00:01 Good morning everyone and thank you for participating in today’s conference call to discuss Columbia Care’s Financial Results for the Fourth Quarter and Full-Year Ended December 31, 2021. This call is being recorded for replay purposes. A replay of the audio webcast will be available in the investors sections of the company’s website approximately two hours after the completion of the call and will be archived for 30 days. 00:24 I would now like to turn the conference over to Lee Evans, Senior Vice President, Capital Markets for Columbia Care.

00:32 Thank you, Melissa. Good morning and thank you for joining Columbia Care's fourth quarter and full-year 2021 earnings conference call. With me today are Nicholas Vita, our Chief Executive Officer; David Hart, our Chief Operating Officer; Derek Watson, our Chief Financial Officer; and Jesse Channon, our Chief Growth Officer. 00:47 Earlier this morning, we issued a press release reporting our fourth quarter and full-year 2021 results, which we also filed with the applicable Canadian Securities Regulatory Authorities on SEDAR and the U.S. Securities and Exchange Commission on EDGAR. A copy of this release is available on the Investors section of our corporate website, where you will also be able to access a replay of this call for up to 30 days. 01:06 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 and U.S. Securities Laws. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, which we disclosed in more detail in the Risk Factor section of our Annual Information Form dated March 31, 2021, as filed with applicable regulatory authorities and posted on SEDAR and our amended Form 10, filed with the SEC on February 15, 2022 on EDGAR. 01:35 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-GAAP financial measures such as adjusted EBITDA. 01:54 These measures do not have any standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other companies. Columbia Care considers certain non-GAAP measures to be meaningful indicators of the performance of its business in addition to, but not as a substitute for our GAAP results. A reconciliation of such non-IFRS financial measures to their nearest comparable GAAP measure is included in our press release issued earlier today. 02:15 As this is our first call reporting under GAAP, for a final time on this call, we will also refer to certain non-IFRS financial measures such as combined adjusted EBITDA. These references are intended to assist analysts in assessing our results as our 2021 guidance was presented with reference to IFRS. 02:15 These non-IFRS financial measures do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. A reconciliation of such non-IFRS financial measures to their nearest comparable IFRS measure is included in our press release issued earlier today. 02:43 With that, I will turn the call over to Nicholas Vita to get us started. Nick?

02:48 Thank you, Lee, and good morning everyone. Our team is very pleased to be with you today to discuss our fourth quarter and full-year results, as well as our outlook for the coming year. But first, allow me to comment on the exciting news that Columbia Care will be combining with Cresco Labs to become the undisputed leader in cannabis in North America. 03:06 As was announced yesterday, Columbia Care will be combing with Cresco Labs creating the new leader in North American cannabis. Together, Columbia Care and Cresco Labs will be the largest multi-state operator on a proforma basis with over $1.4 billion in revenue and leading physicians in 17 states in the District of Columbia. 03:06 The combined company will have over 130 retail locations, a more diversified revenue stream by market, full vertical integration in 16 states and an industry leading wholesale platform. The combined company’s scale will enable us to leverage our investments, increase vertical integration, and reduce redundant operating costs more effectively. A share exchange will give Columbia shareholders approximately 35% ownership of the combined company on a fully diluted in-the-money basis. 03:52 To summarize it simply, the combination of the best companies in the business enables us to accelerate our strategies for the growth and deliver the best outcomes for shareholders. Cresco and Columbia Care are aligned in our vision for the future of cannabis and together we will be best positioned to continue our mission as a combined force. 04:09 With Columbia Care’s strategic footprint, national footprint, and the most attractive markets, especially those poised to transitioned to adult use such as New Jersey and Virginia alongside Cresco’s success in execution and incredibly popular brands, we will together create the most important and investible company in cannabis. 04:28 Getting to know Charlie Bachtell, the Co-Founder and CEO of Cresco along with his team and the culture at Cresco has given me a great deal of confidence and the ability to successfully integrate Columbia Care and maximize the value of the tremendous footprint we’ve assembled so that we can best serve our patients and consumers. I’m now more excited than ever about the possibilities before us and together with Cresco, we will accelerate the pace of profitable growth. 04:53 Now, let me turn briefly to the fourth quarter and full-year of 2021. Looking back on the past year, I am so proud of what we have been able to achieve. In 2021, we opened 12 new retail locations inclusive of Medicine Man in Colorado, [entered three new] [ph] markets West Virginia, Missouri, and Utah, upgraded 22 locations to the new cannabis branding and expanded to 49 different product categories across our house of brands such as Classics, Triple Seven, and Seed & Strain. 05:21 Added more than 1 million square feet of additional growth capacity, including the largest cultivation facility on the East Coast at Riverhead on the North Fork of Long Island, New York. These achievements and others that David will discuss in more detail in just a few moments drove strong year-over-year financial results. 05:39 On a GAAP basis, revenue rose from $179.5 million to over $460 million, an increase of 156%. On a combined IFRS basis, revenue rose a 139% in-line with our guidance. We extended our record of sequential growth every quarter in 2021, including 5% sequential growth in 4Q. 06:02 We had strong bottom line growth with combined adjusted EBITDA reaching a record $85 million, also in-line with our guidance. Last quarter, I spoke about our four North Stars being the MSO in the best markets for the best margins, establishing a nationwide retail experience with Cannabis, as well as a highly recognizable and sought after national brands portfolio, continuing to build upon our unique and sustainable competitive advantages and leveraging data driven decision-making to ensure customer loyalty and drive the highest returns on investment. 06:31 We are relentlessly pursuing these initiatives and we'll continue to do so up to and through the combination with Cresco. The ground-breaking combination of the two companies will accelerate the pace of change, and it represents a clear inflection point in the growth opportunity for both companies. 06:48 We believe the time for consolidation is now allowing for the preservation and generation of cash flow today and creating the most strategic positioning ahead of federal legalization and greater capital markets access. We look forward to having all of you with us on this journey as we create the most important and investable company in cannabis. 07:06 Now, I will turn the call over to our CFO, Derek Watson to cover our financial results and outlook. Derek?

