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If you want to ring in the New Year on a good note, check out our list of the top cannabis stocks for December 2020. Investors endured tremendous market volatility over the past few months, but there may be light at the end of the tunnel. The Biden presidential win signaled a loosening of regulations and a greater likelihood that cannabis businesses can thrive. Here are the cannabis stocks we think you should be watching.
Jushi Holdings, a multi-state operator (MSO), is a hidden gem in the cannabis space. As one of the most promising small-cap stocks, Jushi Holdings may deliver favorable results in 2021 and beyond. It's important to note that Jushi sold 11.5 million shares in October to raise capital for its new retail locations and acquisitions.
It’s dependence on selling shares can dilute the stock's value in the long run. However, selling shares is a significant source of financing in spite of federal banking restrictions.
Jushi has seen consistent quarterly sales growth, although it has lost $55.2 million during the first nine months of 2020. While this type of loss is expected for a new MSO, the competition is on its way to becoming profitable in early 2021. The question is: Can Jushi keep up?
Now, let's get into why Jushi is a top cannabis stock. The company is in 7 markets. Its focus is on Pennsylvania, Virginia, and Illinois. All of these states have a limited number of operators. Jushi knows the value of these limited licenses.
It runs a dozen active retailers and has permits to open about 30 more. It also plans to have 15 stores in Pennsylvania, 4 in Illinois, and 6 in Virginia.
Nearly all of its sales are expected to come from these 3 states. Sales in Pennsylvania are set to lead the pack by a significant margin.
Cresco Labs, a vertically integrated MSO, is another stock market darling with plenty of promise.
Cresco’s primary focus is on its 19 active stores and 29 licenses set to open in 9 markets. Many of these are located in the burgeoning Illinois market. About half of the active stores are located there. This gives Cresco a substantial market share in a market estimated to reach over $1 billion by 2024.
Cresco has also taken a vast market share of the industry’s wholesale cannabis business. It is the largest wholesale cannabis operator in North America. In January, it acquired Origin House, a distribution license in California. California is the world's biggest cannabis market. The license allows Cresco to distribute its products to more than 575 active retailers in the state.
Green Thumb Industries
Green Thumb Industries is another top MSO in the US. It just opened its 50th retail shop and runs 13 manufacturing facilities. Its shares have reached over 100% year-to-date with rising revenue rates year-over-year and quarter-over-quarter. GTI has also recently become profitable, unlike many MSOs.
GTI may keep its momentum if its focus markets continue to expand, especially Illinois and Pennsylvania. It also has 46 licenses for retail locations on the back burner. It has even expressed interest in entering the newly legalized New Jersey market.
Innovative Industrial Properties
Innovative Industrial Properties is a hot real estate investment trust focused on the medical cannabis industry.
If you're looking for big stock growth, this stock has doubled in value this year with no end in sight. Its business model focuses on buying properties from medical cannabis operators and leasing it back to them. This agreement is known as a sale-leaseback deal.
IIP's business model has worked out so far. In under 11 months, they've gone from 46 to 64 acquired properties. Out of the 35 medical cannabis states, they have a presence in 16 of these states.
Planet 13 Holdings
Planet 13 Holdings is a cannabis megastore off the Las Vegas Strip. This year, the stock has nearly doubled despite reduced tourism to the area. As a result of the pandemic, the company shifted to a cannabis delivery business model. It even has plans of a superstore expansion in California set for early to mid-2021. It also plans to open another Nevada store this year.
GrowGeneration, a hydroponics and organic gardening retail chain, has been consistently growing. It offers a vast supply of growing tools for soil-based and soilless growers. Its online presence offers a user-friendly marketplace for these new and growing markets.
GrowGeneration has catered to everyone from hobby to mid-size growers to MSOs. It has especially catered to those working with organic gardens.
Amid a pandemic and with an online retail presence, it has still been able to increase walk-in business quarter-over-quarter.
GrowGeneration has 28 hydroponic and gardening stores. It has a presence in 10 states, including California, Michigan, Nevada, and Colorado. It plans to have 50 locations in 15 states by the end of 2021.
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