Green Thumb Industries Inc.: Form 10-Q for the period ended Sep 30, 2025

This management discussion and analysis (“MD&A”) of the financial condition and results of operations of Green Thumb Industries Inc. (the “Company” or “Green Thumb”) is for the three and nine months ended September 30, 2025 and 2024. It is supplemental to, and should be read in conjunction with, the Company’s unaudited interim condensed consolidated financial statements as of September 30, 2025 and the consolidated financial statements for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 27, 2025 (the “2024 Form 10-K”) and the accompanying notes for each respective period. The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$” or “US$”), unless otherwise indicated.

This MD&A contains certain “forward-looking statements” and certain “forward-looking information” as defined under applicable United States securities laws. Please refer to the discussion of forward-looking statements and information set out under the heading “Disclosure Regarding Forward-Looking Statements,” identified in the ‘‘Risks and Uncertainties’’ section of this MD&A and in Part I, Item 1A, “Risk Factors of the 2024 Form 10-K.” As a result of many factors, the Company’s actual results may differ materially from those anticipated in these forward-looking statements and information.

OVERVIEW OF THE COMPANY

Established in 2014 and headquartered in Chicago, Illinois, Green Thumb, a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while being committed to community and sustainable, profitable growth. As of September 30, 2025, Green Thumb has operations in fourteen U.S. markets, employs approximately 4,800 people and serves millions of patients and customers annually.

Green Thumb’s core business is manufacturing, distributing and marketing a portfolio of cannabis consumer packaged goods brands (which we refer to as our Consumer Packaged Goods business), including &Shine, Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredibles and RYTHM. The Company distributes and markets these products primarily to third-party licensed retail cannabis stores across the United States as well as to Green Thumb-owned retail stores (which we refer to as our Retail business).

In addition, an immaterial portion of the Company’s business involves producing products containing hemp-derived tetrahydrocannabinol (“THC”) such as Delta-8 THC and Delta-9 THC.

The Company’s Consumer Packaged Goods portfolio is primarily generated from plant material that Green Thumb grows and processes itself, which we use to produce our consumer packaged goods in twenty manufacturing facilities. This portfolio consists of cannabis product categories, including flower, pre-rolls, concentrates, vape, capsules, tinctures, edibles, topicals, as well as other cannabis-related products across a range of stock keeping units (“SKUs”) (of which none of these product categories are individually material to the Company).

Green Thumb owns and operates a national cannabis retail chain called RISE Dispensaries that aims to bring patients and customers a variety of high-quality products at multiple price points and provide excellent service. In addition, Green Thumb owns stores under other names, primarily where naming is subject to licensing or similar restrictions. The income from Green Thumb’s retail stores is primarily derived from the sale of cannabis-related products, which includes the sale of Green Thumb produced products as well as those produced by third parties, with an immaterial (under 10%) portion of this income resulting from the sale of other merchandise (such as t-shirts and accessories for cannabis use). RISE Dispensaries currently are located in the fourteen states in which we operate. As of September 30, 2025, the Company had 108 open and operating Retail stores. The Company’s new store opening plans will remain fluid depending on market conditions, obtaining local licensing, construction and other permissions and subject to the Company’s capital allocation plans as described under the heading “Liquidity, Financing Activities During the Period, and Capital Resources” below.

Results of Operations – Consolidated

The following table sets forth the Company’s selected consolidated financial results for the periods, and as of the dates, indicated. The (i) unaudited interim condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024 and (ii) unaudited interim condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024 have been derived from, and should be read in conjunction with, the unaudited interim condensed consolidated financial statements and accompanying notes presented in Item 1 of this quarterly report on Form 10-Q.

The Company’s unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP and on a going-concern basis that contemplates continuity of operations and realization of assets and liquidation of liabilities in the ordinary course of business.

(in thousands, except share and per share amounts)

(in thousands)

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

Revenues, net of Discounts

Revenues, net of discounts for the three months ended September 30, 2025 was $291,369 thousand, an increase of 2% from $286,865 thousand during the three months ended September 30, 2024. The increase in revenue was largely due to the launch of adult-use sales in Minnesota and Ohio which began on September 16, 2025 and August 6, 2024, respectively, as well as continued growth in existing markets, particularly in Florida and New York, and revenue generated from new and existing Retail stores, partially offset by price compression and increased competition in select markets.

