According to industry analysts, the American cannabis market is expected to grow to $46.90 billion through 2027. This growth is due to several factors, such as an increase in the number of dispensaries, growing awareness and interest in potential therapeutic uses, and increased demand for both medical and recreational cannabis in legalized states. These factors open up opportunities for investors to buy excellent cannabis stocks.
As more states legalize medical cannabis, the demand for it is also expected to increase. In this article, we’ll cover three cannabis stocks set to capitalize on this growing green market.
Green Thumb Industries Inc. (GTBIF)
Green Thumb Industries Inc. (OTCMKTS:GTBIF) is the first on our list of potentially great cannabis stocks. The company operates two primary business segments: consumer packaged goods and retail. The consumer goods segment focuses on the cultivation, production, and distribution of cannabis products. It offers these goods under brands like Beboe, Dogwalkers, and RYTHM. These products span multiple categories, including flowers, vapes, edibles, and topicals. The retail segment directly sells cannabis products to consumers through its Rise retail chain. As one of the top players in the cannabis field, Green Thumb Industries now has a market cap of over $2.5 billion.
GTBIF delivered solid third-quarter results, with revenue growing 9% from the previous quarter to reach $275 million. Green Thumb maintained a healthy balance sheet with $137 million in cash at the end of the quarter. The company also reported a GAAP net income of $11 million. Adjusted EBITDA ended at $83 million, representing 30% of its revenue. The company continued increasing shareholder value by repurchasing over 1% of outstanding shares.
Trulieve Cannabis Corp. (TCNNF)
The next cannabis stock on our list operates as a medical cannabis company currently headquartered in Quincy, Florida, Trulieve Cannabis Corp. (OTCMKTS:TCNNF). With a market cap of over $990 million, Trulieve produces a variety of cannabis products in-house, including flowers, edibles, vapes, concentrates, topicals, and more under brands like Avenue, Cultivar Collection, and Modern Flower. TCNNF distributes these products through Trulieve dispensaries in Florida and other states, including Arizona, California, West Virginia, etc., and operates cultivation and processing facilities across multiple states, including Georgia, Maryland, Massachusetts, and Pennsylvania.
Trulieve Cannabis Corp. recently announced the appointment of Wes Getman as Chief Financial Officer, effective on Jan. 1, 2024. With over 25 years of experience in accounting and finance, Getman’s background aligns well with Trulieve’s growth strategy in the cannabis industry. This transition is anticipated to improve the company’s future financials.
TCNNF generated strong third-quarter financial results. The company reported $275 million in total revenue, 96% of which is from its retail segment. Adjusted net loss came in at $15 million; however, Trulieve ended the quarter with a 52% gross margin and $143 million gross profit. The company also realized solid cash flow, generating $93 million from operations and $87 million in free cash flow during the quarter. Meanwhile, analysts expect the company could reach $24.72 over the next 12 months, potentially offering investors a substantial upside.
Curaleaf Holdings Inc (CURLF)
The last cannabis stock on our list is a U.S.-based cannabis company headquartered in New York, Curaleaf Holdings, Inc. (OTCMKTS:CURLF). The company operates through Domestic Operations and International Operations business segments. It produces cannabis products, including flowers, pre-rolls, pods, vaporizer cartridges, concentrates, edibles, tinctures, capsules, and topicals. Curaleaf offers both recreational and medical cannabis as well as hemp-based CBD and other cannabigerol products across its retail and wholesale channels.
Curaleaf Holdings, Inc. has recently started wholesale adult-use cannabis product sales in New York after receiving approval from the New York State Office of Cannabis Management. The company now offers vape, edible, and flower products from its Select and Grassroots brands in the state, with stated commitments to corporate responsibility in its New York hiring practices.
Curaleaf Holdings Inc. reported steady third-quarter financials with 2% year-over-year growth in net revenue to $333.2 million. The report indicated a net loss of $92.3 million due to discontinued operations. Despite that, it also highlighted promising key financial metrics. For example, the company maintained healthy gross margins at 45%, gross profit of $150.1 million, and generated adjusted EBITDA of $75.3 million, representing 23% of total revenue. Curaleaf continued to build its cash reserves, finishing the quarter with $118.1 million in cash after generating a free cash flow of $33.4 million from continuing operations.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.