Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vireo Growth Inc (VREOF, Financial) reported a 6.2% year-over-year increase in total revenue, driven by double-digit sales growth in Maryland.
- The company has shown strong improvements in harvest yields and flower quality, particularly in challenging operational conditions.
- Vireo Growth Inc (VREOF) successfully launched hemp-derived beverage and gummy products, expanding their distribution network both locally and nationally.
- The company secured an additional $10 million financing commitment from their lender, reflecting continued support for their long-term success.
- Vireo Growth Inc (VREOF) achieved market share growth in Maryland, with retail revenue up 12% and wholesale up 26% year-over-year.
Negative Points
- Retail sales in Minnesota have slowed, with the market anticipating the introduction of adult use in 2025.
- The divestiture process in New York is taking longer than anticipated, although the regulatory environment has improved.
- Year-over-year financial comparisons were challenging due to the lack of new regulatory catalysts or store openings.
- The company faces ongoing litigation with Rao, with delays in the hearing process impacting progress.
- Capacity constraints in Maryland may limit further production growth, with expectations remaining status quo.
Q & A Highlights
Q: Can you expand on the CapEx plans for Minnesota adult use, particularly between retail stores and production facilities?
A: (CEO Amber Shinba) Our primary focus is relocating the Moorhead store, with ongoing finalization of design and construction bids. We are also considering additional relocations instead of retrofits. On the production side, we are exploring improvements with a potential $6 million CapEx to enhance cultivation capacity, pending further capital support.
Q: Is there any CapEx planned for the production facility in Minnesota?
A: (CEO Amber Shinba) Yes, we are looking at nominal CapEx improvements in lab and manufacturing. For cultivation, we are considering a $6 million investment to boost throughput and capacity, contingent on additional capital support.
Q: Could you provide an overview of the current dynamics in the New York market and your latest thinking on this asset?
A: (CEO Amber Shinba) The divestiture process in New York is taking longer than expected. Meanwhile, we've activated seven flower rooms in our Bluebird facility to capitalize on market opportunities, particularly in indoor flower sales, despite the crowded market.
Q: Regarding Maryland, what is your ability to continue driving market share gains, especially in the vape segment?
A: (CEO Amber Shinba) We are focusing on high-quality products like vapes and liquid diamonds, which complement our existing offerings. This strategy has empowered our retail and wholesale channels, allowing us to offer unique products and gain positive market feedback.
Q: Do you have additional capacity in Maryland to continue driving share gains, or are you maxed out?
A: (CEO Amber Shinba) While we may find some efficiencies, our production capacity in Maryland is largely at status quo. We are focusing on maintaining current levels rather than expanding capacity significantly.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
