Good morning. My name is Pam and I will be your conference operator today. At this time, I’d like to welcome everyone to the GrowGeneration Corp. third quarter 2020 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. If you’d like to ask a question during this time, simply press star then the number one on your telephone keypad. If you’d like to withdraw your question, please press star followed by two. Thank you. Mr. Michael Salaman, you may begin your conference.

Thank you. Good morning. My name is Michael Salaman, co-founder and President of GrowGeneration. At this time, I would like to welcome everyone to the GrowGeneration third quarter earnings conference call. With me this morning is Darren Lampert, our CEO and co-founder; Monty Lamirato, our CFO; and Tony Sullivan, our Chief Operating Officer, who will all be participants on our call this morning. After our CEO, CFO and COO’s remarks, there will be a question and answer session. As always, we expect to make forward-looking statements this morning, but I want to caution that our actual results could differ materially from what we say here. Investors should familiarize themselves with 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 I’d also remind everyone that today’s call is being recorded and an archived version of our call will be available on our website later today. Let’s begin the call. In the third quarter, GrowGeneration continued to further its leadership position in the hydroponics and garden supply industry. We recorded our 11th consecutive quarter of record revenues and we achieved record adjusted EBITDA and net income for the quarter ended September 30, 2020. Today we have 31 locations and recently announced the signing of an asset purchase agreement with the nation’s third largest chain of hydroponic garden centers, The GrowBiz. In anticipation of legalization passing, on October 12 we added our 11th state with our purchase of Hydroponics Depot located in Phoenix, Arizona. In addition, with New Jersey approving adult use cannabis, GrowGen anticipates opening a location in the Garden State in the spring of 2021. With the four new states that passed adult use legalization, there are now 15 states or approximately…

Thank you Michael. Good morning and welcome to our third quarter 2020 earnings call. Before I begin my prepared remarks, I would like to thank each and every one of our staff and customers for their hard work, dedication, and loyalty. 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 31 garden centers remained open during this difficult time. We have procedures in place to ensure our customers and employees stay safe. All of us at GrowGeneration remain committed the safety and wellbeing of our customers and employees. We’re excited to report another quarter of record financial results and operating performance by our company. As we continue to outpace our guidance, we are increasing fiscal year 2020 revenue guidance to $185 million to $190 million and increasing adjusted EBITDA guidance for 2020 to $19 million to $20 million. We have set 2020 full year GAAP pre-tax net income guidance to $9 million to $11 million. Revenue guidance for full year 2021 is $280 million to $300 million, and full year adjusted EBITDA 2021 is $34 million to $36 million. The company’s third quarter 2020 record financial results reflect our continued focus on revenue growth and adjusted EBITDA expansion. The third quarter of 2020 was the company’s 11th consecutive quarter of record revenue growth. Our continued ability to attract the best of breed hydroponic garden centers is again evidenced by the recent signing of our asset purchase agreement with The GrowBiz that we plan to close before the end of the year. The GrowBiz adds an additional five garden centers in California and Oregon to the GrowGen portfolio and is the nation’s third largest hydroponic chain. The GrowBiz business…

Thank you Darren. We had another successful quarter with record financial results and we are very proud of our team’s continued growth, execution, and performance in the third quarter. As stated by Darren, our top priority has been and will be the safety of our team, their families and our customers. Currently all 31 of our locations are open and operating efficiently. We have been relentless and one step ahead with all safety protocols throughout this pandemic. We are classified as an essential business and supply chain for agriculture and medical sectors. Every city, county and state, and federal COVID-19 mandate, we have been on top of. We monitor all the changes multiple times a day, and we communicate to our teams daily. We have deployed remote working environments for all non-essential store personnel, including at our SFV, ecomm, commercial, IT and purchasing departments. COVID is a fluid, ever-changing situation and we continue to manage, monitor and communicate daily to maintain all communication, safety and cleaning protocols as we work towards [indiscernible] our new normal business practices. We are monitoring and have significant cleaning and safety supplies in all of our locations. We will continue to stay one step ahead, operating with stricter protocols to keep our teams and our customers safe. We are also ready to implement our proven level one through five protocols if or when necessary. Let me give you a couple of updates on our key operating initiatives and accomplishments in third quarter. We have developed a real estate and a two-year growth strategy that will strengthen our multi-channel supply chain and our state by state ownership. In the area of omni channel, as Michael had shared with you, our new website is up and running, and we are currently testing BOPUS, pick, pack and ship,…

