Make sure these “Big Four” cannabis stocks are in your portfolio this 4/20…
“But at some point, we’re going to move forward, period.”
Those were the words Senate Majority Leader Chuck Schumer (D-NY) had for Politico on April 3 when asked about cannabis legalization.
He didn’t mince his words. He didn’t hedge his bets. He stated directly that federal cannabis legalization was inevitable.
And that’s not the first time he made clear this inevitability.
Earlier this year, Schumer – alongside Senators Ron Wyden (D-OR) and Cory Booker (D-NJ) – first declared that a federally legal United States cannabis market is now a Senate priority.
Only this time, the new Senate Majority Leader wanted to state plainly that Congress has the power to make it happen, with or without the support of President Joe Biden.
Statements like these are all steps towards legalization, and every step closer represents a major stride towards unlocking the full potential of legal cannabis in the U.S. – a market set to make a 5-fold leap to over $100 billion in annual sales over the next three years.
It’s that kind of hyper-growth that makes cannabis one of the fastest growing sectors in the U.S., and it’s why cannabis stocks have the potential to deliver such massive gains.
I’m talking 10X to 20X your initial stake over the next 12 to 24 months.
But you don’t want to wait for Congress to act before investing in cannabis stocks.
You need to act now before the inevitable becomes obvious.
And what better day to start making money with cannabis stocks than 4/20, the unofficial cannabis holiday?
Number One in Revenue Generation
Make no mistake, the cannabis market is still very fragmented.
By some estimates, there are between 5,000 to 7,000 dispensaries operating within the U.S., and over 30,000 businesses derive most of their revenue from legal cannabis sales.
But look at the market shares of multistate operators (MSOs), and four leaders emerge.
Each of these “Big Four” sold over $400 million in cannabis products last year, while the next nearest competitor managed to sell about half that amount.
And among the Big Four, Curaleaf Holdings Inc. (OTC: CURLF) dominates them all.
It took the lead last year when it acquired Grassroots, which enabled it to sell a whopping $626 million worth of cannabis products in 2020 – a 184% jump from 2019.
Curaleaf managed that remarkable growth while also improving profitability.
And with 104 dispensaries across 23 states (plus $355 million in excess cash to fuel even more acquisitions), any company not already in the top four will have a hard time chipping away at Curaleaf’s considerable market leadership.
Right now, Curaleaf stock can be bought for just over $14 a share. But with the cannabis market hypergrowth tailwind pushing Curaleaf’s revenue into multibillion-dollar territory, you could be looking at an easy double over the next few months.
Top 5 Tech Stocks to Buy Today
Venture capitalists and billionaire hedge fund managers are starting to pour millions into a technology created just years ago. The mainstream media is distracted with stimulus money, infrastructure bills, and job reports…for now. But these five companies leading this tech’s development won’t stay under the radar much longer.
And while Curaleaf may dominate on revenue, no company in all of cannabis can hold a candle to this next Big Four MSO when it comes to profits…
Number One in Profitability
Trulieve Cannabis Corp. (OTC: TCNNF) has been profitable from the get-go.
Even way back in 2018 and 2019, when all other wannabe MSOs and Canadian licensed producers (LPs) were burning through cash, Kim Rivers, Trulieve’s founder and CEO, has had her eye on the bottom line.
She focused on Florida. She won licenses. And she grew her company at a pace that made sure she delivered profits to shareholders every step of the way.
The result of this hyper-focus on operating expertise means that Trulieve created $98 million in value for shareholders in 2020. From an “Economic Value Added” (EVA) framework, that’s a 19% profit margin and triple the value created by the next most profitable MSO.
Let me take a minute to put that 19% profit margin in perspective in the chart below.
The light blue line shows the “Economic Profit Margin” for all publicly traded U.S. companies, the average of which is shown by the dark blue line at 2.6%. That’s ALL companies – not just cannabis companies.
Trulieve’s 2020 economic profit margin is shown by the gold line at 19%. So, for 2020, Trulieve created over 7X more shareholder value than the average American company managed in any single year over the last 25 years.
That’s how you drive a stock price higher.
And based on the revenue growth Trulieve can achieve with legal cannabis demand growing at over 50% per year and even more gains in profitability driven by Kim, Trulieve’s stock price could one day cross the $200 per share barrier – a 5X gain from where you can pick up the stock today.
Once Schumer and crew get their way in the Senate, the money flood pouring into cannabis could drive Trulieve’s stock price to that level much sooner than anyone dares predict.
And that 5X will be on your money – provided you don’t wait.
The Rest of Your Big Four
The same holds true for all of the Big Four in cannabis.
Revenue for these cannabis titans jumped between 100% and 300% percent in 2020. They all crossed the profitability threshold last year. And their stocks still trade at a massive discount considering each will likely cross the $1 billion revenue mark this year.
Each of these names – Curaleaf, Trulieve, and the remaining two – have the potential to turn a $1,000 stake into $5,000 or a $10,000 position into $50,000 over the next few months as federal legislation continues its inevitable march towards making legal cannabis the law of the land.
So, get into cannabis before the inevitable becomes obvious, consider adding positions in Curaleaf and Trulieve to your portfolios, and find out more about the rest of the Big Four – plus the other up-and-comers with even more upside potential – by joining NICI Membership today.
We’re even offering you a special new member discount in celebration of 4/20.
Current NICI Membership subscribers can access the full “Big Four” list right here.
Executive Director, National Institute for Cannabis Investors
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April 20 2021