Valued at a market cap of $2.4 billion, Green Thumb Industries (CNSX:GTII) is a cannabis stock that is down almost 80% from all-time highs.
Green Thumb manufactures, distributes, markets, and sells cannabis products for medical and adult-use in the United States. The marijuana producer distributes its products to third-party licensed retail customers and sells finished products directly to consumers through its retail stores, as well as a direct-to-consumer delivery channel.
In 2025, Canadian cannabis companies continue to wrestle with weak fundamentals, sluggish sales, negative margins, and rising competition. Comparatively, U.S.-based marijuana producers, including Green Thumb, are reporting consistent profits amid a challenging macro environment.
Is this cannabis stock a good buy right now?
In Q2 2025, Green Thumb reported revenue of US$293 million, an increase of 5% year over year. The cannabis multistate operator generated adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of US$83 million, indicating a 28% margin, down from the previous quarter as competitive pressures intensified.
Green Thumb’s performance reflected broader industry challenges. These headwinds include price compression, competition from unregulated hemp-derived products, and an illicit market that continues to undercut legal operators.
In the June quarter, Green Thumb’s retail comparable sales decreased by 4% due to pricing pressures, which were offset by 17% growth in the consumer-packaged goods segment, driven by third-party distribution and new market entries, including New York.
In Q2, Green Thumb allocated US$19 million towards strategic retail expansions and capacity improvements. It ended the quarter with US$177 million in cash and repurchased 5.6 million shares worth US$24 million, indicating an average cost of US$4.28 per share.
Is the worst over for Green Thumb stock?
Green Thumb is well-positioned for future growth opportunities in markets such as Minnesota, where adult-use sales are expected to launch this fall, and in Pennsylvania and Virginia, where management remains optimistic about potential legalization within the next 12 months.
The company’s brand portfolio, including Rythm, Dogwalkers, and Incredibles, showed strong performance with increased market share gains in key states.
However, Morningstar analysts recently slashed their fair value estimate for the cannabis stock from $12 to $10 per share, citing worse-than-expected price compression and margin deterioration. The analyst noted that adjusted EBITDA margins are expected to remain below 30% in the coming quarters as industry pressures continue.
The management also announced that they will pause quarterly earnings calls, citing a market focus on regulatory uncertainty rather than business fundamentals.
Is the cannabis stock undervalued?
Analysts tracking GTII stock forecast sales to rise from US$1.13 billion in 2024 to US$1.43 billion in 2029. During this period, adjusted earnings are expected to increase from US$0.35 per share to US$0.76 per share. We can see that while revenue is projected to grow by 4.8% annually, estimated earnings growth is much higher at 16.5%.
However, investors should note that earnings are forecast to narrow to US$0.16 per share in 2025 before expanding to US$0.52 per share in 2027. If GTII stock trades at 20 times forward earnings, it should more than double within the next four years. Given consensus price target estimates, the marijuana stock trades at a discount of 85% in September 2025.
