Welcome to the AYR Wellness Q3 2024 earnings call. Joining us today are AYR's Interim CEO, Steven Cohen, and the company's CFO, Brad Asher. Before we begin, we would like to remind everyone that certain statements from management during this presentation may contain forward-looking information for purposes of applicable securities laws and are based on management's current expectations.
These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by you as a guarantee, assurance, prediction, estimate, or definitive statement of fact or probability. Many of these risks and uncertainties are discussed in our most recent public filings, including our most recently filed annual information form and management's discussion and analysis, both of which are available to be viewed through the company's profile on SEDAR+ or EDGAR.
Numerous risks and uncertainties could cause the actual events and results to differ materially from the estimates, beliefs, and assumptions expressed or implied in these forward-looking statements and might not be expressed today. Numerous factors that will determine AYR's future results are beyond AYR's control and cannot be predicted at this point with any accuracy or at all. In light of the uncertainties inherent in any forward-looking statements, you are cautioned against relying on these statements.
While AYR may elect to update forward-looking statements at some point in the future, AYR specifically disclaims any obligation to do so except as required by law. During this presentation, we may reference non-GAAP financial measures such as Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin.
For a reconciliation of our non-GAAP measures to GAAP results, please see our earnings release posted in the Investor Relations section of our website earlier this morning, as well as on SEDAR+. With that, I will now hand the call to Interim CEO, Steven Cohen.
Good morning, everyone, and thank you for joining AYR's Q3 2024 earnings call. I'd like to start today's call by thanking the entire team at AYR for their assistance and support as I stepped into the role of Interim CEO. In the cannabis industry, every quarter is challenging, but we are committed to AYR developing sustained growth and profitability over the years. This will only be accomplished through improved execution and capitalizing on the company's presence in the best markets.
We're disappointed with last week's results on the Florida Amendment 3 initiative. Despite not achieving the desired outcome, we extend our thanks to the 56% or so of Florida voters who turned out to vote yes on 3, and also thank our partners in the Smart and Safe Coalition.
I do want to stress that Florida remains one of the largest cannabis markets in the world, with projected sales of roughly $2.7 billion this year, according to BDSA, and AYR is deeply committed to our medical business in the state. There is significant opportunity for organic growth in our Florida business over time, particularly as we bring online a 100,000 sq ft indoor cultivation facility in Ocala. Our Ocala facility complements our existing cultivation and production facility in Gainesville and addresses one of AYR's biggest deficits in the state: a lack of premium flower. We have historically underperformed on market share in flower, and our expectation is that the new facility will change that.
The Ocala facility will more than double our current flower production capacity, which supports future store openings and more robust menu offerings that, in turn, open us up to new types of customers even within the current medical market. The facility and ongoing build-out is fully financed through a sale-lease-back transaction with Innovative Industrial Properties. We anticipate contributions from the facility beginning next summer in 2025. Beyond Florida, we're focused on scaling our business in Ohio, where AYR was among the first operators to launch adult use sales in August via our three existing stores and wholesale business.
The launch of adult-use sales in Ohio resulted in an increase in both retail and wholesale revenues in the state during the Q3, even as the overall launch for the state was somewhat muted by temporary regulatory impediments that prohibit certain types of products, such as pre-rolls, as well as marketing and advertising. We expect a further ramp-up in statewide sales once additional form factors are approved.
In the coming months, we plan for further expansion in Ohio as we target operating eight AYR-branded stores open in the first half of 2025, leveraging additional licenses awarded as part of the adult-use rollout. As additional stores open throughout the state of Ohio in 2025, we intend to further scale production levels at our 58,000 sq ft Parma facility for cultivation and our Akron production facility to support our stores and wholesale operations.
In Pennsylvania, we continue to be optimistic about the prospects for adult legalization in 2025. Both retail and wholesale performance in the state's medical market have been challenged in recent quarters due to the increased competition pricing dynamics. However, the state remains one of the largest markets yet to convert to adult use and presents a meaningful growth opportunity for us in the future.
AYR maintains a robust vertically integrated operation in Pennsylvania with nine retail stores and two cultivation sites that are all primed to convert to adult use once legislation passes, without the need for meaningful CapEx investment. Meanwhile, in September, we announced receipt of a conditional license for exclusive rights to open vertically integrated operation in Virginia's Health Service Area 1 region. The region is one of five in the state and includes Charlottesville, Fredericksburg, Spotsylvania, and Stafford, representing a serviceable population of roughly 1.5 million people.
