GrowGeneration Corp. — Call Transcript 2026

Good morning. Thank you all for joining us. My name is Brian Nagel. I'm the Senior Equity Research Analyst here at Oppenheimer, covering consumer growth and e-commerce. This is day 3 of our 26th annual Oppenheimer Consumer Growth and E-commerce Conference. We very much appreciate you all tuning in. I'm pleased to announce or introduce our next presenting company, GrowGeneration. I've had the pleasure of covering and interacting with GrowGeneration now for a very long time. Very dynamic, interesting business model. We have two of the company's senior executives, Co-Founder and CEO, Darren Lampert, and CFO, Greg Sanders. Gentlemen, thank you for joining us. Thank you, Brian. Thanks, Brian. We're going to structure this as an informal fireside chat with me asking questions and the GrowGen team responding to those questions. To the extent there are questions from the audience, just send them through the chat and we will be happy to work them into our conversation. Guys, I thought when we start, before we talk about specific dynamics at GrowGeneration, I'd love to just begin, kind of a theme we're having with this conference is just the overall health of the consumer, what you're seeing and any impacts lately upon the GrowGeneration operations from the health of the consumer. Sure, Brian. One of the most important changes that you've seen at GrowGeneration over the past four years is that we're no longer primarily dependent on the retail consumer. Historically, investors viewed us as a hydroponic retail chain, serving hobbyist growers, small operators, and also the consumer. Today, our business is increasingly driven by commercial cultivation, wholesale distribution, proprietary brands, and B2B solutions. While broader economic conditions certainly impact spending behavior, our customers are focused on improving yields, lowering product costs, increasing efficiency, maximizing profitability. Our products, our proprietary products such as Drip Hydro, Char Coir, Power Si, directly help customers improve operating economics. As a result, we believe our business today is more resilient and less dependent on discretionary consumer spending than it was several years ago. I guess the key takeaway, Brian, GrowGen has shifted from a consumer discretionary exposure toward the commercial solutions model, which is not as affected by today's economy. No, it's very helpful, Darren. It's a perfect segue into the conversation on GrowGen. I've had the pleasure of studying very closely this transformation that's happening, which you've just alluded to, the transformation of the GrowGen business model. I'd love to go into more detail, especially for those who are maybe less familiar with the GrowGen story, particularly the kind of the new dynamics. Discuss the transformation you're undertaking. You're going from point A to point B, importantly where are you in this transformation, and as investors, how should we think about the financial ramifications of this significant transformation of the GrowGen model? We started GrowGen back in 2014. I guess the business model and our contention back then was, as the cannabis business grows, that consumers are going to be growing plants in their backyard, cannabis plants. When we embarked on this incredible growth strategy, building GrowGen from a million-dollar business on the sales side of it in 2014, till we peaked out in about $425 million in 2021. We built from three stores, our initial three stores, we built that up to 65 stores, over a million square feet of space around the country, transacting over 100,000 transactions a month. As the dynamics of the industry changed so dramatically, we had to pivot. Over the last several years, really, we've transformed GrowGen from a retail-focused operator into a higher margin technology-enabled B2B platform. We reduced operating expenses significantly. We optimized our store footprint and inventory. We dropped inventory from almost $130 million down to $40 million. We consolidated distribution. We strengthened our balance sheet. We invested in systems including CRM, ERP, WMS. We now have rolled out commercial portals that use our commercial warehouses to ship products directly. When you look at our remaining 19 locations around the country, down from 65, what you've seen really is they're more marketing hubs and distribution hubs, really, for our commercial customers as opposed to serving retailers. They're closed on weekends, 90% of them. What you're also starting to see right now is we've built this incredible commercial team at GrowGen and a technical team out there that's out on the street looking for business as opposed to waiting for business to walk into our stores. At the same time, we've built a portfolio of proprietary brands from under 10% back in 2021. It now represents approximately 37% of cultivation and gardening revenue, year-end target of 40% this year. We believe that number probably goes into the mid-40s to 50 next year. Looking forward, our priorities are straightforward. We're continuing growing our proprietary brands, continuing to roll out new ones, and we believe a lot of them are in the early stage of launch. We're expanding our commercial market share. We're increasing wholesale distribution. We're growing our lawn and garden channels and specialty ag. We believe that vertical is incredibly powerful right now. The TAM on the lawn and garden and the ag space is far dwarfs what we have right now in the cannabis space. Cannabis still is our bread and butter and, again, it's growing. We're pursuing international opportunities. We've recently signed some contracts to start delivering our products, just GrowGen proprietary products, into Canada, into Europe, into Latin America. We believe that'll be a fast-growing part of our business. We're deriving sustainable profitability and cash flow. We believe we're still in this early transformation, and you're starting to see it in our numbers. I guess key takeaways, Brian, we're becoming a branded product and solutions company opposed to just that typical retailer that's waiting on the consumer to walk into the stores. We couldn't be any more excited of the transformation. I still do believe that GrowGeneration right now is a stronger business than we were in 2021 when the stock was $60. Our proprietary brands are taking over the industry, and we've pivoted with the industry. I think right now, when you look where we are, in such the early growth cycle of the cannabis industry, I think lawn and garden, I think specialty ag, and with the products that we're starting to bring into big box and to the distribution channels, I think you're going to see a different business going forward through to the rest of the decade and probably for many years to come. That's very helpful, Darren. I want to make sure we understand clearly the difference in the consumer of GrowGeneration today versus the consumer back in the prior business model. Yeah, I think, as we spoke, we had 100,000 transactions, again, I think even a week back then. At 65 stores, we had stores doing 200 transactions a day. We had 800 employees. We're down to 200 employees right now. We're growing year-over-year. We just grew two quarters year-over-year. Our customers right now are the large multi-state operators, large single-state operators. We're representing 90% of our businesses on the business-to-business side of it. We used to rely on the business-to-consumer side of it, and the business-to-consumer side of it is changed dramatically. When you look into wine and spirits, people growing wine, beers, it's just a very small minutia of the industry. What we've also seen through the growth of our private label brands, that these brands have tremendous legs going into lawn and garden and going into specialty retail, and into ag. They're best of breed, what we always say is, if you can grow a cannabis plant, you can grow any plant in the world. It's the most difficult plant to grow. The products that we're launching are, again, from a price point, are incredible. We're selling at The Home Depot right now. We're selling at the Lowe's right now, through The Harvest Company. Char Coir is the fastest-growing coco brand in the country right now. You're seeing that with all our brands. The interesting and exciting part, as we'll talk about later, is we still believe these brands are in such early stage of launches. We're talking mid-40 margin business as opposed to high teens that you're seeing with distributed brands. Again, it's something that makes us tremendously excited. I think we pivoted back in 2021 when we saw, again, Wall Street and again, the industry changed dramatically, built out too quickly. Again, the consumers walked away. It made more sense going to a dispensary than growing your own. I think we did a tremendous job when we started looking at the competition around the industry, we'll talk about after too, that we've pivoted at the right time. Greg, I'd love to get you in the conversation. As the head of the financial piece of this model, how do you view, Darren's talked a lot about the improved efficiency of the business model, but from a financial perspective, how much more powerful is this business model now under this new operating model? Yeah, that's a great question, Brian. Over the last several years, we've taken a deliberate approach to resizing the organization and aligning our cost structure with the realities of the current cultivation market. Our objective was not simply to reduce expenses over the last few years, but to create a leaner, more efficient platform capable of generating improved profitability across a range of market conditions. I think the results of those efforts are becoming increasingly visible in our financial performance. Throughout 2025 and into 2026, we meaningfully reduced our operating expense base through initiatives that included store rationalization, organizational streamlining, supply chain efficiencies, and a continued focus on disciplined spending. Those actions have lowered our fixed cost structure and improved our operating leverage over the business. As a result, we reduced expenses in 2025 compared to 2024 by around $30 million and reduced total expenses by closer to $60 million over the past four years. Because of that, we've been able to demonstrate improving profitability metrics, even in a market that remains challenged from a demand perspective. We forecasted positive adjusted EBITDA in the second quarter of 2026. We expanded margins through a combination of proprietary brand growth and operational efficiencies. Importantly, we've achieved these improvements while maintaining a strong balance sheet and continuing to invest in strategic initiatives that support future growth. What we're particularly encouraged by is that many of these cost actions are structural rather than temporary. The benefits are embedded in how the business operates today. That means as the industry conditions improve and revenue growth returns, we believe a greater percentage of incremental gross profit has the potential to flow through to the bottom line, which wouldn't have been the case several years ago. While we remain focused on further operational improvements, we believe the work that we've done so far has positioned GrowGen to be a more efficient, more resilient company with a significantly lower break-even point and a stronger foundation for long-term profitability. That's very helpful. Just on the cost side, the cost infrastructure now is right, and basically where it should be, poised to lever as the growth returns. Yeah, that's exactly right, Brian. I think the big key over the last several years is we've reduced our store count from near 70 in the end of 2021 to less than 20 at this point today. We've reduced expenses, like I mentioned earlier, close to $60 million over the last several years. When you look at the business, I think it's positioned sustainably for long-term profitable growth, largely due to the store reductions that we've had in place, in addition to the headcount reductions and other improvements that we've made across the operation. Darren, from your perspective, what needs to happen in order to really reignite growth, sustained growth, at GrowGeneration than maybe in the sector more broadly? I think you're seeing that right now, Brian. Again, we just had two quarters of year-over-year growth. Hopefully, the second quarter will be the third. I think we are reigniting growth, and we're doing that with, again, as we said, almost 40 less stores. Every time we close a store, we're losing 30%-50% of the business coming out of that store on the consumer side of it. We are starting to pick that back up. We've done an extreme large amount of work with our portals right now, and distribution. Through our distribution hubs and our portals, consumers that used to shop with us can now still shop with us. They can go online, order whatever they do need, and we ship it right out of our warehouses. I think that we've started to take care of that side of it. When you look really at the future drivers of GrowGen, it's our private label brands. You're talking about, again, as I said earlier, changing mid-teen margin business into mid-40 margin business. What you're also seeing is the stickiness of it. When people are buying Char Coir and Drip and our brands, they're usually buying full portfolios from us, and especially the larger players in the industry. The growth leverage right now is you have the cannabis space that's always been our bread and butter, you're starting to see right now growth drivers moving into lawn and garden. You're starting to see small ag. You're starting to see overseas. That's going to take time. We're going off an extremely small base right now. Again, when you start seeing the customers that GrowGen are starting to pick up right now, full facilities, full customers, we haven't seen that before. Another growth driver that you're going to probably see throughout the rest of the decade is CapEx is coming back into the industry. I've spoken about it at length that all the builds, all these large grow facilities that came on board from 2018 to 2021, their equipment needs to be replaced. With the shoring up of balance sheets and things of that nature right now, we're starting to see more CapEx coming through GrowGen