The cannabis industry is booming, and investors are flocking to start new companies. Among these are Innovative Industrial Properties, GrowGeneration, Aphria, and Cresco Labs. Let’s take a closer look at these companies and where they stand. These companies are poised to become leaders in the marijuana industry, and have potential for significant upside. However, before investing in a marijuana stock, it is important to understand what the industry is all about.
Innovative Industrial Properties
One of the companies that has been making the most noise in the marijuana industry is Innovative Industrial Properties, Inc. IIP is a real estate investment trust that owns cannabis-related properties and middle-market businesses. The company is backed by companies such as Altria, which is known for its tobacco business, and Constellation Brands, which owns Corona and Modelo and has invested in cannabis companies like Cronos Group. These companies are all in the business of bringing CBD-infused beverages to consumers in the United States.
The company has been in the cannabis industry since 2014, when it became legal to grow marijuana. It now owns cultivation facilities in southern California where marijuana companies operate. IIPR has been expanding its portfolio by purchasing these facilities from these companies and renting them out for a long-term lease at a discounted rate. The company is providing both the cannabis companies with the real estate they need as well as support for their operations.
The marijuana industry is a hot market for investors, with 65% of Americans in favor of legalization and legal distribution. In addition, more than 40 countries have legalized the use of marijuana. In February, Jefferies initiated coverage of the cannabis industry, predicting that the marijuana industry would be a $50 billion industry by 2029. According to analyst Owen Bennett, this figure could increase to $130 billion within ten years.
Despite the hot market for cannabis stocks, investors should be careful not to invest in marijuana before legalization is complete. While this type of investment may be risky, it could be a solid financial decision if the trend continues. GW Pharmaceuticals has been a favorite among investors because it focuses on distribution and medical use of marijuana. Innovative Industrial Properties is another pure cannabis play. But investors should remember that any investment involves risk.
Growing up in New Jersey, GrowGeneration has a regional footprint that is unmatched for the marijuana industry. It has signed leases in Michigan, Massachusetts, Pennsylvania and Colorado, and plans to open up to 100 retail stores in the U.S. by 2023. Most of its stores are located in burgeoning cannabis markets, but the company is also expanding into new areas such as Ohio and Maryland.
The hydroponic garden center chain, GrowGeneration, is one of the companies with the most buzz in the marijuana industry. Its stock has gained over 700% this year. With the marijuana industry booming, GrowGeneration is one of the best-performing stocks for the year. The company’s recent earnings report highlighted its growth prospects and future expansion plans. Its first quarter 2021 revenue increased by 173% year over year, and its gross margins jumped from 26.8% to 28. It has made several acquisitions, and it has little debt, allowing it to continue to grow.
Although GrowGeneration’s ecommerce operations have lagged this year, the company’s private label division has continued to grow, accounting for 12 percent of its sales in the second quarter. The company also has a strong distribution company. The company has a strong balance sheet and a stable leadership team. However, growing marijuana in an unregulated environment like California isn’t easy.
The company offers various products to cannabis growers, including soil, lighting, hydroponic systems, and supplies for greenhouses. It has recently announced a partnership with the Horticultural Rep Group, which sells gardening supplies. Jazz Pharmaceuticals entered the cannabis industry in 2021 with the acquisition of GW Pharmaceuticals. The company recently launched Epidiolex, the first cannabis-based pharmaceutical to be approved by the FDA. The drug has proven to be a success and is gaining momentum in the marijuana industry.
While the medical marijuana segment is the company’s core business, Aphria is not content to sit back and enjoy its performance. It is aggressively pursuing exposure in the recreational marijuana segment as Canada prepares to legalize marijuana across the country. As more states and Canada legalize marijuana, Aphria will have to maintain its discipline as competitors battle for market share. As long as it can maintain a dominant position on the production side of the industry, Aphria should continue to grow and offer shareholders a steady stream of steady, profitably predictable growth prospects.
