Why So Many Investors Are Watching These Marijuana Stocks
The future of the cannabis industry is projected to be quite good. Many leading analysts have stated that within the next decade, we may see the cannabis industry be worth as much as $100 billion globally. While this may be an overstatement, there’s no doubt that growth will occur. While many investors tend to focus on the big-name pot stocks like Aurora Cannabis Inc. (ACB Stock Report) and Cronos Group Inc. (CRON Stock Report), there are plenty of other options. These options span several different sectors of the cannabis industry. This includes pure-play, retailers, and ancillary marijuana stocks.
All of these areas have their own value points. And, they all have different pros and cons for different investors. Those who are more conservative with their portfolios may want to look at the ancillary pot stocks. These companies usually are much less volatile than pure-play pot stocks. On the other hand, those that swing or day trade may want to look at the more volatile marijuana stocks. With that in mind, let’s take a look at why so many investors are looking at these marijuana stocks.
Pot Stocks to Watch: Green Thumb Industries Inc.
Green Thumb Industries Inc. (GTBIF Stock Report) is one of the most consistent marijuana stocks in the industry. The company has made a lot of headway in the cannabis industry due to its performance. In the past two quarters, the company has achieved a positive EBITDA which is quite promising. In addition, the company posted an almost 170% revenue growth amount year over year. This represents an amount of around $120 million in that period. In its most recent second quarter, the company posted a positive EBITDA of 40% over the previous years second quarter. In addition, as of June of this year, the company posted that it held around $83 million in cash.
One of the main reasons that the company has posted so much growth is that the demand for marijuana has increased greatly in the U.S. this year. This is due to the effects that Covid has on the cannabis industry. With a presence in 12 states around the U.S., GTBIF stock is one of the broadest marijuana stocks in the industry. In those 12 states, the company has 48 retail stores. In addition, it has its products in almost 100 stores around the nation. For this reason and others, it remains a leading pot stock to watch.
Pot Stock to Watch: Canopy Growth Corp.
Canopy Growth Corp. (CGC Stock Report) is widely considered to be the largest marijuana stock in the industry by market cap. With a value of $5.3 billion as of mid-October, the company has made big headway. Despite its large size, its fourth-quarter results left a little to be desired. The company posted a 13% loss over the previous quarter in its net revenue. With that in mind, the company still posted a revenue amount of almost CA$110 million. CEO of the company, David Klein stated that he is “excited to implement (a new) strategy reset and organization redesign over the course of fiscal 2021, with a renewed strategic focus and a clear change agenda that is already under way.”
This plan has been somewhat successful so far as the company has reduced its cash burn by roughly 50% over the previous year. In addition, the company posted around 75% in year over year growth. While the earlier news may be disheartening for some, CGC stock is still one of the most potential-filled pot stocks to watch. With a healthy amount of free-flowing cash, CGC stock remains a pot stock to watch.
Pot Stock to Watch: Harvest Health & Recreation (HRVSF Stock Report)
Harvest Health & Recreation Inc. (HRVSF Stock Report) is one of the leading, relatively unknown MSOs in the U.S. based out of Arizona, HRVSF stock has been able to make some serious headway in the cannabis industry. In Arizona, the company recently opened its 15th retail dispensary. But, outside of its home state, the company has 20 more dispensaries around the U.S. In its most recent second-quarter results, the company announced sales of around $55 million.
This represents a 26% gain over the previous quarter and almost 110% more than the prior year’s same quarter. In the past five quarters, HRVSF stock has reported a loss which is not something investors want to hear. But, the company has a great deal of growth prospects on the horizon that could pay off. If Arizona legalizes cannabis in the upcoming election, it would be very big news for HRVSF stock. If not, the company still has a solid chance at future growth. With that in mind, it remains a leading pot stock to watch.
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