☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 day. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of ~~May~~August 1, 2023, there were ~~207,989,463~~209,739,033 shares of the registrant’s Subordinate Voting Shares, 3,853,100 shares of the registrant’s Multiple Voting Shares (on an as converted basis) and 25,169,000 shares of the registrant’s Super Voting Shares (on an as converted basis).

In this Quarterly Report on Form 10-Q, unless the context otherwise requires, the terms “we,” “us,” “our,” “Company,” “Corporation” or “Green Thumb” refer to Green Thumb Industries Inc. together with its wholly-owned subsidiaries.

Unless otherwise indicated, all references to “$” or “US$” in this document refer to United States dollars, and all references to “C$” refer to Canadian dollars.

This Quarterly Report on Form 10-Q contains statements that we believe are, or may be considered to be, “forward-looking statements.” All statements other than statements of historical fact included in this document regarding the prospects of our industry or our prospects, plans, financial position or business strategy may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,” “plan,” “forecast,” “continue” or “could” or the negative of these terms or variations of them or similar terms or expressions of similar meaning. Furthermore, forward-looking statements may be included in various filings that we make with the Securities and Exchange Commission (the “SEC”), and in press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These known and unknown risks include, without limitation: cannabis remains illegal under U.S. federal law, and enforcement of cannabis laws could change; the Company may be subject to action by the U.S. federal government; state regulation of cannabis is uncertain; the Company may be subject to heightened scrutiny by Canadian regulatory authorities; the Company may face limitations on ownership of cannabis licenses; the Company may become subject to U.S. Food and Drug Administration or the U.S. Bureau of Alcohol, Tobacco Firearms and Explosives regulation; cannabis businesses are subject to applicable anti-money laundering laws and regulations and have restricted access to banking and other financial services; the Company may face difficulties acquiring additional financing; the Company faces intense competition; the Company faces competition from ~~irregulated~~unregulated products; the Company is dependent upon the popularity and consumer acceptance of its brand portfolio; the Company lacks access to U.S. bankruptcy protections; the Company operates in a highly regulated sector and may not always succeed in complying fully with applicable regulatory requirements in all jurisdictions where the Company carries on business; the Company may face difficulties in enforcing its contracts; the Company has limited trademark protection; cannabis businesses are subject to unfavorable tax treatment; cannabis businesses may be subject to civil asset forfeiture; the Company is subject to proceeds of crime statutes; the Company faces exposure to fraudulent or illegal activity; the Company’s use of joint ventures may expose it to risks associated with jointly owned investments; the Company faces risks due to industry immaturity or limited comparable, competitive or established industry best practices; the Company faces risks related to its products; the Company’s business is subject to the risks inherent in agricultural operations; the Company ~~faces risks related to its information technology systems and potential cyber-attacks and security breaches; the Company~~ relies on ~~third-party~~third party software providers for numerous capabilities that it depends upon to operate, and a disruption of one or more systems could adversely affect the business; the Company faces risks related to its information technology systems and potential cyber-attacks and security breaches; the Company faces an inherent risk of product liability or similar claims; the Company’s products may be subject to product recalls; the Company may face unfavorable publicity or consumer perception; the Company’s voting control is concentrated; the Company’s capital structure and voting control may cause unpredictability; and issuances of substantial amounts of Super Voting Shares, Multiple Voting Shares or Subordinate Voting Shares may result in ~~dilution and further~~dilution. Further information on these and other potential factors that could affect the Company’s business and financial condition and the results of operations are included in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and elsewhere in the Company’s filings with the SEC, which are available on the SEC’s website or at https://investors.gtigrows.com. Readers are cautioned not to place undue reliance on any forward-looking statements contained in this document, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this document.

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity

~~The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements~~

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements

The Company recorded amortization expense for the three and six months ended ~~March 31,~~June 30, 2023 ~~and 2022~~ of $~~12,610~~12,744 thousand and $~~14,942~~25,354 thousand, respectively. The Company recorded amortization for the three and six months ended June 30, 2022 of $15,097 thousand and $30,039 thousand, respectively.

As of ~~March 31,~~June 30, 2023, the weighted average amortization period remaining for intangible assets was ~~12.07~~11.84 years.

5.5. INVESTMENTS

As of ~~March 31,~~June 30, 2023 and December 31, 2022, the Company held various equity interests in cannabis related companies as well as investments in ~~convertible notes~~note receivable instruments that had a combined fair value of $~~75,668~~75,060 thousand and $74,169 thousand as of each period end, respectively. The Company measures its investments that do not have readily determinable fair value at cost minus impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company performs an assessment on a quarterly basis to determine whether triggering events for impairment exist and to identify any observable price changes.

The following table summarizes the changes in the Company’s investments during the ~~three~~six months ended ~~March 31,~~June 30, 2023 and year ending December 31, 2022:


		March 31, 2023		December 31, 2022		June 30, 2023		December 31, 2022
	(in thousands)				(in thousands)
Beginning	$	74,169	$	94,902	$	74,169	$	94,902
Additions		2,200		5,444		2,200		5,444
Disposals		(300)		(3,571)		(331)		(3,571)
Fair value adjustment		(351)		(22,606)		(928)		(22,606)
Transfers and other		(50)		—		(50)		—
Ending	$	75,668	$	74,169	$	75,060	$	74,169

During the three and six months ended ~~March 31,~~June 30, 2023, the Company recorded a fair value ~~loss,~~losses, net of $(interest income of $~~351~~577) thousand ~~of which $(~~and $~~479~~928) thousand, respectively. The fair value losses associated with the Company's equity investments in the amount of $655 thousand and $1,134 thousand as of the three and six months ended June 30, 2023, respectively, was recorded within other income (expense) ~~and $128~~ ~~thousand~~on the Company's unaudited interim condensed consolidated statements of operations. The interest income portion associated with ~~various~~the Company's note receivable investments in the amount of $78 thousand and $206 thousand as of the three and six months ended June 30, 2023, respectively was recorded towithin interest income ~~net~~ on the unaudited interim condensed consolidated ~~statement~~statements of operations.

(a) Equity Investments

As of ~~March 31,~~June 30, 2023 and December 31, 2022, the Company held equity investments in publicly traded entities which have readily determinable fair values, which are classified as Level 1 investments, of $~~2,056~~1,370 thousand and $2,535 thousand, respectively. During the three and six months ended ~~March 31,~~June 30, 2023, the Company recorded net losses on the change in fair value of such investments of $655 thousand and $1,134 thousand, respectively, within other income (expense) on the unaudited interim condensed consolidated statements of operations. During the three and six months ended June 30, 2022, the Company recorded net losses on the change in fair value of such investments of $($~~479~~6,396) thousand and $($~~7,897~~14,293) thousand, respectively, within other income (expense) on the unaudited interim condensed consolidated ~~statement~~statements of operations. ~~The~~During the six months ended June 30, 2023 and 2022, the Company received proceeds from the sale of such investments of ~~$160~~$31 thousand ~~during the three months ended March 31, 2022. There were no such sales of these investments during the three months ended March 31, 2023.~~and $160 thousand, respectively. These investments are classified as trading securities on the Company's unaudited interim condensed consolidated balance sheets.

As of ~~March 31,~~June 30, 2023 and December 31, 2022, the Company held equity investments in privately held entities that did not have readily determinable fair values, which are classified as Level 3 investments, of $42,330 thousand and $40,330 thousand, respectively. For the three and six months ended ~~March 31,~~June 30, 2023, there were no gains or losses on the change in fair value of such investments. During the three and six months ended ~~March 31,~~June 30, 2022, the Company recorded net gains on the change in fair value of such investments of $~~455~~22 thousand and $477 thousand, respectively, within other income (expense) on the unaudited interim condensed consolidated ~~statement~~statements of operations. There were no sales of these investments during these periods. These investments are classified as trading securities on the Company's unaudited interim condensed consolidated balance sheets.

See Note 1413 - Fair Value Measurements for additional details.

~~Unrealized net losses recognized on equity investments held during the three months ended March 31, 2023 and 2022 were $(477) thousand and $(9,477) thousand, respectively.~~

1314

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

5. INVESTMENTS (Continued)

(a) Equity Investments (Continued)

Unrealized gains and (losses) recognized on equity investments held during the three and six months ended June 30, 2023 were $(653) thousand and $1,996 thousand, respectively. Unrealized losses recognized on equity investments held during the three and six months ended June 30, 2022 were $(6,367) thousand and $(13,792) thousand, respectively.

(b) ~~Notes~~Note Receivable Instruments

~~During the three months ended March 31, 2023 and year ended December 31, 2022, the~~The Company has made multiple investments in various note receivable instruments, including note receivable instruments with conversion features.

~~As of March 31, 2023 and December 31, 2022, the~~The Company held note receivable instruments, which were classified as a Level 1 investment as they represent public debt of a publicly traded entity, and had a fair value of $22,214 thousand as of ~~each period end, respectively. There~~June 30, 2023 and December 31, 2022. During the three and six months ended June 30, 2023, there were no gains or ~~losses recognized~~(losses) on ~~these investments during~~the change in fair value of such investments. For the three and six months ended ~~March 31, 2023. During the three months ended March 31,~~June 30, 2022, the Company recorded net losses on the change in fair value of such investments of $($~~276~~378) thousand and $654 thousand, respectively within other income (expense) on the unaudited interim condensed consolidated ~~statement~~statements of operations. The ~~notes~~note receivable ~~had~~instruments have a stated interest rate of 13% and a maturity date of April ~~29, 2025. The notes~~30, 2025. These note receivable instruments did not contain ~~any~~ conversion features and are currently classified as trading securities on the Company's unaudited interim condensed consolidated balance sheets.

As of ~~March 31,~~June 30, 2023 and December 31, 2022, the Company held note receivable instruments which were classified as Level 3 investments as they represent loans provided to privately held entities that do not have readily determinable fair values. The note receivable instruments had a combined fair value of $~~9,068~~9,146 thousand and $9,090 thousand, respectively, with stated interest ranging between 0.91% - 10% and terms between 15 months to five years. ~~There~~During the three and six months ended June 30, 2023, there were no gains or ~~losses recognized~~(losses) recorded on ~~these~~the change in fair value of such investments, ~~during~~however, the ~~three months ended March 31, 2023.~~company recorded accrued interest of $78 thousand and $206 thousand, respectively, within interest income on the unaudited interim condensed consolidated statements of operations. During the three and six months ended ~~March 31,~~June 30, 2022, the Company recorded net losses on the change in fair value of such investments of $($~~1,891~~1,266) thousand and $3,157 thousand, respectively, within other income (expense) and accrued interest of $153 thousand and $307 thousand, respectively, within interest income on the unaudited interim condensed consolidated statements of operations. ~~The combined fair value amounts include the initial investment cost and combined contractual accrued interest of $128~~ ~~thousand.~~ These ~~notes~~note receivable instruments are classified as trading securities on the Company's unaudited interim condensed consolidated balance sheets.

See Note 1413 - Fair Value Measurements for additional details.

1415

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

6. LEASES

(a) Operating Leases

The Company has operating leases for its retail stores and processing and cultivation facilities located throughout the ~~U.S,~~U.S., as well as ~~for~~ corporate office space located in Illinois. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.

