The cannabis industry has faced immense challenges over the past couple of years. Although, there are a few companies that are pushing forward and proving doubters wrong once again.
The geography of all cannabis stocks matters significantly because, in many states and countries, it hasn’t yet been legalized. There would undoubtedly be an enormous euphoria of investors frantically buying these stocks if this were to change.
Investors should be reminded that because of regulations, the cannabis industry is prone to volatility.
Tilray (NASDAQ: TLRY) is a leader in the consumer cannabis industry that has been consistently growing its core business, leading to a substantial rise in its share price over the past year, despite declines.
In Tilray’s recent quarter, they announced an increase of 43% year-over-year in net revenue, resulting in $168 million. This growth was driven by cannabis, beverages, and more, boosting gross profit to $51 million compared to only $35 million last year during the same quarter.
Its current portfolio of medical cannabis and other products has made Tilray maintain a market leader in Canada and Germany with hopes to acquire a large portion of the market in the United States upon legalization.
Innovative Industrial Properties
Innovative Industrial Properties (NYSE: IIPR) is a real estate company that is positioned in the regulated cannabis industry. They offer facilities to cannabis producers to conduct operations, effectively allowing a consistent source of revenue and earnings.
They recently reported third-quarter results, which illustrated an increase of 57% year-over-year, totaling $53.9 million in revenue.
Innovative Industrial Properties does have a much higher valuation compared to its colleagues in the cannabis industry. However, they do offer consistent profitability on their balance sheet, alongside a hefty dividend for investors. The dividend is equivalent to an annualized dividend of $6.00 per common share.
Organigram (NASDAQ: OGI) is a licensed producer of cannabis-based products and derivatives in Canada.
Organigram reported their recent quarterly results, establishing 43% revenue growth year-over-year, resulting in gross revenue reaching $36.2 million in Canadian dollars.
Moving forward, Organigram is focused on delivering high-end cannabis-based products to consumers on shelves through its portfolio of valuable brands.
Organigram is a much smaller company than the others on this list, which could be a major deciding factor for investors looking to gain exposure to the cannabis market.
Overall, many companies are positioned to take advantage of the possible legalization in more states and other countries.
Another positive for the cannabis industry is that according to politico.com, nearly half of Republican voters support federally decriminalizing cannabis. GOP lawmakers are now beginning to reflect their constituents’ view by increasingly supporting broad legalization at the state and federal levels.
However, there are always risks at play since the cannabis industry as a whole is only beginning to become recognized worldwide. Investors with a higher risk tolerance will likely succeed in these markets more than others as they can withstand volatility.
Tilray Recent Quarter: https://ir.tilray.com/news-releases/news-release-details/tilray-inc-reports-first-quarter-fiscal-year2022-financial#:~:text=Financial%20Highlights%20%E2%80%93%20First,business%20combin ation%20synergies.
Innovative Industrial Properties Recent Quarter: http://investors.innovativeindustrialproperties.com/press-releases/2021/11-03-2021-201019082
About Organigram: https://www.organigram.ca/about