Good afternoon, welcome to Green Thumb's Q3 2020 earnings conference call. At this time, all participants are in listen-only mode. A question- and- answer session will follow the conclusion of formal remarks. During the question- and- answer session, we will ask for a limit of one question and one follow-up question per person. As a reminder, a live audio webcast of the call is available on the investor relations section of Green Thumb's website and will be archived for replay. I'd like to remind everyone that today's call is being recorded. I will now turn the call over to Jennifer Dooley, Chief Strategy Officer. Please go ahead.
Thanks, Rob. Good afternoon, welcome to Green Thumb's Q3 2020 earnings call. I'm here today with Founder and Chief Executive Officer, Ben Kovler, and Chief Financial Officer, Anthony Georgiadis. Today's discussion and responses to questions may include forward-looking statements which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. These risks and uncertainties are detailed in the company's reports filed with the United States Securities and Exchange Commission and Canadian securities regulators, including our quarterly report on Form 10-Q, which we expect will be filed tomorrow. This report, along with today's earnings press release, can be found under the investors section of our website. Green Thumb assumes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call.
Throughout the discussion, Green Thumb will refer to non-GAAP financial measures, including EBITDA and adjusted operating EBITDA, and reconciliation of non-GAAP financials to the most directly comparable GAAP measures is included in our earnings press release and SEC and SEDAR filings. Please note all financial information is provided in US dollars unless otherwise indicated. Thanks, everyone. Now here's Ben.
Good afternoon, and thank you for joining our Q3 earnings call. A special thank you to all of those who served on this special day. Against the backdrop of this unprecedented year, I would like to begin by thanking our entire team for their efforts to make our mission of promoting well-being through cannabis a viable and credible reality. Amid all the uncertainty, Green Thumb's mission, strategy, and execution of our Enter, Open, Scale playbook remain our North Star, as this combination delivered strong top-line growth and, for the first time since we have been public, bottom-line profitability. Following a clean sweep of cannabis legislation measures across five states, the green wave is big and real. In fact, it's like a tidal wave, as consumers demand cannabis for well-being. People want a natural alternative to dangerous opioids, chemical pharmaceuticals, and painful hangovers.
People are alarmed by the social, economic, and health disparities brought on by the war on drugs. The ingredients are in place as the political and capital climates warm up to this tremendous new industry. Well-being through cannabis is the next great American growth story. While the U.S. cannabis stocks are posting strong revenue growth, the S&P is posting consecutive quarterly revenue declines. It's important to note the cannabis industry is becoming a significant contributor to both federal and state economies through job creation and tax revenue. In response, the capital markets are continuing to open up with a greater inflow of quality institutional participants. Prudent capital allocation has always been the bedrock of our story, which we think positions us well to be a leader in the capital markets.
Cannabis is set up to be one of the best U.S. stories of our time, and we welcome the comparison to the great growth stories out there today, like cloud computing, online gaming, and hard seltzer. The animal spirits are not going to sleep through cannabis. The U.S. cannabis industry is rapidly evolving into an estimated $100 billion consumer packaged goods category, with projected annual growth rates of 20% for the next decade. That makes cannabis larger than the U.S. wine and spirits industry, U.S. confections, and U.S. beauty and personal care, to give you a sense. Five years into legal cannabis in our home state of Illinois, and only 10 months into adult use here, industry-wide cannabis sales for the state are approaching $1.5 billion on an annual run rate basis. Illinois adult use grew double digits the month of October, and over 330% year-over-year.
That's impressive growth, but amazingly nowhere near the top. We began shipping from our second production facility in Illinois in the Q3 , and in October, we opened the first adult use store in Naperville, a Chicago suburb that is the third-largest city in Illinois. We have eight open stores across the state, with the potential for 10. We believe what is happening in Illinois will happen across the country. It is a matter of when, not if. In a divided country, we are united on this issue. In the green wave, Americans voted in support of cannabis. Mississippi opened up for medical use. South Dakota, Montana, Arizona, and New Jersey joined the adult-use 21 and over roster. New Jersey is great news for Green Thumb, and we began the timely production and distribution of our brand portfolio there in the Q3 .
Furthermore, this 9 million-person state in the densely populated East Coast region raises the stakes for neighbors to follow the adoption of adult use. In fact, after the New Jersey vote, Governor Cuomo called on New York to legalize adult use in 2021. We have one of the 10 licenses in New York. In Connecticut, Governor Lamont is also awake to what's happening around him in New Jersey and Massachusetts, as he expressed interest in adding adult use on top of a successful medical program in 2021. As a reminder, we have one of the four licenses in Connecticut. In Pennsylvania, Governor Tom Wolf is urging legislators to legalize adult use to provide a new revenue stream to aid its economic recovery and restore social justice.
Pennsylvania has over 11 million people, just like Illinois, and its legal cannabis industry is big and growing, and has not yet opened for adult use. We started shipping our new capacity in Pennsylvania this quarter, allowing us to distribute more of our RYTHM products to more stores and more consumers. In October, we opened Rise Monroeville in a suburb of Pittsburgh. This is the 13th Rise store in the state, and our 49th store across the country. Next week, we'll open our 50th store in Kendall, Florida. Same-store sales across our entire retail fleet exceeded 65% on a base of 25 stores for the quarter. It is worth noting that the three Essence stores we acquired in June of 2019 were added to the base for the first time in the Q3 of this year.
On a sequential basis, comp sales were up 18% on a base of 42 stores. For those of you that remember, that compares to 8% on a base of 40 stores last quarter. While we work to optimize our brick-and-mortar presence, we continue to think forward about the future of cannabis retail in this evolving digital age. Whether physical or virtual, we are committed to delivering superior experiences for our consumers. Our brands are now being distributed across 11 states, coast- to- coast. These are states including California, Colorado, Connecticut, Florida, Illinois, Maryland, Massachusetts, Nevada, Pennsylvania, and new to the list in the Q3 , strong ponies we have a lot of faith in, Ohio, and of course, New Jersey. Collectively, this is roughly 130 million Americans, or 40% of the population of this country.
As we have always contended, distributing brands at scale is the key to strong organic growth, and we love our brands. RYTHM, incredibles, Dogwalkers, Beboe, Dr. Solomon's. It is really about the connections they are forming with the consumers. This quarter, incredibles launched Snoozzzeberry, a gummy aimed to help the millions of people struggling to find that good night's sleep. We're very pleased to hear the positive feedback so far as Americans across the country reach for the snores. There is growth and opportunity across our platform. Our team continues to show resilience and adaptability. With thoughtful positioning and through these unique times, we delivered a very strong quarter with $157 million of revenue, a 31% increase quarter-over-quarter, and a 131% increase versus 2019. Adjusted EBITDA improved by 50% quarter-over-quarter to $53 million.
