Good afternoon, ladies and gentlemen. I would like to welcome everyone to Grown Rogue International Inc.'s first quarter 2026 results call. As a reminder, during the course of this conference call, Grown Rogue management may make forward-looking statements based on current expectations, estimates, and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks are described in the Risk Factors section of the company's filings and other public disclosure materials. Any forward-looking statements made on this call speak only as of today, and Grown Rogue undertakes no obligation to update or revise them in the future, except as required by law. During today's call, we will also refer to certain non-GAAP measures, including EBITDA and adjusted EBITDA.
These measures do not have standardized meanings under GAAP and may not be comparable to similarly titled measures used by other companies. Grown Rogue believes these measures provide useful supplemental information to investors, but they should not be considered a substitute for non-GAAP measures. A reconciliation to the most directly comparable GAAP measures is included in the press release issued earlier today. After the speaker's remarks, there will be a question and answer session. I'll turn the call over to Obie Strickler, Chief Executive Officer of Grown Rogue. Obie, please go ahead.
All right. Thank you very much. Thanks everyone for joining today. Today's gonna sound a lot like the update we gave about a month ago, both because it wasn't that long ago and also 'cause we've been head down kinda, you know, executing our growth plans with Phase II in New Jersey, the activation of our new project in Illinois, and the construction in Minnesota. One topic I did wanna talk about, and I'd be remiss not to spend a bit of time, is the recent DOJ announcement on April 23rd. You know, you've heard us talk, and as we noted previously regarding, you know, federal regulatory environment. We stay educated with a willingness to make appropriate pivots.
As we stated for years, our focus is to continue building a business that's resilient and successful regardless of what happens with the federal legalization and the framework that's, you know, coming about. Like many in the industry, we're super excited about the prospects of these announcements and, you know, trying to make sure we stay calibrated to specific opportunities that arise for us to capitalize on these shifting landscapes. For us, we really like our existing business and our growth plan. You're not gonna see us make any, you know, big bet-the-company pivots or spend heavily on, you know, speculative paths while, you know, uncertainty still remains quite high. That said, we're from Oregon, and we've long daydreamed about leaning into kind of the Oregon outdoor roots and having access to interstate commerce.
After the recent announcement, we obviously spent a bit of time educating ourselves around the opportunity, talking to different folks. While we don't anticipate interstate commerce coming anytime soon, you know, we're definitely taking some measured actions around this, mostly because the cost and then the time suck is gonna be pretty low. Last week, we submitted and received medical licensure in Oregon. As some of you may or may not know, we already have medical licenses in the state of Michigan. Now the next step is we're working through, again, since the cost of the DEA registration is low, of registering our state-sanctioned medical licenses just to make sure that we're, you know, have the ability and can maintain the optionality, you know, as these kind of, you know, rules and, you know, different things kind of evolve.
One of the benefits of being in Oregon and we anticipate and are confident the state of Oregon will be a cooperative partner if these paths kind of emerge as credible. For those of you that may or may not know, and as a reminder, you know, Oregon passed kind of pioneering legislation, I think back in 2019, Senate Bill 582, effectively, you know, designating and allowing Oregon to enter into interstate cannabis commerce pacts or agreements with other states. That was, you know, of course, contingent upon changes to federal law, which is now maybe coming to fruition. Enough on kind of the, you know, speculative stuff and, you know, again, our goal and our time is best spent making sure we execute upon the pretty demonstrable growth plans that are right in front of us.
Core message to leave everyone with today is that our business and projects remain on track. You know, we've been talking about this for six months. We've talked about it on the last call just one month ago. All that stuff stays on schedule and on track. In New Jersey, we'll be harvesting the first flower room that we built, this is flower room five, later this month as part of our Phase II expansion. Still expect to have the rest of our flower rooms fully completed at this facility by the end of the year. Right now we're in the midst of a small power upgrade that will support those three remaining flower rooms. Yeah, looking forward to getting that done and having that facility fully constructed in 2026.
