Good morning. My name is Joanna and I'll be your conference operator today. At this time, I would like to welcome everyone to GrowGeneration Corp. 2019 Fiscal Year-End Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Mr. Michael Salaman, President and Co-Founder, you may begin your conference.

Thank you. Good morning. My name is Michael Salaman, Co-Founder and President of GrowGeneration Corporation. At this time, I would like to welcome everyone to the GrowGeneration 2019 earnings conference call. With me this morning is Darren Lampert, our CEO and Co-Founder; Monty Lamirato, our CFO; and Tony Sullivan our COO, who will all be participants on our call this morning. After our presentation, there will be a question-and-answer session. As always, we expect to make forward-looking statements this morning. I want to caution you that our actual results could differ materially from what we say here. Investors should familiarize themselves of the full range of risk factors that could impact our results, and those are filed in our Form 10-K, which we filed with the Securities and Exchange Commission. I’d also remind everyone that today's call is being recorded, and an archived version of our call will be available on our website later today. As we all tackle and cope with the COVID-19 outbreak, GrowGeneration has implemented protocols, procedures, and processes to keep our employees and customers safe while continuing to service our customers. Darren and Tony will outline in more detail the steps we have taken. And we report to you today, all 27 locations are all open for business. GrowGen has been designated essential as we are a critical part of the supply chain to the agricultural and farming industries. Our just-in-time supply chain is operating extremely well with more customers ordering through our online channel, GrowGen.Pro and using our curbside and will call options to pick up at our garden centers. We are fulfilling virtually all of the critical products that our customers need to nourish their plants as well as the many safety products like gloves, isopropyl alcohol and other items needed to keep their employees and cultivation facility safe and clean. You will hear today from Darren and Monty that all of our financial metrics continue to be positive, all the while investing in technology and infrastructure. Our balance sheet is strong, allowing us to continue to execute our plan, focusing on internal growth initiatives that include same store sales. Our omnichannel strategy, buy online, pickup in store, private label products while continuing to purchase the best of breed hydroponic operators and opening up new GrowGen garden centers around the country. With that, I will turn the call over to Darren, who will present our 2019 results. Darren?

Thank you, Michael. Good morning and welcome to our 2019 earnings call. Before we begin our 2019 earnings call, I'd like to begin by thanking our staff and customers during this time of uncertainty. As we continue to monitor the COVID-19 outbreak, GrowGen is considered an essential supplier to the agricultural industry, supplying the nutrients and nourishments required to feed their plants. Accordingly, all our 27 stores are open during this difficult time and will remain open for the foreseeable future. We have plans and procedures in place to ensure our customers and employees stay safe during this time of uncertainty. All of us at GrowGeneration remain committed to the safety and well-being of our customers and employees and send our prayers and thoughts to all in the growing community and beyond. To do our part, GrowGeneration has committed to donate up to $500,000 of free product to our loyal customers and local communities that have been severely affected. The Company's fiscal year 2019 record financial results reflect our continued focus on revenue growth and adjusted EBITDA expansion. Revenue was up 175% year-over-year to approximately $80 million. Adjusted EBITDA was $6.6 million for 2019 compared to a loss of $823,000 for 2018. Adjusted EBITDA for 2019 was $0.20 per share basic, $0.02 above our high end guidance, compared to a negative $0.04 per share basic in 2018. Our same store sales were up 62% in Q4 2019 versus Q4 2018. For the full year, same store sales were up 36% versus for full year 2018. Our online business, GrowGen.Pro is projected to exceed $10 million in revenue in 2020. Our omnichannel strategy will connect all our store inventory to our e-commerce site, allowing for buy online and pickup in store functionality. GrowGen’s just-in-time supply chain delivers our products safely and…

