Cannabis stocks have been beaten down for quite a while, and some of the biggest names in the industry have seen their stocks record significant declines. That being said, there are still many promising companies in the sector, and one of those is Green Thumb Industries Inc. (CSE:GTII) (OTCQX:GTBIF).
Key Things to Watch
The Chicago based company is primarily into cannabis retail and boasts of as many as five different brands that cater to different consumer tastes. In 2019, it generated sales of $219 million, but in 2020, the market conditions are a bit different owing to the coronavirus crisis. Here is a closer look at GTI in order to figure out if the stock is worth considering as an investment.
Considering the tough situation that is going to be in store for many companies in the coming months, a strong cash position is vitally important, and in that regard, GTI is well endowed. Despite making a $59.1 million loss last year, GTI has $46 million worth of cash and cash equivalents.
The company’s operating costs had been $18 million in each of the last two years, and hence, if cash burn does not go through the roof, GTI is in a position to ride out the storm. The company is expected to spend less in light of the current restrictions as well.
On the other hand, the company has a wide variety of goods in both its retail and consumer packaged goods channels. In 2019, the company managed to boost its retail sales threefold to $137.8 million, and on the other hand, consumer packaged goods sales soared fourfold to $109.9 million. It is clear that the company has diversified effectively, and two high growth revenues channels could help the company in diversifying far more aggressively going forward.
The GTI stock is down by 27% in 2020 so far, but given its strong growth numbers, it could prove to be a prudent investment. That being said, it could be better if investors held off for now and waited until GTI announces its quarterly results towards the end of May.