Global cannabis sales will soar by several billion within the next ten years. In this scenario, the investors who can recognize the right companies will taste success like never before in the fast-growing and innovative market. The fact that states around the country are increasingly legalizing medical marijuana gives investors reasons to raise their hopes.
If you are planning to cash in on the nationwide marijuana boom, now is the time. Given below are the top three marijuana stocks that you can consider in 2021.
1. Innovative Industrial Properties
When it comes to turning cannabis into cash for investors, Innovative Industrial Properties is one of the top names. Instead of directly producing cannabis, Innovative Industrial Properties acquires properties that can be used for growing medical marijuana and leases the same to state-licensed properties. The REIT (Real Estate Investment Trust) passes cash flows from the leases on to the shareholders through fast-growing dividend payments.
The total addressable market of IIP will hopefully grow even larger when more states start legalizing marijuana, though there is enough room available for expanding within the existing markets. Already medical marijuana is legal in over thirty states, and IIP presently owns about sixty-six properties in seventeen states. Back in 2019, they had eleven properties in nine states. So, just as Sunday Scaries CBD, the rise of IIP has been consistent and meteoric.
In terms of expanding the property portfolio, the dividend of IIP has gone from $0.15 in the 2nd quarter of 2017 to $1.24 in the 4th quarter of 2020. In turn, the stock price of IIP has increased by over 880 percent since its IPO (initial public offering)filing in December 2016. With a lot of growth waiting to come, Innovative Industrial Properties are slated to deliver greater share price appreciation and sustained increase in dividend prices in 2021 and beyond.
2. Altria
Altria frequently gets overlooked by cannabis investors to profit from marijuana, which is a significant mistake. In this steadily growing industry, the tobacco titan is set to come up as a considerable force.
The company bought a 45 percent stake in the renowned Canadian cannabis producer and dealer Cronos Group for 1.8 billion dollars in December 2018. The warrant it owns gives it all the rights for increasing the stake to 55 percent. Doing this will provide Altria control over the majority of the cannabis company, and it will get to quickly acquire the rest of the Cronos Group shares if they want.
The distribution and regulatory expertise of Altria should be helpful for the Cronos Group to expand the market share in the years to come. The company can also utilize some of the eight billion dollars in annual free cash flows to acquire other cannabis-based businesses and consolidate the fragmented marijuana industry in this process.
Meanwhile, the shareholders of Altria can get at least an eight percent yield on the investment. Additionally, this tobacco giant has increased the dividend by fifty-five times in the past fifty-one years and nearly doubled the cash payout in the last ten years. Moreover, one can have the shares of Altria for only nine times the analysts’ earnings estimates for this year. These prices are nothing short of a bargain for the top-notch, high-yielding marijuana dividend stock found in the market at present.
3. Planet 13
Planet 13 Holdings might be precisely the options you were looking for if you were searching for pure-play cannabis stocks. The company runs the biggest cannabis entertainment complex and dispensary in the world in Nevada. Nevada happens to be the most attractive marijuana market in the country.
You will find the sprawling 112,000-square-foot SuperStore of Planet 13 near the glittering Las Vegas Strip. The store has the widest selection of infused products, marijuana extracts, and cannabis. It has become one of the most popular places for both tourists and locals.
Planet 13 pushed past the multitude of challenges posed by the global pandemic and generated record sales in its 3rd quarter. Moreover, the company stands out to provide more delivery options and curbside pickup choices to the customers when facing capacity restraints from coronavirus. In turn, the company’s revenue increased by 36.5 percent per year and became $22.8 million, while the earnings before amortization (EBITDA), depreciation, taxes, and interest increased by 84% to become $6.2 million.
Experts are expecting the profits and revenue of the company to go even higher this year. It is also going to launch another cannabis SuperStore in California. The new store will build on a site of 40,000 square feet, which will be close to the popular South Coast Plaza Mall (over 24 million visitors annually) and at a distance of about ten minutes from Disneyland.
If the company is successful with the SuperStore model in the markets beyond Vegas, shareholders can conclude that they will have a good year not only for 2021 but also in the days ahead.
The Bottom Line
Legalizing medical and recreational cannabis is sweeping across the country, and in the past couple of years, several states have joined the bandwagon. With the increased legalization and ever-increasing number of active users, now is the time to turn to cannabis stocks. So, if you plan to venture into new avenues of investment, cannabis stocks are the ones to consider.
