美国
证券交易委员会
华盛顿特区20549
表格
截至2024年6月30日季度结束
或
委员会文件编号
(依凭章程所载的完整登记名称)
(依据所在地或其他管辖区) 的注册地或组织地点) |
(I.R.S. 雇主识别号码) 识别号码) |
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(总部办公地址) |
388-0349 |
注册人的电话号码,包括区域代码 - (
根据《证券法》第12(g)条规定注册的证券:
(每一课的标题)
请勾选以下项目,以判定在过去12个月(或更短期间,该注册人被要求提交报告)内所有根据1934年证券交易法第13条或第15(d)条要求提供报告的报告是否已经提交,并且该注册人在过去90天中是否受到提交报告的要求。
在前12个月内(或公司需要提交这些文件的较短时间内),公司是否已通过选中标记表明已阅读并提交了应根据S-t法规第405条规定(本章第232.405条)提交的所有互动式数据文件?
请勾选该申报者是否为大型快速申报者、快速申报者、非快速申报者、小型报告公司或新兴成长公司。请参阅交易所法案第1202条中“大型快速申报者”、“快速申报者”、“小型报告公司”和“新兴成长公司”的定义。
☒ |
加速归档人 |
☐ |
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非加速归档人 |
☐ |
小型报告公司 |
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新兴成长型企业 |
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如果是新兴成长公司,请用勾选表示该注册人已选择不使用根据《交易所法》第13(a)条提供的任何新的或修订的财务会计标准的扩展过渡期来遵守。 ☐
请勾选表示登记人是否为空壳公司(按照法案第120亿2条的定义)。是 ☐ 否
截至2024年11月1日有
绿拇指工业股份有限公司。
第10-Q表格季报告
截至2024年9月30日的季度结束
目 录
财务 资讯 |
页面 |
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第一部分 |
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截至2024年9月30日和2023年12月31日的未经审核的中期总账基本报表 |
4 |
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截至2024年9月30日和2023年的三个和九个月的未经审核的中期摘要综合损益表 |
5 |
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截至2024年9月30日和2023年的三个和九个月的未经审核的中期损益表 |
6 |
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截至2024年9月30日和2023年基本报表未经审计的中期简明综合现金流量表 |
8 |
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未经审核中期纵向合并基本报表附注 |
10 |
管理层对财务状况和业绩的讨论与分析 |
29 |
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市场风险的定量和定性披露 |
37 |
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内部控制及程序 |
37 |
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其他 资讯 |
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法律诉讼 |
38 |
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风险因素 |
38 |
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股票权益的未注册销售和资金用途 |
38 |
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优先证券违约 |
38 |
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矿业安全披露 |
39 |
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其他信息 |
39 |
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展品 |
40 |
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41 |
姓名的使用
在本十大卷报告书中,除非情况另有要求,“我们”、“我们的”、“我们公司”、“企业”或“Green Thumb”指的是 Green Thumb Industries Inc. 及其全资子公司。
货币
本文件中提及的“$”或“US$”均指美元,“C$”指加拿大元。
关于前瞻性声明的披露
本季度10-Q表格中包含我们认为是或可能被视为“前瞻性陈述”的陈述。 本文件中包含的除了历史事实陈述之外的所有陈述,涉及我们行业前景或我们的前景、计划、财务状况或业务策略,均可能构成前瞻性陈述。此外,前瞻性陈述通常可通过使用前瞻性字词,如“可能”、“将”、“期望”、“打算”、“估计”、“预见”、“项目”、“预计”、“相信”、“计划”、“预测”、“继续” 或“可能”或这些词的否定形式或这些词或与它们具有类似含义的词或表达方式的变体来识别。 此外,前瞻性陈述可能包含在我们向证券交易委员会(“SEC”)提交的各种申请中,以及由我们授权的一位主管人员之一进行的新闻稿或口头陈述中。尽管我们认为这些前瞻性陈述所反映的期望是合理的,但我们无法保证这些期望将被证明正确。 这些前瞻性陈述受到某些已知和未知风险和不确定性的影响,以及可能导致实际结果与这些前瞻性陈述所反映的结果有实质差异的假设。这些已知和未知风险包括但不限于:大麻在美国联邦法律下仍属非法,并且执法有可能发生变化;各州对大麻的管制不确定;公司可能无法获得或保留必要的许可和授权;公司可能受到加拿大监管机构的高度关注;公司可能面临大麻许可的所有权限制;公司可能会受到美国食品和药品管理局或美国酒精、烟草、枪支和爆裂品管理局的管制;作为大麻企业,公司受适用反洗钱法律和法规的约束,并受限于银行和其他金融服务的使用;公司可能面临获得额外融资的困难;公司无法获得美国破产法的保护;公司运营于受到高度管制的行业中,可能无法始终成功地遵守公司进行业务的所有司法管辖区的申请性法规要求;公司面临激烈的竞争;公司面临来自非法市场以及符合农业法案的实际或号称符合农业法案的大麻产品的竞争;公司依赖其品牌组合的受欢迎程度和消费者接受程度;公司的商标保护有限;大麻企业受到不利税收待遇,可能会承担重大税务负担;公司受犯罪所得法令约束;公司面临欺诈或非法活动的风险;公司面临因行业尚不成熟或比较有限、竞争激烈或尚未建立行业最佳实践而产生的风险;公司面临与其产品相关的风险;公司的业务受到农业运作固有风险的影响;公司可能受到能源成本上升或波动和供应不足的影响;公司面临与其资讯技术系统以及潜在的网络攻击和安全漏洞相关的风险;公司依赖第三方软件提供商提供许多其操作所依赖的能力,一个或多个系统的中断可能会对业务产生不利影响;公司依赖公司管理团队和其他在大麻行业有经验的员工的专业知识,关键人员流失可能会对公司的业务、财务状况和营运结果产生负面影响;公司面临产品责任或类似索赔的固有风险;公司的产品可能受到召回;公司可能面临不利的宣传或消费者观感;并且公司的表决权受集中控制;公司的资本结构和表决权可能导致不可预测性;在公开市场上,我们的普通股股东出售大量次级表决股可能对我们次级表决股的市场价格产生不利影响,并可能影响公司的业务和财务状况以及营运结果。 这些以及其他风险在该公司截至2023年12月31日止的年度10-k报告的“风险因素”部分中进一步描述,以及该公司在美国证券交易委员会提交的及SEC的网站上或网址中可获得的文件中描述。 https://investors.gtigrows.com读者应该谨慎对待本文件中包含的任何前瞻性声明,这些声明仅反映管理层截至本日期的意见。除非法律要求,我们将不会有义务修订或公开发布任何前瞻性声明的结果。建议您查阅我们在向美国证券交易委员会提交的报告中作出的任何额外披露。我们或代表我们行事的任何人作出的所有后续书面和口头前瞻性声明均受到本文件中包含的警语性声明的完全限制。
3
绿拇指产业公司。
未经审计的中期简明综合资产负债表
截至2024年9月30日和2023年12月31日
(金额以美元表示)
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九月三十日, |
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12月31日, |
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2024 |
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2023 |
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(已经接受审计) |
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(以千为单位) |
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资产 |
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流动资产: |
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现金及现金等价物 |
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应收帐款净额 |
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应收所得税 |
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存货净额 |
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预付费用 |
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其他流动资产 |
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所有流动资产总额 |
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资产和设备,净值 |
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使用权资产,净额 |
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投资 |
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对联属公司的投资 |
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应收票据 |
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无形资产,扣除累计摊销和减值,净额 |
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商誉 |
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逆延迟所得税资产 |
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存款和其他资产 |
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总资产 |
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$ |
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负债和股东权益 |
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负债 |
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当前负债: |
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应付帐款 |
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$ |
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应计负债 |
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应付酬劳 |
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应付票据的当期部分 |
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租赁负债的当期部分 |
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应付所得税 |
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全部流动负债 |
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长期负债: |
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租赁负债净额,不含当期部分 |
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应付票据,减除当期部分及债务折扣 |
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应付条件性对价款 |
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递延所得税 |
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负债合计 |
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股东权益 |
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普通股股份 (2024年9月30日授权、发行及流通股份: |
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多重投票股(截至2024年9月30日授权、发行及流通股份: |
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超级投票股(截至2024年9月30日授权、发行及流通股份: |
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股本 |
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盈余(赤字)盈余 |
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推迟的股份发行 |
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累积盈余(赤字) |
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绿拇指产业公司的权益 |
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非控制权益 |
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股东权益总计 |
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负债及股东权益总额 |
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附注是这些未经审核的中期简明综合基本报表的组成部分
4
绿拇指产业公司。
未经审计的基本营业费用简明综合报表
2024年和2023年截至9月30日的三个和九个月
(金额以美元表示,股份数量除外)
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截至9月30日的三个月 |
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截至9月30日的九个月 |
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2023 |
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收入,折扣后净额 |
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营业成本 |
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毛利润 |
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费用: |
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销售、一般及行政费用 |
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总费用 |
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营业收入 |
