Thanks, Cheryl. Good afternoon and welcome to Green Thumb’s first quarter 2020 earnings call.

I’m here today with Founder and Chief Executive Officer, Ben Kovler; and Chief Financial Officer, Anthony Georgiadis. Today’s discussion and responses to questions may include forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements.

These risks and uncertainties are detailed in the company's report filed with the United States Securities and Exchange Commission and Canadian Securities Regulators including the annual report on Form 10-K which was filed on April 15, 2020 and our quarterly report on Form 10-Q which we expect to be filed tomorrow. These reports, along with today’s earnings press release, can be found under the Investors section of our website.

Green Thumb assumes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. Throughout the discussion, Green Thumb will refer to non-GAAP financial measures, including EBITDA and adjusted operating EBITDA.

A reconciliation of non-GAAP financial to the most directly comparable GAAP measures is included in our earnings press release in SEC and SEDAR filings. Please note all financial information is provided in US dollars unless otherwise indicated.

Thanks, everyone, and now, here’s Ben.

Good afternoon and thank you for joining us on our first quarter earnings conference call. While we are all settling into a new day to day one thing has remained the same.

The Green Thumb team continues to execute. Of course, the great John, the star of the team is the team and we truly have a great team at GTI.

I am proud to share that we hit the $100 million revenue milestone this quarter growing more than 30% quarter-over-quarter. As you'll see in the results we are beginning to see real operating leverage and free cash flow from our business.

We are well on our way to deepening the connection to well-being through cannabis by distributing our brand at scale. All of this while managing and executing through a global pandemic is a true testament to our team, especially those on the frontlines.

During this time, all our stores and facilities across our operating markets have been classified as essential and remain open for business. We continue to take extra steps to ensure a safe working environment for our team and a safe and welcoming retail and digital experience for our customers.

Despite the challenges brought on by COVID, it is truly amazing that I can say our manufacturing capacity expansion projects have continued and are moving forward. In response to the pandemic’s immediate impact on consumer shopping behaviors, we have accelerated the development of our omnichannel infrastructure including our e-commerce, customer service, delivery and curbside pickup platforms.

This accelerated expansion of our retail capabilities not only better service our customers during these unprecedented times, but importantly bolsters our existing platform. Turning to progress and COVID’s impacting our key markets.

Illinois just completed its first full quarter of adult use sales. Even with the stay at home and social distancing requirements that were imposed in mid-March, consumer demand for cannabis remains alive and well.

The quarter had approximately $200 million in industry wide sales, which equates to a run rate of about $800 million. This will be more than 3x 2019 sales and it wasn't just [indiscernible].

We saw a strong momentum continued in April where it was a 4% increase over March. We see the potential of the Illinois market to be at $3 billion and that means that even with this year's dramatic growth there is still $2 billion of opportunity up progress.

With our successful rollout of the adult use program and our leading position in the state we see Illinois as one of the highest return opportunities. We have seven stores open, our license for three more and remain very active and expanding the manufacturing and production of our brand portfolio.

Pennsylvania continues to be a growth driver and a top priority with a large medical program and the potential to transition to adult use the market continues to be supply constrained, but it's performing steadily despite COVID-19. We like our position and see solid growth opportunities as we continue to strengthen our vertical platform.

In April we opened our 10th Pennsylvania retail location and rolled out curbside pickup to provide patients with additional options for safe access. Strong growth in Illinois and Pennsylvania has helped offset some of the COVID regulatory driven softness in Massachusetts and Nevada.

At its core Massachusetts is a growing and high potential adult use market. In response to COVID beginning in March 24, the governor issued a temporary halt on adult use sales citing the issue of safe, social distancing from out of the state consumers.

At this time, only medical sales are allowed based on this order which is effective through May 18. Operationally, we continue to produce and distribute our brand portfolio to third party retailers and a Rise [ph] store remains open for medical customers.

We believe this is a temporary disruption and expect adult use sales to return once the restriction is lifted. Along the same lines, regulators in Nevada required adult use dispensaries to transition to a delivery only model beginning on March 20.

We quickly adapted and ramped up our vehicle fleet to provide incremental support to our third party delivery service. Recently on May 1, the state expanded access to allow curbside pick-up and late last week the state reinstated in-store sales with limited occupancy.

With our earlier curbside implementation in the Illinois, we were among the first to be approved and rolled out curbside service to our Nevada stores essentially overnight which provided a nice uptick. The temporary challenges in both states underscore the importance of our market diversification.

While the pandemic created headwinds in markets like Massachusetts and Nevada, I could not be more proud of our teams’ problem solving and commitment to serving the needs of our customers and partners while keeping one another safe. Right now, there is no such thing as business as usual.

That said, we want our customers to know how much we value them by providing the safest environment, superior products and highest level of service regardless of challenging times. Digging into our first quarter results, revenue was a CAD 103 million, a 35% increase from the fourth quarter 2019.