07:14 Thank you, Nick, and good morning, everyone. I'll provide a brief summary of the key financial results for the fourth quarter and the full-year, discuss our outlook for 2022 and briefly address the exciting transaction with Cresco that we announced yesterday. 07:29 As we've mentioned today in our preliminary earnings release last week, this is our first quarter and full-year reporting on the U.S. GAAP after we became an SEC filer in mid-February. We hope to make this transition as transparent as possible, so have provided a reconciliation between our IFRS and U.S. GAAP results and will reference comparable IFRS results for the fourth quarter and full-year given that with the basis of our 2021 guidance. 07:55 Also keep in mind that due to the close of our Ohio transaction effective July 1, starting in Q3 of 2021, we no longer report closely combined metrics. For the full-year, therefore, the first six months do include combined metrics, and again, we've provided that reconciliation in our supplemental materials. 08:14 So, to begin with our results, revenue in the fourth quarter was 139 million, an increase of more than 5% sequentially quarter-over-quarter, and over 70% year-over-year when compared with Q4 of 2020. The sequential growth was driven primarily by sales increases in our Massachusetts Florida and Virginia markets in our Colorado wholesale business where we had our first outdoor harvest, and contribution from the acquisition of Medicine Man in Colorado to join the Columbia Care family effective November 1. 08:45 For the full-year, we achieved 474 million in combined revenue, representing growth 139% year-over-year and in-line with our IFRS guidance. Adjusted gross profit for the fourth quarter declined sequentially by approximately $1 million to 64 million under IFRS, resulting in an adjusted gross margin of 46%, down from 49% in Q3 and bringing our full-year adjusted gross margin to 45.1%. The main driver of this sequential decline was softness in the Pennsylvania market and wholesale in particular. 09:21 Reported operating expenses was 70 million in the fourth quarter, excluding a one-time impairment charge, compared to 62 million in the third quarter. And as a percentage of reported revenue, our operating expenses continue a downward trend with our corporate-only operating expense now representing 11% of total revenue in Q4. 09:42 Combined adjusted EBITDA for 2021 was 85.1 million, also in-line with our guidance, bringing our full-year adjusted EBITDA margin to 18%. This adjusted EBITDA in Q4 was 27 million or 20% of revenue, down 4 percentage points from Q3 and driven by the margin compression we’ve described at 8 percentage points higher when compared to Q4 of 2020. 10:08 The equivalent adjusted EBITDA margin under U.S. GAAP was 13% and this will be the basis we use for our 2022 guidance and results going forward. Wholesale represented approximately 19% of revenue in Q4, compared to 20% in Q3. The change driven again by the decline in our Pennsylvania market. 10:29 We had another quarter of positive cash flow from operations, helping bring our year-end cash balance to approximately $82 million and subsequent to year-end, we also completed a private placement by 185 million and 9.5% senior notes due 2026. This financing is non-dilutive and provides us with continued flexibility as we invest in our growth initiatives. 10:52 Capital expenditures in the fourth quarter were approximately 45 million, compared to 41 million in the third quarter, and we continue to invest in our growth markets, including New Jersey, West Virginia, Virginia, New York, and in the expansion of other cultivation sites including in Ohio and Pennsylvania. 11:11 Turning to our outlook for 2022, again, we're issuing guidance in U.S. GAAP and guiding to 625 million to 675 million in revenue and 120 million to 135 million in adjusted EBITDA. This outlook assumes adult use begins in New Jersey in Q2 of 2022, but does not include any contribution from future acquisitions nor any changes in the regular environment in our other markets. 11:39 As our competitors have already been recording, we continue to see some headwinds from late 2021 extending into early 2022, including unfavorable pricing dynamics in certain markets such as Pennsylvania and California, macro pressures, such as inflation, impacting discretionary spending, and we no longer see income subsidies for consumers as we did during the height of the pandemic. 12:01 With the combination of these factors, we foresee flat to negative topline growth in Q1 of 2022 versus the fourth quarter. However, we continue to focus on improving our gross margins through cultivation efficiencies in scale even in markets where competition is increasing and further improving our EBITDA margins by leveraging corporate overhead. 12:21 We're anticipating positive catalysts in the year, including adult use sales in New Jersey, new store openings in Virginia and West Virginia, and organic growth in many of our existing markets like Florida and Ohio. 12:35 Lastly, I'd like to quickly address the exciting transaction announced yesterday with Cresco. And as Nick has mentioned already, the combination of two of the largest MSOs will create the number one operator in the industry based on pro forma revenue and with a leading national footprint in both wholesale and retail. 12:53 In looking for the strength of this combination, we anticipate significant value to be created through operating synergies, avoiding the duplication of longer-term CapEx in overlapping markets, and proceeds from the sale of assets in jurisdiction where there is some regulatory overlap. There's obviously a lot more to do here, but based on the anticipated timing of closing around the end of 2022, we'll be working with a Cresco team over the next nine plus months to develop a thoughtful approach to this integration and how we’re executing [at the] [ph] post-closing of the transaction. 13:25 And with that, let me turn the call over to David to cover more of our operational highlights. David?