than we've seen in a while. The exciting part about CapEx is when you're working on CapEx and initial builds, they're usually going with GrowGen for a whole suite of products. It's just not that build, it's the consumables for years to come. That's always the exciting part about CapEx. When you get the CapEx builds, you also get the consumables for years, and years of years. It's kind of like the razor and razor blades. If you buy the razor, you got to buy the razor blades. The consumable products are our higher margin products that people need on a weekly, monthly basis. That's where growth is coming from. I think we've hit that bottom number, Brian. With all the store closings that you've seen out of GrowGen, we have lost business from closing stores. There are still consumers that don't like computers, especially in the cannabis space and the lawn and garden space. Some products are extremely bulky to ship, and it gets expensive. There are people that still have cash in their pockets and want to spend cash. You can't spend cash online. There are ways to do it, some people can't figure it out. It's still sticky in certain places. When you're starting to see even in our first quarter this year, I think we had 12 less stores, we still had year-over-year growth. When you took that $3 million, $4 million of sales that we lost, we still picked up a couple million, that's what's starting to get exciting. What's also exciting to me is back in 2024. We lost over $15 million of adjusted EBITDA. In 2025, we lost $6 million. This year, we're looking to be profitable on an adjusted EBITDA basis. We're picking up these big clumps every year, $6 million, $7 million, $8 million a year. It's going to start adding up going through the decade, we honestly don't see it stopping. That's what excites me right now. I think it excites our team. We have taken typical store workers and replaced them with technical salespeople, commercial salespeople that can walk into any facility in the country, whether it's cannabis, whether it's ag, and help. Value add. It's value add, consultative-based selling, and that's the stickiness of it. Our guys become integrated into facilities, integrated into companies. We're their supply chain, but we're more than their supply chain. We are making their businesses better, and the consulting side of it, we pay for. We haven't been charging for consulting. We haven't been charging for that side of the business because these are groups that are adopting our private label brands. We have a $50 million CPG part of our business. That's exciting, and we see that not stopping. When you look at GrowGen in the future, it's going to be a product-driven, consultative-based company, and we believe products all over the world. This is just the start of it. It's the reformation of a company that was built, I guess, on the belief that everyone was going to grow a specific plant in their backyard, and that belief is gone. That's not happening. We could have pressed it longer and sat and watched the industry unfold, we made a extremely deliberate decision back in 2021, and it was a hard decision. It was selling through $100 million of inventory that we were selling to small individual growers that don't really mesh into some of the large commercial MSOs. We had two choices back then. One was to take a $50 million-$100 million write-off. The other was to sell product at a break even to a loss that goes through the P&L and goes through margins. We believe that you're also going to see, besides sales reigniting, we believe margins are going to reignite, too. That's why you hear certainly optimism from me, and I think optimism from anyone you speak to at GrowGen right now. Darren, you made, I think, a really interesting point just a few moments ago about as we think about just the overall, I guess maybe say better, underlying demand for cannabis. Right? What I think you said was that it's gone from that small individual grower, personal use, I would assume, to someone that says, "Look, I'm just going to buy a dispensary." Is that really the demand has just shifted, and then the GrowGen model is now shifting with that demand? We believe it has, Brian. Again, like anything else, I think what you read about cannabis coming out of the illegal growers around the country, it's not the future. The industry is growing up. What people still don't want to understand is cannabis was recreational legal in 2014, so it's been 10 years. We're just coming out of prohibition in certain ways. When you look at wine and spirits, it's a trillion-dollar industry, but it took a long time also. You're talking 100 years later. The growth that people always thought has been slower because a couple different reasons. One has been the price drop of cannabis. Cannabis was $5,000 a pound when I started this business in 2014. It went to $600 a pound, and you're seeing prices stabilize. Back then, people always thought, "If I got to go to a dispensary and it's $5,000 a pound and cannabis is so expensive, I'll grow it myself." What you've seen is tremendous price compression. What you're seeing, every ball that's been thrown at the industry, there's not much more that could be thrown at the industry. You're seeing legalization on the horizon. You're seeing rescheduling on the medical side. You saw that come through last month. You're starting to see tremendous efforts to push an industry that's been deflated over the last 10 years. You're seeing your first couple listings on the New York Stock Exchange, Trulieve and Curaleaf. Trulieve was just done on Wednesday, on today, I think. You're starting to see the exchanges starting to pick it up. Next month is the hearings in front of the ALJ on recreational cannabis rescheduling. You saw rescheduling on medical done last month. There's a lot going on right now. Most of it, everything that we see is positive. Not that we're basing GrowGen's future growth on tremendous positive. Right now, what you're seeing from GrowGen is our expectations for 2026 are pretty much that nothing happens, but you're starting to see things happen right now. We believe that it's going to be this gradual move up in the industry and pricing, and you're going to start seeing exporting into other countries. You're going to see supply and demand in the cannabis growing, we believe, come back into equilibrium, so prices stabilize. We do believe that the illegal markets are going to start disappearing in our country, which will be tremendously helpful for GrowGen because 95% of our business comes from the legal cannabis growers. Darren, talk a bit of the brands. You mentioned a few of the real key names here in our conversation so far, but I guess we just step back. How many brands do you have now? What are the key brands? As investors, how should we think about the underlying growth in that brand portfolio? I guess our key brands right now are mostly on the consumable side of it, products that people need every week, every month, every day to grow a plant. This isn't just cannabis. This is every plant in America. Char Coir is our leading brand right now. It's a $25 million business and growing. It's a premium coco substrate business with direct sourcing out of India. It's RHP certified, one of the only cocos in the United States that's RHP certified. We continue to come out with new products under the Char Coir brand, for lawn and garden, for ag. It's just been a tremendous product for us. One of the hardest parts is, again, when talking about the economics, it comes from India. We went through six to eight months of 50% tariffs on our product coming in from India, which was tremendously challenging for us on the margin side of it. There's only so much price increases you can take on a coco product. We ate a lot of it, but net right now, it's back down to that 10%. We're starting to realize profits back from Char Coir right now. It's a fast-growing business, and we couldn't be any more excited with it. We've recently launched something for propagation. That's where to start a plant's life, our coco coins with trays. It's a Jiffy-based product, but we believe faster growing. We've just seen tremendous appetite for this product, and we think it's going to be a product that's, again, going to grow for many years. We continue to launch new products from Char Coir. Drip Hydro is our nutrient brand right now. It's developed by growers, really for growers. It's a million-dollar-a-month product right now and growing. It's been an incredible launch with Drip. Changing growers' appetites for new products is tremendously difficult. There's three ways to do it, and you have to do all three. It's got to be price, better yield, better quality. If not, they're not switching. They have to change their fertigation systems, and again, we go through months and months of testing with these groups, especially for bigger facilities, lab testing, quality, having our technical guys go over to the facilities on a monthly basis. It's a slow process, but the process is working. We believe Drip has many years of growth ahead of it, so we couldn't be any more excited about that. One of our new divisions out of GrowGen is The Harvest Company. It extends our reach into broader lawn and garden markets. It's anything you need to grow any plant. It's gloves, it's scissors, it's pots, it's trellising. It's hundreds of different products. It's under The Harvest Company name. We have our website that anyone can go online and buy it. We sell this into Home Depot, into Lowe's, starting to make way more traction into big box, sell it through [Arid] into 2,000 lawn and garden stores around the country. This was a new deal that we forged this year. Like anything else, Brian, getting into these large, big box and lawn, it takes time. This is our first year into it. The products are all GrowGen products. They're high-margin products. The packaging is spot on. The products are best of breed and priced properly. When you look at that's what's driving this $50 million division. We also have a lighting brand, ION. We have probably the most recognized silicon-based product, Power Si. That sells into the cannabis space, and we also believe it'll start selling into ag too. When you look at these brands, where we're selling them, you have the commercial sales, GrowGen portals, GrowGen Pro portals, GrowGen locations, wholesale hydroponic stores, international distribution. All our brands will be distributed internationally and emerging into lawn and garden and into ag. Again, it's the biggest, fastest-growing division of GrowGen, and we believe it's going to be something that you hear for years to come out of our company. That's very helpful, Darren. I know our time's winding down here. Let's wrap up on the balance sheet, because again, I think that's been a huge bright spot here for GrowGen and really it allowed you to pursue this aggressive transformation while others have faltered. I guess, how do you think about the balance sheet now, the cash position, your desire to strategically buy back stock here? We've got Greg, do you want to go over this or do you want me to? Sure. Yeah. We do believe that one of GrowGeneration's key differentiators is the strength of our balance sheet. Over the past several years, we've been disciplined in managing costs, optimizing our working capital, and preserving liquidity, while most companies in the industry have faced significant financial pressures. As a result, we maintain a healthy balance sheet with substantial liquidity at this point. We have the flexibility to be patient and strategic in how we deploy capital. When we look at capital allocation, our primary objective is creating long-term shareholder value. We evaluate opportunities through that lens and prioritize investments that can strengthen the business and improve our earnings power over time. We remain focused on organic growth opportunities. That includes the investments that we've made in proprietary brands, a lot of the technology initiatives that Darren alluded to, operational efficiencies and other projects that enhance profitability and generate attractive returns on our invested capital. We believe that there's still opportunities within our existing platform to drive growth and expand margins as the market continues to normalize. Second, we continue to evaluate inorganic opportunities. Given the current environment, we believe there could be attractive opportunities to acquire complementary businesses, brands, capabilities, or assets at valuations that have a sufficient rationale for the business. We do have the financial flexibility to pursue those opportunities if they meet our criteria, although we do remain disciplined in how we're looking at deals at this point in time. Then I think the share repurchase authorization that we announced should be viewed within the broader capital allocation framework of the business. We announced $10 million in authorization from our board of directors. Importantly, it's both opportunistic and multi-year in nature. It doesn't obligate us to repurchase any specific amount of stock within a defined timeframe. Rather, it provides us with an additional tool to allocate capital when we believe our shares are trading at a meaningful discount to intrinsic value. We're continuing to look at windows of opportunity for repurchase over the next several years. Ultimately, we're fortunate to be in a position where we don't have to make decisions from a place of financial constraint. Our liquidity ratios remain very strong. We feel good about the health of the balance sheet and have the flexibility to pursue the highest return opportunities available to us. As we sit here today, we would generally view high return organic investments and compelling strategic acquisitions as our highest priorities for capital deployment, with the buyback serving as an additional shareholder-friendly option when market conditions warrant. The overarching message is that we intend to remain disciplined, maintain balance sheet strength, and allocate capital where we believe it can generate a great long-term value for our shareholders. Well, guys, I think our time has come to an end. Enjoyed the conversation. Congrats on the ongoing recent success here. Look forward to watching this story continue to play out. Much appreciated, Brian. Always a pleasure. Thank you. Thanks, Brian.

