't seen that in a while, and hence the excitement around being able to be one of the first ones to pivot into that demand by bringing on the next greenhouse. Aaron, as you can imagine, it's painful to be at the SoCal facility with 80% of that facility growing tomatoes and cucumbers when you know the demand is just incredible right now. You know, at the end of the day, in case people start going, "Oh my God, is Glass House gonna miss it?" We're completely focusing on COGS. It's what we can control. You know, the price swings that happen in these markets, they happen. As long as we're profitable, then, you know, we'll really enjoy when those swings are up, and we'll be able to make money when those swings are down. I wanted to ask, my second question was specifically about the 80% that is not being used. It's one of, I think, the key points for your company, is that you're only at 20% capacity utilization. I wanna make sure that I understand the math from your commentary and from what you said on the call, that it will take about $10 million of expansion CapEx to turn on phase two. If you assume a lower biomass price of $275 than what you're forecasting for this year, I believe you're forecasting $300 now, then that $10 million investment would bring you $30 million in, obviously, it would take a, you know, we would see it next year. You spend $10 million this year, assuming that prices fell from this year, you would see a $30 million gross margin. I wanted to make sure that I understood that, one. Two, I have to assume that there's not much in terms of SG&A that phase II would bring on. Would that $30 million just basically fall to the bottom line? Is that how we should think about kind of every phase from there? Is that, you know, for another $10 million. Could I add up all the phases together and get another $40 million or $50 million and do the same math exercise? Let me let Mark handle that, Aaron. Yes, the numbers you're saying are pretty damn tantalizing, Mark. Aaron, for the first this incremental greenhouse, you've nailed the numbers. I mean, the SG&A is remarkably low to run the wholesale operation. It's super efficient from a cash conversion perspective. With the build-out of phase one, the only new CapEx is really in this greenhouse because the existing nursery and can accommodate the incremental greenhouse, plus the pack house capacity we have can support the incremental greenhouse. It's a real easy decision to look to add the capacity because truly it is, you know, $10 million of CapEx and Working capital buried within that. Each additional addition will have to be evaluated because we may need to bring in some additional infrastructure on top of it, but it's still going to be extremely efficient and have great gross margins. I just wanted to just make sure that there's no real additional SG&A when you turn on phase two. No. I mean, you know what? Maybe hiring one or two people in sales, but it's minor relative to, you know, $68 million in revenue. Thank you. Thank you. This is one of the real powers of that greenhouse, right? We've talked about it a little bit before, right? If you go and compare it to, you know, other you'd have to buy 50 of the biggest farms in Santa Barbara, I mean, in California, to equal that, right? You look at other operators in multiple states, you can take everything they have in 20 different states and combine it together, and that farm is still twice as big, right? Like, you don't need a new security director, right? You don't need a new safety guy. You don't need, like, all of these things. The infrastructures on the people side, the organizational side are there, right? You flush out, you get another grower, you have a few more folks in the greenhouse. As Mark mentioned, like, another couple sales people. Like, that's. You know, this structure is built. Now you're just going to turn the dial with very flat, you know, operational expense changes as you go forward, which really all just gonna be in the COGS, which we're gonna push them lower. The rest of the support structure is there and kind of ready for it. Great. Thanks so much. Your next question comes from the line of Ed Stein from Private Investor. Your line is now open. Hey, guys. I had all my questions answered already. Just congratulations on everything you're doing, and keep up the good work. Hey, Ed, it's been a long time since we've spoken. Does that mean that you're gonna buy me a sandwich at Katz's Delicatessen next time I'm in New York? Since I'm not in New York anymore, it's gonna be hard to do. If you come down to Naples, Florida, or Vermont, I'll buy you a sandwich. Yeah, those are your two choices now. Okay. We'll bring it. It has been a long while. That's too bad. We'll have to get together soon. I like it. Thank you, Ed. Yes. Yeah. Thanks for the congrats, Ed. Appreciate it. Your next question comes from the line of Mike Regan from Excelsior Equities. Your line is now open. Hey, guys. Thanks for the question. Just two quick questions. One following up on what Aaron was asking about the incremental in the greenhouse. Basically, the existing nursery and drying room, it obviously can support one more room. Like, is there any way to think about how much of the entire greenhouse it could? Like, if you had two, three, four, the full $5.5 million without sort of any incremental spend on those other infrastructure portions? The nursery should be pretty set for, you know, really the entire facility is our expectation. The drying and curing and processing space, what we have will, you know, support the next greenhouse here. Eventually, we