Revenue was $103 million, a 35% increase from the fourth quarter 2019. Growth was fueled largely by the expanded production and distribution of our brand portfolio, new store openings and increased foot traffic to our retail stores, especially in Illinois and Pennsylvania.

With the revenue gains, we see meaningful improvement in our operating leverage. SG&A was essentially flat to last quarter.

So with 35% growth in revenue, our SG&A improved significantly as a percent of sales. Excluding depreciation and amortization and stock based comp, the improvement is even more pronounced as you'll hear from Anthony.

Adjusted operating EBITDA for the quarter improved 85% from the fourth quarter last year to $25.5 million and we're proud of that number as it produced positive free cash flow after taxes. Turning to our operations.

Our activities during the quarter really set the stage for continued progress on our 2020 initiatives. On the Consumer Products side, branded products sales grew 21% on gross basis and 13% net quarter over quarter, with Illinois and Pennsylvania delivering especially stronger growth.

Green Thumb branded products are now sold in over 700 retail stores in the United States, including our fleet of Rise and Essence stores. We've been very busy with the distribution and expansion of our product portfolio and are excited to share the latest developments.

As you may know, Massachusetts' ban on vape was lifted at the end of the fourth quarter. We were pleased to see our Rhythm Vape resume sales in the state throughout the first quarter.

In Maryland, with our newly adopted – newly added cultivation capacity, we launched Rhythm flower and Dogwalkers. We also launched Soft Lozenges within The Feel Collection.

In Florida, subsequent to the quarter, we launched our Big Dog line extension under Dogwalkers, as well as Dr. Solomon's capsules.

It is also important to note that despite COVID-19 we have not seen a meaningful shift in product mix away from core Inhaleable product categories like flower and vape. Our branded products business continues at a nice clip even ahead of the completion of capacity expansion projects in Illinois and Pennsylvania.

In addition, New Jersey and Ohio are on track to begin production over the next few months. Our retail business also delivered solid results for the quarter.

Same-store sales were again strong. This quarter exceeded 75% of a comp base of 14 stores open for at least 12 months.

Sequential quarter-over-quarter same-store sales grew approximately 24% on a base of 33 stores. First quarter revenue including sales from 42 open stores and was driven by increased transactions and ticket size.

During the quarter, we opened three new stores, two in Illinois, Rise Joliet and Rise Quincy The state's first two adult use only stores, bringing our total open stores in Illinois to seven. In Pennsylvania, during the pandemic we opened Rise Cranberry bringing the total count to 10 in that state.

And subsequent to the quarter in April, we opened Rise Lakewood Detroit in Ohio bringing the state total of five stores and just this week we opened Essence South Rainbow our fourth store in The Las Vegas area and 44th store across the country. To open three stores across three states in the face of COVID is a true testament to the strength of our team.

On the capital front we continue to be prudent and disciplined capital allocators. In the first quarter, we completed two sale and leaseback transactions with the IIP for Toledo, Ohio and Oglesby, Illinois facilities which provides us with about $57 million of non-diluted capital.

Given the industry and especially at this time, we believe it is a wide new for shareholders during these sale lease backs with IIP. Our growth plans are funded and we believe the best use of capital is reinvesting back in our business and in our platform.

There is an, there is an abundant opportunity within our 12-state network to deploy capital and we should generate solid shareholder returns for the foreseeable future. I am more excited than ever about our business.

With that, I’ll turn the call over to Anthony to review our financial results for the first quarter.

Thanks, Ben, and hello everyone. Just to reiterate, we can’t thank our team enough for all their hard work this past quarter.

It was quite an emotional rollercoaster. On one hand, we've had excitement of adult use sales in Illinois, on the other overwhelming fear of the unknown as new to the pandemic spread.

Looking back to those dark days in March, I’m proud with how our team reacted. Are we perfect, no.

Can we make some mistakes? Absolutely.

We continually evolve and adapt, you bet. Ensuring to add the right of biography is great and up to this point.

Our obsessive focus on getting better every day would be a key part of the story. Before I jump into the numbers, I want to remind everyone that we are now a US domestic filer with the SEC.

All reported financials are now in US GAAP, our entire accounting team at HQ has been extra busy these past few months to make this transition a reality. So, a special shout out to their hard work in the midst of COVID.

As you just heard, our Q1 revenue finished over a $100 million, representing a 35% increase over Q4. When compared to Q1 of last year, up 268%.

Looking back, we probably should have issued new seat belts to all team members on New Year’s day, it’s been quite a ride. I have [indiscernible] to quarterly revenue is another major milestone for the company and then we hope to never look back on.

Our Q1 growth is primarily driven by increased product distribution across our footprint especially in Illinois with the onset we don't use sales in Pennsylvania where demand for medical cannabis continues to be robust. On a sequential basis gross revenue per consumer packaged goods segment grew by $8 million or 21% largely driven by strong performance in the two markets I just mentioned.