In Illinois, which is in Dwight, we are continuing to work on, you know, kind of the modest infrastructure improvements. As you remember, we took over a fully operational and built-out facility. Obviously working with local and state governments to get the occupancy approvals we need to, you know, move plants into the building. Anticipate this being completed this quarter, so still on track with what we originally thought and, you know, just continue to work aggressively to get that done. Technically, you know, we're definitely ready, team's ready, you know, all the systems are in place. Really it's just into regulatory timing and approvals, and as we know, sometimes that cannot go, you know, directly according to plan. So far, everything in working with them has been very positive.
Minnesota is in active construction and still targeting occupancy and plants in the building in late Q3. Team is obviously working diligently across technical planning. You know, Mark, our VP Construction, you know, obviously leading the construction process down there with, you know, all the different aspects that go into getting a facility up and operational. If you've had time to look at the press release, you'll notice that we modestly increased our revenue guidance for the year, mostly tied to the fact that we entered the year with some heightened uncertainty with respect to performance in Michigan, with the implementation of that new punitive wholesale tax. We're pleased with how we've been, you know, seeing the market respond in, you know, March, April, and May.
January was a little goofy with kind of the big December as people were trying to get in front of that tax. Very pleased with how we're seeing Michigan kind of evolve. You know, you saw in some of our KPIs just the, you know, yield improvements and just the efficiency that's happening in that state. I'd also like to, you know, kind of verbally add on this call, and, you know, we didn't put it in the print, that we strongly believe we'll be at the higher end of our adjusted EBITDA guidance. Again, off to that, leave that unchanged. We work to get our, you know, new rooms productive in New Jersey and also, you know, finalize our, you know, Illinois regulatory approval, you know, over coming weeks and month. Obviously, this is a big lift for the team this year.
You know, we talked historically a lot about, you know, how many projects we could take on in a year, and this year we're doing a couple of them. You know, I'm sure the team will be glad to tell all of you that I won't let them get enough sleep until we have plants in the building in Illinois and Minnesota. That being said, I talked about on the last call as kind of the entry and the opener, you know, the caliber of the team we have, their drive, intensity, passion actually doesn't require much poking from me. It's just truly a blessing, and I think about this every day. They're such a motivated team, you know, focused on achieving our goals collectively. Some more general updates.
You know, we're a flower forward business, and we continue to look at ways to stay true to that. We're also providing new products to our loyal customers. Recent launch of vape carts in Oregon is a testament to that. Strain-specific products, so we can provide the same kind of Rogue flower with just a different experience. Very excited about what that's going and, you know, the first kind of iterations of market and consumer feedback's been very strong, and we're starting to, you know, scale that kind of business segment up a little bit in Oregon. While we're doing new products in the Grown Rogue way, you know, measured and disciplined, you know, developing quality, product fit, you know, and market demand before we scale aggressively. Again, the feedback has just been exceptional, so, you know, very excited about that.
Also kind of the, you know, we have like social and, you know, across multiple states now, and then hearing some of the feedback from consumers in the other markets after seeing that launch of vapes in Oregon, you know, asking for those products. Starting to see kind of, you know, where the brand's going and kind of some of that, you know, just, consumer loyalty that we're building. Continuing to invest in the brand and, you know, take our high quality, low cost foundation and ensure, you know, the brand matches kind of our core foundation of, you know, high quality, low cost, you know, flower production. Particularly proud, and you guys will see this in the KPIs, of the 97% package sales number in Jersey this quarter.
You know, we might expect a little bit of that to move around as we bring on more capacity, but really kind of confirming, like, the ability of our brand to hit the consumer kind of demand in that state, and it's a very exciting kind of number for us. You know, we've been under price pressure in Oregon and Michigan for quite some time, and not to jinx us with any kind of, you know, ourselves internally or whatnot, and it's only a few months of data, but we are starting to see some early signs of pricing recovery in Oregon. You know, we've been through several of these cycles in these mature markets. I think this is the third one we've seen in Oregon.
Kind of an interesting anecdote is, you know, when we started Grown Rogue, like I was the person in Metrc. It was literally my cell phone that we gave to the state for licensing, I'm still on all of, like, the state databases, Metrc manifest, things like that. Yes, I know I need to change that. For years, like as, you know, it actually acts as a very interesting signal to market conditions. As I get all the random outreach from people in the market, you know, coupled with thousands of spam calls a day. Just kidding, it's not that many, but spam calls definitely suck.
