4Front Ventures Corp

Welcome to the Forefront Ventures 3rd Quarter 2024 Earnings Conference Call. Today's call is being recorded, and at this time, all lines have been placed on mute to prevent any background noise. After the prepared remarks, there will be a question and answer session. As a reminder, during the course of this conference call, Forefront's management may make forward-looking statements that are based on current expectations and are subject to a number of risks, and uncertainties that may cause actual results to differ materially from expectations. These risks are outlined in the Risk Factors section of the company's filings and disclosure material. Any forward-looking statements should be considered in light of these factors. Please note, as a safety harbor, any outlook presented speaks as of today and Forefronts Management does not undertake any obligation to revise any forward-looking statements in the future. Also, in today's call, we will refer to certain non-GAAP financial measures such as EBITDA and adjusted EBITDA. These measures do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. Forefront Ventures considers certain non-GAAP measures to be meaningful indicators of the performance of its business in addition to, but is not as a substitute for our GAAP results. A reconciliation of non-GAAP financial measures to the nearest comparable GAAP measures is included in our press release issued earlier today. I will now turn the call over to Andrew Toots, Chief Executive Officer of Forefront Ventures.

Please go ahead. Thank you, Operator, and welcome, everyone.

Joining me on the call today are Brandon Mills, EVP of Operations, Michael Cronberg, our Interim CFO, Carl Toscano, our consulting president, and Ray Landgraf, president of corporate development. As we begin today's discussion, I want to emphasize how encouraged I am by the strides we've made, and I feel as confident about our operations as I have since stepping into a more hands-on operational role over the last year. I'm genuinely encouraged by the progress achieved and the direction we're headed. This is a pivotal time for Forefront. and the actions we're taking right now are laying a strong foundation for future success. Our quarter-over-quarter performance is a key indicator of the company's trajectory, and I'm proud of the sequential growth we've achieved across critical areas. From operational improvements to product expansion, we're making steady strides that are positioning this organization for long-term stability and growth. While there is work ahead, I'm confident in our team and the strategic steps that we've put in place to help guide us forward. As we look at our progress in Illinois, I couldn't be more excited about the opportunity our massive facility represents. This facility, a standout in both scale and design, has been met with positive reactions from everyone who steps through its doors. From state representatives to local community and industry leaders, the feedback has been overwhelmingly supportive, culminating in our most recent ribbon-cutting ceremony, a true milestone for Forefront. Built with growth in mind, Matson isn't just a beautiful facility. It's a testament to our commitment to high-quality, efficient production that we believe will play a central role in our next stage of growth. Every inch of Matson was developed with purpose, allowing us to expand our presence in Illinois as we deliver on our vision and meet the strong demand from wholesale and retail partners across the state. Looking at our Q3 results, I'm pleased to report some positive highlights. Total revenue from Illinois and Massachusetts came in at $17.1 million, with our wholesale channel demonstrating strong performance overall, with Massachusetts achieving significant growth and Illinois contributing steady gains as we scale those operations. This combined performance reflects the success of our approach to expanding partnerships and delivering high-demand products across both markets. One of the standouts in Q3 was the improvement in both flower quality and product availability, particularly in our Illinois and Massachusetts operations. Those gains drove success across both our retail and wholesale channels, where we made substantial progress in securing long-term supply contracts and wholesale agreements, critical elements of our growth strategy. We recognize that our success hinges on a solid financial foundation. and we're committed to making the necessary adjustments to ensure stability. Actively engaging with financial partners, we're working to streamline costs and enhance operational efficiencies across the board to support sustainable growth in cash flow. As part of our plan, we're also taking deliberate steps to raise additional capital and optimize our balance sheet, creating the runway needed to drive our growth plans forward. This disciplined approach not only addresses our immediate needs, but establishes a financial pathway for long-term profitability and expansion. Turning to this quarter's highlights, our wholesale operations are showing strong momentum. In Massachusetts, we saw an impressive 56% increase quarter over quarter, while Illinois delivered steady results leading up to where we are now, always to unlock the full potential of our massive facilities. We strengthened our team, and with a focused push in branding and