10-K: Green Thumb Industries Reports Strong 2025 Net Income Growth

Green Thumb Industries Inc. reported a significant increase in net income for the fiscal year ended December 31, 2025, driven by adult-use sales launches and strategic brand licensing deals.

Summary

• Net revenue for the fiscal year ended December 31, 2025, increased by 3% to $1,175,295 thousand, up from $1,137,141 thousand in 2024.
• Net income attributable to Green Thumb Industries Inc. surged by 56% to $114,152 thousand in 2025, compared to $73,083 thousand in 2024.
• Basic net income per share rose to $0.49 in 2025 from $0.31 in 2024, while diluted net income per share increased to $0.48 from $0.30.
• Gross profit decreased by 4% to $574,893 thousand in 2025, with gross margin falling to 49% from 53% in 2024, primarily due to price compression and brand licensing fees.
• Total expenses increased by 16% to $437,193 thousand in 2025, representing 37% of revenues, up from 33% in 2024, mainly due to higher salaries, benefits, and retail store operating costs.
• Total other income saw a substantial increase to $125,655 thousand in 2025, largely driven by fair value adjustments on related party warrants and a gain on the sale of intellectual property.
• The company launched adult-use sales in Minnesota (September 16, 2025) and Ohio (August 6, 2024), contributing to revenue growth.
• Green Thumb operated 113 retail locations as of December 31, 2025, an increase from 101 in the prior year.
• The company sold intellectual property rights for its Consumer Packaged Goods brands (e.g., incredibles, RYTHM, Beboe) to RYTHM, Inc. (RYM) in May and August 2025, entering into licensing arrangements for continued exclusive use in existing markets.
• As of December 31, 2025, Green Thumb owns approximately 33% of RYM's outstanding common stock.
• Cash and cash equivalents increased to $274,298 thousand as of December 31, 2025, from $171,687 thousand in 2024.
• Working capital increased by $160,925 thousand to $399,856 thousand as of December 31, 2025, primarily due to lower income taxes paid and the maturity of a related party note receivable.
• The company repurchased 7,209,875 Subordinate Voting Shares at an average price of $4.84 during 2025, returning $38,873 thousand to shareholders.
• A new share repurchase program was authorized on September 23, 2025, allowing for the repurchase of up to 10,364,640 Subordinate Voting Shares at an aggregate cost of up to $50,000 thousand over a 12-month period.
• The company accrued $8,219 thousand for a legal judgment (unpaid rent, interest, and attorney fees) and posted a supersedeas bond of $9,284 thousand as of December 31, 2025, for an appeal.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing as moderately positive. While operational income declined and gross margins compressed, the significant increase in net income, strong cash flow from operations, and strategic capital allocation (share repurchases, brand licensing) demonstrate effective financial management and adaptability in a challenging regulatory environment.

Positives

• Net income attributable to Green Thumb Industries Inc. increased significantly by 56% year-over-year to $114,152 thousand.
• Basic and diluted net income per share showed strong growth, increasing by 58% and 60% respectively.
• Revenue grew by 3% to $1,175,295 thousand, driven by new adult-use markets in Minnesota and Ohio, and expansion in existing markets like Florida, Maryland, Nevada, and New York.
• The company expanded its retail footprint, operating 113 locations as of December 31, 2025, up from 101 in the prior year.
• Total other income increased substantially due to fair value adjustments on related party warrants and a gain from the divestiture of intellectual property.
• Cash and cash equivalents increased by over $100 million, indicating improved liquidity.
• Working capital saw a significant increase of $160,925 thousand, reflecting better financial health.
• The company continued its share repurchase program, returning $38,873 thousand to shareholders in 2025, demonstrating a commitment to shareholder value.
• A new share repurchase program was authorized for up to $50,000 thousand, signaling continued confidence in the company's valuation and capital allocation strategy.
• The company successfully settled an arbitration award in its favor for $17,000 thousand with Ascend Wellness Holdings Inc. in February 2026, post-period.

