and John Mazarakis, cannabis-adjusted EBITDA margin was 22.4% for the quarter, compared to 27.7% in the year-ago period, and our non-cannabis-adjusted EBITDA margin was 6.3%. Moving on to the balance sheet, we ended the quarter with cash and cash equivalents of $122.7 million and an additional $1 million of marketable liquid securities, providing very significant financial flexibility. Combined with improving industry fundamentals and our disciplined capital allocation strategy, We believe we're positioned to continue executing on both organic growth initiatives and accretive acquisitions. I'll also mention here, in support of executing these growth initiatives and acquisitions, Vireo, through our non-cannabis segment, recently entered into a new asset-based lending credit facility with certain financial institutions in Bank of Montreal, providing a $65 million initial commitment, expandable to $85 million, and further to $105 million through a $20 million accordion feature. This ABL priced at an industry-leading rate of term SOFR plus 1.75% to 2%, currently 5.37% to 5.62%, will provide us with the additional liquidity and financial flexibility through a revolving credit facility to support working capital, capital expenditures, strategic M&A, and other general corporate purposes while diversifying our sources of capital. Total current assets excluding income tax receivables were $374 million compared to current liabilities excluding uncertain tax liabilities and contingent consideration of $181.4 million. During the second quarter, after our annual meeting, the company consolidated its subordinated voting shares. As of June 30th, Aviria had a total of 54.4 million subordinate voting shares outstanding on a treasury method basis using a share price of $15. This was comprised of 45.8 million subordinate voting shares outstanding on an as-converted basis, 2.1 million RSUs, 1.2 million shares issuable upon conversion of convertible debt, 3.5 million shares held in escrow, 1.2 million shares expected to be issued in connection with the satisfaction of earn-out liabilities, and 0.6 million in the money warrants and options adjusted for the Treasury method. Finally, at the end of June, we appointed BDO as our independent registered public accounting firm. We view this as another important step in the continued evolution of Vireo as we build a larger, more diversified business with a strong foundation of financial discipline in corporate governments. That concludes my prepared remarks. I'll now hand the call back to John for closing comments.

Thank you, Tyson. Before we open the call for Q&A, I'd like to leave you with one final thought. Over the past 18 months, we've demonstrated that we can successfully identify, acquire, integrate, and optimize businesses while maintaining financial discipline. And we're starting to see the financial model take place. Each transaction that we've announced is intentional, selected to strengthen our platform. We believe the combination of leading market positions, disciplined capital allocation, and a differentiated cannabis and agribusiness strategy positions Vireo to create meaningful long-term shareholder value. We're excited about the opportunities ahead and appreciate your continued support. Thank you for joining us today. Operator.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Pablo Zuanek from Zuanek and Associates. Your line is now open. Please go ahead.

Thank you. Good morning, everyone. John, thank you very much for those prepared remarks. I think you gave a great color that explains the strategy, so that was very, very helpful. And not to make you repeat what you already said, but we've seen, you know, companies like cannabis and others that were very aggressive in terms of expanding in this industry, taking on a lot of leverage, probably overpaying. and we all know what happened with them eventually, right? And I think you made it very clear why your strategy is different, but you might wanna expand a little bit on that in terms of why is this different? Thank you.

Well, Pablo, first of all, we're not levered. We're one of the most under-levered companies in cannabis. And second of all, I think we're buying at the right multiples and we're running a very decentralized model which enables us to move fast, integrate quickly and maintain local control. Our objective is to get every market to what we think is a sustainable long-term market share with meaningful tailwinds and that is 100 million, at least 100 million. So that's the litmus test. and that 100 million is not just a random number. It allows us to have the right leadership, the proper comp, so that we can run this decentralized model. And I'm just not sure that anyone else has done it in this way. So I don't see how we compare to others of the past.

Yeah, no, that's well-colored. Yeah, thank you very much. Very useful, thank you. And then just on the same topic, when you talk about you're not done yet, does that mean that you may go into other states also or just keep the 15 that you have right now and just gain depth? If you can expand on that, that would help. And related to that, you said that by 2027, it would be easier for people to get, you know, financials. Does that mean that you wouldn't be doing many deals in 2027? Maybe you want to explain that also. Thank you.