These quarterly results were largely driven by the production expansions that came online during the quarter in New Jersey, Ohio, Illinois, and Pennsylvania, as well as the bounce-back in Nevada and Massachusetts. Our growing scale drove operating leverage at nearly 3X revenue and 8X adjusted EBITDA year to date compared to last year. These results are the outcome of continual investments and constant evolution of our people and processes over the years. We know there is more to do, but we feel good about what's ahead for Green Thumb. We have two highly complementary businesses that present a tremendous opportunity for outsized growth over time, right here in the U.S. When we compare our industry's growth with other sectors of the S&P 500, we feel pretty good. Our thesis is proving out, and we have a great team to keep the momentum going.
With that, I'll turn the call over to the best CFO in the business to review our financial results for the Q3 . Anthony?
Thanks, Ben. Good afternoon, everyone. Before I begin, I'd like to thank all those who served, as without their sacrifices, we would not be here today. As you just heard, in the Q3 , Green Thumb posted record quarterly revenue, EBITDA, and for the first time in company history, positive earnings per share. Performance that truly speaks to the breadth and depth of our team, as well as our daily commitment to excellence. In the backdrop of this financial performance, we cannot ignore the macro trend that is unfolding before our eyes. The tidal wave of demand that Ben has been preaching to us for years was fully on display during last week's election. Our key takeaway as a management team, build a bigger boat. The green tsunami is on our doorstep, and the walls of prohibition are directly in its path.
In the Q3 , the company generated a robust $157 million of revenue. Our top-line growth of 31% was primarily driven by earlier than expected contribution from our recently completed cultivation expansions in Illinois and Pennsylvania, as well as the rebounding of Nevada and Massachusetts to pre-COVID levels. Gross revenue for our consumer packaged goods business, CPG, grew by $18 million, or 33%, quarter- over- quarter. On a net basis, which accounts for intercompany revenue, our growth approximated $13 million or 41%. In retail, revenue increased $24 million or 28%, driven by new store openings and same-store sales growth that exceeded 65%. On a gross basis, our revenue split for the quarter was approximately 60% retail, 40% CPG. On a net basis, 71% retail, 29% CPG. These numbers are similar to Q2, just slightly more tilted towards CPG.
As a reminder, the difference between gross and net is intercompany revenue, which approximated $30 million in Q3 and $24 million in Q2. During the quarter, we completed our wholesale facility expansions in Illinois, Pennsylvania, and Ohio. All three facilities contributed to our Q3 financial results and are well on their way to being positive profitability centers for the company. Hats off again to our team for their execution, as our Illinois and Pennsylvania expansions ended up contributing more to our business in the Q3 than we initially anticipated. As such, their incremental contribution in Q4 will be somewhat tempered. Turning to profitability, the company generated gross margins in excess of 55%, 200 basis points greater than last quarter.
While our intrinsic goal of keeping this very important metric above 50% remains, we are witnessing the true potential of our platform when combined with solid execution in highly attractive limited license markets. Below the gross margin line, our SG&A of $50 million was essentially flat to Q2. Excluding D&A and stock-based comp, our normalized operating costs totaled $34 million, or $2 million greater than last quarter. It helps that the same quarter we increased cash operating costs by $2 million, we increased revenue by $37 million. Other expenses for the quarter approximated $2 million, which reflected a favorable valuation adjustment to our strategic investment portfolio, as well as interest and warrant expenses associated with our senior debt. Net of these expenses, the company generated $39 million in pre-tax income and over $9 million in net income, providing our shareholders with its first positive EPS of $0.04 a share.
The company also experienced significant improvement to its adjusted operating EBITDA, which totaled $53 million, just under 34% of revenue. Year- to- date, the company has generated $114 million in adjusted operating EBITDA, 4x greater than our full year 2019 figure. Another monster achievement for the team. Turning to our balance sheet, the end of the quarter was $78 million in cash. This is $4 million less than last quarter, as the company made substantial payments to Uncle Sam and also kept its foot on the gas on the CapEx front. Subsequent to quarter- end, we executed an agreement with Innovative Industrial Properties that will provide an additional $25 million in funding to build out our Ohio cultivation license. On our public float, over 70% of our shares are currently freely traded, representing 150 million shares and over $3 billion in value.
We continue to believe that liquidity breeds confidence. In summary, we are incredibly proud of our Q3 and year-to-date financial results. Looking ahead, it's impossible to ignore the opportunity ahead of us, and I'll leave you with an interesting data point. Colorado, with a population of just under six million and 80 million annual tourists, is now averaging over $200 million of cannabis spend per month. That's an annual run rate in excess of $2.4 billion. If Colorado can hit these sorts of numbers in the year since legalization, what's going to happen in Illinois, New Jersey, New York, Pennsylvania, and others over the next several years? We at Green Thumb certainly have our thoughts. While the world around us continues to evolve, many things for us largely stay the same.
As we look ahead to 2021, I'd expect us to continue to do the following, lead with the consumer, stay focused on markets where we have or can create edge, build and invest in our team, play hard and play to win, and last, continue to wave that Green Thumb flag wide and high. Until next time, hope everyone has a safe holiday season with their loved ones, and see you all in the new year. Back to you, Ben.
Thank you, Anthony. As always, your remarks are both informative and colorful, a rare combination in CFO commentary. I believe the key takeaway from our Q3 is that our continued execution and prudent capital allocation strategy has led to steady, profitable growth. We have strong revenue, improved profitability on nearly every metric down the income statement, and a balance sheet that leads to a good night's sleep. While that is very exciting for us, we remain focused on being a leader in this brand-new industry here in the United States. That means several things. We must stay focused on leveraging our strengths and executing our strategic plan while being innovative and adaptable. We must stay dedicated to our core values by promoting social equity, diversity and inclusion, community engagement, and environmental stewardship. We must continue to do what we say we're going to do.
We must never lose sight that first and foremost, this is a people business. Being people first means listening and taking care of our team, customers, and communities. We are very proud of our commitment to those who we serve. First-day profits from all new store openings go directly to community organizations such as the Last Prisoner Project, Loaves & Fishes in Illinois, 412 Food Rescue in Pennsylvania, and next week to the Florida Rights Restoration Coalition. With today being Veterans Day, it is also a timely reminder to thank those who protect our democracy, our freedoms, and the right to choose cannabis. In November, our brand, Dogwalkers and Operation 1620 teamed up to help bring awareness, education, and support to veterans who choose cannabis as an alternative to pharmaceuticals.
