Jumping into a frothy and evolving investment like a cannabis stock is a potential shortcut to becoming a millionaire. When you allocate funds in a fast-growing industry, the chances of achieving great success are much greater than normal – if you can tolerate the risk.
At the moment, the following three companies are closer to failing than to minting millionaires. Their market values are small and most of their growth is likely to be in the future. You shouldn’t bet your life savings on their success, at least not in their current form. However, they can only have the notion of greatness that could help a small investment overburden a portfolio in the long run, potentially to the point of generating millions for shareholders.
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1. Jushi Holdings
Jushi Holdings (OTC: JUSHF) has most of the ingredients in a stock ready for a massive boom. First, its quarterly revenue has exploded by more than 6,400% since the beginning of 2019, thanks to its presence in the main U.S. cannabis markets, such as Pennsylvania, where it operates 10 drug dispensaries. 2021 will see a massive increase in Jushi’s facilities in all areas. In Virginia, it plans to open five new dispensaries (an increase of 500%) by the end of next year, and other states will see similarly sized openings, proportionally.
With growth like that, it wouldn’t be very surprising if revenue also skyrocketed in a year or two. This would potentially give stocks the catalyst they need to enrich shareholders, but profitability can be a stumbling block for some time to come. Depending on the level of demand and the pace of marijuana legalization, a pivot to sell cannabis to adults to a broader market can also be a favorable factor. In the meantime, be sure to take a look at Jushi’s annual report for 2020, due out in late April, to see what management is doing to prepare the company for its future expansion.
2. Curaleaf
The history of Curaleaf Holdings (OTC: CURLF) it is an increase in sales volume and an increase in efficiency. Since 2019, revenue has more than doubled and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) have grown by 456%. Of equal importance is the fact that the company is not a negligible regional competitor, where such impressive statistics are unlikely to grow. Curaleaf has facilities in almost half of the U.S. states and a strong presence in central markets like Pennsylvania, New York, Massachusetts and California.
It is also about to be active in the EU’s medical cannabis markets, which could be the fuel it needs to generate massive returns for shareholders in the future. Earlier this month, it acquired a vertically integrated European cannabis company for $ 286 million in shares and a small portion of cash. As soon as the deal closes in the second quarter of this year, Curaleaf will have production and retail locations spread across the EU – and this will generate even more revenue as US operations expand. In the long run, the company could become one of the largest suppliers of cannabis in the world, which could very well enrich investors.
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3. Green thumb industries
Like the other actions I discussed, Green Thumb Industries (OTC: GTBIF) is in the enviable position of seeing its revenues and profits rise dramatically at the same time. Its revenue in 2020 increased by 157.2%, reaching $ 556.6 million, as a result of its efforts to expand to the United States market. To maintain this revenue growth, management has prioritized the launch of new products to meet consumer preferences and, it seems, is working.
In the near future, Green Thumb plans to more than double its retail share and already has the licenses it needs to move forward. This includes expanding into the largest US state markets, like – yes, you guessed it – Pennsylvania and New York. In the future, investors can expect the company to continue to engulf smaller regional operators and open new stores. If things continue as they are, Green Thumb could multiply in value in the coming years.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even our own – helps all of us to think critically about investing and making decisions that help us become smarter, happier and wealthier.