Greetings, and welcome to the Columbia Care Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. As a reminder, this conference call is being recorded. It's now my pleasure to turn the call over to Lee Ann Evans, Vice President, Investor Relations. Please go ahead.

Thank you, Kevin. Good morning, everyone, and thank you for joining us for Columbia Care's Fourth Quarter and Full Year 2020 Earnings Conference Call. With me today are Nicholas Vita, our Chief Executive Officer; Lars Boesgaard, our Chief Financial Officer; and David Hart, our Chief Operating Officer. Earlier this morning, we issued a press release reporting our fourth quarter and full year results, which we also filed with the applicable Canadian securities regulatory authorities on SEDAR. A copy of this release is available in the Investors section of our corporate website, where you can also access a replay of this call for up to 30 days. Please note that the remarks we make today regarding future expectations, plans and prospects for the Company constitute forward-looking statements within the meaning of applicable Canadian securities laws. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, which we disclose in more detail in the Risk Factors section of our annual information form filed with the applicable Canadian securities regulatory authorities and also found at www.sedar.com. We remind you that any forward-looking statements represent our views as of today and should not be relied upon as representing our views as of any subsequent date. While we may update any such forward-looking statements in the future, we specifically disclaim any obligation to do so, except as otherwise required by applicable law. Also, please note that on today's call, we will refer to certain non-IFRS financial measures such as adjusted EBITDA and gross profit margin, excluding changes in fair value of biological assets. These measures do not have any standardized meaning described by IFRS and may not be comparable to similar measures presented by other companies. Columbia Care considers certain non-IFRS measures to be meaningful indicators of the performance of this business in addition to, but not as a substitute for our IFRS results. A reconciliation of such non-IFRS measures to their nearest comparable IFRS measure is included in our press release issued earlier today. With that, I will turn the call over to Nick to get us started.

Great. Thank you, Lee, and good morning, everyone. 2020 was a transformational year for Columbia Care. Our fourth quarter performance continued the record-breaking momentum we've generated all year. We saw robust growth across combined revenue, gross profit, gross margin and adjusted EBITDA on both a sequential and year-over-year basis, and exceeded every milestone target we established in our full year 2020 outlook. Combined revenue was up 151% year-over-year and 234% sequentially, and our fourth quarter was our most profitable quarter yet, with $9.4 million in adjusted EBITDA. Our top markets by combined revenue and adjusted EBITDA in the fourth quarter were Colorado, Massachusetts, Pennsylvania, Ohio and Illinois. As we discussed in Q3, we have turned the corner towards profitability and anticipate continued growth as we begin to sweat our assets and fully leverage our vertically integrated national footprint. Including our pending acquisitions, we have 87 dispensaries and 27 cultivation and manufacturing facilities open or in development across the United States. In 2020, we added 39 dispensaries to our footprint, including organically and via acquisition. 2020 proved to be the year we began to make our mark as an industry consolidator, closing several key accretive acquisitions in the world's number one and number two cannabis markets that have already contributed to our record results. I'm happy to report that integration of our closed acquisitions, Project Cannabis and the Healing Center in San Diego in California and The Green Solution, or TGS in Colorado, is progressing brilliantly. Q4 represented the first full quarter of TGS contribution on our platform, and we are pleased to be generating such strong performance in Colorado, the world's second largest cannabis market. And with Project Cannabis on our platform as of December, we can fully optimize both profitability and scale in California, the world's largest cannabis market. We plan to utilize Project Cannabis' extensive distribution network in premium and exotic strains and nationally recognized brand portfolio, including 777 and Classics to enhance our own product offerings to all markets. We are also on track to close the Green Leaf Medical acquisition by Q3 2021, perfecting our vertically integrated portfolio in the Mid-Atlantic, with operations in Pennsylvania, Maryland, Ohio and Virginia. Of these states, three of them expected to convert from medical to adult-use in the next 24 months. gLeaf has established itself as a regional market leader with a strong operational track record and cultivation extraction processing, wholesale and retail operations across its four-state footprint. Across our national footprint, we have demonstrated incredible operating discipline and execution throughout a dynamic year for our industry. As we continue to offset to offer best-in-class trusted products to all of our medical and adult-use customers, we are benefiting from regulatory tailwinds in several markets that will or have transitioned for medical to adult use. In Arizona, we launched adult-use sales at our SWC dispensaries in Tempe and Prescot earlier this year and are already seeing encouraging results. We are aggressively expanding canopy in New Jersey so that we will be able to meet the needs of the medical and adult-use markets. In Virginia, we opened our Portsmouth dispensary in December and are anticipating flower entering the medical program later this year. In anticipation of continued strategic CapEx and acquisition opportunities in 2021, we have bolstered our balance sheet, having raised an additional $140 million of institutional capital thus far in 2021. We are deeply grateful for the support and confidence of our investors as they entrust us to continue executing on our strategic objectives. We have the discipline to identify, acquire and integrate accretive assets, while generating strong growth within our existing markets. As we look to 2021, we have many levers to pull to continue driving outsized growth and margin expansion. I look forward to providing more detail on our business developments and market highlights later in the call. But first, I'll turn the call over to Lars to review our financial results. Lars?

