This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
11/7/2024
Good day, and welcome to Green Thumb Industries' third quarter 2024 earnings conference call and webcast. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. On today's call, management will provide prepared remarks, and then we will open up the call for your questions. To ask a question, analysts may press star and one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key. And to withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Shay Capeless, Director of Communications at Green Thumb. Please go ahead.
Thank you, Betsy. Good afternoon, and welcome to Green Thumb's third quarter 2024 earnings call. I'm here today with founder and CEO, Ben Kozler, President Anthony Georgianis, and our Chief Financial Officer, Matt Faulkner. Today's discussion and response to questions may include forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. These risks and uncertainties are detailed in the earnings press release issued today, along with the reports filed with the United States Security and Exchange Commission and Canadian securities regulators. including the 2023 annual report filed on Form 10-K. This report, along with today's earnings release, can be found under the Investors section of our website. Green Thumb assumes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. Throughout the discussion, Green Thumb will refer to non-GAAP financial measures, including EBITDA and adjusted operating EBITDA. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in our earnings press release and SEC and CDER filings. Please note, all financial information is provided in U.S. dollars unless otherwise indicated. Thanks, everyone. And now, here's Ben.
Thank you, Shay. Good afternoon, everyone, and thank you for joining our third quarter 2024 conference call. 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. 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. Moving on to the business at hand, For the third quarter, our team delivered impressive results, including $287 million in revenue, adjusted EBITDA of $89 million, and $48 million in cash flow operations after paying $35 million in taxes. Our focus on cash flow and disciplined capital allocation has played a critical role in building trust and strong relationships in the banking community. As a result, in early September, we entered into a $150 million syndicated bank loan, a first-of-its-kind financing in the cannabis industry. It was an oversubscribed, non-brokered deal at an industry-leading rate of SOFR plus 5%, which, after today's 25-point interest rate cut, is about 9.5% cash interest. With the proceeds, we retired the $225 million in senior secured debt due in April 2025. The notes from this new financing don't mature until September of 2029. So in one action, we de-levered our balance sheet, maintained our cash interest expense, and added valuable duration, another five years to execute on our growth plan. Capital allocation has always been our North Star, and by now you know we're longtime fans of Warren Buffett and take his wisdom to heart. One of our favorite quotes is, quote, what is smart at one price is dumb at another. We think about that when putting precious capital to work in building our business. Price matters. It starts with our team having conviction that every dollar we spend can produce a tangible return and help scale our business. Our strategy has been to invest in cultivation and manufacturing as we launch retail stores. In the quarter, we opened four new dispensaries for a total of 98 locations nationwide. New RISE locations include East Syracuse, New York, two RISE dispensaries in Tallahassee, and one in Jacksonville, Florida. Just this morning, we announced our 99th store will be opening in Orlando, Florida, on Goodhomes Road. It's unfortunate that adult use did not pass on Tuesday. We believe our footprint in Florida is right-sized to its medical market, so the failed referendum on adult use is somewhat neutral to our business plan. That said, while frustrated we did hit the 60%, we continue to feel good about our opportunity in the state. Anthony will go into more detail on our CapEx plan and our exciting consumer package goods initiative. On a high level, we are intensely focused on building brand equity from our portfolio of outstanding products. I'm sure most of you know the world-famous Magnolia Bakery that has been a treasured New York institution for nearly 30 years with its beloved banana puddings, cakes, brownies, and cupcakes. Our initial collaboration with this iconic bakery in 2023 was a huge success, so both Magnolia and Green Thumb were thrilled to expand our partnership this October. This collaboration is just one example of how our brands are making a big splash in new and innovative ways, and how we expand access to our products through various distribution channels. It is a new world today, one where you can purchase Incredibles in person at Rye's dispensaries, online at IncrediblesHemp.shop, and even convenient same-day delivery, often within one hour through DoorDash. It's becoming easier than ever to access Green Thumb products for well-being, and this is just the beginning. We are excited by all the opportunity for our brands to reach even more consumers across the country. Accelerating that brand awareness continues to be one of our top priorities as we look to 2025. Rhythm, our highly acclaimed lifestyle brand and new partner to Barstool. Dog Walkers, America's favorite pre-roll brand. our ever-expanding line of Incredibles, and Bebo for the sophisticated cannabis experience, our top-rated brands, building reputations as mainstays in the cannabis industry and the American experience. Anthony will touch on this topic a bit further, but net-net, we light the path we are on. Our strong balance sheet is the key to having options and the ability to execute. And to protect our strong balance sheet, we have to pay our taxes to avoid incurring a significant tax liability under 280E, a heavy burden to the industry. Before I close, I want to reiterate what I've said time and time again, that the future is bright for Green Zone. We have a very productive asset base with a strong presence in many new and upcoming adult use markets. We love our balance sheet, especially with the recent debt refinancing, and we will continue to thoughtfully deploy capital into the business explore unique investment opportunities, and remain open to strategic M&A. Most importantly, we have the best team in the business to ride the green wave. This team puts their head down and executes, focusing on the mission of bringing high-quality cannabis products to Americans who need them now more than ever. I think it's safe to say that so many gummies were consumed while awaiting Tuesday night's election results, And that consumption is not slowing down. Now, I'll turn the call over to Anthony.
You're reading a preview of the GTBIF Q3 2024 earnings call.
Free account.
