The Greenrose Holding Co

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Green Holding Company's financial results for the second quarter ending June 30, 2022. Joining us today are Green Road CEO, Mickey Harley, the company's CFO, Bernard Wing, and the company's Chief Business Officer, Paul Weimer. Before I introduce Mickey, I remind you that today's call, including the question and answer session, is statements that are not historical facts, including any objections or guidance. statements regarding future events or future financial performance or statements of intent or belief, our forward-looking statements are covered by the safe harbor disclaimers contained in today's press release and the company's public filing with the SEC. Actual outcomes and results may differ materially from what is expressed in or implied by these forward-looking statements. Specifically, please refer to the company's form Q10 for the quarter end of June 30 of 2022 which was filed prior to the call, as well as other filings made by Green Roads with the SEC from time to time. These filings identify factors that could cause results to differ materially from those forward-looking statements. Please note that during the call, management will disclose adjusted EBITDA. This is a non-GAAP financial measure as defined by the SEC regulations. A reconciliation of this non-GAAP financial measure to the most directly comparable gap measure, and the statements disclose the reasons why company's management believe that adjusted EBITDA provides useful information of investors regarding the company's financial conditions and results of operation is included in today's press release that is posted on the company's website. With that, I will turn the call over to Mickey.

Thank you, Operator, and good afternoon, everyone. We continue to make progress on strengthening our foundation as an early stage multi-state operator during the second quarter. Across the two states in which we operate, Connecticut and Arizona, we have worked diligently to optimize and ramp our capacity in an effort to deepen our presence in these markets and prepare for the forthcoming expansion opportunities, in particular, the opening of the Connecticut adult use market. Our second quarter revenue increased by 40% year-over-year due to incremental revenue contributions from TrueHarvest, where we have made strong progress with de-bottlenecking our operations and have generated sequential month-over-month sales improvements. The operational improvements allowed us to focus our efforts on sales and market share, noting that as per BDSA, sales in Arizona were off year-over-year while we increased our own sales during the same time period. At the same time, we are observing increased wholesale supply generally in the Arizona market, which appears to be putting pressure on both wholesale and retail pricing. As a premium-tier producer in Arizona, we have seen less of an impact, but we are closely monitoring the market dynamics. From a production perspective, we have continued to finish the build-out of our expanded cultivation capacity at True Harvest. While our True Harvest production has generally been below capacity, we expect a stronger second half now that the facility is fully activated, with the seventh and eighth flower rooms now online. To handle our increased capacity, we are currently expanding our two-harvest sales team. As we bring more of this capacity online, we look forward to further improving our operational efficiencies, bringing costs down, and expanding our margins. In Connecticut, TheraPlant has continued to operate well. We have continued working to ramp our expanded cultivation capacity at TheraPlant, as well as build inventory ahead of the expected start of recreational cannabis sales in the state. After we completed the population of all our grow rooms at our cultivation facility last quarter, we successfully completed our first harvest from the two newest grow rooms in June. As we have scaled the operations, the TerraPlant management team has executed in an extremely efficient manner, driving an already low cost per pound down even further. At the same time, we have continued to build inventory in preparation of the opening of the Connecticut adult lease market. Overall, TheraPlant continues to generate strong, free cash flow, and we are excitedly awaiting the adult use market. Within Connecticut's current medical market, we continue to experience headwinds from lower patient demand during the second quarter, as well as increased competition from the illicit, safe illicit market. These headwinds impacted our revenue performance during the quarter, which came in softer than expected. while these dynamics have created a challenging operating environment in the first half of this year we are focused on maintaining our strong wholesale relationships with our dispensary partners throughout connecticut as we navigate limited visibility on how the state's medical market may evolve going forward as our chief business officer paul weimer will discuss in greater detail later in the call green rose together with its partners filed initial retail license applications in the connecticut state as part of the state's equity joint venture or EJV program subsequent to the end of the second quarter. In the Connecticut Social Equity Council's review of the applications, we were among the 14 applications which were denied due to certain identified deficiencies. We are currently working with our partners to address these deficiencies in the applications and satisfy applicable regulatory requirements while also exploring other ways to participate in the forthcoming recreational retail landscape. As the year has progressed, our view into when and how the Connecticut adult use market will open has evolved, and accordingly, we are re-forecasting our 2022 and 2023 projections. As we do this work, we are temporarily suspending our 2022 financial outlook, which had assumed an October 1st, 2022 start date to Connecticut's recreational cannabis sales. We expect to update the market with our re-forecast for 2022 and 2023 soon. As we progress into the second half of the year, we believe we are well positioned to continue expanding our operations and enhancing our presence in Arizona and Connecticut. We are growing the foundation of our multi-state presence around two robust, efficient cultivation operations that are positioned to benefit from not only the early stage recreational market opportunity in these states, but also the traction that our TheraPlant and Shango branded products have already gained in these markets. We continue to believe that leading with cultivation allows us to focus on enhancing our capacity, operational efficiency to serve our rapidly expanding addressable markets in each state. I am proud of our team's work to do so through the first half of this year, and we look forward to making additional progress on these fronts over the coming quarters. We will have more to say on our strategic objectives later in the call, but first I'd like to introduce and turn the call over to our new Chief Financial Officer, Bernard Wang. Bernard was appointed as our new CFO effective August 8th, and he brings over 25 years of finance and accounting experience, assisting both public and private companies to improve internal controls and accounting processes, and also in capital raising initiatives. We look forward to leveraging Bernard's strong public company reporting and cannabis industry expertise, and we would like to thank our former CFO, Scott Cohen, for his contributions to Greenrose during his time with the company. Now I'd like to turn the call over to Bernard for a quick introduction. Bernard, over to you.

Thank you, Mickey. It's great to be speaking with all of you today. As Mickey mentioned, I have worked with both public and private companies over the past 25 years in various finance and accounting capacities. Most recently, I served as the interim corporate controller and director of accounting at Fat Brand. and I previously served as the Corporate Controller and Vice President of Finance at Candescent, a California-based luxury cannabis company. I look forward to working with our Green Roads team to support our strategic objectives as an early-stage cannabis company. Now, to review the company's second quarter financial results and a few other operational highlights, I'll turn the call over to our Chief Business Officer, Paul Wimmer. Paul?