marketing, we're gaining solid traction with both consumers and wholesale partners as we enter this new growth stage. As I mentioned, I'm also extremely optimistic about our progress on our growth opportunity in Illinois. Now with 24,000 square feet of flowering canopy already active at Mattson and plans to expand to 34,800 by mid-January 2025, We're poised to significantly scale our wholesale capacity, add increased wholesale accounts while providing increased offerings to our current accounts, and capture increased branded market share in-state. Since our first harvest on September 7th, we anticipate producing 3,000 pounds of total biomass with 2,000 pounds of sellable flour monthly by year-end. This growth firmly establishes Massin as a key driver for our continued success in the supply-constrained Illinois market, and we are laser-focused on executing on this significant opportunity. To elaborate, the demand for our product in Illinois has been particularly robust, underscoring the critical role our Mattson facility will play in meeting and sustaining this market appetite. Illinois remains one of the most promising and supply-constrained markets, and Mattson's scale-up is set to capture immediate opportunities while serving as a key factor in de-risking our growth strategy. In just the first weeks of operations, we've already secured substantial supply agreements and strategic partnerships, with the majority of our flour and excess derivative products, including distillate, pre-sold for the foreseeable future. By bringing this production capacity online, we're positioned to reliably serve our wholesale and retail partners, strengthening our foothold, and capitalizing on Illinois' growth potential with competence. We've also made significant strides in flower quality and expanded our product lines, rolling those improvements out across our entire portfolio. By staying in tune with consumer preferences and delivering impactful, high-quality products, we're steadily building growth across our key markets. Massachusetts has experienced some tough market conditions and pricing challenges. Despite this, our wholesale operations are expanding, and our efforts to boost brand visibility are yielding encouraging results. Massachusetts has also set quality benchmarks, with 100% pass rates on cultivation tests since the end of Q2. This focus on quality and sustainable growth is making a real difference, even in a competitive environment. Washington remains a standout for us and continues to set the bar for what's possible in our other markets. In Q3, there was a notable 6.6% quarter-over-quarter revenue growth, with record sales across multiple categories. The success of the Easy Vape line and connoisseur-oriented live resin products underscores the payoff of consumer-focused innovations at both ends of the price spectrum. We're eager to replicate these successes in Illinois and Massachusetts. We're also keeping a close watch on potential federal reforms that could benefit the industry. such as changes to 280E taxation. The cannabis industry has potentially gained an unexpected advocate in the newly elected administration, as recent support for rescheduling marijuana and backing the Safe Banking Act signals a potential shift in federal policy. This could reshape the industry landscape, with reclassification to Schedule III anticipated in 2025, and we are prepared to capitalize on these opportunities if and when they arise. As we close out the quarter, I'd like to give you a sneak peek into the momentum we saw in October, one of our strongest months for wholesale this year and a promising sign of what's ahead. Our wholesale revenue reached impressive levels, with Illinois achieving its third best month of the year and Massachusetts recording its second best, signaling a solid return to form. In fact, October wholesale revenue in Massachusetts was up 91% year over year. In Illinois, Targeted promotions and rising brand recognition drove significant multi-store orders, highlighting strong demand for our branded products. Massachusetts has shown steady growth as well, benefiting from effective local promotions and customer loyalty initiatives. Operational improvements have boosted our ability to meet this demand, and October's momentum has positioned us well as we look forward to further growth next quarter. Speaking of sneak peeks, in Q4, we're excited to roll out new Mission cannabis strains, Marma's high-dose edibles, and Crystal Clear disposable vapes in Massachusetts and Illinois, plus smoke breaks, diamond-infused multi-pack tins, and easy flower products. Over in Washington, Crystal Clear and Marma Bar cartridges will be introduced, giving our customers even more variety to choose from. In closing, while this is a critical juncture, I believe we're taking the right steps to strengthen our position. The quarter-over-quarter gains, improvements in product quality, and expansion of our wholesale business underscore our commitment to sustainable growth. We're making significant strides, and with our focus on refining our branding, marketing, and business strategy, I believe we're well-positioned for continued success as we take advantage of our large near-term opportunity in our Illinois expansion. Thank you for your continued support. I'll now turn it over to Brandon, who will provide a deeper dive into our state-by-state performance. Brandon?

