Medicine Man Technologies (SHWZ) investor relations material

Executive summary

• Gained market share in Colorado and New Mexico, outperforming local markets year-over-year and sequentially.

• Focused on consumer needs, retail experience, and loyalty programs to drive customer acquisition and retention.

• Executed restructuring, closing underperforming dispensaries and non-core operations to optimize profitability.

• Strengthened wholesale business with increased penetration and catalog expansion in both states.

• Achieved sequential quarterly growth across all key financial metrics in Q2 2024, driven by growth and restructuring initiatives.

Financial highlights

• Q2 2024 revenue rose 2% year-over-year to $43.2M, driven by new stores but offset by lower wholesale revenue and pricing pressure.

• Gross profit was $19M (44% margin), down from $23M (54%) last year, mainly due to pricing pressure and higher third-party purchases.

• Operating expenses increased to $21.8M from $18.1M, reflecting costs from five new stores and non-recurring professional fees.

• Loss from operations was $2.7M versus $5M income last year; net loss widened to $13.9M from $6.6M; Adjusted EBITDA was $9M (21% margin), down from $13.8M (33%).

• Cash and equivalents stood at $12.3M; total debt was $163.4M as of June 30, 2024.

Outlook and guidance

• Anticipates continued growth and improved profitability in the second half of 2024, driven by operational efficiencies and refined retail strategy.

• Plans to file delayed 10-Qs and uplist from OTC Expert Market to OTCQX in coming months, expecting improved liquidity and share price.

• Ongoing restructuring and optimization efforts will continue, especially in cultivation and manufacturing.

• Targeting 40% wholesale penetration in both states by end of Q3, with further catalog expansion planned.

• Recent debt restructuring provides financial flexibility for strategic growth in Colorado and New Mexico.