3 Reasons to Buy Green Thumb Industries Stock Hand Over Fist

Green Thumb Industries (OTC: GTBIF) has become one of the strongest operators in the U.S. cannabis industry. While many of its competitors continue to struggle with profitability, high debt, and weak cash flow, Green Thumb has consistently generated earnings and cash while expanding its retail footprint.

To be sure, the company still faces the same challenges confronting the broader cannabis sector, such as price compression, heavy taxation, and an uncertain regulatory environment, but its financial performance suggests it's better positioned than most to navigate them.

Here are three reasons the stock deserves a closer look.

1. Green Thumb makes money

Profitability remains one of Green Thumb's biggest competitive advantages.

During the first quarter of 2026, the company generated $300 million in revenue, up 7.4% year over year. It also produced $15.4 million in generally accepted accounting principles (GAAP) net income, $76 million in operating cash flow, and $93.5 million in normalized earnings before interest, taxes, depreciation, and amortization (EBITDA), representing a 31.2% EBITDA margin.

Those aren't numbers many cannabis companies can match.

And while some operators continue to issue stock or take on debt to fund expansion, Green Thumb is largely financing its growth internally, which gives management more flexibility to invest in new markets, improve operations, and return capital to shareholders through an aggressive share repurchase program.

The company's profitability also provides a margin of safety if cannabis prices remain under pressure in certain states.

2. Its balance sheet gives it room to keep growing

Financial strength is paramount in the cannabis industry, where access to traditional banking remains limited.

Green Thumb ended the first quarter with $344.5 million in cash and expanded its syndicated credit facility, giving it additional financial flexibility. Since September 2023, the company has repurchased roughly 29 million shares for approximately $200 million.

Green Thumb also continues investing in its business. The company finished 2025 operating 113 retail stores across 14 states after opening 12 new locations during the year. Its brands -- including RYTHM, Dogwalkers, incredibles, Beboe, and Good Green -- have all established strong positions in several of the country's largest legal cannabis markets.

That combination of retail scale, recognizable consumer brands, and financial discipline gives Green Thumb a competitive position that many smaller operators struggle to match.

Image source: Getty Images.

3. Federal reform could significantly improve profitability

Green Thumb doesn't need full federal legalization of marijuana to become a better business. That said, the federal government's decision to move state-licensed medical cannabis from Schedule I to Schedule III under the Controlled Substances Act can only bolster the company's strength.

If implemented as expected, qualifying medical cannabis businesses would no longer be subject to Section 280E of the Internal Revenue Code, which currently prevents cannabis companies from deducting many ordinary business expenses. That provision -- which should be going away -- has resulted in unusually high effective tax rates across the industry for years.

Green Thumb has already submitted DEA applications to position its medical operations for the new framework. While the regulatory process is still unfolding, reduced tax expenses could meaningfully improve future earnings and free cash flow.

The company would also certainly benefit if broader cannabis reform eventually opens the door to interstate commerce or easier access to banking services. Still, it doesn't necessarily need those developments to continue producing solid financial results.

Volatility and discipline

The cannabis industry remains volatile, and there are no guarantees that pricing pressure or regulatory uncertainty will disappear anytime soon.

But Green Thumb has shown that disciplined execution can enable profitability. The company continues generating profits while many competitors remain unprofitable. It produces meaningful operating cash flow, maintains one of the strongest balance sheets in the industry, repurchases its own shares, and continues expanding into attractive markets.

If you want exposure to the cannabis industry without taking on too much risk, Green Thumb Industries should be at the top of your list.

Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool recommends Green Thumb Industries. The Motley Fool has a disclosure policy.