Green Thumb Industries should be a core holding for cannabis investors, analyst says

Green Thumb Industries (Green Thumb Industries Stock Quote, Chart, News, Analysts, Financials CSE:GTII) delivered a steady first quarter and remains a top cannabis pick for Haywood Securities, where analyst Neal Gilmer is maintaining his “Buy” rating and C$21.00 target price, citing strong margins, robust cash flow and continued dispensary growth.

Green Thumb Industries is a national cannabis consumer packaged goods company and owner of RISE Dispensaries.

“Green Thumb Industries (GTI) reported a generally in-line quarter with continued solid cash flow generation,” Gilmer said in his May 8 radar flash note on Q1 2025 financial results. “The company achieved gross margins ahead of our expectations, that led to EBITDA slightly above our forecast. The company continues to deliver strong results, highlighted by its OCF generation of approximately $74M in Q1/25. GTI continues to repurchase shares and spend on CAPEX all while executing on its growth plan. In our view, Green Thumb should be a core position in any cannabis investor’s portfolio due to its industry-leading financial position, attractive footprint, and consistent financial results.”

Gilmer estimates that Green Thumb will generate US$343.8-million in adjusted EBITDA on US$1,776.6-million in revenue for fiscal 2025. He expects those figures to shift to US$370.6-million in adjusted EBITDA on US$1,240.5-million in revenue in 2026.

“We are off to a great start in 2025,” Green Thumb President Anthony Georgiadis said on May 7 in a press release announcing the Q1 results. “During the first quarter, we opened two new stores, including RISE Whitehall, which serves the greater Columbus, Ohio area and further cements our presence in one of the fastest-growing markets in the country. Our outstanding retail and CPG teams are hard at work preparing for the launch of adult-use sales in Minnesota, which is expected to commence before year-end. While we anticipate ongoing near-term headwinds from pricing compression, increased competition and consumer softness, we are confident in our team’s ability to navigate these challenges and continue delivering strong results for shareholders.”

Green Thumb Industries (GTI) reported Q1 2025 revenue of $ 279.5 million, a 1.4% increase from last year and a 5% drop from the previous quarter, roughly in line with analyst estimates. Retail sales fell 2.5% year-over-year due to price pressure in Illinois, Pennsylvania, New Jersey, and Connecticut, though gains in Ohio and New York helped offset that. Gross margin came in strong at 51.3%, above expectations. Adjusted EBITDA was $85.2-million, or 30.5% of revenue, ahead of forecasts. The company generated $74-million in operating cash flow during the quarter, ending with $210.6-million in cash and $252.4-million in debt, most from a credit facility established in September 2024.

GTI opened new dispensaries in Ohio and Nevada during the quarter and another in Florida after quarter-end, bringing its total to 104 stores across 14 states.

The company also bought back 160,000 shares for about $1-million as part of a previously announced $50-million share repurchase program.

“Green Thumb guided for Q2/25 revenue to be flat compared to Q1 due to continued price compression and an uncertain macro picture,” Gilmer said. “Management highlighted that the price compression is likely to impact gross margins and pressure EBITDA margins below its long-term target of 30%. Further, GTI reiterated CAPEX plans for 2025 similar to the $80M last year that will include renovations, relocations and new stores of about 10-12 this year, as well as wholesale investments in key markets. With disciplined capital allocation, GTII is well-positioned in 2025 with a very strong balance sheet.

“We are not revising our estimates at this time and will look to make adjustments after a review of the full financials.”

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