What you see is during times of supply and pricing pressure, what I get is the inbound texts or calls from people asking us if we will buy their product since we have, you know, wholesale licenses in the state and we're well-regarded in, you know, this jurisdiction. You get the opposite during supply waning and pricing recovery. Recently we've been seeing more inbound requests looking for product availability, and we started to see this like uptick of ASP, you know, particularly towards the end of March, and definitely in through April. Again, while things change quickly in these markets and, you know, the six weeks of kind of pricing recovery, you know, in a demonstrable way is, you know, it can change quick.
You know, if it continues, it's going to bode very, very well for us what we're doing in Oregon. We also continue to augment our existing facilities with inexpensive upgrades and improvements. We have completely retrofitted all of Oregon with LEDs, which is our lighting technology. Sorry, I just got distracted there for a second. These lights create a higher quality and more consistent product and just, you know, super excited to watch kind of the difference over the last couple of years. You know, improved yield, improved quality, improved consistency. As we talked about kind of over the last, you know, three or four months, you know, we're also seeing some of the fruits of our small technology improvements that are really starting to drive yield.
We trialed these in Oregon starting maybe, I don't know, 18 months ago, just to go through our kind of R&D process, and then rolled out that concept in Michigan the middle of last year, where, you know, you can see the yield improvements in the KPIs. I think we're averaging 82 g a foot over the last couple of quarters, you know, which is a 20%-30% plus improvements to kind of the historical yield kind of environment that Grown Rogue's operated in. Expect to have Michigan fully outfitted with this technology this year, and then we have ordered and are implementing and installing this in about half of the Oregon indoor business, just as we continue to roll this out to keep driving quality, yield, and consistency across the organization.
New Jersey is really starting to hit its stride, you know, with more consistent execution. With the completion of Phase II, you know, we'll also be able to fully amortize our fixed costs against, you know, essentially twice the production capacity. We expect to see some meaningful improvements in both yield and cost as we move through 2026 and into 2027. We also, you know, going back to brand and kind of how we're starting to interact with our, you know, that portion of our business. We had our first brand party earlier this month in New Jersey, and it was a huge success.
I think we had over 500 people attend. Coupled that on the back end at this thing kind of, I think it was MJ Unpacked. You know, Grown Rogue won a couple more awards in the state. We got first place for our indica flower, and then second place for the non-infused pre-roll category in the market. This is on back of the awards we won, I don't know, six or eight months ago at the Miss Grass competition. You know, just again, overall positive quarter, excited about 26. With that, I will pass it over to Josh.
All right. Thanks, Obie. I have not all that much to add this quarter. I mean, much like Obie referenced, we covered a lot of ground last month. One anecdote that is fun to share, and it dovetails to Obie's comment around New Jersey here, and this ties into something that those that have heard me talk about brands and cannabis before, reference, is we had a handful of folks at that party actually get Grown Rogue tattoos.
My rule of thumb for cannabis brands is that you don't really know if you have a real brand in weed unless either, A, your product is being sold for a premium illegally in New York City bodegas, and actually you get a little extra bonus points if it's counterfeit product from a branding standpoint, or B, your fans put it in permanent ink on their body. Thought that was a fun anecdote for the team. It was, I think, six folks, one of them being an employee, they probably don't count, but nonetheless. Yeah, I'd still suggest that Grown Rogue is very much a sales-driven culture more than a marketing-driven culture, but it's fun to see the growth and acceptance of the brand.
The roots and quality have always been there, and it's just great to see the greater recognition. I'll wrap up my very short comments by noting that I'm still spending a lot of time evaluating and pursuing distressed opportunities. It's this work and networking that led to our Dwight, Illinois opportunity. These opportunities are episodic and very difficult to handicap with respect to timing and ultimately whether we can or want to get them to the finish line.
The underlying theme is bringing our capabilities to underperforming or overbuilt infrastructure, and that by getting the efficiency and quality of cultivation right, we're able to fix the engine of the supply chain. We're great at what I think is the hardest part to get consistently right, ultimately, we're in the enviable position of not needing to do anything, as our existing path is a strong one as it is. With that, I will hand it over to Andrew.
