Top 3 Marijuana Stocks To Invest In

Top 3 Marijuana Stocks To Invest In

August 27, 2020 0 Comment

As of April 2019, cannabis stocks are no longer the hottest stocks on the market. Marijuana used to be a popular stock choice because of the tremendous growth potential, but now most marijuana stocks have lost 50% of their value.

Investors are demanding the results they were promised as more and more states pass cannabis legalizations. Not all cannabis stocks are a safe investment in the current market.

Top Marijuana Stocks To Invest In

Below is a list of businesses that are positioned to be successful.

Green Thumb Industries 

Green Thumb has 46 dispensaries in select legal states and is poised to open an additional 96 in 12 states. Green Thumb has focuses its expansion in Illinois and Nevada.

Illinois, the newest to the industry, legalized recreational marijuana in January 2020 and is projected to generate 1 billion in annual sales by 2024.

Nevada’s popularity as a tourist destination alludes to it becoming the state with the highest cannabis spending per capita by mid-decade, pending unprecedented events. 

The reason Green Thumb is forecasted to create high profits is due to its variety of products. Dried cannabis flower is the most popular cannabis product used in America, but Green Thumb generated two-thirds of its sales from derivatives.

These derivatives include products like edibles, vapes, and topicals. Derivatives cost more per gram than dried flowers and offer a premium margin. 

Innovative Industrial Properties

Innovative Industrial Properties started in 2019 with 11 assets. Now, they own 57 cultivations in 15 states. They’re a stable investment as their weighted average lease length on these assets is 16.1 years, meaning there is plenty of cash flow coming their way.

Innovative Industrial Properties also has a low-cost business model, so they save for the significant upfront costs when acquiring property. 

Innovative Industrial Properties has also been part of sale-leaseback agreements. They’ve benefited from this by providing upfront cash to MSOs in exchange for acquiring and immediately leasing assets back to the seller.

Scotts Miracle-Gro 

Scotts is known for its lawn and garden care. With COVID-19, people are spending more time at home remodeling and doing other time at-home projects.

Due to this increased attention, Scotts Miracle-Gro predicts its US consumer segment to grow 9% to 11% in the fiscal year 2020. This number grew in just two months from the expected growth of 1% to 3%. 

Not only that, but Scotts Miracle-Gro acquired Ohio Sunlight Supply in 2018, which added product diversity to Hawthorne Gardening. Hawthorn Gardening provides indoor growing solutions for the cannabis industry like hydroponics, lighting equipment, soil, and nutrients.

This resulted in a fast growth from Hawthorne with forecasted sales to be up 45% to 50% in the fiscal year 2020, with Hawthorne now accounting for almost 17% of Scotts Miracle-Gro’s total sales. 

Start Investing Now!

Investing can be a scary task, but with the right amount of research, all the hard work could pay off. The cannabis industry has always been a hot market but requires plenty of knowledge, so you don’t lose your money.

This guide should provide you with an overview of what the type of companies to look for when investing in the cannabis industry. Happy investing!

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