Green Thumb Industries (OTCMKTS: GTBIF, CNSX:GTII) I am closely watching this stock. There are somethings that intrigued me. Well, this stock is currently trading at $14.74 on OTC Markets and 19.66CAD on Canadian Securities Exchange as of 4/17/19. The price difference is due to the Exchange Rate between US Dollar and Canadian dollar. Thus, this investment would also mean that there is exchange rate risk apart from the risks inherently from the stock, the sector, and the market itself. Even then, I find this stock intriguing.
This company is vertically integrated. They have their own manufacturing sites and 72 retail locations. This company started in 2014. It is only 5 years old. My question was if this company is young. Then is it undervalued? overvalued? This stock is not a trending stock but with it’s sector increasingly becoming lawful globally, would there be a surge in the stock prices in the future? I had so much questions.
Now I compared the audited annual report of GTBIF on their website. I saw that their cash position grew from approximately 12 million to 29 million from 2016 to 2017. growth in cash however was from their increase in accounts payable, notes payable and stockholders equity. This may mean that this company borrowed money, purchased on credit and received cash from issuing equity securities. Well, what did they do in 2018 with the funds received from their investors and lenders? Did they invest in new retail spaces? new manufacturing facilities? Invest heavily in marketing? I am pondering on this. This is very important. The audited 2018 annual report wasn’t available on their website as of today. Maybe I need to find it on other website. I will do that next time.
By the way, their grow profit increased from approximately 2 million to 7 million from 2016 to 2017. But the Net Loss went from 3 million to 4 million. Hmmmmm. Well their General and Administrative Expenses grew from 4 million to 11 million approximately. What did this company do in 2018 to decrease the amount of these expenses? Is this sign of an inefficient company or an infant startup trying to find its place in one of the fastest growing industry? Well according to their combined statement of cash flows, in 2017, they used huge amount on investing activities and purchased a lot on properties, equipments and businesses. In 2018 what did they do?
With these questions in my head, I am pondering deeply whether to buy this stock. I think I probably will also look into this stock. I am watching closely. Next time, maybe I will talk more about the technical side of this stock and analyze it’s price action and volume. I will have to look into it.