Thank you, Nick, and good morning, everyone. I'll proceed to provide a summary of the key financials for the fourth quarter. Please note that combined metrics included our reported financials as well as the results from the four dispensaries operated by a partner in Ohio. Both our combined and reported results include our first full quarter of contribution from TGS, which we acquired on September 1, 2020, as well as approximately one month's impact from Project Cannabis, which we acquired on December 2, 2020. Combined revenue in the fourth quarter was $81.8 million, a more than threefold increase year-over-year and up 51% quarter-over-quarter. From a sequential perspective, the increase was primarily driven by the benefits of a full quarter of contribution from TGS, the addition of Project Cannabis in December as well as strong organic growth in Massachusetts, Pennsylvania and Ohio markets. Excluding $5.7 million of sales revenue from Fortis centuries in Ohio, we reported total revenues in the fourth quarter of $76.1 million, which also represents significant increase compared to last year, and an increase of 56% sequentially, primarily driven by contribution from TGS, Project Cannabis as well as the continued expansion of our dispensary network and stronger same-store sales at our existing expense release. Combined adjusted gross profit for the fourth quarter was up 61% quarter-over-quarter and more than fivefold year-over-year to $34 million, resulting in gross margin of approximately 42%. In addition to excluding impact from changes in the fair value of biological assets and inventory, this gross profit and margin also excludes $1.4 million related to write-up of inventory acquired in the Project Cannabis and TGS acquisitions. Our reported gross profit before fair value adjustments for the fourth quarter was $30.4 million, an increase of 76% on a quarter-over-quarter basis and a more than fivefold increase on a year-over-year basis. Reported operating expenses for the quarter were $45.3 million compared to $33.6 million last quarter and $34.7 million in the year ago period. The sequential increase was primarily driven by the addition of TGS for the full quarter and Project Cannabis for the month of December. Combined adjusted EBITDA improved significantly to $9.5 million compared to $4.2 million last quarter and a negative $14.3 million in the year ago period. The improvement in adjusted EBITDA was driven primarily by the addition of TGS and Project Cannabis as well as improved contribution from several key existing markets such as Pennsylvania, Massachusetts and Ohio. Reported adjusted EBITDA for the fourth quarter increased significantly on a sequential and year-over-year basis, coming in at $8.3 million compared to $3.1 million last year and negative $13.9 million in the year ago period. Our capital expenditures for the fourth quarter were $3.2 million and for the full year, it was $31 million, which is net of proceeds from sale-leaseback transactions completed in 2020. As of December 31, 2020, our cash balance was $61.1 million compared to $47.5 million as of December 31, 2019. This does not include approximately $140 million in aggregate proceeds raised subsequent to the quarter, as Nick mentioned earlier. On December 22, 2020, we announced a definitive agreement to acquire Green Leaf Medical for upfront consideration of approximately $240 million comprised of $45 million in cash, $195 million in Columbia Care stock and the potential for additional performance-based milestones in 2022 and 2023. We expect that this transaction will be accretive to gross margin, adjusted EBITDA and cash flow from operations. And that it will give us important scale in both wholesale and retail leadership positions across Pennsylvania, Virginia, Ohio and Maryland. In line with the time line we have previously announced, this transaction remains on track to close in Q3. Subsequent to the end of the quarter, we further expanded our California presence through the acquisition of the Healing Center, San Diego, which we announced on January 7, 2021. The total consideration was approximately $15 million, comprised of $3 million in cash, $6 million in Colombia Care stock and $6 million in seller promissory notes. On the back of the strong momentum we have sustained throughout 2020, we are providing guidance for combined revenue, adjusted gross margin and adjusted EBITDA for 2021. On a pro forma basis, we expect our combined revenue for the full year 2021 to come in between $500 million and $530 million, our combined adjusted gross margin to be at least 47% and our combined adjusted EBITDA to come in between $95 million and $105 million. Please note that this outlook assumes that our pending acquisition of Green Leaf closes on July 1, 2021. The however, it does not include any contribution from future acquisitions, nor does it assume any changes in the regulatory environment in markets where we currently operate, such as the pending adult-use program in New Jersey. Our outlook also does not include markets where conversion from medical-only to adult-use is under consideration by the state's governor or legislators, such as New York and Virginia. This concludes my prepared remarks. I'll turn the call back over to Nick.

Thank you, Lars. As we look to the rest of 2021, there are a number of catalysts that will drive growth for Columbia Care across our markets from California to New Jersey. From a branding perspective, we are preparing to launch our popular 777 Seed & Strain classics and Amber brands across additional markets throughout the year. Starting in 2Q, we also plan to roll out a new dispensary concept that will provide a more approachable, more curated retail experience for medical and adult-use customers alike. We are confident that 2021 will be a breakout year for Columbia Care. I'm incredibly proud of the strong momentum we have generated with our aggressively expanded platform, and I want to thank our team for their tireless work and dedication during such an unprecedented year in 2020. Operator, we'll now open up the call for Q&A.

[Operator Instructions] Our first question today is coming from Scott Fortune from ROTH Capital Partners. Your line is now live.

Can you dig in a little bit into California and the strategy there or the opportunity to potentially go deeper in the state? And kind of help us understand the Project Cannabis margin metrics and the strategy with the premium brands. It sounds like you're moving these premium brands nationally kind of expectation and timing-wise there for that?

Sure. I'll give you a very high-level overview, and then I'll turn it over to David to talk a little bit about operations and Jesse to talk a little bit about the rollout of the brands. From a strategic perspective, obviously, having the world's largest market red at our front door is critical, and it's important not only for us as an organization, but to really demonstrate leadership, not only in the United States, but globally. The California market is hyper-fragmented. It's very complicated. And up until this point, it's been very difficult for people to really run successful businesses. Our view has been that by sort of finding the right mix of assets, the right mix of people, and the right strategy and the balance between not only branded products, but also wholesale versus retail, we can create kind of regional centers of excellence beginning in Southern California, which is exactly what we've done. So, we have a very strong footprint in San Diego. We have a very strong footprint in Los Angeles. And we expect that our wholesale relationships, which are statewide, will continue to yield strong results. But it wasn't just for us about creating sort of a free cash flow generating business. It was about really creating scale. And that scale is something that very few people have achieved in California. We think we have the right sort of degree of operational core competencies to do that. And not only sort of accelerate our growth in margin and footprint in California to capture the sort of the market share, which is a byproduct of all of the sort of thematic trends we're seeing that are very, very positive, but also to take that skill and really export it throughout the United States, which is preciously what we intend to do. And so we have a lot of markets where there really is no brand architecture at all amongst any of our competitors, whether there's brand architecture that isn't tailored or relevant. And so, when Jesse goes through sort of a high-level overview of how we think about that dynamic, it will become very clear how those brands fit in very, very well with the way we've segmented the market. But first, let me turn it over to David. David, you can share your insights.

Sure. Thanks Nick. Just to put a final point on it, our priority in 2020 was to become vertically integrated in California, which we achieved with Project Cannabis. Second priority was to begin to build some density in certain markets, in particular, San Diego, given that we've got retail manufacturing presence there. So the THC SD acquisition allowed us to bring on a second door, if you will, for our products and for the brand leveraging purposes. As we look out into 2021, the opportunity, as Nick mentioned, is to continue to build profitably in California, but to build where we think we can add value quickly across the supply chain being vertically integrated. In the integration process through the acquisitions has allowed us to really prioritize everyone's skill sets in the assets that we brought in house. So we are very quickly integrating our retail concepts. How we retail, how we market? We're now pulling material from the Project Cannabis canopy, for example, down into a manufacturing facility to go through, which Jesse will cover the brand extensions in the media term in California. And we continue to find ways and look at opportunities to build our footprint throughout the state selectively. We are going to have incremental canopy this year in our existing footprint in Southern California. Again, I think, as Nick mentioned, that market is not as institutionalized as other markets throughout the country, surprisingly so to some. And so, we continue to want to control our supply chain to the extent we can as we grow our business. And high quality, consistent biomass is something that we definitely want to have, and I think we can actually offer to others as we go to footprint. So operationally, it's about leveraging the vertical nature of our business and spreading our marketing dollars across wholesale and retail. Jesse will talk about the brand extension opportunities, but it's really building those brands in our dispensaries to create that demand, if you will, that will allow us to continue to expand our wholesale presence in the entire state. But Jesse, I'll turn it over to you to talk about brands.

