This is my top U.S. cannabis stock, analyst says

Green Thumb Industries (Green Thumb Industries Stock Quote, Chart, News, Analysts, Financials CSE:GTII) reported stronger-than-expected third-quarter revenue and profitability, supported by growth in both its retail and consumer packaged goods businesses, prompting Haywood Securities analyst Neal Gilmer to reaffirm the company as his top pick in the U.S. cannabis sector.

Gilmer maintained his “Buy” rating and C$20.50 target on Nov. 5, citing the Chicago-based company’s operating performance, cash generation and financial position. “We believe Green Thumb’s consistent track record and strong balance sheet leave it well-positioned to maintain its leadership in the US cannabis market,” Gilmer said.

Green Thumb reported third-quarter revenue of US$324.4-million, up 11.3% year-over-year and ahead of Haywood’s US$309.9-million estimate and consensus of US$307.8-million. Adjusted EBITDA was US$73.7-million, exceeding Gilmer’s US$67.9-million forecast, while gross margin reached 45.2%, compared with his 43.9% estimate.

“Green Thumb increased net revenue by 11.3% Y/Y, with strong performance from both its retail and consumer packaged goods segments,” Gilmer said.

Retail revenue increased 10.1%, while comparable-store sales returned to growth for the first time since the third quarter of 2024, rising 3% across 108 stores. Consumer packaged goods revenue increased 16%, supported by growth in Minnesota, New Jersey, Ohio, New York and Illinois, partially offset by price compression. Green Thumb opened six dispensaries during the quarter and another three in Florida afterward, bringing its Florida total to 27 locations.

The company generated US$58.3-million in operating cash flow during the quarter and ended September with US$316-million in cash.

“Based on its balance sheet as well as cash flow generation and continued operational execution, we maintain GTI as our top pick,” Gilmer said.

Management expects fourth-quarter revenue to be flat to slightly lower because of pricing pressure. However, Gilmer increased his second-half 2027 estimates to reflect the anticipated introduction of adult-use cannabis sales in Virginia on July 1, 2027.

The analyst raised his fiscal 2026 revenue forecast to US$1.26-billion from US$1.24-billion and his Adjusted EBITDA estimate to US$303-million from US$295.6-million. For fiscal 2027, he increased his revenue estimate to US$1.32-billion from US$1.27-billion and his Adjusted EBITDA forecast to US$332.4-million from US$303.7-million.

“We continue to favour the U.S. cannabis market and GTI continues to demonstrate a leading position in the industry,” he said.

-30-