Many investors seem to have thrown in the towel on the cannabis market. Most stocks related to the cannabis industry have plunged over the past 12 months as hopes of major federal cannabis reform in the U.S. have faded quite a bit. But…
the long-term opportunities for the cannabis industry remain much brighter than the current environment reflects. The sell-off has also created some opportunities to find some bargains. Here are three dirt cheap marijuana stocks you can buy right now.
1. Ayr Wellness
Ayr Wellness (OTC: AYRW.F) stock currently trades at less than eight times expected earnings. Its price-to-sales (P/S) ratio is only 2.2, a super-low level.
The U.S. multi-state cannabis operator’s business is also booming. Ayr recently opened its 45th dispensary in Florida. The company even relocated its headquarters from New York City to Miami in recognition of its opportunity in the Sunshine State.
Florida isn’t Ayr’s only focus, though. It also operates in Arizona, Illinois, Massachusetts, Nevada, New Jersey, Ohio, and Pennsylvania, with dispensaries in all of the markets except Ohio, where it has cultivation and production facilities.
Look for Ayr’s momentum to continue. The company hopes to have 95 dispensaries by the end of this year. Ayr’s revenue will likely increase to $800 million in 2022, giving it a P/S ratio of less than 1 based on the current share price.
2. Cresco Labs
Cresco Labs (OTC: CRLBF) stands out as another attractively valued U.S. multi-state operator. Its shares trade at a little over two times sales.
There are several common denominators with Cresco and Ayr. Both companies have prioritized Florida’s medical-cannabis market. Cresco opened its 15th store in Florida in February, bringing its total number of dispensaries to 49. Like Ayr, Cresco also operates in Arizona, Illinois, Massachusetts, Ohio, and Pennsylvania.
However, Cresco is also a key player in several major markets where Ayr doesn’t have a presence. In particular, Cresco has achieved success in California and New York, two of the four biggest cannabis markets. The company also ranks as the top U.S. wholesaler of branded cannabis products.
Cresco should be on track for another record year in 2022. Over the long term, the company’s wholesale strategy could also pay off with the potential for exceptional profit margins.
3. Village Farms International
I think that Village Farms International (NASDAQ: VFF) is without question the best Canadian cannabis stock on the market right now. And it’s absurdly cheap, with shares trading at less than 1.7 times sales and a little over 13 times expected earnings.
Village Farms’ Pure Sunfarms ranks as the No.1 dried flower brand in three of Canada’s largest provinces — Alberta, British Columbia, and Ontario. It’s gaining momentum in Ontario, with its market share increasing more than four times last year. Village Farms should also soon make a splash in Quebec, thanks to its acquisition of Rose Lifescience.
CEO Michael DeGiglio said in the company’s Q4 conference call, “If we can be successful in the tough Canadian market, we believe we can be successful anywhere.” Village Farms could soon prove if he’s right. The company hopes to begin exporting cannabis to Germany and Israel later this year.
Village Farms already operates in the U.S., selling fresh produce including tomatoes and peppers. Its acquisition of Balance Health Botanicals last year also makes it a leader in the…
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