This year has seen the economy take one of its biggest hits ever. But it might also be one of the best times to buy stocks in cannabis.
Thanks to the US election, residents in Arizona, Montana, New Jersey, and South Dakota all voted to legalize recreational marijuana. Due to which, cannabis stocks have been having a bit of a heyday of late.
While cannabis stocks are trending, though, some are worth pursuing more than others. If you’re wondering which cannabis stocks are worth buying for your Christmas stocking, we’re here to point you in the right direction.
Innovative Industrial Properties Cannabis Stocks
Innovative Industrial Properties’ revenue has more than doubled in 2020 and it’s not hard to see why. The company gets its consistent stream of revenue by buying properties from medical cannabis businesses and then leasing them back to them. Companies benefit from this leaseback system by getting more liquidity and even some additional capital for upgrades.
IIP doesn’t show any sign of slowing down and is already doing business in 16 of the 35 states that have voted to legalize medical cannabis. Additionally, because producing and selling marijuana is still illegal at a federal level and IIP doesn’t directly handle cannabis, it’s also one of the rare cannabis stocks that can be listed on a major US stock exchange right now. This lack of competition makes it a key stock to invest in, especially as long as marijuana isn’t fully legalized.
As an additional bonus, IIP also offers an awesome dividend that’s in high growth and currently yields over 3%—making this is a great time to invest in this company’s cannabis stocks.
Green Thumb Industries
Another cannabis stock to keep your eye on right now is Green Thumb Industries. It is one of the biggest cannabis operators in the US. The company’s shares have skyrocketed over 100% year to date, with reported revenue of $157.1 million, up 131% year over year.
Green Thumb Industries operates in 13 manufacturing facilities and just opened its 50th retail store. The company is seeing accelerated growth in many of its key markets. And still has another 46 licenses for retail locations that it hasn’t used yet. This makes it a hot cannabis stock to buy for the foreseeable future.
Aurora Cannabis Stocks
Although Aurora Cannabis is the most popular cannabis stock in the world, it’s had its fair share of volatility over the year. Aurora’s shares soared nearly 186% in November and it’s nearly tripled over the past month, thanks to a healthy boost from the election. But given the company’s history of poor management, buying into the stock doesn’t come without some risks.
In addition to CEO Terry Booth resigning, the previous management team left the company with a ton of overvalued and unnecessary assets. Shaky past aside, though, there has been progress made by Aurora having cut expenses and reduced its cash burn recently.
The decision on whether to buy Aurora Cannabis Stocks is a complex one. It depends on how well the company is managed from here onward and other factors—like the plunging price of dried flowers in Canada’s marijuana industry.
Whether it’s a stock to avoid in 2021 or one that will continue its upward trend in the new year, time will only tell.
Aphria Inc
With its high growth both in Canada and internationally, a steady increase in value over the past six quarters, and strong valuation, Aphria is a hot stock to watch.
The company has been expanding into major Canadian markets. Also, it recently entered the US market with its acquisition of SweetWater Brewing Company. The acquired company sells the best-selling hemp-flavored beer in the country and has also made an agreement to supply dried flower to Israeli medical cannabis producer Canndoc.
Additionally, Aphria’s German subsidiary, CC Pharma, gives the company access to 13,000 drug stores across Germany. These stores have been selling medical cannabis, contributing to over half of its overall sales.
Trulieve
Trulieve is a US company based out of Florida. The company holds an impressive 52% market share in the state’s medical cannabis industry. Trulieve was founded in year 2015. It operates 72 dispensaries across the country, with each location making on average $7.5 million in sales.
With Florida’s medical marijuana industry expected to become a robust $2.6 billion industry by 2025 and grow by 25% each year from 2019, Trulieve is an excellent cannabis stock to buy right now.
The company made $252.8 million in revenue in 2019 and predicts it will make $485 million in revenue in 2020. With Trulieve trading at eight times sales, it’s a buy right now.
Acreage Holdings Cannabis Stocks
If you’re looking for a cheap cannabis stock with potential, Acreage might be one of your best bets. The US dispensary chain has 28 stores across 15 states. These stores sell:
Although the company’s revenue grew by 42% in 2020. It isn’t yet profitable and has an operating loss of $24 million per quarter. But, since Acreage is trading at four times revenue, it’s a cheaper stock than its competitors.
Add in the pending acquisition of Canopy Growth with whom it’s planning to launch CBD-infused beverages and Acreage is a stock worth getting your hands on this Christmas.
Canopy Growth Corporation
Similar to Aurora, Canopy Growth is a stock with potential but also risks. The Ontario-based company that was founded in 2013 has a strong position in the market with its increasing market share and expanding brand awareness. That said, with a loss of $85 million in the second fiscal quarter of 2021, down from $150 million in the year prior, the company is still unprofitable.
Management is continuing to cut costs, but depending on how things are managed in the future, Canopy Growth is a stock that you might want to think twice about investing in. That said, with the buzz from the election and the prospect of federal legalization, it could have potential.
What are your favorite cannabis stocks to buy right now? Let us know in the comments below!