For those interested, I went back on the CIN podcast to cover the big 5 MSOs' results through the first quarter of 2023. Big focus was on market footprints and diving deep into cash flow dynamics and balance sheet strength

Does suggest the potential if a larger operator could buy out and pay down debt (not sure what the stipulations are on early debt paydown). Florida, even with price compression, clearly still a very valuable market to operate in with scale

64% gross margins, 44% aEBITDA margins and healthy growth. Debt on the balance sheet is a killer though- $5.1M in OCF adjusted for taxes and IFRS lease payments means actual OCF was $448k. Q1 Interest payment ($4.25M) is roughly the same as what GTI pays

Not bad for @GTIGrows @veranobrands @crescolabs @AscendHoldings @Curaleaf_Inc, all of whom are easily north of $100M coming from IL annually

Not ready for the last episode ever of Succession 🥺

Discussions around the CC merger are still top of mind as both companies continue to struggle on their own. Personally thought management showed more hesitancy than ever regarding the prospects of it closing, outlining several obstacles needed to overcome

Deal makes perfect sense on paper (good operator w/ limited footprint in CL + a poor operator w/ an expansive footprint in CC means 1+1=3), but deteriorating market conditions have sent asset prices plummeting meaning there isn't enough to paydown combined debt sufficiently imho

Mixed Q1 from @crescolabs, with better cost control and a small beat on top-line expectations, but also limited growth prospects on their own and an inability to inflect towards meaningful cash generation with a relatively weak margin profile.

Modest improvement in Q1 from @Curaleaf_Inc, with more still needed to inflect towards sustained profitability and CF. The good: beat consensus as west coast exits reduced OpEx and enhanced margins. The bad: tax-adjusted CF still negative with the BS increasingly looking thin

Improving showing from @AYRWellness in Q1, with better cost control and important M&A restructuring that have calmed balance sheet and dilution concerns (for now). More is needed though to inflect towards real profitability and CF though as the company focuses on core markets

13 senate committees ✅ 15 house committees ✅ Full House vote ✅ Full Senate vote - ✅ Reconciliation between house and Senate bills- ✅ Governor signs bill- this week! 🙏🙏

One statistic that stood out in Q1 highlighting the shortcomings of aEBITDA for a company like Columbia Care and the challenges of generating CF with a thin margin profile and high debt: Q1 Interest Paid: $12.61M Q1 aEBITDA: $16.4M Q1 Interest Paid as a % of aEBITDA: 76.9%!!!

Modestly improved Q1 from @ColumbiaCare as cost control efforts begin to show, but a precarious BS and a relatively thin footprint means margins are still low relative to peers while positive CF and profitability remain elusive with a Cresco Labs merger hanging in the balance

2022 figures for reference. I'll keep updating the Q1 numbers as further names report

-GTI continues to lead with a rate similar to their 2022 level -VRNO/TRUL both took a step in the right direction after break-even for all of 2022 -Note that SHWZ had prepaid expenses and AP paydown that made Q1 CF worse than it appears (about breakeven if all factored in)

Q1 aEBITDA to tax-adjusted OCF conversions for MSOs that have reported full Q1 financials to date:

Modest Q1 showing from @terrascendcorp, with results in-line with expectations and better GM's in a seasonally slow Q1, but also tax-adjusted CF that still needs work to sustain the business long-term. MD AU in July should offer a boost, as does TSX uplisting potential in June

Solid start to 2023 from @veranobrands, w/ modest growth ahead of expectations, good cost control, and much improved cash flow. AU sales in NJ and now CT paid dividends, with MD conversion on the horizon in July- 3 markets where VRNO holds strong market share.

Note they also let taxes accrue in Q1 by $5.3M so tax-adjusted CF is even further negative

Team at schwazze just out here making up new definitions for free cash flow by removing interest expense from the equation... Good quarter but lets be real.

Tough Q1 showing from @Trulieve- missed consensus while growth and margins continue to move in the wrong direction- but there was some light at the end of the tunnel as cost-cutting efforts start to show up leading to better tax-adjusted cash flow (ultimately the focus for 2023)

Mixed Q1 from @AscendHoldings: while strong CPG growth drove the top-line above expectations in a seasonally slow Q1, margins took a hit from MO competition to their IL stores and a cultivation issue in NJ. Positive OCF print a good sign but will need to be sustainable through 23

5) Cura: 6.8% 6) VRNO: 6.3% 7) CCHW: 5.1% 8) TRUL: 3.7% Just a snapshot in time from Q1 but should give a good idea. With AU conversion fees based on sales, also may reflect who will pay the most to convert

With Maryland AU sales to start 7/1, can look at market share leaders in the med market for a sense of who stands to benefit. Q1 23' data per BDSA: 1) Curio Wellness (private): 11.1% 2) GTI: 10.3% 3) Holistic Industries (private): 8.1% 4) Sunmed Growers (private): 7.1%

On the negative side, lots of Tier 2 MSOs in CC/TER/ AYR/AWH that generated modest aEBITDA margins but failed to convert to CF. TRUL and VRNO at $400M and $323M in 22' aEBIDTA respectively also stand out in that all of that aEBIDTA ultimately converted to break-even on OCF.