Good morning, everyone. Thank you for joining us. This is our 25th annual Oppenheimer Consumer Growth and E-commerce Conference. I was very pleased to have you. I guess we're kicking the conference off at this moment. Thanks, everyone, for joining us. My name is Brian Nagel. I serve as the Senior Equity Research Analyst at Oppenheimer, covering consumer growth and e-commerce. I'm very pleased to have our first presenting company today, GrowGeneration, and two of the company's senior executives, Founder, Chairman, CEO Darren Lampert, and CFO Greg Sanders. Gentlemen, thank you for joining us. Thank you, Brian. Always a pleasure. I've had, you know, those of you who follow my research know that I've had the pleasure of covering GrowGeneration very closely now for a number of years. I remain extraordinarily impressed at how this business continues to evolve, particularly against a really difficult backdrop within the cannabis space. What I'd love to start the conversation with, Darren, is you made an announcement just literally a few minutes ago about an acquisition you're making. Maybe we could start there, talk about the acquisition, then we can talk more about how the strategy of GrowGen is evolving here. Yeah, Brian, it was a pleasure this morning. We just finished off a couple of months of due diligence, and we purchased Viagrow this morning. Viagrow is a small but growing company in the lawn and garden space that distributes proprietary brands into Home Depot, Lowe's, and Tractor. They have some wonderful contracts and some wonderful products that we believe, you know, have tremendous longevity in the industry. Viagrow is extremely undercapitalized. We're taking the company and really bringing GrowGen's knowledge of the industry, you know, from growing a plant. And, you know, we believe that we build upon, you know, what they've built over the last 20 years. Also importantly, we also have contacts within Big Box now and into lawn and garden that we believe that our Char Coir drip and other brands and hardcore brands would also serve a tremendous runway for us into lawn and garden. One thing that we have been very passionate about, if you can grow a cannabis plant, you can grow any plant. It is the most difficult plant in the world to grow. What you are starting to do is see some crossovers, some verticals from GrowGen. You know, we are coming out with products right now that, albeit, are in the cannabis space, but they grow a plant. They grow a stronger plant with stronger roots. We always say, if you can grow a cannabis plant and you use GrowGen's products, you will have the biggest, best tomatoes in the country, in your neighborhood. We couldn't be any more excited to start expanding GrowGen's reach out with our distribution and also our product knowledge. Darren, with respect to this acquisition, I guess maybe it's a good dovetail to kind of have a strategy of GrowGen is evolving. I mean, I guess as we're looking at this acquisition, you're talking about how, you know, this is going to help you partner with some of the, you know, the bigger box like the Home Depots and Lowe's of the world. As investors, should we expect more acquisitions like this to come? I believe you should on the product side of it, you know, and also on the relationship side of it. You know, what GrowGen right now is doing is, as we've told Wall Street and certainly have spoken about it, you know, pretty openly, that the TAM in the lawn and garden space is hundreds of times the TAM right now in what we do. We're in an extremely specialized part of growing. And what you've seen over the last 10 years is you've seen lawn and garden companies come into the cannabis space to try to help. We'll be the first going the other way that, you know, a company that has pretty much made its stake in the cannabis space, now switching over and also joining the lawn and garden space. We believe that we will bring cutting-edge products into this industry and really start growing our private label brands. As you know, we built private label at GrowGen from 0% about five years ago. It's approaching 35% of sales right now. We are rolling out new products, you know, on a monthly basis right now. You know, it would be no less an honor, but we do believe that these products will end up in lawn and garden and then also the cannabis space. We'll start really bringing some real dollars to GrowGen's portfolio. What type of investment? Again, I want to talk a bit about, there's kind of, like I was saying before, how the business model is really evolving here from a storage-based model now to one that's, you know, more focused on your own products and private label. I guess the question I want to ask initially though, is you know, particularly with an acquisition like this today, I mean, how much of an investment do you need in your business in order to support, you know, these types of acquisitions and then growing these types of companies or brands? Yeah, the one part that is really nice, you know, as GrowGen has consolidated over the last couple of years. A s everyone knows, back in 2021, we were a $425 million business and