Good morning, and welcome to today's conference call to discuss Greenlane Holdings, Inc. Q1 2022 financial results. A press release detailing the financial results for the quarter ended March 31, 2022, was distributed earlier this morning and is available on the investor relations section of the Greenlane website at investor.gnln.com. As a reminder, today's conference is being recorded. A replay of this call, as well as a copy of the supplemental earnings slides, will be archived on the company's IR website at investor.gnln.com. On the call today are Nick Kovacevich, Chief Executive Officer, Bill Mote, outgoing Chief Financial Officer, and Darsh Dahya, Chief Accounting Officer. Before we begin, Greenlane would like to remind listeners that today's prepared remarks may contain forward-looking statements, and management may make additional forward-looking statements in response to the questions received. These statements do not guarantee future performance, and therefore undue reliance should not be placed on them. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties and other factors discussed in today's press release. This call also contains time-sensitive information that speaks only as of the date of this live broadcast, May 17, 2022. Factors that could cause Greenlane's results to differ materially are set forth in today's press release and in Greenlane's Annual Report on Form 10-K for the year ended December 31, 2021, and Quarterly Report on Form 10-Q for the three months ended March 31, 2022, previously filed with the SEC. Any forward-looking statements made today on this call are based on assumptions as of today, and Greenlane assumes no obligation to update these statements as a result of new information or future events. During today's call, Greenlane management may discuss non-GAAP financial measures, including adjusted gross margin, adjusted SG&A, and adjusted EBITDA. Greenlane has included a reconciliation of these non-GAAP measures in today's press release, which is available in the investor relations section of the company's website at investor.gnln.com. I would now like to turn the call over to Mr. Nick Kovacevich, Chief Executive Officer of Greenlane. Please go ahead, Nick. Thank you, operator, and good morning, everyone. I'd like to thank you all for joining us today to hear the latest about Greenlane. Over the past couple of months, a lot has been going on in the broader capital markets and geopolitical landscape, and even more so here at our company as we continue to execute on our 2022 plan to reduce our cost structure, increase liquidity, and accelerate our path to profitability. I'll start today's call by first providing a high-level overview of our results for the Q1. Then I'll turn to some of our more recent developments and how we believe these will help us achieve our stated goal of positive adjusted EBITDA by Q3 of this year. After that, I'll do a more comprehensive review of our financial results before we then open it up for Q&A. Before we get started, I wanted to spend a quick moment thanking Bill Mote for all of his contributions to Greenlane over the last couple of years, especially as we successfully integrated our merger with KushCo. As we announced in our 10-Q yesterday, Bill will be stepping down from his role as Chief Financial Officer to pursue other opportunities, and we all wish him nothing but the best in the next chapter of his career. Our new Chief Accounting Officer, Darsh Dahya, will be filling in and will lead many of Greenlane's principal financial activities, including accounting and controllership, financial reporting, financial planning and analysis, tax and treasury. Darsh has a compelling blend of accounting and finance expertise and brings valuable and unique experience in the highly nuanced cannabis industry, having transformed the financial reporting process and infrastructure at MedMen over the past four years. We're really excited by what Darsh brings to the table and are thrilled to see him already hitting the ground running, rolling up his sleeves these past couple of weeks to help with preparing our Q1 financial reporting. Darsh will join me in the Q&A to help answer any questions, but before I jump into the rest of my prepared remarks, I wanted to quickly pass the call over to Bill for some brief final comments. Thanks, Nick, and hello, everyone. It's been an absolute pleasure to serve as Greenlane CFO these past couple of years, and I am extremely proud of what the team has been able to accomplish in such a short timeframe. I'm optimistic about the company's future, especially as it moves closer towards profitability and generating incremental value for shareholders. I wish the company nothing but the best and remain a big supporter on the sidelines as the company grows in its next stage of evolution. Thank you, Bill. We wish you all the best in your future endeavors. With that, let's jump right into slide three of the supplemental earnings slides, which you can find on our IR website if you haven't downloaded them already. As a reminder, the results I will be reviewing for you this morning can be found in our earnings release that is available on EDGAR and in the investor relations section of our website at investor.gnln.com. Net sales for the quarter grew 37% year-over-year to $46.5 million. The increase was primarily driven by the KushCo merger, but if you exclude KushCo's post-merger sales, revenue actually declined 47% to $18.1 million. Compared to $34 million for the same period in 2021. A big part of this decrease is explained by our strategic shift away from non-core third-party brands in favor of our higher margin Greenlane brands. In fact, third-party brand sales for the quarter decreased 49% as we continue to shift away from these lower quality sales that are no longer part of our core strategy. As I mentioned on our last call, we expect a decline in total revenue from discontinuing some of these third-party brand relationships, but we believe the overall quality and margin profile of the revenue that we will be generating going forward will be far more favorable and sustainable. Sales of our Greenlane brands were down 34% to $6 million, compared to $9 million for Q1 2021. The decrease was mainly due to our ERP system implementation, which caused interruptions in our consumer business and in our ability to accept and fulfill customer orders. Although we expect to fully transition to this new ERP by the end of 2022, these interruptions materially impacted revenue for the Q1, with some orders slipping into the Q2. I've said it many times before that growing our brands remains a key focus of ours as it helps expand our strategic moat, expand our gross margins, increase our revenue, and increase our profitability. To that end, we're excited that we have