Negatives

• Gross profit decreased by 4% and gross margin declined from 53% to 49% in 2025, primarily due to price compression and the impact of brand licensing fees.
• Total expenses increased by 16% to $437,193 thousand, outpacing revenue growth and leading to a higher expense-to-revenue ratio (37% vs. 33%).
• Income from operations decreased by 39% to $137,700 thousand, indicating reduced operational efficiency before other income/expenses.
• The company incurred a legal judgment of $7,307 thousand for unpaid rent, plus $912 thousand in interest and attorney fees, related to a breached commercial property lease.
• The company recorded a loss of $11,678 thousand on the sale of its incredibles brand intellectual property and hemp business to RYM in May 2025.
• The cannabis industry faces intense competition from illicit markets and unregulated hemp-derived THC products, which are not subject to the same costly regulations and taxes, potentially undercutting prices.
• The company is subject to unfavorable U.S. tax treatment under IRC Section 280E, which prohibits deducting certain business expenses, leading to high effective tax rates.
• The company's voting control is concentrated among senior executives (Benjamin Kovler, Andrew Grossman, Anthony Georgiadis) due to Super Voting Shares, which could delay or prevent actions favored by other shareholders.
• The company faces risks related to the federal illegality of cannabis, which could lead to enforcement actions, asset forfeiture, and difficulties in accessing traditional banking and U.S. bankruptcy protections.
• The 2026 Appropriations Act, enacted November 12, 2025, includes a provision to effectively prohibit currently commercialized hemp-derived THC products, creating uncertainty for the broader cannabis market and the company's investments in RYM.

Risks

• Cannabis remains illegal under U.S. federal law, and enforcement of cannabis laws could change, leading to significant fines, penalties, administrative sanctions, or criminal charges.
• Future state regulation of cannabis is uncertain, with potential for repeal or curtailment of state laws, or local governmental authorities limiting applicability, which could materially and adversely affect business.
• Inability to obtain or maintain necessary permits and authorizations, or to comply fully with applicable laws and regulations, could result in restrictions on operations or significant costs.
• Limitations on ownership of cannabis licenses in certain states may restrict the company's growth in those markets.
• Potential subjection to U.S. Food and Drug Administration or Bureau of Alcohol, Tobacco, Firearms and Explosives regulation if cannabis is reclassified, leading to unknown costs, requirements, or prohibitions.
• Restricted access to banking and other financial services due to federal anti-money laundering laws and regulations, making it difficult to operate efficiently.
• Difficulties acquiring additional financing from traditional banking institutions due to the federal illegality of cannabis, limiting growth and potentially impacting financial condition.
• Lack of access to U.S. bankruptcy protections, which would have a material adverse effect in the event of bankruptcy.
• Intense competition from other cannabis producers and retailers, including larger, better-financed competitors, and potential new entrants from pharmaceutical, alcohol, or tobacco industries if cannabis is rescheduled.
• Competition from the illicit market and unregulated hemp-derived THC products, which have lower costs due to lack of regulation and taxes, potentially undercutting prices.
• Dependence on the popularity and consumer acceptance of its brand portfolio, which is licensed from a third party (RYM), with risks of termination of licensing agreements.
• Limited trademark protection at the federal level for cannabis products, potentially affecting brand value outside operating states.
• Constraints on marketing products due to strict state regulations, hindering business development and market share competition.
• Risks related to the results of future clinical research, which may reveal negative health and safety effects of cannabis, impacting reputation and financial performance.
• Subject to unfavorable U.S. tax treatment under Section 280E of the IRC, prohibiting deduction of certain business expenses and leading to high effective tax rates.
• Exposure to civil asset forfeiture of property used in the cannabis business due to federal illegality.
• Subject to proceeds of crime statutes, which could restrict or jeopardize the ability to declare dividends or repatriate funds.
• Exposure to fraudulent or illegal activity by employees, independent contractors, or consultants, leading to potential penalties and litigation.
• Internal controls over financial reporting may not be effective, potentially leading to reporting failures or loss of investor confidence.
• Risks associated with material acquisitions, dispositions, and other strategic transactions, including disruption, distraction of management, increased financial leverage, and failure to realize anticipated benefits.
• Risks associated with investments in private companies, which may not meet anticipated development targets or generate revenue.
• Risks associated with jointly owned investments (joint ventures, strategic partnerships) due to lack of control, disagreements with partners, or partner insolvency.
• Limitations related to the acquisition and leasing of suitable properties for cannabis operations, potentially impeding growth and increasing costs.
• Reputation and ability to do business may be negatively impacted by improper conduct by business partners, employees, or agents.
• Risks due to industry immaturity or limited comparable, competitive, or established industry best practices.
• Risks related to product development and market acceptance, with new products being relatively untested.
• Inherent risks in agricultural operations, such as insects, plant diseases, and natural elements affecting production.
• Inherent risk of product liability and similar claims, including product defects, contamination, or adverse reactions.
• Products may be subject to product recalls, leading to unexpected expenses, lost sales, and reputational harm.
• Unfavorable publicity or consumer perception regarding the safety, efficacy, or quality of cannabis products.
• Adverse impact from rising or volatile energy costs and availability, affecting profitability and operations.
• Encountering unknown environmental risks, such as hazardous conditions, delaying development and requiring significant expenditures.
• Risks related to information and operational technology systems, and potential cyber-attacks and security breaches, leading to data loss, reputational damage, and legal liabilities.
• Reliance on third-party software providers, with disruptions potentially affecting business operations and profitability.
• Risks related to insurance coverage and uninsurable risks, as insurance may not cover all potential hazards or be available on acceptable terms.
• Dependence on key inputs, suppliers, and skilled labor, with fluctuations in cost or availability negatively affecting results.
• Loss of key personnel could negatively affect business, financial condition, and results of operations.
• Sales are difficult to forecast due to limited and unreliable market data in the nascent cannabis industry.
• Growth-related risks, including capacity constraints and pressure on internal systems and controls.
• Exposure to infringement or misappropriation claims by third parties regarding intellectual property.
• Increased labor costs based on union activity, potentially leading to work stoppages or reduced flexibility.
• The company is a holding company, making investors subject to the risks attributable to its subsidiaries.
• Heightened scrutiny by Canadian regulatory authorities, potentially leading to restrictions on operations or investments.
• General economic risks and risks of continued inflation, influencing consumer trends, spending, and operational costs.
• Negative impact from challenging global economic conditions, including supply chain disruptions and decreased consumer spending.
• Requirement to disclose personal information of owners, investors, officers, managers, and directors to regulators, with non-compliance endangering licenses.
• Risks arising from epidemic diseases, potentially disrupting business activities and supply chains.
• A return on the company's securities is not guaranteed, and holding Subordinate Voting Shares is speculative.
• Exposure to significant currency fluctuations due to operations in the U.S. and shares denominated in Canadian dollars.
• Capital structure and voting control may cause unpredictability and greater fluctuations in stock price.
• Additional issuances of Super Voting Shares, Multiple Voting Shares, or Subordinate Voting Shares may result in dilution.
• Sales of substantial amounts of Subordinate Voting Shares by shareholders in the public market may adversely affect the market price.
• The market price for Subordinate Voting Shares may be volatile due to numerous factors beyond the company's control.
• If securities or industry analysts cease publishing research or publish misleading/unfavorable research, stock price and trading volume could decline.
• Liquidity risks due to trading on the CSE and OTCQX, with no assurance of an active trading market.
• Increased costs as a result of being a public company in Canada and the United States.
• Costs of maintaining a public listing, including legal, accounting, and regulatory compliance expenses.
• No intention to pay dividends on Subordinate Voting Shares, making return dependent on price appreciation.
• The market for Subordinate Voting Shares may be limited for U.S. resident holders due to the heightened risk profile of cannabis in the U.S.