ran into some issues in the cannabis space and with legalization and everything else. You know, right now, when we take a look at the staff at GrowGen, our distribution centers at GrowGen, our mini hubs within GrowGen, you know, we believe we have tremendous runway without investing much money into these initiatives. You know, I think we have the nuts in the bolts in place right now, Brian, that we probably have a runway of $50 million with very little investment. You know, as we continue to grow this side of the business, you will see money, you know, dropping to the bottom line. We believe this acquisition is immediately accretive to GrowGen as we will be shutting their warehouses down, bringing their products into our distribution centers, and also combining it with our e-com division and our distribution division. You know, for us, it's a win-win. Now, look, I think a big theme of our conference, you know, over the next few days will be global trade and tariffs. Maybe we can just kind of dive into that here, you know, just talk about this acquisition. Where are these, where are, you know, either this company you're purchasing versus in general, where are the products sourced? To what extent, you know, is GrowGen affected by or impacted by some of these shifts in global trade policy, tariffs, et cetera? You know, we are seeing some issues with products where we're bringing in from India right now. As you know, they relaxed the tariffs for India down to 10%. Albeit, we're bringing in, you know, $15 million-$20 million of coco every year. We are negotiating with vendors overseas and also passing some price increases onto our customers. I think that's really what you're seeing around; you know, you're seeing that from most distribution companies right now and manufacturing companies. There's only so much you can pass on, but certainly a large part will be passed on. A lot of the Viagrow products that we're buying are manufactured here. Some are also manufactured over in India, where coco is coming in. It's a balancing act like anything else. Some of the products have sufficient margins that we can eat some of it. You know, it's going to be give and take. You know, right now, one of the hardest parts is, you know, we're very unsure of the go-forward with the tariffs right now. If they stay the way they are with just the additional 10%, it's certainly, you know, it's something that, you know, most companies can't handle. Talk a bit, Darren. Again, you're going just back to the evolution of the business. You know, not that long ago, you know, and I was following GrowGen closely, I mean, you were growing out essentially retail stores, you know, both to sort of DIY customers and professional customers focused primarily on the cannabis space. I guess the question I want to ask is, how should we think about the kind of the retail presence now of GrowGen, particularly with this new strategy? I think the future of GrowGen is not in the retail spaces, Brian. You know, cannabis was certainly a new segment, you know, that came very quickly and grew very quickly. I think what you're starting to see right now in the space that we're in, it's really gone business- to- business. Business- to- business, you know, right at this point right now, it's really serviced out of the warehouses, out of the hub stores. It's distribution to farm shipments. You know, right now, we're seeing much less traffic within the stores, you know, and those are getting less and less every day. It's not that business is not good. We're just doing a lot more shipping. We're doing what our customers want. We've opened portals up in the last six months that are working. We're starting to see the adoption of the portal business right now. Opposed to going to the store, you go on your portal and you order, and it shows up the next day or a couple of days later. With the implementation of our private label brands going into our warehouses from where we're ordering, it's just an easier solution for GrowGen, also a cheaper solution. We're cutting out basically the stores, or the middleman, in a lot of ways. What we've seen is, and I think you probably have seen it around the country, that, you know, rents continue to go up, labor continues to go up. In a business-to-business world, it's just not the way to service customers anymore. We may be giving up certain of our smaller customers that can go online or shop on our portals. But, you know, right now, you know, GrowGen has a very specific go-forward. It is shutting another 10 stores, getting down to that 20-store number right now. The 20 stores are really distribution centers for us. They're mini hubs. They're advertising for us, marketing for us. The easiest way to fulfill our customers. There are still certain states out there with a tremendous amount of growing because you have caregiver rules and just different licensing rules. The stores that have tremendous walk-in business, —those stores we will keep. But, you know, right now, we review the portfolio every day. You know, we still look back to 2020 when the company did $180 million in sales, pretty much where we are