13:32 Thank you, Derek, and good morning, everyone. I'd also like to take a look back into key accomplishments of this past year, as well as discuss the current operational landscape. In addition to the highlights that Nick covered, we had transformative achievements in 2021 reflective of our priorities to continually optimize our efficiency from an operational perspective, especially when we saw ongoing pricing pressure in both wholesale and retail in Q4. 13:56 [Chief] [ph] among these investments in 2021, beginning with cultivation manufacturing or in the course of 2021, we added over 1 million square feet of incremental cultivation manufacturing capacity. The optimization of production planning, genetics selection, environmental controls, and plant management across the cultivation portfolio, which has driven a dramatic and favorable impact on gross margin improvements, as well as [crop-yield] [ph] and potency. 14:20 We increased the market with the introduction of wholesale flower sale in Virginia in September and in New York in October. The launch of the Classics whole flower brand in five markets in single day in October, the largest single day launch of the flower brand in the industry, which was made possible by the infrastructure and team that we had in place. 14:41 The completion of the first harvest at our New Riverhead New York location in December, which is now producing flower for the New York medical program. The opening of our first manufacturing site in West Virginia with three retail locations open to date and another expected to come online shortly before the end of this quarter. 14:57 The addition of the manufacturing side in Missouri, which became operational in Q4 and a record indoor harvest in Colorado where the results are indicative by the progress we're making in our overarching strategy. On to retail, we have maintained a continuous focus on driving labor productivity at the store level, despite the challenging hiring environment. The continued expansion and improvement in store level dashboard systems to maximize efficiencies across our entire retail footprint. The conversion of 26 stores to the cannabis brand, including all 14 Florida locations, which were simultaneously converted on the same day. Approximately one-third of all Columbia Care retail locations are now under the cannabis brand which was introduced in May of 2021. 15:38 We also closed several meaningful acquisitions in 2021, including The Healing Center, San Diego; Green Leaf Medical; CannAscend in Ohio; Medicine Man in Colorado, and nearly 1 million square feet of cultivation production capacity on Long Island, New York, all of which had served to deepen our footprint. These achievements are the result of the hard work of everyone in our manufacturing distribution and retail networks. I’m incredibly proud of what they've accomplished. 16:03 As we discussed in the third quarter call, we continue to operate in a challenging environment from hiring to inflationary costs to aggressive discounting by competitors to regulatory delays. Our teams continue to work hard every day to drive the top and bottom line. 16:17 As you look back at Q4 more specifically, on a revenue basis, our top 5 markets in alphabetical order were California, Colorado, Massachusetts, Ohio, and Pennsylvania. On an adjusted EBITDA basis, the top five markets alphabetically were Colorado, Maryland, Massachusetts, Pennsylvania, and Virginia. 16:36 We opened the West Virginia and Missouri manufacturing sites, as I mentioned a moment ago, as well as the retail location enrichment. We opened Virginia Beach in Q1 of 2022 and now have four locations opened in the State of Virginia. We ended the year with 79 retail locations opened, another 20 under development. To date, we had 83 active retail locations and 16 in development. 16:59 Looking forward to 2022, we remain highly focused on a number of key initiatives. Retail openings was 16 cannabis locations in the pipeline, including West Virginia, New Jersey, and New York, and Virginia. Expansion of cultivation in our Riverhead, New York facility to scale with growing medical program and the advance of adult-use. Further optimization of our cultivation facilities to maximize yield and quality maintain grams per square foot and THC levels for flower will be critical to offset price decline curves anticipated in many of our markets. 17:30 The concentrated effort to driving efficiencies and our packing and distribution capabilities to match the significant performance improvements that we've achieved elsewhere in the value chain. Further development of the [Forge] [ph] application, enabling consumers to explore production options, [indiscernible] the products of their choice, and further [conform] [ph] our manufacturing distribution decision, decision-making through data, and a continued expansion of our nationwide rollout of our exclusive [product plans] [ph]. 17:56 Much to the CapEx spend in Q4 was dedicated to cultivation in markets such as Ohio, West Virginia, New York, and Virginia, which we anticipate will demonstrate results in 2022, particularly in the second half. We continue to put money to work growing from growth opportunities. We're facing pricing pressure in some markets. We're also investing an incremental canopy to ensure that we can manage the costs. We have made progress in automating and standardizing across the markets, which sets us up nicely for 2022. 18:24 With that, I would like to turn the call back to Nick for few closing points before we open up for the Q&A. Nick?

18:32 Thank you, David. I want to close with the final note on the transaction that was announced yesterday and what it means for Columbia Care. The extraordinary strength of this partnership is undeniable. Together, Columbia Care and Cresco Labs will be the true leader of this industry by every measure, but most importantly, we’re natural partners with complementary skills, cultures, and values. 18:53 While we've been competitors since the very beginning, we've always had a mutual respect for how each other operates in this space. This partnership will establish the new leader in North American cannabis and the most important and impactful company in our industry by every measure. 19:07 We will be positioned for balanced and sustainable growth by marrying Cresco Labs’ number one wholesale portfolio and Columbia Care’s robust retail network. There is a lot of work ahead of us to bringing the transaction to a successful close, including divestitures, but I am confident in our ability to execute as we have in the past. 19:24 I'm inspired by what this partnership means for the future of Columbia Care and the cannabis industry as a whole. We have found partners that see the world with the same lens as us and we have the opportunity to make a historic impact. We will continue to strive forward towards execution of our strategic priorities in 2022 and look forward to a new chapter for Columbia Care going forward thereafter. I am grateful to my team and everyone, including those of you on this phone, who have worked so hard to bring to this point and cannot thank you enough. 19:54 We're happy now to take your questions. Operator?

19:58 Thank you. [Operator Instructions] Our first question comes from the line of Aaron Grey with Alliance Global Partners. Please proceed with your question.

20:29 Hi, Aaron.

20:31 Hi, Nick and team. Good morning and thank you for the questions. So, first question for me, appreciate the color in terms of the margin impact and that coming from Pennsylvania. And obviously, we'll get some of the third party [indiscernible] seeing some of the pressure there in the overall market as well as for legacy duly, so just wondering in terms of, how do you think about the timing of that turning around? It looks like you're going to expect some continued margin pressure there. Maybe changes you're making at the cultivation and when you might expect to see a turnaround in terms of your market share and the overall, kind of price that you're seeing within Pennsylvania? Thank you.

21:07 Sure. David Hart, why don’t I turn that over to you?