announced last week a partnership with Universal Distribution to distribute our products in Latin America. Latin America represents a promising new emerging market for us, and given that we are not subject to the same global trade restrictions as our plant-touching peers, we can actually ship our products worldwide in an asset-light manner, enabling us to scale faster and wider and ultimately build our brands ahead of legalization in these markets. Gross margins for the quarter were 12.8%, down from 25.2% in Q1 last year, with the decrease being driven by write-offs of obsolete inventory related to our post-merger and ongoing product rationalization initiatives. If you exclude these write-offs, adjusted gross margins were 25.3% in the quarter, compared to 28.1% for the same period in 2021. The decrease there is related to an increase in lower margin KushCo-related sales and a decrease in Greenlane brand sales, which of course carry a higher margin profile than third-party brand sales. As we continue to shift away from lower margin brands and focus on our higher margin Greenlane brands, we believe this should help us preserve and actually increase our gross margins over time. With that brief overview of the quarter, let's now turn to slide 4, which outlines our 2022 strategic plan. I shared a great amount of detail on this slide in our last earnings call, but suffice to say, we remain on track to achieve positive adjusted EBITDA by Q3 of this year, and we are making meaningful progress in generating liquidity in excess of $30 million to help bridge this gap into profitability. Starting with the first part, we completed our reduction in force back in March, which we expect will help us generate approximately $8 million in annualized cash compensation savings. We did see some severance expenses show up during the quarter, but now we are largely past that, and this should pave the way for a lower operating cost structure going forward. We're also in the process of further reducing our facility footprint and making additional changes to the business to bring our adjusted SG&A, which excludes depreciation and amortization, down to between roughly $14-$16 million by Q3 of this year. That's compared to $26.6 million that we reported in Q3 of last year. With a 25% gross margin target, we expect this operating cost range to be sufficient to achieve positive adjusted EBITDA, and we look forward to providing more updates on this front as they materialize. Until we get to this goal, conserving and building on our current cash levels is of the utmost highest importance. To that effect, we are making great headway in generating liquidity from non-dilutive sources, starting with selling our headquarters building. We've already received offers in what is currently a very hot Florida commercial real estate market, and we look forward to hopefully finalizing a deal here in the near term. We also have begun discontinuing many of our other non-core assets and discontinuing some of our non-core strategic lower margin third-party branded products that are no longer core to our business. Finally, we expect to complete in Q2 our process of finding an adequate asset-based loan that can support our working capital needs. We're confident that if all of these measures are successful, that we can generate in excess of $30 million of non-dilutive capital, which we estimate will be enough to get us to positive adjusted EBITDA and hopefully beyond as the equity capital markets continue to languish amid rising interest rates and inflation, the devastating geopolitical and humanitarian situation in Ukraine, and additional supply disruptions caused by China's recent COVID lockdowns. Turning now to slide 5. Sales in our consumer goods segment totaled $17.1 million for Q1 2022, compared to $30.5 million in Q1 2021. The decrease was primarily due to a decrease in third-party brand sales, as well as the aforementioned order and fulfillment interruptions from the ERP migration. Sales in our industrial goods segment totaled $29.4 million for Q1 2022 compared to $3.5 million in Q1 2021. The increase was due to the merger with KushCo. Net sales of the Greenlane brands decreased 34% to $6 million for the quarter. SG&A for Q1 2022 increased to $24.2 million compared to $16.5 million in Q1 2021, primarily due to the KushCo merger and due to an increase in stock compensation expense, severance costs, and fees for our ERP implementation. On an adjusted basis, which excludes depreciation and amortization, SG&A for Q1 2022 totaled $21.8 million compared to $16 million in Q1 2021. Net loss for Q1 2022 was $18.7 million compared to $7.7 million in Q1 2021. Adjusted EBITDA was negative $5.3 million in Q1 2022 compared to negative $5.2 million in Q1 2021. We ended the quarter with $5.9 million in cash and working capital of $41.7 million compared to $53.8 million as of December 31, 2021. We're continuing to be judicious with our cash position and have the ability to opportunistically raise capital under our ATM program. However, we're being very thoughtful about how we use our balance sheet to fund our growth initiatives, and we believe our 2022 plan will not only help us achieve positive adjusted EBITDA in Q3 of this year, but also help us generate sufficient liquidity to support the business as we transition into profitability. With that, I will now turn the call over to the operator and open it up for Q&A. Thank you very much. Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold while we poll for questions. Thank you. Your first question is coming from Vivien Azer of Cowen. Vivien, please ask your question. Great. Thank you so much for taking the question. This is Harrison Vivas for Vivien Azer. Just first on the ERP implementation, can you quantify the specific impact that it had on your Greenlane branded sales? Did it affect any specific brand more than others? I guess, how much of those sales do you expect to recover in the Q2? If you could just kinda talk more about the impact of that implementation. Thanks. Yeah. Thanks for the question. The implementation was disruptive. Unfortunately, we did have to move ERP systems completely, and we had to complete it within the deadline. That was not our decision to do so, but we were forced to. We had to do it quickly. Unfortunately, that meant that the system was down for longer than expected. It took quite a big chunk out of our January sales to start the year. The good news is we were able to complete that integration and you know, get the system smoothly running you know, over the course of the quarter. Now we're in a position to gain back some of the sales, as you mentioned. We expect that when we do the final part of our integration later this year that it'll be significantly smoother now that we've gone through it and