As cannabis stocks continue to regain their mojo off of what appears to be a good candidate for a “generational low” in the space recorded in March, investors would be wise to pay close attention to the space as it may offer far superior returns to other sectors over coming years given strong catalysts ahead in terms of US legalization trends and the fact that truly vulnerable balance sheets in the group have already been weeded out.
The cannabis stock bear market appears to be over, having lasted from October 2018 through March 2020, capitulating in step with the precipitous crash in the broad global stock indices in response to the coronavirus crisis and the start of major lockdowns in the developed world this spring.
Since the March lows, we have seen sentiment in cannabis stocks remain poor (which is a bullish sign) despite 100-300% rallies in many stocks in the space. Pullbacks are now to be seen as productive bargain sales in these stocks as far as we are concerned.
While most legitimate stocks in the space will likely do well, some will likely do far better than others. With that in mind, we parse through some of the more actively traded small-cap cannabis stocks below, including: Cresco Labs Inc (OTCMKTS:CRLBF), Medical Marijuana Inc (OTCMKTS:MJNA), Cannabis Strategic Ventures (OTCMKTS:NUGS), Green Thumb Industries Inc (OTCMKTS:GTBIF), and GrowGeneration Corp (NASDAQ:GRWG).
Cresco Labs Inc (OTCMKTS:CRLBF) recently announced that it has been granted a provisional processing license by the state of Ohio. The License allows Cresco to extract oils and manufacture products from cannabis which will now provide Cresco the ability to sell its entire House of Brands in Ohio.
“We continue to believe that to win in this industry you need to create meaningful, material positions in the most strategic states possible,” said Charlie Bachtell, CEO and Co-founder of Cresco Labs. “We have established leading positions in Illinois and Pennsylvania, the fifth and sixth most populous states in the country, and we are now substantially increasing our position in Ohio, the seventh most populous state. Our Company currently only sells flower into 60% of Ohio’s dispensaries, and we’re excited to introduce our House of Brands and full suite of products, including vape pens, concentrates and edibles, to patients in the state.”
Cresco Labs Inc (OTCMKTS:CRLBF) trumpets itself as a company that manufactures and sells medical cannabis products in the United States. It offers cannabis dry flower; vaporizer forms of cannabis; cannabis oil in capsule, oral and sublingual solutions; cannabis in topical; and other cannabis products.
The company also provides cannabis infused edibles, including chocolate and toffee confections, fruit-forward gummies, and hard sweet and chews. Cresco Labs Inc. sells its products under the Cresco brand. Headquartered in Chicago, Illinois, the company also operators a Hope Heal Health dispensary in Fall River, Bristol County, Massachusetts.
If you’re long this stock, then you’re liking how the stock has responded to the announcement. CRLBF shares have been moving higher over the past week overall, pushing about 2% to the upside on above average trading volume. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -5%.
Cresco Labs Inc (OTCMKTS:CRLBF) managed to rope in revenues totaling $89.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 219%, as compared to year-ago data in comparable terms.
Medical Marijuana Inc (OTCMKTS:MJNA) just announced that its subsidiary HempMeds has hired Vince DiMella as its U.S. Director of Sales and Marketing. We would note that this stock is one of our least favorite names in the space, so any claims it makes should be taken with a grain of salt in our estimation.
“HempMeds has created a unique brand that pioneered markets and has changed the global dialogue about cannabis and particularly its non-psychoactive CBD forms,” said Medical Marijuana Inc. CEO Dr. Stuart Titus. “HempMeds first reported sales in the U.S. during the spring of 2012, launched the CBD medical prescription market in Brazil during April 2014 and was similarly first into Mexico with hemp-based CBD products in February 2016. Having met personally and discussed branding with Vince, I am delighted that he will be leading our team with skill and pedigree to navigate HempMeds’ major market arenas.”
Medical Marijuana Inc (OTCMKTS:MJNA) bills itself as an investment holding company that operates in the medical marijuana and industrial hemp markets.
Its products range from patented and proprietary based cannabinoid products to seed and stalk or isolated high value extracts manufactured and formulated for the pharmaceutical, nutraceutical, and cosmeceutical industries. The company licenses its proprietary testing, genetics, labeling and packaging, tracking, production, and standardization methods for the medicinal cannabinoid industry.
It engages in the research and development of cannabinoid-based pharmaceuticals; and marketing and distribution of cannabidiol hemp oil-based products. In addition, the company provides management support and services to cooperatives, collectives, health and wellness facilities, and medical clinics; and consulting and securities services to businesses and individuals in the legal cannabis industry.
Further, it focuses on the treatment of pain and other medical disorders with the application of chewing gum-based cannabis/cannabinoid medical products.
Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week. MJNA shares have been relatively flat over the past month of action, with very little net movement during that period.
Medical Marijuana Inc (OTCMKTS:MJNA) managed to rope in revenues totaling $16.9M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a declining rate of top line growth of -4.2%, as compared to year-ago data in comparable terms.
Cannabis Strategic Ventures (OTCMKTS:NUGS) has been expanding while many other cannabis players have been putting on the brakes. This is further exemplified by the company’s most recent announcement, which suggests the company is now putting some of its built up cash from operations to use and picking up a new 300k square-foot state-of-the-art grow facility, which could make it one of the biggest growers in California.
