The legislative factor driving the cannabis space in the stock market shouldn’t be underappreciated by long-term investors and speculators alike. The movement is inexorable, and continues to pile up key steps.
The latest is news out last week that a bipartisan group of federal lawmakers introduced a bill to remove barriers to conducting research on marijuana, including by allowing scientists to access cannabis from state-legal dispensaries.
According to marijuanamoment.net, the Medical Marijuana Research Act, filed by the unlikely duo of pro-legalization Rep. Earl Blumenauer (D-OR) and prohibitionist Rep. Andy Harris (R-MD), would streamline the process for researchers to apply and get approved to study cannabis and set clear deadlines on federal agencies to act on their applications.
This is another key step that could help foster growth in the cannabis space because it helps to establish undeniable data points that can’t be ignored by lawmakers looking to keep the movement under wraps. There’s no better way to spur change than through unambiguous data.
This new bill was introduced with bipartisan support, which helps to suggest it will push forward. And it introduces a clear path to develop the data needed to push further toward the biggest catalyst possible for these stocks: the move toward full national recreational legalization of cannabis products in the world’s biggest market – the US.
With that in mind, we take a look at a handful of the most interesting stocks in the space along with some recent catalysts of note.
Curaleaf Holdings Inc. (OTC US:CURLF) operates in the medical and wellness cannabis market through its Cannabis Operations and Non-Cannabis Operations segments.
The Cannabis Operations segment includes the production and sale of cannabis via retail and wholesale channels. The Non-Cannabis Operations segment provides professional services including cultivation, processing and retail know-how and back office administration, intellectual property licensing, real estate leasing services and lending facilities to medical and adult-use cannabis licensees under management service agreements.
Curaleaf Holdings Inc. (OTC US:CURLF) recently announced that its Select brand has reached an agreement with cultural authority Rolling Stone to expand the co-branded Rolling Stone by Select line to additional markets across the US. The cannabis products that are “Made for Music” will launch in California, Arizona and Massachusetts in early 2022.
“We are thrilled to introduce Rolling Stone by Select products to these new markets after receiving overwhelming support from our customers in Nevada,” said Joe Bayern, CEO of Curaleaf. “Rolling Stone has been covering cannabis with authentic, hard hitting journalism and amplifying the synergies between music, cannabis, and culture for over fifty years, and we hope this carefully selected co-branded product line continues to destigmatize and normalize cannabis consumption. Select has set itself apart in the vape world by constantly innovating and manufacturing the highest-quality, smoothest cartridges possible, and we look forward to bringing new cannabis experiences to our customers.”
Even in light of this news, CURLF hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -17%.
Curaleaf Holdings Inc. (OTC US:CURLF) managed to rope in revenues totaling $383.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 135.5%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($413.3M against $266.7M).
Cannabis Strategic Ventures (OTC US:NUGS) qualifies at this point as an unheralded dark-horse candidate for the bigtime. The stock trades on the OTC, but it has lined up a very interesting path as a true farm-to-sale vertical player in the booming California cannabis marketplace, with a number of interesting pieces now coming together, rooted in its recent grab of a number of new licenses that appear set to allow it to actualize its vision.
This is an interesting dynamic because the market clearly has not spotted this stock despite its recent jump in potential as a growing vertical player. It’s announcement this morning is a good case in point.
Cannabis Strategic Ventures (OTC US:NUGS) just dropped news that it is set to take full operational control of the downtown Los Angeles “MDRN Tree” cannabis product dispensary, the Company’s first in-house end-market consumer-facing retail sales outlet. According to the release, NUGS will begin to record sales from the dispensary on its books beginning in November 2021.
“We continue to build a full farm-to-sale vertical model, and MDRN Tree is a big part of that vision,” noted Simon Yu, CEO of NUGS. “It’s exciting to watch the pieces come together, and we look forward to supplying and growing the MDRN Tree brand, and continuing to develop a model that will give our cultivation business wider distribution at potentially higher margins.”
Management notes that NUGS has been working diligently with its accounting and operations team to ensure a smooth transition as it takes over operational control at the dispensary. The downtown Los Angeles MDRN Tree dispensary will represent the implementation of one of the Company’s recently acquired California cannabis licenses.
Cannabis Strategic Ventures (OTC US:NUGS) has been grinding out a potential basing pattern over the past several weeks, basically holding support in the $0.04 area on steadily increasing volume. This is a company that has already established operations as a cultivator with its NUGS Farm North site. Now, with the addition of a dispensary arm, it has the potential to drive sales growth at rising margins. Coming from such a cheap market-cap value, it could be an interesting speculative opportunity in the space.
Cresco Labs Inc. (OTC US:CRLBF) engages in the business of cultivating medical grade cannabis, manufacturing medical products derived from cannabis cultivation, and distributing such products to medical or adult use consumers.
The company focuses on regulatory compliance while working to develop condition-specific strains of cannabis and non-invasive delivery methods.
Cresco Labs Inc. (OTC US:CRLBF) recently announced the opening of a new Sunnyside dispensary in Wyomissing, Pennsylvania. Wyomissing will be Cresco Labs’ fifth dispensary in Pennsylvania and 38th nationwide. Sunnyside Wyomissing opens Friday, October 22, marking Cresco Labs’ first store in the city of Reading and fifth location in Pennsylvania.
According to the release, the new store will offer premium quality products from Cresco Labs’ wholesale brands Cresco, Supply and Remedi, as well as other top brands. Products include flower; vape products like liquid live resin; concentrates; Rick Simpson Oil (RSO); topicals like lotion; capsules; and tinctures. It will also sell branded merchandise and accessories including vaporizers, vape batteries and more.
Even in light of this news, CRLBF hasn’t really done much of anything over the past week, with shares logging no net movement over that period. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -18%.
Cresco Labs Inc. (OTC US:CRLBF) managed to rope in revenues totaling $257.8M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 97.4%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($167.5M against $241M, respectively).
Other core tickers of interest in the cannabis market space include Tilray Inc. (Nasdaq:TLRY), Sundial Growers Inc. (Nasdaq:SNDL), Village Farms International Inc. (Nasdaq:VFF), Green Thumb Industries Inc. (OTC US:GTBIF), Trulieve Cannabis Corp. (OTC US:TCNNF), and ETFMG Alternative Harvest ETF (NYSEArca:MJ).
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