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Profit at Marijuana Seller Green Thumb Stays High, Despite Slower Economy
By Bill Alpert
https://www.barrons.com/articles/green-thumb-gtbif-stock-price-marijuana-sales-profit-51659628469
Aug. 4, 2022 11:56 am ET
People are buying marijuana products, but opting for lower-priced options, Green Thumb's CEO says.
One place consumers can find refuge from inflation is the cannabis dispensary.
“The cannabis industry isn’t experiencing inflation,” Green Thumb Industries GTII –0.08% chief Ben Kovler told Barron’s after the marijuana vendor reported earnings Wednesday. “It is experiencing price compression.”
Green Thumb (ticker: GTBIF) is the first of the multistate cannabis operators to report. Like other state-licensed operations, the 74-store chain is seeing consumers shift their purchases toward lower-priced products. So while Green Thumb’s June quarter revenue rose 5% sequentially and 15% year over year, gross margins narrowed to 50% of sales in June, compared with 55% in the year-ago quarter.
Disciplined spending allowed Green Thumb to continue as one of the few multistate operators that reports net income. The company earned $24 million, or 10 cents a share, compared with $22 million and 10 cents in June 2021.
The federal illegality of cannabis keeps shares of state-legal firms like Green Thumb on the over-the-counter market, where the stock was up 0.5% in Thursday morning trading to $9.76. The failure of legalization bills to advance through Congress has weighed on U.S. operators like Green Thumb. Its stock has dropped about 55% this year, in line with the industry tracking AdvisorShares Pure US Cannabis exchange-traded fund (MSOS), but well worse than the 20% decline of the Nasdaq Composite indexCOMP +0.20% .
Chief executive Kovler says that unit volumes are holding up, but pressures on consumer purchasing power have changed the sales mix. “Consumers are buying less high-end product and more in the value space,” he said.
Bigger jumps in Green Thumb’s sales will track state expansions. The start of recreational sales in New Jersey helped offset some of the economy’s crunch in the June quarter. Illinois needs to allow more stores, and Pennsylvania has yet to allow cannabis edibles and recreational sales, Kovler noted.
Sales in the second half of this year will benefit from the start of recreational sales in Connecticut and Rhode Island. New York is a market where Green Thumb has invested ahead of the state’s planned recreational opening—but state regulators moved slowly, while illegal sellers operate openly in places like Manhattan.
“You can buy marijuana from a truck, a street corner, or a store, all over Manhattan,” Kovler said.
In Congress, Senators Chuck Schumer (D-N.Y.) and Cory Booker (D-N.J.) are talking up their cannabis legalization bill, but Kovler sees little movement. A bill to ease his industry’s access to banks never made it through Congress.
Despite challenges, Kovler says his market and business remain robust. Green Thumb produced $140 million in cash flow this year and has plenty of cash on its balance sheet.
Analyst Pablo Zuanic at Cantor Fitzgerald wrote in a Thursday note that near-term growth at Green Thumb may remain subdued, even though he foresees long-term gains. While maintaining his Overweight rating, Zuanic trimmed his price target from $39 to $31. That still implies plenty of upside for a stock that he calls one of his top picks.
Write to Bill Alpert at william.alpert@barrons.com
Green Thumb Industries Extends Maturity Date Of Senior Debt Facility
7/14/22 9:39 AM ET (Benzinga)Print
Green Thumb Industries Inc. (OTCQX: GTBIF) (CSE:GTII) , a leading national cannabis consumer packaged goods company and owner of RISE dispensaries, has exercised its right to extend the maturity date of its senior non-brokered debt by one year, from April 30, 2024 to April 30, 2025.
The current senior secured notes, which have a total principal amount of approximately $250 million, bear interest at a rate of 7% per annum and is paid quarterly. The extended maturity date did not involve any amendments to the notes or any additional consideration to the existing lenders.
About Green Thumb Industries:
Green Thumb Industries Inc., a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which it serves. Green Thumb manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredibles and RYTHM.
