Green Thumb Industries Inc: U.S. Pot Stock Up 415% YoY, Reports Record Results

Green Thumb Industries Stock at Record Levels & Just Getting Started

Green Thumb Industries Inc (CNSX:GTII, OTCMKTS:GTBIF) is one of the most compelling U.S. pot stocks out there. And it’s one cannabis play I’ve been bullish on since 2018.

While GTBIF stock has done well since then, it has really been on fire over the last 12 months. In fact, Green Thumb Industries stock has been one of the most reliable, best-performing pot stocks over the past year. It soared 415% year-over-year and is up by almost 20% in 2021.

Although GTBIF stock has slipped recently, its outlook remains stellar. If anything, the dip below the 50-day moving average, which is a bearish indicator, is just a temporary setback. Green Thumb Industries stock is simply running in step with the rest of the market.

2020 will forever be remembered as the year that COVID-19 shut down the global economy and sent stocks cratering. But for Green Thumb Industries Inc, it was a milestone year that saw the company deliver record results and swing to profitability. This year could be just as monumental.

Chart courtesy of StockCharts.com

GTBIF Stock Overview

Green Thumb Industries is a Chicago, IL-based, multi-state cannabis consumer packaged goods company. (Source: “Investor Presentation: March 2021,” Green Thumb Industries Inc, last accessed March 29, 2021.)

The company manufactures and distributes a portfolio of top-selling, branded cannabis products including “Beboe,” “Dogwalkers,” “Dr. Solomon’s,” “incredibles,” “Rythm,” and “The Feel Collection.”

Green Thumb Industries Inc also owns and operates a rapidly growing chain of stores called “Rise.” It has locations in 12 states, including California, Colorado, Florida, Illinois, Nevada, New York, and Pennsylvania.

On March 10, Green Thumb entered the California retail market, with the opening of a Rise location in Pasadena. On March 31, the company opened its 56th Rise location, in Pennsylvania.

Green Thumb Industries Inc currently owns 96 retail licenses, so it has plenty of room to grow.

The company also operates 13 cultivation and manufacturing facilities.

Record 2020 Results & Increased Guidance

For the fourth quarter ended December 31, 2020, Green Thumb announced that its revenue increased 133.8% year-over-year and 12.8% sequentially to $177.2 million. (Source: “Green Thumb Industries Reports Record Results for the Fourth Quarter and Full Year 2020,” Green Thumb Industries Inc, March 17, 2021.)

The company reported fourth-quarter net income of $22.5 million ($0.11 per share), compared to a net loss of $14.1 million ($0.07 loss per share).

Its earnings before interest, taxes, depreciation, and amortization (EBITDA) were $61.3 million (34.6% of its revenue), versus $7.8 million (10.3% of its revenue) in the fourth quarter of 2019.

Green Thumb Industries Inc finished the fourth quarter with total assets of $183.9 million, including cash and cash equivalents of $83.8 million. The company’s total outstanding debt at the end of the quarter was $99.1 million, of which $342,000 was due within 12 months.

Ben Kovler, the chairman, founder, and CEO, commented:

This was a solid quarter to top off a milestone year for the Green Thumb team. In the fourth quarter, we delivered substantial revenue growth, expanded gross margins, recorded our fourth consecutive quarter of improved operating leverage and achieved positive [generally accepted accounting principles] net income and [earnings per share] for the second quarter in a row.

(Source: Ibid.)

Green Thumb Industries Inc’s full-year revenue increased by 157.2% to $556.6 million. Its net income in 2020 was $15.0 million ($0.07 per share), compared to a net loss in 2019 of $59.1 million ($0.31 loss per share).

Kovler added,

To start off 2021, we completed our U.S. initial public offering and first sale of [Securities and Exchange Commission]-registered shares directly to U.S. investors. We view the institutional support as a vote of confidence in our proven operating model and a leading indicator of what’s to come for the industry. The capital markets are waking up to the great American cannabis growth story and the ‘Green Wave’ is picking up steam.

(Source: Ibid.)

Analyst Take

Green Thumb Industries Inc is an excellent U.S. pot company with a strong balance sheet. The company recently reported record financial results, swinging to fourth-quarter and full-year profitability. The company also delivered its second consecutive quarter of positive net income.

Green Thumb has been expanding its product offerings and growing its national retail presence, opening 11 new stores in 2020. The company has also been expanding its consumer packaged goods business.

The momentum that propelled Green Thumb Industries stock significantly higher in 2020 has carried into 2021.