The cannabis industry is a very interesting portion of the stock market. A few years ago, cannabis stocks exploded in popularity due to investors wanting to get a piece of the next big thing. But over time, interest in these companies has faded due to a number of industry-wide legislative hurdles. Curaleaf Holdings (OTC:CURLF), the largest cannabis company by market cap share price, has fallen by 80% since its all-time high of nearly $17 per share in early 2021.
The biggest issue plaguing marijuana companies is the failure of the SAFE Banking Act to make it through Congress. That means banks aren’t legally allowed to work with cannabis companies due to the fact that marijuana is still an illicit substance, despite being legal in many states. These cannabis companies have to find other ways to acquire capital for business activities, which significantly stunts their overall potential.
Investing in cannabis companies is somewhat speculative, but they also offer an exciting opportunity in that most of these companies are trading at historic lows because of regulatory pressure. But, with more and more U.S. states legalizing marijuana use and the possible positive regulatory outlook for the industry in the future, investing in cannabis companies may be a game changer from now on.
Cresco Labs (CRLBF)
Cresco Labs (OTC:CRLBF) is based out of Chicago, Illinois, and they produce, distribute, and sell retail and medical cannabis products. The company operates 68 dispensaries under its Sunnyside brand in 10 different states. The company has multiple other products, such as High Supply, which offers concentrates, pre-rolls, vape pens and Good News — a cannabis gummy brand. Plus, its Remedi brand offers tinctures and capsules. The company trades on the Canadian Securities Exchange.
In late May, the company released its first quarter results in which the company stated a decrease in total revenue of 9% and an expanded net loss increase of 17% compared to the previous year.
Cresco Labs has recently opened new retail Sunnyside locations in Florida and Pennsylvania. Over the last couple of months, Cresco Labs has been trying to put the necessary steps in place to acquire Columbia Care (OTC:CCHWF), another cannabis product manufacturer located in New York, New York. Cresco Labs announced in June that the planned acquisition was at a standstill due to Cresco Labs needing help securing all the necessary regulatory approvals.
Curaleaf Holdings (CURLF)
Curaleaf Holdings is located in New York, New York, and they cultivate, manufacture and distribute retail and wholesale cannabis products. They operate in 19 states and have 152 dispensary locations. They sell hemp, concentrates, topical lotion, and edible products.
In its most recent earnings report, net revenue increased by 14% year-over-year, and net loss expanded by 49%. That was due to reduced gross margins from an overall decrease in product prices. Curaleaf Holdings plans to release its second-quarter earnings results on August 9.
In July, Curaleaf launched a standalone mobile app that allows customers to purchase cannabis products. They also recently announced they opened three new dispensaries in Florida and unveiled their new product JAWS a flavored edible product.
Green Thumb Industries (GTBIF)
Green Thumb Industries (OTC:GTBIF), located in Chicago, Illinois the company sells cannabis products for a wide range of uses from brands such as Beboe, Dogwalkers, Good Green, and RYTHM. Similar to the other companies mentioned, they offer products like tinctures, cannabis flowers, concentrates, vapes, and capsules.
On its most recent earnings releases, the company reported an increase in overall revenue of 2%. The company also stated it had earnings per share (EPS) of $0.04 compared to $0.12 in the first quarter of 2022.
Within the first quarter, two RISE Dispensary locations were added in Minnesota and Pennsylvania. RISE Dispensary is a cannabis retail chain owned by Green Thumb Industries.
On the date of publication, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
