Verano Hldgs Corp

Good day and thank you for standing by. Welcome to the Verano Holdings first quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. 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 hand the conference over to your first speaker today, Steve Mazzica, Vice President, Investor Relations. Please go ahead.

Thank you and good morning, everyone. Welcome to Verano's first quarter of 2026 earnings conference call. I am joined today by George Arcos, Founder and Chief Executive Officer, Rich Tarabchak, 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 Cedar, including our financial statements for the quarter ended March 31, 2026. 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 the 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 and of these measures to their respective most directly comparable GAAP financial measures. Comparative market share, brand performance, and industry data that is mentioned during this call is derived from hoodie analytics data unless otherwise noted. Lastly, all currency is in U.S. dollars. I'll now pass it over to George.

Thank you, and good morning, everyone. Before outlining our first quarter results, I would like to acknowledge last week's transformative announcement that state-licensed medical cannabis has been rescheduled to Schedule III with immediate effect. We are beyond grateful for President Trump and Acting Attorney General Blanch's leadership and commitment to reschedule medical cannabis to Schedule III, which promises to unlock the full medical, research, and commercial potential of America's next great industry. In many ways, this announcement is personal for me, and represents a full circle moment after founding Verano as a medical cannabis company in our home state of Illinois more than a decade ago. I was inspired to enter the cannabis space after seeing its potential as an effective alternative plant medicine and that medical and patient first ethos has always been ingrained in Verano's DNA. With the U.S. government now officially acknowledging the medicinal value of the plant, we hope that powerful endorsement sends a clear signal that legitimizes cannabis as a federally recognized alternative medicine and creates new pathways for patient access nationwide. After starting 2026 on a high note by announcing our $195 million credit facility and posting solid year-end results, I am proud of our team for keeping the momentum going with a strong first quarter, highlighted by revenue growth for the second straight quarter. Given our business performance and catalysts, including the recent Schedule III designation, this morning we were pleased to announce a share repurchase authorization of up to $20 million of company stock. We believe the repurchase authorization provides Verano another strategic outlet to unlock value for the company and our stockholders. including strengthening the balance sheet and the creative M&A opportunities. We generated $208 million in first quarter revenue, an increase of $2 million sequentially, and a decrease of $2 million versus the prior year period. The increase in total revenue versus the fourth quarter was primarily driven by strong retail performance, and the slight decrease versus the prior year was due to increased competition and promotional activity in wholesale markets. Retail revenue was $172 million, an increase of $2 million sequentially and $3 million versus the prior year period. The positive retail results were driven by revenue increases in key markets including Pennsylvania, Maryland, Arizona, Nevada, Florida, and West Virginia. I'm proud of our team for generating retail growth in the first quarter, particularly following the busy fourth quarter holiday shopping season. On the wholesale side, excluding intersegment eliminations, First quarter revenue was $79 million, a decrease of $5 million sequentially and slightly lower than the prior year period. However, third-party wholesale sales held steady, remaining in line with the fourth quarter. Gross profit was $99 million or 48% of revenue and adjusted EBITDA was $49 million or 24% of revenue. Looking ahead, we plan to maintain our laser focus on generating cost savings and operational efficiencies across the business throughout 2026. On the operations front, we aim to sustain the market share momentum we built over the course of 2025 by launching new products across high-growth categories. After finishing 2025 with top three share positions in every category we compete in, we kicked off 2026 with the launch of SwiftLifts as a standalone national pre-roll brand In January and by the end of the first quarter, they were already the number five selling pre-roll brand across launch markets. We've also supercharged our Hyphen vape pod system with large formats and live resin options and expanded Hyphen across additional markets, including Florida earlier this month, which has contributed to sustained quarterly market share gains in the vape category over the last year. And from an overall Verano house brand standpoint, we ended the first quarter with share gains across the majority of our markets compared to the fourth quarter and aim to continue strengthening our business and product portfolio with new innovation throughout this year. We've continued elevating our CPG operations by scaling automation and technology and activating additional capacity improvements to increase yields and meet higher demands. Thus far in 2026, we've also opened three new move dispensaries, elevating our retail footprint to 85 Florida locations and 162 nationwide. As we strategically evaluate retail expansion opportunities, we anticipate opening approximately five to 10 new dispensaries in 2026, primarily in Florida. We also plan to implement additional retail enhancements across our footprint, to ensure Zenleaf and MOVE continue to serve as best-in-class dispensary destinations for medical patients and adult use customers. Before passing over to Rich, I am proud of our team for executing another great 420 holiday this year by welcoming tens of thousands of visitors across our dispensaries and extending the holiday by rewarding loyalty members with great deals and in-store activations throughout the entire month of April. Rich, over to you.