Chicago Atlantic Real Estate Finance, Inc. (NASDAQ:REFI) Q4 2022 Earnings Call Transcript

John Mazarakis: And again, with respect to states like Pennsylvania and Ohio, this goes back to our strategy from the beginning. These are still medical states. There has been some compression, but having that transition to adult use still has — is to come. So that really is a in terms of overall value.

Mark Smith: Okay. And then similarly, as you guys think about the pipeline, what maybe gives you some confidence in being able to continue to originate new loans as you guys look at the pipeline?

John Mazarakis: Yeah. I mean, obviously, you’ve seen a lot of other reports of going around. From a supply and demand perspective, there is significantly more demand than supply of capital. So, as far as new loans, it is — we have the pick of a litter, and ultimately can maximize our returns on a risk adjusted basis because there’s just not that much competition out there.

Mark Smith: Okay. And as you guys look at the pipeline, any breakdown or thoughts on existing states where you operate versus kind of new states, either new to you or new states, regulatory wise coming online, like Minnesota that you’re talking about. As you think about the pipeline, what’s kind of the breakdown of new states versus where you currently operate?

John Mazarakis: In term — there are two ways, Mark, that you can define the term new states, right? You can have states that are currently listed, that have no presence of medical or adult use markets. And those are harder to identify. Who knows, I don’t have a crystal ball. In terms of medical state that will convert to adult use, that would be my guess Minnesota would be high on the list to convert because Minnesota is — has turned democratic both on the senate side and the house side, which is an unusual phenomena. It hasn’t happened in several decades. So, that is the one state that kind of stands out. In terms of others, I would just be guessing. Obviously, Maryland is already wrecked. Everyone is saying that adult use sales will commence July 1st.

But that has not been confirmed yet. And Missouri has had one complete full month, which exceeded everyone’s expectations. I think, Missouri has gone up once the transition occurred somewhere in the ballpark of two to three x of top line retail revenue in one month, month over month.

Mark Smith: Okay.

John Mazarakis: They exceeded $100 million in sales the first month that they were open for business.

Mark Smith: Great. Thank you guys.

John Mazarakis: Thank you.

End of Q&A:

Operator: Thank you. That concludes our Q&A session today. Thank you for joining.