The recent downward trend of pot stocks shouldn’t be a reason to give up on them. Like any other evolving industry, the marijuana sector experiences ups and downs. But the prospects of this industry are intriguing. Even without federal legalization…
the sector is flourishing in the U.S., and so are the domestic players. There are many outstanding pot stocks to choose from to earn some fruitful returns over the long term.
But my eyes are on these two that stand out. After establishing a strong presence in their respective home markets, Florida-based Trulieve Cannabis (OTC:TCNNF) and Illinois-based Green Thumb Industries (OTC:GTBIF) are all set to spread their roots in other key cannabis state markets. Let’s take a look at why these two explosive pot stocks are investors’ best bet for 2022 and beyond.
1. Trulieve Cannabis
Trulieve’s sole focus in the Florida market had investors questioning its growth. But the company was smart in strengthening its roots in its home state before planning any expansions. It operates 112 stores in Florida, dominating the medical cannabis market there. It also now operates stores in California, Massachusetts, and Connecticut. From a total of just 47 stores at the start of 2020 to a total of 160 stores nationally now, Trulieve has come a long way.
Its third-quarter results also demonstrate its exceptional performance. Q3 marked its 15th consecutive profitable quarter; net profit surged 7% to $19 million from Q3 2020. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also jumped 43% to $98 million from the year-ago period. It reported 64% year-over-year growth in net revenue for the quarter to $224 million.
As more and more states legalize marijuana, Trulieve’s financial stability will allow it to expand smoothly. Management stated in the earnings call that the company has enough cash to fund its growth initiatives. It ended its Q3 with a cash balance of $213.6 million. Regarding its debt position, the CFO noted, “We have retired $270 million of high-cost and short-term Harvest debt and $18 million of Trulieve notes payable.” Its acquisition of Arizona-based Harvest Health & Recreation (finalized in October) also strengthened Trulieve’s position in key markets of Arizona, Pennsylvania, and Maryland.
When federal legalization happens, I see Trulieve as one of the top contenders in the domestic cannabis space.
2. Green Thumb Industries
Increased traffic from 65 of its operating dispensaries drew in another exceptional quarter for Green Thumb. Total revenue surged 49% to $233.7 million from the year-ago quarter. Q3 marked Green Thumb’s fifth consecutive quarter of profitability, wherein GAAP net income of $20.8 million came in better than the net profit of $9 million in the year-ago period.
While growing revenue and profit, the company is aggressively expanding, too. It opened 13 new stores this year. On Dec. 6…
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