Pot stocks are on fire. It’s that simple. The space is red hot as the retail investor crowd pours in to catch a piece of the massive growth equation ahead.
Skeptics might say, “this is just a commodity market!”
But the reality that appears to be coming together is that it is a consumer packaged goods market with vertical supply chains bound by regulatory firewalls, allowing for protected value in a healthy competitive context. Wrap that story up in the narrative of politically favorable winds in terms of further legalization steps ahead, and the sky is apparently the limit.
That framework has captured the imagination of Wall Street Analysts and Retail investors alike.
With that in mind, we take a look at a few of the more interesting names in the cannabis patch, including: Cresco Labs Inc (OTCMKTS:CRLBF), MedX Holdings Inc (OTCMKTS:MEDH), and Sundial Growers Inc (NASDAQ:SNDL).
Cresco Labs Inc (OTCMKTS:CRLBF) is one of the largest vertically integrated, multistate cannabis operators in the United States, with a mission to normalize and professionalize the cannabis industry. Employing a consumer-packaged goods approach, Cresco Labs is the largest wholesaler of branded cannabis products in the U.S.
Its brands are designed to meet the needs of all consumer segments and comprised of some of the most recognized and trusted brands including Cresco, Remedi, High Supply, Cresco Reserve, Good News, Wonder Wellness, FloraCal Farms and Mindy’s Chef Led Artisanal Edibles created by James Beard Award-winning chef Mindy Segal. Sunnyside, Cresco Labs’ national dispensary brand, is a wellness-focused retailer created to build trust, education and convenience for both existing and new cannabis consumers.
Cresco Labs Inc (OTCMKTS:CRLBF) most recently announced that it has entered into an exclusive distribution agreement (the “Agreement”) with Humboldt County-based Emerald Family Farms, a farmer co-op with hundreds of the Emerald Triangle’s finest farmers. EFF is a producer of sustainable, sun-grown cannabis.
According to the release, the Agreement will bring EFF’s award-winning lineup of jarred flower, pre-rolls and concentrates onto Cresco’s California distribution platform, Continuum, which is one of the largest full-service distribution businesses in the state.
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 22% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 40% in that time on strong overall action.
Cresco Labs Inc (OTCMKTS:CRLBF) generated sales of $204.3M, 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 56.4% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($79.6M against $325.6M, respectively).
MedX Holdings Inc (OTCMKTS:MEDH) is focused on driving growth through vertical integration, strategic partnerships, licensing, franchising, and providing solutions to the emerging hemp and cannabis industry, and its recent reboot could provide an interesting bargain scenario before the crowd spots it.
The stock is smaller and more speculative, but that could also add up to additional upside opportunity if management executes from here.
MedX Holdings Inc (OTCMKTS:MEDH) recently issued a corporate update and outlook against the backdrop of the January 2021 legislative session in Texas. According to the company’s release, currently, 15 states and Washington D.C. permit marijuana for adult recreational use, while 36 states allow it for medical purposes. In other words, MEDH is playing in a prepotent context.
“We hope to complete our plans to merge and acquire internal and external brands and entities in Q2 and throughout the remainder of 2021,” stated MEDH CEO Hans Enriquez. “We look forward to a favorable outcome of the legislative session and expect expansion to the hemp and medical program in Texas. We are excited to execute our operational strategies in 2021 and prepare for the next phase of growth.”
The stock is running on strong upside momentum as the crowd finds it, with shares up about 200% since late December.
MedX Holdings Inc (OTCMKTS:MEDH) just regained OTC Markets access, got its last three periods of quarterly filings caught up, and achieved Pink Current status. That now sets up a rebirth situation. MEDH could be set to push out new catalysts in a fresh corporate context just as it starts to get noticed in a hot thematic market theme.
Sundial Growers Inc (NASDAQ:SNDL) is a licensed producer that crafts cannabis using state-of-the-art indoor facilities. The company cites its ‘craft-at-scale’ modular growing approach, award-winning genetics, and experienced master growers as the factors that set it apart from the competition in the rapidly growing cannabis space.
Sundial’s brand portfolio includes Top Leaf, Sundial Cannabis, Palmetto and Grasslands. Our consumer-packaged goods experience enables us to not just grow quality cannabis, but also to create exceptional consumer and customer experiences.
Sundial Growers Inc (NASDAQ:SNDL) most recently announced that it has launched high-quality cannabis derivative products under the Top Leaf brand in response to rising consumer demands for solventless cannabis extracts. This most recent launch is consistent with Sundial’s focus on premium inhalables, following branded retail offerings of flower, pre-roll and vape cartridges.
“We made a strategic decision to produce these premium products based on demand for solventless, flavorful, pure, and potent cannabis concentrates from a growing group of consumers,” said Andrew Stordeur, President and Chief Operating Officer of Sundial. “Our control of the entire manufacturing process from cultivation to extraction enables us to deliver premium quality products on a consistent basis. Adding bubble hash and other advanced concentrates to our product portfolio will expand Sundial’s share of this rapidly expanding market segment.”
The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 144% in that timeframe. Shares of the stock have powered higher over the past month, rallying roughly 342% in that time on strong overall action. Sundial Growers Inc (NASDAQ:SNDL) managed to rope in revenues totaling $9.7M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of -62%, 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 ($19.7M against $76.6M, respectively).