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其他收入(费用): |
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其他(费用)收益,净额 |
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利息收入净额 |
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利息支出,净 |
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其他费用总额 |
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税前收入及非控制权益之前的净利润 |
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所得税负债 |
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非控制权益之前的净利润 |
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归属于非控制权益的净利润 |
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属于Green Thumb Industries Inc.的净利润 |
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基本每股收益 |
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稀释每股收益 |
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基本每股未股份的加权平均数量 |
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稀释后加权平均股本 |
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附注是这些未经审计的中期简明综合基本报表的不可或缺的一部分。
5
未经审核的中期简明综合股东权益变动表
2024年和2023年截至9月30日的三个和九个月
(金额以美元表示)
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A类普通股(即「股份」) |
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贡献 |
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递延股份 |
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累计 |
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非控制 |
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总计 |
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2023年7月1日结存 |
$ |
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条件性对价款之分配 |
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期权、RSU行使 |
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股份报酬 |
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支付给非控股权持有人的分配 |
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回购优先投票股份 |
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净利润 |
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2023年9月30日的余额 |
$ |
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$ |
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$ |
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$ |
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2023年1月1日的结余 |
$ |
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$ |
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$ |
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发行递延股份 |
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分配条件考量 |
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与后收购成本相关的递延股份补偿 |
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期权和限制性股票单位(RSUs)的行使 |
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股份报酬 |
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分配给非控制股权持有人 |
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回购普通投票股份 |
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净利润 |
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— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
2023年9月30日的余额 |
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
( |
) |
$ |
|
|
$ |
|
|
附注是这些未经审计的中期简明综合基本报表的一部分
6
绿拇指产业公司。
未经审核的中期简明综合股东权益变动表
2024年和2023年截至9月30日的三个和九个月
(金额以美元表示)
|
|
A类普通股(即「股份」) |
|
贡献 |
|
推迟股份 |
|
累计 |
|
非控制 |
|
总计 |
|
|
(以千为单位) |
||||||||||
2024年7月1日结余 |
$ |
$ |
( |
$ |
$ |
$ |
$ |
|||||
期权和RSU的执行 |
|
|
( |
|
— |
|
— |
|
— |
|
||
透过净股份结算行使期权 |
|
( |
|
— |
|
— |
|
— |
|
— |
|
( |
股份报酬 |
|
— |
|
|
— |
|
— |
|
— |
|
||
提供给非控制权益持有人的分配 |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
净利润 |
|
— |
|
— |
|
— |
|
|
|
|||
2024年9月30日结余 |
$ |
$ |
( |
$ |
$ |
$ |
( |
$ |
||||
2024年1月1日的余额 |
$ |
$ |
$ |
$ |
( |
$ |
$ |
|||||
条件性考虑的分配 |
|
|
— |
|
— |
|
— |
|
— |
|
||
期权和RSU的行使 |
|
|
( |
|
— |
|
— |
|
— |
|
||
透过净股份结算行使期权 |
|
|
( |
|
— |
|
— |
|
— |
|
( |
|
股份报酬 |
|
— |
|
|
— |
|
— |
|
— |
|
||
对非控制股权持有人的派息 |
|
— |
|
— |
|
— |
|
— |
|
( |
|
( |
赎回优先投票股 |
|
— |
|
( |
|
— |
|
— |
|
— |
|
( |
净利润 |
|
— |
|
— |
|
— |
|
|
|
|||
2024年9月30日结余 |
$ |
$ |
( |
$ |
$ |
$ |
( |
$ |
附注是这些未经审核的中期简明合并基本报表的一部分
7
绿拇指产业公司。
未经查核的中期简明合并现金流量表
2024年和2023年截至9月30日的九个月
(金额以美元表示)
|
|
截至9月30日的九个月 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(以千为单位) |
|
|||||
经营活动的现金流量 |
|
|
|
|
|
|
||
归属于Green Thumb Industries Inc.的净利润。 |
|
$ |
|
|
$ |
|
||
归属于非控股权益的净利润 |
|
|
|
|
|
|
||
调整净利润以达经营活动所提供之净现金流量: |
|
|
|
|
|
|
||
折旧与摊提 |
|
|
|
|
|
|
||
营运租赁使用资产摊销 |
|
|
|
|
|
|
||
处分固定资产损失 |
|
|
|
|
|
|
||
长期资产和设备减值 |
|
|
|
|
|
|
||
股权法投资亏损 |
|
|
|
|
|
|
||
租约修改亏损 |
|
|
|
|
|
|
||
股份报酬 |
|
|
|
|
|
|
||
投资公允价值增加减少 |
|
|
( |
) |
|
|
|
|
协议条件结算获利 |
|
|
( |
) |
|
|
|
|
应收待列公允价值增加。 |
|
|
|
|
|
|
||
warrants公平值下降 |
|
|
( |
) |
|
|
( |
) |
与发帖后收购成本相关的首次供与股份获得收益 |
|
|
|
|
|
( |
) |
|
债务折价摊销 |
|
|
|
|
|
|
||
营运资产和负债的变化: |
|
|
|
|
|
|
||
应收帐款净额 |
|
|
( |
) |
|
|
( |
) |
存货净值 |
|
|
( |
) |
|
|
( |
) |
预付费用及其他流动资产 |
|
|
|
|
|
( |
) |
|
存款及其他资产 |
|
|
|
|
|
|
||
应付账款 |
|
|
( |
) |
|
|
|
|
应付负债 |
|
|
|
|
|
|
||
营业租赁负债 |
|
|
( |
) |
|
|
( |
) |
应收及应付所得税,净额 |
|
|
|
|
|
|
||
经营活动提供的净现金 |
|
|
|
|
|
|
||
投资活动产生的现金流量 |
|
|
|
|
|
|
||
购买不动产和设备 |
|
|
( |
) |
|
|
( |
) |
处置不动产和设备的收益 |
|
|
|
|
|
|
||
证券及联合企业投资 |
|
|
( |
) |
|
|
( |
) |
权益投资及应收票据的收益 |
|
|
|
|
|
|
||
投资活动中的净现金支出 |
|
|
( |
) |
|
|
( |
) |
融资活动中的现金流量 |
|
|
|
|
|
|
||
非控股股东分派 |
|
|
( |
) |
|
|
( |
) |
回购次级表决股份 |
|
|
( |
) |
|
|
( |
) |
与净股份解决权益奖励相关的税款支付 |
|
|
( |
) |
|
|
|
|
期权和RSUs行使收益 |
|
|
|
|
|
|
||
发行应付票据所得款项 |
|
|
|
|
|
|
||
应付票据本金还款 |
|
|
( |
) |
|
|
( |
) |
融资活动中使用的净现金 |
|
|
( |
) |
|
|
( |
) |
现金及现金等价物: |
|
|
|
|
|
|
||
现金及现金等价物的净增加(减少) |
|
|
|
|
|
( |
) |
|
期初现金及现金等价物 |
|
|
|
|
|
|
||
期末现金及现金等价物 |
|
$ |
|
|
$ |
|
附注是这些未经审计的中期简明综合财务报表的重要组成部分
8
绿拇指产业公司。
未经查核的中期简明合并现金流量表
2024年和2023年截至9月30日的九个月
(金额以美元表示)
|
|
截至9月30日的九个月 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(以千为单位) |
|
|||||
现金流资讯的补充性披露 |
|
|
|
|
|
|
||
支付利息 |
|
$ |
|
|
$ |
|
||
非现金投资和筹资活动 |
|
|
|
|
|
|
||
应计的资本支出 |
|
$ |
|
|
$ |
( |
) |
|
非现金增加使用权资产 |
|
$ |
( |
) |
|
$ |
( |
) |
非现金增加租赁负债 |
|
$ |
|
|
$ |
|
||
与待定条件有关的股份发行 |
|
$ |
|
|
$ |
|
||
延迟的股份分配 |
|
$ |
|
|
$ |
( |
) |
附注是这些未经审计的中期简明综合基本报表的不可或缺的一部分。
9
绿拇指产业公司。
未经审核中期纵向合并基本报表附注
(金额以美元表示,除非另有说明)
1.简报概述及基础
(a) 业务描述
Green Thumb Industries Inc.(「Green Thumb」,「公司」,「我们」或「我们」)是一家国家大麻消费包装产品公司和零售商,通过大麻的力量促进福祉,同时致力于社区和可持续、有利可持续的增长。Green Thumb 拥有、制造和分发一系列大麻消费包装产品品牌组合,包括 &Shine、Beboe、Dogwalkers、所罗门博士、Good Green、超人超人和 RythM,到美国各地的第三方零售商店以及 Green Thumb 拥有的零售地点。该公司还拥有和经营零售大麻商店,其中包括一家名为 RISE Dispensaries 的全国连锁链,该连锁店销售我们的产品和第三方产品。截至 2024 年 9 月 30 日,Green Thumb 在十四个市场(加州、康涅狄格州、佛罗里达州、伊利诺伊州、马里兰州、马萨诸塞州、明尼苏达州、内华达州、纽约、俄亥俄州、宾夕法尼亚州、罗德岛州和弗吉尼亚州)拥有收入,雇用约 4,800 名员工,每年为数百万患者和客户提供服务。
公司注册办事处位于豪威街 250 号 20 号第 楼层, 温哥华, 不列颠哥伦比亚省, V6C 3R8.公司的美国总部位于伊利诺州芝加哥华街 325 号休伦街 325 号套房 60654。
(b)
随附的未经审核中期简明合并财务报表包括 Green Thumb 的帐目,并按照美国普遍接受的会计原则(「GAAP」)编制中期财务资讯,并按照美国证券交易委员会(「SEC」)的规则和法规编制。因此,它们不包括 GAAP 所需的所有信息和注脚,因此,通常在年度财务报表中包含的某些信息、注脚和披露,并根据 GAAP 拟备的某些信息、注释和披露已根据 SEC 规则和规例进行简明或省略。本文所载的财务数据应与截至二零二三年十二月三十一日止年度之公司表格 10-k 年报内所载之经审核合并财务报表及附带附注一并阅读 (「2023 年」) 表格 10-K」)。根据管理层认为,所提交的财务数据包括所有必要的调整,以公平地呈现所列中期的财务状况、营运结果和现金流量。某些先前报告的金额已在明细行项目之间重新分类,以符合当前期间表示。中期的结果不应被视为全年业绩的指示性。这些未经审核中期简明合并财务报表包括管理层的估计和假设,这些预估和假设会影响未经审核简明合并财务报表中报告的金额。实际结果可能与这些估计不同。
(c)
本公司于 2023 年内之综合财务报表附注 2 所述的重要会计政策并未有任何变更 表格 10 公里
(d)
每股基本盈利采用库务股票方法计算,通过将股东应占净盈利除以每个展示期间发行普通股的加权平均数目。随机发行股份(包括托管中持有的股份)不被视为未发行的普通股,因此不包括在每股盈利计算中。每股稀释盈利是以库务股方法计算,通过调整流行普通股的加权平均数目,以假设所有稀释潜在普通股的转换。本公司有三类可能稀释普通股等价股:限制股票单位、股票期权及认股权证。截至二零二四年九月三十日,该公司有
10
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
1. Overview and Basis of Presentation (Continued)
(d)
In order to determine diluted earnings per share, it is assumed that any proceeds from the vesting of dilutive unvested restricted stock units, or exercise of unvested stock options and warrants would be used to repurchase common shares at the average market price during the period. Under the treasury stock method, the diluted earnings per share calculation excludes any potential conversion of stock options and convertible debt that would increase earnings per share or decrease loss per share. For the three months ended September 30, 2024, the computation of diluted earnings per share included
(e)
The Company reviews recently issued accounting standards on a quarterly basis and has determined there are no other standards yet to be adopted which are relevant to the business for disclosure.
