Like any other evolving industry, the marijuana sector also consistently experiences some highs and lows. The prospects of legalization helped the sector soar last year, but legislation delays then clouded these dreams. That doesn’t mean investors should…
avoid marijuana stocks altogether. The industry is still growing rapidly (whether legalization happens or not), and domestic cannabis companies will continue expanding aggressively.
Despite being strong companies, some of these cannabis companies’ shares suffered from the recent industry sell-off. But make no mistake: This industry has huge potential, which makes these three stocks a sure-shot buy that could make investors rich in the long run.
1. Green Thumb Industries
Illinois-based Green Thumb Industries (OTC:GTBIF) is one of the strongest cannabis stocks right now. Besides its 73 operating dispensaries, the company holds additional 114 retail store licenses in 14 U.S. markets.
Why is this important? Cannabis is still illegal federally, so states are careful in issuing licenses; it is also a tedious process. This means holding additional licenses gives Green Thumb a huge competitive advantage over its peers.
However, the company hasn’t disclosed yet how and when it plans to use these licenses. But when it does, it will have a stronghold over the U.S. cannabis market. It ended 2021 by acquiring Minnesota-based LeafLine Industries. This acquisition extended its national presence to 15 states, with a total of 73 retail stores open nationwide.
Increased traffic from 65 stores (at the end of the third quarter) resulted in another strong quarter. Total revenue surged 49% to $233.7 million from the year-ago quarter. Q3 also marked Green Thumb’s fifth consecutive quarter of profitability. It reported GAAP net income of $20.8 million versus net profit of $9 million in the year-ago period.
The company opened 15 new stores in 2021. It will be interesting to see how many it opens this year, given its rapid ongoing expansion. The company took good advantage of its home state, a new cannabis market that legalized recreational marijuana in 2020. Recreational sales in Illinois hit $1.3 billion for the year.
Green Thumb ended the quarter with cash and cash equivalents of $285.8 million and outstanding total debt of $206.5 million.
2. Curaleaf Holdings
Massachusetts-based Curaleaf Holdings (OTC:CURLF) isn’t a profitable cannabis stock yet, but with full-year revenue closer to $1 billion, it won’t be long before the company starts enjoying profits. The company announced in late December 2021 it will acquire Bloom Dispensaries, which will increase its store count to 16 in Arizona as well as 128 nationwide. It was smart of Curaleaf to expand its footprint in Arizona, which recently legalized recreational marijuana.
Curaleaf’s strategy of making timely acquisitions has been working out in its favor in the last two years. In its recent third-quarter results, the company showed a revenue jump of…
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