Thank you, Darren. And as Darren has stated, our top priority continues to be the safety of our team, their families and our customers. We are classified as an essential business, supply chain for agricultural and medical, and we are continuing to monitor multiple times a day our city, county, state and federal mandates, updates and changes, as well as communicating that daily across our entire organization. We have deployed remote working environments for all non-essential store personnel. For example, store support center teams, e-comm, commercial, IT, purchasing, et cetera. Daily calls with our executive team, management team and store teams continue to help keep everybody aware of everything that's going on, specifically emphasizing the importance of our team safety, our team's family safety and the customer safety, giving guidelines and tips to help make sure that we ensure this, at all levels. We continue to review the safety standards and protocols, six-foot distancing, how to handle transactions, cleaning protocols as well as additional tips on supplies that we have available to make sure these protocols are carried out at every level. We discuss and track team members that have self quarantined and-or feeling any symptoms. And to-date, we can report that no team members have tested positive. We have been very proactive. We've developed a level one-through-five protocol and a set of policies to handle current state to a complete shutdown at the store level. If we were mandated to go to level five, we will still have revenue through commercial e-com delivery and will call pickup with no interaction with the customers other than on the phone. And we have a state that has currently mandated all team members traveling to and from work that will need to carry a letter. So, we have letters that are available…

Thanks, Tony. 2019 highlights: Revenues were up 175% to $79.7 million for 2019 versus $29 million for 2018. The increase in revenues is due to the addition of 10 new retail stores opened or acquired during 2019, for which there were no sales for these retail stores for the year ending December 31, 2018, and eight stores and the e-commerce site opened or acquired at various times during 2018 that were opened for all of 2019. Sales in the 10 stores opened or acquired in 2019 were approximately $26 million. Sales from the e-commerce site and the eight stores opened in 2018 were approximately $38.3 million for the year-ended December 31, 2019 compared to approximately $14.5 million for the year-ended December 31, 2018. Same-store sales were $13 million for 2019 versus $9.5 million for 2018, a 36% increase. Adjusted EBITDA was $6.6 million for 2019 compared to a negative $824,000 for 2018, which translated to adjusted EBITDA of $0.20 per share basic. Net income per share basic was $0.06 for 2019 versus $0.22 for 2018. Net income loss per share fully diluted was $0.05 per share for 2019 versus $0.22 loss for 2018. The net income for the year ended December 31, 2019 was approximately $1.9 million, compared to a loss of approximately $5.1 million for the year ended December 31, 2018, an increase of $6.9 million. The net income for 2019 compared to the net loss for 2018 was primarily due to the 175% increase in revenues, with only a 154% increase in cost of goods sold, thereby increasing both margin percentage and margin dollars by $16.1 million for 2019. Store operating costs increased only $4.9 million in 2019 compared to 2018. So, the store operations contributed $11.6 million more in store profit in 2019 than in 2018. Gross…

Thank you, Monty. In conclusion, GrowGeneration has built an essential supply chain for the agricultural industry. Our leadership position is driven through a corporate mission statement to be the largest hydroponic service provider in world. We continue to cultivate the best and most knowledgeable staff in the country. We're focused on world class customer service, a commitment to our customers. We continue to invest in our supply chain and technology, creating more efficiencies across all departments. Execution of our financial goals and guidance is evident with the 2019 numbers we reported with revenue up 175% year-over-year and adjusted EBITDA earnings $0.20 a share, $0.02 higher than our guidance. Our first quarter 2020 has been strong, as we have successfully added Miami, Portland and Tulsa 2 to the portfolio. Our balance sheet is strong, which allows us to continue to execute our internal growth initiatives, while we continue to purchase the best of breed hydroponic operations and open new GrowGen locations. We have set 2020 revenue guidance at $130 million to $135 million, adjusted EBITDA guidance for 2020 is $11.5 million to $13.5 million. Revenue guidance for Q1 2020 is $31.5 million to $32.5 million. We look forward to continuing to provide guidance as need be, and we are excited to share our successes with our shareholders, our management team and partners. We will now answer a few brief questions.

[Operator Instructions] The first question is from Aaron Grey of Alliance Global Partners. Please go ahead.

