Cannabis Stocks: High Growth At Low Prices

Cannabis stocks had a rough 2018, 2019, and most of 2020. However, it looks like the bear market may finally be ending now.

In the last two months, cannabis stocks have surged higher. The largest cannabis exchange-traded fund (ETF) by assets — the ETFMG Alternative Harvest ETF (MJ) — rose from around $11.50 at the beginning of November 2020 to around $19.40 today. However, the MJ ETF is still way off its all-time highs of September 2018, when it briefly traded at more than $40 per share.

I think this new cannabis bull market still has serious potential to run. The primary reason is simple — growth remains stellar.

Neon blue on blue cannabis leaf

Incredible Growth Numbers

The cannabis industry continues to put up big growth numbers. The largest player in Canada — Canopy Growth Corporation — grew revenue 77% year-over-year in its latest quarter. That’s impressive for such a large and mature company.

Here in the U.S., legal cannabis sales are estimated to have increased 40% from 2019 to 2020. And top cannabis firms are putting up huge year-over-year (YoY) numbers. Multi-state operator (MSO) and distributor Cresco Labs saw revenue increase 326% YoY to $153 million in its most recent earnings report. Curaleaf, another vertically-integrated MSO, saw revenue jump 197% YoY to $182 million in its latest quarterly earnings release. And major U.S. player Trulieve saw sales rise 92% YoY to $132 million. That’s an impressive set of gains from three significant firms.

The once-humble legal marijuana industry is turning into a multi-billion dollar giant. And strong growth is projected for years to come.

Growth + Value

Everyone in the world seems to be laser-focused on technology stocks these days. And sure, there’s some nice growth to be found there. It’s not uncommon to see large tech stocks still growing at 20%-to-30% per year. And a few hot public tech companies are even growing 70% or more a year.

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