UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

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

For the quarterly period ended ~~September~~June 30, ~~2020~~2021

☐	~~TRANSITION 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

Commission file number 000-56132

GREEN THUMB INDUSTRIES INC.

(Exact name of registrant as specified in its charter)


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)

~~(312) 471-6720~~

(Registrant’s telephone number, including area ~~code)~~code - (312) 471-6720

Securities registered pursuant to Section 12(g) of the Act:

Subordinate Voting Shares

Multiple Voting Shares

Super Voting Shares

(Title of each Class)

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 ~~days.~~ 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.


~~Large accelerated filer~~		☐		~~Accelerated filer~~		☐

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	☒		Smaller reporting company		☐

				Emerging growth company	☒	☒

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 ~~November 5, 2020,~~August 1, 2021, there were ~~175,040,286~~190,949,708 shares of the registrant’s Subordinate Voting Shares, ~~6,779,300~~3,965,400 shares of the registrant’s Multiple Voting Shares (on an as converted basis) and ~~31,203,100~~29,503,100 shares of the registrant’s Super Voting Shares (on an as converted basis).

GREEN THUMB INDUSTRIES INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~June 30, ~~2020~~2021

TABLE OF CONTENTS


FINANCIAL INFORMATION			Page
		~~Part I~~
	Part I
ITEM 1:		Unaudited Interim Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020			4
		Unaudited Interim Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020			5
		Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity for the ~~nine~~three and six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020			6
		Unaudited Interim Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020			7	8
		Notes to Unaudited Interim Condensed Consolidated Financial Statements			9	10
ITEM 2:		Management’s Discussion and Analysis of Financial Condition and Results of Operations				30
ITEM 3:		Quantitative and Qualitative Disclosure About Market Risk				38
ITEM 4:		Controls and Procedures

		~~Part II~~				38
~~OTHER INFORMATION~~	Part II
~~ITEM 1:~~OTHER INFORMATION		~~Legal Proceedings~~			44
ITEM ~~1a:~~1:	Legal Proceedings	~~Risk Factors~~			44	40
ITEM 1a:	Risk Factors	40
ITEM 2:	Sale of Unregistered Securities	40
ITEM 3:	Defaults Upon Senior Securities	40
ITEM 4:		Mine Safety Disclosure			45	40
ITEM 6:5:	Other Information	~~Exhibits~~			45	40
~~Signatures~~ITEM 6:	Exhibits	41
Signatures				42

Use of Names

In this ~~Interim~~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.

Currency

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.

Disclosure Regarding Forward-Looking Statements

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. 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: ~~marijuana~~cannabis remains illegal under 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 ~~regulation by the~~ U.S. Food and Drug Administration or the U.S. Bureau of Alcohol, Tobacco Firearms and ~~Firearms;~~Explosives regulation; cannabis businesses are subject to applicable antimoney laundering laws and regulations and have restricted access to banking and other financial services; the Company may face difficulties ~~obtaining~~acquiring additional financing; 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 we carry on business; the Company is subject to general economic risks; the Company may be negatively impacted by challenging global economic conditions; the Company is subject to risks arising from epidemic diseases, such as the recent outbreak of the COVID-19 illness; the Company may face difficulties in enforcing its contracts; the Company ~~is subject to taxation in Canada and the United States;~~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 ~~security risks; our~~exposure to fraudulent or illegal activity; the Company’s use of joint ventures may expose usit to risks associated with jointly owned investments; ~~competition for~~ the ~~acquisition and leasing of properties suitable for the cultivation, production and sale of medical and adult use cannabis may impede our ability~~Company faces risks due to ~~make acquisitions~~industry immaturity or ~~increase the cost of these acquisitions, which could adversely affect our operating results and financial condition;~~limited comparable, competitive or established industry best practices; the Company faces risks related to its products; the Company is dependent on the popularity of consumer acceptance of the Company’s brand portfolio; the Company faces risks related to its insurance coverage and uninsurable risks; the Company is dependent on key inputs, suppliers and skilled labor; the Company must attract and maintain key personnel or our business will fail; the Company’s business is subject to the risks inherent in agricultural operations; the ~~Company’s sales are difficult to forecast;~~Company may be adversely impacted by rising or volatile energy costs; 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 faces intense competition; the~~ Company’s voting control is concentrated; the Company’s capital structure and voting control may cause unpredictability; ~~and additional~~ issuances of substantial amounts of Super Voting Shares, Multiple Voting Shares or Subordinate Voting Shares may result in ~~dilution.~~dilution; and the Company is governed by corporate laws in British Columbia, Canada which in some cases have a different effect on shareholders than the corporate laws in Delaware, United States. 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, ~~2019,~~2020, and elsewhere in the Company’s filings with the SEC, which are available on the SEC’s website or at https://~~investors.gtigrows.com.~~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.

~~- 3 -~~

Green Thumb Industries Inc.
Unaudited Interim Condensed Consolidated Balance Sheets
As of September 30, 2020 and December 31, 2019
(Amounts Expressed in United States Dollars, Except for Share Amounts)

   September 30,
2020 December 31,
2019
   (Audited)
ASSETS

Current Assets:

Cash and Cash Equivalents
   $ 78,091,073 $ 46,667,334
Accounts Receivable
   13,121,285 7,530,253
Inventories
   55,164,258 46,034,481
Prepaid Expenses
   6,990,373 6,780,657
Other Current Assets
   5,692,248 2,049,886


Total Current Assets
   159,059,237 109,062,611
Property and Equipment, Net
   177,725,092 155,596,675
Right of Use Assets, Net
   99,447,497 63,647,812
Investments
   22,210,999 14,068,821
Investment in Associate
   11,750,000 10,350,000
Notes Receivable
   —   815,937
Intangible Assets, Net
   409,655,517 435,246,898
Goodwill
   373,081,716 375,084,991
Deposits and Other Assets
   1,684,389 3,662,879


TOTAL ASSETS
   $ 1,254,614,447 $ 1,167,536,624


LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES

Current Liabilities:

Accounts Payable
   $ 10,988,374 $ 8,745,821
Accrued Liabilities
   46,311,550 37,184,406
Current Portion of Notes Payable
   301,027 206,675
Current Portion of Lease Liabilities
   4,654,032 3,833,268
Liability for Acquisition of Noncontrolling Interest
   —   5,500,000
Contingent Consideration Payable
   27,100,000 50,391,181
Income Tax Payable
   16,543,826 5,505,904


Total Current Liabilities
   105,898,809 111,367,255
Long-Term Liabilities:

Lease Liabilities, Net of Current Portion
   102,408,462 61,115,737
Notes Payable, Net of Current Portion and Debt Discount
   96,758,233 91,140,194
Contingent Consideration Payable
   9,215,360 8,545,558
Warrant Liability
   18,513,000 15,879,843
Deferred Income Taxes
   41,744,283 36,279,361


TOTAL LIABILITIES
   374,538,147 324,327,948
COMMITMENTS AND CONTINGENCIES SHARE HOLDERS’ EQUITY

Subordinate Voting Shares (Shares Authorized, Issued and Outstanding at September 30, 2020: Unlimited, 162,999,921 and 162,999,921, respectively, at December 31, 2019: Unlimited, 128,999,964 and 128,999,964, respectively)
   —   —
Multiple Voting Shares (Shares Authorized, Issued and Outstanding at September 30, 2020: Unlimited, 120,910 and 120,910, respectively, at December 31, 2019: Unlimited, 373,350 and 373,350, respectively)
   —   —
Super Voting Shares (Shares Authorized, Issued and Outstanding at September 30, 2020: Unlimited, 379,336 and 379,336, respectively, at December 31, 2019: Unlimited, 402,289 and 402,289, respectively)
   —   —
Share Capital
   1,041,770,917 980,638,701
Contributed Surplus
   1,656,498 3,960,854
Deferred Share Issuances
   1,835,331 16,587,798
Accumulated Deficit
   (167,963,430 ) (160,491,590 )


Equity of Green Thumb Industries Inc.
   877,299,316 840,695,763
Noncontrolling interests
   2,776,984 2,512,913


TOTAL SHAREHOLDERS’ EQUITY
   880,076,300 843,208,676


TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 1,254,614,447 $ 1,167,536,624



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

~~- 4 -~~

Green Thumb Industries Inc.

Unaudited Interim Condensed Consolidated ~~Statements~~Balance Sheets

As of ~~Operations~~June 30, 2021 and December 31, 2020

~~Three and Nine Months Ended September 30, 2020 and 2019~~

(Amounts Expressed in United States ~~Dollars, Except Share Amounts)~~Dollars)


	June 30,			December 31,
	2021			2020
				(Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	359,188,735		$	83,757,785
Accounts Receivable		24,705,148			21,414,987
Inventories		81,726,227			69,542,953
Prepaid Expenses		9,055,368			6,445,393
Other Current Assets		6,944,070			2,782,887
Total Current Assets		481,619,548			183,944,005
Property and Equipment, Net		241,460,209			189,925,877
Right of Use Assets, Net		158,652,337			140,382,781
Investments		41,725,403			40,794,806
Investment in Associate		31,508,586			12,669,963
Intangible Assets, Net		411,538,100			406,242,034
Goodwill		422,840,467			382,697,467
Deposits and Other Assets		3,289,765			1,892,229
TOTAL ASSETS	$	1,792,634,415		$	1,358,549,162
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities:
Accounts Payable	$	14,976,618		$	20,503,572
Accrued Liabilities		72,889,621			56,288,729
Current Portion of Notes Payable		581,436			341,983
Current Portion of Lease Liabilities		6,485,628			3,862,110
Contingent Consideration Payable		9,900,000			22,150,000
Income Tax Payable		528,161			16,142,041
Total Current Liabilities		105,361,464			119,288,435
Long-Term Liabilities:
Lease Liabilities, Net of Current Portion		165,514,117			146,426,760
Notes Payable, Net of Current Portion and Debt Discount		197,036,410			98,712,996
Contingent Consideration Payable		4,950,000			4,950,000
Warrant Liability		47,464,750			39,454,000
Deferred Income Taxes		43,149,727			35,557,630
TOTAL LIABILITIES		563,476,468			444,389,821
COMMITMENTS AND CONTINGENCIES
SHARE HOLDERS' EQUITY
Subordinate Voting Shares (Shares Authorized, Issued and Outstanding at June 30, 2021: Unlimited, 187,786,682, and 187,786,682, respectively, at December 31, 2020: Unlimited, 178,113,221, and 178,113,221, respectively)		0			0
Multiple Voting Shares (Shares Authorized, Issued and Outstanding at June 30, 2021: Unlimited, 39,654 and 39,654, respectively, at December 31, 2020: Unlimited, 40,289 and 40,289, respectively)		0			0
Super Voting Shares (Shares Authorized, Issued and Outstanding at June 30, 2021: Unlimited, 301,031 and 301,031, respectively, at December 31, 2020: Unlimited, 312,031 and 312,031, respectively)		0			0
Share Capital		1,316,465,184			1,048,640,398
Contributed Surplus		13,159,133			4,893,153
Deferred Share Issuances		8,565,707			2,587,317
Accumulated Deficit		(113,077,966	)		(145,498,623	)
Equity of Green Thumb Industries Inc.		1,225,112,058			910,622,245
Noncontrolling interests		4,045,889			3,537,096
TOTAL SHAREHOLDERS' EQUITY		1,229,157,947			914,159,341
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,792,634,415		$	1,358,549,162

   Three Months Ended September 30, Nine Months Ended September 30,
   2020 2019 2020 2019
Revenues, net of discounts
   $ 157,103,841 $ 67,990,907 $ 379,346,367 $ 140,630,847
Cost of Goods Sold, net
   (70,146,676 ) (35,849,783 ) (175,707,874 ) (74,196,750 )


Gross Profit
   86,957,165 32,141,124 203,638,493 66,434,097


Expenses:

Selling, General, and Administrative
   49,745,979 30,764,406 144,823,947 88,013,769


Total Expenses
   49,745,979 30,764,406 144,823,947 88,013,769


Income (Loss) From Operations
   37,211,186 1,376,718 58,814,546 (21,579,672 )


Other Income (Expense):

Other Income (Expense), net
   6,432,883 (6,585,540 ) 7,501,566 (7,969,433 )
Interest Income, net
   5,397 407,509 109,922 1,300,233
Interest Expense, net
   (4,460,125 ) (5,912,290 ) (14,236,475 ) (11,762,222 )


Total Other Income (Expense)
   1,978,155 (12,090,321 ) (6,624,987 ) (18,431,422 )


Income (Loss) Before Provision for Income Taxes And Non-Controlling Interest
   39,189,341 (10,713,603 ) 52,189,559 (40,011,094 )


Provision For Income Taxes
   28,436,332 3,624,333 56,964,047 4,706,000


Net Income (Loss) Before Non-Controlling Interest
   10,753,009 (14,337,936 ) (4,774,488 ) (44,717,094 )
Net Income Attributable to Non-Controlling Interest
   1,109,080 252,857 2,697,352 328,804


Net Income (Loss) Attributable To Green Thumb Industries Inc.
   $ 9,643,929 $ (14,590,793 ) $ (7,471,840 ) $ (45,045,898 )


Net Income (Loss) per share - basic
   $ 0.04 $ (0.07 ) $ (0.04 ) $ (0.24 )


Net Income (Loss) per share - diluted
   $ 0.04 $ (0.07 ) $ (0.04 ) $ (0.24 )


Weighted average number of shares outstanding - basic
   211,990,405 204,709,085 210,127,323 184,851,805


Weighted average number of shares - outstandingdiluted
   214,212,292 204,709,085 210,127,323 184,851,805

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

~~- 5 -~~4

Green Thumb Industries Inc.

Unaudited Interim Condensed Consolidated Statements of Operations

Three and Six Months Ended June 30, 2021 and 2020

(Amounts Expressed in United States Dollars, Except Share Amounts)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Revenues, net of discounts

$
221,871,812

$
119,639,924

$
416,302,396

$
222,242,526

Cost of Goods Sold, net

(98,960,988
)

(55,946,010
)

(182,526,072
)

(105,561,198
)
Gross Profit

122,910,824

63,693,914

233,776,324

116,681,328

Expenses:

Selling, General, and Administrative

72,055,473

49,643,211

131,386,724

95,077,968

Total Expenses

72,055,473

49,643,211

131,386,724

95,077,968

Income From Operations

50,855,351

14,050,703

102,389,600

21,603,360

Other Income (Expense):

Other Income (Expense), net

6,830,277

(5,717,427
)

1,680,460

1,068,683

Interest Income, net

295,690

16,410

345,580

104,525

Interest Expense, net

(4,679,795
)

(4,734,908
)

(8,802,971
)

(9,776,350
)
Total Other Income (Expense)

2,446,172

(10,435,925
)

(6,776,931
)

(8,603,142
)
Income Before Provision for Income Taxes And Non-Controlling Interest

53,301,523

3,614,778

95,612,669

13,000,218

Provision For Income Taxes

30,026,732

15,378,715

60,882,910

28,527,715

Net Income (Loss) Before Non-Controlling Interest

23,274,791

(11,763,937
)

34,729,759

(15,527,497
)
Net Income Attributable to Non-Controlling Interest

1,222,800

1,145,568

2,309,102

1,588,272

Net Income (Loss) Attributable To Green Thumb Industries Inc.

$
22,051,991

$
(12,909,505
)

$
32,420,657

$
(17,115,769
)
Net Income (Loss) per share - basic

$
0.10

$
(0.06
)

$
0.15

$
(0.08
)
Net Income (Loss) per share - diluted

$
0.10

$
(0.06
)

$
0.15

$
(0.08
)
Weighted average number of shares outstanding - basic

220,323,622

209,902,732

218,276,376

209,185,544

Weighted average number of shares outstanding - diluted

224,843,155

209,902,732

222,927,120

209,185,544

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements
5
Green Thumb Industries Inc.

Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity

~~Nine~~Three and Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

(Amounts Expressed in United States Dollars)


	Share Capital		Contributed Surplus (Deficit)			Deferred Share Issuance			Accumulated Earnings (Deficit)			Non-Controlling Interest			Total
Balance, April 1, 2020	$	990,290,509	$	8,302,730		$	16,587,798		$	(164,697,854	)	$	2,322,334		$	852,805,517
Noncontrolling interests adjustment for change in ownership		—		(5,700,000	)		—			—			—			(5,700,000	)
Issuance of shares under business combinations and investments		1,840,009		(2,000,000	)		—			—			—			(159,991	)
Distribution of Contingent Consideration		11,227,642		—			—			—			—			11,227,642
Distribution of deferred shares		1,307,798		—			(1,307,798	)		—			—			—
Issuance of warrants		—		181,272			—			—			—			181,272
Exercise of options		146,104		61,568			—			—			—			207,672
Stock based compensation		—		5,700,142			—			—			—			5,700,142
Distributions to third party and limited liability company unit holders		—		—			—			—			(1,099,998	)		(1,099,998	)
Net (loss) income		—		—			—			(12,909,505	)		1,145,568			(11,763,937	)
Balance, June 30, 2020	$	1,004,812,062	$	6,545,712		$	15,280,000		$	(177,607,359	)	$	2,367,904		$	851,398,319
Balance, January 1, 2020	$	980,638,701	$	3,960,854		$	16,587,798		$	(160,491,590	)	$	2,512,913		$	843,208,676
Noncontrolling interests adjustment for change in ownership		—		(5,700,000	)		—			—			—			(5,700,000	)
Contributions from limited liability company unit holders		—		—			—			—			50,000			50,000
Issuance of shares under business combinations and investments		2,524,560		(2,678,489	)		—			—			—			(153,929	)
Distribution of Contingent Consideration		20,194,899		—			—			—			—			20,194,899
Distribution of deferred shares		1,307,798		—			(1,307,798	)		—			—			—
Issuance of warrants		—		181,272			—			—			—			181,272
Exercise of options		146,104		61,568			—			—			—			207,672
Stock based compensation		—		10,773,884			—			—			—			10,773,884
Distributions to third party and limited liability company unit holders		—		(53,377	)		—			—			(1,783,281	)		(1,836,658	)
Net (loss) income		—		—			—			(17,115,769	)		1,588,272			(15,527,497	)
Balance, June 30, 2020	$	1,004,812,062	$	6,545,712		$	15,280,000		$	(177,607,359	)	$	2,367,904		$	851,398,319

Share Capital Shares to
Be Issued Contributed
Surplus Deferred Share
Issuance Accumulated
Earnings (Deficit) Non-Controlling
Interest Total
Balance, July 1, 2019
$ 950,736,500 $ —   $ (4,997,380 ) $ 16,587,798 $ (131,830,288 ) $ (392,655 ) $ 830,103,975
Issuance of shares under business combinations and investments
14,085,238 —   88 —   —   —   14,085,326
Stock based compensation
—   —   3,564,095 —   —   —   3,564,095
Shares withheld in lieu of cash
—   —   (125,060 ) —   —   —   (125,060 )
Distributions to limited liability company unit holders
—   —   —   —   —   (1,900,000 ) (1,900,000 )
Net (loss) income
—   —   —   —   (14,590,793 ) 252,857 (14,337,936 )

Balance, September 30, 2019
$ 964,821,738 $ —   $ (1,558,257 ) $ 16,587,798 $ (146,421,081 ) $ (2,039,798 ) $ 831,390,400

Balance, January 1, 2019
$ 397,590,465 $ 27,773,234 $ 14,202,659 $ —   $ (100,876,937 ) $ 3,497,459 $ 342,186,880
Adoption of ASC 842, Leases
—   —   —   —   (498,246 ) —   (498,246 )
Noncontrolling interests adjustment for change in ownership
27,773,234 (27,773,234 ) 4,200,382 —   —   —   4,200,382
Contributions from limited liability company unit holders
—   —   —   —   —   1,650,000 1,650,000
Issuance of shares under business combinations and investments
509,568,665 —   (23,813,393 ) —   —   —   485,755,272
Reciprocal derivative instrument
—   —   (4,526,401 ) —   —   —   (4,526,401 )
Issuance of shares for redemption of noncontrolling interests
29,889,374 —   (4,820,527 ) —   —   —   25,068,847
Deferred share issuances
—   —   —   16,587,798 —   —   16,587,798
Stock based compensation
—   —   13,324,083 —   —   —   13,324,083
Shares withheld in lieu of cash
—   —   (125,060 ) —   —   —   (125,060 )
Distributions to limited liability company unit holders
—   —   —   —   —   (7,516,061 ) (7,516,061 )
Net (loss) income
—   —   —   —   (45,045,898 ) 328,804 (44,717,094 )

Balance, September 30, 2019
$ 964,821,738 $ —   $ (1,558,257 ) $ 16,587,798 $ (146,421,081 ) $ (2,039,798 ) $ 831,390,400

Balance, July 1, 2020
$ 1,004,812,062 $ —   $ 6,545,712 $ 15,280,000 $ (177,607,359 ) $ 2,367,904 $ 851,398,319
Noncontrolling interests adjustment for change in ownership
—   —   5,700,000 —   —   —   5,700,000
Issuance of shares for redemption of noncontrolling interests
20,078,940 —   (14,728,940 ) —   —   —   5,350,000
Distribution of contingent consideration
2,690,914 —   —   —   —   —   2,690,914
Distribution of deferred shares
13,444,669 —   —   (13,444,669 ) —   —   —
Exercise of options and warrants
744,332 —   (295,908 ) —   —   —   448,424
Stock based compensation
—   —   4,435,634 —   —   —   4,435,634
Distributions to third party and limited liability company unit holders
—   —   —   —   —   (700,000 ) (700,000 )
Net income
—   —   —   —   9,643,929 1,109,080 10,753,009

Balance, September 30, 2020
$ 1,041,770,917 $ —   $ 1,656,498 $ 1,835,331 $ (167,963,430 ) $ 2,776,984 $ 880,076,300

Balance, January 1, 2020
$ 980,638,701 $ —   $ 3,960,854 $ 16,587,798 $ (160,491,590 ) $ 2,512,913 $ 843,208,676
Contributions from limited liability company unit holders
—   —   —   —   —   50,000 50,000
Issuance of shares under business combinations and investments
2,524,560 —   (2,678,489 ) —   —   —   (153,929 )
Issuance of shares for redemption of noncontrolling interests
20,078,940 —   (14,728,940 ) —   —   —   5,350,000
Distribution of contingent consideration
22,885,813 —   —   —   —   —   22,885,813
Distribution of deferred shares
14,752,467 —   —   (14,752,467 ) —   —   —
Issueance of warrants
—   —   181,272 —   —   —   181,272
Exercise of options and warrants
890,436 —   (234,340 ) —   —   —   656,096
Stock based compensation
—   —   15,209,518 —   —   —   15,209,518
Distributions to third party and limited liability company unit holders
—   —   (53,377 ) —   —   (2,483,281 ) (2,536,658 )
Net (loss) income
—   —   —   —   (7,471,840 ) 2,697,352 (4,774,488 )

Balance, September 30, 2020
$ 1,041,770,917 $ —   $ 1,656,498 $ 1,835,331 $ (167,963,430 ) $ 2,776,984 $ 880,076,300

~~- 6 -~~

~~Green Thumb Industries Inc.~~

~~Unaudited Interim Condensed Consolidated Statements of Cash Flows~~

~~Nine Months Ended September 30, 2020 and 2019~~

~~(Amounts Expressed in United States Dollars)~~

   Nine Months Ended September 30,
   2020 2019
CASH FLOW FROM OPERATING ACTIVITIES

Net loss attributable to Green Thumb Industries Inc.
   $ (7,471,840 ) $ (45,045,898 )
Net income attributable to non-controlling interest
   2,697,352 328,804
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization
   38,479,960 17,528,891
Amortization of operating lease assets
   18,987,980 4,229,889
Loss on disposal of property and equipment
   29,858 —
(Gain) loss from investment in associate
   —   56,423
Bad debt expense
   315,798 —
Deferred income taxes
   4,377,000 (5,712,000 )
Stock based compensation
   15,209,520 13,324,083
Decrease (increase) in fair value of investments
   (9,542,178 ) 886,002
Changes in value of liabilities related to put option and purchase of noncontrolling interests
   —   (823,550 )
Interest on contingent consideration payable and acquisition liabilities
   998,842 3,258,804
Decrease in fair value of contingent consideration
   (425,424 ) —
Increase in fair value of warrant liability
   2,060,771 —
Decrease in fair value of note receivable
   815,937 7,424,727
Amortization of debt discount
   4,048,531 2,100,738
Changes in operating assets and liabilities:

Accounts receivable
   (5,616,054 ) 1,165,271
Inventories
   (9,129,777 ) (9,478,848 )
Prepaid expenses and other current assets
   (4,142,854 ) (3,237,772 )
Deposits and other assets
   1,567,458 1,045,821
Accounts payable
   2,242,553 1,707,947
Accrued liabilities
   13,609,399 14,451,557
Operating lease liabilities
   (12,674,176 ) (4,184,228 )
Income tax payable
   14,617,544 260,535


NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
   71,056,200 (712,804 )


CASH FLOW FROM INVESTING ACTIVITIES

Purchases of property and equipment
   (49,221,442 ) (66,875,245 )
Proceeds from disposal of assets
   11,799,025 —
Repayment of debenture investments
   —   3,000,000
Purchase of businesses, net of cash acquired
   —   (108,067,892 )


NET CASH USED IN INVESTING ACTIVITIES
   (37,422,417 ) (171,943,137 )


CASH FLOW FROM FINANCING ACTIVITIES

Contributions from limited liability company unit holders
   50,000 1,650,000
Distributions to third parties and limited liability company unit holders
   (2,536,658 ) (7,516,061 )
Proceeds from exercise of options and warrants
   656,096 —
Proceeds from issuance of notes payable
   —   117,435,724
Payment for purchase of noncontrolling interest
   (150,000 ) —
Principal repayment of notes payable
   (229,482 ) (18,778,140 )


NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES
   (2,210,044 ) 92,791,523


CASH, CASH EQUIVALENTS AND RESTRICED CASH:

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
   31,423,739 (79,864,418 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
   46,667,334 145,986,072


CASH AND CASH EQUIVALENTS, END OF PERIOD
   $ 78,091,073 $ 66,121,654

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

~~- 7 -~~6

Green Thumb Industries Inc.