Thanks, Andrew. I'll begin with Washington results, as I believe they properly set the stage for the growth we aim to build upon in both Illinois and Massachusetts markets, showcasing what Forefront can achieve in a highly competitive wholesale environment at scale. Starting at the top, In Q3, Washington achieved its strongest quarter since Q1 of 2022, generating $9.72 million in system-wide Washington sales, representing a 6.6% quarter-over-quarter growth. It was a standout period with record-breaking wholesale sales across multiple product categories. In both edibles and vape, we hold a top-three market share position, with mid- to high-single-digit market share and growing in both categories. We saw the highest ever quarterly sales of vape units, moving an impressive 473,000 units, which represents 20% quarter-over-quarter growth each quarter this year. Additionally, the Washington facilities are having a record year for flower sales to retailers this year, with 5,100 pounds distributed in Q3 alone, representing 16% growth since Q1. Live resin vape sales also reached new heights, with 55,000 units sold, generating $636,000, over 30% category growth year-to-date, and a category we plan to continue to expand into and take market share. Similarly, the value-oriented Easy Vape line saw the highest sales of the year, with 155,000 units sold in Q3, translating to $1.14 million in revenue, a notable increase over Q1 and Q2. This surge in bait sales speaks to our ability to be data-driven in our product development process, to listen to our customers, track the market trends, and quickly respond and deliver high-quality, innovative products to stay ahead of evolving consumer preferences. Our ability to continue to make improvements across our cultivation facilities and processes has resulted in increasingly high-quality and commercially in-demand flour. which is in every market, serves as the foundation for our success across other categories. What's especially exciting is how Washington is serving as our R&D lab, a space where we can test and refine products before rolling them out in other markets, a capability that will soon be shared with and further developed in Illinois. Successful innovations across our brand and product portfolio in Washington, like our popular EasyVape pen, are now being introduced in other markets. ultimately creating a stronger and more compelling assortment nationwide. In short, we're leaning into what works, and the performance in Washington will be invaluable as we scale our wholesale efforts in Massachusetts and, most importantly, Illinois. Now shifting to Massachusetts. The market demonstrated a 3.5% growth from Q2 to Q3, consistent with previous quarter-over-quarter trends, as reported by BDS. Flower pricing softened in the mid-single-digit percentages over the period, settling at $4.93 per gram in Q3. Even in this competitive pricing environment, Forefront managed to achieve just over 2% growth when excluding the impact of our now-closed Brookline retail location. This growth was largely propelled by our strong wholesale performance, leveraging product that would have gone to Brookline or that wasn't available in the prior quarter due to our strategic reset at our Worcester grow facility. The Massachusetts retail market has shown significant expansion, with approximately 493 retailers licensed today and about 375 of those currently operational, compared to 452 licensed and 334 operational at the start of the year. This increase of 41 new dispensaries reflects a material wholesale opportunity for Forefront, which we're well on the way to capitalizing on. Shifting into wholesale performance, Our revenue was up over 56% quarter-over-quarter, approaching $2 million in quarterly revenue. With our current production rates driven by historically high yields and historically low failure rates, we firmly believe that achieving an additional 50% growth to reach around $1 million per month in wholesale revenue is within our sights. This momentum is bolstered by an exciting roadmap of new brands and products launching throughout Q4 and into Q1, as Andrew mentioned earlier. including some innovative product expansions into THCA isolates and solventless hash rosin this quarter. Turning to our cultivation operations in Massachusetts, we couldn't be more optimistic about the quality and quantity of the flour we're producing. In Q3, our Worcester, Hollison, and Georgetown grows achieved a 100% pass rate on testing. Not a single batch failed. This success reflects our ongoing investments in genetics, pest control, cleaning, and environmental programs. Additionally, we continue to uphold a zero irradiation policy on all of our flour, placing us among a select group of operators in any market maintaining this standard. And finally, turning to Illinois. According to BDS and Illinois State data, the market declined by just under 2% from Q2 to Q3, primarily driven by softer flower pricing, which fell by about 3.8%. As new retail locations continue to open in a relatively fixed supply environment, we expect overall relative price stability and promising wholesale growth prospects through Q4 and into 2025 as new stores scale and additional stores come online. Focusing on our retail performance, our mission stores saw a little over a 12% decline quarter over quarter, driven by a mix of macro factors and localized temporary challenges that we've since resolved, which I'll go into. A key pressure point has been the intensified competition for consumer spending, as new retail entrants compete for a relatively stable consumer audience. Although same-store foot traffic was down across most MSOs reporting over the last week or two, our mission customers maintained consistent spending, We simply had to rely more heavily on promotions and bundling last quarter to stay competitive and sustain average transaction sizes. We also faced a one-time administrative setback related to taxes, which temporarily closed two retail locations for about a week in Q3. We acted swiftly to reopen the doors, working closely with the IDOR. With renewed local marketing efforts and offers, we expect to recover any temporary dislocation in traffic. and are working closely with our marketing agency to launch and test various campaigns that are already delivering results. In July, our South Chicago location also experienced a three-day closure due to technical issues with our safe and cash management system. Altogether, these closures accounted for 8.7% of the quarter's operational period for these two locations, which explains most of the quarter-over-quarter decline, and which we do not expect to be an issue in future periods. Our newest store in Norwich, which soft opened in Q2, is steadily progressing toward full maturity. We're encouraged by the strong local demographics and the above-average performance of nearby competitors. With more aggressive local marketing starting in October, we anticipate attracting customers from competing locations and integrating them into our loyalty programs, which have demonstrated significantly higher purchase frequency, average order size, and lifetime customer value. More to come on that progress next quarter. In short, in Illinois, the story is clear. Rapid retail license expansion has been a double-edged sword. While it has intensified competition for our own mission retail locations, it also provides a material tailwind and a solid foundation for future wholesale growth. At the beginning of the year, there were approximately 177 retailers. Today, that number has risen to 234, representing 32% growth year-to-date. Looking ahead, we are confident in our ability to operate profitable retail stores that serve as strong hubs for distributing our branded products, building a large and loyal fan base, and providing valuable insights for our product development. We are equally, if not more, confident in our ability to bring a proven portfolio of high-performing brands and products to a wholesale market starved for the high-quality products we are producing nationwide at Forefront. I'd like to wrap up my section on another positive note. Our investment in our flagship medicine facility is finally beginning to bear fruit. As Andrew mentioned, we're now about two-thirds scaled in terms of where we will take flower capacity over the next two months. The quality is exceptional, some of the best we've produced nationwide in our history. Failure rates are extremely low. Yields are exceeding expectations. And unlike most of our peers in Illinois, not a single gram of this flower will be irradiated before reaching our customers. EU expansion has begun. and our extraction lab is now running seven days a week. The team is growing, and the energy in the facility is both positive and contagious. Most importantly, the results are already speaking for themselves. Nearly all our planned production output is spoken for through the expansion of our own brands and products reaching the market via mission stores, our rapidly growing wholesale footprint, as well as pre-sale agreements, long-term supply contracts, and strategic partnerships that will position Forefront alongside the largest players in one of the most attractive cannabis markets in the country. We're excited to share more details soon and are beyond proud of the foundation being laid for substantial growth as we enter the next quarter and beyond. Now, I'd like to introduce Michael Kronberg, our new interim CFO. Michael brings extensive experience as a CPA and a valuable background in cannabis from his time at Cresco. As an Illinois resident and now a member of our local leadership team at the Mastin facility, we're looking forward to his contributions as we build on the momentum we've established. Michael, welcome to the team. I'll turn it over to you to say a few words.

