3 Pot Stocks I’d Buy Before Even Considering Sundial Growers

Sundial Growers (NASDAQ:SNDL) is an intriguing stock. Even though there are question marks surrounding the company’s future and its growth numbers aren’t good at all, its shares are up 115% this year — significantly outperforming the Horizons Marijuana Life Sciences ETF, which is up 55%. And while I can definitely see scenarios where Sundial’s stock could continue rising in value (and they all relate to M&A activity), I can also see many more where its share price crashes…

It’s a risky investment, and rather than speculate on its future, there are three other pot stocks I would buy before even giving Sundial serious consideration. Planet 13 (OTC:PLNH.F)Trulieve Cannabis (OTC:TCNNF), and Fire & Flower (OTC:FFLW.F) are all stocks that are much better and safer buys for cannabis investors.

1. Planet 13

One of the reasons I love Planet 13 is for the simplicity of its operations. The company isn’t going out and trying to expand all over the world and acquiring businesses left and right. Instead, Planet 13 has been carefully building the largest dispensary on the planet in Las Vegas (“SuperStore”), and slowly moving out to other markets. That is not only a safer model, but also a more cost-effective one.

The company released its year-end results on April 5, and its sales of $70.5 million for all of 2020 grew 10.8% from the previous year. Its adjusted EBITDA profit of $8.9 million was down 12.7% from a year ago in what was still a strong performance for the cannabis company, despite shutdowns and lockdowns limiting the number of people who could visit its Las Vegas-based dispensary.

And co-CEO Larry Scheffler is optimistic that things will be even better moving forward, noting that the company generated record monthly revenue in March which totaled $9.7 million. Planet 13 also said its new SuperStore location in California is still on schedule to open this July, potentially setting up 2021 to be a blowout year for the business.

Year to date, shares of the pot stock are up 21%, but there is a lot more upside here once the economy recovers from the pandemic and both of Planet 13’s SuperStore locations are up and running at full capacity.

2. Trulieve Cannabis

Trulieve has been much more aggressive on expansion than Planet 13, but a lot of that has also been within just one state. As of March 18, it had 83 locations across the country — 78 of which were in its home state of Florida.

Focusing on one market makes it easier to keep costs down and manage supply. A company can’t transport pot across state lines since marijuana remains illegal at the federal level. And that means expansion into another state is going to involve either an acquisition or setting up operations there from scratch — typically companies go with the former, which can be very costly. But to tap into more growth opportunities, out-of-state expansion is inevitable, and Trulieve has been working on that of late.

On April 5, it announced it would acquire three dispensaries from…

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