Thank Tony. Net revenue for the three months ended September 30, 2020 was approximately $55 million compared to approximately $21.8 million, an increase of 153%. Same stores contributed revenue of $33.4 million for the quarter ended September 30, 2020 compared to revenues of $19.2 million for the same period last year, a 73% increase. Gross profit was approximately $14.6 million for the three months ended September 30, 2020 compared to approximately $6.5 million for the three months ended September 30, 2019, an increase of approximately $8.1 million or 124%. Gross profit as a percentage of revenues was 26.5% for the three months ended September 30, 2020 compared to 29.9% for the three months ended September 30, 2019. The decrease in the gross profit margin percentage is due to a greater percentage of our revenues coming from commercial and ecommerce revenues as a percentage of our overall revenues in the third quarter of 2020. Commercial and ecommerce accounted for approximately 29.3% of our overall sales for the quarter ended September 30, 2020 compared to 27.3% for the quarter ended September 30, 2019, resulting in a margin reduction of approximately 1.3 basis points. For the nine months ended September 30, 2020, the company has maintained a consistent margin of 27% throughout all of 2020. Operating expenses are comprised of store operations, which are primarily payroll, rent and utilities, and corporate overhead. Operating costs were approximately 9.5 million for the three months ended September 30, 2020 and approximately $5.4 million for the three months ended September 30, 2019, an increase of approximately $4.1 million or 76%. Store operating costs were $5 million for the three months ended September 30, 2020, compared to $2.7 million for the quarter ended September 30, 2019, an increase of 81%. Store operating costs as a percentage of sales…

Thank you Monty. GrowGeneration recorded its 11th consecutive record quarter of increased revenue and we achieved record earnings. We believe that our company has tremendous growth and momentum built into the remainder of the year and into 2021. Our store acquisitions and new store openings continue to drive growth, and we continue to deliver double-digit same store sales results quarter over quarter. We plan to own and operate over 50 locations in 15 states during the year 2021. Today, we own and operate 31 locations, 36 if you include The GrowBiz. GrowGeneration has built a national, scalable supply chain for the agricultural and cannabis industry. Our leadership position is driven through our corporate mission: statement to be the largest chain of hydroponic garden centers in the United States. 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 third quarter 2020 numbers we reported, with revenue up 153% quarter over quarter and adjusted EBITDA earnings of $6.6 million or $0.14 a share. We completed a $48 million institutional follow-on public offering led by Oppenheimer which was over-subscribed three times. Our stock is now 50% institutionally owned. Our balance sheet is strong with approximately $50 million in cash, which allows us to continue to execute our internal growth initiatives while we continue to purchase the best of breed operations and open new GrowGeneration locations. We have increased fiscal year 2020 revenue guidance to $185 million to $190 million, adjusted EBITDA guidance for 2020 of $19 million to $20 million, and full year GAAP pre-tax net income guidance to $9 million to $11 million. Revenue guidance for full year 2021 is $280 million to $300 million. Adjusted EBITDA guidance for the full year 2021 is $34 million to $36 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. Now we will turn the call over for questions.

[Operator instructions] Your first question comes from Brian Nagel with Oppenheimer. Please go ahead.

Good morning. Congrats on a great quarter, very nicely done.

Thank you Brian.

My first question, it’s a question I get a lot certainly as we’re talking to our clients on the GrowGen story, but the guidance--you once again lifted guidance here, so congratulations on that. As we think particularly with the ’21 guidance, could you give us more color on the build-up of that revenue guidance, how you’re thinking about potential acquisitions relative to that guidance, comp store sales?

