Green Thumb Industries (OTC:GTBIF) (GTI), a prominent player in the cannabis industry, reported robust financial results for the second quarter of 2024. The company saw an 11% increase in revenue, which reached $280 million, and a significant rise in EBITDA, which exceeded $90 million. Green Thumb also generated a substantial $20 million in cash flow from operations, despite paying $53 million in tax installments.
With a focus on expanding its retail stores, enhancing the wholesale business, and increasing brand awareness, GTI is positioning itself for continued growth. Notably, the company has shown interest in a potential combination with Boston Beer (NYSE:SAM), reflecting a strategic bet on shifting consumer preferences from alcohol to cannabis.
Key Takeaways
- Green Thumb Industries' revenue climbed to $280 million, an 11% increase.
- EBITDA for the quarter stood over $90 million, with $20 million in operational cash flow.
- GTI paid $53 million in tax installments and repurchased 1.6 million shares for $20 million.
- The company ended the quarter with $196 million in cash and plans to invest $50-60 million in capital expenditures.
- A potential combination with Boston Beer is being explored, indicating a trend shift from alcohol to cannabis.
- GTI is preparing for the launch of adult-use cannabis sales in Ohio and sees growth opportunities in Virginia, Minnesota, and other states.
Company Outlook
- Green Thumb is set to expand its retail presence and focus on consumer experience.
- The company anticipates the adult-use market in Ohio to double.
- Expansion plans are contingent on the success of adult-use sales in Ohio starting in September.
- GTI is interested in a US listing, expecting American citizens to invest in domestic cannabis companies soon.
Bearish Highlights
- Operating expenses have risen due to increased compensation costs and the opening of new retail stores.
- Pricing gaps within various price segments require further analysis to optimize.
Bullish Highlights
- Improved gross margins were driven by higher cannabis production and lower acquisition costs.
- GTI's strong balance sheet and record cash flow generation point to a robust financial position.
- The crackdown on illicit stores in New York has led to increased demand for GTI's products.
Misses
- The company acknowledges that the consumer market may be impacted by macroeconomic conditions.
- Pricing challenges remain, with a focus on correctly pricing products in retail stores.
Q&A Highlights
- Benjamin Kovler highlighted the high demand for cannabis despite a potentially weaker consumer.
- GTI is studying the market and identifying well-performing operators, aiming to cater to price-sensitive demand.
- The company is investing in Florida, showing confidence in the cannabis market's resilience.
Green Thumb Industries (GTI) has showcased a robust performance in the second quarter of 2024, with its strategic initiatives and strong financials setting the stage for future growth. As the company navigates the evolving cannabis landscape, it remains focused on consumer demand and market opportunities, laying a foundation for sustained success.
InvestingPro Insights
Green Thumb Industries (GTI) has not only delivered impressive revenue growth but also demonstrated strategic financial management as reflected in the latest InvestingPro data. The company's market capitalization stands at a solid $2.54 billion, highlighting its substantial presence in the cannabis industry. GTI's price-to-earnings (P/E) ratio, a measure of the company's valuation, is currently at 44.91, which indicates a higher earnings multiple compared to some peers, suggesting investor confidence in its future earnings potential. Additionally, GTI's revenue for the last twelve months as of Q2 2024 reached nearly $1.11 billion, with a notable revenue growth of 8.63%, reinforcing its strong financial performance.
InvestingPro Tips for GTI reveal strategic moves by management that could influence investor sentiment. The company's management has been actively engaged in share buybacks, which can often signal confidence in the company's value and prospects. Furthermore, analysts' projections for GTI indicate net income growth this year, adding to the bullish sentiment surrounding the company.
For investors seeking more comprehensive insights, InvestingPro offers a total of 10 tips on GTI, including analysis on profitability, stock price volatility, and cash flow adequacy. These additional tips are available on InvestingPro's platform and can provide investors with a deeper understanding of GTI's financial health and future outlook.
Investors looking to make informed decisions about GTI can consider these insights and tips, alongside the company's strategic endeavors, such as the potential combination with Boston Beer and the expansion into new markets. With a focus on growth and a strong financial backbone, GTI appears poised to capitalize on the evolving cannabis landscape.
