I will provide a brief overall business review, and our newly appointed President, Nirup Krishnamurthy, will provide operational details before our CFO, Nancy Huber, reviews our quarterly financial results in detail. I will then conclude our presentation with some final thoughts, and afterwards, we would then be happy to take your questions. For the third quarter of 2022, Schwazze continued to outperform the Colorado market despite a continuing challenging environment. I'm extremely proud of the Schwazze team for their commitment and dedication over the past year. Despite a challenging economic backdrop, we outperformed our markets in Colorado by 12%. We worked hard to continue to grow our market share, increase our profitability rate, and generate free cash flow from operations, and that's after paying taxes and CapEx, placing us in an exclusive club within the cannabis sector.
Our team continues on our vision and journey to become the most admired cannabis company by making a difference in our communities and providing trusted products, brands, and experiences that improve the human condition. Our growth plans remain on track, and despite challenges for the entire industry, we maintain our conviction in our long-term plan of building a regional powerhouse, developing scale with a customer-first approach, curating a distinguished house of brands that are driven by passion for innovation, craftsmanship, efficiency, and teamwork, and leveraging data analytics and technology to drive decisions. Now, I would like to officially welcome newly appointed President, Nirup Krishnam urthy, to take us through some of our accomplishments this quarter and since the beginning of the year.
Before we continue, I would like to say that as President, Nirup has assumed oversight and responsibility for strategic planning, growth initiatives in our core markets, and operational execution. He works directly with the executive leadership team to accelerate innovation, growth, and our performance. Nirup joined Schwazze in 2020, bringing more than 25 years of experience in innovation, technology, retail operations, and M&A at Fortune 500 companies. Nirup has played an integral role in building the company and growing revenue from $9 million to a run rate of $176 million, run rate EBITDA of $60 million. Under his leadership, Schwazze has grown from less than 20 employees to over 725 today. Prior to joining the company, Nirup held C-level roles with United Airlines, Northern Trust Bank, and former national grocery retailer, A&P.
He earned a bachelor's in mechanical engineering and a doctorate in industrial engineering from State University of New York at Buffalo.
Thank you, Justin. As you mentioned, I have been with the company almost since inception, and I am very proud of the team we have assembled and what the team has accomplished to date. There is still much more to do as we navigate and continue with our unique skill set and strategy to be a leader in the markets that we enter. Now let's look at the past quarter and discuss our challenges and successes, of which there have been quite a few. We, like the rest of our industry partners, are continuing to navigate the ongoing effects of the pandemic as well as the broader economic conditions in our country in both our markets in Colorado and New Mexico. Despite these challenges, our team delivered another record quarter in terms of revenue and adjusted EBITDA growth.
I would like to thank all our team members for their commitment to our customers, hard work, enthusiasm, and operational excellence. Since December 2021, Schwazze has added 15 cannabis dispensaries, 10 in New Mexico and five in Colorado, five cultivation facilities, four in New Mexico and one in Colorado, and one manufacturing asset in New Mexico. This year, we also opened two new dispensaries in New Mexico. This brings our total dispensary count to 35 across our two markets. I would like to highlight a few of our key accomplishments this quarter. On September 8, we announced the grand opening of our adult use dispensary, Star Buds, located in Glendale, Colorado at 492 South Colorado Boulevard at the corner of Virginia Avenue and Colorado Boulevard. On September 14, we announced that we signed definitive documents to acquire certain assets of Lightshade Labs LLC.
This included the adult-use Lightshade dispensaries located at 503 Havana Street in Aurora and at 2215 East Mississippi Avenue in Denver's vibrant Washington Park neighborhood. On September 28, we announced the opening of an R.Greenleaf adult-use dispensary located in the heart of Ruidoso, New Mexico at 360 Sudderth Drive. On October 4, we announced the opening of R. Greenleaf adult-use dispensary located in Clovis, New Mexico at 2009 Ross Street in Clovis. Most importantly, and I cannot stress this enough, our success is built on this cornerstone of our strategy, wherein we continue to develop a decentralized operating system that fosters local management oversight, agility, efficiency, and responsiveness to our customers and local communities. We continue to build our house of retail brands, adding R. Greenleaf dispensaries, expanding the Star Buds and Emerald Fields banners.
