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Stock Strategist

Initiating Coverage of Green Thumb Industries

The cannabis producer offers investors attractive exposure to the fast-growing U.S. market.

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We are initiating coverage of Green Thumb Industries (GTBIF), a U.S. cannabis producer operating in 12 states. Our fair value estimates are $18 per share and CAD 23.50 per share, based on a 10-year explicit forecast that assumes a nearly 37% revenue CAGR and a 2028 operating margin before plant adjustments of 32%. At current prices, shares look undervalued as the stock trades in 4-star territory. In our view, it offers investors attractive exposure to the fast-growing U.S. market.

In line with our other cannabis coverage, we assign the firm a no-moat rating and a stable moat trend, as the probability of material value destruction over the next 10 years remains high. We also assign a very high uncertainty rating, which includes impacts from the pace at which legalization is passed, distribution is expanded, and the prevalence of cannabis consumption.

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Kristoffer Inton does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.