Does Cannabis Expansion Create Shareholder Value? Follow Five Years of SEC Filings

By Rolando García, PhD, Chief Economic Columnist

Green Thumb Industries (OTCQX: GTBIF) (#3 world’s biggest cannabis company by equity value, on my count) reported $114.2 million in net income attributable to the company in 2025, according to its annual report, its sixth consecutive profitable year. Verano (OTCQX: VRNOF) (#8) reported a $257.9 million net loss in its annual report, which is its fifth consecutive annual loss. Although of different sizes, both companies generated operating cash, bought property and equipment, and expanded their retail and production networks.

So a couple of interesting, rather theoretical questions we could ask are ‘how much growth the existing cannabis businesses can fund?’, and also ‘what claims on future cash the rest of that growth creates?’.

In the book, there’s a downside for every road to expansion. For instance, acquiring an operating firm creates obligations before you fully use new capacity. Depreciation, amortization of acquired intangibles, and impairments reach the income statement on a different schedule. Funding sources also carry an implicit order of preference. Internal cash comes first and equity last, because investors discount new shares when they suspect managers are selling stock that insiders consider expensive.

Where a company sits in that order over several years says more about its expansion than any single year’s earnings. So to understand how the main cannabis companies have financed their expansion, we look at five years’ earnings.

The six companies below combined those sources differently between fiscal 2021 and 2025. Figures come from annual filings and later comparative statements, in U.S. dollars unless noted. Acquisitions and disposals changed what each company owns, so five-year consolidated results do not describe a constant business.

Funding growth from operations

Green Thumb generated about $1.006 billion in operating cash across 2021–2025 and spent $748.6 million on property and equipment, according to its fiscal 2023 and fiscal 2025 annual reports. In 2021, operating cash of $132.0 million fell short of $187.9 million in property and equipment purchases, before acquisitions, and net financing inflows of $295.3 million covered the difference. By 2025, operating cash had reached $294.9 million, against purchases of $81.1 million. The company reported 113 open retail locations at year-end.

Two items in the 2025 filing change how that year should be read. Income from operations fell from $224.4 million to $137.7 million. Net income rose because Green Thumb recorded a $125.9 million noncash gain on the fair value of warrants in RYTHM (Nasdaq: RYM), a company whose board is chaired by Green Thumb’s chief executive. The gain accounted for nearly half of pre-tax income.

The cash figure also moved for a reason unrelated to operations. Green Thumb recorded $128.6 million in current income tax expense for 2025 and paid $30.2 million, after paying $130.6 million in 2024. That difference of about $98 million is close to the $99.7 million increase in operating cash between the two years, and the deferred income tax liability on the balance sheet rose from $78.6 million to $220.6 million. With the difference removed, operating cash still exceeded capital spending by roughly $115 million, so the surplus is real at a smaller size.

Before you take Green Thumb as the template, notice what the consolidated number hides. Lower capital spending can simply mean a construction cycle ended. And a group surplus mixes mature stores throwing off cash with newer facilities that have not yet recovered their cost. You only see which is which by looking at cash contribution per facility or per market, net of maintenance spending. That is the calculation your own board should be asking for, and the one no annual report will do for you.

Funding growth through acquisitions and debt

Verano reported losses in every year from 2021 to 2025 while generating about $552.0 million in operating cash, according to its fiscal 2023 and fiscal 2025 annual reports. Property and equipment purchases absorbed $437.0 million, and acquisitions, net of cash acquired, absorbed $460.4 million. Those two uses exceeded operating cash by about $345 million.

Net financing inflows over the period were $378.0 million, concentrated in 2021 and 2022. The cash statement also understates what the acquisitions cost: in 2024, Verano issued $34.5 million in shares and $25.8 million in debt to sellers, amounts that appear only in the noncash disclosures.

Impairments account for most of the distance between cash and earnings. Charges against goodwill, intangibles, fixed assets, assets held for sale and investments totaled about $569 million across 2023–2025, compared with $717 million in net losses over the same years.

The charges are the company telling you that what it bought is worth less than what it recorded at closing. Adding those charges back into an adjusted measure does not return the cash. The only test I find useful here is what each acquisition has returned in cash against the full consideration paid, counting stock and seller notes alongside the wire transfer.

Building capacity ahead of cash

Glass House (NYSE: GLAS, formerly OTCQX: GLASF) generated about $2.0 million in cumulative operating cash between 2021 and 2025 and spent $186.0 million on property and equipment, according to its fiscal 2023, fiscal 2024, and fiscal 2025 annual filings. Net financing inflows were $208.3 million, most of it raised in 2021. Operating cash was negative in 2021 and 2022 and positive from 2023, but the $11.4 million generated in 2025 fell short of that year’s $27.2 million in purchases.

The company’s annual information form sets out the phases at its Camarillo greenhouse complex. The first harvest was completed in June 2022. Greenhouse 5 produced its first harvest in the first quarter of 2024, and the first third of Greenhouse 2 was built out in 2025 and harvested in the fourth quarter. Each phase committed capital before the previous one had a full operating record.