Unaudited Interim Condensed Consolidated Statements of ~~Cash Flows~~Changes in Shareholders’ Equity

~~Nine~~Three and Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

(Amounts Expressed in United States Dollars)


	Share Capital		Contributed Surplus (Deficit)			Deferred Share Issuance			Accumulated Earnings (Deficit)			Non-Controlling Interest			Total
Balance, April 1, 2021	$	1,236,987,614	$	(2,788,150	)	$	751,988		$	(135,129,957	)	$	2,948,398		$	1,102,769,893
Issuance of shares under business combinations and investments		56,754,956		—			—			—			—			56,754,956
Issuance of deferred shares		—		—			7,813,719			—			—			7,813,719
Exercise of options, RSUs and warrants		15,316,754		(11,984,008	)		—			—			—			3,332,746
Warrants and shares issued in association with notes payable		270,660		22,258,608			—			—			—			22,529,268
Shares issued for settlement of business dispute		7,135,200		—			—			—			—			7,135,200
Stock based compensation		—		5,672,683			—			—			—			5,672,683
Distributions to limited liability company unit holders		—		—			—			—			(125,309	)		(125,309	)
Net income		—		—			—			22,051,991			1,222,800			23,274,791
Balance, June 30, 2021	$	1,316,465,184	$	13,159,133		$	8,565,707		$	(113,077,966	)	$	4,045,889		$	1,229,157,947
Balance, January 1, 2021	$	1,048,640,398	$	4,893,153		$	2,587,317		$	(145,498,623	)	$	3,537,096		$	914,159,341
Issuance of shares under business combinations and investments		57,793,263		(38,307	)		—			—			—			57,754,956
Shares issued as contingent consideration		12,672,681		—			—			—			—			12,672,681
Issuance of deferred shares		—		—			7,813,719			—			—			7,813,719
Distribution of deferred shares		1,825,597		—			(1,835,329	)		—			—			(9,732	)
Issuance of registered shares pursuant to Form S-1		155,803,084		(304,944	)		—			—			—			155,498,140
Exercise of options, RSUs and warrants		32,324,301		(23,352,715	)		—			—			—			8,971,586
Warrants and shares issued in association with notes payable		270,660		22,258,608			—			—			—			22,529,268
Shares issued for settlement of business dispute		7,135,200		0			—			—			—			7,135,200
Stock based compensation		—		9,703,338			—			—			—			9,703,338
Distributions to limited liability company unit holders		—		—			—			—			(1,800,309	)		(1,800,309	)
Net income		—		—			—			32,420,657			2,309,102			34,729,759
Balance, June 30, 2021	$	1,316,465,184	$	13,159,133		$	8,565,707		$	(113,077,966	)	$	4,045,889		$	1,229,157,947

   Nine Months Ended September 30,
   2020 2019
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest paid
   $ 9,418,727 $ 5,964,621


NONCASH INVESTING AND FINANCING ACTIVITIES

Accrued capital expenditures
   $ (6,798,187 ) $ 4,232,914


Noncash increase in right of use asset
   $ (36,854,352 ) $ (22,233,609 )


Noncash increase in lease liability
   $ 36,854,352 $ 22,731,855


Net liability upon adoption of ASC 842, Leases
   $ —   $ (498,246 )


Exercise of put option
   $ —   $ 4,200,382


Warrants attributable to debt issuance
   $ 753,658 $ —


Mortgages associated with dispensaries
   $ 2,647,000 $ —


Liability for purchase of noncontrolling interest
   $ (5,350,000 ) $ —


Liability associated with acquisition agreement
   $ 2,000,000 $ —


Issuance of shares under acquisition agreement
   $ 22,485,670 $ (485,476,925 )


Deferred share issuances
   $ (14,752,467 ) $ 16,587,798


Acquisitions

Inventory
   $ —   $ 13,602,245
Accounts receivable
   —   2,117,412
Property and equipment
   80,615 17,341,103
Right of use assets
   —   4,154,672
Identifiable intangible assets
   (145,000 ) 305,625,592
Goodwill
   (2,003,275 ) 393,278,807
Deposits and other assets
   603,988 1,694,533
Liabilities assumed
   (1,302,604 ) (9,489,616 )
Lease liabilities
   —   (4,154,672 )
Contingent liabilities
   —   (52,864,000 )
Equity interests issued
   503,389 (485,476,925 )
Deferred share issuances
   —   (16,587,798 )
Conversion of note receivable previously issued
   —   (27,025,800 )
Acquisition liability
   (228,813 ) (1,630,893 )
Deferred income taxes
   2,491,700 (32,448,100 )


   $ —   $ —


RECONCILIATION OF CASH, AND CASH EQUIVALENTS AND RESTRICTED CASH

Cash and cash equivalents
   $ 75,116,621 $ 66,121,654
Restricted cash
   2,974,452 —


TOTAL CASH, AND CASH EQUIVALENTS AND RESTRICED CASH
   $ 78,091,073 $ 66,121,654

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

~~- 8 -~~7

Green Thumb Industries Inc.

Unaudited Interim Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30, 2021 and 2020

(Amounts Expressed in United States Dollars)

Six Months Ended June 30,

2021

2020

CASH FLOW FROM OPERATING ACTIVITIES

Net income (loss) attributable to Green Thumb Industries Inc.

$
32,420,657

$
(17,115,769
)
Net income attributable to non-controlling interest

2,309,102

1,588,272

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

30,066,413

26,945,085

Amortization of operating lease assets

16,027,698

12,430,640

Loss on extinguishment of debt

9,881,847

0

Loss on disposal of property and equipment

64,340

4,155

Earnings from equity method investments

(1,646,373
)

(550,000
)
Bad debt expense

5,983

318,896

Deferred income taxes

1,042,097

(593,000
)
Stock-based compensation

9,703,338

10,773,886

(Increase) decrease in fair value of investments

(18,754,321
)

17,035

Interest on contingent consideration payable and acquisition liabilities

0

769,217

Increase in fair value of contingent consideration

412,949

17,565

Increase (decrease) in fair value of warrants

8,010,750

(1,120,343
)
Shares issued for settlement of business dispute

7,135,200

0

Decrease in fair value of note receivable

0

815,937

Amortization of debt discount

2,763,857

2,959,016

Changes in operating assets and liabilities:

Accounts receivable

(2,793,377
)

(2,535,533
)
Inventories

(10,373,446
)

(7,950,215
)
Prepaid expenses and other current assets

(6,303,131
)

2,858,221

Deposits and other assets

(1,397,536
)

977,444

Accounts payable

(6,074,449
)

3,174,865

Accrued liabilities

3,995,523

5,820,802

Operating lease liabilities

(12,586,379
)

(7,928,586
)
Income tax payable

(15,613,880
)

28,572,736

NET CASH PROVIDED BY OPERATING ACTIVITIES

48,296,862

60,250,326

CASH FLOW FROM INVESTING ACTIVITIES

Purchases of property and equipment

(44,157,853
)

(34,033,957
)
Proceeds from disposal of assets

60,000

11,799,025

Investments in securities

(18,135,615
)

0

Proceeds from sale of investments

18,417,089

0

Purchase of businesses, net of cash acquired

233,227

0

NET CASH USED IN INVESTING ACTIVITIES

(43,583,152
)

(22,234,932
)
CASH FLOW FROM FINANCING ACTIVITIES

Contributions from limited liability company unit holders

0

50,000

Distributions to third parties and limited liability company unit holders

(1,800,309
)

(1,836,658
)
Distributions from unconsolidated subsidiaries

350,000

0

Net proceeds from issuance of registered shares pursuant to Form S-1

155,498,140

0

Proceeds from exercise of options and warrants

8,971,586

207,672

Proceeds from issuance of notes payable

175,500,047

0

Principal repayment of notes payable

(64,602,310
)

(161,070
)
Prepayment penalty and other costs associated with refinancing

(3,199,914
)

0

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

270,717,240

(1,740,056
)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

NET INCREASE IN CASH AND CASH EQUIVALENTS

275,430,950

36,275,338

CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF PERIOD

83,757,785

46,667,334

CASH, CASH EQUIVALENTS AND RESTRICTED CASH END OF PERIOD

$
359,188,735

$
82,942,672

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements
8
Green Thumb Industries Inc.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2021 and 2020
(Amounts Expressed in United States Dollars)

Six Months Ended June 30,

2021

2020

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest paid

$
6,825,020

$
6,048,116

NONCASH INVESTING AND FINANCING ACTIVITIES

Accrued capital expenditures

$
13,808,012

$
(3,564,688
)
Noncash increase in right of use asset

$
(10,781,445
)

$
(37,863,550
)
Noncash increase in lease liability

$
10,781,445

$
37,863,550

Warrant issuance associated with note payable

$
22,529,268

$
753,658

Mortgages associated with dispensaries

$
0

$
1,814,000

Liability for purchase of noncontrolling interest

$
0

$
5,700,000

Liability associated with acquisition agreement

$
0

$
2,000,000

Issuance of contingent consideration

$
13,672,681

$
20,194,899

Deferred share issuances

$
7,813,719

$
0

Deferred share distributions

$
(1,835,329
)

$
(1,707,941
)
Issuance of shares under business combinations

$
56,754,956

$
0

Acquisitions

Inventory

$
1,809,828

$
0

Accounts receivable

502,767

0

Prepaid assets

118,027

0

Property and equipment

3,712,829

80,615

Right of use assets

12,267,252

0

Identifiable intangible assets

25,342,457

(145,000
)
Goodwill

40,143,000

(2,003,275
)
Deposits and other assets

350,000

603,988

Liabilities assumed

(1,093,460
)

(1,302,604
)
Lease liabilities

(12,267,252
)

0

Equity interests issued

(64,568,675
)

503,389

Acquisition liability

0

(228,813
)
Deferred income taxes

(6,550,000
)

2,491,700

$
(233,227
)

$
0

RECONCILIATION OF CASH, AND CASH EQUIVALENTS AND
RESTRICTED CASH

Cash and cash equivalents

$
359,188,735

$
78,537,236

Restricted cash

0

4,405,436

TOTAL CASH, AND CASH EQUIVALENTS AND RESTRICED CASH

$
359,188,735

$
82,942,672

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements
9
Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

1. Overview and Basis of Presentation

1.	~~Overview and Basis of Presentation~~

(a)

Description of Business

~~(a)~~

~~Description of Business~~

Green Thumb Industries Inc. (“Green ~~Thumb”~~Thumb” or the ~~“Company”~~“Company”) ~~is promoting~~a national cannabis consumer packaged goods company and retailer, promotes well-being through the power of cannabis ~~through branded consumer packaged goods and people-first retail experiences,~~ while being committed to community and sustainable profitable growth. Green Thumb owns, manufactures, and distributes a portfolio of cannabis consumer packaged goods brands including Beboe, Dogwalkers, Dr. Solomon’s, incredibles, Rythm and The Feel Collection, ~~primarily~~ to third-party retail stores across the United States as well as to Green Thumb owned retail stores. The Company ~~also~~ owns and operates retail cannabis stores that include a rapidly growing national chain ~~of retail cannabis stores~~ named Rise™ Dispensaries, all of which sell our products and ~~a Las Vegas, Nevada area chain of retail cannabis stores named Essence.~~third-party products. As of ~~September~~June 30, ~~2020,~~2021, Green Thumb has revenue in twelve markets (California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio, and Pennsylvania)., employs approximately 2,850 people and serves millions of patients and customers annually.

~~On June 12, 2018,~~In addition to the states listed above, the Company ~~completed a reverse takeover transaction (“RTO”) as further described~~also conducts pre-licensing activities in ~~Note 3 of Green Thumb’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on April 15, 2020 (“2019 Form 10-K”). Following the RTO,~~other markets. In these markets, the Company ~~was listed~~has either applied for licenses, or plans on ~~the Canadian Securities Exchange (the “CSE”) under ticker symbol “GTII” and on the OTCQX, part of the OTC Markets Group, under the ticker “GTBIF”.~~applying for licenses, but does not currently own any cultivation, production or retail licenses.

The Company’s registered office is located at ~~885 West Georgia~~250 Howe Street, ~~Suite 2200,~~20th Floor, Vancouver, British Columbia, V6C ~~3E8, Canada.~~3R8. The Company’s U.S. headquarters are at 325 W. Huron St., Suite 700, Chicago, IL 60654.

(b)

Basis of Presentation

~~(b)~~

~~Basis of Presentation~~

The accompanying unaudited interim condensed consolidated financial statements include the accounts of Green Thumb Industries Inc. and have been prepared in accordance with accounting principles generally accepted in the United States (“~~GAAP”~~GAAP”) for interim financial information and in accordance with the rules and regulations of the ~~SEC.~~U.S. Securities & Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and, accordingly, certain information, footnotes and disclosures normally included in the annual financial statements, prepared in accordance with GAAP, have been condensed or omitted in accordance with SEC rules and regulations. The financial data presented herein should be read in conjunction with the audited consolidated ~~and combined~~ financial statements and accompanying notes included in the ~~2019~~2020 Form 10-K. In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Results of interim periods should not be considered indicative of the results for the full year. These unaudited interim condensed consolidated financial statements include estimates and assumptions of management that affect the amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from these estimates.

Certain previously reported amounts have been reclassified between line items to conform to the current presentation. The reclassifications did not affect the Company’s previously reported consolidated balance sheets, consolidated statements of operations, statements of cash flows or statements of changes in shareholders’ equity.

The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 are not necessarily indicative of the results to be expected for the entire year ending December 31, ~~2020.~~2021.

(c)

Significant Accounting Policies

~~(c)~~

~~Significant Accounting Policies~~

There have been no changes to the Company’s significant accounting policies as described in Note 2 of the Company’s ~~2019~~2020 annual report on Form 10-K.

(d)

Earnings (Loss) per Share

~~- 9 -~~

~~Green Thumb Industries Inc.~~

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

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

1.	~~Overview and Basis of Presentation~~ ~~(Continued)~~

~~(d)~~

~~Earnings (Loss) per Share~~

Basic earnings (loss) per share is calculated using the treasury stock method, by dividing the net ~~income~~earnings (loss) attributable to shareholders by the weighted average number of common shares ~~(Subordinate Voting Shares, Multiple Voting Shares on an as converted basis, and Super Voting Shares on an as converted basis)~~ outstanding during each of the periods presented. Contingently issuable shares (including shares held in escrow) are not considered outstanding common shares and consequently are not included in the ~~basic earnings (loss)~~loss per share ~~calculations.~~calculation. Diluted earnings ~~(loss)~~ per share is calculated using the treasury stock method by adjusting the weighted average number of common shares outstanding to assume conversion of all dilutive potential common shares. The Company has three categories of potentially dilutive common share equivalents: restricted stock units, stock options and warrants. ~~At September~~As of June 30, 2021, the Company had 5,819,363 options, 391,736 restricted stock units and 3,644,085 warrants outstanding. As of June 30, 2020, the Company had ~~5,782,599~~5,857,045 options, ~~688,507~~906,173 restricted stock units and ~~2,520,794~~2,526,735 warrants outstanding. ~~At September 30, 2019, the Company had 6,031,833 options, 1,479,038 restricted stock units~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

1. Overview and ~~2,041,735 warrants outstanding.~~Basis of Presentation (Continued)

In order to determine diluted earnings ~~(loss)~~ per share, it is assumed that any proceeds from the exercise of dilutive unvested restricted stock units, stock options, and warrants would be used to repurchase common shares at the average market price during the period. Under the treasury stock method, the diluted ~~loss~~earnings per share calculation excludes any potential ~~exercise~~conversion of ~~restricted stock units,~~ stock options ~~or warrants~~and convertible debt that would increase earnings per share or decrease loss per share. For the three months ended ~~September~~June 30, ~~2020,~~2021, the computation of diluted ~~loss~~earnings per share included ~~1,928,946~~3,191,752 options, ~~151,458~~234,042 restricted stock units and ~~141,482~~1,093,739 warrants. For the six months ended June 30, 2021, the computation of diluted earnings per share included 3,279,087 options, 224,774 restricted stock units and 1,146,883 warrants. No potentially dilutive common share equivalents were included in the computation of diluted loss per share for the three and six months ended ~~September~~June 30, ~~2019 and nine months ended September 30,~~ 2020 ~~and 2019~~ because their impact was anti-dilutive.

~~(e)~~

~~Recently Adopted Accounting Standards~~

~~(i)~~

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which replaces the incurred loss model with a current expected credit loss (“CECL”) model and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. This standard applies to financial assets, measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases and trade accounts receivable. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings in the period of adoption. The Company adopted the new standard in the first quarter of 2020. The adoption of the standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements.

~~(ii)~~

In January 2017, the FASB issued Accounting Standards Update No. 2017-04 “Intangibles— Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which simplifies the accounting for goodwill impairment. ASU 2017-04 requires entities to record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (Step 1 under the current impairment test). The standard eliminates Step 2 from the current goodwill impairment test, which included determining the implied fair value of goodwill and comparing it with the carrying amount of that goodwill. ASU 2017-04 must be applied prospectively and is effective in the first quarter of 2020. Early adoption is permitted. The Company adopted the new standard in the first quarter of 2020. The adoption of the standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements.

(e)

Recently Adopted Accounting Standards

(i)

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - 10Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of the standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements.

(ii)

In January 2020, the FASB issued ASU 2020-01, Investments -

~~Green Thumb Industries Inc.~~

~~Notes~~ Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU 2020-01”), which is intended to ~~Unaudited Interim Condensed Consolidated Financial Statements~~

~~(Amounts Expressed~~clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in ~~United States Dollars, Except Where Stated Otherwise)~~

1.	~~Overview and Basis of Presentation~~ ~~(Continued)~~

~~(e)~~

~~Recently Adopted Accounting Standards (Continued)~~

~~(iii)~~

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820)(“ASU 2018-13”). ASU 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. ASU 2018-13 is effective for annual and interim periods beginning after December 15, 2019. The Company adopted the new standard in the first quarter of 2020. The adoption of the standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements.

~~(f)~~

~~Recently Issued Accounting Standards~~

~~(i)~~

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning January 1, 2021. The Company is currently evaluating the effect of adopting this ASU on the Company’s financial statements.

~~(ii)~~

In January 2020, the FASB issued ASU 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU 2020-01”), which is intended to clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for the Company beginning January 1, 2021. The Company is currently evaluating the effect of adopting this ASU on the Company’s financial statements.

~~(iii)~~

~~On August 5, 2020, the FASB issued Accounting Standards Update No. 2020-06,~~ ~~Debt -~~ Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The Company adopted ASU 2020-01 on January 1, 2021. The adoption of the standard did not have a material impact on the Company’s unaudited interim condensed consolidated financial statements.

(f)
Recently Issued Accounting Standards

(i)

On August 5, 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The amendments in this Update are effective for public business entities that meet the definition of a Securities and Exchange Commission (“SEC”) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The FASB specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The Company is currently evaluating the effect of adopting this ASU on the Company’s financial statements.

~~- 11 -~~

~~Green Thumb Industries Inc.~~

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

~~(Amounts Expressed~~improve financial reporting associated with accounting for convertible instruments and contracts in ~~United States Dollars, Except Where Stated Otherwise)~~

an entity’s own equity. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. We do not expect the adoption of this guidance will have a material impact on the Company’s unaudited interim condensed consolidated financial statements.

(g)

Coronavirus Pandemic

1.	~~Overview and Basis of Presentation~~ ~~(Continued)~~

~~(g)~~

~~Coronavirus Pandemic~~

In March 2020, the World Health Organization categorized coronavirus disease 2019 ~~(“COVID-19”~~(together with its variants, “COVID-19”) as a pandemic. COVID-19 continues to spread throughout the U.S. and other countries across the world, and the duration and severity of its effects are currently unknown. The Company ~~is implementing~~continues to implement and ~~evaluating~~evaluate actions to strengthen its financial position and support the continuity of its business and operations.

