A "Green Wave" for Marijuana Stocks

11/23/2020 5:00 am EST

Focus: CANNABIS

Sean Brodrick

Senior Editor, Weiss Ratings

In the recent election, a “green wave” advanced cannabis legalization across America. And that’s just one of the forces powering up pot stocks right now, asserts Sean Brodrick, growth stock expert and editor of WealthWave.

Let’s talk about the election results first. Voters in New Jersey, Arizona, Montana and South Dakota all legalized recreational cannabis.

South Dakota also approved a medicinal marijuana program on top of recreational. Meanwhile, Mississippi voters approved a purely medicinal marketplace.

That, combined with previous legalization efforts, gives us a U.S. map that looks like this:

marijuana

A total of 15 states have now legalized adult-use, recreational marijuana. Add in those states that allow medical marijuana use, and that’s a total of 36 states with some form of legal marijuana. Those states contain 70% of the U.S. population.

After years of investment, more and more U.S. cannabis multi-state operators are edging toward profitability. The better ones are already there. Here are some examples.

Grow Generation Corp. (GRWG) is a specialty garden center — catering to the pot-growing crowd — with 31 locations across 11 U.S. states. The company recently released their third-quarter earnings. Revenues rose 153% to $55 million. Earnings are projected to rise 229% this year and another 149% next year.

Green Thumb Industries Inc. (GTBIF) is headquartered in Chicago and operates in 12 states. It just reported a tremendous quarter with revenue increasing 131% to $157.1 million. Green Thumb should swing to a profit this year and profits are projected to catapult 805% in 2021.

TerrAscend Corp. (TRSSF) has vertically integrated operations in Canada, as well as Pennsylvania, California and New Jersey. It is forecast to lose money this year, then make a huge swing to profitability next year.

Then again, earnings estimates for the current quarter have ratcheted up a whopping 89% in the past four weeks, so maybe it will get to profitability sooner than later.

We've already had 50%+ gains on these stocks. And you know what? I think these stocks are going a lot higher from here. They’re riding the great green wave. Grab a board and go along for the ride.

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