Replies to post #2457 on Green Thumb Industries Inc (GTBIF)

[FUNMAN]

This Growing Pot Stock Could Make You Rich in 5 Years

Expanding into one state could lead to over one billion in additional revenue.

By: Jeff Little
May 12, 2021 at 6:10AM

https://www.fool.com/investing/2021/05/12/this-growing-pot-stock-could-make-you-rich-in-5-ye/

The U.S. cannabis market is still trying navigate its way through what I call the "three Rs of legalization": regulations, real estate, and reality.

More and more states are legalizing medical and recreational-use cannabis each year, and the Biden administration has shown support for decriminalization -- though nothing concrete on federal legalization, which some members of Congress are pushing for. Meanwhile, cannabis companies are vying for retail space and submitting license applications in an attempt to grab state-by-state victories.

In the case of Green Thumb Industries (OTC:GTBIF), those victories are mounting. As an investor, you might be asking whether those victories could make you rich -- maybe even within the next five years.

Yes, Virginia, there is a Cannabis Claus

In April of this year, Virginia became the 16th state, and the first southern state, to legalize marijuana, allowing adults 21 and older to possess small amounts starting July 1, 2021 -- though recreational sales are not expected to begin until the start of 2024.

In preparing for legalization, Virginia lawmakers offered up five vertically integrated licenses, allowing those licensed medical marijuana operators to grow, process, and sell directly to consumers.

This is an important number, because based on previously approved legislation, new licensees will not be permitted to vertically integrate. That means the market for one-stop shops will be tight, and those that have licenses will have a strong foothold. It didn't take Green Thumb long to get in on the action.

Quick access through acquisition

Shortly after securing $217 million in debt financing, the company announced it was purchasing Dharma Pharmaceuticals -- an established medical cannabis operator with dispensaries in Virginia -- in an effort to expand into the state's cannabis market.

For Green Thumb, this is big. The purchase provides the company with one of the five vertically integrated licenses, an existing production facility, and access to an existing customer base in an emerging market, and allows it to open five additional retail locations in Virginia.

Adding Virginia to its base will increase the company's cannabis presence to 13 states, and expose it to a potential $1.5 billion more in legal cannabis sales by 2024.

From a momentum perspective, the timing doesn't get much better.

In March, the company released a full-year earnings report in which it boasted a 157% increase in revenue to $556 million, netting $0.07 per share for investors, compared to a loss of $0.31 per share in 2019.

For the fourth quarter alone, revenue was up 12.8% sequentially, and 134% year over year.

Those numbers led chairman, founder, and chief executive officer Ben Kovler to refer to the past year as a "milestone year for Green Thumb," with four consecutive quarters of operating leverage and a positive GAAP net income for two straight quarters.

Reward won't come easy

Green Thumb's world is not without obstacles, though, as is par for the course in these early stages of the cannabis market. One of those obstacles comes in the form of competition.

In Virginia, the company will be competing for market share against multiple growers, processors, retailers, and vertically integrated licensees such as Columbia Care (OTC:CCHWF).

Columbia Care, based out of New York, currently has one dispensary in Virginia, located in the southeastern portion of the state. But much like Green Thumb, it has multiple dispensaries -- 36 in all -- spread across 11 states, plus the District of Columbia. Those states include Green Thumb's own home state of Illinois.

Competitors will remain an obstacle as the market continues to grow, but so far, Green Thumb's actions have shown that it is up for the challenge.

So close you can taste it

It's a bit too early to tell if investors should schedule a money truck to back up to the front door, but Green Thumb's latest revenue and earnings, combined with its growth, should give investors the confidence to ride this one for a while.

Year-to-date returns are outpacing the S&P 500 by a score of 21% to 12%. The stock price is currently down around 22% from its one-year high in February, and was down as much as 24% before starting to find its way back up a bit.

If you're still not convinced, remember that the performance the company has shown so far is based on business in 13 states, with no current federal legalization in place. When that happens, investors will wish they got in on this one now.

[FUNMAN]

This is huge ... Congressional Bill To Federally Legalize Marijuana Filed By Republican Lawmakers ... coming from the side with all of the members that say "no". Maybe they can reconcile a breakthrough. - FUNMAN

Published 45 mins ago on May 12, 2021
By Kyle Jaeger

A pair of congressional Republican lawmakers have introduced a bill to federally legalize marijuana, protect banks that service state-legal cannabis business and ensure that military veterans are specifically permitted to use marijuana in compliance with state laws.

