Navigating the Green Rush: Best US Cannabis Stocks
In Q4 2023, the landscape of the US marijuana industry and top marijuana stocks is poised for significant growth and transformation, making it an enticing sector for investors to keep a keen eye on. Recent statistics indicate that the cannabis market in the United States is on a meteoric rise, with a projected compound annual growth rate (CAGR) of over 16% between 2023 and 2030. This growth is driven by many factors, including the ongoing legalization efforts in various states, increasing public acceptance, and the potential for federal decriminalization, all of which contribute to a favorable market environment.
When trading top US marijuana stocks, it’s imperative to adopt a strategy that combines core analysis with technical indicators. Proper risk management is crucial, ensuring investments are diversified to mitigate potential losses. By staying informed about industry trends, regulatory developments, and the performance of individual companies, investors can make more informed decisions and navigate the evolving cannabis market successfully. So, whether you are a seasoned investor or a newcomer, the US marijuana industry in Q4 2023 offers many opportunities for those who approach it with a well-informed and well-balanced trading strategy.
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Cannabis Investment Insights: Top US Marijuana Stocks for Q4 2023
- Green Thumb Industries Inc. (OTC: GTBIF)
- Trulieve Cannabis Corp. (OTC: TCNNF)
- Planet 13 Holdings Inc. (OTC: PLNH)
Green Thumb Industries Inc.
One of the biggest companies in the US cannabis consumer packaged goods (CPG) market is Green Thumb Industries Inc. At the moment, 14 states are home to 83 Green Thumb establishments. GTI will soon have 111 retail licenses, with more to come. According to the terms of the first agreement between GTI and the privately held Cookies Brand, a Cookies location will debut in 2021 on the Las Vegas Strip. Green Thumb, which successfully acquired Dharma Pharmaceuticals, has announced the opening of its marijuana business in Virginia. Now that it has purchased Leafline Industries, the company operates in Minnesota. On July 1st, the firm opened four stores in Maryland and began selling cannabis for adult use.
Highlights for the second quarter and six months ended June 30, 2023
- Second quarter revenue of $252 million increased 2% sequentially; first half 2023 revenue increased 1% to $501 million year-over-year.
- GAAP net income of $13 million or $0.05 per basic and diluted share.
- Adjusted EBITDA was $76 million or 30% of revenue.
- Six months of cash flow from operations of $93 million, net of $52 million of tax payments.
- Cash at quarter end totaled $149 million.
- Six RISE retail stores were opened: two in Pennsylvania, two in Virginia, and one each in Minnesota and Nevada.
GTBIF Stock Performance
On November 6th, GTBIF shares finished at $9.20, down 9.09% in the last trading month. Currently, the stock has a 52-week price range of $6.42-$16.50 and is up 6.49% year to date. According to analysts at CNN Business, GTBIF stock has a 12-month average price target of $14.00 per share. In this case, this would represent an increase of 52.17% from its last trading price of $9.20.
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Trulieve Cannabis Corp.
Eleven-state operator Trulieve Cannabis Inc. controls most of the Florida market. The company leads the US cannabis market with 186 retail locations. The complex has four million square feet of processing and expansion capacity. Trulieve’s standing in the Southeast cannabis market has improved with the issuance of the most recent manufacturing license in Georgia. The company established its first dispensary in Massachusetts, setting the stage for further expansion. Early in February, the business bought a 64,00 square foot growing facility close to Phoenix in order to increase its manufacturing capacity in the southwest. The company expanded into West Virginia by acquiring Greenhouse Wellness West Virginia Dispensaries LLC in April.
Q2 2023 Financial and Operational Highlights
- Revenue of $282 million, with 96% of revenue from retail sales. Excluding deferred revenue, retail revenue increased by $3 million, sequentially driven by increased traffic and volume partly offset by price compression.
- Achieved GAAP gross margin of 50%, with gross profit of $142 million. Reclassification of idle capacity expense to COGS resulted in $2 million of tax savings.
