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Green Thumb Industries reported record third-quarter revenue of $324.4 million, up 11.3% year over year and nearly 6% sequentially, in a quarter when most of its peers are fighting for flat. Retail grew 10%, CPG grew 16%, and comparable store sales turned positive at 3% after a slight decline in Q2. Ben Kovler’s framing was characteristically terse: Green Thumb “has spent more than a decade building a business that performs through uncertainty,” and the top line backs him up.

The bottom line is more complicated. GTI posted a GAAP net loss of $4.8 million, its first in years, and adjusted EBITDA fell to $73.7 million from $80.2 million a year ago, with margin compressing to 22.7% from 26%. Gross margin dropped more than four points to 45.2%. To understand why, you have to understand the RYTHM transaction, because it’s reshaping how GTI’s income statement reads.

The RYTHM effect

Last year Green Thumb sold its brand intellectual property to RYTHM, Inc., the Nasdaq-listed vehicle formerly known as Agrify, and now pays $15.75 million per quarter in licensing fees to use its own brands. That fee lands in cost of goods sold, which is why reported gross margin fell to 45.2% while margin excluding the fee was 50.1%, slightly above last year. It’s also why the company introduced “Normalized EBITDA,” which adds the fee back and comes in at $89.4 million, a 27.6% margin, essentially flat with the prior year’s 27.5%. Kovler’s “maintained our Normalized EBITDA margin” claim is accurate on that basis.

Investors have to decide whether to care. The licensing fee is real cash leaving GTI and going to a company GTI controls through convertible notes and warrants. Effective October 10, the ownership cap on those instruments was removed, and GTI will consolidate RYTHM starting in Q4. That means the fee becomes an intercompany transfer that eliminates on consolidation, RYTHM’s hemp-derived THC beverage business shows up in GTI’s numbers, and the fourth quarter will not be comparable to anything before it. The accounting is about to get cleaner. The underlying strategy, using a separate listed entity to pursue the hemp beverage channel while the parent stays in regulated cannabis, is the bet.

Where the growth came from

Six RISE dispensaries opened in the quarter: two in Florida, one in Nevada and three in Pennsylvania. Three more Florida stores opened after quarter-end, taking the state to 27 locations, and Florida accounts for five of nine openings since September 30. Green Thumb entered Florida late, and it is now building there faster than anywhere else, which is a direct read on the medical-only Schedule III economics: every Florida store is a 280E-exempt store.

CPG growth of 16% was driven by Minnesota, where adult-use launched in September 2025 and where GTI’s cultivation has been one of the few supply sources in a shortage-constrained market. Retail growth was cited in Florida, New Jersey, New York, Ohio and Virginia. Virginia adult-use is expected in July 2027. The company is “advancing toward entry” in Texas under a conditional license, and several of its medical dispensaries received DEA registrations in the first wave announced last week.

The cost of that growth shows in SG&A, which rose to 37.5% of revenue from 36.8% on compensation tied to new stores and retention plans. That’s the right place to spend if comps hold, and the 3% comp print suggests they’re holding.

Taxes and cash

Income tax expense fell to $28.1 million from $49.1 million a year ago, which the company attributes directly to the Schedule III order on state-licensed medical cannabis. That’s a $21 million swing in a single quarter for an operator whose footprint is majority adult-use. If the full rescheduling lands, that line compresses again. Operating cash flow was $58.3 million. Cash ended at $316 million against $277.3 million of total debt, including $177 million of senior notes, leaving GTI net cash positive with the strongest balance sheet in the sector.

It’s still buying its own stock. More than $80 million repurchased year-to-date, 29.5 million shares retired since 2023 at an average of $6.90, and $50 million remaining under the authorization through September 2027. Weighted share count is down to 218.6 million from 231.7 million a year ago. Kovler’s line on “prioritizing what delivers the best long-term return” is code for continuing to shrink the float while the stock trades at a discount to what he thinks it’s worth.

The gaps

The release doesn’t disclose capex or free cash flow, which matters for a company opening a store every two weeks. No guidance, as usual. The RYTHM consolidation will introduce a hemp beverage business with its own losses into GTI’s reported results, and the company hasn’t quantified what that does to Q4 margins. And the adjusted EBITDA decline is real even if normalized EBITDA is flat: GTI is paying $63 million a year to RYTHM, and shareholders who don’t own RYTHM directly are funding that.