The Company’s unaudited interim condensed consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and reported amounts of revenue and expenses during the periods presented. Such estimates and assumptions affect, among other things, the Company’s ~~goodwill,~~goodwill; long-lived assets and intangible assets; operating lease right of use assets and operating lease liabilities; assessment of the annual effective tax rate; valuation of deferred income taxes; the allowance for doubtful accounts; assessment of the Company’s lease and non-lease contract expenses; and measurement of compensation cost for bonus and other compensation plans. While the Company’s revenue, gross profit and operating income were not impacted during the first ~~nine~~six months of ~~2020,~~2021, the uncertain nature of the spread of COVID-19 and the uncertainty of the impact of nationwide vaccine programs may impact the Company’s business operations for reasons including the potential quarantine of the Company’s employees or those of its supply chain partners, and the Company’s continued designation as an “essential” business in states where the Company does business that currently or in the future impose restrictions on its business operations. The estimates and assumptions used in the unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2020 include, but are not limited to certain judgmental reserves requiring management to makes estimates based on current information. The carrying value of the Company’s goodwill and other long-lived assets, may change in future periods as the expected impacts from COVID-19 are revised, resulting in further potential impacts to the Company’s financial statements.

2.	~~INVENTORIES~~

~~The Company’s inventories include the following at September 30, 2020 and December 31, 2019:~~

   September 30,    December 31,
   2020    2019
Raw Material
   $ 3,603,977    $ 6,375,032
Packaging and Miscellaneous
   6,173,017    4,887,970
Work in Process
   24,945,006    20,162,723
Finished Goods
   22,430,016    16,640,629
Reserve for Obsolete Inventory
   (1,987,758 )    (2,031,873 )




Total Inventories
   $ 55,164,258    $ 46,034,481

~~- 12 -~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

3.	~~PROPERTY AND EQUIPMENT~~

2. INVENTORIES

The Company’s inventories include the following at June 30, 2021 and December 31, 2020:


	June 30, 2021			December 31, 2020
Raw Material	$	8,630,042		$	6,372,659
Packaging and Miscellaneous		7,687,302			8,592,153
Work in Process		31,560,037			25,488,806
Finished Goods		34,951,236			30,821,392
Reserve for Obsolete Inventory		(1,102,390	)		(1,732,057	)
Total Inventories	$	81,726,227		$	69,542,953

3. PROPERTY AND EQUIPMENT

At ~~September~~June 30, 2021 and December 31, 2020, property and equipment consisted of the following:

Cost
   Land Buildings and
Improvements Equipment,
Computers
and Furniture    Leasehold
Improvements    Capitalized
Interest    Assets Under
Construction Total
As at January 1, 2020
   $ 3,272,439 $ 33,377,471 $ 35,509,871    $ 68,681,497    $ 2,500,000    $ 21,372,116 $ 164,713,394
Additions
   586.867 21,128,482 4,794,342    12,413,970    342,966    6,118,878 45,385,505
Disposals
   (979,930 ) (4,507,086 ) —      —      —      (6,978,389 ) (12,465,405 )








As at September 30, 2020
   $ 2,879,376 $ 49,998,867 $ 40,304,213    $ 81,095,467    $ 2,842,966    $ 20,512,605 $ 197,633,494








Accumulated Depreciation

As at January 1, 2020
   $ —   $ 2,236,254 $ 3,882,178    $ 2,998,287    $ —      $ —   $ 9,116,719
As at September 30, 2020
   $ —   $ 2,939,951 $ 8,375,318    $ 8,426,333    $ 166,800    $ —   $ 19,908,402
Net book value

As at January 1, 2020
   $ 3,272,439 $ 31,141,217 $ 31,627,693    $ 65,683,210    $ 2,500,000    $ 21,372,116 $ 155,596,675
As at September 30, 2020
   $ 2,879,376 $ 47,058,916 $ 31,928,895    $ 72,669,134    $ 2,676,166    $ 20,512,605 $ 177,725,092


	June 30, 2021			December 31, 2020
Buildings and Improvements	$	53,231,046		$	51,557,405
Equipment, Computers and Furniture		61,635,098			49,097,109
Leasehold Improvements		103,233,931			88,607,252
Capitalized Interest		3,774,589			2,988,681
Total Property and Equipment		221,874,664			192,250,447
Less: Accumulated Depreciation		(33,298,775	)		(24,192,900	)
Property and Equipment, net		188,575,889			168,057,547
Land		5,510,945			2,879,376
Assets Under Construction		47,373,375			18,988,954
Property and equipment, net	$	241,460,209		$	189,925,877

~~At December 31, 2019, property and equipment consisted of the following:~~

Cost
   Land Buildings and
Improvements Equipment,
Computers
and Furniture Leasehold
Improvements    Capitalized
Interest    Assets Under
Construction    Total
As at January 1, 2019
   $ 2,243,085 $ 20,861,988 $ 11,001,498 $ 18,435,893    $ —      $ 16,664,958    $ 69,207,422
Additions
   4,393,030 28,217,500 23,109,209 38,002,678    2,500,000    4,678,084    100,900,501
Additions from acquisitions
   —   —   4,253,362 12,242,926    —      29,074    16,525,362
Disposals
   (3,363,676 ) (15,702,017 ) $ (2,854,198 ) —      —      —      (21,919,891 )








As at December 31, 2019
   $ 3,272,439 $ 33,377,471 $ 35,509,871 $ 68,681,497    $ 2,500,000    $ 21,372,116    $ 164,713,394








Accumulated Depreciation

As at January 1, 2019
   $ —   $ 1,351,230 $ 1,524,114 $ 1,007,998    $ —      $ —      $ 3,883,342
As at December 31, 2019
   $ —   $ 2,236,254 $ 3,882,178 $ 2,998,287    $ —      $ —      $ 9,116,719
Net book value

As at January 1, 2019
   $ 2,243,085 $ 19,510,758 $ 9,477,384 $ 17,427,895    $ —      $ 16,664,958    $ 65,324,080
As at December 31, 2019
   $ 3,272,439 $ 31,141,217 $ 31,627,693 $ 65,683,210    $ 2,500,000    $ 21,372,116    $ 155,596,675

Assets under construction represent construction in progress related to both cultivation and dispensary facilities not yet completed or otherwise not ready for use.

Depreciation expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 totaled ~~$2,003,585~~$5,253,672 and ~~$11,193,570,~~$10,020,023, respectively of which ~~$311,315~~$3,212,413 and ~~$5,571,477,~~$6,091,642, respectively, is included in cost of goods sold. Depreciation expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 totaled ~~$2,494,601~~$5,402,980 and ~~$5,113,195,~~$9,189,985, respectively of which ~~$1,732,146~~$2,582,435 and ~~$3,541,236,~~$5,260,162, respectively, is included in cost of goods sold.

On January 31, 2020, the Company closed a sale and lease back transaction to sell its Toledo, Ohio processing facility to Innovative Industrial Properties (“IIP”). Under the long-term agreement, the Company will lease back the facility and continue to operate and manage it. As a result of the sale, the Company disposed of $205,000 of land and $2,695,000 of construction in progress. There was no gain or loss on the sale.

On March 6, 2020, the Company closed a sale and lease back transaction to sell its Oglesby, Illinois cultivation and processing facility to IIP. Under the long-term agreement, the Company will lease back the facility and continue to operate and manage it. As a result of the sale, the Company disposed of $774,930 of land, $4,507,086 of buildings and improvements and $3,813,636 of construction in progress. The Company recognized a gain on the sale of Oglesby facility of $239,096 which was recorded within other income (expense) on the unaudited interim condensed consolidated statement of operations.12

~~For further information regarding these transactions, see Note 5 - Leases.~~

~~- 13 -~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

4.	~~INTANGIBLE ASSETS AND GOODWILL~~

4. ACQUISITIONS

The Company has determined that the below acquisitions are business combinations under Accounting Standards Codification ("ASC") 805, Business Combinations. They are accounted for by applying the acquisition method, whereby the assets acquired and the liabilities assumed are recorded at their fair values with any excess of the aggregate consideration over the fair values of the identifiable net assets allocated to goodwill. Operating results have been included in these consolidated financial statements from the date of the acquisition. Supplemental pro forma financial information has not been presented as the impact was not material to the Company's consolidated financial statements. The goodwill recorded primarily includes the expected synergies resulting from combining the operations of the acquired entity with those of the Company.

(a)

2021 Business Acquisitions

(i)

Acquisition of Liberty Compassion Inc.

On June 1, 2021, the Company acquired 100% of the ownership interests of Liberty Compassion Inc. ("Liberty"), a Massachusetts-based medical cannabis cultivator and retailer, for the purposes of expanding the Company's operational capacity in the Massachusetts market. The acquisition was an all stock transaction whereby consideration was satisfied through the issuance of 2,146,565 Subordinate Voting Shares (including 259,765 deferred shares) valued at approximately $64.6 million, based on the fair value of the securities on their date of issuance, which was the closing price of Green Thumb's Subordinate Voting Shares as traded on the CSE on the date of the transaction.

The Company completed a preliminary allocation of the purchase price of the assets acquired and liabilities assumed. The preliminary valuation was based on management’s estimates and assumptions which are subject to change within the purchase price allocation period (generally one year from the acquisition date). The primary areas of the purchase price allocation that are not yet finalized relate to the valuation of the tangible and intangible assets acquired and the residual goodwill. Acquisition related costs associated with the transaction were not material. The following table summarizes the initial accounting estimates:


	Liberty Compassion, Inc.
Cash	$	233,227
Inventory		1,809,828
Accounts receivable		502,767
Prepaid expenses		118,027
Property and equipment, net		3,712,829
Right-of-use asset, net		12,267,252
Deposits and other assets		350,000
Intangible assets, net:
Licenses and permits		25,342,457
Liabilities assumed		(1,093,460	)
Lease liabilities		(12,267,252	)
Deferred income tax liabilities		(6,550,000	)
Total identifiable net assets		24,425,675
Goodwill (non-tax deductible)		40,143,000
Net assets	$	64,568,675

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

5. INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

Intangible assets are recorded at cost less accumulated amortization and impairment losses, if any. Intangible assets acquired in a business combination are measured at fair value at the acquisition date. Amortization of definite life intangibles is provided on a straight-line basis over their estimated useful lives. The estimated useful lives, residual values, and amortization methods are reviewed at each year end, and any changes in estimates are accounted for prospectively.

At ~~September~~June 30, 2021 and December 31, 2020, intangible assets consisted of the following:

   Licenses
and Permits Tradenames    Customer
Relationships    Non-Competition
Agreements    Total
Cost

As at January 1, 2020
   $ 336,954,213 $ 97,455,590    $ 25,258,000    $ 2,585,480    $ 462,253,283
Adjustments to Purchase Price Allocation
   (145,000 ) 1,840,009    —      —      1,695,009








As at September 30, 2020
   $ 336,809,213 $ 99,295,599    $ 25,258,000    $ 2,585,480    $ 463,948,292
Accumulated Amortization

As at January 1, 2020
   $ 18,477,500 $ 4,121,800    $ 3,932,416    $ 474,669    $ 27,006,385
Amortization
   17,701,556 6,412,282    2,777,802    394,750    27,286,390








As at September 30, 2020
   $ 36,179,056 $ 10,534,082    $ 6,710,218    $ 869,419    $ 54,292,775
Net book value

As at January 1, 2020
   $ 318,476,713 $ 93,333,790    $ 21,325,584    $ 2,110,811    $ 435,246,898
As at September 30, 2020
   $ 300,630,157 $ 88,761,517    $ 18,547,782    $ 1,716,061    $ 409,655,517


	June 30, 2021						December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Licenses and Permits	$	366,784,694	$	52,495,559	$	314,289,135	$	343,135,736	$	41,993,595	$	301,142,141
Trademarks		98,935,601		19,259,650		79,675,951		99,295,599		13,455,178		85,840,421
Customer Relationships		24,438,000		8,199,097		16,238,903		25,258,000		7,583,005		17,674,995
Non-Competition Agreements		2,565,000		1,230,889		1,334,111		2,585,480		1,001,003		1,584,477
Total Intangible Assets	$	492,723,295	$	81,185,195	$	411,538,100	$	470,274,815	$	64,032,781	$	406,242,034

~~At December 31, 2019 intangible assets consisted of the following:~~

   Licenses
and Permits    Tradenames    Customer
Relationships    Non-Competition
Agreements    Total
Cost

As at January 1, 2019
   $ 89,705,213    $ 360,000    $ 820,000    $ 20,480    $ 90,905,693
Additions from acquisitions
   247,249,000    97,095,590    24,438,000    2,565,000    371,347,590










As at December 31, 2019
   $ 336,954,213    $ 97,455,590    $ 25,258,000    $ 2,585,480    $ 462,253,283
Accumulated Amortization

As at January 1, 2019
   $ 2,322,715    $ —      $ 204,500    $ 12,800    $ 2,540,015
Amortization
   16,154,785    4,121,800    3,727,916    461,869    24,466,370










As at December 31, 2019
   $ 18,477,500    $ 4,121,800    $ 3,932,416    $ 474,669    $ 27,006,385
Net book value

As at January 1, 2019
   $ 87,382,498    $ 360,000    $ 615,500    $ 7,680    $ 88,365,678
As at December 31, 2019
   $ 318,476,713    $ 93,333,790    $ 21,325,584    $ 2,110,811    $ 435,246,898

The Company recorded amortization expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 of ~~$9,531,290~~$9,819,320 and ~~$27,286,390, respectively, and~~$20,046,391, respectively. The Company recorded amortization expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 of ~~$5,419,212,~~$8,836,933 and ~~$12,415,696,~~$17,755,100, respectively. During the second quarter of 2020, the Company recorded a measurement period adjustment in connection with its June 27, 2019 acquisition of MC Brands, LLC of $1,840,009 which increased intangible assets and share capital. The remainder of the adjustments to purchase price allocations relate to the finalization of several 2019 acquisitions.

In addition, the Company reviewed the estimated useful lives of its intangible assets as part of the Company’s plans to rebrand one of its retail stores. Based on that review, the Company determined that certain intangible assets associated with the Company’s retail tradenames have a useful life shorter than initially estimated.

~~- 14 -~~

~~Green Thumb Industries Inc.~~

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

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

4.	~~INTANGIBLE ASSETS AND GOODWILL (~~~~Continued~~)

Beginning July 1, 2020, the Company adjusted the useful life of its retail tradename associated with the acquisition of Essence from 15 years to 7 years. The change in useful life was made as a prospective adjustment and resulted in an increase in amortization expense of $1,266,880 for the remainder of 2020, $5,067,520 annually for years 2021 through 2024, and a net reduction in amortization expense of $21,536,960 thereafter.

The following table outlines the estimated annual amortization expense related to intangible assets as of ~~September~~June 30, 2021:


Year Ending December 31,	Estimated Amortization
Remainder of 2021	$	19,473,991
2022		40,173,612
2023		40,170,835
2024		39,589,501
2025		39,491,835
Thereafter		232,638,326
	$	411,538,100

As of June 30, 2021, the weighted average amortization period remaining for intangible assets was 11.74 years.

Goodwill

At June 30, 2021 and December 31, 2020 ~~and illustrates~~ the ~~effect~~balances of ~~the change in useful life of the Essence tradename discussed above:~~

Year Ending December 31,
   Estimated
Amortization
(Prior to
Change in
Useful Life)    Increase
(Decrease)
from Change
in
Useful Life    Estimated
Amortization
(After Change
in Useful Life)
Remainder of 2020
   $ 8,426,261    $ 1,266,880    $ 9,693,141
2021
   33,705,044    5,067,520    38,772,564
2022
   33,274,305    5,067,520    38,341,825
2023
   33,191,489    5,067,520    38,259,009
2024
   32,610,156    5,067,520    37,677,676
Thereafter
   268,448,262    (21,536,960 )    246,911,302






   $ 409,655,517    $ —      $ 409,655,517

~~Goodwill~~

~~At September 30, 2020, Goodwill~~goodwill, by segment, consisted of the following:

   Retail    Consumer
Packaged Goods    Total
As at January 1, 2020
   $ 119,873,759    $ 255,211,232    $ 375,084,991
Adjustments to Purchase Price Allocations
   1,191,425    (3,194,700 )    (2,003,275 )






As at September 30, 2020
   $ 121,065,184    $ 252,016,532    $ 373,081,716


	December 31, 2020		Acquisition of Liberty Compassion Inc.		June 30, 2021
Retail	$	130,680,935	$	8,028,600	$	138,709,535
Consumer Package Goods		252,016,532		32,114,400		284,130,932
Total Goodwill	$	382,697,467	$	40,143,000	$	422,840,467

~~At December 31, 2019, Goodwill consisted of the following:~~

   Retail    Consumer
Packaged Goods    Total
As at January 1, 2019
   $ 15,286,360    $ 23,918,000    $ 39,204,360
Acquisition of Advanced Grow Labs, LLC
   16,756,250    44,572,349    61,328,599
Acquisition of Integral Associates, LLC
   46,655,753    69,323,570    115,979,323
Other Acquisitions
   32,936,590    120,963,598    153,900,188
Adjustments to Purchase Price Allocations
   8,238,808    (3,566,285 )    4,672,523






As at December 31, 2019
   $ 119,873,759    $ 255,211,232    $ 375,084,991

During the nine months ended September 30, 2020, the Company recorded measurement period adjustments resulting in a net decrease in goodwill of $2,003,275 associated with various acquisitions. In regard to the Consumer Packaged Goods segment, the Company recorded measurement period adjustments associated with its acquisition of For Success Holdings Company and Advanced Grow Labs, LLC of $1,687,700 and $1,507,000, respectively, which represented a reduction in the value of goodwill and deferred tax liabilities. Regarding the Retail segment, the Company recorded measurement period adjustments associated with its acquisition of Fiorello Pharmaceuticals, Inc. of $1,000,000 which represented an increase in the value of goodwill and corresponding adjustment to current liabilities. The remainder of the adjustments to the Retail segment represent the finalization of purchase price allocations related to other 2019 acquisitions.

~~- 15 -~~14

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

5.	~~LEASES~~

6. INVESTMENTS

~~(a)~~

~~Operating Leases Under Accounting Standards Update No. 2016-02~~

~~In February 2016,~~

As of June 30, 2021 and December 31, 2020, the ~~FASB issued ASU No. 2016-02 - Leases (Topic 842) (“ASU 2016-02”~~Company held various equity interests in privately held cannabis companies as well as investments in convertible notes which had a combined fair value of $41,725,403 and $40,794,806 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 change in the Company’s investments during the six months ended June 30, 2021 and year ending December 31, 2020:


	June 30, 2021			December 31, 2020
Beginning	$	40,794,806		$	14,068,821
Additions		18,135,615			525,000
Disposals		(18,417,089	)		(169,818	)
Fair value adjustment		18,754,321			26,370,803
Transfers out		(17,542,250	)		0
Ending	$	41,725,403		$	40,794,806

On January 15, 2021, the Company sold approximately half of its equity interest in a privately held entity for $18,112,500 in cash. Subsequently, the privately held entity became publicly traded and Green Thumb recorded fair value adjustments on the equity interest of $13,517,189 based on the trading price of the securities during each of the three and six months ended June 30, 2021. As of June 30, 2021 and December 31, 2020, the fair value of the equity interest was $32,653,878 and $37,249,189, respectively.

Separately, during the second quarter, the Company made an additional investment in a privately held entity in the amount of $12,335,635, recorded fair value adjustments of $4,110,378 and obtained representation on the entity's board of directors. Given Green Thumb's cumulative ownership interest and representation on the entity's board of directors, it was determined that the Company could exert significant influence over the entity. As of June 30, 2021, the Company reclassified its investment in the privately held entity to investment in associates on the unaudited interim condensed consolidated balance sheets and began accounting for the investment as an equity method investment.

Unrealized gains and (losses) recognized on equity investments held during the three and six months ended June 30, 2021and 2020 were $18,351,672 and $18,733,067and $198,572 and $(17,035), ~~which requires lessees~~respectively.

Green Thumb Industries Inc.

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

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

7. LEASES

(a)

Operating Leases

The Company has operating leases for certain Rise, Essence and other retail dispensaries as well as many of the Company’s processing and cultivation facilities located throughout the US. Additionally, the Company has an operating lease for corporate office space 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 but recognize expense~~sheet. Equipment and other non-real estate leases with an initial term of twelve months or less are not recorded on the ~~income statement~~balance sheet. Lease agreements for some locations provide for rent escalations and renewal options. Certain real estate leases require payment for taxes, insurance and maintenance which are considered non-lease components. The Company accounts for real estate leases and the related fixed 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 ~~a manner similar to current accounting. On January 1, 2019,~~the contract and if the Company ~~adopted~~directs how and for what purpose the ~~ASU 2016-02~~asset is used during the term of the contract. For the three and ~~all related amendments, using~~six months ended June 30, 2021 the ~~optional transition method (modified retrospective approach) applied~~company recorded operating lease expense of $8,276,399 and $16,027,698 compared to ~~leases at the adoption date. Under the modified retrospective approach, comparative periods have not been restated~~operating lease expense of $8,173,125 and ~~continue to be reported under the accounting standards in effect for those periods. Additionally, an adjustment was recorded to accumulated deficit to account~~$12,430,640 for the ~~initial adoption of the standard.~~three and six months ended June 30, 2020.

~~For additional information regarding the adoption of ASU 2016-02, see Note 9 – Leases in the 2019 Form 10-K.~~

Other information related to operating leases as of and for the ~~three~~six months ended June 30, 2021 and ~~nine months~~year ending ~~September 30,~~December 31, 2020 were as follows:


	~~As of~~ ~~September 30, 2020~~
~~Weighted average remaining lease term~~		~~10.81~~
~~Weighted average discount rate~~		~~13.2~~	%


	June 30, 2021			December 31, 2020
Weighted avgerage remaining lease term (years)	11.95				12.10
Weighted average discount rate		13.97	%		13.70	%

Maturities of lease liabilities for operating leases as of ~~September~~June 30, ~~2020~~2021 were as follows:


	Maturities of Lease Liability										Maturities of Lease Liability
	Third Party			Related Party			Total
Remainder of 2020	$	4,767,957		$	322,287		$	5,090,244
2021		22,243,662			1,307,183			23,550,845
Year Ending December 31,											Third Party				Related Party				Total
Remainder of 2021										$		14,431,765		$		658,811		$		15,090,576
2022		22,285,836			1,337,130			23,622,966				29,923,298				749,125				30,672,423
2023		22,092,882			1,367,771			23,460,653				30,454,945				197,328				30,652,273
2024		21,387,294			1,255,714			22,643,008				29,722,890				305,087				30,027,977
2025 and Thereafter		183,998,689			10,345,330			194,344,019

2025												27,470,590				322,874				27,793,464
2026 and Thereafter												277,789,291				178,713				277,968,004
Total Lease Payments		276,776,320			15,935,415			292,711,735				409,792,779				2,411,937				412,204,716

Less: Interest		(177,811,636	)		(7,837,605	)		(185,649,241	)			(238,783,784	)			(1,421,187	)			(240,204,971	)

Present Value of Lease Liability	$	98,964,684		$	8,907,810		$	107,062,494		$		171,008,995		$		990,750		$		171,999,745

For the three and nine months ended September 30, 2020 the Company recorded operating lease expense of $6,590,553 and $19,021,190, respectively. For the three and nine months ended September 30, 2019, the Company recorded operating lease expenses of $1,962,561 and $4,229,889, respectively.

