Investor’s Insight: Tracking the Leading US Marijuana Stocks in August
As the cannabis market develops, 2023 offers an appealing setting for investors interested in the top US marijuana stocks. The market is primed for tremendous growth, with the continued expansion of legalization across several states and a growing acceptance of cannabis for medical and recreational usage. This year, investors are keeping a close eye on short-term trading possibilities while examining the possibility of holding long-term positions in this volatile sector. However, given the inherent volatility of the market and the effect of regulatory changes, managing this climate requires a thorough understanding of risk management measures.
Short-term trading in the US marijuana stock market allows dynamic investors to profit from fast price movements. However, due to the industry’s susceptibility to news, political developments, and shifting legal frameworks, these short-term benefits are frequently coupled with increased risk. As a result, investors who engage in short-term trading should stay informed, pay attention to market conditions, and use risk mitigation strategies such as stop-loss orders to protect their money.
On the other hand, many investors are examining the possible benefits of owning long-term positions in significant US marijuana stocks. The ongoing extension of legalization, as well as the broader societal change toward allowing cannabis use, point to the possibility of continued development in the future years. Long-term investing in the cannabis business, however, necessitates careful examination of fundamental analyses, in-depth research into specific companies, and the ability to weather market downturns.
Smart risk management procedures, portfolio diversification, and a long-term perspective are required for investors seeking to navigate the complex terrain of US marijuana companies in 2023. Staying informed about regulatory developments and market trends will be critical in making well-informed investment decisions that combine possible rewards with acceptable risks as the industry matures.
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Top US Marijuana Stocks Catching Fire in August 2023
- Verano Holdings Corp. (OTC: VRNOF)
- Ayr Wellness Inc. (OTC: AYRWF)
- TerrAscend Corp. (OTC: TSNDF)
Verano Holdings Corp.
Verano Holdings Corp. is a multi-state, vertically integrated cannabis company based in the United States. The company sells high-end cannabis products under a variety of brand names. Verano has 14 manufacturing and processing units, 129 dispensaries, and 13 states. Regardless, the company is well-known throughout Florida and has 63 locations. Zen LeafTM and MÜVTM, two of the company’s retail brands, run dispensaries serving medicinal and recreational clientele. The company opened its 68th location in Florida, in Miami Kendall, on June 1st.
First Quarter 2023 Results
Revenue for the first quarter of 2023 was $227 million, a 12% rise over the first quarter of 2022 and a 1% increase over the fourth quarter of 2022. Revenue increased in the first quarter of 2023 compared to the first quarter of 2022, owing mostly to higher retail and wholesale adult-use sales in New Jersey and Connecticut, offset slightly by lower retail sales in Pennsylvania.
Gross profit was $109 million or 48% of revenue in the first quarter of 2023, up from $99 million or 49% in the first quarter of 2022 and $103 million or 46% in the fourth quarter of 2022. The first-quarter net loss in 2023 was $(9) million, compared to a minor loss in 2022 and $(216) million in the fourth quarter of 2022. The company maintains its Free Cash Flow1 prediction of $50-75 million while cutting its Capital Expenditure guidance to $35-50 million.
VRNOF Stock Performance
VRNOF shares closed at $2.89 on August 4th, down 9.69 in the past month of trading. The stock has a 52-week price range of $2.58-$7.19 and is down 7.37% year to date. According to analysts at Tip Ranks, VRNOF stock has a 12-month average price target of $8.63 per share. This would represent an increase of 198.62% from its last trading price of $2.89.
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Ayr Wellness Inc.
Ayr Wellness Inc. is a well-known Florida cannabis company. 60 of the company’s 70 marijuana-related firms are based in Florida. To expand in Illinois, the company purchased Herbal Remedies Dispensaries, LLC. Adult marijuana use can potentially boost companies’ appeal in Ayr, Massachusetts. In Pennsylvania, the business has opened its sixth linked dispensary. Ayr intended to open its 86,000-square-foot processing and growing plant in December after receiving regulatory certification from Arizona. The company invested significantly in the beverage business by acquiring Levia Cannabis Infused Seltzer in 2022.
