Analyzing Q2 2023’s Leading US Marijuana Stocks and Trading Tactics
In the dynamic landscape of the US cannabis industry, where the tide of legality has turned in favor of marijuana, investors find themselves at a pivotal juncture. As the cannabis sector readies to disclose its second-quarter earnings in 2023, the spotlight is once again on the top-performing marijuana stocks that are making waves in the market. Profit potential accompanies volatility; risk management and technical analysis are crucial for traders capitalizing on the burgeoning market’s opportunities.
The hemp industry has made remarkable progress in recent years, with a growing number of US states legalizing marijuana for medical and recreational use. This tendency has allowed several enterprises to establish their position in the market, providing investors with many options. While there is the possibility for significant returns, the industry’s inherent volatility necessitates caution.
As the second quarter earnings season develops, investors must be prepared to negotiate the cannabis market’s highs and lows. The landscape is teeming with enterprises fighting for attention, ranging from established behemoths to inventive newbies. Analyzing and finding the companies with the highest growth potential necessitates a diverse approach that combines fundamental analysis with intelligent risk management tactics.
Top US marijuana stocks primed to make a mark during the 2023 second-quarter earnings season. We present a complete review of each company’s potential upside by examining its fundamentals and development prospects. Furthermore, we investigate the implications of risk management tactics in the inherently volatile cannabis market and shed light on how technical analysis can serve as a guiding light for traders.
Cannabis Earnings Season 2023: Exploring High-Performing US Marijuana Stocks
Cresco Labs Inc.
Cresco Laboratories is an American cannabis vertically integrated company. The company is currently setting the benchmark in the country for producing branded cannabis products. Across 11 states, the corporation operates 63 retail locations and 20 industrial buildings. The company opened sites in Palm Harbor and Lake Worth in March, increasing the total number of dispensaries in Florida to 28. On July 31st, the firm announced the termination of its $2 billion merger with Columbia Care. Furthermore, the firms canceled an arrangement with hip-hop mogul Sean “Diddy” Combs to purchase some divested operations in New York, Massachusetts, and Illinois for up to $185 million.
Words From The CEO
“In light of the evolving landscape in the cannabis industry, we believe the decision to terminate the planned transaction is in the long-term interest of Cresco Labs and our shareholders,”
Cresco CEO Charles Bachtell
Q1 2023 Results
Cresco’s sales were $194 million in the first quarter of 2023, a 3% decrease from the previous quarter. Furthermore, the number of branded equalized units increased by 32% yearly to 17.6 million. The adjusted gross profit for the company was $89 million, accounting for 46% of sales. Cresco reported a net loss of $28 million in the first quarter. Sunnyside presently has 63 locations, with eight in Florida and eight in Pennsylvania. In addition, Cresco’s online retail sales through the company’s e-commerce platform topped $1 billion. The company will report its second quarter 2023 results on August 16th before the market opens.
CRLBF Stock Performance
CRLBF shares finished on August 10th at $1.2676, down 19.26% in the last five days of trading. The stock is presently trading in a 52-week price range of $1.276-$4.45, showing a 29.59 percent decline year to date. According to analysts at CNN Business, CRLBF stock has a 12-month median price target of $2.57 per share. In this case, this represents an upside of 102.60% from its last trading price of $1.2676.
Jushi Holdings Inc.
Jushi Holdings Inc. is a United States hemp and cannabis company extending its market share in the medical and recreational marijuana sectors. The company’s major purpose is to sell branded marijuana and hemp-derived products to the US market. The BEYOND/HELLO brand is used by 34 Jushi-owned and managed dispensaries nationwide. Furthermore, Jushi has 31 retail licenses in the United States, and Beyond/Hello, its national cannabis dispensary brand, is expanding both online and offline. By acquiring NuLeaf Inc. in April, the company expanded its vertically integrated operations into Nevada.
First Quarter 2023 Results
Revenue increased 12.9% to $69.9 million in the first quarter of 2023 from $61.9 million in the first quarter of 2022 (“Q1 2022”). The year-over-year revenue increase can be attributed to a 7.5% increase in retail revenue, or $4.4 million, owing mostly to new dispensary openings due to build-outs and acquisitions. The Company acquired Apothecarium and NuLeaf in Nevada in March and April of 2022, respectively, and built new Beyond HelloTM dispensaries in Ohio, Pennsylvania, and Virginia.
