Morningstar Green Thumb Industries Inc GTII fair value $36Green Thumb Industries cultivates and sells medicinal and recreational cannabis through wholesale and retail channels in the United States. Unlike its Canadian peers, the firm is more vertically integrated as it owns dispensaries in addition to the cultivation and processing of value-added products. It has a presence in 15 states through 18 production facilities, and 87 dispensaries. In states with more mature cannabis markets, Green Thumb believes there are enough cultivators available and purchases cannabis from third parties. This helps reduce capital intensity for expansion without sacrificing exposure to widening legalization.
Its growth strategy focuses on states with large populations and limited licenses, including Illinois, Massachusetts, New York, Florida, and Ohio. It strategically operates in states with robust medical cannabis markets with momentum around future recreational legalization.
We think the U.S. has the highest potential and offers the fastest growth of any market. But the U.S. regulatory environment is murky, with individual states legalizing recreational or medical cannabis while it remains illegal federally. Eventually, we expect federal law will be changed to allow states to choose the legality of cannabis within their borders. We forecast high-teens average annual growth for the U.S. recreational market and low-single-digit growth for the medical market through 2032..