💸 The Tape

Green Thumb Industries didn't just deliver a good quarter — it delivered the kind of quarter that makes you wonder why this company's stock isn't trading at a significantly higher multiple.

The leading U.S. cannabis operator and owner of RISE Dispensaries reported Q1 2026 revenue of $300.2 million, up 7.4% year-over-year, with normalized EBITDA of $93.5 million at a 31.2% margin, GAAP net income of $15.4 million, and operating cash flow of $76 million. The company ended the quarter with $344.5 million in cash — a war chest that's being deployed aggressively into share repurchases while the market continues to undervalue the business.

CEO Ben Kovler put it simply: "Our conviction in Green Thumb remains as strong as ever." The numbers make that conviction easy to justify.

Revenue Growth With Multiple Drivers

The 7.4% top-line growth was driven by a combination of new market launches and continued expansion in existing states. The most significant contributor was Minnesota, where Green Thumb launched adult-use sales on September 17, 2025, adding a meaningful new revenue stream that didn't exist in the prior year comparable. Connecticut and Florida also delivered continued growth, helping offset headwinds from price compression and increased competition that are impacting virtually every operator in the industry.

Retail revenue increased 4.7% year-over-year, though same-store comparable sales (stores open at least 12 months) dipped 0.5% on a base of 100 stores — a modest decline that reflects the pricing pressures endemic to maturing cannabis markets rather than any deterioration in consumer demand.

On the Consumer Packaged Goods side, gross revenue declined 1.6% versus the prior year, primarily due to the same price compression dynamics, partially offset by Minnesota adult-use contributions. The branded wholesale business remains a strategic asset, but it's navigating the same competitive environment squeezing margins across the sector.

Margins: Strong but Evolving

Gross profit was $143.6 million, or 47.9% of revenue — down from 51.3% in Q1 2025. The margin compression was driven primarily by brand license fees incurred in the current period (a new cost structure related to the RYTHM, Inc. separation) and ongoing price compression in wholesale markets. A nearly 340 basis point gross margin decline is notable, but the absolute dollar figure remained virtually unchanged year-over-year at $143.6 million versus $143.3 million — meaning Green Thumb is generating the same gross profit on higher revenue.

SG&A expenses were $102.9 million, or 34.3% of revenue — an improvement from 36.1% in the prior year period despite a modest increase in absolute dollars driven by higher compensation costs. The company is demonstrating operating leverage as revenue scales.

Normalized EBITDA of $93.5 million at a 31.2% margin was up from $85.2 million and 30.5% in Q1 2025 — a meaningful improvement that reflects disciplined cost management even as new expenses like licensing fees enter the picture. A cannabis company generating nearly $100 million in quarterly EBITDA with margins above 31% is operating at a level that few peers can match.

Net income of $15.4 million, or $0.07 per share, was up from $8.3 million in Q1 2025, though the increase was partially driven by a one-time $17 million arbitration settlement and $6.5 million in income from a related party equity method investment. Excluding those items, the underlying profitability was steady — which, in an industry where most companies are still posting losses, remains a distinguishing characteristic.

Cash Flow and Capital Allocation

The cash flow story is where Green Thumb truly separates itself. Operating cash flow of $76 million in a single quarter is remarkable — and it's being redeployed with conviction.

During Q1, the company repurchased approximately 6 million shares for $33.3 million at an average price of $5.51 per share. Subsequent to quarter end, another 7.4 million shares were repurchased, bringing 2026 year-to-date buybacks to approximately 13.4 million shares for roughly $77.7 million.

Since initiating its share repurchase programs in September 2023, Green Thumb has now repurchased approximately 29 million shares for roughly $200 million. That's not a token gesture — it's a systematic, multi-year capital return program funded entirely by operating cash flow, executed by a management team that clearly believes the market is mispricing their business.

The balance sheet reinforces the confidence. Cash of $344.5 million against total debt of $289.9 million (including $188.8 million in senior debt) gives Green Thumb a net cash position — an extraordinary rarity in U.S. cannabis. The company also increased its syndicated credit facility by $50 million during the quarter, adding further financial flexibility.

Strategic Developments

Beyond the financial results, Green Thumb advanced several strategic initiatives that extend its competitive positioning.

The company was conditionally awarded a Texas Compassionate Use Program license for vertically integrated operations — opening the door to one of the largest potential cannabis markets in the country, even in its current medical-only form.

Green Thumb also submitted DEA registration applications for certain state-licensed medical cannabis operations following the Schedule III rescheduling — putting the company at the front of the queue for formal federal recognition and the 280E tax relief that comes with it.

President Anthony Georgiadis framed the rescheduling moment in operational terms: "The resulting Section 280E relief for the medical portion of our business creates meaningful flexibility to reinvest in our operations, our people, and the communities we serve." That's the practical translation of rescheduling — not just a policy milestone, but real dollars flowing back into the business.

