Chicago-based Green Thumb Industries Inc. (CSE: GTII) (OTCQX: GTBIF) on Tuesday announced a year-long stock share repurchase program for up to 10.4 million shares, ostensibly designed to increase the value of the company’s roughly 200 million other shares.
The company didn’t spell out how much it would pay for shares, just that its board of directors has authorized as much as $50 million to purchase as many as 10,486,951 out of the total 209,239,033 shares in existence, according to a press release.
The buy-back program starts on Sept. 11 and will run until Sept. 10, 2024. However, it is a voluntary step by GTI that may come to an end whenever the board decides.
“If management determines it has a better use for its cash reserves, it is under no obligation to continue to purchase shares, and share purchases may be suspended or terminated at any time at Green Thumb’s discretion,” the company asserted in a release.
GTI Ben Kovler said that the move is designed – in light of last week’s blockbuster cannabis rescheduling news that sent many marijuana stocks skyrocketing – to further increase share value for 95% of GTI shares.
“Having witnessed a 30-plus percent move in the sector based on news from Washington, D.C., we want the ability to take advantage for shareholders should the opportunity arise,” Kovler said, adding that the repurchase program was in the works prior to the rescheduling news.
“As Warren Buffett taught us in this year’s Berkshire Hathaway annual letter to shareholders, ‘The math isn’t complicated: When the share count goes down, your interest in our [business] goes up. Every small bit helps if repurchases are made at value-accretive prices,’” Kovler said.
GTI does not expect to incur any debt due to the repurchase program, the company further said, and repurchase share prices “will depend upon market conditions at the time and securities law requirements. All shares acquired will be returned to treasury and cancelled.”