Trulieve Cannabis Corp. (TRUL) Earnings Call Transcript & Summary

Good afternoon, everyone. Thank you for joining us here today. We have a great presentation for you this afternoon. Our management is going to provide a brief company overview in the first session. We'll start with Kim Rivers, our Founder, Chairman and CEO. Our CFO, Alex D'Amico, will then provide a financial overview, followed by a brief overview of our strategy by our President, Steve White. We will take questions at that time, and then there will be a very brief pause for about 10 minutes. And then in the second session, we'll be providing additional detail on our operations, starting with our Chief Production Officer, Kyle Landrum followed by our Chief Sales Officer, Tim Morey, and then Gina Collins, our Vice President of Marketing; and then Nilyum Jhala, our Chief Technology Officer. At that time, we will have a second question-and-answer session, and then we'll conclude the event. So with that, we'll get started. I'd like to welcome Kim Rivers.

Thanks, Christine. It is such a pleasure to be with you guys today. And thank you, in particular, to folks who traveled to Tallahassee, it's not always the easiest place to get to. So appreciate your trials and tribulations to get here and to join us on our, hopefully, informative tour this morning of one of our cultivation sites out of our 22 sites that we have across the nation, along with our primary production and manufacturing site here in Florida. So thank you again for your time. My name is Kim Rivers. I have the distinct honor and privilege to serve as Trulieve's Chief Executive Officer and Chairman. I've been with the company since the company was founded. I was there for the 2,000-page application submission that we did in the state of Florida, still have some paper cut scars to prove it. And just very excited today for you all to hear from our expanded management team who really are the heart of this company, and who really make us the company that we are today. So my role today is just to provide a quick overview in terms of who we are and where the opportunity is ahead. And so really truly at a glance. As many of you know, we are a leading U.S. multistate operator. We were founded in 2014, as I mentioned, here in our home state of Florida. And really, our business thesis, people ask me all the time, how did you get also quick? How did you become this first market mover. And really, the answer is very simple, and it also is foundational for how we look at the world continuously in Trulieve and it's that we do what we said we were going to do. We actually had a business plan which is unique, I guess, in cannabis sometimes an application process is where we literally laid out a business plan in terms of how we were going to launch the company, the investments that we were going to make and then how we were going to achieve scale from there on out. And so when we were awarded the license, we moved very fast. We had our first production facility open within the first 80 days actually after receiving the license. And we opened our first store in 2016. Fun story when we opened our first store here in Florida, we had a medically transport in the first patient because there was not a market in Florida. It was fantastic for photos and to get that media, but then we looked at one another and we went, okay, now what? And so this team and this company is about building and we're about grinding and again, we're about sticking to a plan. And so we knew that we had a lot of work ahead of us, and we set out to do that work, and of course, are still doing that work today across the U.S. So we went public back in 2018. That's when I got the opportunity to meet many of you in this room from -- in terms of where we started. And some of you, it's been really interesting to have conversations around, you coming and touring our facilities then to see where we were then and where we are today. Of course, now we're a company that has over 4 million square feet of cultivation and production along with an industry-leading retail presence of 168 dispensaries. And Tim, that's right, right? We didn't open any today okay, 168. I always have to check, dispensaries open across the U.S. today and we have over 9,000 employees, which is just phenomenal when we think about where we started. We started this company, it was myself and a team of 10. My office used to be the cultivation conference room back in our original cultivation business. So my half are how we come and really how far is left to go. We are one of the few companies who have reported guidance in this industry, and we're very proud of that. And we will -- again, that's our commitment to being dedicated to a plan and to doing what we say we are going to do. And so that guidance for this year, which we recently reiterated is between $1.3 billion and $1.4 billion in revenue, and $450 million to $500 million in adjusted EBITDA. Our revenue growth has been very impressive over the years. So 106 -- or I'm sorry, 146% 106% and 80% in 2019, 2020 and 2021, respectively. And that really speaks to the fast growth and fast-paced nature, not only in this industry but also of our company and how we -- which I think is one of the most interesting aspects of our team, how we continue to scale and build while operating at such a fast pace and continuing to operate that scale. So you don't just scale and then leave, right? You have to actually operate that scale and continuously improve on your existing operations while continuing to build at really an incredibly fast rate. We've announced very methodically, our regional hub strategy that was announced to the market back in 2020, and we've executed on that strategy, again, doing what we say that we're going to do. So this is just a quick map to show where we exist today and how those regions and that hub strategy is playing out. So we're in 3 regions now, the Southeast, Northeast and Southwest with a meaningful footprint across each region. Over -- well over 30% of our retail footprint as an example is outside of our -- the -- our home state of Florida at this point. So true focus on diversification, but in a very strategic and strategy-first way. So what defines us? What makes us, us. So we are known for operational excellence, I believe. And this team is very, very proud of our commitment to execution. I mean, that's -- we have a proven track record, again, of actually doing what we say we're going to do. We have a purposeful approach to growth. So we are not a grow at all cost company, we are a growth with underlying strategy company. We're very financially disciplined, and we hold our dollars accountable, making sure that we understand are able to communicate both internally and externally what that return on those investment dollars looks like. And again, not chasing every shiny object. I appreciate everyone in this room and all of your input and suggestions in terms of where we should focus and what we should be doing. But oftentimes, it's also important for us to make sure that we've got a long-term view on making sure that we're executing, and we're investing in long term -- in investments that create long-term shareholder value that are strategically backed. And I think that, that is something that we're known for as well. We have a track record of profitability, which has allowed us to reinvest into both our markets that we're in today as well as to fund additional future growth. The -- and so what makes Trulieve different? Our ability to tune out the noise. I think that this was most on display back in 2019 when it really became this -- in this concept of going deep, quite frankly, which I think now everyone likes to talk about was not a thing in 2019. It was all about the map, right? It was all about the total addressable market and your breadth as opposed to your depth. And for us, during that time, one, we've kind of always thought that it was a little interesting to talk about things in terms of total addressable market. We think about things in terms of the market that we can serve through our footprint because really, those are the dollars that you can bring and the customer relationships that you can cultivate through any type of network are those folks that we can actually see in our doors. In other words, it doesn't make sense for us to say that one store in California equals market penetration of the entire state. And those are the types of things that we were seeing in 2019. Also, it was important for us to have a true strategy before we expanded. And so we took that time to say, "You know what, we're going to stick to what we know. We're going to continue to build out and to scale in the markets that we're in, generate profit and develop a strategy, make sure we have the foundation in place so that when we are ready to diversify can do it in a meaningful and an impactful way." And that's what you saw from us, again, with the communication of our hub strategy as well as now our execution of our hub strategy, our ability to tune out the noise, stay true to who we are as a company, and our skill set, going deep, building authentic and reciprocal and repetitive customer relationships, and then building purposely over time. In addition, we've had a number of market firsts. we love to be first, right? We were first in Florida. We were first in West Virginia. We were the first company to have over 50% -- or 50% women female representation on our board. The first company to put out an ESG report, the first company to have a number of first end product development across certain markets. And we like to position ahead of Catalyst in a meaningful way. So when we think about huge catalysts that are coming such as the catalyst in the rec flip in Maryland or in Pennsylvania or in Florida, building that scale again in a meaningful way so that we are best positioned to take advantage of more than our fair share of that market opportunity when it presents is, again, a hallmark of Trulieve. And, of course, being able to be opportunistic in our ability to evolve in a dynamic industry. Because of our discipline and our ability to have profitability for 16 consecutive quarters, that has made us an attractive investment for folks as we think about having access to capital even in downturn markets. It also positions us uniquely to be able to take advantage of opportunities such as distressed assets, companies that maybe don't have such a strong financial footing as more and more of those opportunities present themselves, which we're already starting to see, and we think will become more robust opportunities over time. Look, no one is happy with the current market, myself included. I'm a very large shareholder here as well as my fellow panelists, every single one of whom just bought shares in the open market. We are a very shareholder-aligned team. At the same time, we're very excited about the opportunity that we see during this economic volatility for Trulieve specifically vis-a-vis our peer set. So with that, why don't we zoom out a little bit and remind ourselves why U.S. cannabis is such a fantastic opportunity. Cannabis is increasingly mainstream. We all know that, although sometimes it's interesting to just sort of remind ourselves, right? Recent Gallup poll shows, again, continued increasing support for U.S. marijuana legalization between 1969 and 2021. We know that, but certainly, the polling has never been better as it relates to acceptance and willingness to accept cannabis within the U.S. population. Legal cannabis is expected to almost double in 5 years to $46 billion, truly even the markets that we're in today is expected to grow by 67%, representing half of that 2026 forecast at $22 billion. What's interesting there is, like I said, we like to scale. We like to go deep. We like to take advantage of more than our fair share of that opportunity in that piece of the pie that we see coming down the pipe. And so again, how are we uniquely positioned? One, we have a growing distribution network and we have scale and depth in markets. The team that you're going to meet today are unique in that many of them have been with us for a long time, and they've helped build the scale in cannabis in the industry. And when you think about other companies and where they're going to be pulling talent from and you think about companies that have scale currently, very few of those companies are actually also concurrently building right? So companies that operate at mass scale typically are slow growth companies, growing less than, call it, 5% year-over-year. You add in the rapid pace of scale. It's a really unique skill set, and I'm very proud to have with me today folks that have a proven track record within this industry of building and operating scale within the cannabis landscape. We have significant industry know-how, which again, you'll hear from market experts today, and we're focused on building long-term brand value in multiple channels, whether it's the corporate Trulieve brand, whether it's our retail brand or whether it's our product suite, again, having the ability and also the focus to build out brand equity. And then I can't say it enough, our access to capital to fund future growth. Again, thank you so much for being here today. I'm really excited for you to learn a bit more about our company. And with that, I'm going to turn it over to really someone who is my -- one of my right hands in this industry and on this journey, Alex D'Amico, our CFO.