(b)

Related Party Operating Leases

~~(b)~~

~~Related Party Operating Leases~~

The Company entered into related party transactions with respect to its leasing arrangements for certain facilities in Florida, ~~Illinois,~~ 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 certain 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 Chief Executive Officer and a director of the Company (through KP Capital, LLC), and Anthony Georgiadis, the Chief Financial Officer and a director of the Company (through Three One Four Holdings, LLC). The terms of these leases range from 7 years to 15 ~~years.~~years. For the three and six months ended June 30, 2021, the Company recorded lease expense of $300,229 and $595,432, respectively, associated with these leasing arrangements. For the three and six months ended June 30, 2020, the Company recorded lease expense of $386,787 and $734,323, respectively associated with these leases.

~~- 16 -~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

8. NOTES PAYABLE

5.	~~LEASES~~ ~~(Continued)~~

~~(b)~~

~~Related Party Operating Leases~~ ~~(Continued)~~

~~and nine months ended September~~At June 30, 2020, the Company recorded lease expense of $157,076 and $601,753, respectively, associated with these leasing arrangements. For the three and nine month ended September 30, 2019, the Company recorded operating lease expenses of $148,226 and $339,961, respectively, associated with these leasing arrangements.

On June 5, 2020, a wholly owned subsidiary of the Company purchased the building and building improvements of the Company’s dispensary located in Joliet, Illinois for $1,814,000 from Mosaic Real Estate Joliet, LLC. The transaction resulted in the termination of the Illinois related party leasing arrangement. For additional information see Note 6 – Notes Payable.

In connection with the Company’s acquisition of Integral Associates, LLC, the Company, through a subsidiary, leases property from Durango Teco Partners, LLC, which commenced on June 27, 2020 for an Essence retail store in Nevada. Durango Teco Partners, LLC is owned in part by Armenco Capital LLC, which is in turn owned in part by Alejandro Yemenidjian, a former owner of Integral Associates, LLC and a current director of the Company. The lease has a ten year term. For the three and nine months ended September 30, 2020, the Company recorded lease expense of $58,332 and $77,776, respectively, associated with this lease.

~~(c)~~

~~Sales Lease Back Transactions~~

On January 31, 2020, the Company closed on a sale and lease back transaction to sell its Toledo, Ohio processing facility to IIP. Under a long-term agreement, the Company has leased back the facility and continues to operate and manage it. The purchase price for the property was $2,900,000, excluding transaction costs. The Company is making certain improvements to the property that will significantly enhance production capacity, for which IIP has agreed to provide reimbursement of up to $4,300,000.

Following the end of the third quarter of 2020, on October 1, 2020, the Company and IIP agreed to amend the lease on the Toledo, Ohio processing facility. Under the amendment, IIP will provide an additional $25,000,000 in funding to be used for the construction of a cannabis cultivation facility at the property, which currently houses a separate cannabis processing facility. Assuming full payment of the additional funding, IIP’s total investment in the property pursuant to the sale and leaseback transaction and related amendment will be $32,200,000. The Company is in process of evaluating the lease amendment and will conclude on the classification, and value of the right of use asset and related lease liability in the following quarter.

On March 6, 2020, the Company closed on a sale and lease back transaction to sell its Oglesby, Illinois cultivation and processing facility to IIP. Under a long-term agreement, the Company has leased back the facility and continues to operate and manage it. The purchase price for the property was $9,000,000, excluding transaction costs. The Company is making certain improvements to the property that will significantly enhance production capacity, for which IIP has agreed to provide reimbursement of up to $41,000,000. Assuming full reimbursement for such improvements, IIP’s total investment in the property will be $50,000,000. The lease has a term of 16 years and was recorded as an operating lease and resulted in a right of use asset and related lease liability of $26,828,221 and was recorded net of the improvements allowance of $41,000,000.

~~- 17 -~~

~~Green Thumb Industries Inc.~~

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

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

6.	~~NOTES PAYABLE~~

~~At September 30, 2020~~2021 and December 31, ~~2019,~~2020, notes payable consisted of the following:

   September 30,
2020 December 31,
2019
In connection with an acquisition completed in 2017, the Company is required to make quarterly charitable contributions of $50,000 through October 2024. The net present value of these required payments has been recorded as a liability with an interest rate of 2.17%.
   $ 763,284 $ 970,957
Private placement debt dated May 22, 2019, in the original amount of $105,466,429 with an interest rate of 12.00%, matures on May 22, 2023. The debt was issued at a discount, the carrying value of which is $11,618,400 as of September 30, 2020
   93,848,029 90,375,912
Rise Joliet mortgage dated June 5, 2020, in the original amount of $1,814,000 with an interest rate of 5.00%, matures on June 5, 2035. The debt was issued at a discount, the carrying value of which is $177,244 as of September 30, 2020.
   1,616,606 —
Rise Lakewood mortgage dated August 20, 2020, in the original amount of $833,000 with an interest rate of 7.25%, matures on August 20, 2025.
   831,341 —


Total notes payable
   97,059,260 91,346,869
Less: current portion of notes payable
   (301,027 ) (206,675 )


Notes payable, net of current portion
   $ 96,758,233 $ 91,140,194



	June 30, 2021			December 31, 2020
Charitable Contributions 1	$	1,331,053		$	717,430
Private placement debt dated May 22, 2019 2		0			94,955,094
Private placement debt dated April 30, 20213		192,975,932			0
Mortgage notes 4		3,310,861			3,382,455
Total notes payable		197,617,846			99,054,979
Less: current portion of notes payable		(581,436	)		(341,983	)
Notes payable, net of current portion	$	197,036,410		$	98,712,996

____________________

~~(a)~~

~~Extension of Private Placement Financing~~

1 In connection with acquisitions completed in 2017 and 2019, the Company is required to make quarterly charitable contributions of $50,000 through October 2024 and $200,000 per year through May 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%

2On May ~~21, 2020,~~22, 2019, the Company ~~exercised its option~~issued private placement debt in an original amount of $105,466,429 with an interest rate of 12.00%, maturing on May 22 2023. The debt was issued at a discount, the carrying value of which was $9,045,187 and $10,511,335 as of April 30, 2021, just prior to ~~extend~~repayment, and December 31, 2020, respectively.

3 The April 30, 2021 private placement debt was issued in an original amount of $216,734,258 with an interest rate of 7.00%, maturing on April 30, 2024. The debt was issued at a discount, the ~~maturity date~~carrying value of ~~its~~which was $23,758,326 as of June 30, 2021.

4 Mortgage notes, in the original amount of $3,607,000 were issued by the Company in connection with various Retail dispensaries. These mortgage notes mature between August 20, 2025 and June 5, 2035 and were issued at a discount, the carrying value of which was $168,181 and $174,223, and are presented net of principal payments of $127,958 and $50,322 as of June 30, 2021 and December 31, 2020, respectively.

(a)

April 30, 2021 Private Placement Financing

On April 30, 2021, the Company closed a $216,734,258 Senior Secured non-brokered private placement financing through the issuance of senior secured notes (the ~~“Notes”~~“Notes”). The Company used the proceeds to retire the Company’s existing $105,466,429, senior secured notes due May 22 2023 and the remaining proceeds for general working capital purposes as well as various growth initiatives. The Notes have a maturity date of April 30, 2024 and bear interest from the date of issue of 7.00% per annum, payable quarterly, with an option, at the discretion of the Company, to extend for an additional 12 months. The financing permits the Company to borrow an additional $33,265,742 over the next twelve months. The purchasers of the Notes also received 1,459,044 warrants (the “Warrants”) ~~pursuant~~which allow the holder to purchase one Subordinate Voting Share at an exercise price of $32.68 per share, for a period of 60 months from the ~~Note Purchase Agreement, dated~~date of issue.

The refinancing of the Notes involved multiple lenders who were considered members of a loan syndicate. In determining whether the refinancing of the Notes should be accounted for as a debt extinguishment or a debt modification, the Company considered whether, prior to and following the refinancing, creditors remained the same or changed, and whether the changes in debt terms were substantial. A change in the terms of the Notes was considered to be substantial if the present value of the remaining cash flows under the April 30, 2021 Notes were at least 10% different from the present value of the remaining cash flows under the May 22, 2019 Notes (commonly referred to as ~~amended (the “Note Purchase Agreement”~~the “10% Test”). The Company performed a separate 10% Test for ~~an additional year. Following this exercise, which was~~each individual lender participating in the ~~Company’s sole discretion under~~loan syndication. Of the ~~Note Purchase Agreement,~~30 lenders who participated in the ~~new maturity date for~~original financing of the ~~Notes is~~ May 22, ~~2023.~~

~~(b)~~

~~Mortgage on Joliet, Illinois Dispensary~~

On June 5, 2020, the Company closed on a secured promissory note (the “Mortgage”) of $1,814,000. The Mortgage bears interest of 5% per annum and matures on June 5, 2035. The Mortgage provided by the lender was used to purchase the building and building improvements of one of the Company’s dispensaries located in Joliet, Illinois that the Company previously leased from Mosaic Real Estate Joliet, LLC, a related party. As part of the transaction, the Company issued 35,000 warrants valued at $181,272 using a Black Scholes Option Pricing model which2019 Notes, 18 were accounted for as ~~equity and recorded~~a debt extinguishment, while 12 were treated as a ~~discount on~~modification. Additionally, 9 new lenders joined the ~~Mortgage.~~loan syndicate.

(b)

Related Parties

~~- 18 -~~

~~Green Thumb Industries Inc.~~

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

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

6.	~~NOTES PAYABLE~~ ~~(Continued)~~

~~(c)~~

~~Mortgage on Lakewood, Ohio Dispensary~~

On August 20, 2020, the Company closed on a secured promissory note (the “Lakewood Mortgage”) of $833,000. The Lakewood Mortgage bears interest of 7.25% per annum and matures on August 20, 2025. The Lakewood Mortgage provided by the lender was used to purchase the land, building and building improvements of one of the Company’s dispensaries located in Lakewood, Ohio that the company previously leased.

~~(d)~~

~~Related Parties~~

~~The private placement debt is~~are held by related parties as well as unrelated third-party lenders at a percentage of approximately 1%1% and ~~99%~~99%, respectively. The related parties consist of Benjamin Kovler, the Chief Executive Officer and a director of the Company ~~(through~~(held through KP Capital, LLC and Outsiders Capital, LLC); Andrew Grossman, the Executive Vice President of Capital Markets of the Company ~~(through~~(held through AG Funding Group, LLC); ~~and~~ Anthony Georgiadis, the Chief Financial Officer and a director of the Corporation ~~(through~~(held through Three One Four Holdings, ~~LLC~~LLC); and Anthony Georgiadis and William Gruver, a director of the Corporation (held through ABG, LLC).

7.	~~WARRANTS~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

9. WARRANTS

As part of the Company’s private placement financing ~~and Mortgage on the Joliet, Illinois dispensary,~~as well as other financing arrangements, the Company issued warrants to related parties, as well as ~~un-related~~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 warrants outstanding as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:

   Number of
Shares    Weighted
Average
Exercise
Price
(C$)    Weighted
Average
Contractual
Life    Number
of
Shares    Weighted
Average
Exercise
Price
(USD)    Weighted
Average
Contractual
Life
   Liability Classified    Equity Classified
Balance as at December 31, 2019
   2,406,811 C$    18.59    4.86    -    $ -    -
Additional Modification Warrants
   84,924    14.03    5.00    -    -    -
Dispensary Mortgage Warrants
   -    ^-    -    35,000    9.10    5.00
Warrants Exercised
   (5,941 )    12.42    5.00    -    -    -












Balance as at September 30, 2020
   2,485,794 C$    18.45    4.87    35,000    $ 9.10    5.00


	Liability Classified								Equity Classified
	Number of Shares				Weighted Average Exercise Price (C$)		Weighted Average Remaining Contractual Life		Number of Shares			Weighted Average Exercise Price (USD)		Weighted Average Remaining Contractual Life
Balance as at December 31, 2020		2,485,794		C$		18.45		3.40		35,000	$		9.10		3.93
Warrants Issued		0				0		—		1,459,044			32.68		4.84
Warrants Exercised		(226,271	)			18.01		3.01		0			0		—
Warrants Expired		(109,482	)			22.90		1.28		0			0		—
Balance as at June 30, 2021		2,150,041		C$		18.27		2.92		1,494,044	$		32.13		4.81

~~(a)~~

~~Additional Modification Warrants~~

As part of the November 9, 2019 modification of the Notes, the Company agreed to issue 84,924 additional warrants by May 22, 2020 to participating lenders in the event the Company decided to raise additional capital or to the original lenders involved in the May 22, 2019 private placement financing in the event the Company did not. On May 21, 2020, the Company issued the warrants to the original lenders involved in the private placement financing which allows the holder to purchase 84,924 Subordinate Voting Shares. The warrants are denominated in CAD. Upon issuance, the Company recorded an additional amount to debt discount with a corresponding amount to the warrant liability of $572,387, which was measured at fair value using the following assumptions:

~~- 19 -~~

(a)

Liability Classified Warrants Outstanding

~~Green Thumb Industries Inc.~~

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

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

7.	~~WARRANTS~~ ~~(Continued)~~

~~(a)~~

~~Additional Modification Warrants~~ ~~(continued)~~


~~Significant Assumptions~~	~~May 21, 2020~~ ~~(Date of Issuance)~~
~~Volatility~~		~~100~~	%
~~Remaining Term~~		~~5 years~~
~~Risk Free Rate~~		~~0.42~~	%

~~(b)~~

~~Dispensary Mortgage Warrants~~

On June 5, 2020, as part of the $1,814,000 promissory note, the Company issued warrants that allow the promissory noteholder to purchase 35,000 Subordinate Voting Shares. These warrants are denominated in USD, which is the Company’s functional currency. As such, upon issuance, the Company recorded an additional amount to debt discount with a corresponding amount to contributed surplus of $181,272 which was measured at fair value using a Black Scholes Options Pricing model. The Company did not incur any other material fees related to the promissory note.

~~(c)~~

~~Liability Classified Warrants Outstanding~~

The following table summarizes the fair value of the liability classified warrants at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:


												Fair Value
Warrant Liability	Strike Price		Warrants Outstanding		September 30, 2020		December 31, 2019		Strike Price	Warrants Outstanding		June 30, 2021		December 31, 2020		Change
Bridge Financing Warrants	C$	22.90		218,964	$	1,065,000	$	1,385,400	C$22.90		109,482	$	1,789,250	$	2,544,500	$	(755,250	)
Private Placement Financing Warrants	C$	19.39		1,822,771		13,457,000		12,189,169	C$19.39		1,641,301		35,613,000		28,756,500		6,856,500
Modification Warrants Additional Modification Warrants	C$ C$	12.04 14.03		360,256 83,803		3,251,500 739,500		2,305,274 —

Modification Warrants									C$12.04		323,910		8,198,500		6,630,000		1,568,500
Additional Modification Warrants									C$14.03		75,348		1,864,000		1,523,000		341,000
Totals				2,485,794	$	18,513,000	$	15,879,843			2,150,041	$	47,464,750	$	39,454,000	$	8,010,750

During the three and ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, the Company recorded a loss of ~~$3,181,114~~$2,160,079 and $8,010,750, and a loss of ~~$2,060,771,~~$6,262,500 and a gain of $1,120,343, 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.

The following table summarizes the significant assumptions used in determining the fair value of the warrant liability as of each reporting date (see Note 1314 - Fair Value Measurements for additional details):


~~Significant Assumptions~~	~~September 30, 2020~~		~~December 31, 2019~~
~~Volatility~~		~~85.36% - 89.50%~~		~~117.43% - 123.64%~~
~~Remaining Term~~		~~2.03 - 4.64 years~~		~~2.78 - 4.86 years~~
~~Risk Free Rate~~		~~0.25% - 0.34%~~		~~1.68% - 1.69%~~


	June 30,	December 31,
Significant Assumptions	2021	2020
Volatility	62.80% - 77.17%	72.19% - 79.10%
Remaining Term	1.28 - 3.89 years	1.78 - 4.39 years
Risk Free Rate	0.44% - 0.79%	0.20% - 0.28%

~~- 20 -~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

7.	~~WARRANTS~~ ~~(Continued)~~

9. WARRANTS(Continued)

~~(e)~~

~~Equity Classified Warrants Outstanding~~

(b)

Equity Classified Warrants Outstanding

The following table summarizes the fair value of the equity classified warrants at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019:~~2020:


													Fair Value
											Warrants		June 30,		December 31,
Warrants Included in Contributed Surplus	Strike Price		Warrants Outstanding		September 30, 2020		December 31, 2019		Strike Price		Outstanding		2021		2020
Dispensary Mortgage Warrants	$	9.10		35,000	$	181,272	$	—	$	9.10		35,000	$	181,272	$	181,272
Private Placement Refinancing Warrants									$	32.68		1,459,044		22,258,608		0
Totals												1,494,044	$	22,439,880	$	181,272

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 ~~equity classified~~ warrants as of each ~~reporting~~respective issuance date:


~~Significant Assumptions~~	~~September 30,~~ ~~2020~~			~~December 31,~~ ~~2019~~
~~Volatility~~		80	%		—
~~Remaining Term~~		~~5 years~~			—
~~Risk Free Rate~~		~~0.37~~	%		—

8.	~~INCOME TAXES~~

~~The following table summarizes the Company’s income tax expense and effective tax rates for the three and nine months ended September 30, 2020 and September 30, 2019:~~


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

   Three Months Ended
September 30, Nine Months Ended
September 30,
   2020 2019 2020 2019
Income/(Loss) before Income Taxes
   $ 39,189,341 $ (10,713,603 ) $ 52,189,559 (40,011,094 )
Income Tax Expense
   $ 28,436,332 $ 3,624,333 $ 56,964,047 4,706,000
Effective Tax Rate
   72.6 % -33.8 % 109.1 % -11.8 %

Historically, the Company has calculated its provision for income taxes during its interim reporting periods by applying an estimate of the annual effective tax rate for the full year “ordinary” income or loss for the respective reporting period. For the nine months ended September 30, 2020, the Company has computed its provision for income taxes under the discrete method which treats the year-to-date period as if it were the annual period and determines the income tax expense or benefit on that basis. The discrete method is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pre-tax income due to the early growth stage of the business.

Due to its cannabis operations, the Company is subject to the limitations of Internal Revenue Code (“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.

The effective tax rate for the three and nine months ended September 30, 2020 varies widely from the three and nine months ended September 30, 2019, respectively, primarily due to the Company reporting pre-tax loss in 2019 as opposed to pre-tax income in 2020. The Company incurred a large amount of expenses that were not deductible due to IRC Section 280E limitations which resulted in income tax expense being incurred while there were pre-tax losses for the three and nine months ended September 2019.

~~- 21 -~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

8.	~~INCOME TAXES~~ ~~(Continued)~~

10. SHARE CAPITAL

The Company is subject to income taxes in the United States and Canada. Significant judgment is required in evaluating the Company’s uncertain tax positions and determining the provision for income taxes. The Company’s gross unrecognized tax benefits were approximately $16,264,727 and $2,113,263 as of September 30, 2020 and December 31, 2019, respectively, recorded within Deferred Income Taxes.

The federal statute of limitation remains open for the 2017 tax year to the present. The state income tax returns generally remain open for the 2016 tax year through the present. Net operating losses arising prior to these years are also open to examination if and when utilized.

~~Taxes paid during the nine months ended September 30, 2020 and 2019 were $37,820,228 and $10,534,408, respectively.~~

9.	~~INVESTMENTS~~

The Company holds direct equity investments in cannabis companies, some of which converted from notes which matured August 1, 2020. The following table summarizes the change in the Company’s investments as of September 30, 2020:

   Convertible
Notes
Receivable Equity    Total
Balance at January 1, 2020
   $ 7,533,000 $ 6,535,821    $ 14,068,821
Additions
   —   25,000    25,000
Conversion of notes receivable
   (7,533,000 ) 7,533,000    —
Fair value adjustment
   —   8,117,178    8,117,178



Balance at September 30, 2020
   $ —   $ 22,210,999    $ 22,210,999

As of September 30, 2020, the Company updated its valuation for the notes that converted to equity as well as certain equity investments. The equity investments were valued using a market approach using the following significant assumptions:


		~~September 30, 2020~~
~~Discount for lack of control~~		~~13%~~
~~Discount for lack of marketability~~		~~10%-30%~~

~~The following table summarizes the change in the Company’s investments as of December 31, 2019:~~

   Convertible Notes
Receivable    Equity    Total
Balance at January 1, 2019
   $ 30,336,000    $ 10,597,283    $ 40,933,283
Fair value adjustment
   (1,398,000 )    (4,061,462 )    (5,459,462 )
Applied to consideration in business combination
   (21,405,000 )    —      (21,405,000 )






Balance at December 31, 2019
   $ 7,533,000    $ 6,535,821    $ 14,068,821

The calculated fair values are recorded as a Level 3 fair value investment as of September 30, 2020 and December 31, 2019. See Note 13 - Fair Value Measurements for additional details. As of December 31, 2019, the convertible notes receivable were valued using the Binomial Lattice Model, which is based on a generalized binomial option pricing formula, using the following assumptions:

~~- 22 -~~

~~Green Thumb Industries Inc.~~

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

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

9.	~~INVESTMENTS~~ ~~(Continued)~~


		~~December 31, 2019~~
~~Risk free rate~~		~~1.58% -2.46%~~
~~Equity Volatility~~		~~58% - 106%~~
~~Market Yield~~		~~15% - 18%~~
~~Probability of Qualified Financing~~		0%
~~Probability of Sale~~		~~30%~~
~~Probability of No Event~~		~~70%~~

~~10.~~

~~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 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 vesting periods are recorded as share capital. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with ~~Accounting Standards Codification (ASC)~~ASC 740, Income Taxes.

(a)

Authorized

~~(a)~~

~~Authorized~~

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

(i)

Subordinate Voting Shares

~~(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 ~~nine~~six months ~~ending September~~ended June 30, ~~2020,~~2021, the shareholders of the Company converted ~~252,440~~635 Multiple Voting Shares into ~~25,244,000~~63,500 Subordinate Voting Shares and ~~22,953~~11,000 Super Voting Shares into ~~2,295,300~~1,100,000 Subordinate Voting Shares.

(ii)

Multiple 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 ~~September~~June 30, ~~2020,~~2021, the Company had ~~120,910~~39,654 issued and outstanding Multiple Voting Shares, which convert into ~~12,091,000~~3,965,400 Subordinate Voting Shares. The Company is authorized to issue an unlimited number of Multiple Voting Shares. During the ~~nine~~six months ~~ending September~~ended June 30, ~~2020,~~2021, the shareholders of the Company converted ~~252,440~~635 Multiple Voting Shares into ~~25,244,000~~63,500 Subordinate Voting Shares.

(iii)

Super 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 ~~September~~June 30, ~~2020,~~2021, the Company had ~~379,336~~301,031 issued and outstanding Super Voting Shares which convert into ~~37,933,600~~30,103,100 Subordinate Voting Shares. The Company is authorized to issue an unlimited number of Super Voting Shares. During the ~~nine~~six months ~~ending September~~ended June 30, ~~2020,~~2021, the shareholders of the Company converted ~~22,953~~11,000 Super Voting Shares into ~~2,295,300~~1,100,000 Subordinate Voting Shares.

