The next decade could have investors seeing green — and I’m not just talking about money. Quietly, the North American cannabis industry is growing into a giant. According to a forecast from New Frontier Data, U.S. weed sales are expected to grow by 21% annually between 2019 and 2025. This growth rate works out to a doubling in total sales every 3.4 years, and should result in $41.5 billion in annual sales by mid-decade…
Meanwhile, the Canadian pot industry is finally maturing. After more than two years, supply chain issues are abating as key provinces open new dispensaries. Cannabis analytics company BDSA expects Canadian marijuana sales to jump from $2.6 billion in 2020 to $6.4 billion by 2026.
The industry is ripe for investment, but only a handful of cannabis stocks have the long-term potential to make investors marijuana millionaires. If you’re looking to get rich from cannabis, here are the three pot stocks to buy.
The marijuana stock I’m most convinced will make long-term investors millionaires is U.S. multistate operator (MSO) Cresco Labs (OTC:CRLBF). Cresco has a two-pronged growth strategy that I believe will be wildly successful.
To begin with, Cresco has its retail operations. It ended 2020 with 19 operating locations, but recently closed a deal where it acquired four Ohio dispensaries, and has two additional acquisitions pending. In short, Cresco’s roughly two dozen open dispensaries today should soon be north of 30.
What’s interesting about Cresco’s retail focus is that it’s chosen a number of markets where retail license issuance is limited (e.g., Illinois and Ohio). By maximizing its retail presence in Illinois and Ohio, Cresco is marginalizing some of its competition, but still staying focused on states that offer billion-dollar annual sales potential.
The even bigger star for Cresco Labs is its industry-leading wholesale segment. Even though wholesale cannabis produces lower operating margins than retail, the company has more than enough wholesale volume for lower margins to be easily overlooked. That’s because it holds a highly coveted cannabis distribution license in the most lucrative marijuana market in the world: California. Being able to place proprietary and third-party pot products into more than 575 dispensaries throughout the Golden State should allow Cresco to sustain one of the highest growth rates within the pot industry over the next five years.
This is a company that should turn to the corner to recurring profitability this year, yet is valued at less than three times Wall Street’s projected sales. That’s far too inexpensive for the premier wholesale cannabis company.
While I feel most confident in Cresco, the cannabis stock that offers the highest potential ceiling is small-cap MSO Jushi Holdings (OTC:JUSHF). If things go very right, it could be a 10-bagger this decade.
What stands out about Jushi is the way it approaches its expansion. Despite having a presence in…
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