Thank you, Brandon, for the introduction and for outlining the operational highlights. I'm glad to be on board and look forward to helping us navigate the current environment and drive all financial objectives forward. Now, Let's take a closer look at the financial results for the quarter. In Q3 2024, Forefront reported total revenue of $17.1 million, which is down just over 8% from Q2 2024. Including Washington revenue, which adds another $9.7 million in the third quarter, Pearl Forma total revenue was $26.9 million, down from $27.8 million in the second quarter. Our adjusted EBITDA for the quarter was 1 million, representing a moderate decline from Q2 2024 adjusted EBITDA of 2.6 million. This decrease in adjusted EBITDA was almost entirely attributable to the softness within retail in both Massachusetts and Illinois. This was further compounded by the increasing cost of goods associated with the Matson facility. As we continue to scale operations at Matson to full capacity, We expect this incremental revenue to generate a greater contribution margin due to the effective distribution of fixed overhead costs across increased production and improved operational efficiency. This scaling will position us not only for stronger profitability, but also a stronger margin profile as we leverage our growing production base. In Illinois, our total Q3 2024 revenue was $7.3 million, reflecting a 12% decrease from the previous quarter, which was driven by the retail softness that Brandon had discussed earlier. Massachusetts contributed revenues of $7.9 million, representing a 4% decrease quarter over quarter. Similar to the Illinois market, this softness was entirely attributable to retail while being offset by the 56% growth in wholesale from the previous quarter. From a balance sheet perspective, as of the end of Q3, we had $1 million in cash and cash equivalents with total debt at $68 million. We remain optimistic about our ability to generate further cash flows as we scale our operations. I'll now turn the call back to Andrew for final remarks before opening it up for questions.

