The cannabis industry performed horribly in 2021. The Horizons Marijuana Life Sciences ETF, an industry benchmark, has dropped by a little more than 50% over the past 12 months, and many of the top players in the sector didn’t do much better. Still…
the pot market in North America will expand at a compound annual growth rate of 16.6% through 2028, according to some estimates. In other words, this high-growth industry presents attractive long-term opportunities, and two of the best companies to cash in on it are Trulieve Cannabis (OTC:TCNNF) and Jazz Pharmaceuticals (NASDAQ:JAZZ).
1. Trulieve Cannabis
Cannabis dispensary operators with an already strong presence across many U.S. states seem better positioned to profit from the long-term tailwind the industry will experience. One pot grower with solid footprints across the country is Trulieve Cannabis, which produces and sells various cannabis products.
Although it is best known for its leadership presence in the state of Florida, it recently expanded its reach thanks to the acquisition of Harvest Health and Recreation in an all-stock transaction valued at $2.1 billion; the deal closed in October.
Harvest Health and Recreation, based in Arizona, does business primarily in the West and Northeast of the country. The combined entity has a presence in 11 states in the U.S., with 155 dispensaries as of the end of the third quarter, which made Trulieve Cannabis the leader among pot companies in this category at the time.
Here’s one more thing to appreciate about Trulieve Cannabis: The company’s recurrent profits. In the third quarter, its revenue jumped by 64% to $224.1 million, while its net income came in at $18.6 million, 7% higher than the year-ago period. Many pot companies in North America struggle to show green on the bottom line at all, but Trulieve Cannabis has now done it for 15 consecutive reporting periods.
Furthermore, after its poor showing on the stock market over the past 12 months, Trulieve Cannabis’ shares have gotten a lot cheaper. The company currently offers a forward price-to-earnings (P/E) of 14.95, compared to a forward P/E of 16.6 for the sector. Trulieve Cannabis is the leader in Pennsylvania, Arizona, and Florida, and it holds a 50% share of the market in the Sunshine State.
The company’s acquisition of Harvest Health and Recreation, which expanded its network, will help it make headway in the pot market in the U.S. as this industry continues to grow. On top of that, Trulieve Cannabis is consistently profitable and trades at reasonable levels. The case for investing in this top marijuana stock and holding onto it looks strong for those willing to hold onto its shares for a while, despite its recent woes on the market.
2. Jazz Pharmaceuticals
Jazz Pharma is a biotech that was founded in 2003. Last year, it dove headfirst into the cannabis industry with its May 2021 acquisition of GW Pharmaceuticals, in a cash and stock transaction valued at $7.2 billion. GW Pharma focuses on developing cannabidiol (CBD)-derived medicines.
The combined entity owns a couple of exciting products in this niche. First, there is…
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