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Green Thumb Launches $50M Buyback: Time to Get Bullish on the Stock?
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Key Takeaways
Green Thumb authorized a $50M buyback, sending shares up 9% in Tuesday trading.
The move reflects confidence in long-term prospects and aims to return shareholder value.
A prior 2023 program repurchased 13.5M shares for $108M, showing a track record of buybacks.
Shares of Green Thumb Industries (GTBIF - Free Report) soared 9% on Tuesday after the company’s board of directors authorized a $50 million share repurchase program.
GTBIF’s Buyback Program Aims to Enhance Shareholder Value
This decision marks a notable move in the cannabis industry, where buybacks are rare due to limited access to capital and heavy regulatory burdens. The program signals management’s confidence in Green Thumb’s long-term prospects, while also aiming to return value to shareholders.
In theory, buybacks reduce the number of outstanding shares, boosting earnings per share (EPS) and potentially stabilizing share price performance in a volatile sector. Investors may also interpret the announcement as a signal that the company considers its stock undervalued, potentially providing additional support to market sentiment.
Notably, this is not Green Thumb’s first attempt at returning value via repurchases. In 2023, the company had a similar program and repurchased nearly 13.5 million shares for $108 million, highlighting its track record of shareholder-friendly actions.
Still, it’s worth noting that the company is not obligated to purchase any share under the current plan. If GTBIF determines it has a better use for its cash reserves — such as funding expansion or preserving liquidity — the buyback program can be suspended or terminated at any time. This flexibility suggests that the actual impact will depend on how aggressively the company executes the buyback.
However, we cannot make an investment decision based solely on this single event. Let’s delve into GTBIF’s broader fundamentals to gain a better understanding of how to play the stock amid this recent development.
Pricing Pressures Weigh on GTBIF’s Profitability
What sets Green Thumb apart from many peers is its vertically integrated model — cultivating, processing and selling cannabis through its own retail and wholesale operations. However, with 100% of the company’s revenues tied to U.S. markets, it remains highly exposed to domestic regulatory risks, particularly the lack of federal legalization, which continues to restrict access to capital and interstate commerce.
Green Thumb’s second-quarter 2025 top-line numbers rose nearly 5% year over year to $293 million. While the company’s consumer packaged goods (CPG) business delivered over 8% year-over-year growth, it registered relatively flat growth in the retail sales segment as sales growth in new stores was offset by significant price compression across all markets. Sales of comparable stores (open at least 12 months) fell 4% during the quarter, reflecting competitive pressure and softer consumer demand.
However, the company’s profitability continued to remain under pressure. Gross profit margins during the quarter were 49.9%, down 380 basis points from the year-ago period’s level due to the price compression.
Meanwhile, selling and operating expenses rose 11%, and the company reported a higher effective tax rate of nearly 97% (vs. 60% in the year-ago period). These cost pressures contributed to a significant hit to net income, leading GTBIF to post a loss during the quarter.
Looking ahead, we expect Green Thumb to remain under pressure due to persistent pricing compression in maturing markets. While the company continues to prioritize cash flow and prudent cost management, margin expansion could remain elusive without meaningful regulatory reform or a rebound in retail pricing dynamics.
Stiff Competition From Peers
Green Thumb operates in an increasingly saturated U.S. cannabis market, where price compression and oversupply are weighing on nearly all players. It faces stiff competition from peers like Curaleaf Holdings (CURLF - Free Report) and Tilray Brands (TLRY - Free Report) , both of which are also pursuing aggressive expansion and cost-control initiatives.
What makes the landscape even tougher is that rivals such as Curaleaf and Tilray are diversifying geographically, expanding into international markets like Europe and Australia. This global exposure provides them with additional growth channels and cushions against U.S.-specific risks. In comparison, Green Thumb remains fully reliant on the fragmented and crowded U.S. market, which heightens its exposure to regulatory hurdles and intensifies competition.
GTBIF Stock Performance and Estimates
Shares of Green Thumb have lost nearly 6% year to date against the industry’s 5% growth, as shown in the chart below.
Image Source: Zacks Investment Research
EPS estimates for 2025 and 2026 have trended downward over the past 60 days.
Image Source: Zacks Investment Research
How to Play GTBIF Stock?
Although a stable revenue stream and the ability to generate free cash flow offer some support for GTBIF stock, the significant exposure to the domestic market, along with pricing pressures, continues to strain its financial profile. President Trump’s recent comments on marijuana rescheduling have reignited optimism in the cannabis sector, but investors may prefer to wait for clearer signs before initiating or expanding positions.
