This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk03: greetings and welcome to the chalice brands limited third quarter 2021 earnings call and corporate webinar at this time all participants are in a listen-only mode as a reminder this conference is being recorded today tuesday november 23rd and will be available for replay on the company's website at investors.chalicebrandslimited.com it is now my pleasure to introduce the host of the call John Varghese, Executive Chairman, and Jeff Yap, President and Chief Executive Officer, who will share strategy and business updates, operating highlights, and financial performance for Chalice Brand's third quarter of 2021. At the end of the presentation, management will answer some previously submitted questions. If you are interested in asking a question and haven't done so already, please forward them to chalice at rbmilestone.com, and we will address them in a timely fashion. Lastly, RBMG is not a registered investment advisor or broker dealer. For more information, please visit rbmilestone.com. And now I'll hand it off to John Varghese, Executive Chairman of Chalice Brands Limited.
spk01: Thank you, David. Hello, everyone, and thank you all for joining us today to review Chalice Brands' record-setting performance for the third quarter of 2021. On the call with me today is Jeff Yap. our President and Chief Executive Officer. I would like to remind everyone that except for historical information, our discussion today will include forward-looking statements that are based on assumptions which are subject to risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Management can give no assurance that any forward-looking statements will prove to be correct. Forward-looking statements discussed on this call are relevant as of the date of this call, and we undertake no obligation to update or revise any of these statements except as required by applicable law. Management refers you to the cautionary statement and risk factors included in the company's MD&A by which any forward-looking statements made during this call are qualified in their entirety. Please note that all financial information is provided in U.S. dollars unless otherwise specified. Jeff and I have prepared a few remarks, followed by the review of the financial statements for the third quarter of 2021. And then during the webinar deck presentation afterwards, we'll answer some of the frequently asked questions of the past quarter. As anyone invested in the cannabis space knows, the entire sector has been in decline since March 1st, 2021, for a variety of reasons. Chalice, like all others, have suffered in terms of market capitalization and share price. In spite of it all, Chalice has continued and will continue to execute our strategy. We closed the homegrown transaction in May, and now after a full quarter of ownership, we're able to demonstrate the benefits of the synergies, both in terms of revenue and margin growth. Our short-term strategy comprised of organic growth combined with small, bite-sized acquisitions that allow us to add to our footprint. The reversal of the capital markets made access to capital difficult, which then forced us to delay some of the acquisitions that were available to us. The purchase of the four cannibalist stores from acreage, as announced in September, allowed us to add another four stores in Oregon without dilution, demonstrating our continued commitment to capital allocation and to try to build shareholder value. At the same time, we believe scale is important and to achieve scale, we need to keep finding ways to grow. Earlier today, We announced the closing of our financing that was announced in October, and we're able to complete the equity component at 75 cents per share, though the stock closed today at 65 cents, reflecting almost a 17% premium on that close price. This reflects the continuing confidence in the company by our supporting shareholders. As we are now cashflow positive, we can, and will use these funds for strategic purposes. With that, let me turn the call over to Jeff.
