Vext Science Inc

Thank you for standing by. This is the conference operator. Welcome to the VEX Science Third Quarter 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, you may signal an operator by pressing star then 0. I would now like to turn the conference over to Priyam Chakraborty. Please go ahead.

Thanks, Operator. Good morning, everyone, and thank you for joining us today. VEXed third 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 VEXed 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 vexed other public filings that are made available on CRI+. 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 differ 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, as well as the MDMA. Forward-looking statements made during this conference call are made as of the date of this call. Next, this claims 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 Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX.

Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer of VEX. Eric Offenberger, Chief Executive Officer In typical third quarter seasonality in Arizona, VEX continued to demonstrate its operational strength. Strategic investments and targeted promotions supported by product from our Eloy cultivation facility drove strong unit volume growth, enabled us to sustain and grow market share. Thus, combined those results from the initial rollout of adult use in Ohio led to solid performance. In the third quarter of 2024, we generated $9 million in revenue, an adjusted EBITDA of $2.9 million. A significant mid-quarter milestone further supported our third quarter performance as our Ohio dispensaries began offering adult-use cannabis on August 6th. As anticipated, sales showed strong growth in the weeks following adult-use launch, with total adult-use cannabis sales in the state exceeding $150 million as of November 9th, according to state data. Our Jackson and Columbus locations achieved over 200% sequential growth in the third quarter of 2024, which translated into a 14.2% increase in total sales compared to the second quarter of 2024, driven by higher customer count and order volumes. I'm proud of our team's performance, and as our stores consistently outperformed or matched the state average for comparable locations, As expected, Ohio wholesale sales in the third quarter of 2024 saw a sequential decline, primarily due to significant market stocking in the prior quarter in anticipation of the launch of adult-use sales. Moving forward, we expect to see a return to normal wholesale activity, along with new growth opportunities driven by the anticipated issuance of additional dispensary license. Similar to our approach in Arizona, we view wholesale as a short- to medium-term opportunity, and expect to align its pace with our own anticipated retail needs. Overall, our Ohio operations are growing significantly. We're awaiting state approval to complete the acquisition of two big perm dispensaries, which will bring our retail footprint to four in the state. Combined with our existing cultivation and manufacturing facilities and our 10b allocation, we project operating up to eight dispensaries by early 2026. This will position us with one of the largest vertically integrated footprints in the Ohio market among publicly traded peers. Turning to Arizona, as I previously outlined, consumer-related businesses continue to face significant sales headwinds during the third quarter. Pressure on consumer discretionary spending combined with an oversupply of cultivators and products in the state drove pricing downward and led to a decrease in total sales across both our dispensaries compared to the third quarter of 2023. We have consistently outperformed published state averages in Arizona, and in the third quarter, I'm particularly pleased to report that our targeted campaigns drove strong unit volume growth, surpassing state averages. While state data indicated a 20.5% decline in average first-door sales from April 2024 to July 2024, our Arizona sales experienced a decline of less than 1%. Furthermore, average crop yield and potency at the LA cultivation facility improved significantly compared to the legacy Arizona cultivation facilities. These enhanced cultivation capabilities supported our strategic promotions and were instrumental in capturing market share in Arizona during a typically seasonally slow third quarter. While we anticipate that margins in Arizona will continue to be challenged, we view the state as a strong market with solid fundamentals. With our fully vertically integrated and modular footprint, VEX remains well positioned to capitalize on its potential as weaker operators continue to exit the market. As we build on our performance and strategic initiatives in our core markets, we are also focused on identifying and capitalizing on low capex, high return growth opportunities within our broader joint venture portfolio. In Kentucky, voters recently approved the sale of medical cannabis and the state is set to hold dispensary license lotteries in the coming weeks. We are closely monitoring opportunities to engage in the medical licensing process and are evaluating the potential to transition our existing CBD joint venture into a medical cannabis operation, which could potentially enhance returns. On the whole, during this challenging period for consumer-facing companies, our team remains focused on driving results for shareholders. As 2024 comes to a close, we anticipate steadily improving performance by leveraging our fully vertical integrated footprint in Ohio through our revenue and cash flow from operations, while further optimizing our vertical presence in Arizona. With that, over to Trevor for a quick review of the financials. Trevor?