Despite a turbulent year for the broader market, marijuana stocks were the buzz on Wall Street in 2020. Slowly but surely we have seen cannabis become a legitimate industry.
In Canada, the opening of new dispensaries is easing some of the early bottlenecks that plagued the kettle industry. Meanwhile, in the United States, a total of 36 states have now given the green light for medical marijuana, 15 of which also allow adult consumption and / or retail.
This booming industry has spawned 10 stocks of marijuana worth at least $ 2 billion. Here’s how these industry titans rank as we head into 2021.
1. Canopy Growth: $ 9.18 billion
As has been the case for years, a licensed Canadian producer Canopy growth (NASDAQ: CGC) is the largest pot stock in the world – although it has lost its large cap status. Canopy’s gigantic cash stack, thanks to multiple direct and indirect investments in shares of the spirits giant Constellation marks, was mainly responsible for the valuation of the company. On an operational basis, the former Constellation CFO and now Canopy CEO David Klein worked overtime to keep costs down. Although the industry leader in terms of market capitalization, there is still a lot of work to be done to bring this company close to recurring profitability.
2. Curaleaf Holdings: $ 7.92 billion
Multistate Operator (MSO) Curaleaf Fund (OTC: CURLF) is the largest undisputed pure-play pot stock in the United States. Curaleaf made two major acquisitions last year, taking over Cura Partners, which owned the famous cannabis brand Select, and buying MSO Grassroots, a private company. Today, Curaleaf has more than 90 operational dispensaries, holds over 130 dispensary licenses and is present in 23 states. Wall Street expects Curaleaf to become the first weed stock to hit $ 1 billion in annual sales.
3. Green Thumb Industries: $ 5.21 billion
US MSO Green thumb industries (OTC: GTBIF) enters 2020 with a market cap north of $ 5 billion. It has 50 operational dispensaries, but has enough licenses to open 96 outlets in 12 states. Green Thumb’s success can be attributed to its market selectivity and the fact that two-thirds of its sales are generated from derivative products (edibles, vapes, infused drinks, concentrates and topicals). Derivatives generate significantly juicier margins than dried cannabis flower, which will push Green Thumb to recurring profitability before many of its peers.
4. Innovative industrial properties: $ 4.06 billion
Cannabis-focused real estate investment trust (REIT) Innovative industrial properties (NYSE: IIPR) enters the new year after surpassing a valuation of $ 4 billion. Innovative Industrial Properties is the most profitable pure-play pot stock per share (say three times faster) and has aggressively acquired growing and processing assets over the past two years. In particular, the absence of cannabis banking reform at the federal level in the United States has allowed the IIP’s leaseback program to shine. See 2021 as another year of exceptional growth.
5. Trulieve Cannabis: $ 3.71 billion
While IIP is the most profitable marijuana stock per share, MSO Cannabis Trulieve (OTC: TCNNF) is the most profitable pot stock. Trulieve’s growth is the result of its laser focus on the medical marijuana market in Florida. It ended 2020 with 75 operational dispensaries across the country, including 70 in the Sunshine State. The statewide saturation of Trulieve has helped the company effectively grow its brand without spending a lot on marketing, and has enabled it to capture approximately half of Sunshine State’s medical weed market share.
6. GW Pharmaceuticals: $ 3.39 billion
Although his management team hates being lumped into marijuana stocks, a cannabinoid-focused drug developer GW Pharmaceuticals (NASDAQ: GWPH) will slide as the sixth largest pot stock. GW Pharmaceuticals’ fame is Epidiolex, a cannabidiol drug approved to treat two rare forms of childhood epilepsy, and its label was expanded in 2020 to also include the tuberous sclerosis complex. This year, Wall Street will be looking to push the company over to recurring profitability after a 43% increase in year-over-year sales.
7. Cronos Group: $ 2.47 billion
Aside from the growth of the canopy, Cronos Group (NASDAQ: CRON) is the only other Canadian producer authorized to appear on the list. Like Canopy, Cronos’ valuation was bolstered by its substantial cash position. In March 2019, Cronos received $ 1.8 billion from the tobacco giant Altria Group in exchange for a 45% stake in the company. This duo is expected to develop and market high margin vaping products across Canada. However, Cronos’ operating results have so far left a lot to be desired.
8. GrowGeneration: $ 2.2 billion
Hydroponic and organic gardening store chain GrowGeneration (NASDAQ: GRWG) catapulted its way into the top 10 after a colossal 881% return in 2020. GrowGen, as the company is known, operates 36 stores in 11 states, but plans to expand to 50 stores in 15 states by the end of the year. It is a company that is experiencing high double-digit organic growth as producers look to improve their performance, but has completed its expansion with nearly a dozen acquisitions since 2014. After consecutive years of sales growth triple-digit Wall Street is looking for a 54% more “modest” GrowGeneration sales increase in 2021.
9. Cresco Labs: $ 2.13 billion
Surprise! Yet another American MSO makes the list. Cresco Laboratories (OTC: CRLBF) currently has 20 operational dispensaries, 10 of which are located in the limited license state of Illinois. Lincoln Country is expected to grow into a billion dollar weed market by 2024.
Cresco also has an emerging wholesale business. The company’s acquisition of Origin House in January 2020 allowed it to place potted products in more than 575 dispensaries in California, the world’s largest marijuana market. Cresco has a good chance of achieving recurring profitability in 2021, followed by $ 1 billion in annual sales in 2022.
10. Columbia Care: $ 2 billion
Finally, another American MSO, Columbia Care (OTC: CCHWF). Previously known to focus on medical cannabis and manufacturing, Columbia Care is finding a world of additional opportunity by pivoting to include recreational pot. Columbia Care currently has 76 dispensaries open in 18 states and is primarily looking to grow through acquisitions. In September, Columbia Care acquired Colorado’s leading vertically integrated cannabis operator, The Green Solution.