All real estate leases are recorded on the balance sheet. Equipment and other non-real estate leases with an initial term of twelve months or less are not recorded on the balance sheet. Lease agreements for some locations provide for rent escalations and renewal options. Certain real estate leases require payment for fixed and variable non-lease components, such as taxes, insurance and maintenance. The Company accounts for each real estate lease and the related non-lease components together as a single component.

The Company determines if an arrangement is a lease at inception. The Company must consider whether the contract conveys the right to control the use of an identified asset. Certain arrangements require significant judgment to determine if an asset is specified in the contract and if the Company directs how and for what purpose the asset is used during the term of the contract. For the three and six months ended ~~March 31,~~June 30, 2023, ~~and 2022,~~ the Company recorded operating lease expense of $~~12,222~~12,146 thousand and $~~9,821~~24,368 thousand, respectively compared to operating lease expense of $10,201 thousand and $20,022 thousand for the three and six months ended June 30, 2022, respectively.

Other information related to operating leases as of ~~March 31,~~June 30, 2023 and December 31, 2022 were as follows:


	March 31, 2023	December 31, 2022	June 30, 2023	December 31, 2022
Weighted average remaining lease term (years)	11.49	11.64	12.17	11.64
Weighted average discount rate	12.40%	12.42%	12.46%	12.42%

Maturities of lease liabilities for operating leases as of ~~March 31,~~June 30, 2023 were as follows:


		Maturities of Lease Liability						Maturities of Lease Liability
Year Ending December 31,		Third Party		Related Party		Total		Third Party		Related Party		Total
		(in thousands)						(in thousands)
Remainder of 2023	$	32,391	$	428	$	32,819	$	21,641	$	287	$	21,928
2024		43,261		437		43,698		43,304		437		43,741
2025		40,995		343		41,338		41,087		343		41,430
2026		39,316		350		39,666		39,391		350		39,741
2027		39,575		357		39,932		39,672		357		40,029
2028 and Thereafter		352,294		1,728		354,022		352,023		1,728		353,751
Total Lease Payments		547,832		3,643		551,475		537,118		3,502		540,620
Less: Interest		(286,716)		(1,399)		(288,115)		(278,715)		(1,332)		(280,047)
Present Value of Lease Liability	$	261,116	$	2,244	$	263,360	$	258,403	$	2,170	$	260,573

(b) Related Party Operating Leases

The Company has leasing arrangements that are related party transactions including for certain facilities in Maryland, Massachusetts and Nevada. Wendy Berger, a director of the Company, is a principal of WBS Equities, LLC, which is the Manager of Mosaic Real Estate, LLC, and owns the facilities leased by the Company. Additionally, Mosaic Real Estate, LLC is indirectly owned in part by Ms. Berger (through the Wendy Berger 1998 Revocable Trust), Benjamin Kovler, the Chairman and a Chief Executive Officer of the Company (through KP Capital, LLC), and Anthony Georgiadis, the President and a director of the Company (through Three One Four Holdings, LLC). The terms of these leases range from 7 years to 15 years. For the three and six months ended ~~March 31,~~June 30, 2023, ~~and 2022,~~ the Company recorded lease expense of $~~139~~137 thousand and $~~295~~276 thousand, respectively, compared to lease expense of $296 thousand and $589 thousand for the three and six months ended June 30, 2022, respectively.

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

7. NOTES PAYABLE

At ~~March 31,~~June 30, 2023 and December 31, 2022, notes payable consisted of the following:


		March 31, 2023		December 31, 2022		June 30, 2023		December 31, 2022
		(in thousands)				(in thousands)
Charitable Contributions1	$	716	$	764	$	449	$	764
Private placement debt dated April 30, 20212		240,071		237,795		242,347		237,795
Mortgage notes3		37,040		37,109		47,109		37,109
Total notes payable		277,827		275,668		289,905		275,668
Less: current portion of notes payable		(1,052)		(1,037)		(1,048)		(1,037)
Notes payable, net of current portion	$	276,775	$	274,631	$	288,857	$	274,631

1 In connection with acquisitions completed in 2017 and 2019, the Company is required to make quarterly charitable contributions of $50 thousand through October 2024 and annual charitable contributions of $250 thousand throughMay 2024, respectively. The net present value of these required payments has been recorded as a liability with interest rates ranging between 2.17% - 7.00%.

2 The April 30, 2021 private placement debt, ~~and amendment~~as amended on October 21, 2021 ~~was~~(the “April 30, 2021 Notes”), were issued in a total amount of $249,934 thousand with an interest rate of 7.00%, maturing on April 30, 2025. The ~~debt was~~April 30, 2021 Notes were issued at a discount, the carrying value of which was $~~9,863~~7,587 thousand and $12,139 thousand as of ~~March 31,~~June 30, 2023 and December 31, 2022, respectively.

3 Mortgage notes with an initial value of $48,426 thousand and $38,292 thousand, respectively, were issued by the Company in connection with various operating properties, and were recorded at such gross value as of ~~March 31,~~June 30, 2023 and December 31, 2022. These mortgage notes mature between August 20, 2025 and June 5, 2035 with interest rates ranging between 5.00% and9.25%. The mortgage notes were issued at a discount, the carrying value of which was $~~348~~259 thousand and $437 thousand, respectively, and are presented net of principal payments of $~~904~~1,058 thousand and $746 thousand as of ~~March 31,~~June 30, 2023 and December 31, 2022, respectively.

~~(a)~~(b) Related Parties

A portion of the April 30, 2021 Notes are held by related parties as well as unrelated third-party lenders at a percentage of approximately 1% and 99%, respectively. The related parties consist of Benjamin Kovler, the Chairman and Chief Executive Officer of the Company (held through KP Capital, LLC and Outsiders Capital, LLC); Andrew Grossman, the Executive Vice President of Capital Markets of the Company (held through AG Funding Group, LLC); Anthony Georgiadis, the President and a director of the Company (held through Three One Four Holdings, LLC); and Anthony Georgiadis and William Gruver, a former director of the Company (held through ABG, LLC).

1617

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

8. WARRANTS

As part of the ~~terms of the Company’s issuance~~financing of the April 30, 2021 Notes, as well as other financing arrangements, the Company issued warrants to related parties, as well as unrelated third parties, which allow the holders to purchase Subordinate Voting Shares at an exercise price determined at the time of issuance.

The following table summarizes the number of warrants outstanding as of ~~March 31,~~June 30, 2023 and December 31, 2022:


	Liability Classified							Equity Classified							Liability Classified							Equity Classified
	Number of Shares			Weighted Average Exercise Price (C$)		Weighted Average Remaining Contractual Life		Number of Shares			Weighted Average Exercise Price (USD)		Weighted Average Remaining Contractual Life		Number of Shares			Weighted Average Exercise Price (C$)		Weighted Average Remaining Contractual Life		Number of Shares			Weighted Average Exercise Price (USD)		Weighted Average Remaining Contractual Life
Balance as of December 31, 2022		1,997,208	C$		18.03		1.50		1,737,347	$		31.83		3.38		1,997,208	C$		18.03		1.50		1,737,347	$		31.83		3.38
Balance as of March 31, 2023		1,997,208	C$		18.03		1.26		1,737,347	$		31.83		3.13
Balance as of June 30, 2023																1,997,208	C$		18.03		1.01		1,737,347	$		31.83		2.88

(a) Liability Classified Warrants Outstanding

The following table summarizes the fair value of the liability classified warrants at ~~March 31,~~June 30, 2023 and December 31, 2022:


			Fair Value						Fair Value
Warrant Liability	Strike Price	Warrants Outstanding	March 31, 2023	December 31, 2022	Change	Strike Price	Warrants Outstanding		June 30, 2023		December 31, 2022		Change
			(in thousands)						(in thousands)
Private Placement Financing Warrants Issued May 2019	C$19.39	1,606,533	$1,852	$3,125	$(1,273)	C$19.39		1,606,533	$	1,414	$	3,125	$	(1,711	)
Modification Warrants Issued November 2019	C$12.04	316,947	831	1,139	(308)	C$12.04		316,947		668		1,139		(471	)
Additional Modification Warrants Issued May 2020	C$14.03	73,728	195	256	(61)	C$14.03		73,728		175		256		(81	)
Totals		1,997,208	$2,878	$4,520	$(1,642)			1,997,208	$	2,257	$	4,520	$	(2,263	)

During the three and six months ended ~~March 31,~~June 30, 2023 and 2022, the Company recorded gains of $~~1,642~~621 thousand and $~~7,929~~2,263 thousand, and $13,843 thousand and $21,772 thousand, respectively, on the change in the fair value of the warrant liability within other income ~~(expense)~~ on the unaudited interim condensed consolidated statements of operations. As of June 30, 2023, the warrant liability was classified as a current liability, and recorded within accrued liabilities on the unaudited interim condensed consolidated balance sheet.

The following table summarizes the significant assumptions used in determining the fair value of the warrant liability as of each reporting date (see Note 13 - Fair Value Measurements for additional details):


	March 31,	December 31,	June 30,	December 31,
Significant Assumptions	2023	2022	2023	2022
Volatility	71.15% - 75.98%	70.44% - 78.21%	71.66% - 76.66%	70.44% - 78.21%
Remaining Term	1.15 - 2.15 years	1.39 - 2.39 years	0.9 - 1.9 years	1.39 - 2.39 years
Risk Free Rate	3.51% - 3.78%	3.82% - 4.07%	4.54%	3.82% - 4.07%

1718

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

8. WARRANTS (Continued)

(b) Equity Classified Warrants Outstanding

The Company's equity classified warrants were recorded at fair value at each respective date of issuance. Equity classified warrants are not remeasured at fair value on a recurring basis and are carried at their issuance date fair value. The following table summarizes the carrying amounts of the Company's equity classified warrants at~~at March 31,~~ June 30, 2023 and December 31, 2022:


					Issuance Date Fair Value								Issuance Date Fair Value
			Warrants		March 31,		December 31,				Warrants		June 30,		December 31,
Warrants Included in Contributed Surplus	Strike Price		Outstanding		2023		2022		Strike Price		Outstanding		2023		2022
					(in thousands)								(in thousands)
Mortgage Warrants Issued June 2020	$	9.10		35,000	$	181	$	181	$	9.10		35,000	$	181	$	181
Private Placement Refinance Warrants Issued April 2021	$	32.68		1,459,044		22,259		22,259	$	32.68		1,459,044		22,259		22,259
Private Placement Refinance Warrants Issued October 2021	$	30.02		243,303		2,616		2,616	$	30.02		243,303		2,616		2,616
Totals				1,737,347	$	25,056	$	25,056				1,737,347	$	25,056	$	25,056

The equity warrants were valued as of the date of issuance using a Black Scholes Option Pricing model. The following table summarizes the significant assumptions used in determining the fair value of the warrants as of each respective issuance date:


Significant Assumptions	Private Placement Refinancing Warrants	Private Placement Refinancing Warrants	Dispensary Mortgage Warrants
Date of Issuance	October 15, 2021	April 30, 2021	June 5, 2020
Volatility	73%	73%	80%
Estimated Term	4 years	4 years	5 years
Risk Free Rate	1.12%	0.74%	0.37%

1819

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

9. SHARE CAPITAL

Common shares, which include the Company’s Subordinate Voting Shares, Multiple Voting Shares and Super Voting Shares, are classified as equity. Incremental costs directly attributable to the issuance of common shares are recognized as a deduction from equity. The proceeds from the exercise of stock options or warrants together with amounts previously recorded in reserves over the applicable vesting periods are recorded as share capital. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with Accounting ~~Standard~~Standards Codification ~~(“ASC”~~(“ASC”) 740, Income Taxes.