Future Outlook

The company's new store opening plans will remain fluid depending on market conditions, ability to obtain local licensing, construction, and capital allocation plans. Management expects to continue its growth strategy by expanding its footprint within current markets through acquisitions and partnerships, and scaling resources into new markets. The company anticipates continued investment in corporate infrastructure and incentive compensation to attract and retain top-tier talent. The legal status of hemp-derived THC products is uncertain, with a federal prohibition becoming effective in November 2026, which could blunt their impact on the cannabis market. Rescheduling cannabis to Schedule III may increase competition from non-cannabis companies. A new legislative framework for adult-use sales in Virginia is expected to be introduced in the 2026 legislative session, with the earliest sales commencing in November 2026.

Management Comments

• Green Thumb promotes well-being through the power of cannabis while being committed to community and sustainable, profitable growth.
• Our new store opening plans will remain fluid depending on market conditions, our ability to obtain local licensing, construction and other permissions and subject to the Company's capital allocation plans.
• Management views the Company's market share as less at risk than operators without a current operating footprint due to our established brand recognition and supply and distribution chains.
• Management believes the medical and adult-use cannabis industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the cannabis produced.
• Management believes a hypothetical 10% change in the price of raw materials (labels and packaging) would not have a significant effect on the Company's consolidated annual results of operations or cash flows, as these costs are generally passed through to its customers.

