Green Thumb Earnings: Return to Healthy Top-Line Growth While Pending State Legalizations Loom

No-moat Green Thumb’s third quarter saw a return to healthy top-line growth, with third-quarter revenue of $275 million representing 9% growth sequentially and 5% over the prior-year quarter. We don’t expect a lot of changes to our model except for increasing our overhead expenses forecast to reflect year-to-date growth. This is likely to lead to a reduction of a couple dollars to our fair value estimates of $28 and CAD 38 per share. Shares are well undervalued, as we think the market remains overly focused on the lack of progress around easing federal prohibition. Meanwhile, we see tailwinds from additional states legalizing adult use following Ohio’s successful referendum, with states like Florida planning votes in 2024.