11
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
2. INVENTORIES
The Company’s inventories include the following at September 30, 2024 and December 31, 2023:
|
|
September 30, 2024 |
|
December 31, 2023 |
|
|
(in thousands) |
||
Raw Material |
$ |
$ |
||
Packaging and Miscellaneous |
|
|
||
Work in Process |
|
|
||
Finished Goods |
|
|
||
Reserve for Obsolete Inventory |
|
( |
|
( |
Total Inventories, Net |
$ |
$ |
3. PROPERTY AND EQUIPMENT
At September 30, 2024 and December 31, 2023, property and equipment consisted of the following:
|
|
September 30, 2024 |
|
December 31, 2023 |
|
|
(in thousands) |
||
Buildings and Improvements |
$ |
$ |
||
Equipment, Computers and Furniture |
|
|
||
Leasehold Improvements |
|
|
||
Land |
|
|
||
Land Improvements |
|
|
||
Assets Under Construction |
|
|
||
Capitalized Interest |
|
|
||
Total Property and Equipment |
|
|
||
Less: Accumulated Depreciation |
|
( |
|
( |
Property and Equipment, net |
$ |
$ |
Assets under construction represent costs associated with construction projects on cultivation and production facilities and retail stores as well as costs associated with internal-use software not yet placed in service.
Depreciation expense for the three and nine months ended September 30, 2024 totaled $
12
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
4. INTANGIBLE ASSETS AND GOODWILL
(a) Intangible Assets
Intangible assets are recorded at cost less accumulated amortization and impairment losses. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Amortization of definite life intangibles is provided on a straight-line basis over their estimated useful lives. The estimated useful lives, residual values, and amortization methods are reviewed at each year end, and any changes in estimates are accounted for prospectively.
At September 30, 2024 and December 31, 2023, intangible assets consisted of the following:
|
|
September 30, 2024 |
|
December 31, 2023 |
||||||||
|
|
Gross Carrying Amount |
|
Accumulated Amortization |
|
Net Book Value |
|
Gross Carrying Amount |
|
Accumulated Amortization |
|
Net Book Value |
|
|
(in thousands) |
|
(in thousands) |
||||||||
Licenses and Permits |
$ |
$ |
$ |
$ |
$ |
$ |
||||||
Trademarks |
|
|
|
|
|
|
||||||
Customer Relationships |
|
|
|
|
|
|
||||||
Non-Competition Agreements |
|
|
|
|
|
|
||||||
Total Intangible Assets |
$ |
$ |
$ |
$ |
$ |
$ |
The Company recorded amortization expense for the three and nine months ended September 30, 2024 of $
The following table outlines the estimated annual amortization expense related to intangible assets as of September 30, 2024:
|
|
Estimated |
Year Ending December 31, |
|
(in thousands) |
Remainder of 2024 |
$ |
|
2025 |
|
|
2026 |
|
|
2027 |
|
|
2028 |
|
|
2029 and Thereafter |
|
|
|
$ |
As of September 30, 2024, the weighted average amortization period remaining for intangible assets was
(b) Goodwill
At September 30, 2024 and December 31, 2023 the balances of goodwill, by segment, consisted of the following:
|
|
September 30, 2024 |
|
December 31, 2023 |
|
|
(in thousands) |
||
Retail |
$ |
$ |
||
Consumer Packaged Goods |
|
|
||
Total |
$ |
$ |
Goodwill is recognized net of accumulated impairment losses of $
13
14Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
5. INVESTMENTS
As of September 30, 2024 and December 31, 2023, the Company held various equity interests in cannabis-related companies as well as investments in note(s) receivable instruments that had a combined fair value of $
The following table summarizes the changes in the Company’s investments during the nine months ended September 30, 2024 and year ended December 31, 2023:
|
|
September 30, 2024 |
|
December 31, 2023 |
|
|
(in thousands) |
||
Beginning |
$ |
$ |
||
Additions |
|
|
||
Proceeds |
|
( |
|
( |
Fair value adjustment |
|
|
( |
|
Transfers and other |
|
|
( |
|
Ending |
$ |
$ |
The following table summarizes the change in fair value associated with the Company's equity investments and notes receivable instruments recorded during the three and nine months ended September 30, 2024 and 2023.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
(in thousands) |
||||||||
Equity Investments |
$ |
( |
$ |
|
$ |
$ |
( |
||
Notes Receivable Instruments |
|
|
|
|
|
||||
Accrued Interest on Notes Receivable Instruments |
|
( |
|
|
|
|
|||
Net fair value gains (losses) |
$ |
( |
$ |
|
$ |
$ |
( |
(a) Equity Investments
The Company held equity investments in both publicly and privately traded entities throughout the three and nine months ended September 30, 2024 and 2023. Publicly traded entities generally have readily determinable fair values and are classified as Level 1 investments. Meanwhile, non-publicly traded entities generally do not have readily determinable fair values and are classified as Level 3 investments. The Company has classified all of its holdings as trading securities and recorded such amounts within investments on the Company's unaudited interim condensed consolidated balance sheets.
The following table summarizes the change in the Company's Level 1 equity investments during the three and nine months ended September 30, 2024 and 2023.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
(in thousands) |
||||||||
Beginning |
$ |
$ |
|
$ |
$ |
||||
Proceeds |
|
( |
|
|
|
( |
|
( |
|
Fair value adjustment |
|
( |
|
|
|
|
( |
||
Ending |
$ |
$ |
|
$ |
$ |
14
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
5. INVESTMENTS (Continued)
(a) Equity Investments (Continued)
The following table summarizes the change in the Company's Level 3 equity investments during the three and nine months ended September 30, 2024 and 2023.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
(in thousands) |
||||||||
Beginning |
$ |
$ |
|
$ |
$ |
||||
Additions |
|
|
|
|
|
||||
Transfers and other |
|
|
|
|
|
||||
Ending |
$ |
$ |
|
$ |
$ |
The following table summarizes unrealized (losses) gains recognized on the Company's equity investments held during the three and nine months ended September 30, 2024 and 2023.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
(in thousands) |
||||||||
Unrealized gain (loss) recognized on equity investments |
$ |
( |
$ |
|
$ |
$ |
( |
||
Realized gain (loss) recognized on equity investments |
|
( |
|
|
|
|
|||
Net unrealized gain (loss) on equity investments |
$ |
$ |
|
$ |
$ |
( |
See Note 13 - Fair Value Measurements for additional details.
(b) Notes Receivable Instruments
The Company held note(s) receivable instrument(s) in publicly and privately traded entities throughout the three and nine months ended September 30, 2024 and 2023. The combined fair value of these notes receivable instruments includes the initial investment cost and combined contractual accrued interest recorded within interest income on the unaudited interim condensed consolidated statements of operations.
All of the Company's notes receivable instruments are classified as trading securities and are included within investments on the Company's unaudited interim condensed consolidated balance sheets.
The following table summarizes the change in the Company's Level 1 note receivable instrument during the three and nine months ended September 30, 2024 and 2023.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
(in thousands) |
||||||||
Beginning |
$ |
$ |
|
$ |
$ |
||||
Additions |
|
|
|
|
|
||||
Fair value adjustment |
|
|
|
|
|
||||
Ending |
$ |
$ |
|
$ |
$ |
The Company's Level 1 note receivable instrument had a stated interest rate of
15
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
5. INVESTMENTS (Continued)
(b) Notes Receivable Instruments (Continued)
The following table summarizes the change in the Company's Level 3 notes receivable instruments during the three and nine months ended September 30, 2024 and 2023.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
(in thousands) |
||||||||
Beginning |
$ |
$ |
|
$ |
$ |
||||
Additions |
|
|
|
|
|
||||
Proceeds |
|
( |
|
|
|
( |
|
( |
|
Accrued Interest |
|
( |
|
|
|
|
|||
Transfers and other |
|
( |
|
|
|
( |
|
( |
|
Ending |
$ |
$ |
|
$ |
$ |
The Company's Level 3 notes receivable instruments had a stated interest rate of
On January 9, 2024, one of the Company's privately held notes receivable instruments matured and the Company collected the principal amount of $
See Note 13 - Fair Value Measurements for additional details.
