Vireo Growth Inc

good morning and welcome to vireo growth inc's q4 2025 results call this company the company would like to remind everyone that today's conference call may contain forward-looking statements within the meaning of u.s and canadian securities laws these statements are based on management's current expectations and involve risks and uncertainties that could differ materially from actual events in those described in such forward-looking statements For more information on forward-looking statements, please refer to forward-looking statements disclosure in the company's earnings release. This call may also contain non-GAAP financial measures. Please see our earnings release for reconciliations to GAAP measures. I'll now hand the call over to Chief Executive Officer John Mazarrakis.

Thank you. Good morning, everyone. We're pleased to report another strong quarter for Vireo highlighted by double-digit organic growth and continued integration progress across our extended platform. We continue to operate with discipline at the local level while pursuing accretive M&A opportunities that strengthen our national presence and enhance long-term cash flow stability. In the fourth quarter, same-store sales increased 22% year-over-year and 11.3%, excluding Minnesota, reflecting healthy consumer demand and continued share gains in key markets. Wholesale revenue also rose 55% year-over-year, supported by strong output from our integrated cultivation assets. Over the past several months, we've announced a number of transformative transactions, including SWAT's EASE and Pharmacan's Colorado retail assets, as well as a non-binding memorandum of understanding with Scotch Miracle-Gro for the potential acquisition of Hawthorne Gardening Company. Combined, the Swazis and Pharmacan transactions represent approximately 78 dispensaries across Colorado and New Mexico, 12 dispensaries in California, and 40 dispensaries operating in Florida, in exchange for an equity consideration of around $174 million in Vireo shares. Together, these deals establish one of the largest integrated retail platforms in Colorado and New Mexico, positioning us for further scalable accretive growth in those states. These deals also represent our entry into two important markets, California and Florida. Regarding the Hawthorne opportunity, this transaction represents the first step in building a national procurement and supply chain platform with meaningful scale and recurring revenue. We plan on using this platform to purchase the ancillary products used across our business in a cost-effective manner. We like this opportunity because the Hawthorne business has moved past their CapEx inventory-focused sales model, like lights, and into a more OPEX-focused model of monthly recurring sales, which we believe is the first step to succeeding in this ancillary market. As part of the Hawthorne deal, it is contemplated that we would receive $35 million of cash, approximately $50 million of networking capital, $20 million of liquid inventory comprised mostly of soil supplied to us incrementally over two years, and the ongoing business with meaningful ancillary product sales and meaningful ongoing EBITDA in exchange for 206 million shares and 80 million cash stock options struck at 85 cents. All these transactions are expected to close within the next two and a half months. Following their completion, our operating footprint is expected to expand to 10 states and more than 160 dispensaries, and our net leverage ratio is expected to be lower than our Q4 reported level. As we scale, we continue to execute post-integration initiatives. During the fourth quarter, we completed the key integration work related to the transactions that closed in 2025, including integrating our HR, ERP platforms, rationalizing insurance providers and policies, and centralizing procurement across the enterprise. These efforts have already generated meaningful corporate overhead and ongoing operating synergies, which we expect will become even more evident in our 2026 results. We closed the fourth quarter with over $120 million in cash on the balance sheet, providing us with the flexibility to continue executing our growth strategy through both accretive M&A and targeted organic investments to support our local operators. That concludes my prepared remarks. I'll now hand the call over to Tyson.

Thank you, John, and thanks to everyone for joining us. I'll run through a quick summary of key income statement line items and the reviewer balance sheet in more detail. Fourth quarter gap revenue of 184.5 million increased 318% year over year on a reported basis and 26% on a pro forma basis, giving effect to the mergers of deep roots, proper and wholesome as if they were completed on October 1st, 2024. Of the 26% year over year increase on a pro forma basis, 12% was driven by the optimization of the recently acquired wholesome deep roots and proper businesses. 9% was driven by the launch of a Minnesota adult use. and the remaining 5% was driven by the continued growth of our New York business. For a complete review of our revenue performance by state and sales channel for the fourth quarter, please refer to the accompanying market sales tables in today's earnings release, which will also be filed with our 10-K later today. GAAP gross margin was impacted by the non-cash inventory valuation adjustments, primarily related to the required GAAP fair value step-up associated with our closed transactions. Excluding this impact, Gross margin was 56.3% and reflected an improvement of 510 basis points compared to the prior year quarter. Adjusted EBITDA was approximately 29.5 million, or 28.2% of sales, reflecting an improvement of approximately 22.9 million and 180 basis points as compared to the fourth quarter of last year, and an improvement of approximately 6.8 million and 80 basis points relative to the fourth quarter of last year on a pro forma basis. Moving to the balance sheet, we ended the quarter with 122.5 million of cash and an additional $1 million of marketable liquid securities. Total current assets, excluding tax receivables, assets held for sale, and the Schwoz notes receivable were 204.1 million, compared to current liabilities, excluding uncertain tax liabilities, of 71.6 million. As of December 1st, 2025, the company had approximately 1.2 billion shares outstanding on the treasury stock method basis using a share price of 60 cents. We remain in a very healthy financial position and are focused on driving returns for shareholders through prudent capital deployment against our highest growth opportunities. That concludes my prepared remarks. I'll now hand the call back to John for some closing comments.