Good day, and welcome to today's conference call to discuss Greenlane Holdings Fourth Quarter and Full Year 2022 Financial Results. A press release detailing the financial results for the quarter and full year ended December 31, 2022 was distributed today and is available on the Investor Relations section of the Greenlane website at investor.gnln.com. As a reminder, today’s conference is being recorded. A replay of this call, as well as a copy of the supplemental earnings slide will be archived in the company's IR website at investor.gnln.com. On the call today are Craig Snyder, Chief Executive Officer; and Lana Reeve, Chief Financial and Legal Officer. Before we begin, Greenlane would like to remind listeners that today's prepared remarks may contain forward-looking statements and management may make additional forward-looking statements in response to the questions received. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties and other factors discussed in today's press release. This call also contains time sensitive information that speaks only as of the date of this live broadcast, April 3, 2023. Factors that could cause Greenlane’s results to differ materially are set forth in yesterday’s press release and in Greenlane’s Annual Report on Form 10-K filed with the SEC. Any forward-looking statements made today on this call are based upon assumptions as of today, and Greenlane assumes no obligation to update these statements as a result of new information or future events. During today’s call, Greenlane management may discuss non-GAAP financial measures, included adjusted SG&A and adjusted EBITDA. Greenlane has included a reconciliation of these non-GAAP measures in today’s press release, which is available in the Investor Relations section of the company’s website at investor.gnln.com. I would now like to turn the call over to Mr. Craig Snyder, Chief Executive Officer of Greenlane. Please go ahead, Craig.

Hello, everyone, and thank you for attending our fourth quarter 2022 earnings call and my first earnings call since taking over as CEO on January 1. I would like to first thank Nick for everything he has done for the company and his 10 years of leadership between KushCo and Greenlane. 2022 proves to be a challenging year for our entire sector and Greenlane was not an exception. The business did not perform up to the expected standards and began an aggressive transformative strategy to actively put the business on a path to profitability. On today’s call, we’ll outline the steps we have taken and will continue to take to fulfill the three key areas of concentration we have set forth for the company; number one, an unwavering commitment to profitability; number two, enhancing and growing our leading position as a product innovator, and disruptor in our segment; and number three, continued advancement performance in developing our global omni-channel strategy. 2022 was the year of realigning our fundamentals, so that we can achieve our goal of profitability in 2023 with a more efficient model, focused on scalable, leverageable and durable revenue combined with consistent margins. We have made meaningful tangible progress and have a solid line of sight to profitability and long-term sustainability. Tackling profitability first, we are engaged in a strategic shift to a higher margin, higher value, less capital-intensive business model that can be profitable and sustainable. This also includes improving our balance sheet, working capital and free cash flow. Lastly, there is a continued focus on eliminating and lowering costs, bringing the company’s cost structure in line with gross margins. In our goal toward profitability, Greenlane has made several strategic decisions to restructure parts of our industrial business, because segments of our industrial business are very capital…

Thanks, Craig, and hello everyone. Thank you for joining us on the call today. As a reminder, the results I will be reviewing with you this morning can be found in our earnings release that is available on EDGAR and the Investor Relations section of our website at investors.gnln.com. Let's get to the fiscal 2022 numbers. For the year, ending, December, 31, 2022, total net sales were approximately $137.1 million, compared to approximately a $166.1 million for the year ending, December, 31, 2021, representing a decrease of $29 million or 17.4%. The overall year-to-year decrease was primarily driven by a decrease in the Consumer Goods segment of $62 million or 56.3% decrease offset by an increase in the Industrial segment of $33 million or 59% due to the net sales contributed by our merger with KushCo that was completed on August 31st 2021. The decline in the Consumer Goods segment revenue was due to a major restructuring effort during fiscal year 2022 to increase profitability by focusing on in-house brands that have a higher margin profile and rationalizing third-party brand offerings that carry a lower margin profile, while reducing operating cost as a percent of revenue, selling arm interest in the Vibes brand, terminating or restructuring several third-party agreements, and rebalancing overall inventory levels. The company also experienced some operational issues impacting revenue, during the first half of the year related to the new ERP CRM and B2B systems. The company reported $22 million in net sales for the three months ending December 31st 2022. For the year ending December 31, 2022, gross profit was $24.9 million, compared to $33.8 million for the prior year, representing a decrease of $8.8 million or 26.1%. The decrease in gross profit is the result of the declining revenue. Gross margin decreased by 2.1%…