21:10 Sure. Thanks. So, we are in middle of the construction process for our [Saxton Facility] [ph] in the state of Pennsylvania. It's, I think everyone's aware that it is a large footprint. We've invested a fair amount of capital into that project. We are going to add incremental canopy over a phased approach as we bring products to market. 21:32 So, in addition to incremental canopy, and obviously the, I think leveraging the fixed assets that are scheduled for 2022, we're also in the middle of introducing a number of our national brands into the State of Pennsylvania, which we’ve not yet done. So, from our perspective, there is incremental supply that's going to be coming out of our facility in Pennsylvania over the course of 2022. 21:53 We're obviously going to be thoughtful about that. We continue to pressing the envelope with respect the percentage of G-Leaf product that's on our three stores shelves. And so that continues to increase as we work to bring incremental genetics, potency, and quality from the Saxton Facility into the marketplace. 22:13 We continue to develop relationships across the market in Pennsylvania. There are obviously plenty of legacy relationships with the G-Leaf team, but we've done our best to bring some incremental relationships. And so from an operational perspective, if the timing issue with how much incremental canopy we're going to bring on during the course of 2022. We're going to be thoughtful about that as we look at the market. 22:13 I think we highlighted in Q3, late Q3 and early Q4, that we had some production issues in the Saxton Facility that have now been fully resolved. And so, the quality and quantity in materials coming out of that facility is back to historical levels, in fact, I think it's above, which is positive for gross margin. So, we continue to watch very closely the Pennsylvania wholesale market. 22:56 We see both on the retail side in our stores and obviously what the G-Leaf team is seeing in real time on the wholesale side, but we're taking a balanced approach bringing that incremental canopy on, but there's no question that, to the extent that there are price decline curves that present themselves in 2022 in Pennsylvania having an incremental scale and leverage will allow us to be efficient with our production and hopefully offset from a gross margin perspective those price decline curves.

23:22 Alright, great. Thank you very much for that color. That's helpful. And second question for me before I pass it along. So, you know first quarter flat to down some. We look at the remainder of the year at the midpoint of guidance, that implies about 170 million average, if you assume it's flat for the first quarter. So, a pretty good amount of growth for the remainder of the year. You talked about pricing pressure continuing. Just wanted to know in terms of how much pricing pressure you have embedded within your model for the remainder of the year, versus the growth opportunities that you see in terms of New Jersey starting the new stores in Virginia and West Virginia. So, really just want to get better [content] [ph] of what pricing expectations you have embedded within the guidance? Thank you.

24:07 So, let me turn that over to Derek, and then I'll hand it over to David.

24:12 Yeah. Thank you, Nick. So, we're looking at obviously 17 different markets around the country. There are different pricing pressures depending on the market. A number of our markets, we have experienced increased average basket size in Q4, and a lot of that in many cases it's due to the cannabis rollout and people switching into our new retail banner and spending more in those doors. So, yes there's pricing pressure, but between the segments that we're operating in, we are seeing some uplift in prices and that's true for a lot of markets around the country as we moved through 2022.

24:53 David, do you have any thoughts?

24:56 Yes, I would also add, you know, we have been, we've gotten through this digestive phase before with our CapEx, and that's obviously something – we're in the middle of right now based on what we spent in totality in 2021. So, you're talking about new canopy analyzing year-over-year in Virginia, New Jersey, New York, Ohio, obviously, West Virginia, Florida, and improvements in yields across the board, but particularly in Colorado and California and Pennsylvania, and the manufacturing in Arizona, Florida, obviously, West Virginia, and Ohio. So, there's a fair amount of new assets in production coming out of our assets during the course of 2022 as a result of the investments we made in 2021. 25:36 And so that is, all that material coming online and working its way through our supply chain and ultimately in the wholesale and retail market, we'll provide incremental lift as well from adjusted total dollars perspective.

25:48 Okay, great. Thank you very much for the color and I'll jump back in the queue.

25:53 Thank you. Our next question comes from the line of Vivien Azer with Cowen and Company. Please proceed with your question.

26:00 Hi, good morning. Thank you. I wanted to follow-up on Aaron’s line of questioning on Pennsylvania, sorry to [indiscernible] the point, but it clearly has been at the topical market throughout earnings season. This a market where you and your competitors have been incredibly transparent around the amount of capacity that's coming online. So, deflation shouldn’t have been unexpected. I don't think but I am curious relative to your internal expectation, where did deflation trends not just for the fourth quarter, but we got from closing 1Q to any incremental commentary on 1Q would be helpful too? Thank you.

26:35 So, I'll turn it over to David, and then I'll turn it over to Derek.

26:41 Sure. Morning, Vivien. So, in Pennsylvania, we have tried to provide a fair amount of transparency. There's obviously a lot of data that's out there through third party resources to show where the trends are. We saw in Q3, early Q3, and then actually into Q4, we saw some price decline curves in Pennsylvania that I think, were pretty breathtaking for a period of time. 27:04 They have rebounded, particularly for, I think what is now taking place in Pennsylvania, which we've seen in other markets particularly marketplace in Colorado or in California, where there's a segmentation with respect to quality and potency. And so, the price decline curve is for, call that B or C quality flower is pretty significant in Pennsylvania. We don't anticipate that rebounding any anytime soon. 27:28 The market for high quality, high potency flower has rebounded in terms of the price per pound. And so that's one data point that is constructive for the Pennsylvania market. There is clearly still demand for high quality flower. So that is part of our thinking, part of our expectation for Pennsylvania. 27:50 I think it just highlights what we're probably going to see, I think in most of the markets on the East Coast, which wasn't probably present two years ago, is that genetic diversification and potency matter from pricing perspective, and so you will see that categorization of flower and flower derivatives in most of these markets, including Pennsylvania. 28:09 So, that's one of the key factors that we're focused on, which is the productivity coming out of the facilities in Pennsylvania. In addition, I do think that bringing in the number of new, not only just genetics, but new form factors and brands, namely our National brands into the Pennsylvania market will help allow us to put incremental products in the shelf throughout the state. 28:31 So, to me, those are the factors that we control internally right now within Columbia Care and [legacy JVs] [ph], for our expectations for Pennsylvania, but there's no question it was a sizable part of our business and our expectation in the second half of 2021 and we have made obviously some forecasting assumptions for 2022 as it relates to Pennsylvania. I think thankfully, we've got a number of markets that are expected to outpace the broader market in terms of growth opportunities, organic to Columbia Care, but also to macro level within the state that are going to tailwinds for us to the course of the year to help offset what we think will continue to be some constraints on the demand side for anything below a quality flower coming out of Pennsylvania.