Good morning and congrats on a strong finish to 2019 year. So first, certainly appreciate you providing guidance amid this uncertainty we have in the market. So, I just wanted to dig a little bit deeper into that, especially in terms of the top line. In January, when you announced preliminary sales, you called out some planned store openings in about six cities and some acquisitions in the pipeline. I know you executed on one with Miami and you also had Tulsa as well. But just as we look to guidance you announced on Friday and then what you had probably had planned in January, before the market environment changed, how much of an impact did that have in terms your 2020 outlook, both in terms of like top line and number of stores you plan to have at the end of the year. So, any kind of context in terms of how much that changes given the uncertainty with COVID would be helpful. Thank you.

Yes. Aaron, I’ll give you my -- this is Darren. I'll give you my best estimates. And certainly, as we all know, it's pretty hard to gauge right now. The one good thing from our guidance that we've given today is the $130 million to $135 million in sales for 2020 is based upon what we see in our portfolio today. Like anything else, as we've given guidance in the past, we've kind of been -- we've been guidance and upping guidance as we closed deals throughout the year. And what you’ll see from our first quarter numbers is the $135 million (sic) [$130 million] to $135 million, if the stores continue to function and the world -- and our stores continue to stay open. These are the numbers that we're seeing internally right now. We certainly see the latter part of the year. Our acquisitions will continue, our new store openings will continue. But like anything else right now, we've put all external acquisitions and store openings on hold for at least a few months, pending a little more clarity of the COVID outbreak.

Okay, great. Thanks. That's really helpful and good to hear. It's just based on the current store base.

That's correct, Aaron.

Okay, great. So, just want to drop down to the bottom line guidance on, even if simply, the implied margin gets you to about 9.4%, so about a 100 basis points margin expansion at the midpoint. So, I just want to kind of conceptualize where you kind of see that margin expansion come from, where you might be able to see some upside there. Because I know you guys do have your private label initiative, that's when you start rolling out this year, and then you also have your ERP pieces and fully implemented. So, it sounds like there's a lot of opportunity for additional SG&A leverage. So, where do you kind of see the opportunity in terms of that EBITDA margin expansion in terms of SG&A and the gross margin as we look forward to 2020? Thanks.

Aaron, easy part of that -- go ahead, Michael.

Real quick, I just want to address and Darren, I'll throw it back to you. Aaron, absolutely, I mean the Company has certainly focused internal initiatives, which includes not only the private label with same store sales, private label, also the efficiencies that we're going to gain from a buy online, which is certainly being implemented as part of this COVID outbreak situation with will calls and curbside. So, we see efficiencies coming from a variety of areas internally. And certainly with the ERP system and Tony Sullivan's initiatives from the operation side, we see a lot of corporate efficiencies that will translate into some margin expansion. We're also very aggressive on our commercial business, our commercial business continues to expand, which is more revenue, and a little lower margin. So, we balanced that business against the expansion initiatives that we have in the Company. But, we certainly are focused on margin and EBITDA. And I think the initiatives that we have set forth are the ones that we're focused on to the next several quarters. I'm sorry, Darren. I'll go back to you.

No. I think, it's perfect, Michael. I think that you answered the question. Thank you.

Thank you. The next question comes from Eric Des Lauriers of Craig-Hallum. Please go ahead.

Hi, guys. Thanks for taking my questions and congrats as well on a great year. I’d just like to start off with one quick clarification. Did I hear correctly that Tulsa 2 opened March 7th is already contributing to EBITDA?

That is correct, Eric. The store has been open -- going on three weeks and the store is performing well.

That's great to hear. First question for me, I just wonder if I could dive into the newly disclosed hemp division, or I guess, newly broken out. What kind of products are you guys currently selling through that channel? And could you give us an idea of e-commerce versus physical breakdown and which geographies that might be most concentrated in?

In terms of the -- Michael, do you want to take that?