We expanded our Purplebee's vape portfolio by introducing our Autograph brand, a premium cannabis terpene-infused vape in Colorado, and expect to roll it out in New Mexico early next year. We also announced a licensing agreement with Lowell Farms to manufacture and distribute Lowell Smokes, a premier line of pre-rolled joints to dispensaries statewide, both in Colorado and New Mexico. We expect to begin sales in Colorado in Q4 2022. We are in our final stretch in the construction of our Colorado internal distribution center, which has been delayed due to city approvals. We expect to begin distribution in Q4, and the distribution center will play a key role in driving waste out of our supply chain, which will benefit our customers, our suppliers, and the company as a whole.
We continue to implement lean manufacturing techniques throughout our manufacturing and cultivation areas, steadily driving down our internal cost of goods. The margin benefits of this initiative will be fully realized in 2023. On April 1st, 2022, Schwazze commenced selling both recreational and medical cannabis in New Mexico. We can report that New Mexico sales have increased 48.4% over prior year's Q3 for the same-store sales. We are pleased with these results and continue to see sales growth month-over-month. We have plans to open four additional stores throughout the state this year, following with more openings in 2023, where we will focus on adding coverage to areas where we currently do not serve customers. Our revenue for Q3 totaled $43.2 million compared to $31.8 million in the same quarter 2021, representing a 36% increase.
Colorado two-year stacked same-store sales identicals for Q3 2022 compared to Q3 2021 and Q3 2020 were -9.7%, and one-year identicals were -10.6% compared to Q3 2022 and Q3 2021. Average basket size for Q3 2022 was $60.96, up slightly by 0.1% compared to Q3 2021. Recorded customer visits for Q3 2022 totaled 452,220, down by 10.7% compared to Q3 2021. Despite lower customer visits, we are pleased to report that we once again outpaced the state of Colorado by 12% in the third quarter. A remarkable achievement when you consider the challenges faced by the industry at this time.
New Mexico two-year stacked identicals for Q3 2022 compared to Q3 2021 and Q3 2020 for same-store sales were up 52.9%, and one-year identicals were 48.4% comparing Q3 2022 to Q3 2021. Average basket size for Q3 2022 was $52.67, down by 12.2% compared to Q3 2021, primarily due to lower recreational use baskets. Recorded customer visits for Q3 2022 totaled 231,137, up by 69% compared to Q3 2021. As stated in our report last quarter, we anticipate growth in the Colorado market to continue to be challenging this year due to increased cultivation capacity in the state, resulting in an oversupply of wholesale cannabis products.
New Mexico, however, continues to grow as we add new markets in the state, especially along the southern and eastern borders. This quarter, we generated approximately 92% of our revenue from retail. We expect the contribution from the retail segment to continue to grow as we add to our dispensary count and see additional growth in recreational sales in New Mexico. Through the implementation of our operating playbook, we continue to effectively contribute to the growth and efficiencies at our retail and production locations. At retail, we continue to review our product categories, aligning product assortment across our dispensaries, partner with our vendors to promote products, and optimize the supply chain as we move to a central distribution model.
We have rebannered our Colorado acquisitions to either Star Buds or Emerald Fields based on location and demographics. Of the two Drift dispensaries, one is now a Star Buds and the other an Emerald Fields. The Smoking Gun store on Colorado Boulevard has been completely remodeled into a flagship Star Buds dispensary. All three dispensaries are experiencing increased revenue and traffic that we attribute to these activities. We're actively working on remodeling our Emerald Fields Highland location, which we purchased in the second quarter.
We introduced universal gift cards that can be used in all our retail banners in time for the holiday season, and have launched a customized Star Buds e-commerce site at starbudscolorado.com. Launch was very well received by our customers as evidenced by surveys. We will continue to evaluate additional opportunities across the cannabis industry, with a primary focus on retail expansion with adequate cultivation and manufacturing assets supporting the expansion.
Our criteria for potential acquisitions includes dispensaries that complement our footprint and have a loyal customer base, accretive to bottom line with material synergy opportunities, well-branded products that complement ours. Any announcements regarding expansion intentions will be made once we have reached definitive agreements with prospective partners. Now, I'd like to turn the discussion over to Nancy to continue our financial review.
