If you are wondering what is the best cannabis to invest in right now, you are not alone. There are many companies out there that offer a variety of marijuana products to choose from. For example, you can find a cannabis company that offers medical marijuana, as well as a product that is legal to buy online.
Aphria
It’s hard to beat Aphria cannabis right now. With positive EBITDA and a market cap that’s a fraction of Aurora Cannabis, this is a stock to watch.
The company has made a few strategic moves outside of Canada. Its recent purchase of a craft brewery in the U.S., as well as its partnership with an Australian medical life science company, could help it enter some lucrative markets.
It also is looking outside the country to see if there are opportunities to expand in key markets. These moves could give it access to some of the most lucrative markets for cannabis products in the world.
Another reason to invest in Aphria is its growth potential. This Canadian company is expected to double its gross profits by 2020.
It’s also a company that’s been able to grow its revenue and EBITDA every quarter for the past four years. A big part of the company’s success has been a consistent increase in demand for cannabis products.
The company has also been focusing on building out its production facilities. In its most recent fiscal quarter, Aphria generated $33 million in profits.
Aphria has the largest operating cultivation capacity in the Canadian cannabis industry. Besides cannabis, the company sells a variety of adult-use products, including beer and vapes.
The company has also recently made a couple of major moves outside the country, buying stakes in several cannabis companies. Its recent deal with Liberty Health Sciences will allow it to license its medical brand of cannabis.
While it’s possible to make a profit today, it’s important to keep in mind the risk associated with investing in a cannabis stock. There is a good chance that regulatory hurdles will eventually arise.
22nd Century Group
If you want to invest in the cannabis industry, 22nd Century Group, Inc. (XXII) is the best marijuana investment right now.
22nd Century Group started in the tobacco space, but has since moved into the cannabis space. The company works on developing hemp/cannabis plants with optimized cannabinoid profiles and advantageous agronomic traits. It also supplies high-quality cannabinoid ingredients to customers.
22nd Century has three business segments, focusing on the upstream value chain of the cannabis industry. The company is also working on a low-nicotine tobacco strain. Despite the lack of profitability, 22nd Century has raised millions of dollars in funding rounds. Ultimately, the company hopes to grow its business by bringing strains to new markets when federal legislation allows.
Currently, approximately 50% of 22nd Century’s business is in the tobacco sector. In the next two to three years, the company expects to see a modest growth in its hops business.
22nd Century’s biggest catalyst for growth is its VLN brand. It plans to launch cigarettes in 18 states by 2023. This will help drive revenue growth for the company. Additionally, the company will distribute its products through Circle K convenience stores.
22nd Century has also partnered with Anandia Labs to develop new plant strains. These strains have been genetically engineered to increase yields and optimize alkaloid and flavonoid profiles.
GVB Biopharma, a contract development and manufacturing organization, was acquired by 22nd Century Group. With this acquisition, the company has added valuable talent. Specifically, CFO Hugh Kinsman joined the company.
The company’s leadership team is in the process of analyzing the profitability of its operations. They are also looking at market penetration and fixed and variable costs. As a result, they are planning to scale up the production of low-nicotine tobacco by 25%.
Innovative Industrial
Innovative Industrial Properties (IIP), a publicly traded equity REIT has done a number of things to increase its visibility. First, the company has moved from the undervalued micro-cap to the big leagues, courtesy of a $102 million public offering last August. Next, it has forged a partnership with Curaleaf Holdings, Inc., which has agreed to lease five of the company’s facilities.
A new breed of cannabis-focused real estate companies, such as IIPR, have begun popping up all over the place. IIP is a real estate investment trust based in Park City, Utah. The company focuses on the acquisition and management of properties, including retail distribution and industrial buildings, greenhouses, and specialized industrial facilities. In its most recent quarter, it paid $21.5 million to acquire a property in Webster, Massachusetts.
Although IIPR has been one of the better-performing REITs in recent months, a recent dip raises some concerns. It’s still the top performer in its sector, with an average annualized return of over 40%.
As a pioneering real estate investment trust, IIPR has the opportunity to make use of creative and innovative real estate-based capital solutions. On the business side, it has the distinction of being the first to list properties on the New York Stock Exchange.
Among its competitors, IIPR stands out for its impressive number of properties and geographic footprint, with 111 properties spread across 19 states. Additionally, the company has a well-rounded tenant roster, with thirteen publicly-traded operators, such as PharmaCann, Inc. and Cresco Labs.
One of the more interesting features of IIPR’s business is its proprietary lease-management platform, which is able to optimize, control, and track tenant operations. Using a combination of automated data collection, a human-powered workflow, and a proprietary analytics engine, IIPR is able to glean insights into tenant behavior that can be used to drive the company’s bottom line.
Cronos
If you are looking for a cannabis investment, Cronos Group (CRON) may be the best one to choose. The company has a strong balance sheet, low inventory and cash burn. Its stock trades at a significant premium to its peers. However, its financial backing from Altria Group Inc MO could make it worth buying now.
Founded by Lorne Michael Gertner and Paul Rosen, Cronos Group is a licensed producer and distributor of cannabis. They manufacture products under a variety of brands, including PEACE NATURALS, Spinach, COVE and PEACE+. Their operations also include medical cannabis sales in Israel.
After a tough couple of years, Cronos is starting to gain ground in the Canadian market. Although they still trail their rivals, they are doing so by a small margin. In fact, the company is tied with HEXO for fifth place in the category.
With a strong cash balance, the company is well positioned to continue its growth in the U.S. and other markets.
Cronos is a leader in several categories, such as edibles and vapes. This makes it an attractive option for ESG investors who want to diversify their holdings.
Canopy Growth (CGC) is another company that is making an aggressive push for growth. They are banking too heavily on the U.S. market for future growth. But they are leading Cronos in the medicinal marijuana market. And the recent investment from Constellation Brands has bolstered their position.
While other marijuana stocks are struggling with liquidity, Cronos has a solid cash position that should be able to sustain multiples in the near term. Having a larger enterprise value will give them the ability to be more aggressive with their investment in the American cannabis industry.
GrowGeneration
GrowGeneration is one of the hottest stocks in the cannabis space. The company owns a chain of retail centers that sells products for the gardening and hydroponics industry. They have over 50 locations across the US.
The company’s products range from soils to growing media, lighting and irrigation equipment. Their products also include private label products. However, they are in a highly fragmented industry.
The company reported solid revenue growth in the first half of 2021, which they believe will continue. It also announced plans to expand into the indoor vertical farming market in the next couple of years.
Although the company’s stock price has taken a beating over the past year, there is still plenty to like about it. This is a young company that is establishing itself in a highly profitable and expanding industry.
One of the best things about this stock is that it isn’t very expensive. With a P/E of 104, the company is relatively inexpensive, and if you can wait, this could be a good long-term buy.
Another appealing aspect of the stock is its low risk. As more states legalize the use of marijuana, the company expects to open stores in states that have loosened their restrictions. While this may not be a panacea for the company’s future, it can be a stepping stone.
As it stands, the company is on track to reach its goal of 100 stores by the end of the decade. It currently operates 52 stores in the U.S., with the plan to add another 100 by the end of 2023.
If the state laws continue to liberalize, GrowGeneration could benefit from the rising revenues that come from the legalization of marijuana in North America.
