Chicago-based Green Thumb Industries, a cannabis company that operates in 12 states, reported $194.4 million in revenue for the first quarter—a 90% increase year-over-year due to increased demand. Ben Kovler, the CEO and founder of Green Thumb Industries, says understanding what drove the company’s growth is not difficult.
“American consumers want more weed,” says Kovler. “It’s simple.”
GTI had a strong first quarter, reporting the second highest revenues in the industry, behind only Massachusetts-based Curaleaf, and the industry’s highest margin. According to a note published by Cowen on Thursday, one of the reasons GTI is the equity research firm’s top pick is because it has the industry’s “healthiest” adjusted EBITDA margin of 36.7%.
Net income for the quarter was $10.4 million, compared with a net loss of $4.2 million a year earlier. The company also reported its fifth consecutive quarter with positive cash flow, generating $40 million.
Matt McGinley, an analyst who covers cannabis at Needham, referred to GTI’s quarter as “perfectly boring” in a good way. “Green Thumb’s first quarter had better than expected revenue growth, steady margin rate, and strong free cash flow generation,” McGinley wrote. “Suffice to say, assets with high rates of growth and consistency are unusual in the cannabis industry, or in any industry for that matter.”
McGinley says that with industry demand accelerating, GTI’s prospects for growth over the next two years are “excellent.”
GTI, which has a total of 97 retail locations and 13 manufacturing facilities across 12 states, generated most of its revenue from its core markets of Illinois, Pennsylvania, and Nevada. But it is gearing up