3 Marijuana Stocks To Avoid In June

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The prospects for the cannabis industry have never looked better in the United States. With 17 states, two territories, and Washington, D.C., have already legalized recreational cannabis and 36 states and two territories allowing medical marijuana, this year could certainly be revolutionary for the industry. And now, with the reintroduction of the MORE Act by Judiciary Committee chairman Jerry Nadler, which proposes decriminalization of cannabis on a Federal level, the tension between the state and federal level regarding the legalization of cannabis is expected to end soon.

However, even though the democratically-controlled House is likely to pass the bill, the Senate is expected to be an obstacle. Republicans have previously stepped back in voting in favor of any marijuana reform measures. This disagreement in the chamber could cause a hindrance in the federal legalization process.

Amid this uncertainty, it is wise to stay away from cannabis operators that are not in a good position financially. Now with new players entering the space, the business climate for marijuana players could become even more competitive. As such, overvalued marijuana companies Curaleaf Holdings, Inc. (CURLF), Innovative Industrial Properties, Inc. (IIPR), and TerrAscend Corp. (TRSSF) with bleak financials should be avoided now.

Curaleaf Holdings, Inc. (CURLF)

CURLF is a leading provider of integrated medical and wellness cannabis in the United States. The company’s Cannabis Operations segment engages in the production and sale of cannabis through retail and wholesale channels, while the Non-Cannabis Operations segment provides cultivation, processing, and real estate leasing services. As of March 9, 2021, the company operated 101 dispensaries, 23 cultivation sites, and 30 processing sites.

This month, CURLF acquired Los Sueños Farms and its related entities, the largest outdoor grow in Colorado. The proposed transaction includes three Pueblo, Colorado outdoor cannabis grows facilities covering 66 acres of cultivation capacity, a 1,800-plant indoor grow, and two retail cannabis dispensary locations serving adult-use customers. Even though this should significantly expand CURLF’s presence in the Colorado market in the long term, it will lead to a reduction in its cash balance for the time being.

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Alpha Stockman 2 weeks ago Member's comment

I appreciate the insight!

Exactly, as a growing REIT they need to spend all of their available capital to continue improving affo, ffo, ni, and revs across the board which helps increase shareholder value and dividends!

Cannabis Stock Buyer 2 weeks ago Member's comment

I read the article and the entry for IIPR read as only positive to me. The only "negatives" they had to offer was the fact the company is spending lots of money to buy up more property and thus has greatly reduced its cash flow.

The way I see it real estate prices are only going up so good on them for buying it up now while its cheap.