Operator: Your next question comes from the line of Scott Fortune from ROTH MKM.
Scott Fortune: I appreciate all the color on the pricing kind of overall for the industry, but can you focus a little bit more on your ability to continue whether it’s the being the price leader in your markets or continuing to — kind of give us a little color on the pricing of the input cost that’s going on. And then what’s the kind of competitive landscape now? I’m sure there’s a lot of pressure from the competitors on your side and potential pricing pressure there, just kind of — for the pricing within your own stores and that ability right now.
Darren Lampert: I think, Scott, what you’re seeing is similar to the — our underlying business, which is the cannabis space. There was an abundance of oversupply on the product side, and with this tremendous slowdown in our industry, and when you look at GrowGeneration, our same-store sales were down 51% last year. And I think it was quite a feat when our same-store sales was down 51% and you cut inventory $28 million. So, we did a tremendous job moving through inventory SKU rationalization, and I think you’re seeing that around the country right now. But on the other side, we’re seeing many store closures out there as you’re seeing on the cannabis side of it. So, when industries usually hit bottom, you see consolidation, and we’re starting to see that right now.
And again, pricing, pricing at GrowGen has been pretty normalized this year. If you were to take out the tremendous amount of discounting we did on skew rationalization, and certain skews that we needed to bring down, and it was really on the non-consumable side of it that GrowGen along with many companies brought levels up when shipping was so difficult coming out to China back during COVID, and many products came in three to six months later and kind of came in at that downturn of the market. I think you heard similar comments from Bill Toler over at Hydrofarm the other day, and I think you also heard it from Hawthorne. So, as we all work through inventory, we believe pricing will normalize. But when you look at GrowGen, our private label products and some of our higher margin products have been doing a tremendous job really masking the tremendous aggregation and margins that you’re seeing on our sale products to bring inventory down the way we did.
Scott Fortune: I appreciate that. And then, Darren, you’ve been through a few cycles here and we understand the CapEx equipment side, right? That’s been obviously down, very limited capital or production capacity being added here. But outside of new states, obviously that — will continue, but help us understand, at some point there’s going to be a refresh cycle, right, for a lot of spin that’s going on, a lot of the operators are looking to become more efficient operating on their production side of things. But how do you look at kind of the CapEx spin, and then what happens with — is there an aftermarket for a lot of these equipment’s like lights and such that you guys can see some growth from? Just kind of step us through that — the refresh cycle probably not factoring much in there, but the potential there.
Darren Lampert: We believe you will see a refresh cycle coming up, maybe not this year but maybe the following year. I mean, you still are seeing facilities that are using double-ended bulbs and fixtures opposed to LEDs. And again, it’s all a matter of capital, Scott. Wall Street has shut down. Wall Street has shut down the cannabis space, and I do believe you will see a resurgence. You’re starting to even see right now, certain comments that they may be opening up the Toronto Exchange up in Canada to get some more liquidity and capital into these companies. So, there’s a lot of ifs. The one thing that we do know when we look into our 2022 sales, the biggest degradation in sales that we saw was on the capital equipment side.
