The Next Frontier for Pot Stocks (GRWG, MEDH, APHA)

Pot stocks jumped to start the week after New York Governor Andrew Cuomo said New York is “very close” to legalizing weed on a recreational basis.

That sent TLRY and APHA launching, along with most of the rest of the space. “I think this should’ve been passed years ago,” Cuomo said in an afternoon news conference. “We have to get it done. I think too many people have been imprisoned, incarcerated, and punished. Too many of those people are Black, Latino, and poor. It’s exaggerated the injustice of the justice system.”

New York would be the largest market to legalize in the US since California, which boosted the total US market by nearly $3 billion.

With that in mind, we take a look at a few of the more interesting names in the cannabis patch, including: GrowGeneration Corp (OTCMKTS:GRWG), MedX Holdings Inc (OTCMKTS:MEDH), and Aphria Inc (NASDAQ:APHA).

 

GrowGeneration Corp (OTCMKTS:GRWG) trumpets itself as a company that, through its subsidiaries, owns and operates retail hydroponic and organic gardening stores in the United States. The company has been growing rapidly through a series of key strategic moves.

GrowGen carries and sells thousands of products, including organic nutrients and soils, advanced lighting technology and state of the art hydroponic equipment to be used indoors and outdoors by commercial and home growers.

GrowGeneration Corp (OTCMKTS:GRWG) just announced its acquisition of 55 Hydroponics, a hydroponic and organic fertilizer superstore located in Santa Ana, California. Founded in 2010 by Michael Dominguez, 55 Hydroponics is the dominant hydroponics supplier in Orange County, with annual revenues approaching $10 million.

According to the release, the acquisition brings the number of GrowGen locations in California, the country’s largest legal cannabis market, to 18, with 9 locations in Southern California. When added to the recently announced leased locations in the Southern California market, GrowGen will operate close to 800,000 square feet of retail and warehouse space across 53 locations nationwide, with 11 of those locations in the important Southern California market.

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 16% in that timeframe.

GrowGeneration Corp (OTCMKTS:GRWG) pulled in sales of $55M in its last reported quarterly financials, representing top line growth of 152.6%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($55.3M against $20.9M).

 

MedX Holdings Inc (OTCMKTS:MEDH) is focused on driving growth through vertical integration, strategic partnerships, licensing, franchising, and providing solutions to the emerging hemp and cannabis industry, and its recent reboot could provide an interesting bargain scenario before the crowd spots it.

The stock is smaller and more speculative, but that could also add up to additional upside opportunity if management executes from here.

MedX Holdings Inc (OTCMKTS:MEDH) recently announced that it has acquired Smart Brands Digital, LLC as a wholly owned subsidiary. According to the release, Smart Brands Digital, a Texas company, will be responsible for the online product marketing and brand awareness of MEDH’s various hemp and cannabidiol (CBD) products and initiatives.

“Bringing in Smart Brands represents the first phase of several acquisitions under MEDH in achieving our long-term operational strategy. We look forward to providing to shareholders additional updates as they unfold,” stated Hans Enriquez, CEO of MEDH. The Company intends to announce additional subsidiaries in the near future, following the release of its upcoming annual report.

The stock has been running strong in 2021, but with a bit of a roller-coaster in place on the charts. The recent dip could provide a fresh opportunity. The last time the stock was at its current level, we saw more than a double within two weeks.

MedX Holdings Inc (OTCMKTS:MEDH) just regained OTC Markets access, got its last three periods of quarterly filings caught up, and achieved Pink Current status. That now sets up a rebirth situation. MEDH could be set to push out new catalysts in a fresh corporate context just as it starts to get noticed in a hot thematic market theme.

 

Aphria Inc (NASDAQ:APHA) bills itself as a leading global cannabis-lifestyle consumer packaged goods company with operations in Canada, United States, Europe and Latin America, that is changing people’s lives for the better – one person at a time – by inspiring and empowering the worldwide community to live their very best life by providing them with products that meet the needs of their mind, body and soul and invoke a sense of wellbeing.

Aphria’s mission is to be the trusted partner for its patients and consumers by providing them with a cultivated experience and health and wellbeing through high-quality, differentiated brands and innovative products. Headquartered in Leamington, Ontario, Aphria cultivates, processes, markets and sells medical and adult-use cannabis, cannabis-derived extracts and derivative cannabis products in Canada under the provisions of the Cannabis Act and globally pursuant to applicable international regulations. Aphria also manufactures, markets and sells alcoholic beverages in the United States.

Aphria Inc (NASDAQ:APHA) recently announced, with Tilray Inc (NASDAQ:TLRY), a global pioneer in cannabis research, cultivation, production and distribution, the launch of the website: www.aphriatilraytogether.com.

According to the release, this new, dedicated resource seeks to provide shareholders of both companies with pertinent information, news and updates leading up to the special meetings of shareholders at which Aphria’s and Tilray’s respective shareholders will vote on the resolutions necessary to implement the proposed business combination of the two companies. The website will also allow shareholders and other interested parties to register for Transaction updates that are made publicly available, so they receive information directly to their e-mail addresses.

And the stock has been acting well over recent days, up something like 11% in that time.

Aphria Inc (NASDAQ:APHA) generated sales of $160.5M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 10.9% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($188M against $293M, respectively).

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