(a) Authorized

The Company has the following classes of share capital, with each class having no par value:

(i) Subordinate Voting Shares

The holders of the Subordinate Voting Shares are entitled to receive dividends which may be declared from time to time and are entitled to one vote per share at meetings of the Company’s shareholders. All Subordinate Voting Shares are ranked equally with regard to the Company’s residual assets. The Company is authorized to issue an unlimited number of no par value Subordinate Voting Shares. ~~During the three months ended March 31, 2023,~~ no ~~Multiple Voting Shares were converted into Subordinate Voting Shares.~~

(ii) Multiple Voting Shares

Each Multiple Voting Share is entitled to 100 votes per share at shareholder meetings of the Company and is exchangeable for 100 Subordinate Voting Shares. At ~~March 31,~~June 30, 2023, the Company had 38,531 issued and outstanding Multiple Voting Shares, which convert into 3,853,100 Subordinate Voting Shares. The Company is authorized to issue an unlimited number of Multiple Voting Shares. ~~During the three months ended March 31, 2023,~~ no ~~Multiple Voting Shares were converted into Subordinate Voting Shares.~~

(iii) Super Voting Shares

Each Super Voting Share is entitled to 1,000 votes per share at shareholder meetings of the Company and is exchangeable for 100 Subordinate Voting Shares or one Multiple Voting Share. At ~~March 31,~~June 30, 2023, the Company had 251,690 issued and outstanding Super Voting Shares which convert into 25,169,000 Subordinate Voting Shares. The Company is authorized to issue an unlimited number of Super Voting Shares. ~~During the three months ended March 31, 2023,~~ no ~~Super Voting Shares were converted into Multiple Voting Shares.~~

(b) Issued and Outstanding

A reconciliation of the beginning and ending amounts of the issued and outstanding shares by class is as follows:


	Issued and Outstanding			Issued and Outstanding
	Subordinate Voting Shares	Multiple Voting Shares	Super Voting Shares	Subordinate Voting Shares	Multiple Voting Shares	Super Voting Shares
As at January 1, 2023	206,991,275	38,531	251,690	206,991,275	38,531	251,690
Distribution of contingent consideration				822,447	—	—
Distribution of deferred shares	615,819	—	—	680,089	—	—
Issuance of shares upon exercise of options and warrants	70,750	—	—
Issuance of shares upon exercise of options				130,508	—	—
Issuances of shares upon vesting of RSUs	75,620	—	—	351,721	—	—
As at March 31, 2023	207,753,464	38,531	251,690
As at June 30, 2023				208,976,040	38,531	251,690

1920

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

9. SHARE CAPITAL (Continued)

(b) Issued and Outstanding (Continued)

(i) Distribution of Deferred Shares

~~Liberty Compassion, Inc.~~

As part of the consideration exchanged for certain acquisitions completed throughout 2021, the Company deferred the distribution of Subordinate Voting Shares to secure the Company's indemnification rights associated with post-acquisition costs. The following table summarizes the activity during the six months ended June 30, 2023:


Related Acquisition	As at December 31, 2022	Distributed Shares	Cancelled Shares	As at June 30, 2023
Liberty Compassion, Inc.	214,768	(214,768)	—	—
Dharma Pharmaceuticals, LLC	229,878	(229,878)	—	—
Mobley Pain Management and Wellness Center, LLC and Canwell Processing, LLC	264,760	(12,305)	(84,122)	168,333
GreenStar Herbals, Inc.	161,306	(161,306)	—	—
Maryland Health and Wellness Center, Inc.	61,832	(61,832)	—	—
LeafLine Industries, LLC	386,002	—	—	386,002
Total	1,318,546	(680,089)	(84,122)	554,335

As of June 30, 2023 and December 31, 2022, the Company held deferred shares in the amount of $12,973 thousand and $36,211 thousand, respectively. In accordance with the relevant acquisition agreement, a portion of the outstanding deferred shares were cancelled in order to indemnify the Company for post-acquisition costs. As the cancellation of the deferred shares occurred outside of the measurement period, rather than an adjustment to the purchase price allocation, the Company recorded a gain of $2,784 thousand during the three and six months ended June 30, 2023. For the three and six months ended June 30, 2022, no such cancellations occurred.

(ii) Distribution of Contingent Consideration

Dharma Pharmaceuticals, LLC

In connection with the Company's 2021 acquisition of ~~Liberty Compassion, Inc.~~Dharma Pharmaceuticals, LLC (“~~Liberty”~~Dharma”), the ~~Company withheld~~ purchase agreement included contingent consideration of up to $~~214,768~~65,000 thousand in Subordinate Voting Shares ~~for~~of Green Thumb, dependent upon the successful opening of up to five retail stores in the Virginia area within the first three years following the signing of the agreement and the legal sale of adult-use cannabis in a ~~period of eighteen months for the purpose of indemnifying~~retail store by January 1, 2025. On June 1, 2023, the Company ~~for post-acquisition costs incurred subsequent to the close of the transaction. The Company released the~~issued ~~214,768~~822,447 Subordinate Voting Shares to the ~~previous~~former owners of ~~Liberty.~~Dharma in connection with the successful opening of the fourth retail store in Virginia. The ~~deferred~~ shares had a fair value of $~~6,460~~6,070 thousand ~~which was based upon the closing price of Green Thumb's Subordinate Voting Shares as traded on the Canadian Securities Exchange (“CSE”) on~~at the date of issuance. On June 28, 2023, the ~~transaction.~~

~~Dharma Pharmaceuticals, LLC~~

Company successfully opened a fifth retail store in Virginia. However, the shares associated with this achievement were not issued until July 2023. As ~~part~~the liability was no longer contingent upon a future event, the Company recorded an obligation of $6,000 thousand, within accrued liabilities on the Company's unaudited interim condensed consolidated balance sheets representing the fair value of the ~~consideration exchanged in the Company's 2021 acquisition of Dharma Pharmaceuticals, Inc. (“Dharma”), the Company withheld~~ ~~229,878~~ Subordinate Voting Shares for a period of eighteen months for the purpose of indemnifying Green Thumb for post-acquisition costs incurred subsequent to the close of the transaction. The Company released the ~~229,878~~ Subordinate Voting Shares to ~~the previous owners of Dharma. The deferred shares had a fair value of $~~be issued.~~7,590~~ ~~thousand which was based upon the closing price of Green Thumb's Subordinate Voting Shares as traded on the CSE on the date of the transaction.~~

~~GreenStar Herbals, Inc.~~

~~As part of the consideration exchanged in the Company's 2021 acquisition of GreenStar Herbals, Inc. (“GreenStar”), the Company withheld~~ ~~161,306~~

~~Subordinate Voting Shares for a period of eighteen months for the purpose of indemnifying~~

Green Thumb ~~for post-acquisition costs incurred subsequent~~Industries Inc.

Notes to ~~the close of the transaction. The Company released the~~ Unaudited Interim Condensed Consolidated Financial Statements~~161,306~~

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

9. SHARE CAPITAL ~~Subordinate Voting Shares to the previous owners of GreenStar. The deferred shares had a fair value of $~~(Continued)~~4,762~~

~~thousand which was based upon the closing price of Green Thumb's Subordinate Voting Shares as traded on the CSE on the date of the transaction.~~

The Company operates equity settled stock-based remuneration plans for its eligible directors, officers, employees and consultants. All goods and services received in exchange for the grant of any stock-based payments are measured at their fair value unless the fair value cannot be estimated reliably. If the Company cannot estimate reliably the fair value of the goods and services received, the Company measures their value indirectly by reference to the fair value of the equity instruments granted. For transactions with employees and others providing similar services, the Company measures the fair value of the services by reference to the fair value of the equity instruments granted. Equity settled stock-based payments under stock-based payment plans are ultimately recognized as an expense in profit or loss with a corresponding credit to equity.

In June 2018, the Company established the Green Thumb Industries Inc. 2018 Stock and Incentive Plan, which was amended by Amendment No. 1 and Amendment No. 2 thereto (as amended, the “Plan”). The maximum number of Restricted Stock Units (“RSUs”) and options issued under the Plan shall not exceed 10% of the issued and outstanding shares on an as-converted basis.

The Company recognizes compensation expense for RSUs and options on a straight-line basis over the requisite service period of the award. Non-market vesting conditions are included in the assumptions about the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from the previous estimate. Any cumulative adjustment prior to vesting is recognized in the current period with no adjustment to prior periods for expense previously recognized.

Option and RSU awards generally vest over three years, and options typically have a life of five to ten years. Option grants are determined by the Compensation Committee of the Company’s Board of Directors with the option price set at no less than 100% of the fair market value of a share on the date of grant.

Stock option activity is summarized as follows:


	Number of Shares	Weighted Average Exercise Price	Weighted Average Remaining Contractual Life

Balance as of December 31, 2022	9,577,947	$12.71	4.80
Granted	2,172,481	7.75	6.73
Exercised	(130,508)	7.03
Forfeited	(745,869)	10.75
Balance as of June 30, 2023	10,874,051	$11.92	4.69
Vested	5,666,427	$14.91
Exercisable of June 30, 2023	1,096,059	$6.56	2.04

The Company used the Black-Scholes option pricing model to estimate the fair value of the options granted during the six months ended June 30, 2023 and the year ended December 31, 2022, using the following ranges of assumptions:


	June 30,	December 31,
	2023	2022
Risk-free interest rate	3.06% - 3.64%	1.18% - 3.54%
Expected dividend yield	0%	0%
Expected volatility	64%	60% - 64%
Expected option life	3.5 – 4.5 years	3 – 4.5 years

20As permitted under ASC 718, the Company has made an accounting policy choice to account for forfeitures when they occur.

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

9. SHARE CAPITAL (Continued)

~~(c) Stock-Based Compensation(Continued)~~

~~Stock option activity is summarized as follows:~~

Number of Shares
Weighted Average Exercise Price
Weighted Average Remaining Contractual Life

Balance as of December 31, 2022
9,577,947
$12.71
4.80
Granted
331,222
8.62
6.81
Exercised
(70,750)
7.01

Forfeited
(238,035)
10.00

Balance as of March 31, 2023
9,600,384
$12.67
4.29
Vested
5,281,364
$13.49

Exercisable of March 31, 2023
4,052,823
$7.94
3.15

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on March 31, 2023 and December 31, 2022, respectively, and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their in-the-money options on March 31, 2023 and December 31, 2022. This amount will change in future periods based on the fair market value of the Company’s Subordinate Voting Shares and the number of options outstanding.