~~- 23 -~~

(b)

Issued and Outstanding

~~Green Thumb Industries Inc.~~

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

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

~~10.~~

~~SHARE CAPITAL~~ ~~(Continued)~~

~~(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
   Subordinate
Voting
Shares    Multiple
Voting
Shares Super
Voting
Shares
As at December 31, 2019
   128,999,964    373,350 402,289
Issuance of shares under business combinations and investments
   238,450    —   —
Distribution of contingent consideration
   2,713,463    —   —
Distribution of deferred shares
   1,220,548    —   —
Issuance of shares for redemption of noncontrolling interests
   1,315,789    —   —
Issuance of shares upon exercise of options and warrants
   71,384    —   —
Issuances of shares upon vesting of RSUs
   901,023    —   —
Exchange of shares
   27,539,300    (252,440 ) (22,953 )




As at September 30, 2020
   162,999,921    120,910 379,336


	Issued and Outstanding
	Subordinate Voting Shares		Multiple Voting Shares			Super Voting Shares
As at December 31, 2020		178,113,221		40,289			312,031
Issuance of common shares pursuant to S-1		4,693,991		—			0
Issuance of shares under business combinations and investments		1,917,214		0			0
Distribution of contingent consideration		412,744		0			0
Distribution of deferred shares		146,315		0			0
Issuance of shares upon exercise of options and warrants		783,415		0			0
Issuances of shares upon vesting of RSUs		307,768		0			0
Shares issued in association with notes payable		8,514		0			0
Shares issued for settlement of business dispute		240,000		0			0
Exchange of shares		1,163,500		(635	)		(11,000	)
As at June 30, 2021		187,786,682		39,654			301,031

~~Issuance of Shares Under Business Combinations and Investments~~

~~MC Brands, LLC~~

~~On June 29, 2020, the Company issued 190,000 Subordinate Voting~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

10. SHARE CAPITAL

(b) Issued and Outstanding(Continued)

(i)

Issuance of Shares ~~with a value of $1,840,009 in connection with the Company’s June 27, 2019 acquisition of MC Brands, LLC. The shares issued resulted in an increase in share capital~~Under Business Combinations and ~~a corresponding increase to intangible assets on the Company’s unaudited interim condensed consolidated balance sheets.~~

Investments

~~KW Ventures, LLC~~

On February 10, 2020, the Company issued 48,450 Subordinate Voting Shares which were issued at a value of $400,413 in connection with its January 1, 2019 acquisition of KW Ventures, LLC. Such shares were held back as part of the transaction and resulted in an increase in share capital and a reduction in accrued liabilities.

GTI New Jersey, LLC

In connection with the Company’s April 23, 2019 acquisition of the non-controlling interest in GTI New Jersey, LLC, the Company agreed to award the previous minority shareholders of the entity up to $3,000,000 in Subordinate Voting Shares. On May 7, 2020, the Company received approval from the New Jersey Department of Health to begin buildout of an additional retail dispensary. As ~~a result,~~of that date, the Company recorded a current obligation ~~and corresponding reduction to contributed surplus~~ of ~~$2,000,000~~$2,000,000 representing the maximum value of the shares to be issuable to the former minority shareholders of GTI New Jersey, LLC. On March 15, 2021, one of the retail dispensaries, located in Paramus, New Jersey, was successfully opened. As a result, the Company issued 30,414 Subordinate Voting Shares to the former minority shareholders of GTI New Jersey, LLC. The shares had a fair value of $1,038,307 on the date of issuance. As of June 30, 2021, and December 31, 2020, the Company carried an obligation of $1,000,000 and $2,000,000, respectively, associated with the retail dispensary agreement with the former minority shareholders of GTI New Jersey, LLC.

(ii)

Distribution of Contingent Consideration

Integral Associates, LLC

In connection with the Company’s 2019 acquisition of Integral Associates, LLC, the purchase agreement included contingent consideration which was dependent upon the awarding of conditional and final dispensary operating licenses. On March 22, 2021, the Company issued 412,744 Subordinate Voting Shares to the former owners of Integral Associates, LLC in connection with the awarding of a final retail dispensary license located in Pasadena, California. The shares had a fair value of $12,672,681 at the date of issuance and resulted in a loss of $8,172,681 which was recorded in other income (expense) in the unaudited interim condensed consolidated statement of operations. In addition, the Company determined that there is a remote likelihood that the Company will obtain retail dispensary operating licenses in either West Hollywood or Culver City, California, under commercially reasonable terms. Consequently, the Company remeasured the contingent liability associated with these milestones which resulted in a reduction to the contingent liability of $7,750,000 with a corresponding reduction to other income (expense) in the unaudited interim condensed consolidated statement of operations.

~~- 24 -~~As of June 30, 2021 and December 31, 2020, the estimated fair value of the contingent consideration associated with the acquisition of Integral Associates, LLC, which was valued using a probability weighting of the potential payouts, was $14,850,000 and $27,100,000, respectively of which $4,950,000, in each period, was recorded as a non-current liability.

(iii)

Distribution of Deferred Shares

For Success Holding Company

As part of the consideration exchanged in the Company’s 2019 acquisition of For Success Holding Company, deferred shares were held back for a period of twenty-four months from the close of the transaction. On February 22, 2021, the Company issued 146,315 Subordinate Voting Shares with a value of $1,825,597 in connection with the Company’s 2019 acquisition of For Success Holding Company. The issuance of the deferred shares represented the final payout to the former owners of For Success Holding Company and resulted in the cancelation of 780 shares valued at $9,732 representing certain reimbursable costs incurred by the Company.

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

~~10.~~

~~SHARE CAPITAL~~ ~~(Continued)~~

10. SHARE CAPITAL (Continued)

~~Distribution of Contingent Consideration~~

(b) Issued and Outstanding(Continued)

(iv)

Issuance of ~~September 30, 2020,~~Registered Shares Pursuant to S-1

On February 8, 2021, the SEC declared effective the Company’s Registration Statement No. 333-248213 on Form S-1 filed on February 2, 2021. Shortly thereafter, the Company ~~issued 2,713,463~~received an offer from a single institutional investor to purchase 3,122,074 of the Subordinate Voting Shares toregistered on the ~~previous owners~~Form S-1 at a price of ~~several entities in connection with acquisitions completed during 2019. Upon issuance,~~$32.03 per share for a total of $100,000,030. The transaction closed on February 9, 2021. On February 23, 2021, the Company ~~recorded~~accepted additional offers to purchase a ~~reduction to contingent consideration payable and an increase in share capital. The following table represents the contingent shares issued as~~total of ~~September 30, 2020 in relation to each acquisition:~~

~~Contingent~~

~~Shares Issued~~

      September 30, 2020
Transaction

Date of Transaction
   Units    Value
Advanced Grow Labs, LLC
   February 12, 2019    1,396,533    $ 11,544,855
For Success Holdings Company
   February 21, 2019    779,690    6,686,432
Integral Associates, LLC
   June 5, 2019    537,240    4,654,526




      2,713,463    $ 22,885,813

~~Distribution of Deferred Shares~~

As a result of several acquisitions that occurred during 2019, the Company held 1,367,643 deferred shares with a value of $16,587,798 as of December 31, 2019. The deferred shares were to be issued upon the passage of twelve to twenty-four months from the close of each transaction as defined within each respective acquisition agreement. On May 15, 2020, Green Thumb issued 101,6951,571,917 Subordinate Voting Shares ~~with~~at a ~~value~~price of ~~$1,307,798~~$35.50 per share, for a total of $55,803,054. The Company intends to use the net proceeds from the sale of securities for general corporate purposes, which may include capital expenditures, working capital and general and administrative expenses. The Company may also use a portion of the net proceeds to acquire or invest in ~~connection with~~business and products that are complimentary to the Company’s ~~May 15, 2019 acquisition of Salveo. On August 12, 2020,~~own business and products. Additionally, the Company ~~issued 472,500 Subordinate Voting Shares with a value~~incurred legal, audit and other professional fees of ~~$5,380,00 in connection with~~$304,944 associated the ~~Company’s February 12, 2019 acquisition~~issuance of ~~Advanced Grow Labs, LLC. Additionally, on August 26, 2020,~~ the Company issued 646,353 Subordinate Voting Shares with a value of $8,064,668 in connection with the Company’s February 21, 2019 acquisition of For Success Holdings Company. The three distributions discussed above resulted in a reduction to deferred share issuances and a corresponding increase to share capital onregistered shares. Such fees have been recorded within contributed surplus (deficit) within the Company’s unaudited interim condensed consolidated statement of ~~changes in~~ shareholders’ equity.

(c)

Stock-Based Compensation

~~(c)~~

~~Stock-Based Compensation~~

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 thereto (as amended, the ~~“Plan”~~“Plan”). The maximum number of Restricted Stock Units (“~~RSUs”~~RSUs”) and options issued under the Plan shall not exceed ~~10%~~10% of the issued and outstanding shares on an as-converted basis.

~~- 25 -~~

~~Green Thumb Industries Inc.~~

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

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

~~10.~~

~~SHARE CAPITAL~~ ~~(Continued)~~

~~(c)~~

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

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 grants generally vest over three years, and options typically have a life of five or 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:

~~Stock~~

~~option activity is summarized as follows:~~


	Number of Shares			Weighted Average Exercise Price C$		Weighted Avereage Remaining Contractual Life		Aggregate Intrinsic Value
Balance as at December 31, 2020		5,664,406			11.91		4.39	$	85,408,034
Granted		1,095,544			37.32		4.66
Exercised		(557,144	)		13.13				10,968,914
Forfeited		(383,443	)		12.59
Balance as at June 30, 2021		5,819,363			16.53		4.05	$	114,062,498
Vested		2,635,677			12.72
Exercisable at June 30, 2021		1,852,007			12.42		4.01	$	42,582,624

   Number of
Shares Weighted Average
Exercise Price
(CAD)    Weighted Average
Contractual Life
(Years)    Aggregate
Intrinsic Value
Balance as at December 31, 2019
   3,839,017 13.21    5.81    $ 218,234
Granted
   2,496,511 9.76    5.00
Exercised
   (65,443 ) 11.02    3.98
Forfeited
   (487,486 ) 13.82    5.22







Balance as at September 30, 2020
   5,782,599 11.69    5.53
Vested
   1,635,030 13.36    6.65
Exercisable at September 30, 2020
   1,516,872 13.22    6.73    $ 4,601,129

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

10. SHARE CAPITAL (Continued)

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 ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, 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 ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. 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 following table summarizes the weighted average grant date fair value and intrinsic value of options exercised for the six months ended June 30, 2021 and 2020:


		Six Months Ended June 30,
		2021			2020
Weighted average grant date fair value (per share) of stock option units granted (C$)	C$		14.80	C$		4.41
Intrinsic value of stock option units exercised, using market price at vest date (US$)	$		10,968,914	$		24,293

The Company used the Black-Scholes option pricing model to estimate the fair value of the options granted during the ~~nine~~six months ended ~~September~~June 30, 2021 and the year ended December 31, 2020, using the following ranges of assumptions:


~~Risk-free interest rate~~			~~0.36% - 2.33%~~
~~Expected dividend yield~~			0%
~~Expected volatility~~			~~80% - 100%~~
~~Expected option life~~			~~3 – 10 years~~


	June 30,	December 31,
	2021	2020
Risk-free interest rate	0.33% - 0.74%	0.31% - 1.37%
Expected dividend yield	0%	0%
Expected volatility	73%	80%
Expected option life	3 - 3.5 years	3 - 5 years

As the Company became publicly traded in June 2018, sufficient historical trading information was not available to determine an expected volatility rate. The volatility rate was based on comparable companies within the same industry.

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

~~- 26 -~~

~~Green Thumb Industries Inc.~~

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

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

~~10.~~

~~SHARE CAPITAL~~ ~~(Continued)~~

~~(c)~~

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

The following table summarizes the number of non-vested RSU awards as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 and the changes during the ~~nine~~six months ended ~~September~~June 30, ~~2020:~~2021:


	Number of Shares			Weighted Average Grant Date Fair Value (CAD)		Number of Shares			Weighted Average Grant Date Fair Value (C$)
Nonvested Shares at December 31, 2019		1,399,762			9.30
Nonvested Shares at December 31, 2020							689,340			16.77
Granted		254,268			12,65		89,666			38.37
Forfeited		(64,500	)		15.60		(79,502	)		14.99
Vested		(901,023	)		14.85		(307,768	)		21.39

Nonvested Shares at September 30, 2020		688,507			16.77
Nonvested Shares at June 30, 2021							391,736			18.55

The following table summarizes the weighted average grant date fair value and total fair value of RSUs vested for the six months ended June 30, 2021 and 2020:


		Six Months Ended June 30,
		2021			2020
Weighted average grant date fair value (per share) of granted (C$)	C$		38.37	C$		10.87
Intrinsic value of RSUs vested, using market price at vest date (US$)	$		9,254,928	$		650,463

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

10. SHARE CAPITAL (Continued)

The stock-based compensation expense for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 was as ~~followed:~~follows:


	For the Three Months Ended				For the Nine Months Ended
	September 30,				September 30,				For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2020		2019		2020		2019		2021		2020		2021		2020
Stock options expense	$	2,614,273	$	1,666,465	$	8,209,557	$	4,248,461	$	3,709,080	$	2,904,127	$	6,337,938	$	5,595,284
RSUs		1,821,054		1,897,630		6,999,963		9,075,622

Restricted Stock Units										1,963,603		2,796,017		3,365,400		5,178,602
Total Stock Based Compensation Expense	$	4,435,634	$	3,564,095	$	15,209,520	$	13,324,083	$	5,672,683	$	5,700,144	$	9,703,338	$	10,773,886

As of ~~September~~June 30, ~~2020, $25,815,117~~2021, $28,327,907 of total unrecognized expense related to ~~Stock Based Compensation~~stock-based compensation awards is expected to be recognized over a weighted-average period of ~~1.93~~2.05 years.

11. INCOME TAXES

~~(d)~~

~~Issuance of Shares for Redemption of Noncontrolling Interest~~

~~On August 8, 2020,~~

The following table summarizes the ~~Company~~Company’s income tax expense and its joint venture partner in Ohio Investors 2017, LLC reached an agreement allowing Green Thumb to purchase the remaining noncontrolling interest in Ohio Investors 2017, LLC from the partner. As a result, on August 31, 2020, the Company issued 1,315,789 Subordinate Voting Shares with a value of $20,078,940 in considerationeffective tax rates for the noncontrolling partner’s interest in Ohio Investors 2017, LLC. Upon the closing of the transaction, the Company recorded a reduction to the current liability established for the purchase of the noncontrolling interest of $11,200,000, an increase in share capital for the fair value of the noncontrolling partners interest of $20,078,940 and a reduction to contributed capital of $8,878,940.

~~11.~~

~~OTHER INCOME (EXPENSE)~~

~~For~~ the three and ~~nine~~six months ended ~~September~~June 30, 2021 and 2020:


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Income before Income Taxes	$	53,301,523		$	3,614,778		$	95,612,669		$	13,000,218
Income Tax Expense		30,026,732			15,378,715			60,882,910			28,527,715
Effective Tax Rate		56.3	%		425.4	%		63.7	%		219.4	%

The Company has computed its provision for income taxes under the discrete method which treats the year-to-date period as if it were the annual period and determines the income tax expense or benefit on that basis. The discrete method is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pre-tax income due to the early growth stage of the business.

The effective tax rate for the three and six months ended June 30, 2021 varies widely from the three and six months ended June 30, 2020, primarily due to the reduction in non deductible expenses as a proportion of total expenses in the current year. The Company incurs expenses that are not deductible due to IRC Section 280E limitations which results in significant income tax expense.

The Company is subject to income taxes in the United States and ~~2019 other~~Canada. Significant judgment is required in evaluating the Company’s uncertain tax positions and determining the provision for income ~~(expense) was comprised~~taxes. The Company’s gross unrecognized tax benefits were approximately $16.8 million and $10.3 million as of June 30, 2021 and December 31, 2020, respectively, recorded within Deferred Income Taxes.

The federal statute of limitation remains open for the ~~following:~~2017 tax year to the present. The state income tax returns generally remain open for the 2016 tax year through the present. Net operating losses arising prior to these years are also open to examination if and when utilized.

   For the Three Months Ended
September 30, For the Nine Months Ended
September 30,
   2020 2019 2020 2019
Fair value adjustments on equity investments
   $ 8,134,213 $ (1,196,676 ) $ 8,117,178 $ (932,983 )
Fair value adjustments on variable note receivable
   —   (5,428,542 ) (815,937 ) (7,424,727 )
Fair value adjustments on warrants issued
   (3,181,114 ) —   (2,060,771 ) —
Fair value adjustments on contingent consideration
   442,991 —   425,426 —
Other
   1,036,793 39,678 1,835,670 388,277


Total Other Income (Expense)
   $ 6,432,883 $ (6,585,540 ) $ 7,501,566 $ (7,969,433 )

Taxes paid during the six months ended June 30, 2021 and 2020 were $75,454,693 and $541,264, respectively.

~~- 27 -~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

~~12.~~

~~COMMITMENTS AND CONTINGENCIES~~

12. OTHER INCOME (EXPENSE)

For the three and six months ended June 30, 2021 and 2020 other income (expense) was comprised of the following:


		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2021				2020				2021				2020
Fair value adjustments on equity investments	$		18,287,762		$		198,572		$		18,679,321		$		(17,035	)
Loss on extinguishment of debt			(9,881,847	)			0				(9,881,847	)			0
Fair value adjustments on variable note receivable			0				(5,600	)			0				(815,937	)
Fair value adjustments on warrants issued			(2,160,079	)			(6,262,500	)			(8,010,750	)			1,120,343
Fair value adjustments on contingent consideration			0				(188,555	)			(412,949	)			(17,565	)
Earnings from equity method investments			1,023,280				300,000				1,646,373				550,000
Other			(438,839	)			240,656				(339,688	)			248,877
Total Other Income (expense)	$		6,830,277		$		(5,717,427	)	$		1,680,460		$		1,068,683

13. 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 of operations.

(a)

Contingencies

~~(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. While management believes that the Company is in compliance with applicable local and state regulations at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, cannabis and other regulations continue to evolve and are subject to differing interpretations. As a result, the Company may be subject to regulatory fines, penalties, or restrictions in the future.

(b)

Claims and Litigation

~~(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. At ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, there were no0 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.

(c)

Construction Commitments

~~(c)~~

~~Construction Commitments~~

As of ~~September~~June 30, ~~2020,~~2021, the Company held approximately ~~$25,600,000~~$48,510,000 of open construction commitments to contractors ~~primarily associated with improvements~~on work being ~~made~~performed.

Green Thumb Industries Inc.

Notes to one of the Company’s cultivation and processing facilities. The Company expects to be reimbursed for approximately $22,500,000 of the open commitment as part of its sale and lease back agreement with IIP.Unaudited Interim Condensed Consolidated Financial Statements

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

~~13.~~

~~FAIR VALUE MEASUREMENTS~~

14. 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.

~~- 28 -~~

~~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~~ ~~(Continued)~~

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.

Financial Instruments

~~Financial~~

~~Instruments~~

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, ~~notes receivable, due from related parties,~~ investments, accounts payable and accrued liabilities, notes payable, ~~derivative~~warrant liability, ~~liability for acquisition of noncontrolling interest~~ and contingent consideration payable.

For the Company's long-term notes payable (which consist of charitable contributions, private placement debt and mortgage notes), for which there were no quoted market prices or active trading markets, it was not practicable to estimate the fair value of these financial instruments. The carrying amount of notes payable at June 30, 2021 and December 31, 2020 was $197,617,846 and $99,054,979, which includes $581,436 and $341,983, 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 September 30, 2020
	Level 1		Level 2		Level 3			Total			As of June 30, 2021
											Level 1		Level 2		Level 3			Total
Cash and Cash Equivalents	$	78,091,073	$	—	$	—		$	78,091,073		$	359,188,735	$	0	$	0		$	359,188,735
Investments		675,594		—		21,535,406			22,210,999			33,667,924		0		8,057,479			41,725,403
Liability of Redemption of Noncontrolling Interest		—		—		—			—
Contingent Consideration Payable		—		—		(36,315,360	)		(36,315,360	)		0		0		(14,850,000	)		(14,850,000	)
Warrant Liability		—		—		(18,513,000	)		(18,513,000	)		0		0		(47,464,750	)		(47,464,750	)
											$	392,856,659	$	0	$	(54,257,271	)	$	338,599,388
	$	78,766,667	$	—	$	(33,292,954	)	$	45,473,712


	As of December 31, 2019
	Level 1		Level 2		Level 3			Total			As of December 31, 2020
											Level 1		Level 2		Level 3			Total
Cash and Cash Equivalents	$	46,667,334	$	—	$	—		$	46,667,334		$	83,757,785	$	0	$	0		$	83,757,785
Notes Receivable		—		—		815,937			815,937
Investments		—		—		14,068,821			14,068,821			923,581		0		39,871,225			40,794,806
Liability of Redemption of Noncontrolling Interest		—		—		(5,500,000	)		(5,500,000	)
Contingent Consideration Payable		—		—		(58,936,739	)		(58,936,739	)		0		0		(27,100,000	)		(27,100,000	)
Warrant Liability		—		—		(15,879,843	)		(15,879,843	)		0		0		(39,454,000	)		(39,454,000	)
											$	84,681,366	$	0	$	(26,682,775	)	$	57,998,591
	$	46,667,334	$	—	$	(65,431,824	)	$	(18,764,490	)

As of December 31, ~~2019,~~2020, the Company held an ~~equity~~ investment in a privately held entity that ~~was subsequently acquired by~~became a publicly traded ~~entity~~company during the ~~third quarter of 2020.~~three months ended June 30, 2021. As a result, ~~of the acquisition,~~ the Company received shares of the ~~acquiring~~publicly traded entity in exchange for the shares in the privately held entity. ~~Further, the~~The transaction resulted in a transfer of the investment from Level 3 to Level 1. As of ~~September~~June 30, 2021 and December 31, 2020 the fair value of the ~~Level 1~~ investment was ~~$675,594.~~$32,653,878 and $37,249,189, respectively.

~~- 29 -~~There were 0 transfers between fair value levels during the six months ended June 30, 2020.