Brian, I’ll answer that for you. First and foremost, there is a pandemic and COVID is in full force right now, so like each quarter during COVID, we are very, very conservative wit guidance. When we look to the emerging markets, it’s six months to a year conservatively to get states organized, to get business up and running, so certainly when looking at new markets, that’s going to be the latter part of 2021. On new store openings in emerging markets, we’re forecasting very little sales in those new markets, and certainly we will see how they unfold during the year. Right now, same store sales this year have been up 59% year-to-date, last year mid to high 30s. We certainly do not expect that to continue, but as of now, we certainly don’t know when they’re going to start slowing down. Our stores are getting more mature in states that we’re in. We’re starting to see tremendous efficiencies in our purchases, so when you’re looking at purchases from GrowGen, you’re usually looking out at least six months until we start gathering efficiencies in the new stores that we’re purchasing, so you’re seeing tremendous growth the following year from GrowGen on those stores. Right now, we have about $35 million out of our $55 million in sales that are coming through same store sales, and you’ll see the rest of our stores starting to come on next year into same store sales calculations. Really, what you’re looking at right now is a combination of growth within our current stores for next year, new acquisitions and new store openings, and it’s a combination of all three. Like anything else, Brian, we do update guidance on a quarterly basis depending upon what we’re seeing in the industry, and it’s still our contention that the industry is in such an early growth state that it’s really challenging during these times to really forecast and forecast properly. When you’re looking at forecasting from GrowGen, it’s still our position and understanding that these are the low parts, and when we guide, we certainly do feel that we will beat quarters right now with the growth in this industry.

That’s very helpful, Darren, thank you. Then just one really quick follow-up, and again relative to the guidance, so I guess we’re now, call it several weeks into the fourth quarter, any comment on just how the business has performed during the fourth quarter relative to what we saw in the results for Q3?

Yes, our fourth quarter is tracking well a month and a half into the quarter. We’re seeing no issues, no slowdowns as of today, and customarily our fourth quarter usually is our slowest quarter of the year but we’re certainly seeing no slowdown as of today.

Congrats again, thank you.

Thank you Brian.

Your next question comes from Eric Des Lauriers with Craig Hallum Capital Group. Please go ahead.

All right, thank you, and congrats on yet another strong quarter and impressive guide. Great execution, guys. Maybe a bit of a follow-up on that first question there, just on M&A versus greenfield openings. Obviously unit growth is a vital component of your strategy. Can you help us understand how you guys think of M&A versus greenfield openings - you know, basically the buy versus build decision? What drives those decisions for you guys, and what are the differences in economics between those two?

Eric, I’ll take that and then I’m going to send it over to Tony to finish up the question. We’ve been pretty consistent - we purchase in emerging--we purchase stores in mature markets, markets that have been--you know, again, that are up running and have consistent numbers to it, markets like California, markets like Michigan, Colorado, Oregon, and we open stores in new emerging markets. Oklahoma was an emerging market for us, you’ll see us opening stores in New Jersey and Illinois, Massachusetts and states of that nature, hopefully Pennsylvania and New York. Our unit economics, we’re buying anywhere from two to five times EBITDA, half time sales. Opening stores right now, I think we’ve gone through unit economics - you know, it’s usually costing us anywhere from a quarter of a million to half a million to greenfield a store plus inventory, depending upon the size of the store and it’s really dependent upon how much inventory is stocked in those stores. Next year and as of now, right now, we have a very full acquisition pipeline that will continue into the beginning of next year, and then you’ll probably see GrowGen shift into new store openings, into new emerging markets - New Jersey, hopefully Pennsylvania, New York. You’ll see us probably greenfielding stores in Illinois and Missouri, and again still waiting--like anything else, the elections have been very important and just starting to wait to see how they shake out in the future.

Okay, great. That’s very helpful. Then as a bit of a follow-up to that one, for the stores that you do acquire, can you help us understand how you guys think about cash versus stock? What’s your ideal mix, why is that, and how might that change going forward?

The mix has been pretty constant through the five years that we’ve been in business. We usually pay cash for inventory and we’re very resilient in certainly inventory counting, with obsolete and slow moving inventories. Then, we split the goodwill usually between stock and cash - it’s usually a 50/50 split in most transactions we’re doing, and the reason for that is we want the prior owners of these stores to share in the successes of GrowGen. We think it keeps them much focused, so the larger transactions you’re usually seeing, again, a 50% stock component to it. Some of the smaller transactions, the immaterial transactions to GrowGen, you may see an all-cash deal from time to time.

All right, great. That’s helpful. Congrats again guys, and good luck going forward.

Thank you Eric.

Your next question comes from Andrew Carter with Stifel. Please go ahead.

Hey, thanks. Good morning. Not to beat a dead horse, but I do want to ask, relative to your previous guidance if you include the incremental M&A, it is well below what you had for outstanding for 2021, and I get that it’s a fluid mix of acquisitions, new store openings, etc., but as you’re looking at that update range for 2021, is that more of just an organic number, what you can do with the business in hand now, versus no incremental M&A, more [indiscernible] store openings? Can you help us understand how you’re thinking about that?

