Top Marijuana Stocks with Growth Potential
Good morning! The U.S. cannabis industry and top marijuana stocks are rapidly evolving, showing promise for investors. Recent statistics indicate a significant growth trajectory. By 2024, the market is expected to expand notably. This growth is fueled by increasing legalization and public acceptance. Notably, the market size was valued at $13.6 billion in 2019. Experts project it could reach $41 billion by 2025, a substantial increase.
Investors are increasingly turning to technical analysis for marijuana stocks. This approach helps identify optimal trading opportunities. Key indicators, such as moving averages and volume, guide entry and exit points. By analyzing price patterns and market trends, investors can make informed decisions. This method is especially useful in the volatile cannabis sector. It provides a structured way to navigate market fluctuations.
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High Potential: Leading Marijuana Stocks to Keep on Your Radar
- Acreage Holdings, Inc. (OTC: ACRHF)
- Verano Holdings Corp. (OTC: VRNOF)
- Gold Flora Corporation (OTC: GRAM)
Acreage Holdings, Inc.
Among the cannabis industry’s notable players is Acreage Holdings, Inc. Their areas of expertise include the production, distribution, and handling of cannabis and its byproducts. The United States serves as the primary base of operations for the organization. They concentrate on the markets for cannabis, both recreational and medical.
Acreage Holdings is a national chain of retail outlets with a substantial presence. They are well-known throughout several states, with the greatest number of locations in California, Colorado, and Florida. Their wide network is indicative of their importance as a major cannabis business in the United States. They have a wide and expanding presence in the market.
Third Quarter 2023 Financial Highlights
The third quarter of 2023 brought mixed financial results for Acreage Holdings, Inc. With $56.5 million in consolidated revenue, they saw a 2.8% decline from the second quarter of 2023. Their gross margin held steady at 38% despite this. The gross margin increased to 41% when non-cash inventory adjustments were taken out. But for this time, the business declared a $7.9 million net loss. Fortunately, their Adjusted EBITDA of $6.6 million represented 12% of the total revenue.
Operationally, Acreage Holdings saw significant growth in certain regions. In Connecticut, sales rose by 27% year-to-date as of September 2023 compared to the same period in 2022. Notably, The Botanist Danbury store recorded an impressive 64% increase in sales year-over-year. New Jersey also showed robust growth, with a 34% increase in year-to-date sales for 2023 compared to 2022, and wholesale revenue in the state hitting $1 million in August 2023.
The company is expanding its presence in Connecticut with a new dispensary in Vernon, expected to open in April 2024. In New Jersey, Acreage is nearing completion of a major infrastructure project at Egg Harbor Township, which will enhance biomass production capabilities. In Illinois, the company increased its in-house product retail sales significantly from 13% in Q3 2022 to 31% in Q3 2023. Massachusetts saw the establishment of Superflux as the top extracts brand in September 2023 and a growth in market share for both Superflux and The Botanist brands.
ACRHF Stock Performance
ACRHF stock closed at $0.1412 on December 27th, down 8.90% in the last month of trading. The stock has a 52-week price range of $0.11-$0.7870 and is down 72.31% year to date.
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Verano Holdings Corp.
Verano Holdings Inc. is a prominent participant in the cannabis market in the United States, renowned for its ability to generate money across a wide range of geographies and for its high-achieving brands. The company is a multi-state, vertically integrated operator that embraces plant progress and daring cannabis exploration as core values. Under the Zen LeafTM and MÜVTM dispensary labels, Verano Holdings sets itself apart by offering a superior shopping experience in the medical and adult-use sectors. A variety of authorized cannabis products are offered by the corporation under well-known consumer names, including AvexiaTM, BITSTM, SavvyTM, EncoreTM, MÜVTM, and VeranoTM. With 14 production sites spread throughout 13 states in the United States, Verano has a wide market reach.
Verano Holdings employs more than 4,000 people and runs more than 120 owned dispensaries. The company has a wide reach, with 50 active dispensaries and 28 retail stores operating under the Zen Leaf brand, with plans to build about ten more this year. Verano’s dedication to broadening its market reach and accessibility is demonstrated by this expansion. With licenses for production, dispensary, and cultivation, the corporation operates in 14 states in the United States and provides a variety of revenue streams.