Thank you, Kim. Good afternoon, everyone. Thanks for joining us for this fantastic event, the first of its kind for our organization. I'm Alex D'Amico, Chief Financial Officer here at Trulieve. I've been with the company for just over 2 years now. Like I say, I've seen some things, right? A lot of change, tremendous amount of growth. I always laugh when I came from tech directly before here. I thought that was fast based until I got to cannabis. When I think about my earliest conversations with Kim, she was talking about this notion of hubs and this regional hub network. And it's been a fun ride to partake in developing those strategies with her and seeing them play out and come to fruition, help building out the infrastructure and the internal teams to support that vision. We've done a tremendous amount of deals, I think, 7 last year. I think 9 in total, since I've been here, highlighted, of course, by the largest U.S. cannabis transaction today in Harvest closing last October. And we're sitting here today Kim and I talked about in our earlier conversations, but now we're sitting here today with 3 real regional hubs that we operate in, in a meaningful way. So just to be on that ride has been a lot of fun for me. And it's not just about the expansion of our footprint. I think it's really about the diversification of our company. Of course, in states through organic growth and acquisitions, but revenue streams, the development of our wholesale channel and the launch of that cultivation and processing facilities, and you saw a bunch of that today, and product lines and SKUs. And then I think what doesn't get mentioned enough, Kim referenced that we have over 9,000 employees. But the tremendous amount of talent we've brought into this organization over the last few years, the depth of leadership that allows us to execute across this regional hub network. All of that's been happening with a lot of outside noise, right? We had COVID. We came off of COVID, we had the second wave COVID. We have various macroeconomic challenges the back half of last year and definitely what we're going through right now. And as you all know, our regulatory hurdles that we live with day in and day out. Through all of that, what makes me most proud to be a part of this team is everyone you'll hear from today and all of the 9,000 employees that support them, they just continue to answer the bell time and time again, laser-focused on execution and the speed of execution, just blows me away. So kudos to everyone that's on this panel today. A quick look at financial snapshot. It was through strategic growth, organic growth, strategic acquisition is that we grew top line by 80% from -- in 2021 over 2020 and adjusted EBITDA by 40% over that same time period. That includes a full quarter contribution from the Harvest acquisition, which closed on October 1. If you look at Q1 2022, which we just completed, it was our second quarter post Harvest close. We grew top line by 64% over the same period in the prior year and adjusted EBITDA by 16%. I'm particularly proud of Q1, we were able to grow over 4% sequentially over Q4 2021 during a particularly challenging macroeconomic time, all while integrating a large MSO acquisition. So again, kudos to the operational teams that you'll hear from in a bit. It's through our execution capabilities and our financial diligence that we've developed a strong financial profile. It's that financial profile that allowed us to do an acquisition like Harvest in the first place and it's what allows us to take advantage of opportunities as they arise. We're focused on generating cash flow from operations and investing back into the business. Strategic acquisitions, CapEx investments in core markets and the build-outs of new markets ahead of catalyst. In Q1, we generated $45 million in cash flow from operations and ended the quarter with $267 million of cash. Our cash balance and our operational cash flow allow us to fully fund our 2022 CapEx plans, which has tremendous flexibility built into it. We could throttle that back if necessary as we assess market conditions and the timing of catalysts. Earlier this year, as you heard Kim mentioned, we issued financial guidance, and we reiterated that guidance during our Q1 earnings, top line revenue, $1.3 billion to $1.4 billion, adjusted EBITDA of $450 million to $500 million. This includes the opening of 25 to 30 new dispensaries and the relocation of up to 6 Florida dispensaries. Core to our strategic strategy in 2022 is the build-out of our infrastructure and supply chain, particularly in our acquired markets of Pennsylvania and Arizona. We're building out that infrastructure to support the leading retail in those markets. And we are going to increase our throughput of branded product through the branded retail channels, an effort you'll hear more about from our operational teams in a bit. It's through that process that we anticipate improved second half performance off of first half baselines, and we will leverage that in support of our long-term model that we have noted for 2 to 3 years out of 60% margin, 40% adjusted EBITDA, the timing of which will have ebbs and flows as different market conditions take place, and we make investments in newer markets. And you may have heard me say in the past, I always talk about entering a new market or a new opportunity, there's is along a spectrum of, call it, optimization, right? So wherever we are in that kind of spectrum, we'll dictate how that longtime model flows out, flows from a quarter-to-quarter basis. Speaking of execution, a deeper look at the Harvest acquisition. We announced it in early -- in May of last year. We closed it on October 1. So technically less than 5 months from announcement to close, which is still blows me away. We have now printed 2 full quarters. We're harvesting the fold. We immediately retired $275 million of Harvest debt short term and high interest debt with change of control provisions. And really, one of my favorite operational wins to date is we sold through all of the acquired inventory in just 2 quarters. So we eliminated a lot of the noise within our financials from the deal -- from the transaction my favorite topic, the fair value step-up of inventory has been eliminated through Q1. And we're now in the process of repositioning assets across the platform, again with the notion of cultivation and processing facilities to support our leading retail, which will lead to improved second half performance and again, support our long-term model. And with more on the Harvest acquisition, and other strategic initiatives. I'll hand it over to someone that I'm proud to call a friend and colleague on this wild journey, our President, Steve White.

For those of you who don't know me, my name is Steve White. I'm the President of Trulieve. And before -- so I've been at Trulieve since roughly October 1 of last year. That doesn't mean that I'm a short timer in the industry. For about the previous 10 years, I was building a little company called Harvest. And we started very early in 2011, 2012, built the organization up to be one of the largest multistate operators in the country. Before ultimately deciding that an alignment with Trulieve made more sense than going it alone. And there was -- during that process, we had a lot of different conversations. And I think it is important to remember, there was all of the public conversation where you take a company who, despite some stumbles, built an incredible base of assets and you marry that with on the Trulieve side, an incredible balance sheet, unrivaled access to capital in the industry and with similar strategy about profitability and how to address markets and similar strategy. So as we are going through this process, there were a few things that I was trying to figure out when we were determining whether or not this acquisition or sale in our case, made sense. And when you go through one of these processes, you have advisers and you have lawyers, you have this bevy of people who are giving you advice. And we were starting the due diligence process, and I was making -- I guess it was really my second trip out. But I really needed to get into and visit a number of the assets, some of which you saw today, for those of you who are here. And I was asked by our Board and by those advisers, okay, what is it -- what's the agenda? What is it that you're trying to see? What do you want to know about Trulieve that's going to determine whether or not that makes sense. And when you think about what the relative positioning of the 2 companies were. It was a question about whether or not the team at Trulieve was the right team to optimize the assets that Harvest was going to vend into the transaction. And so you take the trip out. And you go through -- you guys saw for those of you that are here, you saw a glimpse of it today, right? So you saw cultivation at a scale and with innovation that you probably haven't seen before in indoor cultivation. But what you didn't see is all the other places that we visited when we were here, right? So you're looking at innovation and you're looking at the advancements that in R&D and in retail in the various other parts of the organization. The conclusion that we -- there are 2 things that happened. The conclusion I came away with was we're not catching that organization on our own. And it answers the question about the team because what you saw when you see that result, that result doesn't come about by accident. That's the result of people -- qualified, competent people trying to address tomorrow's problems ahead of time. So they're thinking about where this industry is going and planning and executing. When we're there, it's actually kind of funny, I didn't come alone. I had other people who are with me, one of whom kept complimenting everybody at -- every time we went some places like wow we haven't seen this before, this is way better. I finally had to pull him aside and say, "Hey, you got to shut up. This deal is not done, and you're not being helpful right now. I understand that the depth and the scale is super impressive. But let's save that for later like post close, we can have that conversation." So you guys saw a glimpse of what we saw when we were entering into this transaction. And we -- there's the thing that you can explain to people and then there's the thing that you can only really understand when you see it. So hopefully, today's tour was helpful to give you insight into what's behind the organization and also for -- give you a better understanding of what we were looking at when we decided that, that Trulieve was the right transaction for us. So while we went through that transaction, Alex mentioned that we closed really quickly. The reason we closed really quickly was because we had people who were uneasy throughout the process. And so we decided because we were able to close quickly because the -- we executed really well on getting licenses transferred and things that -- the number of assets that transferred at that speed, you're not going to see that again in cannabis. But we decided that we needed to get people harvesters and truly were shoulder to shoulder at building the organization for the future, and we needed to do that quickly. So we pushed for a faster close, which we then we executed on. Four strategic priorities for this year. And we've shared them in different ways, and we'll -- you're going to hear a lot more about them from our operational folks who are going to talk to you after the break. First, delivering exceptional customer experiences and building brand loyalty. To me, this is pretty simple. And you may have seen it in one of the facilities you're in today, Trulieve grows 1 customer at a time. You'll also talk about people being customer-obsessed. What we realize is that if you take care of customers, the customers take care of the businesses in some really important ways. For me, I think of it pretty simply, when you have an unrivaled base of transactions, you need to be able to learn from those actions and then take your learnings and turn them into actions. So underlying that, you'll hear from Nilyum about the systems that make us able to do just that. Growth via the hubs. You heard both Kim and Alex mentioned it, but you have -- so contextually, when you go back a few years, Trulieve was predominantly a Florida-based organization with incredible depth in the state of Florida, did something really unique, said to the world, hey, we're going to become a national organization and we're going to grow. And we're going to tell you exactly how we're going to do it. And then we're going to go out and execute it. So at the time, what was told to everybody is there are going to be 5 -- potentially 5 hubs across the country. Why does that matter? There's 2 -- well, there's a handful of reasons. First, it goes to the point of saying what you're going to do and going out and executing it. But more importantly, once you develop infrastructure in a particular hub, it makes additional acquisitions in that hub easier. So it facilitates tuck-in acquisitions. And you can -- it's not -- it makes them more successful because you already have a base in that particular region. And secondly, and we don't talk about this a lot because we don't really know how this is going to play out or when it's going to happen. But if you think about how cannabis companies should be governed in the event that you have full interstate commerce, it looks a lot like a hub strategy. Third, what we talk about internally is branded product or branded retail. The reason why we talk about developing both our brands, our partnership brands and our retail brands is it drives traffic and increases margins for the organization. Fourth, talk about the focus on profitable growth and the creation of shareholder value. You saw today an example of intelligent capital expenditures when you went to the Jefferson County cultivation facility. You can see from that facility that you -- the automation that you see and at the scale that you see in it that you're going to see a different operational cost associated with that facility than probably any indoor facility you've seen in the United States. There are a couple of ways that we grow as an organization. One, Trulieve has developed a successful license application team. It's been reflected in wins in West Virginia and Georgia. In addition, the company has been involved in a significant amount of mergers and acquisitions. For a company that has a reputation or that I always heard the reputation of Trulieve being cheap, we actually closed 7 transactions last year. And by the way, thankfully, it's -- we should be thankful to have such -- I would consider good reputation in the industry, partially because, as Kim mentioned, there is going to be a time in the not-so-distant future where you're going to see a lot of distressed assets. When you look at cannabis companies across the landscape, what you see is a number of companies that you're going to really struggle to model how they survive. It's going to leave less opportunities for them or less alternatives. If you have a company that has a strong balance sheet, and a track record of execution, that's the company that's going to be there when it's time to do something with those assets. What's also important and kind of underlies what we've all been talking about and what you're going to hear from the operational folks later is what we don't do as an organization. to us, it's just as important to talk about the things that we skip than talk about the things that we actually accomplish. There are so many opportunities in cannabis. I've talked to a lot of you over time about what is your CBD strategy. What are you going to do about New York? The answer for us is if it does not align with our strategy, we don't -- we don't have to do it. And we can be unpopular for a short period of time because we know as a business, we are building a sustainable and profitable business, and that dictates certain decisions that maybe at certain times won't be popular. So when we talk about our M&A criteria, they don't change despite market conditions. Does the particular opportunity align with our strategy, what are the assets that we're looking at in the context of the market that they sit in. Are we acquiring talent in that acquisition? In some instances, if you're entering a mature market, and it's your first entree into that market, you would need to acquire a team in order for that to make sense. The timing, is the timing right for our organization. If we've just completed the largest transaction in U.S. history, probably not the time to immediately a month later announce a number of additional acquisitions. Now that we've started to digest that acquisition, as Alex talked about, now we're in a position to potentially do something if the right opportunity comes along. And sometimes, most importantly, what is the price that we're paying for a particular asset. So as we see industry consolidation dictated by macroeconomic conditions, think about Trulieve as somebody who is going to do what we say we're going to do and importantly, choose to skip certain things. As we always say, we lead with the strategy, we follow with execution and we go deep in markets like our profitability depends on it. So with that, we'll open it up to a Q&A session based on what you heard from Kim, Alex and I.