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

~~14.~~

~~VARIABLE INTEREST ENTITIES~~

15. VARIABLE INTEREST ENTITIES

The following table presents the summarized financial information about the Company’s consolidated variable interest entities (“~~VIEs”~~VIEs”) which are included in the unaudited interim condensed consolidated balance ~~sheets~~sheet as of ~~September~~June 30, ~~2020~~2021 and the consolidated balance sheet as of December 31, ~~2019:~~2020. All of these entities were determined to be VIEs as the Company possesses the power to direct activities through management services agreements (“MSAs”):


														June 30, 2021						December 31, 2020
	September 30, 2020						December 31, 2019							Chesapeake Alternatives,		Illinois		Other Non-material		Chesapeake Alternatives,		Illinois		Other Non-material
	Chesapeake Alternatives, LLC		Illinois Disp, LLC		Other Non-material VIEs		Chesapeake Alternatives, LLC		Illinois Disp, LLC		Other Non-material VIEs			LLC		Disp, LLC		VIEs		LLC		Disp, LLC		VIEs
Current assets	$	29,728,652	$	2,489,118	$	2,261,685	$	19,455,533	$	1,381,716	$	1,352,935		$	0	$	5,048,014	$	2,456,440	$	32,307,718	$	3,738,868	$	2,362,572
Non-current assets		3,041,401		3,752,645		2,353,991		22,384,663		3,083,659		2,534,297			0		3,465,136		2,140,394		3,367,360		3,657,392		2,281,839
Current liabilities		21,228,691		898,661		1,108,292		14,219,204		149,498		783,682			0		1,194,653		425,822		23,362,255		336,970		1,563,224
Non-current liabilities		785,724		473,136		802,823		1,169,989		137,736		855,440			0		438,213		741,753		768,573		461,926		783,356
Equity attributable to noncontrolling interests		298,252		2,309,983		85,561		350,206		2,089,071		(22,488	)
Noncontrolling interests															0		3,440,142		509,624		0		3,173,683		267,289
Equity attributable to Green Thumb Industries Inc.		10,457,386		2,309,983		2,619,001		6,645,263		2,089,070		2,270,598			0		3,440,142		2,919,635		11,544,250		3,173,683		2,030,542

On December 31, 2020, the MSA for Chesapeake Alternatives, LLC was amended and restated to make GTI Maryland, LLC, the sole member of the entity. As a result, the remaining equity associated with the noncontrolling interest was closed to share capital of Green Thumb as of December 31, 2020.

The Following tables presents the summarized financial information about the Company’s VIEs which are included in the unaudited interim condensed consolidated statements of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:

   Three Months Ended
   September 30, 2020    September 30, 2019
   Chesapeake
Alternatives, LLC    Illinois Disp, LLC    Other Non-material
VIEs    Chesapeake
Alternatives, LLC Illinois
Disp, LLC    Other Non-material
VIEs
Revenues
   $ 5,684,349    $ 5,224,583    $ 2,695,781    $ 4,369,436 $ 1,620,065    $ 689,097
Net income (loss) attributable to noncontrolling interests
   26,134    897,494    185,452    1,807,394 185,930    (1,624,850 )
Net income (loss) attributable to Green Thumb Industries Inc.
   1,033,650    897,494    294,969    (971,880 ) 185,931    1,059,653










Net income (loss)
   $ 1,059,784    $ 1,794,988    $ 480,421    $ 835,514 $ 371,860    $ (565,197 )


	Three Months Ended
	June 30, 2021						June 30, 2020
	Chesapeake Alternatives,		Illinois		Other Non-material		Chesapeake Alternatives,		Illinois		Other Non-material
	LLC		Disp, LLC		VIEs		LLC		Disp, LLC		VIEs
Revenues	$	0	$	6,216,536	$	3,822,263	$	4,799,732	$	5,164,316	$	2,370,069
Net income attributable to noncontrolling interests		0		858,411		364,389		139,386		909,302		96,880
Net income attributable to Green Thumb Industries Inc.		0		858,411		473,408		1,639,408		909,301		306,999
Net income	$	0	$	1,716,822	$	837,797	$	1,778,794	$	1,818,603	$	403,879

	Six Months Ended
	June 30, 2021						June 30, 2020
	Chesapeake Alternatives,		Illinois		Other Non-material		Chesapeake Alternatives,		Illinois		Other Non-material
	LLC		Disp, LLC		VIEs		LLC		Disp, LLC		VIEs
Revenues	$	0	$	11,943,810	$	7,133,546	$	9,108,361	$	7,945,931	$	4,082,719
Net income attributable to noncontrolling interests		0		1,641,459		667,643		180,795		1,273,418		134,059
Net income attributable to Green Thumb Industries Inc.		0		1,641,458		889,096		2,778,471		1,273,418		366,372
Net income	$	0	$	3,282,917	$	1,556,739	$	2,959,266	$	2,546,836	$	500,431

   Nine Months Ended
   September 30, 2020    September 30, 2019
   Chesapeake
Alternatives, LLC    Illinois Disp, LLC    Other Non-material
VIEs    Chesapeake
Alternatives, LLC    Illinois Disp, LLC    Other Non-material
VIEs
Revenues
   $ 14,792,710    $ 13,170,514    $ 6,778,501    $ 12,458,427    $ 4,174,045    $ 2,373,042
Net income (loss) attributable to noncontrolling interests
   206,929    2,170,912    319,511    2,244,546    506,972    (2,307,097 )
Net income (loss) attributable to Green Thumb Industries Inc.
   3,812,121    2,170,913    661,341    —      506,972    —












Net income (loss)
   $ 4,019,050    $ 4,341,825    $ 980,852    $ 2,244,546    $ 1,013,943    $ (2,307,097 )

As of ~~September~~June 30, 2021 and 2020, and December 31, ~~2019,~~2020, VIEs included in the Other Non-material VIEs are Bluepoint Wellness of Westport LLC and Meshow, LLC. ~~As of September 30, 2019, VIEs included~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

(Amounts Expressed in the Other Non-material VIEs are Meshow, LLC, KW Ventures Holdings, LLC and Ohio Investors 2017, LLC. All of these entities were determined to be VIEs as the Company possesses the power to direct activities through management services agreements.United States Dollars, Except Where Stated Otherwise)

~~15.~~

~~SEGMENT REPORTING~~

16. SEGMENT REPORTING

The Company operates in two segments: the cultivation, production and sale of cannabis products to retail stores (“Consumer Packaged ~~Goods”~~Goods”) and retailing of cannabis to patients and consumers (“~~Retail”~~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.

~~- 30 -~~

~~Green Thumb Industries Inc.~~

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

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

~~15.~~

~~SEGMENT REPORTING~~ ~~(Continued)~~

The below table presents revenues by type for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Revenues, Net of Discounts
Consumer Packaged Goods	$	74,702,069		$	35,093,858		$	177,355,614		$	71,651,968		$	117,863,490		$	56,331,517		$	221,940,928		$	102,653,545
Retail		111,948,115			43,532,286			275,451,137			85,501,646			150,115,879			87,541,572			280,224,597			163,503,022
Intersegment Eliminations		(29,546,343	)		(10,635,237	)		(73,460,384	)		(16,522,767	)		(46,107,557	)		(24,233,165	)		(85,863,129	)		(43,914,041	)

Total Revenues, net of discounts	$	157,103,841		$	67,990,907		$	379,346,367		$	140,630,847		$	221,871,812		$	119,639,924		$	416,302,396		$	222,242,526

Depreciation and Amortization
Consumer Packaged Goods	$	10,029,857		$	7,226,614		$	33,089,808		$	16,100,635		$	8,412,964		$	7,571,575		$	16,413,911		$	15,165,941
Retail		1,505,019			687,199			5,309,152			1,428,256			6,660,028			6,668,338			13,652,502			11,779,144
Intersegment Eliminations		—			—			—			—			0			0			0			0

Total Depreciation and Amortization	$	11,534,876		$	7,913,813		$	38,479,960		$	17,528,891		$	15,072,992		$	14,239,913		$	30,066,413		$	26,945,085

Income Taxes
Consumer Packaged Goods	$	12,928,449		$	1,072,333		$	23,553,449		$	1,761,333		$	13,206,447		$	6,398,000		$	30,493,541		$	10,625,000
Retail		15,507.883			5,128,000			33,410,598			9,028,000			16,820,285			8,980,715			30,389,369			17,902,715
Intersegment Eliminations and Corporate		—			(2,576,000	)		—			(6,083,333	)

Intersegment Eliminations														0			0			0			0
Total Income Taxes	$	28,436,332		$	3,624,333		$	56,964,047		$	4,706,000		$	30,026,732		$	15,378,715		$	60,882,910		$	28,527,715

Goodwill assigned to the Consumer Packaged Goods segment as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 was ~~$252,016,532~~$284,130,932 and ~~$255,211,232,~~$252,016,532, respectively. Intangible assets, net assigned to the Consumer Packaged Goods segment as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 was ~~$215,986,854~~$222,098,783 and ~~$228,244,254,~~$211,303,718, respectively.

Goodwill assigned to the Retail segment as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 was ~~$121,065,184~~$138,709,535 and ~~$119,873,759,~~$130,680,935, respectively. Intangible assets, net assigned to the Retail segment as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 was ~~$193,668,663~~$189,439,317 and ~~$207,002,644,~~$194,938,316, 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 22 reporting units. The Company determined its reporting units by first reviewing the operating segments based on the geographic areas in which Green Thumb conducts business (or each market). The markets were then further divided into reporting units based on the market operations (Retail and Consumer Packaged Goods) which were primarily determined based on the licenses each market holds. All revenues are derived from customers domiciled in the United States and all assets are located in the United States.

~~- 31 -~~

Green Thumb Industries Inc.

Notes to Unaudited Interim Condensed Consolidated Financial Statements

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

17. SUBSEQUENT EVENTS

(a) Virginia

On July 1, 2021, the Company acquired Dharma Pharmaceuticals LLC ("Dharma") a Virginia-based medical cannabis cultivator, processor and retailer for approximately $17 million in cash and 2,298,779 Subordinate Voting Shares valued at approximately $76 million (including 229,878 deferred shares) based on the fair value of the securities on their date of issuance, which was the closing price of Green Thumb's Subordinate Voting Shares as traded on the CSE on the date of the transaction. In addition, the purchase agreement also included contingent consideration up to $65 million in shares of Green Thumb and is dependent upon the achievement of certain milestones. To date, the Company has issued $6 million in shares to the former owners of Dharma associated with the achievement of one of the milestones. The Company has not yet completed the valuation of the acquired entity or related purchase accounting for the transaction.

(b) Rhode Island

On August 1, 2021, the Company acquired Mobley Pain Management and Wellness Center LLC and Canwell Processing LLC, both of which have contractual interests in Summit Medical Compassion Center, Inc. a non-profit with vertically integrated cannabis operations in Rhode Island. Green Thumb exchanged 2,387,807 Subordinate Voting Shares valued at approximately $71 million (including 303,599 deferred shares) based on the fair value of the securities on their date of issuance, which was the closing price of Green Thumb's Subordinate Voting Shares as traded on the CSE on the date of the transaction. The Company has not yet completed the valuation of the acquired entity or related purchase accounting for the transaction.

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

This management discussion and analysis (“MD~~&A”~~&A”) of the financial condition and results of operations of Green Thumb Industries Inc. (the ~~“Company”~~“Company” or ~~“Green Thumb”~~“Green Thumb”) is for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020. It is supplemental to, and should be read in conjunction with, the Company’s unaudited interim condensed consolidated financial statements as of ~~September~~June 30, ~~2020~~2021 and the consolidated financial statements for the year ended December 31, ~~2019~~2020 included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 filed with the U.S. Securities and Exchange Commission on ~~April 15, 2019~~March 18, 2021 (the ~~“2019~~“2020 Form ~~10-K”~~10-K”) and the accompanying notes for each respective ~~periods.~~period. The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“~~GAAP”~~GAAP”). Financial information presented in this MD&A is presented in United States dollars (“$” or ~~“US$~~“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 ~~“Cautionary Note~~“Disclosure Regarding Forward-Looking ~~Information,~~Statements,” identified in the ‘‘Risks and Uncertainties’’ section of this MD&A and in Part II, Item 1A, “Risk Factors.” As a result of many factors, the Company’s actual results may differ materially from those anticipated in these forward-looking statements and information.

COVID-19 Considerations

In March 2020, the World Health Organization categorized coronavirus disease 2019 ~~(“COVID-19”~~(together with its variants “COVID-19”) as a pandemic. COVID-19 continues to spread throughout the U.S. and other countries across the world, and the duration and severity of its effects and those of its variants are currently unknown. The Company continues to implement and evaluate actions to strengthen its financial position and support the continuity of its business and operations in the face of this pandemic and other events.

The Company’s priorities during the COVID-19 pandemic are protecting the health and safety of its employees and its customers, following the recommended actions of government and health authorities. In the future, the pandemic may cause reduced demand for the Company’s products and services if, for example, the pandemic results in a recessionary economic environment or potential new restrictions on business operations or the movement of individuals. However, given the Company’s operations have to date been deemed “essential” services in the states in which it does business, the Company believes that there will continue to be strong demand for Green Thumb products.

Operations of the Company are currently ongoing as the cultivation, processing and sale of cannabis products is currently considered an “essential” business by all states in which the Company operates with respect to all customers. The Company’s ability to continue to operate without any significant negative operational impact from the COVID-19 pandemic and any of its variants will in part depend on the Company’s ability to protect its employees, customers and supply chain and its continued designation as “essential” in states where it does business that currently or in the future impose restrictions on business operations.

The pandemic has not materially impacted the Company’s business operations or liquidity position to date. The Company continues to generate operating cash flows to meet its short-term liquidity needs. In all locations where applicable regulations limiting in-store retail activity have been enacted by governmental authorities, the Company has expanded consumer delivery options and curbside pickup to help further protect the health and safety of Green Thumb employees and customers.

~~While during~~

During the first ~~nine~~six months of ~~2020~~2021 the Company’s revenue, gross profit and operating income were not negatively impacted by COVID-19 and the Company generally maintained the consistency of its ~~operations,~~operations. However, the uncertain nature of the spread of COVID-19 and its variants may impact its business operations for reasons including the potential quarantine of Green Thumb employees or those of its supply chain partners and ~~our~~its continued designation as “essential” in states where ~~we do~~it does business that currently or in the future impose restrictions on business operations.

~~- 32 -~~

For additional information on risk factors related to the pandemic or other risks that could impact Green Thumb’s results, please refer to “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

OVERVIEW OF THE COMPANY

Established in 2014 and headquartered in Chicago, Illinois, Green Thumb, ~~is promoting~~a national cannabis consumer packaged goods company and retailer promotes well-being through the power of cannabis while being committed to community and sustainable profitable growth. As of ~~September~~June 30, ~~2020,~~2021, Green Thumb has operations across 12 U.S. markets, employs approximately ~~2,000~~2,850 people and serves ~~hundreds of thousands~~millions of patients and customers ~~quarterly.~~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 Beboe, Dogwalkers, Dr. Solomon’s, incredibles ~~Rhythm,~~ and ~~The Feel Collection.~~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 1314 manufacturing facilities. This portfolio consists of stock keeping units (“~~SKUs”~~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 throughout the 12 U.S. markets Green Thumb operates including Green Thumb’s own Rise and Essence dispensaries.

Green Thumb owns and operates a national cannabis retail chain called Rise™, and in the Las Vegas, Nevada ~~area,~~and Pasadena, California areas, a chain of stores called Essence, which are 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, ~~we own~~Green Thumb owns stores under other names, primarily where we co-own the stores or naming is subject to licensing or similar restrictions. The income from Green Thumb’s retail stores is primarily 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 eight of the states in which we operate (including Nevada). The Essence stores were acquired in connection with the 2019 acquisition of Integral Associates and are located in ~~Nevada.~~Nevada and beginning in March 2021, California. The Essence stores differ from the Rise stores mainly in geographic location. As of ~~September~~June 30, ~~2020,~~2021, the Company had 4858 open and operating retail locations. 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 and the evolving situation with respect to the COVID-19 as described above and under the heading “Liquidity, Financing Activities During the Period, and Capital Resources” below.

~~Revenue Streams~~

The Company has consolidated financial statements across its operating businesses with revenue from the manufacture, sale and distribution of branded cannabis products to third-party retail customers as well as the sale of finished products to consumers in its retail stores.

As of September 30, 2020, Green Thumb has revenue in its 12 markets (California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio and Pennsylvania).

~~- 33 -~~

Results of Operations – Consolidated

The following table sets forth the Company’s selected consolidated financial ~~data~~results for the periods, and as of the dates, indicated. The (i) unaudited condensed consolidated statements of operations for the three and ~~nine~~six months ended ~~September~~June 30, 2021 and 2020 and ~~2019 and~~ (ii) unaudited interim condensed consolidated balance sheet ~~data~~ as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 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 Report.

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.


	As of and for the												Three Months Ended June 30,						Six Months Ended June 30,						QTD Change				YTD Change
	Three Months Ended September 30,						Nine Months Ended September 30,						2021			2020			2021			2020			$			%	$			%
	2020			2019			2020			2019
Total Revenues, net of discounts	$	157,103,841		$	67,990,907		$	379,346,367		$	140,630,847
Revenues, net of discounts													$	221,871,812		$	119,639,924		$	416,302,396		$	222,242,526		$	102,231,888		85%	$	194,059,870		87%
Cost of Goods Sold, net	$	(70,146,676	)	$	(35,849,783	)	$	(175,707,874	)	$	(74,196,750	)		(98,960,988	)		(55,946,010	)		(182,526,072	)		(105,561,198	)		(43,014,978	)	(77)%		(76,964,874	)	(73)%
Gross Profit	$	86,957,165		$	32,141,124		$	203,638,493		$	66,434,097			122,910,824			63,693,914			233,776,324			116,681,328			59,216,910		93%		117,094,996		100%
Total Expenses	$	49,745,979		$	30,764,406		$	144,823,947		$	88,013,769			72,055,473			49,643,211			131,386,724			95,077,968			22,412,262		45%		36,308,756		38%
Other Income (Expense)	$	1,978,155		$	(12,090,321	)	$	(6,624,987	)	$	(18,431,422	)
Net Income (Loss) Attributable to Green Thumb	$	9,643,929		$	(14,590,793	)	$	(7,471,840	)	$	(45,045,898	)
Income From Operations														50,855,351			14,050,703			102,389,600			21,603,360			36,804,648		262%		80,786,240		374%
Total Other Income (Expense)														2,446,172			(10,435,925	)		(6,776,931	)		(8,603,142	)		12,882,097		123%		1,826,211		21%
Income Before Provision for Income Taxes and Non-Controlling Interest														53,301,523			3,614,778			95,612,669			13,000,218			49,686,745		1,375%		82,612,451		635%
Provision for Income Taxes														30,026,732			15,378,715			60,882,910			28,527,715			14,648,017		95%		32,355,195		113%
Net Income (Loss) Before Non-Controlling Interest														23,274,791			(11,763,937	)		34,729,759			(15,527,497	)		35,038,728		298%		50,257,256		324%
Net Income Attributable to Non-Controlling Interest														1,222,800			1,145,568			2,309,102			1,588,272			77,232		7%		720,830		45%
Net Income (Loss) Attributable to Green Thumb Industries Inc.													$	22,051,991		$	(12,909,505	)	$	32,420,657		$	(17,115,769	)	$	34,961,496		271%	$	49,536,426		289%
Net Income (Loss) per share – basic													$	0.10		$	(0.06	)	$	0.15		$	(0.08	)	$	0.16		263%	$	0.23		282%
Net Income (Loss) per share – diluted													$	0.10		$	(0.06	)	$	0.15		$	(0.08	)	$	0.16		259%	$	0.23		278%
Weighted average number of shares outstanding – basic														220,323,622			209,902,732			218,276,376			209,185,544
Weighted average number of shares outstanding –diluted														224,843,155			209,902,732			222,927,120			209,185,544


	As of
	September 30, 2020		December 31, 2019		June 30, 2021		December 30, 2020
Total Assets	$	1,254,614,447	$	1,167,536,624	$	1,792,634,415	$	1,358,549,162
Long-Term Liabilities	$	268,639,338	$	212,960,693	$	458,115,004	$	325,101,386

Three Months Ended ~~September~~June 30, ~~2020~~2021 Compared to the Three Months Ended ~~September~~June 30, ~~2019~~2020

Revenues, net of Discounts

Revenue for the three months ended ~~September~~June 30, ~~2020~~2021 was ~~$157,103,841,~~$221,871,812, up ~~131%~~85% from ~~$67,990,907~~$119,639,924 for the three months ended ~~September~~June 30, ~~2019~~2020 driven by contributions from both Retail and Consumer Packaged Goods, largely due to continued growth in Illinois and Pennsylvania. Key performance drivers for the quarter are: launch of Cookies brand of cannabis products in Nevada, increased store traffic to Green Thumb’s open and operating retail stores, particularly in Illinois, and ~~Pennsylvania.~~Pennsylvania and new store openings including acquired stores, particularly in Pennsylvania, Illinois and Connecticut. The Company generated revenue from 4858 Retail locations during the quarter compared to 3248 in the same quarter of the prior year. During the three months ended ~~September~~June 30, ~~2020,~~2021, the Company ~~did not open any~~acquired two new stores ~~whereas during the same period~~ in ~~2019, the Company opened 4 stores and acquired 3 stores.~~Massachusetts. Since ~~September~~June 30, ~~2019,~~2020, the Company acquired one retail store in Connecticut and two in Massachusetts that contributed to the increase in Retail revenues and opened 15seven new Retail locations in Pennsylvania, ~~Florida,~~ Illinois, ~~Ohio, Nevada, Connecticut~~California, Florida and New Jersey.

The key driver for the Consumer Packaged Goods revenue increase was the opening of one cultivation and processing facility in Illinois as well as the expansion of sales of Green Thumb’s branded product portfolio to third-party retailers through the Company’s existing Consumer Packaged Goods cultivation and processing facilities in Illinois, Pennsylvania, Massachusetts, Maryland, Nevada, New Jersey and ~~Maryland~~Connecticut due to increased scale and efficiency. The Company also added one cultivation and processing facility through the acquisition of Liberty during the three months ended June 30, 2021.

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 ~~September~~June 30, ~~2020~~2021 was ~~$70,146,676,~~$(98,960,988), up ~~96%~~(77)% from ~~$35,849,783~~$(55,946,010) for the three months ended ~~September~~June 30, ~~2019,~~2020, driven by increased volume in open and operating retail stores; new and acquired retail store openings in Pennsylvania, Illinois and ~~Pennsylvania~~Connecticut and expansion of the consumer products sales primarily in Illinois, Pennsylvania, Massachusetts, Maryland, Nevada and ~~Maryland~~Connecticut as described above.

~~- 34 -~~32

Gross Profit

Gross profit for the three months ended ~~September~~June 30, ~~2020~~2021 was ~~$86,957,165,~~$122,910,824, 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 55%. This is compared to gross profit for the three months ended ~~September~~June 30, ~~2019~~2020 of ~~$32,141,124~~$63,693,914 or a ~~47%~~53% gross margin. The Company’s increase in gross margin percentage was mainly attributed to expanded capacity in the Company’s Consumer Packaged Goods segment. The increase in gross profit (dollars) was directly attributable to the revenue increase as described above.

Total Expenses

Total expenses for the three months ended ~~September~~June 30, ~~2020~~2021 were ~~$49,745,979~~$72,055,473 or 32% of ~~total~~ revenues, net of discounts, resulting in an increase of ~~$18,981,573.~~$22,412,262. Total expenses for the three months ended ~~September~~June 30, ~~2019~~2020 were ~~$30,764,406~~$49,643,211 or ~~45%~~41% of ~~total~~ revenues, net of discounts.

