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Although cannabis stocks have made headlines this past week thanks to President Biden’s comments about consider the Schedule 1 designation of cannabisThis sector in both the United States and Canada will decline in 2022.
The new one Cannabis trading company US Cannabis Operators Indexcontains the largest multi-state operators in the United States, which are down 59% years to date. The Canadian Cannabis LP To be down 54% in the same time period.
While Biden’s comments on October 6 may have renewed hopes of federal marijuana legalization or some kind of marijuana reform, there’s still a long way to go either way. this happens.
There are ways to invest in cannabis without buying shares in companies that are directly involved in growing or selling cannabis plants. These ancillary companies provide everything from the hydroponic supplies needed to deliver cannabis to online platforms that connect consumers to dispensaries.
New Cannabis Ventures Follow These Companies Through Auxiliary cannabis index. YTD, it is 71% off.
Despite the strong losses, here are some companies in the ancillary index that you may want to check out for alternative cannabis investments.
Growth
The nation’s largest hydroponic supplier, GrowGeneration Corp. (NASDAQ:GRWG), has 62 stores in 13 states. Since nearly all commercially grown cannabis is grown indoors, hydroponics played an important role in making that possible.
Most of the company’s footprint is in California, where it also receives most of its annual revenue of -35%. Although GrowGeneration (GRWG) not only caters to the cannabis industry, it has a vision of expansion in states where adult cannabis dispensaries have recently started or will soon be open. These states are Missouri, Illinois, Arizona, Pennsylvania, New York, and New Jersey.
The company missed EPS estimates for three of the last four quarters it reported. Looking for Alpha collaborator, Davide Ravena says that GrowGeneration is an effort because ittoo much focus on the cannabis industrywhich he said is slowing in many parts of the country due to regulatory uncertainty and delays in establishing new markets.
Leafly
Leafly Holdings (LFLY) is primarily known as a company that runs a website where cannabis consumers can find drugstores near them, read reviews about them and, more recently, even have their cannabis delivered to them. .
The company did not make a profit and reported only $12 million in revenue for the second quarter of fiscal 2022. Leafly (LFLY) only one Strong sell rating from Seeking Alpha’s Quant Rating.
While maintaining its stock rating, Seeking Alpha contributor Stone Fox Capital warns that Leafly (LFLY) Investors Don’t expect to make money in the next few years.
WM Technology
WM Technology (NASDAQ:MAP) is better known as the company behind Weedmaps, a website that works the same way as Leafly (LFLY). However, WM (MAP) also offers a suite of monthly subscription-based software solutions to support cannabis retailers.
Like Leafly (LFLY), WM (MAP) had a disappointing year, down 67% YTD. Quantitative evaluation also see stocks as a commodity for sale.
Looking for Alpha Contributor Donovan Jones recently noted that while WM (MAP) continue to increase revenue and gross profit, high activity hole. He evaluates the stock he is holding.
Brand Turning Point
Brand During the Turning Point (TPB) is known for its production of tobacco products and smoking accessories, it also manufactures the Zig-Zag line of rolling papers, which are used to make cannabis joints.
Like other ancillary companies, Turning Point (TPB) is having a bad year, ~43% off and earn a Strong sell rating from Quantity Review.
Still, there’s hope for stocks, according to contributor Carles Diaz Caron, who have a buy rating. He wrote that despite the downturn, The Turning Point (TPB) is “a very profitable company with very high margins and good cash generation.”
AFC Gamma
This company establishes, underwrites and invests in premium secured loans and other debt securities for established companies operating in the cannabis industry where it is legal for medicinal use. economic or adult. An outstanding attribute of AFC Gamma (NASDAQ:AFCG) is its huge dividend yield, currently at 13.82%.
Over the past four quarters, it has surpassed EPS estimates twice and trailed the other two. Mayank N. Sharma, a contributor, calls AFC Gamma a purchase, stating that the mortgage real estate investment trust (REIT) To be on a strong growth track with a well-balanced loan portfolio.
Creative industry attributes
Creative industry attributes (NYSE:IIPR) is an industrial REIT invested exclusively in properties related to cannabis operations. It has a total of 65 properties, with the most concentrated in Massachusetts and Pennsylvania, where it has 9 locations in each state.
Stocks are 63% off YTD Rating and Quantity see it as a hold. However, the view of collaborator Bela Lakos Creative industry attributes (IIPR) buys due to its attractive valuation, high-quality portfolio, and flexible balance sheet.
