Darren Lampert: Yes. Brian, my belief is that on a go forward basis, you’ll see much slower growth in the hydroponic and cannabis industries. I think the hyper growth, the 20% year-over-year compounded growth that people are expecting through the 20s, I don’t believe that to be true any longer. I think what you’re seeing right now is an industry that has tremendous potential. But I do believe that you will see slower growth in this industry. You’ll see tremendous consolidation in this industry. And I do believe that what you’ve seen over the last 20 months there was many reasons for it coming out of COVID. There was a tremendous amount of capital coming into the cannabis industry that has slowed in the last 20 months. And like most industries, in the early stages, you do run into these issues.
And I think what you’re seeing right now is inventory is coming down, both on the cannabis side of it, but also more importantly on the hydroponic side of it. There was a tremendous amount of hydroponic equipment that was brought into this market to fuel the build-outs and the feverish build-outs that you’ve seen. And that is slowed to a much more normalized base. And forecasting is going to become much easier for GrowGen as we build out our distribution centers. So, we believe that you will see growth in this industry, but I think the hyper-growth that people thought, you will not see in the future.
Brian Nagel: And then, I guess to follow up on that, as you look at some of the new markets and where you’ve seen license — I guess legalization and then subsequent licensing, particularly on these, how would you characterize that initial build out in those markets versus what you saw in some, like the Michigans or Oklahomas?
Darren Lampert: You’re seeing a much slower ramp back east in Virginia markets. It’s taken an enormous amount of time to get regulations passed, but it’s also taken an enormous amount of time to get properties built. And one of the issues that you’re seeing, Brian, is with the slowdown in the Oklahoma markets and the Michigan markets and the California markets, the capital has dried up. And with the dry-up of capital, you’re seeing much less building and you’re seeing — you’re not seeing the race to the start, which you’ve seen years ago. So, you’re seeing a much more controlled build-out environment. And I do believe that’s what you will see in the future. And we’re seeing that in the stores that we’ve opened. We opened five new stores in four states last year, Virginia, New Jersey, Missouri, and Mississippi.
And we’re seeing — we were seeing stores go profitable first month into builds, and we’re not seeing that right now. Albeit we are seeing ramps in all our stores that we’ve built, but not the ramps that we’ve seen back in €˜18, €˜19, and €˜20.
Brian Nagel: Got it. And then, just one more, if I could flip it back just more specific to your business. So, you closed a number of stores. As you look at the base now, is it — are there — would there be additional closures or is it basically cleaned out and poised to grow from here? And then, a follow-up to that, the stores you closed, I assume those were acquired stores, not stores that GrowGen opened organically, correct?
Darren Lampert: That is correct, Brian. On the other side of that, we still do believe that you will see a few more store closures from GrowGen this year, but not anywhere near the pace last year. We’re targeting anywhere from one to four store closures this year. And just so you do know, most of our store closures come when leases are up and we’re not renewing leases. So, the costs have been pretty tame for store closings. And we have kept a good portion of business, but not as much as we would have liked from these store closures.