The Company used the Black-Scholes option pricing model to estimate the fair value of the options granted during the three months ended March 31, 2023 and the year ended December 31, 2022, using the following ranges of assumptions:

March 31,
December 31,

2023
2022
Risk-free interest rate
3.06% - 3.64%
1.18% - 3.54%
Expected dividend yield
0%
0%
Expected volatility
64%
60% - 64%
Expected option life
3 – 4.5 years
3 – 4.5 years

~~As permitted under ASC 718, the Company has made an accounting policy choice to account for forfeitures when they occur.~~

~~Green Thumb Industries Inc.~~

~~Notes to Unaudited Interim Condensed Consolidated Financial Statements~~

~~(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)~~

~~9. SHARE CAPITAL~~ ~~(Continued)~~

The following table summarizes the number of unvested RSU awards as of ~~March 31,~~June 30, 2023 and December 31, 2022 and the changes during the ~~three~~six months ended ~~March 31,~~June 30, 2023:


	Number of Shares		Weighted Average Grant Date Fair Value	Number of Shares		Weighted Average Grant Date Fair Value
Unvested Shares at December 31, 2022	947,502	$	17.91	947,502	$	17.91
Granted	256,940		8.53	3,092,835		7.65
Forfeited	(33,843)		18.31	(235,156)		11.64
Vested	(75,620)		9.36	(351,721)		15.78
Unvested Shares at March 31, 2023	1,094,979	$	16.28
Unvested Shares at June 30, 2023				3,453,460	$	9.37

The stock-based compensation expense for the three and six months ended ~~March 31,~~June 30, 2023 and 2022 was as follows:


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022		2023		2022
		(in thousands)				(in thousands)				(in thousands)
Stock options expense	$	4,483	$	3,207	$	4,303	$	3,775	$	8,786	$	6,982
Restricted Stock Units		1,756		1,444		3,078		3,058		4,834		4,502
Total Stock Based Compensation Expense	$	6,239	$	4,651	$	7,381	$	6,833	$	13,620	$	11,484

As of ~~March 31,~~June 30, 2023, $~~34,546~~51,798 thousand of total unrecognized expense related to stock-based compensation awards is expected to be recognized over a weighted-average period of ~~1.86~~2.20 years.

2223

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

10. INCOME TAX EXPENSE

The following table summarizes the Company’s income tax expense and effective tax rates for the three and six months ended ~~March 31,~~June 30, 2023 and 2022:

Three Months Ended March 31,

2023

2022
Income before Income Taxes
$
43,041
$
60,817
Income Tax Expense

33,636

31,131
Effective Tax Rate

78.1%

51.2%


		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Income before Income Taxes	$	39,455	$	63,071	$	82,496	$	123,888
Income Tax Expense		25,765		38,340		59,401		69,471
Effective Tax Rate		65.3%		60.8%		72.0%		56.1%

The effective tax rates for the three and six months ended ~~March 31,~~June 30, 2023 and 2022 were based on the Company’s forecasted annualized effective tax rates and were adjusted for discrete items that occurred within the periods presented.

Due to its cannabis operations, the Company is subject to the limitations of the U.S. Internal Revenue Code of 1986, as amended (“IRC”) Section 280E under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income and provides for effective tax rates that are well in excess of statutory tax rates.

Taxes paid during the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022 were $~~159~~52,134 thousand and $~~132~~64,803 thousand, respectively.

2324

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

11. OTHER INCOME (EXPENSE)

For the three and six months ended ~~March 31,~~June 30, 2023 and 2022 other income (expense) was comprised of the following:


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022		2023		2022
		(in thousands)				(in thousands)				(in thousands)
Fair value adjustments on equity investments	$	(479)	$	(9,609)	$	(655)	$	(8,018)	$	(1,134)	$	(17,627)
Fair value adjustments on equity method investments		—		14,119		—		—		—		14,119
Fair value adjustments on warrants issued		1,642		7,929		621		13,843		2,263		21,772
Earnings (loss) from equity method investments		(318)		(1,203)		(432)		(738)		(750)		(1,941)
Other		79		199		196		496		275		695
Total Other Income (Expense)	$	924	$	11,435	$	(270)	$	5,583	$	654	$	17,018

12. COMMITMENTS AND CONTINGENCIES

The Company is subject to lawsuits, investigations and other claims related to employment, commercial and other matters that arise out of operations in the normal course of business. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in other liabilities.

Contingent liabilities are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the reporting period and are discounted to present value where the effect is material. The Company performs evaluations to identify contingent liabilities for contracts. Contingent consideration is measured upon acquisition and is estimated using probability weighting of potential payouts. Subsequent changes in the estimated contingent consideration from the final purchase price allocation are recognized in the Company’s unaudited interim condensed consolidated ~~statement~~statements of operations.

(a) Contingencies

The Company’s operations are subject to a variety of local and state regulations. Failure to comply with one or more of those regulations could result in fines, sanctions, restrictions on its operations, or losses of permits that could result in the Company ceasing operations in that specific state or local jurisdiction. The Company may be subject to regulatory fines, penalties, or restrictions in the future as cannabis and other regulations continue to evolve and are subject to differing interpretations.

(b) Claims and Litigation

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of ~~March 31,~~June 30, 2023, the following matter ~~was being appealed by the Company:~~remains pending:

Cresco Labs New York, LLC and Cresco Labs LLC (“Plaintiffs”) filed an amended complaint against one of the Company’s subsidiaries, Fiorello Pharmaceuticals, Inc. (“Defendant”) on November 20, 2018, in the Supreme Court of the State of New York, ~~NY County~~ alleging Defendant breached the parties’ Equity Purchase Agreement Letter of Intent (“LOI”) relating to the acquisition of Defendant by Plaintiffs. In December 2022, the trial court granted Plaintiffs' motion for summary judgment on their claim that Defendant breached the LOI. However, Defendant ~~disputes any liability~~successfully appealed the trial court's decision, and ~~is vigorously appealing~~in June 2023, the New York Appellate Court vacated the trial court’s ~~decision. The Company believes a successful appeal~~decision on liability, and completely and unanimously reversed the trial court on the issue of damages, making clear that Plaintiffs, if Defendant is ~~probable, and as such, as~~found liable, are limited to out-of-pocket damages. Plaintiffs have since sought the Appellate Division’s permission for further review from the New York Court of ~~March 31,~~Appeals. As of June 30, 2023 and December 31, 2022, a $900 thousand loss contingency was recorded within accrued liabilities on the unaudited interim condensed consolidated balance sheets as of each period ~~end. In~~end representing the ~~event that~~Company's estimate of out-of-pocket damages associated with the ~~Defendant’s appeal is unsuccessful, any damages will be determined by further legal proceedings. The Company has estimated that the possible range of loss is between $900~~ ~~thousand and $72,915~~ ~~thousand.~~complaint.

At ~~March 31,~~June 30, 2023, ~~other than as discussed above,~~ there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s consolidated operations. There are also no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a material interest adverse to the Company’s interest.

As of ~~March 31,~~June 30, 2023, the Company held approximately $~~47,900~~22,000 thousand of open construction commitments to contractors on work being performed.

2425

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

13. FAIR VALUE MEASUREMENTS

The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers all related factors of the asset by market participants in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels, and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and

Level 3 – Inputs for the asset or liability that are not based on observable market data.

(a) Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, investments, accounts payable and accrued liabilities, notes payable, warrant liability, and contingent consideration payable.

It was not practicable to estimate the fair value of the Company's long-term notes payable, which consist of charitable contributions, private placement debt and mortgage notes, since there were no quoted ~~market~~ prices or active trading markets. The carrying amount of notes payable at ~~March 31,~~June 30, 2023 and December 31, 2022 was $~~277,827~~289,905 thousand and $275,668 thousand, which includes $~~1,052~~1,048 thousand and $1,037 thousand, respectively, of short-term debt due within one year.

Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of the inputs to fair value measurements. The fair values of the Company’s financial instruments associated with each of the three levels of the hierarchy are:


		As of March 31, 2023								As of June 30, 2023
	(in thousands)								(in thousands)
		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Cash and Cash Equivalents	$	185,367	$	—	$	—	$	185,367	$	149,026	$	—	$	—	$	149,026
Investments		24,270		—		51,398		75,668		23,584		—		51,476		75,060
Contingent Consideration Payable		—		—		(42,674)		(42,674)		—		—		(32,022)		(32,022)
Warrant Liability		—		—		(2,878)		(2,878)		—		—		(2,257)		(2,257)
	$	209,637	$	—	$	5,846	$	215,483	$	172,610	$	—	$	17,197	$	189,807


		As of December 31, 2022
	(in thousands)
		Level 1		Level 2		Level 3		Total
Cash and Cash Equivalents	$	177,682	$	—	$	—	$	177,682
Investments		24,749		—		49,420		74,169
Contingent Consideration Payable		—		—		(41,943)		(41,943)
Warrant Liability		—		—		(4,520)		(4,520)
	$	202,431	$	—	$	2,957	$	205,388

2526

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in United States Dollars, Except Where Stated Otherwise)

14. SEGMENT REPORTING

The Company operates in two segments: the cultivation, production and sale of cannabis products to retail stores (“Consumer Packaged Goods”) and retailing of cannabis to patients and consumers (“Retail”). The Company does not allocate operating expenses to these business units, nor does it allocate specific assets. Additionally, the Chief Operating Decision Maker does not review total assets or net income (loss) by segments; therefore, such information is not presented below.

The below table presents revenues by type for the three and six months ended ~~March 31,~~June 30, 2023 and 2022:


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022		2023		2022
		(in thousands)				(in thousands)				(in thousands)
Revenues, Net of Discounts
Retail	$	188,878	$	172,586	$	188,044	$	192,734	$	376,922	$	365,320
Consumer Packaged Goods		125,617		120,412		136,054		120,604		261,671		241,016
Intersegment Eliminations		(65,959)		(50,398)		(71,710)		(59,027)		(137,669)		(109,425)
Total Revenues, Net of Discounts	$	248,536	$	242,600	$	252,388	$	254,311	$	500,924	$	496,911
Depreciation and Amortization
Retail	$	8,832	$	9,833	$	9,109	$	10,127	$	17,941	$	19,960
Consumer Packaged Goods		14,669		13,157		15,125		14,071		29,794		27,228
Intersegment Eliminations		—		—		—		—		—		—
Total Depreciation and Amortization	$	23,501	$	22,990	$	24,234	$	24,198	$	47,735	$	47,188
Income Taxes
Retail	$	19,011	$	18,190	$	13,328	$	21,681	$	32,339	$	39,871
Consumer Packaged Goods		14,625		12,941		12,437		16,659		27,062		29,600
Intersegment Eliminations		—		—		—		—		—		—
Total Income Taxes	$	33,636	$	31,131	$	25,765	$	38,340	$	59,401	$	69,471

Goodwill assigned to the Consumer Packaged Goods segment as of ~~March 31,~~June 30, 2023 and December 31, 2022 was $315,889 thousand and $315,889 thousand, respectively. Intangible assets, net assigned to the Consumer Packaged Goods segment as of ~~March 31,~~June 30, 2023 and December 31, 2022 was $~~280,278~~273,581 thousand and $286,922 thousand, respectively.

Goodwill assigned to the Retail segment as of ~~March 31,~~June 30, 2023 and December 31, 2022 was $273,802 thousand and $273,802 thousand, respectively. Intangible assets, net assigned to the Retail segment as of ~~March 31,~~June 30, 2023 and December 31, 2022 was $~~296,631~~290,584 thousand and $302,597 thousand, respectively.

The Company’s assets are aggregated into two reportable segments (Retail and Consumer Packaged Goods). For the purposes of testing goodwill, Green Thumb has identified two reporting units which align with our reportable segments (Retail and Consumer Packaged Goods). All revenues are derived from customers domiciled in the United States and all assets are located in the United States.

