The Leading Cannabis Stocks of April 2024
The U.S. marijuana industry and top marijuana stocks have been a hotbed of activity and growth, making it a key area for investors to watch. With the landscape constantly evolving, certain stocks stand out this week as potential game-changers. These companies, ranging from cultivation to retail, are at the forefront of innovation and market expansion. Moreover, recent legislative advancements have further bolstered the industry’s prospects. For instance, several states have pushed forward with legalization measures, bringing the topic into the national spotlight. This shift has not only opened up new markets but also enhanced the legitimacy and acceptance of cannabis-related businesses. As a result, the industry has seen a significant uptick in investment interest.
Furthermore, the U.S. cannabis sector is projected to experience substantial growth, with statistics indicating a bullish future. Currently valued at billions, the market is expected to double in the next few years. This projection is supported by increasing consumer acceptance and growing legal markets. However, navigating this rapidly changing landscape requires a keen understanding of technical analysis and proper risk management. Investors are advised to stay informed about market trends, regulatory changes, and company performances. Additionally, recent headlines about federal legalization efforts have sparked excitement and speculation, highlighting the importance of staying updated. By doing so, investors can identify opportunities, mitigate risks, and capitalize on the industry’s growth trajectory.
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Top U.S. Cannabis Stocks for April 2024
- Trulieve Cannabis Corp. (OTC: TCNNF)
- Green Thumb Industries (OTC: GTBIF)
- Glass House Brands Inc. (OTC: GLASF)
Trulieve Cannabis Corp.
One of the top companies in the US cannabis market is Trulieve Cannabis Corp. The company was founded in 2016 to create cannabis products for medical use. Providing top-notch cannabis products and services is their primary objective. Trulieve is a well-known brand in the cannabis market. By the end of 2023, Trulieve intends to run over 160 dispensaries nationwide. Their first appearance was in the state of Florida. They have expanded into several other states as well. Among them are Connecticut, Massachusetts, and California. Their rapid growth is evidence of their commitment to quality and usability.
Vertical integration is at the core of Trulieve’s business plan. This method manages the entire process, from retail to agriculture. It guarantees dependability and excellent outcomes. They provide a wide range of products to meet different medical cannabis needs. They offer meals, topical applications, flowers, and concentrates for sale. It is amazing how dedicated Trulieve is to patient education and community involvement. They take an active part in educational programs and community events. Their brand is strengthened, and this engagement increases customer loyalty. Their strategy is an excellent example of combining business savvy with social responsibility.
Q4 2023 Financial and Operational Highlights
Trulieve Cannabis Corp. reported Q4 2023 revenue of $287 million, a 4% sequential increase driven primarily by retail sales, which accounted for 95% of total revenue. Despite declaring a $33 million net loss, the corporation attained a GAAP gross margin of 54% or a gross profit of $154 million. Non-recurring expenses and other exclusions were taken into account for the adjusted net loss of $23 million. With $131 million from operations and $122 million in free cash flow, the quarter saw noteworthy cash flow. Due to strong consumer demand and holiday sales, EBITDA was $73 million, or 25% of revenue, and adjusted EBITDA was $88 million, or 31% of revenue. These figures demonstrate the company’s robust success. The company also managed significant financial maneuvers, including redeeming $130 million in senior secured notes and securing $25 million in mortgage financing.
Trulieve’s revenue for the full year of 2023 was $1.13 billion, with retail sales accounting for 96% of total revenue. Despite a reported net loss of $527 million, the company kept a GAAP gross margin of 52%, with a gross profit of $589 million, and cut SG&A spending by $61 million over the prior year. Various costs and impairments are not included in the $70 million adjusted net loss. At $202 million, operational cash flow was robust, while free cash flow came to $161 million. Adjusted EBITDA was realized at $322 million, or 29% of revenue. Trulieve also focused on expanding its market presence, launching adult-use sales in Connecticut and Maryland, and increasing its retail footprint to 192 locations by year-end. Recent developments include the addition of two executives and the operation of 193 retail dispensaries nationwide.
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Green Thumb Industries
Green Thumb Industries stands as a leading figure in the U.S. cannabis industry. Known for its commitment to quality and innovation, the company cultivates, manufactures, and sells a wide range of cannabis products. They operate numerous retail stores across the United States, offering both medicinal and recreational cannabis under various brand names. As of my last update, they had expanded their footprint to over 50 retail locations, showcasing their significant presence and influence in the market.
Predominantly, Green Thumb Industries has made its mark in states like Illinois and Pennsylvania, where their operations are most concentrated. In these states, they’ve established themselves as retailers and as integral parts of the community, contributing to economic growth and advocating for cannabis education and reform. Their extensive network of dispensaries, branded under names like Rise and Essence, reflects their strategic approach to capturing key markets. Moreover, their expansion efforts continue, with plans to extend their reach and impact in the ever-evolving cannabis industry landscape.