16
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
6. LEASES
(a) Operating Leases
The Company has operating leases for its retail stores, processing and cultivation facilities and corporate office spaces. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.
All real estate leases are recorded on the balance sheet. Equipment and other non-real estate leases with an initial term of twelve months or less are not recorded on the balance sheet. Lease agreements for some locations provide for rent escalations and renewal options. Certain real estate leases require payment for fixed and variable non-lease components, such as taxes, insurance and maintenance. The Company accounts for each real estate lease and the related non-lease components together as a single component.
The Company determines if an arrangement is a lease at inception. The Company must consider whether the contract conveys the right to control the use of an identified asset. Certain arrangements require significant judgment to determine if an asset is specified in the contract and if the Company directs how and for what purpose the asset is used during the term of the contract. For three and nine months ended September 30, 2024, the Company recorded operating lease expense of $
Other information related to operating leases as of September 30, 2024 and December 31, 2023 were as follows:
|
|
September 30, 2024 |
|
December 31, 2023 |
Weighted average remaining lease term (years) |
|
|
||
Weighted average discount rate |
|
|
Maturities of lease liabilities for operating leases as of September 30, 2024 were as follows:
|
|
Maturities of Lease Liability |
||||
Year Ending December 31, |
|
Third-Party |
|
Related Party |
|
Total |
|
|
(in thousands) |
||||
Remainder of 2024 |
$ |
$ |
$ |
|||
2025 |
|
|
|
|||
2026 |
|
|
|
|||
2027 |
|
|
|
|||
2028 |
|
|
|
|||
2029 and Thereafter |
|
|
|
|||
Total Lease Payments |
|
|
|
|||
Less: Interest |
|
( |
|
( |
|
( |
Present Value of Lease Liability |
$ |
$ |
$ |
(b) Related Party Operating Leases
The Company has leasing arrangements that are related party transactions, including for certain facilities in Maryland, Massachusetts and Nevada. Wendy Berger, a former director of the Company, is a principal of WBS Equities, LLC, which is the Manager of Mosaic Real Estate, LLC, which owned the facilities leased by the Company. Additionally, Mosaic Real Estate, LLC is owned in part by Ms. Berger (through the Wendy Berger 1998 Revocable Trust), Benjamin Kovler, the Chairman and Chief Executive Officer of the Company (through KP Capital, LLC), and Anthony Georgiadis, the President and a director of the Company (through Three One Four Holdings, LLC). The terms of these leases range from
17
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
7. NOTES PAYABLE
|
|
September 30, 2024 |
|
December 31, 2023 |
|
|
(in thousands) |
||
Charitable contributions1 |
$ |
$ |
||
Private placement debt dated April 30, 20212 |
|
|
||
Syndicated credit facility dated September 11, 20243 |
|
|
||
Mortgage notes4 |
|
|
||
Total notes payable |
|
|
||
Less: current portion of notes payable |
|
( |
|
( |
Notes payable, net of current portion |
$ |
$ |
1
2
3
4
(a) Syndicated Credit Facility
On September 11, 2024, the Company entered into a $
(b) Warwick, New York Mortgage Note
On September 4, 2024, the Company closed on a $
18
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
8. WARRANTS
As part of the terms of the Company’s issuance of the April 30, 2021 Notes, as well as other financing arrangements, the Company issued warrants, which allow the holders to purchase the Company's Subordinate Voting Shares at an exercise price determined at the time of issuance.
The following table summarizes the number of warrants outstanding as of September 30, 2024 and December 31, 2023:
|
Liability Classified |
|
Equity Classified |
|||||||
|
Number of Shares |
|
Weighted Average Exercise Price (C$) |
|
Weighted Average Remaining Contractual Life |
|
Number of Shares |
|
Weighted Average Exercise Price (USD) |
Weighted Average |
Balance as of December 31, 2023 |
C$ |
|
|
$ |
||||||
Warrants Expired |
( |
|
|
— |
|
|
— |
|||
Balance as of September 30, 2024 |
C$ |
|
|
$ |
(a) Liability Classified Warrants Outstanding
The following table summarizes the fair value of the liability classified warrants at September 30, 2024 and December 31, 2023:
|
|
|
|
|
Fair Value |
||||
Warrant Liability |
Strike Price |
|
Warrants Outstanding |
|
September 30, 2024 |
|
December 31, 2023 |
|
Change |
|
|
|
|
|
(in thousands) |
||||
Private Placement Financing Warrants Issued May 2019 |
C$ |
|
$ |
$ |
$ |
( |
|||
Modification Warrants Issued November 2019 |
C$ |
|
|
|
|
( |
|||
Additional Modification Warrants Issued May 2020 |
C$ |
|
|
|
|
( |
|||
Totals |
|
|
$ |
$ |
$ |
( |
During the three and nine months ended September 30, 2024 and 2023, the Company recorded gains of $
The following table summarizes the significant assumptions used in determining the fair value of the warrant liability as of each reporting date (see Note 13 - Fair Value Measurements for additional details):
|
September 30, |
|
December 31, |
Significant Assumptions |
2024 |
|
2023 |
Volatility |
|
||
Remaining Term |
|
||
Risk Free Rate |
|
19
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
8. WARRANTS (Continued)
(b) Equity Classified Warrants Outstanding
The Company's equity classified warrants were recorded at fair value at each respective date of issuance. Equity classified warrants are not remeasured at fair value on a recurring basis and are carried at their issuance date fair value.
|
|
|
|
|
Issuance Date Fair Value |
||
|
|
|
Warrants |
|
September 30, |
|
December 31, |
Warrants Included in Contributed Surplus |
Strike Price |
|
Outstanding |
|
2024 |
|
2023 |
|
|
|
|
|
(in thousands) |
||
Mortgage Warrants Issued June 2020 |
$ |
|
$ |
$ |
|||
Private Placement Refinance Warrants Issued April 2021 |
$ |
|
|
|
|||
Private Placement Refinance Warrants Issued October 2021 |
$ |
|
|
|
|||
Totals |
|
|
$ |
$ |
The equity warrants were valued as of the date of issuance using a Black Scholes Option Pricing model. The following table summarizes the significant assumptions used in determining the fair value of the warrants as of each respective issuance date:
Significant Assumptions |
Private Placement Refinancing Warrants |
|
Private Placement Refinancing Warrants |
|
Mortgage Warrants |
Date of Issuance |
|
|
|||
Volatility |
|
|
|||
Estimated Term |
|
|
|||
Risk Free Rate |
|
|
20
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
9. SHARE CAPITAL
Common shares, which include the Company’s Subordinate Voting Shares, Multiple Voting Shares and Super Voting Shares, are classified as equity. Incremental costs directly attributable to the issuance of common shares are recognized as a deduction from equity. The proceeds from the exercise of stock options or warrants together with amounts previously recorded in reserves over the applicable vesting periods are recorded as share capital. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes.
(a) Authorized
The Company has the following classes of share capital, with each class having no par value:
(i) Subordinate Voting Shares
The holders of the Subordinate Voting Shares are entitled to receive dividends which may be declared from time to time and are entitled to one vote per share at meetings of the Company’s shareholders. All Subordinate Voting Shares are ranked equally with regard to the Company’s residual assets. The Company is authorized to issue an unlimited number of no par value Subordinate Voting Shares.
(ii) Multiple Voting Shares
Each Multiple Voting Share is entitled to
(iii) Super Voting Shares
Each Super Voting Share is entitled to
(b) Issued and Outstanding
A reconciliation of the beginning and ending amounts of the issued and outstanding shares by class is as follows:
|
|
Issued and Outstanding |
||||
|
|
Subordinate |
|
Multiple |
|
Super |
As at January 1, 2024 |
|
|
|
|||
Distribution of contingent consideration |
|
|
— |
|
— |
|
Issuance of shares upon exercise of options |
|
|
— |
|
— |
|
Issuances of shares upon vesting of RSUs |
|
|
— |
|
— |
|
Repurchase of Subordinate Voting Shares |
|
( |
|
— |
|
— |
Exchange of shares |
|
|
( |
|
( |
|
As at September 30, 2024 |
|
|
|
21
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
9. SHARE CAPITAL (Continued)
(i) Distribution of Contingent Consideration
Dharma Pharmaceuticals, LLC
In connection with the Company's 2021 acquisition of Dharma Pharmaceuticals, LLC (“Dharma”), the purchase agreement included contingent consideration of up to $
On February 9, 2024, the Company and the former owners of Dharma agreed to amend the conditions of the Recreational Sales Milestone (the “Amended Agreement”). Under the Amended Agreement, the former owners waived their right to the Recreational Sales Milestone in exchange for the delivery of
(ii) Repurchase of Subordinate Voting Shares
Following the expiration of the Company's previous share program on September 10, 2024, on September 13, 2024, the Company's Board of Directors authorized a share repurchase program that allows the Company to repurchase up to
Under the Company's original share repurchase program, a total of
(c) Stock-Based Compensation
The Company operates equity settled stock-based remuneration plans for its eligible directors, officers, employees and consultants. All goods and services received in exchange for the grant of any stock-based payments are measured at their fair value unless the fair value cannot be estimated reliably. If the Company cannot estimate reliably the fair value of the goods and services received, the Company measures their value indirectly by reference to the fair value of the equity instruments granted. For transactions with employees and others providing similar services, the Company measures the fair value of the services by reference to the fair value of the equity instruments granted. Equity settled stock-based payments under stock-based payment plans are ultimately recognized as an expense in profit or loss with a corresponding credit to equity.