Thanks, David. And as we look to roll out the brand architecture, as Nick and David both alluded to across the country, there's a few key factors that we've really sort of taken into account. One of them being with the launch of the Seed & Strain national brand in the back half of last year, we learned a lot of lessons and really took note of a lot of the things that were very successful. And that is that brands that are founded off of consistency, whether it be on testing, on characteristics such as THC or terpene profiles or certain cultivation levels of quality really resonate with the consumers across the markets where we were able to launch those brands. And so as we look forward through the rest of this year at 777, which is a super premium flower brand that will be launched beginning this month across multiple markets into the summer months with the launch of Classics, our goal is to really continue to provide brands that are targeted at and attract customers across those consistencies of testing terpene profiles as well as sort of cultivation characteristics. The expansion of brands like Amber and Press also see us moving concentrates and hard-pressed tablets into additional markets, where, again, we feel that those forms are something that are very compelling to a lot of the audiences and patients that we serve and should allow us to create levels of consistency and experience and sort of affinity for shoppers to be able to come in and know exactly what it is they're going to get. So, we're incredibly excited about those expansions, and we intend to do them in the same way that we did with Seed & Strain, which is multiple states at initial launch for each of the brands and then a continued rollout of more and more states as those brands come online.

Thank you, Jesse. Thank you, David. So Scott, just to sort of really kind of summarize. Now that we have scale, we can optimize the business model and really flex into sort of leveraging the infrastructure, which is what we intend to do. Project Cannabis was free cash flow when we acquired it. It's going to contribute to free cash flow as we move forward. Those brands that Jesse just outlined on, let's call it, the adult using consumer product side, imagine we do what we've done in medical, which is we define the marketplace, we define the consumer, we define the use cases. And then we rolled out things that were relevant to the consumers to really build loyalty. And we found that to be a very successful model. And then in between, you have operations, which make sure that we provide access to a customer journey and wholesale relationship that's durable and that withstands time. It actually develops and increases the degree of loyalty over time as consumers sort of build up their preferences. And so, we're very excited about California, we're very excited about what it has -- the implications it has for us nationally. And what we've seen so far is that all of the directional trends have been very favorable.

Thank you. Our next question is coming from Kenric Tyghe from ATB Capital Markets. Your line is now live.

Nick, just on your prepared remarks, you made a comment with respect to the Green leaf closing being by July 1. I think you correctly. Previously, I understood that to be during the third quarter. So can you just clarify for us the commentary with respect to the expected Green Leaf?

So, I appreciate you asking the question. Our expectation is that it closes in the sort of the first part of the third quarter. We're obviously working as quickly as possible to move to close, but we certainly don't want to sort of set a milestone that we can't achieve. So, it's really the third quarter is still what we're targeting.

Great. And then just, if I could switch gears here quickly. Virginia, obviously, front and center, a lot of people's minds, you've called out that on the closing of Green Leaf, you'll have your 147,000 square feet worth of capacity in that market. Could you speak to what it's going to take for you to get ready between here and one January 1, 2024, go live? And what is it going to take for the market to get ready? Because obviously, it's a long runway that's kind of few people scratching their head, so any color you can provide around your positioning, the market positioning and readiness and what needs to happen between here and 2024? And perhaps even just touch on the importance of flower in the context of that movement.

Certainly. So why don't I start off with a very high level overview. And then, David, I'll turn it over to you to sort of describe from an operational perspective, what we intend to do. As a starting point, I think you can look at the medical expansion in adult-use on a parallel path, and one really feeds into the other, meaning the addition of flower into the medical market will be meaningful, and it will sort of really begin to establish the sort of the credibility amongst consumers and patients and adult-use consumers alike that the Virginia program is not only viable, but a true access point relative to the illicit market and relative to other sort of standards of care. And so when we think about what happened in Florida, as an example, or Pennsylvania when flower was introduced, right? It had a profound change in the market opportunity and the way consumers approach to the market. And so that's the first thing that will happen, which is great news for everybody, for policymakers, for regulators and for consumers. From the standpoint of the politics around the transition from medical to adult use, Virginia took a really methodical approach, meaning they established sort of a bright line as sort of ambition. They did it in -- through the legislative process. And now that's out there. Now I think what you have are, let's call it, the tail ends, meaning you have mandated sort of steps in the process that must be done by a certain period of time. That does not mean it couldn't go faster. It just means that we now know what sort of the end of the tail looks like. And so at this point, now that we have this, obviously, Governor Northam has kind of really done a great job of establishing legacy here for himself as well as many of the leadership members within the legislature. The next governor, whoever it may be, is likely to sort of carry the same baton because the legislature will be largely intact. And so our view is that, from a policy and a regulation perspective, it's really important that Virginia get it right, just like every state should get it right. This legal approach or legislative approach allows the regulators to take the time to really be thoughtful about the way you implement things like social equity, a way you implement an adult-use program in a state that historically has been sort of center -- very sort of moderate in terms of its political spectrum. And so this may look like a long time line, but in the context of cannabis, it's actually very, very reasonable. I mean, you think about what it took to get New Jersey from talking about cannabis being a legal for adult-use purposes to actually be implemented. We're still going through the process. And so we're very, very excited about the political environment, about the legislative environment, about the regulatory environment. We think it's very supportive of the industry expanding and providing access to consumers and doing it in the right way. And at the same time, what you've seen us do at Columbia Care is really lean in, right? We're expanding our dispensary and retail footprint. We're expanding our wholesale and cultivation and manufacturing capabilities, all of those things are underway. And they're being done under the sort of umbrella of medical to make sure it's the highest quality possible so that as patients, today in Virginia, think about it in adult-use environment, they never have any questions about what that really means from the standpoint of accessing the highest quality products available anywhere in the country. So with that, let me turn it over to David. The only thing I might add is that the thing about Virginia that's so interesting is that people often think about states and the total available addressable market as sort of the captive population. Virginia is one of the most popular vacation destinations in the country. And so it's not just the sort of Virginians that have an impact here. It's also all of the people who go to Virginia, and who will travel to Virginia and spend time in Virginia. And so for us, this is a very important sort of thing to think about when you think about the implications from a regulatory and legislative perspective on what Virginia is actually pushing for and what they intend to achieve. So David, why don't I turn it over to you?