We're excited to operate in Virginia's medical market while closely monitoring any movement on adult use opportunities in the future. To date, we have identified sites for the dual-purpose cultivation and retail facility and five satellite retail locations, and we're working through the regulatory process to build out our presence in the state. Just yesterday, we received notification that New York State was awarding our New York partnership a Registered Organization license to operate in the medical market. That's good news for AYR and for the future of our business that should develop in New York as the New York marketplace begins to expand and grow.
Pivoting to our Q3 results, overall revenues declined 2.5% sequentially compared to Q2 results and were flat year over year. Despite lower revenue, we grew Adjusted EBITDA in the quarter and adjusted margin improved to 100 basis points sequentially to 22.9%.
The Q3 revenue decline reflected ongoing macroeconomic pressure on the consumer wallet as well as increased competition in a few of our key markets, particularly in New Jersey and Pennsylvania. These pressures offset growth from the launch of adult use sales in Ohio, wholesale expansion in Massachusetts, and the opening of new retail stores in Florida, Illinois, and Connecticut. While some retail weakness in New Jersey persisted due to increased competition, the larger drag on the quarter came in wholesale, with pricing and sales affected by new cultivation and production capacity coming online throughout the state.
In New Jersey, there have been more than 40 cultivation licenses approved in the past two quarters, and the number of operational product manufacturers in the state wholesale market is up four times since last quarter, leading to a more crowded and increasingly competitive wholesale market.
We're confident that we can return to our target of 25% EBITDA margins over time through continued operational enhancements, product development, and as growth catalysts come to fruition, which include further ramp-up in Ohio, contribution for the new Florida indoor cultivation, and the prospect of adult use conversion in Pennsylvania. We'll pursue additional cost reductions where possible, as reflected by our facility and corporate consolidation in Q3, which will provide roughly $16 million in annual cost savings moving forward. These cost savings are keyed to achieving greater efficiency without compromising performance.
As we enter the Q4, we anticipate a continuation of consumer wallet pressure driving value-based decision-making and competitive pressures, and thus we expect revenue and adjusted EBITDA to be in line with the Q3. Notably, we remain on track to generate positive cash from operations for the full year 2024. Finally, I'd like to touch upon recent management changes.
In September, we announced the departure of David Goubert, our previous President and CEO, and we wish him well in his future endeavors. AYR's board of directors has appointed me to the role of CEO. I appreciate the vote of confidence placed in me by the board of directors. I view my role as to ensure continuity of operations as the board identifies AYR's new permanent CEO. We've commenced a search, and the company will provide further updates when appropriate. In the meantime, AYR cannot be flat-footed. As we all know, cannabis is a dynamic and challenging marketplace. I am mindful that AYR must be responsive to the various markets in which we operate and to the opportunities as they arise.
I believe that one of my most important roles during my tenure will be to ensure that an excellent leadership team is in place and has the support to be successful. To that end, there have been changes made to the senior leadership structure, transitioning all revenue responsibilities into our two Chief Revenue Officers, Jamie Mendola and Julie Winter, in conjunction with Chief Operating Officer George DeNardo. George's role as COO was expanded to provide greater oversight of marketing and greater coordination with our Co-Chief Revenue Officers.
We have also given our Chief Technology Officer, Sarvesh Mathur, supervision over digital aspects of our marketing efforts. In all, these steps are designed to align responsibility and accountability. We are confident that the new approach will enhance our effectiveness and create a more nimble organization.
With that, I'll now turn it over to Brad Asher, Chief Financial Officer, to walk through the financial results before returning for closing remarks. Brad.
Thanks, Steve, and good morning. Q3 sales of $114.3 million represents a decrease of 2.5% from prior quarter and flat to prior year, coming in below our guidance, which called for modest growth due to price compression and macro headwinds across our key markets and a slower-than-expected ramp in the Ohio adult use launch. The price compression was pervasive this quarter, with BDSA reporting decreases across many of our markets, including approximately 15% price compression in Florida quarter over quarter.
