Best Cannabis Stock for 2021: GrowGeneration
Though 2020 was a disaster for almost every industry (with the exception of tech), the cannabis sector sidestepped many of the potholes, as people’s attitudes towards pot started changing. The industry is still trending because this year it found another reason to cheer when democrats took power over the white house and senate. GrowGeneration has lived up to its name and has taken the industry by storm by providing nearly 900% growth in one year and about 90% in the last 3 months. The Denver-based company is primarily engaged in the hot business of hydroponics and is the largest hydroponic dealer in America with 46 locations. But is GrowGeneration the best cannabis stock for 2021?
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Cannin.com has been recommending this cannabis stock since May 2020 when it was trading at $6/share. Had you taken our advice, you would be up over 800%!
GrowGeneration: High Growth Prospects
Investors know that cannabis is an explosive industry. Though GrowGeneration is not directly in the cannabis business, the growth in its primary hydroponic segments is highly dependent on the kind of demand and response the cannabis industry receives. As democrats have begun taking measures to bring newer cannabis rules and regulations that will decriminalize or legalize cannabis at the Federal level with no restrictions on interstate trade, the industry is hoping for those regulations to come soon.
GrowGeneration is a seller of cutting-edge hydroponic equipment that facilitates the efficient growth of cannabis plants. It also deals in organic gardening tools and products like organic soil and organic nutrients. Both home-based and commercial growers can rely on these products.
The pot growers would always require hydroponic supplies and therefore the demand for these types of equipment would not fade until the demand for cannabis is there. The US legal marijuana market is currently growing at 17.8% and it is expected to reach $65.1 billion by 2027 thereby indicating GrowGeneration still has a huge room for growth despite facing tough competition. And if recreational marijuana gets legalized, the company might see growth like never before.
Additional Growth Opportunities for GrowGeneration
GrowGeneration already has the largest chain of hydroponic gardens in America with retail locations in California, Michigan, Colorado, Oklahoma, Maine, Nevada, Washington, Oregon, Rhode Island, and Florida. It also has its own e-commerce site. However, the company continues to focus on expansion.
Last year when the pandemic was wide-spread, Growgeneration was able to achieve such gigantic growth only because it had successfully acquired six other business houses. This acquisition spree is still intact and Growgeneration has already announced 4 acquisitions this year. Last week it again announced the acquisition of Colorado-based Grow Warehouse, a hydroponics retail chain with four locations that will enable the company to set its footprints in the region of Colorado and Oklahoma.
Soon after it again targeted the California marijuana market which is considered one the most established marijuana markets in the USA. Having a good market share in such a region surely blows up revenues. Further, Growgeneration acquired its California-based peer San Diego Hydroponics & Organics just a few days back. This acquisition has strategically strengthened its position to serve the commercial growers in the Southern California market.
GrowGeneration: Consistent Rise in Revenues
GrowGeneration had a wonderful 2020 despite all the ongoing economic turmoil. Last month the company had come out with its full-year financials and it showed the sales revenue for the year had grown by a massive 140% with a 63% increase in the same-store-sales. Within the first quarter of 2020, it had reported a 152% revenue growth on a Y/Y basis, following which it again reported a 123%, 153%, and 142% revenue growth respectively. Its same-store sales also grew by 58%, 49%, 73%, and 58% during these quarters.
For 2021, the management is expecting sales revenue between $335 million and $350 million for the full year. It intends to expand in the retail space and has already started working on it.
Though the cannabis industry is full of volatility, GrowGeneration is a bright light as it has shown exceptional performance even during the period of the great economic depression. The stock is still unstoppable and is expected to remain bullish in the coming days as well. It is one of the best investment options available today in the marijuana market and is a strong buy. Is GrowGeneration the best cannabis stock for 2021? We certainly think it’s among the best.
Best Cannabis Stock for 2021: GrowGeneration
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