Green Thumb Industries Reports First Quarter 2021 Results

CHICAGO and VANCOUVER, British Columbia, May 12, 2021 (GLOBE NEWSWIRE) -- Green Thumb Industries Inc. (“Green Thumb,” or the “Company”) (CSE: GTII) (OTCQX: GTBIF), a leading national cannabis consumer packaged goods company and owner of Rise™ Dispensaries, today reported its financial results for the first quarter ended March 31, 2021. Financial results are reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and all currency is in U.S. dollars.

Highlights for the quarter ended March 31, 2021:

• Revenue increased 9.7% sequentially and 89.5% year-over-year to $194.4 million
• Third consecutive quarter of positive GAAP net income, delivering $10.4 million or $0.05 per basic and diluted share.
• Adjusted Operating EBITDA grew 9.0% sequentially and 179.3% year-over-year to $71.4 million or 36.7% of revenue.
• Fifth consecutive quarter of positive cash flow from operations, delivering $39.7 million.
• In February 2021, the Company raised approximately $156.0 million through direct public sales of approximately 4.7 million shares in the Company’s U.S. initial public offering of securities (the “U.S. IPO”).
• On April 30, 2021, subsequent to quarter end, Green Thumb raised $216.7 million in senior secured debt at 7%. The Company intends to use the proceeds to retire its existing $105.5 million senior secured debt (at 12%) and for general working capital and to support various growth initiatives.
• On May 3, 2021, subsequent to quarter end, the Company announced the signing of an agreement for its strategic expansion into Virginia and acquisition of Dharma Pharmaceuticals, LLC (“Dharma”), the holder of one of five vertical licenses in Virginia, which includes an operating production facility with one retail location and the opportunity to open up to five additional retail locations in the state.
  

See definition and reconciliation of non-GAAP measures elsewhere in this release.

Management Commentary  

“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.

“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 Kovler.

First Quarter Financial Overview

Total revenue for the first quarter 2021 was $194.4 million, up 9.7% sequentially and up 89.5% from $102.6 million in the prior year period. 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 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.

Gross profit for the first quarter 2021 was $110.9 million or 57.0% of revenue compared to $53.0 million or 51.6% of revenue for the comparable period. Gross margin performance was driven by increased scale in the Consumer Packaged Goods and Retail businesses.

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.

Total other expense was $9.2 million for the first quarter 2021, primarily reflecting warrant expense and interest associated with its senior secured notes.

Net income attributable to the Company for the first quarter 2021 was $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.

EBITDA for the first quarter 2021 was $66.5 million or 34.2% of revenue compared to $20.3 million or 19.7% of revenue for the same period in the prior year. Adjusted Operating EBITDA for the first quarter 2021, which excluded non-cash stock-based compensation of $4.0 million, was $71.4 million or 36.7% of revenue as compared to $25.5 million or 24.9% of revenue for the first quarter 2020. The significant improvement in EBITDA and Adjusted Operating EBITDA largely reflected revenue growth and increased scale-driven operating leverage from both the Consumer Packaged Goods and Retail businesses. For additional information on these non-GAAP financial measures, see below under “Non-GAAP Financial Information.”

Balance Sheet and Liquidity

As of March 31, 2021, current assets were $381.0 million, including cash and cash equivalents of $275.9 million. Total debt outstanding was $100.1 million.

Total basic and diluted weighted average shares outstanding for the three months ended March 31, 2021 were 216,210,429 shares and 221,616,157 shares, respectively.

Capital Markets & Financing

In February 2021, in the Company’s U.S. IPO, the Company raised approximately $156.0 million through direct public sales of approximately 4.7 million shares registered with the U.S. Securities and Exchange Commission (“SEC”). The offering was made pursuant to the Form S-1 Registration Statement, declared effective by the SEC on February 8, 2021, and completed on a “self-underwritten, best efforts” basis.

On April 30, 2021, subsequent to quarter end, the Company closed a $216.7 million senior secured non-brokered private placement financing through the issuance of senior secured notes. The Company intends to use the proceeds to retire the Company’s existing $105.5 million senior secured debt and for general working capit