Our Top 7 Weed Stock Picks for 2022
In December 2020, the U.S. Drug Enforcement Administration (DEA) officially removed hemp from its list of controlled substances. This has opened up many new opportunities for cannabis investors and companies alike. Today, the legal cannabis industry is rapidly growing as more states legalize its use. Research firm Cowen estimates that the total U.S. cannabis market could reach $80 billion by 2030.
The cannabis industry has been attracting a lot of investor attention since the legalization of recreational marijuana in Colorado and Washington in 2012. Since then, another 11 states in the U.S. have legalized recreational marijuana and 33 more have legalized medical marijuana. The industry is growing at a rapid pace, but there are still companies that are better positioned to deliver above-average growth compared to their peers.
So how can you get in on the action? The easiest way is to invest in publicly traded marijuana stocks. Here are seven top-rated marijuana stocks to consider buying today:
Green Thumb Industries Inc. (GTBIF)
Green Thumb Industries Inc. (GTBIF) is a multi-state cannabis company that operates in 12 states and has licenses to operate up to 70 retail locations, according to its press releases.
Green Thumb follows a vertically integrated cannabis business model that operates branded retail stores around the country and manufactures various marijuana-related products including flower, edibles, concentrates, and topicals. The company’s sales have been growing at an annual rate of 118% over the last five years and are expected to grow by another 90%
Moreover, the company has been on a shopping spree of late, scooping up other cannabis companies with a healthy balance sheet, including For Success Holding Co., otherwise known as Beboe, which creates high-end vaporizer products.
Ayr Wellness Inc. (AYRWF)
Ayr Wellness is a vertically integrated multi-state operator of cannabis businesses in the United States. The company’s primary objective is to enhance the well-being of consumers and communities by providing access to high quality cannabis and cannabis products. The company had sales of $36.9 million for the fourth quarter of 2020, up from $7.4 million for the same quarter in 2019. Its full year 2020 sales were $97 million, up from $30 million in 2019.
The company recently closed on its acquisition of Fiddler’s Greens, which operates two dispensaries and two cultivation sites in Colorado Springs and Pueblo County in Colorado. It also acquired Good Meds Network, which runs three dispensaries in Denver, Lakewood and Englewood, Colorado.
In March 2021 Ayr Wellness announced plans to acquire 100% interest in three additional dispensaries located in Massachusetts, Maryland and Nevada.
It trades at a market cap of $255 million with a price-to-book ratio (P/B) of 0.5 and a price-to-sales (P/S) ratio of 2.3 times sales for its previous quarter.
Curaleaf Holdings Inc. (CURLF)
The recently announced acquisition of privately held Eureka Impact Inc, which focuses on value-added CBD products and topical creams will further strengthen Curaleaf’s position and boost its margins. The company expects 2021 adjusted EBITDA to grow approximately 150% to $175 million to $200 million, backed by more stores and higher patient count.
The company has moved up from being a multi-state operator (MSO) to a producer of hemp-derived consumer products through its acquisition of Select Brands
As one of the largest multi-state operators (“MSO”), Curaleaf is also expanding internationally. It recently agreed to acquire Panaxia Labs Israel, a pharma-grade medical cannabis manufacturer in Israel and Germany. The deal is expected to close in Q1 2021. Panaxia’s unique non-smokable dosage forms will boost Curaleaf’s global expansion plans.
Curaleaf’s products include CBD topicals like creams, sprays, lotions and salves and it is expanding into wellness products like vitamins and supplements
Trulieve Cannabis Corp. (TCNNF)
Trulieve Cannabis Corp. (TCNNF). This U.S.-based medical cannabis company’s stock price has soared over the last year and was up nearly 41% year to date as of Dec. 3. It is based in Florida but sells its products across the United States and Canada via retail stores and home delivery programs.
Trulieve Cannabis Corp. (TCNNF) company cultivates, processes and dispenses medical marijuana. It operates in Florida, Massachusetts and California and recently entered Pennsylvania with the acquisition of PurePenn.
Trulieve has an impressive market share in Florida — it’s the largest retail market for medical marijuana in the country — with an estimated 50% of the state’s dispensaries. The company has been focusing on expanding its operations and presence nationwide through acquisitions and new licenses.
Trulieve has over 50 retail locations in Florida, which is double the number of its next competitor. These dispensaries are strategically located throughout the state and are open seven days a week until 7 p.m., making them convenient for patients to get their prescriptions filled.
The company also provides home delivery services to all 67 counties in Florida, which has helped it maintain a loyal customer base during the pandemic and points to strong demand for its products.