Okay. So we're going to open it up to questions. So if you guys will just queue up and remember that we'll have a second Q&A at the end of the ops section. So I would just encourage you all if there are like very specific operational questions to maybe hold until -- and I may signal that. So just know that we will table it and come back to it if there's an operational person that I think might be more appropriate to answer that question. Okay, Derek.

Derek Dley, Canaccord Genuity. Just wondering if you could talk a little bit more in depth about some of the newer states that you're looking at or some of the less mature states, particularly Georgia and West Virginia and just what the opportunity that looks like in those states? .

Sure. So -- and I'll take that one. Georgia is -- and West Virginia are both really exciting markets for us. Georgia, we have started the build-out in Georgia. We're 1 of 2 top-tier licensees in the state of Georgia. Obviously, CBD as it relates to ramp of that market. And we know that, of course, there is an established patient base that is growing ahead of product availability. We're also currently sourcing retail locations in Georgia. So again, we have every intention of making a strong entrance into that Georgian market. We see that market as very familiar and that it really does mimic a number of the aspects and characteristics that Florida had in early days. As a reminder, again, for those that may not be as familiar, Florida actually started as a CBD-only market and then transitioned into a right to try, meaning that THC was only available to folks that were terminal or had significant cancer or spasticity conditions. And so it was a very small market that then evolved over time. it's very kind of hallmark, if you will, in our mind of how many Southeast markets could evolve. And so we're very comfortable and excited about Georgia in that evolution. West Virginia is going really well. We just opened a couple of stores in West Virginia. We have more on the horizon. Also, we just completed a cultivation expansion in West Virginia, and feel free, Kyle and or Tim could give you additional details in terms of how that from an operational perspective, market is going. But I think that, that speaks Derek, in a broader sense of what we were talking about earlier, the fact that we as an organization have to wear a number of different hats in terms of where these markets are in their life cycle, right? We have start-up markets, we have early entry markets and then we have markets that are scaled markets, right, like markets here in Florida and everything in between. And so this team's ability to walk and chew gum at the same time from an operational perspective is really second to none. It's not just a single strategy. It's your balancing and you're really pushing those markets that are at different evolutions in their growth cycle simultaneously.

Mackenzie Boydston, BTIG. Just a question on your home state of Florida. I know last quarter, you guys saw a nice rebound in March, particularly on margins as well and just the promotional environment. So any kind of update you can give quarter-to-date on trends in this market, particularly on the margin side?

Yes. So we're not going to do any QTD today. So just -- sorry, we're only going to be able to speak on available public information. But Alex, if you want to talk about kind of what we saw in Q1 and any color or commentary on that, take the mic and stand up.

Yes. I think in Q1, what you saw was a pickup over Q4. Obviously, Florida is a big part of our footprint. So a driver there, right? And I think we look forward again, we're not going to give QTD information, but we look forward to pick up in the second half from a margin perspective as we build out in other markets and also leverage Florida, which should also flow down to our adjusted EBITDA.

Yes. And I would just say also kind of listen in the second part of the conversation where with both Gena and William are going to talk a bit about our strategy and our focus on -- just in terms of how we think about promotions and how we really are driving personalization efforts. And we launched in Florida in Q1 our CDP customer data platform. So I think that there are definitely -- there's definitely a focus by the team to make sure that we are delivering that right product, right price, right time, right store -- which, of course, adds to installation of margin across different product lines. Yes.

Kenric Tyghe, ATB Capital Markets. Just looking at the adjacent campus this morning, night and day compared to what we've seen a couple of years ago. Can you speak to how you're positioning both in terms of availability consistent of, frankly, just the operational actions we're seeing out of that facility has actually served to not only differentiate but essentially provide some sort of a moat through the last year or 18 months, it's been a particularly tough and competitive market. And yet a few if any of your competitors have made the inroads that were expected, frankly. And I think that obviously speaks to a bit of a fortress Florida type of approach. So anything you could speak to that would be really useful.

Yes. And again, you'll hear from Kyle in kind of our thought process around cultivation in terms of a national strategy. Here in Florida, though, it's funny, and it kind of always laugh a bit because I remember when we were going public in 2018 we had 50-plus percent share that every single question was around, well, I need to model this going to 20 in the next 3 years. And here we sit today, and it's a testament to the team and what we do every day in terms of our ability to maintain a position in Florida in a competitive environment. I think that the main message is that we're not slowing down. We've never slowed down. We don't slowdown in any of our markets. We're continuing to innovate, one of our themes that truly is this incremental improvement. You may have heard that today. So we're constantly evaluating. We're constantly pushing the envelope and our biggest competitor is ourselves. That's also something that we say often. And so I think that, to your point, our ability to have scale in Florida or in any market, absolutely provides insulation to noise and to volatility in the market. Our ability to gain efficiencies, drive down costs. It makes us, again, have the ability to be more inquisitive as it relates to R&D pull out more products without sacrificing existing product lines, right? It's not an either/or analysis for us. We're able to offer both to the consumer, do true A/B testing and then either scale or not a particular product line or innovation based on customer response and reaction. So it absolutely provides us flexibility and optionality, which is something we're always looking for in the cannabis space.

Victor Ma from Cowen. So recent commentary from retailers like Target and Walmart suggests that the price-sensitive consumer is continuing to weaken. What kind of trends can you talk about in terms of consumption you're seeing maybe in the mainstream and value segments recently?

Yes. So again, I'm going to put a -- if you can ask that question again on the next section because I definitely want to give both Tim Morey, our Chief Sales Officer, as well as Gina Collins, our Vice President of Marketing an opportunity to answer that question more specifically. What I can tell you and what we've continuously said is that we continue to see increased activity in both the value segment and the premium segment. And I think we are -- I mean, we're embracing that data. We're a very data-forward company. And so when we talk about doing things like product innovation or even -- and sometimes that means a whole new form factor, other times it means repositioning within an existing product line or category. And so today, you heard from us as an example, with our ground product, which is squarely a value product. It's a Roll One brand. We rebranded that into Roll One under our flower portfolio, our combined Harvest and Trulieve portfolio of products that every 2 weeks we offer a single strain ground launch, right? That is speaking directly to that value customer, treating them with a bit of a premium, a more premium product within that ground segment at an attractive price point. So I think for us, it's as much of certainly being strategic with promotions and being thoughtful in terms of how we're speaking to a customer, but also, again, that personalization that you're going to hear about and leaning into and creating a bit of a differentiated experience or a differentiated product offering among and for that value customer. We don't want our value customers to feel like they just get the leftovers. And then it just becomes kind of this race to the bottom or this nondifferentiated strategy. For us, it's important to have a differentiated strategy at each tier of our products.

Andrew Partheniou from Stifel GMP. There's a 2-part question on -- focused on M&A, thinking about the past and looking to the future. For the past, could you talk a little bit about lessons learned or the things that both Steve and Kim you've learned from each other's organization that you found was unmatched in the industry. And for the forward part of the question, thinking about M&A, which seems like the commentary has definitely turned or had a different tone now than in the past, thinking about your capital position, do you have a certain optimal leverage that you look at? How are you thinking about the balance sheet? And are you thinking about funding things internally or looking towards capital markets, even though we are seeing a challenging period now.

Yes. That was like a 3-part question with subparts, so I'm going to do my best here, and you're going to have to keep me honest. I'll lead off, so guys is what we're going to do. I'm going to lead it off with lessons learned from my vantage point, at least on the Harvest, Trulieve transaction. I'll kick it to Steve to give his thoughts there and then also maybe take us through kind of high-level M&A. And then Alex will end with you around the financial positioning and how we're thinking about funding sources. I think that's all the parts, right? Okay. All right. So lessons learned from Harvest. I would say a couple of key lessons. One, really, it was our first foray into a market that had recently transitioned to recreational right? And so the team's execution and their excellence during that transition was extraordinary. I mean, it was very, very impressive. And we certainly are excited to have that level of expertise on board as we position ahead of those catalysts coming in key markets. So I think that was a really fantastic to have a front row seat to what happened there because our talks had started, quite frankly, prior to that actual execution happening. So we really did have a -- like I said, a front row seat to that. Second, I would say that as a result of Harvest, we now have a different organizational structure, which is huge for us. So -- and I mentioned this to some of you earlier, the fact that we have -- and I'm very passionate about a flat organization and a matrix organization, particularly in a high-growth industry because of our ability and really focusing on our -- the entrepreneurial spirit and our ability to pivot with new information, which is important. And so we were organized truly historically, was organized with deep levels of expertise across different skill sets then cross communicated. Harvest was organized in really a state first structure. And so we blended those 2 strategies into the current Trulieve organization. So we've maintained our deep levels of expertise so that we can have cross collaboration across departments, if you will. So the cultivation teams from Arizona are talking to the cultivation teams and sharing best practices with the teams from Pennsylvania or Maryland and Florida, right, and all of that knowledge and very specific deep information can be shared yet at the same time, allowing decision-making to happen in a very meaningful way at the state level because it does matter the regulatory structure you're in. It does matter, and it's very important to understand what the trends look like and where the market is headed at that state level. And so blending those 2 together, I think, has had a huge impact on our organization to the positive. And again, as repeatable as we continue to scale across hubs, and across states and kind of overlaying that now, we have this hub team that really takes the best of that and blend it together. So I think that's a pretty a pretty meaningful fell out, if you will, from that transaction. Steve?