29:19 Do you have anything to add?

29:22 Sure. So, it's one of those markets where obviously the industry is positioning for adult use coming on, so there's more cultivation coming online in Pennsylvania ahead of that. So, not unexpected. I will just add to what David was saying, which is, we've reported here, the Pennsylvania is still one of our top five markets and still one of our top five markets, but it's revenue and adjusted EBITDA. 29:49 So, although there’s some headwinds from Q4 of 2021, including some of the cultivation challenges that David mentioned, it's still one of our top markets and remains in that top profile for us.

30:04 Understood and thank you for that color, and just to follow-up on that though, given the characterization of the drop off at the end of 3Q, it seems like the price deflation perhaps started, but certainly was more significant than you've anticipated and I appreciate that you're bringing on more canopy in Pennsylvania to insulate gross margin and skew towards a higher quality profile with genetic diversification, all of that is clearly important. But I'm hopeful that you guys can articulate maybe, it's a little bit more specifically how you guys change your market modeling in terms of the supply and demand imbalance, I get it, there’s optimism in the market around use, I don't share that optimism. So, there's still a lot of capacity coming online. So, how have you changed your market modeling assumptions? Thanks.

30:56 Look Vivien, let me just add to that. I think [indiscernible] and trying to avoid being repetitive, but like this is a scale game. Right? And so, you have to have the most efficient manufacturing model with the best products and you have to be able to convey products that is actually, sort of embrace the value proposition in the eyes of the consumer. And so, when we think about the way we've changed our market modeling, we have assumed the price decline curve that we're not going to discuss today, but it is the price decline curve. 31:24 We've also – and that is based on, not only the impact of the macroeconomic environment, which is probably in my opinion the single most important factor that's hurting the wallet of the consumer, but also the competitive dynamics. 31:39 There are always going to be additional players coming into every market. This is just the way every market is going to materialize over time. And I think the industry needs to get positioned for that eventuality. That is one of the driving factors behind our decision to combine with Cresco. Our Saxton facility is arguably the most scaled facility in the state of Pennsylvania. 31:59 We will be able to produce products at a much lower rate and a much, sort of higher level of quality than most of our competitors above all of our competitors. When you add to that the idea of the, sort of the value proposition of form factors and branding, that is the only way that someone can escape the commonization of their products, and that is precisely what we are doing. And so, not only have we changed our market model, we've actually adjusted our overall strategy and tactics to the way we've approached Pennsylvania and the national market. 32:26 So, it's a very fair question, but I think that, you have to, sort of this is something we've seen in Colorado, something we've seen in California, it doesn't surprise us at all and it shouldn’t surprise anybody on this phone, because this is going to happen in New York, this is going to happen in Virginia, and just – if the question is, what is the timeline? And so, that is, I think when you think about it from the standpoint of, sort of the top down, that's what's driving a lot of our decisions right now. 32:51 In addition to cost of capital and other things like that, but it is the specifics of how we do it and why we do it, I think are proprietary, but sort of the overall – the overarching sort changes we've made continue to improve it. By the way, we have seen improvements in our pricing power in the wholesale market. And there’s value to be had in having a fully integrated model that allows you to [indiscernible] yourself somewhat from a lot of the dynamics.

33:19 Thank you. Our next question comes from the line of Matt McGinley with Needham and Company. Please proceed with your question.

33:25 Thank you. Your 2022 guidance implies that you expect around a 6 point to 7 point improvement in EBITDA rate this year. Would you expect that improvement to be weighted more to gross margin improvement or from G&A leverage? And on the flat to negative comment for top line in the first quarter, does that extend the margin rate as well or would the operating efficiencies that you've been speaking about enable you to grow that rate in the first quarter as well?

33:51 Let me turn that over to David and then I'll also ask Derek to end.

33:58 Yes. So, it's a good question. It's the combination of both. There's clearly incremental scale and leverage that we're going achieve from an OpEx perspective as we grow, just the organic topline. So that is definitely a part of the story. We do expect to continue to see some improvements. And again, we've got a number of markets, but in aggregate, we expect to continue to see incremental throughput that's going to drive incremental gross margin improvement during the course of the year, but Derek I'll hand it over to you if you want to provide any sort of specificity?

34:32 Sure. Yes. And Well said. It is a combination. We’ve obviously got high topline growth in 2022 as for expanding in markets and we've got new store openings. And it is a leverage. It is a scale benefit on the cultivation assets and the gross margin and the infrastructure that we built in corporate expenses. So, get very much hitting both aspects.

34:55 Great. And on the CapEx spend, you spend about 75% of your total dollars in the last two quarters of 2021. Do you expect the sustain CapEx at that level into this year? And how much of that spend would you expect to make on growth investments relative to some of the productivity enhancements that you invested in or put in place last year?

35:17 I'll start off with the very high level statements. So, the CapEx curve will decline as the year goes forward. If you recall, when we raised the debt at the beginning of the year, that was really to position the three, kind of primary transition markets, New York, New Jersey, and Virginia. We continue to invest in those markets, but that's in anticipation of, sort of an adult use changeover. 35:39 There will be small enhancements here and there, but the bulk of the capital is really going to, sort of materially, sort of materially meaningful opportunities that are, kind of near-term. But let me turn that over to David and Derek.