spk00: Thank you, John. Chalice Brands exists to serve the community, enable consumers, and empower small farmers and businesses so that more people can enjoy the benefits of cannabis. We continue to scale with discipline and build deeper relationships across our ecosystem, which has enabled Chalice to position itself as a market leader in Oregon. The company remains dedicated to executing our conservative crawl, walk, run capital allocation strategy, which will ensure Chalice is well positioned and prepared for both short and long-term growth and expansion. In spite of the market conditions, Chalice executed on several key strategic objectives during the quarter, building on our solid foundation and strengthening our position as a best-in-class multi-state operator. As of today, Chalice has an incredible workforce of over 250 employees and a combined retail portfolio of 16 locations, of which 12 are owned. Seven of those operate under the Chalice Farms brand and four under a management services agreement until we receive all our regulatory approvals. Additionally, Chalice Brands has retail presence in three significant armed metro areas, Portland, Salem, and Eugene. In the third quarter we complete the acquisition for retail dispensaries branded cannabis from acreage holdings which increased our retail footprint in the state of Oregon by almost 130%. The cannabis team has done a tremendous job in Portland, Eugene and Springfield, Oregon in building historic businesses and a strong reputation for friendly customer service. And recently had the opportunity to visit all four retail stores and experience the awesome environment their employees have fostered. With the cannabis acquisition, Chalice strengthens its customer base in the Oregon market, while also increasing our vertical margin contribution through the distribution of our Bald Pig Flower, Chalice Farms, Private Stash, RXO, and Elysian Fields branded products into cannabis stores. This acquisition, likewise, to the previous homegrown Oregon, is a great demonstration of our strategy, and we believe the company executes and growth is part of the run phase of our cap allocation strategy. The purchase of cannabis will dramatically increase our leverage and expand our core competencies in retail management, culture, marketing, digital promotion, and innovation. Similar to our strategy objectives with homegrown, cannabis will transition under the Chalice Farms brand eventually. We look forward to updating our shareholders on this transition. As part of our West Coast-focused growth strategy, we'll continue to seek out positions like this to demonstrate that we are principled allocators of capital. We are very proud of our Bald Peak Grow, which provides us with the size and scale necessary to fully vertical capabilities in every part of the cannabis supply chain, with indoor cultivation, an extraction facility, edibles manufacturing, in-house distribution, and our 16 dispensers. This year has marked a significant increase in our output in the quality of our Bald Peak flour. An all-time high of over 50% with Bald Peak flour representing our number one selling product in our child's stores. It's a 50% vertical contribution. We look forward to our continued positive impact on Bald Peak, led by our Chief Operating Officer, Megan Miller, and the impact it will have on our business. We continue to execute effectively in the business by staying committed to standards that John and I set for the Chalice brands. We feel strongly that our efforts since summer of 2019 had clearly demonstrated that the business model for the company is working. We are extremely proud of the team we have built at Chalice and created a culture of agility, integrity, and transparency. We always put the customer experience at the center of everything we do, and we were recently recognized as the number one hottest cannabis brand in Oregon for consumer engagement this past summer. We continue to carry strong momentum to close out the year and look forward to accelerating growth as we add more stores to our portfolio. Look forward to a very bright future as we continue to earn your trust and support through our performance. At this time, I will turn the call over to John, who will review our financial results.
spk01: Thank you, Jeff. As Jeff has highlighted, the team that he has built has executed and continues to execute on the crawl, walk, run mantra that is embedded as a fabric into our culture, the fabric of our culture. We continued our focus on operations and moving into the walk-facing California and boldly executed on the run phase in Oregon with the acquisition of Candleless in September, as we previously stated. Specifically, the third quarter of 2021 represented another strategic step towards positioning Chalice in a sustainable and profitable manner. We have reported a record revenue quarter and continue to show record year-over-year results, and we recorded a fourth consecutive and record adjusted EBITDA positive third quarter 2021. For the quarter ended September 