In June 2018, the Company established the Green Thumb Industries Inc. 2018 Stock and Incentive Plan, which was amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto (as amended, the “Plan”). The maximum number of Restricted Stock Units (“RSUs”) and options outstanding under the Plan at any time shall not exceed
The Company recognizes compensation expense for RSUs and options on a straight-line basis over the requisite service period of the award. Non-market vesting conditions are included in the assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of options expected to vest differs from the previous estimate. Any cumulative adjustment prior to vesting is recognized in the current period with no adjustment to prior periods for expense previously recognized. Option and RSU awards generally vest over three years, and options typically have a life of five to ten years. Option grants under the Plan are determined by the Compensation Committee of the Company’s Board of Directors with the option price set at no less than 100% of the fair market value of a share on the date of grant.
22
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
9. SHARE CAPITAL (Continued)
(c) Stock-Based Compensation (Continued)
Stock option activity is summarized as follows:
|
Number of Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life |
Balance as of December 31, 2023 |
$ |
||
Granted |
|
||
Exercised |
( |
|
|
Forfeited |
( |
|
|
Balance as of September 30, 2024 |
$ |
||
Exercisable as of September 30, 2024 |
$ |
The Company used the Black-Scholes option pricing model to estimate the fair value of the options granted during the nine months ended September 30, 2024 and the year ended December 31, 2023, using the following ranges of assumptions:
|
September 30, |
December 31, |
|
2024 |
2023 |
Risk-free interest rate |
||
Expected dividend yield |
||
Expected volatility |
||
Expected option life |
As permitted under ASC 718, the Company has made an accounting policy choice to account for forfeitures when they occur.
The following table summarizes the number of unvested RSU awards as of September 30, 2024 and December 31, 2023 and the changes during the nine months ended September 30, 2024:
|
|
Number of Shares |
|
Weighted Average Grant Date Fair Value |
Unvested Shares at December 31, 2023 |
|
$ |
||
Granted |
|
|
||
Forfeited |
|
( |
|
|
Vested |
|
( |
|
|
Unvested Shares at September 30, 2024 |
|
$ |
The stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023 was as follows:
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
(in thousands) |
|
(in thousands) |
||||
Stock options expense |
$ |
$ |
$ |
$ |
||||
Restricted Stock Units |
|
|
|
|
||||
Total Stock Based Compensation Expense |
$ |
$ |
$ |
$ |
As of September 30, 2024, $
23
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
10. INCOME TAX EXPENSE
The following table summarizes the Company’s income tax expense and effective tax rates for the three and nine months ended September 30, 2024 and 2023:
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Income before Income Taxes |
$ |
$ |
$ |
$ |
||||
Income Tax Expense |
|
|
|
|
||||
Effective Tax Rate |
|
|
|
|
The effective tax rates for the three months ended September 30, 2024 and 2023 were based on the Company’s forecasted annualized effective tax rates and were adjusted for discrete items that occurred within the periods presented.
Due to its cannabis operations, the Company is subject to the limitations of the U.S. Internal Revenue Code of 1986, as amended (“IRC”) Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income and provides for effective tax rates that are well in excess of statutory tax rates.
Taxes paid during the nine months ended September 30, 2024 and 2023 were $
24
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
11. OTHER INCOME (EXPENSE)
For the three and nine months ended September 30, 2024 and 2023 other income (expense) was comprised of the following:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
|
(in thousands) |
|
|
(in thousands) |
||||
Fair value adjustments on equity investments |
$ |
( |
$ |
|
$ |
$ |
( |
||
Fair value adjustments on warrants issued |
|
|
( |
|
|
|
|||
Loss from equity method investments |
|
( |
|
( |
|
|
( |
|
( |
Other |
|
|
|
|
|
||||
Total Other Income (Expense) |
$ |
( |
$ |
( |
|
$ |
$ |
12. COMMITMENTS AND CONTINGENCIES
The Company is subject to lawsuits, investigations and other claims related to employment, commercial and other matters that arise out of operations in the normal course of business. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in other liabilities.
Contingent liabilities are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the reporting period and are discounted to present value where the effect is material. The Company performs evaluations to identify contingent liabilities for contracts. Contingent consideration is measured upon acquisition and is estimated using probability weighting of potential payouts. Subsequent changes in the estimated contingent consideration from the final purchase price allocation are recognized in the Company’s unaudited interim condensed consolidated statements of operations.
(a) Contingencies
The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, sanctions, restrictions on its operations, or losses of permits that could result in the Company ceasing operations in that specific state or local jurisdiction. The Company may be subject to regulatory fines, penalties, or restrictions in the future as cannabis and other regulations continue to evolve and are subject to differing interpretations.
(b) Claims and Litigation
From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. During the quarter ending September 30, 2024, the Company received Findings of Fact and Conclusions of Law regarding an October 30, 2019 complaint filed against Green Thumb (“Defendant”) alleging Defendant breached a commercial property lease with ineffective termination. The court ruled in favor of plaintiff landlord in the amount of $
Other than the matter discussed above, as of September 30, 2024 and December 31, 2023, there were
(c) Construction Commitments
25
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
13. FAIR VALUE MEASUREMENTS
The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers all related factors of the asset by market participants in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.
The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and
Level 3 – Inputs for the asset or liability that are not based on observable market data.
(a) Financial Instruments
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, investments, accounts payable and accrued liabilities, notes payable, warrant liability, and contingent consideration payable.
It was not practicable to estimate the fair value of the Company's long-term notes payable, which consist of charitable contributions, April 30, 2021 Notes, the Credit Facility and mortgage notes, since there were no quoted market prices or active trading markets. The carrying amount of notes payable at September 30, 2024 and December 31, 2023 was $
Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of the inputs to fair value measurements.
|
|
As of September 30, 2024 |
||||||
|
(in thousands) |
|||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
Cash and Cash Equivalents |
$ |
$ |
$ |
$ |
||||
Investments |
|
|
|
|
||||
Warrant Liability |
|
|
|
( |
|
( |
||
|
$ |
$ |
$ |
$ |
|
|
As of December 31, 2023 |
||||||
|
(in thousands) |
|||||||
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
Cash and Cash Equivalents |
$ |
$ |
$ |
$ |
||||
Investments |
|
|
|
|
||||
Contingent Consideration Payable |
|
|
|
( |
|
( |
||
Warrant Liability |
|
|
|
( |
|
( |
||
|
$ |
$ |
$ |
$ |
26
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
14. SEGMENT REPORTING
The Company operates in two segments: the cultivation, production and sale of cannabis products to retail stores (“Consumer Packaged Goods”) and retailing of cannabis to patients and consumers (“Retail”). The Company does not allocate operating expenses to these business units, nor does it allocate specific assets. Additionally, the CODM does not review total assets or net income (loss) by segments; therefore, such information is not presented below.
The below table presents revenues by type for the three and nine months ended September 30, 2024 and 2023:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
|
(in thousands) |
|
|
(in thousands) |
||||
Revenues, Net of Discounts |
|
|
|
|
|
|
|
|
|
Retail |
$ |
$ |
|
$ |
$ |
||||
Consumer Packaged Goods |
|
|
|
|
|
||||
Intersegment Eliminations |
|
( |
|
( |
|
|
( |
|
( |
Total Revenues, Net of Discounts |
$ |
$ |
|
$ |
$ |
||||
Depreciation and Amortization |
|
|
|
|
|
|
|
|
|
Retail |
$ |
$ |
|
$ |
$ |
||||
Consumer Packaged Goods |
|
|
|
|
|
||||
Intersegment Eliminations |
|
|
|
|
|
||||
Total Depreciation and Amortization |
$ |
$ |
|
$ |
$ |
||||
Income Taxes |
|
|
|
|
|
|
|
|
|
Retail |
$ |
$ |
|
$ |
$ |
||||
Consumer Packaged Goods |
|
|
|
|
|
||||
Intersegment Eliminations |
|
|
|
|
|
||||
Total Income Taxes |
$ |
$ |
|
$ |
$ |
Goodwill assigned to the Retail segment as of September 30, 2024 and December 31, 2023 was $
Goodwill assigned to the Consumer Packaged Goods segment as of September 30, 2024 and December 31, 2023 was $
The Company’s assets are aggregated into two reportable segments (Retail and Consumer Packaged Goods). For the purposes of testing goodwill, Green Thumb has identified two reporting units which align with our reportable segments (Retail and Consumer Packaged Goods). All revenues are derived from customers domiciled in the United States and all assets are located in the United States.
27
Green Thumb Industries Inc.
Notes to Unaudited Interim Condensed Consolidated Financial Statements
(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)
15. SUBSEQUENT EVENTS
On November 05, 2024, the Company agreed to extend a $
Following the acceptance of the resignations of a Director and its CEO and Chairman, the Agrify Board appointed Benjamin Kovler as its Chairman and Interim CEO. In addition Armon Vakili, Vice President, Strategic Initiatives and Partnerships of Green Thumb, was also appointed to join the Agrify Board.
