Investor Presentaiton
$ / Lb.
OPERATIONS:
UNMATCHED COST STRUCTURE
PRO FORMA WHOLESALE BIOMASS ECONOMICS 1
Declining cost of production leads to improving gross margins
Cost of Production²
Cultivation Proforma Economics
Q4 2023 Cost of Production assumes the Company delivers on its 2H 2023 guidance of $120/lb
Weighted Average Selling Price 3,61
$300
$350
$188
$237
$204
$236
$290
$340
$336
$312
70%
$300
$238
$250
68%
65%
$250
50%
59%
$196
$200
$200
$150
$159
$139
$134
$127 $122
$118
$100
$/ Lb.
$150
46%
34%
32%
33%
3.0%
$100
10%
$238
$159
$134
$127
$196
$139
$118
$100
$100
$50
-10%
$50
$-
-27%
$(50)
-30%
$-
Q1 22
Q2 22
Q3 22
Q422
Q1 23
Q2 23
Q1
Q2
Q3
Q4
Long-Term Goal
Q3 23 Long-Term
Goal
4
5
2022 2023
I Cost of Production
Proforma Gross Profit"
Proforma Gross Margin %
1. This table includes forward-looking information that is disclosed using non-GAAP measures. These non-GAAP measures are described in the notes below. For more information on non-GAAP measures and forward-looking statements, please see Disclaimers on Slide 2.
2. Cost of Production includes all expenses from nursery & cultivation to curing & trimming at which point the product is ready for sale as wholesale cannabis or to be transferred to CPG. 2022 and Q1 Q2 & Q3 2023 costs are actual. Q4 23 cost assumes the Company delivers on its
2H 2023 guidance of $120/lb.
3. Weighted Average Selling Price = the individual selling price for flower, smalls and trim multiplied by the mix of product for each product sold.
4. Proforma Gross Profit = Weighted Average Selling Price minus Cost of Production.
5. Proforma Gross Profit Margin = Proforma Gross Profit divided by Weighted Average Selling Price
6. Full Year 2023 projected weighted average selling price of $312/lb. is used for proforma Gross Margin calculation for 'Long Term Goal'. Cost of production is typically highest in Q1 and Q2 due to a seasonal decline in pounds produced. We expect to produce about 353,000 to
355,000 pounds of wholesale biomass in 2023, with 43% in the first half and 57% in the second half, based on the midpoint of guidance.
7. The purpose of this financial analysis is to provide investors with a basis for analysis of the Company's proforma cost structure. Readers are cautioned that the information may not be appropriate for other purposes.
15View entire presentation