Green Thumb Industries Inc: U.S. Pot Stock Continues to Soar

Green Thumb Industries Is Red Hot, Could Quadruple Again

Green Thumb Industries Inc (OTCMKTS:GTBIF, CNSX:GTII) is an excellent pot stock that I have been following for a while now. I last wrote about the Chicago-based multi-state operator in early July.

At the time, Green Thumb Industries stock was trading near $10.00 and had climbed approximately 170% since hitting its March low of $3.69. The company has made some serious moves since then, and its share price has, as predicted, soared.

On August 14, GTBIF stock hit a new 52-week high of $16.05, a 60.5% increase from when I looked at the company in early July. The company’s stock is up 78.1% year-over-year, 58.5% year-to-date, and a whopping 335% since March.

A rising tide lifts all boats, but in this case, Green Thumb Industries stock’s huge gains are justified. The company recently reported great second-quarter results and provided strong guidance.

GTBIF Stock Overview

Green Thumb Industries is a seed-to-sale marijuana operator that owns “Rise” and “Essence” retail stores. It has 13 cultivation and manufacturing facilities, 48 open retail locations, and licenses for 96 retail locations. (Source: “Green Thumb Industries Reports Second Quarter 2020 Results,” Green Thumb Industries Inc, August 12, 2020.)

Green Thumb has operations in 12 U.S. markets, including California, Colorado, Florida, Illinois, and New York. Through its June 2019 acquisition of Integral Associates LLC, Green Thumb has a foothold in Nevada, including a store on the Las Vegas Strip.

And the company is opening new locations all the time. On June 27, it opened a new store in South Durango, Nevada. This is the company’s fifth Essence store in Nevada and its 48th retail location in the country. (Source: “Green Thumb Industries to Open Essence South Durango, Its Fifth Cannabis Store in Las Vegas Area and 48th in the Nation, on June 27,” Green Thumb Industries Inc, June 26, 2020.)

Chart courtesy of StockCharts.com

Second Consecutive Quarter Exceeding $100 Million in Sales

On August 12, Green Thumb announced that its revenue for the second quarter ended June 30 increased 167.5% year-over-year and 16.6% sequentially to $119.6 million. Its revenue for the first half of the year of $222.2 million exceeded the full-year 2019 revenue of $216.4 million. (Source: Green Thumb Industries Inc, op. cit.)

The company reported a second-quarter net loss of $12.9 million, or $0.06 per share, versus a net loss of $20.9 million, or $0.11 per share, for the second quarter of 2019.

Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) was $35.4 million, considerably higher than the second-quarter 2019 adjusted EBITDA of $2.3 million and the first-quarter 2020 adjusted EBITDA of $25.5 million.

Green Thumb wrapped up the second quarter with total assets of $152.6 million, which included cash and cash equivalents of $82.9 million. Total debt stood at $95.2 million. Of that, $300,000 is due in the next 12 months.

Ben Kovler, co-founder and CEO noted, “Demand is strong as cannabis continues to behave like a consumer staple. … We opened six new stores during the quarter, bringing total stores to 48 nationwide, and successfully introduced an e-commerce platform enabling delivery and curb-side pickup.” (Source: Ibid.)

Analyst Take

What’s not to like about Green Thumb Industries Inc? The company has been posting strong revenue growth, positive adjusted EBITDA, and a strong balance sheet. It has also been launching new products and opening new retail locations.

The company’s management said that recent developments are expected to “further propel [its] business in the second half of 2020.”

That’s good to hear for investors in Green Thumb Industries stock.