While overall retail transactions continued to increase with a 1% increase this quarter, marking our third sequential quarter of transaction growth, overall retail sales declined 1.5% quarter over quarter, driven by a 2.5% decline in average basket size. Ohio retail has increased approximately 130%, resulting in an increased market share, with the overall market increasing closer to 100% since the adult use launch on August 6.
However, there were also lower-than-expected increases from the contribution of new stores during the quarter, including two in Illinois and our first store in Connecticut, which are still in customer acquisition mode, and we expect these to continue ramping through the Q4 and early 2025. Retail gains from these markets were fully offset by the impact of price compression and further competition across the remaining key markets. On the wholesale front, the sequential decline of $1.5 million was driven by an overall decline in MSO customer accounts across key markets, as the trend of increasing their own share of retail shelf space continues.
In addition, New Jersey wholesale took a step back as the overall number of cultivation and manufacturing operations in the state jumped, increasing the state-brand market share of non-MSOs from 18% in March to 31% in September, according to our calculations from BDSA market data.
And lastly, while Ohio wholesale increased sequentially upon the launch of adult use, the contribution came in below expectations, which will take longer to ramp as the new adult use retail licenses begin to open over the next few quarters. Q3 gross profit of $43 million represents a decrease of 9% and 11% compared to prior quarter and prior year, respectively.
Q3 adjusted gross margin, a non-GAAP measure of 52.8%, represents a slight increase of approximately 100 basis points compared to the prior quarter, as a result of Ohio adult use launch and increased utilization of the cultivation facility, and slightly higher retail internalization of 64.6% compared to 63.4% in prior quarter, and 190 basis points improvement when excluding Florida, as well as cost-saving initiatives. With regards to cost savings, we remain committed to driving efficiency and are fully focused on generating cash flow.
During Q3, we identified additional opportunities to consolidate operations, which allowed us to sunset a standalone manufacturing space in Nevada, as well as enter a sublease of our legacy Massachusetts cultivation space to a third party. While this resulted in $2.2 million of non-cash impairment realized during the quarter, streamlining these operations will contribute to immediate cash savings, and following the Florida vote, we are doubling down and accelerating further streamlining and cost-cutting initiatives.
Loss from continuing operations of $17.4 million represents an increased loss of approximately $9.8 million and $16 million compared to the prior quarter and the prior year, respectively. In addition to the $2.2 million impairment discussed previously, there were $7 million of severance expense during the quarter, which contributed to the increased loss. Approximately 90% of the severance expense relates to non-cash stock-based compensation.
Overall, annualized salaries decreased by approximately $5 million when compared to the start of Q3 to the start of Q4, inclusive of the actions to streamline operations as well as reduction in corporate headcount. These savings occurred during the course of the last several months and therefore will see more of an impact in Q4 than Q3. Adjusted EBITDA add-backs increased during the quarter, driven by the transition to sunset certain cultivation and manufacturing facilities, as well as non-cash inventory write-downs and severance costs.
However, it is worth noting that adjusted EBITDA add-backs, comprising acquisition and transaction costs, startup costs, and other, are still 15% below the prior year year-to-date amount. Q3 adjusted EBITDA, a non-GAAP measure of $26.1 million, is in line with prior quarter and approximately $2.3 million below prior year.
Adjusted EBITDA as a percentage of sales during the quarter of 22.9% was 100 basis points above the prior quarter of 21.9% and 200 basis points below the prior year of 24.9%. While this was in line with our Q3 guidance of improved adjusted EBITDA margins, we now anticipate margins to be roughly flat through the Q4. Moving to the balance sheet, we ended the quarter with a cash balance of $50.6 million, representing a $3.1 million increase from the prior quarter, primarily driven by positive cash flow from operations during the quarter of $16.3 million and free cash flow of $10.2 million.
The sequential increase in cash is inclusive of the $2.9 million of principal debt payments during the quarter, leaving approximately $4 million of principal debt payments in the Q4 and approximately $19.6 million over the next 12 months.