The company also owns and operates growing national retail cannabis stores called RISE. Headquartered in Chicago, Illinois, Green Thumb has 17 manufacturing facilities, 77 open retail locations and operations across 15 U.S. markets. Established in 2014, Green Thumb employs approximately 4,000 people and serves millions of patients and customers each year.
Good to see. We'll take it.
Innovative Industrial Properties Expands Real Estate Partnership with Green Thumb Industries at Pennsylvania Property
Thu, June 30, 2022, 7:00 AM·6 min read
IIP Funds Additional $55.0 Million for a New 152,000-Square-Foot Industrial Facility
SAN DIEGO, June 30, 2022--(BUSINESS WIRE)--Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange (NYSE: IIPR) focused on the regulated U.S. cannabis industry, announced today that it entered into an amendment of the lease with Green Thumb Industries Inc. (Green Thumb) (CSE: GTII; OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of RISE dispensaries. The lease amendment in Danville, Pennsylvania, provided $55.0 million in reimbursement to Green Thumb for the recently completed development of a 152,000-square-foot industrial building for cultivation and processing, in addition to a new electric substation on the property to enhance electrical load capacity. The lease amendment also adjusted the base rent under the lease to take into account the additional available funding for the development. IIP funded in full the reimbursement, making IIP’s total investment in the 300,000-square-foot property $94.6 million. This lease amendment was made pursuant to the exercise of an option by Green Thumb for IIP to provide reimbursement of these improvements, with this option originally included in a lease amendment executed in 2021.
"We are grateful for the continued partnership with IIP at our Danville facility," said Green Thumb Founder and Chief Executive Officer Ben Kovler. "Having negotiated the lease and terms last year, we are pleased to have waited to draw the remaining funds until now when the facility is complete. We are excited about the future of cannabis in Pennsylvania."
Details of the IIP Pennsylvania property are as follows:
IIP originally acquired the property for $20.3 million and entered into a long-term lease with Green Thumb in 2019 and under the lease made available $19.3 million for qualifying improvements to the property. At the time, the facility consisted of approximately 148,000-square-feet of industrial space, about half of which was operational.
Improvements included build-out of the remainder of the facility, consisting of new grow rooms, production rooms, processing rooms and the construction of additional mezzanine space to house new mechanical, plumbing and electrical infrastructure.
IIP’s $55.0 million additional capital commitment was utilized as reimbursement to Green Thumb for costs incurred in the ground-up development of an additional approximately 152,000-square-foot indoor cultivation and processing facility.
Eligible direct costs for the project for which IIP reimbursed Green Thumb included site planning and preparation, base building construction and the enhanced HVAC, electrical, mechanical, fertigation and other building systems required for indoor cannabis cultivation and processing, in addition to the construction of the new electrical substation located on the property.
The new facility contains flower rooms, veg rooms, mother rooms, dry rooms, processing, storage, office and supporting spaces.
In addition to this facility in Pennsylvania, IIP owns and leases two regulated cannabis cultivation and processing facilities in Illinois and Ohio to Green Thumb, comprising a total of approximately 606,000 square feet. IIP’s total investment in properties leased to Green Thumb is approximately $176.8 million. Green Thumb is IIP’s fourth largest tenant partner in terms of capital investment.
As the pioneering real estate investment trust (REIT) for the medical-use cannabis industry, IIP partners with experienced medical-use cannabis operators and serves as a source of capital by acquiring and leasing back their real estate assets, in addition to offering other creative real estate-based capital solutions.
"We are proud to have supported Green Thumb as their long-term real estate partner since 2019," said Paul Smithers, IIP’s President and Chief Executive Officer. "Since that time, Green Thumb has grown from $216 million in revenues in 2019 to nearly $900 million in revenues in 2021, demonstrating the strength of Green Thumb’s operational footprint and their ability to execute and produce high quality products for patients and customers at scale throughout the United States."