Sure. Operationally, it is steady she goes for us. This is about building out our footprint, building out our cultivation capabilities, the amount of biomass we will have by the end of this year and going forward, building out our dispensaries in our region as well as hiring all the team members that are required, and then ultimately, building out the brands for patients. We want to be good stewards of the medical program. I know, from a regulatory perspective, we've made several improvements to the program to allow patients to get access to their medical cards faster, which I know was sort of a real limiting factor in addition to a long flower to come in later this year. So from an operational perspective, this is -- we've done this in many of our markets, frankly, outside of the acquisitions where it's strict development and commercialization priorities to make sure we can help grow the medical program and represent the state of Virginia and the patients there responsibly. So, it is about execution in 2021, both from a construction, development and, ultimately, commercialization program perspective.

Next question today is coming from Andrew Semple from Echelon Capital Markets. Your line is now live.

Congrats on the solid quarter. We've now seen several months of encouraging sales data of your Florida operations. I'm just wondering if you could talk through some of the dynamics there. Are you through the regulatory bottlenecks on product approvals? And if so, where would the current bottlenecks within that state lie as you look to grow in 2021?

So, I'm going to turn this over to David again, but let me just refresh, for those of you who we haven't had a chance to talk to. Last year was disappointing for our financial performance in Florida. We were very happy with the culture of the organization built. We're very happy with the infrastructure that was built we did have a number of bottlenecks we had to solve for. But we -- I think that there was -- because of the scale of the operation in Florida, there was a point in time, probably in the third and fourth quarter, at the beginning sort of the end of the third, beginning of the fourth quarter, when we really took a step back and we took -- began to look at every aspect of the operation for the ground up. And you can see this in the numbers, all right? That are published by the state of Florida. You saw sort of a nice growth trajectory, and then you saw sort of a bit of a flat lining and then you saw a pickup in the second half of December. What happened in the second half of December is that we actually implemented many of the changes that we had sort of unearthed as we went through the kind of that introspective process. And the operations team did an absolutely spectacular job at this. So one of the things -- one of the great things about having a national platform is that we can afford to do that, right? So we had a great year, a great quarter, but we were able to actually fix the ship while we're driving down the road. And so Florida, it's going to be one of our best markets. It's performing well. We love everything about what's happening with our organization in Florida and all the people that are responsible for day-to-day execution. I think the difference here is that we always want to make sure we put our best foot forward. And if we don't, we're not afraid to kind of take a step back and look at ourselves operationally and kind of reexamine the situation. We took expertise from around the country we brought it to Florida. We've been working with the team to make sure that we do have that consolidated approach because, as David mentioned, when he was describing Virginia, we have an enormous amount of operational experience from an organic perspective. We built most of our portfolio organically. And that really pays out because what you do is you establish a culture and you establish an organization that's comfortable being objective about its own performance and then being objective about taking help and using one another to really scale that intellectual know-how. And that's what happened in Florida. And so what we see happening is kind of precisely what we would see happening in any market, if there was some kind of operational hiccup or operational sort of milestone that wasn't being met. And we look at it objectively and we fix it. I think that, for us, having all of these resources and having all this experience around the country is invaluable. And it's really -- I think that's what you're seeing here is that the application of that in combination with strong leadership with strong human capital. With the right sort of infrastructure and the right people, you can affect this type of transition. And so we still consider Florida as being enormously sort of underappreciated by operators. We think there's a huge amount of white space. And we think that it's a competitive dynamic that where scale matters, but you have to have the right scale in the right place. So it's not just about having bodies on the ground. It's about making sure that they're actually effective. So let me turn that over to David, and David can share his insights as well.

Sure, Nick. And great question. We certainly work through the supply chain in 2020 in the state of Florida. We're very aggressive on our construction and our development plans in the state of Florida with the introduction of flowers and approved products certainly changed the calculation with respect to the amount of biomass and the shift in retail priorities from concentrates to flower. And we were fighting that in real-time as we were expanding the business, expanding the canopy and making sure we had the right -- ultimately the right expression genetics in the marketplace and that we can have a comprehensive flower portfolio. So to Nick's point, we were doing that in real-time as the bus is rolling down the street and credit to all the team members in Florida that were working around the clock to help us move the ball down the field. It is a market, as Nick mentioned, that every week, we get to see how we did relative to everybody, and that's pretty unique in all of these markets. And so everybody is hyper-focused on it as an operational leadership team. We've deployed assets. We've got ownership with various team members of parts of the supply chain to work with the team members in Florida so we can solve things in real time. We've largely gotten through the new product approval process, everything that is pending with the regulators for new products that are coming out that are part of our '21 strategy. We know the time line and the turnaround. So that has been mapped out in accordance with our budget. We are moving hard and fast to introduce edibles. That is happening in real-time right now. We are expanding our canopy. And ultimately, we're making sure we've got a comprehensive and competitive priced portfolio of products in our dispensaries, and working with Jesse and his team to ensure that we are generating foot traffic and the awareness for what we now have. I think the one challenge we probably haven't highlighted in 2020 that it was, in fact, real overcoming right now is we launched a number of new dispensaries in the state of Florida during coded, which was very difficult to build a brand, a retail brand around given the COVID restrictions. And so some of our markets, we're still introducing ourselves at the hyperlocal level to the local communities. And so that's an aggressive priority for us throughout the state of Florida. So to reiterate what Nick said, we're excited about the state of Florida. We've proven that when we can execute and we can put on the shelf, what we know we're capable of putting on the shelf that patients are looking for, we take market share, and we're going to continue to do that in 2021.

Our next question today is coming from Russell Stanley from Beacon Securities. Your line is now live.

Thanks for taking my question. Just on cultivation, this is a more general question. In the past, you've talked about porting the expertise you acquired, particularly in the acquisition to other markets, and I understand that process takes time. So I'm just wondering, from your perspective, where are you in that process from a percentage completion perspective? I know something like that is never fully complete, but where do you stand on putting those best practices to other markets, and which markets are you really focused on-to-date?

Sure. You think that one of the things that will always be an ongoing effort is the replication of best practices across markets in the attempt to, not necessarily standardize, but at least make sure that people have access to sort of approaches and SOPs that have proven to be successful in different environments. Cultivation is a great place where people have either sort of made their fortunes or lost their fortunes. For us, we have a single person who's responsible for sort of all cultivation operations that reports into David. But the fact is that the -- it goes both ways. And so for us, it's not just about sort of, let's say, the Colorado expertise moving to New York. It's about some of the New York -- some of the New York form factors and chemistry moving to California, some of the California expertise moving to Colorado, some of the things in Colorado moving out in terms of infrastructure to the rest of the country. And so it's a constant ebb and flow of information, which is institutionalized through the processes that David has set in place. So David, why don't I turn that over to you and you can sort of provide a level of granularity on what it is? I mean I would just say, that if there was a measure or a benchmark of completion, I'd say, in perpetuity, we're always going to be at about 20%, meaning there's always 80% improvement out there on horizon that we can really sort of direct ourselves towards. But David, why don't you take this?

