Federal legalization (if and when it happens) will drive these companies up and make action expensive. Tilray and Green Thumb are now cheap with a price-to-sales ratio of less than 3. Both stocks are down 60% to 70% from their 52-week high. It`s not too late for investors to grab these two growth stocks and hold them on for the long term. Several Canadian provinces, including Ontario, British Columbia and Newfoundland, began selling online only through government-owned portals, in part because their privately licensed marijuana retailers were not open at the beginning of legalization, so residents of Toronto or elsewhere in Canada`s most populous province had to buy their marijuana online from a Shopify store if they wanted to Buy legally during the first months of last winter. E-commerce is also expected to account for a fairly significant share of the marijuana industry in Canada, including provinces where the government allows stores rather than operating retail stores themselves, and Shopify, as Canada`s technology champion today and the best-known (and arguably the easiest to use) e-commerce facilitator. is likely to get much of this activity. They even market it specifically on their website. Despite a challenging quarter, management expects to achieve its adjusted EBITDA target of $70 million to $80 million and continue to generate positive free cash flow in this fiscal year (ended May 31, 2023). Tilray could have the upper hand in the U.S.
cannabis market after legalization. It has strong business partners such as SweetWater Brewing, Breckenridge Distillery and Manitoba Harvest, all of which are profitable through EBITDA. Tilray aims to generate $4 billion in annual revenue by the end of fiscal 2024. The COVID-19 pandemic has affected almost every sector of the global economy, including the cannabis industry. In many U.S. states, cannabis dispensaries have been identified as essential businesses. Cannabis sales exploded in some states in the early months of the coronavirus outbreak, in part because of more time spent at home and increased anxiety. Marijuana growers and retailers benefited, as did suppliers who sold gardening supplies and other products to these companies.
While this does not indicate legalization, it is certainly a positive step towards decriminalization. The legalization of cannabis in the United States may be inevitable, perhaps in a decade. Savvy investors know that if that happens, pot stocks will be expensive. So why not take advantage of the bargain price now? Here are two stocks that I think are the best buy before legalization. New Jersey remains a significant growth opportunity for GTI, with its large population and significant potential to legalize recreational cannabis. In addition, GTI continues to focus on investments in promising emerging markets with strong economic potential. Ultimately, GTI has what it takes to continue to thrive and ensure long-term success in the cannabis industry. This makes it one of the best stocks of cannabis. “A little-known Canadian company has unlocked what some experts believe is key to capitalizing on the coming marijuana boom. According to Allied Market Research, the cannabis industry is changing rapidly, estimated to be worth $149 billion by 2031. Tilray and Green Thumb have proven to be solid companies, even without legalization. Road analysts are bullish on Jushi stock, predicting a potential upside of nearly 286% over the next 12 months.
An acceleration of state legalization could boost Jushi`s growth numbers and generate strong returns for investors this year. Cresco targets limited-license markets like Pennsylvania, Illinois, and Ohio, which has helped build brand awareness such as Mindy`s Edibles, High Supply, and more. This has allowed the company to compete with the largest multi-state players. The company has also benefited from the cannabis boom in its home Illinois market, where it operates 10 dispensaries. While marijuana legalization at the federal level may not be the emerging reality that proponents had hoped for, advances at the state level have created a wealth of opportunities for cannabis companies and investors. Currently, 38 out of 50 states have at least partially legalized medical marijuana, while 19 states have legalized recreational use. Access to the world`s largest pot market would be a huge opportunity for these companies. However, investors should exercise caution before assuming that they will both make good purchases or that their gains in stocks will offset the losses investors have suffered so far on these distressed stocks. Here`s why legalizing these two actions might actually be a bad thing.
