In the latest cannabis market analysis from Beacon Securities, three major multi-state operators (MSOs) Village Farms, Green Thumb Industries, and Jushi Holdings—demonstrate distinct strategies for navigating the challenging landscape.
Here's a look at how each company is betting on different recipes for growth.
Village Farms Leverages European Expansion To Offset Domestic Challenges
Village Farms International (NASDAQ:VFF) reported a strong Q3 performance, with Canadian cannabis sales up 20% year-over-year to $ 27 million, despite a broader market decline of 1%. The company's strategic expansion into the Netherlands could be a game-changer. VFF is one of only 10 license holders in the country's recreational cannabis pilot program.
According to Beacon's analyst, VFF's newly completed 2,000 kg facility is expected to generate USD 12.7 million in annual revenue, with a selling price of approximately $6.40 per gram. With no excise taxes applied, the EBITDA margin is projected at over 30%, adding $4.5 million in cash flow annually. If successful, this European foothold could contribute significantly to VFF's goal of an annualized EBITDA of $29 million by the end of FY25.
Green Thumb Industries' Cash Reserves Enable Strategic Buybacks And M&A Flexibility
Green Thumb Industries (OTC:GTBIF) showcased its financial strength in Q3, reporting $287 million in revenue, surpassing both its internal forecast of $280 million and the consensus estimate of $283 million. Operating cash flow reached $48 million, beating the projected $39 million.
The company ended the quarter with $176 million in cash after repaying $225 million in debt. GTII's $150 million credit facility, secured at SOFR + 5%, positions it well for potential acquisitions without diluting shareholder value. The elimination of 280E tax burdens through federal rescheduling could boost GTII's free cash flow by 30%, further enhancing its financial flexibility as it targets high-margin branded products and strategic expansion.
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Jushi Holdings Bets Big On Ohio's Emerging Adult-Use Market
Jushi Holdings (OTC:JUSH) faced a challenging quarter, with revenue declining 6% year-over-year to $62 million, missing the $67 million forecast. Adjusted EBITDA dropped to $10 million, a 30% shortfall. However, the company is doubling down on Ohio's newly legalized adult-use market, where revenue surged 77% year-over-year. Jushi plans to open up to eight dispensaries in Ohio, including four pending acquisitions.
The expansion aims to counter headwinds from increased competition in core markets like Illinois and Pennsylvania. Jushi's streamlined management approach, including the appointment of a new Chief Revenue Officer, is expected to drive annual savings of $2.2 million while the company works through operational challenges.
