MariMed Inc. Fiscal Q4 2025 Earnings Call - Brand-led Wholesale Growth Offsets Price Pressure, EBITDA Remains Positive

Conference Operator: Thank you for standing by. At this time, I would like to welcome everyone to the MariMed Fiscal Year and Fourth Quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. I would now like to turn the conference over to Andrew Pacheco, General Manager for MariMed in Massachusetts. Sir, the floor is yours.

Andrew Pacheco, General Manager, Massachusetts, MariMed Inc.: Hello and good morning, everyone. I’m Andrew Pacheco, General Manager for Massachusetts at MariMed. I’m honored to kick off today’s 2025 fiscal year and fourth quarter earnings call. My team at our New Bedford cultivation and processing facility is responsible for the manufacturing of our great brands that is distributed throughout the state. I’m privileged to see firsthand the expertise, collaboration, and dedication our employees contribute on a daily basis. They take the company’s mission to improve lives every day very seriously. You’re going to hear during this call about our performance in Massachusetts in 2025 relative to the rest of the market, and I think it’s our team’s commitment to our success that’s a huge part of what differentiates us and our performance in Massachusetts.

Joining the call today are Jon Levine, our Chief Executive Officer, Ryan Crandall, our Chief Commercial Officer, and Mario Pinho, our Chief Financial Officer. This call will be archived on our investor relations website and contains forward-looking statements. Actual events or results may differ materially from these forward-looking statements and are subject to various risks and uncertainties. These risks are discussed in the Risk Factors section of our 10-K and 10-Qs available on our website. Any forward-looking statements reflect management’s expectations as of today, and we assume no obligation to update them unless required by law. Additionally, we will refer to certain non-GAAP financial measures which are reconciled in our earnings release. I will now turn the call over to Jon for his overview.

Jon Levine, Chief Executive Officer, MariMed Inc.: Thank you, Andy. Good morning, everyone, and thank you for joining us. Last night, we reported full-year revenue of $160 million for 2025, a 1% increase over 2024. 2025 also marked the sixth consecutive year we generated positive adjusted EBITDA. The cannabis industry continues to evolve rapidly. As we have consistently said, we believe an enduring advantage in this environment will come from owning the strongest and most accessible brands. That conviction continues to guide our Expand the Brand roadmap, which is built around three strategic pillars. First, capturing meaningful market share in our existing markets. Second, investing thoughtfully to bring our best-performing brands into new markets. Third, further strengthening our balance sheet to support long-term growth initiatives. We made progress across all three pillars in 2025 and have continued advancing them into early 2026.

With respect to the first pillar, owning a meaningful share in each of our existing markets, our proven wholesale capabilities delivered another strong year as wholesale revenue grew in each of our core markets. Our integrated expertise across cultivation, manufacturing, distribution, and marketing, in addition to the quality of our products, has enabled several of our brands to secure leading market positions. Notably, for the fourth quarter, Betty’s Eddies was the number one-selling edible across the markets where it’s available. In the beverage category, which includes hundreds of ready-to-drink options, our Vibations powdered drink mix ranked fourth. Turning to the second pillar, expanding into new markets. In 2025, we laid the groundwork to bring our brands to Pennsylvania and New York and launched Betty’s Eddies in Maine through a new licensing agreement. Expanding through licensing is a clear validation of our brand’s strengths.

We’re very confident about the revenue potential for our brands in Pennsylvania, especially with adult sales likely to come in the next year or two. We’ve watched our products thrive in the neighboring states of Maryland and Delaware. We’re already learning a lot about the Pennsylvania market through the managed services partnership we entered into in 2025. In fact, we helped significantly grow our partner’s revenue during the short period in which we’ve managed their business in Pennsylvania. We’ve established a licensing agreement with the same partner last year and have submitted our products and packaging for state approval. Turning to New York, construction is underway on the processing kitchen we’re building with our partner.

