The US Cannabis Stocks Setting the Pace in March 2024
This week, several top US marijuana stocks have caught the attention of investors and traders alike. With the US cannabis industry poised for significant growth, these companies stand out for their innovative approaches and strategic market positions. The industry’s expansion is fueled by increasing legalization at the state level. Yet, federal legislation remains a complex hurdle. Developments in federal cannabis reform are eagerly watched. Any progress could unlock further market potential. The stocks in focus offer a mix of cultivation, distribution, and technology solutions. They reflect the sector’s diverse opportunities and challenges.
Investing in marijuana stocks requires careful consideration. Technical analysis and proper risk management are crucial. Investors should look for trends in price movements and volume. They should also set stop-loss orders to manage risks. The industry’s volatility can lead to significant price swings. But, it also presents unique opportunities for informed investors. The future growth of the US cannabis industry hinges on legal developments and market acceptance. Both factors suggest a dynamic and evolving investment landscape. As such, staying informed and cautious is key to navigating this promising sector.
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Key Marijuana Stocks in the US Making Moves in March
- Trulieve Cannabis Corp. (OTC: TCNNF)
- Cresco Labs Inc.(OTC: CRLBF)
- Planet 13 Holdings Inc. (OTC: PLNH)
Trulieve Cannabis Corp.
Trulieve Cannabis Corp. is one of the leading businesses in the US cannabis industry. The company was established in 2016 to produce medical cannabis products. Their main goal is to deliver top-notch cannabis goods and services. One well-known brand in the cannabis industry is Trulieve. Trulieve plans to operate more than 160 dispensaries nationwide by the end of 2023. They initially surfaced in the state of Florida. They have also spread into several other states. Connecticut, Massachusetts, and California are a few of them. Their quick expansion is proof of their dedication to usability and quality.
Trulieve’s business strategy is centered around vertical integration. The entire process—from cultivation to retail—is managed with this approach. It ensures consistency and high-quality results. They provide a large selection of goods to satisfy various medicinal cannabis needs. They sell concentrates, meals, flowers, and topical applications. Trulieve’s commitment to patient education and community involvement is truly remarkable. They actively participate in community events and educational initiatives. This interaction strengthens their brand and fosters client loyalty. Their approach is an excellent illustration of how to blend social responsibility with business acumen.
Q4 2023 Financial and Operational Highlights
Trulieve Cannabis Corp. reported a Q4 2023 revenue of $287 million, marking a 4% sequential increase, primarily fueled by retail sales, which constituted 95% of the revenue. The company achieved a GAAP gross margin of 54%, translating to a gross profit of $154 million, despite reporting a net loss of $33 million. An adjusted net loss of $23 million accounted for non-recurring charges, among other exclusions. Notably, the quarter saw significant cash flow, with $131 million from operations and $122 million in free cash flow. EBITDA stood at $73 million, or 25% of revenue, with adjusted EBITDA at $88 million, or 31% of revenue, highlighting strong performance due to consumer strength and holiday sales. The company also managed significant financial maneuvers, including redeeming $130 million in senior secured notes and securing $25 million in mortgage financing.
For the full year of 2023, Trulieve posted revenue of $1.13 billion, primarily driven by retail sales, which accounted for 96% of total revenue. The company maintained a GAAP gross margin of 52%, with a gross profit of $589 million, and managed to reduce SG&A expenses by $61 million from the previous year despite a reported net loss of $527 million. An adjusted net loss of $70 million excludes various charges and impairments. Operational cash flow was strong at $202 million, with a free cash flow of $161 million. Adjusted EBITDA reached $322 million, representing 29% of revenue. Trulieve also focused on expanding its market presence, launching adult-use sales in Connecticut and Maryland, and increasing its retail footprint to 192 locations by year-end. Recent developments include the addition of two executives and the operation of 193 retail dispensaries nationwide.
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Cresco Labs Inc.
Cresco Labs Inc. is the industry leader in branded cannabis products. It functions as a subsidiary of Sunnyside Dispensaries. The business provides a wide range of the most well-known cannabis brands in the US. Seventy of Cresco Labs’ Sunnyside dispensaries will be operational nationwide by September 2023.
This company is well-represented in key markets such as Massachusetts, Pennsylvania, and Illinois and has the largest share position in these states. One of Cresco Labs’ best-selling product categories is its branded flower and concentration line. It is also well-known for its candy and branded e-cigarettes. In the cannabis sector, Cresco highly values brand awareness and quality.
Third Quarter 2023 Financial Highlights
In the third quarter of 2023, Cresco Labs reported a revenue of $191 million, bolstered by retail growth and strong performance in core markets. This helped offset the loss from divested assets. The company’s “Year-of-the-Core” strategy, initiated in Q1, significantly increased adjusted gross margin by over 480 basis points. Adjusted SG&A decreased by $40 million annually, and the adjusted EBITDA margin rose by over 1000 basis points. In the first nine months, Cresco Labs generated $62 million in operating cash flow. Their gross profit was $94 million, accounting for 49% of the revenue.