Yes, I'll take that. I mean, basically, what's nice about our market is that we have a portfolio of products that transfers over into multiple vertical markets. And certainly, we're focused today in the hydroponic space. Cannabis is certainly the fast moving market, which is where we spend a lot of our time. But certainly, vertical market, hemp, hydroponically grown produce is a big vertical market that we see ourselves, ultimately getting into with this at home economy that's evolving, the Company is certainly looking at products that could satisfy the home market as well. So, we have products that are suitable for outdoor growing. We have SOPs, we have our own private label product that we just launched under the Sunleaves brand, which is a product that is certainly a product that the hemp farmers could use for outdoor, outdoor growing, certainly, cloning and other types of propagation products that farmers use. So, the portfolio of inventory that the Company has today can satisfy the hemp market. So, we have that in place today to take care of it. In terms of e-commerce, Eric, e-commerce is something that is certainly initiative that is part of our omnichannel. And certainly the big focus for the spring is to integrate our online business with our infrastructure that we've built over this over the last several years. Giving our customers the optionality to order online and pickup at any one of our locations, whether it's a will call, curbside, and have that transaction consummated, whether it's an online transaction or it's being consummated at the store. We're putting that technology -- implementing that technology right now. We've been working on it for many, many months. And right now, the plan is to have that operational, that functionality of buy online and pickup in store, sometime in the spring, pending that there's no additional, changes based on this COVID outbreak. But, we are on a schedule and right now we are on a pace to implement that functionality in the spring. And that's something that we think will bring, you know, more revenue to the Company, both online and offline, and will drive more -- we think more customers to our local garden centers, we think will drive more e-commerce business. And we also, we believe, will also bring more brand awareness, more commercial sign-ups. So, it's a really multifaceted marketing strategy and sales strategy that we've been planning to implement and we've been working on. We couldn't get to an implementation until our ERP system was in place, which was completed at the end of last year. Now, all of our 27 locations are on our ERP system on one database and we're now able to implement omnichannel strategy, which we think will have a significant top and bottom line effect on the Company.

Okay. That's great. And then, final one for me was just private label. I know, you guys kind of just started to get products out in Q4, just looking for a quick update there. I know, it's early days overall. But, have you guys received any kind of feedback on your products on the private label side?

People are responding very favorably. And we do a lot of testing, we do a lot of research, and we're very selective to what private label products we bring in to the market. But, I could tell you that there's significant upside. We think there's 10% to 20% over the next 12 to 24 months of margin expansion of a percentage of purchasing of what we will buy will be private label products. Tony's been leading that team that we have internally. And we believe that we will have a private label product within every department that we have within the Company. And there's tremendous margin expansion anywhere from 30% to 50% of margin that we can pick up through a private label product. But, I can tell you, we will only bring a product to the market that is equal to or better than what's out in the marketplace today. Quality and price is certainly the mantra that we have in our private label division. It's a tremendous focus for the Company. It's evolving. It’s developing. We now have -- our first five items actually are in market right now, and we're bringing another wave of products that will hit the stores in the second quarter, some which will include some pods and scissors and some trellis. So, we're very much on plan and we see that being a tremendous margin expansion for the Company.

That's great to hear. Congrats again, guys. I'll hop back in the queue.

Thanks, Eric.

Thank you. The next question comes from Scott Fortune at Roth Capital Partners. Please go ahead.

Good morning. Congrats on a quarter. I wanted to break down a little bit kind of coming up against same store comp sales, does it get tougher through 2020? Are you providing any more guidance on kind of same store comp sales here going forward?

I think we're going to -- we will, quarter-to-quarter, Scott. Right now, we will not chase.

Okay. And just want to look at -- kind of can you call out on California market and what's going on there? We know we've seen a lot of weakness in that state that is offset by growth in other states that you're doing well in Oklahoma and such that market. And then, last question for me is what percent of revenue is coming from recurring products, like the nutrients, fertilizers, the safety gear or the stuff you need from a recurring standpoint? If you could break that out that'd be great.

Scott, currently, we're not seeing any weakness in our California markets at all. As you probably know from looking at our portfolio, GrowGen is very strong in Northern California. We only have one store down in Palm Springs, which is our Southern California location. But, as of now, we're seeing no weakness up in Northern California at all in our stores. Mike, do you want to take the second part of that question?

Scott, do me a favor. Repeat that question again. I'm sorry.

Just a recurring revenue part of it that comes from nutrients and fertilizers and the goods that are needed from a basis, could you break out that percentage?

