This article first appeared on GuruFocus .
Release Date: November 04, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue increased 11% year-over-year to $324 million, driven by adult-use retail sales in Minnesota and growth in existing markets.
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Normalized EBITDA was $89 million, approximately 28% of revenue, maintaining margin despite pricing pressure.
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Cash flow from operations was $58 million, a solid step up from the second quarter, with $316 million in cash on the balance sheet.
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Same-store sales grew 3%, the first positive comp since Q3 2024, showing improvement from the previous quarter's decline.
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RYTHM ranked number one nationally in branded flower, and Dogwalkers ranked number one nationally in uninfused pre-rolls, demonstrating strong brand performance.
Negative Points
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Federal regulatory uncertainty remains the biggest wild card, with broader rescheduling still pending and tax clarity on 280E unresolved.
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Pricing pressure persists in several markets, and fourth quarter sequential revenue is expected to be flat to down slightly due to the pricing environment.
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Gross margin decreased to 45% from 49% year-over-year, driven by $15.8 million in brand licensing fees.
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SG&A expenses increased to $122 million (38% of revenue) from $107 million (37% of revenue) year-over-year, primarily due to compensation and retail expansion costs.
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The delay of full rescheduling and 280E relief could mean the continuation of significant tax liabilities, impacting profitability.
Q & A Highlights
Q: With a healthy cash position, how is Green Thumb prioritizing capital allocation between CapEx, M&A, and shareholder returns? A: CEO Ben Kovler said the company is being cautious amid uncertainty, so M&A deals "have to look a lot better" and the tax picture needs more clarity. He prefers deploying capital into markets the company knows well, such as Virginia, Texas, and Florida, and stressed there is no rush given the strong balance sheet. He added that a $30 billion to $40 billion industry (potentially $50 billion including hemp) means a leader with Green Thumb's brands "should be far larger."
Q: How short of biomass will Virginia be at adult-use launch, and how might supply evolve? A: President Anthony Georgiadis said it is hard to predict, but with five incumbents there is some capacity that has yet to be turned on. Drawing on the Minnesota experience, he said product shortages can slow conversion from hemp and the illicit market, and he estimated it could take 12 to 24, maybe 36, months before the state has enough capacity to absorb anticipated demand. Green Thumb has made substantial investments in Virginia ahead of the July 1, 2027 adult-use start.
Q: How should investors think about Minnesota's tailwind as the adult-use launch laps? A: Georgiadis said the business should be bifurcated: new store openings pressure retail, while wholesale plays a larger role as Green Thumb supplies those stores with its brands. He noted the full impact of the recent outdoor harvest has not yet been seen, with product mostly converting into MEP categories. He expects the Minnesota business to become more wholesale-focused than retail-focused, as it has been over the last 12 months.
Q: How should margins be modeled for Q4 and into 2027 given pricing pressure? A: CFO Matt Faulkner said there are pockets of stabilization but still plenty of erosion, making it hard to predict. He expects some continued compression in coming quarters, with hemp policy a potential tailwind whose role remains uncertain.
Q: What is the pace and focus of retail expansion over the next 12 to 16 months? A: Georgiadis said three to five Florida stores are planned before year-end, with 10-plus more in Florida next year, one or two in Ohio, and Texas as the big unknown. He said the company is "putting the wheels in motion" and getting the team ready to "step on the gas" in Texas if needed.
Q: Have you seen pantry loading or retailer/distributor behavior changes ahead of the potential hemp ban? A: Kovler said yes, "a lot, tons." Consumers do not understand the product is going away, shelves are empty, and distributors are hesitant to restock. He noted the category is 10%-plus of sales in a liquor store, with promotions for large-quantity purchases within regulations, and said moving consumers to dispensaries in the short term will be part of the response.
Q: Does the election change your view on rescheduling, and how long will you wait before considering an uplisting or bifurcating the business? A: Kovler said he has no special insight on rescheduling but believes it should happen. On uplisting, he said Green Thumb is "not interested in bifurcating the business" because it creates complications across people and audit. He argued a listing alone does not change valuation without federal certainty on scheduling and taxes, and that institutional buyers are not circling the sector. He would reconsider if a listed medical business commanded a much higher multiple, but noted peers trade at roughly four to six times EBITDA.
Q: Does Trulieve's NYSE uplisting give it a strategic advantage the longer rescheduling takes? A: Kovler pushed back, calling it "a different business" and noting Green Thumb trades at roughly four to five times EBITDA versus Trulieve's roughly five to six. He said if a medical business traded at 15 times EBITDA on the NYSE, "we'd be thinking about this very differently," adding that Green Thumb has met with all the exchanges and understands what is needed, but splitting one company into two compliant entities is a complicated venture.
Q: Given the midterm results, do you expect an accelerated effort on adult-use in Pennsylvania, and are there other states that excite you? A: Georgiadis said it is too preliminary to map immediate next steps, though the governor is supportive. He said the company will huddle with other operators in the state to see if there is a path for adult use.
Q: Does the change in Texas governorship affect your outlook and how aggressively you pursue the medical market while awaiting a final license? A: Georgiadis said the dust is still settling after a surprising "clean sweep," and it is unclear whether the TCUP program will be affected, though the company hopes any impact is positive. In parallel, Green Thumb is operationalizing, having recently purchased a facility outside Fort Worth, and looks forward to helping the new administration get the program off the ground.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