30th, the company reported record revenues of $8 million, growing 29% year over year compared to 6.2 million for the same period in 2020. The increase in revenue from the second quarter 2021 is in part driven by a full quarter of revenues from the company's homegrown stores. Material growth and gross profit for the third quarter of 2021 of 3.6 million are 45% gross margin compared to 2.2 million or 36% gross margin for the same period in 2020. When we say the benefits of vertical integration, this is what we're talking about. As we blend in more Chalice branded products from Ball Peak, we start seeing it drop to our gross margin line. For the third quarter of 2021, we're extremely proud to support a sustained and positive adjusted EBITDA of $600,000 compared to a loss of $260,000 for the same period of 2020. That's more than a 300% improvement on the bottom line. For the nine months end of September 30th, 2021, Total revenue from continuing operations was 20.4 million as compared to 16.4 million for the same period, 2020, and almost matching the entire sales of fiscal 2020. For the nine months ended September 30th, 2021, gross profit was 9.2 million. Again, at a 45% gross margin compared to 5.1 million or 31% as of the same time in 2020, an almost 100% increase in gross margin dollars. For the nine months ended September 30, 2021, Adjusted EBITDA was approximately 1.6 million positive compared to a loss of approximately 1.9 million for the same period in 2020. This underscores what the team has been able to achieve. We have set the foundation for ongoing and continued growth. Management believes that a well-run, properly scaled, vertically integrated cannabis company should be able to achieve north of 25% adjusted EBITDA margin. And we are laser focused on achieving this goal. And as you can see by our quarter on quarter improved performance, we are laser focused on this. Our third quarter revenue grew 29% year over year compared to a year ago. Gross profit is up 43%, gross margin 45. We're very proud of all of these results and cannot wait to show continued improvement for the remainder of 2021 and beyond. At this point, I'd like to thank everyone who joined our call and we look forward to continued conversations in the new year. Now, if we could turn your attention over to your screen, Jeff and I will take you through the presentation focused on the third quarter, followed by a few commonly asked questions from investors during the quarter. David, if you could advance the screen. Obviously we have to highlight the disclaimers that are contained as we included in our presentation earlier. Next page. Chalice today, we're proud to say, best-in-class multi-state operator. We have demonstrated that we're an adjusted EBITDA positive, financially disciplined multi-state operator that's focused on building a leading brand presence in the West Coast. Our high-level competencies, which we show on this page, we have market focus. We have discipline growth. We have the competitive advantage that vertical integration provides, where our competencies are retail excellence, brand awareness, scale, regulatory expertise, network benefits, and technology. So Jeff, his background, his leadership, and the team that he's built, we will continue to establish brand identity. Jeff, if you could talk to us a little bit about where we are today. Sure. Next slide, please.
spk00: so you've been through the highlights next slide please next slide please so as we just discussed on our update we're now a workforce of 250 people uh we're working towards a five percent market share we're representing all the key metro areas in oregon portland salem and eugene we have statewide wholesale distribution i think the thing we are most proud of and clearly showing up in our financial results is a completely vertically integrated uh you know organization from our grow all the way through to our retail stores which i think has continues to drive really strong results and allows us to continue to acquire other operators and make that very accretive for our shareholders We're now up over 3,000 pounds of annual cultivation capacity at Ball Peak. We have a genetics library of just over 60 strains and can do as many as 45 in a flood. So overall, we feel great about what we're operating in. We have a wholesale operation in California, which distributes chalice and leasing fields, as well as our edible products. And we'll continue to kind of expand our presence in California in our next big opportunity. Next, please. We built the business around core brands. We have a fairly sophisticated brand architecture. Each brand having a distinct target, a distinct benefit profile, and distinct product mix. Those brands are Chalice, which has really targeted our new users. Elysium Fields, which is our craft, our highest quality. Think of it, these products are as close to the flower as possible. RxO, target towards active seniors. And then Fifth and Root is really a brand that allows us to build a national e-commerce presence. Currently distributed nationally