According to the release, the new facility would more than double the Company’s cannabis production capacity.
“In this environment, the market is going to take as much as we can produce given our steady evolution in product quality, and we see those conditions extending for quite some time,” stated Simon Yu, CEO of Cannabis Strategic Ventures. “That strongly points to strategic value in expansion. We have seen recent strong improvements in output, pricing and sales volume, and we are aggressively interested in expanding capacity to capitalize on micro and macro factors to drive more value for our shareholders.”
Cannabis Strategic Ventures (OTCMKTS:NUGS) is one of fastest growing stories in the cannabis space, with a strong presence in the California cannabis marketplace showing consistent growth on a sequential monthly and quarterly basis. Q2 2020 appears to be a breakout quarter for the company.
In addition, the company has recently successfully expanded its production capacity by as much as 2.5x. That expansion was necessary to keep up with demand as overall top line sales have increased rapidly during calendar Q2, with the monthly pace of sales this quarter on pace to average more than 800% above the average monthly pace seen in calendar Q1. The new farm will presumably balloon that capacity factor when it comes online for operations.
The stock has suffered a bit of late, with shares of NUGS taking a hit in recent action, down about -2% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -18%. However, NUGS has exploded over 100% higher in the past 3 months.
Cannabis Strategic Ventures (OTCMKTS:NUGS) pulled in sales of $1.4M in its last reported quarterly financials, representing top line growth of 91.4%. The company also has provided data from recent operations that suggests it is on pace to surpass $11M in sales in 2020, outperforming its guidance from December projecting $5M in 2020 sales.
Green Thumb Industries Inc (OTCMKTS:GTBIF) just announced that it opened Rise Chambersburg, its 46th retail location, on June 8.
According to the release, profits from the first day of sales will be donated to Last Prisoner Project, a nonprofit coalition of cannabis industry leaders, executives, and artists dedicated to bringing restorative justice to the cannabis industry.
“We are grateful to open another Rise™ location in Pennsylvania and to continue to create jobs during the ongoing COVID-19 crisis,” said Green Thumb Founder and Chief Executive Officer Ben Kovler. “Rise Chambersburg is our seventh store opening this year and fifth since the crisis began. We are also honored to donate our first day’s profit to the Last Prisoner Project and to support their important work through our ongoing partnership.”
Green Thumb Industries Inc (OTCMKTS:GTBIF) is a producer and distributor of cannabis products including flower, concentrates for dabbing and vaporizing, edibles, and topicals. The company markets its products through third party retailers. It also owns and operates a chain of 50 retail stores under the RISE dispensaries name. The company was founded in 2014 and is headquartered in Chicago, Illinois.
The company is a national cannabis cultivator, processor and dispensary operator, is dedicated to providing dignified access to safe and effective cannabis nationwide while giving back to the communities in which they serve.
As a vertically integrated company, GTI manufactures and sells a well-rounded suite of branded cannabis products including flower, concentrates, edibles, and topicals. The company also owns and operates a rapidly growing national chain of retail cannabis stores called RISE(TM) dispensaries.
Headquartered in Chicago, Illinois, GTI has seven manufacturing facilities and licenses for 50 retail locations across seven highly regulated U.S. markets. Established in 2014, GTI employs more than 350 people and serves hundreds of thousands of patients and customers each year.
If you’re long this stock, then you’re liking how the stock has responded to the announcement. GTBIF shares have been moving higher over the past week overall, pushing about 11% to the upside on above average trading volume.
Green Thumb Industries Inc (OTCMKTS:GTBIF) managed to rope in revenues totaling $138M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 271.9%, as compared to year-ago data in comparable terms.
GrowGeneration Corp (NASDAQ:GRWG) just announced that it has purchased the assets of H2O Hydroponics, LLC (“H2O”), the largest hydroponic garden center in Lansing, MI.
According to the release, following the asset purchase, the Company will open a new location in Lansing, MI, which will serve as a retail/commercial operation, as well as a fulfillment center, supporting the Company’s online and direct-to-farm deliveries.
Darren Lampert, CEO, commented, “H2O Hydroponics is the largest hydroponic store in Lansing, MI. with 2019 sales of approximately $4.0 million. We are consolidating our current West Lansing location, with H2O, and relocating into a newly built 15,000 square foot super hydroponic garden center, that we expect will generate over $7.0 million in sales. With this acquisition, we continue to increase our footprint and strengthened our supply chain in the Michigan market.”
GrowGeneration Corp (OTCMKTS:GRWG) trumpets itself as a company that, through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States.
Currently, GrowGen has 27 stores, which include 5 locations in Colorado, 5 locations in California, 2 locations in Nevada, 1 location in Washington, 4 locations in Michigan, 1 location in Rhode Island, 4 locations in Oklahoma, 1 location in Oregon, 3 locations in Maine and 1 location in Florida.
GrowGen carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state of the art hydroponic equipment to be used indoors and outdoors by commercial and home growers.
GRWG has been acting well over recent days, up something like 11% in that time. Shares of the stock have powered higher over the past month, rallying roughly 22% in that time on strong overall action. GrowGeneration Corp (NASDAQ:GRWG) generated sales of $33M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 29.9% on the top line.
