Green Thumb Sells Another 10 Million Shares For $56 Million

Green Thumb Industries Inc. (OTCQX: GTBIF) announced it has raised approximately $56 million by selling 10 million of its subordinate voting shares, that was declared effective by the U.S. Securities and Exchange Commission (SEC) as of February 8, 2021.  Green Thumb said it had received and accepted offers from investors to purchase 1.6 million registered subordinate voting shares at $35.50 per share for a total of approximately $56 million.  The stock closed at $35.35 on Monday.

“The strength of investor demand suggests growing confidence within the U.S. capital markets for cannabis,” said Green Thumb Founder and Chief Executive Officer Ben Kovler. “The Green Thumb team is excited by the momentum and is proactively advocating for U.S. cannabis companies to receive access to U.S. exchanges like our Canadian peers. This access is a key step to unlock greater job creation, significantly more tax revenue and a more robust effort to right some of the wrongs caused by the war on drugs.”

The company said that the sale would close on February 23, 2021, and follows the previous sale of shares pursuant to the Registration Statement that closed on February 9, 2021, for $100 million. On February 9, Green Thumb said it received and accepted an offer from a single institutional investor to purchase approximately 3.1 million registered subordinate voting shares at $32.03 per share for a total of $100 million.  The company did not disclose the name of the buyer.

According to Yahoo Finance, six analysts cover GTI. The average price target is $34.39 with all buy ratings.

GTI is a leading cannabis consumer packaged goods company and the owner of Rise Dispensaries. In November, the company reported its earnings for the third quarter of 2020. Overall, the company’s balance sheet was strong and retained a positive cash flow for the third consecutive quarter. Green Thumb’s revenue increased 31.3% quarter-over-quarter, and year-over-year 131.% to $157.1 million. The company’s gross margin for the third quarter of 2020 was 55.4%, an increase from a 53.2% gross margin the quarter prior.

The company’s adjusted operating EBITDA increased by 50% to $53.2 million, or 33.9% of revenue for the third quarter of 2020. The prior quarter ended with an adjusted EBITDA of $35.4 million, or 29.6% of revenue. As of September 30th, 2020, Green Thumb’s current assets totaled $159.1 million and included cash and cash equivalents equaling $78.1 million. The company reported a total debt outstanding of $97.1 million, $0.3 million being due within 12 months.

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