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Weed is stomping out cigarettes in the US — here are 3 stocks to consider as the industry keeps growing

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Weed is stomping out cigarettes in the US — here are 3 stocks to consider as the industry keeps growing

Marijuana stocks don’t seem to be making the big headlines they used to. But that doesn’t mean the green wave has stopped.

According to a recent Gallup poll, 16% of Americans said they smoked marijuana in the past week, while just 11% said they smoked a tobacco cigarette.

It marks the first time that smoking pot is more popular than smoking cigarettes in America. It is also the highest percentage of reported past-week marijuana use since Gallup began tracking the data since 2013.

Experimentation with the substance has also grown in America — by a lot.

In 1969, when Gallup first asked the question of whether you have ever happened to try marijuana, only 4% of Americans answered yes. Today, nearly half of Americans say they have tried it.

Let’s take a look at three marijuana stocks ready to capitalize on this trend. They are listed on stock exchanges in Canada but trade over the counter in the U.S. — analysts also see major upside in this trio.

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Trulieve Cannabis Corp (TCNNF)

Trulieve Cannabis entered the cannabis industry by winning the first medical marijuana application in Florida in 2015. Today, it has 100 stores in the Sunshine State, and around 150 operated and affiliated dispensaries nationwide.

The company claims that it has leading market positions not just in Florida, but also in Arizona and Pennsylvania.

Trulieve’s financials have grown tremendously, and even the COVID-19 pandemic couldn’t stop the momentum. In 2020, revenue rose 106% from the 2019 level to $521.5 million.

In 2021, revenue surged another 80% to $938.4 million.

According to the latest earnings report, Trulieve earned $320.3 million of revenue in Q2 of 2022, up 49% year over year.

The stock, however, has plunged over 55% year to date.

Canaccord analyst Derek Dley sees a rebound on the horizon. The analyst has a ‘buy’ rating on Trulieve and a price target of C$57 on its Canada-listed shares — implying a potential upside of 298%.

Green Thumb Industries (GTBIF)

Green Thumb is a vertically integrated cannabis company headquartered in Chicago. It has 17 cultivation and manufacturing facilities, six consumer product brands, 77 open retail locations, and operations in 15 U.S. markets.

Just like Trulieve, Green Thumb stock hasn’t been a hot commodity: shares are down more than 30% in 2022.

Business, however, is still on the rise.

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Revenue totaled $261 million for the quarter that ended in September, up 12% year over year and 3% sequentially.

But the best part has been the bottom line. Green Thumb earned a profit of $10 for the quarter, marking its ninth consecutive quarter of positive net income.

Stifel analyst Andrew Partheniou has a ‘buy’ rating on Green Thumb and a price target of C$30.50 on its Canada-listed shares. Since these shares trade at C$16 right now, the price target represents a potential upside of 91%.

Curaleaf Holdings (CURLF)

With a market cap of around $4.6 billion CAD, Curaleaf is a bigger company than both Trulieve and Green Thumb.

It has a huge presence in the U.S. cannabis industry, with 26 cultivation sites, approximately 4.4 million square feet of cultivation capacity, 136 retail locations and more than 2,150 wholesale partner accounts.

During the third quarter, revenue grew 7% year over year to $340 million.

Notably, Curaleaf has a strong focus on research and development: the company is currently on pace to increase new product revenue 75% year over year.

Still, this pot heavyweight is not immune to the industry-wide sell-off as shares are down over 30% year to date.

Alliance Global Partners analyst Aaron Grey has a ‘buy’ rating on Curaleaf and a price target of C$12 on its Canada-listed shares — roughly 60% above where they sit today.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.


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