Green Thumb Industries Looks to Raise $150 Million
Green Thumb Industries (CSE: GTII, OTCQX: GTBIF)is looking to raise as much as $150.6 million through the sale of 10 million subordinate voting shares on the over-the-counter (OTC) market, the cannabis firm revealed Friday.
In a filing, the Chicago-based company said it intends to use the proceeds for “general corporate purposes, including working capital, operating expenses and capital expenditures.”
GTI — which described the raise as an “initial public offering” of U.S. securities — also said it would consider using a portion of the funds for possible acquisitions and other investments.
“The principal purposes of this offering are to increase our capitalization and financial flexibility,” the company wrote.
In its prospectus, GTI outlined several risk factors, including that it has no intention of paying dividends on its common shares for the “foreseeable future.”
“We currently anticipate that we will retain future earnings, if materialized, for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future,” the company wrote.
GTI also noted that its senior executives — including founder and CEO Bev Kovler, among others — hold a “significant majority” of the company’s voting power. Super Voting shares are entitled to 1,000 votes per share, while subordinate shares are entitled to one vote per share, GTI noted.
“This concentrated control could delay, defer or prevent a change of control, arrangement or merger or sale of all or substantially all of our assets that our other shareholders may support,” the company wrote. “Conversely, this concentrated control could allow the holders of the Super Voting Shares to consummate such a transaction that our other shareholders do not support.”
Founded in 2014, GTI currently operates in 12 U.S. markets, employs 1,900 people, and has 13 manufacturing facilities and 96 retail licenses. The company makes and markets a range of cannabis products, including pre-rolls, flower, concentrates, vapes, edibles, topicals and other items. Its core brands include Dogwalkers, Rhythm, and Beboe, among others.
In its most recent earnings report, GTI reported 16.6% quarter-over-quarter revenue growth, to nearly $120 million. Its first-half revenue of $222 million in 2020 exceeded its total 2019 revenue of $216 million.
“We operate in high-growth, high-potential markets as we execute our enter, open and scale strategy to distribute brands at scale,” Kovler said earlier this month. “Our team remains resilient and adaptable and we are well-positioned to capitalize on the estimated $75 billion U.S. cannabis industry that is unfolding before our eyes.”
Additional information is available in the company’s 246-page S-1 filing.