The destigmatization of cannabis in 2021 has allowed stock related to the cannabis industry to thrive. Every year, more states are choosing to legalize cannabis for medical and recreational purposes. Within the last year alone, we have seen a tremendous leap towards federal legalization. Connecticut, New Mexico, New York, and Virginia have all passed legislation to legalize marijuana for recreational purposes in 2021. With all of this action going on, naturally, cannabis stocks have been rising.
These emerging markets led to the creation of all different types of cannabis businesses. Some businesses focus on the individual and combined tasks of cannabis cultivation, distribution, sale, and ancillary needs.
Here are six cannabis-related companies whose stocks have made notable gains in the year 2021.
Canva Graphic by Madi Forbes
GrowGeneration Corp Stock (GRWG)
Just like the cannabis plants they help, GrowGeneration is growing by leaps and bounds. The booming U.S. cannabis industry has created fast-growing demand for hydroponics supplies, which can substitute for traditional soil mediums. Although only founded in 2014, GrowGeneration is the leading supplier of hydroponic equipment in the U.S., acquiring a market value of $1.7 billion. It traded as high as $65/share in February and has since seen its share price cut in half. However, GRWG stock has roughly doubled annually on average over the past three years. In July, GrowGeneration announced it would acquire HGS Hydro, the third-largest hydroponic retailer in the U.S—Including its most recent acquisition, GrowGeneration has 65 stores in 12 states and looking to add 35 more by 2023.
Amyris Inc Stock (AMRS)
Since the fall of 2020, Amyris stock has rocketed 450%. Amyris leads the synthetic biology industry and creates synthetic cannabinoids that make B2B businesses less reliant on large, expensive growing facilities. With a $4.5 billion market cap, Amyris’s most recent quarterly results posted quarter-over-quarter sales figures up 74.4%.
Innovative Industrial Properties Stock (IIPR)
Innovative Industrial Properties is a real estate investment trust (REIT) that invests in greenhouses and industrial facilities for the medical cannabis industry. In addition to a market value of 5.5 billion dollars, they have opened 73 properties since 2016. Innovative Industrial’s sale-leaseback program will have new customers able to participate more and more as legislation continues to pass in favor of marijuana’s use. IIPR remains a popular stock among analysts because it has delivered an annualized total return of 91.0% since 2018.
Curaleaf Holdings Inc Stock (CURA)
Curaleaf owns 108 dispensaries, 23 cultivation sites, and 30 processing sites across 23 states, with headquarters residing in Massachusetts. The company started by developing one of the first vaporizers to administer a measured medical marijuana dose. Today, it is one of the top industry players in North America and has a market cap of $8.17 billion. Curaleaf fuels its revenue growth with an ongoing expansion of its production and retail presence. For instance, they acquired Los Suenos Farms, the largest outdoor growing operation in Colorado.
Sometimes Curaleaf stock is traded at thin volumes, so setting stop losses are advised. In short, trading CURA correctly could be one of the best cannabis stock plays of 2021.
Tilray Stock (TLRY)
Tilray formed from a reverse merger between some of Canada’s cannabis titans: Aphria and Tilray. As a result, the company now operates under the name Tilray and a shifted to producing cannabis-focused consumer packaged goods. Because of this, the combined company has a market cap of approximately 8.2 billion dollars. Above all, Tilray’s 3-year plan is to grow its market share, in Canada’s adult-use market, from 16% to 30% by 2023. Meanwhile, in the U.S. market, its SweetWater Brewing and Manitoba Harvest businesses continue furthering company success.
Considering the Risks
Several types of cannabis industries emerged because of opportunities from new legislation. However, companies’ stock prices can be heavily affected by changing rules that might interfere with a company’s competitive advantage. For example, the Medical Cannabis Industry made a lot of money selling cannabis before states legalized cannabis for recreational use.
In conclusion, Investors should be aware of the risks and have a strategy to help absorb inevitable sector volatility. Tesla is a good case study for this phenomenon.
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