Once again, it’s a combination. It certainly includes acquisitions that will be going on throughout the year, also new store openings, and certainly same store sales included in there. Once again, new industry, it takes us six months to thoroughly get the stores up and running that we’re purchasing, it takes us three to four months to build stores out, so right now it’s just so early in the game. I mean, we’re still in November, 2021 is a long ways away, so right now this is our best estimate for 2021. As I said earlier, we will adjust guidance as we see fit, if we’re seeing business is stronger going out throughout the first quarter.

Got it, thanks. The second part of your guidance is you did upgrade your adjusted EBITDA margin expectations for next year, so I want to understand the puts and takes there. We have the private label program - margin accretive, consumer ecommerce will be a drag going forward, but also growing scale benefits, so help us understand the change there and your expectations for the stronger profit performance in the out years. Thanks.

Monty, would you like to take that? Monty, are you there?

Sorry, I was on mute. One of the things we’re seeing is tremendous leverage on all of our operating costs, from store operating costs to corporate overhead. A greater percentage of our dollars are hitting the bottom line in terms of an adjusted EBITDA number, and so even though margins have been consistent at 26, 27%, basically the 27% level, we’re getting tremendous leverage from all the other costs and therefore dropping more dollars to the bottom line.

Thanks, I’ll pass it on.

Andrew, did you have a follow-up?

Oh no, thank. I’ll pass it on.

Your next question comes from Glenn Mattson with Ladenburg Thalmann. Please go ahead.

Hi, thanks for taking the question, and nice results on the quarter. Good to see that you’re opening a store in New Jersey. I’m curious - obviously New Jersey is not a huge market yet for cultivation, likely it will be down the road, but Pennsylvania clearly is and I know you’ve been serving the Pennsylvania market from the Rhode Island store, I believe. I guess I’m curious if you see a bigger pick-up in Pennsylvania that you’re able to service from the New Jersey store or if you’re already capturing a lot of share in Pennsylvania as it stands today?

Michael, can you take that, please?

Yes, I’ll take that. Glenn, basically the strategy--and right now, we are servicing Pennsylvania customers, so the strategy for next year is to put a fulfillment center, a hub which will be a larger GrowGeneration garden center in the south Jersey area, which will not only service the emerging New Jersey market but also allow us to really service the tri-state area. It will put us closer to the customers that we’re already working with in the Pennsylvania market. We certainly believe Pennsylvania and New York are going to follow the lead of New Jersey, so we’re looking at really the whole tri-state area as a supply center for GrowGen. Right now, we’re looking at New Jersey, but we certainly see as legalization unfolds, multiple stores between New York, New Jersey and Pennsylvania, but starting in the spring we’ll have a super hydroponic garden center, 30,000, 40,000 square feet that gives us the ability to service our current customers and any new customers that are obtaining licenses in both the New Jersey and Pennsylvania markets.

Great, thanks. You’re in 12 states now with Arizona, so you’ve contemplated 15 states by next year--I’m sorry, 11 states with Arizona, 12 I guess would be New Jersey. What other markets are you contemplating for 2021?

We’re looking at Ohio, we’re looking at Massachusetts, believe it not Montana, which has passed legalization. We’re also expanding our footprint in California, we’re looking at New York and Pennsylvania certainly - you know, we’re keeping our eye on those markets. Going deeper in Southern California, Florida we think is going to start moving more towards an adult use market, so we’re looking at the entire landscape. As we’ve mentioned earlier, we follow--really what’s nice is that we’re able to follow the road map of legalization and be relatively predictive as these states go from medical to adult, and our ability to open up a new location once we locate a facility, we can have a new GrowGen facility up and running and operating within 90 days, so we’re very nimble and we’re certainly continuing to look at the best of breed of stores that exist. We still believe there’s another good 50 to 100 stores out there that are potential acquisitions in multiple markets for GrowGen.

A question on the margins quickly. It makes a ton of sense, obviously, that commercial has lower gross margins than the brick and mortar standard, but can you give us a sense of how much difference there is between online gross margin versus the retail store gross margin?

Monty, you want to take that?