Industry Context

StockSavvy.ai notes that Green Thumb Industries operates within a rapidly evolving and highly regulated U.S. cannabis market. The company's strategy of expanding its retail footprint and leveraging brand licensing, as seen with RYTHM, Inc., is a common approach for multi-state operators (MSOs) seeking to navigate state-by-state legal complexities while building national brand recognition. The significant increase in net income despite a slight decline in gross margin reflects the industry's ongoing price compression challenges but also the potential for MSOs to achieve profitability through scale and strategic financial management, such as the fair value adjustments on related party warrants and intellectual property divestitures. The impending federal prohibition on hemp-derived THC products (effective November 2026) and the potential rescheduling of cannabis to Schedule III are pivotal industry developments. While rescheduling could alleviate the burden of IRC Section 280E and open up traditional financing, it also poses a risk of increased competition from well-capitalized non-cannabis companies. Green Thumb's continued share repurchases indicate a focus on shareholder returns, a positive signal in a capital-intensive and often volatile sector. The legal and regulatory uncertainty, particularly at the federal level, remains a defining characteristic of the U.S. cannabis industry, requiring companies like Green Thumb to maintain robust compliance programs and adaptable business models.

Comparison to Industry Standards

• Green Thumb's 2025 revenue growth of 3% to $1.175 billion, while positive, is lower than the 8% growth seen in 2024, suggesting a maturing market or increased competitive pressures compared to earlier periods of rapid expansion for MSOs like Trulieve Cannabis Corp. and Curaleaf Holdings, Inc.
• The decline in gross margin from 53% to 49% in 2025, attributed to price compression and licensing fees, is a trend observed across the U.S. cannabis industry, where increased supply and competition often lead to downward pressure on pricing, impacting profitability for cultivators and manufacturers, including peers like Cresco Labs Inc. and Verano Holdings Corp.
• Green Thumb's net income growth of 56% to $114.152 million in 2025, despite lower operating income, highlights the impact of strategic financial transactions, such as the fair value adjustments on related party warrants and intellectual property sales, which may not be directly comparable to core operational performance metrics of all industry peers.
• The company's expansion to 113 retail locations by December 31, 2025, demonstrates continued physical footprint growth, aligning with the expansion strategies of other leading MSOs that aim to capture market share in newly legalized or expanding state markets.
• The authorization of a new $50 million share repurchase program is a capital allocation strategy that, while common in mature industries, is less frequent among cannabis MSOs still in high-growth phases, potentially indicating a shift towards returning capital to shareholders or a belief that the stock is undervalued relative to peers.

Management Changes

Corporate Governance

Legal Proceedings

• In July 2024, the company received Findings of Fact and Conclusions of Law regarding an October 30, 2019 complaint alleging breach of a commercial property lease with ineffective termination.
• On June 25, 2025, the court issued a Final Judgment ruling in favor of the plaintiff landlord for $7,307 thousand in unpaid rent, plus $912 thousand in interest and attorney fees.
• In August 2025, the company appealed the Final Judgment and posted a supersedeas bond of $9,284 thousand, held within restricted cash and cash equivalents, to stay enforcement during the appeal.
• Subsequent to the quarter, on February 5, 2026, the company was notified of an arbitration award in its favor related to a 2018 agreement with Ascend Wellness Holdings Inc., resulting in a $17,000 thousand settlement payment to Green Thumb on February 12, 2026.

