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CEO Oren Shuster stated that while the restructuring is complete, the full financial savings were not yet reflected in Q1 results but will become apparent in the coming quarters. He added that the company is now focused on sales and marketing and will continue to improve efficiencies and synergies to sharpen the organization.

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Founder and CEO Ben Kovler described the top-line performance as a combination of factors and projected a 'flat zone' for Q2 revenue, with growth expected in the second half of the year driven by new stores and Maryland's adult-use launch. President Anthony Georgiadis added that markets like New Jersey and Connecticut are performing to plan, with the initial revenue step-up having already occurred.

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President Anthony Georgiadis responded that the dynamic varies by market but that a significant driver is the conversion of consumers from the unregulated legacy market, especially as legal prices become more competitive. He also attributed the volume growth to wider social acceptance of cannabis and a steady flow of new patients and customers entering their stores for the first time.

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CFO Anthony Georgiadis attributed the growth to more transactions with a slightly lower ticket size, noting a steady influx of new consumers. He described pricing as market-specific, with some stabilization but new pressure emerging in markets like Maryland.

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CEO & Founder George Archos reported that wholesale pricing is beginning to stabilize in Arizona and Nevada, with hopes for similar trends in Pennsylvania, partly due to a slowdown in new cultivation projects across the industry. He identified Nevada, Arizona, and Pennsylvania as markets with room to increase verticality. He stated that Verano's Florida cultivation can support about 10 more stores beyond its current footprint of roughly 65 dispensaries.

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CEO George Archos explained that new brand rollouts will occur in waves across markets and product formats, scaled as deemed appropriate. Regarding margins, he noted that the Q2 margin profile was impacted by bringing new cultivation facilities online in West Virginia, Massachusetts, and Nevada. He anticipates that efficiencies from automation will help offset some of the margin pressure from the new, lower-priced product lines.

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CEO George Archos stated that new products are being added weekly in New Jersey as cultivation ramps up. He noted that while premier pricing is stable, the company is introducing mid-tier and value lines to address a ~2% decline in basket size observed across the country, which he attributes to the macroeconomic environment.

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CEO George Archos described Florida as a key market where the company is building a second facility. He stated that their premium products continue to sell out and drive margins, and they are now implementing a 'Good-Better-Best' tiered pricing strategy to capture the entire market. He confirmed the strong sales run-rate in March was a broad trend seen across the country, not isolated to one or two states.

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CEO Raymond Chang stated that since the Rapid Deployment Programs (RDPs) are just now being ordered, there are no specific metrics yet, but results should be similar to existing VFUs. He added that the new 3.7 VFU, expected in Q1 2023, should offer improved yields. Regarding the supply chain, he noted that pressures are subsiding and that the company has sufficient inventory to fulfill immediate cultivation orders.

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CFO Timothy Oakes detailed that of the $19.3 million in Q2 revenue, approximately $10 million came from the extraction division, with the rest from design/build and VFU sales. CEO Raymond Chang added that going forward, extraction demand will remain strong while design/build revenue declines. He explained the RDP will be offered in multiples of eight VFUs, allowing for deployment in under 30 days for under $1 million, with an option for an extraction lab add-on. This strategy aims to lower entry barriers and accelerate the path to profitability for customers.

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Executive Raymond Chang provided a detailed schedule, stating that projects are on track and, in some cases, ahead of schedule. He outlined that Treehouse will begin commissioning next week with revenues expected next quarter; Hannah and Greenstone will generate revenue in Q3 2022; Bud & Mary's will generate revenue in Q1 2023; and El Mirage and Gold Leaf are expected to generate revenue in Q4 2023. He also noted that SaaS fees from non-TTK customer WhiteCloud will begin in the current quarter (Q2 2022).

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CEO Raymond Chang explained that of the 3,729 VFUs, the vast majority are for TTK projects, with only about 300 being non-TTK cash sales. He broke down the $570M pipeline as approximately $313M for TTK, $45M for extraction, and the rest for non-TTK VFU sales. For extraction growth, Chang noted it's broad-based, driven by a general consumer shift to non-flower products, with demand coming from MSOs, single-state operators, and new markets like New York.

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