Sure. Great question. I think to make a final point on what Nick mentioned, we do have a team that's spearheaded by one individual that oversees essentially all of our canopy is KPI for the entire Canopy organization. And with his team, they do travel across the country to make sure we are moving towards a standardized process. In the facilities that we have built organically, for the most part, I would say, we're nearly complete with respect to standardization, nutrient, type of lighting, environmental controls, automating irrigation. All of those are starting to look and feel the same with the same SOPs. With respect to acquisitions, we've learned a ton in Colorado. We've actually improved their processes as well, taking our best practices that we've developed everywhere. They have a unique five-Tier grow in Colorado, and it does present opportunities with scale, and it also presents challenges with respect to potential total yield and quality of flower that we are working through that, although they're already hitting great metrics, we've actually been able to see some improvement there through best practices that we brought from the East Coast, frankly. So I'm really excited about the cultivation teams we have. I think they've seen enough types of facilities. Not every facility is the same. We've got greenhouse. We have basically perfectly environments which controlled indoor grows, and we've got outdoor grow in Colorado. And we're actually executing on all of them. We have continual WACC EML pockets where we need to address the situation. But the team is working collaboratively. At the end of the day, it's about communication, the biggest risk factor in this industry from my vantage point, if you have a self-inflicted foot fall in cultivation because it can take weeks and months to course correct. So garden planning tied into production planning ultimately to drive what Jesse is planning from a branding perspective, is mission-critical. And I think the team is doing a better job now than they ever have. And I think kudos to the project management integration leadership within Columbia Care for spearheading that collaborative approach and fostering that communication, which ultimately, at the end of the day is what's required. But we've moved significantly in the last six months towards standardization, where we can across the supply chain with the initial focus being on cultivation and then actually migrate now into post-harvest manufacturing.

Our next question is coming from Aaron Grey from Alliance Global Partners. Your line is now live.

So for me, I just want to jump back to the guidance of $500 million, $530 million. Thanks for the additional detail in terms of assumptions for gLeaf within that. But I would love to hear in terms of what you're looking at for the growth drivers and how to kind of bridge where you stand within fourth quarter and getting to that guide in terms of key markets you're looking for to kind of drive that growth? And then if you could give additional color in terms of how much of gLeaf is actually included in that within the back half of the year. So just helping us bridge to where we stand today and getting to that $500 million to $530 million guidance, I think, would be helpful?

Sure. So why don't -- Lars, why don't you sort of provide a high level overview? And then we miss it up. Jesse, you can give your thoughts on kind of how you think about what the real growth drivers are. And then, David, you can kind of wrap it up with the both. Lars, may be on mute.

Sorry. No, I think there was a bit of noise on the line, but sorry about that. So high-level view here, I'll be happy to. I think you're absolutely right, Aaron. What we are, and we've touched on this before. In order to sort of draw a line in the sand, we are including gLeaf in our pro forma guidance as of July 1. And it is subject to regulatory approvals. It is still our intent, as Nick mentioned before, that we will close gLeaf deal in early Q3, but we want it to be -- to try and be helpful to give you at that point in time at the very least for guidance purposes. In terms of other sort of high-level drivers and I will defer, of course, to the commercial folks to discuss the individual markets and activities and kind of initiatives we're doing. We're seeing -- we're expecting growth across the board. And I think we are piggybacking off a promising performance in growth in Florida and in several of our other more established markets where we see continued growth. We're also seeing, and expecting to see the continued performance in Colorado continue. As we've discussed before, 2020 was a pleasant surprise for us in Colorado. And so I think the bottom line for us is really that we're seeing, across the portfolio, a lot of promise and a lot of good indicators. And that includes, by the way, also California as discussed previously by Nick and David and Jesse. In terms of -- in terms of just overall scale, we also see us continuing the trend we've seen throughout 2020, where we are essentially sweating the assets, so to speak, and that will help us continue to achieve improved margins as also exemplified by the guidance. And again, that is more about essentially utilizing the capacity that we have and also improving really the output and yield from the assets we have. And that goes with David's comments about how we are applying learnings across the portfolio of cultivation sites. It's also an expression really of things that Jesse has mentioned, where we are building brand equity, which, in turn, will give us pricing power, which, of course, also translates into more robust margins. In terms of the EBITDA, we are also feeling good about our cost base, both on the market side as well as -- also importantly, on the overhead and, if you like, the corporate side. We've shown, I think, good, good cost discipline in 2020, and we intend to continue doing that, which, again, will leverage our operating model, and you will see that translate into what we believe are our healthy EBITDA and well on our way, I think, to achieving a long-term sustainable EBITDA, EBITDA profitability.

Thank you, Lars. Jessie, why don't you share your thoughts?

Yes, absolutely. Thanks Nick. So a couple of things that I would touch on that, I think, ultimately, speak to this is, this year, as it's already been mentioned, there's going to be a few, I think, really exciting catalyst opportunities for growth on the branding side, not only from products, but also from the upcoming retail rebrand. We feel that, that retail rebrand has a real opportunity to approach things through a better sort of experience lens for the customer as well as an increased focus on things like education. We have some proprietary built technology that will be launched in concert with that rebrand that should continue to sort of innovate on the customer experience side and product discovery side. And then, lastly, I would say that as we've been preparing for these launches, we've also been retooling and rebuilding infrastructure on the back end throughout 2020 for our advertising data and insights capabilities. And I think that gives us a really unique opportunity to continue to scale on those programs. And as we scale month-over-month, we continue to see better returns on those investments, and we're able to make better decisioning due to that sort of retooling and investment that took place last year. So that sets us up to be able to be more aggressive and more targeted in a lot of our marketing and advertising spend and our campaign builds, which we see. Ultimately, as providing an opportunity to lift both foot traffic from a patient and new customer acquisition point of view as we continue to get people interested in the products and the experiences that we're going to be launching, but also increases in things like overall basket size. So, those are the things that I would highlight that, I think, make us incredibly excited about 2021 from a growth point of view.

Our next question is coming from Matt Bottomley from Canaccord Genuity. Your line is now live.

Maybe just staying on the guidance. Just wondering, if at a high level, if it's accurate to assume, if you look at the purchase multiple on the announcement, it looks like it's potentially a $50 million EBITDA business. Is it fair to say roughly half of that is what's in your EBITDA within your 2021 outlook?

So, Lars, I'm going to turn that one over to you.