The Company generated revenue from 108 Retail stores during the quarter compared to 98 in the same quarter of the prior year. Retail revenues made up 70% of total revenues during the three months ended September 30, 2025 as compared to 72% during the three months ended September 30, 2024. Since September 30, 2024, the Company opened two new Retail stores in Florida, two in Nevada and one each in Illinois, Minnesota, Ohio and Pennsylvania. Additionally, the Company acquired three Retail stores in Connecticut and disposed of one Retail store in Massachusetts.

Consumer Packaged Goods revenues made up 30% of total revenues during the three months ended September 30, 2025 as compared to 28% during the three months ended September 30, 2024.

Cost of Goods Sold

Cost of goods sold are derived from retail purchases made by the Company from its third-party licensed producers operating within the Company's state markets and costs related to the internal cultivation and production of cannabis. Cost of goods sold for the three months ended September 30, 2025 was $147,342 thousand, an increase of 6% from $139,274 thousand for the three months ended September 30, 2024, driven by continued growth in existing markets, particularly in Florida and New York, the legalization of adult-use sales in Minnesota and Ohio as described above, and new Retail store openings since September 30, 2024.

Gross Profit

Gross profit for the three months ended September 30, 2025 was $144,027 thousand, representing a gross margin on the sale of branded cannabis flower and processed and packaged products including concentrates, edibles, topicals and other cannabis products, of 49%. This is compared to gross profit for the three months ended September 30, 2024 of $147,591 thousand, or a 51% gross margin. The decrease in gross profit was primarily driven by price compression.

Total Expenses

Total expenses for the three months ended September 30, 2025 were $107,286 thousand, or 37% of revenues, net of discounts, an increase of $2,319 thousand compared to the same period in the prior year. Total expenses for the three months ended September 30, 2024 were $104,967 thousand or 37% of revenues, net of discounts. The increase in total expenses was attributable to overall salaries and benefits and increased costs associated with the opening and operation of new Retail stores as described above.

Total Other Income (Expense)

Total other income (expense) for the three months ended September 30, 2025 was $36,182 thousand, a favorable change of $39,103 thousand, primarily due to the net gain on sale of Green Thumb's intellectual property rights to RYTHM, Inc. during the three months ended September 30, 2025.

Income Before Provision for Income Taxes and Non-Controlling Interest

Income before provision for income taxes and non-controlling interest for the three months ended September 30, 2025 was $72,923 thousand, an increase of $33,220 thousand compared to the three months ended September 30, 2024.

As presented under the heading “Non-GAAP Measures” below, after adjusting for non-cash equity incentive compensation of $11,654 thousand and $8,349 thousand in the three months ended September 30, 2025 and 2024, respectively, and other nonoperating expenses of $1,687 thousand and $9,727 thousand in three months ended September 30, 2025 and 2024, respectively, Adjusted EBITDA was $80,163 thousand and $89,192 thousand, respectively.

Provision for Income Taxes

Income tax expense is recognized based on the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end. For the three months ended September 30, 2025, federal and state income tax expense totaled $49,122 thousand compared to expense of $30,922 thousand for the three months ended September 30, 2024.

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Revenues, net of Discounts

Revenues, net of discounts for the nine months ended September 30, 2025 was $864,166 thousand, an increase of 3% from $842,818 thousand for the nine months ended September 30, 2024. The increase in revenue was largely due to the launch of adult-use sales in Minnesota and Ohio which began on September 16, 2025 and August 6, 2024, respectively, as well as continued growth in existing markets, particularly in Florida and New York, and revenue generated from new and Retail stores, partially offset by price compression and increased competition in select markets.

The Company generated revenue from 108 Retail stores during the period compared to 98 in the same period of the prior year. Since September 30, 2024, the Company opened two new Retail stores in Florida, two in Nevada and one each in Illinois, Minnesota, Ohio and Pennsylvania. Additionally, the Company acquired three Retail stores in Connecticut and disposed of one Retail store in Massachusetts.