Thank you, Nirup. I would now like to review our financial results for the third quarter of 2022. As Nirup mentioned earlier, Schwazze reported a record revenue of $43.2 million, an increase of 36% compared to $31.8 million in third quarter ended September 30th, 2021. I am also very pleased to report that we reported a nine-month revenue increase of 46% to $119.2 million compared to $81.9 million. Total revenue for the quarter included retail sales of $39.8 million, wholesale sales of $3.3 million, and other operating revenues of $96,000. When comparing year-over-year revenue, remember, we added Emerald Fields, Drift, Brow 2, and New Mexico in late January to mid-February of this year, as well as Urban Wellness assets in Q2.
In addition, New Mexico added recreational sales in Q2 of 2022. Much of our revenue growth this quarter over the prior year is due to these acquisitions and change in regulations. Wholesale revenues once again decreased due to an oversupply of wholesale cannabis, driving down pricing and an overall decrease in the Colorado market. Total cost of goods and services for the quarter totaled $17.2 million, compared to cost of services of $16.8 million for the same quarter in 2021, representing an increase of $0.4 million or 3%. The increase in cost of goods is driven by the increase in revenue; however, not at the same rate. In the quarter, the company experienced a reduction in costs driven by vertical integration and third-party price negotiations.
Gross profit margin increased as a percentage of revenue from 47.3% to 60.1%. This positive result reflects a higher percentage of retail sales, our consolidated purchasing approach, the implementation of our retail playbook, and vertical product sales in New Mexico. Operating expenses for the quarter totaled $14.8 million compared to operating expenses of $11.2 million during the same quarter in 2021, representing an increase of $3.6 million or 32%. This increase is due to increased selling, general and administrative expenses, professional service fees, salaries, benefits, and related employment costs driven by growth from acquisitions offset by stock-based compensation. Operating expenses decreased as a percentage of revenue from 35.2% to 34.4% as we continue to focus on expense rationalization.
Other expense for the quarter totaled $3.7 million compared to $1.6 million for the same quarter last year, representing an increase in other expenses of $2.2 million or 139%. The increase in other expenses is due to higher interest payments on the company's debt obligations due to higher debt balances, which was partially offset this quarter by the revaluation of the derivative liability related to the investor notes issued in December 2021 t hat was recognized as an unrealized gain in the three months ended September 30, 2022. As a result of these factors, Schwazze generated net income for the quarter of $1.8 million compared to net income of $1 million for the same quarter in 2021.
After accumulated preferred stock dividends for the period, basic and diluted earnings per share was $0.00 for Q3 2022 versus $0.02 for the prior year. Adjusted EBITDA for the quarter was $15.9 million, representing 36.7% of revenue, compared to $8.8 million and 27.6% of revenue for the same period last year. This is derived from operating income and adjusting one-time expenses, merger and acquisition and capital raising costs, non-cash related compensation costs, and depreciation and amortization. See the financial table of adjusted EBITDA for the details. For the three months ending September 30, 2022, we generated $4 million in positive cash from operations, and we expect to generate positive cash flow before acquisition costs for the year.
We feel this focus puts us in a select class as one of the very few cannabis companies expecting to generate positive cash flow before acquisitions. For the nine months, the company has used cash for operations of $4 million compared to generating cash of $4.8 million for the same period in 2021. Schwazze currently has cash and cash equivalents of $38.7 million at the end of the third quarter. Turning now to the outlook for 2022, projected revenue and adjusted EBITDA guidance was revised to reflect the current industry challenges. Guidance for revenue for the entire fiscal year 2022 is projected to be $155 million-$165 million, and the projected fiscal year 2022 adjusted EBITDA is projected to be from $51 million - $56 million.
We are on target to deliver the lower end of the range for adjusted EBITDA, which was a fourth quarter annualized run rate of $60 million-$72 million. We expect to be slightly below the projected fourth quarter annualized run rate of $175 million-$200 million for revenue. This lower than expected revenue in the fourth quarter is due to lower than expected wholesale sales and construction delays in the new store openings in New Mexico. Despite industry pressures, we remain optimistic that 2022 will continue to be another pivotal year as we integrate and synergize our acquisitions and continue our expansion and M&A plans. Thank you for your time today, and I'd now like to turn back to Justin, who will open the call to questions and answers.
