Are These The Best Cannabis Stocks To Watch Before October?
The cannabis industry has been on a wild ride since 2019, and the volatility we see this year came as no surprise to many. While not all cannabis stocks are equal, some have managed to generate excellent returns for their shareholders this year. The strong trend of growing sales in the pot industry has generated a lot of optimism. Many investors are looking for top marijuana stocks to buy amid the strong surge in pot sales. Of course, investors would be wise to practice caution when looking at headlines to avoid buying into rumors. For instance, some investors apparently thought that Aurora Cannabis (ACB Stock Report) would report some good news in its fourth quarter of 2020. But the truth is, there wasn’t any good news. As a result, the stock is slumping today.
Although we can’t take the volatility out of cannabis stocks, we could improve our odds by starting to look at profitable cannabis stocks we have in the stock market today. But before we start diving in, there is also another potential catalyst. It will provide a nice setup for the industry to rebound, and that is the U.S. presidential election.
Why The November Election Could Be Huge For Top Cannabis Stocks
With the U.S. presidential election just less than two months away, investors are paying close attention to top pot stocks in the market. With Joe Biden leading the 2020 US election polls, marijuana stock investors are beginning to feel more hopeful about the prospects of the industry.
Instead of outright federal legalization, the Biden administration will pursue decriminalization instead. This would leave the issue of legalization to individual states, many of which have existing infrastructures for turn-key growth. The Senate race is of particular importance as that’s been the bottleneck for the bulls the last few years. Should the initiative work in favour of the industry, a Biden win should be huge for marijuana stocks investors. In any case, cannabis stocks with a strong profitability record would still be doing well regardless of who wins this November.
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Top Pot Stocks To Watch Before October 2020: Innovative Industrial Properties
First, up the list, Innovative Industrial Properties (IIPR Stock Report) is a marijuana-focused real estate investment trust (REIT). The company buys properties from medical cannabis operators and then leases those properties back to the operators. Yup, I know what you are thinking. This isn’t exactly a pot stock. But bear with me here. Those leases are typically between 10 to 20 years. As a result, IIP is able to collect rental income. It can also pass along annual rental increases to beat inflation. Besides, IIP charges a property management fee which is 1.5% of a property’s base rental rate. The company has seen decent growth due to new asset acquisitions.
If you like companies with simple and strong business models, IIP stock would be a perfect fit for you. Judging from the performance of the REIT, it could potentially double in value a few years down the road. Don’t believe me?
Take a look at the historical price change since the beginning of 2018. What IIP has to do is to do what it has been doing, which is reinvesting cash into new properties. Recall that the Fed intends to keep interest rates at a dovish level through 2023. This means that IIP’s borrowing costs will remain low, fully taking advantage of the cheap money for acquisitions.
Top Pot Stocks To Watch Before October 2020: Trulieve Cannabis
If you are looking for one of the most profitable cannabis stocks in North America, Trulieve Cannabis (TCNNF Stock Report) should be on your list of best pot stocks to buy. Recently, the company reported that it will be venturing in Pennsylvania with a pair of acquisitions, giving its first assets in that state. The first is PurePenn and Pioneer Leasing & Consulting, a cannabis producer. The other is dispensary operator Keystone Relief Centers.
From its most recent quarter results, Trulieve reported $120.8 million in net sales, representing a 109% improvement from the prior-year period. The company’s massive success continues to center on the Florida market. The company is absolutely firing on all cylinders in its home market. According to the company’s own estimates, Truelieve controls 51% of Florida’s medical marijuana sales. But it’s not just Trulieve’s market share that’s impressive.
Despite opening 55 out of 57 dispensaries in Florida, Trulieve has been able to keep its marketing and operating expenses reasonably low. But the question here is, can Truelieve replicate its success outside the Sunshine State? Should the company indeed be successful in expanding its operations outside Florida, TCNNF stock would be one of the best pot stocks to buy today.
Top Pot Stocks To Watch Before October 2020: Green Thumb Industries
Green Thumb Industries Inc. (GTBIF Stock Report) is a cannabis stock that has shown a great deal of potential in the past few years. Because it is based in the U.S., the company is not subject to the ups and downs of the Canadian cannabis industry.
Green Thumb has made the astute move of investing in its home state of Illinois. The state made recreational marijuana legal in January. During the first month, cannabis sales in the state were $39.2 million. The number soon rose quickly to $63 million by August.
In addition, GTBIF stock also posted an adjusted EBITDA margin of around 30%. With a market cap at around $3 billion as of mid-September, Green Thumb Industries is without a doubt one of the largest operators in the cannabis industry. Because it has consistently grown over the past few years, many investors believe in the future of the company. For that reason, it remains a top cannabis stock to watch.