The increase in total expenses was attributable to Retail salaries and benefits, depreciation expense and other operational and facility expenses mainly as a result of the Company’s addition of 16seven new and three acquired retail facilities over the prior year period. In addition, an increase in intangible amortization expense and corporate staff salaries ~~and non-cash equity incentive compensation expense~~ also contributed to the overall increase in total expenses. The reduction in expenses as a percent of revenue was attributable to measures deployed to control variable expenses as well as inherent operating leverage caused by the significant increase in revenue.

Total Other Income (Expense)

Total other income (expense) for three months ended ~~September~~June 30, ~~2020~~2021 was ~~$1,978,155, an increase~~$2,446,172, a change of ~~$14,068,476,~~$12,882,097, mainly due to ~~favorable~~unfavorable fair value adjustments ~~recorded in~~associated with the Company’s warrant liability during the three months ended June 30, 2020.

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

Net operating income before provision for income taxes and non-controlling interest for three months ended ~~September~~June 30, ~~2020~~2021 was ~~$39,189,341,~~$53,301,523, an increase of ~~$49,902,944~~$49,686,745 compared to the three months ended ~~September~~June 30, ~~2019.~~2020.

As presented under the heading “Non-GAAP Measures” below, after adjusting for non-cash equity incentive compensation of ~~$4,435,634,~~$5,672,683 and $5,700,144, adjusted operating EBITDA was ~~$53,181,696~~$79,284,415 and ~~$13,786,391~~$35,412,711 for the three months ended ~~September~~June 30, 2021 and 2020, ~~and 2019,~~ 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 ~~September~~June 30, ~~2020,~~2021, federal and state income tax expense totaled ~~$(28,436,332)~~$30,026,732 compared to expense of ~~$(3,624,333)~~$15,378,715 for the three months ended ~~September~~June 30, ~~2019.~~2020.

~~The effective tax rate for the three months ended September~~

Six Months Ended June 30, ~~2020 varies widely from the three months ended September 30, 2019 primarily due~~2021 Compared to the change from pre-tax loss in 2019 to pre-tax income in 2020. The large amount of nondeductible expenses incurred by the Company being subjected to Internal Revenue Code (“IRC”) Section 280E, was the driver for income tax expense being incurred in a pre-tax loss quarter for 2019.

~~- 35 -~~

~~Nine~~Six Months Ended ~~September~~June 30, 2020 ~~Compared with Nine Months Ended September 30, 2019~~

~~Revenue,~~Revenues, net of Discounts

Revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~$379,346,367~~$416,302,396, up ~~170%~~87% from ~~$140,630,847~~$222,242,526 for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 driven by contributions from both Retail and Consumer Packaged Goods, largely due to growth in Illinois and Pennsylvania. Key performance drivers for the period are: launch of Cookies brand of cannabis products in Nevada and increased store traffic to Green Thumb’s open and operating retail stores, particularly in Illinois and ~~Pennsylvania.~~Pennsylvania and new and acquired store openings, particularly in Pennsylvania, Illinois and Connecticut. The Company generated revenue from 4858 Retail locations during the quarter compared to 3248 in the same quarter of the prior year. During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, the Company opened 9five new stores ~~as compared to 11 new stores opened~~ and ~~7 stores~~ acquired ~~during the same period in 2019.~~two stores. Since ~~September~~June 30, ~~2019,~~2020, the Company acquired one retail store in Connecticut and two in Massachusetts that contributed to the increase in Retail revenues and opened 15seven new Retail locations in Pennsylvania, ~~Florida,~~ Illinois, ~~Ohio, Nevada, Connecticut,~~California, Florida, and New Jersey.

The key ~~drivers~~driver for the Consumer Packaged Goods revenue increase was the opening of one cultivation and processing facility in Illinois as well as expansion of sales of Green Thumb’s branded product portfolio to third-party retailers through the Company’s existing Consumer Packaged Goods cultivation and processing facilities in Illinois, Pennsylvania, Massachusetts, Maryland, Nevada ~~Massachusetts~~ and ~~Connecticut~~New Jersey due to increased scale and efficiency. The Company also added one cultivation and processing facility through the acquisition of Liberty during the three months ended June 30, 2021.

Cost of Goods Sold, net

Cost of goods sold are derived from ~~cost~~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 and from retail purchases made from other licensed producers operating within our state markets.~~

cannabis. Cost of goods sold for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~$175,707,874,~~$182,526,072, up ~~137%~~73% from ~~$101,511,125~~$105,561,198 for the ~~nine~~six months ended ~~September~~June 30, ~~2019,~~2020, driven by increased volume in open and operating retail stores; new retail store openings in ~~Illinois,~~ Pennsylvania and ~~Nevada;~~Illinois and expansion of the consumer products sales primarily in Illinois, Pennsylvania, Massachusetts, Maryland, Nevada ~~Massachusetts~~ and ~~Connecticut.~~Connecticut as described above.

Gross Profit

Gross profit for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~$203,638,493,~~$233,776,324, representing a gross margin on the sale of ~~finished~~branded cannabis ~~consumer~~flower and processed and packaged ~~goods~~products including concentrates, edibles, topicals and other cannabis products, of ~~54%~~56%. This is compared to gross profit for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 of ~~$66,434,097~~$116,681,328 or a ~~47%~~53% gross margin. The Company’s increase in gross margin percentage was mainly attributed to ~~an overall increase~~expanded capacity in ~~Retail sales as a proportion of total sales. In addition,~~the Company’s Consumer Packaged Goods ~~also contributed to the increase in gross profit through expanded capacity.~~segment. The increase in gross profit was directly attributable to the revenue increase as ~~further~~ described above.

Total Expenses

Total expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were ~~$144,823,947~~$131,386,724 or ~~38%~~32% of ~~total~~ revenues, net of ~~discounts.~~discounts, resulting in an increase of $36,308,756. Total expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 were ~~$88,013,769~~$95,077,968 or ~~63%~~43% of ~~Total Revenues,~~revenues, net of discounts.

The increase in total expenses was attributable to ~~retail~~Retail salaries and benefits, depreciation expense and other operational and facility expenses mainly as a result of the Company’s addition of seven new and three acquired retail ~~facilities.~~facilities over the prior year period. In addition, an increase in intangible amortization expense ~~back-office personnel costs~~ and ~~non-cash equity incentive compensation expense~~corporate staff salaries also contributed to the overall increase in total expenses. The reduction in expenses as a percent of revenue was attributable to measures deployed to control variable expenses as well as inherent operating leverage caused by the significant increase in revenue.

~~- 36 -~~

Total Other Income (Expense)

Total other ~~expense~~income (expense) for ~~the nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~($6,624,987), compared to expense~~$6,776,931 a change of ~~($18,431,422), for the nine months ended September 30, 2019,~~$1,826,211, mainly due to ~~favorable fair value adjustments recorded~~a reduction in ~~2020.~~interest expense as a result of the Company's April 30, 2021 refinancing and an increase in earnings on the Company's equity method investments.

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

Net operating income before provision for income taxes and non-controlling interest for ~~the nine~~six months ended ~~September~~June 30, ~~2020~~2021 was ~~$52,189,559~~$95,612,669, an increase of $82,612,451 compared to ~~loss of ($40,011,094) for~~ the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

As presented under the heading “Non-GAAP Measures” below, after adjusting for non-cash equity incentive compensation of ~~$15,209,520 as described above, as well as other non-operating items,~~$9,703,338 and $10,773,886, adjusted operating EBITDA was ~~$114,139,331~~$150,639,696 and ~~$13,955,329~~$60,957,635 for the ~~nine~~three and six months ended ~~September~~June 30, 2021 and 2020, ~~and 2019,~~ 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 ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, federal and state income tax expense totaled ~~$56,964,047~~$60,882,910 compared to ~~$4,706,000~~expense of $28,527,715 for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

The net expense of $56,964,047 for the nine months ended September 30, 2020 includes current tax expense of $52,587,047 and deferred tax expense of $4,377,000 in the current period. The deferred tax benefit is mainly driven by changes in the fair value of investments and amortization of intangibles.

Results of Operation by Segment

The following table summarizes revenues net of sales discounts by segment for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019:~~2020:


	Three Months Ended September 30,												Three Months Ended June 30,
	2020			2019			$ Change			% Change			2021			2020			$ Change			% Change
Consumer Packaged Goods	$	74,702,069		$	35,093,857		$	39,608,212			113	%	$	117,863,490		$	56,331,517		$	61,531,973			109	%
Retail		111,948,115			43,532,288			68,415,827			157	%		150,115,879			87,541,572			62,574,307			71	%
Intersegment Eliminations		(29,546,343	)		(10,635,238	)		(18,911,105	)		n.m.			(46,107,557	)		(24,233,165	)		(21,874,392	)		90	%

Total Revenues, Net of Discounts	$	157,103,841		$	67,990,907			89,112,934			131	%	$	221,871,812		$	119,639,924		$	102,231,888			85	%


	Nine Months Ended September 30,												Six Months Ended June 30,
	2020			2019			$ Change			% Change			2021			2020			$ Change			% Change
Consumer Packaged Goods	$	177,355,614		$	71,651,968		$	105,703,646			148	%	$	221,940,928		$	102,653,545		$	119,287,383			116	%
Retail		275,451,137			85,501,646			189,949,491			222	%		280,224,597			163,503,022			116,721,575			71	%
Intersegment Eliminations		(73,460,384	)		(16,522,767	)		(56,937,617	)		n.m.			(85,863,129	)		(43,914,041	)		(41,949,088	)		96	%

Total Revenues, Net of Discounts	$	379,346,367		$	140,630,847		$	238,715,520			170	%	$	416,302,396		$	222,242,526		$	194,059,870			87	%

~~n.m.~~ –~~not meaningful~~

Three Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the Three Months Ended ~~September~~June 30, ~~2019~~2020

Revenues, net of discounts for the Retail segment were ~~$111,948,115,~~$150,115,879, an increase of ~~$68,415,827~~$62,574,307 or ~~157%~~71%, compared to the three months ended ~~September~~June 30, ~~2019.~~2020. The increase in Retail revenues, net of discounts, was primarily driven by ~~legalization of adult-use~~increased store traffic to Green Thumb’s open and operating retail stores, particularly in Illinois, ~~on January 1, 2020~~Nevada and Pennsylvania, as well as new store openings particularly in ~~Illinois and~~ Pennsylvania.

~~- 37 -~~

Revenues, net of discounts for the Consumer Packaged Goods Segment were ~~$74,702,069,~~$117,863,490, an increase of ~~$39,608,212~~$61,531,973 or ~~113%~~109%, compared to the three months ended ~~September~~June 30, ~~2019.~~2020. The increase in Consumer Packaged Goods revenues, net of discounts, was primarily driven by ~~the legalization of adult-use of cannabis in Illinois on January 1, 2020, along with~~ increased sales volume in established markets such as Illinois, Pennsylvania, Massachusetts ~~Nevada~~ and ~~Maryland.~~Nevada.

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.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 Compared with the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2019~~2020

Revenues, net of discounts for the Retail ~~Segment~~segment were ~~$275,451,137,~~$280,224,597, an increase of ~~$189,949,491~~$116,721,575 or ~~222%~~71%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The increase in Retail revenues, net of discounts, was primarily driven by ~~legalization of adult-use~~increased store traffic to Green Thumb’s open and operating retail stores, particularly in Pennsylvania and Illinois, ~~on January 1, 2020~~ as well as new store openings particularly in ~~Illinois and~~ Pennsylvania and ~~the 2020 full period effect of the acquisition of the Essence stores in Nevada in June 2019.~~Illinois.

Revenues, net of discounts for the Consumer Packaged Goods Segment were ~~$177,355,614,~~$221,940,928, an increase of ~~$105,703,646~~$119,287,383 or ~~148%~~116%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The increase in Consumer Packaged Goods revenues, net of discounts, was primarily driven by ~~the legalization of adult-use of cannabis in Illinois on January 1, 2020,~~ increased sales volume in established markets such as Illinois, Pennsylvania, Massachusetts, Nevada and ~~Maryland and the 2020 full period effect of the acquisition of Desert Grown Farms and Cannabiotix in Nevada in June 2019.~~New Jersey.

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, incredibles, ~~Rythm,~~ and ~~The Feel Collection,~~Rythm, primarily to third-party retail 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 stores, as well as direct-to-consumer delivery where applicable by state law.

For the ~~nine~~three and six months ended ~~September~~June 30, ~~2020,~~2021, revenue was contributed from Consumer Packaged Goods and Retail sales across ~~twelve markets, which consist of~~ California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio and Pennsylvania.

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.

~~Over~~

During the ~~nine months ended September~~Six Months Ended June 30, ~~2020,~~2021, the Company continued to be focused on ~~executing~~creating sustainable, profitable growth of the Company’s business while pursuing expansion. Green Thumb expects to continue its growth strategy for the foreseeable future as the Company expands its Consumer Packaged Goods and Retail footprint within its current markets with acquisitions and partnerships, and scales resources into new markets.

~~- 38 -~~

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~~revenue. As new locations begin operations, these locations generally experience higher selling costs as a percentage of revenue compared to more established locations, which experience a more constant rate of selling ~~costs.As~~costs. As a percentage of sales, the Company expects selling costs to remain constant in the more established locations and increase in the newer locations 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. The Company expects to continue to invest considerably in this area to support aggressive expansion plans and to support the business by attracting and retaining top-tier talent. Furthermore, the Company anticipates an increase in ~~stock~~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 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 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, Adjusted Operating 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 June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net Income (Loss) Before Non-Controlling Interest	$	23,274,791		$	(11,763,937	)	$	34,729,759		$	(15,527,497	)
Interest Income, net		(295,690	)		(16,410	)		(345,580	)		(104,525	)
Interest Expense, net		4,679,795			4,734,908			8,802,971			9,776,350
Provision For Income Taxes		30,026,732			15,378,715			60,882,910			28,527,715
Other (Income) Expense, net		(6,830,277	)		5,717,427			(1,680,460	)		(1,068,683	)
Depreciation and amortization		15,072,992			14,239,915			30,066,413			26,945,085
Earnings before interest, taxes, depreciation and amortization (EBITDA) (non-GAAP measure)	$	65,928,343		$	28,290,618		$	132,456,013		$	48,548,445
Stock-based compensation, non-cash		5,672,683			5,700,144			9,703,338			10,773,886
Acquisition, transaction and other non-operating costs		7,683,389			1,421,949			8,480,345			1,635,304
Adjusted Operating EBITDA (non-GAAP measure)	$	79,284,415		$	35,412,711		$	150,639,696		$	60,957,635

~~- 39 -~~

   Three Months Ended Nine Months Ended
   September 30, September 30,
   2020 2019 2020 2019
Net Income (Loss) Before Non-Controlling Interest
   $ 10,753,009 $ (14,337,936 ) $ (4,774,488 ) $ (44,717,094 )
Interest Income
   (5,397 ) (407,509 ) (109,922 ) (1,300,233 )
Interest Expense
   4,460,125 5,912,290 14,236,475 11,762,222
Provision For Income Taxes
   28,436,332 3,624,333 56,964,047 4,706,000
Other (Income) Expense, net
   (6,432,883 ) 6,585,540 (7,501,566 ) 7,969,433
Depreciation and amortization
   11,534,876 7,685,428 38,479,960 17,198,731


Earnings before interest, taxes, depreciation and amortization (EBITDA) (non-GAAP measure)
   $ 48,746,062 $ 9,062,146 $ 97,294,506 $ (4,380,941 )


Stock-based compensation, non-cash
   4,435,634 3,564,095 15,209,520 13,324,083
Acquisition, transaction and other non-operating costs
   —   1,160,150 1,635,304 5,012,187


Adjusted Operating EBITDA (non-GAAP measure)
   $ 53,181,696 $ 13,786,391 $ 114,139,331 $ 13,955,329

Liquidity, Financing Activities During the Period, and Capital Resources

As of ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019~~2020 the Company had total current liabilities of ~~$105,898,809~~$105,361,464 and ~~$111,367,255,~~$119,288,435, respectively, and cash and cash equivalents of ~~$78,091,073~~$359,188,735 and ~~$46,667,334,~~$83,757,785, respectively to meet its current obligations. The Company had working capital of ~~$53,160,428~~$376,258,084 as of ~~September~~June 30, ~~2020,~~2021, an increase of ~~$55,465,072~~$311,602,514 as compared to December 31, ~~2019.~~2020. This increase in working capital was primarily driven by the ~~$81,302,083 increase in revenue experienced in the third quarter~~$155,498,140 sale of ~~2020 over the fourth quarter of 2019. The Company’s quarterly results were driven by organic growth across~~registered Subordinate Voting Shares pursuant to the Company’s ~~Consumer Packaged Goods and Retail businesses, particularly in Illinois following~~Registration Statement on Form S-1 as well as the ~~commencement~~Company's April 30, 2021 216,734,258 issuance of ~~adult use sales on January 1, 2020, and in Pennsylvania, along with~~private placement debt. Partially offset by the ~~settlement~~repayment of ~~certain contingent consideration during the quarter.~~105,466,429.

In the first ~~nine~~six months of ~~2020,~~2021, Green Thumb generated revenue from all 12 of its markets: California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, New Jersey, New York, Ohio and Pennsylvania. The Company’s Consumer Packaged Goods revenue grew approximately ~~33%~~13%, net of discounts, during the three months ended ~~September~~June 30, ~~2020~~2021 as compared to the three months ended ~~June 30, 2020. As of September 30, 2020, Green Thumb’s branded products were sold in over 700 retail stores, including~~March 31, 2021, primarily driven by organic growth across the Company’s ~~Rise and Essence retail stores.~~Consumer Packaged Goods Business. The Company’s Retail revenue, net of discounts, increased ~~28%~~15% during the three months ended ~~September~~June 30, ~~2020~~2021 as compared to the three months ended ~~June 30, 2020,~~March 31, 2021, primarily driven by the launch of Cookies brand and increased transaction activity across the Company’s ~~48 retail~~58 Retail store footprint.

The Company is an early-stage growth company, ~~which is~~ generating cash from revenues ~~and is~~ deploying its capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and near 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.

While our revenue, gross profit and operating income were not materially impacted by COVID-19 and we maintained the consistency of our operations during the first ~~nine~~six months of ~~2020,~~2021, the uncertain nature of the spread of COVID-19 may impact our business operations for reasons including the potential quarantine of our employees or those of our supply chain partners. Our ability to continue to operate without any significant negative operational impact from the COVID-19 pandemic will in part depend on our ability to protect our employees, customers and supply chain and our continued designation as an “essential” business in states where we do business that currently or in the future impose restrictions on business operations. 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.

~~- 40 -~~

Cash Flows

Cash Used in Operating Activities,

~~Net cash used in operating activities for the nine months ended September 30, 2020~~ Investing and ~~2019, were as follows:~~

   Nine Months Ended September 30,
   2020    2019
Net Cash provided by (used in) Operating Activities
   $ 71,056,200    $ (712,804 )

~~Cash Flow from Investing Activities~~

~~Net cash used in investing activities for the nine months ended September 30, 2020 and 2019, were as follows:~~

   Nine Months Ended September 30,
   2020 2019
Net Cash (used in) provided by Investing Activities
   $ (37,422,417 ) $ (171,943,137 )

~~Cash Flow from~~ Financing Activities

Net cash provided by (used in) operating, investing and financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, were as follows:

   Nine Months Ended September 30,
   2020 2019
Net Cash (used in) provided by Financing Activities
   $ (2,210,044 ) $ 92,791,523


	Six Months Ended June 30,
	2021			2020
Net Cash provided by Operating Activities	$	48,296,862		$	60,250,326
Net Cash Used in Investing Activities	$	(43,583,152	)	$	(22,234,932	)
Net Cash provided by (used in) Financing Activities	$	270,717,240		$	(1,740,056	)

~~Contractual Cash Obligations and Other Commitments and Contingencies~~

~~The following table quantifies the Company’s future contractual obligations as of September 30, 2020:~~

   Total    2020    2021    2022    2023    2024    Thereafter
Notes Payable^(a)
   $ 105,466,429    $ —      $ —      $ —      $ 105,466,429    $ —      $ —
Charitable Contributions
   763,284    45,846    185,887    189,953    194,109    147,490    —
Mortgage Payable^(b)
   1,862,857    28,522    117,794    124,662    131,943    139,299    1,320,638
Interest Due on Notes Payable
   33,460,307    3,155,324    12,655,971    12,655,971    4,933,041    —      —
Interest Due on Mortgage Payable
   1,022,953    37,565    146,552    139,684    132,403    125,047    441,702
Operating Leases—Third Party
   276,776,320    4,767,957    22,243,662    22,285,836    22,092,882    21,387,294    183,998,689
Operating Leases—Related Parties
   15,935,415    322,287    1,307,183    1,337,130    1,367,771    1,255,714    10,345,330
Contingent Consideration
   36,315,361    27,100,000    9,215,361    —      —      —      —
Construction Commitments^(c)
   25,640,072    25,640,072    —      —      —      —      —














Total as of September 30, 2020
   $ 497,242,999    $ 61,097,574    $ 45,872,410    $ 36,733,237    $ 134,378,579    $ 23,054,844    $ 196,106,359

~~(a) -~~

On May 21, 2020, the Company exercised its option to extend the maturity date of its senior secured notes for an additional year. The new maturity date is May 22, 2023. Additionally, this amount excludes $11,618,400 of unamortized debt discount as of September 30, 2020. See Note 6 - Notes Payable to our unaudited interim condensed consolidated financial statements for the period for details.

~~(b) -~~

The amount excludes $177,244 of unamortized debt discount as of September 30, 2020. See Note 6 - Notes Payable to our unaudited interim condensed consolidated financial statements for the period for details.

~~(c) -~~

The Company expects to be reimbursed for approximately $22,500,000 of the construction commitment as part of its sale and lease back agreement with IIP. See Note 5 - Leases to our unaudited interim condensed consolidated financial statements for the period for details.

~~- 41 -~~

Off-Balance Sheet Arrangements

As of ~~September~~June 30, ~~2020,~~2021, 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 -~~ 1—Overview and Basis of Presentation.

Critical Accounting Policies and Significant Judgements 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 ~~2019~~2020 Form 10-K.

Emerging Growth Company Status

The Company is an “emerging growth company” as defined in the Section 2(a) of the Exchange Act, as modified by the Jumpstart Our Business Start-ups Act of 2012, or the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Exchange Act for complying with new or revised accounting standards applicable to public companies. The Company has elected to take advantage of this extended transition period and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

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 ~~Annual Report on~~2020 Form ~~10-K for the year ended December 31, 2019 except as described below.~~10-K.

~~COVID-19~~

The Company is monitoring COVID-19 closely, and although operations have not been materially affected by the COVID-19 outbreak to date, the ultimate severity of the outbreak and its impact on the economic environment is uncertain. Operations of the Company are currently ongoing as the cultivation, processing and sale of cannabis products is currently considered an “essential” business by the States in which we operate with respect to all customers. Our ability to continue to operate without any significant negative operational impact from COVID-19 pandemic will in part depend on our ability to protect our employees, customers and supply chain and continued designation as “essential” in states where we do business that currently or in the future impose restrictions on business operations.