Year-to-date, we maintain positive cash flow from continuing operations of $19 million, and we continue to expect positive cash flow from operations for the full year. Year-to-date CapEx of $16.5 million is on track with the annual estimate of approximately $20 million. Looking ahead to next year, we anticipate CapEx to be at least 25% to 50% less and will provide a full-year target during the Q4 earnings call. In conclusion, this was a challenging quarter that fell below our expectations. However, we continue to tighten the belt on the expense side and remain focused on driving further efficiencies in the business. With that, I'll turn the call back to Steve.
Thank you, Brad. With a great footprint, pathways to growth ahead of us, and strong business leaders in place, we must now take further steps to become more effective in executing our business objectives. We are committed to enhancing the overall health of the business and ensuring that AYR is poised for sustainable and profitable financial growth. Thank you again to our entire team at AYR for their continued dedication and effort, and thank you to everyone for joining today's call. Operator, we will now open the call for questions.
Thank you. We will now begin the analyst question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. Analysts are asked to limit themselves to one question and one follow-up, and then return to the queue if they would like to ask more.
To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. The first question comes from Andrew Semple with Ventum Financial. Please go ahead.
Good morning. Thanks for taking my questions here. First off, starting on Florida, while I might understand that AYR would like some additional flower capacity in the state, I'm just wondering whether you're still thinking of building out that facility fully in line with your initial expectations before the vote, or maybe said differently, whether you still need the full 100,000 square ft new indoor grow, or whether that could be scaled back a little bit after last week's vote.
Hey, Andrew. Thank you for the question. Indoor flower is needed regardless of adult use. We have a clear need when you look at our market share for flower at around 6.5% in Q3 compared to oil at 12% and change. There's a clear opportunity for us to bridge this gap, and so we're going to manage the S&OP process very closely next year, but we're going to light up flower rooms gradually. We also don't expect pricing to recover in Florida, so we're going to need more inventory, and Ocala allows us to compete, so no change for now except for managing it closely and looking forward to indoor flower being a game changer for our stores next year.
Great. That's helpful, and then maybe just staying on the Florida topic here, it looks as if some other Florida-based operators might have been building inventory positions within the quarter, so maybe if you could just comment on how you might be planning to navigate that market in the near term, if any of that buildup arrives on markets and likely causing some pricing pressures, how do you plan to navigate maybe the near-term volatility in the Florida market?
Yeah. Look, it's been very competitive to date, so we expect it to continue to be. We're comfortable competing. We're hoping that the market stays rational in terms of pricing, but with Ocala, it allows us to compete with more inventory. We've been also competing with one arm tied behind our back without indoor flowers, so this will be a big difference for us. And we also have a low cost basis in Florida, which allows us, again, to be competitive on the price front.
Let me also jump in here at Steve. I think there's a certain reality that is now going to affect the market in Florida. As you approach the vote, there was a slowdown, a natural slowdown in the number of medical card signups and renewals that were going on in anticipation of what people believed to be, and in fact, 56% of the people wanted to be, an adult use market. Now that we know that that adult use market is not going to be realized, at least for now in Florida, there's an expectation that those potential customers will begin to go back to the medical use process and that there will be an increased demand. Admittedly, it'll be a slow ramp-up, but we are robust in believing that the Florida market is still a premier market and one in which we can excel.
Thank you. The next question comes from Russell Stanley with Beacon Securities. Please go ahead.
Good morning, and thank you for taking my question. Just following up on the comments regarding CapEx expectations for 2025, I'm wondering if you can talk to your expected pace of build-out in Virginia in particular in that context. Thank you.
Yeah. CapEx for 2025, it's going to be overall, I'd say, retail-heavy. We are expecting it to be, as I mentioned in the prepared remarks, about 25%-50% below the current run rate. Between going from three stores in Ohio to eight and building out to six stores in Virginia, it is going to be retail-heavy. In terms of timing, we mentioned first half of the year for Ohio, and on Virginia, we're looking to move as fast as possible. We're working closely with the regulator to do whatever we can to get those stores open as soon as possible, but don't have more specifics to share on timing just yet.
Great. Thank you on that. And maybe on my follow-up, just on your sales of AYR Brands, your vertical mix at 65% ex-Florida, just wondering where you think the upper bound of that might be, understanding it'll vary by state, but wondering how much more room for improvement there is on that number and which markets might offer the most room for growth. Thanks.
