Green Thumb Industries Tops Revenue Estimates

Green Thumb Industries

As a sea of new financial reports have been made public from the cannabis industry, there have been a few notable results worth mentioning.

One of those came from Canadian-listed, U.S. operated Green Thumb Industries (CNSX: GTI). Unlike other marijuana companies, which failed to meet expectations from analysts, Green Thumb Industries beat expectations.

The company reported first-quarter revenues at $27.9 million, an increase of 155 percent in comparison to the same time last year. Total assets of the company were valued at $151.1 million, while total debt outstanding was at a measly $7.2 million, an excellent sign for GTI that is quite impressive to investors.

It’s probably for this reason, having stayed relatively debt free over the course of its life, that investors weren’t too shaken when GTI reported that it saw net losses for the first quarter at $9.7 million.

Investors overall have been turned off by most cannabis companies lack of profits. Not willing to sit back and just accept mere revenue growth, investors have flocked towards companies those rare businesses that are actually profitable, while those that lack profitability have seen their stocks fall regardless of how strong their revenues were.

“Delivering a solid first quarter is a great start to 2019.  We saw accelerated organic growth across both our consumer products and retail businesses, continued execution of our store build-out with four new openings year-to-date, and further expansion of our consumer products business with the closing of the AGL and Beboe transactions. Integral Associates, Nevada’s top cannabis operator, is on track to close in the second quarter, which will significantly scale our branded products and retail footprint in the western U.S,” said Green Thumb Industries Founder and CEO Ben Kovler. “This performance led to the successful closing of our $105 million debt financing. GTI continues to be a first mover—this time in the capital markets. Importantly, this financing allows us to continue building a capital-efficient business that is well positioned for scalable, long-term sustainable growth.”

Overall analyst consensus on Green Thumb Industries is positive. One analyst gives a “strong buy” recommendation for the stock prior to today’s news, while another six give a “buy” recommendation.

None of the analysts currently covering the company gave a “hold” or “sell” rating, with most analysts giving an average target stock price for the company at around C$28. Currently it’s trading around C$15 per share.

Around the week ago, the company did announce they planned on raising $105 million in financing. Green Thumb Industries said that they planned to use those funds to pay off their existing $7.2 million in debt while supporting further expansion. The decision to take on more debt hasn’t changed analysts opinions much.

Shares of Green Thumb Industries stayed relatively the same on Thursday. Like most other cannabis companies, the stock has been falling somewhat over the past month, breaking what was been a strong year so far for the company.

At one point, shares of the company doubled between January and April, shooting from C$10 to C$22 before giving back some of those gains.