Full transcript - Green Thumb Industries Inc (GTBIF) Q2 2024:
Operator: Good day, and welcome to the Green Thumb Industries Second Quarter 2024 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. [Operator Instructions]. On today's call, management will provide prepared remarks and then we will open up the call for your questions. [Operator instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Shannon Weaver. Please go ahead, ma'am.
Shannon Weaver: Thanks, Nick. Good afternoon, and welcome to Green Thumb's second quarter 2024 earnings call. I'm here today with Founder and CEO, Ben Kovler; President, Anthony Georgiadis; and Chief Financial Officer, Mat Faulkner. Today's discussion and responses to questions may include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. These risks and uncertainties are detailed in the earnings press release issued today, along with the reports filed with the United States Securities and Exchange Commission and Canadian securities regulators, including our most recent annual report filed on Form 10-K. This report, along with today's earnings release, can be found under the Investors section of our website. Green Thumb assumes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. Throughout the discussion, Green Thumb will refer to non-GAAP financial measures, including EBITDA and adjusted EBITDA. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is included in our earnings press release and SEC and SEDAR+ filings. Please note that all financial information is provided in US. dollars, unless otherwise indicated. Thanks, everyone, and now here's Ben.
Benjamin Kovler: Thank you, Shannon. Good afternoon, everyone, and thank you for joining our second quarter 2024 conference call. I'm pleased to report that our team delivered another strong quarter, with revenue up 11% over the prior year to $280 million and over $90 million in EBITDA. Importantly, cash flow from operations was $20 million, after paying almost $53 million in two tax installments this quarter. On June 28, the IR's issued a statement that made it clear that Cannabis companies were obligated to pay taxes under 280E, while Cannabis remains a schedule one controlled substance. Thus, the regulatory attention is squarely on the DEA and leader Anne Milgram, and whether or not she chooses to reschedule candidates to schedule three, engage in an ALJ review process or stay silent until the next administration. For the good of the country, we encourage Anne Milgram to do her job and reschedule Cannabis immediately. No more waiting. During the second quarter, we also repurchased 1.6 million shares for approximately $20 million, bringing the aggregate spend under the share repurchase program to $73 million for approximately 6.6 million shares. Under the current program, we still have the option to repurchase almost $27 million in shares. We believe in the value creating nature of share buybacks at attractive prices. We ended the quarter with $196 million in cash, has plenty of dry powder to execute our capital allocation plan for 2024 and beyond. From an industry perspective, there is still price compression in most markets as well as inflationary pressure, not to mention national anxiety around the upcoming elections. Despite this uncertainty, we are focused on the product, our brands and the relationship with the consumer. Green thumb will continue following our same playbook since day one, scaling our business through retail store expansion, building out our wholesale business, leveraging operational efficiencies and carefully managing our balance sheet. Green Thumb has some of the top rated brands in the business, RHYTHM, Dogwalkers, Incredibles and Beboe, and we're focusing a lot of energy this year on expanding brand awareness by creating meaningful experiences for consumers, authentic relationships, especially through the power of music. We recently announced that our Miracle among the line two-day festival will be back this year with a highly anticipated line-up of musicians, including Cannabis icon Wiz Khalifa. The RHYTHM artist series has -- the RHYTHM artist series features strains chosen and smoked by artists such as multi-platinum R&B disruptor Tinashe. Tinashe's green tea has created a lot of great buzz. Music is also at the core of Bloodball, an annual concert we throw in market, which we opened up to Philly for the first time this year. We saw record turnout these events and the Finder RHYTHM lifestyle was on full display. We are also excited to bring more of our brands to new markets, with Beboe launching in New York just last month, and that's going well and plans to expand to New Jersey very soon. We like the progress in our brands, but believe this is just the beginning of how these lifestyle brands will live in America. We want our brands to become integral to the American experience, and we are intensely watching consumer trends. We believe alcohol is melting, and for folks under 35 years old, alcohol is a lot less appealing than it was for their parents. This line of thinking led us to approach Boston Beer about a possible combination. Green thumb has 50% more EBITDA than Boston Beer, and we think consumer trends will force Boston Beer and others to diversify away from alcohol into products the future American consumer wants. I outline the benefits of combining our two businesses, including a potential US listing for Green thumb, in my letter to Boston Beer's Chairman and Founder and posted that on X. It often takes time for an incumbent industry to recognize and embrace change. In the meantime, Green thumb will do what we have always done, keep our head down and execute, focus on building shareholder value through prudent capital allocation, all the while using the consumer as our North Star. Stopping for a moment and looking around to where we are, we feel good green gum is gaining market share in us Cannabis as our brands build momentum. Furthermore, we are well positioned in the emerging Cannabis markets like Ohio, where we will kick off adult use sales at all five of our RISE Dispensaries tomorrow morning. Looking forward to seeing our incredible team in action on day-one in the Buckeye State, we see a nice long Runway for growth and are confident in our team's abilities to strategically and profitably scale our business in Ohio. With that, I'll turn the call over to Anthony. Anthony?