in some large retailers like Ulta. But it's a CBD's clean cosmetics products. But the target is where we believe the growth opportunity exists when the federal legalization and opens up. We believe female head of house will be fundamental to the decisions to bring cannabis and plant-based medicines into homes, and we took them to allow us to build that relationship. Next, please. I think when you think about our team, I want you to think about the terms of balance. One of the things I noticed when we first got started was that you There's an art of running the science of running profitable business and art of cannabis. And I tended to see either or in business. So I saw people who had had long track record of making money in other businesses, but didn't understand cannabis. We had lots of people who loved cannabis and did not make a lot of money with all the regulations requirements. So we set off in the very beginning to balance those two things. john and i represent the balance john is focused on capital markets and our investors i get to focus on running the business we both recognized early on that both require intense focus and the best way for us to do it would be to partner up and where we go so we have two you know my background is primarily in running businesses and john's is on the financial side of the business and capital markets so actually works great Megan is just a great example of extremely experienced cannabis person. She started in the genetics business, worked with some of the top growers around the world. And brings, you know, on top of that, she has a strong sales background and sales leadership. But she came in, started first with her grow business. and vendors, and I think today we have some of the best vendor relationships in the state, almost of anybody. We have access to the best products for our customers. We made a commitment to our partners that, you know, our target is about 50% of revenue for our own products and 50% from the community. It's critical and we think it's a responsibility to provide a great opportunity for small farmers, innovators to have a home for their product also. Megan does a good job of doing that. Andrew has started at Chalice, originally Golden, left, came back, and then we convinced him to come on full-time as a CFO, but has not only strong public accounting background, but more importantly, strong financial across several companies in the cannabis space and some experience. Ginger's a great example of someone who comes out of a strong cultural company. She spent 17 years at Apple, drove global readiness. We really think about her as kind of integration officer from a culture standpoint. She's our GM of Fifth and Root. Karen Morgan, I've known Karen for a long time. Karen comes out of, she's probably at the bleeding edge of digital innovation. She's our chief marketing officer. She really understands marketing as a platform, building digital platform. Jane is, you know, 40 years In the HR space, large retail, Sunglass Hut, Coach. She was then 12 years at Apple, and then I worked with her for almost seven years, eight years at Microsoft. And then Joel, Joel Cobles, who runs production, I think had one of the first production licenses in the state of Oregon, was a response for launching some of the key brands you know out there today. And it's just been an incredible apartment, but really, really deep experience. You see a real balance across our team. I think that's what differentiates our team. Next slide, please.
spk01: Yeah, our board, Jeff and I are lucky. We've got one long-term continuity. If you think of where this company was two or three years ago, really none of these directors would have had any reason to continue except for their commitment to first to the company and then to Jeff and I. Rick Miller is our lead director. a gentleman that runs multi-state businesses in the senior healthcare. He's very much involved. He's a great counsel for Jeff and I, great strategy, and a voice of reason on the board. Bob McKnight was a co-founder of Quicksilver, an organization that he built until 2015. Strong retail branding and marketing expertise, which ties into where we want to take everything related to branding. He feeds in nicely with Jeff's background set. Scott Secord came on the board this year. He brings a wealth of public company experience as a CEO. He's had experience in another cannabis, in the cannabis industry. And he acts as our head of our audit committee. Larry Martin is a lawyer by background, but with an entrepreneurial background. He's been 35 plus years in various technology companies, real estate, consumer branding, Patrick Corbett- And the medical industry so it's a really well rounded board either an engaged for they certainly aren't getting paid much to be here so. Patrick Corbett- You know people don't really understand the commitment that the people at the table are doing or making to try and deliver value to to this company and we're proud Jeff and I are lucky and we're proud to have them around next slide please.
