Green Thumb unfazed by election results: ‘We continue to execute’

One of the few profitable multistate operators in the U.S. cannabis trade, Chicago-based Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF), is “frustrated” but undaunted by this year’s election results, including the failure of recreational marijuana in Florida.

“Now that the election is over, the good news for us is that Green Thumb is set up to win regardless of federal change. We’ve said that from the beginning, and we’ve built our business on that principle,” CEO Ben Kovler reminded analysts at the outset of the company’s  earnings call.

“We continue to execute as we have all along, staying focused on what we can control to grow our business, thinking in decades, not what may or may not happen over the next few years,” Kovler said, adding that it’s “unfortunate” that not enough Florida voters backed recreational marijuana legalization this year, but said that ultimately it’s “somewhat neutral to our business plan.”

“We see Green Thumb up 4% year-over-year, the industry up 2%. And we view that as some modest market share gain,” Kovler said, adding that for most of the U.S. cannabis industry, “It’s a grind.”

“Obviously, it’s a tricky time, with the industry taking a major step back in terms of valuations this week. But there’s really no change around here. It’s head down and execute the whole time,” Kovler said. “We don’t really care about the short-term voting. We want to take advantage of that, as simply as sell high and buy low, which is really what we’re doing.”

GTI President Anthony Georgiadis said that during recent months, the company had made solid inroads in New Jersey, New York, Ohio and Pennsylvania. Kovler also noted that GTI is eyeballing the European cannabis markets.

That said, Kovler and others acknowledged that the industry still faces major hurdles.

“The price compression is real. So, the price is down 20%. You got to sell more units that equal the same revenue, which sometimes costs you more, particularly at retail,” Kovler said. “This is hard work.”

But, he also pointed to major headwinds in the alcohol business, which could provide an opening for marijuana companies to fill the gap in the near future.

“Quite frankly, still walking down the street in any city, half an hour before closing at last call is ugly and unpleasant. And we think the future is different. We see headwinds in alcohol,” Kovler said. “We’ve got a lot of capital to play offense.”