- The best cannabis stocks for your portfolio stand out because they have the most upside potential in the fast-growing marijuana space.
- Trulieve Cannabis (TCNNF): Leadership position in the Florida marijuana market with consistent top and bottom-line growth
- high tide (HITI): Massive sales growth of late, with a wide footprint in the Canadian market
- Green Thumb Industries (GTBIF): One of the largest MSOs in the US with incredible market share in the North-Eastern side of the country
- grow generation (GRWG): First-mover in the up and coming hydroponics industry with staggering growth rates
- Planet 13 Holdings (PLNHF): Robust business with strong positioning in the Las Vegas strip
- Yushi Holdings (JUSHF): Vertically integrated MSO with an enviable liquidity profile and widespread cultivation footprint
- Sundial Growers (SNDL): Leading Canadian cannabis penny stock, with a colossal cash balance to pursue expansion opportunities
The cannabis industry has been growing at a breathtaking pace over the past few years. Governments worldwide have been taking steps towards legalization, with strong backing from investors. The best cannabis stocks to buy now present excellent upside potential over the long term.
Despite the pandemic-led troubles and stalled progress on the legalization front in the US, the cannabis sector did relatively well. Marijuana stocks took a beating last year due to a lack of progress on the US federal cannabis reform, but recent developments point to encourage a more scenario this year.
A record-high percentage of Americans favor marijuana legalization, which points to massive demand ahead. Cannabis research firm BDSA suggests that global cannabis sales might rise by an incredible 22% this year.
|TCNNF||Trulieve Cannabis Corp.||$14.77|
|HITI||High Tide Inc.||$1.80|
|GTBIF||Green Thumb Industries Inc.||$13.12|
|GRWG||Grow Generation Corp.||$4.77|
|PLNHF||Planet 13 Holdings Inc.||$1.61|
|JUSHF||Jushi Holdings Inc.||$1.82|
|SNDL||Sundial Growers Inc.||$0.384|
Best Cannabis Stocks: Trulieve Cannabis (TCNNF)
Source: Leigh Trail / Shutterstock.com
Trulieve Cannabis (OTCMKTS:TCNNF) is one of the leading cannabis producers and retailers in the US, which focuses mainly on the medical marijuana market in Florida. Though it’s medical only, it is likely to go adult-use by 2024
Trulieve accounts for roughly 50% of total marijuana sales in the state and has been profitable since 2017. Revenues and profits have been consistently growing at double-digit percentages for multiple years.
Last year, the company announced that it was acquiring Harvest Health and Recreation for a whopping $2.1 billion. With the acquisition, it would now have its footprint across 11 states. The majority of its footprint is concentrated within three main hubs, including Pennsylvania, Florida and Arizona. Management notes that volumes rose by 35% upon upgrades of Harvest stores in Florida.
High Tide (HITI)
Source: Hudozhnica_Ananas / Shutterstock
high tide (NASDAQ:HITI) is a Canadian penny stock that has flown under the radar. However, it’s been growing revenues at triple-digit percentages over the last three years. It has established its presence across all provinces in Canada and is the largest retailer in Alberta.
The firm has quickly grown its retail footprint across Canada, acquiring budding startups across multiple provinces. It recently acquired cannabis retailers in Bud Heaven and Boreal Cannabis to add to the long list of its acquisitions.
Recent results have been mighty impressive, with sales growth of 88.5% on a year-over-year basis to CA$72.22 million during the first quarter. Moreover, in April, it recently reported stellar numbers across its brick-and-mortar stores and ecommerce channels. Overall retail gross revenues increased by 76.21% for the month.
Green Thumb Industries (GTBIF)
Green Thumb Industries (OTCMKTS:GTBIF) is one of the largest multi-state operators in the US, focusing on the Northeast. It owns and operates 77 retail stores in the US that continue to grow each year. Its national presence serves roughly 50% of Americans.
The firm completed multiple acquisitions last year and is likely to continue growing its business through organic and inorganic means. With the launch of recreational cannabis in New York next year and a sales ramp in New Jersey, it could potentially see a massive boost in sales and EBITDA. It generated an impressive $71 million in EBITDA last year, and once the regulatory hurdles are cleared, it can pick up the pace.
