Where will the cannabis industry be in a decade? You can bet that it’s going to look a lot different than it does now. More states could legalize adult-use recreational cannabis, and medical cannabis could be legalized at a national level…
These prospects translate to tremendous opportunities for investors with a long-term perspective. But what are the best ways to capitalize on those opportunities? Here are three top marijuana stocks to buy and hold for the next 10 years.
Scotts Miracle-Gro (NYSE:SMG) just might be the most likely to succeed with changes in the cannabis industry. Back during the gold-rush days, those who supplied picks and shovels to gold miners usually profited more than the gold miners themselves. Scotts is arguably the best picks-and-shovels cannabis stock on the market.
The company’s Hawthorne segment ranks as a leading supplier of organic and hydroponics products to cannabis growers. Hawthorne has more than doubled in size over the last three years. With the continued expansion of the U.S. cannabis market, the business could be in a position to deliver strong double-digit percentage sales growth year in and year out.
You might think that Scott’s core consumer lawn and garden business might be boring. However, the segment has generated sales growth of more than 35% over the last three years. That level of growth, fueled in large part by the COVID-19 pandemic, probably won’t be sustainable. Still, though, Scotts should be able to count on modest but steady growth for its consumer lawn and garden products over the long term.
Unlike many companies in the cannabis industry, Scotts is already profitable. It even pays a dividend that yields a little over 1%. Scotts Miracle-Gro just might be the safest marijuana stock to buy and hold on the market.
Innovative Industrial Properties
Innovative Industrial Properties (NYSE:IIPR) stands out as another profitable company that serves the cannabis industry. The company is a real estate investment trust (REIT) that focuses on providing real estate capital to cannabis operators.
It’s hard not to like IIP’s business model. The company specializes in sale-leaseback deals where cannabis operators sell their properties to IIP, and then IIP leases them back to the operators under long-term agreements. The cannabis operators get access to capital, while IIP gets a steady revenue stream.
This approach has enabled IIP to deliver fantastic growth. Over the last three years, its trailing-12-month revenue has skyrocketed more than…
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