Thank you, Michael. To wrap things up, I want to give a huge shout-out to our incredible forefront team. Their grit, passion, and relentless drive have been nothing short of awe-inspiring this quarter. It hasn't been an easy ride. Like any growth journey, we've faced some bumps along the way, but every challenge has made us stronger and sharper. As we gear up for Q4, we're more fired up than ever. We're laser-focused on keeping this momentum going, dialing in our operational efficiency, and continuing to build on our footprint in the markets that matter most. We know there's still a lot of work to be done, but with this team, there's no doubt in my mind that we're on the right path to achieving even bigger things in the months ahead. I'll now turn the call back to the operator to open up the lines for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. As a reminder, only analysts are permitted to queue up for questions. If you have a question, please press star one on your touchtone phone. you will hear a prompt indicating your hand has been raised. If you do not wish to participate, please press star 2. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from the line of Yuen Kang of Kanakor Genuity. Please go ahead.

Hi. Good afternoon, everyone. Thank you for the question. This is Yuen Kang on behalf of MapBottomly. Good, good.

So yeah, my first question here is just regarding, you know, the usage of that facility. I'm just wondering how you guys are thinking about, you know, this additional capacity coming online with the flower prices that continue to decline in this state with, you know, additional retail competition that's coming online. Would there be any plans to, you know, penetrate the hemp-derived market, which is something that we've been seeing a lot of your peers get into just because it is able to be transported across state lines.

And so I was just wondering how you guys are thinking about that segment.

Andrew or Carl, either of you want to take that one?

Yeah, it's Andrew. Just in terms of the hemp, It's certainly something that we've been keeping an eye on. In terms of hemp-derived products, currently edibles, beverages and such, the small portion of the market currently. And so we are very focused on traditional cannabis, Delta 9, and The beauty of how we're positioned, though, is we have plenty of space in our mass and facility and in Washington to pivot as we see fit. So as it currently stands, we're really focused on getting the flour and our products into the Illinois market and expanding our wholesale footprint in Massachusetts. But hemp, as we sort of look at the months ahead, hemp is certainly something that we have the capacity to process and grow. And it's something that we continue to look at. But we're sort of chopping the wood that's in front of us as first things first.

Great.

Thank you.

My second question is, obviously, you know, for the past couple of quarters, we've seen revenue declines, but obviously with this Mattinson facility finally coming online and, you know, I think in your prepared remarks, it was mentioned that you guys are expecting a lot of wholesale growth coming out of that facility. So would it be fair to assume that, you know, you guys have kind of hit the trough in terms of revenues and we should expect to see continued growth coming forward?

I would think that that's fair to assume. Yeah, I'll take that one. Sure, go ahead. Yeah, that's fair to assume.

I was just going to say, I think retail, you know, continues to be a challenge in both Massachusetts and Illinois in that there are more retail licenses coming online in a relatively fixed supply environment. So, I think we're all going to be fighting fiercely for every retail dollar we can get. That being said, I think the locations that we have online today are strong. We continue to improve them. We've actually been layering on more local marketing efforts, especially in Illinois, than we had historically. I think we can hold serve in retail. All the growth will come from wholesale. That comes in a few different flavors. It comes in the growth of our branded, packaged wholesale business through third-party retailers. It comes through long-term supply chain agreements like we have in Illinois with large partners that can help offload a significant amount of that product at attractive prices. And then eventually it can come in flavors like strategic co-packing agreements or brand licensing agreements, which we're just starting to entertain those conversations. Each of the different flavors of wholesale growth come with a different trade-off in terms of their strategic value, their margin profile, our ability to to grow our other wholesale footprint, our ability to represent more brands in the portfolio. So we're just carefully weighing those tradeoffs as we grow.

Great. Thank you for the color. And if I could just ask one final question.

Just on the SG&A line here, I saw that there was a sequential decline of about 11%. Is this kind of a good base going forward and could you comment on any of the specific initiatives that have led to the sequential decline in the cost this quarter?

Thank you.

Absolutely. Yeah, so as far as the decline in SG&A, one of the primary drivers of that is actually our Mattson facility coming down. So previously, those costs associated with the lease of our Mattson facility were rolling into SG&A. So now, with our matching facility ramping up and beginning its production activities, those costs have actually shifted over to our cost of goods. So that was the primary driver, but there absolutely are a ton of great cost-saving initiatives as we look at our labor and our staffing models, trying to ensure that we are effectively placing people where they need to be in order to keep our production as maxed out as possible. But that would be the large reason for, or the biggest driver for the decrease in SG&A.

Great. Thanks so much for the caller. I'll jump back into the queue.

Thank you, An.

Thank you. Your next question comes from the line of Josh Sulker of CB1 Capital. Please go ahead.

