The Cannabis Industry In 2021
In general, 2021 started off phenomenal for top marijuana stocks. After reaching new highs in February most cannabis stocks have declined back to December 2020 levels. Because of this reduction in value, many analysts are predicting much higher price targets for pot stocks in 2021. In the US the cannabis industry is expanding at a rapid rate with more states opting into some form of legal cannabis program.
Currently, 36 states now have implemented medical cannabis markets and 16 plus DC have established recreational use. This number has grown substantially in the past two years and continues to expand as the year progresses. One area that is seeing significant revenue growth in their latest earnings is US cannabis companies. In 2021 most have reported significant increases in revenue for Q1 and are also giving strong 2021 revenue guidance.
In general, the US cannabis market is predicted to be the largest in the world. According to a BDSA forecast, US sales are expected to reach $41.3 billion by 2026. Globally cannabis sales are expected to grow from $21.3 billion in 2020 to $55.9 billion in 2026. By these figures, the US cannabis market makes up the majority of cannabis sales worldwide.
US Cannabis Companies And The US Marijuana Market
As it stands many US companies are positioning themselves to capitalize on the growing industry. In the next five years, these companies could deliver strong earnings and large returns for investors. But before investing in the cannabis sector there are some important factors to consider that could affect your investment.
For one marijuana stocks are known for extreme volatility in the market. Because of this, it’s important for investors to do their due diligence before investing in a company. In general, researching a company’s financials and studying how the stock behaves in the market can help you establish the best investments for your portfolio.
With this in mind, we can look into some leading cannabis companies for you to add to your watchlist in June. Currently, in the US these companies are reporting record earnings and expanding into new cannabis markets across the United States. For this reason, let’s take a look at 3 of the top US marijuana stocks to invest in for June 2021.
Marijuana Stocks To Watch
- Green Thumb Industries Inc. (OTC: GTBIF)
- Curaleaf Holdings, Inc. (OTC: CURLF)
- Cresco Labs Inc. (OTC: CRLBF)
Green Thumb Industries Inc.
Leading the cannabis consumer packaged segment in the US is Green Thumb Industries Inc. As it stands this MSO is known as one of the top-performing US cannabis companies and continues to expand its footprint in key markets across the nation. Currently, GTI has 56 retail locations across 11 states and has recently opened new stores in prime markets. In May GTI announced its first-quarter 2021 financials with total revenue of $194.4 million an increase of 89.5% from Q1 of 2020. Also important, the company is reporting gross profits of $110.9 million in Q1 of 2021, or 57% of revenue. In particular, this is the third consecutive quarter of positive GAAP net income bringing in $10.4 million or $0.05 per basic diluted share.
Additionally, in May GTI announced the opening of Cookies on the Las Vegas Strip through an exclusive partnership with the privately-owned Cookies Brand. To elaborate Cookies is a Bay Area brand founded by the entrepreneur Berner with his partner Jai a master cannabis cultivator and breeder. At the present time Cookies is a popular brand among younger cannabis consumers and could be the start of a larger partnership between the two companies. Ultimately, aligning itself with Cookies could increase GTI’s popularity and establish the company with a new generation of cannabis consumers.
GTBIF stock closed on May 28th at $29.67 and is up 29.10% year to date. After reaching a new high in February of $39.11 the stock is down 2.88% in the last month. According to analysts at Tip Ranks GTBIF stock has a 12-month average price target of $47.04 per share. This forecast represents an increase of 58.54% from current levels. With this in mind, GTBIF stock is a top US marijuana stock to add to your watchlist in June.
Curaleaf Holdings, Inc.
Another leading cannabis company that has been expanding recently in the US is Curaleaf Holdings, Inc. Primarily, the company provides packaged cannabis products and has established a footprint with 106th retail locations nationwide. In May Curaleaf reported its first-quarter 2021 revenue of $260 million up 170% year over year. Additionally, Curlaeaf announced revenue guidance for Q2 2021 of $305-$315 million.
On May 17th the company announced it acquired the Los Suenos Farms the largest outdoor grow facility in Colorado. In detail, the facility covers 66 acres of cultivation space. Also, Curaleaf will receive two dispensary locations serving adult-use cannabis. At the present time, the company is reporting strong Q1 results without the addition of sales from New York and New Jersey. Once that is factored in Curaleaf could beat its 2021 full-year guidance for revenue of $1.2 -$1.3 billion.
CURLF stock closed on May 28th at $14.74 and is up 23.11% year to date. With a 52-week high of $18.38, the stock is up 10.32% in the last month. According to analysts at Market Beat CURLF stock has a consensus price target of $22.50. Essentially this forecast would be an increase of 52.7% from its current trading level. For this reason, CURLF stock could be one of the best cannabis stocks to buy in 2021.
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Cresco Labs Inc.
Cresco Labs Inc. is one of the largest U.S. cannabis MSOs and the number one wholesaler of branded cannabis products. With a consumer-packaged approach, the company operates 32 dispensaries in 10 states with 18 production facilities across the US. The company has been expanding through strategic acquisitions that further increases its footprint nationwide. This year Cresco has launched adult-use cannabis sales in Arizona adding to the possibility of future revenue growth in 2021.
On May 27th Cresco announced its first-quarter financial results under GAAP with a record revenue of $178 million. In addition, the company expects to reach annualized revenue of more than $1 billion in 2021. Specifically, the company saw gross profits of $87.0 million or 48.8% of revenue. For 2021 Cresco expects gross profit margins in excess of 50% for the remaining 3 quarters.
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