Cost of Goods Sold

Cost of goods sold are derived from retail purchases made by the Company from its third-party licensed producers operating within our state markets and costs related to the internal cultivation and production of cannabis. Cost of goods sold for the nine months ended September 30, 2025 was $430,608 thousand, an increase of 8% from $399,778 thousand for the nine months ended September 30, 2024, driven by continued growth in existing markets, particularly in Florida and New York, legalization of adult-use sales in Minnesota and Ohio as described above, and new Retail store openings since September 30, 2024.

Gross Profit

Gross profit for the nine months ended September 30, 2025 was $433,558 thousand, representing a gross margin on the sale of branded cannabis flower and processed and packaged products including concentrates, edibles, topicals and other cannabis products, of 50%. This is compared to gross profit for the nine months ended September 30, 2024 of $443,040 thousand or a 53% gross margin. The decrease in gross profit was primarily driven by price compression.

Total Expenses

Total expenses for the nine months ended September 30, 2025 were $314,902 thousand or 36% of revenues, net of discounts, an increase of $39,177 thousand over the same period in the prior year. Total expenses for the nine months ended September 30, 2024 were $275,725 thousand or 33% of revenues, net of discounts. The increase in total expenses was attributable to overall salaries and benefits and increased costs associated with the opening and operation of new Retail stores as described above. In addition, expenses for the nine months ended September 30, 2024, included the impact of one-time favorable fair value adjustments associated with the Company's contingent consideration arrangements.

Total Other Income (Expense)

Total other income (expense) for the nine months ended September 30, 2025 was $16,291 thousand, a favorable change of $27,589 thousand over the same period in the prior year, primarily due to the net gain on sale of Green Thumb's intellectual property rights to RYTHM during the nine months ended September 30, 2025.

Income Before Provision for Income Taxes and Non-Controlling Interest

Income before provision for income taxes and non-controlling interest for the nine months ended September 30, 2025 was $134,947 thousand, a decrease of $21,070 thousand compared to the nine months ended September 30, 2024.

As presented under the heading “Non-GAAP Measures” below, after adjusting for non-cash equity incentive compensation of $33,929 thousand and $23,705 thousand, and other nonoperating expenses (income), of $6,402 thousand and $(1,736) thousand in the nine months ended September 30, 2025 and 2024, respectively, Adjusted EBITDA was $248,150 thousand and $273,536 thousand, respectively.

Provision for Income Taxes

Income tax expense is recognized based on the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end. For the nine months ended September 30, 2025, federal and state income tax expense totaled $102,013 thousand compared to expense of $94,970 thousand for the nine months ended September 30, 2024.

Results of Operations by Segment

The following table summarizes revenues, net of discounts by segment for the three and nine months ended September 30, 2025 and 2024:

(in thousands)

(in thousands)

Three Months Ended September 30, 2025 Compared with the Three Months Ended September 30, 2024

Revenues, net of discounts, for the Retail segment were $204,056 thousand, a decrease of $2,068 thousand, compared to the three months ended September 30, 2024. The decrease in Retail revenues, net of discounts, was primarily driven by price compression and increased competition, particularly in Illinois, New Jersey and Pennsylvania, primarily offset by: (i) the launch of adult-use sales in Minnesota and Ohio which began on September 16, 2025 and August 6, 2024, respectively, (ii) revenue generated from new Retail stores openings as described above, and (iii) the acquisition of three stores in Connecticut.

Revenues, net of discounts, for the Consumer Packaged Goods segment were $163,292 thousand, a decrease of $2,208 thousand or 1%, compared to the three months ended September 30, 2024. The decrease in Consumer Packaged Goods revenues, net of discounts, was primarily driven by price compression and increased competition particularly in Illinois, New Jersey and Pennsylvania, primarily offset by the launch of adult-use sales in Minnesota and Ohio which began on September 16, 2025 and August 6, 2024, respectively, as well as continued growth in existing markets, particularly in Florida and New York.