we've built the right teams, the right processes, and we have the historical experience with the new system. We don't expect this situation to continue to come around and, you know, nip at our sales. This is sort of a one-time thing. Yeah, unfortunately, you know, with the consumer products, sometimes if you're unable to complete a transaction to a customer, they'll go somewhere else to find that. Some of those sales are obviously lost. We believe that some of them will be recaptured just over time from some of our enterprise clients. Ultimately, the key now is to make sure it's smooth sailing going forward. Oh, okay. That's helpful. I guess just kinda shifting gears to the partnership with Universal. I guess, just given the rationalization and the SKUs that you're doing, given the reduction in headcount that you're kind of taking on and all what's going on in the business, I guess, can you talk about why now is the right time to pursue a LATAM strategy? I guess, can you also talk about, you know, how you will go about this partnership and, like, how does it, you know, actually impact sales? You know, how are we gonna roll it out over the next few quarters? Thank you. Yeah, no, it's a great question. You know, I think it highlights one of the key advantages that we have at Greenlane being an ancillary provider. We're gonna be really smart about how we attack international markets. We're not going to be investing into infrastructure in these markets. The good news is we don't need to. We're gonna be focused on building our brands primarily domestically. Given our brands have you know high quality proprietary products meaningful brand value and traction with consumers there is appetite for these brands globally. Maybe in the past, we would've made that investment ourselves and put boots on the ground in these international markets. Under our new strategy, we're not gonna be doing that. We're gonna find partners that are fully capable, that are fully funded, that are able to just buy in bulk quantity, the products from Greenlane and be able to then leverage their own sales force and their own infrastructure in these international markets to gain traction with these brands and penetrate the retail customer and the end consumer directly. Our cost and our investment in this partnership is gonna be extremely light, outside of the investment we're already making in our brands and in our branded products, which complements our core business here in the US. That's how we're able to enter into an agreement like this and know that we're not gonna be taking much-needed resources from our base country here and allocating them there. We're gonna leverage their resources and their partnership to do the heavy lifting. This is a model that's extremely scalable. It's something we can replicate in a lot of these emerging markets, and it's something that's certainly asset light, as I mentioned. There's other demand from other distributors that are interested in these types of deals. You can expect to see more deals like this coming from Greenlane. We've also talked about how we're gonna be leveraging major global platforms like Amazon, eBay, potentially Walmart, to help distribute our products as well. Again, in the future, it's gonna be about working smarter, leveraging infrastructure that's already in existence, and being able to bolt on top of it in a very asset-light, cost-light manner. Now our core business, where we're gonna continue to make bigger investments, that'll be limited more to the domestic U.S., where we have obviously a huge opportunity with our industrial goods, that is yet to be materializing in some of these foreign markets, right? We need regulation and legalization before that part of our business shows up. On our consumer side, perfect opportunity to get ahead of the curve, get out there into these international markets without a big investment on our behalf, and still be able to reap those benefits and essentially front run what is going to be at some point a gigantic legal cannabis market. Great. Okay. Understood. I'll pass it on. Thanks. Thank you. Thank you very much. Your next question is coming from Aaron Grey of Alliance Global Partners. Aaron, please ask your question. Hi, good morning, and thank you for the questions. Hey, Aaron. First question from me. Hey, how's it going? During, you know, some channel checks, recently around New Jersey with the start of adult use sales, I saw a good amount of, you know, Greenlane branded products and third-party products that you guys distribute on display on the floor as well as countertops. You know, I know that was a big initiative that you guys had with the merger, with KushCo, kind of leveraging the two relationships. So love to get, you know, an update of the progress. You know, seems to be, you know, going well, you know, in the early days of that. Also, just in terms of new adult use markets, just in talking with a lot of, you know, the staff at dispensaries, they noted a big uptick in the number of accessory sales. How important you think it is for you to be able to be at the forefront of new retail stores opening up, with new adult use sales, how you're looking to then target new retail licenses as they're getting awarded in New Jersey as well as other markets that are coming online, such as New York and Connecticut, just to go along with that initiative? Thank you. Great question, and I'm glad you were able to see some of our products in those New Jersey dispensaries as they were lighting up into the first days of adult use. Look, I think it's a key part of our strategy. A lot of work to be done. We're just getting started. We have all the pieces to this puzzle, right? We have relationships with the large MSOs that control a majority of the retail, especially in the limited license states. We have the product set. It's a comprehensive product set. I mean, for a dispensary client, we could be their sole ancillary provider for all of the things that they would need. They could, of course, supplement that with one or two other providers. We do have the wide range of offering to be a meaningful, if not a complete solution, for these dispensaries, which is not the case with our traditional channel, smoke shop and head shop, right? You go to a smoke shop and head shop, there's thousands and thousands of SKUs. There's SKUs that Greenlane doesn't carry. Even if Greenlane wanted to try to carry all the SKUs in a smoke shop and head shop, it'd be impossible. That's gonna be a very different product mix than you're gonna see in a retail dispensary. Right? In a retail dispensary channel doesn't need to carry, you know, five or six different brands of rolling papers. No, they just need to have all the different relevant form factors, whether it's cones, whether it's rice