That project is on schedule. In Maine, our new licensing partner began distributing Betty’s Eddies during the fourth quarter of 2025 and were tracking with our expectations, achieving positive results with exceptional sell-through at the accounts opened to date. Collectively, adding these three states provide a strategic foothold for MariMed across the Northeast and Mid-Atlantic. Licensing allows us to pursue growth and expand brand distribution in a capital-efficient manner and will continue to pursue other agreements as part of Expand the Brand strategy. This brings me to our third pillar, continuing to strengthen our balance sheet. We have always maintained a strong balance sheet, and we intend to continue fortifying it to support our future growth initiatives. Last week, we successfully completed the restructuring of the convertible stock held by our Series D shareholder.

The agreement extended the maturity of the preferred shares, further enhancing our financial flexibility to support our growth initiatives. We are pleased to execute the agreement with favorable market terms for the company. Along with reductions in operating expense that Mario will discuss, our objective to provide the stability and flexibility required to execute our growth plan. We recognize that implementing all the initiatives I’ve outlined will only get us part of the way to our goal of value creation we seek, and our investors deserve. To help us achieve that goal, accretive M&A remains an active and imperative avenue for the company. Our Thrive retail stores also play an integral role in our growth plan. First, they serve as premium showcases for our brands. Second, they enable us to cultivate direct consumer relationships through our Thrive loyalty program.

Third, and perhaps the most important, retail will continue to generate the majority of our revenue and operating cash flow. In Ohio, we intend to leverage our second retail license with a new Thrive store to be located in the Columbus area. We anticipate it opening this year. In summary, in 2025, we maintained or strengthened our brand leadership across core markets and expanded our geographic reach. We intend to build on our momentum in 2026 while continuing to reinforce our financial foundation. Our primary growth drivers this year will include continued wholesale penetration and full-year contributions from Delaware’s expanding adult use market and our main licensing partnership, and anticipated revenue generated by our new Ohio dispensary. At the same time, we will do everything in our control to move up the timeline for distribution of our brands in Pennsylvania and New York.

While we remain optimistic about the potential for federal reform in Schedule III, finally getting over the finish line, our growth strategies do not depend on it. It depends on disciplined capital allocation and the execution capabilities of the strongest team in cannabis, and we are fortunate to have both. I wanna thank our employees for their dedication, hard work, and unwavering commitment. Their contributions are the foundation of our success. I’ll now turn the call over to Ryan to provide details around our fourth quarter performance.

Ryan Crandall, Chief Commercial Officer, MariMed Inc.: Thanks, John, and good morning, everyone. Let me walk you through our performance at a high level and then across each of our core markets. Our sales, marketing, and operations teams delivered another strong year, with aggregate wholesale revenue increasing 11% in 2025. Wholesale represents 44% of MariMed’s total revenue, up from 40% in 2024. Our diversified portfolio across flower, vapes, edibles, and concentrates continues to resonate with consumers, delivering compelling value and performance across multiple price tiers and in every market we serve. Overall, we increased our penetration into dispensaries in 2025 by 200 basis points, selling our brands into 85% of retail stores in the markets in which we operate.

Turning to retail, we finished the year with momentum, achieving sequential growth of 4% during the fourth quarter, compared to a decline of 5% during the same period in 2024. We also increased transactions in our stores by 4% sequentially and 8% year over year. Adding Delaware adult use sales in August was certainly part of our growth story, but several initiatives we implemented during the year really started gaining traction toward the end of 2025, helping offset price pressures across our core markets. Those initiatives included centralizing our retail buying, which delivered cross-market intelligence and buying power for the company. Second, we improved our assortments and decreased our days on hand inventories. Working together, these steps elevated our customer experience while also supporting margin expansion.

Third, we unified the Thrive brand across all of our stores and at the same time launched a new, more user-friendly website to make online purchasing easier. Fourth, we made it easier to shop inside our stores by expanding our store hours as well as our payment options. Fifth, we focused on generating more revenue through our loyalty program, whose members shop more often and with larger basket sizes than non-members. We accomplished that by reactivating dormant membership and by implementing strategies to increase membership. Membership in the program increased 7% sequentially during the fourth quarter and 31% year over year. The results of those initiatives give us confidence as we look ahead to this year, especially when combined with new initiatives we’re executing in 2026, which include the following.

