Investing in the cannabis sector can seem risky these days, as the Horizons Marijuana Life Sciences ETF has plummeted more than 50% in just one year, while the S&P 500 has risen by 13%.
But if you’re willing to stick with the cannabis industry for the long haul, there could be some incredible opportunities to buy some promising stocks right now.
30, 2021, sales of $132.3 million were up 144% year over year, and its adjusted earnings before interest, taxes, depreciation and amortization profit of $31 million meant its bottom line was an impressive 23% of sales.
In April 2020, the early stages of the pandemic, it launched a virtual shopping experience where “on-site experts” would help customers shop from the convenience of their own home.
At a price-to-sales multiple of just over 2, it’s also slightly cheaper than more popular stocks like Curaleaf Holdings or Trulieve Cannabis, which trade at more than three times their revenue.
The company opened that location in November 2021, and with many baseball games and other events nearby, it has the potential to draw in lots of customers.
It says it’s “where the pros go to grow,” selling grow lights, tents, water pumps, and many other related things growers require.
The company released its fourth-quarter earnings earlier this month, reporting that sales of $90.6 million for the last three months of the year grew by 46% from the prior-year period.
Investors may be uninspired about the company’s projections for 2022, which include a sales forecast where the top line will be between $415 million and $445 million, meaning that it could potentially be lower than the $422.5 million GrowGeneration reported in all of 2021.
The positive is that the company is focused on improving its bottom line.
GrowGeneration is facing some headwinds, but as the industry normalizes and with more states potentially legalizing marijuana in the future, there will still be plenty of growth opportunities ahead for the company.
Although GrowGeneration’s 84% decline in one year is troubling, the one thing I never liked about the stock was its hefty valuation, as it was largely overpriced to begin with; its P/S ratio has gone from more than 12 a year ago to now being at just over 1.