Verano Hldgs Corp

Ladies and gentlemen, thank you for standing by and welcome to Verona's Holdings fourth quarter and full year 2024 earnings conference call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. If your question has been answered and you would like to withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your first speaker today, Steve Mazzucchella, Vice President of Communications. Please go ahead.

Thank you and good morning, everyone. Welcome to Verano's fourth quarter and full year 2024 earnings conference call. I am joined today by George Arcos, Founder and Chief Executive Officer, Brett Summerer, Chief Financial Officer, Darren Weiss, President, and Aaron Miles, Chief Investment Officer. During this call, we will discuss our business outlook and make forward-looking statements within the meaning of applicable U.S. and Canadian securities laws, which are based on management's current assumptions and expectations. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, and achievements of the business or developments in the company's industry to differ materially from those implied by such forward-looking statements. Actual events or results could differ considerably due to risks and uncertainties mentioned in our filings on EDGAR and CDAR, including our financial statements for the year and quarter ended December 31, 2024. In addition, throughout today's discussion, we will refer to non-GAAP financial measures that do not have any standardized meaning prescribed by GAAP. Management believes non-GAAP results are useful to enhance the understanding of the company's ongoing performance, but these are supplemental to and should not be considered in isolation from or as a substitute for GAAP financial measures. These non-GAAP measures are defined in our earnings press release and available on our website at investors.verano.com, which also includes the reconciliation of these measures to the respective most directly comparable GAAP financial measures. Lastly, all currency is in U.S. dollars unless otherwise noted. I'll now pass it over to George.

Good morning, everyone, and thank you for joining us today. 2024 was a dynamic year for Verano and the industry at large. As we navigate the ever-evolving cannabis landscape, I am proud of our team's ability to remain proactive and move with speed and agility to unlock opportunities in the market. Last year, our brands continued to gain strength across our footprint, demonstrated by the strongest-ever performance of our wholesale business. We also ignited momentum with the first of a series of innovative new product launches And from a cultural perspective, cannabis reform was part of the mainstream conversation for millions of voters during election season and remains a key bipartisan issue supported by a majority of Americans. 2024 also marked a company milestone as our 10th year in business. As a lifelong entrepreneur who built the company from the ground up, I've worked with leaders across Verano to foster an ownership mindset that we consider a competitive advantage we see challenges as opportunities and will always work faster, harder, and smarter to pursue growth. Our goal is to thrive in 25 by continuing to building one of the strongest, most resilient cannabis companies in the industry, which we aim to achieve through a relentless focus on innovation, automation, differentiation, and efficiency, while keeping quality at the center of everything that we do. Before we dive into 2025, I'll provide additional color on 2024 results. For the full year, we delivered $879 million in revenue and adjusted EBITDA of $264 million. And in the fourth quarter, we generated revenue of $218 million, up 1% sequentially from the prior quarter, and delivered adjusted EBITDA of $63 million. Despite industry dynamics, I'm proud of our ability to adapt and drive efficiencies across the business to protect margin and lower costs. In 2024, we strengthened our retail footprint with the addition of 17 new dispensaries across key markets. These include high-performing stores in Virginia and Arizona acquired from the cannabis company in the third quarter, along with the new locations in Pennsylvania, New Jersey, Connecticut, and Florida. Additionally, we moved two existing Zenleaf dispensaries to more Main Street high-traffic locations in Pennsylvania and Arizona, strengthening our presence in the Philadelphia and Phoenix markets. We generated total retail revenue of $672 million for the full year and $175 million for the fourth quarter. While we experienced a slight decline in full year retail revenue versus 23 due to pricing compression, promotional activity, and competition in markets, including Illinois, New Jersey, and Florida, we were up 6% in retail revenue versus the third quarter of 2024. This increase was driven by solid retail execution during key holiday windows, the first full quarter of contributions from acquired cannabis assets, and positive sales and market share gains in Florida. We also drove retail gains in Maryland during the state's first full year of adult use, and in Ohio following another seamless adult use transition last August. Additionally, following our efforts to streamline operations, we improved retail productivity in the fourth quarter by driving increases in transactions per headcount of 54% in Florida and 14% in the rest of our markets versus the third quarter. On the wholesale side, we finished 2024 with $353 million in total wholesale revenue, a gain of 1% versus the prior year, the highest annual total we've ever achieved in the wholesale segment. We also increased our active accounts by 29% and drove an 8% gain in third-party units sold versus the prior year, our highest annual volume ever. Growing our third-party customer base delivered an increase of over $9 million in third-party wholesale revenue versus 2023, driven primarily by strength in Illinois, New Jersey, and Maryland, along with Ohio following the state's first full quarter of adult use sales. And in Virginia, we continue to see positive trends following our first full quarter of operations. Leveraging our industry relationships and experience, we drove a more than 30% average monthly increase in Virginia, third-party wholesale sales over the three months of the fourth quarter when compared to the first full month of sales under Verano's leadership and plan to introduce more of our brands and products this year. These results drove an increase in our full-year wholesale retail split with wholesale accounting for 34% of revenue 2024, a 2% gain in wholesale revenue contribution versus the prior year, demonstrating our ability to sell into new doors and expanding retail markets. In the fourth quarter, we kicked off the first of a series of innovative new product launches with Extra Savvy two-grain vape cartridges in Illinois, New Jersey, Maryland, and Arizona markets, with plans to scale into Pennsylvania and Florida in the near future. According to BDSA, our Extra Savvy White Widow has been the top-selling vape in the Illinois market in February, and four Extra Savvys used rank in the top six vape products statewide. We also introduced the Essence J's barrel-style pre-roll joints, leveraging cutting-edge manufacturing innovation that exponentially increases production efficiency and output. The Essence J's deliver both consumer affordability and quality and have already become one of the top-selling pre-rolls in launch markets. We also rolled out line extensions in the fourth quarter, including Encore RSO chocolates, Savvy Guap macro-dose single-serve edibles infused with RSO, a dragon fruit skew for our popular Brits brand, and a new 7-gram format for our Essence flower line. I'm proud of our team for securing big portfolio wins in 2024, including top 10 share positions in a majority of our markets, according to BDSA. Highlighting an example of successful brand development, we've sold more than 12 million Savvy product units since the brand's debut in the fall of 2022. And Savvy recently jumped into the number six share position across all our BDSA track markets to date in 2025. We'll look to build on the success story of robust lineup of new product innovation and line extensions across our most popular brands this year. I will provide additional color on 2025, but first I'll hand it over to Brett to discuss our financials in more detail.