Yes. I mean, one of the -- which is right now, we've been designated essential because of the fact that GrowGen is feeding the plants. So farmers, cultivation, facilities, the medical patients, they need their product. And GrowGen provides the nutrients, the additives, the food, if you will, for the plants. And that's the consumable side of the business, the continuity side of the business. Scott, it's about 30% to 40% of the business comes from the consumable side. And, it's a cash flow business because of that. The farmer is coming to GrowGen weekly, monthly to continue to satisfy the feeding regimens for their plants. So, GrowGen is certainly an essential component of that supply chain. And that's a big part of the consumable, the continuity side of the business, which also tends to have a higher margin.

Hey Scott, on same store sales of first quarter, as you probably can see from guidance of $31.5 million to $32.5 million, with only a few new stores added to our portfolio, first quarter same store sales remain very strong.

That's helpful. I appreciate. Thanks for the color.

Thank you. The next question comes from Glenn Mattson of Ladenburg. Please go ahead.

Hi, guys. Congrats on the year as well, nice quarter and thanks for taking the question. So, curious about two things really. Number one is, how you think seasonality will play into the year in 2020, if there'll be some significant impact that we should model for? And then, as that relates to gross margin, do you imagine that ticking back up in Q1 a bit? And do you imagine it steady throughout the year or fluctuating quarter-to-quarter?

Do you want to take that, Darren?

Yes. I'll take that question. Glenn, first of all, margins, certainly we see pretty steady throughout the year. A lot of times what you will see is, you may see a point upward down based upon a few very large sales during certain quarters. We've usually seen -- since 2019 we've seen margins tick up during the year opposed to tick down. So hopefully, we do see that again in this year. There is only so much data we have to look at. Seasonality, second quarter was usually our strongest quarter, based upon what we've seen in the last five years of running GrowGeneration. That's based upon outdoor sales in certain of our markets, Northern California, Southern Colorado on certain outdoor growing. So, what you usually will see, our second quarter that's coming up right now is usually the strongest quarter. We're seeing less seasonality at GrowGen because the amount of states we're in, the amount of medical customers we have out there, and really the large commercial growers that are mostly growing inside right now but you will see usually, based upon what we've seen a little uptick in the second quarter.

Your next question comes from Brian Nagel of Oppenheimer. Please go ahead.

So, the first question I have, it may be a bit of a follow-up to some of the prior questions. But, if we step back and really kind of taking the corona virus crisis point upon various aspects of the U.S. economy and other economy, how are you close with your customers? And clearly your stores are opening [indiscernible] your core customers. If you look at your customers, has it pretty much changed in their underlying activity or do you foresee much change coming as corona virus crisis likely persists for a while?

I think, Brian, the easy way, I guess, to answer that question is our business is based upon our customers’ business. And what we're hearing right now and I think everyone has also been reading is the underlying cannabis companies right now remain strong. Our business remains strong at the dispensary level and also at the cultivation level. So, as long as we're seeing that, we're seeing that trickle down to GrowGeneration right now. Secondly, coming into the second quarter, it's outdoor season and it's also -- it's gardening season also for gardeners. And we also usually do see a pickup, soil pots from regular gardeners, guys growing tomatoes in their backyard. And based upon what's going on right now with COVID, we think growing is going to get stronger and continue, and people will be buying organic products from our stores. So, as long as people are able to shop and also we have increased our online presence dramatically, and continue to -- the real wonderful option for the individuals out there right now and also the corporations too.

The second question I have, you've talked in this call about just taking this as an opportunity to really focus more internally and externally, which makes a lot of sense. As you think about your operations and your stores and your store operations, what do you think bigger opportunities are to sort of say, [indiscernible] internal operations?