Yes, there is about a six point difference between the online and commercial and brick and mortar, and so that’s why you see the combined margin where it is. Once again, depending on the percentage of ecommerce and commercial relative to total revenues, it has an impact on the margin.

Okay, great.

Glenn, last thing - just so you know, we do believe that in 2021, we should see a point, point and a half bump in margins based upon our private label offerings that we will be rolling out through the year.

Okay, thanks Darren, and good quarter, so thanks again.

Thank you.

Your next question comes from Aaron Grey with Alliance Global. Please go ahead.

Hi guys, congrats on the quarter, and thanks for the questions. First of all from me, kind of on commercial business, I saw real nice sequential growth from $9 million to $13 million. Can you just talk about some updates there and your relationship [indiscernible] and how that’s been building out as that’s becoming more and more of an important part of your revenue and growth that you guys see, especially as those start to become the consolidators within the overall cannabis space? Thanks.

Michael, can you take that please?

Yes, I’ll take that. Aaron, as we’ve mentioned, the company has a multi-sales strategy where we’re obtaining customers from walk-ins that are coming into any of our 31 locations, through our ecommerce site that today gets over 150,000 unique visitors that are coming. We get leads for commercial business through our website, and then the dedicated commercial division that is made up of commercial account managers, customer service reps, quoters, we have a very white glove customer service approach when we’re dealing with the MSOs. That approach has created a customer base on the commercial side. Right now, we’re servicing over 1,000 commercial customers. Quarter over quarter, we were able to pick up an additional 240 new licensed commercial customers, and the reflection is that our revenue has gone up. Right now, we’re well ahead of our projections. We did $13.2 million for the quarter. For the nine months, we’re over $32.7 million, so we’ve actually adjusted our internal numbers, which we mentioned we’ll do over $40 million of commercial business. I believe the attraction to GrowGen is our ability to service, to customize solutions, to deliver just-in-time, to provide a high level of customer service which is challenging when you’re dealing with the multi-state operators. But our ability to execute at that level, whether it’s a single state operator, Aaron, or a multi-state operator, each customer is treated the same way and it’s the execution of the commercial team that continues to excel. We certainly believe with the combination of the commercial team, which is a very strong team coming out of GrowBiz, with the commercial division that GrowGen has built, you’re going to see commercial revenues skyrocket in 2021.

Thanks for that color, that’s super helpful. Kind of tagging onto that, one thing I think that’s very unique about you guys versus some of the other players [indiscernible] is your ability to operate and do well in various regulatory environments - take Oklahoma, an unlimited license market that has been tremendous for you guys. Just curious - now that we have some new states coming online, Arizona we can kind of see how regulations are going to look, New Jersey we’re still kind of pending, just wanted to know in terms of lemonade in unlicensed markets, I know you guys are able to operate well in both but is there one that you guys prefer versus the other in terms of how you look at new regulations and licensing opportunities as new states come about? Thank you.

Darren, do you want to take that?

You can take that, Michael.

Yes. Aaron, our revenue certainly tracks to the number of licenses that are being issued, so Oklahoma has over 5,000 licenses, so our position--you know, GrowGeneration is a proponent of an open market, a green economy, multiple licenses and we’re starting to see that certainly in talking to some of the insiders within New Jersey and certainly following what’s happening in Illinois. We believe that social equality, entrepreneurship, taxation, real estate, value increasing with idle warehouses that will be converted into beautiful cultivation facilities, we believe that that is going to be the future of the economy on a state-by-state basis. GrowGen’s business trends and tracks - the more licenses, the more business, so we are certainly well positioned to take advantage, whether it’s a state like Oklahoma where today we have four locations to manage those 5,000 licenses, or Arizona - right now we’ve put our first location which we’re actually going to be consolidating into a 30,000 square foot facility in Phoenix, anticipating the growth. We believe that these states, the new states and certainly the mature states, where there already are thousands of licenses, GrowGen will be in those markets, servicing those customers, and continuing to execute our plan.

Thanks for that color and congrats on the quarter. I’ll pass it on.

Thank you Aaron.

Your next question comes from Mark Smith with Lake Street Capital Markets. Please go ahead.

Hey, good morning guys. First one from me, just looking at the guidance, is it safe to assume that the GrowBiz acquisition is built into the guidance?

The GrowBiz, it is built into the guidance, Mark.