Its earnings need the same care. Glass House reported $0.5 million in net income attributable to the company in 2024, before preferred dividends, in a year that included a $13.7 million gain on the fair value of contingent liabilities and shares payable. Loss per common share was still negative.

In 2025, with more capacity in place, revenue fell from $200.9 million to $182.0 million and gross profit from $97.4 million to $77.0 million, while the company paid $8.3 million in preferred distributions.

Bigger facilities do lower the cost per pound by spreading fixed costs over more saleable output. Whether that pays depends on realized prices, yields, utilization, and the cash you tie up in inventory and receivables, but Glass House’s gross profit fell in 2025 while its capacity grew.

If you are building greenhouse space now, your funding has to reach past commissioning, through harvest, sale, and collection, with interest and any preferred distributions paid the whole way. Phasing helps, because it lets you make the next commitment conditional on the yields and prices you actually got. It only helps if you finance each phase through commercial operation.

Paying for scale with stock

Vireo (OTCQX: VREOF) closed three acquisitions in 2025, Wholesome in May and Proper and Deep Roots in June, and its annual report describes all three as all-share mergers.

The share count was based in part on a multiple of the targets’ combined 2024 “Closing EBITDA” of $77 million, calculated pro forma for pending acquisitions, planned store openings and expansion projects, at a reference price of $0.52 per subordinate voting share.

The agreements set the acquisition multiple at 4.175. Sellers can receive additional shares if 2026 results exceed the closing base, and Vireo can claw back up to half of the upfront shares if results fall short.

The acquired businesses brought $39.4 million of cash into the group, so Vireo reported an investing inflow from transactions that transferred a large economic stake to the sellers. Consolidated operating cash, which includes the acquired businesses after closing, was $3.7 million in 2025, after four consecutive years of negative operating cash, according to the company’s fiscal 2022 and fiscal 2024 reports.

Stock let Vireo buy businesses far larger than its own cash flow could have carried. Its shareholders now own a smaller piece of a bigger company, and the sellers kept their exposure to the result. The number I would watch is not post-closing revenue but the per-share arithmetic, because the shares were priced off an adjusted and partly projected earnings figure rather than cash anyone had already collected. Read the financing account gross while you are there: Vireo raised $146.0 million in long-term debt, net of costs, and repaid $127.8 million of principal in 2025, and the net inflow of $18.4 million shows none of that.

Turning cash toward the balance sheet

Trulieve (NYSE: TRLV, formerly OTCQX: TCNNF) cut property and equipment purchases from $275.9 million in 2021 to $44.2 million in 2025, with an increase to $122.6 million in 2024, according to its fiscal 2023 and fiscal 2025 annual reports.

In 2025, it generated $272.8 million in operating cash, repaid $393.3 million of long-term borrowings, issued $140 million in private-placement notes, and spent $16.3 million on internal-use software, reminding us that the property-and-equipment line does not capture every capitalized investment. Reported results moved in the opposite direction over the same years, from positive results attributable to common shareholders through 2021 to losses in each year from 2022 to 2025.

Part of that cash came from tax the company has recorded and not paid. Truelieve argues that Section 280E does not prevent it from deducting ordinary business expenses, so it still books the tax as an expense while carrying the unpaid amount as an uncertain-tax-position liability, which reached $668.4 million at year-end 2025, with $630.3 million tied to the 280E position.

Income taxes paid fell from $178.7 million in 2021 to $1.5 million in 2025. That increased operating cash were $160.9 million in 2023, $264.9 million in 2024, and $223.2 million in 2025. Excluding the 2025 accrual, operating cash was about $50 million, below the $60.5 million spent on property, equipment, and software. Verano’s 2025 accounts show a smaller version of the same effect, with a net increase of $55.9 million in tax liabilities against $52.9 million of operating cash.

Rescheduling may resolve that exposure, reduce it or leave it standing, and nobody, including the companies, can tell you when it settles. So if you are measuring your own cash generation against these operators, do it net of unpaid tax accruals. Otherwise you are comparing your business against a benchmark that is partly a loan from the IRS.

Contracting

Canopy Growth (Nasdaq: CGC) has now spent five years shrinking instead.

Operations used about C$2.017 billion across fiscal 2021–2025, according to its fiscal 2023, fiscal 2024 and fiscal 2026 annual reports. Net financing inflows totaled C$883 million over the same period. Property and equipment purchases fell from C$164.5 million to C$10.8 million, and the fiscal 2026 report attributes asset sales to restructuring of its Canadian cannabis operations and a transition to an asset-light model. Lower investment preserves liquidity. It leaves open whether the remaining operations can generate enough cash to sustain themselves.

So, when the next expansion proposal reaches your desk, the mature business should show a cash contribution after maintenance capital, working capital, and the taxes it expects to pay. New facilities and acquisitions need separate capital schedules, expected cash returns, and funding committed through commercial operation. 

Debt maturities, preferred distributions, contingent liabilities, and share issuance then determine how claimants share returns, and how much margin remains if prices or volumes come in below plan.

Note from the editor: Additional financial disclosures can be viewed in Green Thumb’s 2025 SEC Form 10-K and Verano’s Q3 Form 10-Q filing.