Green Thumb’s most recent quarter beat revenue estimates and made $243 million in sales. It should comfortably beat its $1.1 billion sales target, considering the solid start to the year. Moreover, it saw its net income skyrocket to a whopping 179% during the first quarter.
Best Cannabis Stocks: Grow Generation (GRWG)
Source: LuYago / Shutterstock.com
grow generation (NASDAQ:GRWG) owns hydroponic and organic gardening stores in the US Hydroponics is an emerging industry that involves growing plants without soil. GRWG has been taking advantage of its position in the space to expand its retail garden centers across the country.
GrowGeneration has been selling third-party products in proprietary hydroponic centers and operates a brand that produces and markets its own products. The company has been looking to quickly expand its retail sales channels to grow its revenues and increase market share.
Over the past four years, the company has grown sales and margins at an incredible pace. From 2017 to 2021, its revenues shot up 2.834% to $422.5 million. Moreover, its EBITDA margins improved from a negative 18.75% to 6.53%. Additionally, revenues and EBITDA growth have expanded by triple-digit margins. GrowGeneration operates a highly successful business that continues to prove the bears wrong.
Planet 13 Holdings (PLNHF)
Source: Ralf Liebhold / Shutterstock.com
Planet 13 Holdings (OTCMKTS:PLNHF) operates an integrated marijuana business primarily in Nevada. Its business has been performing consistently over several years, with robust sales numbers, a lean balance sheet, and healthy profits. Moreover, it boasts industry-leading gross margins, which have stayed over 50% for the past five years.
The multi-state operator relies mainly on the Las Vegas market but expanded into California in diversifying operations. California has been a relatively tough market for MSOs to generate stable revenues from, but it could be a lucrative market down the line.
Results have been solid for Planet 13 Holdings, with revenues growing 69.5% annually in its fourth quarter. Moreover, its $16.9 million in EBITDA came in well ahead of estimates of $6.7 million. With the pandemic-related headwinds fading away, tourist volumes in Orange Country and Las Vegas are likely to improve significantly.
Jushi Holdings (JUSHF)
Yushi Holdings (OTCMKTS:JUSHF) is a vertically integrated multi-state operator, quickly becoming a threat to some industry stalwarts. Its fundamentals have been rock-solid, and though its risks are relevant, its operations will continue to fare remarkably well for the foreseeable future. Hence, it is one of the top cannabis picks this year on its strong liquidity and product portfolio.
The up-and-coming enterprise has established cultivation centers, dispensaries, and collecting licenses. Its operations are spread out across some of the mass market centers in the US, including Ohio, Nevada and California. Moreover, Jushi is also looking to target emerging markets such as Pennsylvania.
The majority of the company sales are online, which helps command strong profit margins. Recent results have been spectacular, with revenues increasing by double-digit percentages over the past several quarters. Moreover, its positive adjusted EBITDA has been in the green for six straight quarters. With a colossal cash balance of roughly $95 million and growing profits, Jushi will continue on an upward trajectory in the future.
Best Cannabis Stocks: Sundial Growers (SNDL)
Sundial Growers (NASDAQ:SNDL) is a leading Canadian cannabis player, which earned meme stock status last year. Taking advantage of the retail trading mania, it built a massive cash war chest and went on an acquisition spree. Results of late have been splendid and pointing to better pastures ahead.
Nevertheless, it remains a risky play on the back of its dwindling share price, remarkable levels of cash burn, and concerns over the depth of the Canadian cannabis market.
Sundial posted its fourth-quarter results, where revenues rose 63% from the prior-year quarter to CA$22.7 million. Additionally, sales from cannabis production jumped over 50%, while adjusted EBITDA came in at CA$18.4 million, a massive improvement from a loss of CA$5.6 million last year. All in all, 2021, was a transformational year for the business, and with SNDL stock trading for some chump change, it won’t hurt wagering on it.
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On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.