35:54 Yes. So, I'd echo that. And a lot that as Nick has mentioned is on the evolution of the individual market. So, when we're creating initial scale in a new market and New York, Virginia, New Jersey being great examples of that there's a lot of CapEx to just build that footprint. 36:13 As the markets evolved and we talked about Colorado and Pennsylvania already, those investments are to improve efficiency and improve yields and that's obviously helping the gross margin than those more mature markets.

36:32 Thank you. Our next question comes from the line of Matt Bottomley with Canaccord Genuity. Please proceed with your question.

36:39 Good morning, everyone and congrats on yesterday's news. Just was wondering on your potential future endeavors here on continuing to increase operating leverage and getting full economics from a lot of the facilities you guys have built out in the past. Is there any change on the back of yesterday's news? Given that it is a nine-month plus, probably closing date on that deal with Cresco of things that you might take your foot off the accelerator on that you otherwise what if considering there could be divestitures of some of these assets and does that play in at all to your forecast for next year?

37:13 So, I'm going to, let me take a very high little approach to that. So, obviously, we're in a in a moment time where we have to be very, very deliberate in how we think about the business and how we move forward. I think the safe assumption is to, sort of look at the world through the lens of Columbia Care standalone until the moment in time that Columbia Care is combined with Cresco. 37:36 So, we're going to keep our foot on the gas and push ourselves as hard as we can, but the lesson we learned from last year regarding our guidance is that we actually had to reduce guidance, I'm sure everyone on the phone remembers that. That was not an easy process for us. And a lot of the feedback we heard from many of our institutional investors was, you’re not getting credit for being a high growth player in this market, you're not getting the multiple you deserve, so don't put out expectations that are anything but more than achievable. And that's precisely what we've done. 38:06 So, we've taken a very, very conservative approach based on the portfolio we have. There are obviously headwinds in some markets and there are opportunities in others, but we're managing the headwinds, I think effectively and intelligently, and we're taking advantage of the opportunities as aggressively as we can. So, we are absolutely not taking our foot of the gas. 38:23 We're pushing ourselves harder than ever to make sure that we continue to move forward and continue the momentum. And I would anticipate that carrying through the next here, but one of the things that I never want to do again is, go back to the street and basically, sort of eat my hat, and apologize, we're having to reset expectations. So, it's just, it was actually really driven by a very practical kind of messaging and credibility issue more than anything.

38:53 Got it. Okay. Thanks. And then I just wanted to pivot now to New Jersey specifically, so you mentioned, in the prepared remarks, potentially a Q2 kickoff date, I know there's a meeting later today with the commission, but I’m just wondering if I can get a little more granularity on your expectations, just maybe in terms of materiality for how the roll-out is going to go and not specific to anything, Columbia Care, but just, sort of more macro. It doesn't seem like there's a lot of stores that are going to be approved out of the gate. What's your expectation for, where this state is by the end of the year, assuming everything goes along timelines in terms of just infrastructure to supply this market, very large TAM, very large population, but just seems like the – what's built today for all the 12 or 10 operators is fairly modest relative to the opportunity size.

39:37 So, from a very high level perspective, one of the lessons we learned year-after-year-after-year is that the political process, the regulatory process is highly complicated and unpredictable. It is the single least predictable element of our business. And so, I'm sure you remember in the fourth quarter there was some expectation set that New Jersey would transition to adult use in fourth quarter of 2021 or than it was the first quarter of 2022, we've always said that it's a second quarter 2022 issue. And I think that's a reasonable expectation. 40:07 We've maybe proven to be wrong, but I always conservative at the time we sort of can begin to share it, and I think it's turned out to be appropriate. It is an massive market, and there it is a very well regulated market. I think it's an intelligently regulated market, but there are other political and regulatory matters that will need to be addressed by the state before the program really takes off. And that's something that will take time. 40:07 So, I think having an expectation for what New Jersey could mean for the industry is very, very realistic and appropriate, but I would always, sort of whatever expectations are, I always kind of push it back to couple of quarters because things happen and those things are always out of the industry’s control because the decisions are being made by policy makers. 40:55 So, I think that you'll see a very, very nice ramp of revenue ramp going into the end of this year. I think the second half of the year you're going to begin to see the resemblance of a foundation being set. And I do think you see the rollout of adult use, but it'll be slower than people expect. And I think there will be a lot of hurdles that the operators have to overcome just to get their facilities up and running. 40:55 If you recall, one of the most complicated elements of this process has been to get the local municipalities to provide that letter of support. We've done that in two out of our three markets. The third market has expressed support. Now, we're having an issue with the department of transportation. Who would have thought, right? 41:32 So, the, sort of – for us, we have done in my opinion everything right. The team has executed absolutely flawlessly on the ground, and done a great job, and in our manufacturing capacity is coming along exactly as we had hoped. It's not coming up, it didn't come online ahead of the curve too far, which is something I did not want to happen. But we've made those investments. We're very happy with them and the way things are turning out, but there definitely will be, sort of speed bumps along the way. 41:59 So, I think it's going to be a great market and really beginning to show that trend line materialize towards the end of this year, but between now and then and by the way, if I'm wrong, great, that means everyone has upside, especially us, but I think that's just a safe way to think about it.

42:15 Thank you. Our next question comes from the line of Kenric Tyghe with ATB Capital Markets. Please proceed with your question.

42:23 Thank you and good morning. Nick, one of the other markets that has been a bit of an [indiscernible] through the supporting season is Massachusetts. Can you speak to what do you think needs to change, where is the rebalancing that's required or what does the rebalancing that’s required in Massachusetts? And how material do you think that Boston is and remains to Massachusetts finding and getting some wind in its sales and perhaps starting a slightly bit of course through the second half of this year at least, if not first?

