Marijuana presents a once-in-a-lifetime opportunity because it is an emerging industry with plenty of growth ahead. The question for investors, though, is which marijuana stocks…
are the best to buy and hold for the long term.
Pot investors should seek stocks with strong records of earnings growth that are likely to take off as more states legalize cannabis. And keep an eye on any moves the federal government makes toward full legalization. Three marijuana stocks that fit the bill are Curaleaf (OTC:CURLF), Trulieve Cannabis (OTC:TCNNF) and Innovative Industrial Properties (NYSE:IIPR).
Curaleaf making the most of its size
At last count, Curaleaf operates 109 dispensaries across 23 states. The stock is down more than 9% for the year despite steadily improving revenue.
The company has grown revenue every year since its founding in 2010 and continued that trend in the second quarter. It reported quarterly revenue of $312 million, up 166% year over year and 20% sequentially, topping other multi-state marijuana operators. Curaleaf isn’t profitable yet, losing $9.7 million in the second quarter, compared to a net loss of $17.2 million in the same quarter in 2020 and a net loss of $1.8 million in the first quarter of 2021. However, it is moving toward profitability by recording its ninth consecutive quarter of positive adjusted EBITDA — hitting a record $84 million, which is up 201% from Q2 2020 and up 35% sequentially.
The company is number one in market share in New York, Vermont, and North Dakota, and number two in Florida, Oregon, and Arizona. It’s the only multi-state operator to have much of a presence in Europe, thanks to its April purchase of EMMAC Life Sciences Limited for $50 million and 17.5 million Curaleaf shares. The company renamed EMMAC to Curaleaf International and operates in the United Kingdom, Germany, Italy, Spain, and Portugal.
Trulieve’s temporary troubles provide an entry point
Florida-based multi-state operator Trulieve was on a winning streak until some publicity troubles began casting a cloud over the company. J.T. Burnette, the husband of Trulieve CEO Kim Rivers, was found guilty last month of several corruptiom charges including extortion and fraud. The stock is down more than 23% this year and more than 33% over the past three months. While this news has dampened investors’ enthusiasm for Trulieve, it has little impact on the company’s growth possibilities.
Trulieve just opened its 100th dispensary, and its recent purchase of Harvest Health & Recreation could make it the top cannabis company by revenue. Trulieve said it will have 145 dispensaries after the acquisition of Harvest Health is complete.
In the second quarter, Trulieve reported…
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