How are pot stocks performing in US? Here’s a look at 5 of them

Highlights

• Tilray, Inc. (NASDAQ:TLRY) and Aphria completed their merger in May 2021. The TLRY stock gave a 35.84% return YTD.
• The Chicago-based Cresco Labs Inc. (OTC:CRLBF) operates 20 cannabis facilities and 37 dispensaries in 10 states. 
• GrowGeneration Corp. (NASDAQ:GRWG) has a P/E ratio of 88.61. On Sep 15, it said it would open two new hydroponic garden centers in Los Angeles County, California.

Cannabis stocks saw considerable traction early this year, but the momentum gradually died down. At the time, several foreign cannabis companies had planned to enter the US market, encouraged by Biden’s remarks endorsing repealing a federal law banning marijuana.

However, marijuana has been legalized in 36 US states and the District of Columbia for medical or recreational use. In addition, in April this year, the House of Representatives passed a bipartisan bill to allow banks to give services to cannabis companies where it is legal. BDSA, the leading cannabis market research firm, expects some form of federal endorsement in 2022.

Here we discuss five cannabis stocks in the market.

Canopy Growth Corporation (NASDAQ:CGC)

The Ontario, Canada-based company cultivates and sells medicinal and recreational cannabis and hemp. Its primary operation is in Canada but also has licenses for the production and distribution of its products in over a dozen countries.

The company was founded in 2015. Its net income in the June quarter of 2020 was US$390 million compared to a net loss of US$(128) million in the same quarter a year ago. The revenue increased to US$155.4 million compared to US$119.09 million in the June quarter of 2020.

Canopy Growth has a market capitalization of US$5.6 billion. CGC stock fell 45.13% YTD. The stock closed at US$13.52 on Sep 21.  

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Tilray, Inc. (NASDAQ:TLRY)

The company cultivates and sells medical and recreational cannabis. The New York-based Tilray earns most of the revenue from Canada, and the rest comes from the international market.

In the fiscal year ended May 31, 2021, its revenue was US$513 million. Of which, 84% of revenue came from adult-use cannabis products. In FY 2020, the revenue was US$405 million. The net loss for FY 2021 was US$(336) million compared to US$(100.8) million in FY 2020.

Tilray and Aphria completed their merger in May 2021. Tilray’s market capitalization is US$5.25 billion. The stock closed at US$11.22 on Sep 21. It gave a return of 35.84% YTD.

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Cronos Group Inc. (NASDAQ:CRON)

CRON is based in Ontario, Canada, and it is engaged in cultivating and selling medicinal and recreational cannabis through its popular brands: Peace Naturals, Cove, and Spinach.

Its revenue for the June quarter of 2021 was US$18.8 million, and net income was US$70.6 million. In the June quarter of 2020, the revenue and the net losses were US$11.43 million and US$(55.07) million, respectively.

About 68% of its revenue came from Canada, Israel 15%, and the US 14%. The remaining 3% came from other countries. CRON’s market capitalization is US$2.23 billion.

The stock fell 17.87% YTD. It closed at US$5.67 on Sep 21.

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Cresco Labs Inc. (OTC:CRLBF)

Founded in 2013, it is the largest multi-state cannabis operator in the US. Cresco grows, manufactures, and distributes packaged cannabis goods.

It operates in 10 states, with 20 production facilities and 37 operational dispensaries. 

For the June quarter of 2021, the revenue and net income were US$210 million and US$2.65 million, respectively. The revenue in the comparable quarter of the previous year was US$94.26 million, and net loss was US$(41.70) million.

The Chicago, Illinois-based company has a market capitalization of US$2.15 billion. The stock fell 13.94% YTD, and it closed at US$8.4896 on Sep 21, 2021.

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GrowGeneration Corp. (NASDAQ:GRWG)

The company owns and operates specialty retail hydroponic and organic gardening stores. The Denver, Colorado-based cannabis distributor has a P/E ratio of 88.61. 

Its sales were US$126 million in the June quarter of 2021 compared to US$43.45 million in the same quarter of the previous year. The net income was US$6.7 million compared to US$2.57 million in the June quarter of 2020.

On Sep 15, GrowGeneration announced to open two new hydroponic garden centers in Los Angeles County, California, from Sep 24, 2021.

Its market capitalization is US$1.58 billion. The stock fell 35.41% YTD. The closing price of the stock was US$25.98 on Sep 21, 2021.

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Bottomline

Many investors are pinning their hopes on the cannabis industry as it is expected to double by 2025. With more US states legalizing cannabis, the companies are hopeful of their business growth. However, investors must evaluate the companies before investing in stocks.