Investing In The Best US Pot Stocks In 2021
Are you looking for top marijuana stocks to buy before October? Last week the cannabis sector and overall markets experienced some market volatility and pulled back during the first half of the week. But with an announcement from Congress that the SAFE Banking Act passed in the House the best cannabis stocks to invest in rallied to close the week. With many analysts predicting the market could continue seeing upward momentum in the fourth quarter it could be time to find top pot stocks before October.
In the US cannabis companies are performing well delivering strong revenue growth and expanding across the country. Unfortunately for investors, this has not translated into market gains in 2021. For the past seven months, the cannabis sector has experienced significant declines in the market. This is partly because the federal government had not changed cannabis prohibition as expected.
But now with the possibility of marijuana banking reform happening in Q4, more investors are looking at top cannabis stocks. In addition to the SAFE Banking Act, the House will vote on the MORE Act next week as well. In 2021 this was the catalyst the cannabis sector rallied for earlier in the year. Now with another chance of seeing federal marijuana legalization and reform, we could see some upside for the best marijuana stocks to invest in.
Is Now The Time To Investing In The Cannabis Industry Long Term?
As we head into October the cannabis sector has seen an uptrend in the market. In general, many pot stocks were at their lowest price points in September. This could mean some further upside if the overall markets continue this recent uptrend. For investors, it’s always important to research a company before starting a position. Looking into a company’s financials and studying how the stock performs in the market can help you achieve the best returns. As we close out September with things looking up let’s look at 3 top marijuana stocks for your list in October.
[Read More] 3 Marijuana Stocks To Watch This Upcoming Week
Top Marijuana Stocks To Watch Before Next Week
- Innovative Industrial Properties, Inc. (NYSE:IIPR)
- The Scotts Miracle-Gro Company (NYSE:SMG)
- GrowGeneration Corp. (NASDAQ:GRWG)
Innovative Industrial Properties, Inc.
First on the list is Innovative Industrial Properties, Inc. a real estate investment trust with a focus on the US-licensed cannabis market. Primarily, the company has a total of approximately 6.8 million rentable square feet and 2.4 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. 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. The company invested an estimated $1.3 billion across its portfolio and has committed another $385.3 million for the completion of construction and tenant improvements at IIP properties.
On September 20th the company acquired a property in Missouri and entering into a long-term lease. In its latest financials, IIP reported its second-quarter 2021 financials with performance-driven growth of 101% in total revenue year over year. In detail, 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.
The Scotts Miracle-Gro Company
Scotts Miracle-Gro is 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 September Scott’s named Cory Miller as Executive Vice President and Chief Financial Officer.
In August the company announced its 3rd quarter financials and reaffirmed sales and earnings guidance for fiscal 2021. To highlight, the company 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. SMG stock dropped significantly in September giving investors a lower entry point.
Last on the list is GrowGeneration Corp. a leading owner and operator of retail hydroponic and organic gardening stores across the US. Primarily, the company markets and distributes organics, lighting, and hydroponic equipment mainly used by cannabis cultivators. At the present time, GrowGen has 60 organic garden centers across 12 states recently opening its 6th store in Michigan. In August the company acquired Commercial Grow Supply to strengthen its footprint in southern California. Additionally, the company has also been working on its online presence with the launch of GrowGeneration.com. Recently, the company launched a newly redesigned e-commerce platform. The site is a one-stop-e-commerce destination with over 10,000 products ranging from nutrients to lighting technology. In the next five years, the company is expecting to have over 100 locations operating in the US.
GrowGen reported second-quarter 2021 financials with a record revenue of $125.9 million up 190% year over year. Notably, the company delivered a net income of $6.7 million and adjusted EBITDA of $14.5 million. In addition, the company raised its revenue guidance in 2021 to $455-$475 million. As a result, the company experienced a comparable store sales increase of 60% from the prior year. Although GrowGen delivered strong revenue growth GRWG stock saw the sharpest selloff of all ancillary marijuana stocks. GRWG stock will start the week near its lowest price points in 2021 at $25.79 per share.
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