Valued at a market cap of $2.4 billion, Inexperienced Thumb Industries (CNSX:GTII) is a hashish inventory that’s down virtually 80% from all-time highs.
Inexperienced Thumb manufactures, distributes, markets, and sells hashish merchandise for medical and adult-use in america. The marijuana producer distributes its merchandise to third-party licensed retail prospects and sells completed merchandise on to shoppers by means of its retail shops, in addition to a direct-to-consumer supply channel.
In 2025, Canadian hashish corporations proceed to wrestle with weak fundamentals, sluggish gross sales, detrimental margins, and rising competitors. Comparatively, U.S.-based marijuana producers, together with Inexperienced Thumb, are reporting constant income amid a difficult macro setting.
Is that this hashish inventory an excellent purchase proper now?
In Q2 2025, Inexperienced Thumb reported income of US$293 million, a rise of 5% yr over yr. The hashish multistate operator generated adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortization) of US$83 million, indicating a 28% margin, down from the earlier quarter as aggressive pressures intensified.
Inexperienced Thumb’s efficiency mirrored broader trade challenges. These headwinds embrace worth compression, competitors from unregulated hemp-derived merchandise, and a bootleg market that continues to undercut authorized operators.
Within the June quarter, Inexperienced Thumb’s retail comparable gross sales decreased by 4% as a result of pricing pressures, which have been offset by 17% development within the consumer-packaged items section, pushed by third-party distribution and new market entries, together with New York.
In Q2, Inexperienced Thumb allotted US$19 million in the direction of strategic retail expansions and capability enhancements. It ended the quarter with US$177 million in money and repurchased 5.6 million shares price US$24 million, indicating a median price of US$4.28 per share.
Is the worst over for Inexperienced Thumb inventory?
Inexperienced Thumb is well-positioned for future development alternatives in markets reminiscent of Minnesota, the place adult-use gross sales are anticipated to launch this fall, and in Pennsylvania and Virginia, the place administration stays optimistic about potential legalization throughout the subsequent 12 months.
The corporate’s model portfolio, together with Rythm, Dogwalkers, and Incredibles, confirmed sturdy efficiency with elevated market share beneficial properties in key states.
Nevertheless, Morningstar analysts just lately slashed their truthful worth estimate for the hashish inventory from $12 to $10 per share, citing worse-than-expected worth compression and margin deterioration. The analyst famous that adjusted EBITDA margins are anticipated to stay beneath 30% within the coming quarters as trade pressures proceed.
The administration additionally introduced that they are going to pause quarterly earnings calls, citing a market deal with regulatory uncertainty relatively than enterprise fundamentals.
Is the hashish inventory undervalued?
Analysts monitoring GTII inventory forecast gross sales to rise from US$1.13 billion in 2024 to US$1.43 billion in 2029. Throughout this era, adjusted earnings are anticipated to extend from US$0.35 per share to US$0.76 per share. We are able to see that whereas income is projected to develop by 4.8% yearly, estimated earnings development is way greater at 16.5%.
Nevertheless, traders ought to word that earnings are forecast to slender to US$0.16 per share in 2025 earlier than increasing to US$0.52 per share in 2027. If GTII inventory trades at 20 instances ahead earnings, it ought to greater than double throughout the subsequent 4 years. Given consensus worth goal estimates, the marijuana inventory trades at a reduction of 85% in September 2025.
