Vext Science Inc

Thank you for standing by. This is the conference operator. Welcome to the VEX Science Second Quarter 2026 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 one on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Priyam Chakraborty. Please go ahead.

Priyam Chakraborty Thanks, Operator. Good evening, everyone, and thank you for joining us today. WEXT's second quarter 2026 financial results were released earlier today. The press release, financial statements, and MD&A are available on CEDAR Plus as well as on the WEXT website at wextscience.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 development 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 VEX 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 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 disclosure and reconciliation included in our press release disseminated earlier today as well as the MDMA. Overlooking 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 Offenberger, Chief Executive Officer of VEX.

Eric Offenberger Thanks, Priyam. Good evening, everybody, and thank you for joining our second quarter 2026 financial results conference call. I'm joined today by Trevor Smith, Beck's CFO. The second quarter largely played out the way we told you it would. We completed the Arizona cultivation wind down on schedule. We said we would continue to scale our Ohio footprint. Fairfield opened in June and adjusted EBITDA group for a second consecutive quarter. I'm very proud of how the team executed. Before Trevor gets into the numbers, let me frame how we run the business. Because this quarter makes a lot more sense in that context. Start with what we own. The Herbal Wellness Center retail brand. Our house products and the majority of the real estate are underneath the business. We have never done a sale lease back. Because we own those assets outright, the balance sheet stays under our control and we can sell an asset on our own timing, which is exactly what we're doing with the Eloy property in Arizona. Now that cultivation there has ceased. Expected proceeds are earmarked to reduce our secure debt. Second, how we operate. This is a commodity business. And in a commodity business, you have to watch both sides of the equation. What it costs to put product on the shelf and what the customer will pay for it. That consumer buys on price and potency. So we compete on sourcing, pricing, and merchandising, not brand marketing. and we view the retail channel as the core of VEX. Cultivation and manufacturing earn their place only if they make our retail stronger. Trevor will show you what that discipline did to margins this quarter. Ohio is where the model is working hardest and it remains our growth engine. The state market is growing. Statewide sales were up about 28% in the first half of the year according to state data. But it's also getting more competitive as new dispensaries come online. against that backdrop, our stores are performing well. We opened our sixth dispensary and fair filled in June in a high volume location and it is ramped nicely. Cultivation yields improved again and because we stock our own shelves, higher yields lower costs of goods and fund our everyday price position that helps keep customers coming through the door. We also build inventory deliberately during the quarter to supply our growing retail base Part of that build also reflected timing. Ohio implemented new naming and product standards, and the approval process created delays in getting product cleared for sale. So that build is finished, product that was ready but waiting on approval, not slow-moving inventory. That process has improved significantly, and we are selling through. Our seventh dispensary in Columbus is being built under a dual-use license. allowing us to serve both medical and adult use customers, and we anticipate to open in the first quarter of 2027. We also made a misstep in Ohio this quarter, and we'll own it. The state allowed a change in product sizes. We elected to make that change, and we priced retail flour higher than the market would bear. That cost us some volume. We caught it in the numbers, corrected in May, and customer accounts recovered. most notable at the existing dispensary in Columbus, where weekly traffic came back to the strongest levels of the period. We measure it, we fix it, and we move on. Arizona is a different market. Statewide sales were down about 6 percent the first five months of the year, according to state data, and wholesale flower prices hit their lowest level on record. Flower was playing on the wholesale market for less than it cost us to grow. There was no strategic reason to continue carrying the cost to grow, and to operate a cultivation facility when we could transition to a third-party purchasing model at substantially lower prices. So we wound down cultivation and repositioned Arizona around what makes money there. Two dispensaries in the Phoenix Metro and a light manufacturing footprint. Three to source and price to the market instead of absorbing our own production. The result of this strategy are showing up where we look first, customer counts. Central Phoenix traffic in June was the strongest since October 2023, nearly three years prior. And that store continues to outperform the state average. So it's a tale of two markets, and the capital follows the returns. Arizona cultivation capital comes out and gets redeployed. Going forward, the priorities for our business remain unchanged. Grow Ohio, finish the Arizona repositioning, and pay down debt. measure us against those three next quarter. With that, I'll turn it over to Trevor for a closer look at the financials.