Growth Prospects: Top US Cannabis Stocks for November 2023
As November 2023 approaches, the US marijuana stock market is expected to experience remarkable growth. The cannabis market in the United States has seen a notable upswing in the last several years, and forecasts suggest that this trend will continue. Since several jurisdictions have legalized cannabis for both medical and recreational purposes, this emerging industry is expected to grow rapidly and might eventually reach a valuation in the tens of billions. This post will examine the top US marijuana stocks to watch on in November and provide insight into the businesses most likely to succeed in this rapidly changing sector.
A calculated strategy combining technical analysis and strict risk management is needed when investing in cannabis stocks. Technical indicators can help traders find the best times to enter and exit positions so they can profit from the industry’s growth. In addition, in a market where volatility is well-known, safeguarding investments requires effective risk management techniques. Investors may confidently traverse the growing US marijuana sector and choose which stocks to include in their portfolios if they have a firm grasp of these ideas.
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US Marijuana Stocks to Keep an Eye on in November
- Ayr Wellness Inc. (OTC: AYRWF)
- Cresco Labs Inc. (OTC: CRLBF)
- Curaleaf Holdings, Inc. (OTC: CURLF)
Ayr Wellness Inc.
Ayr Wellness Inc. is a well-known cannabis company in Florida. Florida is home to sixty-one of the company’s seventy marijuana-related businesses. The business bought Herbal Remedies Dispensaries, LLC to grow into Illinois. The usage of marijuana by adults may make businesses in Ayr, Massachusetts more desirable. The company has opened its sixth linked dispensary in Pennsylvania. Ayr intended to begin building its 86,000 square foot processing and growing facility in December, if Arizonan regulators gave their approval. In 2022, the corporation made a large investment in the beverage industry when it purchased Levia Cannabis Infused Seltzer.
Second Quarter 2023 Highlights
AYR, in its press release for the second quarter of 2023, revealed several significant highlights. The company reported a substantial year-over-year increase in revenue, climbing by 18% to reach $116.7 million. This growth excludes income from discontinued operations, underlining the company’s core financial strength.
Furthermore, AYR achieved a remarkable milestone by delivering record-breaking adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of $29.4 million. This figure represents an impressive 78% year-over-year surge and a 12% sequential increase. Equally noteworthy is the adjusted EBITDA margin, which stood at a solid 25%.
The company’s financial performance showed promising signs as it substantially improved its GAAP (Generally Accepted Accounting Principles) Loss from Operations. Year-over-year, this loss was reduced by an impressive 81%, and sequentially, it improved by 79%. When excluding discontinued operations, the GAAP Loss from Operations reached $(4.5) million.
Looking ahead, AYR remains committed to securing its financial well-being and strives for sustainable, long-term growth and profitability across all the markets it operates in. The company is optimistic about the second half of 2023 and the year 2024, anticipating growth in both revenue and adjusted EBITDA. Moreover, they aim to generate positive GAAP cash flow from operations for the entire calendar year of 2023.
AYRWF Stock Performance
AYRWF stock closed on October 27th, at $1.18, down 53.54% in the last month of trading. Currently, the stock has a 52-week price range of $0.5660-$4.17 and is down 1.67% year to date.
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Cresco Labs Inc.
Cresco Laboratories is a vertically integrated cannabis corporation based in the United States. At the moment, the business is leading the nation in the manufacture of branded cannabis goods. The company runs 20 industrial facilities and 63 retail sites throughout 11 states. There are now 28 dispensaries in Florida after the firm launched locations in Palm Harbor and Lake Worth in March. The company terminated its $2 billion merger with Columbia Care on July 31st. In addition, the companies called off their agreement with Sean “Diddy” Combs, the hip-hop tycoon, to pay up to $185 million for the acquisition of certain divested businesses in Illinois, Massachusetts, and New York.
Second Quarter 2023 Financial Highlights
- Second quarter revenue of $198 million, up 2% sequentially, driven by retail growth of 4% and flat wholesale revenue.
- Gross profit of $87 million, 44% of revenue.
- Adjusted gross profit1 of $93 million and Adjusted gross margin of 47%, up 100 bps from the first quarter.
- Adjusted SG&A1 reduction of $7 million sequentially.
- Adjusted EBITDA1 of $40 million, up 38% sequentially as margin improved 540 bps to 20%.
