Cannabis stocks have staged a rousing return in recent weeks after
a quiet first half of 2021. Sales are on the rise this year as
revenue and profits for many cannabis companies have increased
significantly. During the global COVID-19 pandemic medical
marijuana was deemed "essential,” which definitely had an impact on
increased sales. U.S. legal cannabis sales grew 46% year over year
to $17 billion in 2020. The total U.S. economic impact from
marijuana sales in 2021 is expected to reach $92 billion – up more
than 30% from last year – and upwards of $160 billion in 2025,
according to analysis from the newly published MJBizFactbook.
In addition to increased sales, the cannabis industry is
benefitting from speculation around legalization, which is back on
the government’s agenda with the reintroduction of the MORE Act. If
lawmakers pass this legislation it will federally decriminalize
cannabis. $1.65 trillion Amazon is supporting the MORE Act and
recently announced it plans to relax internal cannabis testing for
all positions not under regulation by the Department of
Transportation. The third major factor creating interest in
cannabis stocks is that the group of investors from Reddit
developed a big appetite for them. These factors should kick the
cannabis sector back into high gear. However, investors need to be
selective and look for cannabis companies with growth and
fundamentals.
Tilray, Inc. (NASDAQ:TLRY), Pure
Harvest Corporate Group, Inc. (OTC: PHCG), Cronos
Group (NASDAQ: CRON), and 22nd Century Group,
Inc. (NYSE American: XXII) are four companies that could
have major moves in front of them as investors add cannabis stocks
to their portfolios.
Tilray, Inc. (NASDAQ: TLRY) is a global pioneer
in cannabis research, cultivation, production and distribution. The
Company is focused on producing high-quality cannabis and
cannabis-derived products primarily for recreational adult-use
globally. The big news on Tilray is that Reddit's traders hope to
drive its share price higher by forcing short-sellers to close
their positions, which requires them to buy back the shares they
shorted. Through its wholly owned subsidiary, High Park Holdings
Ltd., Tilray offers a broad-based portfolio of brands and adult-use
products.
Tilray currently supplies high-quality medical cannabis products
to tens of thousands of patients in 17 countries spanning five
continents through its subsidiaries in Australia, Canada, Germany,
Latin America and Portugal, and through agreements with established
pharmaceutical distributors. Tilray also cultivates medical and
adult-use cannabis in Canada and medical cannabis in Portugal.
Analysts at Cantor Fitzgerald recently upgraded the stock after its
merger with Aphria in May. As a result, Tilray has become one of
the leaders in the cannabis industry following the merger, since
the combined company has the largest global geographic footprint in
the industry, low-cost production facilities, and a wealth of
international growth opportunities. For more information on Tilray
visit https://www.tilray.com.
Pure Harvest Corporate Group, Inc. (OTCQB:
PHCG) is a cannabis play that has not garnered the
attention of the main stream media yet. Pure Harvest Corporate
Group has developed numerous high-quality cannabis and hemp derived
retail brands and product lines that are currently available for
purchase in select markets. Pure Harvest intends to grow its
marijuana, hemp derived cannabinoids, and research and development
operations and expand globally as the laws regarding cannabis are
reviewed and rewritten to repeal their prohibition.
Pure Harvest Corporate Group recently announced Q1 2021 revenues
increased by 92.65% from Q4 2020 revenue. In fact, Pure Harvest
Corporate Group did more revenues in the first quarter of 2021 than
it did in all of 2020. Q1 2021 Revenue was $794,148 versus 2020
Year End Revenue of $735,690. The significant increases are largely
attributable to continued growth in sales at the Company’s Colorado
marijuana operations located in Dumont, CO. The Company’s Test
Kitchen subsidiary began generating revenue with the launch of
their white label program and beta product release.
Pure Harvest Corporate Group uses an “acquire and integrate”
approach whereby it uses primarily equity to acquire high-potential
operating cannabis businesses. Since 2018, the Company has made
five such acquisitions, some of which are now hitting new records
in sales each quarter. In the future, the Company plans to acquire
licensed medical and recreational marijuana dispensaries,
cultivation facilities and production facilities in states which
allow publicly traded companies to own and operate dispensaries,
cultivation facilities and production facilities. In addition to
products tailored to marijuana retail dispensaries, the Company’s
line will incorporate infused product options including beverages,
edibles, topicals, concentrates, and distillates.
A primary operational focus for the Company is Test Kitchen, a
wholly-owned subsidiary of Pure Harvest. Test Kitchen is a
laboratory for human potential – an experiment and experience for
creating and sustaining the highest expression of life. Test
Kitchen’s mission is to curate empirical physiology and cultivate
predictable pharmacognosy to optimize mind-body-performance. Pure
Harvest Corporate Group has 25 full-time employees and recently
moved into a new, expanded corporate office in Greenwood Village,
CO, an upscale suburban area on the south side of Denver. For more
information on Pure Harvest Corporate Group visit
http://www.pureharvestgroup.com.
Cronos Group Inc. (NASDAQ: CRON) is a global
cannabinoid company with a brand portfolio that includes PEACE
NATURALS™, a global wellness platform; two adult-use brands, COVE™
and Spinach™; and three U.S. hemp-derived consumer products brands,
Lord Jones™, Happy Dance™ and PEACE+™. The Company has built a
distribution footprint in Canada through the direct-to-client
medical market and the adult-use market, as well as a distribution
footprint for U.S. hemp-derived consumer products in the U.S.
through e-commerce, retail and hospitality channels. During Q1
2021, Cronos's revenue increased 50% year over year to $12.6
million with a $43.5 million operating loss. The Company has no
long term debt and more than $1.2 billion in cash and investments,
most of which came from Altria's CA$2.4 billion investment in 2018
for 45% equity in the company. Altria recently merged with Tilray
and also has an option to exercise warrants to purchase an
additional 10% of Cronus Group.
Cronos Group Inc. recently amended its previous partnership
agreement with Ginkgo Bioworks, Inc., a company involved in cell
programming. The amendment allows Cronos to start commercializing
products with cultured cannabinoids, which means Cronos’ cultured
cannabinoid products will be the first to market in Canada. Cronus
Group has not exactly set the world on fire with great results.
Many investors are looking for a well-placed acquisition to take
the Company to the next level. The cannabis industry is rapidly
consolidating, and Cronos has a cash-rich balance sheet that could
be used to make additional acquisitions in the coming months. For
more information on Cronos Group, Inc. visit
http://www.thecronosgroup.com.
22nd Century Group, Inc. (NYSE American: XXII)
is a leading plant biotechnology company focused on technologies
that alter the level of nicotine in tobacco plants and the level of
cannabinoids in hemp/cannabis plants through genetic engineering,
gene-editing, and modern plant breeding. 22nd Century’s primary
mission in tobacco is to reduce the harm caused by smoking through
the Company’s reduced nicotine content tobacco cigarettes –
containing 95% less nicotine than conventional cigarettes. The
Company’s primary mission in hemp/cannabis is to develop and
commercialize proprietary hemp/cannabis plants with valuable
cannabinoid profiles and desirable agronomic traits.
In several recent press releases, 22nd Century announced the
sale of 10 million shares of stock to an institutional investor at
$4 a share. This will provide the Company with $40 million "to
support the Company's strategic objectives across all of its plant
franchises." 22nd Century announced later that one of these
"objectives" will be to partner with Aurora Cannabis to "actively
explore commercial development opportunities" on tobacco and
cannabis products. 22nd Century expects the first revenue and
profit streams to come in the second half of this year, from
licensing revenue on their original IP. For more information on
22nd Century Group, Inc. visit https://www.xxiicentury.com.
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