Hey, everyone. Congrats on the wholesale strength in the quarter. Thanks for the question. You've noted kind of your capacity in Illinois and what you expect to be selling there. Are you able to touch on what kind of pricing you're seeing in the Illinois wholesale market on a pound basis?

Yeah, sure. Ray, you want to take that one? Sure. Hey, Josh.

So it ranges depending on the type of material, but on the higher end for the type of quality that we're outputting, if we're just talking about trimmed A-grade flour, we're seeing $1,100 to $1,200 per pound. And then it goes down a little bit, all the way down to trim at around $250 per pound. Right under full A's, you can see whole flour around $700 to $800 depending on the quality and testing other characteristics like strain.

Super appreciate that. Does that answer your question on the bulk side? Absolutely. That's bulk though. Yeah, okay. That's bulk.

Yep. And going forward, I think an increasing amount of that will be going to branded flour.

On the brand, it's like $2,500 to $3,100 per pound. Super.

And then on the Washington strength during the quarter, anything you could specifically attribute that to, whether it was the ski launches over the past year, competitors falling out of the market, increased wholesale promotional efforts, any color there would be appreciated.

Thank you.

I think that there are two things going on in Washington, you know, if you were to do your bucket. And I think that, you know, our flower quality, you know, flower quality in this industry is just something that you need to work at every single day. And, you know, flower quality over the years can ebb and flow. And, you know, we're finally at a point as a company where we feel like we have the proper controls in place and focus to keep flower quality sustainably high. going into the future. So I think the first thing is that, is that Washington had, um, the flower qualities improved markedly and, you know, we intended to keep it that way. And so that's, that's been a huge tailwind. And I think the second thing is you look at the businesses, um, you know, if, if you looked at, you know, last year, um, you know, I don't, I don't think that we were innovating as well as we could have on vapes. And there were a number of number of reasons for that. Um, but it got a lot of management focused over the last year. And so we've gotten to a place where we've not only gotten back that market share, but we're starting to elevate the market share in babes. And I guess the third thing is product innovation. We talk about it on the calls, and I'm sure some of it flies over people's heads, but we've spent a lot of time over the last 18 months at forefront making sure that our products are truly innovative, that we're keeping things fresh, that we're keeping our ear to the ground in terms of what the market wants. And we're really starting to see that manifest itself in our wholesale numbers. And so the wholesale numbers we're seeing in Washington have just been growing steadily. We've been delighted to see it. We're going to see some seasonal dip into January, December and January, likely. But we're really looking forward to how 25 is shaping up really across the company. With the strength in Washington, the wholesale strength in Massachusetts, and Maxson coming online full bore, I think we have a lot of reason for optimism as we flip the calendar. Super. Appreciate the call. Andrew, if I could. Andrew, if I could step in on that as well. This is Carl. Of course. I think with Mattson coming on board, the company as a whole, and Mattson coming on board and the movement out of California, the company as a whole has had the opportunity over the last few quarters to really focus on this concept of being a top-grade wholesaler. And in addition to those changes or focuses that we gave to Washington, we really took another look at the way in which we sell product from a wholesale perspective, not only the product we're selling, but how we sell it. And I'm excited, you know, with the changes that we made in, in Washington with respect to our sales team, our structure, our commission leadership, and we're taking that and bringing that into, um, into Illinois and as well into Massachusetts. So in addition to focusing on having great product, and as Andrew puts it, having great flour really is the lead. But we're also taking those extra steps to make sure that when we have great product, we actually know how to sell it. We know how to compensate people appropriately for it. And I do believe that has helped considerably in terms of our significant turnaround in Washington over the last eight months.

Got it. Thank you. Thank you.

Once again, ladies and gentlemen, if you have a question, please press star 1 on your touchtone phone. You will hear a prompt indicating your hand has been raised. There are no further questions at this time. I'd now like to turn the call back over to Andrew for final closing remarks. Please go ahead.

Well, thank you, everyone, for your time. We are, as we said, you know, we are very excited about what we have going on in the forefront right now. Across all three of our states, you know, we see great momentum, you know, from a product side and the wholesale side. And, you know, as matching continues to mature, we expect, as I said earlier, great things as we move into 2025 in terms of continuing to the progress and momentum that we've seen in October and throughout the year. So appreciate your support and look forward to updating people in the new year. Thanks for listening.

Ladies and gentlemen, this concludes our conference call for today. We thank you for participating and ask that you please disconnect your lines.