Intersegment eliminations associated with the Consumer Packaged Goods segment were $75,979 thousand, a decrease of $8,780 thousand or 10% compared to the three months ended September 30, 2024. The decrease in intersegment eliminations was driven by decreased intercompany sales, primarily due to price compression and increased competition particularly in Illinois, New Jersey and Pennsylvania, partially offset by the launch of adult-use sales in Minnesota and Ohio which began on September 16, 2025 and August 6, 2024, respectively. Consumer Packaged Goods revenues, net of intersegment eliminations, made up 30% of total revenues during the three months ended September 30, 2025 as compared to 28% during the three months ended September 30, 2024.

Due to the vertically integrated nature of the business, the Company reviews its revenue at the Retail and Consumer Packaged Goods level while reviewing its operating results on a consolidated basis.

Nine Months Ended September 30, 2025 Compared with the Nine Months Ended September 30, 2024

Revenues, net of discounts for the Retail segment were $608,012 thousand, a decrease of $6,546 thousand or 1%, compared to the nine months ended September 30, 2024. The decrease in Retail revenues, net of discounts, was primarily driven by price compression and increased competition particularly in Illinois, New Jersey and Pennsylvania, primarily offset by: (i) the launch of adult-use sales in Minnesota and Ohio which began on September 16, 2025 and August 6, 2024, respectively, (ii) continued growth in existing markets, particularly in Florida and New York, and (iii) revenue generated from new Retail stores openings as described above.

Revenues, net of discounts, for the Consumer Packaged Goods segment were $503,013 thousand, an increase of $31,278 thousand or 7%, compared to the nine months ended September 30, 2024. The increase in Consumer Packaged Goods revenues was primarily driven by the launch of adult-use sales in Minnesota and Ohio which began on September 16, 2025 and August 6, 2024, respectively, as well as continued growth in existing markets, particularly in Florida and New York, partially offset by price compression and increased competition in select markets.

Intersegment eliminations associated with the Consumer Packaged Goods segment were $246,859 thousand, an increase of $3,384 thousand or 1% compared to the nine months ended September 30, 2024. The increase in intersegment eliminations was driven by increased intercompany sales, primarily due to the launch of adult-use sales in Minnesota and Ohio which began on September 16, 2025 and August 6, 2024, respectively, as well as continued growth in existing markets, particularly in Florida and New York, primarily offset by price compression and increased competition in select markets. Consumer Packaged Goods revenues, net of intersegment eliminations, made up 30% of total revenues during the nine months ended September 30, 2025 as compared to 27% during the nine months ended September 30, 2024.

Due to the vertically integrated nature of the business, the Company reviews its revenue at the Retail and Consumer Packaged Goods level while reviewing its operating results on a consolidated basis.

Drivers of Results of Operations

Revenue

The Company derives its revenue from two revenue streams: a Consumer Packaged Goods business in which it manufactures, sells and distributes a portfolio of Consumer Packaged Goods brands including &Shine, Beboe, Dogwalkers, Dr. Solomon’s, Good Green, incredibles and RYTHM, primarily to third-party customers; and a Retail business in which it sells finished goods sourced primarily from third-party cannabis manufacturers in addition to the Company’s own Consumer Packaged Goods products direct to the end consumer in its Retail stores, as well as direct-to-consumer delivery where permitted by state law.

For the three and nine months ended September 30, 2025, revenue was contributed from Retail and Consumer Packaged Goods sales across California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Virginia.

Gross Profit

Gross profit is revenue less cost of goods sold. Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and other supplies, fees for services and processing, and allocated overhead which includes allocations of rent, utilities and related costs. Cannabis costs are affected by various state regulations that limit the sourcing and procurement of cannabis product, which may create fluctuations in gross profit over comparative periods as the regulatory environment changes. Gross margin measures our gross profit as a percentage of revenue.

During the three and nine months ended September 30, 2025, the Company continued to focus on creating sustainable, profitable growth of the Company’s business while pursuing expansion. Green Thumb expects to continue its growth strategy for the foreseeable future as the Company expands its Consumer Packaged Goods and Retail footprint within its current markets with acquisitions and partnerships, and scales resources into new markets.