Finally, our main job collectively is to promote wellbeing through the power of cannabis, and in doing so, create opportunity and long-term sustainable value for all of our stakeholders. I want to thank our team, our customers, partners, and you, our shareholders, for your continued contribution and support of Green Thumb. Everyone, please stay safe and well during this holiday season. Thank you, everybody. With that, I'll turn the call over to the operator, and we welcome your questions.
Thank you. In order to ask a question, you will need to press star one on your telephone. To withdraw your question, you may press the pound key. As a reminder, please limit yourself to one question and one follow-up. Your first question comes from the line of Lee Cooperman from Omega Family Office. Your line is open.
Yeah, I hesitate asking a question. I think I had the honor of asking the first question on your call as a public company. The very next thing I see my picture in New York Post, and underneath my picture, they refer to me as a cannabis king, knowing very little. Anyway, first, let me congratulate you on outstanding results. I'm kind of making a loose analogy. At the turn of the century, there were a very large number of automobile companies producing automobiles, and of course, the industry consolidated. There are a large number of companies in this space. Do you see an opportunity to consolidate the space given the superior job you've done and having the great CFO that you referenced on the team? That would be first question.
Sure.
If I could squeeze in a second, what is your attitude towards listing on the New York Stock Exchange?
Thanks, Lee. Really appreciate the kind words. We're focused on the execution over here. You're right, turn of the century, whether it's automobiles or prohibition, and we've used the phrase Prohibition 2.0, and I believe that history doesn't repeat, it rhymes. We really look to history for those lessons, and you're totally right. There's monstrous consolidation opportunities. You've seen probably the industry finish in the U.S. The first wave of consolidation that happened as the capital markets got frothy. They've calmed down. Maybe they'll come back, but there is massive opportunity given how big the sector is. There's no $50 billion or $80 billion space, which is where we're going to be, where the biggest companies only do $2 billion, $3 billion, $4 billion in sales. You're exactly right of where it goes over time. The question is how quickly and when.
For us, with the CFO, with the lens and shareholder capital and really shareholder returns with every dollar we spend, is when does it make sense? Like always, everything's on the table if it makes sense for shareholders and it's accretive, and it depends on lots of factors. We have a huge opportunity within the portfolio. But that's not to say there's tuck-in acquisitions that are accretive, and especially as this industry evolves. We can see the field pretty well, and we're excited about what's out there, and we're excited about the current portfolio. To the second question, on the New York Stock Exchange, I think just backing up a second, Green Thumb is registered with the SEC, the U.S. Securities and Exchange Commission. This puts us in a unique spot. That includes we file GAAP financials. You'll see the 10-Q in the morning.
We file 8-Ks, 10-Qs, 10-Ks, GAAP, standard stuff, and we have a registration with the SEC. There's currently not enough clarity in the federal government for a listing on the New York Stock Exchange, but I can tell you we positioned ourselves like has been our history even since before we went public, to be a first mover in the capital markets. I would describe it as we're knocking on the door. We're getting ourselves ready. It obviously doesn't make any real sense that the only access on the New York Stock Exchange is the Canadian operators who don't have exposure to U.S. consumers, and here's where the monstrous business is. We understand that regulatory structure, which creates a moat around our business and makes us extremely bullish about what's ahead.
You've seen us put out things like an S-1, which is a registered offering, with the U.S. Securities Exchange Commission, which really just gives us optionality, another tool in the toolbox. As we've used over history, things like debt sale, leaseback, all with the lens of what's most accretive for shareholders.
Well, you've done an excellent job. Congratulations, I'm very pleased. Thank you.
Thanks, Lee.
Your next question comes from the line of Vivien Azer from Cowen. Your line is open.
Hi, good evening.
Hey, Vivien.
In terms of the revenue growth sequentially, certainly better than I was expecting. I was wondering if you could unpack or dimensionalize the relative contributions from Illinois and Pennsylvania, coming online a little faster than expected relative to Massachusetts and Nevada, reopening and recovering from the COVID lockdown. Thanks.
Yeah, great question. The truth is, clicking on a lot of cylinders last quarter, as Anthony mentioned, somewhat of a tempered outlook versus a 30% or whatever the last quarter was. Where did it come from, to your question, lots of factors. You're exactly right. Production turn on in Illinois, Pennsylvania, drove a lot. Ohio and New Jersey as well. New market turn on. Then two things going in Massachusetts and Nevada is how I would describe it. One is the recovery, and two is growth within that market. All things being equal, there would've been growth out of Massachusetts and Nevada had there not been the dip. With the dip, which was really in April, right? Half of May, which that's what we're comping in the Q3 , there's some factor there.
Really, I would say a vast majority probably, back of the envelope, 75% is a result of organic growth in the portfolio versus lapping a COVID situation. That's because the business executed and turned on these things we talked about last quarter. It happened to be the Q3 , it could've been Q4 , but that's the big step up.
That's great. Super helpful. Thank you. For my follow-up, Ben, I really appreciate the commentary around just New York, very attractive, potential limited license, adult use marketplace. It does seem like the Cuomo administration really means it this time in terms of legalizing adult use. I am curious, though, if you have any thoughts around what a potential licensing framework could look like, in particular, given the sizable, COVID-driven budget deficit the state's facing.
Thanks. There are several ingredients of a successful rollout from medical to adult use. We welcome the conversation with regulators, industry participants, those who are not yet industry participants. There's certainly got to be a place for new folks to come in. This is a massive business. The pie is very big. There's plenty of winners, plenty of ways to win. You can say it in many different ways. However, relying on the operators that can stand it up and deliver that supply, whether it's tax revenue, jobs, capital to get this thing going, it's very big. We're here. We're constructive. A lot of people are talking, and a lot of people are brainstorming. We are excited about what's ahead broadly, across the East Coast.
Your next question comes from the line of Matt McGinley from Needham. Your line is open.
Thank you. The increasing retail revenue growth was quite impressive, but it was especially impressive given most of that was productivity increases. Was that broad-based across the entire portfolio, or did you have specific assets or states where it drove most of that? I guess importantly, has that productivity held into the Q4 ?
Sure. Thanks for the question, Anthony here. We historically haven't broken down state-by-state performance. Holistically, we've seen strength across the platform. Certain markets, obviously, more than others. We have a business here, given the limited licensed markets that we operate in, we're bullish on all of them, literally. We're in the situation where we continue to see nice organic growth, same-store sales within each of the markets that we operate in. In terms of Q4, it's a little early to speak to that. It's been a strong year, and obviously with COVID, we had no idea what to expect when it hit in the Q1 , and we've been pleasantly surprised by the pickup that we've seen across the entire platform, since the Q1 .
