Last year was a rough ride for the cannabis industry, but there’s still plenty to be excited about for 2022. The marijuana industry expects to double in value by 2025, and many investors are seeking to profit from cannabis stocks. But with several states legalizing cannabis in 2021 have made the pot market much more attractive.
Though, Wall Street analysts say that the cannabis industry has long-term promise. We believe there can be a near-mid-term opportunity to make profits in cannabis stocks. It will be highly risky but you have the option to hold it for a bit longer and retain the profit.
Last year, the sentiment was that the Biden administration will follow up on the legalization of marijuana. That didn’t happen to push the cannabis stocks prices down across the sector. However, that also creates much upside and with still huge sentiment around pot stocks, they can surge shortly.
Green Thumb Industries (GTBIF)
Green Thumb Industries (GTBIF) owns retail cannabis stores in 12 states across the U.S. and operates 13 manufacturing facilities. The cannabis firm holds licenses for 96 retail cannabis locations but it has opened only a little over half that many stores.
The company holds a major portion of the market and it is expanding its business across different states. GTBIF is benefiting from the tremendous growth in its home state, Illinois. Along with the opportunity to expand into additional states such as New York and New Jersey, the company has significant growth potential.
The company recently announced the opening of its new GreenStar Herbals Chelsea in Massachuset. Moreover, Green Thumb has also entered the Minnesota medical cannabis market via an acquisition of LeafLine Industries. With the acquisition, Green Thumb has cannabis operations to serve over 50% of the United States population.
Green Thumb’s presence in Minnesota will further enhance and support the medical cannabis patient community. The company will carry the functions through its high-quality branded products and experiences.
Green Thumb has significantly improved its revenue over the past years. The company ended 2021 with $827 million compared to $526 million in 2020 and 216 million in 2019. With the latest acquisition and expansions, GTBIF will significantly improve its revenues. Compared to 2021, GTBIF cannabis stocks is in a much upside position.
Trulieve Cannabis (TCNNF)
Trulieve Cannabis (TCNNF) 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. TCNNF has been consistently profitable since 2017. That’s an achievement few other marijuana companies can claim. Its sales and earnings also continue to soar.
The key to investing in cannabis for 2022 is to stop waiting for the federal government to do anything. The only alternative is to pick companies that can attract capital because they have proven solid management and created a dominant position. Trulieve is one of those cannabis companies in the market that operates in 11 states. The company has leading market positions in Arizona, Florida, and Pennsylvania, as an attractive potential cannabis stocks investment.
Trulieve recently announced the launch of Live Diamonds by Muse. The Live Diamonds are the latest innovation from Trulieve’s state-of-the-art hydrocarbon extraction lab. It’s the only one of its kind in Florida. The company sold the initial 500 units within 24 hours. That shows a successful prospect for this new product. Trulieve anticipates another batch of Live Diamonds to become available for sale in February 2022.
Trulieve is growing its revenues and looks solid. Just like other pot stocks, TCNNF stock can be a good buy that can pump in the mid near term.
MariMed (MRMD) is an exciting cannabis pure-play that has somehow remained under the radar despite its blistering growth of 636% in the last five years. MRMD is a penny stock thanks to its share price of less than $1. Investors shouldn’t expect its price to be the stablest on the market. But you shouldn’t count it out, because it’s likely to keep sizzling. That’s where you can make a profit.
The company only has dispensaries in three states. That means its footprint isn’t anywhere near the size of any other big cannabis firm. But MariMed looks to strengthen its top line by increasing capacity and production.
MariMed projects that its revenue will top $118 million, closing in 2021. While the adjusted EBITDA is expected around $42 million. But that could be a soft figure as CEO Jon Levine hints that the company may outperform. During the recent quarter, MariMed reported revenue of $33.2 million, an increase of 147% from the third quarter of 2020.
There’s a lot to like about MRMD stock. Although the stock soared over 45% last year and it is the only one on this list in positive territory, there could be much more room for this microcap cannabis stock to go even higher.
Innovative Industrial Properties (IIPR)
Innovative Industrial Properties (IIPR) is a big fish in the cannabis market. IIPR’s strategy is to build a real estate empire of cannabis cultivation facilities. The idea is bigger than growing marijuana for consumers to buy.
At the later end of 2021, the company purchased a new property in California worth $51 million. But Innovative Industrial’s game is more than merely buying properties because to generate cash flow from its holdings, it’s necessary to find tenants to rent them out.
Consistently building on rental income by buying new facilities is a business model that won’t ever grow old. At least as long as the marijuana industry continues to be blocked from accessing more traditional sources of financing like bank loans. And that rental income isn’t exactly small, either. IIPR’s revenue grew by 56.9% year over year in the third quarter, which management estimates will result in a total of $195.5 million in 2021.
Over the past six months, IIPR cannabis stocks have outperformed the industry. The stock has rallied 12.4% compared with the industry’s growth of 9.1%. However, this cannabis stock still has upside based on improving growth.
Cresco Labs (CRLBF)
Cresco Labs (CRLBF) is one of the leading cannabis producers. The good thing about Cresco Labs is its strategy to pick its spots carefully. Recently, the company opened its flagship Chicago location, just 300 feet from Wrigley Field. Opening up a store is a key piece of real estate that could be a big money-maker for the company.
Cresco isn’t overly aggressive in its pursuit of growth, which is a key reason CRLBF generates strong margins. In December 2021, the company opened its 12th Florida location and 44th dispensary nationwide.
For the year-end 2021, Cresco projects that its EBITDA margin will be at least 30% of revenue. While the gross margins are expected around 50%. Not a lot of overhead to weigh it down, Cresco is a lean machine that is in an excellent position to grow without sacrificing profitability along the way.
CRLBF cannabis stocks have plunged more than half of their share price over one year period. But with the company posting a strong bottom line, CRLBF could be a hot buy in 2022.