Investors in the cannabis sector were boosted by President Biden`s announcement on June 6. October encouraged pardoning federal convictions for marijuana possession. Aside from state legalization, the marijuana industry hasn`t made much progress toward federal legalization. The Chair also proposed to initiate a review to remove cannabis from the Schedule 1 list of drugs. In recent years, the growing momentum surrounding marijuana legalization has sparked fierce debates on Capitol Hill and in state legislatures. In the midst of this political tug-of-war, however, it`s clear that marijuana has quickly become a bipartisan issue. And yes, for those looking for the answer to a variation of this ad, there`s also one that says the Motley Fool Stock Advisor now only recommends two marijuana companies — neither of which depends on marijuana legalization in the U.S. to succeed. The second is a stock we covered recently, which is Charlotte`s Web (CWEB. TO, CWBHF), the Colorado-based CBD company that was teased a few months ago as Tom Gardner`s first choice marijuana – you can see my story about it here. Like any other evolving industry, the marijuana industry has its ups and downs.
The prospect of legalization helped the industry last year, but legislative delays overshadowed those dreams. One of the most underestimated effects of legalization is that OSMs can list on a major stock exchange like the Nasdaq or the New York Stock Exchange. Because these are companies that touch plants, they violate federal laws and have to stay on an over-the-counter exchange. This means they have access to a smaller pool of investors, which translates into a lower premium paid on these shares. I last added my Shopify position over a year ago, and in fact, I sold a bit at that price last month (to nibble on another stupidly speculative Canadian tech stock), but SHOP is still one of the top ten positions in my real money portfolio because it`s grown so fast. I still find it appealing, I love the company and I`m really impressed with Lutke and the rest of the management team, but the valuation is so crazy that I`d probably be nervous to risk more than 1-2% of my portfolio on this particular stock. Pot or no pot. Investors who buy and hold these shares could benefit handsomely once the cannabis market is booming again. But as with all growth stocks, patience is key. On average, analysts see monstrous upside potential for most marijuana stocks.
My eyes are on those three. If the U.S. legalizes marijuana, the hype surrounding it would undoubtedly push shares of Canopy Growth and Tilray Brands higher in the short term. But in the long run, both companies may end up struggling, and I`m not convinced they`ll end up being better investments. Investors would be better off investing in cannabis companies that are doing well today, not those that could do better after legalization, in the years to come, or not at all. Curaleaf Holdings is a cannabis company that has enjoyed remarkable success recently. Unlike many other marijuana stocks that focus primarily on the Canadian market, Curaleaf is unique. It puts much more emphasis on U.S. assets. This gave Curaleaf a clear advantage and gained access to a larger and more lucrative market than most of its competitors.
As a result, Curaleaf Holdings will continue to thrive in the booming cannabis industry. That doesn`t mean investors should avoid marijuana stocks altogether. The industry continues to grow rapidly (whether legalization takes place or not), and domestic cannabis businesses will continue to grow aggressively. The legalization of marijuana leads to a boom in cannabis stocks. Public opinion has turned in favour of marijuana reform. So it seems likely that federal and state laws will continue to change. Investors have also flocked to this sector in response to news about the potential for cannabis legalization. Cannabis inventories are increasing accordingly. The legalization of marijuana in the U.S. has been a hot topic lately as excitement grows over the possibility of significant reforms underway in the industry. Companies looking to enter the U.S. pot market include Canopy Growth (CGC -4.13%) and Tilray Brands (TLRY -2.14%).
They have certain advantages – they made efforts to provide a product that would work for pot sellers, and it`s a cloud-based offering that can be quickly modified to accommodate regulatory changes. and they`ve also come a long way in offering “internationalized” versions of Shopify in other countries, so they might even make progress as European countries begin to follow Canada`s lead when it comes to legalization. Although Jushi Holdings (JUSHF 2.35%) is a small-cap OSM, it is expanding aggressively. In June, the company opened its 33rd retail location nationwide, which is also Nevada`s fourth dispensary. The state is a popular market for tourists. Much of the worst seems to be over for the cannabis market when it comes to COVID-19, but some impacts are still being felt. Green Thumb`s best-selling family of brands, its burgeoning national presence and profitable business model are compelling reasons to consider this title for a long-term investment. I still hold the only stock I`ll need to retire – WHOLE FOODS Fools are those who don`t do their own due diligence.