Speaker 1: Good morning. Thank you all for joining us. My name is Brian Nagel. I'm the Senior Equity Research Analyst here at Oppenheimer, covering consumer growth and e-commerce. This is day 3 of our 26th annual Oppenheimer Consumer Growth and E-commerce Conference. We very much appreciate you all tuning in. I'm pleased to announce or introduce our next presenting company, GrowGeneration. I've had the pleasure of covering and interacting with GrowGeneration now for a very long time. Very dynamic, interesting business model. We have two of the company's senior executives, Co-Founder and CEO, Darren Lampert, and CFO, Greg Sanders. Gentlemen, thank you for joining us. Good morning. good morning Thank you all for joining us. thank you all for joining us My name is Brian Nagel. my name is brian nagel I'm the Senior Equity Research Analyst here at Oppenheimer, covering consumer growth and e-commerce. i'm the senior equity research analyst here at oppenheimer covering consumer growth and e-commerce This is day 3 of our 26th annual Oppenheimer Consumer Growth and E-commerce Conference. this is day 3 of our 26th annual oppenheimer consumer growth and e-commerce conference We very much appreciate you all tuning in. we very much appreciate you all tuning in I'm pleased to announce or introduce our next presenting company, GrowGeneration. i'm pleased to announce or introduce our next presenting company growgeneration I've had the pleasure of covering and interacting with GrowGeneration now for a very long time. i've had the pleasure of covering and interacting with growgeneration now for a very long time Very dynamic, interesting business model. very dynamic interesting business model We have two of the company's senior executives, Co-Founder and CEO, Darren Lampert, and CFO, Greg Sanders. we have two of the company's senior executives co-founder and ceo darren lampert and cfo greg sanders Gentlemen, thank you for joining us. gentlemen thank you for joining us

Speaker 2: Thank you, Brian. Thank you, Brian. thank you brian

Speaker 3: Thanks, Brian. Thanks, Brian. thanks brian

Speaker 1: We're going to structure this as an informal fireside chat with me asking questions and the GrowGen team responding to those questions. To the extent there are questions from the audience, just send them through the chat and we will be happy to work them into our conversation. Guys, I thought when we start, before we talk about specific dynamics at GrowGeneration, I'd love to just begin, kind of a theme we're having with this conference is just the overall health of the consumer, what you're seeing and any impacts lately upon the GrowGeneration operations from the health of the consumer. We're going to structure this as an informal fireside chat with me asking questions and the GrowGen team responding to those questions. we're going to structure this as an informal fireside chat with me asking questions and the growgen team responding to those questions To the extent there are questions from the audience, just send them through the chat and we will be happy to work them into our conversation. to the extent there are questions from the audience just send them through the chat and we will be happy to work them into our conversation Guys, I thought when we start, before we talk about specific dynamics at GrowGeneration, I'd love to just begin, kind of a theme we're having with this conference is just the overall health of the consumer, what you're seeing and any impacts lately upon the GrowGeneration operations from the health of the consumer. guys i thought when we start before we talk about specific dynamics at growgeneration i'd love to just begin kind of a theme we're having with this conference is just the overall health of the consumer what you're seeing and any impacts lately upon the growgeneration operations from the health of the consumer

Speaker 2: Sure, Brian. One of the most important changes that you've seen at GrowGeneration over the past four years is that we're no longer primarily dependent on the retail consumer. Historically, investors viewed us as a hydroponic retail chain, serving hobbyist growers, small operators, and also the consumer. Today, our business is increasingly driven by commercial cultivation, wholesale distribution, proprietary brands, and B2B solutions. While broader economic conditions certainly impact spending behavior, our customers are focused on improving yields, lowering product costs, increasing efficiency, maximizing profitability. Our products, our proprietary products such as Drip Hydro, Char Coir, Power Si, directly help customers improve operating economics. As a result, we believe our business today is more resilient and less dependent on discretionary consumer spending than it was several years ago. Sure, Brian. sure brian One of the most important changes that you've seen at GrowGeneration over the past four years is that we're no longer primarily dependent on the retail consumer. one of the most important changes that you've seen at growgeneration over the past four years is that we're no longer primarily dependent on the retail consumer Historically, investors viewed us as a hydroponic retail chain, serving hobbyist growers, small operators, and also the consumer. historically investors viewed us as a hydroponic retail chain serving hobbyist growers small operators and also the consumer Today, our business is increasingly driven by commercial cultivation, wholesale distribution, proprietary brands, and B2B solutions. today our business is increasingly driven by commercial cultivation wholesale distribution proprietary brands and b2b solutions While broader economic conditions certainly impact spending behavior, our customers are focused on improving yields, lowering product costs, increasing efficiency, maximizing profitability. while broader economic conditions certainly impact spending behavior our customers are focused on improving yields lowering product costs increasing efficiency maximizing profitability Our products, our proprietary products such as Drip Hydro, Char Coir, Power Si, directly help customers improve operating economics. our products our proprietary products such as drip hydro char coir power si directly help customers improve operating economics As a result, we believe our business today is more resilient and less dependent on discretionary consumer spending than it was several years ago. as a result we believe our business today is more resilient and less dependent on discretionary consumer spending than it was several years ago I guess the key takeaway, Brian, GrowGen has shifted from a consumer discretionary exposure toward the commercial solutions model, which is not as affected by today's economy. I guess the key takeaway, Brian, GrowGen has shifted from a consumer discretionary exposure toward the commercial solutions model, which is not as affected by today's economy. i guess the key takeaway brian growgen has shifted from a consumer discretionary exposure toward the commercial solutions model which is not as affected by today's economy

Speaker 1: No, it's very helpful, Darren. It's a perfect segue into the conversation on GrowGen. I've had the pleasure of studying very closely this transformation that's happening, which you've just alluded to, the transformation of the GrowGen business model. I'd love to go into more detail, especially for those who are maybe less familiar with the GrowGen story, particularly the kind of the new dynamics. Discuss the transformation you're undertaking. You're going from point A to point B, importantly where are you in this transformation, and as investors, how should we think about the financial ramifications of this significant transformation of the GrowGen model? No, it's very helpful, Darren. no it's very helpful darren It's a perfect segue into the conversation on GrowGen. it's a perfect segue into the conversation on growgen I've had the pleasure of studying very closely this transformation that's happening, which you've just alluded to, the transformation of the GrowGen business model. i've had the pleasure of studying very closely this transformation that's happening which you've just alluded to the transformation of the growgen business model I'd love to go into more detail, especially for those who are maybe less familiar with the GrowGen story, particularly the kind of the new dynamics. i'd love to go into more detail especially for those who are maybe less familiar with the growgen story particularly the kind of the new dynamics Discuss the transformation you're undertaking. discuss the transformation you're undertaking You're going from point A to point B, importantly where are you in this transformation, and as investors, how should we think about the financial ramifications of this significant transformation of the GrowGen model? you're going from point a to point b importantly where are you in this transformation and as investors how should we think about the financial ramifications of this significant transformation of the growgen model

