With marijuana decriminalization or federal legalization looking slightly more likely under the Biden administration, investors have been piling into pot stocks to take advantage of the green Wild West. Such strong demand has bid up the prices of many reputable companies, however, making them prohibitively expensive. It’s becoming harder and harder to find sector players that are growing without having to pay too much of a premium for them…
Some of the best choices right now are Harvest Health & Recreation (OTC:HRVSF), Ayr Wellness (OTC: AYRWF), and 22nd Century Group (NYSEMKT:XXII). These three stocks have all returned between 192% and 367% over the past 12 months. Let’s look at why they could become winners for your portfolio in the future.
1. Harvest Health & Recreation
Harvest Health & Recreation is a leading marijuana grower in Arizona, which legalized recreational cannabis last November. Just this February the company’s pot sales increased by a stunning 248% compared to all of Q4 2020. It operates 15 of its 37 dispensaries in Arizona, with the rest spread out across California, Pennsylvania, Maryland, and Florida.
The company is a diversified grower, selling its flowers, vapes, concentrates, topicals, and medical marijuana in its own stores and wholesale. In 2020, Harvest Health’s revenue amounted to $231 million. This year the company is on track to achieve $380 million in sales.
Meanwhile, its stock is trading for only 2.83 times forward revenue. That is an excellent price to pay for a revenue growth rate of 64.5%. With the stock already up 274% from last year, I’d definitely grab some shares before it’s too late.
2. Ayr Wellness
Ayr Wellness is one of the most ambitious growers in the industry. Last December it paid $290 million to acquire Liberty Health Sciences, adding 31 dispensaries in Florida to its store count. By the end of the year the company expects to reach a total of 60 stores.
It also sells its products wholesale to more than 90 dispensaries across the country. At the moment, the company is seeing as many as 8,000 transactions per day across all locations, which is a massive increase over the 5,095 transactions per day in Q4 2020. Aside from the usual dried flowers and edibles, Ayr Wellness also offers the ever-lucrative cannabis-infused drinks for its customers.
What’s more, Ayr Wellness is the No.1 most profitable pot grower in the nation, with a cash-flow-from-operations margin of 23.2%. In 2020 it brought in $155.1 million in sales and…
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