On net basis which accounts for the company revenue, our growth approximately $3 million or 13%. On the retail side of a quarter-over-quarter, our revenue grew 45% largely driven by new sales in Illinois.

New store openings and steady growth across our retail platform. Same store sales exceeding 75% for the quarter.

Another segment revenues split for Q1 ended 74% retail and 26% wholesale. This is up from 69% retail 31% wholesale ratio reported in Q4.

As we've highlighted on previous calls, this segmented split nets out intercompany revenue against the wholesale revenue which understates the true size of our CPG business. In Q4 the company generates $15 million intercompany revenue in Q1 $20.

In both cases this center revenue represented 19% of total revenue predicting the future of where this net mix is headed remains challenging particularly given the number of variables uplift. On construction front, we continue to make solid progress in our wholesale facility expansions.

Through today we have completed wholesale projects in Illinois, New Jersey, Massachusetts and Ohio. The only facility not yet operational is our Toledo Ohio processing facility which just passed it regulatory inspection yesterday.

In Illinois we’re now underway with additional extensions of both our Rock Island in [indiscernible] facilities. In Pennsylvania, we are few months away from completing our latest expansion.

While COVID through our construction and engineering team quite a curveball, we're proud to say that the net impact is a matter of weeks not months. Kudos to them for working some real magic here to minimize the impact on the business.

On the gross margin line performance continues to be solid well we did about 200 basis points of gross margin compared to Q4. Jump to any immediate conclusions given the impact or GAAP conversion had on or Q4 numbers.

As a team we continue to watch this very important metric closely and are pleased with the facility level trends we are witnessing as our wholesale revenue scales. In addition to revenue, another important story of the quarter is operating leverage and our ability to spread our fixed costs across a greater number of revenue dollars.

If year you unpack our Q1 SG&A of $45.4 million, you'll see the following. $10 million of DNA, $5.1 million in stock based comp and $30.3 million in operating costs.

So essentially, 50% to 45% or 33% is non-cash and non-operating. These figures compared favorably to our Q4 SG&A of $46.7 million which when broken down shows 13% to of DNA, 5% of stock base comp and 28.5% in operating costs.

We cut through the noise on a sequential basis, cash operating costs went up by approximately $2 million, while our revenue went up by $27 million, said differently for every incremental dollar of revenue generated. Our Operating costs increased by $0.074.

Now that is simple math. That's fun for the entire Green Thumb family.

It is also the result of successful execution of one of the key players in our entry open scale playbook. Other income for the quarter approximated $1.8 million which represents the net effect of the mark-to-market of our strategic investment portfolio as well as interest and other expenses associated with the debt raise completed last May.

The impact from these operational and financial highlights the company is generating $25.5 million in adjusted operating EBITDA in the first quarter a new company record. The bridge from EBITDA to our internal metric of adjusted operating EBITDA is a total add back of $5.3 million, $5.1 million for stock based comp and $200,000 for M&A and other non-recurring costs.

We continue to think adjusted operating EBITDA is the most important metric for our shareholders as it provides the base of operating cash flows the company needs to execute on its strategy of distributing brand at scale without the need for outside capital. Turning to our balance sheet, we ended the quarter with approximate $71 million of cash and $93 million in long-term debt.

During the quarter we completed sale leaseback transactions in Ohio and Illinois with IIP which once construction is complete we will provide our shareholders with a total of $57 million in non-diluted capital. As I mentioned a month ago, we continue to take a close look at all capital projects knowing that all construction projects for the remainder of 2020 are fully funded.

As we look ahead to the balance of 2020 as much as things change they stay the same. On the CPG side of our business, we will continue to invest in capacity and brand expansion in key markets.

On the retail side we will continue to be aggressive with new store openings where we think it makes sense. We also continue to accelerate our omnichannel strategy so that we can win consumer buying patterns fundamentally shift for COVID or otherwise you're already.

In summary, we will continue in that most heavily in markets where we have edge all the while maintaining or consistent and current approach to capital allocation. In addition, we'll continue to do our part to protect our team, our customers, and our communities when this terrible pandemic.

With that I will turn the call back over to Ben.

Thank you, Andrew. Stepping back our thesis is proving our only licenses and limited and limited license market is a very good thing and we have an entire portfolio of that.

While there will be things we cannot predict it sets up very well for our shareholders. We believe that our strong fundamentals and solid financial position will help us navigate through these challenging times and we will emerge even stronger and more resilient.

We continue to be bullish on the industry and do publish in 2.0 as inevitable. We are actively monitoring the intersection of the COVID the upcoming presidential election and the role candidates in providing much needed tax revenue and new jobs.

I want to thank all the key stakeholders in our business, our over 1,700 strong team members, our customers partners and new our shareholders for your continued support in Green Thumb. Stay healthy and safe everyone.

Take care. With that, I'll turn the call over the operator for questions.

Thank you. First let me congratulate you on an outstanding performance.

Very nice to see. It's a small question or a minor question.