- Generated positive operating cash flow of $18 million, inclusive of $14 million of one-time cash charges related to facility closures, severance payments and M&A related fees.
- Second quarter net loss of $43 million, which includes $22 million of impairment charges.
CRLBF Stock Performance
CRLBF shares finished on October 27th, at $1.16, down 38.30% in the last month of trading. The stock is presently trading in a 52-week price range of $1.00-$4.20, showing a 35.56 percent decline year to date.
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Curaleaf Holdings, Inc.
Curaleaf Holdings, Inc. is a well-known global supplier of cannabis consumer products enhancing people’s lives via the production, dissemination, and celebration of the possibilities of the plant. As a fast-growing cannabis firm with a reputation for quality, expertise, and dependability, the company and its brands, including Curaleaf, Select, and Grassroots, provide industry-leading service, product range, and accessibility in both the medicinal and adult use sectors. Currently, Curaleaf employs over 5,500 people nationwide and operates 152 dispensaries in 19 states. Curaleaf International, the most vertically integrated cannabis company in Europe, with a specialized supply and distribution network that reaches every region on the continent. The company combines state-of-the-art production, extraction, and cultivation techniques with cutting-edge science and research.
Second Quarter 2023 Summary vs. Same Year-Ago Quarter
- Revenue in the second quarter of 2023 increased 21% to approximately $5.0 million compared to $4.1 million for the same period in 2022. The improvement was driven by an increase in cannabinoid segment revenues of 151% to $1.9 million compared to $0.7 million for the same period in 2022, partially offset by lower revenues in the non-cannabinoid segment.
- All-in cost per gram of dry flower was $0.70. There is no comparative data from the prior year, as the Company did not harvest crops at its Colombian operations in the year-ago quarter.
- Gross profit, including a $0.2 million inventory provision, increased 10% to $2.7 million, compared to a $2.5 million gross profit in the year-ago quarter, which included a $0.2 million inventory provision. Adjusted gross profit (a non-GAAP financial measure defined and reconciled herein), which excluded such inventory provisions, increased 8% to $2.9 million compared to $2.7 million.
- Gross margin was 54.7% compared to 60.5%, last year. Adjusted gross margin (a non-GAAP financial measure defined and reconciled herein), which excluded inventory provisions, was 58.8% compared to 66.3%.
- Net loss was $3.6 million compared to $1.0 million. Net loss in the year-ago quarter included a $6.9 million gain on investment following the Company’s sale of a portion of its minority equity stake in Cansativa, along with a $1.3 million gain on remeasurement of warrant liability. Excluding the gains, net loss in the year-ago quarter would have been approximately $9.2 million.
- Adjusted EBITDA (a non-GAAP financial measure defined and reconciled herein) improved to $(2.1) million compared to $(3.5) million. The improvement reflects the aforementioned benefits of the Company’s restructuring and cost reduction initiatives over the past year.
Reiterated 2023 Outlook
With the Company’s current commercial traction and visibility—along with its ongoing work to drive cost savings and improve capital efficiency—Clever Leaves is reaffirming its full year 2023 financial outlook. The Company continues to expect its full-year revenue to range between $19 million and $22 million, with an adjusted gross margin of between 58% and 63%. The Company also continues to expect its 2023 adjusted EBITDA to range between $(13.6) million and $(10.6) million. Additionally, Clever Leaves anticipates approximately $0.5 million to $0.7 million of annual capital expenditures in 2023, representing an estimated 50% reduction compared to 2022.
CURLF Stock Performance
On October 27th , CURLF shares closed at $2.78, down 37.53% in the past month of trading. The stock is currently trading in a 52-week range of $2.19-$7.90 and is down 35.31% year to date.
High Times Ahead: November’s Top US Cannabis Stock Picks
November 2023 holds immense promise for investors in the US marijuana market. By keeping a keen eye on the top US marijuana stocks highlighted in this article, investors can position themselves to capitalize on this evolving landscape. However, it’s crucial to remember that the cannabis sector can be highly volatile. Therefore, employing technical indicators for trading and implementing robust risk management strategies are essential to navigate this market successfully. With the right tools and careful planning, investors can take advantage of the opportunities presented by the ever-expanding US cannabis industry and cultivate a fruitful portfolio in this flourishing sector.
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