Total Expenses

Total expenses other than the cost of goods sold consist of selling costs to support customer relationships and marketing and branding activities. It also includes a significant investment in the corporate infrastructure required to support the Company’s ongoing business.

Retail selling costs generally correlate to revenue. As new stores begin operations, these stores generally experience higher selling costs as a percentage of revenue compared to more established stores, which experience a more constant rate of selling costs. As a percentage of sales, the Company expects selling costs to remain constant in the more established stores and increase in the newer stores as business continues to grow.

General and administrative expenses include costs incurred at the Company’s corporate offices, primarily related to back office personnel costs, including salaries, incentive compensation, benefits, stock-based compensation and other professional service costs, and fair value adjustments on the Company’s contingent consideration arrangements. The Company expects to continue to invest considerably in this area, in particular, stock-based compensation expense is expected to continue to increase in order to support the business by attracting and retaining top-tier talent. General and administrative expenses also include professional fees associated with being a publicly traded company in Canada and registered with the SEC.

Provision for Income Taxes

The Company is subject to income taxes in the jurisdictions in which it operates, and consequently, income tax expense is a function of the allocation of taxable income by jurisdiction and the various activities that impact the timing of taxable events. The IRS has taken the position that companies that operate in the federally illegal cannabis industry, are subject to the limitations of the U.S. Internal Revenue Code of 1986, as amended (“IRC”) Section 280E, under which taxpayers are only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income and provides for effective tax rates that are well in excess of statutory tax rates.

Non-GAAP Measures

EBITDA, and Adjusted EBITDA are non-GAAP measures and do not have standardized definitions under GAAP. The following information provides reconciliations of the supplemental non-GAAP financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented.

(in thousands)

(in thousands)

34

Liquidity, Financing Activities During the Period, and Capital Resources

As of September 30, 2025, and December 31, 2024 the Company had total current liabilities of $241,553 thousand and $164,969 thousand, respectively, and cash and cash equivalents of $226,211 thousand and $171,687 thousand, respectively, to meet its current obligations. The Company had working capital of $235,909 thousand as of September 30, 2025, a decrease of $3,022 thousand as compared to December 31, 2024. This decrease in working capital was primarily driven by acquisitions as well as the repurchase of 5,718,000 Subordinate Voting Shares through the Company's share repurchase program.

The Company generates cash from its operations and deploys its capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and long term. Capital reserves are primarily being utilized for capital expenditures, facility improvements, strategic investment opportunities, product development and marketing, as well as customer, supplier, and investor and industry relations.

The Company takes a cautious approach in allocating its capital to maximize its returns while ensuring appropriate liquidity. Given the current uncertainty of the future economic environment, the Company has taken additional measures in monitoring and deploying its capital to minimize the negative impact on its current operations and expansion plans.

Cash Flows

Cash Provided by (Used in) Operating, Investing and Financing Activities

Net cash provided by (used in) operating, investing and financing activities for the nine months ended September 30, 2025 and 2024 were as follows:

(in thousands)

Material Commitments

Maturities of notes payable as of September 30, 2025 were as follows:

(in thousands)

1 Total maturities of notes payable excludes unamortized debt discount of $1,698 thousand associated with the Credit Facility and $852 thousand associated with the mortgage notes.

Off-Balance Sheet Arrangements

As of September 30, 2025, the Company does not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources.

Changes in or Adoption of Accounting Practices

Refer to the discussion of recently adopted/issued accounting pronouncements under Part I, Item 1, Notes to Unaudited Interim Condensed Consolidated Financial Statements, Note 1—Overview and Basis of Presentation.

Critical Accounting Policies and Significant Judgments and Estimates

There were no material changes to our critical accounting policies and estimates from the information provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2024 Form 10-K.

There have been no material changes to our market risk disclosures as set forth in Part II Item 7A of our 2024 Form 10-K.

Evaluation of Disclosure Controls and Procedures

The Company's management carried out an evaluation under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Based upon that evaluation, management concluded that our disclosure controls and procedures were effective as of September 30, 2025.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the third quarter of 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Control Systems

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our 2024 Form 10-K.