The Best Ancillary Cannabis Stocks In 2021
As many leading cannabis companies report earnings this week which top marijuana stocks are you adding to your watchlist? Last week some top cannabis stocks to invest in delivered earnings that are showing strong revenue growth for this quarter. One area of the cannabis sector that has delivered significant returns for investors is ancillary pot stocks. Ancillary cannabis companies are those that support the cannabis industry without touching the actual plant.
Since the pandemic hit in 2020 these cannabis companies have seen substantial growth in the US cannabis market. Last week some of the best US ancillary cannabis stocks delivered earnings along with some top Canadian cannabis companies. For the most part, cannabis companies experienced growth in revenue and expanded their market share during the quarter. Cannabis companies that supply lighting, growth nutrients, and hydroponic equipment continue to show significant growth in the market.
These companies are well-positioned to grow alongside the cannabis market as it expands across the US. Another ancillary cannabis company has supplied many leading cannabis companies with capital and growing and processing facilities across the US. One of the only cannabis REITs on the New York Stock Exchange has become a favorite for hedge funds and money managers. As one of the few ways to receive a dividend in the cannabis sector, it could be a good way to invest long-term in the market.
Could These Top Pot Stocks Be Good Long-Term Investments?
Before investing in cannabis stocks, it’s important to always do your due diligence and research a company. Looking into a company’s financial health and studying how the stock moves in the market can help you make the most returns on your investment. In recent trading, these 2 top marijuana stocks have been going in opposite directions in the market, but both could offer value to a long-term portfolio.
Finding the right entry point can also secure short-term gains as things progress in the cannabis market. For investors looking for top marijuana stocks that could be better for long-term holds, we can take a closer look at some leading companies. In the US there could be some of the best ancillary marijuana stocks to invest in for 2021.
Best Ancillary Marijuana Stocks To Watch In 2021
Innovative Industrial Properties, Inc.
Innovative Industrial Properties, Inc. is a real estate investment trust or REIT with a focus on the US-licensed cannabis market. The company has a total of approximately 6.8 million rentable square feet and 2.4 million square feet under development. These properties are 100% leased with a weighted average remaining lease term of about 16.7 years. As of July, the company owns 73 properties across 18 states. IIP continues to close acquisitions including properties in Pennsylvania and Massachusetts expanding its lease portfolio significantly in 2021. After the purchase, IIP will enter a long-term triple net lease with the cannabis company using the property.
The company invested an estimated $1.3 billion across its portfolio and has committed another $385.3 million for the completion of construction and tenant improvements at IIP properties. On August 4th IIP reported its second-quarter 2021 financials with performance-driven growth of 101% in total revenue year over year. Specifically, the company generated total revenue of $48.9 million. IIP paid its second-quarter 2021 dividend of $1.40 per share on July 15th a 32% increase from the year prior. This also represents an increase of 6% over the first quarter dividend. IIP has 21% debt to total gross assets with about $2.1 billion in total gross assets. In general, the company has generated total revenues of about $91.8 million for the first six months of 2021.
IIPR Stock Performance
IIPR stock closed at $228.45 on August 6th up 5.31% for the trading day. Last week the stock reached a new high of $230.64 and could continue pushing higher in the market. According to analysts at CNN Business IIPR stock has a 12-month median price target of $245.00 per share. In essence, this forecast would represent an increase of 7.08% from its last trading price of $228.45. IIPR stock has gained 13% in the last month.
The Scotts Miracle-Gro Company
At the present time, Scotts Miracle-Gro is one of the world’s largest marketers of branded consumer lawn and gardening products and has a hand in the cannabis market. The company’s wholly-owned subsidiary Hawthorne Gardening is a leading supplier of nutrients, lighting, and hydroponic equipment used in the process of growing cannabis. On August 4th the company announced its 3rd quarter financials and reaffirmed sales and earnings guidance for fiscal 2021.
In detail, the company reported company-wide Q3 sales increased 8% to $1.61 billion driven by Hawthorne‘s growth of 48%. Hawthorne sales increased to $421.9 million compared to $285.7 million. US consumer sales for Scott’s declined by4% in the third quarter but remained 19% higher year to date. Scott’s saw company-wide sales increase to $4.19 billion up 29% for the first 9 months of fiscal 2021. In the third quarter, Scott’s acquired Hydrologic Purification Systems is a California-based accessory and provider of water filtration and purification products in the cannabis market.
SMG Stock Performance
SMG stock closed on August 6th at $164.09 down 7.66% in the past five trading days. Currently SMG stock is down 17.60% year to date with a high of $254.34 in April. According to analysts at Tip Ranks SMG stock has a 12-month average price target of $231.67 per share. This would be a gain of 41.18% from its last trading price of $164.09. Scotts Miracle pays an annual dividend of $2.48 per share with a yield of 1.51%
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