paper, hemp paper. Those are things that Greenlane has within our VIBES portfolio alone. So you're not gonna see a need for as much SKU proliferation in these retail channels. Which makes it even more attractive channel for Greenlane to hopefully be able to own. So we're super excited, and we're gonna leverage those relationships, but we plan to do this more in an enterprise way. I think historically, we've sold to these clients more on a ad hoc basis. We've sold to... The good news is we sold to most of the MSOs a vast majority, and we continue to sell, but it's not a comprehensive enterprise solution yet. That's what we're having discussions with leading MSOs about right now, is really solving this or providing the solution for them to not only address the problem, but also to capitalize on an opportunity. I think smart retailers are understanding that ancillary products are a great additional value add for their customer. Now that retail storefronts, especially in some markets, are getting more competitive, it's a great way to differentiate. It's a great way to drive incremental spend. Again, somebody spends $100, they're likely to be able to spend another $5 on accessories, right? Or $10 on accessories. Great opportunity there, especially with tourists, right? They need something to consume cannabis with, and they might go after some of the cheaper price point items. If you're going with a heavy user, they might discover a vaporizer product that's better fit for their consumption needs. We think that again, being able to instead of just be transactional and say, "Hey, Greenlane has products. When you need them, buy them from us." We wanna be more of an enterprise solution where we can work with these retailers and say, "How do we best merchandise your store? How do we best optimize your ability to drive that incremental revenue and to create that value add for your customer?" It's not gonna be the same in every market. Being a national player, having that data, having that lens, or having that network that we do, that's really our differentiator. Not to mention our complete product portfolio, that, you know, we just don't see out there in the market that anyone else has, with our extent of our brands that we offer. We're gonna be leveraging all that. This will be a little bit of a longer sales cycle, and ultimately, it's gonna be something that becomes extremely sticky, if we're able to land these enterprise-type relationships with master supply agreements. In some cases, we're tucking these into existing master supply agreements that we have with MSOs for our industrial goods. In terms of servicing the more independent retail channel for social equity licenses and things like that, what we wanna do, again, being smarter, is build that into automated systems. We have our B2B portal that we've been in beta testing since the ERP integration in Q1, and we're expecting to be able to launch that live to our customer base here any day now. This is gonna allow smaller customers to transact themselves through our portal. Doesn't tie up nearly the same amount of resources at Greenlane. Makes that a much more efficient transaction. We wanna have self-service solutions for the smaller retailers, and we wanna have enterprise solutions for the larger chain, and we really wanna capture a majority of this market. We're super excited. Again, that was a long-winded answer, but great question, Aaron, and I'm glad you caught a glimpse of it, and it should only get more robust from here. No, thanks for the details, Nick. That was really helpful. Second question from me, just moving up north to Canada, and I know a lot more focus, you know, on the U.S. now, but could you just, you know, remind us, you know, where you see the Canadian market, you know, right now in terms of where it fits, you know, for Greenlane, particularly because it's still a very competitive market. You talked about, you know, lower margin products there, you know, historically. Is that still one where you're looking to maybe shift away, you know, focus right now, especially as you look to be a little bit more asset light and focused on profitability? Thanks. Yeah, another good question. We are gonna look to streamline our Canadian activities. One of the things about owning our own consumer brands is we can leverage the help of other distributors or sub-distributors that already have relationships in the market. There's certainly enough margin to go around when we own our own brands and we produce our own goods. We plan to do that in Canada on the consumer side. What we are seeing in Canada, which is very, you know, I would say it's expected, but it's interesting to see it materializing because we've been talking about this for quite some time. We are seeing a gigantic migration from smoke shops and head shops to LCRs, licensed cannabis retailers, right? Why is that showing up so profoundly in Canada versus some of the markets here in the U.S.? The reason is, you know, it's still very early here in the US, a lot of these limited license states. You know, these stores are more focused on selling cannabis. They're getting great margins still on their cannabis products, and competition is very light. The market has not yet adopted a wholesale or wholesale scale of ancillary offerings in many markets in the U.S. Now, however, in Canada, it's highly competitive, as you know. Margins of cannabis have come way down. Smart retailers have really embraced the ancillary products, which is what we offer with our consumer goods. They're looking for ways to offset the margin degradation of cannabis with these products that have typically keystone-type margins, which is like a double-up for the retailer. You know, they buy a pipe for $10, they sell it for $20. Then, they also want to differentiate from competition, right? You go to a market like Toronto, there's a dispensary on every corner. How do you become the dispensary of choice? Well, if you're the one-stop shop where someone can go and buy their cannabis and their papers and their pipes and their vaporizers, that's a competitive advantage. We see Canada really embracing this. Again, for Greenlane, we wanna be able to streamline. We wanna get our self-service portal open in Canada, which is scheduled in the coming months. We also wanna be able to leverage sub-distributors. We wanna really do less with more, or I mean, we wanna do more with less infrastructure, right? That’s our key here. We see opportunity there on the consumer side. On the industrial side, you know, it’s been tough. You know, you guys know, obviously, everybody’s seen the market. There’s massive facility closures left and right from the LPs. There’s layoffs left and right. You know, these are the companies that also simultaneously need to invest in hardware to