Continuing to focus on accelerating the growth of our loyalty program membership by personalizing its offerings based on member demographics, geographics, and buying behaviors. Next, we launched a Thrive retail app, which will enable us to increase and personalize our communications with Thrive customers at greatly reduced cost. You can download the app, Thrive Dispensaries, from the Apple and Android stores today. Third, we’re putting a heavier emphasis on increasing the internalization of MariMed-produced brands in our stores, helping expand the company’s margins. Turning to individual market performance. In Massachusetts, wholesale revenue was flat year-over-year and for the year, mapping the state’s performance according to state sales figures. We ended the year with our products in 83% of the dispensaries in the state, a 4% increase since 2024.

In an environment defined by price pressure, the strength and consumer appeal of our brands enabled us to expand our presence across more dispensaries statewide. Betty’s Eddies and Bubby’s Baked continued to shine, ranking number one in their respective edible categories. Vibations, Nature’s Heritage pre-rolls, and InHouse gummies all owned significant share as well, with each ranking among the top 10 in their categories. Retail revenue in Massachusetts was flat sequentially and year over year. We view that outcome positively, given we were able to increase transactions by 5% during the year versus 2024. It’s a recurring theme that sustained pricing pressure in Massachusetts resulted in declines of our AOV. In Maryland, wholesale sales grew 3% in 2025, which was in line with the market’s performance year over year.

We also maintained nearly 100% penetration across open dispensaries, with our products available in 108 of 109 dispensaries. There’s no resting on our laurels for our Maryland team. Their goal in 2026 is hyper-focused on expanding our shelf space in those open accounts. Our brands sustained strong leadership positions in the state, with Betty’s Eddies, Bubby’s Baked, Vibations, and InHouse gummies all ranked within the top 5 in their respective categories by market share. During the fourth quarter of 2025, retail revenue in Maryland increased 14% sequentially and 18% for the full year compared to 2024, with particular credit due to our Upper Marlboro team for delivering outstanding gains. Overall, we increased transactions across our two Maryland dispensaries by 35% in 2025 versus 2024.

Turning to Illinois, where we began distributing our brands just two years ago, wholesale revenue increased 39% in 2025 versus 2024 as we continued building scale. That compares favorably to the state’s overall cannabis sales, which declined 5% according to Headset. We expanded distribution into 27 additional dispensaries in Illinois during the year, finishing the year with 82% penetration and reinforcing the competitiveness of our brands in a crowded marketplace. Retail sales in Illinois were flat sequentially and decreased 26% for the full year versus 2024, primarily attributable to the price pressure in that market. In Delaware, we have been very pleased with wholesale performance following the commencement of adult use sales in August 2025. Wholesale revenue increased 37% sequentially, supported by the expansion of our Milford cultivation facility, which positioned us to meet rising demand.

Our products are available in every Delaware dispensary, and according to Headset, our portfolio achieved the number one overall market share in 2025. Betty’s Eddies, Bubby’s Baked, Vibations, and InHouse gummies each ranked number one in their respective categories. Total sales for both Nature’s Heritage and FSC brands placed us number one in the flower category. At retail, revenue tracked in line with our expectations following the adult use transition, with sales across our two Delaware stores increasing 1.25x following the AU launch. In summary, our business remained resilient in 2025 despite a challenging operating backdrop. We entered 2026 with momentum on our side and well-positioned to further strengthen our brand leadership and build on the foundation we have established. Before turning the call over to Mario, I want to thank all our wholesale and retail employees.

They demonstrated the creativity, expertise, and commitment necessary to deliver strong results in the challenging environment. I will now turn the call over to Mario to provide the financial update.

Mario Pinho, Chief Financial Officer, MariMed Inc.: Thank you, Ryan, and good morning, everyone. For the fourth quarter, total revenue was $41.7 million, bringing full year 2025 revenue to $159.8 million, representing 1.3% sequential growth in the quarter and 7% growth for the full year. Against a broadly flat industry environment, we delivered growth, maintained margin discipline, and strengthened liquidity, reflecting continued operational focus across the business. From a mix perspective, fourth quarter retail revenue was $23.4 million, up 3.6% sequentially. Beyond top line growth, retail continues to generate the majority of our operating cash flow and remains the driver of our cash generation profile. During the quarter, we saw stabilization in store-level contribution margins and improved inventory efficiency, reflecting the operational initiatives Ryan outlined earlier.

