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Most cannabis stocks are available at a bargain rate now, but in my opinion, these three are the right ones to buy and hold for another decade.
The combined company’s quarterly results have been quite impressive since the completion of the merger in May 2021.
Despite an early mover advantage in the Canadian medical cannabis market, revenue increased by 27% generating just $7.9 million for three months ended and $16.3 million six months ended November 30, 2021.
Among all the other benefits of a merger, cost synergies are the reduction in costs made by using each company’s efficiencies to generate profits.
Management is confident that Tilray will easily cross its original target of $80 million ahead of schedule and could also generate an additional $20 million in fiscal 2023.
Only the strong will survive.” The company also plans to go aggressive with its growth and marketing strategy and new product portfolio.
But the company operates 131 facilities, 99 of which are retail stores, in key cannabis markets such as Massachusetts, Ohio, Pennsylvania, Illinois, Maryland, and Virginia.
This strategy has helped it generate $396 million in revenue over its last four reported quarters.
2021 revenue could land in the range of $470 million to $485 million, adjusted EBITDA in the range of $85 million to $95 million, and its adjusted gross profit margin could be about 46%.
The Illinois-based pot company Cresco Labs is also a smaller company by size, with a market cap of just $1.7 billion, but it’s still in much better shape.
The company is not profitable yet, but with consistent revenue and EBITDA growth, it won’t be far along when it starts seeing green in its bottom line.
Cresco benefited from its home state of Illinois , which legalized recreational cannabis in 2020.
Cresco’s management expects fourth-quarter revenue in the range of $235 million to $245 million, an adjusted EBITDA margin of 30% for the full year, and a gross profit margin above 50% for the rest of 2021.
That said, the marijuana sector is still risky, so I would advise starting with a small investment in pot stocks — along with a diversified portfolio of other growth stocks — and holding them for a decade or more to earn some bountiful returns.