Navigating Ancillary Investments: A Guide to Cannabis Stocks for August 2023
As marijuana stocks gain momentum and attract investors worldwide, it is evident that the market’s growth potential extends beyond the major cannabis growers. The spotlight shines brightly on ancillary cannabis stocks in August 2023. These companies operate on the outskirts of the cannabis ecosystem, providing crucial products and services critical to the industry’s success.
While cannabis cultivation, distribution, and retail companies have received the most attention, ancillary companies discreetly contribute to the cannabis revolution. They do this by providing vital support and innovation to the key players. These ancillary companies serve many areas of the cannabis market, ranging from technology and equipment providers to marketing agencies and research organizations.
As legislation changes and the legal landscape surrounding cannabis evolves, the ancillary industry has adapted quickly, demonstrating incredible resilience and inventiveness. The cannabis industry’s ever-changing dynamics give unique investment opportunities for individuals looking to gain on the industry’s growth without being actively involved in cannabis cultivation or distribution.
As we approach August 2023, the ancillary cannabis market is poised for transformational expansion. There has never been a more exciting time to explore the untapped potential of ancillary cannabis stocks, with legal developments, consumer preferences, and technological breakthroughs all playing crucial roles in creating the future.
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Ancillary Cannabis Stocks in August 2023
- High Tide Inc. (NASDAQ: HITI)
- Greenlane Holdings, Inc. (NASDAQ: GNLN)
- TILT Holdings Inc. (OTC: TLLTF)
High Tide Inc.
High Tide Inc. is a cannabis dispensary that produces and distributes cannabis-derived products. In addition to a well-known Canadian cannabis brand, High Tide’s portfolio includes a reputable international manufacturer and distributor of cutting-edge smoking accessories. The organization’s main goal was to dominate the internet accessory supply business. The High Tide brand is currently available at 127 retailers across Canada. Blessed CBD’s core market is the United Kingdom, and High Tide purchased the company in October 2021. With the launch of its 66th retail cannabis store, the firm increased its market share and surpassed all competitors to become the industry leader in Alberta. High Tide said this was the company’s largest acquisition to date.
Second Fiscal Quarter 2023 – Financial Highlights
- Revenue increased to $118.1 million in the second fiscal quarter of 2023 compared to $81.0 million during the same period in 2022, representing an increase of 46% year-over-year and was consistent with the previous quarter.
- Gross profit increased to $31.6 million in the second fiscal quarter of 2023 compared to $22.7 million during the same period in 2022, representing an increase of 39% year-over-year and was down 2% sequentially as there were 3% fewer days.
- The gross profit margin in the three months ended April 30, 2023, was 27%, consistent with the previous three quarters.
- Adjusted EBITDA increased to $6.6 million in the second fiscal quarter of 2023 compared to $2.4 million during the same period in 2022, representing increases of 174% year-over-year and 20% sequentially3
- For locations operational throughout the second fiscal quarter of 2023 and 2022, same-store sales increased by 30% year-over-year.
- Loss from operations improved to ($2.6) million in the second fiscal quarter of 2023, compared to ($7.6) million during the same period in 2022 and ($3.9) million sequentially, representing a reduction in losses of 65% and 33%, respectively.
- Net loss improved to ($1.6) million in the second fiscal quarter of 2023, compared to ($8.3) million during the same period in 2022 and ($3.9) million sequentially, representing reductions in net losses of 81% and 59%, respectively.
- The Company generated fully diluted earnings per share of ($0.02) in the second fiscal quarter of 2023, compared to ($0.14) during the same period in 2022 and ($0.05) sequentially, representing improvements of 86% and 60%, respectively.
- Free cash flow was ($2.0) million in the second fiscal quarter of 2023 compared to ($0.8) million in the first fiscal quarter of 2023. I
- Cash on hand as of April 30, 2023, totaled $22.5 million.
