The marijuana stocks we’ve dug up have seen average revenue growth of 266% year over year
SmallCapPower | October 17, 2019: One year ago, on October 17, 2018, Canada became the first G7 country to legalize the recreational use of cannabis. A lot has changed since, Canadian cultivators and U.S. multi-state-operators (MSOs) have been in a six-month bear market and continue to be under downward pressure. There are a number of factors weighing on these stocks, including: 1) scandals and management turnover in the industry; 2) cannabis companies are finding it hard to compete with black-market prices; and 3) the recent vaping epidemic with the Center for Disease Control (CDC) reporting 1,300 cases, and 26 deaths related to vaping. Amongst all the turmoil there have been some companies that have managed to rapidly grow sales. Today we have weeded out four marijuana stocks that have seen impressive year-over-year revenue growth.
*Share price data as at October 15, 2019, data obtained from S&P Capital IQ
Halo Labs Inc. (NEO:HALO) – $0.275
Halo Labs is an Oregon-based cannabis extraction company with expertise in cultivation, processing, and distribution. On December 12, 2018, Halo Labs announced a letter of intent to enter into a partnership with Bophelo Bioscience and Wellness Pty Ltd, a cannabis company based in Lesotho, South Africa. Under the agreement, Halo Labs is to provide management services and expertise to build, design, and operate cGAP cultivation and cGMP extraction facilities in exchange for a 20% equity position in Bophelo Bioscience, as well as a royalty on future extracted products. On June 17, 2019, Halo entered into an agreement to acquire the remaining shares of Bophelo Bioscience for $24.7M. Recently, in September, Halo announced it had been approved for a C$10.0M credit facility and, on October 11, 2019, announced it had closed a C$4.0M private placement. Halo intends to drawdown its credit facility by $1.0M for working capital purposes and the funds from the private placement for continued expansion efforts in California.
- Market Cap: $61.3M
- 30-Day Return: -9.9%
- YTD-Return: -8.5%
- 30-Day Average Trading Volume: 492,850
- Q2/19 Revenue: $9.6M
- Q2/18 Revenue: $2.0M
- YoY Revenue Growth: +380%
Trulieve Cannabis Corp. (CSE:TRUL) – $13.21
Trulieve is a seed-to-sale operation in the state of Florida, with plans to acquire additional facilities in Massachusetts, California, and Connecticut. The Company claims to be the largest, fully-licensed medical cannabis company in the State of Florida, with over 1.6M sq. ft of cultivation space yielding ~55,000 kg annually. Trulieve is in the process of constructing an additional 72,000 sq. ft, which would increase production capacity by 10,000 kg. TRUL also has a network of 37 dispensaries selling branded products, with a total of 240 stock keeping units (SKUs) and over 203,600 patients as of August 31, 2019. Trulieve is anticipating having 44 dispensaries open by year end. On October 2, 2019, TRUL announced the opening of its 37th dispensary in Cape Coral, Florida and is expecting to offer cannabis products in a variety of delivery methods, including smokable cannabis, concentrates, tinctures, topical creams, and vaporizers.
- Market Cap: $1,503.0M
- 30-Day Return: +8.1%
- YTD-Return: +20.1%
- 30-Day Average Trading Volume: 289,460
- Q2/19 Revenue: $57.9M
- Q2/18 Revenue: $23.3M
- YoY Revenue Growth: +149%
Cresco Labs Inc. (CSE:CL) – $8.31
Cresco Labs focuses primarily on cultivating medical-grade cannabis, manufacturing medical cannabis products, and distributing products to medical patients and recreational users. Currently, the Company has one of the largest footprints in the U.S., with operations in 11 states, 23 production facilities, 56 retail licenses and 22 operational dispensaries. On October 8, 2019, the Company announced the closing of its acquisition of 100% membership interests in Gloucester Street Capital, the parent entity of Valley Agriceuticals. Valley Agriceuticlas has one of the 10 vertically-integrated cannabis business licenses in the State of New York. On October 16, 2019, Cresco announced that it had received regulatory approval for five adult use dispensaries in the state of Illinois, were recreational sales are expected to begin on January 1, 2020.
- Market Cap: $568.2M
- 30-Day Return: -11.6%
- YTD-Return: -8.3%
- 30-Day Average Trading Volume: 466,080
- Q2/19 Revenue: $29.1M
- Q2/18 Revenue: $8.1M
- YoY Revenue Growth: +260%
Planet 13 Holdings Inc. (CSE:PLTH) – $2.21
Planet 13 Holdings cultivates, produces, and distributes medical and recreational cannabis in Nevada. The Company owns the world’s largest cannabis store, the Planet 13 Superstore. This store acts as a showcase for a growing portfolio of branded products, including vapes, edibles, pre-rolls, and concentrates. Planet 13’s ambition is to operate high-end dispensaries in Tier-One markets nationwide and to sell its brands in both its branded stores and wholesale. The Company’s brands include Medizin, Trendi, and Leaf & Vine. On August 29, 2019, PLTH reported Q2/19 financial results, highlighted by $16.5M in revenue, a net loss of $1.0M and adjusted EBITDA of $2.7M. Planet 13 is planning on opening a 15,000 sq. ft expansion to its Superstore during Q3/19, which will include a customer-facing production facility, a restaurant, a coffee shop, and event space.
- Market Cap: $302.0M
- 30-Day Return: -13.3%
- YTD-Return: +48.3%
- 30-Day Average Trading Volume: 177,810
- Q2/19 Revenue: $16.5M
- Q2/18 Revenue: $4.4M
- YoY Revenue Growth: +275%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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