Yes. I would say that Kim actually identified the most important one, which is that blending of 2 different organizational structures and how to do that the right way. And I think in terms of lessons learned, I think all of that goes back to your integration process. and being really deliberate about thinking through and understanding the new assets that you're going to be operating and what's the best way to do it. And so it's really hard. If you're digesting a company the size of Harvest and closing inside of 5 months to fully understand the intricacies of how Western Pennsylvania works relative to Eastern Pennsylvania when you are taking on a number of additional states. So it's really about setting up a process that Kim talked about in a way to digest new assets and then a way to be very intentional about how you do integration and how you understand the targets that you're acquiring.

Okay. And then in terms of -- I'll just answer it, like, yes, we're not going to be using stock to purchase anything soon before anyone says anything differently. So it's going to be a minute, I think, on that front. But Alex, do you have any other additional point?

So I'll take the balance sheet question. So in the last 7 months, we just raised $425 million clean, right? No OIE, no warrants at industry-leading rates. So I'm comfortable where we are in our debt position right now. If you look at our debt to adjusted EBITDA, we're under 1.5. If you look at net debt, we're under 1, right? So I think we have the ability to even take on more for the right reasons. We're starting to see some additional funding sources open up, some bank type financing at even lower rates, right? So as long as you're working within reasonable covenants and ratios, which we are, to me, it's not so much about a debt number. It's about what you're doing with it. If you are you optimizing an asset or you're using for a strategic acquisition like we did following the Harvest acquisition, right, repositioning the balance sheet and then optimizing those assets and building out, like I said, that infrastructure to support the leading retailer. That's why we did it. So it's not going to keep the lights on thing. It's a pivot point for strategic initiatives.

Yes. And I would just say that obviously, we've -- since the very beginning, I mean, we were founder funded. That's how we started, that is in our DNA as a company. And so I mean, it's a regular view of cash and cash flow and how we're investing that cash. And again, I've said I love being in this position. I love and feel very humbled and proud to be the CEO. But the day that I'm concerned about how we're going to pay bills and keep lights on is likely the day that I begin that exit transition. So that's just not how we've built this company, and that's not how we're going to run this company. Okay. On that note, I think we are at a point where we're going to take a quick 10-minute break, and then we'll get you guys ready for the main event, which is our operational team. Okay. Thanks. [Break]

Al right. We are going to continue our presentation. Now we're going to pivot to our operational team, which I'm very excited for you to have the opportunity to meet and hear from today. We are going to start with Kyle Landrum who is our Chief Production Officer. Kyle is one of the OGs of the Trulieve team. He started with us when we were at our single cultivation and production site in Gaston County out of an old tomato packing plant and has literally been with us all the way through to what you saw today and with who we are today. Kyle has a reputation of working shoulder to shoulder and his very, I would say, interactive and engaging management style earns him always top praise from his peers among the executive team, but also with his managers and his employees. So it is my absolute pleasure to introduce you today to Kyle Landrum.

Right. Thank you, Kim. Yes. As mentioned, I'm definitely one of the OGs. So I've started with Trulieve in October of 2017. To put a little bit of perspective on that. Kim mentioned that we've got 22 different production sites across the nation now. We only had just 2 here in the state of Florida. So to say that we've had a little bit of expansion in growth for sure, definitely an understatement. So a few of the departments that I manage now is all of the cultivation and processing assets across the nation, the facilities and engineering teams, the research and development and most recently, the construction and expansion departments. All right, cool. So what did everybody think of the Jefferson County Campus and the 750,000 square foot building? I say I got 2 thumbs up. So yes, yes, that's -- it's been super impressive to see what the design and engineering teams have been able to do with that building and really just the operational execution to bring that facility up to phase of what you saw today, plants, buzzing trays, moving cranes grabbing things, super interesting stuff. And really that's just frankly one example of the innovation that we've got going on throughout the organization and particularly just in my area. And some of other cohorts like Tim and Gena, they'll be able to speak to what's going on in their area as well. So through the different M&A activity that Kim put me on the road for 4-plus years now. I've been able to view that and look underneath of the hood of all of these different cultivation and processing assets really throughout the country. And we keep going back to -- there's not a better build than the 24k model for right time, right place at the right cost. Then ultimately, what is -- what falls out of that is really a quality build that we can become super lightning fast to the first harvest and really deploy it in several markets depending on what the strategy is for that particular state. I would say early on, the Florida market was really the incubator for that particular building type. And what we've now been able to do is recognize that we needed 2 different models. So after we determine that, that 750,000 square foot building is what fell out of that. And so that's our secondary production facility. And what you can really see with a level of automation, it's a true production plant, right? It runs 24 hours a day, run 7 days a week, runs the holidays, doesn't take vacations or PTO. And then also, it's extremely low touch from the standpoint of human interactment. So we use cranes to use the type of -- or move the particular grow pods and really bring that work to the station and the particular employee to help reduce the production costs ultimately. So let's kick over here. All right. So let's transition and talk a little bit about more of the cultivation different types worldwide across -- I'm sorry, nationwide across our different network and all those different 22 different sites. We've got an array of indoor, both single stack like you saw today, also multitiered, so double and some triple. We've got a greenhouse sector and along with the outdoor operations as well. So these purpose-built facilities harvest hundreds of thousands of pounds per year. And what they do is they feed our internal network of branded product with our strategy of pushing the branded product through branded retail. Let's talk a little bit about the national cultivation leadership team. It's comprised of a diverse amount of folks with different growing experiences, both in basically any type of different climate, both that come from traditional cannabis and then also classically trained through university programs and large-scale agriculture. So I'd say it's safe to say from your tour today, that we've really -- we're unmatched when it comes to the level of cultivation, scale and operations that we have amongst our peers. And that really just comes down to the different horticultural techniques, the top-tier plant inputs and really just overall the management team in which we have placed to operate all these assets efficiently as we do. So think about the cultivation division in really 4 main categories or this is how we think about it. A genetic portfolio or curation, crop performance, fertilizer manufacturing and optimization, which everybody was able to see today, and we talked to a little bit of the true blend and how we use it nationwide now. And then really the integrated pest management program along with the plant pathology team. Okay. All right. So one area that we were not able to see or one of many. We were not able to visit the tissue culture lab, which is located right here in North Florida. It was about an hour or so from the facility you saw today in -- at the Jefferson County campus. But it's led by Dr. Zapata, which has roughly 20 years of tissue culture production. And what she's been able to do is advance us forward the fastest among our peer set in the realm of the tissue culture lab. So what we do with that is we use it as a genetic database for all of our production cuts, along with them being inside of our actual production facilities. It's essentially our safety stock. And we talked a little bit about the different strains and quantities that we had on the tour today. Okay. So one thing that you saw today among several is we are not going to compromise on the use of automation where it makes sense and technology to be able to drive that production cost down that everybody is so anxious to ask me about. What that's done has basically led us to increase quality, lower production costs. And really, we use it in other facets of the business more so than you just saw today as well. Okay. So let's hop over to processing a little bit here. So simultaneously, we're building this massive grow system and scale. We've got to have the processing assets in the supply chain distribution network equally matched to be able to get all these different products to our customer base in an efficient manner across these markets and hubs. So really, we're able to create these innovative products with the top -- some of the top experts in our particular field for multiple levels and different types of extraction technology. So you saw the large ethanol extractor today, we've witnessed the CO2 extractors along with our hydrocarbon product and our mechanical separation was at a different site. But -- so really having these experts is it allows us to be able to develop and deliver these innovative products across our network. But ultimately, they really don't do it just by themselves of the teams that you saw or witnessed today. We've got continuous improvement teams that focus on optimization, one piece flow. We've got design and engineering teams that systematically lay out these large production lines across the country. Really -- and then also in addition, reliability, uptime engineers, quality assurance programs. It really starts to paint the picture of a complete production system that you witnessed today. So supply chain, we're able to, through our long-term and short-term planning, deliver the products, the right products to the right customer at the right time at the right price. And that really is not just a strategy in which that you can -- you generate halfheartedly, if you will. But through the thought process of really understanding and getting down to what creates production issues, delays, nonconformances, et cetera. You can really then start to optimize, reduce waste and then ultimately put that product at the right place at the right time at the right price for our customers to purchase. All right. So everybody is probably wondering what's on the screen, funny antidote. I found Steve one day at the end of my cookies line, sweeping them off. No, I'm just kidding, but he thought about it. I know he did. This is product coming off the line in our Tampa facility, our Tampa processing facility as well. Down there is house a full array of high-speed automated equipment for gummy production, chocolate production and confections. And this particular one just happens to be a set of chocolate chip cookies going out the line. All right. So research and development, so co-located with our tissue culture lab, we have decided to invest in an Innovation Center in a big way. So this has been a multiyear product -- project for us. And it's currently operated by the Trulieve research and development team. And it's really a set of team and teams and folks that have an array and diverse background all the way from your legacy cannabis innovator entrepreneur, all the way up to PhD chemists and formulation engineers that helps drive these innovative products through our retail networks. Let's think about how the center operates. It's really in kind of 3 main tiers. First is that new product innovation and development, coupled with the new product commercialization and actually bringing those products to market. Second, it houses a full analytical lab with full capabilities as well. What you can do, clarity compounds, work on minor cannabinoids, all the instrumentation in which you would need to be able to do that is located inside of our Innovation Center. Then finally, the Innovation Center also allows us to concentrate the knowledge here at the center, document the processes and then deploy across the different hubs, these new products when we're ready to bring that particular item to market and the customer demand signals that we do. So they offer more, its process support, and optimization. Okay. All right. So I want to walk everybody through some of the different products that we saw today and that we offer in our portfolio. So it's a full array of different live butters, live diamonds, live marine, live resin. And what that ultimately means is, is it's the closest to the particular plant that we've been able to replicate. And it's been a huge hit in not just the Florida market, but those brands and products have also been deployed across the other hubs. Under the very popular one has been the TruTonic drink powder in our Florida network here, and it's -- we're still seeing the demand increase for that particular item. RSO tincture were a doctor recommendation and a doctor ask for us. So we developed a strain-specific RSO tincture that actually tastes really good and some of the other types of items are going to be our Primo buds and some value -- different value sized edibles, both in our brands and also brand partners. All right. So with that, I want to hand it over to Tim, and he's going to talk to us a little bit about the customer experience. And then really, everybody today that came out, thank you. I hope you saw the passion amongst the team to be able to share their craft with you and what they're able to -- the experiences they're able to bring to our customer base across Florida and our nationwide network. So Tim?