Anthony Georgiadis: Thanks Ben. As you just heard, despite continued consumer inflationary headwinds, our team achieved record second quarter results. Let's take a look at some of the highlights. First, we invested approximately $20 million in CapEx as we continue to expand our Florida retail footprint as well as our Connecticut wholesale facility. Through June, we've opened three new stores and anticipate opening another seven to eight stores in the back half of the year. Year-to-date, we've invested approximately $35 million in CapEx and expect to invest an additional $50 million to $60 million in CapEx throughout the remainder of the year. Second, we continue to drive strong CPG performance across our fleet and increased our CPG revenue by over 15% compared to Q2 of last year. As our retail business continues to absorb the impact of price erosion and greater competition, we plan to enhance our market positions by increasing both the depth and breadth of our product lines and their placement on third party shelves. For those that saw it, Biboe recently launched in New York and we are incredibly excited to introduce her to the Big Apple (NASDAQ:AAPL). Third, we prepared for tomorrow's Ohio launch with the team hired, the store is ready and our menus are stacked with something friendly. Our recent adult use conversions in New Jersey, New York and Maryland have prepared us well for tomorrow's historic event. As we look ahead to the balance of the year, our team is focused on the following. First, optimizing our business. This means different things depending on market dynamics and our position within each market. However, when you zoom out, it comes down to focusing on the consumer, our team, and execution. Second, driving continued distribution of our CPG brand through our rise retail stores as well as third party stores. While we've made substantial progress on this front, we have more work to do to continue expanding the reach of our industry leading brands, including RHYTHM and Dogwalkers. Third, continuing to invest our resources and capital in markets where we can underwrite strong returns. The balance of our 2024 CapEx plan continued retail and wholesale investments in Florida, Nevada, Minnesota, Pennsylvania and Virginia. It's no coincidence that four of these five markets have yet to establish an adult use program. Last, preparing for our momentous second Miracle in Mundelein on September 7 and 8 at our flagship Illinois store in Mundelein; for those unfamiliar, this two-day festival for attendees 21 and over allows for legal Cannabis consumption. This year's event showcases Wiz Khalifa, slightly stupid and revolution. We hope to see you there. In conclusion, we did want to call out hemp as we've received a lot of questions on this topic. As previously disclosed, we entered the hemp market via a license agreement with our Incredibles brand. Through that relationship, we are studying the consumer, the players, the product, the risks and other facets of the market, including overall potential. Since we are in the early days of our exploration, it would be premature for us to comment more than that. However, our North Star always has been and always will be the consumer. With that, I'll turn the call over to Matt to review our financial results. Matt?
