Is Green Thumb Industries Publicly Traded?

Green Thumb Industries (GTBIF) is publicly traded on the Canadian Security Exchange (CSE). That might sound confusing to readers who know that Green Thumb has its headquarters located in Chicago, IL.

Green Thumb became a public traded company on June 13, 2018, as the result of a reverse takeover (RTO). An RTO occurs when a private company merges with a reporting issuer. It’s a common way for American companies to get listed on Canadian markets.

Unfortunately, most cannabis companies are traded on the pink sheets because the federal government lists cannabis as an illegal substance without any medical benefits. Canada’s federal government, however, acknowledges that cannabis can have medical benefits for some users. Canada also has laws at the federal level that let adults use recreational cannabis products.

American investors can purchase shares of GTI on the CSE. Investments aren’t restricted to Canadians. In the US, the ticker symbol is GTBIF.

So, is Green Thumb Industries a good investment opportunity for you?

A Quick History of Green Thumb Industries

Green Thumb Industries was founded by Ben Kovler in 2014. Over the last eight years, it has grown quickly across states with legal cannabis. The company currently has 13 manufacturing facilities and 96 retail locations in 12 US markets. It employs about 1,600 people.

Green Thumb Industries owns several brands, including:

  • Dogwalkers, cannabis pre-rolls made from premium flowers.
  • RYTHM, a line of premium cannabis flowers known for purity and potency.
  • Incredibles, a brand of cannabis-infused confections with clear dosing transparency.
  • Beboe, a line of vaporizer pens and pastilles created through a collaboration between fashion executive Clement Kwan and tattoo artist Scott Campbell.

Green Thumb Industries currently has retail locations in:

  • Illinois
  • Nevada
  • Virginia
  • Florida
  • California
  • Massachusetts
  • Connecticut
  • Rhode Island
  • Minnesota
  • Maryland

The company’s retail stores and medical cannabis dispensary brands include:

  • Maryland Health and Wellness Center (MHWC)
  • Leafline
  • Rise
  • Essence
  • Bluepoint
  • Summit
  • Affinity
  • Southern CT Wellness & Healing (SCWH)

Green Thumb Industries sees itself as more than a selection of brands in the cannabis industry. It advocates for ending what it calls “Prohibition 2.0.” It seeks to expand cannabis laws so more people can access products that contribute to their well-being, health, and happiness.

Recent Information for Potential Investors

Whether you support Green Thumb Industries’ lofty goals of ending cannabis prohibition and expanding access to cannabis products, you need to know how it performs as a business before you choose to invest.

Green Thumb Industries’ most recent report shows that the company has made significant progress and laid a lot of ground for future growth.

Revenue during the fourth quarter grew by 37.4% year-over-year. The company brought in $243.6 million in revenue that quarter.

2021’s fourth quarter was also the eighth consecutive quarter that Green Thumb Industries has seen positive cash flows from its operations. That’s a very good sign because it means that positive cash flow has continued after the height of the pandemic.

GTI also expanded its reach in 2021 by acquiring Minnesota-based company Leafline Industries, which has now joined the Green Thumb Industries family of retail locations.

GTI’s Stock Performance

GTI shares debuted on the CSE at about $8. It quickly increased to $21 on September 21, 2018 before dipping back to the original price. From there, the price rallied to about $15 during the spring of 2019. Unfortunately, this set the stage for a steady decline that reached its lowest point ($4.36) on March 13, 2020.

Of course, nearly all companies’ valuations fell significantly around that time as investors realized the COVID-19 pandemic would have a significant impact on all areas of business.

An interesting thing happened after the initial pandemic panic passed. A growing number of people started relying on cannabis to cope with the stress and uncertainty of living through a pandemic. As cannabis sales spiked, so did GTI’s value. Shares peaked at $36.77 on February 17, 2021.

GTI shares have fluctuated rapidly since the beginning of 2021. So far, the 2022 price has remained between about $21 and $15.60. It’s noticeably higher than it was in 2018, but investors who bought shares during the heights have not seen an increase on their investments.

The Q4 report highlights the following achieves for 2021:

  • The company grew revenues to $893.6 million, a 60.5% increase.
  • Improved GAAP net income of $75.4 million ($0.34 per basic share). 2019’s GAAP net income was $15 million ($0.07 per basic share).
  • Adjusted Operating EBITDA grew by 71.4% to $307.8 million (34.5% of revenue)

The company has a strong balance sheet that should support continued growth through 2022 and the future.

Should You Invest in Green Thumb Industries?

Green Thumb Industries’ numbers look compelling. So, is now a good time to invest?

There’s a good chance that GTI share prices will increase over the next year. The company’s fundamentals have improved a lot since 2018. Despite its improving internals, the stock price isn’t much higher than the day GTI went public.

The recent decline in share price might frighten some potential investors. That’s understandable. It seems unlikely that the price will reach that peak anytime soon.

If you’re willing to hold on to shares for several years, though, this is possibly a terrific time to buy. Prices are pretty low, so the margin of safety has increased. As long as Green Thumb Industries keeps increasing its revenues and entering new markets, its market cap should reflect the stronger fundamentals.

There’s also the possibility that more states, and perhaps even the US federal government, will legalize cannabis. When that happens, companies that have positioned themselves for rapid growth will have a once-in-a-lifetime opportunity. All areas of business would become easier. The company could use traditional banks instead of relying on private lenders and investors. It could potentially list on a primary US stock exchange. It might even find that more states open their borders to responsible cannabis companies. If that were to happen, there’s no telling how high GTI could go.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.