Yeah. We like our balance today. We think it's a healthy balance. Outside of Florida, there probably is room. I think we're at 44% excluding Florida. We can probably get that up to 50%, which would bring us closer to 67% or 68% overall. So we do think there's a bit more room there, but overall, we're pleased with where we stand today.
Thank you. The next question comes from Frederico Gomes with ATB Capital Markets. Please go ahead.
Good morning. Thanks for taking my questions. In regards to Ohio, you have an additional five stores to open there. We know that other players are also planning to open additional stores. So I'm just curious about your outlook for that market, considering these new stores being open. Is it more of a retail or a wholesale opportunity for you at this point? And do you see any risk of that market getting more and more competitive and saturated, as we've seen with some other markets as well? Thanks.
Yeah, so for us, we're looking at it as both a retail and wholesale opportunity. We have a significant cultivation presence in Ohio that we've been ramping gradually. As the market grows, we see it more of a market expansion story rather than these new stores cannibalizing existing stores. If you look at it from a population, 21-plus population to sales perspective, it's still less than half of the average of our other markets. So we do see the market continuing to grow and the new stores really accelerating that growth next year.
Yeah. Let me just say also in Ohio, it is a place where I think we have been incremental in growth and thoughtful about where we've expanded, and you're beginning to see the benefit of that. Ohio is, unlike a lot of other states, I think, operating as a more mature marketplace, and the expansion there and the opportunities there for us are obvious, and I think are a good example of a place where we were poised to grow, and we are, in fact, growing, as evidenced by the startup under the new licenses and the new regime.
Thank you. And then second question, just going back to Florida, just considering the new indoor facility that you have there and heading to next year with additional production, and also considering the competitive environment here and the pricing pressures that you're seeing, in terms of new stores and just expanding your retail footprint, what should we expect heading into next year as you bring up that capacity online?
Yeah. Longer term, we have spoken about wanting to maintain about 10% door share. That is still the longer-term strategy. We haven't committed to a specific store count for next year yet, subsequent to the vote, but we'll be reassessing and over time certainly continuing to add to the state. Right now, we're prioritizing the highest ROI projects, which are Virginia, Ohio, and the other CapEx that we're already committed to.
Thank you. The next question comes from Matt Bottomley with Canaccord Genuity. Please go ahead.
Okay. Good morning, everyone. We're going to move to Pennsylvania. So a bit of one of these crystal ball questions, but it seems like when all the MSOs and operators talk about Pennsylvania, there's always this plus one year rolling expectation of a market launch, which has happened for some time. So I know no one can control this within the operators, but I'm just curious because we've seen some headlines about legislators wanting to push something through, but really, what are sort of the puts and takes, in your opinion, of a real shot at this thing potentially getting some traction buy into 2025 at some point?
Yeah. So with respect to Pennsylvania, I mean, first of all, I would stress, given that we are just a few days after the Florida vote and sort of absorbing what it means, there's a lesson learned, which is politics is complicated, and it's not necessarily driven by what may be rational expectations of the marketplace. It's driven by a whole series of political concerns and needs of the voters.
Now, with that said, I don't want to make the mistake that others made with respect to looking at Florida and saying effectively, "Oh boy, this is a done deal." Nothing's a done deal when you are relying upon elected officials. But with that said, I think there is, for all sorts of reasons, including a strong and supportive governor in Josh Shapiro, a good probability that adult use will become a reality in Pennsylvania.
And I think that we are among several MSOs that are poised in that state for a variety of reasons. So we remain guardedly optimistic. Now, I want to stress, though, the word guardedly. Again, the mistake that, at least from my perspective, you want to avoid is relying upon things you can't control. We can't control the legislature, but I do believe that the conditions are right and that there is, again, as I said before, a very good probability that that marketplace and adult use will open up in Pennsylvania.
All right. Got it. Thanks. And just my follow-up, just sort of on the balance sheet and on the P&L, just two quick questions. One is just with the $50-plus million you have on the balance sheet outside of CapEx, if there's anything else earmarked from an operational standpoint that that's needed for, it looks like your free cash flow is pretty much break-even. And more on the operational side, that 100 basis points quarter-over-quarter improvement in your Adjusted EBITDA, I'm just wondering if you can speak to that in a little more granularity. I know you commented that 25 is the target, so am I to assume there might be some volatility there? I don't want to put words into what you said.