Trulieve is a profitable company with rapidly growing revenue and earnings, which should continue as more states legalize medical marijuana as well as recreational use. It also has a solid balance sheet with $182 million of cash and no long-term debt at the end of 2021.
The stock has gained 97% so far this year and could see even more strength ahead. Trulieve is well positioned for growth as one of Florida’s leading retail dispensary operators with 26 locations with additional licenses for 50 dispensaries across the state. Among its peers, it has been doing exceptionally well, growing revenues at a rate of 196% per annum and posting gains each quarter since its inception.
The company also announced third-quarter results on November 11 with revenues surging 87% from last
Cresco Labs Inc. (CRLBF)
If you’re looking at the big picture, growth is the name of the game in the marijuana industry. And that’s exactly why I’m including Cresco Labs on this list of weed stocks to buy.
Cresco is one of the largest vertically integrated multistate cannabis operators in the U.S., operating in 11 states with licenses for more than 70 retail locations. More importantly, it’s one of only a handful of MSOs with licenses and/or operations in both California and Florida — two states that are massive markets for medical marijuana products.
On top of that, Cresco has a solid presence in Illinois and Pennsylvania, two other major markets for cannabis-based health products.
In terms of its business model, Cresco operates across three primary segments: wholesale distribution, retail sales and manufacturing/processing. These are all key components to building up its brand name recognition as well as its product offerings, but the real opportunity lies in establishing a strong foothold in new state markets as governments continue to roll back restrictions on cannabis production and sales.
For example, Cresco is one of only 18 companies licensed by New York State to grow and process marijuana for recreational use within its borders.
Cresco Labs Inc. (CRLBF) is a great pot stock pick for investors with a long-term horizon.
AFC Gamma Inc. (AFCG)
AFC Gamma Inc. (AFCG), a New York-based company, has made a name for itself with its pharmaceutical and consumer products. Some of the company’s products include painkillers, sleep aids, anti-anxiety medications and anti-smoking treatments.
AFC Gamma shares have risen more than 400% since January 2021, when it was trading below $10 per share. In May 2021, the stock reached an all-time high of $50.30 per share before retreating slightly to currently trade at about $45 per share.
The company’s recent quarterly earnings were impressive; revenue came in at $13 million, which was a whopping 1,100% year-over-year increase from the same quarter last year. The jump in revenue was in part due to sales of its new anti-addiction drug, Cycloset.
In March, the stock was trading at $0.0017 a share. Today, AFC Gamma is trading at $0.04 a share, an increase of 2,236%.
AFC Gamma is one of the largest pharmaceutical companies in the world with more than $1 billion in annual sales.
Northern Lights Acquisition Corp. (NLIT).
Among many other ways one of the most popular ways to invest in marijuana stocks is through special purpose acquisition companies (SPACs). SPACs are shell companies that take investments with the promise of buying an existing business within a certain time frame and merging it with the SPAC.
That’s exactly what Northern Lights is planning to do — merge with a cannabis company by April 30, 2021, or else return investors’ money. And it’s in advanced talks with a strong contender: Canadian cultivator Valens GroWorks Corp., which is known for its high-quality oils and extracts and has built a long list of international distribution partners.
Northern Lights has almost $300 million in cash on its balance sheet and has lined up a $200 million convertible debt financing facility as well, so it definitely has the money to pull off this deal. And if it can add Valens’ revenue stream to its own, then this could be one of the best weed stocks around.
With the cannabis industry continuing to grow like a weed, many investors are now seeking which marijuana stock to invest in. More importantly, getting in on the ground floor of the burgeoning industry before it goes mainstream is something that every investor wants.
In 2021, investing in marijuana stocks has become even more popular after several companies were added to major U.S. exchanges such as Nasdaq and New York Stock Exchange (NYSE). Plus, more states are legalizing cannabis for both medicinal and recreational use, which is expected to increase sales revenues and profits for cannabis businesses across North America.
While many investors know what they are looking for in a pot stock, finding these companies can sometimes be tricky because they all have similar sounding names and business models. But I’ve made things easier by highlighting seven of my favorite weed stocks that could be great investments this year: Northern Lights Acquisition Corp., Hexo Corp., Charlotte’s Web Holdings Inc., Curaleaf Holdings Inc., and Aphria.
“This is not financial advice, nor I’m a financial advisor all information is from research, personal experience and opinion. All money gained from your investments are yours just like all money lost will be yours, so do your diligence research before investing.”