Investing In The Cannabis Industry In 2021
Are you looking for marijuana stocks to buy before it’s federally legal in the US? At the present time, there are many different companies showing potential for investors. In the first quarter of 2021, many leading US cannabis companies have seen significant growth in revenue so far this year. In addition, these companies have also given 2021 revenue guidance that predicts substantial growth for the time period.
For the past couple of year’s cannabis companies have been expanding throughout the US at a rapid pace. Now with federal cannabis reform set to be reintroduced on Capitol Hill investors may see a federally legal cannabis industry in 2021. Because of this possibility, more traders are focusing on the cannabis sector in June looking for the best marijuana stocks to invest in. Currently, there are cannabis stocks that could produce significant gains for investors in the near future.
After several months of declining in market value, May brought some upward momentum to the cannabis sector. Although many pot stocks are still trading much lower than the highs, they achieved in February the upside shows the potential for gains in June. But before investing in cannabis stocks there are a few things to consider. For one the cannabis sector is known for being one of the more volatile parts of the market.
Top Marijuana Stocks And Market Volatility
This volatility can be seen in many of the vertically integrated marijuana stocks in the market. But there are some stocks that have shown more stability in the market for investors. One of those areas is ancillary marijuana stocks. In general, ancillary cannabis companies are those companies that support the cannabis industry without touching the actual plant.
As the cannabis market continues to grow these companies are expanding alongside the industry. For investors looking for long-term positions, these cannabis stocks offer less market fluctuation for traders. In some cases, they also offer a dividend as an incentive to shareholders for long-term investing.
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With this in mind, we can research some cannabis stock options that are ancillary c marijuana companies. In June these marijuana stocks could continue climbing in the market as things progress with cannabis reform. At the present time these. Marijuana stocks could be trading at levels that may produce gains in 2021. For this reason, let’s take a look at 2 of the best marijuana stocks to invest in for the long term.
Marijuana Stocks To Watch
- Innovative Industrial Properties, Inc. (NYSE:IIPR)
- GrowGeneration Corp. (NASDAQ:GRWG)
Innovative Industrial Properties, Inc.
Presently one of the only real estate investment trust that focuses on the US-licensed cannabis industry is Innovative Industrial Properties, Inc. At the present time, IIP owns 72 properties across 19 states nationwide. In May IIP announced it closed several acquisitions that include properties in Pennsylvania and Massachusetts expanding its leases. After the purchases, IIP will enter into long term triple-net master lease for the properties.
Earlier in May IIP announced first quarter 2021 results with total revenue of about $42.9 million an increase of 103% year over year. In addition, IIP paid a quarterly dividend of $1.32 per share on April 15th. Generally speaking, IIP continues to drive revenue growth primarily by the acquisition and leasing of new properties. As the US continues to open new markets on the state level IIP has an incentive to partner with leading medical use operators serving as a source of capital for their cultivation and processing facilities.
IIPR stock closed on May 28th at $180.23 down 1.58% year to date. In the past 3 years, IIIPR stock has given investors a total return of 444.44%. In February the stock reached a new high of $222.08 and is up 4.17% in the last five days. According to analysts at CNN Business IIPR stock has a 12-month median price target of $219.00 per share. In essence, this would represent an increase of 21.66% from current levels. Because of this IIPR stock could be a top marijuana stock to buy for long-term investing.
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GrowGeneration Corp.
One company that recently reported a record first quarter for 2021 is GrowGeneration Corp. At the present time, the company has 55 organic garden centers across 12 states. The company operates hydroponic and organic specialty gardening retail outlets. In the first quarter of 2021, the company increased revenue by 173% to $90 million. One factor that contributed to growth is comparable-store sales that grew by 51% from the prior year. Also important, GrowGen raised its revenue guidance to $450-$470 million and adjusted EBITDA guidance of $54-$58 million.
Another area the company is experiencing significant growth in is e-commerce. Specifically, revenue increased 126% to $4.4 million compared to $1.9 million in 2020. Currently, in 2021 GrowGen expects to have 60 gardening centers across 15 states. In fact, the company expects to have over 100 locations operating in the US by 2026. GrowGen continues to expand its footprint and could be a major part of cannabis cultivation for years to come.
GRWG stock is up 10.42% year to date and closed on May 28th $44.41. In February GRWG stock reached a high of $67.75 and is up 19% in the last five days. For the long term GRWG stock has delivered total returns of 832.98% in the past 3 years. According to analysts at Tip Ranks GRWG stock has a 12-month average price target of $54.00 per share. This represents an increase of 21.59% from current trading levels. With this in mind, GRWG stock could be a top marijuana stock to add to your watchlist in June.
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