HITI Stock Performance
The shares of HITI finished at $1.27 on July 26th, up 4.10% in the last month of trading. The stock is trading in a 52-week price range of $1.0340 to $2.23, down 17.53% year to date. According to Tip Ranks analysts, HITI stock has an average price target of $5.42 per share. In this example, the upside would be 326.77% over the current market price of $1.27.
Greenlane Holdings, Inc.
Greenlane Holdings, Inc., established in the United States, is a cannabis accessory company. Popular items in the United States and other countries include premium vaporizers, child-safe packaging, and cannabis accessories. Greenlane products are currently accessible in over 11,000 locations throughout the world. Greenlane and KushCo Holdings, Inc. also finalized their merger in 2021. The company bought DaVinci, a well-known designer, and manufacturer of high-priced portable vaporizers.
The company reported a 9.0% increase in revenue to $24.0 million in Q1 2023, compared to $22.0 million in Q4 2022. Furthermore, operational expenses in Q1 2023 were $7.1 million, or 32% lower than in Q4 2022, despite a $4.6 million intangible asset impairment charge in Q4 2022. Greenlane Holdings, Inc.’s net loss for Q1 2023 was $10.2 million, compared to $13.3 million in Q4 2022, which included a $4.6 million intangible asset impairment charge. The company’s basic and diluted net loss per share was $0.64, compared to $1.02 in the previous quarter. The adjusted EBITDA loss for the first quarter of 2023 was $6.8 million, compared to $7.6 million in the fourth quarter of 2022.
GNLN Stock Performance
GNLN stock closed at $0.94 on July 26th h, down 51.30% in the past month of trading. The stock has a 52-week price range of $0.85-39 and is down 67.30% year to date. According to analysts at Tip Ranks, GNLN stock has a 12-month average price target of $13.75 per share. In essence, this would represent an increase of 1362.77% from its current trading price of $0.94.
TILT Holdings Inc.
TILT Holdings Inc., an international market specialist, may be able to assist cannabis entrepreneurs in developing a global brand. The companies’ primary markets include the European Union, the United States, Canada, Israel, Mexico, and South America. To clarify, TILT has a wide portfolio of companies that offer manufacturing, production, hardware, and software to other prominent cannabis companies. The company typically provides the best inhalation device for cannabis-based treatments to the American and European markets. After the market closes, the company will release its second quarter 2023 results on August 14th.
Q1 2023 Financial Summary
- Revenue was $42.3 million in the three months ending March 31, 2023, compared to $42.4 million in the prior year.
- Gross profit was $8.8 million in the three months ended March 31, 2023, or approximately 20.8% of revenue, compared to $9.4 million or approximately 22.1% of revenue in the prior year period.
- Net loss improved to $4.9 million in the three months ending March 31, 2023, compared to a net loss of $11.6 million in the prior year.
- Adjusted EBITDA (non-GAAP) was $(79) thousand in the three months ended March 31, 2023, compared to $1.5 million in the prior year period.
- On March 31, 2023, the Company had $5.2 million of cash, cash equivalents, and restricted cash compared to $3.5 million on December 31, 2022. Total net debt on March 31, 2023, was $48.9 million compared to $59.7 million on December 31, 2022.
TLLTF Stock Performance
TLLTF stock is trading at $0.032 on July 26th, down 8.57% in the past month. In this case, the stock has a 52-week price range of $0.023-$0.2050 and is down 20.60% year to date.
[Read More] Best Cannabis & Marijuana Stocks For 2023
Investing In Ancillary Pot Stocks In 2023
Overall, as the cannabis industry matures and expands, ancillary cannabis stocks have emerged as a key driver of growth and innovation. In August 2023, these behind-the-scenes players are proving to be indispensable contributors to the success of the broader cannabis ecosystem. From technology providers to research institutions advancing cannabis science and marketing agencies shaping brand perceptions, the ancillary market is essential to the cannabis landscape.
As investors seek opportunities in this market, exploring ancillary cannabis stocks presents an avenue to capitalize on the industry’s growth. However, with opportunities comes risks, and thorough due diligence is crucial in identifying the most promising ancillary companies.
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