Illinois-based cannabis products maker Green Thumb Industries, Inc. (GTBIF) has entered Minnesota through the acquisition of medical cannabis formulations company LeafLine Industries, which has the license to grow, process and sell cannabis to patients.
LeafLine is one of the only two cultivators that has the license to grow medical cannabis in Minnesota.
The acquisition includes a cultivation facility of LeafLine and five of its retail locations in Willmar, St. Paul, St. Cloud, Hibbing and Eagan. As per the agreement, Green Thumb can open three more retail locations in Minnesota.
Further, the acquisition expands Green Thumb’s operations to more than 50% of U.S. states, including California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Virginia.
Green Thumb’s CEO Ben Kovler, said, “Looking ahead, we are ready to begin providing patients access to high-quality flower and edible products, both of which have been recently approved.”
About Green Thumb
Green Thumb produces and sells medicinal and recreational cannabis through wholesale and retail channels. Its products include Dr. Solomon’s, Dogwalkers, Beboe, Good Green, incredibles and RYTHM.
The company has 17 manufacturing facilities and 73 retail locations across 15 U.S. markets.
Wall Street’s Take
Following the announcement, Echelon Wealth Partners analyst Andrew Semple reiterated a Buy rating on the stock with a price target of $43.07 (101.1% upside potential).
The analyst said, “We are encouraged by the attractive growth prospects in Minnesota as a still-emerging medical cannabis market, and the prospects for strong financial performance due to the state’s very restrictive licensing.”
Overall, the stock has a Strong Buy consensus rating based on 6 unanimous Buys. The average Green Thumb Industries price target of $49.52 implies 131.2% upside potential. Shares have lost 35.3% over the past six months.
Risk Analysis
According to TipRanks’ Risk Factors tool, Green Thumb is at risk mainly from two factors: Finance & Corporate and Legal & Regulatory, which account for 31% and 27%, respectively, of the total 64 risks identified for the stock.
Under the Finance & Corporate risk category, the company has 20 risks, and under the Legal & Regulatory category, there are 17 risks. The details of these risks can be found on the TipRanks website.
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