Could Top Cannabis Stocks To Invest In Rebound In May?
Are top marijuana stocks setting up for a rebound in the market? After 3 months of declines in market value, the best cannabis stocks to invest in have started to show signs of some upside in May. At the present time, cannabis legalization and reform are the biggest catalysts for the cannabis sector. As early as next week Senate leaders could reintroduce a bill to federally legalize marijuana.
Provided that this occurs, it could be a good week to add the best cannabis stocks to buy to your watchlist. In the US leading cannabis companies are expanding rapidly across the country establishing their footprint in the growing market. In general, 2021 has been a very active year in the sense of cannabis legalization for medical and recreational marijuana on the state level.
Recently top cannabis companies in the US have been reporting strong revenue growth in their first quarter of 2021 results. Although this has not had a significant effect on how pot stocks have performed in the market it does display the potential for growth in the cannabis industry.
The Growing Cannabis Industry In The US
In 2021 mergers and acquisitions have been the favored means of expansion with cannabis companies. Primarily leading cannabis companies are using this method to enter new markets and quickly grow in existing ones. Some of these companies are merging to become even larger influences in the industry.
As it stands many analysts are predicting substantial growth for the cannabis industry over the next five years. To find the best marijuana stocks to invest in it’s important to always do your own due diligence on a company. In reality, researching a company’s financial results and watching how a stock performs in the market can help investors achieve better returns on their trades.
Currently, US cannabis companies are achieving the best earnings since 2020 and could be a good area to find leading companies. With this in mind let’s take a look at 3 top US cannabis stocks to watch in the fourth week of May.
Marijuana Stocks To Watch:
Trulieve Cannabis Corp.
Currently, Trulieve Cannabis Corp. is the largest cannabis company in Florida and has more than 50% of the market share in the state. But once the acquisition of Harvest Health & Recreation Inc. (OTC: HRVSF) is complete the company could be the largest cannabis company in the US. In detail, the two companies combine to have a consensus 2021 revenue of $1.2 billion. In fact, with this acquisition, Trulieve will become the largest revenue-producing cannabis company in the world.
Specifically, Trulieve will give Harvest shareholders 0.1170 of a TCNNF stock once the deal is complete. In addition, the company will pay a total consideration of about $2.1 billion based on the stock’s May 7th closing price. As a result, the two company’s combined will now operate in 11 states with a total of 126 dispensaries catering to the medical and recreational cannabis consumer. With a combined adjusted EBITDA of $266 million and a 2021 consensus adjusted EBITDA of $461 million, they could be the most profitable MSO in the US. On May 13th Trulieve reported a record first-quarter 2021 revenue of $193.8 million generating a net income of $30.1 million.
TCNNF stock is 23 .24% year to date to close at $38.97 on May 21st. In February TCNNF stock reached a new high of $53.73 and has increased by 56.19% in the past six months. According to analysts at Tip Ranks TCNNF stock has a 12-month average price target of $70.32 per share. In essence, this would be an 80.45% increase from current levels. With this in mind, TCNNF stock could be a top marijuana stock to buy next week in May.
Cresco Labs Inc.
As one of the largest MSOs in the US Cresco Labs Inc. is the number one wholesaler of branded cannabis products. Primarily, the company has a consumer-packaged approach and operates 32 dispensaries in 10 states with 18 production facilities across the country. Specifically, Cresco has been expanding through strategic acquisitions and has launched adult-use cannabis sales in Arizona. In April Cresco released a survey that finds 25% of Americans now consume cannabis and consumption is up 56% since 2018.
In 2020 Cresco climbed significantly in revenue growth. Specifically, in the company’s latest earnings report Cresco saw full-year 2020 record revenue of $476.3 million. In fact, this is an increase of 271% from the prior year. Additionally, the company had a record full-year adjusted EBITDA of $116 million. Next week, Cresco is expected to report its first-quarter 2021 financial results on May 27th. Also, important the company has now converted to US GAAP accounting principles.
CRLBF stock closed on May 21st at $11.05 up 12.01% year to date. In February CRLBF stock reached a high of $17.49 per share and has increased 26% in the last six months. According to analysts at Tip Ranks CRLBF stock has a 12-month average price target of $22.41 per share. In essence, this would represent an increase of 102.81% from current levels. With this in mind, CRLBF stock could be one of the best cannabis stocks to invest in for 2021.
Columbia Care Inc.
As New York legalizes cannabis investors should take a closer look at Columbia Care Inc. In general, with a recent acquisition of a 34-acre Long Island cultivation site the company has one of the largest cannabis operations on the East Coast. At the present time, Columbia Care operates in 18 US markets and has a presence in the EU. Currently, the company operates 115 facilities which include 87 dispensaries and 28 cultivation and manufacturing facilities.
On May 17th Columbia Care released record first quarter 2021 financial results. In specific, the company saw Q1 combined revenue of $92.5 million an increase of 220% year over year. Additionally, the company saw a Q1 combined adjusted gross profit of $37.7 million increasing 316% from the prior year. For 2021 Columbia Care reaffirmed its combined revenue guidance of $500-$530 million and adjusted EBITDA guidance of $95-$105 million.
CCHWF stock closed on May 21st at $5.73 per share and is up 13.20% year to date. In February CCHWF stock reached a high of $7.89 and is up 44.07% in the past six months. According to analysts at Market Beat CCHWF stock has a consensus price target of $11.40 per share. Essentially this would represent an increase of 99% from its current trading price. For this reason, CCHWF stock could be a top marijuana stock to add to your watchlist for next week.