Green Thumb Industries Inc. (OTCQX: GTBIF) continues to show its strength as an industry leader after reporting solid financial results for the first quarter ended March 31, 2021. GTI delivered total revenue of $194.4 million, up 9.7% sequentially and up 89.5% from $102.6 million in the prior-year period. this beat the Yahoo Finance average analyst estimate for revenue of $187 million.
The company also delivered a net income of $10.4 million or $0.05 per basic and diluted share, compared to a net loss of $4.2 million, or a loss of $0.02 per basic and diluted share in the prior year. This was lower than the Yahoo Finance analyst estimates for $0.08 per share.
GTI said that revenue growth was primarily driven by increased scale in the Consumer Packaged Goods and Retail businesses, especially in Illinois and Pennsylvania. Overall performance was driven by the expanded distribution of Green Thumb’s branded products, 13 new store openings, and increased traffic in the company’s 56 open and operating retail stores. In the first quarter of 2021, Green Thumb generated revenue from all 12 of its markets: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio and Pennsylvania. The company continued to invest in the expansion of its cultivation and manufacturing capabilities in Illinois, Maryland, Massachusetts, New Jersey, Ohio and Pennsylvania.
“2021 is off to a strong start. In the first quarter, we delivered year-over-year revenue growth of 90%, reported adjusted operating EBITDA growth of 179%, and recorded our third sequential quarter of positive net income. Our business continues to scale as the demand for cannabis swells across the country, and our team continues to rise to the occasion for our patients and customers,” said Green Thumb Chairman, Founder and Chief Executive Officer Ben Kovler.
Total selling, general and administrative expenses for the first quarter were $59.3 million or 30.5% of revenue, compared to $45.4 million or 44.3% of revenue for the first quarter 2020. Improved operating costs as a percentage of revenue reflected increased operating leverage in the Company’s Consumer Packaged Goods and Retail businesses.
“We are excited to expand our east coast footprint by signing an agreement to enter the Virginia cannabis market. This follows the recent sweep of adult use legalization measures across Virginia, New York and New Jersey where we see material untapped market potential. Our recent debt financing at industry leading rates positions us to capitalize on the opportunities ahead. A strong balance sheet, supported by a low cost of capital, is key to staying ahead in this fast-paced new industry. As the green wave continues to gain momentum, it is more important than ever to maintain our focus on strong execution and high-value capital allocation. This is the best way for us to build long-term sustainable value for all of our stakeholders,” said
Solid Balance Sheet
The company closed the quarter with cash and cash equivalents of $275 million. Following the end of the quarter, the company closed a $216.7 million senior secured non-brokered private placement financing through the issuance of senior secured notes. GTI said it intends to use the proceeds to retire its existing $105.5 million senior secured debt and for general working capital and various growth initiatives.