2627

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

This management discussion and analysis (“MD&A”) of the financial condition and results of operations of Green Thumb Industries Inc. (the “Company” or “Green Thumb”) is for the three and six months ended ~~March 31,~~June 30, 2023 and 2022. It is supplemental to, and should be read in conjunction with, the Company’s unaudited interim condensed consolidated financial statements as of ~~March 31,~~June 30, 2023 and the consolidated financial statements for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the U.S. Securities and Exchange Commission on March 1, 2023 (the “2022 Form 10-K”) and the accompanying notes for each respective period. The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$” or “US$”), unless otherwise indicated.

This MD&A contains certain “forward-looking statements” and certain “forward-looking information” as defined under applicable United States securities laws. Please refer to the discussion of forward-looking statements and information set out under the heading “Disclosure Regarding Forward-Looking Statements,” identified in the ‘‘Risks and Uncertainties’’ section of this MD&A and in Part II, Item 1A, “Risk Factors of the 2022 Form 10-K.” As a result of many factors, the Company’s actual results may differ materially from those anticipated in these forward-looking statements and information.

OVERVIEW OF THE COMPANY

Established in 2014 and headquartered in Chicago, Illinois, Green Thumb promotes well-being through the power of cannabis through branded consumer packaged goods and people-first retail experiences, while giving back to the communities in which it serves. As of ~~March 31,~~June 30, 2023, Green Thumb has operations in 15fifteen U.S. markets, employs approximately ~~4,000~~4,300 people and serves millions of patients and customers annually.

Green Thumb’s core business is manufacturing, distributing and marketing a portfolio of owned cannabis consumer packaged goods brands (which we refer to as our Consumer Packaged Goods business), including &Shine, Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredibles and RYTHM. The Company distributes and markets these products primarily to third-party licensed retail cannabis stores across the United States as well as to Green Thumb-owned retail stores (which we refer to as our Retail business).

The Company’s Consumer Packaged Goods portfolio is primarily generated from plant material that Green Thumb grows and processes itself, which we use to produce our consumer packaged goods in 18eighteen manufacturing facilities. This portfolio consists of stock keeping units ~~(“SKUs”)~~ across a range of cannabis product categories, including flower, pre-rolls, concentrates, vape, capsules, tinctures, edibles, topicals and other cannabis-related products (none of which product categories are individually material to the Company). These Consumer Packaged Goods products are sold in retail ~~locations~~stores throughout the U.S. including at Green Thumb’s own RISE and other stores.

Green Thumb owns and operates a national cannabis retail chain called RISE that provides relationship-centric retail experiences aimed to deliver a superior level of customer service through high-engagement consumer interaction, a consultative, transparent and education-forward selling approach and a consistently available assortment of cannabis products. In addition, Green Thumb owns stores under other names, primarily where naming is subject to licensing or similar restrictions or in certain instances where we co-own the store. The income from Green Thumb’s ~~Retail~~retail stores is primarily derived from the sale of cannabis-related products, which includes the sale of Green Thumb produced products as well as those produced by third parties, with an immaterial (under 10%) portion of this income resulting from the sale of other merchandise (such as t-shirts and accessories for cannabis use). The RISE stores currently are located in 13fourteen of the states in which we operate. As of ~~March 31,~~June 30, 2023, the Company had 7783 open and operating retail ~~locations.~~stores. The Company’s new store opening plans will remain fluid depending on market conditions, obtaining local licensing, construction and other permissions and subject to the Company’s capital allocation plans.

Results of Operations – Consolidated

The following table sets forth the Company’s selected consolidated financial results for the periods, and as of the dates, indicated. The (i) unaudited interim condensed consolidated statements of operations for the three and six months ended ~~March 31,~~June 30, 2023 and 2022 and (ii) unaudited interim condensed consolidated balance sheet as of ~~March 31,~~June 30, 2023 and December 31, 2022 have been derived from, and should be read in conjunction with, the unaudited interim condensed consolidated financial statements and accompanying notes presented in Item 1 of this quarterly report on Form 10-Q.

The Company’s unaudited interim condensed consolidated financial statements have been prepared in accordance with ~~U.S.~~ GAAP and on a going-concern basis that contemplates continuity of operations and realization of assets and liquidation of liabilities in the ordinary course of business.


		Three Months Ended March 31,				QTD Change			Three Months Ended June 30,				Six Months Ended June 30,				QTD Change			YTD Change
		2023		2022		$	%		2023		2022		2023		2022		$	%		$	%
		(in thousands, except share and per share amounts)							(in thousands, except share and per share amounts)								Increase (Decrease)
Revenues, Net of Discounts	$	248,536	$	242,600	$	5,936	2%	$	252,388	$	254,311	$	500,924	$	496,911	$	(1,923)	(1)%	$	4,013	1%
Cost of Goods Sold, Net		(123,815)		(119,660)		(4,155)	(3)%		(127,108)		(128,513)		(250,923)		(248,173)		(1,405)	(1)%		2,750	1%
Gross Profit		124,721		122,940		1,781	1%		125,280		125,798		250,001		248,738		(518)	(0)%		1,263	1%
Expenses:
Selling, General, and Administrative		80,519		68,388		12,131	18%		84,217		63,535		164,736		131,923		20,682	33%		32,813	25%
Total Expenses		80,519		68,388		12,131	18%		84,217		63,535		164,736		131,923		20,682	33%		32,813	25%
Income From Operations		44,202		54,552		(10,350)	(19)%		41,063		62,263		85,265		116,815		(21,200)	(34)%		(31,550)	(27)%
Total Other Income (Expense)		(1,161)		6,265		(7,426)	(119)%		(1,608)		808		(2,769)		7,073		(2,416)	(299)%		(9,842)	(139)%
Income Before Provision for Income Taxes And Non-Controlling Interest		43,041		60,817		(17,776)	(29)%		39,455		63,071		82,496		123,888		(23,616)	(37)%		(41,392)	(33)%
Provision for Income Taxes		33,636		31,131		2,505	8%		25,765		38,340		59,401		69,471		(12,575)	(33)%		(10,070)	(14)%
Net Income Before Non-Controlling Interest		9,405		29,686		(20,281)	(68)%		13,690		24,731		23,095		54,417		(11,041)	(45)%		(31,322)	(58)%
Net Income Attributable to Non-Controlling Interest		266		747		(481)	(64)%		290		294		556		1,041		(4)	(1)%		(485)	(47)%
Net Income Attributable To Green Thumb Industries Inc.	$	9,139	$	28,939	$	(19,800)	(68)%	$	13,400	$	24,437	$	22,539	$	53,376	$	(11,037)	(45)%	$	(30,837)	(58)%
Net Income Per Share - Basic	$	0.04	$	0.12	$	(0.08)	(67)%	$	0.05	$	0.11	$	0.09	$	0.23	$	(0.06)	(55)%	$	(0.14)	(61)%
Net Income Per Share - Diluted	$	0.04	$	0.12	$	(0.08)	(67)%	$	0.05	$	0.10	$	0.09	$	0.22	$	(0.05)	(50)%	$	(0.13)	(59)%
Weighted Average Number of Shares Outstanding – Basic		237,398,253		235,838,947					238,000,135		236,783,625		237,700,856		236,313,896
Weighted Average Number of Shares Outstanding – Diluted		237,686,092		238,225,420					238,423,288		237,762,903		239,455,964		237,869,300


		March 31, 2023		December 31, 2022		June 30, 2023		December 31, 2022
		(in thousands)				(in thousands)
Total Assets	$	2,493,167	$	2,433,528	$	2,512,834	$	2,433,528
Long-Term Liabilities	$	625,084	$	621,525	$	631,757	$	621,525

Three Months Ended ~~March 31,~~June 30, 2023 Compared to the Three Months Ended ~~March 31,~~June 30, 2022

Revenues, net of Discounts

Revenue for the three months ended ~~March 31,~~June 30, 2023 was ~~$248,536~~$252,388 thousand, ~~up 2%~~a decrease of 1% from ~~$242,600~~$254,311 thousand for the three months ended ~~March 31, 2022, driven primarily~~June 30, 2022. The Company increased the number of total units sold, but due to price compression, total revenue declined. This decrease was partially offset by ~~the operations of the Retail segment. Key performance drivers for the period included: (i) legalization of adult-use sales~~continued growth in existing markets such as New Jersey, ~~which began on April 21, 2022, (ii) legalization of adult-use sales in Rhode Island, which began on December 1, 2022, (iii) legalization of adult-use sales in~~Virginia, and Connecticut, ~~which began on January 10, 2023, and (iv) increased store traffic to Green Thumb’s open and operating~~as well as revenue generated from new retail stores ~~particularly~~opened in ~~Virginia, Minnesota and Maryland.~~the current period.

The Company generated revenue from ~~77 Retail~~83 retail stores during the quarter, compared to 7677 in the same quarter of the prior year. ~~Retail revenues made up 76% of total revenues during~~During the three months ended ~~March 31, 2023 as compared to 71% during the three months ended March 31, 2022. From March 31, 2022 until March 31,~~June 30, 2023, the Company opened two retail stores in Pennsylvania, two retail stores in Virginia, one ~~new Retail~~retail store in ~~Minnesota.~~Minnesota, and one retail store in Nevada.

~~Consumer Packaged Goods revenues made up 24% of total revenues during the three months ended March 31, 2023 as compared to 29% during the three months ended March 31, 2022.~~

Cost of Goods Sold, net

Cost of goods sold are derived from retail purchases made by the Company from its third-party licensed producers operating within our state markets and costs related to the internal cultivation and production of cannabis. Cost of goods sold for the three months ended ~~March 31,~~June 30, 2023 was ~~$123,815~~$127,108 thousand, ~~up 3%~~a decrease of 1% from ~~$119,660~~$128,513 thousand for the three months ended ~~March 31,~~June 30, 2022, driven by ~~increased demand stemming from~~ the ~~launch of adult-use sales~~decrease in ~~New Jersey, Rhode Island, and Connecticut~~revenue as ~~noted above, as well as increased sales volume at the Company's open and operating retail stores.~~described above.

Gross Profit

Gross profit for the three months ended ~~March 31,~~June 30, 2023 was ~~$124,721~~$125,280 thousand, representing a gross margin on the sale of branded cannabis flower and processed and packaged products including concentrates, edibles, topicals and other cannabis products, of 50%. This is compared to gross profit for the three months ended ~~March 31,~~June 30, 2022 of ~~$122,940~~$125,798 thousand, or a ~~51%~~49% gross margin. The increase in gross margin (percent) was primarily driven by increased sales of Company branded products which have higher margins. The decrease in gross profit (dollars) was directly attributable to the revenue ~~increase~~decrease as described above. ~~The decline in gross margin (percent) was primarily driven by price compression.~~

Total Expenses

Total expenses for the three months ended ~~March 31,~~June 30, 2023 were ~~$80,519~~$84,217 thousand, or ~~32%~~33% of revenues, net of discounts, resulting in an increase of ~~$12,131 thousand.~~$20,682 thousand over the same period in the prior year. Total expenses for the three months ended ~~March 31,~~June 30, 2022 were ~~$68,388~~$63,535 thousand or ~~28%~~25% of revenues, net of discounts. ~~The increase~~Total expenses were lower in ~~total expenses was attributable~~the three months ended June 30, 2022 primarily due to favorable fair value adjustments associated with the Company's contingent consideration ~~arrangements recorded during the three months ended March 31, 2022. No such fair value adjustments were recorded during the three months ended March 31, 2023.~~arrangements.

