Medicine Man Technologies (SHWZ) investor relations material

Executive summary

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

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

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

• Implemented restructuring initiatives, including store closures and operational streamlining, to enhance profitability.

Financial highlights

• Q2 2024 revenue increased 2% year-over-year to $43.2 million, primarily from new stores.

• Gross profit was $19 million (44% margin), down from $23 million (54.4%) last year due to pricing pressure and product mix.

• Operating expenses rose to $21.8 million from $18.1 million, driven by SG&A for five new stores and non-recurring professional fees.

• Loss from operations was $2.7 million, compared to $5 million income last year; net loss widened to $13.9 million from $6.6 million.

• Adjusted EBITDA was $9 million (21% margin), down from $13.8 million (33%) last year.

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

Outlook and guidance

• Expect continued growth and improved profitability in the second half of 2024.

• Ongoing focus on refining retail strategy and driving operating efficiencies across retail, cultivation, and manufacturing.

• Anticipate net new store growth in New Mexico to turn negative due to increased regulatory enforcement and closures.

• Recent debt restructuring provides financial flexibility for strategic growth.