The Bottom Line

Green Thumb's Q1 2026 is the financial profile of a company that has already won the operational battle and is now positioned to harvest the regulatory tailwind. $300 million in revenue. $94 million in normalized EBITDA. $76 million in operating cash flow. $345 million in cash. Net cash balance sheet. $200 million in cumulative buybacks.

And now, 280E relief on medical operations, a Texas license, and DEA registration applications filed.

Kovler said the team is "focused on disciplined execution and building for the future." Based on Q1, the future is already here — the market just hasn't fully priced it in yet.

📈 Dog Walkers

$LEEEF ( ▼ 8.94% ) Earnings Strong, and the Farm is Expanding

LEEF Brands just posted the strongest operating quarter in its history — and it did it in the toughest wholesale market in the country.

The California cannabis company reported Q1 2026 revenue of $9.4 million, flat year-over-year on the top line but dramatically improved underneath. Unit volumes surged 60% on core extraction lines, with the flat revenue reflecting persistent pricing pressure in California's distillate market — a headwind that would have crushed a less efficient operator. Instead, LEEF used its vertically integrated model to turn compression into a margin story.

And what a margin story it is. Gross margin more than doubled to 49%, up from 22% in Q1 2025, driven by increased use of in-house biomass from Salisbury Canyon Ranch and higher output from the company's hydrocarbon extraction line. Gross profit jumped to $4.6 million from $2.1 million. Adjusted EBITDA swung from negative $700,000 to positive $2.4 million. And operating cash flow flipped to positive $400,000 from negative $1.8 million — a figure that would have been approximately $1.6 million excluding seasonal DCC licensing fees paid during the quarter.

CFO Kevin Wilson put it in context: "Per-gram pricing in California continues to compress, yet we grew unit volumes by 60% and expanded gross margin to 49%. The cost structure we've built would produce significantly stronger economics in any other state."

That cost structure is about to scale further. LEEF has begun expanding Salisbury Canyon Ranch toward its full 180-acre permitted capacity, adding 14 DCC licenses this spring with the first 2026 harvest expected in June. The expansion is funded by an initial $4.5 million tranche from Mindset Capital, with the remainder of an $8 million round expected to close on May 8. Full farm buildout is targeted for year-end.

The company is also thinking beyond California. CEO Micah Anderson highlighted interstate and global export as significant opportunities, noting that LEEF has engaged Shane Pennington — a leading expert on DEA licensing — and has submitted applications for multiple DEA licenses to support future domestic and international capabilities.

Combined with the recently announced acquisition of Himalaya, which adds a premium branded concentrates platform to LEEF's wholesale backbone, the company is building something increasingly rare in California cannabis: a vertically integrated operator with low-cost inputs, expanding capacity, and a credible path to markets beyond state lines.

Target is Now Selling THC Drinks in TX, FL & IL, but...

Target is doing something that takes either remarkable confidence or remarkable nerve: aggressively expanding into hemp-derived THC beverages just months before the federal government is set to ban them.

The retail giant is rolling out cannabis beverage sales to more than 300 stores across Illinois, Florida, and Texas — including every location in Florida and Texas — building on a pilot program that launched at 10 Minnesota stores last year before expanding to all 72 Target locations in the state. The company is also increasing potency, now selling beverages with up to 10 mg of THC, double the 5 mg cap in its initial Minnesota rollout.

Brands featured in the expansion include Birdie, Cann, Señorita, Wyld, Wynk, and several others that have become staples of the emerging THC beverage category.

The timing is impossible to ignore. Congress passed and President Trump signed legislation that will recriminalize hemp-derived products containing more than 0.4 mg of THC per container — a ban set to take effect in November 2026. Bipartisan efforts to delay the ban have failed to gain traction with congressional leadership, and the House recently passed its Farm Bill without any provision to push back the deadline.

Target appears to be eyes-wide-open about the risk. According to BevNET, the company is reportedly planning to mark down its intoxicating hemp inventory in October if no regulatory solution emerges — essentially hedging its bet with a clearance strategy built into the plan.

The expansion into the second, third, and sixth most populous U.S. states signals that Target sees real consumer demand worth capturing, even on a potentially compressed timeline. And the data supports it — surveys show a majority of Americans view cannabis as healthier than alcohol, and four in five adults who drink THC beverages report reducing their alcohol intake.

The November clock is ticking. Target is running toward it, not away.

Source: MM

🗞️ The News

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Highlights:

• Overview: Dales Report examined if anti-cannabis group SAM is hurting its federal credibility with aggressive tactics in Massachusetts.

• Core Topic: Guest Ryan Dominguez discussed SAM’s $1.55M push to repeal adult-use cannabis sales via 2026 ballot initiative.

• Misleading Tactics: Paid signature gatherers allegedly lied to voters, claiming the petition was about fentanyl, housing, and schools instead of banning recreational cannabis.

• Federal Risks: State-level misleading efforts and dark money could damage SAM’s ongoing federal fights against cannabis rescheduling.