US Cannabis Industry Leaders in 2023: Best US Cannabis Stocks
In Q3 2023, US marijuana stocks emerged as important stock market players, reflecting the fast-growing cannabis sector. The US cannabis sector has attracted attention for its profitable potential, with an astounding annual growth rate of 30% in 2023. In general, the future of the cannabis sector in the United States remains bright, thanks to rising legalization and altering societal attitudes.
Investors use technical analysis to identify optimal trading opportunities within this dynamic sector. Additionally, by analyzing price patterns and indicators, traders can pinpoint potential entry and exit points, enhancing their decision-making process. Also, as the industry matures, keeping a close eye on these top US marijuana stocks through technical analysis becomes pivotal for informed investment strategies.
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Unlocking Q3 2023’s Potential: US Marijuana Stocks Worth Monitoring
- Trulieve Cannabis Corp. (OTC: TCNNF)
- Curaleaf Holdings, Inc. (OTC: CURLF)
- Columbia Care Inc. (OTC: CCHWF)
Trulieve Cannabis Corp.
Trulieve Cannabis Inc., which operates in eleven states, controls most of the Florida market. The corporation dominates the cannabis industry in America, with 186 retail locations. The complex’s processing and expansion area totals 4 million square feet. Trulieve’s position in the Southeast cannabis business has benefited from the most recent Georgia production license. Additionally, the company opened its first dispensary in Massachusetts, laying the framework for future expansion. Also, in early February, the business purchased a 64,00 square foot growing facility near Phoenix to expand its manufacturing capacity in the southwest. In April, the company bought Greenhouse Wellness West Virginia Dispensaries LLC, increasing its geographic footprint into West Virginia.
Q2 2023 Financial and Operational Highlights
- Revenue of $282 million, with 96% of revenue from retail sales. Excluding deferred revenue, retail revenue increased by $3 million, sequentially driven by increased traffic and volume partly offset by price compression.
- Achieved GAAP gross margin of 50%, with a gross profit of $142 million. Reclassification of idle capacity expense to COGS resulted in $2 million of tax savings.
- SG&A expenses lowered by $4 million sequentially to $96 million.
- Reported net loss of $404 million. Adjusted net loss of $15 million* excludes non-recurring charges, asset and goodwill impairments, disposals, and discontinued operations. The recent stock price performance triggered Goodwill impairment and is not connected to management’s forecasts.
- Achieved adjusted EBITDA of $79 million*, or 28% of revenue.
- Generated cash flow from operations, excluding tax payments of $98 million year to date.
- Inventory reduction initiatives drive $24 million in cash generation year to date.
- Cash at quarter end of $160 million.
- Realized record traffic, customers served, and units sold on 4/20 holiday, up 10%, 11%, and 9%, respectively, year over year.
- Sold 11.6 million units of branded products through branded retail, up 9% sequentially.
TCNNF Stock Performance
TCNNF stock closed on August 18th at $3.88, down 13% in the last three months of trading. In addition, the stock has a 52-week price range of $3.71-$16.11 and is down 69.78% in the last year. According to analysts at CNN Business, TCNNF stock has a 12-month average price target of $10.42 per share. In this case, this represents an upside of 168.60% from its last trading price of 3.88.
Curaleaf Holdings, Inc.
Curaleaf Holdings, Inc. is a well-known international provider of cannabis consumer products dedicated to improving people’s lives via cultivating, sharing, and celebrating the plant’s power. The Company and its brands, including Curaleaf, Select, and Grassroots, deliver industry-leading service, product selection, and accessibility throughout the medicinal and adult use sectors as a high-growth cannabis company known for quality, knowledge, and dependability. Overall, Curaleaf now has 152 dispensaries in 19 states and employs around 5,500 Americans. Curaleaf International is Europe’s largest vertically integrated cannabis firm, with a specialized supply and distribution network spanning the whole European market. The company blends cutting-edge cultivation, extraction, and production with cutting-edge science and research.
Second Quarter 2023 Summary vs. Same Year-Ago Quarter
- Revenue in the second quarter of 2023 increased 21% to approximately $5.0 million compared to $4.1 million for the same period in 2022. The improvement was driven by an increase in cannabinoid segment revenues of 151% to $1.9 million compared to $0.7 million for the same period in 2022, partially offset by lower revenues in the non-cannabinoid segment. =
- The all-in cost per gram of dry flower was $0.70. There is no comparative data from the prior year, as the Company did not harvest crops at its Colombian operations in the year-ago quarter.
- Gross profit, including a $0.2 million inventory provision, increased 10% to $2.7 million, compared to a $2.5 million gross profit in the year-ago quarter, which included a $0.2 million inventory provision. Adjusted gross profit (a non-GAAP financial measure defined and reconciled herein), which excluded such inventory provisions, increased by 8% to $2.9 million compared to $2.7 million. =
- The gross margin was 54.7% compared to 60.5% last year. Adjusted gross margin (a non-GAAP financial measure defined and reconciled herein), which excluded inventory provisions, was 58.8% compared to 66.3%. The decrease was attributed to customer and product mix differences compared to the year-ago period.