We have debt of under $100 notice interest expense in the quarter was a touch over $5 million. What's in that interest expense number in the quarter was touch over $5 million.

What’s the net interest expense number and is that really in excess of what the run rate would be going forward?

Good afternoon this is Anthony here. So embedded in that number is the cash interest expense, which is a little over $3 million, as well as some interest expense that runs in that line item that’s non cash that’s related to the warrant issuance that was part of the debt.

I see.

On a go forward basis, the cash interest expense should continue to be little over $3 million.

Got you. Thank you.

And again congratulations on an excellent performance.

Thank you.

Great. Thanks for taking my questions.

And I’d offer my congrats as well. Really impressive quarter.

I was wondering if you…

Hi, Eric.

…could talk a bit more about some of the insights you guys have gained on the digital e-commerce side of things with curbside pickup and delivery mandates in your markets and you know what we might be able to expect from Omni-channel for you guys going forward?

Sure. Thanks for the question.

You know we're not breaking out the different channels, but what we see like everywhere is people want the assistance of a digital menu. They want to preorder and curbside.

People are not going into retail at the moment, so this was already a priority for us and its continued investment, continue development to that. But we’re essentially able to handle a similar number of transactions or more transaction size of equal or greater value in the last hours to be candid with you.

There’s shorter times as baskets are pre-built and whether it’s pickup, delivery, curbside or otherwise, we’re able to take advantage of that. But we got to meet the customers where they are.

We believe in the full scale relationship with them and frankly with the national retail platform we think we can build that.

Okay great, that’s and that’s great to hear. And then last one from me, could you guys give us an update on the timing around your product facilities in Illinois and Pennsylvania, I'm not sure if you've disclosed those yet but any, any kind of sense on the timing of those being completed would be helpful?

Thanks.

Sure. This is Anthony.

Let's start with, with Illinois. So we have two facilities here.

They, they both have construction projects currently taking place on site in Rock Island. That should be completed at some point in the third quarter, and then obviously that should be completed near the end of the third quarter/early fourth quarter.

In Pennsylvania, we expect to be finish with that expansion by the end of the third quarter.

Thank you. My question is on the CPG revenue growth.

Your growth in revenue overall has been fantastic, but the net revenues in the wholesale segment have been in a kind of mid-$20 million range for a couple of quarters. And I know you're selling your own product through your own stores, but is there something that is limiting the growth in that segment relative to retail.

And should we kind of expected to stay in that in that sort of range excluding any COVID impact in the second quarter until the production facilities open up later in the year in, in those key states?

Sure, Matt. This is Anthony here.

I think you nailed it. One of the challenges that we have is obviously we have capacity issues in the food markets where demand currently exceeds supply.

And so as that, as the capacity, as the construction projects are complete, you anticipate a step function up in terms of revenue across the wholesale channel. The one thing that will continue to temper that is in our company revenue across the wholesale channel.

The one thing that will continue to temper that is intercompany revenue where we are supplying our own stores with product and so that's why we made the decision to break it out separately here on the call just so folks could see it. Because while on a net basis it's hard to see a lot of growth we can certainly feel within the facilities themselves that are producing and shipping more units than we would necessarily think when looking at the performance on a net basis.

But you know again it's the way the capacity works it's instead of being linear it's step function up once the capacity is ready plans going to ground and they get harvested and then the effectively the additional revenue turns on.

Great. On the gross margin side what drove the gross margin down by that 190 basis points sequentially.

I would think that selling your own product through your own stores a very high gross margin sale but that you did have some compression there is that lease expense related or is there some component of mix seasonal or seasonality that would have driven that down. I’m just trying to deconstruct what happened with that rate in the quarter?

Yeah. It’s a tough comp over Q4 just given kind of the number of things that were in the gross margin line in Q4 related to our GAAP conversion.

One of the things we did on packaging we did see while we don't have the biological asset treatment now with GAAP you know we are still capitalizing some cultivation costs. And if you look at the total number of plants in the facilities and the age of those plants what we noticed is that in Q1 they were much younger so we capitalized less cost.

In addition we did operationalizing a number of assets in the fourth quarter that resulted in increased depreciation costs in Q1. So this is something we'll be watching closely over the next few quarters But I think just given the noise it's tough to do a direct kind of apples to apples comp.

Thank you. Good afternoon I hope everyone is safe and healthy.

Just sticking with the gross margin question Anthony so you guys have New Jersey in Ohio that are going to be coming online. So which – so we would be expecting some operating deleverage at the gross margin line as you scale back.

How should we think about that, thanks?

Thanks. The reality is the scale of the facilities in Illinois and Pennsylvania.

I wouldn't be surprised of that counters kind of be what you just described with the upfront cost of getting these facility is operational. In Ohio it's a processing only facility and so really the startup costs will be relatively limited because we're going to be buying them on the market and then converting it into – in the process products.

