Often times when one thinks pot stocks, they think of the two or three pure-play companies that occupy the top of the market. While these marijuana stocks may be a solid choice, the alternative and ancillary companies are also very worth watching. These companies have a different exposure to the industry, and because of this, they can often hold less volatility than other cannabis stocks. As we see in trading right now, the coronavirus is hitting pot stocks quite hard. Although there have been several days in the past three weeks where we have seen major gains, the majority of that time period has been characterized by large losses.
What’s worth noting is that the large majority of this volatility, it is seen at the top tier of the industry in terms of market cap. This is not to say that the smaller guys are not volatile, just that the larger ones have more fluctuations in their pricing. So for more conservative investors, and those looking for an alternative cannabis stock, these two companies may be a great place to start looking. Both occupy different areas of the alternative cannabis market, but both have their own inherent values that make them interesting pot stocks to watch.
A Leading Ancillary Pot Stock
KushCo Holdings (KSHB Stock Report) began its career as a producer of packaging supplies for those selling cannabis. With stringent regulation stating how cannabis can and cannot be packaged, KushCo quickly became a leader in this side of the industry. Since that time, the company has entered into various other areas of the cannabis market including the marketing side of the business, as well as selling physical products to consumers. In its latest quarter, it posted around $12 million in losses. Much of this is due to the bad news surrounding vaporizers, which KushCo was selling as a large portion of its revenue.
But, some have stated that we may have moved past this sentiment, and vaping could be coming back around. The company has a great amount of potential in the U.S. cannabis market doing exactly what it started in the first place. In the U.S., packaging requirements are extremely tough, which means that KushCo could see a large benefit from working there. For now, however, it looks like the company’s financials may not be all there yet.
A Retailer Cannabis Stock
Green Thumb Industries (GTBIF Stock Report) has also had quite an interesting year in the past twelve months. Based out of Illinois, the company has quickly become a leader in the midwestern cannabis market. With Illinois only legalizing cannabis around 3 months ago, things have gone quite well so far. Throughout the state, Green Thumb has around six retail stores. With the Illinois industry scheduled to see as much as $2.5 billion in sales, Green Thumb could stumble upon a huge opportunity.
In addition to Illinois, the company has a large presence around the U.S. with over 41 retail stores and 13 production facilities across 13 states. These numbers seem quite good, and also seem to be what’s pulling investors in. With a large number of future prospects in the U.S., the company just needs to continue building out its portfolio of retail locations. If it is able to continue growing substantially, there’s no telling how far Green Thumb Industries could go.
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