I mean, certainly skew rationalization, with all the purchases that we've made over the last four years, we have an enormous amount of inventory that -- and an enormous amount of skews. And one thing for GrowGeneration is we're working on skew rationalization right now. We want to bring on a number of skews at our stores. We're working on our omnichannel, buy online, pickup in stores. So, we're having some time. And we've done so many acquisitions over the last three years. And certainly with Tony Sullivan coming on, this is a good time to breathe and we're going to take the next few months working on our inventory levels, work on our skews, work on our private label. We think it'll make GrowGeneration stronger for the future and certainly stronger for this for the second half of 2020. We also do believe that we will see better pricing out there. We'll see the stores that we're looking to purchase we think we'll get better pricing because of what's going on in the economy right now. So, we're gearing up for an extremely strong second half. Like anything else, it's based upon the world coming back to some normalcy.

Got it. I appreciate the color. Best of luck. Thank you.

Thank you Brian.

Thank you. The next question comes from Mark Smith from Lake Street Capital. Please go ahead.

Hi. Good morning, guys. First off, just looking at unit growth, do you guys currently have any leases signed?

For new stores?

Yes, for new stores.

We do not. There is nothing -- there's a lot of LOIs on my desk right now, but we have -- there is nothing currently right now that we're sitting with that we have not opened.

Okay, perfect. And then, just kind of a follow-up from the last question, as we look at potential increased demand due to COVID-19, can you walk us through kind of the timing of how that may work? Would we see most of that impact here in Q2? Are you already seeing maybe potential increased traffic online or people calling into the stores to start to refill the channel?

What we're saying -- and I'll take this one, Darren. Basically, we're seeing our business trend the way that it normally trends. I mean, we're seeing a little increase in isopropyl alcohol and gloves, but nothing from a material perspective. I mean, we're seeing growth as we normally would see across the portfolio. And because we've added new stores, new market -- and there is a behavioral change that we are seeing in terms of people ordering online, and certainly picking up through a curbside or will call, which has been part of the plan for the company as it is getting close to implementing it on a national level, it's omnichannel. So, it's not something that we're seeing as an unusual spike. It's something that is coming through the same store sales, we see increases. And this has all been part of the budget, part of the forecast. The new stores that we added in the first quarter, Portland basically came in at the end of the fourth quarter. You'll see a full quarter of their revenue. Miami came in mid-quarter. Tulsa 2 came in at the end. All of those operations are now contributing both, top-line and bottom line. So, we're not seeing big spikes that we will see come away and be not in our numbers coming into the second quarter. We see really traditional seasonality coming, which is, as Darren mentioned, has moved out as we diversified the portfolio. So, we're seeing growth coming from the acquisitions that we made and continued demand for the products that we sell.

Okay. Mark, one last thing also, one of the things that we did over at GrowGen few months ago when COVID started is we bulked up on inventory. We increased inventory almost $3 million, probably even a little more. So, one of the things right now is we're winning customers from other stores and from other groups around the country because we're well-stocked. We certainly got ahead of some of the Chinese products, some of the nutrient products. And again, we’re starting to see a little slowdown in supply chain. But one of the nice parts is GrowGen has never been as well-stocked. And certainly, we're pulling customers from a lot of different places right now. And I think these customers will be with us for many years to come. So, during times of trouble, people come to where they feel comfortable and they can get their products. And GrowGen right now is so well-stocked from soup to nuts that we're winning new customers all over the country right now.

Okay, great. And that was part of my next question, was just looking at the supply chain and what you see out there today, if there's any issues in the supply chain. And then secondly, maybe speak to, as being the largest hydroponic store chain that's out there, does this give you an opportunity within the supply chain where you will get supply maybe before your competitors will?

I think we've taken a lot of supply before our competitors have gotten it. So, like anything else -- we're not looking for everything, but we certainly -- we built our stores up to a point where we wanted to have inventory and stock for our customers. And since we're capitalized, we were able to do that. The small hydroponic stores don't have the money, nor do they have the space to store products. So, when supply chain slowed down and you have no space to put products, you can order them. So what you're seeing right now is usually larger companies, if you walked into Home Depot and you walked into Lowe's right now, they're well-stocked and they continue -- their stores continue to run. So, like anything else, the bigger you get, sometimes it becomes a little easier. We have a big staff right now. Certainly, we're working on a skeleton staff, but we can rotate staff members around also, but smaller stores cannot. So, we think we're starting to win a lot of customers around the country. Business remains strong and we certainly will monitor it. We monitor on a daily basis right now, Mark. So, if we see dramatic changes in the industry or in the stores, Wall Street will be the first to know.