spk00: I mean, you hear us talk about this a lot, so we won't spend a lot of time, but it's the foundation under which we do, which, you know, I've always come to believe that capital and cash is the only lifeblood a business has. And if you don't watch it and guard it and protect it carefully, you could... find yourself in the wrong end. And so we think about minimizing the risk of our capital, minimize our capital allocation. So we have four phases. Crawl is all about validating a revenue opportunity. We try to minimize our capital investment. And to do so, we have to forego margin. So you end up basically Off-city margin to balance your risk. If you validate the revenue opportunity, then you can invest to accelerate revenue growth, which is the walk phase, kind of what we're doing in California right now. Run phase is that big step for you now invest to accelerate margin. And the great thing is you've taken all of, you know what your risk, you know, your return goals are, you know, exactly what, you know, you'd expect to see in invested capital. Because you have an understanding of your revenue, you're not guessing. So you have a pretty disciplined expectations of returns in each value. And that's really allowed us to kind of, I think, allows us to be very smart. It's an example of Nevada. We made a decision to pull out of that beginning of COVID because we didn't want to, you know, we didn't believe we're in a position to kind of accelerate the growth as we walked the COVID and 60% of the audience went away. We'd like to get back into Nevada. It represents a great opportunity, but just we use this framework to make those kinds of decisions. Next, please. We talk about this a lot, and I just think it's important. I think some people have written up Oregon as a mature, highly competitive market. But we think Oregon really is a bellwether. And I think if you're an investor in the market, you need to think differently about Oregon. Oregon was one of the first states to decriminalize. on marijuana in 1998. It has further decriminalized the rest of, you know, and I think the next thing, for example, psilocybin is first to decriminalize, you know, and put a regulatory framework in place for mushrooms. It's a mature and competitive market. And one of the things I've talked to several investors about, it's clearly one of the most competitive in terms of number one in retail stores per capita with 16 and a half dispensaries per 100,000. And if you can compete in a market that's that competitive and you then look at a market like, you know, out east Massachusetts, which are essentially monopolies, it doesn't take a lot of skill to operate in those markets. It just takes a lot of money. For us, you know, to operate a market like Oregon, then California doesn't make us afraid. Colorado, we think those are great markets to be in. We think Oregon is, it's to our advantage to learn how to work in a highly competitive market. It's a big business. I think it surprised everyone with its growth. It surpassed, you know, the billion dollar mark. And now it's the third largest market in per capita consumption with 275 annual cannabis spend per capita, which is pretty amazing. We think that when it is fully legalized, Oregon will be, if not the premier, one of the premier growing environments in the country. It will yield the best quality product anywhere in the world, and it will be coming out of Oregon. And then lastly, we're very proud of our senators, both Ron Wyden, our senator, and Earl Blumenauer, our congressman. They really are leading, I've seen at the forefront of the legalization efforts. We have great relationship with both of them. So we're honored to have them represent us in Washington. Thanks. This is just examples of our stores. Obviously, we have a lot more, and I'm having more drawn quickly so you can see them all, but not the 16 stores, but this gives you a sense of what our stores look like. Homegrown. Quickly, just to talk about it. It's a run rate of $11 million business. Really proud of the business that was founded by Alicia and her team. We love the brand. We love the people. And it's been a really nice acquisition for us. We're seeing really nice growth in our vertical product sales, which I think is a great reflection of the quality of our products. You know, we'd love them to push them, but at the end of the day, it's up to the folks in stores and their customers, and our products are really, really well received. So overall, we think this was a great addition to our footprint. Next. Cannibalists, you know, for us, the thing we love about cannabis, it's got one of the very first retail dispensaries in the state of Oregon at the firehouse is now in our umbrella. We have the sorority house down on campus in Eugene, just one of our favorite stores, and two other nice stores. It's a really nice fit. We've liked working with the acreage team. They're terrific. And this is a deal that we were able to close without putting cash down. So for us, this is a great addition. We'll wait for it. And I'll be able to transfer the licenses. And when that happens, that will become a fully part of our footprint organization. The plan is to have both homegrown and cannibalists all operating under chalice. This time, for the first time, we'll have the same holiday programs in all of our stores, the same point of sale material, the same look and feel. All of our vendors who participate in our holiday programs will have the benefit of all of our stores and being able to participate and show up in every one of those stores. So it's been a huge win. The scale and leverage that this has allowed us to have as we've gone from seven to 16 is a huge change and has been great for our vendor partners. Next.
