Marijuana Stock In the Last Week Of January
As the last trading week in January begins top marijuana stocks are trading lower assessing gains from earlier in the month. In essence, the best cannabis stocks to buy have mostly gained double-digit percentages trading to begin 2021. As trading on Monday, January 25th commenced most ancillary pot stocks to watch like Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) are trying to hold on to value from last week.
In essence, this could be considered a buying opportunity for investors wanting entry into the cannabis market. Currently, many analysts are predicting significant revenue gains for most top marijuana stocks in the industry for 2021. This is due to the expansion most cannabis companies underwent during 2020 and now to begin this year.
Currently, the cannabis market is growing rapidly on the state level in the U.S. In reality, the best-positioned cannabis companies could see massive revenue growth because of it. In addition to the MSOs gaining revenue, most companies that support the cannabis industry could be positively impacted by growth. While the cannabis industry is expected to reach sales of $47 billion by 2025 companies that support this evolution could grow tremendously. In essence, these companies might represent a good long-term investment in the cannabis market.
Long-Term Investing In Marijuana Stocks
Although many investors don’t think of investing in cannabis stocks for the long-term in reality there is substantial potential for growth in the industry. In the past, most top marijuana stocks have displayed extreme market volatility and that is one reason for shareholders not to consider pot stocks for the long hold. On the other hand, most ancillary marijuana stocks have shown more stability in the market. In general, this could make them better options for long-term investing.
While marijuana stocks continue with upward momentum cannabis investors are seeing substantial returns on their investments. Currently, cannabis stocks have begun to have more long-term appeal for investors. As the possibilities of American legalization on the federal level increase so does the potential for growth in the industry. In addition, these cannabis stocks also give shareholders incentives for long-term investing. With this in mind, let’s take a look at 2 marijuana stocks that could be better options for long-holds in the cannabis sector.
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Marijuana Stock To Watch:
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
- The Scotts Miracle-Gro Company (NYSE: SMG)
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. targets medical-use cannabis facilities for the acquisition, then participates in sale-leaseback transactions with licensed cannabis growers under long-term, triple-net leases. In reality, this cannabis REIT is one of the only options currently providing capital to cannabis companies through long-term ownership of marijuana facilities. In a press release today, the company announced it closed on an acquisition property in Florida with Harvest Health & Recreation Inc. (OTC: HRVSF). In detail, IIP will purchase the property for $23.8 million then enter into a long-term, triple net lease on the property with Harvest. Additionally, IIP agreed to provide a reimbursement of $10.8 million for facility improvements.
As of January 25th IIP, owns 67 properties across 17 states in the U.S. totaling about 5.7 million sq. ft of rentable space. In addition, IIP has these properties 100% leased with an average remaining lease term of 16.6 years. In essence, this could mean long-term revenue for IIP for the future. Another incentive IIP provides for investors is a rather large dividend for shareholders. In December 2020 the company raised its dividend to an annualized dividend of $4.96 per share. In fact, this was a 24% dividend increase for the same quarter in 2019.
IIPR stock is up 5.52% year-to-date reaching a new high in today’s trading of $206.45. In 2020 the stock more than doubled in value and became a favorite amongst hedge fund investors and large institutions. Currently IIPR stock has analysts at Tip Ranks giving it a 12-month price target of $200.50 per share. As the cannabis industry continues to grow and needs new properties IIPR is best positioned to grow with the market. For this reason, IIPR stock is a candidate for long-term investing in the cannabis market.
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The Scotts Miracle-Gro Company
The Scotts Miracle-Gro Company is one of the world’s largest marketers of branded consumer lawn and garden products. Currently, with about $4.1 billion in sales, the company’s brands are some of the world’s most recognized gardening products. The company’s wholly-owned subsidiary The Hawthorne Gardening Company is a leading provider of all materials used in the indoor and hydroponic growing segment. In essence, Scott’s gives investors exposure to consumer gardening and also cannabis industry cultivation. In 2020 the company saw both main segments of its business model perform extremely well driven by product demand.
Actually, Scotts full year 2020 results show record U.S. consumer sales increasing by 90% in Q4 of 2020. In addition, Hawthorne sales increased 68% in Q4 and climbed 61% for the year. Currently, Scott’s provides a dividend to shareholders of an annualized dividend of $2.48 per share. Scott’s is expected to release its Q1 results on February 3rd, 2021 before the bell. In case the company delivers another strong financial result, SMG stock could continue gaining in the market.
SMG stock is up 15.89% since the start of 2021 closing trading on January 25th at $231.52 per share. In essence SMG stock could be a good way to gain entry into two consumer growing segments that have proven very successful. Currently SMG stock has established a high of $237.68 in today’s trading. Because SMG stock has gained significant value in 2020 and could continue seeing gains in 2021 SMG stock is a top cannabis stock for long-term investing.
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