Medical-use cannabis dispensaries in Pennsylvania made their first sales in 2018; as of March 2022, the Pennsylvania Department of Health reported that over 740,000 patients and caregivers had been registered for the state’s medical cannabis program. Marijuana Business Daily projects regulated medical-use cannabis sales to reach $1.6 - $2.0 billion for 2022. The current program provides for the issuance of up to 25 cultivation and processing licenses and 150 dispensary licenses, in addition to nine clinical registrant licenses, each of which may have a cultivation and processing facility and a dispensary. In March 2022, Pennsylvania’s Senate Law and Justice Committee concluded the last of three hearings examining issues regarding potential adult-use legalization, marking the first hearings by a legislative panel on the issue of adult-use cannabis in the Republican-controlled Pennsylvania General Assembly. The neighboring states of New York and New Jersey recently legalized cannabis for adult-use.
As of June 30, 2022, IIP owned 111 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Dakota, Ohio, Pennsylvania, Texas, Virginia and Washington, representing a total of approximately 8.6 million rentable square feet (including approximately 2.5 million rentable square feet under development / redevelopment). As of June 30, 2022, IIP had committed approximately $2.4 billion across its portfolio, including capital invested to date (excluding transaction costs) and additional capital commitments to fund future construction and improvements at IIP’s properties. These statistics do not include an $18.5 million loan from IIP to a developer for construction of a regulated cannabis cultivation and processing facility in California.
About Innovative Industrial Properties
Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017. Additional information is available at www.innovativeindustrialproperties.com.
About Green Thumb Industries
Green Thumb Industries Inc. ("Green Thumb"), a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which it serves. Green Thumb manufactures and distributes a portfolio of branded cannabis products including Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredibles and RYTHM. The company also owns and operates rapidly growing national retail cannabis stores called RISE. Headquartered in Chicago, Illinois, Green Thumb has 17 manufacturing facilities, 77 open retail locations and operations across 15 U.S. markets. Established in 2014, Green Thumb employs approximately 4,000 people and serves millions of patients and customers each year. The company was named to Crain’s Chicago Business, Fast 50 list in 2021 and 2022 and a Best Workplace by MG Retailer magazine in 2018, 2019 and 2021. More information is available at www.GTIgrows.com.
Innovative Industrial Properties Forward-Looking Statements
This press release contains statements that IIP believes to be "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than historical facts, including, without limitation, statements regarding the lease and development of the Pennsylvania property, Green Thumb and the Pennsylvania regulated cannabis market, are forward-looking statements. When used in this press release, words such as we "expect," "intend," "plan," "estimate," "anticipate," "believe" or "should" or the negative thereof or similar terminology are generally intended to identify forward-looking statements. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Investors should not place undue reliance upon forward-looking statements. IIP disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220630005051/en/
Contacts
Catherine Hastings
Chief Financial Officer
Innovative Industrial Properties, Inc.
(858) 997-3332
FYI - Late last week, a bi-partisan pair of federal lawmakers introduced a new bill to expand cannabis companies’ access to financial resources and opportunities. Introduced by Reps. Troy Carter (D-La.) and Guy Reschenthaler (R-Pa.), the Capital Lending and Investment for Marijuana Businesses (“CLIMB”) Act, H.R. 8200, aims to permit cannabis businesses to engage with community development, small business, minority development, and other public or private financial capital sources for investment and financing. Further, the bill aims to create a safe harbor for security exchanges to list securities for legitimate cannabis businesses.
Background
Currently, cannabis businesses face substantial challenges in accessing the nation’s banking, payment processing and public investment ecosystem. Federal restrictions on cannabis have prompted only a limited number of smaller financial institutions, including banks and credit unions, to take on the risk of providing banking services to cannabis companies. However, those take on such risk are charging high fees and costs. As we have written elsewhere, the economic development of cannabis businesses, and especially small and diversity-owned entities, has been impeded through reduced liquidity, heightened entry barriers, and heightened security issues for some businesses forced to depend on cash transactions.
The CLIMB Act is not the first congressional proposal to address banking issues for cannabis businesses. The SAFE Banking Act has broad bipartisan support and would permit financial institutions to do business with cannabis companies without fear of prosecution, while prohibiting the federal government from terminating or limiting a financial institution’s deposit or share insurance solely because the institution works with a cannabis business. In addition, the bill would provide protections for other financial service providers, such as payment processors, from liability solely because of their activities providing services to legitimate cannabis businesses and investing income derived from such services.