Speaker 2: We started GrowGen back in 2014. I guess the business model and our contention back then was, as the cannabis business grows, that consumers are going to be growing plants in their backyard, cannabis plants. When we embarked on this incredible growth strategy, building GrowGen from a million-dollar business on the sales side of it in 2014, till we peaked out in about $425 million in 2021. We built from three stores, our initial three stores, we built that up to 65 stores, over a million square feet of space around the country, transacting over 100,000 transactions a month. As the dynamics of the industry changed so dramatically, we had to pivot. Over the last several years, really, we've transformed GrowGen from a retail-focused operator into a higher margin technology-enabled B2B platform. We reduced operating expenses significantly. We optimized our store footprint and inventory. We started GrowGen back in 2014. we started growgen back in 2014 I guess the business model and our contention back then was, as the cannabis business grows, that consumers are going to be growing plants in their backyard, cannabis plants. i guess the business model and our contention back then was as the cannabis business grows that consumers are going to be growing plants in their backyard cannabis plants When we embarked on this incredible growth strategy, building GrowGen from a million-dollar business on the sales side of it in 2014, till we peaked out in about $425 million in 2021. when we embarked on this incredible growth strategy building growgen from a million-dollar business on the sales side of it in 2014 till we peaked out in about $425 million in 2021 We built from three stores, our initial three stores, we built that up to 65 stores, over a million square feet of space around the country, transacting over 100,000 transactions a month. we built from three stores our initial three stores we built that up to 65 stores over a million square feet of space around the country transacting over 100,000 transactions a month As the dynamics of the industry changed so dramatically, we had to pivot. as the dynamics of the industry changed so dramatically we had to pivot Over the last several years, really, we've transformed GrowGen from a retail-focused operator into a higher margin technology-enabled B2B platform. over the last several years really we've transformed growgen from a retail-focused operator into a higher margin technology-enabled b2b platform We reduced operating expenses significantly. we reduced operating expenses significantly We optimized our store footprint and inventory. we optimized our store footprint and inventory We dropped inventory from almost $130 million down to $40 million. We consolidated distribution. We strengthened our balance sheet. We invested in systems including CRM, ERP, WMS. We now have rolled out commercial portals that use our commercial warehouses to ship products directly. When you look at our remaining 19 locations around the country, down from 65, what you've seen really is they're more marketing hubs and distribution hubs, really, for our commercial customers as opposed to serving retailers. They're closed on weekends, 90% of them. What you're also starting to see right now is we've built this incredible commercial team at GrowGen and a technical team out there that's out on the street looking for business as opposed to waiting for business to walk into our stores. At the same time, we've built a portfolio of proprietary brands from under 10% back in 2021. We dropped inventory from almost $130 million down to $40 million. we dropped inventory from almost $130 million down to $40 million We consolidated distribution. we consolidated distribution We strengthened our balance sheet. we strengthened our balance sheet We invested in systems including CRM, ERP, WMS. we invested in systems including crm erp wms We now have rolled out commercial portals that use our commercial warehouses to ship products directly. we now have rolled out commercial portals that use our commercial warehouses to ship products directly When you look at our remaining 19 locations around the country, down from 65, what you've seen really is they're more marketing hubs and distribution hubs, really, for our commercial customers as opposed to serving retailers. when you look at our remaining 19 locations around the country down from 65 what you've seen really is they're more marketing hubs and distribution hubs really for our commercial customers as opposed to serving retailers They're closed on weekends, 90% of them. they're closed on weekends 90% of them What you're also starting to see right now is we've built this incredible commercial team at GrowGen and a technical team out there that's out on the street looking for business as opposed to waiting for business to walk into our stores. what you're also starting to see right now is we've built this incredible commercial team at growgen and a technical team out there that's out on the street looking for business as opposed to waiting for business to walk into our stores At the same time, we've built a portfolio of proprietary brands from under 10% back in 2021. at the same time we've built a portfolio of proprietary brands from under 10% back in 2021 It now represents approximately 37% of cultivation and gardening revenue, year-end target of 40% this year. We believe that number probably goes into the mid-40s to 50 next year. Looking forward, our priorities are straightforward. We're continuing growing our proprietary brands, continuing to roll out new ones, and we believe a lot of them are in the early stage of launch. We're expanding our commercial market share. We're increasing wholesale distribution. We're growing our lawn and garden channels and specialty ag. We believe that vertical is incredibly powerful right now. The TAM on the lawn and garden and the ag space is far dwarfs what we have right now in the cannabis space. Cannabis still is our bread and butter and, again, it's growing. We're pursuing international opportunities. It now represents approximately 37% of cultivation and gardening revenue, year-end target of 40% this year. it now represents approximately 37% of cultivation and gardening revenue year-end target of 40% this year We believe that number probably goes into the mid-40s to 50 next year. we believe that number probably goes into the mid-40s to 50 next year Looking forward, our priorities are straightforward. looking forward our priorities are straightforward We're continuing growing our proprietary brands, continuing to roll out new ones, and we believe a lot of them are in the early stage of launch. we're continuing growing our proprietary brands continuing to roll out new ones and we believe a lot of them are in the early stage of launch We're expanding our commercial market share. we're expanding our commercial market share We're increasing wholesale distribution. we're increasing wholesale distribution We're growing our lawn and garden channels and specialty ag. We believe that vertical is incredibly powerful right now. we're growing our lawn and garden channels and specialty ag. we believe that vertical is incredibly powerful right now The TAM on the lawn and garden and the ag space is far dwarfs what we have right now in the cannabis space. the tam on the lawn and garden and the ag space is far dwarfs what we have right now in the cannabis space Cannabis still is our bread and butter and, again, it's growing. cannabis still is our bread and butter and again it's growing We're pursuing international opportunities. we're pursuing international opportunities We've recently signed some contracts to start delivering our products, just GrowGen proprietary products, into Canada, into Europe, into Latin America. We believe that'll be a fast-growing part of our business. We're deriving sustainable profitability and cash flow. We believe we're still in this early transformation, and you're starting to see it in our numbers. I guess key takeaways, Brian, we're becoming a branded product and solutions company opposed to just that typical retailer that's waiting on the consumer to walk into the stores. We couldn't be any more excited of the transformation. I still do believe that GrowGeneration right now is a stronger business than we were in 2021 when the stock was $60. Our proprietary brands are taking over the industry, and we've pivoted with the industry. We've recently signed some contracts to start delivering our products, just GrowGen proprietary products, into Canada, into Europe, into Latin America. we've recently signed some contracts to start delivering our products just growgen proprietary products into canada into europe into latin america We believe that'll be a fast-growing part of our business. we believe that'll be a fast-growing part of our business We're deriving sustainable profitability and cash flow. we're deriving sustainable profitability and cash flow We believe we're still in this early transformation, and you're starting to see it in our numbers. we believe we're still in this early transformation and you're starting to see it in our numbers I guess key takeaways, Brian, we're becoming a branded product and solutions company opposed to just that typical retailer that's waiting on the consumer to walk into the stores. i guess key takeaways brian we're becoming a branded product and solutions company opposed to just that typical retailer that's waiting on the consumer to walk into the stores We couldn't be any more excited of the transformation. we couldn't be any more excited of the transformation I still do believe that GrowGeneration right now is a stronger business than we were in 2021 when the stock was $60. i still do believe that growgeneration right now is a stronger business than we were in 2021 when the stock was $60 Our proprietary brands are taking over the industry, and we've pivoted with the industry. our proprietary brands are taking over the industry and we've pivoted with the industry I think right now, when you look where we are, in such the early growth cycle of the cannabis industry, I think lawn and garden, I think specialty ag, and with the products that we're starting to bring into big box and to the distribution channels, I think you're going to see a different business going forward through to the rest of the decade and probably for many years to come. I think right now, when you look where we are, in such the early growth cycle of the cannabis industry, I think lawn and garden, I think specialty ag, and with the products that we're starting to bring into big box and to the distribution channels, I think you're going to see a different business going forward through to the rest of the decade and probably for many years to come. i think right now when you look where we are in such the early growth cycle of the cannabis industry i think lawn and garden i think specialty ag and with the products that we're starting to bring into big box and to the distribution channels i think you're going to see a different business going forward through to the rest of the decade and probably for many years to come

Speaker 1: That's very helpful, Darren. I want to make sure we understand clearly the difference in the consumer of GrowGeneration today versus the consumer back in the prior business model. That's very helpful, Darren. that's very helpful darren I want to make sure we understand clearly the difference in the consumer of GrowGeneration today versus the consumer back in the prior business model. i want to make sure we understand clearly the difference in the consumer of growgeneration today versus the consumer back in the prior business model

Speaker 2: Yeah, I think, as we spoke, we had 100,000 transactions, again, I think even a week back then. At 65 stores, we had stores doing 200 transactions a day. We had 800 employees. We're down to 200 employees right now. We're growing year-over-year. We just grew two quarters year-over-year. Our customers right now are the large multi-state operators, large single-state operators. We're representing 90% of our businesses on the business-to-business side of it. We used to rely on the business-to-consumer side of it, and the business-to-consumer side of it is changed dramatically. When you look into wine and spirits, people growing wine, beers, it's just a very small minutia of the industry. What we've also seen through the growth of our private label brands, that these brands have tremendous legs going into lawn and garden and going into specialty retail, and into ag. Yeah, I think, as we spoke, we had 100,000 transactions, again, I think even a week back then. yeah i think as we spoke we had 100,000 transactions again i think even a week back then At 65 stores, we had stores doing 200 transactions a day. at 65 stores we had stores doing 200 transactions a day We had 800 employees. we had 800 employees We're down to 200 employees right now. we're down to 200 employees right now We're growing year-over-year. we're growing year-over-year We just grew two quarters year-over-year. we just grew two quarters year-over-year Our customers right now are the large multi-state operators, large single-state operators. our customers right now are the large multi-state operators large single-state operators We're representing 90% of our businesses on the business-to-business side of it. we're representing 90% of our businesses on the business-to-business side of it We used to rely on the business-to-consumer side of it, and the business-to-consumer side of it is changed dramatically. we used to rely on the business-to-consumer side of it and the business-to-consumer side of it is changed dramatically When you look into wine and spirits, people growing wine, beers, it's just a very small minutia of the industry. when you look into wine and spirits people growing wine beers it's just a very small minutia of the industry What we've also seen through the growth of our private label brands, that these brands have tremendous legs going into lawn and garden and going into specialty retail, and into ag. what we've also seen through the growth of our private label brands that these brands have tremendous legs going into lawn and garden and going into specialty retail and into ag They're best of breed, what we always say is, if you can grow a cannabis plant, you can grow any plant in the world. It's the most difficult plant to grow. The products that we're launching are, again, from a price point, are incredible. We're selling at The Home Depot right now. We're selling at the Lowe's right now, through The Harvest Company. Char Coir is the fastest-growing coco brand in the country right now. You're seeing that with all our brands. The interesting and exciting part, as we'll talk about later, is we still believe these brands are in such early stage of launches. We're talking mid-40 margin business as opposed to high teens that you're seeing with distributed brands. Again, it's something that makes us tremendously excited. They're best of breed, what we always say is, if you can grow a cannabis plant, you can grow any plant in the world. they're best of breed what we always say is if you can grow a cannabis plant you can grow any plant in the world It's the most difficult plant to grow. it's the most difficult plant to grow The products that we're launching are, again, from a price point, are incredible. the products that we're launching are again from a price point are incredible We're selling at The Home Depot right now. we're selling at the home depot right now We're selling at the Lowe's right now, through The Harvest Company. we're selling at the lowe's right now through the harvest company Char Coir is the fastest-growing coco brand in the country right now. char coir is the fastest-growing coco brand in the country right now You're seeing that with all our brands. you're seeing that with all our brands The interesting and exciting part, as we'll talk about later, is we still believe these brands are in such early stage of launches. the interesting and exciting part as we'll talk about later is we still believe these brands are in such early stage of launches We're talking mid-40 margin business as opposed to high teens that you're seeing with distributed brands. we're talking mid-40 margin business as opposed to high teens that you're seeing with distributed brands Again, it's something that makes us tremendously excited. again it's something that makes us tremendously excited I think we pivoted back in 2021 when we saw, again, Wall Street and again, the industry changed dramatically, built out too quickly. Again, the consumers walked away. It made more sense going to a dispensary than growing your own. I think we did a tremendous job when we started looking at the competition around the industry, we'll talk about after too, that we've pivoted at the right time. I think we pivoted back in 2021 when we saw, again, Wall Street and again, the industry changed dramatically, built out too quickly. i think we pivoted back in 2021 when we saw again wall street and again the industry changed dramatically built out too quickly Again, the consumers walked away. again the consumers walked away It made more sense going to a dispensary than growing your own. it made more sense going to a dispensary than growing your own I think we did a tremendous job when we started looking at the competition around the industry, we'll talk about after too, that we've pivoted at the right time. i think we did a tremendous job when we started looking at the competition around the industry we'll talk about after too that we've pivoted at the right time

Speaker 1: Greg, I'd love to get you in the conversation. As the head of the financial piece of this model, how do you view, Darren's talked a lot about the improved efficiency of the business model, but from a financial perspective, how much more powerful is this business model now under this new operating model? Greg, I'd love to get you in the conversation. greg i'd love to get you in the conversation As the head of the financial piece of this model, how do you view, Darren's talked a lot about the improved efficiency of the business model, but from a financial perspective, how much more powerful is this business model now under this new operating model? as the head of the financial piece of this model how do you view darren's talked a lot about the improved efficiency of the business model but from a financial perspective how much more powerful is this business model now under this new operating model