As far as gross margin, I would think that the retail gross margin wouldn't be that volatile, and that most of the gross margin upside in this quarter came from production leverage. If the CPG business grows at a faster rate than your retail operation in the Q4 , is there anything with a mix or, I guess, a product mix or a geographic standpoint that would prevent you from expressing continued upside of those gross margin rates? I guess, how should we think about that in terms of what happened in the quarter, in terms of the leverage that you saw in gross margin, and how would that look into the Q4 ? I guess if should be anything we should be thinking about that could keep that from going up even more.
Sure. This is Ben. I'll take that one. Don't really talk quarter- to- quarter on how to think about it. I think over time, you're exactly right. The retail gross margin does not have a lot of upside from what the retail business is. In fact, it's probably downside or a slow melt. The other thing that works against gross margin is obviously price, unless input costs are rising. That's certainly the risk to the model. If you look at our business and you're modeling it out, there's two real levers that'll drive it. One is which pieces are driving the biggest piece of that production? Where are we making the most product? What's the profitability at the places that have the largest product? Product mix and state weightings. Really, we keep both kind of slow and steady with the constant awareness around price.
That's kind of how I would think about it. When we continue to optimize, we continue to think about capital investments that can drive down gross marginal cost per unit. It sets up pretty nicely for that sort of exercise. If you tell me where price is going, I can tell you where gross margin is going. We don't know, and there's a lot of action within markets, and we don't try to play the price game. We try to serve customers, and we certainly try to serve patients who are using this product for wellbeing.
Your next question comes from the line of Eric Des Lauriers from Craig-Hallum. Your line is open.
Thank you for taking my questions. Congrats on a really impressive quarter here. First question is a bit of a follow-up on one of the previous questions regarding uplisting federal reform, especially with the green wave and now prospect of a Democratic president. Certainly a lot of talk about federal reform and especially uplisting to major exchanges. You guys mentioned that you are ahead of your peers in terms of registering with the SEC and GAAP reporting. First, is there anything else that you guys need to do to be able to uplist, or is it just a matter of federal reform at this point? Second, given your discussions with the exchanges, in your opinion, would SAFE Banking potentially give the exchanges enough cover to allow for an uplisting? Thanks.
Sure. This is Ben. Your question's a great question without a great answer to begin, and I obviously can't speak for anybody else. The truth is, the situation right now does not have a lot of clarity, because we see ourselves on the doorstep, with SEC registration. I mean, we're with the U.S. Securities and Exchange Commission with a registered offering to sell U.S. securities. I think that's very unique, and that's differentiated from where things were a year or two ago, right? We went public two and a half years ago, plus or minus. The capital markets have been evolving. When we see things like banking reform and changes to this, what that screams to me is a reduction and a change in cost of capital. Banking change means cost of capital reduction, and that's really good for shareholders.
Listing is one thing, but when you think about things, and I think it's important, as I mentioned, sources of capital. Not just equity, and I wouldn't make shareholders nervous because we'll make shareholders without an overhang here if the business is profitable. What's really interesting about banking change is cost of capital and thinking about our debt, and what that cost of debt might be for the risk profile of the business that's now profitable at 12%. I think a listing happens one day, and it's hard for me to say if it's 2021, 2022, or later. Frankly, for us, that's not the focus.
The focus is to execute the business and think about the cost of capital as we allocate it to this massive business and how to be accretive for shareholders in order to build a monstrous enterprise into an industry that's bigger than U.S. wine. Bigger than U.S. beauty and personal care. Those are big, big numbers and big, big industries that have been around for generations. We believe our relationship with the consumer effectively has been around for generations. We know it. That's the opportunity to execute into, and we are participants in what's happening. We are watching what's happening. Obviously, we're paying tens of millions, hundreds of millions of dollars in taxes. It's not going unnoticed.
It's just a matter of time and setting ourselves up, and putting credibility, whether it's high-quality U.S. institutional capital into the business or paying taxes, having profitability, as an industry, not as a single operator, but really as a U.S. cannabis industry, to make it so obvious that it should be listed. This is the U.S.A. and America first in a major way. There's no reason to transfer the wealth to another country for the cannabis bid that is so native here. We just focus on the day-to-day execution of the business to deliver the product to the consumers that want it, and we believe change is coming. We know change is happening. Again, no semblance of timing and safe.
What's going to happen in the relief bill and Senate. There's just too many variables and too many paths for us to speculate on. We'll just focus on what we can control.
That makes sense, and I appreciate the color there. Certainly seems obvious to me for you guys to be uplisted here. Last question from me. I'd like to just drill in on Illinois, given the very impressive growth we've seen there. In the press release, you guys mentioned that you completed the initial phase of construction at the Oglesby facility. I know you guys generally don't give much state-by-state information here, but could you provide any color on how big that initial build-out is? Or perhaps give us a sense of order of magnitude, how much further you can expand before reaching your square footage cap, and then, any comments on timing would, of course, be helpful too.
Yeah. I mean, great question. Thanks, Eric, and to the first part of your question, feel free to talk to anybody about that belief that we should be listed, because the more education that occurs in the industry with all kinds of participants, the better, and you've done a great job, so thank you. We don't give a lot of details about what's going on in Illinois. I would say we built more, we got more coming, and we have plenty of room to go bigger. We are focused head down on what we do within the building to optimize the product in order to make it for the consumers. We're not worried about the rec cap. We know about the unlimited medical. We have two sites. The business at $100 million now. Last month, we see going bigger.
Very simple to see how big Illinois could be. I mean, you go crazy and use Anthony's numbers of $200 million a month in Colorado. The numbers get very, very big very, very quickly. We even like a $3 billion number for Illinois, and we see those dollars being invested into Illinois being very accretive for shareholders in terms of it's $1 on the balance sheet that becomes many dollars of EBITDA or some dollars of EBITDA would then become a multiple in the equity value or the enterprise value. We're focused on that, and there's plenty of room to grow. We welcome you and anybody else to come to us.
Your next question comes from the line of Pablo Zuanic from Cantor Fitzgerald. Your line is open.
Good afternoon, everyone. Ben, can you just talk about New Jersey in terms of your expectations of how soon rec sales will start? On average, it's taking about two years from a ballot approval in other states. Of course, Illinois is an exception, six months. Just briefly, in the case of Pennsylvania, with a Democratic governor there and Republican legislature, there's talk that a compromise would be to implement rec but have the state-owned liquor stores sell rec cannabis. How do you think about that? Thanks.
Thanks, Pablo. Great question. Appreciate all the work you're doing as well. I'll take the PA one and then Anthony, maybe hit New Jersey. To cut to the chase, we don't think that's very likely. We think the regulatory for state-owned enterprise, we're going to leave that to our friends up north. We think the regulatory structures that are in place can protect the integrity of the industry, right? Why was there ever a three-tier or other sorts of things? It's about inventory and tax, right? Making sure nothing's leaving out the back door, and there's a tight inventory tracking system, seed-to-sale, as you know and everybody knows. In PA, whether it's with MJ Freeway or other states, whether it's with BioTrackTHC, that works and tracks the inventory. We don't really see a lot of upside to that.