The read

Green Thumb is executing the playbook it has run for five years: grow revenue, open stores in the right states, buy back stock, keep leverage low, and let the balance sheet do the talking when peers stumble. The Q3 numbers are messier than usual because of the RYTHM structure, and that noise will get louder before it gets quieter. But an 11% growth rate, positive comps, a 27.6% normalized margin, $316 million in cash and a Florida footprint doubling in a year is not a company with a problem. It’s a company that chose to complicate its income statement in exchange for a shot at the hemp beverage market without putting its cannabis licenses at risk. Whether that trade pays off is a 2027 question. The core business answered its own question this quarter.

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$NLCP ( ▲ 1.02% ) Reports Q3

While Innovative Industrial Properties spent its third quarter terminating 16 leases and pivoting into life-science mezzanine debt, NewLake Capital Partners did something almost quaint: it collected 99.7% of contractual rent year-to-date, paid off its last $7.6 million of debt, and reported a quarter CEO Anthony Coniglio described as “in line with our expectations.”

The numbers are modestly down. Revenue slipped 4.5% to $12.0 million, and AFFO fell to $0.49 per share from $0.52, reflecting lost rent from three properties that came back in 2025. Net income to common dropped to $4.2 million. The $0.43 quarterly dividend, annualized at $1.72, sits at an 88% AFFO payout, which is comfortable rather than tight, and it was paid October 15 without drama.

The tenant workouts are small and orderly. Cannabist agreed to terminate its Aurora, Illinois cultivation lease, forfeited a $100,000 deposit and is being replaced by the buyer of its cultivation operations; rent is current at Cannabist’s three other NewLake properties. PharmaCann’s Shamokin, Pennsylvania facility changed control to a Cresco Labs affiliate, and Cresco stepped in as guarantor on unchanged terms. That’s the ideal outcome for a landlord: a distressed tenant replaced by a stronger credit at the same rent.

The balance sheet is the story. Zero debt, $17.9 million in cash, and a $90 million revolver extended to May 2029 at the greater of prime or 6.25%. NewLake is deploying capital in small bites: a Kentucky dispensary for $0.6 million in August, Michigan and Kentucky stores for $1.3 million after quarter-end, all with improvement commitments and all leased to an existing tenant’s affiliate. The buyback authorization was extended to 2028 with $8.2 million remaining.

The gaps: no occupancy figure, no guidance, no uplisting update, and a portfolio of 37 properties that hasn’t grown meaningfully in two years. NewLake isn’t going to excite anyone. But in a quarter when its larger peer’s growth came from a non-cannabis loan book, a cannabis REIT with no leverage, full rent collection and a covered dividend is worth more than its headline numbers suggest.

$TRLV ( ▲ 0.52% ) Reports Q3

Trulieve reported third-quarter revenue of $230 million, down 20% from a year ago and 15% from Q2, and the stock didn’t flinch, because the decline is the structure working. This is the first full quarter since the June 3 Harvest deconsolidation stripped Arizona, Connecticut, Maryland and Ohio out of the reported numbers, leaving a pure medical-only operator in Florida, Georgia, Pennsylvania and West Virginia. What’s left is smaller, cleaner and considerably more profitable.

Gross margin hit 64%, up from 59% a year ago and 60% last quarter, the highest in the company’s history. Adjusted EBITDA was $89 million at a 39% margin, compared to 36% before the split. Operating expenses dropped 17%. The company swung to net income of about $1 million from a $27 million loss, with adjusted net income of $18 million and adjusted EPS of $0.09.

The cash flow is where the thesis lands. Operating cash flow was $74 million in the quarter and $183 million year-to-date, with free cash flow of $45 million and $120 million respectively. The driver is sitting in the tax line: the income tax provision fell to $26.3 million from $53.0 million, and the nine-month figure is $70.1 million against $160.2 million last year. That’s $90 million of 280E relief in nine months for a company that spent years paying the highest effective tax rate in the sector. Trulieve used it to repay the $65 million Jefferson County mortgage early, and still ended the quarter with $327 million in cash, up from $255.5 million at year-end.

Kim Rivers tied the quarter to the regulatory arc: Schedule III rescheduling of state-licensed medical cannabis “unlocked major milestones including DEA registration,” the removal of 280E and the NYSE uplisting, and the company is “in the early stages of an accelerated growth cycle.” Georgia traffic rose sevenfold after the July 1 expansion, Marco Island and Dunwoody opened, and the Alien Labs and Connected license extends to Texas.

The gaps are the Harvest carrying value, $146.1 million, generating equity-method losses, and the fact that a 20% revenue decline still has to be explained to generalist NYSE investors. But a 39% EBITDA margin with net cash and $240 million of annualized free cash flow isn’t a cannabis story. It’s a consumer staples story with a license moat.

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