The Common Sense Cannabis Reform for Veterans, Small Businesses, and Medical Professionals Act is being sponsored by Reps. David Joyce (R-OH) and Don Young (R-AK).

The main crux of the legislation is to federally deschedule cannabis—and it’s similar to past bipartisan proposals—but this one goes a few steps further with language on legal protections and mandates for federal studies into medical cannabis. It does not contain social justice provisions to repair the past harms of the war on drugs, however.

“With more than 40 states taking action on this issue, it’s past time for Congress to recognize that continued cannabis prohibition is neither tenable nor the will of the American electorate,” Joyce, co-chair of the Congressional Cannabis Caucus (CCC), said in a press release.

Under the proposal, marijuana would be removed from the Controlled Substances Act, clearing states to enact legalization. Cannabis could be imported and exported across states, (IMO this is very harmful to most MSO's - FUNMAN) though transporting marijuana to states where such activity is unlawful would remain federally prohibited.

Two agencies—the Food and Drug Administration and the Alcohol and Tobacco Tax and Trade Bureau, which falls under the Treasury Department—would be responsible for developing regulations for cannabis. Those rules would have to be “similar to federal rules regulating alcohol,” the text of the bill states, and they would have to be issued within one year of enactment.

“For too long, the federal government’s outdated cannabis policies have stood in the way of both individual liberty and a state’s 10th Amendment rights,” Young, also co-chair of the CCC, said. “It is long past time that these archaic laws are updated for the 21st Century.”

Another provision of the measure stipulates that financial institutions that work with state-legal marijuana businesses cannot be penalized by federal regulators, which is similar to a standalone bill that cleared the House last month.

Further, the legislation specifies that military veterans are able to use, possess and transport medical cannabis in compliance with state law. It’s not clear why that would be necessary if marijuana is federally descheduled, but it’s an added layer of protection for that population and is consistent with other recent standalone bills that have been introduced this Congress.

It also says that physicians can discuss medical marijuana use with veterans if legal states and they can “recommend, complete forms for, or register veterans for participating in a treatment program involving medical marijuana.”

“This bill takes significant steps to modernize our laws by removing cannabis from the Controlled Substances Act and allowing the VA to prescribe medical cannabis to veterans, in addition to finally permitting state-legal cannabis businesses to utilize traditional financial services,” Young said. “I call on my colleagues on both sides of the aisle to stand with us in this crucial effort.”

Finally, the proposal calls on the National Institutes of Health (NIH) to “conduct or support a study on the effects of medical marijuana on individuals in pain or who are impaired” and issue a report on its findings within 180 of the study’s completion. NIH would also have to study “the relationship between treatment programs involving medical marijuana that are approved by states, the access of individuals to such programs, and a reduction in opioid abuse.” IMO this is a stall tactic. - FUNMAN

Joyce said that his bill “answers the American people’s call for change and addresses our states’ need for clarity by creating an effective federal regulatory framework for cannabis that will help veterans, support small businesses and their workers, allow for critical research and tackle the opioid crisis, all while respecting the rights of States to make their own decisions regarding cannabis policies that are best for their constituents.”

“I look forward to working with my colleagues on both sides of the aisle to get this bill signed into law so that we can enact sensible and meaningful cannabis reform that will improve lives and livelihoods,” he said.

While ending prohibition is a primary goal of marijuana reform advocates, it stands to reason that this legislation will face pushback for its lack of provisions promoting social equity and reinvesting in communities most impacted by cannabis criminalization.

A bill that’s being drafted by Senate Majority Leader Chuck Schumer (D-NY), Senate Finance Committee Chairman Ron Wyden (D-OR) and Sen. Cory Booker (D-NJ) is expected to contain such components, and the leader has said that the bill will be filed “shortly.”

The trio formally started their reform efforts by holding a meeting earlier this year with representatives from a variety of advocacy groups to gain feedback on the best approach to the reform.

On the House side, Judiciary Chairman Jerrold Nadler (D-NY) said recently that he plans to reintroduced his legalization bill, the Marijuana Opportunity, Reinvestment and Expungement (MORE) Act, which cleared the chamber last year but did not advance in the Senate under GOP control.