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2/26/2025
Good day, and welcome to the Green Thumb Industries fourth quarter and full year 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 to your questions. To ask a question, analysts may press star, then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. And to withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Shea Capelis, Director of Communications for Green Thumbs. Please go ahead.
Thank you, Betsy. Good afternoon and welcome to Green Thumbs' fourth quarter and full year 2024 earnings call. I'm here today with founder and CEO Ben Kozler, President Anthony Giorgiotis, and Chief Financial Officer Matt Faulkner. Today's discussions and responses 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 security regulators, including our most recent annual report filed on Form 10-K. This report, along with today's earnings release, can be found under the Investor 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 EBITDA. A reconciliation of non-GAAP financial measures, the most directly comparable GAAP measures, is included in our earnings press release and SEC and CDAR funds filing. Please note that all financial information is provided in U.S. dollars unless otherwise indicated. Thanks, everyone. And now, here's Ben.
Thanks, Shay. Good afternoon, everyone, and thank you for joining our fourth quarter year-end 2024 conference call. It's been an interesting start to the new year as the new administration takes office in DC. There were high hopes for federal reform under Biden that did not materialize despite favorable conditions for a change to cannabis regulations. With the new administration, Trump's recent picks are not inciting optimism for progress. Yet, THC demand is on the rise, hitting record highs. As we've said from the beginning, though, we have set ourselves up to succeed regardless of what does or does not happen at a federal level. Our North Star continues to be the American consumer. A 2023 study saw that nearly 43 million Americans reported THC consumption in the last 30 days, which is a new high and makes the S-curve of adoption begin to go vertical. These trends are the lifeblood of our business and the reason we know cannabis in America is big and getting bigger, despite the out-of-touch DEA and their goal of limiting access to well-being for Americans and our veterans. The DEA is clearly asleep at the wheel, but the Green Thumb team is wide awake, focused on the factors we can control to grow our business over the long term and tuning out the noise. A quick note on the math of pricing pressure. Remember, if pricing is down 20%, the team has to deliver 25% more units to break even, and that math is tremendously powerful. So with that backdrop and in the face of pricing pressure, the Green Thumb team continued to deliver. You would not know it looking at the stock price, which is hovering at a 52-week low, but in the fourth quarter, we achieved record revenue of 294 million dollars, Record adjusted EBITDA of $98 million, that's a 33% margin, and our full year 2024 cash flow from operations was $195 million after paying $131 million in taxes. These numbers are quite an accomplishment to which I credit our team and senior leadership. I have been fortunate to work alongside an incredibly smart and loyal team with leaders who have been together for many years, and that consistency and longevity matters. We win because of the team, and we believe in the direction DreamDump is heading and our bright future ahead for several reasons. First, our focus on cash flow and disciplined capital allocation has been critical to executing our strategy. Our cash flow and balance sheet allow us to sleep well. We ended 2024 with a strong balance sheet that gives us the optionality to maximize shareholder return through thoughtful CapEx, share repurchase programs, and strategic M&A. In 2024, we engineered a historic industry-first $150 million syndicated bank loan, which helped us retire $225 million in senior secured debt that was due in April 2025. With new financing in place, we delevered our balance sheet, maintained our cash interest expense, and added duration, another five years to execute our growth plan. The interesting reality is that is only $150 million of leverage on what was just $370 million of EBITDA. Second, Our ability to innovate and evolve rapidly to seize opportunity in a dynamic environment. Today's most successful companies are masters of reinvention who see both disruption and new trends emerging simultaneously. They move quickly to capitalize on opportunities while others are dangerously complacent. We have tried to model Green Thumb in that way as we do not want to be the ostrich and stick our heads in the sand and miss something. Instead, we focus on what is best for the American consumer Because after all, we are the American consumer. As consumers, we clearly see the trends that can propel green thumb forward, and we're positioning ourselves to benefit. The changes in alcohol consumption versus cannabis consumption are too dramatic to ignore. We have all discussed the potential harmful effects of alcohol before, and on January 3rd, the Surgeon General advised the public on the now established link of alcohol and cancer. It's no surprise that alcohol consumption rates continue to decline, especially with younger generations. Meanwhile, we are seeing more consumers turn to cannabis products as an alternative. Recently, we invested in Agrify, the owner of Senorita, the award-winning, best-tasting THC beverage on the market. We've been in the THC beverage space for years, and bringing Senorita into the portfolio of brands is a great example of how we were able to act quickly when something makes sense like THC beverages. We are excited about our investment in Agrify as we believe tens of billions of Americans will become THC consumers in the coming years who are not today. One example to reach many of these new consumers is the Incredibles partnership with Magnolia Bakery. Not only do we sell these products at dispensaries around the country, but we sell the same product made from hemp on the Incredibles website and by local delivery in 23 markets across the United States through DoorDash. E-commerce and home delivery are changing the game by offering new, convenient ways for customers to access product and allowing our brands to reach new markets and consumers. Turning to our traditional offerings, Rhythm continues to be the premier choice for cannabis consumers across the country, and we are always looking for ways to bring the premium cannabis brand to more consumers. We launched a first-of-its-kind partnership with Chicago's renowned music venue, The Salt Shed, to showcase the Rhythm lifestyle. Then you host around 150 music shows a year drawing over 600,000 people, in addition to showcasing the rhythm brand the partnership includes our new on site retail experience rise that salt shed which offers THC. Products from Bebo incredible and scenery, in addition, scenery to the venues exclusive THC beverage available for purchase at all venue bars so. You can legally buy the best tasting THC drink on the market at Chicago's recently awarded Best Music Venue. We are excited to continue exploring the potential of similar concepts to connect even more consumers to our brands through unique experience and quality products. Lastly, let's talk about something we all have in common, sleep. According to the recent Harris Poll, 71% of adults 21 and over wish they slept better. The survey also highlights the popularity of cannabis-infused edibles as a sleep aid. Our incredible Snoozeberry line is among the nation's best-selling cannabis products for sleep because we know that when you snooze, you win. It has been a very busy and productive year over here at Green Thumb. Thanks to each and every one of our 4,800-plus amazing team members who show up every day to work hard and share their passion for the plant, we are right on target doing what we said we would do maximize the assets we have in place to generate long-term value for our stakeholders. Now, I'm going to turn the call over to Anthony to cover our operations. Anthony?
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