That's not the case in New Jersey but that's we're kind of building our capacity over time there so I don't anticipate a big hit to the P&L in anyone – in anyone time period.

Great. And like to squeeze in a follow up and then when you were describing the 13 percent growth for your consumer branded good business.

You said that growth was being driven by Pennsylvania and then Illinois that make sense in the helping velocity in this market, in the remain asset. So it’s wholesales channels in this market, but just as a point of clarification, were there markets then outside of Pennsylvania and Illinois where your wholesale would have been [indiscernible].

Sure, that makes sense. We don't know how specifically on this, but I think effectively know, the other business was remain strong just in large numbers and we look at the 21% so the gross which is amount of new product growth that’s happening which I think is the real way to measure the business from the growth, product and manufacture can product it.

So, now we have strength everywhere but as we putting the capital we can get the growth. These are the things you make every month.

It's hard to squeeze more out of that right.

Hi. This is Jeff [ph] on for Michael.

Thanks for taking the question. How should we think about the pace and potential locations of store openings in the remainder of 2020 and how much of a headway or disruptor could COVID be?

Sure. Thanks for the question.

This is Ben. We build in five stores this quarter and we have some visibility on the rest of the pipeline.

We’re not really guiding on the back half of the year, because we have the ability to sort of place the throttle as needed based on the market based on what's going on. I mean, the last time we talked to is March heading into the eye of the storm.

So we'll be in a better position to really comment on that after we get through June and July and where we go. But to give us some color with five open between another Illinois store opening later this quarter and with the other two licenses we're actively working on.

We remain flexible but Pennsylvania, Illinois, and Nevada remain really on schedule and working in Los Angeles, but COVID presents some issues but no change to priorities.

Great. And then as a follow-up how has the competitive landscape changed during COVID and is this disruption of bigger headwind for operators with less capital and could it create an opportunity for you to gain share.

Yeah. And I’d say as this is happening we're focusing inside on executing there's a lot of demand as this is happening, we're focused inside on executing.

There – there's a lot of demand. People are interested in the product.

Medical patients to feel better. Consumers to handle what's going on.

And we're just focused on executing. We're not really monitoring the details of what's going on with the each individual competitor, but we like the supply demand setup in our markets and we're very sensitive to what's going on in the capital markets.

This is not an easy business, it’s not a cheap business. So broadly defined an economic slowdown restricts capital.

And so makes those with capital and the ability to execute in a better position. But we are a 100% consumer focused.

We’re thinking about the consumer every day and how we make that better and more well-being for them across the country. We just going to go execute on the opportunity we have.

Thanks, guys. Thanks for taking my question and congrats on another fantastic quarter there.

Yeah. I, I thought I just ask about you know the previous guidance range that you guys gave for Q1.

Obviously, you're, you’re well exceeding that and you know just given the timing of when you issued those numbers. Could you give us any color on what was the driver of the beat versus your own expectations?

Yeah. Thanks, Robert.

Yeah. Hey, it’s Ben.

I would say you know coming into the end of the quarter in March, what’s, what’s, what’s…. remind ourselves where we were then a lot of uncertainty heading into the end of the quarter.

We saw a strong demand. But you know wanted to put numbers out there we know, and we feel comfortable with.

You know, I think there was some, but I think overall we've seen strong demand all the way through that you’ve seen the April sales in Illinois comp 4% better than March. And I would say just broadly it’s, it’s nice to get some dual momentum into the industry here in the United States.

This is a real, viable, multibillion dollar industry. And I think there’s good incredibly behind it.

Okay great. So that’s helpful.

And just on a follow up, I thought that was interesting what you mentioned Ben about the, the ability to curbside service in a more rapid fashion. And I don't know if this is something you could quantify, but does throughput actually increase with curbside service at retail stores given like you’ve said baskets are already pre-determined it’s just a matter of running them out to a car is that something you guys are seeing?

We’ve spent a lot of time on that. It certainly can be.

I mean it’s a move faster if you're moving lots of cars simultaneously with runners and WiFi outside and debit transactions at the car service. We’re trying to optimize the right experience for the consumer, but we can certainly run a very fruitful oriented curbside not quite drive-thru yet, but curbside experience for consumers to get the product that they want that they can engage with digital experience.

Hi, thanks for the questions and congrats on the quarter as well.

Sure, thank you.

So I think it’s, it's good to see and the strength you guys are seeing it in, in PA and Illinois. But just like to about you know the Nevada market.

Now you're going to have you know curbside you know coming back, coming online in the new stores opening as well. But can you speak to potentially what you saw in terms of the impact of sales from your stores just when you did not have access to that and then obviously with tours on being a hits in Nevada as well, just kind of what trends you're seeing specifically in that market?

Thank you.

Sure. I would say it’s rapidly evolving, right.

The last six weeks has been dramatic change. But primarily, what I would say is its regulatory driven softness, all right, it’s little too that you can’t come into store, you target the shop so delivery was ramped up quickly.