Adjusted gross profit was slightly higher at $96 million, with a 51% adjusted gross margin. SG&A was reduced to $57 million; adjusted EBITDA reached $49 million, 26% of the revenue. The quarter also saw a positive operating cash flow of $41 million, including one-time charges. However, one-time non-cash impairment charges totaled $129 million, leading to a net loss of $113 million.
Operational Highlights
Operationally, Cresco Labs retained the top market share in Illinois, Pennsylvania, and Massachusetts. They maintained the industry’s leading portfolios in branded flower, concentrates, vapes, and edibles. The branded unit volume grew by 28% year-over-year, reaching 20 million. Retail transactions increased by 17%, totaling 1.4 million. The company also expanded its retail presence, opening two Sunnyside stores in Florida, raising the total store count to 70 as of September 30, 2023.
CEO Charles Bachtell highlighted the company’s solid performance and margin gains, attributing these to the focused execution of their core market strategy. Bachtell also noted the significant milestone of Ohio legalizing adult-use cannabis and the growing national support for cannabis legalization. He emphasized Cresco’s readiness for both current market conditions and future opportunities. As of September 30, 2023, the company’s balance sheet showed $303 million in current assets, including $113 million in cash. Their fully converted share count stood at 468,955,546. Cresco also engaged in capital markets and divestiture activities, including a $7 million asset sale in Arizona and securing a $25 million mortgage loan.
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Planet 13 Holdings Inc.
Headquartered in Las Vegas, Nevada, Planet 13 Holdings Inc. is a well-known cannabis company. Planet 13 Superstore, one of the largest cannabis stores in the world, is operated by Planet 13, a company known for its innovative and immersive approach to cannabis shopping. The company’s main goal is to supply a wide variety of cannabis products, such as edibles, extracts, flower, and more. It caters to both recreational and medical clients.
Planet 13’s main clientele is in Nevada, with company headquarters in Las Vegas. Our flagship location’s unique and immersive shopping idea has made it a well-known cannabis destination that draws visitors worldwide. With a focus on providing a sophisticated and enjoyable purchasing experience, Planet 13 is a leading player in the cannabis retail sector.
The organization’s reputation as a trailblazer in the cannabis retail sector can be primarily ascribed to its commitment to providing an extensive assortment of high-quality items and an exceptional client experience. Planet 13 has solidified its position as a pioneer in the cannabis sector and set itself up as an example for other dispensaries looking to enhance the customer experience with its innovative retail approach.
Preliminary Unaudited Financial Highlights – Q4 2023
In the fourth quarter of 2023, the company reported a decline in total revenue to $23.0 million, down 7.5% from $24.8 million the previous year. Despite this, gross profit slightly improved by 2.8% to $11.0 million, reflecting a higher gross profit margin of 47.8% compared to 43.0% in Q4 2022. This improvement highlights a more efficient operation, even as overall revenue dipped. Operating expenses decreased from 60.5% to $18.1 million from $45.9 million, significantly improving the operating expense ratio. The net loss before provision for income taxes narrowed to $10.3 million from a much larger loss the previous year, indicating some cost control measures and operational improvements.
For the full year of 2023, the company experienced a 5.8% decrease in total revenue, down to $98.5 million from $104.6 million in 2022. However, the full-year gross profit declined by 6.6% to $44.8 million, with a consistent gross profit margin of 46%. Operating expenses rose 17.1% to $94.8 million, reflecting increased costs in a challenging operational year. The net loss widened to $73.6 million from $59.5 million, marking a 23.6% increase in losses year-over-year. Yet, the company showed some resilience by achieving a positive adjusted EBITDA of $1.9 million for the year, a significant improvement from a negative $7.5 million in 2022, demonstrating potential for operational efficiency and financial stability moving forward.
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Leading Cannabis Stocks in the US
As we conclude this week’s overview, it’s evident that the top US marijuana stocks have showcased noteworthy performances. These companies highlight the sector’s resilience and potential in an industry undergoing swift changes and poised for considerable growth. With each state that moves towards legalization, the canvas of opportunity broadens, painting a promising picture for the future. Moreover, the winds of change blowing through federal cannabis reform discussions add another layer of anticipation. Recent legislative proposals and debates in Congress are gradually reshaping investor outlook, hinting at a transformative horizon.
Navigating this terrain, investors find solace in the precision of technical analysis. It is a beacon, guiding the market’s ebb and flow with insights on when to hold firm or adjust sails. Embracing proper risk management strategies, including the prudent use of stop-loss orders, safeguards against the unpredictability of this burgeoning market. As we look ahead, the intertwining paths of regulatory advancements and market adaptation present a complex yet exhilarating journey. For those attuned to the nuances of this evolving landscape, the US cannabis industry offers a vista of untapped potential, ripe with both challenges and rewards.
MAPH Enterprises, LLC | (305) 414-0128 | 1501 Venera Ave, Coral Gables, FL 33146 | new@marijuanastocks.com
