A 200% plus increase in revenue might be the catalyst set to strengthen Green Thumb Industries Inc (OTCMKTS: GTBIF) market sentiments. After an excellent start to the year, the stock continues to edge higher as investors react to robust revenue growth.
GTBIF Catalysts And Price Analysis
The stock has been on an impressive run ever since the company confirmed the acquisition of For Success Holding Company in February. With the acquisition, Green Thumb Industries is poised to expand its toes into California, a market with vast opportunities for growth.
Analysts rating the stock as a ‘buy’ could also explain why the stock has continued to climb higher after a harrowing plunge late last year. The stock is already up by more than 70% even on coming under pressure in the second quarter.
The stock has pulled lower from the $16 a share handle in what could be attributed to investors taking profit. The pullback faces support at the $11 a share level, from where it is likely to continue powering high.
A breach of the $11 technical level could result in short sellers coming into the fold who could push the stock lower in continuation of the bearish trend that began last year. Conversely, a rally-followed by a close above the $16 a share level could entice bulls to continue pushing the stock higher with the next stop being 52-week highs of $25.
About Green Thumb Industries
Green Thumb Industries is engaged in the production, distribution, and sales of cannabis products in the United States. The company’s product line is made up of flower, concentrates for dapping, vaporizing as well as edibles, and topical. The company also owns and operates a chain of retail cannabis stores under the brand name RISE.
Why Is Green Thumb Industries Rallying
Shares of Green Thumb Industries have taken a flight ever since the company moved to expand its footprint in California. The acquisition of Los Angeles-based For Success Holding Company provides the company with access to a robust line of lifestyle brand as well as incredible talent, ideal for pursuing growth in the California Cannabis market.
For Success Holding is the creator of Beboe branded cannabis products, better known for iconic rose gold vaporizing pens as well as edible pastilles. The brand is currently available in 125 retail locations in California and Colorado.
“The meticulously-crafted suite of Beboe products supports the premium segment within GTI’s brand portfolio and is firmly aligned with our long-term growth strategy. Beboe has an extremely talented team, a robust innovation pipeline, and an aligned vision on the future of cannabis and a ground-breaking partnership with Barneys New York,” stated GTI Founder and Chief Executive Officer Ben Kovler.
Robust Revenue Growth
The acquisition should go a long way in strengthening Green Thumb Industries revenue base after a stellar performance in Q4. Revenues in Q4 increased 237% to $20.8 million as full-year revenue increased 278% to $62.5 million.
Revenue growth was mostly driven by growth in consumer products as well as retail businesses. Expansion of the company’s branded, products distribution network also helped accelerate sales growth. Green Thumb Industries also benefited from the opening of new stores
Green Thumb Industries also attained significant milestones in the year as the consumer products division grew to include 13 production facilities. The company also opened 88 retail locations on expanding to 12 states.
“We continue to execute against our strategic priorities for 2019: 1) establish a leading brand portfolio through innovation, standardization, and distribution; 2) accelerate retail growth through new store openings and consumer loyalty, and 3) bolster infrastructure with people, process, and technology to deliver sustainable, profitable growth ,” explained Mr. Kovler.
Green Thumb Industries excellent start to the year does not come as a surprise. The company has achieved significant milestones on its bid to become an industry leader in the cannabis sector. Revenue growth attests to a company in a phase of robust growth.
The acquisition of For Success Holding expands the company’s footprint into a market with robust opportunities for growth that should continue to strengthen the bottom line. That said the company remains well positioned to post impressive numbers for the year, a development that should continue to enhance investor sentiments in the stock.
As it stands, Green Thumb Industries remains well positioned to continue edging higher given the positive underlying fundamentals.
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Disclosure: We have no position in GTBIF and have not been compensated for this article.