Executive Summary

Q4 2024 delivered stabilizing top-line and improved profitability: revenue $42.7M (+$2.4M q/q; +$1.8M y/y) and gross margin 44.8% (+586 bps y/y) as Adjusted EBITDA rose to $6.4M from $5.3M in Q3 .
GAAP net income swung to $27.8M from a $11.6M loss in Q3, primarily driven by a large income tax benefit of $34.6M; EBITDA was $3.7M vs. $(0.6)M in Q4 2023 .
No formal guidance provided; post-quarter actions support portfolio focus and balance sheet: Arizona asset sale for ~$36.5M (cash + note) and continued Florida retail expansion (21st store in Jacksonville) to prioritize “smart growth, strong margins” in core markets .
Street consensus estimates were not available for Q4 2024; comparison to expectations is not possible (S&P Global coverage limited). Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well
- Revenue growth with mix/pricing discipline: Q4 revenue $42.7M, +$2.4M q/q and +$1.8M y/y; gross profit $19.1M, +$1.1M q/q and +$3.2M y/y .
- Margin expansion y/y: gross margin 44.8% in Q4 vs. 38.9% in Q4 2023 (+586 bps y/y); FY24 gross margin 44.8% vs. 39.7% in FY23 (+516 bps) .
- Strategic focus supported by portfolio optimization: management emphasized “smart growth, strong margins” as it agreed to sell selected Arizona assets for ~$36.5M to strengthen the balance sheet and refocus on Florida, Maryland, New Jersey, Massachusetts and New York. Quote: “This transaction aligns with our ‘smart growth, strong margins’ strategy…” — CEO Richard Proud .
What Went Wrong
- Slight sequential margin compression: gross margin dipped 9 bps q/q to 44.8% in Q4 (from 44.9% in Q3) despite revenue improvement .
- Elevated financing and accretion costs persist: Q4 interest expense was $4.4M and accretion expense $1.2M, which continue to weigh on EBITDA conversion .
- Non-recurring items still present: Q4 included $0.99M of non-recurring charges, plus inventory reserves/write-downs ($0.25M) and share-based comp ($0.42M), indicating continuing normalization and restructuring costs .

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$40.88	$43.00	$40.29	$42.72
Gross Profit ($USD Millions)	$15.92	$20.69	$18.08	$19.14
Gross Margin (%)	38.9%	48.1%	44.9%	44.8%
Net Income (Loss) ($USD Millions)	$(18.70)	$(9.79)	$(11.64)	$27.79
Net Income (Loss) per Share ($)	(0.00)	(0.00)	(0.00)	0.00
EBITDA (Non-GAAP) ($USD Millions)	$(0.60)	$7.58	$4.47	$3.66
Adjusted EBITDA (Non-GAAP) ($USD Millions)	$3.29	$8.95	$5.35	$6.41

Metric	FY 2023	FY 2024
Revenue ($USD Millions)	$159.24	$167.57
Gross Profit ($USD Millions)	$63.17	$75.11
Gross Margin (%)	39.7%	44.8%
Net Income (Loss) ($USD Millions)	$(76.62)	$(7.64)
EPS ($)	(0.01)	(0.00)
EBITDA (Non-GAAP) ($USD Millions)	$(6.55)	$16.59
Adjusted EBITDA (Non-GAAP) ($USD Millions)	$8.33	$23.95

Non-GAAP reconciliation context: Q4 income tax benefit of $(34.60)M drove the GAAP net income swing; Q4 adjustments included non-recurring charges $0.99M, accretion $1.20M, share-based comp $0.42M, and other items per reconciliation .
Segment/KPIs: No segment or store-level KPIs were disclosed in the Q4 earnings materials; company later announced it reached 21 Florida stores with Jacksonville opening in Feb. 2025 .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2025	Not provided	Not provided	Maintained (no formal guidance)
Margins/OpEx/Tax/Other	FY2025	Not provided	Not provided	Maintained (no formal guidance)

No formal quantitative guidance was issued in the Q4 2024 press release/8-K .

No Q4 2024 earnings call transcript was available; themes below reflect disclosures across the prior two quarter releases and related press releases.

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Portfolio optimization (asset mix)	Q2: Deconsolidation of Nevada ops produced a $2.1M gain; focus on core markets . Q3: Continued non-recurring items tied to strategic review/legal .	Post-Q4: Agreed to sell select AZ assets for ~$36.5M to refocus on FL, MD, NJ, MA, NY .	Accelerating focus and balance sheet strengthening
Margin management	Q2 gross margin 48.1%; Q3 44.9% (still +1,377 bps y/y) .	Q4 44.8% (+586 bps y/y), modest 9 bps sequential compression .	Sustained y/y improvement, slightly lower q/q
Financing burden	Interest expense ~$4.2M–$4.4M per quarter in Q2–Q4 .	Q4 interest expense $4.43M; accretion $1.20M .	Persistent headwind
Legal/tax classification changes	Accounting policy reclassifications noted; tax expenses include penalties now within tax line .	Q4 tax benefit $(34.60)M drove GAAP net income .	Tax line highly impactful
Florida expansion	Noted as core market in strategy .	Opened Jacksonville store (21st statewide) post-Q4 .	Continued retail growth in FL

“This transaction aligns with our ‘smart growth, strong margins’ strategy by enabling us to double down on markets where we can deliver the most value… By streamlining our Arizona operations… and enhanced profitability.” — Richard Proud, CEO, on the Arizona asset sale .
“This is another milestone for the Company and aligns with our ‘smart growth’ and ‘strong margins’ strategy by expanding in a core market like Florida.” — Richard Proud, CEO, on Jacksonville opening .

No Q4 2024 earnings call or Q&A transcript was available in the company’s filings/document set; therefore, no Q&A items to report.

Consensus availability: S&P Global showed no available Wall Street consensus for revenue or EPS for Q4 2024; thus, we cannot assess beats/misses versus Street expectations. Values retrieved from S&P Global.
Actuals (for reference): Revenue $42.72M; Adjusted EBITDA $6.41M; Net income $27.79M; EPS $0.00 .

Q4 marked a return to GAAP profitability due to a sizable tax benefit; underlying operating performance improved y/y with higher gross profit and Adjusted EBITDA, but financing and accretion costs remain a structural headwind .
Gross margin gains y/y are encouraging, though sequential compression indicates continued pricing/mix or cost variability that bears monitoring into 2025 .
Portfolio streamlining (Arizona asset sale) should provide liquidity and reduce debt, consistent with management’s stated strategy to concentrate on core states where it sees the best margin and growth potential .
Florida remains a growth pillar; the Jacksonville opening (21st store) underscores continued retail scaling in a key market .
Lack of Street coverage limits near-term “beat/miss” catalysts; stock narrative likely tied to execution on portfolio optimization, Florida growth, and improvement in cash generation as non-recurring items fade .
Watch the tax line: outsized Q4 tax benefit drove the earnings swing; normalized profitability should be evaluated on EBITDA/Adjusted EBITDA trends and cash flow rather than quarterly GAAP net income volatility .
2025 focus: balance sheet strengthening, cost discipline, and core-market expansion should drive medium-term margin durability if pricing/mix and operating efficiencies hold .