42:54 So, candidly, I think Massachusetts has been one of the most impressive markets in our portfolio. And I'll give a high level overview and then hand it over to David. We have increased market share. We have maintained profitability and pricing. We've shown extremely high levels of growth relative to competitors in spite of the fact you've seen a massive influx of the number of competitors both on dispensary and cultivation side. 43:18 It's been a great market for us. It continues to be great market for us, and candidly, I think that the team has done an outstanding job of executing relative to the headwinds that they've been pushing up against. So, the market will continue, as we've seen in every other market, as markets mature, you will see more and more competition come online. That competition will try to compete on price. They'll try to buy market share. That's not the game we play. 43:43 The conversion of the cannabis has been very successful. We continue to see strong growth out of our Boston facility and as far as, sort of the CCC and kind of let's call it local municipal political relations are concerned, we really have tried to do our level best to maintain and you can continually, sort of improve those relationships so that we can execute on the model without having to, sort of stumble on any unintended consequences with either the regulators locally or at the state level. 44:10 So, I actually think that the team has done an outstanding job, especially when you look at some of the incumbents in where the market was 12 months ago. There are people who have lost 60% of their revenue base. Based on the fact that they, either didn't have the right supply chain, the right products, the right marketing, the right service, whatever it is, meanwhile we've continued to, kind of [indiscernible] in Columbia Care if there's one thing we've always been very good at, it's being sort of Steady Eddie, right. 44:33 So, we're more of the total in [indiscernible], but we keep on making progress on a very kind of deliberate basis. So, let me turn that over to David and see if David has any thoughts.

44:47 The only thing I would just add briefly that we did invest in Massachusetts last year in the conversion of our low dispensary to the cannabis brands. We increased the number of point-of-sale stations to a number of other things. We dramatically improved the size of the vault and some other things. So, we probably experienced the greatest number of competitors in a 15 mile radius in any of our dispensaries [indiscernible] and that store continued to perform and to take market share. 45:18 So, I think we've done a really good job. Location matters, team, and obviously menu and portfolio selection matters, but we've done a great job and a blending strategy, for competitors has come online. And on the manufacturing side, we did invest in our manufacturing facility to add incremental post-harvest automation, which we've now fully scaled up in our – as of this quarter, we're actually – we're opportunistically buying biomass to run through our post-harvest production for opportunities for pre-roll production in our stores and obviously the wholesale markets. 45:48 So continue to see great opportunities in Massachusetts on a relative basis quarter-over-quarter. And as Nick mentioned, the profitability there has remained strong and resilient. So, we're very happy with where we are in Massachusetts. And I think this summer is going to be where you see new records for us with respect to foot traffic and total revenues out of our Boston facility because we were not open in the peak months, if you will foot traffic last year, obviously, we expect foot traffic in Boston generally speaking to be significantly higher than it was last year and the year before with the pandemic. So, continue to see good things out of Massachusetts for us on a relative basis.

46:29 That's great color. Thanks. And then just a quick final one, touching to the West Coast. Nick, can you provide some insight on the extent towards your relative positioning and [the stack] perhaps buffered you to some extent from the pressures and also a reminder on where you are in terms of the capacity utilization, sort of exiting the year and California? Thank you.

46:51 So, look, we it's funny, if you look it back historically to 2021, we, sort of a lot of the pain we felt was self-imposed because we had thought Pennsylvania would be a dramatic, sort outperformance relative to expectations that turned out not too true. And that's why we took Colorado and California offline to really reconstruct not only our organization, but our supply chain. 47:17 The fact that we have a, sort of let's call a closed loop circle in California. I think has helped us insulate ourselves somewhat from the pricing power. Now, if you recall back to when we made the acquisition of project cannabis, one of the things we’re most excited about was the wholesale number and the wholesale opportunity. The issue we ran into was and the reason why we took our supply chain, sort of our, let’s call it our manufacturing supply chain offline in 2021 in California is that the product quality was great for 2018 and 2019, but it was not competitive in 2022. 47:49 And so we're beginning to see the improvements work through the system. We’re beginning to see as sort of the organization improve, but to be very candid, the California market needs to meet a little bit of leadership. And when I say leadership, it needs political leadership. It is a disaster. They can't get out of their own way if – under any circumstances. We’ve seen some of this happen, but you've got, you got crime [running rapid] [ph], you've got – it's ridiculous. 48:20 So, we – our view is that it a phenomenally attractive market. We've always been contrary and I actually think California is going to be one of the best, it has historically been the biggest market of the world. I think going forward, it'll will be a very attractive market and the time to make the investments in a market is when everyone else is running away. Right. 48:40 It's when no one else sees the opportunity, but it's absolutely there. And with the right products with the right supply chain with the right quality, you can actually insulate yourself to a large degree from the pricing pressures that people are seeing and frankly from the competitive dynamic of the illustrative market. Because illustrative market is fine, right, but it's not great. It is just very, very cheap. And if you look at what drives, what drives consumer sentiment, it's the cost and then it's the quality. And it's not a one for one correlation. 49:11 So, if we can get the quality up and be cost competitive, and by the way, some of that is driven by changes from a taxation perspective. So, when the City of San Diego eliminated its cultivation tax or when the State of California was thinking about eliminating it’s cultivation tax that is very, very helpful to us. If we could simply make our products, if you stripped out the tax expense, and you just look at, sort of a one for one comparison, our products and I dare say many of the other organized operators in California would be very, very competitive, but it's the taxation issue that's been problematic and I think since Sacramento their beginning to realize it. 49:50 You can't text your way out of success or towards success I should say. So, I think California is exactly the right time to be looking at it because I think we've kind of passed the trough. I think we're starting to see some stability. I think we've seen a lot of mom and pops and a listed operators actually give up because they simply cannot compete with the competitive dynamics are coming out. I don’t think scale will actually turn out to be one of the most important things, and if you go way back in history of Columbia Care, one of the things we always hope to do and hope to be able to be was a structuring element in a dis-organized marketplace. 50:27 So whether it was Colorado or California, and particularly now you look at the combination between Columbia Care and Cresco, we're going to have the scale to actually add an element of structure too and otherwise inherently unstructured marketplace.