Thank you, Nancy and Nirup. Before we open the call to Q&A, once again, I would like to thank you all for your continued support, encouragement, and interest in Schwazze. We would now be happy to take your questions. To ask a question, please click on the link on the investor relations portion of our website and submit. Thank you.
Thank you, Justin, Nirup, and Nancy. Thank you everyone for participating in Schwazze's third quarter webcast this afternoon. My name is Joanne Jobin. I am the IRO for Schwazze, and I will be moderating the Q&A on behalf of the team today. The first question submitted, as everyone can probably guess, has to do with cash position. Nancy, it's a big topic. Do you have enough cash, and are we generating cash?
Thanks, Joanne. That's a great question. Yeah, the company generated $4 million in cash from operations in the third quarter. For the year, we expect to generate positive cash flow before acquisitions for the year. As I said in the call, this is exceptional for most cannabis companies. We are one of very few that are generating positive cash flow, and we're doing that through maintaining our efforts in controlling costs. You know, you'll hear us talk a lot about things like implementing an internal DC to improve margins and making sure we're using our SG&A as cost effectively as we can. We have a playbook that helps our stores understand how they should be putting labor in their stores, et cetera. We're continuing to focus on those operating expenses and SG&A expenses every single day.
The other thing you'll hear from some of the cannabis companies more recently is they're starting to use lean in their operations, et cetera. We've been using that technique since we started doing plant touching activities. Although you're not gonna see a huge improvement because we've been implementing that all along, you will see continued improvement every quarter as a percent of revenue. We're very targeted on that. For example, you know, this quarter, our gross margins and our SG&A are a lower percent of revenue than they were the quarter before. You know, we will continue to look at delivering positive cash flow every year. That is one of our major focuses, and we're using that cash to drive organic growth as well as make smart acquisitions.
You know, I saw one of the other questions that was asked was about looking for financing. We'll do that as the opportunity presents itself with an M&A activity. Today, our debt is probably priced as good as we can do in the market today, given inflation.
Thank you, Nancy. Next question up, for Nirup. Maybe we can talk a little bit about the new products, the launch of Autograph, that you mentioned in the call, and can you tell us about that and any other brand activity that's been going on in the past quarter?
Thanks, Joanne. Autograph is a brand extension of our Purplebee's brand, which is a well-recognized value priced botanically derived terpene vape brand. We introduced Autograph this quarter. This is our new signature series premium vape line made from cannabis-derived terpenes, so versus the botanical ones we had before. The product is now available in 0.5 g and 1 g across all our stores in Colorado. We are very proud of the fact that we introduced conscious sustainable packaging for this product. This includes the child resistant 100% recyclable tubes that house the products, and they're sourced from ocean-bound plastic, which is utilized in a manner that makes it biodegradable over five years. The secondary packaging or the outer marketing layer is also fully recyclable.
You know, we launched this brand in Q3, and then we will continue to expand it to the wholesale market in 2023. We also have an agreement with Lowell Farms. Schwazze is the exclusive licensing, manufacturing and distribution partner in Colorado and New Mexico for Lowell Farms. Lowell Farms is a premium California-based artisan craft cannabis brand that offers an extensive portfolio of award-winning original and licensed brands for licensed retailers statewide. Our products are now available in all our dispensaries. I'm happy to note that we have made our first wholesale sales this quarter as of this week. We're very happy to partner with Lowell Farms, and I think there is a lot of legs to that product. We'll be taking it to New Mexico in the first quarter of 2023.
Thank you, Nirup. Next question. Nirup, you're still on. Can you discuss the Colorado market and what the state of the market is at this point, and how Schwazze fits into that market?
The Colorado market, in terms of retail, as most of us know, is having a tough year. Colorado market as a whole is down 20%-25% year-to-date. It is basically cycling COVID, and we're also in a tough economic environment. Having said that, I'm very happy to note that we, as in Schwazze, are outpacing the state by 12% once again this quarter. We have had seven quarters in which we outpaced the state, and we continue to do that. You know, we apply our retail playbook to run our retail operations.