- Operating expenses in the second quarter of 2023 improved to $5.9 million compared to $7.8 million for the same period in 2022.
- Net loss was $3.6 million compared to $1.0 million. Net loss in the year-ago quarter included a $6.9 million gain on investment following the Company’s sale of a portion of its minority equity stake in Cansativa, along with a $1.3 million gain on remeasurement of warrant liability. Excluding the gains, the net loss in the year-ago quarter would have been approximately $9.2 million.
- Adjusted EBITDA (a non-GAAP financial measure defined and reconciled herein) improved to $(2.1) million compared to $(3.5) million.
Reiterated 2023 Outlook
With the Company’s current commercial traction and visibility and its ongoing work to drive cost savings and improve capital efficiency—Clever Leaves is reaffirming its full-year 2023 financial outlook. The Company expects its full-year revenue to range between $19 million and $22 million, with an adjusted gross margin of between 58% and 63%. The Company also expects its 2023 adjusted EBITDA to range between $(13.6) million and $(10.6) million. Additionally, Clever Leaves anticipates approximately $0.5 million to $0.7 million of annual capital expenditures in 2023, representing an estimated 50% reduction compared to 2022.
CURLF Stock Performance
On August 18th, CURLF shares closed at $2.79, down 3.79% in the past three months of trading. The stock is currently trading in a 52-week range of $2.19-$7.90, down 52.95% in the last year. According to analysts at CNN Business, CURLF stock has a 12-month average price target of $5.41 per share. In this case, this would represent an upside of 93.87% from its last trading price of $2.79.
Columbia Care Inc.
Columbia Care Inc.’s territory in New York should significantly expand. The business, one of the East Coast’s leading cannabis producers, just purchased a 34-acre Long Island facility. Overall, Columbia Care presently has 131 dispensaries and 33 growing and processing facilities in 18 cities across the United States. The business plans to open its first marijuana store in Missouri in October 2021. The third gLeaf dispensary in Virginia has notified the corporation of its location. The corporation announced corporate steps on July 31st to increase operational savings and cash flow generation.
Words From The CEO
“Our second quarter results were solid, as we achieved more than $129 million in revenue, representing 4% sequential growth, confirming that we have kept our foot on the accelerator over the past 16 months. The financial impact of the measures we have taken to optimize our outstanding footprint and right-size operations are leading to increased profitability, with an 11% increase in gross profit over the first quarter and Adjusted EBITDA1 increasing 24% sequentially to over $20 million. We continue to focus on generating positive cash flow. Growing markets on the east coast fueled our sequential topline growth, counterbalancing further price compression in certain markets such as Florida, Illinois, and Massachusetts. We continued to reduce costs in the quarter, having now eliminated over $38 million, net, in annual expense, as we prioritize cash flow generation. We have announced the initial steps to manage our balance sheet in collaboration with our bondholders and are actively reviewing and considering additional refinancing alternatives. To enhance liquidity and improve operating efficiency, we have continued divesting non-core assets and pursuing commercial mortgages on eligible properties. Our decision to prioritize markets that are driving profitability and growth, and continue our commitment to the diversification of our revenue base, was reflected by continued store openings in Virginia, the launch of adult-use sales in our fully integrated Maryland market on July 1, targeted retail expansion in New Jersey, and the launch of enhanced manufacturing and cultivation capabilities in Ohio, Colorado, West Virginia, and New York.”
Nicholas Vita, CEO of Columbia Care.
CCHWF Stock Performance
CCHWF stock closed on August 18th at $0.4102, down 17.37% in the last three months of trading. Overall, the stock has a 52-week range of $0.3550-$2.23, down 78.41% in the last year. According to analysts at CNN Business, CCHWF stock has a 12-month average price target of $1.11 per share. In this case, this is an upside of 171.54% from its last trading price of $0.4102.
Top US Marijuana Stocks to Consider
The US marijuana stocks of Q3 2023 present a compelling landscape of investment opportunities within the dynamic cannabis industry. As the sector continues to grow at a remarkable annual rate of 30% this year, investors keep a keen eye on top-performing companies dominating the market. These top US marijuana stocks not only reflect the shifting legal and societal perspectives on cannabis but also exemplify the potential for substantial returns for those who strategically navigate this evolving landscape.
In general, technical analysis is essential for investors seeking to capitalize on the US cannabis market’s potential. In addition, by harnessing the power of price patterns, indicators, and historical data, traders can make well-informed decisions and enhance their chances of successful trades. As the industry matures and adapts to changing regulations and consumer preferences, monitoring these carefully selected stocks through technical analysis will be pivotal for investors aiming to harness the lucrative opportunities within the US cannabis market in Q3 2023 and beyond.
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