Dry January? How about high January?
For many Americans cutting back on alcohol, cannabis offers a mellow replacement.
And it’s easier than ever to — legally — access it. As of 2022, 21 states and the District of Columbia offer legal recreational cannabis to their residents. That means, according to Pew Research Center, that 43% of U.S. adults now live in an area that has legalized marijuana use.
But maybe it’s not your thing. Still, there could be some green in it for you. If you don’t care to take a toke, why not let cannabis puff up your portfolio instead?
Here’s a look at three marijuana stocks ready to capitalize on the growing trend towards legalization. They’re listed on stock exchanges in Canada but trade over the counter in the U.S. — and analysts also see major upside in this trio.
Trulieve Cannabis Corp (TCNNF)
Trulieve Cannabis entered the cannabis industry by winning the first medical marijuana application in Florida in 2015. Today, it has 100 stores in the Sunshine State, and around 180 operated and affiliated dispensaries nationwide.
The company claims that it has leading market positions not just in Florida, but also in Arizona and Pennsylvania.
Trulieve’s financials have grown tremendously, and even the COVID-19 pandemic couldn’t stop the momentum. In 2020, revenue rose 106% from the 2019 level to $521.5 million.
In 2021, revenue surged another 80% to $938.4 million.
According to the latest earnings report, Trulieve earned $300.8 million of revenue in Q3 of 2022, up 34% year over year.
The stock, however, has plunged nearly 70% over the last 12 months.
Canaccord analyst Derek Dley sees a rebound on the horizon. The analyst has a ‘buy’ rating on Trulieve and a price target of C$50 on its Canada-listed shares — implying a potential upside of 404%.
Green Thumb Industries (GTBIF)
Green Thumb is a vertically integrated cannabis company headquartered in Chicago. It has 18 cultivation and manufacturing facilities, six consumer product brands, 77 open retail locations, and operations in 15 U.S. markets.
Just like Trulieve, Green Thumb stock hasn’t been a hot commodity: shares are down more than 55% in the last year.
Business, however, is still on the rise.
Revenue totaled $261 million for the quarter that ended in September 2022, up 12% year over year and 3% sequentially.
But the best part has been the bottom line. Green Thumb earned a profit of $10 million for the quarter, marking its ninth consecutive quarter of positive net income.
Stifel analyst Andrew Partheniou has a ‘buy’ rating on Green Thumb and a price target of C$31 on its Canada-listed shares. Since these shares trade at C$11.25 right now, the price target represents a potential upside of 175%.
Curaleaf Holdings (CURLF)
With a market cap of around $3.4 billion CAD, Curaleaf is a bigger company than both Trulieve and Green Thumb.
It has a huge presence in the U.S. cannabis industry, with 29 cultivation sites, approximately 4.4 million square feet of cultivation capacity, 146 retail locations and more than 2,200 wholesale partner accounts.
During the third quarter, revenue grew 7% year over year to $340 million.
Notably, Curaleaf has a strong focus on research and development: the company is currently on pace to increase new product revenue 75% year over year.
Still, this pot heavyweight is not immune to the industry-wide sell-off as shares are down about 24% over the last six months.
Alliance Global Partners analyst Aaron Grey has a ‘buy’ rating on Curaleaf and a price target of C$12 on its Canada-listed shares — roughly 120% above where they sit today.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.