Why Are Marijuana Stocks Down In 2021?
At the present time, investors are waiting for top marijuana stocks to begin rebounding in the market. For more than five months the best cannabis stocks to invest in have seen significant declines in trading. After reaching new highs on February 10th the cannabis sector has been on a downtrend that has top pot stocks trading at some of their lowest valuations in 2021. For new investors, this could be an opportunity to find the best marijuana stocks to buy at lower price points.
In general, for the past few weeks leading cannabis companies have been reporting earnings that show significant revenue growth for most companies. Unfortunately, this has not translated into gains in the market. Instead, some of the better-performing cannabis companies are seeing selloffs after their earnings report. As more states legalize cannabis in 2021 it seems the potential catalyst for the marijuana sector is federal cannabis legalization and reform.
Currently, Senate Majority Leader Chuck Schumer has introduced a draft of the Cannabis Administration and Opportunity Act to gain support. In the White House, President Biden is exploring clemency for people with federal drug convictions. Specifically, the president is looking into using his executive authority to grant clemency to non-violent drug offenders. In general, this is the president’s way of making good on his campaign trail promise to decriminalize cannabis.
Best Ways To Invest In US Marijuana Stocks In 2021
As things start progressing for federal reform top marijuana stocks are currently positioned to see some possible upside in the fourth quarter of 2021. For investors, there are many ways to invest in the cannabis sector that could produce returns for your portfolio. One area of the market that saw substantial gains in the first quarter of 2021 is marijuana penny stocks.
For those not familiar with penny stocks these are any stocks trading under the $5 mark. This area of the market is known for being high risk with significant market volatility. For the most part, traders prefer using short-term trading methods when investing in cannabis penny stocks.
Another area that has delivered gains for investors is ancillary marijuana stocks. These companies are those that support the cannabis industry without touching the actual cannabis plant. In 2020 some of these companies performed better than vertically integrated cannabis stocks for investors. With analysts predicting some upside for pot stocks let’s look at 2 top marijuana stocks for your list next week.
[Read More] Best Marijuana Stock To Buy Before Next Week? 2 For Your Watchlist Right Now
Top Marijuana Stocks For Your Watchlist In August
- AFC Gamma, Inc. (NASDAQ: AFCG)
- MedMen Enterprises Inc. (OTC: MMNFF)
AFC Gamma, Inc. is an institutional lender to leading cannabis companies with strong operations and cash-flow prospects. The company specializes in real estate security and other collateral, and locations in states with favorable supply/demand fundamentals and legislative environments. Currently, AFCG provides innovative and customized financing solutions through first-lien loans, mortgage loans, construction loans, and bridge financings. At the present time, AFC Gamma’s principles are now focused on the exponential growth of the cannabis industry.
On August 5th the company reported its Q2 2021 financials showing net income of $4.6 million or earnings of $0.34 per basic weighted average share of common stock. In. addition the company saw distributable earnings of $5.8 million or $0.43 per basic average share of common stock. In Q2 the company closed $71.3 million of new commitments and funded $77.8 million of new and existing commitments. One prospect that AFC has for shareholders is its dividend. For Q2 2021 the company paid a dividend of $0.38 per common share. As of August 1st, the company has a portfolio consisting of loan commitments worth $195.3 with $175.3 million of outstanding principal across 14 portfolio companies.
AFCG Stock Performance
At the present time, AFCG stock is trading at $20.93 on August 13th up 2.69% in the past five days. The stock has a price range of $19.75-$25.05 and is trading an average volume of 153,501 shares a day. According to analysts at CNN Business AFCG stock has a 12-month median price target of $27.00 per share. Currently, this forecast represents an increase of 29% from its trading price of $20.93. For this reason, AFCG stock could be a top marijuana stock for your list next week.
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MedMen Enterprises Inc.
MedMen Enterprises Inc. is a cannabis retailer with locations in California, Nevada, Illinois, and Florida. At the present time, the company has an extensive selection of high-quality products, including MedMen-owned brands LuxLyte, and MedMen Red. In its Q3 fiscal 2021 results, the company saw net revenue of $31.7 million up 2.8% from the previous quarter. Additionally, MedMen delivered total revenue across operations of $37.8 million an increase of $8.2% sequentially.
In its Q3 report, the company cut its net loss to $9.7 million compared to a net loss of $68.9 million in the previous quarter. In 2021 MedMen is down significantly year over year with third-quarter revenue of $32 million versus $44.1 million in Q3 of 2020. Recently, in Florida, the company opened a new location in South Beach Miami, Florida, and continues expanding and in the US cannabis market. MedMen’s current interim Chief Executive Officer and Chairman of the Board of Directors, Tom Lynch, became the permanent Chief Executive Officer.
MMNFF Stock Performance
At the present time, MMNFF stock is trading at $0.272 on August 13th up 2.06% for the day. The stock is up 105.47% year to date and has a 52-week price range of $0.104-$1.47. According to analysts at Wallet Investor MMNFF stock has a 1-year forecast price target of $0.384 per share. Currently, MedMen has been positioning itself to continue growing in the cannabis market. With this in mind, MMNFF stock could be a top marijuana penny stock for your watchlist right now.
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