Why I Am Downgrading Green Thumb Industries
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Alan Brochstein, CFAInvesting Group LeaderFollow5ShareSavePlay(10min)CommentsSummaryGreen Thumb Industries is downgraded from Strong Buy to Hold after a significant rally, yet still lags peers in performance.GTI’s strong balance sheet, low net debt, and superior tangible equity make it more resilient than other MSOs, especially if 280E taxation remains.While rescheduling and 280E tax elimination would benefit GTBIF, its relative advantage is smaller than peers due to less exposure and a strong balance sheet.Valuation is now middle-of-the-road at 7.3x 2025E EBITDA, with potential downside if rescheduling fails and moderate upside if it succeeds. Sckrepka/iStock via Getty Images Cannabis stocks are still in a bear market that began almost five years ago, but they are now up year-to-date on potential rescheduling news. My favorite American cannabis operator, Green Thumb Industries Inc. (GTBIFThis article was written byAlan Brochstein, CFA72.54K FollowersFollowAlan Brochstein, CFA, is one of the first investment professionals to focus exclusively on the cannabis industry. Alan got his start as a financial professional in the securities industry in 1986, managing investments in institutional environments until he founded AB Analytical Services in 2007 in order to provide independent consulting to registered investment advisors. He is also the managing partner of New Cannabis Ventures, a leading provider of relevant financial information in the cannabis industry since 2015. Alan has run the investing group 420 Investor, for investors interested in the publicly-traded cannabis stocks that he moved to Seeking Alpha in 2023, since 2013. As the leader of the investing group 420 Investor, Alan closely covers 20 stocks and shares investment news as it comes out, previews of their earnings reports and analysis of them afterwards. Other features of the group include: a model portfolio, 10 videos per week with chart analysis, 3 summary pieces weekly, a monthly newsletter, and chat for questions Learn More.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.