We have three main focus areas. One, we have the best assortment in our stores. Number two, we have the highest quality products, and we want to be the best service possible to our customers. I'll tell you this year, our suppliers and the supplier community have been very, very cooperative and have worked very closely with us to provide customers great products at a good price, which have driven good volume. Our customers have remained loyal through this period. You know, Colorado is still a large market, nearly $2 billion, and we will continue to cultivate that market. We expect to continue to grow in this market to be the most admired cannabis company in Colorado.
Thank you, Nirup. While we're at it, we're gonna ask you another question here. Regarding wholesale, there's a lot of people asking about wholesale numbers that are down dramatically, particularly in Colorado, and some companies have even announced that they're exiting the wholesale market. What is Schwazze's strategy?
The wholesale market in Colorado was driven down primarily due to overproduction of flower in 2021. We had a glut in the marketplace. Again, cycling COVID. There was a lot of cultivation that happened last year, which resulted in, number one, excess flower, driving wholesale flower down. Number two, it affected the excess distillate in the market that is essentially used across a lot of our CPG products like vapes, etc., and gummies. We saw significant pressure on distillate pricing last year. Distillate pricing in Colorado was almost down 60% over last year. In spite of that, you know, we have maintained our volumes. We have maintained our tonnage, you know, in terms of number of kilograms sold per month of distillate in the marketplace.
We don't believe the market is going anywhere. I think it is going to come back over a period of time. You know, we value our relationships. We provide distillate to top manufacturers across all categories, and we have healthy relationships that will continue in the years to come. We also expanded our CPG portfolio. You know, we are not in too many doors with our vape brands last year. This year our goal is to expand across over 100 doors and we continue to expand that portfolio.
With Lowell Farms and coming online, and we have other plans to develop new brands, be it on the CPG side or on the flower side, we believe that the wholesale market has good potential in the medium to long run. We believe this is, you know, a temporary kind of depression in the wholesale market, but we are happy with where we are at this point.
Thank you, Nirup. Justin, here's a question for you. Can you speak to inflation and how that is impacting sales or expected to continue to impact sales for the next quarter?
You know, we obviously are concerned about it. When you look at what's going on with the consumer, you know, inflation's still running, you know, at a healthy clip, you know, roughly around 8%. Wages are under pressure, so, you know, people are having a tougher time having their dollar go further. It's really important for, you know, consumer product companies to provide value and provide deals. We continue to watch that. I think this is an emerging category in terms of cannabis. We're seeing that we're, you know, perhaps not completely insulated, but we're certainly resilient, as a category. I think that's certainly encouraging. We're watching how consumers are behaving, what tier of flower they're purchasing. Certainly looking, seeing how they're participating in deals.
Maybe they're buying, you know, buy one, get one free deals in our dispensaries, so we're making those more available. Certainly it's a concern. You know, you're looking at more, you know, debt, particularly mortgage debt is becoming more and more expensive for homeowners. We're in this state where it's concerning, but yet, you know, we've got a low unemployment rate. We're gonna have to continue to watch and see what's happening with our customer and keep our finger on the pulse. Interesting times. Obviously, you know, we'll see what happens with the rest of the vote count. I don't think we have a decisive, really decisive view of what happened with the House and the Senate from last night.
Y ou know, we'll see what happens there as well. Certainly we're watching and we're concerned about the economy.
Thank you, Justin. Nirup, now that we are fully vertical with grow operations in Colorado and New Mexico, can you discuss how you expect this to impact your sales and products going forward?
We have this year acquired two grows in Colorado. With that, we are now rolling out new products, and we are selling flower now in the wholesale side. We are also developing new products like we said, Autograph, and we are also launching a new product in the fourth quarter that I can't quite talk about yet. As you know, we have launched Lowell Farms. I think what happens is, you know, I think Schwazze in Colorado was essentially a third-party supplier-based retail chain last year. Almost 100% of our products were third-party products. You're going to see a shift from that down a little to our own internally manufactured products over the next year or two.
