Leading U.S. Cannabis Stocks for Mid-January 2024 Investment
As we reach the middle of January 2024, marijuana stocks are becoming increasingly prominent in the investment landscape. This surge in interest is primarily due to the progressive legalization and expanding market opportunities within the cannabis sector globally. In the United States, the cannabis industry is particularly poised for substantial growth. This optimism is grounded in evolving legal frameworks and regulatory advancements, making the sector an attractive field for investors seeking new ventures.
When it comes to navigating the complexities of the marijuana stock market, the role of technical analysis cannot be overstated. This methodical approach, which focuses on analyzing market trends and stock price movements, equips investors with valuable insights for decision-making. Equally important is the practice of proper risk management. Strategies such as setting stop-loss limits and diversifying investment portfolios are crucial. They not only help minimize potential losses but also ensure a balanced approach to handling the inherent volatility associated with the cannabis market.
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Cannabis Growth Leaders: Key U.S. Stocks for Your Mid-January 2024 Watchlist
- The Cannabist Company Holdings Inc. (OTC: CBSTF)
- Glass House Brands Inc. (OTC: GLASF)
- Verano Holdings Corp. (OTC: VRNOF)
The Cannabist Company Holdings Inc.
In the US cannabis market, The Cannabist Company Holdings Inc. is one prominent player. Their areas of expertise include cannabis product manufacturing, sales, and cultivation. In general, their product line consists of CBD products, associated accessories, and marijuana for medical and recreational use. They are known for providing exceptional services and for being sustainable.
The Cannabist Company Holdings Inc. plans to run over 50 locations nationwide by December 2023. The states with the highest concentration of them are Colorado, California, and Michigan. It is widely recognized that these states have legalized marijuana in progressive manners. The company’s purposeful concentration on high-demand markets is demonstrated by the breadth of its network in these areas. Because of this distribution, they have grown to be a powerful player in the cannabis industry in the United States.
The third-quarter 2023 U.S. GAAP financial highlights
The Cannabist Company Holdings Inc.’s financial results for the third quarter of 2023 are mixed. Although revenue decreased by 2.6% over the previous year, the company’s revenue remained stable at $129 million. The quarter’s gross profit was $37 million, a significant drop of 28.7% from the previous quarter. Furthermore, Adjusted Gross Profit decreased 3.6% in the quarter over quarter and 8.3% in the year over year. Although there was a 2.4% decrease from the same quarter in the previous year, there was a 0.9% improvement in Adjusted EBITDA compared to Q2 2023. There was a $19.3 million operating loss and a $36.1 million net loss for the corporation. These numbers signify a challenging quarter for the newly independent company that underwent a significant restructuring.
The company’s strategic changes, such as the termination of a merger transaction and an emphasis on boosting gross margins, were stressed by CEO Nicholas Vita. He emphasized that the company’s rebranding from Columbia Care to The Cannabist Company signifies a new phase of growth. Vita stated that there will be opportunities for future growth in Maryland, Virginia, New Jersey, New York, and Ohio. The company plans to open more retail locations in these states starting in 2024. A bigger strategy to boost growth and profitability involves these actions as well as expanding the wholesale program, striving for higher margins through branded product sales, and increasing facility utilization. The Cannabist Company has positioned itself for future growth and improvement in its financial performance despite the difficulties encountered in the third quarter.
CBSTF Stock Performance
CBSTF stock closed on January 12th at $0.5292, up 51.20% in the last month of trading. Currently, the stock has a 52-week range of $0.27-$1.50, up 17.65% year to date.
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Glass House Brands Inc.
Glass House Brands, a key player in the US cannabis market, specializes in the production, marketing, and cultivation of premium cannabis. The company, which is headquartered in California, is known for being a vertically integrated business that values eco-friendly products. In the cannabis industry, which is well-known for its size and growing potential, they enjoy a good reputation in California. Due to its strategic growth, Glass House Brands, a retail brand, has launched several additional sites, cementing its presence in the state.
A company called Glass House Brands provides high-quality cannabis products in response to California’s growing demand for the drug for both recreational and medicinal uses. Their commitment to environmentally friendly and sustainable farming methods makes them stand out in the industry. Investors and consumers alike are drawn to the burgeoning cannabis business, where Glass House Brands is well recognized as a significant participant. In terms of cannabis usage and legalization, California remains a pioneer.
Third Quarter 2023 Highlights
For the third quarter of 2023, Glass House Brands announced outstanding financial outcomes and significant accomplishments. Notably, a $12.8 million inflow from a Series D Preferred Equity Fund Raise helped their cash buffers rise to $37.9 million from $22.7 million in the prior quarter. Operating cash flow for the business increased dramatically, reaching a record $9.1 million in the second quarter of 2023 from $8.3 million. Notable progress was also made by adjusted EBITDA, which increased from $9.5 million to $10.7 million in the prior quarter.
