The Starbucks of Cannabis (GTBIF)
We are moving GTBIF to the top of the Hedgeye Cannabis USA Long.
We will have a more detailed note with the changes in our thinking shortly. Green Thumb reported 3Q21 revenues of $233.7 up 48% YoY and 5% sequentially and beating the street expectations by $1.3M. In the quarter, Green Thumb generated revenue in all 14 of its markets: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Virginia. Comparable sales growth was 14% based on 48 stores. The quarter marked its expansion into Virginia through its acquisition of Dharma Pharmaceuticals and in Rhode Island. Revenues grew 5% sequentially and 49% YoY. (A)EBITDA was also in line at $81.2 Million Vs. Factset $82.6 Million. This was the fifth consecutive quarter of positive GAAP net income delivering $20.2 Million or $.08 per share, missing by $0.02. With some pending legalization likely in the next six months, we can easily see GTBIF more than double in the next 12-months.
Governors Call on Safe Passage
The likelihood that SAFE makes it into the NDAA just went up significantly.
A bipartisan coalition of 24 governors is finally urging congressional leaders to pass Safe Banking reform through the NDAA. The letter states that the Safe Banking Act will "will allow cannabis businesses to access normal banking services, which will transition fully cash-based cannabis transactions into the financial system where they belong." This letter is notable because these governors are specifically requesting congress to take action on Safe in the NDAA. This exemplifies the urgency these governors have for the protection of the cannabis industry. These governors also believe that the bill stands a greater chance of passing through the NDAA than a stand-alone bill. Although Schumer has stated in the past that he would block the bill if it were introduced in the senate before comprehensive action, he has left the door open by saying he would consider a banking bill if social equity components are added.
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Verano Acquisition
VRNOF is a USA Long.
Verano announced the closing of the acquisition of Willow Brook Wellness which holds an active dispensary in Meriden, CT. Verano also announced its further expansion into the Connecticut market by acquiring Caring Nature and Connecticut Pharmaceutical Solutions. Caring Nature holds one active dispensary in Waterbury, CT, while Connecticut Pharmaceutical Solutions is an operational cultivation/production facility. The deal with Connecticut Pharmaceutical Solutions was $113.25 Million. In addition, the company owns an active 216,532 Sq. Ft. state-of-the-art facility in Rocky Hill, CT. With these acquisitions, Verano enters Connecticut with fully integrated operations and cultivation capacity to further expand its retail presence.