build their vape brands, packaging, child-resistant packaging. They’re gonna be very cost-conscious at the moment, right? Normally, these companies would spend the extra money to go with the CCELL product that’s best in class. They might not be in a position to do that right at this moment. Same with packaging. A lot of the unique custom proprietary designs are being downtraded for "give me the cheapest option available." Canada, on the brand side, on the cultivation side, it's a bit of a survival mode up there. Again, in that market, not to say we can't make sales and we don't make sales because we do, but we're not gonna be as focused there, right? We're gonna be more focused in the market that's growing, which is the U.S., where companies actually do have the capital to invest more heavily and, you know, are at the size and scale and volume where they need a solution like CCELL that is, you know, such has such capacity and high quality in their manufacturing. You know, we're there. We expect that to continue to be tough in the near term on the industrial side. We're more focused on taking advantage of Canada on the consumer side at the moment and really focused on industrial goods still with the U.S. MSOs. All right, great. Makes sense. Thanks so much for the call, and I'll jump back in the queue. Thanks, Aaron. Appreciate it. Thank you. Our next question is coming from Scott Fortune of ROTH Capital Partners. Scott, over to you. Good morning, and thank you for the questions. You mentioned a little bit kind of the sales channel mix, but can you provide a little more color on the smoke shops channel as far as that as a sales channel? With the cuts that you've made on the sales force focused on third party and, you know, supplying those channels, how do you look at the channel mix going forward, especially in light with the smoke shop channel, as you mentioned, a lot of focus on the MSOs going forward here? Yeah. Hey, Scott. Good morning. Appreciate you dialing in early. I know you're West Coast, like us. Look, I think the reality is, you know, we're going through a transition. As you guys can see, with the total business, with what we're doing here, you know, cost cutting, right sizing, streamlining our go-to-market approach, internationally and domestically, trying to use technology tools versus people, and ultimately pivoting the business into more higher margin goods. So that's a bit of a transition we're going through as a company. It's also a transition that we're going through with our customer base. So as you mentioned, smoke shops and head shops have historically driven the bulk of our consumer goods business, and it still does today. That's still a very big channel for us. We have started using sub-distributors a lot as well, but they're accessing those channels too. It's been a big complement to the same end channel, which is smoke shops and head shops. A lot of our business is tied up there. We're simultaneously gonna continue to work those channels because they have historically been our bread and butter, and it's an avenue that Greenlane plays well in. However, we'd like to move a lot of that purchasing, especially for the smaller mom and pop retail owners, to a digital platform, right? Again, using technology instead of manpower. That transition is underway. Like I mentioned, the portal is set to turn to the customer side any day now as we've been in beta testing on the Greenlane side, you know, working out all the kinks over the last couple of months. So we're gonna continue to service that channel, and we wanna do it in the most efficient manner possible. We're simultaneously really taking our eye toward the future channels. You know, as Wayne Gretzky said, you know, we wanna skate where the puck's going, right? Where we see that going is more to where there's higher consumer traffic, right? As cannabis moves out of the shadows, you know, folks are in our opinion no longer need to go to a separate smoke shop or head shop that was kind of built as an alternative channel because none of the traditional channels were open to carrying these products. What are these traditional channels? Well, we talked a lot about the retail cannabis retail store. Again, when there was no cannabis retail store and everybody was transacting with their dealer on the corner of their house, well, he's not gonna be carrying around a bunch of ancillary products or pipes or whatever. They do need to travel to that smoke shop and head shop. Well, once they can go to a retail store or even a delivery service to buy their goods, they can hopefully then also be able to get their ancillary product needs met at that same point of transaction. We really focus there. We're also focused on C stores. This is a channel that has historically benefited from the tobacco consumer. That consumer is dying, literally and figuratively. We know that these C stores are finding an interest in what's next, and that's the millennial consumer who is more aligned with cannabis consumption. Rather than, you know, using an old tobacco brand like Zig-Zag, for example, that's associated with the nicotine tobacco industry, the millennial consumer is more inclined to buy VIBES. That's a cannabis consumer cannabis rolling paper brand, right? Being able to take advantage of that opportunity and look, there's products that they've historically not carried, like, you know, pipes, spoon pipes, one-hitters, dugouts. We've got the silicone line with Eyce. It's doing very well with C stores. We see that as a great opportunity. Now they're not gonna carry everything. Again, our premium DaVinci dry herb vaporizer is $300 price point. That's not an item for a C store, but there's gonna be a lot of volume transacted at C stores. It's really an opportunity to be a first mover and to give them a new slate of products to replace what they've historically benefited from, that incremental spend on the tobacco side that's slowing down these days, be able to accelerate them into a new category. We're also super excited about Amazon, and we've talked about that a lot. Amazon in the U.S. is still pretty restrictive. We can't sell our full catalog. There's a lot within our catalog we can sell here in the U.S., and we're expecting to launch our comprehensive Amazon strategy here very soon. We've been in the background building out all the data materials ad campaigns, all the stuff that we need to do to launch. In Europe, for example, they allow a much broader swath of our catalog. Virtually all of our products can be sold over there. So Amazon is great because we can leverage that globally, again, without putting signif- Why weren't you buying your grinders and your papers from Amazon? Because you didn't think they carried it, right? You're used to going to smoke shop and head shop. Well, as