That's not something that worries us, but we think it's a lot about how the sausage is made here as people become educated in the structures that might work and might not work. There's a lot of discussion, a lot of progress to be made. We're obviously bullish on PA. We continue to invest in the market. We continue to open stores and serve the consumer in the Pennsylvania market. It's really a patient now, massive opioid problem, and it's really a pleasure to operate in that state. I'll let Anthony talk about New Jersey.
Sure. Pablo, great question. Look, it's really hard to say how quickly the rollout in New Jersey will actually take place. Illinois took about six months, plus or minus, that was very fast. I will tell you, it feels like there's just a ton of momentum. Last night, 10:00 at night, there I am in bed reading kind of the latest summary of one of the bills that seems to be gaining internal momentum within the state. Look, I think they see the writing on the wall. They want to be a first mover in the Northeast, they see an opportunity to take advantage of that time.
An average, I guess, we've seen different markets take as long as two years, some shorter, then depending on the thing that no one's really talking about yet is, how are the local municipalities going to play a role in that? Once they set up the regime, how quickly can operators actually get to market? Right? You've seen the situation in Massachusetts where clearly the number of retail stores that have opened up in the last few years is a lot lower than anyone would've initially anticipated heading in. Hard to say. I can tell you there is a lot of momentum. You can feel it, and I wouldn't be shocked if at some point next year, the program goes live.
Just a quick follow-up. No, that's good, Anthony. Thanks. I know you're guiding for tempered growth in the Q4 , but just remind us, that new capacity that came in, was that early July or late September? You would still have a big benefit of new capacity, the full quarter utilization in the Q4 , right? Can you give some color on that? Thanks.
Really most of the quarter was there because you heard us on the last quarter say, "Hey, we got all these things coming." It's been all that pre-capital investment. Obviously if it only turned on in the last week, there would be hidden organic growth, but that's not the story.
Your next question comes from the line of Michael Lavery from Piper Sandler. Your line is open.
Thank you. Good evening.
Hi, Michael.
You've talked about how important brand equity is, and obviously as the category evolves, then that'll probably keep growing in importance. Can you give a sense of what, if any, metrics you look at in terms of tracking that? Is it sort of any loyalty measures or price gaps and pricing power? What is it that you look at in terms of understanding how you're building equity with consumers and how sticky that might be going forward?
Thanks. Great question. It's something we really focus on. We think the data and the insights and certainly having a portfolio across the country of what is about to be 50 open stores with consumers in medical. We don't really like to talk about those sorts of specific metrics that can give us brand traction, brand loyalty. It's selling itself through, and we're studying what consumers are saying, how they're feeling, talking to people, collecting data. We think there's extreme power in the data that our business is building and collecting. This is a consumer business, and like all consumer businesses that are in late stage or maturity or wherever, who rely on data for decision-making, the same can be had here. We see a lot of traction and at the end of the day, we want to be making more. Consumers want more.
They want more Dogwalkers. They want more RYTHM premium flower. They want Beboe. They want to feel better with Dr. Solomon's. We can feel it, and we're pleased with where we are, but it's not a done deal, right? This is kind of a no finish line situation as we build and cultivate that relationship with this consumer as they evolve and get educated and experience this product in a new way. What's truly happening is a new experience across the American consumer. It has to be, right? If 50%+ of the product is not smoked anymore, and who, when, where, I think that we just welcome the spotlight of this and the data for everybody to see as it matures.
Okay, thanks. That's helpful. Just a follow-up on the same-store sales growth. You called out a couple drivers there, obviously very, very strong. A little bit of a clarification included in this. When you talked about the comparable sales growth primarily being driven by increased transactions, is that the number of transactions similar to the foot traffic you call out in the sequential gains, or is that increased volume of, and size of transactions, where they're getting bigger, or is it possibly both? I'm just curious about that, what you point to with some of the key drivers. Is it gains from illicit trade? Is it share from competitors, a bit of both? How do you think about where you're sourcing there?
Yeah, great question. Pretty basic. It's the former. I know that it really needs more transactions. What's going to drive it is either ticket size or number of tickets. I don't think there's much else. We're seeing more tickets, which is more people. There's been evolution of the ticket size, and certainly there was pantry loading in March. We've seen that spike, and we've seen it come down, and maybe it hasn't hit the pre-COVID levels, and state to state is a little bit different, but not back there, but marching back there slowly.
Your next question comes from the line of Graeme Kreindler from Eight Capital. Your line is open.
Yeah. Hi, good afternoon. Thank you for taking my questions here. I wanted to follow up on the comments made earlier in the call about building a bigger boat. I understand there's been an intense focus from Green Thumb on allocating capital to opportunities with the highest return, also really running the company like you didn't have to raise another dollar. There were some questions earlier on the call with respect to Illinois. That appears to be really top of the list here on capital priorities.
As you look at everything going on in the existing portfolio and then what's going to happen in New Jersey and what might happen in places like New York and Pennsylvania, wanted to get more color in terms of, you go down that list, how you make the capital decisions from there on out, outside of what's happening in Illinois in the short term here. Thank you.
Yeah. The decision on capital allocation on what's best based on where the market is, first mover, market opportunity, what the licenses are, where we can put it. This is really a return on invested capital gain, as we've been talking about for a long time. Everything's on the table. We're constantly playing the game on where we can get the highest returns in the most protected way. There is a massive green wave going on here, so we don't want to have our head down too much. We got to be watching what's happening everywhere. We're studying, we're learning, but the basic principles of capital are there.
If we can put $50 million into something, what does it equal in terms of just like EBITDA and what year and what rate and free cash flow, when and how, and what does it look like against the competitive set or the inevitable, we don't know what we don't know. Worried all the time about disruption or something else. We're focused on building our brands and our relationships with consumers, which I think we're doing. We're in the beginning of, but that's the value over time to the portfolio. That's really what drives the capital decision, there's accretive opportunities and great things, not just in Illinois, Pennsylvania, New Jersey, Ohio, and other markets across the country. I would just return on the retail thing, I got cut off or something. It's really more tickets, more consumers coming in.
The one thing I would say about that's been unique is people buy more. Unlike a consumer staple, like toilet paper, that lasts you twice as long if you buy twice as much. People buy twice as much cannabis, or they have more cannabis, they consume more. That's not a bad thing for the business. We don't think that's a bad thing for the consumer, but there's a fact that drives velocity into the stores, and so we're studying that to your question on what's driving that. At the end of the day, the ticket's over transaction price or even units, but we're watching all of those in order to serve the customer in the best way possible. Thanks.
