Other cannabis stocks, however, seem to go out of their way to sabotage themselves and their investors. Canopy Growth (NASDAQ:CGC) , Charlotte’s Web Holdings (OTC:CWBHF) , and Aurora Cannabis (NASDAQ:ACB) should be avoided because of self-inflicted wounds that hold them back.
A clutch of acquisitions (the latest one being quality Canadian producer Supreme) have certainly bulked it up and kept it relevant in its home market. Despite this, it still managed to post sequential revenue declines in its last two reported quarters. Many were impressed by the fact that Canopy Growth posted a rare, seemingly quite substantial net profit of CA$390 million ($307 million) in the most recent of those two periods (the first quarter of fiscal 2022). However, digging into the earnings literature, we see that this was due to what the company says was “Other Income totaling $581 million during Q1 2022 primarily attributable to non-cash fair value changes of [CA]$601 million.”
Pot stocks are a big growth opportunity, but not for these three, at least not yet.
Rich Duprey (Aurora Cannabis): Although Aurora Cannabis remains one of the most widely held stocks on the Robinhood platform (it’s currently 14th), it doesn’t warrant the loyalty investors have showered on the business.
A total of 1.74 billion Canadian dollars ($1.37 billion) was the damage in full-year 2020, which spooked even the hardy investors who endured the 2019 loss of over CA$1.3 billion ($1 billion). Which, in turn, was nearly double the CA$736 million ($579 million) shortfall of 2018.
It has since written down large chunks of those costs. In many instances, that was because it hasn’t been able to achieve the kind of premium, high-quality flower its growth strategy requires, particularly at Sky, which was going to be its flagship greenhouse. Today, Sky operates at just 25% of its capacity as it continues to work through the issues there.
"MSOS is the first and only actively managed U.S.-listed ETF with dedicated cannabis exposure focusing exclusively on U.S. companies, including multistate operators," AdvisorShares says. "The portfolio manager allocates across an investable universe of U.S. companies spanning a variety of cannabis-related businesses."
In June, Cronos made a $110.4 million investment in PharmaCann. The investment gives it the right to buy 10.5% of the multistate operator (MSO) at some point in the future. It is a similar deal to the one Canopy Growth (CGC) struck for Acreage Holdings in 2019. It is dependent on Congress legalizing cannabis at the federal level. PharmaCann has cannabis operations in six states, including New York and Massachusetts.
That soaring stock price has reduced its yield to about 2.4%, but IIPR remains one of the few marijuana stocks that produces any income. Making up for that is the REIT's stellar dividend growth. The payout has exploded by 460% since the start of 2018, to $1.40 per share, and has been raised multiple times each year in that time.
Merida Merger I
One of the post-merger highlights was Tilray's SweetWater Brewing division opening a Colorado brewery and SweetWater Mountain Taphouse at the Denver International Airport in July. SweetWater also launched 420 Imperial IPA. At the end of June, SweetWater partnered with the company's Broken Coast craft cannabis brand to launch Broken Coast B.C. Lager.
Almost anyone who invests or is interested in the cannabis industry knows the ETFMG Alternative Harvest ETF (MJ, $16.35).
The merger is expected to be approved in the fourth quarter of 2021.
In July, GrowGeneration announced it would acquire HGS Hydro, a Michigan-based operator of hydroponic garden centers. With six stores open in Michigan and a seventh opening in the fall, HGS Hydro is the third-largest hydroponic retailer in the U.S. It generated $50 million in annual sales during 2020.
These are the marijuana stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in the early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The P/S ratio shows how much you’re paying for the stock for each dollar of sales generated.
Here are the top 5 marijuana stocks with the best value, the fastest growth, and the most momentum.
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks which have outperformed the market will often continue to do so, because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the stocks that had the highest total return over the last 12 months.
Best Value Marijuana Stocks
The marijuana industry is made up of companies that either support or are engaged in the research, development, distribution, and sale of medical and recreational marijuana. Cannabis has begun to gain wider acceptance and has been legalized in a growing number of nations, states, and other jurisdictions for recreational, medicinal, and other uses. Some of the biggest companies in the marijuana industry include Canopy Growth Corp. (CGC), Cronos Group Inc. (CRON), and Tilray Inc. (TLRY). Many big marijuana companies have continued to post sizable net losses as they focus on investing in equipment to speed up revenue growth.
These are the marijuana stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have slightly outperformed the broader market. MJ has provided a total return of 36.9% over the past 12 months, above the Russell 1000 index’s total return of 35.0%. These market performance numbers and all statistics in the tables below are as of Aug. 23, 2021.
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