28
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
This management discussion and analysis (“MD&A”) of the financial condition and results of operations of Green Thumb Industries Inc. (the “Company” or “Green Thumb”) is for the three and nine months ended September 30, 2024 and 2023. It is supplemental to, and should be read in conjunction with, the Company’s unaudited interim condensed consolidated financial statements as of September 30, 2024 and the consolidated financial statements for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 29, 2024 (the “2023 Form 10-K”) and the accompanying notes for each respective period. The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$” or “US$”), unless otherwise indicated.
This MD&A contains certain “forward-looking statements” and certain “forward-looking information” as defined under applicable United States securities laws. Please refer to the discussion of forward-looking statements and information set out under the heading “Disclosure Regarding Forward-Looking Statements,” identified in the ‘‘Risks and Uncertainties’’ section of this MD&A and in Part I, Item 1A, “Risk Factors of the 2023 Form 10-K.” As a result of many factors, the Company’s actual results may differ materially from those anticipated in these forward-looking statements and information.
OVERVIEW OF THE COMPANY
Established in 2014 and headquartered in Chicago, Illinois, Green Thumb, a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while being committed to community and sustainable, profitable growth. As of September 30, 2024, Green Thumb has operations in fourteen U.S. markets, employs approximately 4,800 people and serves millions of patients and customers annually.
Green Thumb’s core business is manufacturing, distributing and marketing a portfolio of cannabis consumer packaged goods brands (which we refer to as our Consumer Packaged Goods business), including &Shine, Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredibles and RYTHM. The Company distributes and markets these products primarily to third-party licensed retail cannabis stores across the United States as well as to Green Thumb-owned retail stores (which we refer to as our Retail business).
The Company’s Consumer Packaged Goods portfolio is primarily generated from plant material that Green Thumb grows and processes itself, which we use to produce our consumer packaged goods in twenty manufacturing facilities. This portfolio consists of cannabis product categories, including flower, pre-rolls, concentrates, vape, capsules, tinctures, edibles, topicals, as well as other cannabis-related products across a range of stock keeping units ("SKUs") (none of which product categories are individually material to the Company).
Green Thumb owns and operates a national cannabis retail chain called RISE Dispensaries that provides relationship-centric retail experiences aimed to deliver a superior level of customer service through high-engagement consumer interaction, a consultative, transparent and education-forward selling approach and a consistently available assortment of cannabis products. In addition, Green Thumb owns Retail stores under other names, primarily where naming is subject to licensing or similar restrictions. The income from Green Thumb’s Retail business is primarily derived from the sale of cannabis-related products, which includes the sale of Green Thumb produced products as well as those produced by third parties, with an immaterial (under 10%) portion of this income resulting from the sale of other merchandise (such as t-shirts and accessories for cannabis use). The RISE Dispensaries currently are located in all fourteen of the states in which we operate. As of September 30, 2024, the Company had 98 open and operating Retail locations. The Company’s new store opening plans will remain fluid depending on market conditions, obtaining local licensing, construction and other permissions and subject to the Company’s capital allocation plans.
29
Results of Operations – Consolidated
The following table sets forth the Company’s selected consolidated financial results for the periods, and as of the dates, indicated. The (i) unaudited interim condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 and (ii) unaudited interim condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 have been derived from, and should be read in conjunction with, the unaudited interim condensed consolidated financial statements and accompanying notes presented in Item 1 of this quarterly report on Form 10-Q.
The Company’s unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP and on a going-concern basis that contemplates continuity of operations and realization of assets and liquidation of liabilities in the ordinary course of business.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
QTD Change |
|
YTD Change |
||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
|
$ |
% |
|
$ |
% |
|
|
(in thousands, except share and per share amounts) |
|
|
Increase (Decrease) |
|||||||||||
Revenues, Net of Discounts |
$ |
286,865 |
$ |
275,398 |
|
$ |
842,818 |
$ |
776,322 |
|
$ |
11,467 |
4% |
$ |
66,496 |
9% |
Cost of Goods Sold |
|
(139,274) |
|
(141,592) |
|
|
(399,778) |
|
(392,515) |
|
|
(2,318) |
(2)% |
|
7,263 |
2% |
Gross Profit |
|
147,591 |
|
133,806 |
|
|
443,040 |
|
383,807 |
|
|
13,785 |
10% |
|
59,233 |
15% |
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General, and Administrative |
|
104,967 |
|
84,779 |
|
|
275,725 |
|
249,515 |
|
|
20,188 |
24% |
|
26,210 |
11% |
Total Expenses |
|
104,967 |
|
84,779 |
|
|
275,725 |
|
249,515 |
|
|
20,188 |
24% |
|
26,210 |
11% |
Income From Operations |
|
42,624 |
|
49,027 |
|
|
167,315 |
|
134,292 |
|
|
(6,403) |
(13)% |
|
33,023 |
25% |
Total Other Expense |
|
(2,921) |
|
(3,694) |
|
|
(11,298) |
|
(6,463) |
|
|
(773) |
(21)% |
|
4,835 |
75% |
Income Before Provision for Income Taxes And Non-Controlling Interest |
|
39,703 |
|
45,333 |
|
|
156,017 |
|
127,829 |
|
|
(5,630) |
(12)% |
|
28,188 |
22% |
Provision for Income Taxes |
|
30,922 |
|
34,526 |
|
|
94,970 |
|
93,927 |
|
|
(3,604) |
(10)% |
|
1,043 |
1% |
Net Income Before Non-Controlling Interest |
|
8,781 |
|
10,807 |
|
|
61,047 |
|
33,902 |
|
|
(2,026) |
(19)% |
|
27,145 |
80% |
Net Income Attributable to Non-Controlling Interest |
|
165 |
|
295 |
|
|
643 |
|
851 |
|
|
(130) |
(44)% |
|
(208) |
(24)% |
Net Income Attributable To Green Thumb Industries Inc. |
$ |
8,616 |
$ |
10,512 |
|
$ |
60,404 |
$ |
33,051 |
|
$ |
(1,896) |
(18)% |
$ |
27,353 |
83% |
Net Income Per Share - Basic |
$ |
0.04 |
$ |
0.05 |
|
$ |
0.26 |
$ |
0.14 |
|
$ |
(0.01) |
(20)% |
$ |
0.12 |
86% |
Net Income Per Share - Diluted |
$ |
0.04 |
$ |
0.05 |
|
$ |
0.26 |
$ |
0.14 |
|
$ |
(0.01) |
(20)% |
$ |
0.12 |
86% |
Weighted Average Number of Shares Outstanding – Basic |
|
236,303,348 |
|
239,459,783 |
|
|
236,821,181 |
|
238,248,852 |
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding – Diluted |
|
238,295,887 |
|
240,289,959 |
|
|
239,934,521 |
|
239,827,112 |
|
|
|
|
|
|
|
|
|
September 30, 2024 |
|
December 31, 2023 |
|
|
(in thousands) |
||
Total Assets |
$ |
2,514,872 |
$ |
2,490,057 |
Long-Term Liabilities |
$ |
579,482 |
$ |
660,751 |
Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023
Revenues, net of Discounts
Revenues, net of discounts for the three months ended September 30, 2024 was $286,865 thousand, up 4% from $275,398 thousand for the three months ended September 30, 2023. Key performance drivers for the period included the expansion of the adult-use market in New York and Maryland, legalization of adult-use sales in Ohio, which began on August 6, 2024, and revenue generated from new retail stores, partially offset by price compression and increased competition in certain markets.
The Company generated revenue from 98 Retail stores during the quarter compared to 85 in the same quarter of the prior year. Retail revenues made up 72% of total revenues during the three months ended September 30, 2024 as compared to 75% during the three months ended September 30, 2023. Since September 30, 2023, the Company has opened twelve new Retail stores in Florida and two new Retail stores in New York. The Company also disposed of one Retail store in Massachusetts.
Consumer Packaged Goods revenues made up 28% of total revenues during the three months ended September 30, 2024 as compared to 25% during the three months ended September 30, 2023.
30
Cost of Goods Sold
Cost of goods sold are derived from retail purchases made by the Company from its third-party licensed producers operating within our state markets and costs related to the internal cultivation and production of cannabis. Cost of goods sold for the three months ended September 30, 2024 was $139,274 thousand, down 2% from $141,592 thousand for the three months ended September 30, 2023. The decrease was driven by operational leverage from the Company's Consumer Packaged Goods business and an increase in Retail sales of Green Thumb-produced products.
Gross Profit
Gross profit for the three months ended September 30, 2024 was $147,591 thousand, representing a gross margin on the sale of branded cannabis flower and processed and packaged products including concentrates, edibles, topicals and other cannabis products, of 51%. This is compared to gross profit for the three months ended September 30, 2023 of $133,806 thousand, or a 49% gross margin. The increase in gross profit (dollars) was directly attributable to the revenue increase as described above. The increase in gross margin (percent) was primarily driven by operational leverage from the Company's Consumer Packaged Goods business, as described above, and lower costs associated with the purchase of Retail inventory.
Total Expenses
Total expenses for the three months ended September 30, 2024 were $104,967 thousand, or 37% of revenues, net of discounts, an increase of $20,188 thousand compared to the same period in the prior year. Total expenses for the three months ended September 30, 2023 were $84,779 thousand or 31% of revenues, net of discounts. The increase in total expenses was attributable to increased costs associated with ongoing claims and litigation and increased costs associated with the opening and operation of new Retail stores as described above.
