How Are These Pot Stocks Performing In The Market?
While profitability is not the only factor to use when searching for a pot stock to watch, it is quite important. Some of the largest marijuana stocks in the industry like Canopy Growth Corp. (CGC Stock Report) and Aphria Inc. (APHA Stock Report), have yet to post profitability. But, smaller pot stocks like Trulieve Cannabis Corp. (TCNNF Stock Report), have. Why is this the case you might ask? Well for starters, each and every pot stock is different. And therefore, each marijuana stock is backed by a different business model. In addition, some areas of the cannabis industry may offer more potential for profitability than others.
This includes the ancillary pot stock sector as well as MSOs and ESPs. Now, it is important to note that the area that a cannabis stock is in, will not always equal profitability. Investors should always make sure that they have done all the research possible to ensure that the investment is secure. While no investment can truly be a safe one, with the right information, we can beat out unwanted volatility in our portfolios. With that in mind, here are two marijuana stocks with more profitability than most.
Marijuana Stocks to Watch: Innovative Industrial Properties Inc.
Innovative Industrial Properties Inc. (IIPR Stock Report) is one of the most profitable marijuana stocks in the cannabis industry. The company operates as a REIT with a focus on those who wish to grow cannabis. As a REIT, IIPR stock has been able to secure long term and consistent profits for its investors. The company operates off of long term contracts which usually range in the 10 to 20 year period. The business model of a real estate investment trust means that capital is always invested the same way, and returns can often meet expectations.
In addition, REITs are required to pay out the majority of profits in the form of dividends. In the past few years, IIPR stock’s dividends have shot up from around $0.15 per quarter to over $1.15 per quarter in its most recent term. The company currently has as many as 62 properties that span across 16 states in the U.S. With some massive growth prospects on the horizon, IIPR stock continues to show why so many investors are interested in the company.
Marijuana Stocks to Watch: The Valens Company Inc.
The Valens Company Inc. (VLNCF Stock Report) is categorized as an ESP or extraction service provider. In 2020, VLNCF stock has reported that it may be able to push more than $40 million in net income. One of the main reasons behind Valens’ success is the area of the cannabis industry that it operates in. As discussed earlier, ESPs are some of the most profitable cannabis stocks in the industry. These companies work off of long term contracts which make earnings and revenue quite stable in the long term.
In addition, the use of extractions in cannabis products has grown exponentially in the past few years. With the addition of Canada legalizing extracted cannabis products this year, many believe that ESPs could have a solid long term future ahead. Valens has stated that it has the potential to process as much as 425,000 kilograms of cannabis per year. With this, many investors have remained focused on VLNCF stock. With its financials looking quite steady as of September 2020, VLNCF stock remains an intriguing pot stock to watch.