Despite a topsy-turvy year for the broader market, marijuana stocks were quite the buzz on Wall Street in 2020. Slowly but surely, we’ve watching cannabis grow into a legitimate industry…
In Canada, the opening of new dispensaries is easing some of the early stage bottlenecks that plagued the pot industry. Meanwhile, in the U.S., a total of 36 states have now given the green light to medical marijuana, 15 of which also allow for adult-use consumption and/or retail sale.
This burgeoning industry has given rise to 10 marijuana stocks with at least a $2 billion valuation. Here’s how these industry titans rank as we enter 2021.
1. Canopy Growth: $9.18 billion
As has been the case for years, Canadian licensed producer Canopy Growth (NASDAQ:CGC) is the largest pot stock in the world — although it’s lost its large-cap status. Canopy’s mammoth cash pile, courtesy of multiple direct and indirect equity investments from spirits giant Constellation Brands, has been primarily responsible for buoying the company’s valuation. On an operating basis, former Constellation CFO and now Canopy CEO David Klein has been working overtime to cut costs. Despite leading the industry in market cap, there’s still a lot of work to be done to get this company anywhere near recurring profitability.
2. Curaleaf Holdings: $7.92 billion
Multistate operator (MSO) Curaleaf Holdings (OTC:CURLF) is the unquestioned largest pure-play pot stock in the United States. Curaleaf completed two major acquisitions last year, scooping up Cura Partners, which owned the popular Select brand of cannabis products, and buying privately held MSO Grassroots. Today, Curaleaf has more than 90 operational dispensaries, holds over 130 dispensary licenses, and has a presence in 23 states. Wall Street expects Curaleaf to become the first weed stock to hit $1 billion in annual sales.
3. Green Thumb Industries: $5.21 billion
U.S. MSO Green Thumb Industries (OTC:GTBIF) enters 2020 sporting a market cap north of $5 billion. It has 50 operational dispensaries, but holds enough licenses to open 96 retail locations in 12 states. Green Thumb’s success can be attributed to its market selectivity and the fact that two-thirds of its sales are generated from derivatives (edibles, vapes, infused beverages, concentrates, and topicals). Derivatives yield substantially juicier margins than dried cannabis flower, which’ll push Green Thumb to recurring profitability before many of its peers.
4. Innovative Industrial Properties: $4.06 billion
Cannabis-focused real estate investment trust (REIT) Innovative Industrial Properties (NYSE:IIPR) enters the new year having topped a $4 billion valuation. Innovative Industrial Properties is the most profitable pure-play pot stock on a per-share basis (say that three times fast) and has aggressively acquired cultivation and processing assets over the past two years. In particular, the lack of cannabis banking reform at the federal level in the U.S. has allowed IIP’s sale-leaseback program to shine. Look for 2021 to be another year of exceptional growth.
5. Trulieve Cannabis: $3.71 billion
Whereas IIP is the most profitable marijuana stock on a per-share basis, MSO Trulieve Cannabis (OTC:TCNNF) is the most nominally profitable pot stock. Trulieve’s growth is the result of its laser focus on Florida’s medical marijuana market. It ended 2020 with 75 operational dispensaries nationwide, 70 of which are…
Continue reading at THE MOTLEY FOOL