Existing shareholders may consider maintaining exposure while monitoring this Zacks Rank #3 (Hold) company’s execution on its profitability roadmap.
Image: Bigstock
Green Thumb Launches $50M Buyback: Time to Get Bullish on the Stock?
Key Takeaways
Shares of Green Thumb Industries (GTBIF - Free Report) soared 9% on Tuesday after the company’s board of directors authorized a $50 million share repurchase program.
GTBIF’s Buyback Program Aims to Enhance Shareholder Value
This decision marks a notable move in the cannabis industry, where buybacks are rare due to limited access to capital and heavy regulatory burdens. The program signals management’s confidence in Green Thumb’s long-term prospects, while also aiming to return value to shareholders.
In theory, buybacks reduce the number of outstanding shares, boosting earnings per share (EPS) and potentially stabilizing share price performance in a volatile sector. Investors may also interpret the announcement as a signal that the company considers its stock undervalued, potentially providing additional support to market sentiment.
Notably, this is not Green Thumb’s first attempt at returning value via repurchases. In 2023, the company had a similar program and repurchased nearly 13.5 million shares for $108 million, highlighting its track record of shareholder-friendly actions.
Still, it’s worth noting that the company is not obligated to purchase any share under the current plan. If GTBIF determines it has a better use for its cash reserves — such as funding expansion or preserving liquidity — the buyback program can be suspended or terminated at any time. This flexibility suggests that the actual impact will depend on how aggressively the company executes the buyback.
However, we cannot make an investment decision based solely on this single event. Let’s delve into GTBIF’s broader fundamentals to gain a better understanding of how to play the stock amid this recent development.
Pricing Pressures Weigh on GTBIF’s Profitability
What sets Green Thumb apart from many peers is its vertically integrated model — cultivating, processing and selling cannabis through its own retail and wholesale operations. However, with 100% of the company’s revenues tied to U.S. markets, it remains highly exposed to domestic regulatory risks, particularly the lack of federal legalization, which continues to restrict access to capital and interstate commerce.
Green Thumb’s second-quarter 2025 top-line numbers rose nearly 5% year over year to $293 million. While the company’s consumer packaged goods (CPG) business delivered over 8% year-over-year growth, it registered relatively flat growth in the retail sales segment as sales growth in new stores was offset by significant price compression across all markets. Sales of comparable stores (open at least 12 months) fell 4% during the quarter, reflecting competitive pressure and softer consumer demand.
However, the company’s profitability continued to remain under pressure. Gross profit margins during the quarter were 49.9%, down 380 basis points from the year-ago period’s level due to the price compression.
Meanwhile, selling and operating expenses rose 11%, and the company reported a higher effective tax rate of nearly 97% (vs. 60% in the year-ago period). These cost pressures contributed to a significant hit to net income, leading GTBIF to post a loss during the quarter.
Looking ahead, we expect Green Thumb to remain under pressure due to persistent pricing compression in maturing markets. While the company continues to prioritize cash flow and prudent cost management, margin expansion could remain elusive without meaningful regulatory reform or a rebound in retail pricing dynamics.
Stiff Competition From Peers
Green Thumb operates in an increasingly saturated U.S. cannabis market, where price compression and oversupply are weighing on nearly all players. It faces stiff competition from peers like Curaleaf Holdings (CURLF - Free Report) and Tilray Brands (TLRY - Free Report) , both of which are also pursuing aggressive expansion and cost-control initiatives.
What makes the landscape even tougher is that rivals such as Curaleaf and Tilray are diversifying geographically, expanding into international markets like Europe and Australia. This global exposure provides them with additional growth channels and cushions against U.S.-specific risks. In comparison, Green Thumb remains fully reliant on the fragmented and crowded U.S. market, which heightens its exposure to regulatory hurdles and intensifies competition.
GTBIF Stock Performance and Estimates
Shares of Green Thumb have lost nearly 6% year to date against the industry’s 5% growth, as shown in the chart below.
Image Source: Zacks Investment Research
EPS estimates for 2025 and 2026 have trended downward over the past 60 days.
Image Source: Zacks Investment Research
How to Play GTBIF Stock?
Although a stable revenue stream and the ability to generate free cash flow offer some support for GTBIF stock, the significant exposure to the domestic market, along with pricing pressures, continues to strain its financial profile. President Trump’s recent comments on marijuana rescheduling have reignited optimism in the cannabis sector, but investors may prefer to wait for clearer signs before initiating or expanding positions.
Existing shareholders may consider maintaining exposure while monitoring this Zacks Rank #3 (Hold) company’s execution on its profitability roadmap.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.