Third Quarter 2023 Financial Highlights
In its third-quarter 2023 financial report, the company disclosed a revenue of $240 million. This represents a 5% increase year-over-year and a 3% rise from the previous quarter. They introduced regular state-level revenue reporting. Gross profit stood at $133 million, or 55% of revenue. Selling, general, and administrative (SG&A) expenses were $86 million, 36% of revenue. The company reported a net loss of $(18) million, with an adjusted EBITDA of $89 million, or 37% of revenue. Notably, the net cash provided by operating activities was $37 million, capital expenditures were $10 million, and free cash flow reached $27 million.
For the 2023 financial guidance, the company has made positive adjustments. It raised its free cash flow guidance to $72-76 million, up from the previous $65-75 million. Additionally, it reduced its capital expenditure guidance to $30-37 million, down from $35-50 million. These adjustments indicate a positive outlook on the company’s financial health and operational efficiency.
The financial report suggests a mixed potential impact on the company’s stock price. The increase in revenue and free cash flow guidance could attract investors, signaling robust financial health. However, the reported net loss might raise concerns about long-term profitability. A balanced perspective would consider both the financial growth and the challenges in profitability. Overall, the company’s financial management and transparency could maintain investor confidence, despite short-term setbacks.
VRNOF Stock Performance
VRNOF shares closed at $4.22 on December 27th, down 2.65% in the past month of trading. Currently, the stock has a 52-week price range of $2.53-$5.10 and is up 35.26% year to date.
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Gold Flora Corporation
In California, Gold Flora Corporation is a leading vertically integrated cannabis company run by women that manages eight distinct cannabis brands, fifteen retail locations, and various other enterprises. Stately Distribution is one of the companies in the issue. Among its retail enterprises are Airfield Supply Company, Varda, Caliva, Coastal, Calma, King’s Crew, and Higher Level.
Gold Flora Corporation has three structures and 72,000 square feet of indoor growing canopy at Desert Hot Springs. The business can expand by around 240,000 square feet to the additional acreage that was originally approved. It’s crucial to remember that this is a unique opportunity that might be timed to satisfy consumer demand. The company’s extraction, production, and Stately Distribution operations are housed in a modern 200,000-square-foot structure. The product is protected for the length of its journey through the company’s pipeline at this concentrated location, which also provides the finest logistical and security benefits.
Through hubs spread across the state, the company offers several well-known brands, including its premium lines of Gold Flora, Monogram, Caliva, Mirayo by Santana, Cruisers, Roll Bleezy, Sword & Stoned, Aviation Cannabis, and Jetfuel Cannabis. An increasing number of external enterprises are reaching out to the organization seeking established channels for distribution and reliable sources of input.
Q3 2023 Highlights
The corporation had $32 million in revenue during the third quarter of 2023. With a gross profit of $13.1 million and an adjusted gross margin of 57%, the company’s gross profit and gross margin were respectively 35% and 57%. Notably, a $49 million non-cash gain from a business combination with TPCO Holding Corp. helped the quarter’s net income of $23 million.
The completion of the business combination with TPCO and Gold Flora, LLC is one of the operational highlights. The company exceeded earlier forecasts and realized annualized cost savings of $30 million. Redesigning the organization, cutting wages, optimizing real estate, and utilizing its vertically integrated platform were important tactics. Twenty-one percent of the company’s retail income came from its portfolio of first-party brands, and it greatly increased the capacity for cultivation at its Desert Hot Springs Campus. The establishment of Stately Distribution also intends to oversee a portfolio of partner brands from outside the company and increase retail expansion.
GRAM Stock Performance
GRAM stock closed at $0.18 on December 27th, up 65.14% in the last month of trading. In this case, the stock has a 52-week price range of $0.005-$0.34 and is up 23.64% year to date.
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Cannabis Industry Innovators: Stocks to Keep an Eye on for 2024
As we approach 2024, the marijuana industry presents a landscape ripe with investment opportunities. The projected market growth, fueled by increasing legalization and societal acceptance, positions top cannabis stocks as potentially lucrative options. In general, these companies, showcasing robust financials and innovative business models, could capitalize on the expanding market. Additionally, investors should closely monitor these stocks, as they offer a blend of growth potential and industry innovation.
However, investors must exercise proper risk management. The cannabis sector, known for its volatility, requires a cautious approach. Using technical analysis is essential before entering a position. This method helps in identifying optimal entry and exit points, minimizing risks. Investors should not overlook the importance of a well-thought-out investment strategy. It’s imperative to balance the allure of high returns with the reality of market risks.
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