right now, and we made $20 million that year on an EBITDA basis. We continue to cut costs out of this business, Brian, and we continue to evolve. And, you know, GrowGen's only been in business 11 years. And, you know, there are lawn and garden companies out there, you know, still, you know, from the 1900s. And with the products that we're bringing out and the technology at GrowGen right now, you know, there's no reason that this company doesn't get profitable and gets back on that growth trajectory. If we're looking at the business today, you know, kind of looking over the next, you know, few several years, Darren, what's the model going to look like then? Is it, you know, you've mentioned the 20 stores are now service distribution centers. Would you need more distribution capacity beyond that? Depends where sales go, Brian. You know, right now, we have plenty of runway. You know, the runway right now, we can, you know, close another 10 stores and still service out of our distribution centers and hubs the same amount of business that we're doing right now. You know, we're just cutting out the redundancy. There's a lot of redundancy, you know. W hen you build a business, you know, from, you know, it was $80 million in 2018, and we grew it to $425 million in 2021. The redundancies are all coming out of the business right now. The technology is much better at GrowGen. Our distribution centers are working well. Our portals are working well. I think most importantly, you're seeing tremendous launch of products out of GrowGen. You know, GrowGen will be, you know, any, you know, it'll be partially a CPG company in certain ways. The products are going to be the most important part for us right now as we launch new products, you know, into both sides of the industry, both cannabis and lawn and garden. You know, a couple of one of our products is our Char Coir product is over $20 million brand right now and growing, you know— and our drip products also. We have shown to Wall Street and also to the investment community that we can take a product from R&D through registration, through launch and packaging. We have a tremendously dynamic team at GrowGen right now that is as sophisticated as any group on the plant- growing side of it. That's not just cannabis. It's lawn garden. It's plants. You know, and I always say, if you can grow a cannabis plant, you can grow any plant. How does competition change? I am going to continue here to my theme of, you know, how the business is evolving. Again, not that long ago when you were a retail operator focused on the cannabis space, and we used to look at this as, you know, in a very, very fragmented space, GrowGeneration was really the leading player. You know, as we are looking at the business evolve now and turn much more to our product company, moving beyond the cannabis space, how do you think about the competitive set out there? You know, the competitive set is certainly, you know, for us, we're the top of the food chain and we always will be. It's because of our commercial team also. One of the things, you know, as we close stores, you know, managers are staying with us. They're becoming commercial salespeople. You know, we're rejiggering in a lot of ways, you know, the way our staff works. You know, the big joke at GrowGen right now is if you're sitting in the store waiting for someone to come in, you're not doing your job. If you get back, get out on the street, you go to the farms, you go to the grows, you go to this, you know, you got to get out. You know, if you're waiting for someone to show up, you're going to be, you know, you're not going to have a productive day. You know, that's kind of what we've seen. You know, at GrowGen, you know, we track customers coming into the stores; we always have. When you start seeing those numbers drop so precipitously because people, you don't wake up in the morning anymore, Brian, and say. Y ou know, I don't want to be a banker anymore. I don't want to be an analyst. I want to grow cannabis. That happened back during COVID. You can't even imagine the amount of money that was being thrown in the cannabis space. It's disappeared. You know, there's a lot of pricing has dropped in certain places. You know, it's survival of the fittest in a lot of ways. There are a lot of hydroponic stores closing right now. The TAM is just too small for the amount that was built. But, you know, with what we have right now and the skill of our commercial team, our commercial team is growing. So it's not that we're stopping, you know; we're not stopping the train. We're reformulating in a lot of ways. That's helpful. In talking, you know, as you build this collection of brands, I mean, maybe we can go back in upon the acquisition was announced just a short while ago, you know, to what extent are your customers that if you have one brand, are they asking for more brands? I mean, having a bigger portfolio helped you endear you further, you know, to these customers, like, you know, like the Home Depots of the world, which you mentioned at the onset, or even some of your maybe your bigger commercial customers? I think when you