- SG&A expenses lowered by $4 million sequentially to $96 million.
- Reported net loss of $404 million. Adjusted net loss of $15 million* excludes non-recurring charges, asset and goodwill impairments, disposals, and discontinued operations. Goodwill impairment was triggered by the recent stock price performance and is not connected to management’s forecasts.
- Achieved adjusted EBITDA of $79 million*, or 28% of revenue.
- Generated cash flow from operations, excluding tax payments of $98 million year to date.
- Inventory reduction initiatives drive $24 million in cash generation year to date.
- Cash at quarter end of $160 million.
- Realized record traffic, customers served, and units sold on the 4/20 holiday, up 10%, 11%, and 9%, respectively, year over year.
- Sold 11.6 million units of branded products through branded retail, up 9% sequentially.
TCNNF Stock Performance
TCNNF stock closed on November 6th at $4.73, down 8.16% in the last month of trading. Currently, the stock has a 52-week price range of $3.42-$16.11 and is down 37.52% year to date. According to analysts at CNN Business, TCNNF stock has a 12-month average price target of $10.04 per share. In this case, this represents an upside of 112.31% from its last trading price of 4.73.
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Planet 13 Holdings Inc.
Planet 13 (www.planet13holdings.com), a multi-award-winning cannabis corporation, engages in cultivation, dispensary, and production operations. Its offices are situated in Orange County, California, and Las Vegas, Nevada. Furthermore, Planet 13 holds a preliminary Illinois Social-Equity Justice Involved dispensary license in addition to a Florida medical marijuana treatment center license. Planet 13 aspires to become a household name recognized for its innovative product development and upscale cannabis retail enterprises.
Financial Highlights – Q2 – 2023
Operating Results
- All comparisons below are to the quarter ended June 30, 2022, unless otherwise noted.
- Revenue was $25.8 million as compared to $28.4 million, a decrease of 9.1%. The decline in revenue was driven by a decline in the average price of cannabis in Nevada, partially offset by an increase in wholesale revenue in Nevada.
- Gross profit was $11.9 million or 46.0% as compared to $13.8 million or 48.7%. The decline in gross profit was driven by a decrease in the average price of cannabis in Nevada and a greater percentage of revenue coming from lower-margin wholesale revenue.
- Total expenses were $15.4 million as compared to $15.6 million, a decrease of 1.6%. The decline in total expenses was driven by lower share-based compensation offset by higher professional fees associated with potential M&A.
- Net loss of $4.3 million as compared to a net loss of $2.0 million. The increase in net loss was driven by lower gross profit dollars as well as high one-time costs associated with potential M&A.
- Adjusted EBITDA of $3.0 million as compared to Adjusted EBITDA of $2.9 million. The higher Adjusted EBITDA margin was primarily due to improvement in the Company’s operating costs.
PLNH Stock Performance
PLNH stock closed on November 6th at $0.6571, down 16.64% in the last month of trading. Currently, the stock has a 52-week price range of $0.451-$1.51 and is up 7.72% year to date.
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Top US Marijuana Stocks to Consider
In the final analysis, as we move into Q4 2023, the US marijuana sector is experiencing an exhilarating and revolutionary period. With a predicted CAGR of more than 16% from 2023 to 2030, this industry has significant growth potential. Through vigilantly monitoring the leading U.S. marijuana stocks, utilizing a knowledgeable trading approach that blends technical indicators and fundamental research, and guaranteeing appropriate risk mitigation, investors can adeptly capitalize on the prospects afforded by the dynamic cannabis market.
However, it’s important to remember that the cannabis market can be volatile, with regulatory changes and market sentiment playing a significant role in stock performance. As such, staying informed, diversifying investments, and maintaining a long-term perspective are essential practices for success. Whether you’re a seasoned investor or a newcomer, the US marijuana sector in Q4 2023 offers a promising avenue for growth, provided you approach it with diligence and a well-balanced investment approach.
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