3 best marijuana stocks to buy in January
TThe past year has not been kind to marijuana investors, who have seen most cannabis stocks collapse as momentum for federal legalization halted in Congress. the Horizons Marijuana Life Sciences NBIF was down 20% in 2021, down from 34% from peaks reached last February.
Many pot stocks have done much worse, and the only reason the exchange-traded fund isn’t declining even more is the performance of companies like the marijuana-focused real estate investment trust. Innovative industrial properties – a top 10 ETF holdings, and one that behaves well in good times as well as in bad times.
I recently explained why I think Innovative Industrial is a strong buy for the industry, but there are also other good marijuana stocks to consider, even those that have fallen due to the industry’s pessimism.
With a huge opportunity ahead of them, the following trio of cannabis companies should be on your list of stocks to buy in January.
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One of the largest vertically integrated multistate (OSM) operators in the country, Cresco Laboratories (OTC: CRLBF) has a two-pronged approach to growth, operating upstream retail stores while managing back-end production and processing. This makes them a leading wholesaler in the branded cannabis products industry.
By the end of the third quarter, it had 21 production facilities and 46 dispensaries, but in December it completed its acquisition of Laurel Harvest Labs, which gave it another operational dispensary in Pennsylvania with licensing options for open five more. It also opened its 13th dispensary in Florida, the fifth since entering the market last April through its acquisition of Bluma Wellness.
The dual growth strategy both organically and through acquisitions gives Cresco broad coverage in the states most important for the expansion of marijuana.
Not only does Cresco sell its marijuana products in its own dispensaries, but it is also able to integrate its own branded cannabis products such as Mindy’s and Sunnyside in more than 1,000 dispensaries across the country. More than half of them are sold in retail stores across California, the largest marijuana market.
Cresco stock lost a third of its value in 2021, but Wall Street is seeing its income growing at a compound rate of 33% per year and reaching nearly $ 2 billion by the middle of the decade, while growing from losses to adjusted net profits of $ 370 million. At $ 5 a share, Cresco Labs is a stock to buy this month.
Image source: Getty Images.
GrowGeneration (NASDAQ: GRWG) may have been one of the biggest losers of the past year, which could make an investment in this unique marijuana game a huge winner in 2022.
GrowGeneration does not grow or sell cannabis itself, but rather is the largest provider of specialized hydroponic and organic garden centers in the country. This is a stock of pickaxes and shovels that is expected to grow alongside the industry, as it provides the basic materials that commercial producers and consumers need for their business.
The garden center operator has extensive coverage with 62 stores in 13 states, but it is also strengthening its e-commerce presence, and online sales are expected to reach $ 35 million for the year it releases its fourth quarter results. trimester. It also focuses on own brands and own brands to strengthen its profit margins. Gross margins increased 290 basis points to 29.4%, and it is profitable both on an adjusted basis and under GAAP.
Revenue is expected to double over the next five years to $ 843 million, and adjusted earnings are expected to triple. In February, GrowGeneration was soaring to almost $ 68 per share, but today it costs around $ 13. Wall Street has a consensus price target of $ 35.75 per share, giving that stock a 170% rise in the coming year.
Image source: Getty Images.
Another big MSO, Columbia care (OTC: CCHWF) outperforms Cresco Labs with 99 dispensaries in 17 states, as well as 32 growing and manufacturing facilities operating alongside its wholesale distribution business in 13 markets. But it really focuses on limited licensing markets like Pennsylvania, Ohio, and Massachusetts, which limits its competition and gives it some pricing power.
Its goal, however, is to scale up as quickly as possible. In recent months, it has acquired vertically integrated medical marijuana company Green Leaf Medical; CannAscend, a four dispensary operation focused on Ohio; and California-based grower, wholesaler and retailer, Project Cannabis. He also bought Medicine Man and has just entered the new medical marijuana market in Virginia with some of the state’s first whole flower sales to patients under his Seed & Strain and gLeaf brands.
Columbia Care shares lost more than half of their value in 2021. This is despite third quarter revenue more than doubling from last year and comparable store sales up nearly 16%.
Wall Street remains bullish, expecting it to exceed $ 1.3 billion in revenue over the next several years, and with a consensus price target of $ 12.80 per share, this MSO is expected to rise by nearly 350% next year from its level below $ 3 per share. -part of the current value. January would be a great time to check out this growing stock of marijuana.
10 stocks we prefer over Cresco Labs Inc.
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Rich Duprey has no position in the stocks mentioned. The Motley Fool owns and recommends Cresco Labs Inc., GrowGeneration Corp and Innovative Industrial Properties. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.