Five more states are likely to move toward greater legalization of pot on Tuesday. And a Biden big blue wave win would also likely usher in a federal decriminalization shift that could spur further changes that benefit current players in the cannabis space.
However, because the polls presented such a poor understanding of the outcome in the 2016 election, markets have not been able to easily discount this result into the pricing of shares. That leaves open the potential for a post-election run for stocks in the space, instead of the pre-election run we saw four years ago.
With that in mind, we take a look here at a handful of compelling names in the space, including: Curaleaf Holdings Inc (OTCMKTS:CURLF), GrowGeneration Corp (OTCMKTS:GRWG), Sugarmade Inc (OTCMKTS:SGMD), and Cresco Labs Inc (OTCMKTS:CRLBF).
Curaleaf Holdings Inc (OTCMKTS:CURLF) operates as an integrated medical and wellness cannabis operator in the United States. Curaleaf Inc.’s Florida operations were the first in the cannabis industry to receive the Safe Quality Food certification under the Global Food Safety Initiative, setting a new standard of excellence.
It cultivates, processes, markets, and/or dispenses a range of cannabis products in various operating markets, including flower, pre-rolls and flower pods, dry-herb vaporizer cartridges, concentrates for vaporizing, concentrates for dabbing, tinctures, lozenges, capsules, and edibles.
Curaleaf Holdings Inc (OTCMKTS:CURLF) most recently announced that it has expanded its award-winning line of Select Oil brand products to its 15th state, Illinois – the nation’s second-largest adult-use market after California – starting with its Select Elite Live cannabis oil cartridges.
“The Select brand has worked diligently to earn its place as an industry leader and is rapidly becoming the first nationally-recognized cannabis brand,” said Joe Bayern, President at Curaleaf. “Illinois is one of the largest adult-use cannabis markets in the country and one that has worked incredibly hard to address the need for reparation and normalization of our industry. We look forward to becoming part of the Illinois community, and serving the patients and consumers with the best in class cannabis consumer products available anywhere.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action CURLF shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -3% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
Curaleaf Holdings Inc (OTCMKTS:CURLF) generated sales of $162.8M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 25.4% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($167.2M against $176.4M, respectively).
GrowGeneration Corp (OTCMKTS:GRWG) trumpets itself as a company that, through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. GrowGen also operates an online superstore for cultivators, located at https://growgen.pro/.
GrowGen carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state of the art hydroponic equipment to be used indoors and outdoors by commercial and home growers.
GrowGeneration Corp (OTCMKTS:GRWG) announced a few days ago that it acquired Big Green Tomato, a two-store chain in Battle Creek and Taylor, Michigan. Big Green Tomato is one of Michigan’s premier hydroponic equipment stores, founded in 2011 by a team of experienced executives with 25 years of combined experience in the industry. BGT has two well established locations with strong commercial operations and annual revenues approaching $16M. As part of the transaction, GrowGen purchased the 10,000 square-foot retail property in Battle Creek.
“Michigan’s recreational cannabis market is growing exponentially,” said Tony Sullivan, GrowGen’s COO. “We’re encouraged by new state regulations that will allow for more cultivation licenses, which in turn will fuel continued expansion and growth for GrowGeneration’s customer base in the state.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action GRWG shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -19% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
GrowGeneration Corp (OTCMKTS:GRWG) pulled in sales of $43.5M in its last reported quarterly financials, representing top line growth of 123%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($14.8M against $18.8M, respectively).
Sugarmade Inc (OTCMKTS:SGMD) is in prime position to become an increasingly visible player in the cannabis space in the months ahead given its advantageous execution as a rapidly growing force in the cannabis delivery marketplace in California so far this year through its major interest in BudCars, one of the fastest growing vertically integrated cannabis delivery players in the space.
SGMD is a product and branding marketing company investing in operations and technologies with disruptive potential. Its Brand portfolio includes CarryOutsupplies.com, SugarRush™ and Budcars.com.
Sugarmade Inc (OTCMKTS:SGMD) provided shareholders with a preannouncement of BudCars performance for the three months ended September 30 last month. The data represent another strong surprise to the upside in terms of growth versus expectations, as we see it.
The keys here are summarized by strong gross margins, nearly $2M in Gross Receipts, and more than 60% growth in Net Sales, Customer Orders, and Gross Profits on a sequential quarterly basis.
“BudCars continues to perform, setting records in basically every key metric we track,” stated Jimmy Chan, CEO of Sugarmade. “It was a tremendous quarter, with a big jump in customers and regional market share and robust margins on every sale. That paints a very motivating picture as we gear up to significantly expand our service territory, with upcoming expansion into the North Bay and Wine Country areas as well as our upcoming grand opening of BudCars LA.”
This story looks to get more interesting as the company paves a path toward strategic geographic expansion ahead. As announced in a recent Letter to Shareholders, the Company is expanding BudCars initially into the North San Francisco Bay Area and the Wine Country Counties. That will be followed by the grand opening of BudCars Los Angeles, which is anticipated to take place in November.
Sugarmade Inc (OTCMKTS:SGMD) continues to drive interest as an emerging major player in the California cannabis space, with a verticalizing model that looks to pick up more top and bottom-line growth through expansion and integration. The numbers are jumping here, but the pace of that growth could actually be poised to turn higher if the company’s stated objectives are executed efficiently.
Cresco Labs Inc (OTCMKTS:CRLBF) manufactures and sells medical cannabis products in the United States. It offers cannabis dry flower; vaporizer forms of cannabis; cannabis oil in capsule, oral and sublingual solutions; cannabis in topical; and other cannabis products.
The company also provides cannabis infused edibles, including chocolate and toffee confections, fruit-forward gummies, and hard sweet and chews. Cresco Labs Inc. sells its products under the Cresco brand. In addition, it operates a Hope Heal Health dispensary in Fall River, Bristol County, Massachusetts.
Cresco Labs Inc (OTCMKTS:CRLBF) recently announced the launch of a 1.0 g Liquid Live Resin (LLR) vape cartridge in its Cresco brand portfolio. Illinois and California are the first markets to carry the Company’s newest LLR offering. Cresco Labs’ LLR is unique and differentiated from other live resin products in market today because the Company uses an extraction process that flash-freezes whole flower at peak freshness, preserving premium flavor, cannabinoids, and quality.
“In Illinois and California, we’re focused on providing more consumer choice within our brand portfolio to drive continued wholesale growth and deliver high quality products our customers want most,” said Greg Butler, Chief Commercial Officer at Cresco Labs. “Our Liquid Live Resin line of products from our Cresco brand provides our customers with both the confidence and assurance that they are consuming trusted and reliable cannabis products with nothing added or taken away from a single, pure cannabis strain. We capture the original full-spectrum effect of fresh flower, and we’re excited to deliver a larger form vape offering to meet the rising popularity of this option among our customers in Illinois and California.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action CRLBF shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -6% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Cresco Labs Inc (OTCMKTS:CRLBF) managed to rope in revenues totaling $130.6M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 226.5%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($100.6M against $222.5M, respectively).
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