Wholesale revenue for the quarter was $17.6 million, compared to $18 million in the prior quarter. While sequential pricing pressure persisted in certain mature markets, we continued to manage production planning, yield optimization, and brand positioning to protect contribution margins. Importantly, performance in newer markets with healthier supply-demand dynamics, such as Delaware, continues to validate our strategy, with stronger demand dynamics supporting healthier unit economics. non-GAAP cost of revenue for the quarter was $25 million, resulting in gross profit of $16.5 million. non-GAAP gross margin declined modestly to 40%. Operational efficiencies across cultivation and manufacturing helped offset pressure in certain mature markets, allowing us to maintain margin stability. Turning to operating expenses. Total operating expenses were $56.9 million for the year, representing only a 0.7% increase compared to 2024.

This reflects continued discipline across SG&A, even as we invested selectively in brand expansion and new market infrastructure. This expense discipline demonstrated the scalability of our operating model and our ability to generate operating leverage as revenue grows. Operating income for the quarter was $2.4 million, down $667,000 sequentially. For the full year, operating income was $8.8 million, compared to $11.4 million in 2024. The decline primarily reflects lower gross profit in certain mature markets, as well as a negative contribution from our Missouri operations prior to our exit in October. Excluding Missouri, the year-over-year decline would have been meaningfully smaller, reflecting disciplined cost control across the organization. On an adjusted basis, operating margin declined less than 1 percentage point year-over-year, demonstrating the effectiveness of our cost discipline.

From a full-year cash earnings perspective, non-GAAP EBITDA for 2025 was $16.9 million, representing a margin of 10.5%. This margin reflects a disciplined balance between protecting profitability in a price-compressed environment and continuing to invest in long-term value drivers such as brand expansion and market positioning. For the full year, non-GAAP EBITDA declined 12.8% year-over-year, primarily reflecting lower gross profit and the impact of Missouri operations prior to our exit in October. These factors were partially offset by disciplined cost control and operational efficiencies across the business. Turning to capital discipline and liquidity, cash flow from operations remained positive during the quarter and for the year, supported by disciplined working capital management. We exited non-core operations with Missouri, maintained measured capital expenditures, and prioritized liquidity preservation in a constrained capital environment.

We ended the year with $8.9 million in cash and cash equivalents, up from $7.3 million at the end of 2024. In addition, as Jon mentioned, we recently completed the restructuring of our Series B preferred shares, extending maturities and enhancing financial flexibility. Importantly, we have no material debt maturities in the near term, positioning us to execute our growth strategy without near-term capital pressure. Looking ahead, our financial focus remains centered on three objectives, driving margin expansion through mix optimization and cost management, prioritizing capital deployment into the highest return opportunities, and finally, strengthening liquidity and financial flexibility. We believe our disciplined approach to liquidity will position us to create long-term shareholder value while navigating near-term sector volatility. With that, I’ll turn the call over to Jon. Thank you, Mario.

Jon Levine, Chief Executive Officer, MariMed Inc.: In summary, I’m proud of what MariMed accomplished in 2025, and I’m excited about our prospects for 2026 and beyond. Our company performed well in a challenging environment. Looking ahead, we have a strong leadership team, strong business fundamentals, outstanding brands, and no material debt maturing for the next several years. Together with the strategic initiatives we have underway, we are confident in MariMed’s tremendous upside over the long term. Operator, you can now open the line for questions.

Conference Operator: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star, then the number one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Your first question comes from Pablo Zuanic with Zuanic & Associates. Your line is open.

Pablo Zuanic, Analyst, Zuanic & Associates: Thank you, and good morning, everyone. Look, special thanks to Ryan for all the color that he gave at the state level. I just wanna follow up on a couple of points there. I think you said Illinois retail revenue flat sequentially, but down 26% for the year. My question is more about we’ve seen the rise in the number of stores in Illinois. I think we’re already getting close to the cap, so the effect from the new stores should begin to subside. I mean, correct me if I’m wrong on that because I mean, the fact that after that big drop for the year, that Illinois store revenues are stabilizing, that’s a good sign. Or do you still expect deflation in 2026 and still expect more revenue per store erosion in 2026? I’m speaking specifically about Illinois.

