Green Thumb Industries Reports Third Quarter 2023 Results
CHICAGO and VANCOUVER, British Columbia, Nov. 08, 2023 (GLOBE NEWSWIRE) — Green Thumb Industries Inc. (“Green Thumb” or the “Company”) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of RISE Dispensaries, today reported its financial results for the third quarter ended September 30, 2023. Financial results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and all currency is in U.S. dollars.
Highlights for the third quarter and nine months ended September 30, 2023:
- Third quarter revenue of $275 million increased 9% sequentially.
- GAAP net income for the third quarter of $11 million or $0.05 per basic and diluted share.
- Adjusted EBITDA for the third quarter was $83 million or 30% of revenue.
- Third quarter cash flow from operations was $61 million, bringing the year-to-date total to $154 million.
- Cash at quarter end totaled $137 million.
- Share repurchases of $25 million during the quarter, over 1% of shares outstanding.
- Adult-use cannabis sales commenced at four RISE Dispensaries in Maryland on July 1.
- RISE Dispensaries opened in Las Vegas, Nevada and Fruitland Park, Florida.
Additionally, after quarter end, the Company opened RISE Dispensaries in Brandon and Sun City Center, Florida, and announced the opening of a RISE Dispensary in Clearwater, Florida on November 10.
See definitions and reconciliation of non-GAAP measures elsewhere in this release.
Management Commentary
I’m pleased to report that our team delivered a great third quarter, including record revenue of $275 million and GAAP net income of $11 million or $0.05 per basic and diluted share. Adjusted EBITDA was $83 million or 30% of revenue. Nine-month cash flow from operations was $154 million and we ended the quarter with a strong balance sheet including $137 million in cash, net of the share buyback.
Green Thumb Founder, Chairman and Chief Executive Officer Ben Kovler
Our third quarter performance was largely driven by the July 1 launch of adult-use sales in Maryland. I want to give a special thanks to all our team members who helped make our first few months of adult-use in Maryland a success.
Green Thumb President Anthony Georgiadis added, “We are proud of the team’s results in the third quarter, and how we are positioned going into 2024. Our obsessive focus on operational efficiency, working capital management, and cash flow generation has allowed us to continue to generate strong revenue and profitability performance despite continued macro-economic and pricing headwinds in some of our markets.”
Third Quarter 2023 Financial Overview
Total revenue for the third quarter 2023 was $275.4 million, up 5.4% from the prior year period. The increase in revenue was primarily driven by increased retail and consumer packaged goods sales in Maryland, reflecting the legalization of adult-use cannabis on July 1.
Overall retail revenue increased 2.9% versus the third quarter of 2022. Third quarter 2023 comparable sales (stores open at least 12 months) increased 0.2% versus the prior year on a base of 77 stores. Consumer Packaged Goods gross revenue increased 17.8% versus the third quarter of 2022.
Gross profit for the third quarter 2023 was $133.8 million or 48.6% of revenue compared to $131.2 million or 50.2% of revenue year-over-year. The decrease in gross margin was primarily driven by price compression, while the increase in gross profit was directly attributed to the revenue increases described above.
Total selling, general and administrative expenses for the third quarter were $84.8 million or 30.8% of revenue, compared to $82.5 million or 31.6% of revenue for the third quarter 2022. The increase in total expenses was primarily due to increased expenses associated with opening new stores, as well as the launch of adult-use cannabis sales in Maryland.
Net income attributable to the Company for the third quarter 2023 was $10.5 million or $0.05 per basic and diluted share, compared to net income of $9.8 million, or income of $0.04 per basic and diluted share in the prior year period.
In the third quarter 2023, EBITDA was $74.7 million or 27.1% of revenue versus $73.3 million or 28.1% of revenue for the comparable period. Adjusted EBITDA, which excluded non-cash stock-based compensation of $7.2 million and other non-operating adjustments of $1.1 million, was $83.0 million or 30.1% of revenue as compared to $84.5 million or 32.3% of revenue for the third quarter 2022.
For additional information on these non-GAAP financial measures, see below under “Non-GAAP Financial Information.”
Balance Sheet and Liquidity
As of September 30, 2023, current assets were $320.2 million, including cash and cash equivalents of $136.8 million. Total debt outstanding was $298.5 million.
Total basic and diluted weighted average shares outstanding for the three months ended September 30, 2023, were 239.5 million shares and 240.3 million shares, respectively.