you see, these products are now more available on Amazon. Just like consumers have changed their behavior with virtually all other brick-and-mortar, and they're now buying more online and buying more on Amazon, we expect the same to occur for our ancillary products as cannabis becomes more normalized and destigmatized. We're very focused on these kind of new, you know, again, where the puck's going channels. Not to say we're not gonna continue to monetize our existing smoke shop and head shop channels, especially if we can do it in a more efficient way. I appreciate that detail. That's helpful. Real quick, thinking about your business pace compared relative to the MSOs and broad look at what's happened here, obviously a slower 1Q, but we see a seasonal pickup in March and April. Many of these MSOs are looking for stronger H2 growth here. How are you seeing the retail store pace now? Now New Jersey's on board, as these new states are coming on board. Kind of what's the order level from the MSOs or what are you hearing from your MSOs partners as kind of an outlook here into the Q2 already here and going forward? Yeah, I mean, look, I think everybody's you know, trying to scramble and get ahead of every opportunity. We know New Jersey was a big one. You know, we're seeing obviously that show up in our in the forecasting and demand planning that the MSOs are doing with us on their industrial goods, right? That's obviously much more critical. If they don't have jars, they don't sell flower in New Jersey, right? If they don't have vape pens or cartridges, they don't sell vape pens. Now they'd like to have you know, a fully stocked retail store with papers, lighters, grinders, all of that. But if they're out of one of those items or they don't have the complete offering, you know, it's not the end of the world. Consumers still walking in, consumers still buying cannabis. It's a little bit different on both sides of our business. We're getting more visibility on our industrial side than we are necessarily on the consumer side. We are seeing a little bit of a pickup with that channel on the consumer side, but we want these to be more comprehensive agreements, the enterprise type sales. We don't have much that we can report on that other than anecdotally. You know, for example, one new MSO, not new, an MSO that we hadn't done much historically with on the consumer side, but we have on the industrial side. You know, they bought you know I think $400,000 worth of grinders, right? You can just kind of see the scale that an MSO that owns, you know, 100 doors or whatever, can buy in versus the smoke shops and head shops that, you know, maybe have a couple store fronts and are buying, you know, grinders across, you know, multiple vendors. This is again why we're investing so much in this channel. Again, just anecdotal stuff at this point, but we expect to be able to have more comprehensive and substantive data that we can report on a go-forward basis as this starts to heat up. Makes sense. Strategically focusing on the commercial or industrial channels. That's it for me. I'll jump back into queue. Thanks. Thanks, Scott. Appreciate it. Thank you. Your next question is coming from Glenn Mattson of Ladenburg. Glenn, please ask your question. Yeah, thanks for taking the question. Perhaps you touched on this and I didn't catch it or whatever, but I just thought I'd. Sorry if it's a repeat, but you talked about kind of January sales being hurt by the ERP implementation and stuff. I just wanted to get a sense of, you know, it's not clear if they'll be made up or not because like you said, sometimes you miss those sales if you miss your window or whatever. Could you just give us a general sense, has like the back half of the quarter bounced back to more normal levels and then particularly like into April? Is that how you'd characterize the current environment? Certainly, January is the worst month and, you know, a little bit of a rebound in February and then March. April was a strong month for us, you know, just given 4/20. You know, we are going through a lot of changes at Greenlane, so the ERP was obviously a very big one that had a material impact. But there's other changes that are, you know, make it hard for us at this very moment to kind of forecast, given that we're, you know, reducing SKUs, blowing out all the inventory. We've made some changes with personnel, as you guys know. You know, it's hard for us. We'd like to be able to give better visibility and guidance, and we plan to, but part of that's making sure that we have a business model that is more predictable. We're leveraging contracts, we're leveraging larger customers that we can forecast better, and we're leveraging automated tools so we can transact more efficiently. You know, we're gonna, in terms of your question specifically on the revenue, some of that is gone certainly. Some of that you know showed up in later months, March and then April. Ultimately some of it's about to sell through, so when this product sells through, we're hoping to get bigger buys. Again, very hard to forecast right now on a go-forward basis. Right. Then, when you talk about profitability in the Q3, you adjusted EBITDA basis, and I know you're not looking to give guidance I guess, but just the general sense of a ballpark range of what kind of revenue level you need to be at and what kind of gross margin level. I don't know if you have thoughts yet on kind of like, you know, there's a lot going on with the gross margin, so a lot shifting between the integration of KushCo and the, you know, getting rid of the kind of lower margin stuff. Just like a general sense of where you think gross margin will be when all this plays out maybe in 18 months or 24 months or something like that. Yeah. If you look at our, obviously there was some one-time inventory things. If you look at our adjusted gross margin coming in at 25.3%, we called out the mix shift, you know, and in Q1 specifically it was more skewed toward our industrial goods just given the fact that the consumer was impacted by the ERP migration, right? Even so with that we were still over 25% on an adjusted basis, on a normalized basis. You can expect that to be sort of the floor that we're targeting. Really we believe the margins should be in the high twenties. Our goal is really to get those to 30, you know, certainly by Q1 of next year. That's gonna be what we're working on over the course of this year, as we have margin enhancement initiatives that involve how we structure our pricing, various pass-throughs and surcharges, to offset some of the heavy freight costs. Of course, the broader mix shift to higher margin Greenlane-owned brands. We're very confident there in terms of modeling for profitability. You know, we know the one thing that we can