Ancillary Cannabis Stocks April 2023
Are you looking for the best ways to invest in marijuana stocks for the short and long term? Recent declines in many top cannabis stocks have made them an interesting pay in 2023. One area that cannabis investors can look toward for long-term investments is ancillary marijuana stocks.
Ancillary cannabis companies supply products and services to the cannabis sector but do not work directly with the plant. These businesses provide various services, such as cultivation technology, labeling, packaging, software, financial and legal services, marketing, and branding. In addition, the medical marijuana sector has attracted a lot of attention as investors seek to take advantage of its strong growth prospects.
As the cannabis market grows this year, this may present a chance for new investors. Numerous US cannabis businesses are preparing to expand along with the market as the US cannabis sector continues to expand. Let’s look at 3 top ancillary and medical cannabis stocks to watch in April.
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Top Ancillary Cannabis Stocks For February 2023
- The Scotts Miracle-Gro Company (NYSE: SMG)
- Jazz Pharmaceuticals plc (NASDAQ: JAZZ)
- Innovative Industrial Properties, Inc. (NYSE: IIPR)
The Scotts Miracle-Gro Company
Scotts Miracle-Gro, the world’s largest name-brand consumer lawn and garden goods manufacturer, has entered the cannabis business. An entirely owned subsidiary of the company, Hawthorne Gardening offers hydroponic tools, lighting, and fertilizers for cannabis cultivation. In January, Scotts expanded its Hawthorne line by including True Liberty Bags and Luxx Lights. Hawthorne will be able to increase the scope of its already remarkable line of lighting products thanks to the acquisition. Despite a decrease in income, Hawthorne has not changed its outlook for the year.
Sales across the board for the three months ending on December 31, 2022, fell by 7% to $526.6 million. Consumer-related sales in the United States increased by 8% to $369.0 million from $342.4 million in 2017. Sales for the Hawthorne section fell 31% to $131.5 million from $190.6 million during the same quarter last year, highlighting the hydroponic industry’s ongoing difficulties. In comparison to the preceding year’s loss of $50.0 million, or $0.90 per share, the company recorded a GAAP loss of $64.7 million, or $1.17 per share. The business distributed a $0.66 dividend in March. 3.4% dividend yield on the company’s equity represents an alluring increase in shareholder profits.
SMG Stock Performance
SMG stock closed at $71.44 on April 6th, down 10.05% in the last month. Currently, the stock has a 52-week price range of $39.06-$120.66 and is up 47.03% year to date. According to analysts at CNN Business, SMG stock has a 12-month price target of $80.00 per share. This forecast represents an increase of 11.97% from its last trading price of $71.44.
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Jazz Pharmaceuticals plc
Jazz is a biopharmaceutical company that develops and commercializes pharmaceutical products for unmet medical needs in the US, Europe, and other parts of the world. The majority of the business’s product lines are associated with neurology, including those for movement disorders and sleep medicine. In 2021, Jazz acquired GW Pharmaceuticals, a big cultivator of medical marijuana and the manufacturer of the cannabis-derived medication EPIDIOLEX. In the US and other nations, a drug called Epidiolex is used to treat seizures brought on by a number of grave conditions. Epidiolex is one of the few medications that has received FDA approval for medical use in both the US and the EU.
Strong execution helped the company achieve record revenues in 2022 of $3.7 billion, an increase of 18% over 2021 for its fourth quarter and full fiscal year 2022 results. Notably, Epidyolex® demonstrated impressive growth in 4Q22. It has since been released and is now covered by insurance in all five important European markets: France, Italy, Spain, Germany, and the United Kingdom. On a pro forma basis, sales of Epidiolex/Epidyolex climbed 12% to $736.4 million in 2022 and 7% to $207.0 million in 4Q22 as compared to the same periods in 2021.
JAZZ Stock Performance
JAZZ stock closed at $147.16 on April 6th, up 3.07% in the last month. The stock has a 52-week price range of $125.36-$169.98 and is down 7.63% year to date. According to analysts at CNN Business, JAZZ stock has a 12-month median price target of $204 per share. In essence, this would represent an increase of 38.89% from its last trading price of $147.16.
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Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. is a cannabis-focused real estate investment corporation based in the United States. 8.7 million square feet of rentable space are currently available at the company, and 2.5 million square feet more will in the near future. Most of these structures are fully leased, with an average lease term of 16.4 years. Now, the corporation owns 111 properties scattered throughout 19 states. In addition to the additional $227.1 million in predicted rent payments, IIP has already spent $2.4 billion on property renovations as of April. IIP predicts that as a result of its continued real estate investments, particularly in Pennsylvania and Massachusetts, its lease portfolio will expand significantly in 2022.
When the corporation released its fourth quarter and full year 2022 results on February 27, it outperformed forecasts. IIP generated total revenues of nearly $70.5 million for Q4 2022, a 20% increase from roughly $58.9 million for the same quarter in 2021. IIP generated around $276.4 million in total revenues for the entire year of 2022 as opposed to $204.6 million in 2021, a 35% increase.
Additionally, IIP reported FFO (diluted) and FFO (diluted) per diluted share for the entire year 2022 of approximately $211.3 million and $7.64, respectively. It also reported net income attributable to common stockholders (diluted) for the year 2022 of roughly $153.0 million and net income attributable to common stockholders (diluted) per diluted share for the year 2022 of roughly $5.52. IIP paid stockholders of record as of December 30, 2022, a quarterly dividend of $1.80 per common share, or an annualized dividend of $7.20 per share, on January 13, 2023. In Q4 2022, IIP had an AFFO payout ratio of 85%.
IIPR Stock Performance
On April 6th, IIPR stock closed at $72.75, down 15.04% in the last month of trading. The stock is trading in a 52-week price range of $71.20-$189.86, down 28.22% year to date. IIPR stock has a 12-month median price target of $125 per share, according to Tip Ranks analysts. In this forecast, this would be a 71.87% increase over the previous trade price of $72.75.
Investing In Pot Stocks For 2023
In general, these ancillary and medical cannabis stocks can be a good choice for new investors looking for long-term investments to get into the cannabis industry. When investing in a company, you should always do your own research. In addition, it may just be necessary to briefly check the companies’ financial statements and press releases to identify which ones represent the greatest investments. If you want to make long-term investments in 2023, these marijuana stocks could be the ones to watch.
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