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Liberty Health Sciences: Great Marijuana Stock Investment Opportunity for 2020

Strong operations, significant market share, great valuation, and phenomenal financials are why we’re going long on this marijuana stock.

Liberty Health Sciences: Great Marijuana Stock Opportunity for 2020Marijuana stocks have taken a nosedive recently due to the COVID-19 crisis. The fallout from COVID will have many cannabis companies shuttering their doors but the issues have been more systemic than the virus. Pervasive overvaluations and long-term operating viability have gutted the value of many cannabis companies and many marijuana stock investors are cutting their losses. In fact, most marijuana stocks are down 50-90% in the last calendar year.

While the last twelve months have been an absolute nightmare for marijuana stock investors, there’s still a ton of potential opportunities out there as the long-term outlook for the global cannabis industry remains as bright as ever. The winners and losers among the bunch are now becoming more and more evident. In fact, analysts at MJ Business Daily predict the fallout from the COVID crisis will be an “extinction-level event for some companies”. They also maintain that “the long-term investment opportunity for the industry hasn’t changed as legalization spreads and demand grows but companies need to survive long enough to see it”.

The companies that do survive will rebound very sharply. If you expect to profit from your stock investments, you’ll need to pick the winners from the bunch. This is precisely why we love Liberty Health Sciences (LHSIF) OTC.

Why is Liberty Health Sciences a Great Marijuana Stock Investment Opportunity for 2020?

For starters. they’ve got strong operations, significant market share, great valuation and phenomenal financials. Let’s dive into the details:


Liberty Health Sciences currently produces 14,000 kilograms annually and is on track to double production this year. They’ve got a great e-commerce presence and 23 dispensaries throughout Florida. Liberty also has an exclusive Management Agreement with Chestnut Hill Tree Farm, a Florida nursery, as a dispensing organization of medical cannabis in Florida. Chestnut holds one of eight licenses in Florida, which is 14% of the U.S. medical cannabis market, with a total estimated market at maturity of $1.1 bill. Liberty also entered a joint venture to open a medical cannabis dispensary in Dayton, Ohio, in March 2019. The JV will also operate a 10,000 sf processing facility for extraction, refining, formulation, and packaging.


Liberty Health Sciences’ primary operations are in Florida. Florida’s medical marijuana market was estimated at between $200 million-$300 million in 2018, a big jump from $20-$40 million in 2017. Active patients more than tripled over the last two years to 307,000. Their secondary markets in Ohio have much promise as well with their robust extraction and processing capabilities.


We love Liberty’s Price to Sales ratio. The P/S ratio is a key analysis and valuation tool that shows how much investors are willing to pay per dollar of sales for a stock. Liberty Health Sciences’ P/S ratio very close to that of companies found in the tobacco industry (5) – which is a great barometer for marijuana stocks.

  • Current share price: US $0.30
  • Price to Sales: 4.25 (Tobacco industry = 5)
  • 52 week low/high: US $0.226- $0.721
  • EV/Revenue: 3.05
  • Price/book: 1.08


Liberty is sitting on nearly $30 million in cash which is more than enough to fuel its operations during the COVID Crisis. Also, their QoQ revenue growth is an astounding 500%.

  • Third Quarter 2019 Revenue: $16.1 mil
  • Previous Quarter 2018 Revenue: $3.2 mil
  • Outstanding shares (diluted): 332 mil
  • Cash: $28.5 mil
  • Revenue growth QoQ: 500%!

Why are we recommending Liberty Health Sciences as a Great Marijuana Stock Investment Opportunity for 2020?

Liberty is building a solid, low-cost, high-margin, vertically-integrated, medical cannabis business in Florida, which they plan to expand to other states. They are now producing at several facilities and selling through 23 of their own stores, which should generate a strong margin. Liberty claims to already have a 15% market share in FL, and they are aiming to raise that to 25% in a few years.

In their most recent quarter, they generated about $16 million in sales, a pace of about $70 million per year. At their current price of $0.30 per share, we estimate they are priced for revenue of about $60 million.

They expect to produce 14,000 kgs of cannabis this year, which, depending on its price for its CBD products, could produce over $100,000 revenue. They plan to double production to about 30,000 kgs in the coming year and, if they pull this off, this should raise their stock price 4-5x.

What are the risks?

Many things can change this rosy picture. Competition could intensify and reduce their market share. Price could very well drop, decreasing their revenue. They may not increase production as much as they hope, reducing their supply. They could raise money with equity, diluting shares. All of these are possible.

What is the Verdict?

However, with the anticipated strength of the market growth in Florida, even if several of these factors does slow their revenue growth, there is still a significant chance for their revenue to exceed $300 million and cause their price to grow solidly to a higher level than it is today.

For this reason, we believe this company is likely a good investment now, and up to $1.50/share, at least.

Liberty Health Sciences: Great Marijuana Stock Investment Opportunity for 2020

About Cannin: Cannabis and Hemp Investment Experts

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