Top Cannabis Stocks With Long Term Appeal In 2021
Are you looking for the best marijuana stocks to buy for the long term? With top cannabis stocks to invest in trading near 2021 lows, it could be time to add to your long-term portfolio. Because top pot stocks are known for having substantial market volatility it may be difficult to invest in them for the long term. Although some top-tier US MSOs could be good for the long hold their price fluctuations are sometimes hard to stomach when investing long term.
Since 2020 many investors began looking into ancillary marijuana stocks for their long-term portfolios. Ancillary companies are those companies that support the cannabis industry without touching the actual cannabis plant. In 2021 the cannabis industry continued to grow rapidly on the state level in the US. As new states legalize cannabis use investors are waiting for Congress to pass federal marijuana legalization.
For several months top marijuana stocks have experienced declines because of the inability of Congress to pass marijuana legalization and banking reform so far this year. With the House recently passing the SAFE Banking Act and the MORE Act, all eyes are on the Senate in Q4 2021. With the focus on progressing cannabis legislation, we could see some upward momentum once marijuana is rescheduled.
Cannabis Industry Performance And Growth Prospects
Overall, some ancillary cannabis stocks have performed better in 2021 than the rest of the marijuana sector. Additionally, these top pot stocks also give a dividend to shareholders as an incentive for the long hold. Dividends are rare for marijuana stocks currently in the market. For this reason, many hedge fund investors and money managers have also targeted this area for exposure to the cannabis market.
In the next five years, the cannabis industry is predicted to almost double in size. According to a BDSA report, cannabis sales in the US could surpass $24 billion in 2021 and reach $47.6 billion in 2026. For investors, this could be an opportunity to invest in one of the fastest-growing markets in the global economy. Before investing in any company, it’s always important to do your due diligence and research.
Looking into a company’s financials and studying how the stock performs in the market can help you make the best returns on your investments. Finding the best entry levels for your position and adding to that position when the market presents lower price points is a common strategy for investors. Let’s look at 2 top marijuana stocks to watch for your long-term portfolio in 2021.
Best Marijuana Stocks To Watch For Long Term Investing In 2021
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. is a real estate investment trust with a focus on the US-licensed cannabis industry. At the present time, the company has a total of approximately 7.3 million rentable square feet and 2.7 million square feet under development. Specifically, these properties are 100% leased with a weighted average remaining lease term of about 16.7 years. In detail, the company owns 75 properties across 19 states. As of October 1st, IIP has invested a total of $1.4 billion and committed another $417.5 million to reimburse tenants for property improvements. IIP continues to close acquisitions including properties in Pennsylvania and Massachusetts expanding its lease portfolio significantly in 2021. Immediately, after the purchase, IIP will enter a long-term triple net lease with the cannabis company using the property.
In September the company acquired a property in Missouri and entering a long-term lease. IIP reported its second-quarter 2021 financials with performance-driven growth of 101% in total revenue year over year. To highlight, the company generated total revenue of $48.9 million. IIP paid its second-quarter 2021 dividend of $1.40 per share on July 15th a 32% increase from the year prior. Notably, this represents an increase of 6% over the first quarter dividend. IIP has 21% debt to total gross assets with about $2.1 billion in total gross assets. As a result, the company has generated total revenues of about $91.8 million for the first six months of 2021.
IIPR Stock Performance
IIPR stock closed on October 7th at $236.86 down 5.22% in the last month. Currently, the stock has a 52-week price range of $112.25-$253.61 and is up 29.34% year to date. According to analysts at CNN Business IIPR stock has a 12-month median price target of $260.00 per share. In this case, this would be an increase of 9.77% from its current trading price.
The Scotts Miracle-Gro Company
Next on the list is Scotts Miracle-Gro, one of the world’s largest marketers of branded consumer lawn and gardening products and has a hand in the cannabis market. Specifically, the company’s wholly-owned subsidiary Hawthorne Gardening is a leading supplier of nutrients, lighting, and hydroponic equipment used in the process of growing cannabis. In August the company announced its 3rd quarter financials and reaffirmed sales and earnings guidance for fiscal 2021. In September Scott’s named Cory Miller as Executive Vice President and Chief Financial Officer.
Scott’s reported company-wide Q3 sales up 8% to $1.61 billion driven by Hawthorne ‘s growth of 48%. Notably, Hawthorne sales increased to $421.9 million compared to $285.7 million. US consumer sales for Scott’s declined by 4% in the third quarter but remained 19% higher year to date. As a result, Scott’s saw company-wide sales increase to $4.19 billion up 29% for the first 9 months of fiscal 2021. In the third quarter, Scott’s acquired Hydrologic Purification Systems California-based accessories and provider of water filtration and purification products in the cannabis market. In September SMG stock dropped significantly giving investors an opportunity to start positions at better price points. Currently SMG stock pays a dividend of $2.52 per share and the annual dividend yield is 1.73%.
SMG Stock Performance
SMG stock closed at $147.99 down 40.29% in the past six months. Currently, the stock has a 52-week price range of $139.20-$254.34 and is down 25.69% year to date. According to analysts at Tip Ranks SMG stock has a 12-month average forecast price target of $216.00 per share. In essence, this would represent an upside of 45.96% from its last trading price of $147.99.
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