Operator: Your next question comes from the line of Chris Carey from Wells Fargo.
Chris Carey: Hey guys. Why do you expect revenue to increase quarter-over-quarter? Are you seeing something — can you expand on March? I think, you highlighted that. Secondly, this acquisition you did, is that material?
Darren Lampert: The acquisition that we’ve done in March was not material. They’re very small acquisitions. But we are seeing a little pickup in business in March over fourth quarter of last year. And we are going into our seasonally strongest period, which is the second and third quarters. And what we’re hearing from our commercial team, our store team and our customers is that business is starting to pick up and we’re starting to see it in our consumable side of it, and we are starting to see much more quoting on the commercial side of it back east and in new markets.
Chris Carey: Okay. So, this is what you’re seeing, not necessarily what you’re projecting, just to confirm?
Darren Lampert: It’s what we are — well
Chris Carey: But you’re seeing this currently is the point.
Greg Sanders: Yes, Chris, and I’ll jump in as well here. One of the key reports that we use on a daily basis is our daily sales report. And we’ve seen revenue pick up across the country in Q1, on a comparative basis in our retail markets. And that’s part of the optimism that we have around the Q1 numbers and an improvement in the first quarter sales in comparison to Q4.
Chris Carey: Okay, great. That makes total sense. Just on the daily sales comment that you just made, are you seeing daily sales stabilize and start to pick back up? Is that what you’re kind of referring to with the daily sales on a comparative basis?
Darren Lampert: Yes, exactly. We’re seeing improvement in Q1 versus last quarter.
Chris Carey: Okay. Got it. And then just the final question is, if you could put it all together, why you think this is happening? Is it just because at some point the market has to bottom and stabilize? You highlighted pricing seems to be normalizing, inventory seems to be normalizing. Is it just like, do you have any theories about why it’s happening just in aggregate? That’s it for me.
Darren Lampert: Chris, we’re 20 months into a downturn into a market that we still do believe like many, has tremendous potential. 20 months is a long downturn for any cycle, and we are starting to see a pickup in business in March, and as we saw in the last couple months. So we’re starting to feel a little better about the industry. When you start taking a look and talking with our customers, when we have thousands of them. They’re starting to see price stability in the California markets to increasing pricing. They’re starting to see some of the illegal — some of the illegal growers have gone out of business, and we’re hearing up to 15% of the market in California has closed. So, you’re seeing a smaller base of growers out there, which brings down, as you probably know, supply on the cannabis side of it.
So, we are starting to see that. We’ve also seen the same in Michigan. We’ve seen closures in Michigan. So with that, you’re going to see strengthening from the individuals that are still in business. But one thing that we haven’t seen as of yet, you’re not seeing money come back into the markets. And we have been extremely diligent on lending money to customers ours as we continue to keep our balance sheet in tremendously good condition. But we do see right now as our side of the industry consolidates, we see tremendous acquisitions out there. And we do believe that you will see some at GrowGen this year. We don’t think there’ll be any material acquisitions this year. There’ll be some smaller ones filling in white space around the country but we will keep Wall Street and you posted on those.