Thanks, Josh. We appreciate everyone's patience while we've navigated all of the GAAP conversion requirements, including most recently the refiling of all of our 2025 historical quarters under GAAP on SEDAR, which was finalized back on April 30th. We'll also be providing restated trailing four quarters of adjusted EBITDA in the next version of our investor deck as well. These quarters weren't audited, and there may be some accounting noise related to the conversion. As we go through 2026 comparatives, we'll do our best to quantify anything causing any unusual comparisons. Our team is excited to be done with what was a compressed first quarter filing timeline coming right after year-end as well as the quarterly restatements.
We're excited to move forward under normal calendar quarters under U.S. GAAP in addition to all the support and growth we have with the initiatives Grown Rogue has on its plate this year. I also want to highlight that our trailing KPI metric, specifically our cost per pound metric, has been recast to properly remove sales, admin, and packaging costs in an effort to express the most comparable metric of cost to sort our product across all of our markets, which normalizes significant differences related to the sorting and packaging process. We had a modest cleanup of that metric from our previous disclosure. Finally, I'd like to speak briefly to how we're treating the new 24% excise tax in Michigan. This tax only applies to adult use sales, so the full 24% burden isn't felt by our operation.
In conformity with most of our peers in Michigan, we've chosen to invoice out the excise tax, effectively passing through to the customer in the invoice. However, as you could expect, there is some negotiation that goes on there with customers, and often we're forced to reduce our underlying price on the cannabis to compensate. Our ASP and KPIs isn't exactly comparative to historical periods due to the fact that they're, you know, oftentimes we're splitting the baby with the customer in terms of who's taking on the burden of the tax. We are ultimately required to pay this excise tax to the state, and therefore our overall profitability was impacted in the first quarter. Margin will be lower on a comparative basis moving forward as we deal with paying this tax. With that, I'll pass it back to Obie.
Great. Thanks, guys. At this point, we'd love to open it up to questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, press the pound or star key followed by two. If you are using a speakerphone, please lift the handset before pressing any key. One moment, please, for your first question. Again as a remainder if you wish to ask a question, please press star one on your touchtone phone. Your first question comes from the line of Jerry Derevyanny. Please go ahead.
Hey, guys. Great quarter, as they say. Could you guys, noticed you guys talked about a little bit of CapEx that you guys put in, you know, for technology from Michigan and, you know, going to Oregon. Can you give a little bit of color on kinda like what the magnitude of CapEx spend is and then the kinda returns that you guys are getting off of it? It would be interesting to get that as a data point.
Yeah, good question, Jerry. The magnitude of the CapEx is measured in low $100,000, you know, across each facility. I think we spent 60-ish to get half of Oregon, maybe a little bit more than half outfitted. Call it, you know, less than $150,000 to kind of get this technology improvement installed. We think it should have a 20%-30% yield increase as just like a bottom-line like improvement. That does not include, you know, more consistent product, you know, better quality as you get from some of these improvements, especially the LEDs going up top, which is not part of the technology improvement. Just a better experience for our customer.
You know, you take 20%, 30%, you know, amortize that over the production footprint that we have in place, you're talking a material improvement in pounds produced. I mean, if we're doing 1,000 lbs a month in Oregon, maybe a little bit more, 20%, 30%, you're adding 200 lbs - 300 lbs a month. Our team estimated the return on investment on that is measured in, you know, like a couple cycles or a couple harvests once you get those installed. It's, it's probably, and I was talking to the team about this, arguably the most interesting technological improvement I've seen in cannabis in my career in terms of just low cost, high return. It's pretty awesome.
Great.
Yeah. Obie, if I could just add one quick comment, Jerry, before. I think there's kind of a anecdote that goes along with this a long, long ways on this, because in true Grown Rogue fashion, we're able to use used equipment a good portion of the time, or at least purchase but not fully implemented equipment a good portion of the time.
Then the other side of it, because this is part of the internal dialogue, is, you know, there's the implicit return that you have from using this, using these improvements in the mature markets, but also getting the reps tying in these practices and adapting into, you know, the new markets as they come online is also part of this equation over time in terms of just, you know, doing this work. Because it's so cost-effective on the front end, you know, it also has that secondary benefit as we go forward.