Speaker 3: Yeah, that's a great question, Brian. Over the last several years, we've taken a deliberate approach to resizing the organization and aligning our cost structure with the realities of the current cultivation market. Our objective was not simply to reduce expenses over the last few years, but to create a leaner, more efficient platform capable of generating improved profitability across a range of market conditions. I think the results of those efforts are becoming increasingly visible in our financial performance. Throughout 2025 and into 2026, we meaningfully reduced our operating expense base through initiatives that included store rationalization, organizational streamlining, supply chain efficiencies, and a continued focus on disciplined spending. Those actions have lowered our fixed cost structure and improved our operating leverage over the business. Yeah, that's a great question, Brian. yeah that's a great question brian Over the last several years, we've taken a deliberate approach to resizing the organization and aligning our cost structure with the realities of the current cultivation market. over the last several years we've taken a deliberate approach to resizing the organization and aligning our cost structure with the realities of the current cultivation market Our objective was not simply to reduce expenses over the last few years, but to create a leaner, more efficient platform capable of generating improved profitability across a range of market conditions. our objective was not simply to reduce expenses over the last few years but to create a leaner more efficient platform capable of generating improved profitability across a range of market conditions I think the results of those efforts are becoming increasingly visible in our financial performance. i think the results of those efforts are becoming increasingly visible in our financial performance Throughout 2025 and into 2026, we meaningfully reduced our operating expense base through initiatives that included store rationalization, organizational streamlining, supply chain efficiencies, and a continued focus on disciplined spending. throughout 2025 and into 2026 we meaningfully reduced our operating expense base through initiatives that included store rationalization organizational streamlining supply chain efficiencies and a continued focus on disciplined spending Those actions have lowered our fixed cost structure and improved our operating leverage over the business. those actions have lowered our fixed cost structure and improved our operating leverage over the business As a result, we reduced expenses in 2025 compared to 2024 by around $30 million and reduced total expenses by closer to $60 million over the past four years. Because of that, we've been able to demonstrate improving profitability metrics, even in a market that remains challenged from a demand perspective. We forecasted positive adjusted EBITDA in the second quarter of 2026. We expanded margins through a combination of proprietary brand growth and operational efficiencies. Importantly, we've achieved these improvements while maintaining a strong balance sheet and continuing to invest in strategic initiatives that support future growth. What we're particularly encouraged by is that many of these cost actions are structural rather than temporary. The benefits are embedded in how the business operates today. As a result, we reduced expenses in 2025 compared to 2024 by around $30 million and reduced total expenses by closer to $60 million over the past four years. as a result we reduced expenses in 2025 compared to 2024 by around $30 million and reduced total expenses by closer to $60 million over the past four years Because of that, we've been able to demonstrate improving profitability metrics, even in a market that remains challenged from a demand perspective. because of that we've been able to demonstrate improving profitability metrics even in a market that remains challenged from a demand perspective We forecasted positive adjusted EBITDA in the second quarter of 2026. We expanded margins through a combination of proprietary brand growth and operational efficiencies. we forecasted positive adjusted ebitda in the second quarter of 2026. we expanded margins through a combination of proprietary brand growth and operational efficiencies Importantly, we've achieved these improvements while maintaining a strong balance sheet and continuing to invest in strategic initiatives that support future growth. importantly we've achieved these improvements while maintaining a strong balance sheet and continuing to invest in strategic initiatives that support future growth What we're particularly encouraged by is that many of these cost actions are structural rather than temporary. what we're particularly encouraged by is that many of these cost actions are structural rather than temporary The benefits are embedded in how the business operates today. the benefits are embedded in how the business operates today That means as the industry conditions improve and revenue growth returns, we believe a greater percentage of incremental gross profit has the potential to flow through to the bottom line, which wouldn't have been the case several years ago. While we remain focused on further operational improvements, we believe the work that we've done so far has positioned GrowGen to be a more efficient, more resilient company with a significantly lower break-even point and a stronger foundation for long-term profitability. That means as the industry conditions improve and revenue growth returns, we believe a greater percentage of incremental gross profit has the potential to flow through to the bottom line, which wouldn't have been the case several years ago. that means as the industry conditions improve and revenue growth returns we believe a greater percentage of incremental gross profit has the potential to flow through to the bottom line which wouldn't have been the case several years ago While we remain focused on further operational improvements, we believe the work that we've done so far has positioned GrowGen to be a more efficient, more resilient company with a significantly lower break-even point and a stronger foundation for long-term profitability. while we remain focused on further operational improvements we believe the work that we've done so far has positioned growgen to be a more efficient more resilient company with a significantly lower break-even point and a stronger foundation for long-term profitability

Speaker 1: That's very helpful. Just on the cost side, the cost infrastructure now is right, and basically where it should be, poised to lever as the growth returns. That's very helpful. that's very helpful Just on the cost side, the cost infrastructure now is right, and basically where it should be, poised to lever as the growth returns. just on the cost side the cost infrastructure now is right and basically where it should be poised to lever as the growth returns

Speaker 3: Yeah, that's exactly right, Brian. I think the big key over the last several years is we've reduced our store count from near 70 in the end of 2021 to less than 20 at this point today. We've reduced expenses, like I mentioned earlier, close to $60 million over the last several years. When you look at the business, I think it's positioned sustainably for long-term profitable growth, largely due to the store reductions that we've had in place, in addition to the headcount reductions and other improvements that we've made across the operation. Yeah, that's exactly right, Brian. yeah that's exactly right brian I think the big key over the last several years is we've reduced our store count from near 70 in the end of 2021 to less than 20 at this point today. i think the big key over the last several years is we've reduced our store count from near 70 in the end of 2021 to less than 20 at this point today We've reduced expenses, like I mentioned earlier, close to $60 million over the last several years. we've reduced expenses like i mentioned earlier close to $60 million over the last several years When you look at the business, I think it's positioned sustainably for long-term profitable growth, largely due to the store reductions that we've had in place, in addition to the headcount reductions and other improvements that we've made across the operation. when you look at the business i think it's positioned sustainably for long-term profitable growth largely due to the store reductions that we've had in place in addition to the headcount reductions and other improvements that we've made across the operation

Speaker 1: Darren, from your perspective, what needs to happen in order to really reignite growth, sustained growth, at GrowGeneration than maybe in the sector more broadly? Darren, from your perspective, what needs to happen in order to really reignite growth, sustained growth, at GrowGeneration than maybe in the sector more broadly? darren from your perspective what needs to happen in order to really reignite growth sustained growth at growgeneration than maybe in the sector more broadly