will need additional capacity on that side as we bring on more greenhouses. You know, that's there will be some cost there. I think you know, a lot of what we've got in the CapEx is already in there and ready for this expansion. This, you know, of course, was always the plan on some schedule, so it's not a surprise that we're doing it, and we're just trying to be efficient with the capital and the timing and the operational side of things. I think we should be in a pretty good position. You know, maybe the easiest way to think of it is the cost per square meter for expansion should go down from where we started in phase one across the board. We'd expect to be able to do it at a more efficient pace because we've got. You know, the property's already fenced, for example. It's already got an odor control system. It's already got the nursery built out. You know, while we will need more things, a lot of this stuff, you don't need a second fence when we take on the next greenhouse. That stuff is already there and in place. No, that makes sense. It was smart to do it once and effectively overbuild for room one, but have it sit for rooms four through five, so. This is more, I guess, sort of just a question on just California. With the license, you know, the license capacity going down 13%, where are you Like, from your perspective, where is that capacity going? Is it truly just shutting down forever? Is it being mothballed? Is it just going into the illicit market? You know, we're fine, we didn't pay the license, but we're still selling lots of weeds. Like, what are you seeing on those, on that exit of capacity? It, you know, it would force us to speculate because we don't go out there to those greenhouses. We do know that when you make a decision not to renew a license, it's quite a big decision because you have to go through most of the same hoops, which are significant here in California, to turn that back on. You have to write a big check. You know, whether they just say, "Hey, I'm gonna grow another crop. I'm gonna let it go fallow," or whether, "I'm just gonna grow without a license and send, you know, send in the illicit market," we don't know. We know they can't play in the growing legal market, at least for the time being. The other thing to consider is, that is a trailing indicator. If someone turned it off six months ago, we won't know about it until six more months since those licenses are annual. A great example of that is last summer, Cresco put out an announcement that it was exiting the state, I think, in June or July. Their license is actually going to expire, I think, until December or January. If you look at the license count, they show up still active, but there's no one producing. A different way to look at this is over the last, I'm going to say, six or so months, if you look at the number of licenses up for renewal, the actual renewal rate has been closer to 60%. I would expect the true number of active, I'm gonna say, actively producing licenses is a lot smaller than the number of active licenses being recorded. It's just difficult to figure out if, as Kyle said, once they surrender their license, if they decide they're gonna go to the illicit market and continue to cultivate cannabis, but try to sell it illegally. Got it. Yeah, exactly. That's why I was asking you. I thought maybe you had a better idea than I. That's what I'm trying to figure out where the, you know, if it's still sort of feeding into the illicit market or, you know, obviously Cresco's not, but, at least I hope not. I doubt it. It'd be pretty risky in my opinion, right? If you just think of the logistics of that, right? Like a lot of the farms, right, they, you know, NorCal is a particularly good place to hide and grow. Once you become a licensed farm, you're everything but hidden, right? You've got the sheriff there, the county there, the regional water quality, Fish and Wildlife, fire department, right? Like, you have 13 different flags with 13 different agencies on here's where I'm growing, right? Now, to just let your license go away and think that nobody from the state is gonna come and say, "Hey, this license expired. Let's go make sure that there's, you know, not currently operating." That's a pretty. I don't think it'd be very smart, right? Because you now are no longer hidden and you're not licensed. You kind of put yourself in the worst of both worlds. I'd be surprised if those expired licensed farms keep hammering away, or if they do, that they don't do it for long. Great. Okay. Well, thanks a lot. Thanks, Mike. There are no further questions at this time. Mr. Kyle Kazan, please continue. Thanks, JP. In closing, I'd like to welcome you to visit our redesigned website at www.glasshousebrands.com. It is designed to better reflect our mission of delivering the good of cannabis for the good of the people, striving every day to deliver the best value to our customers and also to make lives brighter by harnessing the extraordinary power of the cannabis plant. The new website has a brighter and greener feel to it, and we hope you will find it easier and more enjoyable to navigate. It's been a long time in the making, and we thank Hugh Carter and his team at Nimble Communications, this is an unpaid for plug, for the excellent work they've done in helping us bring it to fruition. As always, we welcome your feedback and comments. Thank you for joining us to discuss our fourth quarter results. We remain focused on the opportunities ahead and look forward to updating you on our next call. Thank you, everybody. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.