Tuesday, October 19, 2021

Long List Cut Short, These Are 3 Cannabis Stocks You Should Definitely Invest In

If you are a retail investor in the United States, then you are probably riding a high wave owing to the bullish market. You must also be aware of the force with which the legalization and decriminalization of marijuana are spreading in the states. As the states welcome marijuana with open arms, it opens doors to new businesses, new markets, investors, retail stores, employment, tax collections, and much more. California had the highest recreational marijuana tax revenue collection at $629.3 million.

Colorado alone has generated more than $1 billion from tax revenues from recreational use of marijuana since it legalized usage back in 2014.

ALSO READ: The expert guide on how to invest in marijuana stocks

Owing to the marijuana boom, there are many companies fighting for this relatively new and potent market. If you are looking to double your money, then Over the Counter (OTC) cannabis stocks are your best bet. With amazing financials and fundamentals, these companies are well poised to benefit from widespread legalization.

Here are 3 such stocks you might want to add to your portfolio

Top 3 Cannabis Stocks To Invest In

1. Harvest Health & Recreation (OTC:HRVSF) – USD 3.00

Harvest Health & Recreation Inc. is incorporated as a medical cannabis company that specializes in cultivation, production facilities, distribution, and dispensaries. Harvest Health & Recreation serves clients globally.

As of Mar 31, 2021, the stock was valued at $3.23 on the OTC exchange. Harvest Inc. is a continuously profitable marijuana company, operating out of Arizona, USA. Recreational use of marijuana was legalized in Nov 2020 in the state. On Jan 23, 2021, recreational marijuana sales began in the state of Arizona. It is well-placed to benefit from legalization in the state and has seen a huge rise in sales in the last quarter ending Dec 2020. 

Total revenue was reported at $69.9 million, an increase of 85% from $37.8 million in the same quarter in 2019. Sales increased by 13% compared to $61.6 million in the third quarter of 2020. Revenue for the year increased 98% to $231.5 million in 2020 as compared to $116.8 million in 2019. Adjusted EBITDA in the fourth quarter was $9.1 million, and $11.5 million in the third quarter. 

In the small window of time since recreational sales began on Jan 22, the company has said that its revenues increased “between 45% and 248%” compared to the fourth quarter of 2020.

ALSO READ: Potpreneurs! This is how you can set up your own marijuana business

Harvest Inc. is in a great spot right now. It operates 15 dispensaries in Arizona and is looking to replicate the same success in other states across the USA such as Florida, Pennsylvania, and Maryland.

2. Curaleaf Holdings Inc. (OTC:CURLF) – $14.73

With reported revenue of $626.6 million last year, Curaleaf is America’s largest cannabis company in terms of revenue. It boasts 101 dispensaries across the United States and focuses majorly on the Northeast with New York, New Jersey, and Pennsylvania. Its recent ambitions to enter the European market by acquiring Emmac Life Sciences possibly gives it entry into a market twice the size of the US market currently.

With its massive size and resources, Curaleaf is without a doubt, one of the most profitable cannabis stocks that you should bet for.

3. Green Thumb Industries Inc. (OTC:GTBIF) – $27.00

Most marijuana stocks struggle to make a profit. For this very reason, it is important to look at the price-to-sales ratio.

Green Thumb Industries was the first marijuana stock in the U.S. to turn a revenue of over $100 million in a single quarter which it achieved in the first quarter of 2020. In the third quarter, it posted a revenue of $157.1 million, and an EBITDA of $53.2 million, an increase of 50% over last year’s quarter. It has achieved break-even and is potentially well poised to break out of the resistance that it received at the $32 level mark.

Green Thumb claims that it expects to make over $800 million in revenue this year.

There are many companies fighting for the billion-dollar cannabis industry. With positive net cash flows and expansion plans in Pennsylvania and New Jersey, Green Thumb Inc. is set to capture and maintain its market position in the U.S. in the years to come.

Caution is advised!

There is still plenty of risks that come in handy with marijuana stocks. There have been wild swings in stock prices of some of these companies mentioned above, and the market is also rallying due to investor euphoria which might not last long. So, precaution is advisable. Do your due diligence before investing in any of these stocks.

The marijuana industry is definitely one of the biggest new entrants into the consumer market space. It opens up avenues for a lot of different ancillary industries like leisure and entertainment to benefit from. The marijuana industry is a multi-billion dollar industry in the United States alone and as the markets mature, so will the size of the possible money that can be made out of it.

So, whether you are a ‘pot lover’ or not, you should definitely secure good number of cannabis stocks in your portfolio.

Rahul Sinha
Rahul is a B.Com(Hons) graduate from Delhi University and a CA final candidate. He is also the co-founder and CFO of a healthcare start-up based out of New Delhi, India. Rahul is an avid investor and holds a diverse portfolio. Having worked for 3+ years with Deloitte in Statutory Audit and then later in a tax profile, Rahul believes in understanding the bottom-up functioning of established businesses and leverages this very knowledge to create value through his company. His next challenge lies in Germany where he will soon be pursuing his masters degree in Finance.

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