50:42 Thank you. Our next question comes from the line of Andrew Semple with Echelon Capital. Please proceed with your question.

50:49 Hi there. Good morning and congrats on the transaction.

50:53 Thank you.

50:54 Just a first question here, housekeeping item on the EBITDA guidance. Just hoping you can maybe provide or be able to quantify the impact of the transition to U.S. GAAP reporting on the 2022 EBITDA outlook relative to what that EBITDA outlook would have been on an IFRS basis?

51:13 So, Derek why don’t I turn it over to you?

51:17 That sounds good. So, we've provided for transparency for 2021 the equivalent GAAP. So, we've got an 18% EBITDA margin under IFRS, and a 13% under U.S. GAAP. That's indicative of the adjustments that you've made from one to another. There are a number of competitors in the industry that have already made that adjustment, I think with similar spreads. And so that's not an unreasonable expectation to continue into 2022 and beyond.

51:52 Okay. Understood. Thank you. Switching gears to Virginia. Just wanted to get an update on that markets, could you maybe speak to the timing of store openings, could you give us an update on how patients are responding to drive flower products now in the markets? And could you comment on has there been any improvements to the patient onboarding bottleneck that was the issue for market growth over the past few months.

52:21 Absolutely. So, David, why don't you start off and if there’s any I like to add, I can always piggyback?

52:28 Sure. So, with respect to store openings, we continue to try to thread the needle to make sure the locations we identify and ultimately commercialize are going to be viable for adult use when ultimately adult use comes. And so, there have been some locations where, frankly, we just didn't think it was going to be a good fit from an adult use perspective to get the actual local municipality to opt-in or opt-out however you wanted to find it. So, we continue to be thoughtful about that. 52:59 There has been an uptick in patient count. In the State of Virginia, it's getting noticeably easier for patients to get registered and come into – become active patients in the program. I think there is a robust wholesale market that we're clearly the leader of, as of right now. And so, on a combined basis with G-Leaf and Columbia Care, we've got a nice healthy wholesale business to have our products on the shelves throughout the state. 53:24 Got relationships with our competitors in the state. Stores that we have opened have been productive relative quickly. So, I think the two things that were material that needed to happen for the State of Virginia outside of the adult use, obviously not coming this year was to have flower introduced into the marketplace and for patient registrations to become easier and have that timeline condense as much as possible. And those things are happening, they’re just not happening overnight. 53:50 So, we continue to see nice trends in the State of Virginia. It's obviously very meaningful for us even in the absence of an adult use timeline that's this year. So, we're going to continue to be thoughtful about where we place our stores, the expectation is that we can get most of them across the finish line during the course of 2022, but I will say that I would – we're going to be hyper focused on finding great locations above anything else, and if that takes a bit of time, so be it, this is from my vantage point. I want to make sure we've got really strong commercially viable locations for adult use when it does come. 54:28 We don't have the regulations for adult use. So, we're trying to make sure that we're just optimally positioned in those locations.

54:39 Thank you. Our next question comes from the line of Scott Fortune with ROTH Capital Partners. Please proceed with your question.

54:46 Hey, good morning. This is [Nick] [ph] on for Scott. I was just looking for color on New York. You had a significant share of that market with your high quality medical offering early on, I was wondering if you could just provide color on where you are now in terms of share and kind of how to pivot to a wellness focused model in some of your locations has impacted your positioning there? Thank you.

55:05 Sure. Let me start off a high level comment. I’ll turn it over to David. So, we've actually had a significant increase in wholesale activity. So, the dispensaries have performed well, but the wholesale activities is probably the single biggest beneficiary in New York State since we began the offering flower. I would say the following. We have arguably one of the most efficient and high quality supply chains for, let's call it, medical, but now, I would argue wholesale adult use oriented products that we don't have adult sales, we don't have adult use products in New York, but those [indiscernible] wellness element of the product portfolio has been very well received and continues to improve in terms of market share and customer loyalty, but most importantly, customer loyalty not just at the individual consumer, but on the wholesale side, but let me turn that over to David and see if David has any specifics that you'd like to share.

56:00 Yeah. No, Nick, I think you answered that, I don't think I have anything incremental to answer there.

56:07 Okay, great. That's it for me. Thank you guys. I'll pass it on.

56:11 Thank you.

56:15 Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I'll turn the floor back to Mr. Vita for any final comments.

56:22 Great. Well, thank you everybody for your time today. We really appreciate it. I'm sure we will be having multiple follow-up conversations. This is an incredibly important and exciting moment in the history of Columbia Care, in the history of Cresco, and frankly in the history of the industry. 56:37 As we all talk today, many of the headwinds that we're seeing in markets, some of which are fairly standard when you see the markets mature. Others are specifically consequences of the macroeconomic environment. And yet others are the result of political decisions and regulatory decisions that all of which has to be worked through in a collaborative way with, sort of the organizations and the entities and the people who we all answer to. But the fact of the matter is – the fundamentals of the industry are incredibly exciting. We see a massive pipeline of markets transitioning from medical to adult use over the next several years. 57:11 The element of scale will be a huge driver of efficiencies both from a capital allocation and a cost of capital perspective, and we couldn't be more excited. So, I forget who asked the question about whether or not we're putting our foot on the gas? I'd say, we probably, we filled the gas [indiscernible] the tank up of gas and we're sort of we're all in to make sure that this organization and the organization on a combined basis with Cresco, winds up being normally at defining moment for both organizations, but really to change the way people think about cannabis in a very profoundly positive way. So, thank you all for your time today. We appreciate it and we look forward to speaking with you soon.

57:47 Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.