In the first quarter of 2023, gross profit was $29.9 million, up from $19.1 million in the first quarter of 2022, showing a year-over-year increase of $10.8 million, or 56.7%. The gross profit margin increased from 30.9% to 42.9% from quarter to quarter. The first-quarter net loss in 2023 was $12.4 million, compared to a net loss of $19.8 million in the first quarter of 2022. In Q1 2023, adjusted EBITDA1 improved by $8.5 million year over year and $1.6 million quarter over quarter, compared to $(0.9) million in Q1 2022 and $6.0 million in Q4 2022. The company will report its second quarter 2023 results on August 11th before the market opens.
JUSHF Stock Performance
JUSHF stock closed at $0.4155 on August 10th, down 8.68% in the last month of trading. The stock has a 52-week price range of $0.3850-$2.34 and is down 45.47% year to date. According to analysts at CNN Business, JUSHF stock has a 12-month average price target of $1.00 per share. In this case, this represents an upside of 140.67% from its last trading price of $0.4155.
SLANG Worldwide Inc.
SLANG Worldwide Inc. is the market leader in branded cannabis consumer packaged goods, with a diverse portfolio of five brands and products in the United States. In general, SLANG focuses on acquiring and extending market-proven regional brands in 13 legal cannabis jurisdictions around the country and developing unique new brands to capitalize on global market potential and fulfill shifting consumer needs. The Company has over a decade of operating expertise in the new and severely regulated cannabis sector, and its partners benefit from that knowledge by having access to the SLANG playbook for effective operations, sales, and marketing.
First Quarter 2023 Results
- Revenue from continuing operations was $10.82 million in the three months ended March 31, 2023, compared to $8.37 million in the three months ended March 31, 2022, reflecting a 29% increase year over year. The key drivers of the rise were an increase in Core Market sales of $2.05 million in Vermont and $0.78 million in Colorado, offset by a decrease in Emerging Market sales. The Company’s CERES Collaborative dispensary, Vermont’s first recreational cannabis store, will open on October 1, 2022, driving the growth in Vermont.
- In Q1 2023, gross profit was $5.72 million (53% gross margin), up from $3.66 million (44% gross margin) in Q1 2022, marking a 56% increase year on year. Adjusted gross profit1 increased 56% year on year to $5.68 million (52% adjusted gross margin) in Q1 2023 from $3.64 million (43% adjusted gross margin) in Q1 2022.
- In Q1 2023, EBITDA1 was $0.68 million, compared to ($2.36 million) in Q1 2022. The increase in EBITDA is primarily due to an increase in gross profit of $2.06 million and a decrease in share-based payments of $0.55 million. Further savings in operating expenses, such as consulting and subcontractors, also helped to increase EBITDA.
- In Q1 2023, Adjusted EBITDA1 was $0.74 million, compared to ($1.64 million) in Q1 2022. The rise in Adjusted EBITDA is primarily due to a $2.04 million increase in gross profit before biological asset fair value adjustments. Further savings in operating expenses, such as consultants and subcontractors, also helped to enhance Adjusted EBITDA.
SLGWF Stock Performance
SLGWF stock closed at $0.0275 on August 10th, down 8.33% in the last five days of trading. The stock has a 52-week price range of $0.014-$0.094 and is up 6.18% year to date.
Evaluating Best US Marijuana Stocks of Q2 2023 and Risk Strategies
Q2 2023 earnings show promise and challenges in US cannabis investing, reflecting industry evolution, growth, and inherent hurdles. Evident in leading companies studied, the market’s path holds promise, fueled by evolving laws and shifting public perspectives. Within the surging sector, significant volatility highlights the need for a comprehensive risk strategy, safeguarding portfolios from unexpected market shifts.
Reflecting on the Q2 2023 cannabis earnings reports and the featured US marijuana stocks, it’s evident that the industry’s development is anything but linear. Lessons highlight balanced investing: fundamentals scrutiny coupled with savvy use of technical tools forms a prudent strategy for success. Comprehending dynamics, noting potential, and respecting risks are vital for navigating the cannabis sector—essential for investors at any level. Remaining informed, flexible, and vigilant are essential for capitalizing on the US cannabis market’s growth amid maturation and regulatory shifts.
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