Yeah. Just to hit your first question on cash, I mean, nothing that's not already reflected in working capital, which as of 9/30 was positive $70 million. On the margins, I'd say the 100 basis points shift is a bit narrow to explain just due to the variability in product mix and inventory valuation. But in terms of how we're countering price pressure during the quarter, we had a few positives that helped counter that, including the Ohio adult-use launch, which is a higher margin state and also a larger mix of sales.
I believe price expanded in Ohio about 30% quarter-over-quarter, according to BDSA. And then, as I mentioned in the remarks, expense savings as well, which we're constantly revisiting and approaching the 2025 budget with zero-based budgeting mentality. And then there was also a slight uptick on internal shelf space. And lastly, getting sharper pricing on third-party product at retail as well.
Thank you. The next question comes from Bill Kirk with Roth MKM. Please go ahead.
Yeah. Good morning. This is Nick on for Bill. First one for me, just wanted to unpack the Virginia opportunity. It seems like there's more focus being put on that market just from an industry standpoint too. Wanted to get your sense of the path to potential adult use sales there. It sounds like it's being pushed out a little bit, but any color you have would be helpful. Thank you.
We do believe it is a real opportunity. It is a reality separate and apart from us that Virginia has areas that are either underserved or not served at all, and that the opportunity to be in a market like that is obviously a positive one. However, and again, you're going to hear me repeatedly echoing words of caution. You walk into something like this marketplace overall, and the one lesson you do embrace is that maturity and thoughtfulness, incremental growth are very important.
And in Virginia right now, our opportunity very much is wedded to being able to work through with the regulators a timeframe and what the specific obligations are for us to move forward. So without more understanding right now of what that looks like, it's hard for us to reasonably predict how quickly we're going to be able to ramp up in Virginia. The opportunity is there, however, and we are moving to take advantage of it as swiftly and reasonably as possible.
I appreciate that color. And second one for me, just on Florida and your current product assortment there, how do you expect that to evolve kind of here over the next 12 months as your indoor capacity comes online? And just what do you expect the premium category to represent in terms of mix in Florida as Ocala ramps? Thank you.
Yeah. So we see the Ocala addition as really incremental to our current offering and our current SKU variety. And I pointed out the disparity we have in market share. It's roughly 2x on oil. So we've been a well-run oil machine, and this is going to be a good opportunity to balance that out. I think there's other trends to call out in terms of improvement. We've seen in edibles and gummies, we started, I think, probably at 3% of our product sales mix last year.
We're at 8% today. We still have room to go to get to the state average and above. So we've seen good improvement there that's also helped counter some of the pricing pressure. But I do think that the indoor flower will be a premium offer from the pricing standpoint that will also help counter pressure that we expect to see next year.
Thank you. This concludes the question and answer session. I would like to turn the conference back over to Steven Cohen for any closing remarks.
Thank you. I just wanted to take a moment to once again reiterate my appreciation for everybody at AYR, but everybody also outside the company who has been so supportive. I did not look for the opportunity to be the Interim CEO, but in this position, I think there are real opportunities with respect to this business. This business has gone through a series of leadership changes that overall, I think, have been productive but have led to a kind of, and I'll acknowledge what it is, a sense of instability that is coming to an end now. What this company needs and what this company is going to embrace is mature leadership and thoughtful growth, and it starts internally.
We have, among the folks who have been with AYR over the years, professionals who know the industry and know their business, and they need to do their jobs, and they need to be put in positions where they are allowed to do their jobs. That was the point of the personnel changes I made immediately upon taking this position with the full support of the board. We now are in a place where we have a fully engaged board of directors.
We have a leadership team in Brad Asher, our CFO, George DeNardo, Julie Winter, Jamie Mendola, who understand this business and understand the opportunities and the hard choices that need to be made. There is nothing easy about this industry. That's what we all have chosen by working in this industry.
But there are tremendous opportunities, and we are here to ensure that we navigate appropriately and that we provide for our shareholders the kind of value that they have a right to expect and also to do the same for our customers. With that, I want to thank everybody. I want to, in particular, thank those of you who have dialed in or logged on for my premier earnings call. And I want to thank you all, and I look forward to talking more in the future.
Thank you. This brings to an end today's AYR Wellness Conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.