Why Green Thumb Industries Inc (OTCMKTS:GTBIF) Has Turned a Corner

Why Green Thumb Industries Inc (OTCMKTS:GTBIF) Has Turned a Corner


As we have noted in our recent coverage, Green Thumb Industries Inc (OTCMKTS:GTBIF) represents a promising place to look for value in the cannabis patch. The stock just moved back above its 50-day simple moving average, and the company proved its growth might once again when it reported its financial results for the second quarter ended June 30, 2019.

According to a recent release, Q2 revenue increased 228% year-over-year to $44.7 million. In addition, sequential quarterly revenue increased 60%, which was a new company record. Revenue growth was driven by organic growth across the company’s consumer products and retail businesses, strategic acquisitions and increased store traffic. The release also noted that gross margins before biological adjustments for the quarter improved to 52% from 46% in the prior year and from 47% in the prior quarter due to increased operating efficiencies as the business continues to scale.

Green Thumb Industries Inc (OTCMKTS:GTBIF) bills itself as a company that manufactures and sells various cannabis products in the United States. The company’s cannabis products include flower, concentrates for dabbing and vaporizing, edibles, and topicals.

The company markets its products through third-party retailers. It also owns and operates a chain of 50 retail stores under the RISE dispensaries name. The company was founded in 2014 and is headquartered in Chicago, Illinois.

According to company materials, “Green Thumb Industries (GTI), a national cannabis cultivator, processor and dispensary operator, is dedicated to providing dignified access to safe and effective cannabis nationwide while giving back to the communities in which they serve. As a vertically integrated company, GTI manufactures and sells a well-rounded suite of branded cannabis products including flower, concentrates, edibles, and topicals. The company also owns and operates a rapidly growing national chain of retail cannabis stores called RISE(TM) dispensaries. Headquartered in Chicago, Illinois, GTI has seven manufacturing facilities and licenses for 50 retail locations across seven highly regulated U.S. markets. Established in 2014, GTI employs more than 350 people and serves hundreds of thousands of patients and customers each year. GTI was named a Best Workplace 2018 by Crain’s Chicago Business.”

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As noted above, GTBIF just announced Q2 financial data, highlighting record growth, particularly on a sequential basis, and improving data across all major data trends.

“We are pleased to report another solid quarter of positive yet disciplined momentum with record revenue and positive adjusted operating EBITDA as our strategic plan delivers on operating efficiencies from scale. Continued execution of key priorities such as the closing of Integral Associates, accelerated store openings, and expanded distribution of our brand portfolio sets us up well for the future,” said GTI Founder and Chief Executive Officer Ben Kovler.

Recent action has seen 14% tacked on to share pricing for the stock in the past week. In addition, the listing has registered increased average transaction volume recently, with the past month seeing 51% over what the stock has registered over the longer term.

“We are deep in the chapter of maximizing the levers in our business to drive long-term operational performance that delivers value for our shareholders and the communities in which we operate,” Kovler continued. “We are focused on optimizing our wholesale and retail businesses, integrating our acquisitions, and further strengthening compliance across the organization. We are pleased to see many of these efforts already bearing fruit as we head into the second half of 2019 and I want to thank our team for all of their hard work.”

At this time, carrying a capital value in the market of $1.24B, GTBIF has about $117M in cash on the books, which is balanced by about $83M in total current liabilities. The company has pulled in $114M in trailing twelve-month revenues, representing 228% growth on a quarterly y/y basis. This continues to be a very compelling story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $GTBIF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $GTBIF, either long or short, and we have not been compensated for this article.

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