Total Other Income (Expense)

Total other income (expense) for three months ended ~~March 31,~~June 30, 2023 was ~~$(1,161)~~$(1,608) thousand, a ~~change~~decrease of ~~$(7,426)~~$2,416 thousand, ~~primarily~~ due to a favorable fair value ~~adjustment associated with~~adjustments to the Company's ~~acquisition of the remaining 50% ownership interest in ILDISP, LLC from the Company's former membership interest partner during the three months ended March 31, 2022,~~warrant liability, partially offset by unfavorable fair value adjustments onassociated with the Company's equity investments, both recorded during the three months ended ~~March 31,~~June 30, 2022.

Income (Loss) Before Provision for Income Taxes and Non-Controlling Interest

Income before provision for income taxes and non-controlling interest for the three months ended ~~March 31,~~June 30, 2023 was ~~$43,041~~$39,455 thousand, a decrease of ~~$17,776~~$23,616 thousand compared to the three months ended ~~March 31,~~June 30, 2022.

As presented under the heading “Non-GAAP Measures” below, after adjusting for non-cash equity incentive compensation of ~~$6,239~~$7,381 thousand and ~~$4,651~~$6,833 thousand in the three months ended ~~March 31,~~June 30, 2023 and 2022, respectively, and other nonoperating (income) expenses, ~~(income),~~ of ~~$2,292~~$3,138 thousand and ~~$(15,154)~~$(14,557) thousand in the three months ended ~~March 31,~~June 30, 2023 and 2022, respectively, adjusted earnings before interest, depreciation, and amortization (“EBITDA”) was ~~$76,234~~$75,816 thousand and ~~$67,039~~$78,737 thousand, respectively.

Provision for Income Taxes

Income tax expense is recognized based on the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end. For the three months ended ~~March 31,~~June 30, 2023, federal and state income tax expense totaled ~~$33,636~~$25,765 thousand compared to expense of ~~$31,131~~$38,340 thousand for the three months ended ~~March 31,~~June 30, 2022.

2930

Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022

Revenues, net of Discounts

Revenue for the six months ended June 30, 2023 was $500,924 thousand, an increase of 1% from $496,911 for the six months ended June 30, 2022. The increase in revenue was largely due to legalization of adult-use sales in New Jersey, which began on April 21, 2022, continued growth in existing markets such as Connecticut and Virginia, as well as revenue generated from new retail stores opened in the current period, partially offset by price compression.

The Company generated revenue from 83 retail stores during the period compared to 77 in the same period of the prior year. During the six months ended June 30, 2023, the Company opened two retail stores in Pennsylvania, two retail stores in Virginia, one retail store in Minnesota, and one retail store in Nevada.

Cost of Goods Sold, net

Gross Profit

Gross profit for the six months ended June 30, 2023 was $250,001 thousand, representing a gross margin on the sale of branded cannabis flower and processed and packaged products including concentrates, edibles, topicals and other cannabis products, of 50%. This is compared to gross profit for the six months ended June 30, 2022 of $248,738 thousand or a 50% gross margin. The increase in gross profit (dollars) was directly attributable to the revenue increase as described above.

Total Expenses

Total expenses for the six months ended June 30, 2023 were $164,736 thousand or 33% of revenues, net of discounts, resulting in an increase of $32,813 thousand over the same period in the prior year. Total expenses for the six months ended June 30, 2022 were $131,923 thousand or 27% of revenues, net of discounts. Total expenses were lower in the first six months of 2022 primarily due to favorable fair value adjustments associated with the Company's contingent consideration arrangements, which were recorded during the six months ended June 30, 2022.

Total Other Income (Expense)

Total other income (expense) for six months ended June 30, 2023 was $(2,769) thousand a decrease of $9,842 thousand, due to favorable adjustments to the Company's warrant liability, partially offset by unfavorable fair value adjustments associated with the Company's equity investments, both recorded during the six months ended June 30, 2022.

Income (Loss) Before Provision for Income Taxes and Non-Controlling Interest

Net operating income before provision for income taxes and non-controlling interest for six months ended June 30, 2023 was $82,496 thousand, a decrease of $41,392 thousand compared to the six months ended June 30, 2022.

As presented under the heading “Non-GAAP Measures” below, after adjusting for non-cash equity incentive compensation of $13,620 thousand and $11,484 thousand, and other nonoperating (income) expenses, of $5,430 thousand and $(29,711) thousand in the six months ended June 30, 2023 and 2022, respectively, Adjusted EBITDA was $152,050 thousand and $145,776 thousand, respectively.

Provision for Income Taxes

Income tax expense is recognized based on the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year-end. For the six months ended June 30, 2023, federal and state income tax expense totaled $59,401 thousand compared to expense of $69,471 thousand for the six months ended June 30, 2022.

Results of ~~Operation~~Operations by Segment

The following table summarizes revenues net of sales discounts by segment for the three and six months ended ~~March 31,~~June 30, 2023 and 2022:


		Three Months Ended March 31,				2023 vs. 2022			Three Months Ended June 30,				2023 vs. 2022
		2023		2022		$ Change	% Change		2023		2022		$ Change	% Change
		(in thousands)							(in thousands)				Increase (Decrease)
Retail	$	188,878	$	172,586	$	16,292	9%	$	188,044	$	192,734	$	(4,690)	(2)%
Consumer Packaged Goods		125,617		120,412		5,205	4%		136,054		120,604		15,450	13%
Intersegment Eliminations		(65,959)		(50,398)		(15,561)	31%		(71,710)		(59,027)		(12,683)	(21)%
Total Revenues, Net of Discounts	$	248,536	$	242,600	$	5,936	2%	$	252,388	$	254,311	$	(1,923)	(1)%


		Six Months Ended June 30,				2023 vs. 2022
		2023		2022		$ Change	% Change
		(in thousands)				Increase (Decrease)
Retail	$	376,922	$	365,320	$	11,602	3%
Consumer Packaged Goods		261,671		241,016		20,655	9%
Intersegment Eliminations		(137,669)		(109,425)		(28,244)	-26%
Total Revenues, Net of Discounts	$	500,924	$	496,911	$	4,013	1%

Three Months Ended ~~March 31,~~June 30, 2023 Compared with the Three Months Ended ~~March 31,~~June 30, 2022

Revenues, net of discounts, for the Retail segment were ~~$188,878~~$188,044 thousand, ~~an increase~~a decrease of ~~$16,292~~$4,690 thousand or 9%2%, compared to the three months ended ~~March 31,~~June 30, 2022. The ~~increase~~Company increased the total number of units sold, but due to price compression, total revenue declined. This decrease was partially offset by continued growth in ~~Retail revenues, net of discounts, was primarily driven by: (i) the legalization of adult-use sales in~~existing markets such as New Jersey, ~~which began on April 21, 2022, (ii) legalization of adult-use sales in Rhode Island, which began on December 1, 2022, (iii) legalization of adult-use sales in~~Virginia, and Connecticut, ~~which began on January 10, 2023, and (iv) increased store traffic to Green Thumb’s open and operating~~as well as revenue generated from new retail stores ~~particularly~~opened in ~~Virginia, Minnesota and Maryland.~~the current period.

Revenues, net of discounts, for the Consumer Packaged Goods Segment were ~~$125,617~~$136,054 thousand, an increase of ~~$5,205~~$15,450 thousand or 4%13%, compared to the three months ended ~~March 31,~~June 30, 2022. The key driver for the increase in Consumer Packaged Goods revenues ~~net of discounts,~~ was ~~primarily driven by the legalization of adult-use sales in New Jersey, which began on April 21, 2022.~~increased production capacity within existing markets.

Intersegment eliminations associated with the Consumer Packaged Goods Segment were ~~$(65,959)~~$71,710 thousand, an increase of ~~$(15,561)~~$12,683 thousand or ~~31%~~21% compared to the three months ended ~~March 31,~~June 30, 2022. The increase in intersegment eliminations was driven by increased intercompany sales ~~primarily~~ to Company-owned ~~Retail stores in New Jersey, Illinois, and Pennsylvania.~~retail stores. Consumer Packaged Goods revenues, net of intersegment eliminations, made up ~~24%~~25% of total revenues during the three months ended ~~March 31,~~June 30, 2023 as compared to ~~29%~~24% during the three months ended ~~March 31,~~June 30, 2022.

Due to the vertically integrated nature of the business, the Company reviews its revenue at the Retail and Consumer Packaged Goods level while reviewing its operating results on a consolidated basis.

Six Months Ended June 30, 2023 Compared with the Six Months Ended June 30, 2022

Revenues, net of discounts for the Retail segment were $376,922, an increase of $11,602 or 3%, compared to the six months ended June 30, 2022. The increase in Retail revenues, net of discounts, was primarily driven by legalization of adult-use sales in New Jersey, which began on April 21, 2022, continued growth in existing markets such as Connecticut and Virginia, as well as revenue generated from new retail stores opened in the current period, partially offset by price compression.

Revenues, net of discounts, for the Consumer Packaged Goods Segment were $261,671 thousand, an increase of $20,655 thousand or 9%, compared to the six months ended June 30, 2022. The key driver for the increase in Consumer Packaged Goods revenues was increased production capacity within existing markets.

Intersegment eliminations associated with the Consumer Packaged Goods Segment were $137,669 thousand, an increase of $28,244 thousand or 26% compared to the six months ended June 30, 2022. The increase in intersegment eliminations was driven by increased intercompany sales to Company-owned retail stores primarily in Illinois, Pennsylvania, and New Jersey as well as to newly acquired retail stores as discussed above. Consumer Packaged Goods revenues, net of intersegment eliminations, made up 25% of total revenues during the six months ended June 30, 2023 as compared to 26% during the six months ended June 30, 2022.

Due to the vertically integrated nature of the business, the Company reviews its revenue at the Retail and Consumer Packaged Goods level while reviewing its operating results on a consolidated basis.

Drivers of Results of Operations

Revenue

The Company derives its revenue from two revenue streams: a Consumer Packaged Goods business in which it manufactures, sells and distributes its portfolio of Consumer Packaged Goods brands including Beboe, Dogwalkers, Dr. Solomon’s, Good Green, incredibles, and RYTHM, primarily to third-party customers; and a Retail business in which it sells finished goods sourced primarily from third-party cannabis manufacturers in addition to the Company’s own Consumer Packaged Goods products direct to the end consumer in its ~~Retail~~retail stores, as well as direct-to-consumer delivery where applicable by state law.

For the three and six months ended ~~March 31,~~June 30, 2023, revenue was contributed from Consumer Packaged Goods and Retail sales across California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Virginia.

Gross Profit

Gross profit is revenue less cost of goods sold. Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and other supplies, fees for services and processing, and allocated overhead which includes allocations of rent, utilities and related costs. Cannabis costs are affected by various state regulations that limit the sourcing and procurement of cannabis product, which may create fluctuations in gross profit over comparative periods as the regulatory environment changes. Gross margin measures our gross profit as a percentage of revenue.