Just a follow-up question here regarding the continued scale then. With respect to the normalized operating costs, which had a very minimal change quarter-over-quarter, if you look into next year and adding even more states or the states getting even bigger, are we at a point here where the business is sufficiently scaled up from that operating expense side of things, or will there be a need to add on more of that as we continue to grow and more market value continues to get unlocked here? Thank you.
Sure. Anthony here. Yeah, my comment about building a bigger boat, part of that is the team, in addition to the infrastructure. I don't think so . We are still kind of building out both the retail and wholesale pieces of our business. As the business grows, the complexity grows, and the opportunity grows. I think what you'll see from us is we will continue to invest in people, obviously the right people. We focus on cost just as decent business operators just trying to run a good business. At the same time, we kind of underwrite these decisions from a ground-up basis without kind of saying to ourselves, "Hey, the target is X number." It's not like we're sitting here saying, "Okay, the SG&A in Q2 of 2021 should approximate X, Y, or Z." We can't do that.
The business is moving too fast, there's a lot of variables changing around us. One thing that we are going to continue to do is invest in the team and continue to build the team so that we can execute on the opportunity ahead of us that we know is just massive. I would expect to see that gross number increasing on a relative basis, quarter- after- quarter. A lot of that just has to do with, call it when certain facilities turn on or how quickly we can find additional team members that can grab an oar and help row this boat that we're building.
Your next question comes from the line of Aaron Grey from Alliance Global. Your line is open.
Hi, good evening. Thanks for the questions, and I'll add my congrats on the quarter. Just want to add on to a question that was asked earlier in terms of, obviously, the capital and what states that'll be specifically allocated to. One state in particular, being Florida, just given you just recently opened up another store there, one of the first ones you've opened in about a year. Just wondering, just given the regulation in the state, there being no wholesale market, are there any plans for any type of cultivation expansion in the state, and are there any additional store openings just kind of specifically focused on Florida? Thank you.
Sure. Great question. Anthony here. Look, we're big fans of the Florida market. May not sound like it, but we are. Look, I think if you rewind, call it nine- 12 months ago, we had some very difficult decisions to make. It all came down to return on invested capital. We effectively, when we looked at our portfolio, we had to earmark dollars that perhaps could have been earmarked for Florida and move them elsewhere because we thought it was better for the business. I think as we look ahead to Florida, we continue to do the work. We continue to assess it. It's something we talk about on a regular basis. Again, here we are now that New Jersey passed, call it last week. That adds another layer of complexity.
As we sit here in our shoes and try to allocate capital that's best for the shareholders, we're constantly reassessing the chips on the table and looking at them. We're bullish on the Florida market. We see the growth. We see some of the performance that some of the operators down there have, and it's impressive. I think for us, what we'll do is we'll just continue to assess it, week after week, month after month, and if it makes sense, then we'll go ahead and pull the trigger. Right now, I think it'd be premature to communicate anything as it relates to 2021.
Okay. All right, great. Thanks. A second question from me then. Obviously, Section 280E is something that still hinders you and the other operators out there. Just as we think about you guys getting more and more profitable and the impacts on free cash flow, specifically between retail and wholesale, can you talk about the impacts that Section 280E might have on the differences between the two, and how having more sales flow through either retail or wholesale could impact the free cash flow you guys get versus what you have to pay out on the taxes side? Thank you.
Sure. Look, obviously, 280E plays a role within the business. We've been able to, obviously now that we're cash flow positive and paying big tax payments to Uncle Sam, the nice part is we have a business that generates healthy after-tax free cash flow. In terms of the impact on the business, look, obviously, the retail is a bit more punitive. I'll just sit here and tell you that that doesn't play a major role in how we kind of run the business. It's something we watch and something that we understand so that if we do see growth of X, Y, or Z within the retail versus the wholesale side of the business, the impact that'll have from a cash basis.
Look, here we are sitting, and it's not like a situation where we don't have the dollars on a pre-tax basis to pay the tax. We can keep our foot on the gas and still generate healthy after-tax cash flow returns for the shareholders, and we'll continue to do that.
Your next question comes to the line of Andrew Partheniou from GMP. Your line is open.
Hi, thanks for taking my questions, and congrats on the incredible quarter, guys. I wanted to just talk a little bit about New Jersey a bit more. Within the enabling legislation that's currently going through state Congress, if it gets passed as it's written, I believe there's a certification process where operators need to certify that they can meet existing medical patient demand to the state before serving rec customers. Do you have any color on what that entails? Assuming, or at the point where rec sales start in New Jersey, do you think that could impact pricing in Massachusetts at all for demand?
Good question. I think the details of the certification are still a bit kind of ambiguous. Look, the supply-demand imbalance will exist for a period of time. How long? No one really knows. There's just too many variables to kind of put your finger on. I didn't fully understand your question about the impact in Massachusetts and New Jersey, maybe if you could just kind of shed a little bit more light there.
When New Jersey rec comes online, perhaps there might be some customers that shop in Massachusetts that would prefer to shop in New Jersey. If there could be any impact at all to the Massachusetts rec market as a result of New Jersey rec coming online.
Hey, this is Ben. Look, if I had to just boil real simplistically, at this moment in time, this is water in the desert. It won't be that way forever. Right now, Massachusetts pricing as a result of New Jersey coming online is not a risk factor. Pricing broadly, as I mentioned, is a constant risk factor and something we're thinking about how to do it. All the supply in New Jersey and then some is needed, heavy on the and then some. Anthony's bigger boat is needed, because there is a huge amount of demand on the East Coast.
Can definitely recognize that with the underserved market in New Jersey. Switching gears and talking a little bit about the health of the consumer. Have you seen any kind of trends, like a shift in more purchasing of value products? You talked about the number of tickets increasing. What about returning customers? How have their purchasing patterns changed or perhaps not changed over the past several months? Particularly in Illinois or any other state that you would like to call out, are there still purchasing restrictions in place, and when do you think that could end?
When do we think what could end? I just missed that last part of your question. Sorry, Andrew.
Any purchasing restrictions that could be in place, particularly in Illinois or any other state that you'd like to call out?
Purchasing restrictions, what I would call is really sort of opportunities for retailers to sort of serve more consumers in a place where there's really not enough water to go around. What's happening in the consumer basket has been pretty steady. Unlike what happened last year, say, in vapegate, at the end, where people, consumers really shifted quick away from vaporizers and the vape pens, and then understood quickly after, as I think the media and everybody did a good job educating folks that it was truly untested and unregistered pens that were making people sick and not legal, and the consumer reacted back. We thought maybe consumers would go away from inhalables given COVID and the respiratory elements, and I think we said before, that did not happen.