Excellent. Then just wanted to follow up on commercial business - you know, the growth there is certainly fantastic. Walk us through how this GrowBiz acquisition impacts commercial, how they trend towards commercial versus your business today.

Michael?

You know, they’re very strong, and certainly--it’s a five-store chain, four locations in California, northern California, one up in Oregon. They have a very talented executive that has created a very substantial commercial business, so this transaction for the company, not only does it accretively add $50 million of revenue going into 2021 but the personnel that we’re picking up and the division that they have in terms of their commercial business, which is a significant part of their overall revenue, is going to be completely integrated into GrowGeneration’s management for our commercial division. When you start to look at it, and they’re more concentrated out west, we have a lot of concentration back east, they had some of the larger MSOs so as we integrate, the pie gets a lot bigger. It was a big part of the strategic nature of why we identified--not only are they the third largest hydroponic chain in America, but they bring tremendous experience. Ross Haley has been in this business for 15, 20 years, has tremendous outreach within the cultivation community. We’re certainly going to leverage that relationship. He built a wonderful company, so it will be completely integrated within our commercial division.

Excellent. Last one from me, just kind of housekeeping, tax rate was a little bit higher here during this quarter. Any guidance you can give us on maybe what we should expect for tax rate going forward?

Monty, can you take that please?

Sure. The tax rate is a combination obviously of not only the federal but the state tax rate, and also one of the things to consider in the tax accrual is that’s a GAAP number, not necessarily the amount of income taxes that are due, so when you’re reversing timing differences and things like that, the tax accrual is a combination of reversal of those timing differences and the actual amounts that you will be paying to the state and federal government. It is a slightly higher rate this quarter, you have some non-deductible expenses, some relate to share-based compensation, and so that has an impact on the taxable income for which the tax rate is applied.

Okay, that’s helpful. Thank you guys.

Thank you.

Your final question comes from Scott Fortune with Roth Capital Partners. Please go ahead.

Good morning and congrats for your consistent execution over the last six years, not just quarter over quarter but you’ve done a great job of driving revenue growth here. I want to focus on the margin side a little bit and private label, touch base more on those initiatives. We’ve seen a lot of potential upside on the margins on leveraging the operating side and those efficiencies, but you said, Darren, I think one to two point bump-up potentially on the private label. Just step us through the private label initiatives looking into 2021 and percentage of revenues, kind of targeting towards that end of 2021 here.

Right now, Scott, we’re targeting approximately 10% of our business next year will come from private label brands. We’re seeing right now in the industry, and really from our initial launches of our private label, we’re seeing margins upward of 50% on private label products. If you factor that in at 10%, it will come out somewhere in the one to two point range. Again, we’re pretty confident with our private label products, and we’ve spent a lot of time this year certainly testing products and curating products and starting to put them out into the markets as we speak and using some of our shelf--you know, certainly some of our shelf space for our private label brands [indiscernible].

Scott, just to add--

I appreciate--go ahead?

Just to add to what Darren said, and I think--and Tony certainly, I think you have some commentary here, selection. GrowGeneration, the position that we’ve taken in the market is to provide all the brands that the growers are seeking and provide them a complete selection of products so it becomes a turnkey solution. We really believe that we provide an experience between the grow professionals that we’ve hired that operate at the store level, to the customer service, solving problems, every one of our growers has--

Hello?

I wonder if Michael fell off. I’m not sure.

I’m still seeing Michael connected. Michael, maybe did you mute yourself?

Hey guys, this is Tony. I’ll wrap that up with the private label piece. As you guys know, we are wanting to offer the best selection, best service, best solutions. We want to offer quality products at the right price to our customers, and as we work forward with the private label, we’ve already tested multiple strategic categories and as we go into 2021, we are going to put together that offering that will allow us to have the best of breed on the brand side as well as on the private label side. We’re very confident in what we’ve already tested and we’re very confident in hitting that 10% of total sales in 2021.

Thanks, I appreciate the color. Congrats again.

Mr. Lampert, there are no further questions at this time. Please proceed.

Yes, I’d like to sum up, guys. I just want to wish everyone a happy Thanksgiving. Stay safe during these trying times, and we wish everyone a happy holiday season that’s coming up. Our staff at GrowGen has never been more focused, and we appreciate each and every one of you, and we certainly pray for everyone’s safety and health during these trying times. Thank you so much, and we look forward to sharing our many accomplishments and successes with you in the future. Thank you.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.