Two Well-Positioned Marijuana Stocks to Watch
When it comes to marijuana stocks, finding a company with a solid position in the cannabis industry is extremely important. The position is something that can make or break the future of a pot stock in this ever-changing marketplace. While some marijuana stocks may seem like a good choice, oftentimes they won’t have the right market reach or dominance in their area of the market. Now, this is not to say that a pot stock has to be the largest in its specific market, but rather investors should examine a company’s place in the overall cannabis industry. With this in mind, there are several marijuana stocks to watch that come to mind.
These could be pure-play pot stocks or leading MSOs. Either way, it always comes down to two factors. For one, investors should scrutinize a company’s business model. This means looking for profitability (if any), and what financial situation a company is in. In addition to this, using a company’s position can help to define where it could go in the next few years. With these factors considered, here are two pot stocks to watch that are well-positioned in the cannabis industry.
A Pure Play Pot Stock to Watch
Aphria Inc. (NYSE:APHA) is one of the most well-positioned cannabis stocks in the industry. While most pure-play pot stocks have reported heavy losses, APHA stock has done quite the opposite. In its past three quarters, APHA stock has reported positive EBITDA which is no small feat. What’s more, is that Aphria has been able to rebuild its business from the ground up. A few years ago, APHA stock was in a position that was not nearly as great as it is now. The company was struggling with high costs and low profitability.
After reevaluating its business model, APHA stock now continues to look like a marijuana stock to watch. Recently, it reported having around CA$515 million in cash and cash equivalents which is a very solid safety net. In addition to this, the company has managed to lower its costs without laying off any employees. All of this adds up to APHA stock looking quite attractive these days. For this reason, many investors continue to view it as a pot stock to watch moving forward.
An MSO Marijuana Stock With a Solid Market Position
Green Thumb Industries Inc. (OTC:GTBIF) is one of the most well-positioned marijuana stocks in the industry. Although it is down by around 50% from its all-time high, since mid-March, GTBIF stock has bounced back up by as much as 220%. While this type of gain is not unprecedented in the cannabis industry, it is quite a large percentage jump. During its most recent first quarter, GTBIF reported around 35% in the quarter over quarter revenue growth. This is mostly due to the increase in demand for cannabis in Illinois.
As of August, GTBIF stock has grown from the company having as many as 47 retail locations. In addition to this, the company has access to almost 50 more licenses. This means that Green Thumb has no shortage of growth potential in the next few years. Although investors are waiting on greater profitability in the near future, it looks like GTBIF stock is an interesting pot stock to watch. For that reason, investors should continue to keep their eyes on it as Green Thumb progresses.
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