Speaker 2: I think you're seeing that right now, Brian. Again, we just had two quarters of year-over-year growth. Hopefully, the second quarter will be the third. I think we are reigniting growth, and we're doing that with, again, as we said, almost 40 less stores. Every time we close a store, we're losing 30%-50% of the business coming out of that store on the consumer side of it. We are starting to pick that back up. We've done an extreme large amount of work with our portals right now, and distribution. Through our distribution hubs and our portals, consumers that used to shop with us can now still shop with us. They can go online, order whatever they do need, and we ship it right out of our warehouses. I think that we've started to take care of that side of it. I think you're seeing that right now, Brian. i think you're seeing that right now brian Again, we just had two quarters of year-over-year growth. again we just had two quarters of year-over-year growth Hopefully, the second quarter will be the third. hopefully the second quarter will be the third I think we are reigniting growth, and we're doing that with, again, as we said, almost 40 less stores. i think we are reigniting growth and we're doing that with again as we said almost 40 less stores Every time we close a store, we're losing 30%-50% of the business coming out of that store on the consumer side of it. every time we close a store we're losing 30%-50% of the business coming out of that store on the consumer side of it We are starting to pick that back up. we are starting to pick that back up We've done an extreme large amount of work with our portals right now, and distribution. we've done an extreme large amount of work with our portals right now and distribution Through our distribution hubs and our portals, consumers that used to shop with us can now still shop with us. through our distribution hubs and our portals consumers that used to shop with us can now still shop with us They can go online, order whatever they do need, and we ship it right out of our warehouses. they can go online order whatever they do need and we ship it right out of our warehouses I think that we've started to take care of that side of it. i think that we've started to take care of that side of it When you look really at the future drivers of GrowGen, it's our private label brands. You're talking about, again, as I said earlier, changing mid-teen margin business into mid-40 margin business. What you're also seeing is the stickiness of it. When people are buying Char Coir and Drip and our brands, they're usually buying full portfolios from us, and especially the larger players in the industry. The growth leverage right now is you have the cannabis space that's always been our bread and butter, you're starting to see right now growth drivers moving into lawn and garden. You're starting to see small ag. You're starting to see overseas. That's going to take time. We're going off an extremely small base right now. When you look really at the future drivers of GrowGen, it's our private label brands. when you look really at the future drivers of growgen it's our private label brands You're talking about, again, as I said earlier, changing mid-teen margin business into mid-40 margin business. you're talking about again as i said earlier changing mid-teen margin business into mid-40 margin business What you're also seeing is the stickiness of it. what you're also seeing is the stickiness of it When people are buying Char Coir and Drip and our brands, they're usually buying full portfolios from us, and especially the larger players in the industry. when people are buying char coir and drip and our brands they're usually buying full portfolios from us and especially the larger players in the industry The growth leverage right now is you have the cannabis space that's always been our bread and butter, you're starting to see right now growth drivers moving into lawn and garden. the growth leverage right now is you have the cannabis space that's always been our bread and butter you're starting to see right now growth drivers moving into lawn and garden You're starting to see small ag. you're starting to see small ag You're starting to see overseas. you're starting to see overseas That's going to take time. that's going to take time We're going off an extremely small base right now. we're going off an extremely small base right now Again, when you start seeing the customers that GrowGen are starting to pick up right now, full facilities, full customers, we haven't seen that before. Another growth driver that you're going to probably see throughout the rest of the decade is CapEx is coming back into the industry. I've spoken about it at length that all the builds, all these large grow facilities that came on board from 2018 to 2021, their equipment needs to be replaced. With the shoring up of balance sheets and things of that nature right now, we're starting to see more CapEx coming through GrowGen than we've seen in a while. The exciting part about CapEx is when you're working on CapEx and initial builds, they're usually going with GrowGen for a whole suite of products. It's just not that build, it's the consumables for years to come. Again, when you start seeing the customers that GrowGen are starting to pick up right now, full facilities, full customers, we haven't seen that before. again when you start seeing the customers that growgen are starting to pick up right now full facilities full customers we haven't seen that before Another growth driver that you're going to probably see throughout the rest of the decade is CapEx is coming back into the industry. another growth driver that you're going to probably see throughout the rest of the decade is capex is coming back into the industry I've spoken about it at length that all the builds, all these large grow facilities that came on board from 2018 to 2021, their equipment needs to be replaced. i've spoken about it at length that all the builds all these large grow facilities that came on board from 2018 to 2021 their equipment needs to be replaced With the shoring up of balance sheets and things of that nature right now, we're starting to see more CapEx coming through GrowGen than we've seen in a while. with the shoring up of balance sheets and things of that nature right now we're starting to see more capex coming through growgen than we've seen in a while The exciting part about CapEx is when you're working on CapEx and initial builds, they're usually going with GrowGen for a whole suite of products. the exciting part about capex is when you're working on capex and initial builds they're usually going with growgen for a whole suite of products It's just not that build, it's the consumables for years to come. it's just not that build it's the consumables for years to come That's always the exciting part about CapEx. When you get the CapEx builds, you also get the consumables for years, and years of years. It's kind of like the razor and razor blades. If you buy the razor, you got to buy the razor blades. The consumable products are our higher margin products that people need on a weekly, monthly basis. That's where growth is coming from. I think we've hit that bottom number, Brian. With all the store closings that you've seen out of GrowGen, we have lost business from closing stores. There are still consumers that don't like computers, especially in the cannabis space and the lawn and garden space. Some products are extremely bulky to ship, and it gets expensive. There are people that still have cash in their pockets and want to spend cash. You can't spend cash online. That's always the exciting part about CapEx. that's always the exciting part about capex When you get the CapEx builds, you also get the consumables for years, and years of years. when you get the capex builds you also get the consumables for years and years of years It's kind of like the razor and razor blades. it's kind of like the razor and razor blades If you buy the razor, you got to buy the razor blades. if you buy the razor you got to buy the razor blades The consumable products are our higher margin products that people need on a weekly, monthly basis. the consumable products are our higher margin products that people need on a weekly monthly basis That's where growth is coming from. that's where growth is coming from I think we've hit that bottom number, Brian. i think we've hit that bottom number brian With all the store closings that you've seen out of GrowGen, we have lost business from closing stores. with all the store closings that you've seen out of growgen we have lost business from closing stores There are still consumers that don't like computers, especially in the cannabis space and the lawn and garden space. there are still consumers that don't like computers especially in the cannabis space and the lawn and garden space Some products are extremely bulky to ship, and it gets expensive. some products are extremely bulky to ship and it gets expensive There are people that still have cash in their pockets and want to spend cash. there are people that still have cash in their pockets and want to spend cash You can't spend cash online. you can't spend cash online There are ways to do it, some people can't figure it out. It's still sticky in certain places. When you're starting to see even in our first quarter this year, I think we had 12 less stores, we still had year-over-year growth. When you took that $3 million, $4 million of sales that we lost, we still picked up a couple million, that's what's starting to get exciting. What's also exciting to me is back in 2024. We lost over $15 million of adjusted EBITDA. In 2025, we lost $6 million. This year, we're looking to be profitable on an adjusted EBITDA basis. We're picking up these big clumps every year, $6 million, $7 million, $8 million a year. It's going to start adding up going through the decade, we honestly don't see it stopping. That's what excites me right now. There are ways to do it, some people can't figure it out. there are ways to do it some people can't figure it out It's still sticky in certain places. it's still sticky in certain places When you're starting to see even in our first quarter this year, I think we had 12 less stores, we still had year-over-year growth. when you're starting to see even in our first quarter this year i think we had 12 less stores we still had year-over-year growth When you took that $3 million, $4 million of sales that we lost, we still picked up a couple million, that's what's starting to get exciting. when you took that $3 million $4 million of sales that we lost we still picked up a couple million that's what's starting to get exciting What's also exciting to me is back in 2024. We lost over $15 million of adjusted EBITDA. what's also exciting to me is back in 2024. we lost over $15 million of adjusted ebitda In 2025, we lost $6 million. in 2025 we lost $6 million This year, we're looking to be profitable on an adjusted EBITDA basis. this year we're looking to be profitable on an adjusted ebitda basis We're picking up these big clumps every year, $6 million, $7 million, $8 million a year. we're picking up these big clumps every year $6 million, $7 million $8 million a year It's going to start adding up going through the decade, we honestly don't see it stopping. it's going to start adding up going through the decade we honestly don't see it stopping That's what excites me right now. that's what excites me right now I think it excites our team. We have taken typical store workers and replaced them with technical salespeople, commercial salespeople that can walk into any facility in the country, whether it's cannabis, whether it's ag, and help. Value add. It's value add, consultative-based selling, and that's the stickiness of it. Our guys become integrated into facilities, integrated into companies. We're their supply chain, but we're more than their supply chain. We are making their businesses better, and the consulting side of it, we pay for. We haven't been charging for consulting. We haven't been charging for that side of the business because these are groups that are adopting our private label brands. We have a $50 million CPG part of our business. That's exciting, and we see that not stopping. I think it excites our team. i think it excites our team We have taken typical store workers and replaced them with technical salespeople, commercial salespeople that can walk into any facility in the country, whether it's cannabis, whether it's ag, and help. we have taken typical store workers and replaced them with technical salespeople commercial salespeople that can walk into any facility in the country whether it's cannabis whether it's ag and help Value add. value add It's value add, consultative-based selling, and that's the stickiness of it. it's value add consultative-based selling and that's the stickiness of it Our guys become integrated into facilities, integrated into companies. our guys become integrated into facilities integrated into companies We're their supply chain, but we're more than their supply chain. we're their supply chain but we're more than their supply chain We are making their businesses better, and the consulting side of it, we pay for. we are making their businesses better and the consulting side of it we pay for We haven't been charging for consulting. we haven't been charging for consulting We haven't been charging for that side of the business because these are groups that are adopting our private label brands. we haven't been charging for that side of the business because these are groups that are adopting our private label brands We have a $50 million CPG part of our business. we have a $50 million cpg part of our business That's exciting, and we see that not stopping. that's exciting and we see that not stopping When you look at GrowGen in the future, it's going to be a product-driven, consultative-based company, and we believe products all over the world. This is just the start of it. It's the reformation of a company that was built, I guess, on the belief that everyone was going to grow a specific plant in their backyard, and that belief is gone. That's not happening. We could have pressed it longer and sat and watched the industry unfold, we made a extremely deliberate decision back in 2021, and it was a hard decision. It was selling through $100 million of inventory that we were selling to small individual growers that don't really mesh into some of the large commercial MSOs. We had two choices back then. One was to take a $50 million-$100 million write-off. When you look at GrowGen in the future, it's going to be a product-driven, consultative-based company, and we believe products all over the world. when you look at growgen in the future it's going to be a product-driven consultative-based company and we believe products all over the world This is just the start of it. this is just the start of it It's the reformation of a company that was built, I guess, on the belief that everyone was going to grow a specific plant in their backyard, and that belief is gone. it's the reformation of a company that was built i guess on the belief that everyone was going to grow a specific plant in their backyard and that belief is gone That's not happening. that's not happening We could have pressed it longer and sat and watched the industry unfold, we made a extremely deliberate decision back in 2021, and it was a hard decision. we could have pressed it longer and sat and watched the industry unfold we made a extremely deliberate decision back in 2021 and it was a hard decision It was selling through $100 million of inventory that we were selling to small individual growers that don't really mesh into some of the large commercial MSOs. it was selling through $100 million of inventory that we were selling to small individual growers that don't really mesh into some of the large commercial msos We had two choices back then. we had two choices back then One was to take a $50 million-$100 million write-off. one was to take a $50 million-$100 million write-off The other was to sell product at a break even to a loss that goes through the P&L and goes through margins. We believe that you're also going to see, besides sales reigniting, we believe margins are going to reignite, too. That's why you hear certainly optimism from me, and I think optimism from anyone you speak to at GrowGen right now. The other was to sell product at a break even to a loss that goes through the P&L and goes through margins. the other was to sell product at a break even to a loss that goes through the p&l and goes through margins We believe that you're also going to see, besides sales reigniting, we believe margins are going to reignite, too. we believe that you're also going to see besides sales reigniting we believe margins are going to reignite too That's why you hear certainly optimism from me, and I think optimism from anyone you speak to at GrowGen right now. that's why you hear certainly optimism from me and i think optimism from anyone you speak to at growgen right now

Speaker 1: Darren, you made, I think, a really interesting point just a few moments ago about as we think about just the overall, I guess maybe say better, underlying demand for cannabis. Right? What I think you said was that it's gone from that small individual grower, personal use, I would assume, to someone that says, "Look, I'm just going to buy a dispensary." Is that really the demand has just shifted, and then the GrowGen model is now shifting with that demand? Darren, you made, I think, a really interesting point just a few moments ago about as we think about just the overall, I guess maybe say better, underlying demand for cannabis. darren you made i think a really interesting point just a few moments ago about as we think about just the overall i guess maybe say better underlying demand for cannabis Right? right What I think you said was that it's gone from that small individual grower, personal use, I would assume, to someone that says, "Look, I'm just going to buy a dispensary." Is that really the demand has just shifted, and then the GrowGen model is now shifting with that demand? what i think you said was that it's gone from that small individual grower personal use i would assume to someone that says "look i'm just going to buy a dispensary." is that really the demand has just shifted and then the growgen model is now shifting with that demand