hone in on the cannabis space, we're coming out with a process, Brian, that we believe, you know, you will grow, you know, probably the best plants in the country, but more importantly, at the cheapest prices. Products that we're rolling out right now are our drip brand, which, you know, which is again, you know, from we started, that's over $10 million right now. We believe, you know, it's got runway to $50 million over the next five years. It's the cheapest nutrient brand on the market right now when you go price per gallon. It's the cleanest. You know, we have side-by-side tests done. You know, we have lab reports done. The only issue we always have is it takes time to switch. You know, it takes time to switch people off their feeding regimens. It's kind of, it's almost akin to, you know, when you go into the drug industry to change someone, you know, from one drug to another. Everything takes time, and everything is very deliberate with the groups, especially the larger groups that we deal with. You know, we always say, you know, we need a little more time. When you take a product that's growing 25%, 30%, you know, 50% year- over- year, you know, for most products, it's wonderful. For GrowGen right now, you know, we're looking; we're always looking for more. We continue to innovate. Our guys understand the industry well. The packaging coming out of GrowGen is as sharp as any packaging you'll see in the lawn and garden space. You know, when you start looking and, you know, we've run all kinds of different tests, you know, and customer segmentation and everything else. What we've seen is most people in the world right now, you know, are not happy with the products that they're using in lawn and garden. Everyone's looking for something new. It's been a very stagnant space in places. You know, we believe that GrowGen can change that. I think that most people out there in this day and age believe that if you can grow a cannabis plant, you can grow any plant. What you're starting to see even in the small IGC world is new products all the time. When you walk into a typical, you know, IGC center, just a small independent garden store, they do carry cannabis products, products, soils, and everything else. We're starting to see a tremendous transformation over to coco. You know, we believe that we have the best coco brands in the country right now out of Char Coir, you know, from their coco coins that we just came out with that are in lawn and garden right now to our coco pots. It's just a cleaner way to grow. You know, we believe that, you know, you'll see a different GrowGen in the future, but we will still stay germane to what we do right now. Our commercial team will lead this industry on the cannabis side of it. There will be another group in GrowGen that, you know, specializes in lawn and garden and will take products that we're rolling out from one side of it and also bring it into the other. Over time, again, you know, just, you know, listen to how the business is shifting here. I mean, how should we think about what ultimately could be the split between the legacy, so to say, cannabis business and then, you know, this newer portion to, you know, lawn and garden or, you know, gardening more broadly? I think the bigger split we get, Brian, the more profitable we'll become, the more successful we'll become. You know, when we take a look at cannabis right now, you know, we believe the industry is flattened. You know, we still believe there's growth within the industry. Some of the holdbacks right now in the industry is that most of our customers have gotten much more efficient in how they grow and what they grow. What you're starting to see is when you look back five years ago, a lot of the cultivators are getting another 30%-40%, you know, from their garden, you know, using better products right now. You know, even though, you know, the cannabis industry is growing, whether it's, you know, again, single digits and everyone always thought, you know, low single digits, but our customers are getting that much more efficient and growing. They need less products to grow. You know, right now that's still a catch-up. We believe that our cannabis business is extremely stable right now. We will see some growth hopefully in 2026 within it as we stabilize it, you know, and, you know, as we close stores, we do lose some customers. We still need to pick that back up. The lawn and garden space, you know, we're starting from a, you know, a very small, a very small place. You know, we believe incrementally as we grow it, it will start exploding on the upside for GrowGen. We look forward to sharing those numbers in 2026 and hopefully breaking those out from our cannabis numbers so you can see the true growth in lawn and garden from us. Darren, let's just talk about, you know, again, you and I have talked over the years a lot about, you know, just we mentioned here, you know, kind of the health of the cannabis space and the drivers. I guess, you know, maybe get your latest thinking on, you know, what's happening with legalization, you know, on the, you know, local level, maybe even the federal