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📈 Higher We March - Maybe? 📈

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William McNarland & Anthony Varrell
May 09, 2024

GM Everyone,

Earnings have been quite an exciting ride so far this week, with several of the Tier 1 majors reporting and impressing with their results. GTI dropped a bomb on everyone after markets closed yesterday, beating all estimates and producing GAAP net income once again, which probably means Ben was walking around the office like Thanos with an Infinity Gauntlet. Village Farms impressed us north of the border, showing a quarter of constant growth and consistently eating up market share in Canada. This brings us to today, where we will have a marathon livestream covering SNDL, Trulieve, The Cannabist, GTI, MariMed, and Curaleaf. Tune in, as it should be action-packed!

Today’s letter can be read in 7 minutes and 18 seconds.

What's Driving the Market Today?

Stock market futures are down by 25bps this morning; these are the top highlights:

  1. Chinese exports and imports rose in April, signaling a possible economic recovery and boosting global markets.

  2. U.S. Commerce Secretary warns of severe impacts from a potential Chinese invasion of Taiwan on U.S. chip supply.

  3. Intel shares fell after the U.S. restricted some exports to China, affecting its sales projections.

  4. Bank of England's upcoming policy decision is watched closely, with potential rate cuts aligning with ECB decisions.

  5. BBVA's takeover bid for Spanish bank Sabadell boosts its shares despite board rejection.

Green Thumb Q1 2024: Growth and Financial Highlights

Facts that matter:

  1. Green Thumb’s revenue growth hits $276 million, a 11% increase.

  2. Gross profit margin for Green Thumb improves to 52.5%.

  3. Company invests in growth via aggressive share repurchase.

Quick Hit: “I am pleased that our team delivered an outstanding quarter with revenue over $275 million, Adjusted EBITDA over $90 million, and cash flow from operations over $80 million,” said Ben Kovler, Founder, Chairman, and CEO of Green Thumb. He highlighted the strategic execution that has positioned the company for sustained growth: “We have the pieces in place to execute our strategy to create award-winning brands and build customer loyalty.”.

MariMed Exceeds Forecasted Revenue Growth and Records 17th Consecutive Quarter of Positive Adjusted EBITDA

Facts that matter:

  1. MariMed reports a 10.2% year-over-year revenue increase in Q1, surpassing expectations.

  2. MariMed has achieved positive quarterly Adjusted EBITDA for 17 consecutive quarters.

  3. The company is well on its way to meet a full-year revenue projection of $157.52 million in 2024.

Quick Hit:“With the first quarter now in the books, I’m pleased to say we are on track with our strategic plan and financial targets,” said Jon Levine, Chief Executive Officer. “The tremendous growth in our wholesale business was undoubtedly the quarter’s highlight. I am proud that once again, MariMed outperformed our competition in every market in which we operate, including Illinois. The strong revenue growth led to our 17th consecutive quarter of positive adjusted EBITDA.”

Coverage Initiated: New Lake Capital Partners

NewLake Capital stands out in the small-cap stock market for its strong financials and its unique position in the cannabis sector. The company’s business model operates on a simple yet efficient premise where it serves as a landlord to cannabis operations, offering real estate solutions that are both strategic and lucrative.They take in the money from the cannabis companies and manage it. The company takes a narrow, thin charge for doing that.

Verano Holdings’ Q1 Results: Revenue and Profitability Insights

Facts that matter:

  1. Verano reports a 3% year-over-year revenue decline in Q1.

  2. Verano’s gross profit margin improves to 51% in Q1.

  3. Verano aims for sustainable growth with reduced net losses.

Quick Hit: Verano Holdings recorded revenues of $221 million for the first quarter, marking a 3% decrease from $227 million year-over-year and a 7% drop from $237 million in the preceding quarter. This decline primarily stems from intensified competition in New Jersey’s retail sector, somewhat offset by stronger wholesale operations performance.

Village Farms Reports Revenue Growth in Q1 2024

Facts that matter:

  1. Village Farms reports a 21% revenue increase to $78.07 million in Q1.

  2. Canadian cannabis sales surge by 49% at Village Farms.

  3. New RNG project boosts Village Farms’ sustainability efforts.

Quick Hit: Village Farms International, Inc. (VFF)  reported yesterday its financial results for the first quarter of 2024, ending March 31. The company revealed significant growth in revenue and improvements in profitability. Village Farms International recorded a net loss per share of $0.03, which did not meet the expected $0.01 loss but exceeded revenue forecasts with a total of $78.07 million. This figure surpassed expectations by $7.51 million and marked a 21% year-over-year increase from $64.7 million. Additionally, adjusted EBITDA rose substantially to $3.6 million from the previous year’s $0.5 million.