3 Hot Marijuana Stocks for 2020
These 3 hot marijuana stocks may have you seeing green by year’s end
2019 was the biggest year for marijuana and, yet, many hot marijuana stocks suffered substantial losses. Companies like Tilray (TLRY), Cronos Group (CRON), Canopy Growth (CGC), and Aurora Cannabis (ACB), are among many marijuana stocks which are now down 50-90%. Based on the report released yesterday by BDSA, 2019 global legal marijuana sales grew by 46% to $14.7 billion, a substantial increase from the 16% growth of 2018, and the industry’s highest annual rate of growth to-date.
The long term outlook for many marijuana stocks remains just as bright as their LED grow lights and we believe these 3 hot marijuana stocks are the ones you should consider buying while they’re trading below their price targets.
What are the 3 hot marijuana stocks for 2020?
3 Hot Marijuana Stocks for 2020: Innovative Industrial Properties (IIPR)
First and foremost, we’re huge fans of Innovative Industrial Properties (IIPR) because it’s one of the strongest ancillary marijuana stocks available. This “picks and shovels” marijuana stock has been making headlines recently with their rapid expansion and dramatic year over year revenue growth. Here are 3 reasons why we think IIPR should be on our list of 3 hot marijuana stocks for 2020:
1. Dividends, baby
Since Innovative Industrial Properties is a Real Estate Investment Trust (REIT), it’s required to distribute a majority of its taxable income to shareholders in the form of dividends. This particular dividend pays over 5%. In fact, Innovative Industrial Properties has grown its dividend by over 550% since 2017. Coupled with IIPR’s ambitious growth strategy, these dividends make this stock incredibly attractive.
2. Growing, growing, gone!
If IIPR’s impressive track record isn’t attractive enough, consider their growth prospects – which are some of the most substantial in the marijuana industry. In fact, IIPR posted an astounding 269% YoY revenue growth in its last quarter with 4x profits than the previous year’s quarter. The two most recent acquisitions Michigan and Massachusetts in April have us thinking that this momentum will continue to grow. IIPR now owns 54 marijuana facilities in 15 US states. With the inevitability of national legalization, new opportunities will continue to present themselves.
3. Picks and Shovels, Like Levi Strauss
Much like Levi Strauss during the gold rush, IIPR supplies the “picks and shovels” companies need to capitalize on this green rush by supplying the necessary infrastructure. It has a direct tie to the cannabis sector through the leases that it offers for its industrial properties. Innovative Industrial Properties will almost always generate the same amount of revenue from its lease agreement and it won’t fluctuate with the demands of the cannabis market. In short, the company is insulated from the volatility of the cannabis market and instead is secured by the cannabis company operators that enter into lease agreements with Innovative Industrial Properties.
3 Hot Marijuana Stocks for 2020: Green Thumb Industries (GTII)
Green Thumb Industries, Inc. (GTI) is an exciting Multi-state Operator (MSO) that engages in the manufacture and distribution of branded cannabis products. We love their diversification and operations through both wholesale and retail segments. Here’s 2 reasons why we think GTI should be on our list of 3 hot marijuana stocks for 2020:
1. Strong Focus
GTI is a multi-state US seed-to-sale cannabis grower, producer, and retailer. It has a wholesale business (its Consumer Package Division, selling its brands to third party dispensaries) and a retail business (selling its own and third-party brands through its own dispensaries). It operates or is building 13 manufacturing facilities—in Illinois, Pennsylvania, Maryland, Massachusetts, and Nevada.
It owns and operates 25 retail dispensaries under its own RISE, Essence, and GTI brands. They are licensed for, and currently plan to own and operate, 88 dispensaries across at least 12 states, each producing on average $3.6 mil in revenue per year. They produce and sell flower, concentrates, edibles, and topicals. Though they currently wholesale much of their harvest and are expanding their cultivation, GTI has said they may not choose to be a large wholesale grower in the long term if price compression becomes an issue with that model. If that happens they will likely focus on creating brands and operating dispensaries.
2. Strong Operations
GTI operates 260,000 sf of cultivation and processing capacity, which is scalable up to 750,000 sf. They do not disclose what portion is grow space versus processing space. If 50-75% is cultivation space, we expect them to produce between 15,000-22,000 kgs/per year, scalable up to 40,000-60,000 kgs per year.
They grow 50 unique cannabis flower strains, geared to different consumer segments. They also process raw flower into oils, using several extraction and purification techniques (BHO, CO2, Ethanol). Their current production is 22,000+ Kg/Year with future production slated at 60,000 Kg/Year.
3 Hot Marijuana Stocks for 2020: Curaleaf Holdings (CURLF)
Among all of the vertically integrated multistate cannabis operators (MSO) in the United States, none is larger than Curaleaf Holdings, Inc. (OTC:CURLF). Assuming they’re able to execute on their 2020 vision, Curaleaf will have 131 retail licenses spanning 19 states. Curaleafs recent acquisitions may allow them to hit their target of $1 billion in annual sales this year, according to the company’s management team.. Here’s 3 reasons why we think CURLF should be on our list of 3 hot marijuana stocks for 2020:
1. Experienced CEO
The company’s CEO, Joe Lusardi, has over 10 years of experience with the cannabis industry and 20 years in entrepreneurship, finance, and private equity placements. Lusardi also is personally invested in the company, literally, with an investment he made with his own $500 million. He did this in order to grow the company and expand development, research, infrastructure, and the company’s staff.
2. Strong Cash Balance
Curaleaf is expected to have 71 cannabis dispensaries by the end of 2020 that will all contribute to its cash balances. The strategic positioning practice the company uses, selectively choosing high-density populations and license limit states, will ensure limited direct competition. The company’s cash balances will grow along with a continued expansion by Curaleaf in order to seize new cannabis market opportunities.
3. Targeted Operations
During the company’s specific selection process, it chose over 11 states to do business in – specifically states that have a limit on the licenses it issues to cannabis operators. These states include Florida, Massachusetts, New Jersey, New York. Curaleaf has a presence in every state that limits the cannabis licenses that single operators can have. Also, the company will have a total of 71 cannabis dispensaries by the end of 2020.
These three marijuana stocks have many more reasons why we believe they are the 3 hot marijuana stock picks for 2020. Feel free to check out our Featured Companies page and Marijuana Stock Reports page to find more comprehensive analyses for these marijuana stocks. At Cannin, our goal is to help you make informed marijuana stock investment decisions. 2020 will undoubtedly be much better for marijuana stock investing than 2019 was. Happy investing.
3 Hot Marijuana Stocks for 2020
About Cannin: Your Marijuana Stock Investment Experts
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