spk01: Yeah, so come back to the financial highlights and we'll wrap this up. I think as we announced in the earnings call, this was the biggest milestone we'd like to talk about is the over 300% swing in EBITDA from just EBITDA from a loss same time this time last year to a adjusted positive EBITDA of around $600,000. That's another record for us. And really, it's a statement of we everything that Jeff just finished talking about the vertical integration is starting to work. And we're, you know, we are poised to just keep seeing a creative growth as we layer in our organic growth, the swing of the product mix, and of course the opportunistic acquisitions that we'll do. So our revenues for the quarter were a record 8 million, a 29% increase year over year compared to the 6.2 million in 2020. In part, as we said before, driven by the benefit of a full quarter of homegrown within our financials. Got a 63.7% growth in gross profit for the third quarter of $3.6 million or 45% gross margin compared to 2.2 million or 36% gross margin for the same period in 2020. Gross margin improvements were due to the increased contribution from our vertical product growth and retail sales of our own bald peak flower. Our Chalice branded products grew in homegrown from 3% pre-acquisition to 24% by the end of the third quarter. We expect to see that number grow and as they match up closer to the existing Chalice stores. In the Chalice branded stores, we reached a high of 43% for the quarter compared to 20% the same period in 2020. That growth, and if we are able to match just by doing that swing within homegrown to more approximating the 43%, will lead to a broader, bigger margin increase on its own. Next page, please. Sorry. I'm having a little problem here. I'm stuck. As we mentioned earlier, the adjusted EBITDA positive quarter of 600,000 was a dramatic improvement. For the nine months end of September 30, adjusted EBITDA was approximately positive 1.6 million, compared with a loss of approximately 1.9 million for the same period in 2020. On a year-to-date basis, as of September 30th, we'd almost matched a full 2020 revenue of 21.9 million, and September 30, 2021, it's a 25% increase compared to 16.4 million for the same period in 2020. The candlestick acquisition of the four retail stores was done for a total consideration of 6.5 million, but we structured in such a way that it's a deferred note that only starts, the clock only starts once we get the approved, the license transfer approvals from OLCC. The timeline, of course, is a pro and a con, we won't start seeing the revenue benefits until the license is transferred over. In the meantime, we're running under management services contract and we're able to bring in Chalice product into Canada. So for the fourth quarter, we'll have the benefit of not the revenue, but at least getting the Chalice branded products on the Canada shelves following the similar pattern that we did within Homegrown. And I think from a management team perspective, I think one of the best Things we did that Jeff and I are proud of is just watching how good and strong she is. It was natural that Megan Miller became our chief operating officer, and she's doing a phenomenal job. Quarterly highlights, as we've highlighted, on a revenue basis, 29% year-over-year growth. The annual growth continues to be strong. As I said, we matched 2020 already, give or take, in the fourth quarter. This is going to be an important week as Thanksgiving rounds up, and we like the trends that we're seeing thus far. The progress and profitability. Look at Q4 2019. We lost almost $3.5 million for the quarter. Jeff and I entered 2020 with $4 million of cash in the bank, running on that million a month loss basis. We found a way to get this thing cash flow positive, survive 2020, and now create the foundation for incremental and sustained growth. The capital structure, this is actually effective. The financing that we announced closed today, and that's also worth talking about. We were able to close on $5.7 million, Canadian dollars, in a very tough market, of which we were able to get a significant chunk of that was equity. priced at 75 cents a share, which I think is a reflection of a better value than the stock represents, but really the support and confidence of the shareholders who did participate. So with the benefit of what we've just done in terms of financing, Jeff and I will continue to tell you that we think we are woefully undervalued, but we're going to stand back. We're going to keep executing. and let our performance eventually hopefully gets noticed and reflected in the share price. We've delivered on all the objectives that we set for ourselves. We think the foundation of the $600,000 that we just did in the quarter, we see nothing ahead that will detract us from reaching our Q4 EBITDA objectives. The clearly the inability to the markets being soft meant that the acquisitions that we had on tap had to be put out. That will, of course, affect long term growth. But we're well on our in terms of where we want to be market share wise. But I think our organic growth and the bringing the companies that we have, the homegrown and cannibalist further and further into the chalice fold will lead to better and better performance. Jeff, you want to wrap up the highlights of why we are a company we are great. Jeff, that was you.
spk00: I said the simplest way to think about what we've done is the balance of our leadership team. It's complete discipline. The way that we are executing our vertical integration strategy, the competencies that the team brings in both, not only from a growing perspective, balanced against branding, balanced against marketing, but I think what you have on our team is experience, balance, integrity and transparency. And I think you invest in people. And I think we have now demonstrated we have built an amazing team whose results show up financially. So hopefully that's a highlight that would make you interested in investing and continue to invest in the company.