control more so than anything else is our costs. We've just simply had far too high of costs at this business. If you look at, you know, Q1 of 2021, for example, you know, we had 16.5% SG&A, and that's, you know, more than almost double our gross profit. If you go into this year, we're at a similar ratio. Again, Q1 is when we did our right-sizing, when we took a lot of restructuring charges and severance charges. We've guided that we believe, you know, we can be down to $15 million in Q3, so that $14 million-$16 million range. That would mean that we would either need to do $60 million in sales at a 25% gross margin or some number lower than $60 million of quarterly sales at a higher gross margin if we're able to get a few extra incremental margin points. You know, we're right there. Again, you know, $46.5 million this quarter, but we did $55 million in Q4, you know, prior to the ERP and some of the disruption. We're right there. Again, we've got work to do. We're very focused on building out, you know, certain channels that we believe are gonna have the most long-term value. We wanna balance short term and long term. We really do wanna get this business profitable ASAP. We believe we can deliver on positive adjusted EBITDA, you know, in the back half of this year, consistently. That's how we would get there essentially in terms of the numbers. Hopefully we can drive revenue growth, although we are expecting revenue to be lighter, just given the fact that we've discontinued certain products. We still think we can get easily over that, you know, sort of $50 million threshold. If we can get up to $60 million, that's where you'd only need a 25% gross margin to deliver on a break-even quarter. We had planned to grow the margins as well, and potentially, you know, hit as low as possible on that SG&A range. Great. All right, that's it for me. Thanks for the call, Nick. Thanks. I appreciate it. Thank you. Your next question is coming from Andrew Bond of Jefferies. Andrew, over to you. Hi, good morning, Nick and Bill. Andrew Bond on the line for Owen Bennett. Thanks for taking our questions. Thanks, Andrew. With some of the macroeconomic factors you touched on at the top of the call, just wanted to get your thoughts on some potential consumer headwinds you might be seeing, specifically related to your consumer business. Are you seeing a more challenged consumer this year, related to your business? And do you see any particular risk specifically around sales from some of your more durable products like pipes and devices like Eyce or DaVinci, versus something like a rolling paper with VIBES? Thank you. Yeah, great question. You know, given all of the things that have happened internally, it's hard for us to know the impact that, you know, consumer spending alone has had on Greenlane sales. One thing we can look at is our websites that are geared more direct to consumer. Those are certainly down, certainly significantly from, you know, the COVID stimulus days, right, 2020 and even into 2021. We could read into that a little bit. I think what's probably interesting data to look at, and I haven't, to be honest, digested it fully, is, you know, sales of our lower price point items, some of the items that, you know, are just gonna be more consistent. They go into like a C store, for example, and that would be VIBES, that would be Eyce. You know, those silicone products, especially the smaller hand pipes and spoon pipes, come at a very nice price point. I would imagine the volume there has been more stable, versus the higher end stuff, right? The ultra high end, you know, we sell Volcano vaporizers from Storz & Bickel. We sell the PAX products. We sell the Grenco products, which are a little bit of a lower price point. We also sell our own DaVinci dry herb vaporizer, which is top of the market in terms of price and quality. I would imagine that's where we're probably taking more of the brunt of this hit with the consumer discretionary spending being challenged in this current environment. I regret to say I haven't fully digested the data, and a bit of that is a little hard given all the other changes we've had at the company, but something we will certainly be looking into more as we progress and seeing how that impacts our business. Yeah, fair enough. Just quick follow-up to that. Within your strategic measures on slide 4, could you tell us which products or which brands specifically you're planning to raise pricing on? Is this more related to some consumer products or industrial side of the business? Any color around that would be helpful. Thank you. Yeah, no, it is around both sides of the business. When it comes to consumer brands, we are working with still some partner brands such as PAX, Grenco, Storz & Bickel, as I mentioned. We're gonna continue to sell through some of the other third-party brands that we've historically carried because we still have inventory in stock. The idea is once we sell out of that inventory, we won't be rebuying a lot of those goods because we're gonna be more selective about the partners we work with. We do have much stronger margins on our Greenlane brands, so we're less concerned about incremental price increases there. We've worked with some of the third-party brands to offer some price increases, which we have. Also just things like covering shipping and stuff that we've done historically. We look for ways to offset that and add incremental margin. On the industrial side, we've worked with key clients that we have master supply agreements with. We've been able to reach terms to increase some of those prices, in some instances as a shipping surcharge, in some instances just as a general material increase, so it varies. Of course the stock products that we sell, we're obviously in more control. We're looking at a couple things. I mean, cash flow is key. We're charging more deposits than we have historically, because cash is tied up longer, right? In this current environment, it's just taking longer to produce goods and get them shipped over. Even though that doesn't necessarily affect margin, it does help cash flow. We also have freight surcharges and tariff surcharges that we can play with. You know, we're monitoring everything as we get cost savings, we wanna be mindful of that. We don't wanna overcharge our customers, especially on the industrial side. We always have to be very price competitive. We also wanna do what's fair, right? Through a lot of the pandemic, we ate the brunt of the additional expense with freight and with tariff. I think our partners that we work with, especially at scale, have understood that investment we've made and understand that, hey, if it's temporary, you know, fine. We'll bear the brunt and we'll get back to normal. This is, you know, kind of the new normal at this