The House has passed the SAFE Banking Act six times, both as part of larger legislative packages and as a stand-alone bill. The measure has so far stalled in the Senate.
The CLIMB Act
The CLIMB Act goes even further than the SAFE Banking Act in its two operative provisions.
First, the CLIMB Act would prohibit any federal agency from bringing any civil, criminal, regulatory, or administrative actions against a business or a person simply because they provide business assistance to a cannabis company or if they received compensation or proceeds from a cannabis company. “Business Assistance” is a defined term within the CLIMB Act, to mean, among other things, management consulting work, insurance, advertising, IT, debt or equity capital services, or banking, credit card, and financial services.
Second, the CLIMB Act would expressly provide a safe harbor for cannabis-related businesses and related service providers to list their securities on national securities exchanges. Specifically, the proposal outlines that the federal illegality of cannabis, whether flowing from the Controlled Substances Act or any other federal law, does not bar the listing or trading of securities on a national security exchange for cannabis-related legitimate business or a service provider.
In a statement announcing the bill, the proposal’s sponsors noted that “access to capital remains one of the biggest barriers to entry and to success in the industry,” and that the bill represents an “opportunity to bring equity and equal opportunity into our nation’s burgeoning cannabis industry.” The statement also included support from many advocacy and industry groups.
What’s Next?
Both the SAFE Banking Act and the CLIMB Act represent incremental reform, as neither would necessarily legalize, or de-schedule, cannabis, but instead each addresses the operational realities of cannabis businesses operating in state-legal markets. Both bills would provide safe harbor for banks, credit card processors, and other financial institutions that service the industry, allowing more access to capital and investment for burgeoning cannabis businesses. The CLIMB Act goes farther than the SAFE Banking Act, expanding these safe harbor provisions to other service providers and even to national securities exchanges. As lawmakers and advocates push for cannabis legislation before the end of this Congress, the CLIMB Act presents another option for Congress to consider as it debates more comprehensive cannabis reforms.
Moreover, the SAFE Banking Act has continued to rack up supporters over the years. On May 25, the Conference of State Bank Supervisors released open letters to the House and Senate calling for the passage and expansion of the SAFE Banking Act. Over 20 governors signed a joint letter supporting the bill in 2021, and more than 35 state attorneys general issued a joint letter in 2019.
The CLIMB Act was referred to the House Committee on Financial Services. It faces an uncertain future, as Congress continues to wrestle with other cannabis legislative proposals. While the SAFE Banking Act has 180 bi-partisan co-sponsors in the House, the CLIMB Act was introduced with just two legislative backers: Representatives Carter and Reschenthaler.
Reforms to the cannabis banking and financial services ecosystem are much needed, as many major financial institutions and payment processors have been reluctant to work with cannabis businesses due to the federal illegality of cannabis. The protections proposed by the SAFE Banking Act, or the CLIMB Act, would provide some clarity to the significant uncertainties and hurdles regarding the financial aspects of the cannabis industry, would particularity help small businesses, and is a public safety imperative.
Yep, 5 of them got fined between 60k and 90k.
Cannabis Times, or Business. Can’t cut and paste on my current technology and it works, so why get more of what you couldn’t use.
Got a link on that?
Eighty thousand dollar fine in NJ for not obeying the difference between medical and recreational MJ
Not cool.
Green Thumb: Undisputed Cash Flow Champion In Cannabis
Jun. 27, 2022 4:04 PM ETGreen Thumb Industries Inc. (GTBIF)AAWH, AMZN, AYRWF, CRLBF, CURLF, CVNA, SNOW, TCNNF, TRSSF, VRNOF23
Summary
Investors must look beyond stock prices to evaluate the quality of cannabis companies.
Cash flow is currently the single best indicator of financial health in cannabis.
