3 Cannabis Stocks to Buy and Hold Through 2022
The companies part of the cannabis sector have the potential to increase your wealth at an enviable rate over the upcoming decade. The recent wave of marijuana legalization sweeping through the U.S. as well as the prospect of decriminalizing or even legalizing recreational cannabis use will be key drivers for licensed pot producers. Given this, what are the 3 cannabis stocks to buy and hold through 2022?
Here, we take a look at three marijuana stocks in Columbia Care, Green Thumb Industries, and Cresco Labs that should be on your buying radar right now. Each of these stocks is also trading at a deep discount to Wall Street estimates, allowing investors to derive market beating gains in 2022.
Columbia Care: Buy and Hold Through 2022?
A U.S.-based multi-state operator, Columbia Care is valued at a market cap of $1.12 billion. The company has already increased revenue from $77.4 million in 2019 to $179 million last year.
Now, Wall Street expects sales to more than triple year over year to $625 million in 2021 and surpass $970 million next year. These stellar growth rates in revenue should allow Columbia Care to improve its bottom-line from a loss per share of $0.48 in 2020 to earnings per share of $0.3.
Columbia Care has a presence in 18 jurisdictions across the U.S. and Europe where it operates 31 cultivation and manufacturing facilities.
The company generated $110 million in revenue in Q2 which was 232% higher than the prior-year period. Columbia Care has 73 active dispensaries and another 26 under development, enabling it to target a rapidly expanding addressable market that is forecast to touch $31.6 billion by 2026.
Analysts tracking Columbia Care stock have a 12-month average price target of $9.38 for the stock which is more than 200% higher than its current trading price.
Green Thumb Industries: Buy and Hold Through 2022?
A cannabis giant trading 46% below its all-time high, Green Thumb Industries is valued at a market cap of $4.4 billion. Headquartered in Illinois, Green Thumb has 13 manufacturing facilities, licenses for 111 retail locations, and currently operates in 14 domestic markets.
In the second quarter of 2021, the company’s revenue rose by 85% year over year to $222 million, driven by strong demand in Pennsylvania and Illinois. The Q2 of 2021 was also the fourth consecutive quarter where Green Thumb reported a profit, with a net income of $22 million compared to a loss of $13 million in the prior-year period.
Green Thumb currently has 65 retail stores and opened a third store in the state of New Jersey which is a market that recently legalized marijuana for recreational use. While retail sales in New Jersey are expected to begin next year, Green Thumb’s presence in the medical marijuana space will enable the company to gain traction in the highly competitive recreational cannabis vertical as well.
Analysts expect Green Thumb stock to rise by 95% in the next 12-months given its average price target of $37.54.
Cresco Labs: Buy and Hold Through 2022?
The final stock on my list is Cresco Labs, another marijuana heavyweight valued at a market cap of $2.16 billion. A vertically integrated cannabis operator, Cresco Labs currently has 40 dispensaries in 10 states and has grown its sales from $43 million in 2018 to $476 million in 2020.
Most states have a limit on the licenses they are allowed to issue and this barrier to entry allows Cresco and peers to enjoy a competitive advantage in the markets they operate in. Cresco Labs reported revenue of $210 million in Q2, a rise of 123% year over year.
It reported a net profit of $2.7 million in Q2 compared to a loss of $41 million in the prior-year quarter. Cresco expects to generate $1 billion in sales by end of 2021, making it among the first marijuana companies to reach the milestone.
Wall Street expects Cresco Labs stock to gain over 60% compared to its current trading price.
3 Cannabis Stocks to Buy and Hold Through 2022
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