During the ~~three~~six months ended ~~March 31,~~June 30, 2023, the Company continued to be focused on creating sustainable, profitable growth of the Company’s business within its current markets while considering strategic acquisition and partnership opportunities.

Total Expenses

Total expenses other than the cost of goods sold consist of selling costs to support customer relationships and marketing and branding activities. It also includes a significant investment in the corporate infrastructure required to support the Company’s ongoing business.

Retail selling costs generally correlate to revenue. As new ~~locations~~stores begin operations, these ~~locations~~stores generally experience higher selling costs as a percentage of revenue compared to more established ~~locations,~~stores, which experience a more constant rate of selling costs. As a percentage of sales, the Company expects selling costs to remain constant in the more established ~~locations~~stores and increase in the newer ~~locations~~stores as business continues to grow.

General and administrative expenses also include costs incurred at the Company’s corporate offices, primarily related to back office personnel costs, including salaries, incentive compensation, benefits, stock-based compensation and other professional service

costs, and fair value adjustments on the Company's contingent consideration arrangements. The Company expects to continue to invest considerably in this area to support the business by attracting and retaining top-tier talent. Furthermore, the Company anticipates an increase in stock-based compensation expenses related to recruiting and hiring talent, along with legal and professional fees associated with being a publicly traded company in Canada and registered with the U.S. Securities and Exchange Commission.

Provision for Income Taxes

The Company is subject to income taxes in the jurisdictions in which it operates and, consequently, income tax expense is a function of the allocation of taxable income by jurisdiction and the various activities that impact the timing of taxable events. As the Company operates in the federally illegal cannabis industry, it is subject to the limitations of the IRC Section 280E, under which taxpayers are only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses ~~deemeda~~deemed non-allowable under IRC Section 280E and a higher effective tax rate than most industries. Therefore, the effective tax rate can be highly variable and may not necessarily correlate to pre-tax income or loss.

Non-GAAP Measures

EBITDA, and Adjusted EBITDA are non-GAAP measures and do not have standardized definitions under GAAP. The following information provides reconciliations of the supplemental non-GAAP financial measures, presented herein to the most directly comparable financial measures calculated and presented in accordance with GAAP. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented.


		Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022		2023		2022
		(in thousands)				(in thousands)				(in thousands)
Net Income Before Non-Controlling Interest	$	9,405	$	29,686	$	13,690	$	24,731	$	23,095	$	54,417
Interest Income, net		(1,731)		(900)		(1,531)		(624)		(3,262)		(1,524)
Interest Expense, net		3,816		6,070		2,869		5,399		6,685		11,469
Provision For Income Taxes		33,636		31,131		25,765		38,340		59,401		69,471
Other Income, Net		(924)		(11,435)
Total Other (Income) Expense						270		(5,583)		(654)		(17,018)
Depreciation and amortization		23,501		22,990		24,234		24,198		47,735		47,188
Earnings before interest, taxes, depreciation and amortization (EBITDA) (non-GAAP measure)	$	67,703	$	77,542	$	65,297	$	86,461	$	133,000	$	164,003
Stock-based compensation, non-cash		6,239		4,651		7,381		6,833		13,620		11,484
Acquisition, transaction and other non-operating (income) costs		2,292		(15,154)		3,138		(14,557)		5,430		(29,711)
Adjusted EBITDA (non-GAAP measure)	$	76,234	$	67,039	$	75,816	$	78,737	$	152,050	$	145,776

3134

Liquidity, Financing Activities During the Period, and Capital Resources

As of ~~March 31,~~June 30, 2023, and December 31, 2022 the Company had total current liabilities of ~~$186,937~~$175,261 thousand and $146,571 thousand, respectively, and cash and cash equivalents of ~~$185,367~~$149,026 thousand and $177,682 thousand, respectively, to meet its current obligations. The Company had working capital of ~~$170,674~~$165,993 thousand as of ~~March 31,~~June 30, 2023, a decrease of ~~$(34,106)~~$38,787 thousand as compared to December 31, 2022. This decrease in working capital was primarily driven by ~~an increase~~purchases of property, plant, and equipment, as well as tax payments made in ~~income taxes payable which will be paid during~~ the ~~second quarter.~~current period.

The Company is an early-stage growth company, generating cash from revenues, deploying its capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and long term. Capital reserves are primarily being utilized for capital expenditures, facility improvements, strategic investment opportunities, product development and marketing, as well as customer, supplier, and investor and industry relations.

The Company takes a cautious approach in allocating its capital to maximize its returns while ensuring appropriate liquidity. Given the current uncertainty of the future economic environment, the Company has taken additional measures in monitoring and deploying its capital to minimize the negative impact on its current operations and expansion plans.

Cash Flows

Cash Used in Operating Activities, Investing and Financing Activities

Net cash provided by (used in) operating, investing and financing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022, were as follows:

Three Months Ended March 31,

2023

2022

(in thousands)
Net Cash Provided by Operating Activities
$
74,711
$
55,376
Net Cash Provided by Investing Activities
$
(66,890)
$
(100,401)
Net Cash Used in Financing Activities
$
(136)
$
(10,856)


		Six Months Ended June 30,
		2023		2022
		(in thousands)
Net Cash Provided by Operating Activities	$	93,028	$	39,914
Net Cash Used in Investing Activities	$	(131,542)	$	(114,296)
Net Cash Provided by (Used in) Financing Activities	$	9,858	$	(10,761)

Off-Balance Sheet Arrangements

As of ~~March 31,~~June 30, 2023, the Company does not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources.

Changes in or Adoption of Accounting Practices

Refer to the discussion of recently adopted/issued accounting pronouncements under Part I, Item 1, Notes to Unaudited Interim Condensed Consolidated Financial Statements, Note 1—Overview and Basis of Presentation.

Critical Accounting Policies and Significant Judgments and Estimates

There were no material changes to our critical accounting policies and estimates from the information provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2022 Form 10-K.

ITEM 3. QUANTITAVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to our market risk disclosures as set forth in Part II Item 7A of our 2022 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company's management carried out an evaluation under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Based upon that evaluation, management concluded that our disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2023.

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company's internal control over financial reporting during the ~~first~~second quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Control Systems

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, will be or have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of simple ~~error~~errors or ~~mistake.~~mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

3336

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is a party to a variety of legal proceedings that arise out of operations in the normal course of business. While the results of these legal proceedings cannot be predicted with certainty, the Company believes that the final outcome of these proceedings will not have a material adverse effect, individually or in the aggregate, on our results of operations or financial condition.

ITEM 1A. RISK FACTORS

For a discussion of our potential risks and uncertainties, see the information under the heading ~~“Risk Factors”~~"Risk Factors" in our 2022 Form 10-K.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES

Recent Sales of Unregistered Securities

Subordinate Voting Shares

Between ~~January~~April 1, 2023 and ~~March 31,~~June 30, 2023, the Company issued a total of ~~615,819~~64,270 deferred shares associated with the Company's previous acquisitions of various privately held Companies.

On June 1, 2023, the Company issued 822,447 Subordinate Voting Shares as contingent consideration associated with the Company's July 2021 acquisition of Dharma Pharmaceuticals, LLC.

Multiple Voting Shares

None.

Super Voting Shares

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

3437

ITEM 6. EXHIBITS

The following exhibits are filed with this report:


~~10.1~~	~~Amendment No. 2 to the Green Thumb Industries Inc. 2018 Stock and incentive Plan~~

~~10.2~~	~~2023 Form of Option Grant Agreement~~

~~10.3~~	~~2023 Form of RSU Grant Agreement~~

31.1	CERTIFICATE OF CHIEF EXECUTIVE OFFICER

31.2	CERTIFICATE OF CHIEF FINANCIAL OFFICER

32.1	CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

32.2	CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

101.INS	Inline XBRL Instance Document

101.SCH	Inline XBRL Taxonomy Extension Schema Document

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (embedded with Inline XBRL File)

3538

SIGNATURES

Pursuant to requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GREEN THUMB INDUSTRIES INC.

/s/Benjamin Kovler

By: Benjamin Kovler

Title: Chief Executive Officer

Date: ~~May 4,~~August 9, 2023

GREEN THUMB INDUSTRIES INC.

/s/Mathew Faulkner

By: Mathew Faulkner

Title: Chief Financial Officer

Date: ~~May 4,~~August 9, 2023

3639


British Columbia	98-1437430
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

325 West Huron Street, Suite 700 Chicago, Illinois	60654
(Address of principal executive offices)	(zip code)


FINANCIAL INFORMATION		Page
	Part I
ITEM 1:	Unaudited Interim Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2023 and December 31, 2022	4
	Unaudited Interim Condensed Consolidated Statements of Operations for the three and six months ended ~~March 31,~~June 30, 2023 and 2022	5
	Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended ~~March 31,~~June 30, 2023 and 2022	6
	Unaudited Interim Condensed Consolidated Statements of Cash Flows for the ~~three~~six months ended ~~March 31,~~June 30, 2023 and 2022	78
	Notes to Unaudited Interim Condensed Consolidated Financial Statements	910
ITEM 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2728
ITEM 3:	Quantitative and Qualitative Disclosure About Market Risk	3336
ITEM 4:	Controls and Procedures	3336
	Part II
OTHER INFORMATION
ITEM 1:	Legal Proceedings	3437
ITEM 1a:	Risk Factors	3437
ITEM 2:	Sale of Unregistered Securities	3437
ITEM 3:	Defaults Upon Senior Securities	3437
ITEM 4:	Mine Safety Disclosure	3437
ITEM 5:	Other Information	3437
ITEM 6:	Exhibits	3538
Signatures		3639


