CannTrust (CTST) — our medical marijuana stock — certainly had an eventful few weeks. So let’s start with the good news, explains Eddy Elfenbein, editor of Growth Stock Advisor.

We added the stock in the April issue of our newsletter — just after the legal weed folks reported disappointing numbers for Q4. The shares also got dinged after the company issued a secondary stock offering.

Frankly, this was a bad move. CannTrust got greedy and the market smacked them for it. They’re still a young company and they made a mistake. The silver lining is that they raised $170 million to finance their expansion.

After the stock plunged 19%, we made our move. Indeed in our May issue, we rated CannTrust our #1 stock. Then, on May 14, CannTrust reported very good first-quarter results. For Q1, Wall Street had been expecting a loss of five cents per share. Instead, CannTrust reported a profit of $9.5 million, or 12 cents per share.

Digging into the report, the numbers are solid. Quarterly revenue rose 115% to $12.5 million. Gross profit margins are running at a healthy 46%. CannTrust’s active patient count rose 70% to 68,000, and harvested production rose five-fold to 9,400 kilograms.

Just to give you an idea of the company’s plans, by next year, they’re aiming to have total production of 200,000 to 300,000 kilograms.

The earnings news tells us that CannTrust is on its way to becoming the leader in medical cannabis. In fact, it’s more accurate to think of CannTrust as an emerging healthcare company. They’re just getting a head start on the rest of the world.

Bear in mind that CannTrust is operating in an embryonic industry. As such, it’s subject to unusual volatility.

That’s just the nature of investing.

Remember the Internet stock craze of 20 years ago? Well, CannTrust is in a lot better financial shape than nearly all those stocks.This earnings report tells you why this is our top stock idea. Expect more great results from CannTrust.

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