Vext Science Inc

Thank you for standing by. This is the conference operator. Welcome to the VEX Science's first quarter and fiscal 2024 financial results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. I would now like to turn the conference over to Jonathan Ross. Please go ahead, sir.

Thanks, Operator. Good morning, everyone, and thanks for joining us today. First quarter 2024 financial results were released earlier this morning. The press release, financial statements, and MD&A are available on CDAR+, as well as on the VEX website at vexscience.com. We would like to remind listeners that portions of today's discussion include forward-looking statements and that forward-looking statements are included in today's filings. There can be no assurance that these forward-looking statements will prove to be accurate or that management's expectations or estimates of future developments, circumstances, or results contained therein will materialize. Risks and uncertainties that could affect future developments, circumstances, or results are detailed in the MD&A and VEXT's other public filings that are made available on CDAR+, and we encourage listeners to read those risk factors in conjunction with today's call. As a result of these risks and uncertainties, the developments, circumstances, or results predicted in forward-looking statements may differ materially from actual developments, circumstances, or results. This call also includes non-IFRS financial information, and such non-IFRS financial measures are subject to the disclosure and reconciliation included in our press release disseminated earlier today. Forward-looking statements made during this conference call are made as of the date of this call. Vext disclaims any intention or obligation to update or revise such information, except as required by applicable law. Vext's financial statements are presented in U.S. dollars, and the results discussed during this call are in U.S. dollars. I will now pass the call over to Eric Offenberger, Chief Executive Officer of Vext.

Thanks, John. Good morning, everybody, and thank you for joining our first quarter 2024 financial results conference call. Today, I am joined on the call by Trevor Smith, CFO of BEX. Since my last update was only a few weeks ago, I will keep my comments brief. Following last year's trend, the first quarter of 2024 was challenging for the legal cannabis market in both Arizona and Ohio. as consumers continued to face significant pricing pressure. Despite this backdrop, our team's strength and experience as an operator continued to shine. We generated a revenue of 8.4 million and adjusted EBITDA of 1.9 million in the quarter. Our team continued to drive traffic into our stores by expanding bundled programs at the retail level during the quarter to meet customer demand for value. While VEX absorbed both revenue and gross margin impacts as a result of the environment, we outperformed state averages. In Arizona, sales reported by the state deteriorated further during the quarter, highlighted by a 10% sequential decline in top line revenue during the quarter, with reported statewide data indicating a 20% year-over-year drop. While I'd like to see better results out of Arizona, In the context of this significant market headwind, I am satisfied with our team's performance in the quarter. This market will improve. It's a simple matter of supply and demand. Arizona's continued population growth offers a promising foundation for expanding the customer base over time as uneconomic supply is rationalized. And VEX has the ability to withstand the current pressure given its vertical footprint in order to be there when it's ready to turn. Our Eloy facility is fully operational and offers us significant flexibility to meet our own needs, with optionality to expand if we choose to add to our retail footprint in the market over the next several years. Turning to Ohio, we are particularly excited about what coming months will bring. In the first quarter, our wholesale operations in Ohio continue to grow with an 8.3% increase in sales compared to quarter four, 2023, and 136% increase year-over-year, largely driven by increased cultivation capacity and anticipation of adult use sales. While we experienced an overall decrease in first-door sales in Ohio due to increased competition and a reduced customer base, this is transitionary and aligned with the experience of other states close to their own adult use transition. Our dispensaries continue to perform in line with state averages. including our Columbus dispensary, which is operating under the Herbal Wellness Center banner and began consolidating the acquisition on February 29th of this year. We also observed promising regulatory updates in Ohio after the first quarter ended. In early May, the Joint Committee on Agency Rule Review permitted rules to proceed without objection, paving the way for a dual licensing program that will allow existing medical marijuana dispensaries who also sell non-medical cannabis products. While the exact timing remains uncertain, we anticipate the launch of adult use sales in Ohio during the second half of 2024. We are optimistic about this development and have been preparing operationally, continuing with the steps taken during 2023 to solidify our position in Ohio. Upon completion of the Ohio expansion transactions, which is expected to occur in 2024, VEX will have an operating Tier 1 cultivation facility, an operating manufacturing facility, and four dispensaries in the state. In closing, I am pleased by our team's performance during an ongoing challenging period for consumer-facing companies. With the closing of the pending acquisition and the launch of adult use sales in Ohio, we will be a larger diversified operator with fully vertical integrated footprints across two limited licensed states with significant potential. By consistently executing our plans in Ohio and further optimizing our vertical presence in Arizona, we anticipate improved performance in the upcoming quarters. With that, over to Trevor for a quick review of the financial results. Trevor?