Mr. Ben Kovler reports

GREEN THUMB INDUSTRIES REPORTS FIRST QUARTER 2023 RESULTS

Green Thumb Industries Inc. has released its financial results for the first quarter ended March 31, 2023. Financial results are reported in accordance with United States generally accepted accounting principles (GAAP) and all currency is in U.S. dollars.

Highlights for the first quarter ended March 31, 2023:

• Revenue increased 2 per cent year-over-year to $249-million;
• GAAP net income of $9-million, or four cents per basic and diluted share;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $76-million, or 31 per cent of revenue;
• Cash flow from operations of $75-million in the first quarter;
• Cash at quarter end totalled $185-million.

Management commentary

"Green Thumb's momentum continues to build in 2023, and I am incredibly proud of our team for their unwavering commitment to creating high-quality products and delivering positive experiences for our patients and consumers. In the first quarter, our revenue increased 2 per cent year-over-year to $249-million, despite continued price compression. Net income was $9-million, or four cents per diluted share. Adjusted EBITDA increased 14 per cent to $76-million in the quarter, a greater-than-300-basis-point margin improvement to 30.7 per cent year-over-year," said Ben Kovler, Green Thumb founder, chairman and chief executive officer.

"Our $185-million cash balance continues to give us the optionality to make investment decisions that will position us for the increasing demand for legal cannabis, a market estimated by analysts to grow to $75-billion over the next decade. For the past few years, we have made sizable investments to strengthen our infrastructure and expand our capacity rather than focus our dollars on significant M&A [mergers and acquisitions]. These strategic decisions strengthen our balance sheet and will allow us to support additional retail locations in key markets this year," concluded Mr. Kovler.

First quarter 2023 financial review

Total revenue increased 2.4 per cent to $248.5-million from $242.6-million in the prior-year period, primarily driven by the operations of the retail segment as well as adult-use legalization in certain markets. Overall retail revenue increased 9.4 per cent versus the first quarter of 2022. First quarter 2023 comparable sales (stores open at least 12 months) increased 6.3 per cent versus the prior year on a base of 73 stores. Consumer packaged goods gross revenue increased 4.3 per cent versus the first quarter of 2022.

Gross profit for the first quarter 2023 was $124.7-million, or 50.2 per cent of revenue, compared with $122.9-million, or 50.7 per cent of revenue, for the comparable period. The decline in gross margin was primarily driven by price compression.

Total selling, general and administrative expenses for the first quarter were $80.5-million, or 32.4 per cent of revenue, compared with $68.4-million, or 28.2 per cent of revenue, for the first quarter of 2022. Last year benefitted from an acquisition-related non-cash fair value credit, which did not occur in the current period.

Net income attributable to the company for the first quarter 2023 was $9.1-million, or four cents per basic and diluted share. This compares with net income in the prior-year quarter of $28.9-million, or 12 cents per basic and diluted share.

Adjusted EBITDA, which excluded non-cash stock-based compensation of $6.2-million and $2.3-million of other non-operating expenses, was $76.2-million, or 30.7 per cent of revenue, as compared with $67-million, or 27.6 per cent of revenue, in the comparable period.

Balance sheet and liquidity

As of March 31, 2023, current assets were $357.6-million, including cash and cash equivalents of $185.4-million. Total debt outstanding was $277.8-million.

Total basic and diluted weighted average shares outstanding for the three months ended March 31, 2023, were 237.4 million and 237.7 million, respectively.

Other developments

Subsequent to the quarter-end, the company opened two new retail stores in April, 2023:

• Rise New Hope, Minnesota, the company's 78th retail location in the nation. Profits from the first day of sales were donated to Balanced Veterans Network.
• Rise Grove City, Pennsylvania, the company's 79th retail location in the nation. Profits from the first day of sales were donated to Grove City Community Food Pantry.

On April 27, 2023, subsequent to quarter-end, the company announced that Ethan Nadelmann was appointed to its board of directors and joined its compensation committee. Mr. Nadelmann brings over 35 years of experience in cannabis policy reform, and has a proven record of transforming state, federal and foreign cannabis and other drug policies through assorted advocacy efforts. He is the founder of both the Drug Policy Alliance and The Lindesmith Center.

Conference call and webcast

Green Thumb will host a conference call on Wednesday, May 3, 2023, at 5 p.m. ET to discuss its first quarter financial results for the quarter ended March 31, 2023. The conference call may be accessed by dialling 844-883-3895 (toll-free) or 412-317-5797 (international), with conference ID: 10177062. A live audio webcast of the call will also be available on the investor relations section of Green Thumb's website and will be archived for replay.

About Green Thumb Industries Inc.

Green Thumb Industries, a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis while giving back to the communities in which it serves. Green Thumb manufactures and distributes a portfolio of branded cannabis products, including &Shine, Beboe, Dogwalkers, Doctor Solomon's, Good Green, incredibles and Rythm. The company also owns and operates rapidly growing national retail cannabis stores called Rise. Headquartered in Chicago, Ill., Green Thumb has 18 manufacturing facilities, 79 open retail locations and operations across 15 U.S. markets. Established in 2014, Green Thumb employs approximately 4,000 people and serves millions of patients and customers each year. The company was named to Crain's Chicago Business Fast 50 list in 2021 and 2022, and a best workplace by MG Retailer magazine in 2018, 2019 and 2021.

We seek Safe Harbor.