In New Mexico, we bought a vertically integrated operation, which is essentially 100% of the product sold was vertically produced. Now, as New Mexico market expands, we expect a lot of suppliers to show up in the market. For example, The Clear has launched in New Mexico, and we are now starting to carry their products. You're gonna see more third-party products come into our stores in New Mexico over time as suppliers enter the market. At the end of the day, you know, our focus is to give the best set of products available, both ours and our suppliers' product to the customers to make sure the best shopping experience they have in our stores. That's gonna be our mantra going forward.
Thank you, Nirup. Can you tell us how many acquisitions since the new year has been undertaken by Schwazze, both in New Mexico and Colorado?
Which one? Sorry, Joanne, could you just repeat that question again?
Can you talk about how many acquisitions have been made since the new year in Colorado and in New Mexico?
Since December of 2021, we have added 15 cannabis dispensaries. Ten in New Mexico and five in Colorado. We also added five cultivation facilities, four in New Mexico and one in Colorado, and we added one manufacturing asset in New Mexico. We also opened two organic stores in New Mexico, in Ruidoso and Clovis, and we expect to open four more stores in New Mexico by the end of the year. Obviously we also have a good pipeline of future targets. However, as you can see by the past year, reviewing, announcing, and closing acquisitions takes time. In our case this year, they all closed literally within the same quarter, so these things come , you know, i n waves, and we expect that to continue.
Okay. Thank you, Nirup. I'm going to move over to Nancy. Nancy, the improvements that you've seen in product margins and revenues continues to be impressive. Do you think that we can continue this trend?
Yeah, thanks, Joanne. That's a good question. You know, when you look at our adjusted EBITDA as a percent of revenue this quarter, it was the highest number it had been. Our target is kind of mid- to high-30s for adjusted EBITDA, so you know, that splits kind of between the gross margin and SG&A. Our gross margin, as we move into 2023, will be positively impacted by adding the internal distribution center. We think that'll have kind of low single-digit effect. This could be offset, as Nirup says, as we add third-party products in New Mexico. You know, it's they kind of potentially offset each other. The other thing to understand is, as we grow stores organically, they obviously don't start out at the revenues we expect them to be.
It usually takes us somewhere between eight to 12 months to get to our full run rate. Things like rent and some of the store costs are being amortized over that. Revenue will be at a higher percentage. That will impact, you know, the percent of SG&A as we look at it, as we continue to add those stores in New Mexico. Much of our growth in New Mexico will be through that organic growth. In Colorado, it's a little harder to add organically, although we do have a couple things in the pipeline for that. More of Colorado ends up being M&A, which, you know, positively hits the P&L because it has full run rate for revenue as well as SG&A costs, but obviously you pay a little bit more for that.
You know, I think what our expectation is that we'll continue to see the EBITDA in that mid-to-high 30 range and, you know, we'll continue to work on operations and SG&A to take out as much cost as possible to return that cash to the shareholders.
Okay. Thank you, Nancy. Can you comment on the guidance, which was revised downwards this year? Do you have any additional color on that?
Yeah. The guidance on the adjusted EBITDA side was not adjusted significantly. We do expect to hit that low end of that guidance range that we had for Q4 run rate. The year, we gave full fiscal year guidance, which was $51 million-$56 million in adjusted EBITDA. You know, if you take out the first three quarters, you'll see that the run rate for Q4 would be on target on that low end. Revenue guidance is a little bit lower. You know, hopefully we're not gonna be at the low end of that guidance. You know, we'd like to think we could hit the midpoint or better.
We are seeing, you know, wholesale continues to be under significant pressure, and as you know, in October there's harvest, and so we anticipate wholesale numbers could still go down a little bit as we see product hit the market from that. We anticipated, as Nirup talked about, we think we'll have four more stores open in New Mexico, but we were hoping we would have those stores open slightly earlier than it looks like we are. We are experiencing construction delays mostly because of approvals from municipalities in terms of inspections and stuff. I think we have a better handle on exactly what that timeline looks like.
As I said, we expect four stores to be open before the end of the year, but we had hoped they'd be open closer to the beginning of Q4 rather than mid to end of Q4.
Thank you, Nancy. One of our listeners is asking us to provide an update on our M&A pipeline. What does that execution look like? Perhaps Justin can take that.