Total Other Income (Expense)
Total other income (expense) for the three months ended September 30, 2024 was $(2,921) thousand, a favorable change of $773 thousand, primarily due to favorable fair value adjustments on the Company's warrant liability during the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
Income Before Provision for Income Taxes and Non-Controlling Interest
Income before provision for income taxes and non-controlling interest for the three months ended September 30, 2024 was $39,703 thousand, a decrease of $5,630 thousand compared to the three months ended September 30, 2023.
As presented under the heading “Non-GAAP Measures” below, after adjusting for non-cash equity incentive compensation of $8,349 thousand and $7,215 thousand in the three months ended September 30, 2024 and 2023, respectively, and other nonoperating expenses of $9,727 thousand and $1,119 thousand in three months ended September 30, 2024 and 2023, respectively, adjusted earnings before interest, depreciation, and amortization (“Adjusted EBITDA”) was $89,192 thousand and $82,989 thousand, respectively.
Provision for Income Taxes
Income tax expense is recognized based on the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end. For the three months ended September 30, 2024, federal and state income tax expense totaled $30,922 thousand compared to expense of $34,526 thousand for the three months ended September 30, 2023.
31
Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023
Revenues, net of Discounts
Revenues, net of discounts for the nine months ended September 30, 2024 was $842,818 thousand, an increase of 9% from $776,322 for the nine months ended September 30, 2023. The increase in revenue was largely due to expansion of adult-use market in Maryland, growth in Consumer Packaged Goods revenues in New York and New Jersey, legalization of adult-use sales in Ohio, as well as revenue generated from new retail stores opened in the current period, partially offset by price compression and increased competition in certain markets.
The Company generated revenue from 98 retail stores during the period compared to 85 in the same period of the prior year. Since September 30, 2023, the Company has opened twelve new Retail stores in Florida and two new Retail stores in New York. The Company also disposed of one Retail store in Massachusetts.
Cost of Goods Sold
Cost of goods sold are derived from retail purchases made by the Company from its third-party licensed producers operating within our state markets and costs related to the internal cultivation and production of cannabis. Cost of goods sold for the nine months ended September 30, 2024 was $399,778 thousand, an increase of 2% from $392,515 thousand for the nine months ended September 30, 2023, driven by increased volume from the launch of adult-use sales in Maryland as described above, and new retail store openings since September 30, 2023 in Florida and New York.
Gross Profit
Gross profit for the nine months ended September 30, 2024 was $443,040 thousand, representing a gross margin on the sale of branded cannabis flower and processed and packaged products including concentrates, edibles, topicals and other cannabis products, of 53%. This is compared to gross profit for the nine months ended September 30, 2023 of $383,807 thousand or a 49% gross margin. The increase in gross profit (dollars) was directly attributable to the revenue increase as described above, while the increase in gross margin (percent) was primarily driven by operational leverage from the Company's CPG business, as described above, and lower costs associated with the purchase of Retail inventory.
Total Expenses
Total expenses for the nine months ended September 30, 2024 were $275,725 thousand or 33% of revenues, net of discounts, an increase of $26,210 thousand over the same period in the prior year. Total expenses for the nine months ended September 30, 2023 were $249,515 thousand or 32% of revenues, net of discounts. The increase in total expenses was attributable to increased costs associated with ongoing claims and litigation and increased costs associated with the opening and operation of new Retail stores as described above. The increase in total expenses was partially offset by favorable fair value adjustments associated with the Company's contingent consideration arrangements recorded during the nine months ended September 30, 2024.
Total Other Income (Expense)
Total other income (expense) for the nine months ended September 30, 2024 was $(11,298) thousand, an unfavorable change of $4,835 thousand over the same period in the prior year, primarily due to a decrease in capitalized interest during the nine months ended September 30, 2024.
Income Before Provision for Income Taxes and Non-Controlling Interest
Income before provision for income taxes and non-controlling interest for the nine months ended September 30, 2024 was $156,017 thousand, an increase of $28,188 thousand compared to the nine months ended September 30, 2023.
As presented under the heading “Non-GAAP Measures” below, after adjusting for non-cash equity incentive compensation of $23,705 thousand and $20,835 thousand, and other nonoperating (income) expenses, of $(1,736) thousand and $6,549 thousand in the nine months ended September 30, 2024 and 2023, respectively, Adjusted EBITDA was $273,536 thousand and $235,039 thousand, respectively.
32
Provision for Income Taxes
Income tax expense is recognized based on the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end. For the nine months ended September 30, 2024, federal and state income tax expense totaled $94,970 thousand compared to expense of $93,927 thousand for the nine months ended September 30, 2023.
Results of Operations by Segment
The following table summarizes revenues, net of discounts by segment for the three and nine months ended September 30, 2024 and 2023:
|
|
Three Months Ended September 30, |
|
QTD Change |
|||
|
|
2024 |
|
2023 |
|
$ |
% |
|
|
(in thousands) |
|
Increase (Decrease) |
|||
Retail |
$ |
206,124 |
$ |
205,441 |
$ |
683 |
0% |
Consumer Packaged Goods |
|
165,500 |
|
150,425 |
|
15,075 |
10% |
Intersegment Eliminations |
|
(84,759) |
|
(80,468) |
|
4,291 |
5% |
Total Revenues, Net of Discounts |
$ |
286,865 |
$ |
275,398 |
$ |
11,467 |
4% |
|
|
Nine Months Ended September 30, |
|
2024 vs. 2023 |
|||
|
|
2024 |
|
2023 |
|
$ |
% |
|
|
(in thousands) |
|
Increase (Decrease) |
|||
Retail |
$ |
614,558 |
$ |
582,363 |
$ |
32,195 |
6% |
Consumer Packaged Goods |
|
471,735 |
|
412,096 |
|
59,639 |
14% |
Intersegment Eliminations |
|
(243,475) |
|
(218,137) |
|
25,338 |
12% |
Total Revenues, Net of Discounts |
$ |
842,818 |
$ |
776,322 |
$ |
66,496 |
9% |
Three Months Ended September 30, 2024 Compared with the Three Months Ended September 30, 2023
Revenues, net of discounts, for the Retail segment were $206,124 thousand, an increase of $683 thousand, compared to the three months ended September 30, 2023. The increase in Retail revenues, net of discounts, was primarily driven by the expansion of the adult-use market in New York and Maryland, legalization of adult-use sales in Ohio and revenue generated from new retail stores, primarily offset by price compression and increased competition in certain markets.
Revenues, net of discounts, for the Consumer Packaged Goods segment were $165,500 thousand, an increase of $15,075 thousand or 10%, compared to the three months ended September 30, 2023. The increase in Consumer Packaged Goods revenues, net of discounts, was primarily driven by the increased production due to the completion of various construction projects in late 2023.
Intersegment eliminations associated with the Consumer Packaged Goods segment were $(84,759) thousand, an increase of $4,291 thousand or 5% compared to the three months ended September 30, 2023. The increase in intersegment eliminations was driven by increased intercompany sales, primarily to Company-owned Retail stores in Florida, New York and Pennsylvania. Consumer Packaged Goods revenues, net of intersegment eliminations, made up 28% of total revenues during the three months ended September 30, 2024 as compared to 25% during the three months ended September 30, 2023.
Due to the vertically integrated nature of the business, the Company reviews its revenue at the Retail and Consumer Packaged Goods level while reviewing its operating results on a consolidated basis.
33
Nine Months Ended September 30, 2024 Compared with the Nine Months Ended September 30, 2023
Revenues, net of discounts for the Retail segment were $614,558, an increase of $32,195 or 6%, compared to the nine months ended September 30, 2023. The increase in Retail revenues, net of discounts, was primarily driven by the legalization of adult-use sales in Maryland, continued growth in existing markets, as well as revenue generated from new retail stores opened in the current period, partially offset by price compression and increased competition in certain markets.
Revenues, net of discounts, for the Consumer Packaged Goods segment were $471,735 thousand, an increase of $59,639 thousand or 14%, compared to the nine months ended September 30, 2023. The increase in Consumer Packaged Goods revenues was primarily driven by the expansion of adult-use sales in Maryland, New York, New Jersey and Ohio, as described above, as well as increased production associated with the completion of various construction projects in 2023.
Intersegment eliminations associated with the Consumer Packaged Goods segment were $243,475 thousand, an increase of $25,338 thousand or 12% compared to the nine months ended September 30, 2023. The increase in intersegment eliminations was driven by increased intercompany sales to Company-owned retail stores primarily in Maryland, Pennsylvania, and New York. Consumer Packaged Goods revenues, net of intersegment eliminations, made up 27% of total revenues during the nine months ended September 30, 2024 as compared to 25% during the nine months ended September 30, 2023.
Due to the vertically integrated nature of the business, the Company reviews its revenue at the Retail and Consumer Packaged Goods level while reviewing its operating results on a consolidated basis.
Drivers of Results of Operations
Revenue
The Company derives its revenue from two revenue streams: a Consumer Packaged Goods business in which it manufactures, sells and distributes its portfolio of Consumer Packaged Goods brands including &Shine, Beboe, Dogwalkers, Dr. Solomon’s, Good Green, incredibles, and RYTHM, primarily to third-party customers; and a Retail business in which it sells finished goods sourced primarily from third-party cannabis manufacturers in addition to the Company’s own Consumer Packaged Goods products direct to the end consumer in its Retail stores, as well as direct-to-consumer delivery where permitted by state law.
For the three and nine months ended September 30, 2024, revenue was contributed from Retail and Consumer Packaged Goods sales across California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Virginia.
