Heading into 2021 – Finest Hashish Shares to Purchase and One Huge Mistake to Keep away from
The real winner on election day was cannabis. We now have legal adult cannabis in 15 states, and roughly 75% of the country has legalized medical marijuana – how does that work when it comes to stocks?
In total, we have four new states (Arizona, New Jersey, South Dakota, and Montana) that have recreational marijuana and one state (Mississippi) that has passed laws introducing a comprehensive medical program. Florida, New York, and Ohio are also expected to pass adult legalization measures next year. If so, nearly half of Americans will live in a state where they can legally use marijuana.
With so much attention to legalization and future markets, cannabis stocks are likely to be hot. Despite the pandemic, many cannabis stocks have remained stable and have skyrocketed in recent weeks. Check out the top few companies we’ve been keeping an eye on and read to the end to learn about the biggest mistake to avoid when investing in cannabis industry today.
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Planet 13 (OTC: PLNH.F)
Planet 13 is called “Disneyland of Cannabis” and is the largest pharmacy in the world. At 115,000 square feet, it’s bigger than your average Walmart, comparable to a small mall. And it’s much more than just an ordinary pharmacy, it’s an experience. Inside there is a restaurant, museum, regular entertainment and a viewing area where customers can watch the manufacturing process of various cannabis derivatives.
At a place like Planet 13, which is right on the Las Vegas Strip, there were significant fears about the impact the pandemic and lack of tourism would have on business and holdings. In my opinion, P13 is really different from other tourist destinations in that it quickly becomes a delivery business model tailored to the local community. At the start of the pandemic, around April, Planet 13 shares were selling for only about $ 1. Now they’re hovering around $ 3.50.
“They adapted extremely well to very challenging times and Planet 13 was hit very hard. They work right on the Las Vegas Strip with their supermarket there, and when the pandemic broke out, of course, tourism was just gone. But the management team has moved really fast, ”said Keith Speights, contributor to Motley Fool.
“You have switched to a sales model in the state of Nevada and serve the local market more than just tourists. You really managed to get through an extremely difficult period. I think in your last quarterly report your sales were actually a good bit higher than in the same period last year. I think Planet 13 is really well positioned to get out of the pandemic. “
Cresco Labs (CNSX: CL) (OTC: CRLBF)
Since its inception in 2013, Cresco Labs has maintained its rank as one of the fastest growing cannabis companies in the country. Cresco Labs is the third largest manufacturer of cannabis products in the country and currently operates 19 pharmacies in nine states. The products are sold in nearly 800 pharmacies across the United States. They make a wide range of products including raw flowers, vape cartridges, groceries, prerolls, and cannabinoid sprays and capsules that they launched just last month
Right now this company is just about to break even but is still not profitable. However, stocks trade at a price to sales ratio (P / S) of 5.8. All in all, that seems high, but it’s because investors are confident that they will make a profit with Cresco Labs in the near future.
For the first half of the year, nearly all of the company’s pharmacies in every state in which they currently operate saw sequential sales growth of over 30%. In California, the world’s largest and most competitive marijuana market, Cresco Labs saw sales grow 41 percent quarter over quarter. It’s very likely that stocks will rise when the company reports its third quarter earnings. It will be published on November 18th.
GrowGeneration (NASDAQ: GRWG)
GrowGeneration is another company that is playing it smart. You will benefit greatly from legalization as states continue to expand their marijuana markets and give people the right to grow cannabis within their own four walls. Starting a small home is becoming increasingly popular in order to save money in the long run and have complete control over the growing environment.
GrowGeneration operates 31 hydroponic gardening stores in 11 different states, and plans to expand to 50 stores in 15 states by the end of 2021. They provide nutrients, additives, lighting, fertilizers and environmental control solutions for both individual growers and large-scale industrial producers. It is the largest chain that sells such products, and its future does not depend solely on the cannabis industry as it caters to the needs of hydroponic growers of many other types of products such as tomatoes, lettuce and peppers.
The company posted a 175% increase in sales for the past year and posted a profit of $ 76.4 million. By 2021, management expects revenue of approximately $ 300 million and operating income of $ 36 million excluding non-cash items (EBITDA). That’s nearly double the Adjusted EBITDA of $ 20 million that GrowGeneration expects by the end of last quarter.
GrowGeneration was ranked the best-performing stock in cannabis for the first half of 2020, and third-quarter earnings reported in September 2020 showed sales growth of 153% year over year. The shares are traded at a PER of eight.
Biggest mistake cannabis investors are making right now
The big mistake some investors make, however, is too bullish based on the assumption that the US will soon legalize cannabis at the federal level. This is true to some extent, and as many of us who follow investment trends have noticed, cannabis stocks rose briefly when Joe Biden was named president on December 3rd.
But let’s not forget that Biden is not very enthusiastic about cannabis reform. In fact, any mention of cannabis reform was completely omitted from Biden’s original draft racial equality transition plan, despite the campaign’s promise to make this a priority.
To make matters worse, the Republicans still have a stronghold over the US Senate. With Senate Majority Leader Mitch McConnell (R-Ky.), We can expect all cannabis legislation to be blocked quickly. Despite support for hemp audits in the 2018 Farm Bill, Senator McConnell has stood in the way of marijuana reform for years.
As of now, the GOP is slated to hold 50 Senate seats next year, and it looks like two remaining races in Georgia will be the deciding factor in which party has the majority. So if (or when) Republicans win those elections in the South, it means Senator McConnell will remain Senate Chairman and continue to prevent progressive cannabis bills from even reaching the Senate for a vote.
Yes, full federal cannabis legalization is upon us, but don’t start basing all of your financial decisions on it yet.
Cannabis stocks are hot, but still not expensive enough to alienate the average investor from the market. If you have the funds, it is a good time to invest your funds in the industry and acquire shares in a reliable company that has promising growth trends. Listed above are a few that have received a lot of attention and may perform well in the years to come.
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