3 Smoking-Hot Opportunities in Cannabis Stocks


  • Here are just a few of the top cannabis stocks to buy and hold today.
  • Green Thumb Industries (GTBIF): A few analysts just raised their price targets on the stock, with a buy rating.
  • Innovative Industrial Properties (IIPR): IIPR has a yield of 7.46% at the moment. That’s after the company declared its recent dividend of $1.82 a share.
  • ETFMG Alternative Harvest ETF (MJ): With patience, I’d like to see the MJ ETF rally back to $10.
Cannabis stocks - 3 Smoking-Hot Opportunities in Cannabis Stocks

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Cannabis may be one of the more controversial investment topics. But with more states legalizing its use, a fight to change its Schedule 1 status, and Kamala Harris saying, “we need to legalize marijuana,” related cannabis stocks could see higher highs.

According to Marijuana Moment, “Kamala Harris called for the legalization of marijuana — signaling a possible shift in the administration’s platform heading into the November elections. Harris told a room of cannabis pardon recipients at the White House on Friday that ‘we need to legalize marijuana,’ a participant in the meeting has revealed.”

In addition, about 70% of U.S. adults say cannabis should be legal, according to a Gallup poll. Nearly 29%, however, say it should not be legal at all. In addition, as noted by Forbes.com, “For the second consecutive year, majority support for legalization is evident across all major subgroups, including age, political party, and ideology, according to Gallup’s results.”

Also, as we near the 2024 presidential election, we could hear more about potential legalization. All because it could help boost chances for success for any candidate that mentions the possibility. That being said, investors may want to jump into cannabis stocks, such as:

Green Thumb Industries (GTBIF)

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The last time I mentioned Green Thumb Industries (OTCMKTS:GTBIF), it traded at around $11 on Jan. 10. Today, after testing a high of $14.30, it’s now at $13.45.

While the company missed its fourth-quarter EPS by four cents, revenue was up 7.3% year over year and beat by $9.86 million.

Even better, according to the company’s founder, chairman, and CEO Ben Kovler, “We delivered a strong fourth quarter, including record revenue of $278 million, record Adjusted EBITDA of $91 million, and full-year 2023 cash flow from operations of $225 million — all the while investing over $200 million in capex to fuel future growth. We ended the year with a strong balance sheet including $162 million in cash, net of $65 million returned to shareholders via share buybacks and debt repurchases.”

Analysts seem to like GTBIF, too. Needham, for example, raised its price target to $24, with a buy rating. Roth MKM raised its price target to $21, with a buy rating. And Craig-Hallum raised its price target to $16, with a buy rating, as well.

Innovative Industrial Properties (IIPR)

A close-up shot of a marijuana growhouse. cannabis trends
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On Jan. 10, I also highlighted an opportunity in Innovative Industrial Properties (NYSE:IIPR), a real estate investment trust (REIT). At the time, IIPR traded at around $94. It’s now up to $97.68, and could easily push higher if we see further federal-level action on cannabis.

In fact, I’d like to see it closer to $105 as we near the presidential election. Making it even more attractive, IIPR has a yield of 7.46% at the moment. That’s after the company declared its recent dividend of $1.82 a share, payable Apr. 15 to shareholders of record as of Mar. 28.

Earnings haven’t been too shabby either. In its most recent quarter, its funds from operations (FFO) was $2.07, which beat by five cents. Revenues of $79.16 million — up 12.3% year over year — beat by $2.68 million. Better, rent collection for its operating portfolio was 100% for the fourth quarter. I should also note IIPR’s operating portfolio is 95.8% leased, as triple net.

ETFMG Alternative Harvest ETF (MJ)

marijuana stocks Hand gently holding rich soil for his marijuana plants. Cannabis Stocks
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On Jan. 10, I also mentioned the ETFMG Alternative Harvest ETF (NYSEARCA:MJ), as it traded at around $3.20. After testing a high of nearly $4, it’s back to $3.59. From here, I’d like to see it initially retest $4.

With an expense ratio of 0.75%, the ETF tracks the performance of cannabis companies benefiting from global medicinal and recreational use. It’s another hot ETF that should benefit from state legalization, and the potential for federal legalization down the road. 

Helping, some of its top holdings include Tilray (NASDAQ:TLRY), Innovative Industrial, SNDL (NASDAQ:SNDL), Cronos Group (NASDAQ:CRON), Canopy Growth (NASDAQ:CGC), and AFC Gamma (NASDAQ:AFCG).

With cannabis stocks, one of my favorite ways to gain broad exposure at a lower cost is with an ETF like this one. With patience, I’d like to see the MJ ETF rally back to $10, and eventually back above $30. But again, it all depends on what happens with potential federal legalization.

On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

Article printed from InvestorPlace Media, https://investorplace.com/2024/03/3-smoking-hot-opportunities-in-cannabis-stocks/.

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