Vext Science Inc

Thank you for standing by. This is the conference operator. Welcome to VEX Sciences second quarter 2024 financial results and conference call. As a reminder, all participants are in a 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 one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Priyam Chakraborty. Please go ahead.

Priyam Chakraborty Thanks, operators. Good morning, everyone, and thank you for joining us today. WEXT's second quarter 2024 financial results were released earlier this morning. The press release, financial statements, and MDMA are available on CEDAW Plus as well as on the WEXT 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 development circumstances or results are detailed in the MD&A and VEC's other public filings that are made available on CEDAW+. And we encourage listeners to read those risk factors in conjunction with today's call. As a result of these risks and uncertainties, the development circumstances or results predicted in forward-looking statements may perform materially from actual development 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. VEX disclaims any intention or obligation to update or revise such information except as required by applicable law. VEX 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 Oppenberger, Chief Executive Officer of VEX.

Thanks, Priyam. Good morning, everybody, and thank you for joining our second quarter 2024 financial results conference call. I am joined today by Trevor Smith, VEX CFO. Overall, the second quarter of 2024 remained a challenging period for consumer-facing companies across sectors. Against this backdrop, our team's strength has consistently set us apart. We generated revenue of $8.4 million and adjusted EBITDA of $1.1 million in the quarter. While we continued to face the impact of a tough consumer environment, we steadily drove traffic to our stores through innovative programs and our own brands to meet customer demand. On today's call, I will focus my remarks primarily on Ohio, where the launch of adult use cannabis sales following the close of the quarter marked a major milestone for Beck. After over two years of serving medical consumers and preparing for this transition, our Jackson and Columbus dispensaries began offering adult use cannabis on August 6th. In the first two weeks of adult use sales in Ohio, we've seen good initial demand. Our dispensers are experiencing solid increases in traffic, as expected, and our brands are resonating well with consumers. We are pleased with these initial results, which validate our strategic positioning and set a strong foundation for performance in the months ahead. Diving deeper into Ohio, we also saw increased demand from third-party wholesale customers in Quarter 2, 2024, as retailers statewide increased inventory in preparation for the launch of adult-use sales. On the retail side, we fully integrated our Columbus dispensary, resulting in a 45% increase in consolidated retail sales. Excluding Columbus, sales were down temporarily as consumers delayed purchases in anticipation of the adult use launch. We see this as a short-term adjustment ahead of the transition and anticipate a significant uptick in customer volume in the coming quarters. As I've highlighted on previous conference calls, We are fully vertically integrated in Ohio. Our network currently includes a Tier 1 cultivation facility, a manufacturing facility, and two operating retail dispensaries. Upon closing of our previously announced acquisitions and completion of additional licensing under state law for the Tier 1 cultivation facility, we anticipate reaching the state dispensary license cap in 2024 and anticipate all will be operational by the first quarter This will position us with one of the largest vertically integrated footprints in the Ohio market among publicly traded peers. We see Ohio as another potential multi-billion dollar market in the Midwest. With the launch of adult youth sales, we're well prepared and strategically positioned to capture significant market share in the state. Turning to Arizona, continued downward pressure on wholesale prices and muted consumer discretionary spending created margin compression causing significant sales headwinds. This led to a decrease in total sales compared to the second quarter of 2023 across both our dispensaries. This is consistent with the state reported averages per store. I am pleased that we're consistently outperforming published state averages in Arizona. We view Arizona as a strong market with a significant population growth, a skilled labor force with record levels in investments, particularly in the semiconductor industry. When the market turns our fully vertically integrated and modular footprint will position us to capitalize on its potential. While our current focus remains primarily on our Arizona and Ohio operations, we continue to monitor market developments in other areas of our joint venture portfolio. With recent medical legislation in Kentucky, We see an opportunity to participate in the medical licensing process to potentially transition our existing CBD joint venture into a medical cannabis operation. In closing, I would like to reiterate that I am pleased by our team's performance during this challenging period for consumer-facing companies. Looking to the back half of the year, we anticipate steadily improving performance through our focus on executing our plans in Ohio in further optimizing our vertical presence in Arizona. Before I turn the call to Trevor, I would like to take a moment to recognize and thank Ty for his leadership, friendship, vision, and commitment during his tenure as chairman of the board. His contributions have been invaluable, and we are pleased that he will continue to provide his expertise as a director. I'm also pleased to share that Mark Odsumer, who is a valuable member of our board, has been appointed as non-executive chairman. With his deep understanding of our business and dedication to our strategic goals, I am confident that Mark's leadership will be instrumental as well as we embark on our next phase of growth. With that, over to Trevor for a quick review of our financials. Trevor?