Investing in cannabis stocks can seem riskier than it really is. While marijuana remains illegal at the federal level, it’s really only a matter of time before that changes. After all, support for the legalization of marijuana is at an all-time high, with more than 90% of Americans believing that cannabis should be legal for either medicinal or recreational use, according to a Pew Research survey last year. Whether it’s…
two years, four years, or more before legalization takes place, at this point, it’s more of a question of when rather than if it will happen.
That’s why I’m comfortable in saying that multiple pot stocks should be solid buys to hang on to over the next decade. After all, buying before legalization takes place and more opportunities arise could lead to better returns later on.
Three marijuana stocks that are among the best to buy and hold right now are Innovative Industrial Properties ( IIPR -2.41% ), Green Thumb Industries ( GTBIF -3.07% ), and Cresco Labs ( CRLBF -3.37% ).
1. Innovative Industrial Properties
Innovative Industrial Properties (IIP) is at the top of this list for good reason. The cannabis-focused real estate investment trust (REIT) is a pick-and-shovel play, so its risk is minimal, and it’s in great shape to generate strong, consistent profits.
A lack of profitability in the industry plagues many companies, and that can make investing in the sector risky. But with IIP, that isn’t the case. The REIT normally nets 50% or more of its revenue as profit. And in just two years, its sales have more than quadrupled, from $44.7 million in 2019 to $204.6 million this past year.
In 10 years, the company will likely be in more states and have a much larger portfolio of assets (and thus, more revenue and profit). In 2021, IIP acquired 37 cannabis-growing properties, finishing the year with 103 locations in total. This included properties in many of the largest cannabis markets in the country — California, Colorado, Florida, Massachusetts, and many others.
Although shares of IIP have been struggling of late, the company’s sound financials make it one of the safer ways to invest in the cannabis industry today.
2. Green Thumb Industries
Cannabis producer Green Thumb Industries has various brands and products in its portfolio designed to meet the needs of a range of consumers. Whether someone is looking for premium flower or something they can use socially, or are just looking for the health and wellness benefits of cannabidiol, the company’s products offer consumers an array of different experiences. The company has 76 stores across the country, and its products are distributed in 15 states.
Although it’s a cannabis producer, Green Thumb is still relatively safe. Last year, its sales totaled $893.6 million, representing a 61% increase year over year. And it earned a profit of $75.4 million on that, for a profit margin of 8.4%. It’s not as impressive as IIP’s bottom line, but…
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