The cannabis industry is in the midst of a boom, and investors are taking notice. As legalization sweeps across the country, stocks have been skyrocketing. Here’s two to consider for your portfolio.
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Long-term investors will find plenty of possibilities in the rapidly expanding marijuana sector. There’s something for every kind of investor, regardless of risk tolerance, from farmers to merchants to auxiliary suppliers.
While some marijuana companies have earned a place in long-term investors’ portfolios as premium buys, others have created a lot of buzz without the businesses or balance sheet development to back it up. Today, we’re going to take a look at two great marijuana investments. Both cannabis stocks have provided substantial returns to investors and are expected to expand at a rapid pace in the coming years. Let’s get started.
1. Industrial Properties that are Unique
In the marijuana business, Innovative Industrial Properties (NYSE:IIPR) is somewhat of a unicorn. The firm isn’t in the marijuana growing or sale industry, nor does it offer growers gardening materials. It’s a real estate investment trust instead.
The business has a large number of assets, including greenhouses and other important agricultural facilities. It exclusively rents these facilities to licensed producers in the state where it operates, and it only accepts tenants who grow marijuana for medicinal reasons.
Innovative Industrial Properties has offices throughout Arizona, California, Colorado, Florida, and Illinois, to name a few. While marijuana legalization is spreading throughout the nation, medicinal marijuana is much more widely authorized than recreational marijuana in the United States.
By limiting its leasing to certified medical-use cannabis producers, the REIT has positioned itself in a much more profitable and stable industry. According to latest statistics from Global Industry Insights, the medical marijuana market in the United States was valued at more than $7 billion in 2020 and is expected to reach over $15 billion by 2027.
Surge in sales and net profits that is mind-boggling.
Has this resulted in significant financial gains for Innovative Industrial Properties? Absolutely. The business recorded a 162 percent rise in sales and a 191 percent increase in net income in 2020 compared to the previous year. Revenue and net income increased by 101 percent and 119 percent, respectively, in the first half of 2021 compared to the same time in 2020.
As if that weren’t enough, Innovative is one of the only marijuana businesses that pays a dividend. The business increases its dividend on a regular basis, and its third-quarter dividend was recently increased by 28% year over year. It currently pays 2.6 percent, compared to 1.3 percent for the S&P 500.
Innovative Industrial Properties is a no-brainer choice right now, whether you’re a seasoned marijuana investor or new to the sector and want to dip your toe into the world of cannabis stocks.
Jushi Holdings is number two on the list.
When it comes to the marijuana business, Jushi Holdings (OTC:JUSHF) is the kind of company that most investors think of. From coast to coast, the multi-state cannabis company has a rapidly expanding network of dispensaries and retail outlets.
Pennsylvania, Illinois, California, Virginia, and Massachusetts are all home to Jushi Holdings. The company’s largest presence is in Pennsylvania, where it has 15 locations.
It has just finalized the acquisition of an 8,000-square-foot medical cannabis processing facility in Ohio, expanding its portfolio. Because Jushi distributes a number of its goods in Ohio via a variety of local partners, this processing plant will substantially increase Jushi’s manufacturing capacity in that state. Marijuana has only been authorized for medicinal purposes in the state, where dispensary sales are expected to reach $425 million in 2021.
Market growth is sparked by brand expansion.
Jushi Holdings also has a strong e-commerce presence, thanks to its online shop, The Jushi Shop, which offers goods from its many cannabis brands. Tasteology, an edible business, and The Bank, which offers packaged flower, infused blunts, and other goods, are two of them.
The business has seen significant development as a consequence of its commitment to expanding its brand and entering new and existing areas. It recorded a 220 percent rise in sales and a 194 percent increase in gross profits in the most recent quarter compared to the previous quarter.
While Jushi has completed numerous significant acquisitions in Ohio, California, and Virginia in recent months, it has maintained solid liquidity and kept its debt ratio under control. On June 30, the company’s balance statement showed $127 million in cash and investments, but just $60 million in total current liabilities.
Although shares are almost 80% more than they were a year ago, they still cost less than $5. As a result, even a little investment may help investors benefit from the company’s long-term development trajectory.
The best stocks to buy now are companies that have a lot of potential and will continue to grow. It is important for investors to invest in these stocks as they will be able to see their profits rise over time.
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