Yeah. We expect to, you know, roll this out across the portfolio. I mean, there is changes to your growing practices. Not to get too technical, but, you know, with added production, you get different watering rates, so your fertigation prepared for that. You know, is your mechanical system set up for that? The way you manage the plants is gonna be different, so you gotta train your team a little bit. We always talk about, you know, there's 50 levers in cannabis that you play with when you're doing, you know, production properly, and you can never change just one. You know, you gotta move all the levers a little bit to kind of just get back to that kind of excellent kind of output and, you know, performance that we expect.
Can you give any kind of early indications on how the vape launch is going? You know, if you could talk about what margins look like there. I'm not sure if you guys are in-housing it or tolling it. What you guys need to see out of Oregon to push that product into Michigan and to other markets?
Yeah. I don't have great margin data on it. I mean, we're using, you know, and a lot of companies do this, but we're doing it in the Grown Rogue fashion. We're outsourcing the production of the cured resin product. Again, it's strain-specific. We don't have that infrastructure in-house, and we may or may not decide to build like C1D1s for processing. Using a third-party manufacturer, we launched very, very lightly. I think we had, you know, and we think of things in pounds, but like 10 lbs of vape carts. You know, what does that translate into, 1 g per cart or a half gram? You know, call it 20,000 cartridges or something like that.
We did that because, again, we want to just define that there's a market before we invest heavily in packaging infrastructure, you know, all of those types of things. We send the product up, it gets, you know, made into the oil, it gets loaded at this third-party manufacturer, and then the cartridges get sent back to us, where it goes into our packaging. You know, our team does that, our sales team is obviously distributing it. The initial response was fantastic. I think, you know, the first order was, call it this, 20,000 carts. We will probably double that, you know, in this next order that's going to come up, with the goal of establishing, you know, a six-figure kind of business in the vape cart, you know, space inside of Oregon. You know, a couple of things.
We are looking at rolling this out into the other markets. There's some early discussions going on in Michigan, again, with a third-party contractor. You know, we're patient when it comes to these things. We don't wanna rush it. We wanna make sure the quality specs are there. When you're relying upon third-party contractors, you also want to make sure that they're gonna meet your standards. So you got the reliability that our customers have, you know, come to depend upon us for. Also sustainability of that. You don't want to go in and out of the market with products, and so you want to make sure you've got a, you know, a manufacturer that can kind of meet your demand requirements.
You know, doing it in Oregon the Grown Rogue way, having discussions in Michigan, you know, because again, the response has been so good here, and we were getting, you know, feedback, you know, from customers in other states saying, "Hey, when are you gonna have that product for us in Michigan? We love your flower. We love your pre-rolls. We'd love to have your flower in a different form factor." In early discussions in New Jersey, you know, thinking about how we just continue to, you know, expand our product portfolio, you know, into these markets and, you know, attract, you know, existing and, you know, new customers into what Grown Rogue's offering.
Okay, great. Thank you. Appreciate it.
Yeah, of course. Thank you for the questions.
Thank you. Your next question comes from the line of Aaron Edelheit from Mindset Capital. Please go ahead.
Hey, guys. Thank you for just sharing all the very clear, concise data. I had a question, specifically when I look at the A -flower yield in New Jersey, and I compare them to Oregon or Michigan. It's lower. Is there any reason why? Is it just the first starting of New Jersey, or do you need to be fully built out to get a higher quality of flower out of New Jersey? Is there any reason why that wouldn't eventually be where Oregon and Michigan are?
There is no reason why it should not get to Oregon and Michigan standards. You know, obviously, you know, deploying our system into new markets, you know, it's a process, right? You gotta get a team trained, you gotta make sure, you know, your genetics are spot on, that you understand your facility. We like the improvements we're seeing there. You know, I would say my expectation is by the end of this year, as you get You know, there was staffing challenges in Jersey, which everyone faces there because the badging process takes so long. There was times when we'd have two months between hiring someone and then being able to come into the facility.
You know, little things like that just, you know, create, you know, timing kind of gaps with how you care for your plants and things like that, which drive the yield. Yeah, there's no reason why we're not gonna hit those numbers, and our expectation kind of internally is, you know, by the end of this year, we should be kind of getting closer to, you know, that 65, 70 g of sq ft of total production with, you know, A kind of ratios in the 45g-50 g, you know, kind of a sq uare foot range. That's the expectation in kind of markets that don't have that technology improvements, and confident that Jersey will get there, you know, as we kind of navigate and, you know, kind of fine-tune everything in 2026.
