Is It Really Too Late to Invest in Green Thumb Industries Stock?

The marijuana industry's recovery

The argument for it being too late to invest in Green Thumb is essentially that the moment of greatest opportunity for marijuana stock investors is in the past, and it isn't coming back.

Quarterly revenue and profit margins

The company's quarterly revenue rose by 897% since five years ago, reaching $278 million. But since the start of 2022, growth has been dramatically slower, suggesting that the U.S. state markets where it competes may be saturated. Its profit margin is thin, and it has gotten even thinner during the past three years, dipping into unprofitability for a while in 2023 before recovering.

Market competition and brand loyalty

Another reason to suspect that it's too late to invest is that it will face more and more pressure on its margins as competition increases in its markets. Green Thumb currently has no competitive advantage or serious brand loyalty to defend its market share.

• Lower selling prices make it harder for commodity producers to realize high margins on their sales.
• Its existing and newly opened retail locations are positioned to serve as many as 50% of adults in the U.S., including in high population states like California, Florida, and New York.

Don't count this business out
As you may have recognized, the majority of the challenges Green Thumb is facing right now do not really have very much to do with the company itself. Nor are the problems likely to be permanent in nature.

Investing in Green Thumb Industries has its challenges, but with the potential for market adaptation and growth opportunities, it may not be too late to consider this stock for long-term investment.

Source: The Motley Fool