However, the marijuana industry has experienced a tough period of late. This is partly due to the waning sales in the U.S. market, which may not be as lucrative as originally anticipated. While Canadian pot companies had hoped to enjoy massive success in the U.S. market, the reality of the transition from prohibition to legalization will take longer than anticipated.
Tilray and Aphria have agreed to merge their operations. The merger will create a new giant in the marijuana industry. Other cannabis stocks that have suffered from the recent market selloff include Aurora Cannabis, GrowGeneration, and Curaleaf Holdings. Although Aphria is one of the most talked-about companies in the marijuana industry, these companies have suffered a major hit from the market’s recent sell-off. Earlier this year, the stocks had been huge outperformers.
The Canadian cannabis company is aiming to merge with Tilray and become the world’s biggest cannabis producer. After the merger, the company should dominate the retail cannabis industry in Canada. Tilray will also acquire Aphria’s CC Pharma distribution business and the Portuguese cannabis operations. Lastly, the merger will help the company boost its position in the European medical marijuana market.
The company is known for designing and manufacturing cannabis-infused products. It has been one of the hottest names in the marijuana industry for the past year, thanks to several recent acquisitions. The company also sells cannabis, designing packaging, and creating paraphernalia for consumers. Its recent moves have given investors a reason to get excited about the company, but what do investors need to know to invest in it?
The Chicago-based cannabis company recently announced that it is buying Columbia Care for $2 billion, creating the nation’s largest multistate operator. The deal will grow Cresco’s operations by ten states, and expand its presence in Washington, D.C. and seven other states. The deal will create the largest cannabis company in the United States by sales, and it will create nearly 2,600 jobs.
While legalization of cannabis has not been finalized in the US, some states are legalizing it for medicinal and recreational use. While it is still too early to say when cannabis will be legal, investors are hopeful that federal legislation will ease the way to a successful and thriving cannabis industry. Its potential is great, but investors will have to wait a bit longer. They should wait until 2020 to see if Cresco Labs will reach its target revenue growth goals.
In a recent article in Inc. magazine, the company was ranked among the top 250 best-led companies in the world. Chicago-based Cresco Labs was at number 74, while Massachusetts-based Curaleaf Holdings was 139th. Arizona-based 4Front Ventures came in at 193rd. Cresco Labs is currently trading at $3.06. Its market cap is $1.22 billion, which is nearly triple the size of its current market cap.
As a publicly-traded company, Green Thumb is one of the most successful in the marijuana industry. It leads the industry in net income, cash flow, and financing. Management is also superior. However, investors’ sentiment can sometimes overshadow the company’s strong and promising fundamentals. If you have invested in Green Thumb, now is a good time to add to it.
The company has also made good use of the growing legalization movement by launching a consumer-branded cannabis brand. Its products include DogWalkers pre-rolls, Rhythm vaporizer pens, and Feel Collection tinctures. The company also recently announced a distribution deal with Cann, a cannabis-infused sparkling beverage company. Its sales will initially be focused in Illinois, but Green Thumb is planning to expand the partnership to other U.S. markets.
One of the biggest shareholders in Green Thumb is Leon Cooperman, a legendary hedge fund investor with a net worth of $2.5 billion. The billionaire reportedly purchased $15,000 shares of GTI in early 2018 and is still the largest shareholder with 18.9 million shares. The sale was likely a “sell to cover” transaction in which Cooperman sold shares to cover taxes related to his equity grant. A spokesperson for Cooperman did not immediately reply to a request for comment. Meanwhile, Green Thumb Industries stock has taken a beating this year. GTI has fallen more than 45% from its high in February 2021 and 67% since the beginning of 2022.
In the midst of all of this, Green Thumb Industries is moving into the Empire State. The company is building a $150 million cannabis manufacturing facility in Mid-Orange, about 60 miles north of Manhattan. The site will be a former prison that was closed by Governor Andrew Cuomo in 2011.