I think what's really happened, the bottom line to the core of your question is more people are consuming cannabis. That translates to category growth across the board. The nuances, while very interesting, important, and incredibly detailed, and a lot happening, core concept is massive new adoption by U.S. consumers and massive more consumption by those consuming. The river's flowing pretty heavy. We're excited about that opportunity.
Your next question comes from the line of Matt Bottomley from Canaccord Genuity. Your line is open.
Good evening, everyone. Thanks for taking the questions this evening. Ben, you described a little bit before that the sequential growth that we saw, very rough figures, obviously about 25% of that was some rebounding in Nevada and Massachusetts. Then there was some specific states mentioned in the press release for the other 75%. One that we haven't really chatted on this call is Ohio. Given that there's a bit more of a hard cap there on the retail side, can you give any dynamics on your ability to carve out greater market share there, whether it's the wholesale channels or just other dynamics in that market with respect to thinking about the bank and where Ohio might rank and in what you consider your core markets at this moment?
Yeah. We love the Buckeye State. Look, we've seen the movie before. They're pretty transparent with what kind of data is going on there. It's a 10 million+ person state, 11 or 12, and we know what that demand among those consumers looks like. We're excited to have the maximum number of retail stores open. We've got great market positions, places like Lakewood, Lorain, Toledo. Unbelievable team out there. We're excited about where this heads and we'll be putting capital into Ohio, that'll drive really sort of high level 2022 and beyond. We'll stay tuned.
All right. Just a follow-up question on one of the other sort of anecdotes you gave with respect to Florida. Are there any other markets and one that is sort of notable as I just sort of look through where your exposure is maybe California, where that's not where a lion's share of the capital allocation is right now, but a lot of different MSOs and other operators in the state that are much more capital constrained than you guys at this time seem to be going narrower as opposed to wider. Is this an opportunistic time for GTI to start expediting capital allocation in other markets?
If you line up everything you're doing or going to be doing in New Jersey and then some of your core markets which still have very high growth rates, is that something that again, would be maybe a nice to have as opposed to something to focus on right now? Any anecdotes on other markets that you think.
might make sense in the nearest term here would be helpful.
Sure. I would summarize it by saying everything is on the table if it makes sense. We are watching a massive green wave transform this country and create the next great American growth industry. It's happening everywhere because people are everywhere. We understand the supply-demand by those markets. We see this green wave. We are studying, we are watching, we're playing an ROIC game in order to grow the chips for shareholders and put them back in the game, to understand what's happening. We love our current portfolio broadly east of the Mississippi. Everywhere we love, we see the flower shortages happening there. Just watching what we call internally the state of the states, you really watch the growth happening across this country. It's quite tremendous, and we're excited for everybody else to eventually wake up.
Your next question comes from the line of Mike Hickey from The Benchmark Company. Your line is open.
Hey, Ben, Anthony, Jennifer, Andy, congrats on the quarter, guys. Superb performance. Well done. Thanks for getting me in here.
Sure.
I guess just one question. I guess it's still early days, green wave is building here, but it's going to be a monster. You continue to scale. I'm just wondering how you think about sort of the construct of your business between CPG and retail, that if you think there's long-term harmony there between those two, or if you think over time, maybe there's benefits to separating those two into separate companies. Thanks, guys.
There's great harmony there. There's a one plus one equals something bigger than five. We're focused on building our brands and the relationship with consumers. That's about being where consumers are. It's about understanding the market and investing in those two businesses. It's a different kind of business to build a storefront, $1 million and build an e-com platform than it is to put $50 million into the state of Pennsylvania in order to build supply and make mass consumer products at scale to be distributed across the entire state. We love both those businesses. My job and the team's is to support those two businesses, build teams that can make sure that those folks can go execute. It's about optimizing the distribution channels, it's about getting Dogwalkers to every consumer that wants them. It's a very easy message.
By the way, it might lead to a nice evening at home. Try for yourself is sort of the message. We watch what happens. Isn't it a pleasure to own the booze and the bong? It's quite simple. It's the same thesis from day one. We continue to optimize those and what we can do to unlock shareholder value in the future, that's what keeps it exciting. It's fortunate for me that I get to think about those sorts of things. We believe we are just getting going.
Ben, I think we've talked for a couple of years now. This is the most fired up I think I've heard you. Is it the quarter? Is it the politics? Is it the growth in front of you? What's really driving, I guess, your enthusiasm? It seems to sort of meter up here on this call.
Thanks. Yeah, trying to be tempered, but there's a tidal wave of demand that we've been talking about for six years in a row, and it's helping people feel better, and it makes me excited to help more people feel better through this product. Then what watch comes out is these numbers. Again, like I just got to bang the table on this is a U.S. story. It's still misunderstood in the media. Literally. Like the wrong ticker symbols are on TV. I don't think the average consumer is understanding how to take advantage of the American story here, for all of us. We're fired up about that. We're fired up about the tens of thousands of people that we can help. Really like big picture, small picture, and the team.
Team fires me up because you guys are doing a good job, and they're making this fun for everybody, so I think that's.
Your next question comes from the line of Scott Fortune from Roth Capital Partners. Your line is open.
Good afternoon. Thanks for the questions. Real quick, just want to follow- up kind of strategically, Ben, around California and the market. We've seen 31 municipalities come on board now to really start opening up legalized cannabis here in the state. What's your thought around brands? You're focused east of Mississippi, but coming from California and your strategy in California, like to gradually build that out with your brands, just from a long-term perspective.
We are studying it very closely. We have been for a long time. Just because it's the biggest doesn't mean it's the best. It might be the best way to lose money. That may be a backward-looking statement, we hope. We are studying it closely. We obviously have a big presence in Nevada, in Las Vegas, a lot of this, close geographically. We have licenses in Southern California we plan to execute on. We are watching the entire supply chain of that market, pricing, participants, brands, retailers, and every part of that supply chain. The team does a really good job.
Okay. Then last question from me. Can you provide an update on kind of number of stores that you're serving? At one point it's about 700. You had good 33% quarter-over-quarter CPG growth, but it sounds like that's mainly coming through throughput in your existing stores. Where are we as far as an inflection point in time production into actually getting more distribution into a higher number of stores? What's that level at, if you have a number?
Yeah, thanks, Scott Fortune. I don't have a detailed number for you, but the way we look at it really is how penetrated by state. When we're 100% penetrated in the state, it's impossible to grow the doors. We're 98%, so it's not like there's a lot of opportunity out there for new doors in many of the states that dominate our portfolio, whether it's Illinois, Pennsylvania, Maryland, et cetera. That's the best measure I can give you until there becomes more stores, and we plan to continue. In Illinois, get 75 new stores out. We plan to have product in the doors there. As new stores open, it's important for us to have product on the shelf for those consumers.
