Cannabis stocks are undoubtedly a booming opportunity. Many investors consider this sector as a great opportunity to invest and compare it with the artificial intelligence and robotics sector. While it is still in the early stages, there is still a lot of research in favor of this sector, such as great developments in medicine, cures for many diseases, and even in the recreational area. Of course, the ideal of trends is to invest in them in the early stages, but we must be aware of what companies are doing in this industry, how they are growing, and what they are contributing to decide to invest in them. Here, I bring you some of the best cannabis stocks that are worth analyzing. Let’s start.
Cannabis Stocks: Emerald Holding (EEX)
Emerald Holding (NYSE:EEX) is a company that excels in curating and hosting a wide array of trade shows and events across various industries. What makes this company particularly intriguing is its recent emergence as an appealing investment option, especially within the burgeoning cannabis sector.
In the second quarter of 2023, they reported an impressive surge in revenue, soaring to $86.5 million. This surge can be attributed to the resounding success of events held both in Q2 2023 and Q2 2022. However, it’s essential to note that the company did post a net loss of $8.1 million in Q2 2023, in stark contrast to the net loss of $0.7 million during the same period in 2022. Despite this, the company’s adjusted EBITDA remained robust, standing at $14.6 million in 2Q 2023.
Their financial strength is evident in several ways. They’ve extended their loan maturity date to 2026, maintaining a healthy cash balance of $204.7 million. Additionally, they have full access to a $110.0 million revolving credit facility. The company has set ambitious revenue and EBITDA targets for the full year 2023, aiming to surpass $400 million in revenue and reach $100 million in adjusted EBITDA.
Emerald’s acquisition of the Cocina Sabrosa Food & Beverage Trade Expo is a significant development. This event focuses on the Latin food and beverage sector, aligning perfectly with the company’s strategy of tapping into high-growth markets. With the Hispanic market’s substantial purchasing power and the continuous growth of the Latino food and beverage industry, this expansion move appears to be strategically sound.
Moreover, Emerald has introduced “reMind,” a media and events platform dedicated to the psychedelic sector. Recognizing the therapeutic potential of psychedelics in treating mental health issues, reMind aims to connect various stakeholders in this rapidly expanding field. The inaugural event, the Psychedelics Business Forum, is scheduled for November 15, 2022, in Las Vegas. Interestingly, this event runs parallel to the renowned MJBizCon, the world’s largest cannabis business conference, which Emerald Holding also owns.
Turning Point Brands (TPB)
Turning Point Brands (NYSE:TPB) is a company deeply involved in manufacturing, promoting, and distributing private-label consumer products. Their focus primarily lies in accessories and consumables for alternative smokers, including those containing active ingredients. What sets them apart is their involvement in the cannabis industry, making them an attractive option for investors looking to diversify their portfolios.
In the second quarter of 2023, Turning Point witnessed remarkable growth across several key areas. Their consolidated revenues grew by 2.6%, reaching $105.6 million. This growth was primarily driven by a 7.3% increase in Stoker’s product sales. Still, Creative Distribution Solutions sales did experience a slight 1.3% decline. Their gross profit also increased by 2.0%, reaching $52.5 million.
However, the most striking figures were the 83.0% surge in net earnings, totaling $9.9 million, and an 8.4% increase in adjusted net earnings, reaching $15.3 million.
Adjusted EBITDA, a critical profitability measure, also rose by 2.2% to $25.3 million. Earnings per share (EPS) displayed notable growth, with diluted EPS at $0.53 and adjusted diluted EPS at $0.79. This is a considerable improvement compared to $0.30 and $0.70, respectively, for the same period in the previous year.
It demonstrates its commitment to shareholders by declaring a regular quarterly dividend of $0.065 per common share. Shareholders can anticipate this dividend to be paid on October 6, 2023. This announcement underscores the company’s intent to provide value to its investors. Indeed, this is one of the top cannabis stocks, in my opinion.
Jazz Pharmaceuticals (JAZZ)
Jazz Pharmaceuticals (NASDAQ:JAZZ) is a pharmaceutical company that has captured the attention of investors, particularly in the cannabis market. In the second quarter of 2023, they reported total revenues of $957 million. The success of products like Xywav and Epidiolex continued to drive sales. These products witnessed remarkable increases in net sales, with Xywav surging by 39%. At the same time, Epidiolex sales grew by 15% compared to the previous year.
Thanks to effective marketing strategies, Xywav, a low-sodium drug, experienced exceptional growth. Rylaze also saw robust demand, boasting a 39% increase in net sales. Jazz will likely achieve around $1 billion in net sales within its oncology portfolio for this year, marking a significant milestone.
They have actively contributed to the field of sleep medicine. They presented data on oxybate, the active ingredient in Xywav, at the Annual Psychiatric Congress. This research is vital for individuals with sleep disorders, as it highlights improvements in sleep quality among patients with narcolepsy.
Plus, Jazz Pharmaceuticals has collaborated with the Pan-Canadian Pharmaceutical Alliance (pCPA) to expand its reach. This partnership aims to provide better access to Rylaze in Canada. This is important for patients battling acute lymphoblastic leukemia (ALL) and lymphoblastic lymphoma (LLB), which primarily affect children and young adults.
As of this writing, Gabriel Osorio-Mazzilli did not hold (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.