~~- 42 -~~

ITEM 4. CONTROLS AND PROCEDURES

(a)

Disclosure Controls and Procedures

~~(a)~~

~~Disclosure Controls and Procedures~~

The Company evaluated the effectiveness of our disclosure controls and procedures as of ~~September~~June 30, ~~2020.~~2021. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. The Company recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. ~~Management, including~~As required by Rule 13a-15(b) under the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of ~~the Company’s~~our disclosure controls and procedures ~~(as defined in Rules 13a-15(b) and Rule 15d-15(e)~~as of June 30, 2021, the

end of the Exchange Act) as of September 30, 2020. As an emerging growth company, Green Thumb is not required to include management’s assessment of Internal Controls over Financial Reporting (“ICFR”) or an attestation report of the Company’s registered public accounting firm in our 2020 Form 10-K. However, management has developed and is in the process of enhancing the Company’s ICFR and its disclosure controls and procedures in preparation for the annual audit of the Company for the 2021 fiscal year. Green Thumb expects to be required to include both management’s assessment of ICFR and the attestation of the Company’s registered public accounting firm regarding the Company’s ICFR in our 2021 annual reportperiod covered by this Quarterly Report on Form ~~10-K. Management, including the~~10-Q. Based upon such evaluation, our Chief Executive Officer and Chief Financial Officer have ~~carefully considered the Company’s progress in the development of the~~concluded that our disclosure controls and procedures ~~to date and determined that they~~ were ~~reasonably~~ effective at the reasonable assurance level as of ~~September 30, 2020.~~such date.

~~- 43 -~~

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

There have been no material changes to the risk factors disclosed in the ~~2019~~2020 Form 10-K.

ITEM 2. UNREGISTERED SALE OF EQUITY SECURITIES

Recent Sales of Unregistered Securities

~~The following information represents securities sold by~~Please see the ~~Company for the period covered by this Quarterly~~Company's Current Report on Form 10-Q which were not registered under the Securities Act. Included are new issues, securities issued in exchange for property, services or other securities, securities issued upon conversion from other share classes and new securities resulting from the modification of outstanding securities. The Company sold all of the securities listed below pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act, or Regulation D or Regulation S promulgated thereunder, or, in the case of shares in connection with our 2018 Share and Incentive Plan, in reliance upon Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer pursuant to benefit plans and contracts related to compensation.

~~Subordinate Voting Shares~~

~~On January 3, 2020, the Company issued 287,478 Subordinate Voting Shares as contingent consideration associated~~8-K filed with the ~~Company’s 2019 acquisition of Advanced Grow Labs.~~

~~On January 15, 2020, the Company converted 127,730 Multiple Voting Shares into 12,773,000 Subordinate Voting Shares.~~

~~On February 11, 2020, the Company converted 2,480 Multiple Voting Shares into 248,000 Subordinate Voting Shares.~~

~~On February 12, 2020, the Company issued 48,450 Subordinate Voting Shares as deferred share issuances associated with the Company’s 2019 acquisition of KW Ventures Holdings, LLC minority interest.~~

~~On February 26, 2020, the Company issued 779,690 Subordinate Voting Shares as contingent consideration associated with the Company’s 2019 acquisition of For Success Holding Company.~~

~~On May 15, 2020, the Company issued 101,695 Subordinate Voting Shares as deferred share issuances associated with the Company’s 2019 acquisition of Salveo (Rise Canton).~~

~~On May 18, 2020, the Company issued 1,109,055 Subordinate Voting Shares as contingent consideration associated with the Company’s 2019 acquisition of Advanced Grow Labs, LLC.~~

~~- 44 -~~

On May 20, 2020, the Company issued 17,112 Subordinate Voting Shares associated with the exercise of broker options issued as part of the Company’s June 12, 2018 reverse takeover of Bayswater Uranium Corporation.

~~On May 25, 2020, the Company issued 268,620 Subordinate Voting Shares as contingent consideration associated with the Company’s 2019 acquisition of Integral Associates, LLC.~~

~~On June 29, 2020, the Company issued 190,000 Subordinate Voting Shares as deferred share issuances associated with the Company’s 2019 acquisition of MC Brands, LLC.~~

~~On July 10, 2020, the Company issued 268,620 Subordinate Voting Shares as contingent consideration associated with the Company’s 2019 acquisition of Integral Associates, LLC.~~

~~On August 12, 2020, the Company issued 472,500 Subordinate Voting Shares as deferred share issuances associated with the Company’s 2019 acquisition of Advanced Grow Labs.~~

~~On August 26, 2020, the Company issued 646,353 Subordinate Voting Shares as deferred share issuances associated with the Company’s 2019 acquisition of For Success Holdings Company.~~

~~On August 31, 2020, the Company issued 1,315,789 Subordinate Voting Shares in consideration for the noncontrolling partner’s interest in Ohio Investors 2017, LLC~~

~~On September 17, 2020, the Company issued 5,941 Subordinate Voting Shares associated with the exercise of warrants issued as part of the purchase of one of its retail dispensaries.~~

~~Beginning~~SEC on ~~January 9, 2020 and continuing through September 15, 2020, the Company converted 275,393 Multiple Voting Shares into 27,539,300 Subordinate Voting Shares.~~

From January 1, 2020 through February 19, 2020 (the effective date of the filing of our registration statement on Form S-8), the Company issued, in total, 77,500 Subordinate Voting Shares to holders of the Company’s RSU’s issued under our 2018 Stock and Incentive Plan, which vested over the same period.

~~Multiple Voting Shares~~

~~Beginning January 15, 2020 and continuing through~~ July 2, ~~2020, the Company converted 22,953 Super Voting Shares were converted into 22,953 Multiple Voting Shares.~~2021.

~~Beginning on January 9, 2020 and continuing through September 15, 2020, the Company converted 275,393 Multiple Voting Shares into 27,539,300 Subordinate Voting Shares.~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed with this report:


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

~~- 45 -~~


~~101.INS~~
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)

~~- 46 -~~

~~SIGNATURES~~

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~~

/s/Benjamin Kovler

By: Benjamin Kovler

Title: Chief Executive Officer

Date: ~~November~~August 12, ~~2020~~2021

GREEN THUMB INDUSTRIES INC.

~~/s/ Anthony Georgiadis~~

~~By: Anthony Georgiadis~~

/s/Anthony Georgiadis

By: Anthony Georgiadis

Title: Chief Financial Officer

Date: ~~November~~August 12, ~~2020~~2021

~~- 37 -~~


Green Thumb Industries Inc.
Unaudited Interim Condensed Consolidated Balance Sheets
As of September 30, 2020 and December 31, 2019
(Amounts Expressed in United States Dollars, Except for Share Amounts)



	September 30, 2020			December 31, 2019
				*(Audited)*
ASSETS
Current Assets:
Cash and Cash Equivalents	$	78,091,073		$	46,667,334
Accounts Receivable		13,121,285			7,530,253
Inventories		55,164,258			46,034,481
Prepaid Expenses		6,990,373			6,780,657
Other Current Assets		5,692,248			2,049,886

Total Current Assets		159,059,237			109,062,611
Property and Equipment, Net		177,725,092			155,596,675
Right of Use Assets, Net		99,447,497			63,647,812
Investments		22,210,999			14,068,821
Investment in Associate		11,750,000			10,350,000
Notes Receivable		—			815,937
Intangible Assets, Net		409,655,517			435,246,898
Goodwill		373,081,716			375,084,991
Deposits and Other Assets		1,684,389			3,662,879

TOTAL ASSETS	$	1,254,614,447		$	1,167,536,624


LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Current Liabilities:
Accounts Payable	$	10,988,374		$	8,745,821
Accrued Liabilities		46,311,550			37,184,406
Current Portion of Notes Payable		301,027			206,675
Current Portion of Lease Liabilities		4,654,032			3,833,268
Liability for Acquisition of Noncontrolling Interest		—			5,500,000
Contingent Consideration Payable		27,100,000			50,391,181
Income Tax Payable		16,543,826			5,505,904

Total Current Liabilities		105,898,809			111,367,255
Long-Term Liabilities:
Lease Liabilities, Net of Current Portion		102,408,462			61,115,737
Notes Payable, Net of Current Portion and Debt Discount		96,758,233			91,140,194
Contingent Consideration Payable		9,215,360			8,545,558
Warrant Liability		18,513,000			15,879,843
Deferred Income Taxes		41,744,283			36,279,361

TOTAL LIABILITIES		374,538,147			324,327,948
COMMITMENTS AND CONTINGENCIES SHARE HOLDERS’ EQUITY
Subordinate Voting Shares (Shares Authorized, Issued and Outstanding at September 30, 2020: Unlimited, 162,999,921 and 162,999,921, respectively, at December 31, 2019: Unlimited, 128,999,964 and 128,999,964, respectively)		—			—
Multiple Voting Shares (Shares Authorized, Issued and Outstanding at September 30, 2020: Unlimited, 120,910 and 120,910, respectively, at December 31, 2019: Unlimited, 373,350 and 373,350, respectively)		—			—
Super Voting Shares (Shares Authorized, Issued and Outstanding at September 30, 2020: Unlimited, 379,336 and 379,336, respectively, at December 31, 2019: Unlimited, 402,289 and 402,289, respectively)		—			—
Share Capital		1,041,770,917			980,638,701
Contributed Surplus		1,656,498			3,960,854
Deferred Share Issuances		1,835,331			16,587,798
Accumulated Deficit		(167,963,430	)		(160,491,590	)

Equity of Green Thumb Industries Inc.		877,299,316			840,695,763
Noncontrolling interests		2,776,984			2,512,913

TOTAL SHAREHOLDERS’ EQUITY		880,076,300			843,208,676

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,254,614,447		$	1,167,536,624




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


	Share Capital		Shares to Be Issued			Contributed Surplus			Deferred Share Issuance			Accumulated Earnings (Deficit)			Non-Controlling Interest			Total
Balance, July 1, 2019	$	950,736,500	$	—		$	(4,997,380	)	$	16,587,798		$	(131,830,288	)	$	(392,655	)	$	830,103,975

Issuance of shares under business combinations and investments		14,085,238		—			88			—			—			—			14,085,326

Stock based compensation		—		—			3,564,095			—			—			—			3,564,095

Shares withheld in lieu of cash		—		—			(125,060	)		—			—			—			(125,060	)

Distributions to limited liability company unit holders		—		—			—			—			—			(1,900,000	)		(1,900,000	)

Net (loss) income		—		—			—			—			(14,590,793	)		252,857			(14,337,936	)


Balance, September 30, 2019	$	964,821,738	$	—		$	(1,558,257	)	$	16,587,798		$	(146,421,081	)	$	(2,039,798	)	$	831,390,400


Balance, January 1, 2019	$	397,590,465	$	27,773,234		$	14,202,659		$	—		$	(100,876,937	)	$	3,497,459		$	342,186,880

Adoption of ASC 842, Leases		—		—			—			—			(498,246	)		—			(498,246	)

Noncontrolling interests adjustment for change in ownership		27,773,234		(27,773,234	)		4,200,382			—			—			—			4,200,382

Contributions from limited liability company unit holders		—		—			—			—			—			1,650,000			1,650,000

Issuance of shares under business combinations and investments		509,568,665		—			(23,813,393	)		—			—			—			485,755,272

Reciprocal derivative instrument		—		—			(4,526,401	)		—			—			—			(4,526,401	)

Issuance of shares for redemption of noncontrolling interests		29,889,374		—			(4,820,527	)		—			—			—			25,068,847

Deferred share issuances		—		—			—			16,587,798			—			—			16,587,798

Stock based compensation		—		—			13,324,083			—			—			—			13,324,083

Shares withheld in lieu of cash		—		—			(125,060	)		—			—			—			(125,060	)

Distributions to limited liability company unit holders		—		—			—			—			—			(7,516,061	)		(7,516,061	)

Net (loss) income		—		—			—			—			(45,045,898	)		328,804			(44,717,094	)


Balance, September 30, 2019	$	964,821,738	$	—		$	(1,558,257	)	$	16,587,798		$	(146,421,081	)	$	(2,039,798	)	$	831,390,400


Balance, July 1, 2020	$	1,004,812,062	$	—		$	6,545,712		$	15,280,000		$	(177,607,359	)	$	2,367,904		$	851,398,319

Noncontrolling interests adjustment for change in ownership		—		—			5,700,000			—			—			—			5,700,000

Issuance of shares for redemption of noncontrolling interests		20,078,940		—			(14,728,940	)		—			—			—			5,350,000

Distribution of contingent consideration		2,690,914		—			—			—			—			—			2,690,914

Distribution of deferred shares		13,444,669		—			—			(13,444,669	)		—			—			—

Exercise of options and warrants		744,332		—			(295,908	)		—			—			—			448,424

Stock based compensation		—		—			4,435,634			—			—			—			4,435,634

Distributions to third party and limited liability company unit holders		—		—			—			—			—			(700,000	)		(700,000	)

Net income		—		—			—			—			9,643,929			1,109,080			10,753,009


Balance, September 30, 2020	$	1,041,770,917	$	—		$	1,656,498		$	1,835,331		$	(167,963,430	)	$	2,776,984		$	880,076,300


Balance, January 1, 2020	$	980,638,701	$	—		$	3,960,854		$	16,587,798		$	(160,491,590	)	$	2,512,913		$	843,208,676

Contributions from limited liability company unit holders		—		—			—			—			—			50,000			50,000

Issuance of shares under business combinations and investments		2,524,560		—			(2,678,489	)		—			—			—			(153,929	)

Issuance of shares for redemption of noncontrolling interests		20,078,940		—			(14,728,940	)		—			—			—			5,350,000

Distribution of contingent consideration		22,885,813		—			—			—			—			—			22,885,813

Distribution of deferred shares		14,752,467		—			—			(14,752,467	)		—			—			—

Issueance of warrants		—		—			181,272			—			—			—			181,272

Exercise of options and warrants		890,436		—			(234,340	)		—			—			—			656,096

Stock based compensation		—		—			15,209,518			—			—			—			15,209,518

Distributions to third party and limited liability company unit holders		—		—			(53,377	)		—			—			(2,483,281	)		(2,536,658	)

Net (loss) income		—		—			—			—			(7,471,840	)		2,697,352			(4,774,488	)


Balance, September 30, 2020	$	1,041,770,917	$	—		$	1,656,498		$	1,835,331		$	(167,963,430	)	$	2,776,984		$	880,076,300


Cost	Land			Buildings and Improvements			Equipment, Computers and Furniture		Leasehold Improvements		Capitalized Interest		Assets Under Construction			Total
As at January 1, 2020	$	3,272,439		$	33,377,471		$	35,509,871	$	68,681,497	$	2,500,000	$	21,372,116		$	164,713,394
Additions		586.867			21,128,482			4,794,342		12,413,970		342,966		6,118,878			45,385,505
Disposals		(979,930	)		(4,507,086	)		—		—		—		(6,978,389	)		(12,465,405	)

As at September 30, 2020	$	2,879,376		$	49,998,867		$	40,304,213	$	81,095,467	$	2,842,966	$	20,512,605		$	197,633,494


Accumulated Depreciation
As at January 1, 2020	$	—		$	2,236,254		$	3,882,178	$	2,998,287	$	—	$	—		$	9,116,719
As at September 30, 2020	$	—		$	2,939,951		$	8,375,318	$	8,426,333	$	166,800	$	—		$	19,908,402

Net book value
As at January 1, 2020	$	3,272,439		$	31,141,217		$	31,627,693	$	65,683,210	$	2,500,000	$	21,372,116		$	155,596,675
As at September 30, 2020	$	2,879,376		$	47,058,916		$	31,928,895	$	72,669,134	$	2,676,166	$	20,512,605		$	177,725,092


	Licenses and Permits			Tradenames		Customer Relationships		Non-Competition Agreements		Total
Cost
As at January 1, 2020	$	336,954,213		$	97,455,590	$	25,258,000	$	2,585,480	$	462,253,283
Adjustments to Purchase Price Allocation		(145,000	)		1,840,009		—		—		1,695,009

As at September 30, 2020	$	336,809,213		$	99,295,599	$	25,258,000	$	2,585,480	$	463,948,292

Accumulated Amortization
As at January 1, 2020	$	18,477,500		$	4,121,800	$	3,932,416	$	474,669	$	27,006,385
Amortization		17,701,556			6,412,282		2,777,802		394,750		27,286,390

As at September 30, 2020	$	36,179,056		$	10,534,082	$	6,710,218	$	869,419	$	54,292,775

Net book value
As at January 1, 2020	$	318,476,713		$	93,333,790	$	21,325,584	$	2,110,811	$	435,246,898
As at September 30, 2020	$	300,630,157		$	88,761,517	$	18,547,782	$	1,716,061	$	409,655,517


Year Ending December 31,	Estimated Amortization (Prior to Change in Useful Life)		Increase (Decrease) from Change in Useful Life			Estimated Amortization (After Change in Useful Life)
Remainder of 2020	$	8,426,261	$	1,266,880		$	9,693,141
2021		33,705,044		5,067,520			38,772,564
2022		33,274,305		5,067,520			38,341,825
2023		33,191,489		5,067,520			38,259,009
2024		32,610,156		5,067,520			37,677,676
Thereafter		268,448,262		(21,536,960	)		246,911,302

	$	409,655,517	$	—		$	409,655,517


	Retail		Consumer Packaged Goods			Total
As at January 1, 2020	$	119,873,759	$	255,211,232		$	375,084,991
Adjustments to Purchase Price Allocations		1,191,425		(3,194,700	)		(2,003,275	)

As at September 30, 2020	$	121,065,184	$	252,016,532		$	373,081,716


	September 30, 2020			December 31, 2019

In connection with an acquisition completed in 2017, the Company is required to make quarterly charitable contributions of $50,000 through October 2024. The net present value of these required payments has been recorded as a liability with an interest rate of 2.17%.	$	763,284		$	970,957

Private placement debt dated May 22, 2019, in the original amount of $105,466,429 with an interest rate of 12.00%, matures on May 22, 2023. The debt was issued at a discount, the carrying value of which is $11,618,400 as of September 30, 2020		93,848,029			90,375,912

Rise Joliet mortgage dated June 5, 2020, in the original amount of $1,814,000 with an interest rate of 5.00%, matures on June 5, 2035. The debt was issued at a discount, the carrying value of which is $177,244 as of September 30, 2020.		1,616,606			—

Rise Lakewood mortgage dated August 20, 2020, in the original amount of $833,000 with an interest rate of 7.25%, matures on August 20, 2025.		831,341			—

Total notes payable		97,059,260			91,346,869
Less: current portion of notes payable		(301,027	)		(206,675	)

Notes payable, net of current portion	$	96,758,233		$	91,140,194


	Number of Shares				Weighted Average Exercise Price (C$)		Weighted Average Contractual Life		Number of Shares		Weighted Average Exercise Price (USD)		Weighted Average Contractual Life
	Liability Classified								Equity Classified
Balance as at December 31, 2019		2,406,811		C$		18.59		4.86		-	$	-		-
Additional Modification Warrants		84,924				14.03		5.00		-		-		-
Dispensary Mortgage Warrants		-				^-		-		35,000		9.10		5.00
Warrants Exercised		(5,941	)			12.42		5.00		-		-		-

Balance as at September 30, 2020		2,485,794		C$		18.45		4.87		35,000	$	9.10		5.00


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Income/(Loss) before Income Taxes	$	39,189,341		$	(10,713,603	)	$	52,189,559			(40,011,094	)
Income Tax Expense	$	28,436,332		$	3,624,333		$	56,964,047			4,706,000
Effective Tax Rate		72.6	%		-33.8	%		109.1	%		-11.8	%


	Convertible Notes Receivable			Equity		Total
Balance at January 1, 2020	$	7,533,000		$	6,535,821	$	14,068,821
Additions		—			25,000		25,000
Conversion of notes receivable		(7,533,000	)		7,533,000		—
Fair value adjustment		—			8,117,178		8,117,178

Balance at September 30, 2020	$	—		$	22,210,999	$	22,210,999


	Convertible Notes Receivable			Equity			Total
Balance at January 1, 2019	$	30,336,000		$	10,597,283		$	40,933,283
Fair value adjustment		(1,398,000	)		(4,061,462	)		(5,459,462	)
Applied to consideration in business combination		(21,405,000	)		—			(21,405,000	)

Balance at December 31, 2019	$	7,533,000		$	6,535,821		$	14,068,821


		September 30, 2020
Transaction	Date of Transaction	Units		Value

Advanced Grow Labs, LLC	February 12, 2019		1,396,533	$	11,544,855
For Success Holdings Company	February 21, 2019		779,690		6,686,432
Integral Associates, LLC	June 5, 2019		537,240		4,654,526

			2,713,463	$	22,885,813


	Number of Shares			Weighted Average Exercise Price (CAD)		Weighted Average Contractual Life (Years)		Aggregate Intrinsic Value
Balance as at December 31, 2019		3,839,017			13.21		5.81	$	218,234
Granted		2,496,511			9.76		5.00
Exercised		(65,443	)		11.02		3.98
Forfeited		(487,486	)		13.82		5.22

Balance as at September 30, 2020		5,782,599			11.69		5.53
Vested		1,635,030			13.36		6.65
Exercisable at September 30, 2020		1,516,872			13.22		6.73	$	4,601,129


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2020			2019			2020			2019

Fair value adjustments on equity investments	$	8,134,213		$	(1,196,676	)	$	8,117,178		$	(932,983	)
Fair value adjustments on variable note receivable		—			(5,428,542	)		(815,937	)		(7,424,727	)
Fair value adjustments on warrants issued		(3,181,114	)		—			(2,060,771	)		—
Fair value adjustments on contingent consideration		442,991			—			425,426			—
Other		1,036,793			39,678			1,835,670			388,277


Total Other Income (Expense)	$	6,432,883		$	(6,585,540	)	$	7,501,566		$	(7,969,433	)


	Three Months Ended
	September 30, 2020						September 30, 2019
	Chesapeake Alternatives, LLC		Illinois Disp, LLC		Other Non-material VIEs		Chesapeake Alternatives, LLC			Illinois Disp, LLC		Other Non-material VIEs
Revenues	$	5,684,349	$	5,224,583	$	2,695,781	$	4,369,436		$	1,620,065	$	689,097
Net income (loss) attributable to noncontrolling interests		26,134		897,494		185,452		1,807,394			185,930		(1,624,850	)
Net income (loss) attributable to Green Thumb Industries Inc.		1,033,650		897,494		294,969		(971,880	)		185,931		1,059,653


Net income (loss)	$	1,059,784	$	1,794,988	$	480,421	$	835,514		$	371,860	$	(565,197	)


	Nine Months Ended
	September 30, 2020						September 30, 2019
	Chesapeake Alternatives, LLC		Illinois Disp, LLC		Other Non-material VIEs		Chesapeake Alternatives, LLC		Illinois Disp, LLC		Other Non-material VIEs
Revenues	$	14,792,710	$	13,170,514	$	6,778,501	$	12,458,427	$	4,174,045	$	2,373,042
Net income (loss) attributable to noncontrolling interests		206,929		2,170,912		319,511		2,244,546		506,972		(2,307,097	)
Net income (loss) attributable to Green Thumb Industries Inc.		3,812,121		2,170,913		661,341		—		506,972		—


Net income (loss)	$	4,019,050	$	4,341,825	$	980,852	$	2,244,546	$	1,013,943	$	(2,307,097	)