This article first appeared on GuruFocus .
Release Date: May 21, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Vext Science Inc ( VEXTF ) reported a 5% year-over-year increase in revenue, reaching $12.2 million, driven by strong performance in Ohio.
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Gross profit more than doubled to $5.5 million, with a significant margin improvement to 45.4% from 19.7% in the prior year.
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Ohio revenue increased by 34% year-over-year to $8.2 million, supported by additional dispensaries and improved cultivation performance.
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The company generated $1.6 million in cash from operations, indicating effective cash flow management despite challenges.
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Vext Science Inc ( VEXTF ) plans to open additional dispensaries in Ohio, with the sixth and seventh stores expected to enhance growth and profitability.
Negative Points
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Arizona operations faced challenges with a 24% decline in revenue due to wholesale market oversupply and pricing pressure.
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The company reported a net loss of $0.9 million, although this was an improvement from the previous year's loss.
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Wholesale revenue declined by approximately 50% year-over-year, reflecting a strategic shift towards retail prioritization.
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The uncertain tax position liability increased to $10.6 million, reflecting adjustments related to tax provisions.
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Pricing pressure and increased competition are emerging in the Ohio market as it matures, potentially impacting future profitability.
Q & A Highlights
Q: Can you provide insights on the expected performance and ramp-up time for the new Fairfield and Columbus stores? A: (Eric Gottenberger, CEO) The Fairfield store is anticipated to be one of our most active, potentially the best in the chain, with a quick ramp-up expected due to its strategic location. We anticipate it will start performing well within a month and a half. The Columbus store, expected to open later, should ramp up in about three to four months and is also expected to be a top performer due to its drive-through capabilities and strategic location.
Q: Are there any pending regulatory changes in Ohio that could impact operations? A: (Eric Gottenberger, CEO) Most regulatory changes have been implemented, including packaging and dosing requirements. There might be ongoing discussions at the federal level regarding hemp beverages, but significant changes are not expected in the near term.
Q: How does the competitive landscape in Ohio compare to Arizona, and why might Ohio not face the same pricing pressures? A: (Eric Gottenberger, CEO) Ohio's cultivation is limited by climate, preventing large-scale greenhouses, which helps control supply. Although more stores will open, disciplined operations and strategic store locations will be key. Ohio's population should support the store count, and rural locations are preferred for their customer loyalty and workforce advantages.
Q: What is the current state of wholesale pricing in Arizona, and how does it compare to previous internal costs? A: (Trevor Smith, CFO) Wholesale pricing is stable around $400 to $500 per pound, significantly lower than the previous internal costs of $800 to $900 per pound. We are opportunistically sourcing deals below $400, which we expect to continue.
Q: What are the expectations for margins and cash flow in Arizona after the Eloy shutdown? A: (Trevor Smith, CFO) We expect margins to improve, although volume is prioritized over margin percentage. With third-party sourcing and standard net 30 terms, we anticipate a meaningful improvement in adjusted EBITDA and cash from operations in Arizona.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