First Quarter 2023 Results
Revenue increased 18% year on year to $117.7 million in the first quarter of 2023, according to AYR data, up 3% sequentially. In addition, Adjusted EBITDA increased by 64% year on year to $26.3 million and 9% sequentially (GAAP loss from operations increased to $21.7 million from $21.0 million in Q1/22). Since the start of 2023, the company has launched seven new sites in Florida, bringing the total number of dispensaries in the state to 60. The company intends to open ten further locations in 2023, increasing the total number of locations to 70 by the end of the year.
The Company estimates that revenue and Adjusted EBITDA will expand in line with Q1 sequential growth patterns in the second quarter. AYR further reiterates its expectation of positive operating cash flow in 2023. However, operating cash flow patterns will not be linear due to the timing of tax payments. The company will report its second-quarter results before the market opens on August 17th.
AYRWF Stock Performance
AYRWF stock closed on August 4th at $0.945, up 2.11% in the last month of trading. The stock has a 52-week price range of $0.5660-$5.28 and is down 21.25% year to date. According to analysts at CNN Business, AYRWF stock has a 12-month average price target of $4.70 per share. In this case, this would represent an upside of 397.77% from the last price of $0.945.
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TerrAscend Corp.
TerrAscend cultivates and distributes marijuana throughout the United States and Canada for medical and recreational reasons. With operations in Pennsylvania, New Jersey, and California, the company is a major cannabis grower in the United States. The company’s primary objectives are to manufacture and promote artisan cannabis goods, as well as hemp and cannabis-infused products. TerrAscend has created several products in Maryland under the Kind Tree brand. The Kind Tree brand’s existing product range, made in Maryland from 15 distinct flower varietals, will include vapes and half-gram pre-rolls.
First Quarter 2023 Financial Highlights
- Net Revenue was $69.4 million, an increase of 0.6% sequentially and 42.8% year-over-year.
- Gross Profit Margin was 48.8%, compared to 44.6% in Q4 2022 and 32.1% in Q1 2022.
- Adjusted Gross Profit Margin1 was 49.0%, compared to 45.3% in Q4 2022 and 40.3% in Q1 2022.
- GAAP Net loss from continuing operations was $19.2 million, compared to $2.0 million in Q4 2022 and $13.8 million in Q1 2022.
- EBITDA from continuing operations1 was $6.1 million, compared to $30.0 million in Q4 2022 and $1.1 million in Q1 2022.
- Adjusted EBITDA from continuing operations1 was $12.2 million, compared to $12.2 million in Q4 2022 and $4.9 million in Q1 2022.
- Adjusted EBITDA Margin from continuing operations1 was 17.6%, compared to 17.7% in Q4 2022 and 10.1% in Q1 2022.
- Cashflow provided by (used in) continuing operations was $8.4 million compared to $7.3 million in Q4 2022 and ($18.8) million in Q1 2022.
- Free cash flow was a positive $5.9 million compared to ($6.9) million in Q4 2022 and ($23.0) million in Q1 2022.
- Cash and Cash Equivalents totaled $32.9 million as of March 31, 2023, as compared to $26.2 million as of December 31, 2022.
TSNDF Stock Performance
TSNDF stock closed at $1.40 on August 4th, down 28.21% in the past month of trading. The stock has a 52-week price range of $1.00-$2.57 and is up 23.89% year to date. According to analysts at CNN Business, TSNDF stock has a 12-month average price target of $2.25 per share. In this case, this would represent an upside of 61.02% from its last trading price of $1.40.
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US Marijuana Stocks to Follow for Market Moves
The 2023 marijuana stock market in the United States offers a blend of short-term trading opportunities and long-term investment potential. As more states legalize marijuana, the cannabis industry is entering a new era. Market participants must display caution and strategic vision whether they are capitalizing on quick price changes through short-term trading tactics or choosing the steadier road of long-term investment. Balancing the temptation of profit with a thorough understanding of risk management will surely be the key to success in an ever-changing industry.
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