This cannabis stock might be a bargain now, but it could double your money in the next year…
Even in 2018, consumers were already spending upwards of $344 billion globally on cannabis each year, according to New Frontier Data – and that was three years ago.
Account for annual growth, and today, that number could easily be as high as $500 billion.
That’s more than consumers shell out on the most sweeping, high-flying tech industries to emerge on the scene since tech took over the economy in the 1990s.
At $500 billion, global demand for cannabis is almost as big as smartphones – one of the most ubiquitous, innovative, and disruptive sectors of the 20th century.
And no other country has done more to transform that demand for cannabis into legal sales than the United States.
Of the over $21 billion spent globally on legal cannabis products in 2020, approximately $20 billion of that came from the U.S. – an increase of 53% in a single year.
And given the states looking to go fully recreational in 2021, the demand for legal cannabis in the U.S. will only surge higher.
New York became the latest to pass recreational use earlier this month, and with over 14 million adults in the state, plus 65 million visitors annually, sales could easily surpass $6 billion in a few years.
Add to that the other states likely to pass full legalization – Virginia, Connecticut, Pennsylvania (with a population of over 18 million), and New Mexico, just to name a few – and we could be looking at a $65 billion market by the end of 2022.
And there’s one lesser known (but up-and-coming) multistate operator (MSO) that’s quickly making its way to the top of the heap of companies that will capture the biggest share of those sales.
The Ayr Advantage
In 2020, Ayr Wellness Inc. (OTC: AYRWF) saw a 100% year-over-year increase to $155 million.
The company built a strong foundation in Massachusetts and Nevada and has recently expanded to high potential states like Arizona, Pennsylvania, New Jersey, and, through its acquisition of Liberty Health Sciences, Florida.
By the end of this year, the company expects to have 64 dispensaries in operation, which is an increase of nearly 50% in one year. Given this aggressive growth, I fully expect Ayr’s revenue to double again to over $300 million.
But it’s not the revenue growth the impresses me the most about this soon-to-be high-flying MSO.
The company’s profitability is surging.
Costs of goods sold declined from 53% to 42%, while sales and administrative expenses fell from nearly 84% in 2019 to just over 56% in 2020. Plus, with $137 million in cash, it has plenty of liquidity to continue its massive growth.
And the stock is cheap.
At $28 per share, AYRWF is trading at around 3X sales, which is exceedingly cheap for such a high-growth company. Simply trading in line with other top MSOs should easily double the value of the stock.
But as revenue surges higher, profitability continues to improve, and management uses its cash to expand into more markets, you could be looking at a $100 stock over the course of the next two years.
Now, Ayr will not be alone among U.S. MSOs delivering those kinds of incredible gains. There will be plenty of room at the top of the most lucrative cannabis market in the world.
But it’ll be the stocks in the NICI Membership model portfolio leading the way to deliver shareholders the biggest potential gains over the next two years.
Find out how you can access all those stock recommendations right here.
And don’t forget that tomorrow, I’ll be hosting a live Q&A to answer any and all questions you might have about Ayr and the other MSOs you want to know more about. Go here now to claim your seat.
Executive Director, National Institute for Cannabis Investors
5 responses to “A New Player Is Quickly Emerging Among America’s Top MSOs (Get in on This Stock Now While It’s Still a Bargain)”
April 14 2021