level. You know, is there anything that we're talking about, you know, the business is not growing today like it was, you know, historically. You know, is there something that could, you know, is there something out there that could change to sort of say, really drive that growth in cannabis? There's so much that can happen, Brian. You know, it's been this back- and- forth conversation of probably going, you know, going. W e got in this industry in 2014. So it's been, it's going on 12 years. I'm at a cannabis conference right now in Chicago at Benzinga and having dinner with all the large MSO CEOs this evening. You know, everyone's still always optimistic, like anything else. We've heard very little from the government, you know, since the Trump administration has come in. You know, he was pro-cannabis prior to winning the election. You know, we believe that he will follow through with it. We just don't know when. You know, like anything else, the world is busy right now. It's probably not top of the list, even though it probably should be in a lot of ways. Anything when it comes to rescheduling, you know, safe banking will be a tremendous boost for this industry on the balance sheet side of it, on the income side of it, on the education side of it. Also the stigma against what you're seeing right now. You know, it's hard to believe, you know, in this day and age, you know, and, you know, where the world is right now, that you have a Schedule I drug that, you know, everyone is smoking. I mean, Schedule I drug is supposed to be something that is deadly, that there's no medical benefits to it. The schedule, what you see it right now, is so contrary to education, to science, to everything that you see. You know, everyone seems to be content within the government that just leave it there. It's, you know, it's something that needs to be changed. It's 75%-80% approval rating in the United States right now. You know, if it's not now, I would imagine going into the interim elections in another year from now, people are going to need some votes. Something's going to need to be done because it's really weighing on the industry. You're seeing a lot of closures. You're seeing a lot of bankruptcies right now in the industry on the growth side of it. You know, people that have, I mean, worked, you know, worked long and hard, you know, going out of business. It's not helping anyone. There's, you know, people losing jobs all over the country right now in this space. This is a space that should be thriving right now, not, you know, not dwindling. You know, like anything else, it's time. Everything is time. You know, the one thing I've certainly learned in Wall Street is people don't want to hear that. No one wants to hear time. People want results today. I wish I can give it to them, but we believe what we've done at GrowGen, you know, over the last couple of years, bringing inventory down about $80 million, cutting costs probably about $50 million, keeping our balance sheet extremely strong, and spending time restructuring this company slowly and getting it to where it is today, that we believe that this company will be profitable in the next couple of quarters. You know, from there, we believe that you will start seeing growth in GrowGen, you know, hopefully going into 2026. Would like to see it sooner, Brian. You know, it's just, again, we just, you know, I can't give you that commitment right now. In terms of rescheduling, Darren, you know, if this happens, or, you know, what's, how should we think about what could be the near-term, almost immediate impacts for a company like GrowGen? It brings money back onto the balance sheets of our customers. You know, right now, there was tremendous building and, you know, building of facilities between 2018 and 2021. Most of these facilities need to be refurbished. They need new lighting. They need new dehumidification and new air conditioning control systems. A lot of the companies do not have the money to do it. What you are starting to see is stress within the industry because a lot of the facilities are falling apart. The lighting is starting to go. The dehumidification is starting to go. The capital equipment is going. 280E, I mean, rescheduling gets rid of 280E, which is a tax penalty on growers, on commercial growers, licensed growers, because it is a Schedule I illegal drug. You know, President Trump was very amenable. He said he would state- by- state, but he would reschedule to three. Health and Human Services came out and recommended it. 95% of what they recommended to DEA gets approved. This one has been just shuffled back and forth and is sitting on someone's desk quietly for months already. This is contrary to what you've always seen from Health and Human Services and the DEA. What you will see bottom line is a couple billion dollars coming back onto the, you know, going into the income statements, back onto the balance sheets, and really shoring up the industry. You know, we always say the better our customers get, the better we are. It'll also help put away the illegal markets. The illegal markets have such an advantage over the legal