point, right? I think they're understanding, and we've seen that show up in some of those negotiations. Great. Thank you, Nick. Very helpful color. I'll pass it on. No problem. Thanks. Thank you very much. Your next question is coming from Pulkit Sabharwal of Canaccord Genuity. Pulkit, please ask your question. Hi, good morning. Most of my questions have already been answered, but just a couple of clarifications on my end. You talked about the ERP implementation and the impact in Q1. Now that I understood that this is, the system is now up and fully running or are there any more components left to be implemented going forward? Yeah. Good question. You know, the system was onboarded in January and you know began transacting the system in mid-January. But it was very clunky, right? We've been able to make improvements throughout. We've been able to fix bugs. We've been able to make sure that you know that the data is flowing properly. Throughout most of this time, our sales team was entering orders into the back end of the system, essentially into the financial ops side of the system, which would be like entering orders into QuickBooks, right? It's fairly manual, right? It takes a little bit more time. I was saying on average, you know, our staff was taking, you know, 20-30 minutes to enter an order into the system, which is not ideal. Especially as you're dealing with a lot of small, you know, mom-and-pop type customers in some of the parts of our business with the smoke shops and head shops. What we were able to do throughout is launch our CRM tool. We have CRM where the customer data is, but it did not have a properly functioning order entry feature. Building the order entry feature, getting that dialed in, getting that beta tested, that occurred throughout Q1 as well and into Q2. We're pleased to have been able to launch that, which dramatically reduces the amount of time it takes a rep to enter an order. It goes from 20-30 minutes down to call it 5 minutes, right? You know, that just got live here recently, so you could see a big improvement with that change. The last piece which I've talked about is the self-serve portal. We've been testing that internally. We're about to flip that externally any day now and allow our customers to put their own order in. That takes your time of order entry down, again, from five minutes internally having one of our people do it to basically no time, right? Zero minutes, because the time is then put on the customer to do their own order entry, right? You can kinda see how we're progressively getting better and more efficient with our system. To answer your question, you know, the system's been live and we've been transacting, but these incremental improvements do make a very big deal. There's work that's been done, and there's still a little bit more work to do, before we have this exactly where we want it to be. Okay, that's very helpful. Just in terms of the impact on Q2, so essentially it's just gonna be the order backlog that you guys are going through as opposed to any more implementation, associated things, right? Yeah, exactly. You know, there's gonna be a little bit of disruption to the business, but not nearly like it was in Q1. Okay, perfect. Just one last clarification. In terms of the SG&A reductions and the headcount reductions that you mentioned in the press release and talked about earlier, are there any left to be implemented over the course of Q2 or the remainder of the year, or that's more or less it? Sorry, you said any more ERP integrations? No, I just meant the headcount reduction. Sorry. Oh, headcount reductions. Yeah. Look, I think we gotta continue to monitor our situation. You know, again, controlling what we can control. If the sales are there as we'd like them to be, then you know, we're in a great position. You know, if the sales remain a little softer than we'd like them to be, then you know, we need to take a little bit more incremental cost reduction. Now, the good news is we're not gonna have to do this in the form of layoffs. We you know, have natural attrition as does every company, especially in this environment, with the change in hiring and you know, the remote working. I just read an article yesterday, it's called the, they're calling it now the forever resignation, versus the great resignation. I think we've forever changed, right? Companies will have higher attrition rates than normal, for the foreseeable future, maybe forever, as the job market is more available to employees 'cause they can work from anywhere, right? That means that, you know, for a company that needs to reduce costs, you simply just don't backfill, right? We're gonna be mindful, and if, you know, if sales don't grow at the rate that we expect them to, then we're not gonna be backfilling a lot of these positions and taking the incremental cost savings there. In terms of the bulk of the heavy lifting, the large layoffs, anything like that, you know, we did what we needed to do in Q1. As most of the analysts know on this call, I mean, we like to work very fast. You know, we're even a bit disappointed that you know, it took us so long from the merger to kind of align on the new business plan completely, and some of that's due to you know, the market continuing to change and the further deterioration of cannabis equities in 2022, which nobody was expecting. People were expecting a rebound. We made all the adjustments as quick as we could. We implemented our plan starting in March. The plan is well underway, and we don't expect anything material to be added to that right-sizing cost reduction plan that we implemented. Okay. That's very helpful. Thanks a lot for the color. No problem. Thank you, ladies and gentlemen. That now concludes the Q&A session. I will hand back over to Nick for any closing remarks. Okay. Thank you guys all for joining today, especially on the West Coast. I know it's early, but you know, this is again you know one more quarter where you see a big transformation with the Greenlane business. We do really expect the business to normalize from here on out. We're very confident in our guidance on SG&A and our ability to get the business profitable this year, which we think is paramount in this climate. We're less focused on revenue for revenue's sake, but really getting the right revenue into the right channels that strategically position us for the long term, and doing it with the right product mix that can deliver on the right margin profile for where our business needs to be today. We appreciate you all being along for the journey and along for the ride. We look forward to giving you future updates and hope everybody has a great rest of your day today, and look forward to seeing you in a few months. Thank you. Bye. Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.