Matt Faulkner: Thanks Anthony and hello everyone. We're pleased with the strong results and record cash flow generation. In the second quarter, we delivered over $280 million in revenue, an 11% increase compared to the prior year period. Revenue during the quarter benefited from eleven incremental retail stores and the legalization of adulthood sales in Maryland. While pricing year over year continued its downward slide, the sequential impact took a turn for the worse in Q2 compared to Q1's improvement. Overall retail revenue increased 9% versus the prior year period. Second quarter comparable sales increased 2.3% compared to the second quarter last year on a base of 76 stores. Consumer packaged goods gross revenue increased 15% versus the prior year quarter. Looking forward, we expect to see third quarter sequential revenue to be flat as we watch macro consumer spending pull back with some expected benefit from Ohio adult use launch. Gross profit for the second quarter was $151 million, or 53.7% of revenue, compared to $125 million, or 49.6% of revenue for the second quarter last year. The increase in gross margin was primarily driven by improved CPG utilization and retail acquisition costs. Turning to OpEx selling, general administrative expenses for the second quarter were $97 million for 34% of revenue, compared to $84 million over 33% of revenue last year, with compensation costs driving the increase. SG&A, excluding depreciation, amortization, one time transaction costs and stock basic, which we refer to as normalized operating costs, approximated $67 million compared to $57 million in the second quarter last year. The increase year-over-year is mainly attributed to the eleven incremental retail stores. Second quarter net income was $21 million or $0.09 per basic and diluted share during the quarter. This compares to net income $13 million, or $0.05 per basic and diluted share reported last year. Adjusted EBITDA, which excludes non-cash, stock based compensation and other non-operating costs, was $94 million, or 33.5% of revenue for the quarter, as compared to $76 million or 30% revenue for the second quarter last year with the increase driven by margin improvement. We ended the second quarter with a strong balance sheet, cash of $196 million and cash flow from operations of $104 million, compared to $93 million last year, all while paying $53 million in income taxes so far this year. In closing, I'm very proud of our team. For all their hard work and execution in the second quarter, I'm confident in our ability to continue to execute our strategic plan, deliver high quality Cannabis to our patients and customers, all while generating strong returns for our shareholders. With that, I'll open the call for your questions. Operator?
Operator: Thank you. We will now begin the question-and-answer session. [Operator instructions]. The first question comes from Matt Bottomley with Canaccord Genuity (TSX:CF). Please go ahead
Matt Bottomley: Evening, everyone. Thanks for the question. Ben, just wondering if I can get a little more color from you with respect to your anticipation in Ohio. Not, not in terms of specific, monetary guidance or anything like that, but if you relate it to maybe what we saw in Maryland, where that was almost, effectively a doubling of the market within months. Given that you're already at the state level max of five, I'm just wondering if you can give us an idea of what the back half of the year might suggest, considering that market turning online tomorrow?
Benjamin Kovler: Yes. Matt, thanks. Yes, you're right. I mean just to level set for everybody, on Friday, we learned that Ohio would start adult-use tomorrow. So Tuesday this week, which is tomorrow, for RISE, that means all five stores will convert to 21 and over. Folks can come in and buy for the first time. And this is not new for us, right? Like you said, Matt, we led the charge in New Jersey. We led the charge in Maryland. We led the charge in Illinois. We've been around for Nevada, Massachusetts, New York and several others. So we're optimistic. I'm not sure what else to tell you except numbers. So the numbers ought to tell you, yes, we think it easily will double as a market. Holistically, it should be bigger. Ohio has been hampered for several different reasons, product, branding, sizing, and we're optimistic about the new regulator in the future, and we're excited about tomorrow. We don't see a gangbuster boulder in a pond start. We see crawl, walk, run, making sure this thing gets off to a good start, everybody is on the same page. And we're excited for tomorrow. I'll be out there. Everybody is welcome, 21 and over, bring your ID, and we'll see you at RISE throughout Ohio.
Matt Bottomley: And sorry, any capacity constraints in that market, just to slip another quick one in there?
Anthony Georgiadis: Yes, Matt, I can take that question. So we are fully built out. So for everyone's benefit, the state, at least before Adobe (NASDAQ:ADBE) started, had a statutory limit of five stores per operator and then had a canopy cap. So we were at the max on both of those limits. Now with adult-use, the canopy cap increases as well as the store count goes from five to eight. But at the moment, we're fully locked and loaded. And then obviously, when the adult-use rates go into effect in early September, that's when we'll take a closer look at the canopy expansion, along with -- we already have a path to open up the additional stores from five to eight.
Operator: [Operator Instructions] The next question comes from Eric Des Lauriers with Craig-Hallum Capital Group. Please go ahead.
Eric Des Lauriers: Great. Thanks for taking my questions and congrats on another impressive quarter here. So your ability to continue gaining market share and realizing operating efficiencies continues to be impressive. Can you talk about where you see opportunities to continue that momentum and how that plays into your CapEx plans for the second half? And then just kind of higher level, should we be thinking about your efficiency gains and ability to kind of offset price compression as more a function of CapEx projects or operating cost leverage? Thank you.