And then curbside has a big uptick and then in-store. From our business to the tourist economy right with this trip essentially shut down we're the fortunate position where most of our in a vast majorities I think we’ve talked about is a local traffic, local consumer not tourist.

But at the same time how is an economic recession or depression a major downturn going to impact consumers dollar share into cannabis which I think is at the core of your question and I think the answer is it's early. But we're not – we're not overly worried or panicked to see certainly other sectors that have good resilience and recession.

As people look for the products and so we’re seeing it in the stores that was a very warm environment people able to come out of their house over 100 degrees in Vegas but people like to experience and they like the product so curbside has certainly ramp that up. And we will be able to watch the state data as it comes out with Nevada 60-plus day delay.

So we will be able to see that.

Hi, great. Thanks for that.

And then just second one on you know the state of Florida. You know obviously a lot of uncertainty in terms of you know expanding brick-and-mortar wise just given COVID.

But you guys have done a good job of that. You know in the past couple of weeks but as you look at you know the next of course I understand you don't have a lot of transparency but is Florida kind of a market that is kind of secondary to some of those other ones and how do you think about kind of expansion in that state as you start six source today.

The cap has come off in that market so you still have some competitors are continuing to expand even that can go beyond the prior cap. So how do you think about that market and both capacity and regional expansion?

Thanks.

Sure. Florida is a great market.

We love it, Aaron. The one unique thing about the Florida market is forced vertical integration So as we really think thorough opportunistically allocating capital, we have higher priorities especially weighted against time.

And what I really mean is first mover advantage in several of these other states matters a lot for us. And so we prioritize every day, every dollar and we have to look to the highest, best, quickest you know shareholder returns on the capital is going to fortify our position over the medium and long term.

But that's not to say anything bad about the Florida market, to your point, very robust. You know certain – still no edibles which is on the horizon in a medical markets, we’ve talked hopefully is about an adult use.

So it's going to be a bigger market with 20 million people down there. There’s a lot of old people who would benefit or older generation folks who would benefit from wellbeing through sleep and pain management the cannabis can provide.

Hi. I'm curious on the Massachusetts, if you could give us a little more detail as to how it performed since the facility you shut down, just adding some color there would help us get a better understanding of maybe what to expect in terms of snapback when it reopens up there?

Thanks.

Again the Massachusetts market is made up of a medical market and an adult use market. And overnight the adult use market was over.

So it went from four adult user to zero. So you’re seeing a lot – and you’re seeing incremental more demand on the medical side of people trying to get help, so you’re seeing a little bit of strength there.

But essentially it's a full stop for all the adult use product in the state. We think that has no impact or will lead to pent up demand actual consumers’ needs and so when it's lifted, we're excited about that market.

We think it will resume with strength. I don't know if you've been broken out historically what you are mix is there for medical versus direct but would you comfortable doing that now?

Yeah. We hadn’t talked about it specifically but it’s not materially different maybe slightly more medical than the state numbers which are public, that’s a pretty good gauge.

States do a pretty good job of being transparent with the information and Massachusetts is really good at daily sales.

Hi, thanks this is actually Pat Sullivan on for Graeme. I just wanted to say or I just want to ask about the positive operating cash flows that you guys saw this quarter.

Is this something that you guys expect to persist this year? And I guess for the cash conversations or CapEx figures by magnitude kind of expected to hold in at the current levels or consistent with schedule impacted by COVID?

Yeah. So Anthony here, and look if we can keep our adjusted operating EBITDA at around or above these levels then absolutely.

You know the way we look at it we try to keep things pretty simple and when we're kind of sitting around the table we look at our adjusted operating EBITDA and we take a look at the impact of tax, we net out our cash interest expense and we look at the working capital kind of swing that we see from over a given time period. And our job is you know if we are generating sizeable adjusted operating EBITDA we should be able to drop cash through the operations so that it can help fund kind of future growth.

So that's one of the core things that you know at least our PA and accounting team kind of focus is on is just ensuring that the cash flows that we generate can be reinvested back into the business and that will generate positive cash flows. positive cash flows.

Okay great. And then on the, the CapEx figures do you expect those to hold in at the, at the end of the same levels or with the sale lease back into improvement and then schedule issues with COVID will that be tempered?

Yeah, so, let’s break that down, you essentially have three types of CapEx, we have maintenance CapEx, it’s not a lot, but it’s, its ongoing, it’s a relatively nominal number. We have wholesale CapEx which is very lumpy, typically kind of quarter-to-quarter depending on the progress that that we make with the construction projects that we have ongoing.

We have those who are fully funded. And then you have our retail dispensary build out.

So we’ve built out color 44 I think stores at this point, so we've got a pretty good bead on, on how much they cost and how long it takes to build them out, depending on the jurisdiction. Going forward, there’s probably going to be some lumpiness quarter-to-quarter.

But when we look at that our estimated CapEx for the year, it's probably at probably at or above the annualized number for this, for this quarter.

