On Monday, Green Thumb Industries (OTCMKTS:GTBIF) opened a Rise brand store in Chambersburg, Pennsylvania—its 46th store in the US. The company operates its stores under the “Rise” and “Essence” brands. So far, the company has opened seven new stores in 2020—five since the beginning of the COVID-19 outbreak. The store offers an online reservation service and an in-store pickup service for patients who have a Pennsylvania medical cannabis card. The state has over 260,000 registered patients with 168,000 active cardholders. The medical cannabis industry serves approximately 65,000 patients and sells over 160,000 products in a week. Since the inception of the Pennsylvania Medical Marijuana Program, patients have made approximately 2.5 million visits, which has yielded $423 million in retail sales and $288 million in wholesale sales.
Green Thumb, which entered the Pennsylvania market in 2017, currently operates 11 Rise retail stores in the state. The company also owns a manufacturing facility in Danville, where it produces branded products.
Green Thumb’s stock performance
So far this year, Green Thumb Industries has outperformed its peers and cannabis ETFs. Last month, the company reported an impressive first-quarter performance. During the quarter, the company beat analysts’ revenue expectations and reported an improvement in its EBITDA. Green Thumb is one of the few cannabis companies that reported a positive EBITDA. The strong first-quarter performance led to a rise in the company’s stock price.
Green Thumb stock has returned 7.1% YTD. Meanwhile, Curaleaf Holdings (OTCMKTS:CURLF), MedMen Enterprises (OTCMKTS:MMNFF), and Cresco Labs (OTCMKTS:CRLBF) have fallen by 5.0%, 49.3%, and 26.1%, respectively. The Horizons Marijuana Life Sciences Index ETF (TSE:HMMJ) has fallen by 7.8% during the same period.
Analysts’ recommendations for GTII
Analysts are optimistic about Green Thumb Industries. All of the 13 analysts that follow the company have given a “buy” recommendation. None of the analysts recommend a “hold” or a “sell.” As of Tuesday, analysts’ consensus target price was 22.40 Canadian dollars, which represents a 12-month return potential of 63.5%.
Overall, I’m bullish on Green Thumb. The company owns licenses to operate 96 stores, which means it can open 50 more retail stores. So, there’s a huge scope to expand the operations. At the end of the first quarter, the company’s total debt was $92.9 million. Green Thumb’s cash and cash equivalents were $71.5 million. For a company reporting a positive EBITDA, the balance sheet looks strong. Given the growth prospects and strong balance sheet, I think that investors should accumulate the stock.