Thank you, Lana. Shifting from the rearview of 2022 to the windshield of 2023, our expectations are much higher and our outlook is extremely positive. We do believe the transformative efforts throughout ‘22 are beginning to make substantial positive impacts on our 2023 financial results. In fact, we are already seeing signs in Q1. Here are some of the reasons to believe Greenlane’s future is bright. One, in Q1, we expect 5% to 10% growth in revenue versus Q4 in the $23 million to $24 million dollar range with strength coming from our Consumer Goods segment, which saw an increase greater than 10% versus the prior quarter. Two, we have launched a total of 13 products with our new brand Groove. Early performance has been extremely solid with an additional 20 plus products scheduled for the remainder of ‘23. Three, we have established new relationships globally in over 14 countries. Four, we have launched our B2B websites in both the US and Europe with over 11,000 customers in our US system, and are seeing exponential growth month-over-month. Five, we have significantly lowered our liabilities throughout the year and we're going to continue to do so in Q1. And six, we are pleased with the progress we continue to make against our cost reduction goals, and fully expect that progress to continue into 2023. I will now turn it back over to the operator to begin Q&A.

[Operator Instructions] Your first question is coming from Aaron Grey from Alliance Global Partners. Your line is live.

Hi, good evening, and thank you for the questions. So, great to see some - the inventory [Indiscernible] you are doing to bring on some cash. You guys also mentioned some additional SG&A cuts you'll be taking with the target of getting EBITDA positive by 4Q 2023. Just like to know in terms of the gross margin expectations. You expect to have to reach that 4Q, ‘23 EBITDA target. I know you're going to be shifting some of those higher margin CPG products. So, if you could help out and kind of talk about some of the gross margin targets you have embedded within that that be helpful. Thanks.

Thanks, Aaron. This is Craig. As we discussed a little bit about some of the inventories going from a gross to a net recognition, we're expecting the gross margins to grow throughout the year. So Q1, we expect margins at 24.5%, Q2 28.7%, Q3 32.9%, Q4, 34.3%, aggregate for the year at about 30.1%.

Okay, great. That's really helpful there. And then in terms of the CPG side, obviously, a lot of initiatives that you guys have, with Eyce and otherwise at Groove as well, but could you talk about which brands are looking to be the primary driver to the growth? Groove obviously 13 products now, additional 20 by the end of the year, are you looking for that to be the primary brand to build up off of and drive growth within CPG for the year?

I think the three brands and those 20 plus products will really occur across four brands. We’ve launched 13 products to-date with Groove, and they have a few more coming. But you'll see newer products coming from Eyce, DaVinci and Higher Standards, as well. And I think you'll still see us work with the top providers on the third-party side as well. But you'll see new products from Groove, Eyce, DaVinci and Higher Standards throughout the year.

Okay, great. Thanks. And then, in terms of distribution and new channels, can you talk about, maybe expanded channel distribution targets that you have, initiatives you have to get into more MSOs and how that's gone so far in terms of dispensaries outside of MSOs, but also within that and then also within head shops and how you look for the mix shift between your different distribution channels? Thank you.

Right. I think one of the big things we tried to do is, integrate the business so that, we talk to everyone from the smallest smoke shop to the largest MSO. They obviously have different needs. What we're seeing from the MSOs is they've begun to complete their digestion of all their acquisitions and some are now looking at national brands. This is good for us because they're turning their eyes on the business towards how they generate more revenue per square foot, attachment rates and what I’d call the more normal retail metrics. And we play a bigger and bigger role in that and that we supply a lot of those ancillary products to those stores. So, with those, those relationships and those conversations continue to deepen and grow as we're going and we feel very good there. We've also increased our focus back and all kind of the mid-tiers. What I’d call single state operators, what I’d call small dispensary groups and smoke shops alike and are aligning our resources to focus across all those groups and their kind of needs are a little bit differently, but we see them growing in 2023 and we're seeing positive results in the first part of the year already.

Okay, great. Thank you so much for the detail and I’ll jump back in the queue.

Thank you. [Operator Instructions] Thank you. That concludes our Q&A session. I will now hand the conference back to management for closing remarks. Please go ahead.

Thanks, Matt. We know there is much to be done, but we are highly encouraged by the early momentum in 2023. Thank you again for joining Greenlane's conference call today. We look forward to updating you on our continued progress on the next earning call. Thank you.

Thank you, everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.