Thank you.

Ryan Crandall, Chief Commercial Officer, MariMed Inc.: Pablo, thank you for the question. I think we still see some price compression happening in Illinois, but I do tend to agree with you overall, that we do believe the market seems to be stabilizing. At least our stores seem to be stabilizing. Price compression is still real in that market and it is forecasted to compress more in 2026.

Pablo Zuanic, Analyst, Zuanic & Associates: All right. Thank you. If you don’t mind, I think you gave, you know, the detail for revenues for Illinois in terms of retail, but can you say in total what happened with Illinois in the fourth quarter, counting retail and wholesale, and then Massachusetts also, retail and wholesale? Again, I don’t know if you provided that or not in the prepared remarks. I’m not sure.

Mario Pinho, Chief Financial Officer, MariMed Inc.: Pablo, hi, it’s Mario. Specific to Illinois?

Yeah. I’m just trying. I know that you said for the year, retail Illinois was down 26%, but wholesale was up, right? We can follow up offline, but just trying to understand the total revenue for Illinois, what happened in the fourth quarter and the full year, and the same thing for Massachusetts. Obviously, Massachusetts, more stable in total compared to Illinois, but just trying to gauge that.

Yeah. We were-

Pablo Zuanic, Analyst, Zuanic & Associates: Again, we can follow up offline, but yeah.

Mario Pinho, Chief Financial Officer, MariMed Inc.: Yeah, we can definitely follow up in detail offline. Sequentially, in Illinois, we were down, primarily driven by the retail side of our product revenue.

Pablo Zuanic, Analyst, Zuanic & Associates: Right. Okay. Then just moving on to Delaware, can you comment on your expectations for how fast the number of stores can grow in Delaware? I mean, obviously, that would create great opportunities on the wholesale side but may lead to some revenue erosion at the store level. What’s the outlook there on timing from what you know for the market in Delaware?

Ryan Crandall, Chief Commercial Officer, MariMed Inc.: Yeah. Pablo, thank you. We are closely working with new stores prior to opening. I think it has been good. We have seen some new stores getting close to coming online. You know, at this point, it has been a relatively slow rollout of new stores. You know, we are increasing our sell-in to stores across the state. You know, as I mentioned, you know, our brands are leading positions across the state in almost every category, and we have a plan to get there in every category.

Very bullish as the new stores come online, that we’re gonna be able to supply those stores and be partners with them out of the gate, and make our brands, you know, really kind of first movers in every store in that market.

Pablo Zuanic, Analyst, Zuanic & Associates: Right. Thank you. Just to follow up here, these are more modeling questions. The Ohio Columbus store, when do you expect exactly that to open, roughly? In the case of the Upper Marlboro store, great growth sequentially. Is that base sustainable, that growth base, or was that one-off related to the fourth quarter? Thanks.

Jon Levine, Chief Executive Officer, MariMed Inc.: Morning, Pablo. Jon. Nice to speak to you again today. First of all, the Ohio store, you know, I can’t put an exact timeline on it, but we do know that it will be in this year, and we’re going as quick as we can. Once we get the building up and running, we’ll

Pablo Zuanic, Analyst, Zuanic & Associates: Mm-hmm.

Jon Levine, Chief Executive Officer, MariMed Inc.: I would hope in short order. That’s a big positive that we are seeing is that the state is very willing to work quickly. As far as the Upper Marlboro, that business has been very strong there for a very small store. It is just a pleasure to watch that continue to grow, and I do believe that it will continue to see additional growth, and it can handle it. I just think part of it is the fact that it’s so hard to find real estate in Upper Marlboro County that we’re getting an advantage, even though we’re a small store, not easily seen, but we’re seeing positives that people are hearing about it and coming in droves.

Pablo Zuanic, Analyst, Zuanic & Associates: Thank you. The last one, maybe bigger picture. I know you’re following an asset-light expansion model. I guess, you know, in my opinion, those are my words, of course, with the licensing deals in New York and Maine. What about acquisitions in terms of entering other states and buying hard assets? Is that part of the strategy or not for now, just protect the balance sheet and keep it asset-light?