We will never say no to deals that are rightly priced. So we continue to evaluate every company that is out there. We're open to doing deals that make sense for the shareholders. Whether those deals are in existing states or new states, I explain how we think about existing states and new states. We think that a state can bring in $100 million in revenue, even if it's not immediate. We will be pursuing that state at the right price.

No, thank you. And then just, you know, if I may, and apologies if there's more people on the line here, I'm waiting on the Q&A queue. You were yesterday at NYSE, right, with the MSOS ETF people and other CEOs from several MSOs. You might want to share your impressions from that experience and what that means for the industry. Let's start with that first.

Yeah, great experience. You know, at Vireo we just, you know, we tried, we love everyone. So it was great seeing all the CEOs kind of come together. MSOS is really the only institutional pathway to meaningful liquidity. uh so obviously it's it's a meaningful platform for all of us we need to support MSOS um and i have a lot of respect for those guys so yeah it was a great experience um we we had great conversations and we got to meet some people that we just you know we didn't know prior to the event yeah thank you and one very last one um you know

very clear everything you explained in terms of how you're thinking or the strategy and expanding. But you have these other companies like, you know, Glasshouse talking all the anti, the dormant commerce laws, right? You have some more Canadian companies publicly saying that they expect interstate trade sooner or later in the US. Do you agree with that view that interstate trade is imminent after rescheduling? And if you agree with that view, How does that color or impact the way that you're building the company right now? Thank you. That's all for me.

Thank you, Pablo. It's not a matter of agreeing or disagreeing. What we do as managers is mitigate risk and risk is embedded in change. So what we do daily is evaluate how that change may impact our billion dollar platform. And of course, We have Plan A, Plan B, and Plan C. I will refrain from kind of using a crystal ball because I don't think it benefits anyone. But just being a student of other regulated industries, and cannabis is very, very regulated, both at the federal level and at the state level, I think change is fair to say that change will come slowly. And regardless, we are prepared to mitigate the risk that comes with that change, whether that's interstate commerce. Obviously, you know, we have a plan if and if or when this happens, but I don't think it will be anytime soon.

Yeah, right. Thank you very much.

Thank you. Good morning, guys. Just a couple of clarifications. I think I heard you said

7% same-store sales. Is that organic growth on the legacy assets, or what is that 7%? Can you clarify that a little bit?

It's organic growth in the legacy assets. We've been announcing same-store sales for the last few quarters, and that is organic growth, same-store sales. And is that

And is that a goal or expectation or based on these recent acquisitions or future ones, is that a good target or goal that you have in that range?

So I'm not sure that it's realistic for a platform with 270 dispensaries to have 7% same store sales year over year. But we would definitely target low single digits, of course, above the inflation rate. So that is my perspective. Being in retail my whole life, 7% in perpetuity is just not realistic.

Yep. Yep, that makes sense. Just wanted to clarify that. And one more clarification. I had a bad connection on the adjusted EBITDA margin decline. I kind of missed the reasons. Can you give more color on that and the expectations of that going forward?

The reasons are primarily, you know, Colorado. Obviously, this is a different market. We happen to think that Colorado is a mature market, and we understand the free cash flow coming from Colorado. is being non-volatile. Therefore, we see the Colorado margin around 20% being a long-term equilibrium for the industry. What has really impacted our overall margin is our agribusiness, which that is high single digits going to low double digits. and that's also, but our main assets have the same margins that they had. So limited licensed states have maintained very similar margins to the previous quarters. And going back to your other question about same store sales, we do expect, if you're asking if this was an anomaly, Actually, we are expecting same-store sales for the foreseeable future to hover around that level. It wasn't an anomaly.

Okay, but it's not a long-term target. It's just what's happening in the industry, in other words, or in your business.

I mean, if you take the best retailer... Long term for me is 10 years. So if you're asking me if we're going to have 7% same store sales increase year over year for the next 10 years, that's just not realistic. But if you're asking me if for the next 24 months, which for me is the short term, we're going to have growth in same store sales, I'd be inclined to agree with that statement.

Got it. That clarifies it for me. Okay, I'll jump back in the line. Thank you.

Thank you, Tom.

There are no further questions at this time. I will now turn the call back to John Mazarakis for closing remarks.

I just wanted to thank all the stakeholders for the support and have a wonderful morning. Thank you.

This concludes today's call. thank you for attending you may now disconnect