spk01: David, with that, turn it over to you. Thank you, gentlemen.
spk03: That was terrific. We do have some questions. We've about a handful. So if If you're ready, I'll begin. The first question, does the company intend to expand acquisitions beyond the state of Oregon in the near future? And what are the characteristics of an acquisition that Chalice would target?
spk01: Well, I think the answer is we're opportunistic, David. The most leverage and the most sense makes Oregon is what makes the most sense. As Jeff said, we're now into the walk phase in California. So as we expand there, there will be opportunistic acquisitions that will make sense. But ultimately speaking, the characteristics are it's going to fit within our culture, bite size. We like the three to five as we continue to build scale. I think as we set ourselves up, into 2022 and beyond. So I think the characteristics will continue to remain as same as the ones we've done thus far. Well-priced. If you looked at where the valuations were at the beginning of the year, if we start approximating where we think the proper value is, It'd be great if we can keep buying between 0.75 and under one times revenue. And ideally, as our multiple expands, it becomes a very, very, you know, a creative strategy. Right now, it's obviously a little bit more challenging, but by bringing the right stores on, by making the product mix swings, we can really affect margins and profitability.
spk03: Next question?
spk01: Yep.
spk03: What is management's pulse on the cannabis market as a whole in the United States in regards to legislation at the state and federal level, sector performance, and potential catalysts for the industry?
spk00: I have to be a little conservative. My comments, because obviously I've been optimistic before, I think generally the momentum seems fairly positive. I think we all had some expectations built up with the change in leadership in the White House, but, and the Senate and the House didn't materialize. But now you've got interest in pressure from both the Democratic side of the House and the Republican side of the House. It almost feels like they're racing to see who's going to get credit for legalization. So I would say we're cautiously optimistic. But as I want to tell everyone, this one's a hard one to guess. So I think the signs are all good. But like anything, the proof will be in the pudding when something finally gets signed.
spk03: I couldn't agree more. All right, next question. Can you explain your marketing efforts with Oregon being a crowded market?
spk00: Absolutely. I think for us, it was recognized early on the importance of brands, the consistency of their positioning. packaging, product quality. And then the other thing that we've done probably better than anyone is we built a marketing platform. Our marketing platform does everything from our in-store networks to our social campaigns, to our digital campaigns, our text platforms, and most importantly, our partner platform. We produce our own magazine. Our partners participate in that magazine. It creates a tremendous amount of content. that then allows our partners to retweet to their audience. So think of this kind of as a network or platform effect. we're now up over 1.5 million impressions per execution so you walked in one of our stores today you will see it a network a video on screen you'll see execution consistently throughout of our stores you'll see our magazine you'll see our social posts everything is tied together our loyalty program ties into it so karen has always thought about our platform as a marketing platform and i think as a result you're seeing the kind of performance we continue to get.
spk03: That's great. Next question. How long until Chalice invests in the East Coast? For example, buying a store in New York or Connecticut or Boston?
spk01: Maybe we can say it in unison. Never. If you go to that run, walk, crawl, walk, run, slide, we're a West Coast and our definition of West Coast is west of the Mississippi.
spk00: Is that fair, Jeff? Absolutely.
spk03: Fair enough. Final question today. Do you see Fifth and Root taking any major steps in 2022 in terms of production and distribution? Yes.
spk02: I love the detail.
spk01: David, we want to thank you. All right.
spk03: That was a mic drop. That's terrific. Thank you, John and Jeff. And thank you everyone for joining today's webinar. Today's webinar recording will soon be made available on Chalice's website. If you have any additional questions that have not been addressed on this webinar, please feel free to email us at chalice at rbmilestone.com. Again, that's chalice at rbmilestone.com. Thank you. And you are now free to disconnect. Thank you, Jonathan.
spk01: Thank you.
Disclaimer