Well, without you know sharing you know some of our secrets, you know, I think you know when we set this thing out three years ago we said we wanted to be number one in Colorado. We wanted to be retail-focused develop good relationships with a broad assortment of suppliers to have the broadest assortment of products give our customers a lot of choice within those stores develop brands and products that we create you know when we listen to the customer and find out what they want. I think Autograph and Purplebee's are good examples of that.
Create, you know, work really hard on lean manufacturing, making data-driven decisions, creating really good processes so we take cost out of the business and we can operate at a very efficient level. That's what we're doing. We're gonna continue to look for organic growth. Stores, finding new stores in the state of Colorado. I'll remind everybody, there's a little over 650 adult use stores. We have 23 of those today, and we see a lot of growth. We think there will continue to be consolidation. We will be a consolidator, and we're gonna continue to work on that. We're gonna continue to partner with good brands and do that.
Then obviously in New Mexico, we 've opened two. W e've got another four coming this year. We've got a good slate of stores. Our real estate team's doing a great job, working in the local towns and counties in both Colorado and New Mexico. You'll see us adding more stores. We want every store to obviously meet the needs of the local town. We're good stewards. We don't spend a great deal of money on those stores. They're clean, they're nice stores, but we watch our capital closely, and we expect them to generate cash flow. We're gonna continue to do that, and we'll continue to find good locations.
Then there's acquisitions that bring great retail locations, bring capabilities, bring brands, products to us, and then we'll look to drive synergies, cost synergies, revenue synergies, and leverage our fixed operating costs and SG&A. Really bring our operating playbook. Merchandising, you know, what good looks like from a product standpoint in the stores. What we're gonna carry, how we're gonna price it, how we're gonna promote it, and then what we're gonna do from a retail and distribution, manufacturing, delivery, et cetera, on the supply chain side. That's what we're gonna continue to work on. Could there be other states that fit our regional strategy? We'll continue to evaluate those types of opportunities, but that's really what we're gonna do.
I mean, goal number one is continue to work on Colorado and continue to work on New Mexico. That's our strategy. We've got a good balance sheet. We've got cash. You know, we're in good shape. That's really where we're headed and what we're up to. Thanks.
Thank you, Justin. We've got a question here, and we've had quite a few of them actually, regarding the difference between setting up organically in New Mexico and Colorado, and why aren't we doing the same thing in Colorado. Nirup?
Yeah. In Colorado, you know, we have over 650 recreational dispensaries. Adding new dispensaries is constrained by, you know, the local counties, where they have some limited license in state. Really, you know, there are a couple of areas that have opened up, jurisdictions that have opened up for new dispensaries. For those areas, we will apply for new licenses. However, most of the counties are pretty much restricted at this point in time. Really, the way we can get in and grow our footprint in those counties is through acquisitions at this point in time. New Mexico is a newer environment, and it is a little more open in terms of trying to get new licenses.
We have secured some very good real estate locations, as Justin mentioned. We're going to launch our Our Greenleaf stores in those locations. I don't think that's gonna last forever. While the first couple of years of recreational use comes online, we wanna make sure we have the best footprint across the state.
Thank you, Nirup. We've got a great question here about labor shortages in the marketplace. Do we see any experiences or challenges to, you know, fulfill personnel positions such as managers, budtenders, et cetera? Nirup, maybe you could comment on that.
Yes. Labor is always, you know, in this environment, in the country over the last couple of years, it's been a challenge to recruit. Having said that, you know, our HR function, Dan Bonach is our head of HR. He's put a really good program in place, where we have a steady pipeline of prospects. In addition, we have, you know, we have implemented some good programs in terms of benefits for our employees. We have introduced a 401(k) program with matching. Our benefits are very good in terms of health, dental. You know, I mean, our budtenders, for example, we have a very good training program that we're working on to ensure that, you know, they become part of the family.
The way we try to hire employees is they come to us, and they wanna stay with us for a while. Creating an environment that allows for that is what we are going after. Yes, you know, hiring is not easy these days.
Thank you, Nirup. We are reaching the top of the hour, so, we've got a few more questions here, and then we're going to wrap it up. Justin, do you have any comments about the election results and what it might mean for the cannabis legislation? I know that's on everybody's mind.