Business Developments
- On July 1, 2023, Green Thumb commenced adult-use sales at its four Maryland RISE Dispensaries in Hagerstown, Joppa, Silver Spring and Bethesda. Each store donated a portion of profits from the first day of adult-use sales to a local nonprofit organization, including Mission of Love Charities, Explore MD Cannabis, and I Support The Girls.
- On August 2, 2023, Green Thumb opened RISE Dispensary Las Vegas on Craig Road; profits from the grand opening were donated to Opportunity Village.
- On August 16, 2023, Green Thumb opened RISE Dispensary Fruitland Park in Florida; profits from the grand opening were donated to Minorities for Medical Marijuana.
Subsequent to quarter end, on October 14, 2023, Green Thumb opened RISE Dispensary Brandon in Florida, and donated profits from the grand opening to Florida Justice Center. On October 27, 2023, Green Thumb opened RISE Dispensary Sun City Center in Florida, and donated profits from the grand opening to Minorities for Medical Marijuana. The Company also announced plans to open a RISE Dispensary in Clearwater, Florida on November 10, 2023, with profits from the grand opening to be donated to Minorities for Medical Marijuana.
RYTHM Artist Series
Also subsequent to quarter end, on October 2, 2023, Green Thumb announced the launch of its RYTHM Artist Series, a collection of cannabis strains that are chosen (and smoked) by artists spanning multiple genres of music. Inspired by the artists’ lifestyle and brand, each strain aligns with the artist’s specific tastes, consumption preferences, and desired effects, and is complemented by its own unique strain name and packaging design. The RYTHM Artist Series kicked off with country artist Mitchell Tenpenny’s Night Owl Haze, which is currently available exclusively at RISE Dispensaries in Florida, with an upcoming launch in Illinois later this month. Additional strain collaborations with talented and passionate artists such as pop-punk band State Champs, Nashville-based rock singer-songwriter Marcus King, and R&B and pop singer Tinashe will launch in the coming months.
Capital Allocation
In September 2023, the Board of Directors authorized a new one-year $50 million program to repurchase up to approximately 10.5 million of the Company’s Subordinate Voting Shares. In the quarter ended September 30, Green Thumb repurchased 2.5 million shares, over 1% of shares outstanding, for $25 million.
Green Thumb is not obligated to purchase any additional shares. If management determines it has better uses for its cash reserves, including for debt refinancing, strategic mergers and acquisitions or net working capital, it is under no obligation to purchase shares and share purchases may be suspended or terminated at any time at Green Thumb’s discretion. The actual number of shares purchased, timing of purchases and share price will depend upon market conditions at the time and securities law requirements. All shares acquired will be returned to treasury and cancelled.
Board of Directors
In September 2023, Green Thumb announced that Richard Reisin and Hannah (Buchan) Ross were appointed to its Board of Directors (the “Board”) as independent members. Reisin formerly served as Executive Vice President and Director at Carylon Corporation and has joined the Company’s audit committee. Ross is the Chief Operating Officer of Edie Parker and has joined the audit and compensation committees of the Board. The appointments bring the Company’s Board to a total of nine members.
Non-GAAP Financial Information
This press release includes certain non-GAAP financial measures as defined by the U.S. Securities and Exchange Commission. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included in the financial schedules attached to this press release. This information should be considered as supplemental in nature and not as a substitute for, or superior to, any measure of performance prepared in accordance with GAAP.
Definitions
EBITDA: Earnings before interest, taxes, other income or expense and depreciation and amortization.
Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, adjusted for other income, non-cash stock-based compensation, one-time transaction related expenses, or other non-operating costs.
Conference Call and Webcast
Green Thumb will host a conference call on Wednesday, November 8, 2023, at 5:00 pm ET to discuss its third quarter 2023 financial results for the quarter ended September 30, 2023. The earnings call may be accessed by dialing 844-883-3895 (toll-free) or 412-317-5797 (international). A live audio webcast of the call will also be available on the Investor Relations section of Green Thumb’s website at https://investors.gtigrows.com and will be archived for replay.
About Green Thumb Industries
Green Thumb Industries Inc. (“Green Thumb”), a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which it serves. Green Thumb manufactures and distributes a portfolio of branded cannabis products including &Shine, Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredibles and RYTHM. The company also owns and operates rapidly growing national retail cannabis stores called RISE. Headquartered in Chicago, Illinois, Green Thumb has 18 manufacturing facilities, 87 open retail locations and operations across 15 U.S. markets. Established in 2014, Green Thumb employs approximately 4,400 people and serves millions of patients and customers each year. More information is available at www.gtigrows.com.