Thank you, Kyle. I appreciate it. So I guess if Kyle is an OG, I'm just a G, I've only been here now for 3 years at Trulieve on the retail side of the business. When I got here, we actually had 21 stores and had 687 employees. And today, fast forward 3 years later, I have 168 stores as you heard earlier, and I have over 4,000 employees that report to me in the different departments across the company. I have over 20-plus years of experience in the retail sector, a lot of it in operations, retail sector as well and then large-scale team building and operations multistate. Here at Trulieve, we're really passionate and obsessed with the customer experience. And I think that goes to say that in most retail operations, a lot of people will say that, but I've like I said, 20-plus years in the industry, I've never seen a group that's as passionate as it is in the cannabis space. And it's really great to be able to take a customer on a journey. And we have 3 different journeys in past that we really focus on here at Trulieve, and that is the delivery at the home. It's also our express or order online and pick up in store and then our walk-in, which is really -- you see a lot of the customers coming in that are new to the space. They need a consultation, a little bit more knowledge and you need to spend a little bit more time with them and really start their journey in cannabis the right way. Several years ago, Alex kind of talked about COVID and how it hit, and it hit a lot of people really hard. But I think it was interesting for us to be able to look at how the path and the journey automatically changed of what the consumer was looking for, right? When -- what was totally mostly walk-in business that we started with and it all moved over to delivery and then the express pickup. And so in a 6-week period of time, we were able to gather our leadership team and say, okay, how are we going to do this differently? How are we going to change the path? How are we going to make things better and continue that great experience. And within the 6-week period of time, we were actually able to double our delivery fleet, flip what our employees' job descriptions were for some of them, add technology to the in-store pickup process. So we're able to text the individuals. They could put themselves in line, we would text them to come in, so we could add speed, efficiency, right, and keep the environment safe for them. And so that just kind of shows you that the scale and the capability that we have here at Trulieve is we were able to really make that adjustment in a very short period of time without skipping a beat on the overall experience for the consumer. Our frictionless returns, our customers love our frictionless returns here at Trulieve, our return percentage is under 1%. But it's one of those that it's a benefit to the customer. If you think about you get a product and it just doesn't have the effect or it doesn't work the way that you want it to, bring it back, right? You'll talk to one of our individuals, our bud tenders and they'll figure out, let's try this one. I think this is going to get the effect that you're looking for, right? And we'll take that back form and send them home because our goal is to make sure that when they leave, they leave happy and they leave with the product that they're looking for to get the experience and the effects that they want. And if they don't, we'll try it again. But we'll make sure that we take care of them and they get what they need before they leave one of our stores. Our loyalty program, we've got rewards, perks, veterans programs, some really great things in our loyalty program, and Gina is going to talk a little bit more about that in part of her segment. Our retail footprint. I talked earlier about building large teams. And one of the things about -- that I am glad that I had the past experience over those 20 years, because in my year one, we went from 21 stores to 48. We doubled the fleet, doubled the team and didn't look back. In the next 2 years, if you can think about it right in a 2-year period of time, 48 to 168. So fast-paced, really a lot of strategic planning and making sure that I have the right leadership and the right hubs that can support the overall organization and drive the expansion that's needed. 30% of the stores are located outside of Florida. And again, that's a testament to that hub and being able to have the right leadership and tuck-in, a new opportunity wherever it exists out there. This year, we are opening 25 to 30 new stores. We're very strategic about how we do our stores. We have a great team that I work with that we select locations. We look at opportunities, we determine the metrics that are needed, right, and the profitability. And we make sure that when we put it all together, when that site is agreed upon, right? The entire team finance to real estate to my retail teams are all in alignment that it's the best thing for the company. I think Steve talked about we're going to relocate 6 locations here in Florida. And the main reason we're going to relocate those is early in cannabis, as most of you know, the opportunity for site selection was not as fast as it is today. So it was a little bit more of a challenge. And then some of those deals you had to get early on to get a site wasn't necessarily what you were looking for either. So we've got an opportunity to relocate 6 stores. And when we relocate those stores and reposition them, it's all about the customer experience and the profitability and doing it for the right reason. Our product strategy. Our product strategy really has been since I joined the team. First and foremost, listen to the customer. It's our priority, right? The customer is going to tell you exactly what they're looking for and the types of products and the demand and the quantities. And so I've got a great partner in Kyle, that we can take that data that's provided to us, and we look at it and we assess it and we determine the needs and then we go make those and deliver them to the right store at the right time at the right price. And that really just makes things kind of flow through, which is all about our national pricing strategy as well, making sure that we have that value. We have that premium and then you have a mid-tier that is needed in that process as well. So there's really 3 different things that or 3 different levels that are needed in the product mix out there. And again, that comes from the customer demand. We're really big on gathering data, as Kim talked about, and then using that data to have the customer tell us. But then we do a fantastic job, I think, with our feedback loops and listening to our team. So we have all these 9,000 employees out there, what are they hearing? And then I have a customer care center that listens to the customers and it calls in for different reasons or needs help, consultations or has a -- needs a different product, listening to all of them. We've got an online digital team listening to them as well. When you think about all of the resources we have to determine what the product is, that's needed and goes market by market. We've got a tremendous array of data to make sure that we get that right. And our national pricing strategy, we look across the country, we try to find market-by-market analysis, talk to the teams on the ground, right? What fits the market and where do we fit in there with our value proposition, right products at the right price. That's the key is making sure that we have that for our customer. Somebody had asked the question, I think earlier, and Kim talks about it all the time, is premium and value. We call it the barbell effect. And that is really 2 distinct value or I mean, 2 distinct categories where the customer is telling us they want to be right now is in that premium and that value. We spend a lot of time working on our competitive analysis by markets, reviewing the information by state, by hub, right? And it's all about what is the customer demand and are we delivering on what the customer is asking us for. Wholesale. So we took Harvest, and we took Trulieve. Trulieve was just getting into the wholesale business. Harvest was already there. So we're able to take those 2 teams and combine them into -- across 7 states and really focus on taking them right to the hub strategy. So now we have leadership, right? And each of the hub strategies, not only for retail, but we also have it for the wholesale side of the business. And we make sure that we're listening to what the customer is telling us on the wholesale side of the business as well. They want differentiated items, right? We can do some gap analysis. Where is the opportunities in the marketplace, where the things that will set us apart in pulling our brand portfolio, which Gina will talk to, a fantastic conversion of the 2 companies has created this great brand portfolio that we have, not only for the retail side, but for the wholesale side as well. And we believe in really working through reciprocal relationships with our partners throughout the state and throughout the country and making sure that we have fair value in what we take from them and they take from us and that we drive the business and what the customer is looking for. Our success factors, this was so hard to kind of think through is there's so many of them. But one of the ones that really stood out to me is as you think about what we've accomplished right, in 6 short years since the first sale in this company to where we are today, absolutely unbelievable. And it all started with -- Steve said, it's about the customer, right? One patient at a time or one customer at a time and then our reciprocal and authentic relationships that we create with those customers. We're out in the communities. We're working with the individuals. We're trying to make sure that when you visit one of our locations, you walk away feeling great about the service you received, right? And that the products you got were at a great value, right, and they were what you wanted. So it's about the quality, broad selection and the value that we have in our products. We've got dedicated leadership in each one of these hubs. I've got a fantastic leadership team in each one of them. So it's the hub, then it's down to the state and great teams across all of our complements of stores out there and states. We focus on our hiring is about that customer first mentality and making sure that you have a servant leadership, you're in the background and thought of a service industry, hospitality, it's about creating that journey, that path and that great customer experience when you walk into a Trulieve store. We spend a lot of time training our employees, making sure that they're customer-centric that they have the product knowledge that's needed to ensure that they deliver, right, and answer the questions that the customer is looking for. And I think one of the biggest things in the success factor is this group right here. It's amazing. I've worked in several companies. And this group right here is a tight-knit team. We cross collaborate all the time. A problem comes up, it's not Kyle's problem, it's not Tim's problem, it's not Nilyum's problem, it's our problem. And we sit down in the room and we solve it together as to what's best for the customer, always putting the customer first at everything we do. And with that, I'm going to turn it over to Gina to talk to you a little bit about our marketing and brands.

Good afternoon, everybody. My name is Gina Collins. I'm the newest member of the team. I joined in the first quarter of this year. And prior to coming to Trulieve, I started my career in big corporate consulting, where then I transitioned to CPG and spent over a decade at the Coca-Cola Company, and from there, spent another decade in retail for which then transitioned to helping smaller and largest -- larger cannabis companies. And I share that with you, #1, so you can get to know me a little better, but most importantly, it's why did I come to Trulieve and what do I believe is truly the differentiating factor of Trulieve in this amazing industry and space. And that is the focus on customer. Everybody here has talked about it today, but for a marketer, it's a dream. Everybody talks about the use of data and how we'll get there. Trulieve really started from the beginning. And I think that builds the basis of a true competitive advantage. I'm going to tell you about some of the priorities of the team today. Wrong way. That would help. There we go. So when we talk about branding and cannabis, we have to first think about the relationships between the brand categories. We have the corporate organization and the corporate brand. This exists to provide stakeholder value. And how do we do that? We invest wisely. We have really strategic M&A, choiceful partnerships and the track record of profitability, again, that Alex and just about everybody talked about today. What does that lead to? That leads to the retail brand. This is where it happens for the customer, right? We've talked about the customer all day today. This is where Trulieve comes to life. We offer them amazing products that have been driven by their need states. We do that with exemplary customer service, as Tim discussed, and we bring that together in a constant and a consistent education about the plan, which is truly differentiated. Product and development, of course, then are led by the customer. Innovation drives demand. And if you think about it that way, the demand is driven by the need. So if we're meeting the customers' need, at the end of the day, we're satisfying them. That builds customer loyalty. It builds differentiation for us to use looking forward, right, for all the exciting things that were mentioned here today. Got it right out of time. Brand hierarchy and our in-house brands. Everybody talked about this a little bit today, too. Again, coming back to what's different about Trulieve. They are focused on the priority of branding before, I think, most are in the industry. They understand what it means because it's coming from the customer lens. Our brands are not only divided by need, but they're divided by the hierarchy of need stay and macro conditions. So what do I mean by that? Let's talk about the value line. Value -- our value products are recognizable strains, they're consistent product offerings, and they allow new customers to enter the market and trial, right? A lot of times, cannabis can be overwhelming. It is our passion to educate. So when they come in and they meet with one of the retail associates, this is the retail associates' opportunity to provide interested entrants into the marketplace. The mid-tier and the mass offering is just as you would expect. This is a variety of categories that literally takes us from the flower all the way to the topical, whatever your need state might be as a customer. For the premium piece, this is exactly what you would assume. This is the true kind of store that understands the difference between the genetics, the lights that we may use to grow, the hand trimming nature of flower, and most recently, as Kyle mentioned, live products. I'm going to get this down before this presentation is over because I went the wrong way again. There we go. Partner Brands, also talked a lot about those. These are relationships that in some markets, which are super important to cannabis, local, local, local. We partnered with them and we've built them from the brand -- from the ground up all the way to nationally established products that we know our customers are looking for. And it basically -- when you take the proprietary products and combine them with a partner, it is a mix like no other, again, focused to serve that customer for every new state that they may have. What does that lead to? Omnichannel. Tim started to touch on this. This is all about seamless and effortless experience across all customer touch points. One thing I'll share with you that I personally found super interesting in my last several months here is in this year alone, we've had over 100 million hits to our site. Well, where does the customer journey start? Of course, in most industries to date, it starts on a mobile device. And from that mobile device, they come to our site. And from that site, we can track them all the way through the journey. It's from the point of entry to the point of sale. And because we have such a mature establishment of the data platforms behind it, we know where we're winning and where we can improve. I did it again. There we go. So what does that mean? It takes us to the outreach piece, right? So if we're serving them through retail and we're serving them through their journey, how are we speaking to them and how are we messaging that because that matters too. And I think one of the most exciting things that I wanted to talk about today is 3 examples of where we've recently gotten to a place where we're testing different strategies with our customer base. We recently focused on a concentrate positioning, a premium flower positioning, and then we have an ongoing effort to reconnect with our customers. And so for the concentrate example, we split the audience into 2 bases. One, any of our customers that had shown interest previously in concentrates or actually purchase concentrates -- on the other side, the rest of the customer base that had simply shopped with us before. The targeted messaging piece delivered a double-digit improvement in click-to-open rates, that's impressive. The next example was Primo. You heard Kyle talk about it. It's one of our premium flower brands, beautiful, will look at large buds. We went into the database and again, scoured for those that are truly interested in those concentrates and premium flower. We sent one group of messages to them and another group of messages to the broader-based audience. This one was double-digit improvement of revenue over the other. And think about that in the long term. When a company gets to a place that every targeted message is intended to increase revenue and meet the need of the customer at the same time, that is your marketing nirvana. And we've already started that process here, again, coming back to why it's truly differentiated and why Trulieve is truly differentiated. On the lapsed guest, right? Every retailer has this. And if they have the ability to know when did they last shop, what are their shopping patterns, we can speak to them in a way that is supportive and consultative, right? So if a customer hasn't shopped in 30 days, we now have a message that goes out to them and says, hey, we've noticed you haven't been here in a couple of days. We also know what was previously in their cart. So we offer them some -- again, education is our passion, maybe some advisement on new products that might be specific to them. 60 days, same message, just a little bit of a different twist. 90 days, different message, truly reengaging, more focused on did you know, right? And at the end of the day, the revenue results we're getting from this last lapsed guest work is 2 and 3x what the industry benchmark would be in any other retailer that would show their metrics with you. So that is giving you an insight into where we are today. And what I encourage you to think about is we're already able to do this now. Think about what we can do 30 days from now. Think about what we can do 60 days from out and 90 days. We're truly ahead of the game, and I can't emphasize that enough. And the reason why we're there is our technology team has built an amazing infrastructure that allows us to do it with ease and have access in real time. And Nilyum is going to speak to you about that today.