Green Thumb is the cash flow king.
https://seekingalpha.com/article/4520585-green-thumb-is-the-undisputed-cash-flow-champion-in-cannabis?source=content_type%3Aall%7Cfirst_level_url%3Aportfolio%7Csection%3Aportfolio_content_unit%7Csection_asset%3Alatest%7Cline%3A1
Never mind Jim I read another post of yours.
What are your thoughts Jim?
Worth noting, we are in a descending wedge and the rsi is at 22.
Currently this company along with all others in this sector are caught in a political game being played out in congress. Once that issue of gamesmanship is completed, there will be a some serious open field running which I believe will show the true growth potential of the bigger players in this sector. This company will certainly be one of them.
Illinois Awards $45M In Cannabis Tax-Funded Grants To Support Community Reinvestment
5:31 pm ET June 24, 2022 (Benzinga) Print
On Thursday, Illinois officials announced - through the Restore, Reinvest, and Renew (R3) program - the awarding of $45 million in grants funded by marijuana tax revenue to support community reinvestment in areas “hardest hit by the failed war on drugs,” reported Marijuana Moment on June 24.
The Reach Of Cannabis Tax Revenue: Illinois’s adult-use cannabis legalization law established the R3 Program. This is the second round of funding that’s being made available through the state.
llinois first announced that applications for this grant round were open in December 2021.
Illinois, by awarding this amount of grant money, will support 148 programs statewide operating on shoestring budgets in designated socioeconomically disadvantaged communities.
“A modern and equitable cannabis industry requires equity, opportunity, and a robust investment in righting the wrongs of the war on drugs,” Gov. J.B. Pritzker (D) said in a press release.
“That means investing in our underserved communities who’ve gone far too long without the funding and resources they need and deserve to heal and prosper.
“We’re proud to use cannabis revenue to directly support community-based organizations invested in creating opportunity,” he added.
The Grant Recipients: Illinois Criminal Justice Information Authority (ICJIA) received 512 completed submissions for R3 grants. Among the grant recipients are the Illinois Prison Project, Illinois Equity Staffing LLC, Lifehouse Recovery Organization, Resilience Partners NFP and Women in Need Recover, which received about $1.5 million each.
Those organizations that received grants through the initial R3 round - in January 2021 - would be able to renew their funding for another year to ensure they can continue to provide services in their communities.
“Illinois is showing what working to repair the damage that plagues our communities looks like by continuing to build the infrastructure that addresses decades of disinvestment, excessive incarceration, and trauma,” said Lt. Governor Juliana Stratton (D). “As a tool that connects communities to the resources they need in an equitable and sustainable way, R3 is at the core of our efforts to bring restorative and healing solutions to people and regions that have been unheard and underserved for far too long.”
What Does Illinois Recreational Marijuana Law Say About Social Justice? According to Illinois recreational marijuana law, 25% of tax revenue generated from cannabis sales must support communities that are in economic distress, experience high rates of violence, and have been disproportionately affected by the criminalization of drugs.
"The benefits of adult-use legalization are many: much-needed tax revenue, regulation to ensure safe products, criminal justice reforms to counteract the failed war on drugs, and an alternative to opioids and alcohol," Ben Kovler, CEO of Green Thumb Industries Inc (OTCQX: GTBIF) told Benzinga when Illinois became the 11th state to legalize recreational marijuana.
Well, I can't figure why that is ... except .... so many piecemeal legislation but nothing. I still say it just better to remove from drug list which fixes all, but they tease with piecemeal bits that never happen. I know this is an on the ball company but it needs news, industry wide news.
This morning the RSI is at a very over sold 21. I don't believe it can stay that low much longer.
Been adding all morning. Didn't get fully filled at 8.10. Changing my bid and see if I can get it a little lower.
Getting close to 8. lol time to load.
I think RSI is 0 hahahahahaha.
Well, some decent pick ups this morning.
Sounds good Ranger ..... Can't wait to back up the truck. Gl
Couple hundred here. Couple hundred there. I’ll follow if down to eight. Then back up the truck.
Wow.... Something is going on with this stock.