Speaker 2: We believe it has, Brian. Again, like anything else, I think what you read about cannabis coming out of the illegal growers around the country, it's not the future. The industry is growing up. What people still don't want to understand is cannabis was recreational legal in 2014, so it's been 10 years. We're just coming out of prohibition in certain ways. When you look at wine and spirits, it's a trillion-dollar industry, but it took a long time also. You're talking 100 years later. The growth that people always thought has been slower because a couple different reasons. One has been the price drop of cannabis. Cannabis was $5,000 a pound when I started this business in 2014. It went to $600 a pound, and you're seeing prices stabilize. We believe it has, Brian. we believe it has brian Again, like anything else, I think what you read about cannabis coming out of the illegal growers around the country, it's not the future. again like anything else i think what you read about cannabis coming out of the illegal growers around the country it's not the future The industry is growing up. the industry is growing up What people still don't want to understand is cannabis was recreational legal in 2014, so it's been 10 years. what people still don't want to understand is cannabis was recreational legal in 2014 so it's been 10 years We're just coming out of prohibition in certain ways. we're just coming out of prohibition in certain ways When you look at wine and spirits, it's a trillion-dollar industry, but it took a long time also. when you look at wine and spirits it's a trillion-dollar industry but it took a long time also You're talking 100 years later. you're talking 100 years later The growth that people always thought has been slower because a couple different reasons. the growth that people always thought has been slower because a couple different reasons One has been the price drop of cannabis. one has been the price drop of cannabis Cannabis was $5,000 a pound when I started this business in 2014. cannabis was $5,000 a pound when i started this business in 2014 It went to $600 a pound, and you're seeing prices stabilize. it went to $600 a pound and you're seeing prices stabilize Back then, people always thought, "If I got to go to a dispensary and it's $5,000 a pound and cannabis is so expensive, I'll grow it myself." What you've seen is tremendous price compression. What you're seeing, every ball that's been thrown at the industry, there's not much more that could be thrown at the industry. You're seeing legalization on the horizon. You're seeing rescheduling on the medical side. You saw that come through last month. You're starting to see tremendous efforts to push an industry that's been deflated over the last 10 years. You're seeing your first couple listings on the New York Stock Exchange, Trulieve and Curaleaf. Trulieve was just done on Wednesday, on today, I think. You're starting to see the exchanges starting to pick it up. Next month is the hearings in front of the ALJ on recreational cannabis rescheduling. Back then, people always thought, "If I got to go to a dispensary and it's $5,000 a pound and cannabis is so expensive, I'll grow it myself." What you've seen is tremendous price compression. back then people always thought "if i got to go to a dispensary and it's $5,000 a pound and cannabis is so expensive i'll grow it myself." what you've seen is tremendous price compression What you're seeing, every ball that's been thrown at the industry, there's not much more that could be thrown at the industry. what you're seeing every ball that's been thrown at the industry there's not much more that could be thrown at the industry You're seeing legalization on the horizon. you're seeing legalization on the horizon You're seeing rescheduling on the medical side. you're seeing rescheduling on the medical side You saw that come through last month. you saw that come through last month You're starting to see tremendous efforts to push an industry that's been deflated over the last 10 years. you're starting to see tremendous efforts to push an industry that's been deflated over the last 10 years You're seeing your first couple listings on the New York Stock Exchange, Trulieve and Curaleaf. you're seeing your first couple listings on the new york stock exchange trulieve and curaleaf Trulieve was just done on Wednesday, on today, I think. trulieve was just done on wednesday on today i think You're starting to see the exchanges starting to pick it up. you're starting to see the exchanges starting to pick it up Next month is the hearings in front of the ALJ on recreational cannabis rescheduling. next month is the hearings in front of the alj on recreational cannabis rescheduling You saw rescheduling on medical done last month. There's a lot going on right now. Most of it, everything that we see is positive. Not that we're basing GrowGen's future growth on tremendous positive. Right now, what you're seeing from GrowGen is our expectations for 2026 are pretty much that nothing happens, but you're starting to see things happen right now. We believe that it's going to be this gradual move up in the industry and pricing, and you're going to start seeing exporting into other countries. You're going to see supply and demand in the cannabis growing, we believe, come back into equilibrium, so prices stabilize. We do believe that the illegal markets are going to start disappearing in our country, which will be tremendously helpful for GrowGen because 95% of our business comes from the legal cannabis growers. You saw rescheduling on medical done last month. you saw rescheduling on medical done last month There's a lot going on right now. there's a lot going on right now Most of it, everything that we see is positive. most of it everything that we see is positive Not that we're basing GrowGen's future growth on tremendous positive. not that we're basing growgen's future growth on tremendous positive Right now, what you're seeing from GrowGen is our expectations for 2026 are pretty much that nothing happens, but you're starting to see things happen right now. right now what you're seeing from growgen is our expectations for 2026 are pretty much that nothing happens but you're starting to see things happen right now We believe that it's going to be this gradual move up in the industry and pricing, and you're going to start seeing exporting into other countries. we believe that it's going to be this gradual move up in the industry and pricing and you're going to start seeing exporting into other countries You're going to see supply and demand in the cannabis growing, we believe, come back into equilibrium, so prices stabilize. you're going to see supply and demand in the cannabis growing we believe come back into equilibrium so prices stabilize We do believe that the illegal markets are going to start disappearing in our country, which will be tremendously helpful for GrowGen because 95% of our business comes from the legal cannabis growers. we do believe that the illegal markets are going to start disappearing in our country which will be tremendously helpful for growgen because 95% of our business comes from the legal cannabis growers

Speaker 1: Darren, talk a bit of the brands. You mentioned a few of the real key names here in our conversation so far, but I guess we just step back. How many brands do you have now? What are the key brands? As investors, how should we think about the underlying growth in that brand portfolio? Darren, talk a bit of the brands. darren talk a bit of the brands You mentioned a few of the real key names here in our conversation so far, but I guess we just step back. you mentioned a few of the real key names here in our conversation so far but i guess we just step back How many brands do you have now? how many brands do you have now What are the key brands? what are the key brands As investors, how should we think about the underlying growth in that brand portfolio? as investors how should we think about the underlying growth in that brand portfolio

Speaker 2: I guess our key brands right now are mostly on the consumable side of it, products that people need every week, every month, every day to grow a plant. This isn't just cannabis. This is every plant in America. Char Coir is our leading brand right now. It's a $25 million business and growing. It's a premium coco substrate business with direct sourcing out of India. It's RHP certified, one of the only cocos in the United States that's RHP certified. We continue to come out with new products under the Char Coir brand, for lawn and garden, for ag. It's just been a tremendous product for us. I guess our key brands right now are mostly on the consumable side of it, products that people need every week, every month, every day to grow a plant. i guess our key brands right now are mostly on the consumable side of it products that people need every week every month every day to grow a plant This isn't just cannabis. this isn't just cannabis This is every plant in America. this is every plant in america Char Coir is our leading brand right now. char coir is our leading brand right now It's a $25 million business and growing. it's a $25 million business and growing It's a premium coco substrate business with direct sourcing out of India. it's a premium coco substrate business with direct sourcing out of india It's RHP certified, one of the only cocos in the United States that's RHP certified. it's rhp certified one of the only cocos in the united states that's rhp certified We continue to come out with new products under the Char Coir brand, for lawn and garden, for ag. we continue to come out with new products under the char coir brand for lawn and garden for ag It's just been a tremendous product for us. it's just been a tremendous product for us One of the hardest parts is, again, when talking about the economics, it comes from India. We went through six to eight months of 50% tariffs on our product coming in from India, which was tremendously challenging for us on the margin side of it. There's only so much price increases you can take on a coco product. We ate a lot of it, but net right now, it's back down to that 10%. We're starting to realize profits back from Char Coir right now. It's a fast-growing business, and we couldn't be any more excited with it. We've recently launched something for propagation. That's where to start a plant's life, our coco coins with trays. It's a Jiffy-based product, but we believe faster growing. One of the hardest parts is, again, when talking about the economics, it comes from India. one of the hardest parts is again when talking about the economics it comes from india We went through six to eight months of 50% tariffs on our product coming in from India, which was tremendously challenging for us on the margin side of it. we went through six to eight months of 50% tariffs on our product coming in from india which was tremendously challenging for us on the margin side of it There's only so much price increases you can take on a coco product. there's only so much price increases you can take on a coco product We ate a lot of it, but net right now, it's back down to that 10%. we ate a lot of it but net right now it's back down to that 10% We're starting to realize profits back from Char Coir right now. we're starting to realize profits back from char coir right now It's a fast-growing business, and we couldn't be any more excited with it. it's a fast-growing business and we couldn't be any more excited with it We've recently launched something for propagation. we've recently launched something for propagation That's where to start a plant's life, our coco coins with trays. that's where to start a plant's life our coco coins with trays It's a Jiffy-based product, but we believe faster growing. it's a jiffy-based product but we believe faster growing We've just seen tremendous appetite for this product, and we think it's going to be a product that's, again, going to grow for many years. We continue to launch new products from Char Coir. Drip Hydro is our nutrient brand right now. It's developed by growers, really for growers. It's a million-dollar-a-month product right now and growing. It's been an incredible launch with Drip. Changing growers' appetites for new products is tremendously difficult. There's three ways to do it, and you have to do all three. It's got to be price, better yield, better quality. If not, they're not switching. They have to change their fertigation systems, and again, we go through months and months of testing with these groups, especially for bigger facilities, lab testing, quality, having our technical guys go over to the facilities on a monthly basis. We've just seen tremendous appetite for this product, and we think it's going to be a product that's, again, going to grow for many years. we've just seen tremendous appetite for this product and we think it's going to be a product that's again going to grow for many years We continue to launch new products from Char Coir. we continue to launch new products from char coir Drip Hydro is our nutrient brand right now. drip hydro is our nutrient brand right now It's developed by growers, really for growers. it's developed by growers really for growers It's a million-dollar-a-month product right now and growing. it's a million-dollar-a-month product right now and growing It's been an incredible launch with Drip. it's been an incredible launch with drip Changing growers' appetites for new products is tremendously difficult. changing growers' appetites for new products is tremendously difficult There's three ways to do it, and you have to do all three. there's three ways to do it and you have to do all three It's got to be price, better yield, better quality. it's got to be price better yield better quality If not, they're not switching. if not they're not switching They have to change their fertigation systems, and again, we go through months and months of testing with these groups, especially for bigger facilities, lab testing, quality, having our technical guys go over to the facilities on a monthly basis. they have to change their fertigation systems and again we go through months and months of testing with these groups especially for bigger facilities lab testing quality having our technical guys go over to the facilities on a monthly basis It's a slow process, but the process is working. We believe Drip has many years of growth ahead of it, so we couldn't be any more excited about that. One of our new divisions out of GrowGen is The Harvest Company. It extends our reach into broader lawn and garden markets. It's anything you need to grow any plant. It's gloves, it's scissors, it's pots, it's trellising. It's hundreds of different products. It's under The Harvest Company name. We have our website that anyone can go online and buy it. We sell this into Home Depot, into Lowe's, starting to make way more traction into big box, sell it through [Arid] into 2,000 lawn and garden stores around the country. This was a new deal that we forged this year. Like anything else, Brian, getting into these large, big box and lawn, it takes time. It's a slow process, but the process is working. it's a slow process but the process is working We believe Drip has many years of growth ahead of it, so we couldn't be any more excited about that. we believe drip has many years of growth ahead of it so we couldn't be any more excited about that One of our new divisions out of GrowGen is The Harvest Company. one of our new divisions out of growgen is the harvest company It extends our reach into broader lawn and garden markets. it extends our reach into broader lawn and garden markets It's anything you need to grow any plant. it's anything you need to grow any plant It's gloves, it's scissors, it's pots, it's trellising. it's gloves it's scissors it's pots it's trellising It's hundreds of different products. it's hundreds of different products It's under The Harvest Company name. it's under the harvest company name We have our website that anyone can go online and buy it. we have our website that anyone can go online and buy it We sell this into Home Depot, into Lowe's, starting to make way more traction into big box, sell it through [Arid] into 2,000 lawn and garden stores around the country. we sell this into home depot into lowe's starting to make way more traction into big box sell it through [arid] into 2,000 lawn and garden stores around the country This was a new deal that we forged this year. this was a new deal that we forged this year Like anything else, Brian, getting into these large, big box and lawn, it takes time. like anything else brian getting into these large big box and lawn it takes time This is our first year into it. The products are all GrowGen products. They're high-margin products. The packaging is spot on. The products are best of breed and priced properly. When you look at that's what's driving this $50 million division. We also have a lighting brand, ION. We have probably the most recognized silicon-based product, Power Si. That sells into the cannabis space, and we also believe it'll start selling into ag too. When you look at these brands, where we're selling them, you have the commercial sales, GrowGen portals, GrowGen Pro portals, GrowGen locations, wholesale hydroponic stores, international distribution. All our brands will be distributed internationally and emerging into lawn and garden and into ag. Again, it's the biggest, fastest-growing division of GrowGen, and we believe it's going to be something that you hear for years to come out of our company. This is our first year into it. this is our first year into it The products are all GrowGen products. the products are all growgen products They're high-margin products. they're high-margin products The packaging is spot on. the packaging is spot on The products are best of breed and priced properly. the products are best of breed and priced properly When you look at that's what's driving this $50 million division. when you look at that's what's driving this $50 million division We also have a lighting brand, ION. we also have a lighting brand ion We have probably the most recognized silicon-based product, Power Si. we have probably the most recognized silicon-based product power si That sells into the cannabis space, and we also believe it'll start selling into ag too. that sells into the cannabis space and we also believe it'll start selling into ag too When you look at these brands, where we're selling them, you have the commercial sales, GrowGen portals, GrowGen Pro portals, GrowGen locations, wholesale hydroponic stores, international distribution. when you look at these brands where we're selling them you have the commercial sales growgen portals growgen pro portals growgen locations wholesale hydroponic stores international distribution All our brands will be distributed internationally and emerging into lawn and garden and into ag. all our brands will be distributed internationally and emerging into lawn and garden and into ag Again, it's the biggest, fastest-growing division of GrowGen, and we believe it's going to be something that you hear for years to come out of our company. again it's the biggest fastest-growing division of growgen and we believe it's going to be something that you hear for years to come out of our company

