As reported in the New York Times this weekend, the big Canadian producers like Aurora Cannabis Inc (NYSE:ACB), Canopy Growth Corp (NYSE:CGC), and OrganiGram Holdings Inc (NASDAQ:OGI) are suffering longer than expected in terms of profitability following the country’s nationwide legalization move for recreational use several years ago.
Canopy Growth, for example, the Canada’s largest producer, lost 1.2 billion Canadian dollars, or about $950 million, in the first nine months of its current operating year.
That said, long-term analysis shows a remarkably constructive path forward for the industry as a whole, particularly in the US market, where demand will far outstretch that found in Canada over the long haul.
That suggests US investors may do far better by focusing on publicly traded companies with US cannabis operational exposure across the market cap spectrum.
With that in mind, we take a look here at a few of the more interesting names that fit this description, including, Trulieve Cannabis Corp (OTCMKTS:TCNNF), MedX Holdings Inc (OTCMKTS:MEDH), and Cresco Labs Inc (OTCMKTS:CRLBF).
Trulieve Cannabis Corp (OTCMKTS:TCNNF) bills itself as a vertically integrated “seed-to-sale” company and is the first and largest fully licensed medical cannabis company in the State of Florida.
Trulieve cultivates and produces all of its products in-house and distributes those products to Trulieve-branded stores (dispensaries) throughout the State of Florida, as well as directly to patients via home delivery. Trulieve also operates in California, Massachusetts, Connecticut and Pennsylvania.
Trulieve Cannabis Corp (OTCMKTS:TCNNF) recently announced today that it acquired Solevo Wellness West Virginia LLC (“Solevo”) and its three West Virginia dispensary permits for $650,000. Solevo was awarded two permits in Morgantown and one in Parkersburg in January 2021 as part of the West Virginia application process.
“This acquisition enables Trulieve to broaden and solidify our position in the newly created West Virginia market. Solevo was granted three dispensaries as part of the application process entered by the Company before becoming part of the Trulieve family. Adding Solevo to our production and dispensary permits, as well as our recently announced definitive agreement to acquire Mountaineer Holdings and its cultivation and dispensary permits, will create a fully vertical presence in the state with nine dispensaries,” said Kim Rivers, CEO of Trulieve. “We look forward to providing the highest level of cannabis products and customer experience through authentic and reciprocal relationships to West Virginia patients.”
The stock has suffered a bit of late, with shares of TCNNF taking a hit in recent action, down about -5% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -25%.
Trulieve Cannabis Corp (OTCMKTS:TCNNF) pulled in sales of $181.6M in its last reported quarterly financials, representing top line growth of -17.3%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($258.3M against $121.8M).
MedX Holdings Inc (OTCMKTS:MEDH) is a new entrant into the US cannabis space that hasn’t yet been discovered by the crowd but appears to be a legitimate player, so it may be worth serious due diligence for speculators interested in earlier-stage opportunities.
The company just put out a new corporate update last week that could be instructive as to the company’s potential as a disruptive new player in the space. Broadly speaking, the update focuses on the company’s outlook for coming quarters, noting that, while its limited operations in 2020 were focused on management changes, 2021 will be about executing on business plans, including acquiring additional subsidiaries and effecting a name and symbol change.
MedX Holdings Inc (OTCMKTS:MEDH) CEO, Hans Enriquez, has reportedly embarked on several meaningful endeavors on behalf of the company. In December, for example, Hans participated as a speaker in the CBD Expo South, discussing merchant solutions in the CBD industry.
In late January, Mr. Enriquez also participated in a webinar hosted by international law firm, Harris Bricken, where Mexico’s entrance into the legal cannabis industry was discussed. In short, the company believes Mexico can present an array of opportunities as they seek international investment. The Company is purportedly exploring these opportunities in depth.
The company is also now performing extensive research into the emerging psychedelic medicine market. The use of psylocibin as a treatment for depression and PTSD is gaining notoriety and the Company believes it could be a significant growth industry. Stated CEO, Hans Enriquez: “I’m pleased with our progress during 2020 and in the first quarter of 2021. As my first-year anniversary approaches as MedX CEO, I’m pleased with what has been accomplished so far and I believe we’re on track to make this a big year for the Company, its subsidiaries and our shareholders.”
MedX Holdings Inc (OTCMKTS:MEDH) could, in other words, be a crossover play that represents exposure to the cannabis and psylocibin markets together, both being potentially extreme high-growth opportunities. Enriquez recently sat down with SmallCapVoice.com and details the company achievements in the first quarter of 2021 and the goals for the remainder of 2021. The interview focuses on the work being done by the Company on its hemp farm, the outlook for hemp in Texas and the entire US, other news and moves by MedX.
Cresco Labs Inc (OTCMKTS:CRLBF) is one of the largest vertically integrated, multistate cannabis operators in the United States, with a mission to normalize and professionalize the cannabis industry.
Employing a consumer-packaged goods approach, Cresco Labs is the largest wholesaler of branded cannabis products in the U.S. Its brands are designed to meet the needs of all consumer segments and comprised of some of the most recognized and trusted brands including Cresco, Remedi, High Supply, Cresco Reserve, Good News, Wonder Wellness, FloraCal Farms and Mindy’s Chef Led Artisanal Edibles created by James Beard Award-winning chef Mindy Segal. Sunnyside, Cresco Labs’ national dispensary brand, is a wellness-focused retailer created to build trust, education and convenience for both existing and new cannabis consumers.
Cresco Labs Inc (OTCMKTS:CRLBF) most recently announced the closing of the Company’s previously announced acquisition of Bluma Wellness, now giving the company meaningful operations in 10 states, including a footprint in all 7 of the top-10 most populated states in the country with cannabis programs.
“The closing today represents yet another strategic acquisition in a top-5 market that is true to our strategy – building the most strategic geographic footprint and achieving material market share positions within each state. Cresco Labs and Bluma Wellness have proven track records of operational execution and together have key advantages for growth and a clear pathway to scale. We look forward to amplifying operations and executing our playbook in Florida this year and in the years to come.” said Charlie Bachtell, CEO and Co-Founder of Cresco Labs.
The stock has suffered a bit of late, with shares of CRLBF taking a hit in recent action, down about -4% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -12%.
Cresco Labs Inc (OTCMKTS:CRLBF) pulled in sales of $211.5M in its last reported quarterly financials, representing top line growth of 287.2%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($179.3M against $248M, respectively).
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