Hi everyone, congrats on the excellent quarter.

Thanks Andrew.

Just on the, the strength of the Q1 results. You've obviously set a very high hurdle for growing your business in Q2.

I'm just wondering what the impact on COVID-19 on some of your key markets and thinking Nevada in particular as well as Massachusetts. How comfortable you are in growing your Q2 sales over Q1 at the rate you’ve, you’ve done historically in the double digit range?

Sure. This is Ben.

We don’t give specific guidance and obviously it’s been a big step function this quarter. So I think it will be crucial to report in the same kind of numbers.

But I can tell you that the second quarter is still early, and we are halfway through but performing out of expectations. And what we did see like I said before some [indiscernible] voting in March does not change a net demand we saw in Illinois for example to your question the 4% growth in April over March.

So we’ll remain excited for the head count focused on the business and ready to perform. We are not only managing our quarter basis, but we’re excited about what's going on in our future for later this year.

Okay. Understood.

And just a follow-up to that, we are heading into a period here a tougher economic period. I just want to get your thoughts on where you think you're in-hose products, stocks up in relation of third-party products in terms of pricing levels.

I’m wondering if you're seeing any notable shifts in demands between your product portfolio between your various brands.

We’ll talk about that a lot inside and that we got to be careful to make blanket judgments on short term data in the supply constrained markets, which is really the predominant part of our business as we supply constrained markets. So we don't want you know pass certain people like things, value obviously is important.

But how is our product went up in different states for premium quality flower. And general we'll know with the highest quality flower in several of our states in Illinois and Maryland et cetera.

And that can take premium price. So we are fighting with that, but at the same time it’s important to understand that consumer and understand that there's a value offering and a premium offering in several different things in between.

So it's important to have a portfolio of brands that can appeal to the consumer.

Hi, guys. Thanks for taking my call and congratulations on the quarter.

Thanks, Bill.

Hi. Okay.

You can hear me. So for my first question I was hoping to get a bit more detail in regards to the Illinois adult use market.

Now I understand that you know management might not want to delve into state by state specifics but perhaps you can help me fill some gaps. When I compare your store count to the readily available data online of 65% approved adult use licenses.

I guess that implies a market share of approximately 10%. Now I don't think this much because you guys just discussed I mean your results indicate that.

But I was hoping if you’d be able to provide me with a bit more detail on the development of the store openings in the state and perhaps share some comments on whether you know this modeling approach to see how GTII compares to the competitors is fairly in-line with what you guys are seeing?

Sure, Bill. This is Ben.

So just set the table a little bit. At the end of the 2019, there were 55 medical cannabis dispensaries in Illinois.

Each one of those has the ability to also offer adult use product that’s approved by the state and local. And I think 48, 49 of those are able to do that plus or minus.

In addition, each one of the 55 getting the additional license open an adult use only store was nonmedical. And we've been the only company, we're the only company in the first quarter to open.

We actually did two of those stores. 56 and 57 in the state and now they are 58 open stores, three of which are adult use only stores.

So, we have seven stores opened now and a pipeline on the other three which we're excited about as I mentioned one of those coming up later this quarter. To your point on market share and what’s going on, we’re not really public with our market share or talking about that.

So we’d just like to live with the number, but I can tell you and there are some publicly available data on it that clearly we’re over indexed. We’ve been a leader in the space, first mover, and we’re good at operating these stores, serving customers, serving patients with care and you know and offering selection and service that people want and they’ll come back to, especially in a supply constrained market.

So we really like what's going on here in our home state and we frankly think it's a set up for many other states to watch what's going on.

Okay, great. Thanks for that.

And I have just one follow up question. Well a separate question.

So there's a number of your peers in the MSO peer group who seem to be hitting the funding crunch as of late and have already announced their intentions of monetizing or spinning off assets. Now, I know you guys get a lot of questions on M&A but with the continual slide of the cannabis state, you know has your strategy changed at all, are you seeing any interesting opportunities, are you still finding it more worthwhile to reinvest in your business due to perhaps higher ROI?

No change in strategy. We continue to look at everything and everything's on the table to make sense for shareholders or within our business.

But I can tell you the bar is high. We've got an amazing business and an amazing platform in the early innings.

So the M&A world you know I'm not interested in inheriting other people's problems. We like our business and we continue to see it as the highest priority and best use of capital for what we have today.

Just first question around Ohio, you talked about opening the processing operations center and you just got the final inspection completed. Congrats on that.

First question around Ohio, you talked about opening the processing the operations center. Yes, you just got the final inspection completed.

Congrats on that. So, I just wondering what the raw material supply is like in Ohio and I guess what, what you've done so far to secure supply?

I guess just to make sure. Hey Ross, Anthony here.

Just to make sure I heard you right, you were asking about the available value of trim?

Yes.

Strong, very strong. There is a lot of product on the market, to continue with the, the price insurance was when we started chatting with folks we were pleasantly surprised.

