Best Cannabis Stocks In Q4 2021
Ancillary marijuana stocks have become one of the ways more investors are establishing positions in top cannabis stocks. In the US ancillary cannabis companies have become favored by money managers and hedge funds as entry into the market. These companies support the cannabis industry without touching the actual plant. For the latter part of 2020, these top cannabis stocks saw significant gains in the market that carried into the first quarter of 2021.
Now down substantially from those highs, the cannabis sector is trading at some of its lowest price points this year. Historically September has always been one of the worst trading months of the year. Although these leading cannabis companies are performing well in 2021 none of their earnings have helped them in the market. This year the one factor that has been a catalyst for the cannabis sector has been marijuana legalization and federal reform.
Evidently now in September, the possibility of seeing federal cannabis banking reform has increased since last week. If this occurs in the fourth quarter, it could be the catalyst pot stocks need to start moving higher. One ancillary marijuana stock that’s performed well for investors on a long-term basis is Innovative Industrial Properties, Inc. (NYSE:IIPR). This US cannabis REIT provides a dividend for shareholders and has a 3-year total return of 481.42%.
Cannabis Industry Growth And Market Volatility
Other ancillary cannabis companies support the cannabis industry in different ways that will grow as the industry develops. Companies that provide organic nutrients, hydroponics, and lighting systems for cultivating cannabis have seen substantial growth in the past few years. Another part of the industry that is positioned for growth in the next five years is the accessories market.
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These top pot stocks continue throughout the week it might be a good time to put some of the cannabis stocks on your watchlist. As this week continues to show volatility in the overall markets these pot stocks could be positioned to produce some upside with the passing of marijuana banking reform. Trading near some of their lowest market values in 2021 we could see another cannabis rally in the fourth quarter. Let’s look at 2 top ancillary marijuana stocks for your list right now.
Best Marijuana Stocks For Your List In September
- Hydrofarm Holdings Group, Inc. (NASDAQ:HYFM)
- Greenlane Holdings, Inc. (NASDAQ:GNLN)
Hydrofarm Holdings Group, Inc.
Hydrofarm Holdings Group, Inc. is a leading distributor and manufacturer of hydroponics equipment and supplies for controlled environment agriculture. Primarily, the company offers a variety of equipment that facilitates the cannabis growing process. Namely, the company offers high-intensity grow lights, climate control solutions, and growing media, as well as a broad portfolio of innovative and proprietary branded products., Hydrofarms has been in business for over 40 years helping growers in the US and Canada achieve premium-quality farming products.
In August, Hydrofarm reported its second-quarter 2021 results with net sales of $133.8 million up 46.7% year over year. As a result, gross profits increased 65% to $29.6 million or 22.1% of net sales. Additionally, the companies adjusted EBITDA increased 127.5% to $16.2 million. In July the company announced it completed the acquisition of Aurora Innovations and its organic nutrients and grow media operations. In August, the company announced the acquisition of a leading Canadian nutrient company Greenstar Plant Products, Inc. Specifically, this acquisition continues Hydrofarms efforts manufacturers of branded products in key CEA categories.
HYFM stock closed on September 21st at $41.22 down 3.13% for the day. The stock has a 52-week price range of $40.38-$95.48 and is down 19.08% year to date. According to analysts at CNN Business HYFM stock has a 12-month median price target of $68.00 per share. In essence, this would represent a gain of 64.77% from its last trading price of $41.22.
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Greenlane Holdings, Inc.
Greenlane Holdings, Inc. is one of the largest cannabis accessories companies serving the global market. In general, the company sells premium cannabis accessories, child-resistant packaging, and specialty vaporization products in the US and in the global market. At the present time, Greenlane has a customer base of more than 11,000 retail locations across the globe. Recently, the company’s shareholders voted to approve the merger with KushCo Holdings, Inc. (OTC: KSHB). In detail, the deal is an all-stock deal creating a new provider of cannabis ancillary products and packaging.
In August Greenlane reported its second-quarter 2021 results with revenue of $34.7 million up 71% year over year. Additionally, the company saw Q2 2021 core revenue of $34.5 million. Greenlane Brands sales grew to $9 million in Q2 2021 up 62.5% year over year. Now Greenlane Brands accounts for 25.9% of total revenue compared to 17.1% in Q2 2020. As a result, gross profits grew to $7.8 million up 22.4% from the previous year.
GNLN stock closed on September 21st at $2.51 down 3.08% for the trading day Currently GNLN stock has a 52-week price range of $1.83-$8.73 and is down 34.60% year to date. According to analysts at Tip Ranks GNLN stock has a 12-month average forecast target price of $5.50 per share. In this case, this would represent an upside of 120% from its last trading price of $2.50. With the possibility of passing marijuana banking reform, these ancillary cannabis stocks could be potential plays for your list right now.
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