Yes, sure. I think that's probably a decent walking around, Matt, number, but I think we are being -- I hope you can recognize, right, we are not providing guidance on a market-by-market basis, gLeaf or otherwise. There is an expectation, of course, that gLeaf, which has had an amazing run the past few years prior to the transaction with Columbia Care, will continue that trajectory. So we do expect to see growth both before and after yet the closing of the transaction. But I think, as a walking around number, I think that's fair. What we will commit to, of course, will be, obviously, on the top line. As we do get to a closing on the transaction, we will, of course, give you more insight really into how we expect the year to progress as we hopefully hit that early Q3 closing date.

Got it. Appreciate that, and then just one other question for me. Some of the other companies that have reported, it's expected that Q4 saw some COVID-19 headwind. So you guys had a lot of closings and a lot of great execution in the quarter. But I'm wondering if you can just center in on maybe same-store growth, what you saw maybe in Q3 versus Q4? If you guys experienced certain headwinds like that or any sort of normalized growth patterns that you saw sequentially in any sort of key markets there?

So it's interesting. And I'll turn this over to David after I've sort of shared some high level thoughts. We've started to see some cyclicality and seasonality in a couple of markets. So for example, Southern California had some seasonality. Colorado had some seasonality in the fourth quarter. And I think that one of the things that we were able to do is offset some of that seasonality by taking advantage of the fragmented nature of some of those larger unlimited license markets. But that didn't -- that wasn't sort of -- that wasn't a unique phenomenon, meaning there were other markets where we saw some degree of seasonality as well because you have a holiday season, right? You have bad weather, and these things actually do sort of keep people home. And it's interesting. Two years ago, you've got sort of a business where, if you had a snow day, it didn't really matter, but now snow days are seven-figure hits, right, in some markets. And so it's really interesting to see how all of that affects the business. But for the most part, I think, we've got -- we've done a better job as we've begun to diversify away from just being, let's call it, sort of completely closed-loop to having a more of a wholesale side of the business. And as that side of the business grows, I think you'll see a diminished impact of that seasonality, and that is -- especially in some of the more sort of traditionally seasonal markets. But let me turn it over to David. And David, why don't you share your thoughts?

Yes. I mean there is some seasonality in pockets of our portfolio, as Nick mentioned, out west and in Colorado. Over time, for example, in Colorado, they've gotten better in that Q4 and Q1 time frame to leverage the wholesale that's a result of their outdoor grow. So they've been able to temper down that seasonality with the opportunity in the wholesale market. Definitely, it's harder to pick a market that had some COVID-related foot traffic softness. It was probably in Southern California. We have seen that rebound in Q1 as the governor has eased the restrictions there. So the part of our business that we probably haven't talked enough about yet, but we will, over time, is the development of our wholesale business. I think everybody knows that Columbia Care, two years ago, was primarily vertically integrated, selling what we were making for the most part with third-party products. We've now started to pretty aggressively move into the wholesale market. And so that will have, for us in particular, will help offset what could be any seasonality impact of the business or COVID related. So to Nick's point, having in this many markets now operational and bringing a few more online this year does allow us to kind of weather the storming plan. And I will say the teams have done a better job on two fronts. One is budgeting for the expected incremental weather that might show up in Q4 and Q1. But we're also getting better at identifying when those storms might come, for example, Colorado has it down. They know when snow is coming, what happens to foot traffic and basket size, and they get in front of it, and they follow-up afterwards. So we just went through that over the weekend out in Colorado, where given that you have to close the stores early. And you have to prepare because there is an increase in foot traffic, 48 hours before storm. So, I think we've gotten better in identifying how to mitigate. You obviously can't get in weather. But from a COVID perspective, I think we were balanced and have enough organic growth occurring in a number of our markets, both on the retail and wholesale side to mitigate some of the headwinds you saw in individual pockets throughout the country.

Yes. The only thing I would add to that is that if you look at our numbers, we had some pretty significant -- at least in the markets that we've highlighted, we've had consistently significant sort of organic growth. And I don't think we expect that to change at all. If you look at our guidance for this year, and our performance last year, there were -- none of our markets saw a decline in the growth rate and the sort of the same-store growth rate. All of them saw an increase and acceleration. So far, so good, but hopefully, that's helpful.

Thank you. Our next question today is coming from Graeme Kreindler from Eight Capital. Your line is now live.

First question I had was with respect to the Company's strong capital position as it starts 2021 here. I was wondering, if you could provide any sort of estimate of what the growth CapEx expenditure and the year would look like? And thinking about the balance of the capital on hand, what is the M&A market looking like right now given the recent appreciation in the cannabis sector? You've been able to find some very accretive deals in the past. Are there still opportunities there? Is it getting a little tighter from what sellers are expecting? Would appreciate some color there.

Sure. So from an M&A perspective, we've continued to see a fairly heightened level of activity. The purchase prices some of our competitors are willing to pay for different assets are surprising to us. People have really begun to pay for synergies. And we think that's never a good thing. The M&A markets are as volatile in many respects as the capital markets. And so, for us, being stewards of capital and being disciplined acquirers is really important. But you have a lot of money that needs to be deployed. You have a lot of stacks out there that need to spend their money. You have a lot of people that are sort of -- that have not been disciplined historically, that are willing to use their currency as a form of acquisition. And in many cases, you have some operators who have actually had a very poor track record of execution. So they may announce acquisitions and then all of a sudden, the acquisitions go away because something happens other than the capital markets or operationally. And so the way we think about the M&A opportunities is we do have a strong balance sheet. We plan on using every tool in the toolkit to sort of find the right acquisitions at the right price with the right people. If you look at the acquisitions we've made, there is a pattern, meaning of the types of organizations we typically find and the type of people we like to partner with, that will be no different going forward. And we've had some success there. But the sort of the opportunity set continues to expand. And I think that, as multiples have increased, people have begun to sort of make higher and higher offers. What's interesting is that the more sophisticated sellers are also looking at those multiples. And they have to make a determination for themselves who stock would they want to own because, in almost every case, these acquisitions are being done using a portion of stock. And for us, one of the things that's been really helpful is, is it more likely that we're going to be worth twice what we are today in 12 months? Or somebody else who has a multiple that's 2x hours is going to be worth -- have experienced the same type of growth, even though they don't have the same fundamentals in place? And so from an operator's perspective, one of the reasons why we're so successful is because the sellers are themselves operators, and they conduct due diligence and they see who else is out there. And by the way, we're not always the high bidder. In fact, oftentimes, we're not. But our culture, our organization, our fundamentals are in place. And so if you think about sort of M&A as just a product, the way we've practiced sort of applying that product has been from the standpoint of really sort of being the choice of partner for the people who know their business as best. And I think that matters. And I think, ultimately, that will translate into something that our investors are very happy with. So I don't know, Lars or David, do you guys have anything to add to that?