And, and so it's clear that some folks are sitting on lot of weight, typically kind of material that that we have not passed some of the stringent testing requirements in Ohio. But we don't see any issue with, with being able to fill that facility with the plant material to get things going.

Great. Thanks for that.

If I could follow up on New Jersey, we talked about this on the last call, just wondering what the latest is on the first dispensary and its performance since the opening and what your latest view is on, on the second and third locations if those might be 2020 events? That's it for me.

Thanks.

Yeah. I mean that’s the whole, that’s in accelerated timeline.

So, New Jersey remains a very attractive market. Not, not only we’ve spent a lot of air time on related deal on [indiscernible] But we see it coming up third right there, and a very attractive CAD 9 million plus personal market medical, some in operators, huge commands, states that’s looking for the tax revenue, we’ve got it on the ballot in November.

We opened the store and pass and the performance was above expectations and we expect that the second store licensed and approved, it’s a little hard to handicap construction and timeline, so I don't want to give you an exact timeline, but it remains a priority as we continue to scale product into a state that is tight on supply.

Yeah. Thanks very much and good afternoon.

A number of them have been covered off. Maybe you obviously made a number of initiatives with respect to the COVID-19 pandemic, both to protect obviously employees, consumers, et cetera.

Is there anything that we should expect in Q2 maybe a slight uptick in whether it be OpEx or maybe some of the stuff comes through your cost of goods sold? And all those initiatives maybe necessary – weren't necessarily planned three months ago.

I'm just wondering whether you're seeing anything there that we might see in the future results that we should be aware of?

Sure, Neal. So you know look obviously it's too early.

I don't think that you'll be able to see it rolling through. Obviously, we’re spending more on PPE and other things and some additional kind of processes that maybe adding some incremental labor here and there.

But I think just given the scale of the business I think it will – it will – it won’t be noticeable and we’ll look to other areas to cut back on to make sure that there's no kind of inherent impact on the business.

Great. Thanks very much.

Thank you. Good afternoon.

Very impressive quarter. Congratulations.

Hi, Scott.

Real quick, I want follow up, again, on the disciplined capital approach you guys are taking and you have lot of opportunities within your own markets and states, but what are you seeing. You talked about private sector really hasn't come down much as far as a pricing standpoint, but are you starting to see that occur a little bit more here and potentially look opportunistically from an M&A side, as some of these private potentially comes down from that standpoint?

Sorry, Scott. This is Ben.

Was your question about private sector M&A?

Yes and those valuations coming down, they remain pretty high for some of the good operators, are you seeing overall some of that starting to come down?

Yeah really the same ones public or private or whatever is going on plus public [ph] will take you pit in cannabis. We’re looking at the true business and the operations of that business.

You know the various metrics not so much public or private, I don't have a strong comment on the valuations in the private sector versus public about what's going on. But we remain looking at things and then everything make sense.

Everything is on the table could make sense but the bar remains high public, private or otherwise.

Okay. And then one follow up, obviously as number of transactions drag down strong retail growth here in-store, your foot size, you have delivery, are they all producing higher average tickets for you going forward as kind of lower in-store volume is offset by [indiscernible] but is each kind of channel producing higher ticket sizes for you?

So a little hard to comment specifically again is there is a short-term swings and various things. But I can say broadly I was hoping people want to go less often so they buy more.

So we’re seeing tickets go up through that. And as we enable the transaction we can enable people to spend.

So whether it's debit, curbside delivery and other things and obviously running delivery fees and different incentive programs and loyalty to drive that ticket to scale the business but people aren’t afraid to spend on cannabis such as they know they want it.

Thanks for taking my call. I was interesting and trying to break down the Illinois revenues.

Are you giving any forward guidance on Illinois and what you are expecting for the year. Thanks so much.

Sure, thanks for the question. This is Ben.

No, we are not providing for our guidance on it, but as you talked to the numbers like I mentioned in the state does a pretty good job of disclosing and being pretty transparent about what's going on. So you seen about $200 million of sales in the first quarter.

So that tracks to an $800 million business. And we don't think that that's an accurate measure of demand.

We think the market is entirely constrained by how much product is out there probably hits the stores, are there others. And so the sales have been a big demand.

So we've seen the size of the market depends on how much supply comes on line as Anthony mentioned we continue to ramps by our other friends in the states continue to ramp supply as well and we did demand will we do that. So I'd be surprised if it's flat for borders in a row and we could net size of the market is in excess of $3 billion and that's a material amount of money that's material amount of tax revenues and material amount of jobs and CapEx into the state and we will continue to look for jobs and other things.

So we're bullish obviously on Illinois here for the citizens and for the program. But that's not…

The current Illinois capacity, have you released the detailed amount of capacity for Illinois?

We have not.

Well, thanks everybody for joining. We're obviously excited and focused on the business here but everybody out there stay safe.

We'll be talking to you in a few months. Thank you.