Speaker 1: That's very helpful, Darren. I know our time's winding down here. Let's wrap up on the balance sheet, because again, I think that's been a huge bright spot here for GrowGen and really it allowed you to pursue this aggressive transformation while others have faltered. I guess, how do you think about the balance sheet now, the cash position, your desire to strategically buy back stock here? That's very helpful, Darren. that's very helpful darren I know our time's winding down here. i know our time's winding down here Let's wrap up on the balance sheet, because again, I think that's been a huge bright spot here for GrowGen and really it allowed you to pursue this aggressive transformation while others have faltered. let's wrap up on the balance sheet because again i think that's been a huge bright spot here for growgen and really it allowed you to pursue this aggressive transformation while others have faltered I guess, how do you think about the balance sheet now, the cash position, your desire to strategically buy back stock here? i guess how do you think about the balance sheet now the cash position your desire to strategically buy back stock here

Speaker 2: We've got Greg, do you want to go over this or do you want me to? We've got Greg, do you want to go over this or do you want me to? we've got greg do you want to go over this or do you want me to

Speaker 3: Sure. Yeah. We do believe that one of GrowGeneration's key differentiators is the strength of our balance sheet. Over the past several years, we've been disciplined in managing costs, optimizing our working capital, and preserving liquidity, while most companies in the industry have faced significant financial pressures. As a result, we maintain a healthy balance sheet with substantial liquidity at this point. We have the flexibility to be patient and strategic in how we deploy capital. When we look at capital allocation, our primary objective is creating long-term shareholder value. We evaluate opportunities through that lens and prioritize investments that can strengthen the business and improve our earnings power over time. We remain focused on organic growth opportunities. Sure. sure Yeah. yeah We do believe that one of GrowGeneration's key differentiators is the strength of our balance sheet. we do believe that one of growgeneration's key differentiators is the strength of our balance sheet Over the past several years, we've been disciplined in managing costs, optimizing our working capital, and preserving liquidity, while most companies in the industry have faced significant financial pressures. over the past several years we've been disciplined in managing costs optimizing our working capital and preserving liquidity while most companies in the industry have faced significant financial pressures As a result, we maintain a healthy balance sheet with substantial liquidity at this point. as a result we maintain a healthy balance sheet with substantial liquidity at this point We have the flexibility to be patient and strategic in how we deploy capital. we have the flexibility to be patient and strategic in how we deploy capital When we look at capital allocation, our primary objective is creating long-term shareholder value. when we look at capital allocation our primary objective is creating long-term shareholder value We evaluate opportunities through that lens and prioritize investments that can strengthen the business and improve our earnings power over time. we evaluate opportunities through that lens and prioritize investments that can strengthen the business and improve our earnings power over time We remain focused on organic growth opportunities. we remain focused on organic growth opportunities That includes the investments that we've made in proprietary brands, a lot of the technology initiatives that Darren alluded to, operational efficiencies and other projects that enhance profitability and generate attractive returns on our invested capital. We believe that there's still opportunities within our existing platform to drive growth and expand margins as the market continues to normalize. Second, we continue to evaluate inorganic opportunities. Given the current environment, we believe there could be attractive opportunities to acquire complementary businesses, brands, capabilities, or assets at valuations that have a sufficient rationale for the business. We do have the financial flexibility to pursue those opportunities if they meet our criteria, although we do remain disciplined in how we're looking at deals at this point in time. Then I think the share repurchase authorization that we announced should be viewed within the broader capital allocation framework of the business. That includes the investments that we've made in proprietary brands, a lot of the technology initiatives that Darren alluded to, operational efficiencies and other projects that enhance profitability and generate attractive returns on our invested capital. that includes the investments that we've made in proprietary brands a lot of the technology initiatives that darren alluded to operational efficiencies and other projects that enhance profitability and generate attractive returns on our invested capital We believe that there's still opportunities within our existing platform to drive growth and expand margins as the market continues to normalize. we believe that there's still opportunities within our existing platform to drive growth and expand margins as the market continues to normalize Second, we continue to evaluate inorganic opportunities. second we continue to evaluate inorganic opportunities Given the current environment, we believe there could be attractive opportunities to acquire complementary businesses, brands, capabilities, or assets at valuations that have a sufficient rationale for the business. given the current environment we believe there could be attractive opportunities to acquire complementary businesses brands capabilities or assets at valuations that have a sufficient rationale for the business We do have the financial flexibility to pursue those opportunities if they meet our criteria, although we do remain disciplined in how we're looking at deals at this point in time. we do have the financial flexibility to pursue those opportunities if they meet our criteria although we do remain disciplined in how we're looking at deals at this point in time Then I think the share repurchase authorization that we announced should be viewed within the broader capital allocation framework of the business. then i think the share repurchase authorization that we announced should be viewed within the broader capital allocation framework of the business We announced $10 million in authorization from our board of directors. Importantly, it's both opportunistic and multi-year in nature. It doesn't obligate us to repurchase any specific amount of stock within a defined timeframe. Rather, it provides us with an additional tool to allocate capital when we believe our shares are trading at a meaningful discount to intrinsic value. We're continuing to look at windows of opportunity for repurchase over the next several years. Ultimately, we're fortunate to be in a position where we don't have to make decisions from a place of financial constraint. Our liquidity ratios remain very strong. We feel good about the health of the balance sheet and have the flexibility to pursue the highest return opportunities available to us. We announced $10 million in authorization from our board of directors. we announced $10 million in authorization from our board of directors Importantly, it's both opportunistic and multi-year in nature. importantly it's both opportunistic and multi-year in nature It doesn't obligate us to repurchase any specific amount of stock within a defined timeframe. it doesn't obligate us to repurchase any specific amount of stock within a defined timeframe Rather, it provides us with an additional tool to allocate capital when we believe our shares are trading at a meaningful discount to intrinsic value. rather it provides us with an additional tool to allocate capital when we believe our shares are trading at a meaningful discount to intrinsic value We're continuing to look at windows of opportunity for repurchase over the next several years. we're continuing to look at windows of opportunity for repurchase over the next several years Ultimately, we're fortunate to be in a position where we don't have to make decisions from a place of financial constraint. ultimately we're fortunate to be in a position where we don't have to make decisions from a place of financial constraint Our liquidity ratios remain very strong. our liquidity ratios remain very strong We feel good about the health of the balance sheet and have the flexibility to pursue the highest return opportunities available to us. we feel good about the health of the balance sheet and have the flexibility to pursue the highest return opportunities available to us As we sit here today, we would generally view high return organic investments and compelling strategic acquisitions as our highest priorities for capital deployment, with the buyback serving as an additional shareholder-friendly option when market conditions warrant. The overarching message is that we intend to remain disciplined, maintain balance sheet strength, and allocate capital where we believe it can generate a great long-term value for our shareholders. As we sit here today, we would generally view high return organic investments and compelling strategic acquisitions as our highest priorities for capital deployment, with the buyback serving as an additional shareholder-friendly option when market conditions warrant. as we sit here today we would generally view high return organic investments and compelling strategic acquisitions as our highest priorities for capital deployment with the buyback serving as an additional shareholder-friendly option when market conditions warrant The overarching message is that we intend to remain disciplined, maintain balance sheet strength, and allocate capital where we believe it can generate a great long-term value for our shareholders. the overarching message is that we intend to remain disciplined maintain balance sheet strength and allocate capital where we believe it can generate a great long-term value for our shareholders

Speaker 1: Well, guys, I think our time has come to an end. Enjoyed the conversation. Congrats on the ongoing recent success here. Look forward to watching this story continue to play out. Well, guys, I think our time has come to an end. well guys i think our time has come to an end Enjoyed the conversation. enjoyed the conversation Congrats on the ongoing recent success here. congrats on the ongoing recent success here Look forward to watching this story continue to play out. look forward to watching this story continue to play out

Speaker 2: Much appreciated, Brian. Always a pleasure. Thank you. Much appreciated, Brian. much appreciated brian Always a pleasure. always a pleasure Thank you. thank you

Speaker 3: Thanks, Brian. Thanks, Brian. thanks brian