When I compare Michigan to Oregon, I see the technology improvements you've made in Michigan gets a greater flower yield per gram. It doesn't seem like the A -flower yield is that different. Can you explain just the nuance of that? Do you expect the A -flower to go up eventually in Michigan?
I'd wanna look at the KPIs going back a little bit, but I think in Oregon we've always had a slightly better A -flower kind of ratio. Like, that's home base. That's where our best talent is, which is where we pulled a bunch of that talent out. The team behind them was ready to step into it. I'd want to look at the kind of, you know, the gradational period over the last, you know, call it two years. I think you see a material, a material increase in total yield that maybe skews a little bit more towards B -flower.
We've seen a pretty strong kind of, you know, return on both that side. I think what you're seeing in Oregon is just a better outcome of A -flower production. You know, as we install this new technology there, I think we'll see that grow, with the overall yield improvements.
Gotcha. In terms of Minnesota, your I mean, I saw your update and your comments. You'd start planning Q3 sales, sounds like January or so. I've heard reports that people are, like, contracting in advance, that, you know, we've done due diligence checks, that there's stores just very short of flower. Do you have any commentary or just how you're thinking on, it sounds like it'll be a very different kind of entry into the market than New Jersey, but do you have any thoughts on how you plan to turn that on? Is there a potential to have kind of like off-take agreements or contracts from people because the market's so short? Any commentary on Minnesota would be helpful.
Yeah. I think all of the above. You know, we're very excited about Minnesota. I saw something today saying that there's now close to 100 dispensaries or retail that are opened in that state, so you're seeing the retail turn on. There's obviously still very little product. We've had a few interactions with some of the retailers, but we don't wanna get ahead of ourselves. You know, part of the planning for a new state is not only construction and technical and, you know, market launch, but it's also the team, right? You know, we're making a lot of the changes. Again, we talked about this last call, you know, just the benefit and value of our team is our GM from Oregon, who's been with us for years, was our sales director to start.
I think we hired him in 2021. He's gonna move to Minnesota. He's gonna be out there next week. He's starting to do some due diligence in the market, starting to kind of understand, like, you know, what that landscape looks like. I think over the next, you know, month or two as we prepare for, you know, the TCO, which is, you know, the occupancies and getting the state licensure, you know, knowing when our plants come in, we got a couple of months before they'll be ready for sale. Like, starting to have those conversations, building relationships with the retailers. We'll know a lot more, you know, over the next two, three months, as we get prepared for actual physical product to be sold. Again, all signs point towards, you know, a very kind of product-constrained marketplace.
As we know, there's not a lot of capital in the space right now. You know, we're not seeing big grows come online. The way they built their regulatory structure is somewhat restricted for kind of the more well-capitalized larger companies in the space because there's limited retail kind of access. We're excited and confident that, you know, we'll be one of the first kind of independent scale operators in that state with a high-quality product that we can give to the customers there and, you know, help kickstart that market. Yeah, super excited about it.
Is there any chance that you could also launch a vape product in Minnesota, or would you need to partner with someone? How do you think about that with the early success in Oregon and that it's such a new market in Minnesota and potentially grabbing market share? Do you have any thoughts on potentially or how aggressive you might be in launching a non-flower like a vape product in Minnesota?
Haven't given it a ton of thought because our focus again is on the core business. Our license does not allow for manufacturing. Like in Oregon, we have all the licenses, wholesale, cultivation, processing. In Michigan, we just have cultivation, you know, which is why we're using the third party. In Michigan, you can take the product back and then self-distribute. In Jersey, for instance, you can't do that. We have a manufacturing license there that's not active. When you outsource it to someone to make the product, you actually physically can take it into your vault. There's a little bit more logistics. I think the same answer in Minnesota, you know, we'll look for the right partners. We've had some discussions with manufacturing license holders that may be thinking about co-locating inside of our building.