Q4 2023 Financial and Operational Highlights
In the fourth quarter of 2023, Green Thumb Industries reported a notable increase in revenue, reaching $278 million, a 7% rise from the previous year, highlighting a robust performance in a competitive sector. This quarter also saw the company with a significant cash reserve of $162 million and a GAAP net income of $3 million, or $0.01 per share, showcasing a solid financial foundation. Notably, the company achieved an Adjusted EBITDA of $91 million, demonstrating operational efficiency and profitability. The period was marked by strategic expansion, with seven new RISE Dispensaries opening, enhancing their market presence, particularly in Florida and New York. Additionally, Green Thumb demonstrated its commitment to shareholder value by repurchasing $25 million in senior debt and $15 million of its shares, underlining a disciplined approach to capital allocation.
Reflecting on the entire year, Green Thumb’s performance remained strong, with an annual revenue of $1.1 billion, a 4% increase over the prior year, and a remarkable 42% increase in cash flow from operations to $225 million. The year concluded with a GAAP net income of $36 million, or $0.15 per share, and an Adjusted EBITDA of $326 million, or 31% of revenue. These achievements underscore the company’s growth trajectory and operational success. In a move that signals confidence in its future, the Board of Directors authorized an additional $50 million towards the share repurchase program, emphasizing the company’s dedication to returning value to shareholders. Management’s commentary highlighted completing a significant capital expenditure program for future growth, setting a positive outlook for 2024 with a strong balance sheet, leading brands, and a growing customer base.
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Glass House Brands Inc.
Glass House Brands is a major player in the US cannabis market, which manufactures, distributes, and cultivates high-quality cannabis. The company is a well-known vertically integrated business prioritizing environmentally friendly goods. California is home to its main office. Their size and development potential have made them well-known in California’s well-established cannabis industry. In order to bolster its position in the state, retailer Glass House Brands has opened numerous locations as part of a planned expansion.
Glass House Brands distributes premium cannabis products in response to California’s growing demand for cannabis for recreational and medicinal purposes. Their commitment to environmentally clean and sustainable farming methods makes them stand out from competitors. The quickly growing cannabis industry, in which Glass House Brands is acknowledged as a key participant, attracts investors. When it comes to cannabis consumption and legalization, California is still at the forefront.
Fourth Quarter 2023 Highlights
The company announced net revenues of $40.4 million for the fourth quarter of 2023, up 35% from the previous quarter but down 16% from the third quarter of 2022. This performance was impressive as it exceeded the projected projection for the quarter, which was between $38 and $40 million. In particular, wholesale biomass revenue, which reached $26.8 million in the same quarter of last year after rising by a considerable 71%, was a major factor in this accomplishment. Despite this, the sequential decline from Q3 2023 was 21%. Notably, this gain was attained with Greenhouse 6 fully operational—this is the second quarter in a row that year-over-year comparisons were made without increasing capacity.
However, the proportion of flower in the volume mix for wholesale biomass sales saw an 8 percentage point decrease compared to the previous quarter and Q4 of the previous year. If the flower mix had remained consistent with Q3, the revenue could have been an impressive $4.0 million higher, boasting an average selling price of $313 per pound, positioning it as the second highest following Q3 2023, and elevating the wholesale biomass gross margin to an impressive 55%.
Revenue Highlights
On the other hand, retail revenue decreased to $9.6 million in Q4 2023 from $10.1 million in Q4 2022 and $10.6 million in Q4 2022 due to increased price discounting and a more competitive market. Additionally, wholesale consumer packaged goods (CPG) sales decreased marginally from $4.3 million to $4.1 million in the previous quarter. The company steadfastly upheld its policy of only supplying to dispensaries that are current on payments, even in the face of a very competitive industry. This cautious strategy prevented notable defaults on accounts receivable, even during some highly publicized store closures.
After reaching a record high of $26.0 million, or 54% of net revenues, in Q3 2023, consolidated gross profit decreased to $18.0 million, or 45% of net revenues. This decline was mainly because of a lower mix of flowers in wholesale biomass production and sales. Moreover, the quarter witnessed a decrease in gross margin in the retail business and a transition into a loss at the gross margin level for CPG, primarily due to $1.9 million in inventory write-offs, more than half of which was associated with the discontinuation of the FIELD and Forbidden Flowers brands.
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U.S. Marijuana Stocks to Watch
As the week comes to a close, top U.S. marijuana stocks are drawing attention. Investors looking to dive into this growing sector find this time ripe. The sector’s growth is swift, pushed by new laws and increasing acceptance. These stocks offer not just immediate value but also long-term prospects. Lately, there’s been a buzz about federal legalization. Such a step could completely change the game. The industry’s value might soar to tens of billions soon. Watching these stocks closely isn’t just wise; it’s a strategic move.
However, the path to leveraging these opportunities requires due diligence. Technical analysis and risk management emerge as indispensable tools in this journey. Investors can forecast potential swings and positions by dissecting market trends, volume movements, and price patterns. Moreover, with the sector’s volatility, setting stop-loss orders and diversifying holdings can safeguard against unforeseen downturns. Ultimately, navigating the top U.S. cannabis stocks balances seizing growth opportunities while mitigating risks. As the industry evolves, staying informed and agile will be key to thriving in this green revolution.
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