What happened
Green Thumb Industries (GTBIF 3.56%) saw its shares plummet 16.8% on Tuesday. The cannabis company's stock closed on Monday at $12.20. On Tuesday, it opened at $12.05 before falling to a low of $9.88, though it rose to $10.15 at the close on Tuesday. Green Thumb is down more than 54% so far this year, with a 52-week low of $7.72 and a 52-week high of $28.56.
So what
The Illinois-based company is in the midst of some upheaval. The company's general counsel and corporate secretary, Beth Burk, resigned on Oct. 4 along with three of the company's four independent directors. All three directors were part of the company's audit committee. The company, in a release on Oct. 6, said the resignations were not related to the company's financial performance, statements, or financial controls, but were over a disagreement over the company's polices and practices on personal misconduct.
It's unclear whether that's the case as the board members who resigned submitted a terse letter that attributed the resignations simply to "material differences with Company management."
Now what
Investors will wait to see if there's something else behind the resignations. Green Thumb was coming off a strong second quarter, with reported revenue of $254.3 million, up 15% year over year and 4.8% sequentially. The company also reported its eighth consecutive quarter of positive net income, with $24.4 million compared to $22 million in the same quarter a year ago.
The marijuana industry in general got a bump last Thursday when President Joe Biden said he was looking to pardon those with simple marijuana possession federal convictions, as well as look into changing the Drug Enforcement Agency's Schedule 1 designation for marijuana, which currently puts it on the same enforcement level as heroin. When President Biden's announcement came out on Oct. 7, Green Thumb's shares jumped 30.3%. Since then, investors have sold a lot of Green Thumb stock, looking to close struggling positions on an up note.