This is Lars. I will just make a brief comment. I mean we're not -- as you know, we're not providing real guidance or estimates on CapEx, but just a couple of things on that note. I think it's fair to say we do expect to see a pickup in CapEx versus last year as we continue the expansion of our current and newer facilities. Timing on CapEx is always a little bit tricky because you're subject to a bunch of both local and internal constraints and so forth on that. I will say that we're comfortable with our capital position. We do consider our balance sheet to be fully funded in order to cover any planned CapEx projects for the year.

Understood. Thank you very much. And if I could sneak in a quick follow-up. Recently, one of your peers enacted a transaction for an entrance into the European market. And I know that's something that Columbia Care, earlier on, had looked to get exposure in that market. I'm wondering where the companies and management thoughts lie with respect to potential optionality in Europe? And where that might stand on the horizon in the grand scheme of or anything else you're working on in the United States right now? Thank you very much.

Sure. Just one follow-up on Capex. You're going to see us deploy capital into markets that are transitioning from medical to adult-use this year. We are leaning into New Jersey. We are leaning into a lot of markets where the call options are actually going to materialize. So that's the one thing I would say. So the prefunding of that CapEx that you've seen us go through in the capital markets is based on the opportunity we see in each one of the markets that's going to be going through that conversion. And as you know, we have more markets than anyone else that are going from medical-only to adult use, which means that sort of hyperbolic growth curve that you can see, if you're scaled properly, can really deliver very, very strong results. So the does, we have no shortage of good opportunities to invest in either in the M&A setting or from the standpoint of CapEx. And our priority is really to lean in and to go a mile leap in every one of our markets and continue that scaling process. From the standpoint of Europe, Europe has been something we're interested in, right? We have revenue in Europe today. We had revenue in Europe last year, albeit much, much less than the U.S. We've been in Europe longer than any other U.S. MSO. And what we observed when the Canadians were going into Europe in size is that they were investing a lot of money. They were looking for a market opportunity that was further out that I think they thought. And they -- I think they underestimated the complexity of individual country regulations and rules. I don't think that dynamic has changed. We continue to be excited about Europe in five years. We continue to be excited about the opportunities that are there. We applaud anybody who's looking outside the U.S. because this is a global industry. But for us, it's been about finding the right time. And timing, for us, has been important, right? So if you look at our M&A strategy or our expansion strategies, there's always been a bit of a contrarian approach. We were in Europe before anyone else. We did our homework, and we tried to figure it out. Europe seemed like it was further away than we would have liked. At the same time, we planted some seeds in places like California. Well, guess what? We've invested in California, and we really have moved in there, right? Why, because it's our home market, which is the United States. It's the largest market in the world, undeniably, and no one else is paying attention. And so for us, it was really about making sure that we had our own strategy kind of optimized for the next one, three, five and seven years. And so when we went to our Board, when we talked to investors, we have been building bridges. We have been sort of building institutional relationships there with policymakers and with other operators. And we will continue to invest in Europe, but it's not a priority. Our business is 99% U.S. driven. And I don't see that changing in sort of the next 12 months because there's so much opportunity here and there's so many things that need to be done in the U.S.

Next question is coming from Glenn Mattson from Ladenburg Thalmann. Your line is now live.

So just as -- maybe, Nick, I'm curious your thoughts between the -- with the prospect of federal regulation changes, and you have a very broad national strategic footprint, can you just talk about necessarily how you might benefit more than others? And, in general, do you think or do you expect to see, when regulations change, people from outside the industry moving in an aggressive way? And how do you expect that to play out? And given your footprint, when you -- it seems like you might be someone who could be targeted for partnerships or some sort of acquisition or something like that. Can you just give us kind of some high-level thoughts on how you're thinking about federal change playing out?

Well, I think that just as a rule of thumb, when you look at the largest sort of strategic partners in the world, they have a critical mass requirement of their own, right? So, they're not going to look for an organization that doesn't have a national footprint. They can't. They don't have enough hours in the day and they don't have enough resources to look at the cannabis market on a state-by-state basis. If you assume that the state regulatory environments persist going forward, at least in the near term, and that opens -- because of some sort of federal decision-making process, it opens the door for strategic players to come into the market, there will be an advantage to those who are scaled and who are national in nature. And that's just the way these big companies have to operate because that's how the boards operate and that's how managers operate, but they're not going to do something that doesn't move the needle. It's not worth their time. And they're not going to do something that only offers them 1/10 of the national market. They need to have something that actually gives them some access to the whole national market. So for us, I think that recognizing, and I learned that lesson back for my days at Goldman Sachs, when we would present opportunities to boards and management teams, right? They just look at the world differently than -- they're looking at it from the top down, not from the bottom up. And so Columbia Care, I think, with the second largest portfolio of states with the only portfolio that's fully integrated in each one of its states, I think that's a real advantage. And I think that's something that will create strategic advantage. Now have we seen an increase in activity, both politically and strategically amongst large players coming to us and talking to us and having conversations? Absolutely, are these large players willing to make that bet today? No, but I think they're starting to make decisions and starting to have conversations looking for organizations that don't just have critical mass, but also have a cultural similarity that have an appreciation for risk, that have -- that really can offer them something that few can. And so there's -- it goes deeper than just the financial and strategic. It actually goes to risk management. And that's an area where, I think, we really do excel. So as we look out on the landscape, all of that's going to change, and it's going to change very, very rapidly. Some of the largest players are now really pushing the federal conversation from a political perspective, and we don't anticipate that, that being different in any other way other than we think that the activity picks up over the next 6 to 12 months. So for that, I just think that we've always thought about our company as an institutional platform. And by the way, for the first time this quarter, and I'm sure you've seen, but as we've done some of these private placements, these are not small organizations that are calling us and saying, hey, we'd like to invest. These are $1 trillion plus U.S.-based mutual funds. These are the biggest organizations you can think of. And when they place a bet, all right? What they're effectively doing is they're partnering with us. And they're telling us that we are sort of their choice. And now we can have start -- we can start thinking about our capital structure as being permanent in nature as opposed to before when I think a lot of folks were relying on retail investors to really build multiples or equity value. For us, that is the single most important change that's happening, that will be a catalyst because another aspect of sort of the strategic thought processes. Well, who do our investors own, who of our investors sort of thought about? And as you see some of these big names start turning up on different balance sheets or different cap tables. That is really important. So all of those things factor into the thought process that will culminate in sort of strategic value and strategic partnerships downstream, but that's -- I think, within the next 24 months, you're going to see some really interesting partnerships announced and materialized.