If people remember, we got 109,000 sq ft, 110,000 sq ft. Obviously that's 'cause we have a 30,000 sq ft canopy potential there, which is about double what we have in most of our markets. The opportunity for increased flower production is really high. We'll definitely be looking at that, and you're hitting the right points, which is, you know, as we learned in Jersey, you know, you can build the brand, you can get that market share, but being early is important, right.
You establish kind of that pole position and that presence from day one, and we're very excited about being kind of that position in New Jersey or in Minnesota. If vape becomes part of that and we find the right manufacturer, yes, we would absolutely be considering that. Again, not to distract from the core business, right? That would be a, just a, an addition to, but nothing that's gonna distract from getting the building constructed, plants in, flower coming out and, you know, focuses on that core, you know, kind of business dynamic for Grown Rogue.
Thanks so much.
Thank you. Your next question comes from the line of Brian Park. Please go ahead.
Hey guys, congrats on the progress. Just got one for you. In the event you could ship out of state, with your outdoor from Oregon, just wondering what your game plan would be if you have one, and what capacity you think you could have, et c?
Obie Strickler, I'm happy to-
Josh, Yeah, you wanna take that one?
I'm good.
Go down the speculative route?
Yes. I mean, truly, I mean, on this topic, it really depends on the counterparty side of the equation in terms of what states and/or countries would allow for said export. It's, you know, from my vantage point and our vantage point when we talked about it internally, we're really comfortable, confident in our ability to develop the rails, both from a self-production standpoint, but also, you know, Obie born and raised in, you know, the top of the Emerald Triangle, the access to other outdoor. There are a lot of quality producers in southern Oregon, you've got a state that, you know, would like to see the industry go down this path over time. You know, our ability to navigate the distribution rails over time is something we're really comfortable that we could navigate as we get clarity.
You know, make up a for instance. For instance, if the state of Florida were to open up import DEA license to DEA license from a medical standpoint, and we were able to partner with, and if, you know, the way Florida runs today from a state standpoint, it's solely vertical, right? You can only sell what you can grow in your own facility with a few exceptions, if you're supply constrained, et c. You know, that would be one very interesting state given how medical that state is, or Pennsylvania is still a medical state, as an example, where it's very clear and there, you know, there's a lot of depth in the market potentially. Pure speculation, nothing we expect to happen very, very soon, but something that we pay very close attention to and are part of the conversations around.
Right on. Thank you.
It's good Josh answered that because I would have said we're ready to ship 10 million lbs. Just kidding.
Yeah, you are.
The other thing that's really important, we've talked about this, right? This is the multi-state strategy that we have, like getting into these markets, taking advantage. It's not only for the current business when you don't have interstate, but they also create these hubs. Right? I think people miss how important the consumer relationship is, right? You don't just show up and all of a sudden be like, "Oh, I'm here. I've got all this weed, and people are gonna buy it." You have to build that brand.
You have to build that customer loyalty. You know, having these relationships with customers in, you know, Michigan, in New Jersey now, soon to be in Illinois, soon to be in Minnesota, I think it sets us well up for that eventuality if it comes to, you know, comes to bear. You know, really excited about that kind of piece of our business, that again is just building reputation and building, you know, customer loyalty and connection, you know, across multiple markets.
Cool. That's all I got. Thank you.
Thanks.
Thank you. Your next question comes from the line of Christopher Smith from Teamsters. Please go ahead.
I appreciate you taking the time to answer this question. Regarding the Dwight, Illinois, cultivation facility, is the company willing to work with the Teamsters union, in hopes of employing individuals who lost their job at that facility, when working under PharmaCann?
Yes, we are in current communication with plenty of the former PharmaCann employees. You know, a couple of them are on contract with us right now that are kind of providing continuity. Definitely one of the big things that we saw as we entered into that, you know, opportunity was, you know, a lot of people lost their jobs. You know, we're excited about the chance to kind of bring jobs back to Dwight, including some of the people that were former employees, at the, you know, former PharmaCann facility.
Would you be willing to recognize the Teamsters union as they were right about to ratify their first contract with PharmaCann? Is that something the company would be willing to do?
I'm not sure. We'd have to look at that. I mean, we have a labor peace agreement in New Jersey. I'm not sure what the requirements are in Illinois. You know, I'm sure you can get a hold of us, and we can talk through something like that.