Okay. So IT is going to bring it home. And there will be a quiz at hand, so please pay attention. So between summary and close out Q&As, there are 3 slides. So I'm Nilyum Jhala. I'm the Chief Technology Officer. Been at Trulieve for close to a year, and what a year it has been. I started my career over 20 years ago at a startup company, have worked various retails and wholesale and a combination of over the last 2 decades. And now for the past year at Trulieve, I'm truly honored to be part of a team that is playing to win. I thought that I could run fast. These guys run faster. So I'm trying to figure out a way to keep up and technology to be at a place where we can work with the Kyles and the Ginas and the Tims of the world. And with Alex breathing down my neck on a [ socks ] here to make sure our systems are representative of a publicly traded company that's running into a [ socks ] here. I'm going to focus on one theme and 3 key focus areas today, data-driven decision-making. We're going to talk about data-driven decision-making. We're going to talk about SAP and technology infrastructure. We're going to talk about stuff that Gina talked about in terms of consumer -- or customer data platforms, omnichannel, hyper-personalization and how some of these things come to life. But I will start with the theme, and you have heard it repeatedly over a long period of time, everybody touched up on it, and it's our customer obsession. We are truly, truly customer-obsessed from the product innovation to create what we create in the labs to what we manufacture, how we ship it, how the frictionless return policy works, how our marketing is staged how our labeling is made. It is all focused on providing the best customer experience in front of our customer every time. How we do it? You heard a bunch of things around data-driven decision-making. Gina talked about 2 examples of hyper-personalizing or targeting experiences. A couple of examples of how we do it is or how we have recently done it is we picked the top 1% customers or we have the capability to pick a top 1% of customers and reach out to them in a one-on-one personalized basis to say, hey, you are a concentrate customer and we have a Primo concentrate drop coming that is going to be of a limited quantity, and we would like for you to participate in that. You guys talked about margins and you guys talked about a bunch of other things. But without sharing the numbers, when we are looking at data, the customer is telling us across all of our touch points what they want, when they want, how they want and at what price points they want. And we have the capabilities to go out and target and hyper-personalized experience. Gina also talked about engaging the customers who shop with us at one point in time and then phased out because they got busy with life or another location open or close to them or for whatever reason. So we go back and touch them and we offer a personalized message to say that, hey, we haven't forgotten about you. We know that you are a flower customer or you shop in a particular category, and we have a big drop coming or we have a particular deal coming that you probably may be interested in. And we repeat this process through our campaigns and through our automation 10x a day with the launch of the consumer data platform. I'll talk a little bit about the technology behind that in a couple of slides that provides us the capability to look at the click-through rates just in time, so we hit them once. And if they are amicable, we will hit them again just in case we have not seen the response come from a specific customer in a given period of time. We made a big investment in SAP as our core backbone platform. In 2020, we launched in an industry-unheard time frame of 5 months from ideation to launch in Q4 2020. Kyle showed some numbers where he showed that we had 14.2 million units produced in 2020 and 25.1 million units produced in 2021. Our SAP infrastructure was able to scale gracefully to support that volume. We purchased SAP, and we continue to invest in that platform to future proof our business. So we are not just planning for today and just trying to survive or thrive in today's market, but when you talk about margin pressure, when you talk about the macro conditions that are coming into place, SAP is an ecosystem that we are doubling down on to make sure that we are -- we can size up and scale to the extent that we need to. We're also going deeper with best-in-class availabilities and capabilities that SAP ecosystem provides. Kim mentioned that -- and Tim mentioned that -- Steve mentioned that we started with a small footprint of customer. We started with a small footprint of employees, and we are hitting 9,000-plus to manage those 9,000 customers -- to manage those 9,000 employees to make sure we are taking care of their benefits, their payroll, their personal information and being judicious about it. In order to do that, we just launched SAP Success Factors as well at the beginning of May that provides us an ability to take care of our employees so they can take care of our customers and again, continue on the journey of customer obsession, if you will. Another thing that we talked about in terms of M&A, we made a bunch of acquisitions. And every time you do that, it's a molding of culture, it's a molding of systems. And what can quickly happen is you had a team of size 10 and all of a sudden, you are managing a system that provides one capability across 3 different markets, and you have a team of 30 that do that. And the cost starts to go out of control pretty quick. But we have an active road map that works towards assimilating technologies, people, processes into our infrastructure from an SAP perspective. And I think that is something that has been in action with the Harvest acquisition where we are trying to harmonize processes. We are looking at the best of what Harvest offered from a best practice perspective, what Trulieve offered from a best practice perspective or if there is a best practice available outside and we pick one and then we just consolidate towards that. So there is a high degree of focus on all of that work that's happening. Now we are doing all of these things along with keeping the lights on and making sure the customer is taken care of. As we continue to add stores, we were able to flip all of Harvest, Florida, cultivation, production and stores in 30 days onto our systems, and that is unheard off. I'll close with the consumer data platform, omnichannel and the hyper-personalization components. Gina talked a lot about it. Tim talked about it in terms of the frictionless return policy. But again, I think if you think about our customer obsession, we focus on increasing our customer engagement. The way you increase the customer engagement is by creating the connections. The way you create the connection is by generating insight. So again, to bring the conversation full 360, knowing the customers, knowing when they interact with us, how much do they want to spend, what is their demographic, what age group is shopping, what category how much -- what is the amount of money that they are willing to spend, what is the time they are showing up into our stores. We are looking at all of that data and making those decisions to continue to make sure that we can create tailored experiences for those customers. So they -- so we become the destination place for them to shop and increase lifetime value. Personalized messaging. What's happening in our industry right now is because of the rules and regulations that we have, we can hit up customers during a certain period of time with a certain amount of information that can go out there, so that handicaps us. So generally speaking, everybody goes out there and last a blanket message to a wide swath of customers that is cost-prohibitive over a long period of time. And it is very generic. There is nothing special about it. But we have generated capabilities at this point where we can personally message customers based on a store group, to market a particular category and their shopping behaviors over a number of days. It could be 30, 60, 90 or a combination of. Unified Commerce, Gina mentioned that digital journey coming through the website. You're coming on your mobile phone. You walk into the store. We're trying to provide you with a seamless connected experience attached with loyalty and the product assortment that is available to you so you can have an easy, seamless, quick in and out experience out there. And again, all of this stands on knowing them better. So we are executing industry-best AI-driven platforms, artificial intelligence-driven platforms that are providing us the insights. Now how do these platforms work? The more data you put in, the more try-out you make. We talked about AB testing and the more information comes into our ecosystem and then we have people who are actively looking at it multiple times a day to figure out how to tweak and what to tweak and when to tweak. And that basically goes back to a place where anything and everything that we do. Any dollar that we spend in the technology ecosystem has to be attached to a strategy that is marketing-informed, production-driven and store-executed because we are customer-obsessed. With that, Kim, I'll let you summarize.

Thanks, Nilyum. So hopefully, you enjoyed hearing from our executive team today. And again, I'm just so proud to be in business with these folks and I really could not do this day-to-day without their support and their deep, deep expertise and passion for what we're building together here at Trulieve. Just in conclusion, this is a generational investment opportunity. And there may be some bumps on the road from a macro perspective, but the thesis remains true. And quite frankly, for Trulieve, it's truer than ever. We are uniquely positioned within U.S. cannabis to take full advantage of the opportunities ahead of us as a company and as an industry, and we are laser-focused on building a leading and sustainable cannabis company to be that, again, winner at the end of the day. And we are and continue to focus on having the right talent, assets and capital to meet this opportunity and believe that we are poised and ready to define the future of cannabis. Thank you guys again for your attention today. Thank you for all of our viewers on the webcast and for spending time with us to talk Trulieve, and as I always say, onward. With that, we're going to open it up to questions for the operations team. So if anyone has any questions, feel free to queue up at the mic. Don't do all those.