Well, we went into the evening with you know, five states up for adult use. You had a blue state in Maryland that you know, that voted for cannabis. You know, you also had a red state in Missouri vote for rec cannabis. Arkansas and the two Dakota states did not. You know, it continues to grow, although , you know, states are still making their own decisions. I think that's positive. I think you know, we're continuing to see momentum. You know, I think it's still too early to call to figure out what's gonna be happening in the Senate and you know, on the congressional side. You know, I think it's gonna be mixed.
I think we're gonna have good checks and balances in D.C. Hopefully, the President does what he said he was gonna do, which is I think the expungement at the federal level and encouraging the governors to do the same thing for those that had minor arrests around cannabis possession. I think that's a good thing for the industry, and it's the right thing to do. Hopefully, we'll start seeing some safe banking discussions, some real movement there. We're hopeful. I think at this point, based on our intelligence, it's more likely than not that we're gonna get safe plus between now and end of January, which would be terrific for the industry.
Being able to not have to deal with cash at the stores, that's a safety issue. Being able to have banks be able to lend you money, term bank loans, term loans, asset-backed revolvers for your liquidity. Be ing able to actually have custody and hold your money with FDIC insurance. Just having more competition and more coverage. Being able to have insurance and being able to offer cheaper but better health benefits and 401(k) 'cause you've got a broader set of vendors that could cover you. I think all that will be very good for the industry, so we're optimistic about that.
Thank you, Justin. One more question before we end the session. What is the plan for the company, and do you expect any liquidity events as well? We've been getting a lot of questions on that.
Great, great question. You know, we've got a very accomplished board of directors. We have great investors in the company, and all of them signed up to build a great company that is leading towards taking care of customers, being innovative there, giving them what they want. Building a really great company that takes care of not only customers but our employees, and creating great careers for them. Building a business that we're really proud of, that, you know, on a relative basis create more value than you know competitors in this market, and run operations better. That's what we're building. Hopefully, one of these days we're gonna get credit for that from a stock perspective. You know, we wanna build a great company.
It's really that simple, and we will get rewarded. You know, there's a great quote that I like a lot from a Greek philosopher, nothing great has ever been created suddenly. It takes time, takes vision, takes a plan, takes hard work, takes execution, and you gotta stay with it. You gotta do it every day. You gotta have good teamwork and know where you're going, and we do. We're gonna continue to drive Colorado, New Mexico, and build a really, really strong company in the Southwest, in this region. That's what we wanna build and develop. It's what we've been working on.
Where that leads us in terms of going public on the Nasdaq or the New York Stock Exchange, if and when that becomes available or something else in Canada or down the road, we don't know. We know this, if we continue to be a growth company, if we continue to grow organically and do really, really good strategic deals on the acquisition side, we continue to drive operational efficiencies and build competitive advantage and market share, we're gonna build something that's really, really valuable. Right now we're trading, you know, at, you know, roughly, in the 4x EBITDA multiple. You know, companies in other sectors that look like us that don't have the EBITDA or the growth profiles are trading, you know, 20x EBITDA.
I think that will happen. We're gonna continue to work at it, be patient. We'll have our day. We'll create value. We'll make sure that we create shareholder value and take care of all of our stakeholders.
Thank you, Justin and Nancy and Nirup. That is all of the time we have for questions today. If you do have questions that were not answered today, please email them to my attention via the investor website, and we'll ensure that they're all answered. Justin, before we sign off, do you have any final remarks before we end the call today?
As always, I want to first start and thank our customers and patients. We don't get to do this without them. I wanna thank all of our team members. Y ou know, we're open seven days a week. Not 24 hours a day, but darn near close to it, and wanna thank them for their passion for the industry and making a difference. Wanna thank all of our leadership team for the sacrifices and what they do. They work very hard. Wanna thank our investors for, you know, giving us the capital to be able to do what we need to do. Wanna thank those that follow us and root for us. With that, go Schwazze.
Thank you, Justin. I'd like to remind everyone that the webcast is available on the Schwazze website. Once again, thank you everyone for joining the Schwazze quarterly webcast.