Perfect. Thank you.
Yeah. You know, I think, Chris, along those lines, I mean, from our vantage point, we're drinking from a fire hose trying to get the facility back up and running on the regulatory side. As you can imagine, having visibility on when we can actually get plants back in the building is our gating factor for even when we can, you know, more fully employ folks as well. We're still, you know, kinda all systems go, just trying to get operational and jobs back.
Yes, no, perfect. You know, in that time when you guys are looking for it, when you guys are ready, we're here to help in any way, whether that's, you know, through the leads of the people we had, you know, there. Thank you for answering that question. I'll definitely reach out, you know, for further conversations.
Great. Thank you.
Thank you. Your next question comes from the line of Darius Robinson from PharmaCann. Please go ahead.
Yes. I had a few different questions. One involves, do you guys plan on adopting all the different licenses that PharmaCann had? Are you going to be looking at bringing up the kitchen again? How quickly do you plan on doing C1D1 extractions if you do plan on doing them?
Yeah, we did not take over PharmaCann's existing license. The license we have at Dwight is a Craft Grower License, which has manufacturing capabilities. We do plan on having extraction because there's a full lab built out of that facility. It's one of the benefits of that one. As it relates to individual products, that's something our team is working through. You know, infused pre-rolls, vape carts, edibles, you know, things like that. Yeah.
We're looking at all those things, but again, you know, Josh said it so eloquently, like, core for us right now is getting the regulatory approval, getting plants in the ground, because all that stuff comes post. You know, having plants in the building, getting your first harvest where you have flower for sale or, you know, the subsequent biomass trim that can turn into kind of those value-add products. Yeah, absolutely, and excited about that part of the business, yeah.
Now, futuristically, and this could be at any timeline, do you guys plan on ever growing for other brands or sharing the license with another company? Are you trying to just keep it Sea Craft and Grown Rogue brand? Are you gonna be doing a lot of third-party extractions for other people or vice versa?
Yeah. Let me, Josh, do you want to take that one?
To Obie's point. I'll jump in real quick. I mean, I think to Obie's point, you know, at this juncture it's premature. It would be fairly speculative to be specific in terms of answering that. It's a little, yeah. On the manufactured goods side, the answer, as Obie answered it, yes, we're moving in that direction, this is a flower-forward business. That's the focus of the effort, particularly in Grown Rogue branded flower-forward business where we can. That being said, we are a profit-seeking enterprise. We recognize there are some inherent challenges in the, you know, just being a naked wholesaler in the state of Illinois, the way that the market works today. You know, where it is a benefit and we can be collaborative, we're pretty open-minded.
And you know, ultimately really just want to build around our core competencies in terms of, you know, flower-forward and team building from a culture standpoint. When you look at the next six months in front of this company, like we are just laser-focused on standing up operations, getting quality flowers through that, through the door in an efficient fashion and getting in the market. You know, the rest of it gets pretty speculative when you get beyond that. The team does, you know, broadly across the Grown Rogue team, we have a multitude of experience across the sector. You know, we have some in-house capabilities that we lean into and obviously we, you know, we'd have to build in the local market as we add.
That's an excellent answer. How do you guys plan on competing with the high prices in Illinois?
I mean, efficient production of quality flower. I mean, that is the blueprint for us. I think you noted it, you know, inherent in the question. You know, we think we spend most of our time focused on markets where we think we can, you know, bring that quality at an affordable price point. Also as Obie referenced, it's a craft grower license, so we're not coming into the market with, you know, 40,000 sq ft of cultivation capacity. In fact, you know, by regulatory constraints, we got to start with 5,000 sq ft . We feel like entering that market in a prudent, measured fashion is gonna be a way that we can really start earning customer loyalty.
Okay. Thank you. That's all I have.
Thank you.
Thank you. There are no further questions at this time. I will now turn the call over to Obie. Please continue.
Great. Everyone, thanks so much for joining and taking the time out of your days to, you know, hear about the business and you know what we're trying to accomplish. If you got any additional questions, feel free to reach out. Again, thanks everyone for coming and, you know, look forward to catching up here in a few months and, you know, furthering the updates around our objectives for 2026. Thanks, everyone.
Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.