Benjamin Kovler: Yes, I can start, Eric, and maybe Anthony will come in on the second part. So I mean I think the first part is where is the growth, where are we optimistic going forward. We think we have an edge on the vision of what's happening in Cannabis in the country. So it's sort of like have the pieces in place ahead of time, which means tomorrow morning, open five stores for nonmedical sales in Ohio, and what that means, in the next year or two, are places like Virginia, Minnesota and a few other states on the market. And then it's even thinking outside the box and being ahead of that. And we have the balance sheet to do it, and we have the ability and the power to make a few mistakes, too, and not tip over the boat. So we see our ability to play offense and really accelerate on the gas and press, and press big time. That's what we're doing for the advantage of shareholders. So it's a pretty good situation where we are there in terms of the actual details, the operating efficiencies and price.
Anthony Georgiadis: Yes. Look, I think as we look ahead, I think we're showing it in terms of kind of where we're allocating capital, right? And the fact that we continue to allocate capital. We've been one of the bigger kind of investors into our business than any other operator. And as we look ahead, we've had to continue to sharpen the pencil and just make sure that the returns continue to pencil out for the shareholders. And so now, I think in my prepared remarks, I mentioned that where we're allocating the dollars really is Florida, Nevada, Minnesota, Pennsylvania and Virginia. And how that evolves over time, we'll see. But we see opportunities within those markets to deploy capital and returns that make sense for shareholders. And then in terms of our performance and ability to continue to kind of drive strong operating performance, it's on the heels of the capital spend, so as we enter in these markets, we stand up the facilities, we continue to optimize kind of our presence within those facilities, and we grow into them. And that's how we've been able to continue to effectively show strong kind of margin performance. On top of that, it's all supported by the strength of our brand and the quality of our products, and that's going to continue to be kind of two pillars that we're going to have to continue to lean on as these markets just continue to become more competitive and more challenging.
Operator: The next question comes from Pablo Zuanic with Zuanic & Associates. Please go ahead.
Pablo Zuanic: Thank you. Ben, can you maybe give more context regarding your letter to Jim Koch regarding the merger with Boston Beer. I mean, obviously, I know it's something that you guys thought through very carefully, and it's not a publicity stunt, for sure. But they are low growth, right? Why dilute your story with a low-growth company? The idea of a US. listing, I mean, Boston Beer could lose their NASDAQ listing if they were to merge with a plan touching company, right? At least that's what we've seen from other cases, even the ones that are trying to have ring fence structure. So maybe just some context about what you try to do there. And then number two, if I can, I know you said not a lot of comments on hemp. From my perspective, there are good players out there in hemp that are following the rules and their products are tested and they go through labs in the various states. And that's why probably you chose LFTD partners as a partner there, but maybe give a bit more context if you can. Because I find that when I read out there, it sounds like everything that's hemp derivative is bad. And obviously, there are products that are properly produced and tested.
Benjamin Kovler: Yes. Thanks, Pablo, it's Ben. I mean I honestly I don't have much more to say than in the letter. I think we've been pretty forthcoming where our thinking is, so I'm not going to rearticulate it here. I think just for the record, there are listed companies on US. exchanges that own licenses to operate marijuana in regulated markets. They're taking in revenue and they're listed. So we think a US. listing is just a matter of time and the right lawyers, the right conversations and the right sort of blow of the wind for people to feel the right cover. But again, for the US, American citizens to not be able to buy stock in an American company that rolls the joints that they smoke doesn't make any sense. So eventually, we know that that's going to be a fact. And buy what you own, Peter Lynch style of investing should take over for this sector because American consumers, and especially young, new interested consumers, want you have access to this sector. And so far, it's been blocked out. It doesn't make sense. Again, there's 428,000 Americans that work in Cannabis, and they're all breaking federal law right now. And everybody in D.C. seems distracted and not quite able to get around to it. So it's quite frustrating. But we view Green Thumb as a listing on the US. exchange here eventually. I can't tell you when, but obviously, we would follow and put this to the other big companies that are listed on the New York Stock Exchange and NASDAQ that are in the marijuana business.