And the next question comes from Peter Wright at Intro-act. Please go ahead.

Great. Thank you. And congratulations guys on a great year and great finish to it. Two questions. First question is, I'm hoping you can help us think about what the experience and economics of the superstore versus your typical store are? Is there -- in light of your comments of skew rationalization, is there incremental services or incremental experiences you get in the superstore that you don't get in a typical store? And does it result in any type of economic numbers that you feel comfortable sharing with us, average cart size, customers per day? What is kind of the difference between those two stores? And I have one follow-up.

The superstores that we're creating are in that 40,000 -- 30,000-40,000 square-foot range, have multiple functionalities. Not only does it act as a retail commercial outfit for the Company but they're also being positioned as fulfillment services for and distribution points for our online business. As we begin and we talk a lot about buying online and picking up at the stores, and also, going into our private label business, and landing bulk buys in larger stores that act as a fulfillment center. So, the store in Tulsa 2, which is our largest facility, the largest hydroponic garden center in the United States is acting not only as a local inventory just in time, retail commercial business, but also will act as a supply chain for our online business. So, it does have a multifunction for the Company, and also will act as a distribution hub for a region. That Tulsa 2 store will certainly be utilized for regional distribution in addition to being tied to our omnichannel.

That's helpful. And a follow-up to that is, when looking at your scale and it was alluded to in a prior question now being the largest hydroponic retailer out there, 10 stores last year -- 10 new stores last year, if you look at the next 10 stores, can you help us understand, now that you guys are the biggest, you know how to build them, how many of the next gen do you think are going to be built by you guys versus bought? And what are some of the critical thinking that we could be thinking about that?

Critical thinking certainly follows legalization. Right now, if you see legalization in New York, New Jersey, Connecticut, a little more advanced and up in Pennsylvania, you'll see GrowGen get very strong on the East Coast, which you are usually seeing. Our mantra is we buy stores in mature states where we understand balance sheets and income statements, stores that have been in business for some time, that have predictable cash flow. New states, you usually can't find stores that fit that model both size wise, revenue wise, EBITDA wise. So, we usually follow what's going on in the world right now as we did in Oklahoma. So, what you'll see from GrowGen, when the COVID-19 outbreak slows down and the world again, gets back to some normalcy, you will see stores from GrowGen in Illinois, you'll see stores from GrowGen in Missouri, and any other states that are getting more aggressive. We're looking very closely right now at Arizona, which again we monitor what's going on in New York and New Jersey very closely right now. So, again, right now, we just don't know where we're going to see some changes and legalization with what's going on in the world right now. And everyone looking for tax dollars, we certainly think there will be some changes in some of the laws in the state by state right now. But, we're still waiting. And again, like anything else, you probably will see stores from us in Illinois this year. Hopefully, you'll see stores from us in Arizona, Missouri and somewhere back East just depending upon changing of laws. And you also will probably see hopefully in the fall, something in Southern California from GrowGeneration in the LA area.

Thank you. There are no further questions at this time. You may proceed.

We want to thank everyone for their time and certainly want to send out prayers and make sure everyone stays healthy and safe during this COVID outbreak and we appreciate all of our staff members, our shareholders and the support that we've gotten. So, thank you again, appreciate your time. And we're here for any additional questions afterwards as well. But, stay safe and stay healthy.

I think, guys, one other thing is something was very important that was in our press release today that GrowGen is giving back. We committed to give over a $0.5 million to communities and growers in need and we will continue to. We've taken wonderful care of our staff. We have not let one of our staff members go. We will be bonusing our staff for working during these trying times. GrowGen will continue to do its part as the leader in this industry. And we're quite proud of it. And as Michael said, thank you everyone and be safe. And we look forward to updating you on further calls. Thank you.

Ladies and gentlemen, this concludes the conference call for today. We thank you for participating and we ask that you please disconnect your lines.