Verano Hldgs Corp

Good day and thank you for standing by. Welcome to the Verano Holdings Corp third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session during which the company will answer certain questions it receives. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today, Steve Mazeka, VP Communications.

Thank you and good morning, everyone. Welcome to Verano's third quarter 2025 earnings conference call. I'm joined today by George Arcos, founder and chief executive officer, Rich Trapchak, chief financial officer, 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 quarter ended September 30th, 2025. 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 an 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 their 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.

Thank you, and good morning, everyone. The third quarter results reflect the strategic actions we've taken to position Verano ahead of long-term growth opportunities. We made progress generating efficiencies, improving wholesale and brand performance, and strengthening our capital structure and financial foundation for the future. Before we jump into the third quarter results, I am pleased to confirm that we have settled all litigation matters with Vireo that have been ongoing in the British Columbia Court for over three years. Although we stand firmly behind our claims against Vireo and our defenses to Vireo's allegations, after careful consideration of the costs and burdens of the prolonged litigation, we determined that resolving this matter was the most prudent business decision for Verano. The settlement to Vireo consisted of a $1 million cash payment and transfer of a building in Pennsylvania, which was non-operational and held for sale. We expect the settlement will have zero impact on our operations. The settlement marks the conclusion of this chapter, and we look forward to moving ahead, laser focused on strategic priorities for the business. Since inception, we have focused on ways to unlock shareholder value and create potential catalysts for the business. Building on our strategic decision to list our shares on CBO Canada, a senior exchange with CBO Global Markets, the world's leading derivatives and securities exchange network based in the US, we're also aligning our organizational and regulatory structure with our operations by redomiciling Verano Holdings Corp in the US. We announced our proposed plan to redomicile Verano Holdings Corp from British Columbia to Nevada, which was approved by our shareholders on October 27, 2025, and ratified by our Board of Directors. We believe redomiciling in the U.S. will increase the acceptance of the company in the U.S. capital markets, improve the marketability of our stock, and allow for a more expedient uplisting onto a U.S.-based exchange in the future. The completion of the redomicile requires filings in both British Columbia and Nevada, and due to an employee strike at the British Columbia Registrar of Companies, we cannot provide a definitive date on when the completion will occur, but we plan to finalize it as expediently as possible. Additionally, we further enhance our capital and finance structure by securing a $75 million revolving credit facility under which we immediately drew $50 million to retire higher interest rate debt. Jumping into the third quarter results, revenue was $203 million, up slightly versus the prior quarter driven primarily by an increase in wholesale revenue, improved efficiencies in cost and management, and strong new product performance. We generated gross profit of $95 million, or 47% of revenue, and adjusted EBITDA of $53 million, or 26% of revenue. Margins were affected primarily by short-term CPG projects that we believe will benefit the business in the long term. Our industry requires light speed decision making, and after a thorough review of our facilities, we made strategic decisions to pull forward planned expenditures on infrastructure enhancements that we believe will benefit the business both now and in the future. SG&A decreased 7% sequentially and 13% versus the prior year period, demonstrating the success of our ongoing efforts to drive efficiencies across the business. The sequential and year-over-year decrease in SG&A is particularly notable given the new store and new products we brought online during the third quarter. From a retail perspective, we generated revenue of $164 million in the third quarter, a decrease of slightly below 3% sequentially and in line with the prior year period. Along with retail pricing and promotional adjustments, seasonality in Arizona and Florida, our largest retail market, contributed to the modest sequential decrease. Heading into the busy holiday season, we expect to stabilize the top line with improved retail performance in the fourth quarter. From a wholesale standpoint, the strategic and purposeful actions we've undertaken throughout the past year drove sequential revenue gains across nearly all of our markets in the third quarter, led by Illinois, New Jersey, Ohio, and Maryland. Excluding intersegment eliminations, we generated $82 million in wholesale revenue, a 12% increase versus the second quarter. The increase in wholesale revenue was driven by successful new product innovation, strengthening relationships with key third-party accounts, and reestablishing additional customers based on our accounts receivable strategy. New product innovation from our stable of powerhouse brands delivered market share gains in key categories across our footprint. Throughout the third quarter, we've rolled out our award-winning Avexia line of topicals and tinctures, barrel-style pre-rolls from our savvy and essence brands, and multiple SKUs from our expanding VAPE portfolio across Florida, which have performed very well in the market. From a footprint optimization standpoint, I'm proud of our ability to efficiently expand our operations while keeping SG&A costs down. We've added six new dispensaries in three states this year, including our 82nd move location in Florida, where we plan to open several more move dispensaries in the months ahead. I'll now pass it over to Rich to go over our financial results in more detail.