Their revenue, which reached a record $48.2 million and increased by an amazing 71% year over year and 8% sequentially, was the most important statistic in their Q3 figures. The gross margin was still much better than 31% even though it decreased from 55% in the second quarter of 2023 to 54% in the same quarter of the previous year. Along with a 36% increase in output, the company also revealed a stunning 142% growth in Q3 Biomass sales over the prior year.
Glass House Brands provided projections for Q4 2023 with an eye toward the future. They predicted revenues of $38 million to $40 million, a 21% increase over Q3 2022. However, because of unfavorable weather that affects flower output, the guideline predicts a 19% consecutive fall from the mid-point.
GLASF Stock Performance
GLASF stock ended at $5.60 on January 12th, up 21.48% in the last month of trading. In this case, the stock has been trading in a 52-week range of $2.05-$5.61. GLASF stock is up 18.39% year to date.
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Verano Holdings Corp.
Verano Holdings Inc. is a well-known player in the US cannabis business, recognized for its high-achieving brands and capacity to make money over a broad spectrum of geographic areas. The corporation is a vertically integrated, multi-state business that considers plant advancement and fearless cannabis exploration to be fundamental principles. Verano Holdings differentiates itself in the medical and adult-use cannabis markets by providing an exceptional shopping experience under the Zen LeafTM and MÜVTM dispensary trademarks. A number of legal cannabis products are marketed by the firm under well-known consumer names, including AvexiaTM, BITSTM, SavvyTM, EncoreTM, MÜVTM, and VeranoTM. With 14 production facilities dispersed throughout 13 states in the US, Verano has a sizable consumer base.
Verano Holdings employs over 4,000 individuals and operates more than 120 owned dispensaries. With 50 active dispensaries and 28 retail locations under the Zen Leaf brand, the company has a large market reach. This year, they intend to open roughly ten more locations. This growth demonstrates Verano’s commitment to expanding its market reach and accessibility. The company offers a range of income streams and operates in 14 states across the US with licenses for production, dispensary, and growing.
Third Quarter 2023 Financial Highlights
During the third quarter of 2023, the corporation revealed $240 million in revenue in its financial report. This is a 3% increase from the prior quarter and a 5% increase year over year. They instituted consistent revenue reporting at the state level. At $133 million, or 55% of revenue, gross profit was recorded. SG&A (selling, general, and administrative) costs totaled $86 million, or 36 percent of revenue. With an adjusted EBITDA of $89 million, or 37% of revenue, the company recorded a net loss of $(18) million. Notably, free cash flow came to $27 million, capital expenses came to $10 million, and net cash from operating activities was $37 million.
The corporation has made improvements to the financial guidance for 2023. It increased its free cash flow projection from $65-75 million to $72-76 million. It also lowered its capital expenditure projection from $35–50 million to $30–37 million. These modifications show that the company’s operational effectiveness and financial stability are improving.
The financial report suggests a mixed potential impact on the company’s stock price. The increase in revenue and free cash flow guidance could attract investors, signaling robust financial health. However, the reported net loss might raise concerns about long-term profitability. A balanced perspective would consider both the financial growth and the challenges in profitability. Overall, the company’s financial management and transparency could maintain investor confidence, despite short-term setbacks.
VRNOF Stock Performance
VRNOF shares closed at $5.14 on January 12th, up 36.64% in the past month of trading. In this case, the stock has a 52-week price range of $2.53-$5.50 and is up 14.73% year to date.
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Top U.S. Pot Stocks to Monitor, Mid-January 2024
As we conclude our overview of top U.S. marijuana stocks for 2024, it’s evident that the cannabis industry presents a dynamic and potentially lucrative investment landscape. In general, the growing legalization and societal acceptance of cannabis have paved the way for significant business growth. However, it’s crucial to approach these investment opportunities with a well-informed strategy. Technical analysis stands out as an invaluable tool in this context. By meticulously analyzing market trends and price movements, investors can identify potential entry and exit points. This analysis also aids in discerning between short-term fluctuations and long-term trends, a key factor in making informed investment decisions.
Proper risk management is another cornerstone of successful investment in marijuana stocks. Given the industry’s volatility, setting stop-loss orders can protect against unforeseen market downturns. Diversification across various stocks within the cannabis sector can further mitigate risks. This strategy ensures that an investor’s exposure is not tied to the performance of a single stock. Keeping abreast of regulatory changes and market developments is also crucial. This vigilance enables investors to adapt their strategies in response to the evolving landscape, maximizing potential gains while minimizing risks.
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