{"id":2349,"date":"2021-11-11T22:49:00","date_gmt":"2021-11-11T22:49:00","guid":{"rendered":"http:\/\/CAIiEB3rDbTbOmHKWLoX8zDrf00qGAgEKg8IACoHCAown9bJATD3yxUw96_BBg"},"modified":"2021-11-11T22:49:00","modified_gmt":"2021-11-11T22:49:00","slug":"while-canadian-weed-producers-wilt-american-operators-like-green-thumb-thrive-barrons","status":"publish","type":"post","link":"https:\/\/thcinct.com\/?p=2349","title":{"rendered":"While Canadian Weed Producers Wilt, American Operators Like Green Thumb Thrive – Barron’s"},"content":{"rendered":"
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Dreamstime <\/span> <\/figcaption><\/figure>\n<\/p><\/div>\n

American cannabis chains continued to outperform their Canadian counterparts in the September quarter\u2014by a widening margin. While U.S. operators like Curaleaf Holdings <\/a><\/span>
\nand Green Thumb Industries <\/a><\/span> grew sales by a respective 74% and 50% over the prior-year quarter, Canadians like Cronos Group <\/a><\/span> and Canopy Growth <\/a><\/span> took write downs of $220 million and $87 million, respectively, because they can\u2019t sell what they\u2019ve got.<\/p>\n

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The licensed cannabis industry in the U.S. now has annualized sales of $25 billion, on its way to $75 billion \u2026$80 billion, or more, Green Thumb chief executive Ben Kovler told Barron\u2019s <\/em>Thursday. His company is preparing for the start of adult recreational sales\u2014 within the next year or so \u2014in four big states: New Jersey, New York, Connecticut and Virginia.<\/p>\n

After reporting quarterly cash earnings growth of 53%, Green Thumb saw its shares (ticker: GTIBF) jump 15% Thursday to $25 on the over-the-counter market\u2014where the stock must trade because the federal illegality of state-licensed cannabis prevents U.S. stock exchanges from listing the shares of American operators. Earnings before interest, taxes, depreciation and amortization (adjusted further for noncash charges) were $81 million, or about 36 cents a share, on sales of $234 million.<\/p>\n

The stock of Green Thumb and other U.S. operators got a brief boost early in the week, on news that House Republicans led by Rep. Nancy Mace (R-SC) were preparing to introduce a bill to federally legalize marijuana. But even after Thursday\u2019s gains, Green Thumb remains well below its February peak of $39.<\/p>\n

Kovler said his main desire for federal reform is an amnesty for the 40,000 prisoners serving time for marijuana convictions. He certainly would like to be welcome in the federal banking system and U.S. stock exchanges, but Green Thumb has done fine without them. \u201cWe\u2019ve built the business to prosper despite this federal weirdness,\u201d said Kovler.<\/p>\n

Curaleaf\u2019s Sept. quarter sales of $317 million were as expected, but its $71 million in Ebitda \u2014 equivalent to about 10 cents a share \u2014 was shy of the more than $90 million expected by analysts. That disappointment set the shares (CURLF) back from $11 on Monday, to a Thursday price of $9.84.<\/p>\n

The U.S. chain <\/span>
\n Cresco <\/a><\/span> Labs (CRLBF) reported Sept. quarter sales growth of 41%, to $216 million. But its report of $56 million in Ebitda was possible only after adjusting for noncash charges like a $291 million impairment for Cresco\u2019s unsuccessful acquisition of a distributor called Origin House. <\/p>\n

North of the border, Canadian companies Cronos (CRON), Canopy (CGC) and Aurora Cannabis <\/a><\/span> (ACB) continued to struggle with the inventory, facilities and acquisitions that they piled up when investors threw money at their U.S.-listed stocks. Particularly embarrassing was the Cronos announcement of an impairment of at least $220 million on its U.S. operations that sell nonintoxicating CBD products. With sales that totaled just $5 million in this year\u2019s first half, the U.S. business consists largely of the Lord Jones products that Cronos acquired for $300 million in 2019 from sellers who included Cronos chairman and former CEO, Mike Gorenstein and his fellow board member Jason Adler.<\/p>\n

Green Thumb\u2019s Kovler said his company looks hard at industry M&A opportunities, but prefers careful growth. \u201cWe don\u2019t want to swing and miss,\u201d he said. \u201cWe\u2019d rather do nothing.\u201d<\/p>\n

Write to Bill Alpert at william.alpert@barrons.com<\/a><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Dreamstime American cannabis chains continued to outperform their Canadian counterparts in the September quarter\u2014by a widening margin. While U.S. operators like Curaleaf Holdings and Green Thumb Industries grew sales by a respective 74% and 50% over the prior-year quarter, Canadians like Cronos Group and Canopy Growth took write downs of $220 million and $87 million, respectively, because they can\u2019t sell what they\u2019ve got. The licensed cannabis industry in the U.S. now has annualized sales of $25 billion, on its way to $75 billion \u2026$80 billion, or more, Green Thumb chief executive Ben Kovler told Barron\u2019s Thursday. His company is preparing… <\/p>\n","protected":false},"author":1,"featured_media":2350,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[2],"tags":[],"class_list":["post-2349","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured"],"jetpack_featured_media_url":"https:\/\/thcinct.com\/wp-content\/uploads\/2021\/11\/while-canadian-weed-producers-wilt-american-operators-like-green-thumb-thrive-barrons.jpg","_links":{"self":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts\/2349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2349"}],"version-history":[{"count":0,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/posts\/2349\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=\/wp\/v2\/media\/2350"}],"wp:attachment":[{"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thcinct.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}