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3 key stocks from the cannabis industry

Do Kwik
27. 2. 2024
4 min read

The cannabis industry has seen solid growth in recent years due to changes in legislation and increasing demand for cannabis products. Key factors in this growth include the legalisation of cannabis in some countries, including some US states, and the growing recognition of the medicinal properties of cannabis. Which 3 companies are at the cutting edge of the cannabis industry and offer investors interesting opportunities for portfolio diversification?

These companies, which have long thrived in other areas of the industry, are now actively investing in the cannabis sector. Their experience and financial stability allow them to successfully expand into this growing market. These decisions open up new opportunities not only for the companies themselves, but also for us as investors.

ScottsMiracle-Gro $SMG+1.0%

ScottsMiracle-Gro, with its long history in the horticulture industry, has become a major player in the cannabis industry. Since its founding in 1868, it has built a a solid position as a leading supplier of lawn and garden products. Today, with its vast product range including fertilizers and other gardening supplies, it generates annual sales in excess of USD 3 billion.

One of key ingredients of its success is its Hawthorne Gardening subsidiary, which specialises in growing products. Since 2014, when the acquisition of Hawthorne Gardening, it has become one of the leading suppliers of cannabis cultivation products. With the growing trend of cannabis cultivation, the company has annual sales of around USD 500 million and continues to expand into new markets.

SMG
$68.58 $0.69 +1.02%

Although the company faces challenges related to rising commodity prices and changing conditions, ScottsMiracle-Gro maintains a strong position in both the horticulture and cannabis industries. Through strategic diversification and the strategic acquisition of Hawthorne Gardening, the company is better able to respond to the diverse needs of the marketplace and maximize its potential for growth and success.

Innovative Industrial Properties $IIPR+2.2%

Innovative Industrial Properties an American company that excels in providing innovative solutions for the cannabis industry. Its primary focus is purchasing properties from medical cannabis operators and then leasing those properties back to those operators. This business model allows cannabis companies to raise the necessary capital for their development while IIPR secures astable income from rental agreements.

IIPR
$98.63 $2.13 +2.21%
Fair Price: $448.50
Alvxwr: 5.43%
Undervalued
Overvalued
Dostupné pouze členům Bulios Black

As a real estate investment trust (REIT), IIPR is required to return to its shareholders at least 90 % of its taxable income to its shareholders. This model therefore allows investors to receive stable dividends from operating real estate in the cannabis industry. Since its founding in 2016, IIPR has grown rapidly and today owns and operates more than 90 properties in various parts of the US. Its extensive portfolio includes both cultivation farms and distribution centers, giving it a robust and diversified source of revenue.

IIPR
$98.63 $2.13 +2.21%

In 2023, IIP's total revenues will reach 309 million USD 309 million, an increase of 12 % compared to the previous year's revenue of 276 million USD 276. This revenue growth confirms the position of this stable real estate player in the cannabis industry.

GrowGeneration $GRWG+8.8%

GrowGeneration, currently operates more than 60 stores in 18 U.S. states. The company's network of stores offers a wide range of products and services related to cannabis cultivation, such as various systems, fertilizers and other gardening supplies. GrowGeneration has seen a growth spurt in recent years strong financial results in recent years.

With its extensive distribution chain and expertise, the company has the potential to become very important in the cannabis industry. Despite short-term challenges such as the oversupply of cannabis in the US, it has GrowGeneration has solid foundations and long-term prospects.

GRWG
$2.46 $0.20 +8.85%

GrowGeneration focuses not only on market trends, but also on innovation in technologies and cultivation methods cannabis. This enables it to offer its customers state-of-the-art products and services. Its business strategy includes the development of new outlets, the acquisition of competitors and providing comprehensive cannabis cultivation solutions. GrowGeneration also plans to invest in additional expansion.

Disclaimer: There is a lot of inspiration to be found on Bulios, but stock selection and portfolio construction is up to you, so always do thorough self-analysis.

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