And when we talk about adjusted SG&A, we’re kind of running right now around this $12 million to $13 million kind of range on an adjusted level, which is down nearly $3.5 million, $4 million from where we began the year. So as we go into 2024, we’re going to get some last benefit from that, just quite simply from the savings that we’ve already instituted and already received some benefit from. You also heard from the restructuring effort Phase 2 that we’re putting in place, we’re expecting $1.5 million of additional savings there. So I definitely feel like we’ve got some more opportunity in front of us with respect to growing the margin at the EBITDA level from here.
Peter Grom: That’s super helpful. Thank you so much. I’ll pass it on.
Bill Toler: Thanks, Peter.
Operator: Our next question comes from Jesse Redmond with Water Tower Research. Please proceed with your question.
Jesse Redmond: Hi, guys. I had a question on the product side, as we’ve chatted before, I always enjoy using your products and personally like your roots organic line or the things that I do in my backyard every season, but I know you’ve also been working on some proprietary nutrient brands. And I’m just wondering if you had an update there or you could talk a little bit about how those are performing.
Bill Toler: Yes. Thanks, Jesse. And probably the strength of our portfolio and embedded in all this adjusted gross profit progress has really been the proprietary nutrient brands. I mean whether it’s House & Garden, which honestly, over the last three years has been our most consistent business, whether it’s HEAVY 16, which had had a tough year last year, but it’s come back Gangbusters, or finally Grotek, which was a business that we bought out of Canada. It’s always been distributed by us in both Canada and the US, has a great presence in Europe as well. Grotek has always done well in the Asian community and we’ve really been able to tap back into that market this year and we’ve had kind of two quarters in a row of just outstanding growth on that brand as well.
But the proprietary Nutrients are really kind of the core of where we’re making our money if you will. And I know we’re not making a ton of money yet, but it really is driving the higher adjusted gross profit results that we’re seeing and it’s been an important part of kind of how this year has held together for us on a positive adjusted EBITDAI and also creating free cash flows. So good progress on the Nutrients. They’re really the centerpiece of our entire proprietary branded offering.
Jesse Redmond: Do you see any trends in terms of, I could see this a couple of ways when I’m talking to operators, there’s people that are interested in growing great flower and want to spend more money to get higher THC numbers and more terpenes and maybe more in the premium part of the market. So we’re looking to spend more on that side to create better products. But also we recognize there’s a lot of margin pressure. And one thing I’ve been hearing in some of the MSO calls is people — consumers are shifting down and going more towards value lines, which makes me think that providing affordable solutions may be of more interest. Curious where you’re seeing the push and pull on that side if you’re seeing people that are looking for more value conscious solutions, or if you’re also seeing people that are looking for whatever is going to push the plant to its maximum potential?
Bill Toler: Yeah. I think you’re right. There’s a wide spectrum of demand curve out there, right? And the margin pressure and the overall kind of glut of product over the last couple of years has caused pricing to drop way down. And so people then — the corresponding reaction to that is they want to get cheaper inputs and cheaper cost of goods for growing. And so we’ve seen some of that. So what we’ve launched — we’ve launched a house and garden dry product, which is a real value orientation instead of having the liquids, which of course you ship the water and you ship the dilution factor there. So the dry product really gives people a value-oriented way, yet it still has the high quality House & Garden branding on it. That’s one of the things we’re doing.