Next question is coming from Jason Zandberg from PI Financial. Your line is now live.

Thanks very much. Congratulations on the quarter. I -- you touched a little bit when you answered Graham's question. But just in terms of California, I recognize as you did that you're paying attention to this market, whereas a lot of your peers are not. I'm just wondering just in terms of your short and medium-term outlook in terms of your footprint there, do you expect to deploy more capital in that market whether it'd be through M&A or through CapEx and just sort of your outlook here?

So, I will answer sort of at a very high-level perspective and then ask David to weigh in as well. And Jesse, you could probably share your thoughts. California is a spectacular market. It is very complicated. It is hyper-politicized. It's -- the COVID has really done a hit job on the overall economic environment. But there's an aspect of California that is really sort of impressive. And I think that the -- many of the societal obstacles that regulated operators have had in the past have really eroded over the past 12 months, right? The proliferation of the black -- of the illicit market is there, but people are now worried about their own safety and security from a health perspective. And so the illicit market can't compete with us when we're talking about regulated products. But the implementation of metric, forcing the supply chain to actually operate in a disciplined fashion, that's been incredibly helpful. Frankly, the use of law enforcement as a tool to really sort of marginalize the footprint of the illicit market and the gray market operators, I mean that's something that is unique to California, right? I don't see that happening in places like New York. And so we're -- we think that all of those sort of macro and thematic trends are incredibly positive. But I would say this is just as a general rule of thumb. Anywhere we have made an investment, you should expect us to continue to make an investment and expect us to continue to grow and to drive market share and to drive profitability and to drive quality of performance and customer service. Because that's a market -- we don't go into a market hoping to be in second place. We go into a market, looking at over a five-year period of time and how do we get to the top spot? And how do we define leadership in the way we define leadership? And so it's a very different approach than just saying, I want to flag on a grab. When we make that commitment, we're either going to be there long-term or we're going to get out. And we've made both decisions, right? You look at what we did in Puerto Rico versus what we've done in California. Those are both test markets. One didn't go the way we'd hoped, the other one did. And so you can see our pattern of behavior begin to evolve. But David, I don't know if you have anything to add. And Jess, if you have anything to add to that?

I mean, this is David. I'll jump in first. I think just to put a finer point on it, we're going to continue to sweat the assets that we have. We've got a great state-of-the-art manufacturing facility in San Diego that we can continue to drive scale through so that we can get it's full utilization. I think we'll be opportunistic as we expand our footprint from a dispensary perspective, I don't think we have aspirations to progressively plow into the dispensary side of the business. I think when you get representation because it ties into I think what Jesse talked about earlier with how we're going to develop and foster and cultivate brands in California. But I do think, to be a responsible partners to the current set of dispensary operators in California and what will, without question, be a growing number of dispensary operators, we wouldn't be an institutional partner of choice in the wholesale side to be a responsible partner with consistency quality products across the SKU categories and price points to be an effective partner. That's -- it's a strategy that's not just specific to the cannabis industry, that's been leveraged in dozens of industries. And so that's not yet represented in California, and that's where we are headed to be that responsible partner from a wholesale perspective. But I do think, Jesse, just maybe spend a couple of minutes on the brand development strategy in California because, I think, as great as the opportunity is for us to take those brands that we're developing on the west side of the country to the East Coast, I mean you're actually creating those brands in the market in California is mission-critical, and it doesn't happen overnight, it takes planning. So maybe just speak a little bit about that.

Jesse, you may be on mute.

Yes. Sorry about that, guys. I. I do think that -- not to be too repetitive, but I do think that we see an incredible opportunity to continue to build consistency. In those brands, but also continue to learn more and iterate from store experience as well as some of the customer data that we see coming out of a market like California. So strictly, from a marketing and product point of view, is obviously, I think that we are continuing to sort of reap the benefits of that increased footprint and ability to test and iterate on some of these product forms as well as continue to scale some of these brands and drive that consistency. So I think that, that -- without being too repetitive to the things that have already been said, I think that, that's something, for us, that I think makes us better across the country.

Next question is coming from Vivien Azer from Cowen. Your line is now live.

I recognize very, very early days, but we are hearing rumblings from the broader consumer discretionary industry that there has already been a positive impact from the pending dissemination of stimulus checks. So I was wondering, Nick or team, if you can comment on what you're hearing on the ground.

So we saw a direct impact to last time simulcast written. And so we knew that, that was coming and we prepared appropriately from an inventory supply chain perspective. So I would say, it's probably a little early for us to comment, but the first quarter has been a good quarter for us, and we feel good about the way things are trending directionally. Lars and David, I don't know if you guys have any specifics that you'd like to share?

Not a lot to add to what Nick said. We did see a positive impact. And I don't think there's any reason to believe we won't see a bit of positive impact as well in the second go around.

David, do you want to just comment on anything?

Yes. The only thing I would add -- sorry, I was on mute. The only thing I would add is, what is different now versus last year is I think you're seeing COVID restrictions going through easing, not being more restricted. So that partnered with, with the incremental stimulus that's sitting people's bank accounts is probably a net-net positive, whereas last year, there was a bit of a -- I think there's an offset with the number of operational challenges that we're throwing away from a number of point-of-sale stations, you could have operational and the amount of people you could have in expense one time. So I think we've got both of those as tailwinds right now.

We have reached end of our question-and-answer session. I'd like to turn the floor back over for any further or closing comments.

Great. Well, I don't think we have anything else to add. I would just -- I want to thank everybody for their time today. We're very excited about 2021. It's going to be a spectacular year for us. The integration of our acquired businesses is going very well. I cannot tell you how happy we are with the talent we've been able to bring on board. It makes us better at what we do. I'm very, very happy to report that the team is -- morale has never been higher, people are working harder than ever, but everyone's really proud of what we've created. And I think that the -- when you look at the type of institutional support we're getting, it is nothing sort of humbling and spectacular at the same time. So we're very excited about 2021. We think 2021 is going to be a fantastic year to prepare us for an outstanding 2022. We think, politically, and legislatively, things are moving in the right direction. And we'd like to think that we're not only the sort of the best operator organization, but also the most responsible and the one that cares most deeply about the people and the communities we serve, and I think that's paying off. So you're going to see a degree of creativity and a degree of sizzle this year that you haven't seen from Columbia Care in the past. And as we roll out some of our new markets and some of our new store -- our storefront architecture, our product architectures, it will really become clear how we intend to approach this market and how differentiated it is. So thank you all for your time, and we really appreciate your support, and we look forward to speaking with you.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation and thanks.