The marijuana cannabis sector is heating up with a plethora of moves in the positive direction. Most of the cannabis stocks you see now are surging in the green after a new legalization bill has emerged that was drafted by a Republican congresswoman that could advance marijuana legalization at the national level.
On Friday, Business News Network reported on the status of the republican led cannabis legalization bill U.S. Rep. Nancy Mace of South Carolina has been preparing to submit to the House of Representatives. CNBC notes, “still is very much a macro story for investors.” This has caused an rippling move on the marijuana sector.
This seems good for shareholders as Marijuana Moment reported last week that Rep. Mace’s bill represents Republican buy-in to Democratic efforts to legalize marijuana at the federal level.
The proposal would include:
- Permit the drug to be cultivated, possessed, sold and consumed.
- Regulate and legalize cannabis in a manner similar to alcohol.
- Set minimum age of 21 for recreational marijuana use.
- Institute a federal tax of 3.75% on cannabis – levied on top of state taxes.
With the new bill underway, reviving cannabis legalization hopes, here are the top 5 cannabis stocks you should be investing in right now:
1. Sundial Growers (SNDL)
Sundial Growers reported its Q3 2021 results on November 11 with positive results. The company also proposed acquisition of public company Alcanna for $278 million almost certainly strengthens the company’s overall investment attractiveness, with Alcanna generating positive free cash flow for the trailing 12 months (TTM) of $16.4 million, providing Sundial’s overall business with a mature and proven business model.
2. MariMed (OTC:MRMD)
Another multi-state operator to put on your watchlist is MariMed. Like Jushi, MariMed doesn’t run a terribly large operation right now. It only has seven dispensaries that are up and running, four of which are in Illinois, one in Massachusetts, and two in Delaware.
The company last reported earnings on Aug. 16, when its sales for the period ending June 30 totaled $32.6 million and grew by a whopping 239% year over year. Increased production in Massachusetts helped drive the improved results, as did growth in its retail locations. What’s impressive is that MariMed reported net income of $7.6 million on that revenue — a profit margin of more than 23%.
During the quarter, the company also generated positive cash flow from its operations totaling $10.8 million. Not only is MariMed turning a profit, but it is accumulating cash that can facilitate more growth opportunities in the future.
Shares of MariMed are down about 3% in the past three months, the mildest of the losses on this list. The company is in a strong financial position, and with MariMed still in the early stages of its growth, now is as good a time as any to add it to your portfolio.
3.Trulieve Cannabis (OTC:TCNNF)
Trulieve Cannabis is a cannabis grower and retailer that focuses primarily on the Florida medical marijuana market. The company dominates in the Sunshine State by accounting for nearly 50% of total cannabis sales and has been consistently profitable since 2017 — an achievement few other marijuana companies can claim. Its sales and earnings also continue to soar.
Trulieve to acquire public company Harvest Health & Recreation in a deal that will boost its presence in several other states and make it the most profitable multi-state marijuana business in the country.
4. GrowGeneration (GRWG)
GrowGeneration is another ancillary provider and the largest specialty retail chain focused on the cannabis market. The booming U.S. cannabis industry has created fast-growing demand for hydroponics supplies, which are used to grow plants in liquid nutrient solutions without soil and for organic gardening.
While much of GrowGeneration’s business caters to cannabis growers, the company also sells to other types of gardeners. GrowGeneration has benefitted from the COVID-19 pandemic due to the surge in customers pursuing organic gardening at home.
5. Canopy Growth Corp (CGC)
Canopy Growth stock had long been the most valuable of U.S.-traded Canadian marijuana stocks. But rival Tilray — with a market cap of $5.7 billion, according to MarketSmith — has recently overtaken Canopy. Canopy’s market value stands at $5.1 billion.
In February, after Canopy reported fiscal third-quarter results, CEO David Klein said Canopy could enter the U.S. legal market for THC products “during calendar 2021,” provided legislation allowed it.
But its most recent quarterly results, reported this month, disappointed investors — continuing a trend of underwhelming financials for the company. Canopy pushed back its profitability targets, blaming competition in Canada for more potent strains and a slow distribution rollout in the U.S.
Canopy has a deal in place to buy U.S. cannabis operator Acreage Holdings and has a CBD business here as well. It has also arranged to eventually buy U.S. edibles maker Wana Brands.