Medicine Man Technologies, Inc.

Total revenue increased 2% year over year to $43.2 million. Gross profit was $19 million, or 44% of revenue, versus $23 million, or 54% a year ago. Operating expenses were $21.8 million versus $18.1 million last year, and adjusted EBITDA was $9 million, or 21% of revenue, versus $13.8 million, or 33% last year. Loss from operations was $2.7 million, compared with income from operations in the prior-year quarter. Cash and cash equivalents were $12.3 million and total debt was $163.4 million as of June 30, 2024. Management said Q2 revenue growth was driven by new stores, partially offset by lower wholesale revenue from pricing pressure and more New Mexico licenses. Forward-looking commentary included continued restructuring, expected sequential wholesale catalog expansion, and a goal of reaching 40% wholesale penetration; management also said amended 280E returns are being prepared and that rescheduling could be worth roughly $15 million of free cash flow.

Justin Dye emphasized that Schwazze is focused on winning in Colorado and New Mexico through tighter execution, sharper pricing, loyalty, and better customer experience. He said the company is simplifying operations, evaluating each store quarterly, and using a more disciplined, retail-forward approach after a challenging period. His tone was defensive but optimistic, framing recent setbacks as temporary and tied to auditor-related issues, OTC market illiquidity, and industry pressures.

Forrest Hoffmaster highlighted sequential growth across financial metrics, with improved wholesale penetration, better wholesale margins, and operational changes aimed at aligning cultivation and manufacturing with demand. He cited the closure of underperforming stores and non-core assets, new LED lighting expected to drive a double-digit yield improvement, and roughly $7 million in annualized savings from restructuring. He also noted cash of $12.3 million, debt of $163.4 million, and said the company expects about $15 million of free cash flow benefit from 280E rescheduling if amended returns are filed successfully.

Analysts focused on delayed filings and the OTC expert market, and management said Baker Tilly is re-auditing 2023 and re-reviewing 2022 before completing Q1 and Q2 filings, with no material misstatements found so far. They said relisting to OTCQX should take about a month after the delayed filings are submitted, and that they believe current share-price weakness is being driven by forced selling and illiquidity. Questions also covered store closures, wholesale targets, debt maturities, and 280E; management said the store base looks stable with no immediate closures planned, wholesale penetration targets are 40%, debt refinancings are being explored, and amended returns for 280E are in process.