	March 31,			December 31,			June 30,			December 31,
	2023			2022			2023			2022
				(Audited)						(Audited)
	(in thousands)						(in thousands)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	185,367		$	177,682		$	149,026		$	177,682
Accounts Receivable		30,987			30,975
Accounts Receivable, Net								39,240			30,975
Income Tax Receivable		—			7,473			5,335			7,473
Inventories		121,069			115,675			124,772			115,675
Prepaid Expenses		12,597			13,364			14,202			13,364
Other Current Assets		7,591			6,182			8,679			6,182
Total Current Assets		357,611			351,351			341,254			351,351
Property and Equipment, Net		620,656			557,873			674,958			557,873
Right of Use Assets, Net		243,926			242,357			239,964			242,357
Investments		75,668			74,169			75,060			74,169
Investments in Associates		25,490			25,508			25,358			25,508
Intangible Assets, Net		576,909			589,519			564,165			589,519
Goodwill		589,691			589,691			589,691			589,691
Deposits and Other Assets		3,216			3,060			2,384			3,060
TOTAL ASSETS	$	2,493,167		$	2,433,528		$	2,512,834		$	2,433,528
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities:
Accounts Payable	$	16,905		$	18,423		$	27,494		$	18,423
Accrued Liabilities		99,917			86,971			116,890			86,971
Compensation Payable		15,315			13,476			7,809			13,476
Current Portion of Notes Payable		1,052			1,037			1,048			1,037
Current Portion of Lease Liabilities		11,753			10,906			12,245			10,906
Contingent Consideration Payable		11,400			11,400			—			11,400
Income Tax Payable		30,595			4,358			9,775			4,358
Total Current Liabilities		186,937			146,571			175,261			146,571
Long-Term Liabilities:
Lease Liabilities, Net of Current Portion		251,607			249,281			248,328			249,281
Notes Payable, Net of Current Portion and Debt Discount		276,775			274,631			288,857			274,631
Contingent Consideration Payable		31,274			30,543			32,022			30,543
Warrant Liability		2,878			4,520			—			4,520
Deferred Income Taxes		62,550			62,550			62,550			62,550
TOTAL LIABILITIES		812,021			768,096			807,018			768,096
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Subordinate Voting Shares (Shares Authorized, Issued and Outstanding at March 31, 2023: Unlimited, 207,753,464, and 207,753,464, respectively, at December 31, 2022: Unlimited, 206,991,275, and 206,991,275, respectively)		—			—
Multiple Voting Shares (Shares Authorized, Issued and Outstanding at March 31, 2023: Unlimited, 38,531 and 38,531, respectively, at December 31, 2022: Unlimited, 38,531 and 38,531, respectively)		—			—
Super Voting Shares (Shares Authorized, Issued and Outstanding at March 31, 2023: Unlimited, 251,690 and 251,690, respectively, at December 31, 2022: Unlimited, 251,690 and 251,690, respectively)		—			—
Subordinate Voting Shares (Shares Authorized, Issued and Outstanding at June 30, 2023: Unlimited, 208,976,040, and 208,976,040, respectively, at December 31, 2022: Unlimited, 206,991,275, and 206,991,275, respectively)								—			—
Multiple Voting Shares (Shares Authorized, Issued and Outstanding at June 30, 2023: Unlimited, 38,531 and 38,531, respectively, at December 31, 2022: Unlimited, 38,531 and 38,531, respectively)								—			—
Super Voting Shares (Shares Authorized, Issued and Outstanding at June 30, 2023: Unlimited, 251,690 and 251,690, respectively, at December 31, 2022: Unlimited, 251,690 and 251,690, respectively)								—			—
Share Capital		1,683,671			1,663,557			1,693,429			1,663,557
Contributed Surplus		28,959			23,233			34,421			23,233
Deferred Share Issuances		17,105			36,211			12,973			36,211
Accumulated Deficit		(48,946	)		(58,085	)		(35,546	)		(58,085	)
Equity of Green Thumb Industries Inc.		1,680,789			1,664,916			1,705,277			1,664,916
Noncontrolling interests		357			516			539			516
TOTAL SHAREHOLDERS' EQUITY		1,681,146			1,665,432			1,705,816			1,665,432
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,493,167		$	2,433,528		$	2,512,834		$	2,433,528


	Three Months Ended March 31,
	2023			2022
	(in thousands)
CASH FLOW FROM OPERATING ACTIVITIES
Net income attributable to Green Thumb Industries Inc.	$	9,139		$	28,939
Net income attributable to non-controlling interest		266			747
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		23,501			22,990
Amortization of operating lease assets		12,222			9,821
Loss on disposal of property and equipment		154			85
Loss on equity method investments		318			1,203
Bad debt expense		376			117
Stock-based compensation		6,239			4,651
Decrease (increase) in fair value of investments		351			(4,664	)
Increase (decrease) in fair value of contingent consideration		731			(15,396	)
(Decrease) increase in fair value of warrants		(1,642	)		(7,929	)
Amortization of debt discount		2,365			2,279
Changes in operating assets and liabilities:
Accounts receivable		(388	)		(5,941	)
Inventories		(5,394	)		(13,817	)
Prepaid expenses and other current assets		(592	)		12
Deposits and other assets		(155	)		(395	)
Accounts payable		(1,517	)		9,555
Accrued liabilities		5,645			235
Operating lease liabilities		(10,618	)		(8,420	)
Income tax receivable and payable, net		33,710			31,304
NET CASH PROVIDED BY OPERATING ACTIVITIES		74,711			55,376
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of property and equipment		(65,009	)		(56,831	)
Proceeds from disposal of property and equipment		319			32
Investments in securities and associates		(2,500	)		(5,444	)
Proceeds from equity investments and notes receivable		300			160
Settlement of acquisition consideration payable		—			(31,732	)
Purchase of businesses, net of cash acquired		—			(6,586	)
NET CASH USED IN INVESTING ACTIVITIES		(66,890	)		(100,401	)
CASH FLOW FROM FINANCING ACTIVITIES
Distributions to limited liability company unit holders		(425	)		(14,311	)
Contributions from unconsolidated subsidiaries		—			550
Proceeds from exercise of options and warrants		495			940
Proceeds from issuance of notes payable		—			2,102
Principal repayment of notes payable		(206	)		(137	)
NET CASH USED IN FINANCING ACTIVITIES		(136	)		(10,856	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH		7,685			(55,881	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF PERIOD		177,682			230,420
CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF PERIOD	$	185,367		$	174,539


	Six Months Ended June 30,
	2023			2022
	(in thousands)
CASH FLOW FROM OPERATING ACTIVITIES
Net income attributable to Green Thumb Industries Inc.	$	22,539		$	53,376
Net income attributable to non-controlling interest		556			1,041
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		47,735			47,188
Amortization of operating lease assets		24,368			20,022
Loss on disposal of property and equipment		1,951			100
Impairment of long-lived property and equipment		285			—
Loss on equity method investments		750			1,941
Gain from lease modification		—			(3,330	)
Stock-based compensation		13,620			11,484
Decrease in fair value of investments		928			3,201
Increase (decrease) in fair value of contingent consideration		2,150			(29,960	)
Decrease in fair value of warrants		(2,263	)		(21,772	)
Shares issued for settlement of business obligation		—			1,000
Gain on indemnification of deferred shares associated with post acquisition costs		(2,784	)		—
Amortization of debt discount		4,762			4,559
Changes in operating assets and liabilities:
Accounts receivable, net		(8,265	)		(3,952	)
Inventories, net		(9,097	)		(27,361	)
Prepaid expenses and other current assets		(3,285	)		(996	)
Deposits and other assets		676			(147	)
Accounts payable		9,071			5,779
Accrued liabilities		3,365			(9,998	)
Operating lease liabilities		(21,589	)		(17,234	)
Income tax receivable and payable, net		7,555			4,973
NET CASH PROVIDED BY OPERATING ACTIVITIES		93,028			39,914
CASH FLOW FROM INVESTING ACTIVITIES
Purchases of property and equipment		(129,392	)		(71,131	)
Proceeds from disposal of property and equipment		319			32
Investments in securities and associates		(2,800	)		(5,453	)
Proceeds from equity investments and notes receivable		331			1,243
Settlement of acquisition consideration payable		—			(31,732	)
Purchase of businesses, net of cash acquired		—			(7,255	)
NET CASH USED IN INVESTING ACTIVITIES		(131,542	)		(114,296	)
CASH FLOW FROM FINANCING ACTIVITIES
Distributions to limited liability company unit holders		(533	)		(14,445	)
Contributions from unconsolidated subsidiaries		—			550
Proceeds from exercise of options and RSUs		916			1,603
Proceeds from issuance of notes payable		10,134			2,102
Principal repayment of notes payable		(659	)		(571	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		9,858			(10,761	)
CASH AND CASH EQUIVALENTS:
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(28,656	)		(85,143	)
CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD		177,682			230,420
CASH AND CASH EQUIVALENTS END OF PERIOD	$	149,026		$	145,277


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐


		Share Capital			Contributed Surplus (Deficit)				Deferred Share Issuance				Accumulated Earnings (Deficit)				Non-Controlling Interest				Total
		(in thousands)
Balance, January 1, 2022	$		1,633,672	$		21,245		$		36,262		$		(70,063	)	$		(1,638	)	$		1,619,478
Noncontrolling interests adjustment for change in ownership			2,379			(17,735	)			—				—				15,356				—
Issuance of shares under business combinations and investments			1,406			—				—				—				—				1,406
Contingent consideration, and other adjustments to purchase accounting			13,111			—				—				—				—				13,111
Exercise of options and RSUs			3,135			(2,195	)			—				—				—				940
Stock-based compensation			—			4,651				—				—				—				4,651
Distributions to third party and limited liability company unit holders			—			—				—				—				(14,311	)			(14,311	)
Net income			—			—				—				28,939				747				29,686
Balance, March 31, 2022	$		1,653,703	$		5,966		$		36,262		$		(41,124	)	$		154		$		1,654,961
Balance, January 1, 2023	$		1,663,557	$		23,233		$		36,211		$		(58,085	)	$		516		$		1,665,432
Distribution of deferred shares			19,106			—				(19,106	)			—				—				—
Exercise of options and RSUs			1,008			(513	)			—				—				—				495
Stock-based compensation			—			6,239				—				—				—				6,239
Distributions to limited liability company unit holders			—			—				—				—				(425	)			(425	)
Net income			—			—				—				9,139				266				9,405
Balance, March 31, 2023	$		1,683,671	$		28,959		$		17,105		$		(48,946	)	$		357		$		1,681,146


		March 31, 2023									December 31, 2022
		Gross Carrying Amount			Accumulated Amortization			Net Book Value			Gross Carrying Amount			Accumulated Amortization			Net Book Value
		(in thousands)									(in thousands)
Licenses and Permits	$		660,716	$		124,691	$		536,025	$		660,716	$		113,800	$		546,916
Trademarks			41,511			11,209			30,302			41,511			10,486			31,025
Customer Relationships			24,438			14,308			10,130			24,438			13,435			11,003
Non-Competition Agreements			2,565			2,113			452			2,565			1,990			575
Total Intangible Assets	$		729,230	$		152,321	$		576,909	$		729,230	$		139,711	$		589,519


		Estimated Amortization		Estimated Amortization
Year Ending December 31,		(in thousands)		(in thousands)
Remainder of 2023	$	38,230	$	25,487
2024		50,392		50,392
2025		50,294		50,294
2026		47,332		47,332
2027		46,803		46,803
2028 and Thereafter		343,858		343,857
	$	576,909	$	564,165


		March 31, 2023		December 31, 2022		June 30, 2023		December 31, 2022
		(in thousands)				(in thousands)
Raw Material	$	2,743	$	3,070	$	1,530	$	3,070
Packaging and Miscellaneous		9,718		9,847		10,695		9,847
Work in Process		57,982		57,287		52,536		57,287
Finished Goods		54,728		49,268		64,391		49,268
Reserve for Obsolete Inventory		(4,102)		(3,797)		(4,380)		(3,797)
Total Inventories	$	121,069	$	115,675
Total Inventories, Net					$	124,772	$	115,675


		March 31, 2023		December 31, 2022		June 30, 2023		December 31, 2022
		(in thousands)				(in thousands)
Buildings and Improvements	$	180,790	$	176,874	$	187,824	$	176,874
Equipment, Computers and Furniture		130,499		122,568		134,705		122,568
Leasehold Improvements		147,853		135,524		156,340		135,524
Land Improvements		847		847		847		847
Capitalized Interest		21,178		16,934		26,546		16,934
Total Property and Equipment		481,167		452,747		506,262		452,747
Less: Accumulated Depreciation		(91,541)		(80,702)		(101,942)		(80,702)
Property and Equipment, net		389,626		372,045		404,320		372,045
Land		30,196		29,106		33,725		29,106
Assets Under Construction		200,834		156,722		236,913		156,722
Property and Equipment, net	$	620,656	$	557,873	$	674,958	$	557,873