Colorado has record adult-use sales in June
Recreational sales in Colorado hit a record high in June, at $158.1M, growing 6% MoM and 29% YoY. At $40.7M, medical sales decreased -5% MoM but grew 37% YoY. Combined, recreational and medical marijuana sold was $198.1M. YTD, total sales in Colorado are closing in on the $1B mark, with medical marijuana comprising 21% and recreational making up 79% of YTD total sales.
Green Thumb Industries (GTBIF) Q2 2020 earnings
Green Thumb reported Q2 2020 revenues of $119.6M vs FactSet Consensus $103.1M, a 168% YoY increase and a 16.6% QoQ increase. The company’s 1H20 revenues of $222.1M already exceeds that of fiscal 2019. The topline driver for the quarter was exceptional sales in Illinois and Pennsylvania. Adjusted Operating EBITDA for the Q2 was $35.4M or 29.6% of revenue as compared to $2.3M or 5.1% of revenue for Q2 2019. The significant improvement in Adjusted Operating EBITDA was driven primarily by revenue growth from both the consumer-packaged goods and retail businesses. Operating income was $7.2M, in line with consensus expectations, but a sequential drop of 5.2%. The company grew cash on hand from $71.5M in Q1 to $82.9M in Q2.
The company will ramp up production and distribution by brands in Ohio and New Jersey. In Q2, Green Thumb opened six stores across Nevada, Ohio, Illinois and Pennsylvania, making it nine added stores YTD and 48 stores across 10 states. Green Thumb had a sales mix of 61% retail and 39% wholesale. Margin improvement was driving by greater utilization of facilities in Illinois and Pennsylvania on the wholesale side.
Green Thumb Industries (GTBIF) is a Hedgeye Cannabis Best Idea LONG.
In D.C., a new initiative to legalize
Legalization activists recently filed a ballot initiative in D.C., titled the “New Modern Day Cannabis Justice Reform Act,” to legalize marijuana sales in the nation’s capital.
The measure proposes to: cease and desist all levels, investigations, prosecutions regarding cannabis; make unlawful search, seizure, and arrest based on probable cause that indicates the presence of cannabis products; persons currently arrested or previously convicted for cannabis products shall be expunged.
The proposal has yet to collect enough valid signatures for the ballot.