markets because they're saving 80% and not paying taxes. What that does is it drives pricing down. Our customers cannot make money. If our customers cannot make money, they cannot buy products. They cannot pay their bills. It is that trickle-down effect that rescheduling will change it all if they reschedule to three. That is where it belongs. I mean, cannabis just is not a Schedule I drug. In context, fentanyl is a Schedule II drug. If you look at the schedules, cannabis is more dangerous than fentanyl. It is scheduled like heroin and some psychedelics. Again, we are not; this is not the 1900s. We look right now at the industry we are in. We are still in prohibition. You know, even though it's acceptable on so many different levels, the government's taxing it, making money. You know, you're seeing state- by- state, you know, the whole thing is a convoluted mess right now, Brian. You know, we believe it gets sorted out. You know, every once in a while, you hear something really positive, but it just disappears. You know, we still run GrowGen like, you know, like nothing's going to happen. When it happens, we believe there'll be a tremendous amount of building. There'll be a, you know, again, I think you'll see increased sales on the other side of it, which will trickle down to increased sales on our side of it. You know, right now, as you know, we have over $50 million cash on our balance sheet. We have, you know, mid-40s in inventory. You know, we have a small company, MMI, that's doing $25 million and making money. When you look in the investment side of GrowGen right now, you got a company trading, you know, with a $65 million market cap that's got over $90 million in cash and inventory, notwithstanding all the assets coming out of GrowGen. You know, we couldn't be any more positive in what we have here right now. And, you know, as time comes, I do believe that people will start understanding, really, you know, the potential and the power that GrowGen has in the future. You know, that's a, —it's a perfect segue. I know we're time's running down here, so maybe it'll be the last topic we'll discuss. Just, Greg, I'd love to get you in the conversation too on the capital side. Those numbers you just went through, Darren, you're extraordinarily liquid. I guess the way I want to ask the question is, I mean, given all the shifts happening at GrowGen now, you know, is there any need for GrowGen to raise capital? You know, is your balance sheet sufficient to sort of say get you through this transition? Yeah, we're in a strong financial position from a liquidity perspective. We've maintained cash between $50 million and $70 million for really the trailing three years throughout this downturn. We don't see any near-term need to raise additional capital. You know, from an operating capital perspective, you know, we generally run the business with $5 million - $10 million in capital on any given day. The rest goes into investment accounts. Last year, we generated close to $3 million in returns from our non-operating cash. It is a benefit and a strength in ways. We intend to continue to manage our balance sheet very tight, particularly through this downturn. The ways that we look at the use of capital are if there are ways that we look at, you know, potentially growing the business in the future, like the acquisition we announced this morning, we'll pursue those types of opportunities. Perfect. We got a couple of minutes left. Darren, is there anything else you want to make sure we, we, any message we want to get out there? Hey, Brian, I think, you know, I think the story is pretty clear. I think that it's not just a cannabis story. It's really, it's a lawn garden cannabis. It's a product-driven company right now that, you know, the closing of the stores, I think, is beneficial to the shareholders, beneficial to the company. You know, as we are able to use our portals, use our commercial team really to bring this company where it is. You know, we still do believe that GrowGen will always have some stores around the country. You know, we're excited about the path that we're taking right now. You know, our staff at GrowGen's, you know, the tenure of our staff, it's, you know, again, is getting better every year. You know, we continue to pick up tremendous talent in the industry. You know, I think you're going to hear some really good things in GrowGen going into 2026. We're excited. You know, we're excited about the industry. We're excited about the verticals, you know, where we can go and how we get there. I think you can hear some great things from us, Brian. We're excited. You know, you would never know by looking at the price of our stock, but there's a lot of excitement in our company right now. The staff is energized. The staff is ready to do the job really to get this company back to where it was a couple of years ago. John, I appreciate your time. It's always a pleasure having you at our conference. Good luck at the conference you're at. I look forward to watching the continued evolution here at GrowGen. Always appreciate it, Brian. Thank you so much for your time. Thanks, guys.