Best Cannabis Stocks For Watchlist In June
Are you looking for the top marijuana stocks to invest in for June? Ancillary cannabis companies supply products and services to the cannabis industry but do not work directly with the plant. These businesses provide various services, such as cultivation technologies, packaging and labeling, software and data analytics, legal and financial services, and marketing and branding.
The continuous expansion of legal cannabis markets is one potential trend that may affect the ancillary cannabis sector in 2023. As more states and nations legalize cannabis for medical or recreational purposes, there will be an increase in demand for ancillary products and services. This could open up prospects for new market entrants while encouraging incumbent firms to increase their offers.
Various factors, including legislative changes, consumer preferences, and technical improvements, are anticipated to impact the auxiliary cannabis business in 2023. While it is impossible to foresee the future confidently, it is apparent that ancillary cannabis companies will continue to play an essential role. These companies support the legal cannabis industry’s growth and development. Let’s look at some of the top ancillary marijuana stocks to watch now.
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- GrowGeneration Corp. (NASDAQ: GRWG)
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
GrowGeneration Corp.
GrowGen is a specialty retail hydroponic and organic growing center owner and operator. The company now has 61 outlets in 17 states. GrowGen also has an online cultivator superstore at growgeneration.com. The company carries and distributes thousands of goods, including organic nutrients and soils, modern lighting technology, and cutting-edge hydroponic equipment for businesses and home growers to utilize indoors and outdoors.
Revenues fell $24.9 million, or 30.5%, to $56.8 million in the quarter that ended March 31, 2023, compared to $81.8 million in the previous quarter. The fall in net revenue was principally due to a 36.6% decrease in same-store sales at 55 retail locations and the Company’s e-commerce operations compared to last year, offset partially by an increase in revenue from our distribution and other segments. Overall retail sales in the first quarter were $39.4 million, compared to $64.3 million in the same period the previous year. The revenue forecast 2023 remains between $250 million and $270 million. The adjusted EBITDA(1) estimate remains between a loss of $4 million and a profit of $1 million.
GRWG Stock Performance
GRWG stock closed at $3.83 on May 22nd, up 25.16% in the last month of trading. In addition, GRWG stock has a 52-week range of $2.77-$8.63 and is down 2.30% year to date. According to analysts at CNN Business, GRWG stock has a 12-month median price target of $4.53. In this case, this represents an 18.46$ increase from its last trading price of $3.83.
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Hydrofarm Holdings Group, Inc.
Hydrofarm is a leading independent manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture, such as grow lights, climate control solutions, growing media, nutrients, and a diverse portfolio of proprietary and innovative branded products. The company has been assisting producers in making growing easier and more productive for over 40 years. The company aims to provide growers, farmers, and cultivators with products that improve their growth projects’ quality, efficiency, consistency, and speed.
Hydrofarm Financial Results
Net sales in the first quarter of 2023 fell to $62.2 million from $111.4 million in the first quarter of 2022 due to a 42.5% drop in volume of products sold, a 1.1% drop in price/mix of products sold, and a 0.6% drop from unfavorable foreign exchange rates. In addition, Net sales in the first quarter of 2023 fell to $62.2 million from $111.4 million in the first quarter of 2022 due to a 42.5% drop in the volume of products sold, a 1.1% drop in price/mix of products sold, and a 0.6% drop from unfavorable foreign exchange rates.
In addition, gross profit fell to $11.4 million in the first quarter of 2023 from $16.6 million the previous year. The decrease was primarily due to a drop in net sales. For the three months ending March 31, 2023, the gross profit margin percentage grew to 18.3%, up from 14.9% in the same period in 2022. In the first quarter of 2023, restructuring charges of $1.2 million reduced the percentage of gross profit margin.
The company sustained a net loss was $(16.8) million, $(0.37) per diluted share, in the first quarter of 2023, compared to a net loss of $(23.3) million, or $(0.52) per diluted share, in the first quarter of 2022. The company is reaffirming its full-year 2023 outlook of net sales of approximately $290 million to $310 million, and the Company now expects results to be toward the low end of the range. With an Adjusted EBITDA(1) that is modestly positive for the full year, consistent with previous expectations.
HYFM Stock Performance
HYFM stock closed at $1.16 on May 22nd, up 13.17% in the last five trading days. At present, HYFM stock has a 52-week price range of $0.956-$7.30, down 25.16% year to date. According to analysts at CNN Business, HYFM stock has a 12-month median price target of $1.45. In this case, this would represent an increase of 26.09% from its last trading price of $1.16.
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Top Ancillary Pot Stocks And Investing In 2023
To summarize, US marijuana stocks are an intriguing alternative for investors seeking exposure to the thriving cannabis market. Investors can position themselves to profit from the expanding market and potentially reap big rewards with careful deliberation, comprehensive research, and a long-term view. As the cannabis green wave grows, people that approach the industry with caution and discernment may find themselves at the forefront of a rewarding investment path.
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