Matt McGinley from Needham. So my question is on -- with the investments in brands and branding. You clearly are gearing to grow that wholesale business to become a bigger part of your total mix, which today, it's sub-10% of your total sales, which is low compared to peers, but that just speaks to how strong your Florida business is. So my question is, if you didn't grow that wholesale business as a percentage of mix, would you still be able to achieve those 60% gross margin targets and 40% EBITDA targets over the next few years? Or is that really contingent upon growth in the wholesale business, which would improve margins over time?

Yes. Thank you, Matt. I would expect nothing else an emerging question. So actually, interestingly enough, as I'm sure that you can appreciate product through branded retail is actually a significantly higher margin contributor than the wholesale business. So I think that the answer to that, I'm going to give you my recovering lawyer answer is that it depends, right, on how quickly we're also scaling retail, right? So if we did not have a wholesale strategy, which we do, we would, in that instance, likely pivot to even more of a retail strategy. And honestly, one of the reasons that we are very comfortable long-term guidance is our strength in branded products through branded retail, our continued focus on that, but with understanding also the need for some diversification of -- in certain markets and in certain regulatory environments, limitations on the ability to have, again, branded products through branded retail, but we will lead with that strategy, at least for the foreseeable future, while supplementing with again, a wholesale -- a more robust wholesale distribution platform.

Thank you for the presentations. Aaron Grey, Alliance Global Partners. Just going off the use of data, Gina from your presentations, you talked about how you're utilizing that data in the early days, both with the hyper-personalization and some of the targeted offerings. You mentioned you guys are still kind of in the early days of utilizing that data. So just curious from your previous experience in retail and traditional CPG, what do you feel like are some opportunities in terms of leveraging that data that aren't being used right now by Trulieve in the broader cannabis industry and that could be used to make it more personalized and also create more of a moat, particularly for Trulieve in Florida where you guys have such a large market share and a lot of competition coming out from that?

Gina?

Yes. I think that goes to the conversation of we're just starting to understand what the opportunity is. The moat infrastructure, if you will, we've already started to dig. So I think it's the continued desire to make it deeper and deeper for that competitive advantage. I think as we get into the aspects of the platform as well as the contribution of the customer meaning all of them are different, right? They've come to cannabis for different reasons, and that reflects in the product conversation of why we I could them the way we do, right? You've got true cannabis connoisseurs, you've got folks that are kind of in the middle and then ones that are truly new to the plant, which have a broader education need than the ones at the top. And so to answer your question directly, I think it's a consistent and constant focus on what data are we gathering, how is it working for us. You saw some of those examples today. And then specific to Trulieve, how can we make it work harder? And that's really where I think Nilyum and I are partnering.

Yes. And I would just say, Aaron, one thing that you heard that I want to gloss over and I just want to maybe highlight for you is that the more we put in the CDP system is new. What's not new is how we utilize feedback loops and how we listen, and we're continuing to do that with our customers. So we're coming -- when we're fashioning these campaigns, when Gina and the teams are sitting down to think about what does that AB testing look like, we're coming from an informed place because of the years of information that we've gathered up to this point, right? And so our ability to take and actually segment out that top customer comes from these years of data that we've been gathering in the Florida market specifically. And then what you also heard is the AI nature of the systems that we're putting in place. So the more campaigns that we're running and the more often we're trying these AB testing, the more suggestions and the more tools in our toolbox in terms of which that the system will generate suggested campaigns for us to run in different targeted markets. And so it's a constant evolving, it's sort of what you put in it sort of multiplies and it becomes exponential with time. And I think to Nilyum's point, we have such a large swath of data that we put into the system coming in. So our ability to have the moat is, again, not surprisingly, particularly in the state of Florida, linked to our scale and our consistent focus on data up to now that we're now leveraging to Gina's point now, right? I mean we're just starting to leverage it in a technology-first way, whereas before, we were leveraging it in an old school, large databases and that data becomes very difficult to manage. So now we're making it work for us in a more expeditious and methodical way. And Nilyum, I don't know if you have anything else to add to that.

The only thing I would say is -- just to add to that, I think you guys covered it all. We have large swaths of data. So we are customer-obsessed. The key is we are in the process of -- or we are in the early stages of transitioning how to influence what Kyle produces. If we can continue to optimize that to the tee, then what it does is it reduces our overall spend footprint. And the moment we optimize that, we would be -- there is no equal right now. However, a lot of competition is coming in. And if we can nail that, which we believe we are on the journey and we have the investment behind that we can nail that, I think we would be truly unbeatable across the board.

Derek Margiotta from Jefferies. Thank you for the presentation. The whole day has been truly great. Just a question on cultivation and processing. I think we're all really impressed with the 750 square-foot facility. I think, what are the plans to implement that type of automation processing across the whole footprint? Does it make sense to actually make the investment into making those automations and scalable automations across the footprint in these markets that have limited license -- or limited cultivation caps rather? And if it does, then what does the future of these smaller types of facilities that we saw, the 24,000 and the 46,000 with more hands on staffing?

Sure. I'll start it and then I'm going to hand it off to you, Kyle. So the answer is, is that we foresee a mixed footprint. It's not a one-size-fits-all at this stage. And again, different markets are in different phases of evolution. That level of automation does not make sense under a certain scale. The type of investment and the ROI on that investment, you need to have the scale behind it to support. That being said, we continuously improve all types of footprints and add automation to all types of footprints where it makes sense. And again, that value proposition and that ROI has to be -- has to fit. Also keep in mind that while, yes, the 750 is certainly, we think, a key element of our future cultivation footprint, we still have data collection to do there, right? It's not completely online yet. We need to make sure that it's accountable to what we thought it was going to do, that the efficiencies are actually delivered. And that's something that we're going to continue to measure and kind of think about, right, as those numbers actually come into reality. That being said, it also takes longer to bring that type of a facility online. And sometimes speed to market perhaps wins, if you will, when we're weighing the options of cultivation styles in front of us. What we've seen here in Florida is we run parallel paths, right? And so we've continued to build out -- or the 46,000 or up to 100,000 in Florida, while that building was coming online, which then were able to slow that down because of the speed to construction so that when that building comes online, we're not -- we don't have an overabundance of capacity. So it really is -- it's not an either/or. And oftentimes, we have to take into account all the different variables in a particular market and what we're forecasting for that market in terms of really what the best fit is for us. And again, what we talked about before is having optionality. And that really is what we think is one of the most important aspects of being successful in the cannabis space is because things change very quickly and you need to be able to pivot and to take advantage of opportunities as they present themselves. Kyle, I don't know if you have any other.

Yes. So Kim did a great job obviously providing the synopsis on it. But just to kind of add in, we're on continuous improvement mode across the organization continually. Even though we've got a team that focuses specifically on that, they focus on teaching it, not just doing it. So we want production centers and plants full of people that are thinking how can we do this the next best way. And sometimes that doesn't mean investing in a crane to pick up pods and move around in a particular market or opportunity, so just a...

Yes. That really -- I mean, Kyle has really done a great job of bringing that mentality to the forefront, particularly in our cultivation, our production facilities and really that continue -- that mindset of continuous improvement, even our 24,000s. And what you saw today is radically different than what you would have seen 2 years ago in those facilities.

Matthew Baker from Cantor Fitzgerald. Just a question regarding the company's footprint. When evaluating opportunities, we're just wondering how you guys think about New York and New Jersey markets? And then between the 2, which one you guys think is better?

Almost all day. So I think we've been very consistent in terms of our messaging. Look, the Northeast is an important hub for us. We've continued to invest in the Northeast. Certainly, we love our positioning in Pennsylvania ahead of what we think to be a very meaningful catalyst that's on the horizon there. And like our ability to really achieve depth and scale in that market, that catalyst. And I think that what you see in some of the other markets that you mentioned is there's going to be a rush to now scale, right? And it's sort of going to be a bit of a -- as we mentioned, some elbow jobbing trying to get that to happen prior to recreational coming online. Look, I would say this, never say never, but it has to meet our criteria and some of that criteria centers around opportunity cost centers around price and it centers around our ability to have a strategy that we feel comfortable articulating and executing in some cases, does require some, I would call it, regulatory certainty in terms of how some of those markets are going to develop. And so I would just say that we remain opportunistic. Again, I wouldn't count us out, but we are thoughtful and we are strategic in terms of where we spend our dollars. I'm very interested to see how both of those markets continue to develop. And I'm hopeful that they turn into great real substantial opportunities in substantial market. It's great for the industry and it's great for the surrounding areas, which we plan to have a meaningful role in.

Eric Des Lauriers at Craig-Hallum. So certainly, throughout the day today, lots of focus on data feedback loops, the processes involved in getting the right product to the right customer at the right place. And I'm wondering if you could talk to -- you also referred to genetics and the tissue culture lab that you guys are working on. Can you talk about how some of those data feedback loops and processes might also enable you to not just sort of maintain share and improve efficiency that you have right now, but perhaps stay ahead of consumer taste changes and really kind of lead on that edge of consumer tastes?

Yes, sure. Who wants to answer that? Anybody? I mean, I can take it. Tim, do you want to talk about that?

Okay.

Okay. We thought we were going to have a wheel up here and we were just going to spin it but...

And see who's up next. No, I think it's a great question. And a lot of the -- from the feedback loop and the information and data we're gathering, a lot of the consumers are telling us what's next and where they want to go. You see a lot of -- everybody in the cannabis talks about West Coast to East Coast, right? It starts in the west and kind of works its way towards the east, but there's a lot of in-between inside of there where when you're really listening to the customer, you can hear about different things that they're asking for. So Kyle talked earlier about a lot of the live products. Those have been out in the marketplace for a while, but we weren't hearing a lot of that, right, in some of our states. And all of a sudden, it became the demand. And so with that, with our scalability, in that listening mode that we're in, it was like, okay, it's here, time to move, right? He already knew how to make it. We jumped right on it and launched and off we go. So I think it's really important that you continue to listen to that consumer because they'll tell you where they want to go.

Nilyum?

A couple of things that I would say is I think there was a part of the question you were talking about how are we looking ahead. So we are a data-first company. However, the brand was built in the south. There's OG, there is G, there is newbie. I am a little bit of a newbie, but I love history. This company is built based on rolling up the sleeves and jumping in there. So we run focus groups. The way we run focus group says we have an active stream as part of our consumer engagement and we run focus groups with our bud tenders because a large population of our employees participate in the lifestyle recreationally or because they -- or somebody in their family is helped by the products that we create. So we do that. That -- and the -- all of these folks are varying ages. So they tell us what works, what doesn't work and what probably we should do. We also go out there with the Harvest acquisition, with the recreational experience and the recreational data starting to come in there, you're running focus groups to figure out the customers who don't shop us, what are they looking for? And when they are going outside, what are they shopping for that's also a data point that is coming in there. And then we go out there and we do some paid focus groups as well, third-party paid focus groups. That basically tells us call it, car shopping or what have you, that also tells us what we should be doing and what we should stop doing. So I think that's an additional set of data points for you.