Gross Profit
Gross profit is revenue less cost of goods sold. Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and other supplies, fees for services and processing, and allocated overhead which includes allocations of rent, utilities and related costs. Cannabis costs are affected by various state regulations that limit the sourcing and procurement of cannabis product, which may create fluctuations in gross profit over comparative periods as the regulatory environment changes. Gross margin measures our gross profit as a percentage of revenue.
During the three and nine months ended September 30, 2024, the Company continued to be focused on creating sustainable, profitable growth of the Company’s business within its current markets while considering strategic acquisition and partnership opportunities.
Total Expenses
Total expenses other than the cost of goods sold consist of selling costs to support customer relationships and marketing and branding activities. It also includes a significant investment in the corporate infrastructure required to support the Company’s ongoing business.
34
Retail selling costs generally correlate to revenue. As new locations begin operations, these locations generally experience higher selling costs as a percentage of revenue compared to more established locations, which experience a more constant rate of selling costs. As a percentage of sales, the Company expects selling costs to remain constant in the more established locations and increase in the newer locations as business continues to grow.
General and administrative expenses also include costs incurred at the Company’s corporate offices, primarily related to back office personnel costs, including salaries, incentive compensation, benefits, stock-based compensation and other professional service costs, and fair value adjustments on the Company's contingent consideration arrangements. The Company expects to continue to invest considerably in this area to support the business by attracting and retaining top-tier talent. Furthermore, the Company anticipates an increase in stock-based compensation expenses related to recruiting and hiring talent, along with legal and professional fees associated with being a publicly traded company in Canada and registered with the SEC.
Provision for Income Taxes
The Company is subject to income taxes in the jurisdictions in which it operates and, consequently, income tax expense is a function of the allocation of taxable income by jurisdiction and the various activities that impact the timing of taxable events. As the Company operates in the federally illegal cannabis industry, it is subject to the limitations of the U.S. Internal Revenue Code of 1986, as amended (“IRC”) Section 280E, under which taxpayers are only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E and a higher effective tax rate than most industries. Therefore, the effective tax rate can be highly variable and may not necessarily correlate to pre-tax income or loss.
Non-GAAP Measures
EBITDA, and Adjusted EBITDA are non-GAAP measures and do not have standardized definitions under GAAP. The following information provides reconciliations of the supplemental non-GAAP financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
|
(in thousands) |
|
|
(in thousands) |
||||
Net Income Before Non-Controlling Interest |
$ |
8,781 |
$ |
10,807 |
|
$ |
61,047 |
$ |
33,902 |
Interest Income, net |
|
(2,665) |
|
(1,576) |
|
|
(7,082) |
|
(4,838) |
Interest Expense, net |
|
5,296 |
|
4,639 |
|
|
18,791 |
|
11,324 |
Provision for Income Taxes |
|
30,922 |
|
34,526 |
|
|
94,970 |
|
93,927 |
Total Other Expense (Income) |
|
290 |
|
631 |
|
|
(411) |
|
(23) |
Depreciation and Amortization |
|
28,492 |
|
25,628 |
|
|
84,252 |
|
73,363 |
Earnings before interest, taxes, depreciation and |
$ |
71,116 |
$ |
74,655 |
|
$ |
251,567 |
$ |
207,655 |
Stock-based Compensation, Non-cash |
|
8,349 |
|
7,215 |
|
|
23,705 |
|
20,835 |
Acquisition, Transaction and Other Non-operating Costs (Income) |
|
9,727 |
|
1,119 |
|
|
(1,736) |
|
6,549 |
Adjusted EBITDA (Non-GAAP Measure) |
$ |
89,192 |
$ |
82,989 |
|
$ |
273,536 |
$ |
235,039 |
35
Liquidity, Financing Activities During the Period, and Capital Resources
As of September 30, 2024, and December 31, 2023 the Company had total current liabilities of $160,669 thousand and $126,050 thousand, respectively, and cash and cash equivalents of $173,641 thousand and $161,634 thousand, respectively, to meet its current obligations. The Company had working capital of $231,205 thousand as of September 30, 2024, an increase of $14,493 thousand as compared to December 31, 2023. This increase in working capital was primarily driven by an increase in inventory.
The Company generates cash from its operations and deploys its capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and long term. Capital reserves are primarily being utilized for capital expenditures, facility improvements, strategic investment opportunities, product development and marketing, as well as customer, supplier, and investor and industry relations.
The Company takes a cautious approach in allocating its capital to maximize its returns while ensuring appropriate liquidity. Given the current uncertainty of the future economic environment, the Company has taken additional measures in monitoring and deploying its capital to minimize the negative impact on its current operations and expansion plans.
Cash Flows
Cash Provided by (Used in) Operating, Investing and Financing Activities
Net cash provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2024 and 2023 were as follows:
|
|
Nine Months Ended September 30, |
||
|
|
2024 |
|
2023 |
|
|
(in thousands) |
||
Net Cash Provided by Operating Activities |
$ |
151,845 |
$ |
153,872 |
Net Cash Used in Investing Activities |
$ |
(53,435) |
$ |
(187,444) |
Net Cash Used in Financing Activities |
$ |
(86,403) |
$ |
(7,268) |
Off-Balance Sheet Arrangements
As of September 30, 2024, the Company does not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources.
Changes in or Adoption of Accounting Practices
Refer to the discussion of recently adopted/issued accounting pronouncements under Part I, Item 1, Notes to Unaudited Interim Condensed Consolidated Financial Statements, Note 1—Overview and Basis of Presentation.
Critical Accounting Policies and Significant Judgments and Estimates
There were no material changes to our critical accounting policies and estimates from the information provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2023 Form 10-K.
36
ITEM 3. QUANTITAVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes to our market risk disclosures as set forth in Part II Item 7A of our 2023 Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company's management carried out an evaluation under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Based upon that evaluation, management concluded that our disclosure controls and procedures were effective as of September 30, 2024.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company's internal control over financial reporting during the third quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Control Systems
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
37
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to a variety of legal proceedings that arise out of operations in the normal course of business. While the results of these legal proceedings cannot be predicted with certainty, the Company believes that the final outcome of these proceedings will not have a material adverse effect, individually or in the aggregate, on our results of operations or financial condition.
ITEM 1A. RISK FACTORS
For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our 2023 Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sales of Unregistered Securities
Subordinate Voting Shares
None.
Multiple Voting Shares
None.
Super Voting Shares
None.
Recent Issuer Purchases of Equity Securities
The following table sets forth repurchases of our Subordinate Voting Shares during the nine months ended September 30, 2024:
(Dollars in thousands except per share amounts) |
||||||
Period |
Total Number of Shares Purchased |
|
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Program (1) |
|
Approximate Dollar Value of Shares that may yet be Purchased Under the Program |
January 1, 2024 through January 31, 2024 |
— |
$ |
— |
— |
$ |
— |
February 1, 2024 through February 29, 2024 |
— |
|
— |
— |
|
— |
March 1, 2024 through March 31, 2024 |
1,067,000 |
|
12.27 |
1,067,000 |
|
46,600 |
April 1, 2024 through April 30, 2024 |
— |
|
— |
— |
|
— |
May 1, 2024 through May 31, 2024 |
659,100 |
|
12.05 |
659,100 |
|
38,660 |
June 1, 2024 through June 30, 2024 |
998,900 |
|
12.33 |
998,900 |
|
26,700 |
July 1, 2024 through July 31, 2024 |
— |
|
— |
— |
|
— |
August 1, 2024 through August 31, 2024 |
— |
|
— |
— |
|
— |
September 1, 2024 through September 30, 2024 |
— |
|
— |
— |
|
50,000 |
|
2,725,000 |
$ |
12.27 |
2,725,000 |
$ |
50,000 |
(1) Following the expiration of the Company's previous share program on September 10, 2024, on September 13, 2024, the Company's Board of Directors authorized a share repurchase program that allows the Company to repurchase up to 10,573,860 of its Subordinate Voting Shares over a 12-month period at an aggregate cost of up to $50,000 thousand. The share repurchase program commenced on September 23, 2024.
Under the Company's original share repurchase program, a total of 6,568,125 Subordinate Voting Shares were repurchased for $73,304 thousand of which 2,725,000 Subordinate Voting Shares for $33,448 thousand were repurchased during the nine months ended September 30, 2024.
38
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5. OTHER INFORMATION
Trading Arrangements
During the quarter ended September 30, 2024, none of the Company's directors or Section 16 officers
39
ITEM 6. EXHIBITS
The following exhibits are filed with this report:
10.1 |
AMENDMENT NO. 3 TO THE GREEN THUMB INDUSTRIES INC. 2018 STOCK AND INCENTIVE PLAN |
|
|
31.1 |
|
|
|
31.2 |
|
|
|
32.1 |
|
|
|
32.2 |
|
|
|
101.Ins |
Inline XBRL Instance Document |
|
|
101.Scs |
Inline XBRL Taxonomy Extension Schema Document |
|
|
101.Cal |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
101.Def |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
101.Lab |
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
101.Pre |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
104 |
Cover Page Interactive Data File (embedded with Inline XBRL File) |
40
SIGNATURES
Pursuant to requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
GREEN THUMB INDUSTRIES INC. |
|
/s/Benjamin Kovler
|
By: Benjamin Kovler |
Title: Chief Executive Officer |
Date: November 8, 2024
|
GREEN THUMB INDUSTRIES INC. |
|
/s/Mathew Faulkner
|
By: Mathew Faulkner |
Title: Chief Financial Officer |
Date: November 8, 2024
41