Related Party Transactions

• On November 5, 2024, Green Thumb acquired a noncontrolling financial interest in Agrify Corporation (now RYTHM Inc. or RYM) for $15,000 thousand in cash and $3,280 thousand in Subordinate Voting Shares, and extended a $10,000 thousand convertible secured note (Original Notes) to RYM.
• Benjamin Kovler (Chairman and CEO) and Armon Vakali (VP, Strategic Initiatives and Partnerships) were appointed to RYM's Board of Directors, with Kovler also becoming RYM's Chairman and Interim CEO.
• On May 20, 2025, Green Thumb sold intellectual property for its incredibles brand and hemp business to RYM for $5,075 thousand in cash, simultaneously entering licensing arrangements for continued exclusive use of the brand.
• On May 22, 2025, Green Thumb extended an additional $27,000 thousand in convertible notes (May 2025 Notes) to RYM, due November 22, 2026.
• On August 25, 2025, Green Thumb extended another $45,000 thousand Convertible Note (August 2025 Notes) to RYM, due February 25, 2027.
• On August 27, 2025, Green Thumb sold intellectual property rights for brands including RYTHM, Beboe, Dogwalkers, Doctor Solomon's, &Shine, and Good Green to RYM for $50,000 thousand in cash, and RYM formally changed its name from Agrify Corporation.
• As of December 31, 2025, Green Thumb held a 32.5% ownership interest in RYM, accounted for using the equity method.
• On November 5, 2025, the Original Notes to RYM matured and were exchanged for 3,222,997 pre-funded warrants, resulting in a gain of $122,769 thousand.
• Green Thumb provides operational support services to RYM under two shared services agreements, with $3,186 thousand owed to Green Thumb as of December 31, 2025.
• Mosaic Real Estate, LLC, partially owned by Benjamin Kovler and Anthony Georgiadis, leases certain facilities to the company, with $504 thousand in lease expense recorded in 2025.
• On December 28, 2025, the company purchased 2,500 Super Voting Shares from Benjamin Kovler and 2,500 Super Voting Shares from Anthony Georgiadis in private transactions.

Stakeholder Impact

• **Shareholders:** Positive impact from increased net income and ongoing share repurchase programs, indicating a commitment to returning capital. However, concentrated voting control by senior executives (Benjamin Kovler, Andrew Grossman, Anthony Georgiadis) through Super Voting Shares could limit influence for other shareholders. Dilution risk exists from future equity issuances.
• **Employees:** The company employs approximately 5,000 team members and offers a comprehensive benefits package, including a 401(k) plan, medical/dental, and employee stock/incentive plans. Increased labor costs due to union activity (20% of workforce represented) could impact profitability. The loss of key personnel is a significant risk.
• **Customers:** Continued expansion of retail locations (113 open) and product offerings aims to provide high-quality products and superior customer service. Price compression in the market could lead to more competitive pricing for consumers. Loyalty reward programs are offered to retail customers.
• **Suppliers:** The company relies on third-party licensed producers and suppliers for packaging materials. Disruptions in the supply chain or changes in supplier relationships could impact product availability and costs. The company also licenses brands from RYM, making it dependent on that relationship.
• **Creditors:** The company has a syndicated credit facility and mortgage notes. Compliance with covenants (e.g., debt service coverage ratio, funded debt to Adjusted EBITDA ratio) is crucial. The federal illegality of cannabis poses risks for lenders, as bankruptcy protections may not be available.
• **Regulatory Authorities:** The company operates in a highly regulated sector and is subject to evolving state and local laws, as well as federal prohibition. Non-compliance could lead to fines, sanctions, or license revocations. The company's tax position under Section 280E is an area of potential challenge by the IRS.

Next Steps

• Continue to expand retail footprint within current markets through acquisitions and partnerships.
• Scale resources into new markets as opportunities arise.
• Monitor and adapt to evolving federal and state cannabis regulations, including potential rescheduling and changes to hemp-derived THC product laws.
• Introduce a new legislative framework for adult-use sales in Virginia during the 2026 legislative session, with sales potentially commencing in November 2026.
• Continue to invest in corporate infrastructure and incentive compensation to support business growth and talent retention.
• Manage the appeal process for the legal judgment regarding the commercial property lease.

Key Dates

Recommendation

Green Thumb Industries demonstrates strong net income growth and improved liquidity, driven by strategic market expansion and effective financial management, including significant gains from related party transactions. The ongoing share repurchase program signals confidence and a commitment to shareholder value. However, the decline in gross margin and operating income due to price compression and increased expenses, coupled with the inherent regulatory risks of the federally illegal cannabis industry (e.g., Section 280E, banking access, potential federal enforcement, and concentrated voting control), present notable headwinds. The uncertain impact of cannabis rescheduling and the federal prohibition of hemp-derived THC products add further volatility. A 'hold' recommendation is appropriate as the company navigates these complex dynamics, balancing its operational strengths and strategic initiatives against significant industry-specific challenges and regulatory uncertainties.

Keywords

Cannabis, Marijuana, Multi-State Operator (MSO), SEC Filing, 10-K, Green Thumb Industries, GTBIF, GTII, Cannabis Retail, Consumer Packaged Goods, Adult-Use Cannabis, Medical Cannabis, Financial Results, Share Repurchase, RYTHM Inc., Intellectual Property Licensing, Regulatory Risk, Section 280E, Dual-Class Shares, Corporate Governance