And I think also just a final point is that also we think about like next-generation in products that are having success. So we're looking at -- so for example, we -- 2 quick examples. We onboarded nanotechnology a while back. We were really one of the pioneers, I think, in the space to really scale nano and begin using it in different formulated products. Then when we looked at, for example, the drink space. And we were thinking about, okay, that's great. There are a lot of these companies that have liquids in some form, whether it's a squeeze product or actual beverage. In Florida, there's actually a prohibition against beverages currently. Also, I think that there is still some distribution pain points as it relates to beverages. And the question is will someone actually come into a dispensary for a cannabis beverage, right, and where those -- where that friction is. And so we really used kind of the -- again, our technology advancement to create something that's unique in the space with a powder, a flavored powder format, easy to transport, right, doesn't spill, doesn't get your first messy and has been -- again, it's growing in popularity in terms of a product form factors. So that's one way that we've used our technology and our capabilities to kind of think ahead in terms of a particular category. And I would just say that in addition, so similarly, minor cannabinoid Research is really something also that our R&D team has been focused on because we had incredible demand for our CBN products, which we have launched now across a variety of form factors, including capsules and gummies. And so thinking through, okay, there was really a great response for this. What other minor cannabinoids should we be focusing on? What other formulations should we be thinking about? Is the market going to be moving to more of an effect-based or, again, to Gina, needs state-based, right, kind of more in your face direct product line? And so that's something that we're working on. So we take a lot of different inputs in terms of our processes. And -- but again, it all comes back to really being in tune with and listening to the customer however and wherever we can.

Mackenzie Boydston from BTIG. On your retail strategy in Florida, could you just talk about how you balance new store growth with delivery and then your existing store base so that you don't cannibalize your sales? And then any tools you're using to preserve your overall profitability?

Sure. Tim?

Yes, great question. So I get asked this quite frequently because we continue to expand our store base in Florida. And it's like, at what point are you cannibalizing yourself, right? And I think, again, we utilize a lot of different tools and information gathering. And it's a little easier in the state of Florida because it is a medical state, and you have the records of where all your customers are coming from. And so you have the opportunity to look for -- between that and delivery that you brought up is where is the demand? And is the demand enough that it fits into our criteria, whether or not we should open a new location to get closer to the customer, right? And ultimately, that's what we're looking for is can we get closer to the customer, deliver the metrics and the profitability that we expect to when we open a new store. So we kind of use those criteria. And when we pick and look at the locations across. And then we actually have something on our website that says, tell us where we should open a new store. And so we look at where all the demand keeps coming in from and then we look at, is that an area where we need to go, and that's pretty much the biggest things that we use for Florida.

Spencer Hanus with Wolfe. I guess if you could just talk a little bit about how you're thinking about managing that opening price point as the consumer faces inflationary pressures really across the board, while you're also building some of these higher tier products and rolling that into the mix. So talk about the trade-off there. And then, I guess a lot of retailers talk about digital as a way to drive comps and personalization as a way to drive better sell-through and reactivate users. But how do you scale that and take you from today, where you're kind of in the early innings to sort of inning 7 or 8? How do you kind of scale that? And what do you see as the key footfalls that you're looking out for there?

Sure. So the first question as it relates to inflation and as we're thinking about -- I think what you're asking, I just want to make sure I get the question right, is how we're kind of distributing time and resources between maybe a value consumer vis-a-vis Primo or a consumer. And again, I'll say, thankfully, we have the ability to walk in to come at the same time. I think that for us, our efforts have categories potentially not equally. Again, right now, we have launched a suite of what I'll call it, elevated value. That is something that we have been focused on. And we think that, that is a differentiator, and that often value brands have gotten kind of relegated to sort of an afterthought. And so us putting intentionality behind across categories. And so not just with -- it's in all categories. So it's flower. It's how are we speaking to that consumer in the flower category, how are we speaking to them in the concentrate category in the vape category and in the, what am I missing, edible category. And so having specificity around brands that they can relate to that they can identify with as opposed to just the lowest thing on the shelf, right, and being intentional about those brands and actually exercising brand building techniques within that value segment, which is -- shouldn't be, but it is somewhat unique in the cannabis space among our peer set. In terms of the premium customer, again, we're looking at data. We're looking at where those trends are, we're looking at consumption. We're looking at the categories that they're -- in subcategories that they're gravitating to. And sometimes, it's not necessarily, as we mentioned, a full on product innovation. It's tweaking, right? Okay, what strains are we making available to what stores and what quantities and making sure that we have that's new and exciting also. If we're bringing out, say for example, in our Primo lines now, we have the ability to forecast, like Gina and William talked about, the fact that we have this new and exciting strain available in this particular product offering that has not been available before, right? So variety is super important for -- especially for that connoisseur customer. So really there, it's a lot of actually also just increasing variety, making sure you're communicating directly with those customers who want that variety and who will spend at that price point. Whereas, again, on value, it's more about hardcore like brand building and making sure that we're speaking directly and embracing that customer in a little bit of an elevated way to protect value proposition of that value customer. And then your second question, I'm going to head over to Nilyum around where we see the personalization, our personalization going or technology going?

Yes. What I would say is there is a classic difference. I think you used a retail example in terms of everybody saying that we're going to do a digital transformation. We are digital-native. We don't have any technology debt. We are cloud-native. We are cloud-first, cloud-always. We have no data centers. We buy those as services. We are in the cannabis business. We are sort of not in the technology business. We use technology to drive cannabis, if you will, or the product assortment. So that being said, that keeps our footprint a whole lot lighter. Because of the rules and regulations, I think there are challenges associated with that, but there are some benefits associated with that as well. Most of our journeys -- and Gina shared this number of 100 million page views coming in. Most of our journeys if not all of our journeys start in a digital fashion, even if they end up in store. Like in Florida, the journey will begin online, but would end up in the store or with the delivery that is happening. So that makes us a little bit different than a classic retailer. Now the key is it's not about doing the hard work, it's about doing the smart work. To talk about the cannibalization example that you were talking about, right, so if a store set is being opened in a Tampa area, we look at it and we go out there and from a personalization perspective, we can say if we opened one of our stores, and Tim touched upon it a little bit, if we open one of our stores within 10 to 20 miles of another store of ours, how has the trend gone and that informs whether we would decide to open the store or not. Now that also decides that by having data enrichment and data hygiene, which is classic across all retail industry, we can go back and target that, hey, if you have to take 4 right turns to get to a closer dispensary, we'll probably hyper-personalize in that fashion. I don't believe any of our competitors aren't even thinking about any of that. And we have the capability to start unlocking that potential now, so that's how we're thinking about it.

Andrew Semple from Echelon Capital Markets. First of all, I want to say that I really enjoyed this discussion. So thank you for putting this together. I think I wanted to ask this question to Kyle and Tim in particular, but anyone else, please feel free to chime in. And it's on the supply and demand dynamics within the Florida market. It feels like we're in a really interesting point. Over the past 2 years, Trulieve in particular, has invested heavily in the state to bring on additional dried flower capacity, when dried flower launched, to bring on edibles capacity to bring on more recently hydrocarbons. I'm wondering if -- I'm wondering from the production side, if we're reaching a point where it's becoming less about adding new capacity to the Florida market and more about optimizing the existing facilities and really focusing maybe a little bit more on driving down costs and building the production side for the long term. And then Tim, from the retail perspective, do you feel the stores are well supplied in all aspects or would you like to see better availability of products in your shelves to better meet consumer demand? And if you are feeling that the stores are well supplied, can you continue to drive growth through quickening the pace of new store openings over the coming years?

All right. I appreciate the question, Andrew. It's a little bit of a tricky one because we've never really thought that we should never stop optimizing or continue to keep driving down cost. But I know -- I understand what you're saying as far as driving max -- switching the mindset from maybe some of the other competitors from max throughput to max efficiency. But for us, that's really been baked in our DNA since the very beginning and we're continuing to live that through our efforts and operations now. I think someone asked me the question if they felt Tim was well stocked, and I said, you know what, you're going to get that chance to ask that question. So here's my report card is coming right now.

Yes. Thanks, Kyle. Yes, a great question, Andrew. And I think it's something that -- Kyle and my office are like right next door to each other, right? So it's like a conversation we have almost every single day, and it goes back to that right product, right time, right place, right price, right? And I think the one there that is the right place, right? And that we've done because we spent the first several years really chasing, right, trying to find a ceiling for a style of product because of the growth and how fast we were expanding our store base and our growing production facilities. So really, this last year has become more about that optimizing, of having the right product at the right depth and the right quantities, right? And that goes back to what Nilyum was saying earlier, is can we get this nailed down to the tee of what he needs to produce and then we got to get it to where it needs to be delivered, right? So you don't want to be in an ever-out situation, but you don't want to be in an overstock situation either. And I think we're dialing that in really well right now because of the new technologies that we have and our ability to work cohesively as a team to, like I say, Kyle and I talk -- it's like, hey, I got a little bit extra over here. We probably need to shift over there, but we work supply chain and those conversations regularly. But I think it's a great question and it's something that's always on our mind.

Yes. And just for the benefit of the group, something that was said on the tour, we're shipping 7 days a week in the state of Florida. And it's a constant adjustment. We also move product and have the ability to move product among stores. We try not to do that, right? I mean if we're doing everything right, we're forecasting correctly and we're getting that right product in the right stores at the right time and the right price. So I would say that there's still, I think, some opportunity in terms of certainly in certain sub cats and certain SKUs that we're still a little light right? And then there are others that is about optimization and kind of dialing in and maybe, again, adding a different level of variety or again, kind of just sort of thinking about that consumer and how to keep how to make sure that we're top of mind for that consumer from a product perspective. But also keeping in mind, I think, broadly, our shelf optimization right? And how -- and what type of product variety and the proper mix of products, not just in Florida but across the country, right? I think that one of the biggest and maybe most seen cannabis challenges is just you have in a lot of markets, just an overabundance of product. And there is a direct correlation, quite frankly, to that activity vis-a-vis profitability. And so being purposeful in terms of what our shelves look like? How they're segmented and how we're communicating that segmentation to customers through retail is also and, quite frankly, how we're also communicating that value proposition through our wholesale and our suite of wholesale products to dispensary partners as well is something that's really critical and something that we're definitely very passionate and focused on across -- really, again, across the country, both Florida as well. Okay. Well, I think that, that wraps it up. Again, I appreciate your time and your attention today. You have been wonderful. Thank you for the thoughtful engagement and questions, and again, giving us the opportunity to showcase the company that we love and are, again, are passionate about every day. So thanks so much. This concludes our 2022 Investor Day. So thanks for participating.