Jon Levine, Chief Executive Officer, MariMed Inc.: No, Pablo, as I said, the big growth opportunities is to still be active in the M&A, and we’re out there talking to quite a few different groups. There’s a lot of fire sales going on, but they have to be for the right price. We don’t wanna do something that will be not beneficial for the company or make our balance sheet worse. We are constantly negotiating, but they also have to have some upside. We don’t want people that are not capable of running a place that we could go in and turn around, but we would also want to make sure that we’re not buying something that’s seeing the price compressions and competition take away from their ability to survive in that market.

Massachusetts, where there’s the biggest overslot of licenses, is you’re seeing a lot of people going out of business, and there’s the opportunity coming up with the expansion in Massachusetts that we hear that they are gonna increase the number of licenses. We are actively looking at trying to gain some more market share.

Pablo Zuanic, Analyst, Zuanic & Associates: Thank you. I wanna add one more if I mean, my apologies if there’s anyone else on the queue here. In the case of a licensing agreement in New York and the MSA in Pennsylvania, is there a path to take control of those assets someday or nothing on paper right now?

Jon Levine, Chief Executive Officer, MariMed Inc.: There is presently nothing on paper. We’re also, I mean, going into these markets on the licensing ability to learn the markets and to see how those markets react, not just to our brands, but just to see what there is in the market in terms of growth potential. Then we will look at negotiating with our partners if there is the opportunity to either buy them or join them in some other way than just the licensing agreement.

Pablo Zuanic, Analyst, Zuanic & Associates: Thank you. That’s all for me.

Conference Operator: Your next question comes from Joe Gomes with Noble Capital Markets. Your line is open.

Joe Gomes, Analyst, Noble Capital Markets: Good morning. Thanks for taking my questions. Wanted to follow up on the Pennsylvania and New York. Jon, you know, from your comments as to what you were looking ahead for 2026 to fuel growth, doesn’t sound like either one of those will be big contributors in 2026. Just wanted to make sure I am reading that properly.

Jon Levine, Chief Executive Officer, MariMed Inc.: You’re reading it properly in the way that we’ve made the statements. We are presently in construction in New York. We’re hopeful that we can get that operation up and running before the end of the year and build the inventory to start revenue either late in the year or early in 2027. Pennsylvania is just basically we have to get the approval of our brands and everything by the state, and then we can go into the manufacturing and, building up the inventory in that state also, but it’s more of the timing that is out of our control. We are just not sitting here saying that we’re gonna have that done. We’re gonna be a little bit conservative on that approach, but we’re very excited about the opportunity in Pennsylvania.

Joe Gomes, Analyst, Noble Capital Markets: Okay.

Jon Levine, Chief Executive Officer, MariMed Inc.: We’re still building up our brands in the state of Maine with our licensing up there also. The licensing is working positive up there.

Joe Gomes, Analyst, Noble Capital Markets: Okay. Thanks for that clarity. Given the fact that, you know, your penetration already is at about 85% in the core markets, you know, how much more, you know, is available, do you think, from that to help drive growth in 2026 and getting additional penetration?

Jon Levine, Chief Executive Officer, MariMed Inc.: Yeah, Joe, thank you for the question. You know, we talk about that often. You know, it’s a tremendous opportunity for us having that type of penetration in these core markets. From a product and brand standpoint, the ability to go wider and deeper with these customers, as we’re already a trusted vendor of theirs, you know, I think that’s our opportunity. You know, we do believe that that’s a tremendous opportunity on the wholesale side. I think as you see the trajectory of going from, you know, 40% of our revenue to 44% and still increasing the revenue year-over-year, you know, that increased penetration can only help us if we have more products to bear for buyers.

Joe Gomes, Analyst, Noble Capital Markets: Okay. Thanks for that. Just one more for me, and I’ll get back in queue. You know, great job on the refi. Just what will that increase in interest costs or interest expense for on an annual basis?

Jon Levine, Chief Executive Officer, MariMed Inc.: That number is approximately 800,000.

Joe Gomes, Analyst, Noble Capital Markets: Okay. Great. Thanks for that. I’ll get back in queue. Thank you.

Conference Operator: This concludes the question and answer portion of the call and today’s call. Thank you so much for attending. You may now disconnect and have a wonderful rest of your day.