Green Thumb Industries continues to lead the pack 💰

EARNINGS
Cannabis earnings season continues

Cannabis earnings season continues, and now the majority of the “Tier 1” multistate operators (MSOs) have reported their results. It was a tough quarter for many companies, though cannabis stocks started to come out of the gutter yesterday after Florida’s Amendment 3 failed to pass on Tuesday. It’s possibly a ‘dead cat’ bounce, though time will tell. 

But there’s a clear winner of the quarter, at least so far: Green Thumb Industries. The company, led by CEO Ben Kovler, is leading the pack on profitability and has been for multiple quarters in a row. 

Credit where it’s due, it looks like the best place to put your money if you (still) want exposure to cannabis equities, though I’d caution that I’m the furthest thing from a financial analyst and am not invested in the sector outside of this newsletter. Some of the few remaining bulls have turned bearish. 

Here’s the rundown so far:

• Green Thumb Industries posted an $8.6 million profit on $286.7 million of revenue for the third quarter, beating average analyst expectations of $282 million. Still profits are down from $10.5 million the same quarter a year prior. During the quarter, GTI secured a $150 million credit facility at an industry-leading rate. 

• Verano lost $42.57 million on $216.7 million of revenue for the third quarter, down from $240 million the same quarter last year. Losses more than doubled as well, from $17.8 million. Operating income declined from $40.2 million to $16.7 million. 

• The Cannabist lost $1.7 million on $114 million of revenue for the third quarter, down about 8% sequentially. The company cut its losses from $36 million the year prior, however. The company’s executives said it is undergoing a process of divestiture from unprofitable markets to focus on where it’s profitable.

• Jushi Holdings lost $16 million on $61.6 million of revenue, down nearly 6% from the year prior and missing analyst expectations. The company said increased competition in state markets like Nevada and Massachusetts forced them to lower prices. Still, the company trimmed losses from $20.6 million sequentially. 

• Chicago Atlantic BDC, formerly Silver Spike, posted total investment income of $3.2 million. 

Here’s the schedule for tomorrow. More coverage to come: 

• Cresco Labs, 8:00 AM

• Planet 13, 6:00 PM

-JB

“It took ten years for the regulated cannabis industry to go from zero to 30 billion. It took two years for hemp to go from zero to 20 billion. If people think that the US cannabis industry is peaking, that’s wrong. The growth has gone into hemp because it’s readily accessible, it’s cheaper, and it has a form factor that Americans love — called beverage,” Curaleaf CEO Boris Jordan said on The Dales Report podcast. 

Jordan is referring to the intoxicating hemp market in comparison to the traditional cannabis market. Intoxicating hemp is essentially the same product as legal cannabis to an average consumer, though treated very differently by federal regulations — hemp is technically legal via the 2018 Farm Bill, while cannabis is not. 

Watch it here.

Illinois social equity struggles 🌿

A group of social equity cannabis transport companies are suing Illinois Gov. JB Pritzker, saying that the Illinois state government is at fault for their failing businesses as a rule change allowed big cannabis companies to transport their own goods. Illinois’ cannabis social equity program has been under pressure in recent months. Read more at Green Market Report. 

More cannabis recalls 👀

The Maine Office of Cannabis Policy issued its third product recall, of The Soap strain produced by Leb City Greeneries. The flower tested positive for yeast and mold, The Portland Press Herald reported. Product recalls are becoming increasingly common in the industry, as testing labs fail to meet consumer safety standards. 

Dallas votes to decriminalize 🤠

Dallas residents voted to decriminalize four ounces or less of cannabis within city limits, CBS News reports. Some more liberal-leaning cities in Republican states like Texas aren’t waiting around for the legislature — they’re taking matters into their own hands.

Springbig, a cannabis marketing technology firm, is pivoting outside the cannabis industry by partnering with Amazon Web Services to offer SMS-marketing services to betting platforms. 

Nevada cannabis company Deep Roots landed a $30 million credit facility from cannabis lender Chicago Atlantic to expand into new areas of the state. No rate was disclosed by the company.

Cannabis packaging waste 🗑️

A new study published in ATSM International’s Journal of Testing and Evaluation found that packaging waste — specifically vapes — in California’s legal cannabis market rivals that of household pharmaceuticals. Read more from Marijuana Moment.

The cannabis ‘Red Wall’ states are those where Republicans have total control over state government and cannabis remains illegal. They include South Dakota and North Dakota, which both tried and failed to legalize cannabis this year. 

Read more from The Conversation. 

What does a Trump win mean for the U.S. cannabis industry? | Green Market Report

Why Florida’s marijuana legalization ballot initiative failed despite Trump endorsement, historic funding and majority voter support | Marijuana Moment