Best Cannabis Stocks Heading Into December 2021
Are you looking for top marijuana stocks to buy right now? Going into December the best cannabis stocks to invest in could have some potential catalysts brewing on Capitol Hill. This week the NDAA could be up for a vote in the Senate with the SAFE Banking Act attached to it. Although Chuck Schumer has already expressed, he intends to pass federal cannabis legalization and decriminalization before banking there has been a bipartisan push to get cannabis reform done. In 2021. The delays in ending US cannabis prohibition have impacted the best marijuana stocks severely in the market. At the present time, many top pot stocks are trading near the lowest price points seen in 2021.
Even though many leading cannabis companies have continued to deliver strong earnings in 2021 this has not translated into gains in the market. In November this round of earnings has not helped cannabis stocks move higher. In general, it seems the only thing that has caused upward momentum with top pot stocks is federal cannabis reform. One area of the cannabis sector that’s seen a significant downside in November is ancillary cannabis stocks. Ancillary companies are those companies that support the cannabis industry without touching the actual plant. Some of these leading companies are well-positioned to grow with the cannabis industry for the next few years.
Investing In Pot Stocks In Todays Market Volatility
According to a recent Statista report, US sales of legal recreational cannabis are forecast to reach $42 billion by 2026. This makes the cannabis industry one of the fastest-growing markets in the US. Before investing in top marijuana stocks, it’s important for investors to research these companies thoroughly.
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Looking into a company’s financial results and press releases is a good way to find the best-performing companies to invest in. In addition, following how a stock behaves in the market can help you establish the best entry points for your investments. With a major possible catalyst for the cannabis sector happening this week let’s look at 2 top ancillary cannabis stocks to watch before December.
Top Ancillary Marijuana Stocks To Add To Your List This Week
- GrowGeneration Corp. (NASDAQ: GRWG)
- Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
GrowGeneration Corp
In the US GrowGeneration Corp. is a leading owner and operator of retail hydroponic and organic gardening stores. In general, the company markets and distributes organics, lighting, and hydroponic equipment mainly used by cannabis cultivators. Currently, GrowGen has 62 organic garden centers across 13 states recently opened its 11th and 12th stores in southern California. In addition, the company has also been working on its online presence with the launch of GrowGeneration.com. As it stands, the site is a one-stop-e-commerce destination with over 10,000 products ranging from nutrients to lighting technology. The company is expecting to have over 100 locations operating in the US in the next five years. During the third quarter, the company announced the opening of the largest hydroponic garden center in Los Angeles County, California.
In November GrowGen delivered its third-quarter 2021 results with a record revenue of $116.0 million up 111% year over year. The company produced an Adjusted EBITDA of $10.8 million for the third quarter. In addition, the company saw same-store sales increase by 15.7% from the prior year. As a result, GrowGen delivered earnings of $0.07 per share in the third quarter. The company updated 2021 full-year guidance to $435-$440 million.
GRWG stock closed on November 26th at $17.99 down 17.44% in the last month. Specifically, GRWG stock has a 52-week price range of $17.11-$67.75 and is down 55.27% year to date. According to analysts at CNN Business GRWG stock has a 12-month median price target of $34 per share. In essence, this would represent an upside of 89.52% from its last trading price of $17.99.
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Hydrofarm Holdings Group, Inc.
Hydrofarm Holdings Group, Inc. is a leading distributor and manufacturer of hydroponics equipment and supplies for controlled environment agriculture. In general, the company offers a variety of equipment that facilitates cannabis cultivation. Primarily, the company has products ranging from high-intensity grow lights, climate control solutions, and growing media. In addition to a broad portfolio of innovative and proprietary branded products. On November 1st the company announced it completed its acquisition of Innovative Growers Equipment, Inc.
In November Hydrofarm delivered its third-quarter 2021 earnings with net sales of $123.8 million up 28.1% year over year. Specifically, the company increased gross profit to $30 million or 24.2% of net sales. As a result, the company has an Adjusted EBITDA of $16.1 million up 116.7% year over year. The company reaffirmed its previous 2021 outlook net sales of $470-$490 million. Also, the company announced it completed the acquisition of Aurora Innovations and Greenstar Plant Products, Inc. Specifically, this acquisition continues Hydrofarms efforts of acquiring manufacturers of branded products in key CEA categories.
HYFM Stock closed on November 26th at $35.97 down 7.75% in the last five trading days. The stock has a 52-week price range of $31.30-$95.48 and is down 31.59% year to date. According to analysts at Tip Ranks HYFM stock has a 12-month average price target of $53.80 per share. In this case, this would be an increase of 49.57% from its last trading level of $35.97. Currently, five wall street analysts on Tip Ranks have HYFM stock listed as a strong buy. As we head into December these could be the best ancillary cannabis stock for your list right now.
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