Cannabis Stocks For May 2023
Are you planning to invest in marijuana stocks in 2023? The stock market for cannabis-related companies suffered massive losses in the first quarter of 2023. Cannabis ancillary companies support the cannabis industry but do not deal with the plant itself. Many companies typically assist the cannabis industry. The cannabis sector benefits from lighting distributors and equipment manufacturers.
One shift that may impact the ancillary cannabis sector in 2023 is the continued growth of legal cannabis marketplaces. As more states and countries legalize cannabis for medical or recreational purposes, demand for related products and services is expected to surge. This could allow new market investors to enter the market and encourage current enterprises to diversify their product ranges. Day traders and swing traders typically make the most money when trading in a market like this. In addition to their huge long-term investments in the cannabis market, some long-term investors adopt short-term trading strategies.
Some of these marijuana stocks are currently available at considerable discounts to investors. Many of these stocks may prove to be the best long-term entry points for prospective cannabis investors, or they may allow profiting from recent market volatility. The following are the top two ancillary marijuana stocks to watch in May 2023.
Top Ancillary Cannabis Stocks To Watch May 2023
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
- Agrify Corporation (NASDAQ: AGFY)
Hydrofarm Holdings Group, Inc.
Hydrofarm Holdings Group, Inc. is a well-known manufacturer of agricultural instruments and supplies for hydroponic and controlled environments. The company continuously offers a diverse assortment of marijuana-growing products. Temperature control systems, high-intensity grow lights, and growth boosters are among the products manufactured by the company. On November 1st, the company announced the acquisition of New Growers Equipment, Inc., a company with several new items and a well-known name. In January, the company teamed with AXEON Water Technologies to provide cutting-edge reverse osmosis water filtration technologies and solutions.
First Quarter 2023 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. The drop in product volume was mainly due to overstock in the cannabis company. The price decrease was primarily due to the sale of discounted lighting goods. The decline in foreign exchange was due to the strength of the US dollar relative to the Canadian dollar.
Gross profit fell to $11.4 million in the first quarter of 2023 from $16.6 million the previous year. The decrease was mostly 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.
HYFM Stock Performance
HYFM Stock closed on May 10th at $1.33, down 13.64% in the past month of trading. The stock has a 52-week price range of $1.17-$8.40 and is down 14.19% year to date. According to analysts at CNN Business, HYFM stock has a 12-month average price target of $2.00 per share. In this case, this would increase 68.78% from its last trading level of $1.19.
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Agrify Corporation, based in the United States, provides reliable machinery and software to the indoor farming business. The company now sells vertical farming systems, LED grow lights, and integrated grow racks. Agrify’s cutting-edge software and technology solutions enable businesses to operate at the highest dependability, effectiveness, and quality levels while investing only a small amount of money. The company provides various services, including consulting, engineering, and construction. The company recently purchased Precision Extraction Solutions and Cascade Sciences, two well-known equipment and support services suppliers for assessing, processing, and extracting hemp and cannabis. In February, the company acquired Lab Society, a pioneer in cannabis extraction, distillation, and solvent separation solutions, with a $10 million annual revenue.
Agrify’s revenue fell from $15.8 million in the third quarter of 2021 to $7.0 million in the third quarter of 2022. Revenue climbed by 51.4% from $34.6 million in the same period last year to $52.4 million this year. The third-quarter loss was $(4.1) million, or (58.6%) of revenue, compared to the same period last year’s gross loss of $(380) thousand, or (2.4%). In comparison to the prior year-to-date quarter’s gross profit (loss) of $393 thousand, or (1.1%) of revenue, the most recent quarter’s gross profit (loss) of $1.7 million, or 3.2% of revenue, was $1.7 million. Agrify anticipates adjusted revenues of $65 million to $70 million in fiscal year 2022. Denver Greens’ whole turnkey cultivation plant was completed, subject to final inspection, the company reported in April.
AGFY Stock Performance
AGFY stock closed on May 10th at $0.21, up 24.47% in the past month of trading. Currently the stock has a range of $0.14-$30.60 and is down 36.94% year to date. According to analysts at CNN Business, AGFY stock has a median price target of $1.68 per share. In this case, this would represent an upside of 711.14% from its last trading price of $0.21.
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Best Ancillary Pot Stocks To Watch 2023
You might be able to tell which cannabis companies are the greatest on the market by looking at their financial statements and press releases. Many experienced traders are actively placing short-term trades on well-known cannabis companies in an attempt to profit from the current market volatility. Use technical indicators and chart patterns to help you pick the finest market chances before starting a position. If you look for trade opportunities, your chances of success will improve. Because of the volatility of the top marijuana companies, these could be some of the best marijuana stocks to watch this month.
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