Look at the volume compared to Tcnnf looks like somebody needs help here. I want to buy more but waiting to see if it drops again. Something is not right.
Lol, I should read my writing before I post... I meant who the hell is selling.
Who the hell keeps buying shares?
Well, guess I joined the crowd as well. Now let's see what Powell has to say.
Hahahahahaha... I couldn't resist either... Down side another buck, upside 30?
At nine bucks and change I couldn’t resist
I feel like a thief.
Onward
do you think there is any chance of safe banking to pass? would it be before mid terms? schumer looks like is even resisting to be in competes bill, not sure what he is thinking, there is zero chance of full fledged bill to pass as i read
Hopefully the keep the SS clean. That has been the downfall for many in the sector
Considering price targets average of around $37 and recient buy/strong buy with targets $45-$50 ... potential 300% upside ... their MSO consistent growth, and many quarters of positive revenues (paving the way for rest of industry)... have to agree $11 does seems dang cheap!
NY decision to insure Medical MJ is a game changer and bodes well for Gtbif.
Looks like MMs have been pushing retail around.... That's going end. I'm in let the good times roll. Lol
This is an unbelievable price..... What's the rationale for destroying the stock price? Well I wish would have bought some today but wasn't paying attention to this ticker.. I think I'll still get a great price on Monday. Wow
Wish I was in green lhere, but long way from $29. I too am green in another though, I just have biger chunk here because GTBIF has a great foundation! Great company doing it right!
GTBIF... My only pot stock still in the green.
Well, I would call that fantastic actually ... however. I cant get a grip on why the stock price keeps tumbling. ...lost 60% book but still not willing to sell ... guess thats faith!
Any expectation that SP will reflect Earnings guys ?
This is great news
This bears repeating. Going into this qt I was concerned what effect inflation and pricing would have on the numbers. EBITDA is very good. with all considered.
This was a very solid qt.
"EBITDA for the first quarter 2022 was $77.5 million or 32% of revenue compared to $66.5 million or 34% of revenue for the same period in the prior year. Adjusted Operating EBITDA, which excluded non-cash stock-based compensation of $4.7 million and $15.2 million of other non-operating income, was $67.0 million or 28% of revenue as compared to $71.4 million or 37% of revenue in the comparable period. The decrease in Adjusted Operating EBITDA largely reflected inflation on raw material inputs and additional compensation for talent throughout the organization. The Company continues to invest in its infrastructure to prepare for future demand in key markets. The decrease also reflected pricing headwinds in Pennsylvania, Nevada and Massachusetts "
It's what we need - Green Thumb Industries Profit Nearly Triples, Powering Past Estimate -- MarketWatch
4:13 pm ET May 4, 2022 (MarketWatch)
Print
Green Thumb Industries Inc. said Wednesday its first-quarter earnings rose to $28.9 million or 12 cents a share, from $10.4 million, or 5 cents a share in the year-ago quarter. Revenue at the cannabis company increased 25% to $242.6 million from $194.4 million in the year-ago period as it opened 20 new stores and ended the quarter with 76 retail stores. Wall Street analysts expected Green Thumb Industries to earn 6 cents a share on revenue of $237.6 million, according to FactSet data. Green Thumb said the three months ended March 31st marked its seventh consecutive quarter of positive net income. "As I have said before, growth is not linear and there will be quarter-to-quarter fluctuations depending on when new markets open to adult-use sales as well as the timing of our infrastructure investments," CEO Ben Kovler said. Shares of Green Thumb Industries are down 41.6% in 2022, compared to a decline of 41.7% percent by the AdvisorShares Pure US Cannabis ETF (MSOS) and a drop of 17.1% by the Nasdaq .
I'll take it! - Green Thumb Industries Reports First Quarter 2022 Financial Results
MAY 4, 2022
CHICAGO and VANCOUVER, British Columbia, May 04, 2022 (GLOBE NEWSWIRE) -- Green Thumb Industries Inc. (Green Thumb) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of RISE dispensaries, today reported its financial results for the first quarter ended March 31, 2022. Financial results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and all currency is in U.S. dollars.
