Beyond the Buds: Discovering Growth Potential in US Ancillary Cannabis Stocks
The worldwide cannabis industry and top marijuana stocks have undergone significant growth and transforming regulatory landscapes in recent years. While cultivators, producers, and dispensaries have received the most attention, a new wave of cannabis stocks has emerged as key players in this developing market. These auxiliary businesses provide critical products and services to the cannabis ecosystem, from technology to packaging and branding skills.
In addition, the cannabis industry’s internet presence has grown rapidly, harnessing the power of digital platforms to interact with consumers, create education, and remove the marijuana stigma. The internet has become a critical tool for cannabis companies to manage the complexity of this fast-evolving market, from e-commerce platforms to educational tools and online networks.
In this article, we’ll look into the area of ancillary cannabis stocks and look at how they’re shaping the industry’s growth. We also look at the ever-changing online world, which has become a significant facilitator for cannabis companies looking to engage with their target audience, develop brand identification, and cultivate a loyal client base.
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US Ancillary Cannabis Stocks to Watch in July 2023
- WM Technology, Inc. (NASDAQ: MAPS)
- Leafly Holdings, Inc. (NASDAQ: LFLY)
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
WM Technology, Inc.
Weedmaps is an online cannabis retailer and a user and business directory. The company’s owner is WM Technology, Inc. As their operating system, cannabis shops often use WM Business’s cloud-based SaaS solutions. The solutions and services offered by WM Business frequently make it easier to comply with the cannabis industry’s complex and ever-changing regulatory standards. WM Technologies unveiled a digital payment option in Ontario to expand its product portfolio in May. Because curbside pickup, delivery, and cashless transactions grew more common, small companies benefited.
Weedmaps reported $48.0 million in revenue in the first quarter of 2023, compared to $57.5 million in the first quarter of 2022. Furthermore, the average monthly paying client was 5,641, up from 5,026 in the previous year. The company’s net loss was $4.0 million, compared to a net loss of $31.2 million the previous year. Adjusted EBITDA was $7.1 million, up from $(1.0) million the previous year. The company also provided expectations for the second quarter of 2023, with sales expected to be identical to the first quarter of 2023.
MAPS Stock Performance
MAPS stock closed at $0.9494 on July 12th, up 5.02% in the last five days of trading. The stock has a 52-week price range of $0.596- $3.79 and is down 6% year to date. According to analysts at CNN Business, MAPS stock has a 12-month average price target of $1.50 per share. In essence, this would represent an upside of 54.27% from its last trading price of $0.9494.
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Leafly Holdings, Inc.
Leafly Holdings Inc. owns and manages a platform that connects clients to cannabis brands and authorized merchants and offers customers cannabis-related information. The firm runs the most trustworthy website for locating and purchasing cannabis goods from licensed dealers worldwide. Every year, over 125 million people use Leafly to research cannabis and purchase online from neighboring retailers. Customers can make informed purchasing decisions because of the organization’s extensive resources, which include technology and advertising services. This assists cannabis businesses in attracting and retaining repeat clients. Customers may now buy cannabis directly from the company’s website, thanks to the online cannabis delivery service it built when it opened its doors in California in May.
First Quarter Financial Results
- Revenue was $11.2 million, down 1.5% from Q1 2022.
- Gross margin was 88%, improved from 87% in Q1 2022.
- Total operating expense was $14.9 million, down 14.7% from $17.4 million in Q1 2022, reflecting the impact of recently announced cost-cutting measures.
- Net loss for Q1 2023 was $5.4 million. This compares to a net loss of $19.4 million in Q1 2022.
- Adjusted EBITDA loss was $3.3 million, compared to adjusted EBITDA loss of $5.4 million in Q1 2022.
LFLY Stock Performance
LFLY stock closed on July 12th at $0.2940, up 2.80%% in the past five trading days. Currently, the stock has a range of $0.265-$10.76 and is down 54.90% year to date. According to analysts at CNN Business, LFLY stock has a median price target of $2.00 per share. In this case, this would represent an upside of 611.74% from its last trading price of $0.2940.
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Hydrofarm Holdings Group, Inc.
Hydrofarm is a leading independent manufacturer and distributor of branded hydroponics equipment and supplies for controlled environment agriculture, including grow lights, climate control solutions, growing media, and nutrients, in addition to a diverse portfolio of proprietary and innovative branded products. For over 40 years, Hydrofarm has supported producers in making growing more accessible and more productive. The company aims to deliver items that improve the quality, efficiency, consistency, and speed of growing projects for growers, farmers, and cultivators.
Latest Financial Results
Net sales in the first quarter of 2023 declined to $62.2 million from $111.4 million in the first quarter of 2022 due to a 42.5% drop in volume of products sold, a 1.1% drop in price/mix of products sold, and a 0.6% loss from unfavorable foreign exchange rates. Furthermore, net sales declined 42.5% to $62.2 million in the first quarter of 2023, from $111.4 million in the first quarter of 2022, due to a 42.5% drop in volume of products sold, a 1.1% drop in price/mix of products sold, and a 0.6% loss from unfavorable foreign exchange rates. Furthermore, gross profit declined from $16.6 million in the previous year to $11.4 million in the first quarter of 2023.
In the first quarter of 2023, the company lost $(16.8) million, or $(0.37) per diluted share, compared to a loss of $(23.3) million, or $(0.52) per diluted share, in the first quarter of 2022. The company is reiterating its full-year 2023 net sales forecast of $290 million to $310 million, with results now expected to be at the low end of the range, with a moderately positive Adjusted EBITDA(1) for the full year, in line with previous projections.
HYFM Stock Performance
HYFM stock closed at $0.9179 on July 12th, up 8.51% in the last five trading days. At present, HYFM stock has a 52-week price range of $0.6720-$5.01, down 40.78% year to date. According to analysts at CNN Business, HYFM stock has a 12-month median price target of $1.45. In this case, this would represent an increase of 54.93% from its last trading price of $0.9179.
Exploring Lucrative US Ancillary Cannabis Stocks in July 2023
In the cannabis market, ancillary cannabis stocks have emerged as an appealing investment possibility. In addition, These equities have shown strong growth potential in recent years as they provide crucial products and services to the cannabis industry. While the cannabis business evolves, auxiliary stocks allow investors to profit from the sector’s growth without directly exposing themselves to the regulatory concerns of cannabis cultivation and production.
Short-term trading equities in the cannabis ancillary industry might give unique opportunities for investors looking to capitalize on market volatility and short-term price swings. However, before making investing selections, it is critical to approach short-term trading with prudence and undertake thorough research. Short-term trading can be difficult due to the inherent volatility of the cannabis market and the broader stock market, and it necessitates a disciplined strategy, risk management measures, and constant monitoring of market patterns.
Investors may navigate the dynamic environment of ancillary cannabis stocks and make intelligent investment decisions to potentially benefit from the industry’s growth and maturation by remaining informed and completing comprehensive research.
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