Anthony Georgiadis: Yes. Pablo, good call out and good comments on hemp. Again, I think my prepared remarks kind of said it best. We're at the very early stages of our exploration here. And one of the things I said, we're studying the players. So absolutely, there are some operators that we've come across that seem to be doing a nice job. Unfortunately, not everyone seems to be kind of falling within those same guidelines. But we're at the early stages. And my guess is, over time, we'll start to kind of really peel back the onion here and understand how and if we play in this market. We also said that the consumer is really what our main focus on. So at the end of the day, we're going to be focused on that. And so we have to keep our eyes wide open as Cannabis continues to evolve.
Operator: The next question comes from Aaron Grey with Alliance Global Partners (NYSE:GLP). Please go ahead.
Aaron Grey: Hi. Good evening and thank you for the question. Nice execution on the CPG side of the business, both year-over-year but also on a mid-single-digit basis, taking away the Maryland adult-use impact. Could you provide some color in terms of standouts in terms of formats or brands or where you have seen the most success in the first half of the year for that? And then you've spoken about pricing pressure in the sector. Can you speak to your current comparability in terms of the price gaps within respective price segments and whether or not that's changed and driven some of the success that you've seen? Thank you.
Anthony Georgiadis: All right, Aaron, there's a lot of you were coming through a little bubble there, but your first question is related to specific to Maryland in terms of the products and the brands that are having a lot of traction in the market. Is that it? Did I catch that right?
Aaron Grey: No. First question was just overall CPG success and what formats or brands have been standouts.
Anthony Georgiadis: Okay. So yes, let's answer that first. So in terms of the products, the brands, look, it's RYTHM and Dogwalkers, along with strength within Incredibles and Beboe, depending on the market and where they're launched, right? But overall, we're pretty pleased. Look, we look at the same data as everyone else. We take a look at BDSA and Headset data. And in many markets, we're making strong progress. There are some markets where maybe we're not making the progress that we'd like to make. And I can tell you we're going to be working hard on those. But taking a step back, we feel really good about the progress we've made thus far. And again, it comes back to high-quality products, right? We've got strength within the flower category given how we kind of build this business with highly automated indoor facilities that can achieve just exceptional kind of humidity and temperature levels and whatnot. So we have the ability to produce the high-quality flower. That helps us on the RYTHM side as well on the Dogwalkers side of the business. And then it's really just continuing to meet the consumer with where the demand is within the category such as pre-roll that has nice growth associated with it. So that's really where we've been focused. And so far, we've had some nice success that have showed into the numbers within the first half of the year.
Aaron Grey: Yes, the second part of that was just your comfortability in terms of price gaps within our respective price segments for your brands?
Anthony Georgiadis: Look, here, the data is much more murky. And the real challenging factor is like-for-like SKUs, particularly right now, what we're seeing with the consumer just on the retail side, the store business are there, the traffic is there, but there's an essential kind it's just trading down in bulk purchasing that's happening that effectively is driving down the overall revenue per gram and that's metro track, which for us is. So it's hard to really look apples-to-apples compared against kind of other brands, other categories, like-for-like. It's just incredibly challenging. So for us, the way that we're looking at it is -- we look at how we price our products within our own retail stores relative to third-party products. And if we can get a sense for value and we feel good about the value that effect our products are carrying on the shelf, that's really the first step, and that's what gives us the confidence that we're pricing our product correctly.
Operator: The next question comes from Frederick Smith with ATB Capital. Please go ahead.
Frederick Smith: Hi, thanks for taking my question. Congrats on the quarter. Just on New York, could you just comment on what you're seeing there in the ads market, especially with the crackdown that we're seeing on the illicit store side. Are you seeing any meaningful benefit from that enforcement against the illicit market? And do you think that New York got to a point where you could see that market rising finally.
Anthony Georgiadis: Sure. Anthony here, I know everyone searched for quite a bit already, but I'll take that one. So on New York with zoom out, as of today, we have five stores in New York. We opened up our latest store in Syracuse late last week. And look, I'll tell you that the market overall has received kind of an injection of life ever since we started seem to stay cracked down these stores. And we're seeing it because we're feeling the demand on the wholesale side of the business, pulling through, particularly at the retail stores that are within that -- within kind of the city limits. And so we can already tell it's starting to have an impact. I mean, obviously, we think they're in the early stages of this, and there's a lot more room to grow. But just given the size of the state, we're finally starting to see life within a market with over 20 million people that we all kind of anticipated would be there, call it, 5, 10 years ago. So the early stages seems like it's working, but there's more -- there's more work to do. We'll continue to monitor it. But definitely, it's having an impact. If anything, it's just the morality of the industry within New York is a lot more positive now that it seems like it's just one less kind of front we have to -- we inevitably have to fight.
