Medicine Man Tech Inc

Good afternoon. My name is Joe and I will be your conference operator today. At this time, I would like to welcome everyone to Schwoz's second quarter 2024 conference call. All lines have been placed on mute to prevent any background noise. And if at any time you need assistance, please signal conference operator by pressing the star key followed by zero. Following their prepared remarks, management will take questions submitted via the web link found on Schwoz's investor relations website and in the earnings press release. Please also note that today's conference call is being recorded. I would now like to hand the conference over to the company's external head of investor relations, Sean Manceri, with Elevate IR. Sir, please go ahead.

Thank you. Good afternoon, everyone, and welcome to Schwoz's second quarter 2024 earnings conference call. Joining me on the call are Forrest Hoffmaster, Interim Chief Executive Officer and Chief Financial Officer, and Justin Dye, Chairman of the Board. The company will begin with prepared remarks, and then we will open the call for Q&A. I would like to remind you that management's prepared remarks and answers to your submitted questions may contain forward-looking statements, which are subject to risks and uncertainties. Examples of forward-looking statements include statements regarding legislation and regulation, Schwoz's future results and financial position, and Schwoz's business strategy and plans for future operations. Such forward-looking statements may be preceded by the words plan, will, may, continue, anticipate, become, develop, expect, believe, project, could, or similar expressions as they relate to Schwoz. Investors are cautioned that all forward-looking statements involve risks and uncertainties that may cause actual events, results, performance, or achievements to differ from those anticipated by Schwoz at this time. Additional information concerning factors that could cause events, results, performance, or achievements to differ materially is available in Schwoz's earnings release made available before this call and available on Schwoz's investor relations website and in Schwoz's annual report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 27, 2024. In addition, other information is more fully described in Schwoz's public filings with the U.S. Securities and Exchange Commission, which can be reviewed at www.sec.gov or on cedar.com or on the company's investor relations website. Also, Schwoz may discuss non-GAAP financial measures during today's call. A reconciliation of the differences between the non-GAAP financial measures discussed during the call and with the most directly comparable gap measure can be found in Schwoz's earnings press release made available before this call and available on Schwoz's investor relations website. I'll now turn the call over to the company's chairman of the board, Justin Dye, for opening remarks. Justin.

Thank you, Sean, and good afternoon, everyone. Thank you for joining us to discuss our financial and operating results for the second quarter of 2024. As we assess the U.S. cannabis landscape, Schwoz is actively gaining market share in two of its most competitive markets. Our focus has always been and will remain centered on understanding and adapting to our consumers' dynamic needs and preferences. This principle has distinguished Schwoz as the consumer's retail of choice in both Colorado and New Mexico. As we consistently delivered on our brand promise of offering the best assortment of high quality products with exceptional customer service. In Colorado, there were 677 active adult use licenses as of quarter end, underscoring the importance of delivering a unique and differentiated customer experience focused on driving customer acquisition and retention. Our hard work is paying off. As we've outperformed the Colorado market on both a year-over-year and quarter-over-quarter basis, these results are a testament to the strength of our operating playbook and team. And we're focused on continuing to thrive and win in these challenging markets. In New Mexico, the increase in new licenses continued to exceed the growth of state cannabis sales in the second quarter. The state's regulatory body has reinforced its commitment to license enforcement by increasing the number of inspectors and accelerating compliance checks. These actions plus the per unit economics for many of the state's operators led to 71 closures and a sequential reduction in net new store openings in quarter two. We anticipate this trend to continue, eventually shifting net new store growth from positive to negative in the latter half of the year. Like Colorado, we believe we have the right market strategy, operating playbook, and team to win in this market. Before handing it over to Forrest, I'd like to convey my appreciation to him and the entire Schwoz team for their wavering dedication. Despite the many hurdles we've faced, their commitment to excellence has positioned Schwoz for long-term success. I'm confident that we have the right team in place to execute on our growth and profitability objectives ahead. Forrest, over to you. Thanks, Justin.