Your next question comes from the line of Andrew Semple from Echelon Capital Markets. Your line is open.
Hello. Good evening, everyone, and congrats on yet another excellent quarter.
Thanks, Andrew.
My first question is just on the balance sheet. It appears to be in great shape. When you look at debt of about $100 million and you compare that to about $50 million of EBITDA being generated this quarter, and that figure is obviously growing quite quickly. It would appear that there is capacity to add leverage. What's your thoughts on that, on potentially looking at debt financing to accelerate capital expansion programs, or else accelerate your M&A pipeline, where you see accretive opportunities? If you had any comment on whether there's anything holding you back from pursuing debt financing.
Ben, I can hit that a little bit. I think we mentioned how accretive it is and what happens with the cost of capital. As you know, and I think everybody knows, the depths of capital markets in U.S. cannabis, it's not deep. We have been forging new ground for two and a half years publicly and five, six years privately. If somebody would like to refinance our debt at 6%, we think our interest cash cost would stay the same if we borrowed $200 million, and we can put that money to work for shareholders and create huge amounts of equity value, and we're ready to go. We're also very careful who our partners are. We have a methodical approach.
We're examining everything on the table. I think I've talked to where the best places are like this for shareholder appreciation, non-dilution. It's not that we need to raise equity capital. I just kind of reemphasize that we don't need to raise the capital. There are attractive ways. We're measuring that all the time. We're being prudent stewards of that capital. As cost of debt goes down, our refi opportunity becomes interesting.
Thanks for those comments. Just my next question, and speaking about putting shareholder money to work. We're nearing the end of 2020. Just wondering if you would perhaps clarify what's on the agenda for 2021 in terms of capital projects and what your overall capital budget for next year might be.
No surprise. I can hit this one. Real high level on CapEx, we spent $100 million in 2019. We spent a little over $90 million so far this year. There's no reason to slow down. I would look for us going bigger in 2021. No surprise on the list of where that capital's going. I've rattled it all off, and we have great opportunities, and we're excited about what's going to happen.
Your next question comes from the line of Glenn Mattson from Ladenburg. Your line is open.
Hi. Yeah, thanks for taking the question. Great quarter. Building on that last question about capital. This quarter, a lot of capacity came online all at once and really created this surge in revenue and stuff. Do you imagine more uniform, or should we expect kind of stairstep increases in capacity next year?
It really depends. Anthony here. The retail is easy. That's more kind of linear, just given the spend there per store. Wholesale is where it's very lumpy. As we kind of build out more facilities, we optimize our build-outs even more efficiently. I'd say the size of our bets kind of get bigger because our confidence gets bigger. I don't think that'll change much on a go-forward basis.
One more quick one. Hopefully by spring this isn't an issue anymore given the various vaccines that are out there and everything, but there appears to be a significant increase in COVID cases out there. You've been through this once before, the industry, and you guys managed very well through it. Can you make any plans or contingencies, or how do you prepare the business for any potential disruptions this spring related to COVID?
For sure. Expect the unexpected, keep the team ready for adaptability, and invest in the team. Cleanliness procedures, SOP adjustments, PPE, split shifts, flexibility, testing, temp checks, all the standard stuff that was new before when we invented it, as did everybody across the country and all over, is now in the playbook, part of the SOP. It's unfortunate we got to kind of ramp a few things up in different levels on different facilities. That's where we're at. We want to invest in the team and keep it safe. The plants don't stop. The consumer wants the product, and that motivates us. We got to be safe. We got to watch what's going on in the building, but we continue to operate.
Your next question comes from the line of Russell Stanley from Beacon Securities. Your line is open.
Hello, and thanks for taking my question. I guess the first one, with respect to Illinois, Pennsylvania, and understanding your comments around water in the desert. Just wondering, given the supply expansions you brought online and some of your peers having managed to do the same, have you seen any evidence of supply shortages or tightness easing at all? Where is the race between demand and supply? Where does that look now relative to where it was three-six months ago?
October in Illinois is way better than January, without a doubt. There is flower. Many operators have come online. We had $100 million versus whatever it was out of the gate, and $25 in December. PA has pockets of tightness. High-quality flower remains in demand. There's ebbs and flows. Product that comes online effectively doesn't go back, right? To Anthony's point, that stair-step function. Once the supply comes on, it's there. If there's more to go, there's more to go, there's more to go. It's better now than it's been in any of these markets. With each year, it continues to get better. The thing is, the consumer base grows. Brand loyalty grows. It continues, but it's not a dire situation in Illinois the way it might've been in the beginning. There is still massive unmet demand.
Excellent. Just as my follow-up, I wanted to clarify, I think, something you said earlier with respect to Nevada and Massachusetts and the dips we saw in those markets. Have you fully returned to pre-COVID shutdown levels in both of those markets? I know you mentioned a lot of recovery, but just wondering if you've crested above water, if there's still a little bit more work to be done there.
Yeah. I knew that quickly. As a state, each one of those are above pre-COVID levels. Pockets of strength, opportunities within each, what's happening. As a state, they are above and growing.
Your next question comes from the line of Howard Penney from Hedgeye. Your line is open.
Thank you so much for the question. As institutional investors continue to come into the space and GTI looks to attract those institutional investors, have you contemplated giving long-term targets to growth in revenues, EBITDA, profitability, whatever you think might be deemed important to contextualize your growth relative to the industry? Thanks.
Hey, Howard. Thanks. Ben, if I thought we thought you thought that that would mean that things would change in the capital markets, sure. That's a non-factor. It's not that hard for the underwriting to happen here. It's not a portfolio manager gating item here. It's a compliance officer gating item. The investment case is there. This is very, very simple. You see massive growth. You compare it against anywhere what's happening and now profitability and cash flow and all the other kinds of fun things. This is not about future targets because it's easy to see a 20% compound annual growth for an industry that could even be bigger and businesses growing over 100%, us included and others. That's a massive opportunity, and whether you're a value, GARP, growth, you can find pockets of amazing opportunity here, and we're seeing that.
I don't think targets would add to the bid.
Thanks for the question.
Sure. Thank you.
There are no further questions at this time. Ben, I turn the call back over to you for some closing remarks.
Sure. Thanks, everybody. I know it got a little long. We're excited about what's happening here for everybody to see. The business is in a good spot. There's not a need for capital, but there's a great use for capital. We're on that path to over $1 billion in sales. As the world wakes up to the U.S. cannabis opportunity, we're excited to feel the privilege of this. Happy Veterans Day to everybody. Safe holiday season, and we'll talk to you in March. Thanks, everybody.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.