Operator: The next question comes from Mike Regan with Excelsior Equities. Please go ahead.
Michael Regan: Hi, everyone. Thanks for the question. I guess turning to sort of the spending in Florida. Is that more just to build out the existing medical market if adult use doesn't pass in November? Or is it sort of in anticipation of adult-use taking in November sort of on that, I guess, any thoughts on, I guess, the yes on three campaign and additional contributions, especially now that Ken Griffin is donating $12 million to fight it. Thanks..
Anthony Georgiadis: Yes. So Anthony here, Mike. I'll take that one as well. Look, we're investing into Florida irrespective of the vote in November, right? So the big November is just essentially more optionality on the business. Look, given the vertically integrated nature of that market, you have to invest essentially within wholesale before retail. We've done that. We're going to continue to make additional wholesale investments. We're going to continue to make additional retail investments. Now the investments we're making today is not a bet on a go-to-use. Now if and when the vote goes our way, the industry's way in November, that will probably force us to revisit our capital plan in the state of Florida and revisited debt. In terms of how the ballot initiative is looking at this moment, I mean, look, we're a number of months away. It's pretty premature at this point to really comment on it because, again, there's a lot of game to be played. There's more dollars and donations that are going to be coming in on both sides. And the reality is that asking a couple of months, we'll have a better sense of where this thing is really tracking. But you're agreed, we're investing in the market irrespective of the both of them.
Operator: The next question comes from Scott Fortune with ROTH Capital Partners. Please go ahead.
Scott Fortune: Good afternoon. Thanks for the questions. Just want to call out, we've talked a little bit about the consumer, but I just want to provide a little more color on the overall consumer strength here. You guys called out there's data indicating a tougher macro consumer spending, you guys called that out. But how is volume transactions holding up and your thoughts of where that's coming from that side, as I think on the consumer side, pricing coming down? Are we seeing more consumers kind of converting from the listed market or a substitution effect away from alcohol. Just kind of your overall sense on the consumer and how you guys are positioned to benefit from those trends as you see going forward here?
Benjamin Kovler: Scott, yes, it's Ben. I can take that. Yes. I would say, overall, we see the impact. We don't think the consumer is as strong as they were, but we see demand in Cannabis not letting up. So transactions are not -- tickets are not suffering in transaction volume. How to define the demand pie in Cannabis remains pretty interesting and remains expansive and morphing what happens to rules and what's going on in the legal market and what's at hemp, what's at the vape store and all that sort of thing. So -- and we continue to try to cater towards that consumer. We think the consumer is price sensitive. People care about how many dollars are in their pocket. You only have to look to like the major retailers of the country to see major signs of weakness in even today's market, et cetera, et cetera. So we don't think Cannabis is totally immune, but the demand is there, the demand remains strong. Demand is really strong even when things get bad, we think we'll see that with the election with other things coming up. So headline number that the industry is annualizing over $30 billion, that's the first time that's happened. This thing is strong, getting stronger. So that's why I said we're confident in the future of Cannabis the American consumer. We're very confident in Green Thumb. We've got the buyback going. We're bullish on what we're doing here. It's a very complicated environment. And just as we conclude here, was in on the regulatory environment is pretty unique -- we've runing the business for 10 years, and we've never quite seen anything like this and nobody really knows what's going on. Nobody knows what's going on macro, but nobody really knows what's going on in Canada. So we're focused on how great the product is. We believe in our brands, we believe in the future. So we hope those of you that are analyzing the industry that aren't getting invested, take a real look. It's a unique opportunity. We're coming to work excited every day, and look forward to talking to you again in 90 days. Thanks, Scott. Thanks, everybody.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Ben Kovler for any closing remarks.
Benjamin Kovler: That will do it, talk to you guys in 90 days.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
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