Green Thumb Industries on Pace to Double Revenue in 2020

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Green Thumb Industries (CSE: GTII, OTCQX: GTBIF) announced Wednesday its second quarter financial results, reporting total revenue of $119.6 million — a quarter-over-quarter increase of 16.6%.

The Chicago-based cannabis firm, which boasts 96 retail licenses and has operations in 12 U.S. markets, also said first half revenue of $222.2 million exceeded total 2019 revenue ($216.4 million).

In a news release, Green Thumb founder and CEO Ben Kovler said it was the firm’s second consecutive $100 million quarter.

“We are moving faster as our investments in infrastructure deliver operating leverage and the team continues to meet the evolving needs of our customers and communities,” he said, adding that demand for cannabis is “strong” and that the category is behaving like a “consumer staple.”

“In the face of the ongoing pandemic and social unrest, we remain laser-focused on executing our growth strategy while prioritizing the health and safety of our team and customers,” he said.

Despite the impressive sales, Green Thumb still reported a net loss of $12.9 million during the quarter, up from the $4.2 million it lost in Q1.

However, gross profits during the quarter reached $63.7 million, up from roughly $53 million last quarter, while adjusted EBITDA surpassed $35 million.

Cowen analyst was impressed with Green Thumb’s performance during Q2, noting that results were “far better” than she had previously anticipated.

“GTI remains our favorite name in U.S. cannabis,” she wrote in a note to investors.

Azer was particularly impressed with GTI’s adjusted EBITDA, which grew 39% versus Q1 and was 43% ahead of Cowen’s forecasting.

“This comes on the heels of impressive 85% sequential EBITDA growth in the prior quarter, such that GTI's adjusted EBITDA is up an impressive 157% versus 4Q19,” she noted. “GTI continues to be among the most profitable companies (in absolute dollars) among the major U.S. MSOs.”

Indeed, GTI derived revenue from all 12 of its markets — California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio and Pennsylvania -- during the quarter.

The company also said Q2 revenue from 48 retail dispensaries across 10 of states — in all of the above-mentioned markets excluding California and Colorado — grew 15.2% versus Q1.

That growth was driven by new store openings, increased foot traffic at established dispensaries, and higher basket rings in Illinois and Pennsylvania outlets. By Azer’s estimates, those two states accounted for 60% of GTI’s sales in Q2.

Nonetheless, same store sales (16 outlets open for at least 12 months) grew 75% year-over-year. Meanwhile, quarter-over-quarter sales in 40 of GTI's stores grew 8.3%, driven by increased transactions.

“More than ever, we remain bullish on the long-term prospects of our business,” Kovler said. “We operate in high-growth, high-potential markets as we execute our enter, open and scale strategy to distribute brands at scale. 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 on GTI’s website.


Tags: Earnings

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