Highlights for the first quarter ended March 31, 2022:
Revenue increased 25% year-over-year to $243 million, flat compared to the fourth quarter of 2021
Seventh consecutive quarter of positive GAAP net income, delivering $29 million or $0.12 per basic and diluted share
Adjusted Operating EBITDA was $67 million or 28% of revenue
Ninth consecutive quarter of positive cash flow from operations, generating $55 million in the first quarter
Cash at quarter end totaled $175 million
Subsequent to quarter end, New Jersey’s Cannabis Regulatory Commission approved seven medical marijuana operators, including Green Thumb, to begin selling adult-use cannabis on April 21; RISE Bloomfield and RISE Paterson were among the first stores to begin adult-use sales on Day One.
See definitions and reconciliation of non-GAAP measures elsewhere in this release.
Management Commentary
“Our team delivered solid first quarter results with revenue increasing 25% over the prior year quarter. We generated our seventh consecutive quarter of positive net income of $29 million, or $0.12 per share, and Adjusted Operating EBITDA of $67 million. For the ninth consecutive quarter, we delivered positive cash flow from operations, which was $55 million in the first quarter,” said Green Thumb Founder and Chief Executive Officer Ben Kovler. “We continue to have strong conviction in our core thesis and given the opportunity ahead, we will invest in markets where we know demand is coming. As I have said before, growth is not linear and there will be quarter-to-quarter fluctuations depending on when new markets open to adult-use sales as well as the timing of our infrastructure investments. Our preparations in New Jersey positioned us well for demand on Day One, and we feel confident in our playbook for future adult-use transitions.”
“We believe that all our markets will eventually open to adult-use sales—we don’t know exactly when—but we do know that Americans are choosing cannabis for well-being and our trusted family of brands are well-positioned for the future. There is tremendous opportunity in this Great American Growth story, and we believe that the approximately $25 billion legal U.S. cannabis market will have significant growth over the next decade,” concluded Kovler.
First Quarter 2022 Financial Review
Total revenue increased 25% to $242.6 million from $194.4 million in the prior year period, driven by contributions from both the Retail and Consumer Packaged Goods businesses. On a sequential basis, revenue was essentially flat compared to $243.6 million in the fourth quarter 2021. Year-over-year revenue growth was driven by expanded distribution of Green Thumb’s branded products, 20 new stores and increased traffic in the Company’s 76 retail stores open and operating at quarter end.
All 15 of Green Thumb’s state markets contributed to first quarter revenue: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Virginia. The Company also continued to invest in the expansion of its cultivation and manufacturing capabilities across its footprint.
Gross profit for the first quarter 2022 was $122.9 million or 51% of revenue compared to $110.9 million or 57% of revenue for the comparable period.
Total selling, general and administrative expenses for the first quarter were $68.4 million or 28% of revenue, compared to $59.3 million or 31% of revenue for the first quarter 2021. Improved operating costs as a percentage of revenue reflected increased operating leverage.
Net income attributable to the Company for the first quarter 2022 was $28.9 million or $0.12 per basic and diluted share, compared to net income of $10.4 million, or $0.05 per basic and diluted share in the prior year.
EBITDA for the first quarter 2022 was $77.5 million or 32% of revenue compared to $66.5 million or 34% of revenue for the same period in the prior year. Adjusted Operating EBITDA, which excluded non-cash stock-based compensation of $4.7 million and $15.2 million of other non-operating income, was $67.0 million or 28% of revenue as compared to $71.4 million or 37% of revenue in the comparable period. The decrease in Adjusted Operating EBITDA largely reflected inflation on raw material inputs and additional compensation for talent throughout the organization. The Company continues to invest in its infrastructure to prepare for future demand in key markets. The decrease also reflected pricing headwinds in Pennsylvania, Nevada and Massachusetts.
For additional information on these non-GAAP financial measures, see below under “Non-GAAP Financial Information.”
Currently the RSI is 24.19 {very oversold} . It also has 5 weeks in a row down trend on LESS than avg volume.
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