Hot Stocks: The 3 Best Opportunities for Investing in Cannabis
With 38 states now legalizing the use of medical cannabis, the market for cannabis stocks is better than ever. It is expected to grow tremendously in the years to come. Retailers, property owners, technology, and medicinal providers all exist within this market. They create a high demand for these hot stocks this year.
These three stocks provide necessary services, products, and deals to retailers and other cannabis companies operating within the industry. They capitalize on the growing demand and, as a result, show incredible prospects for investors who want to try their hand at cannabis stocks.
We’ll cover these stocks’ latest performance and the metrics that make them some of the best opportunities for investors to invest in the cannabis industry.
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WM Technology (MAPS)
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WM Technology (NASDAQ:MAPS) is a leading software and technology provider for cannabis companies throughout America. While some risk accompanies the stock, it demonstrated sporadic growth last year and offers an excellent potential for investors for long-term profits.
For example, in 2023, many analysts expected a lower EBITDA for Q3. However, the company ended the quarter with a slight increase from the previous year, ending at $10.7 million. The company’s cash flow and total shares also have reached hopeful heights since last year.
Another exciting prospect of WM Technology’s growth is that the company has no outstanding debt, meaning profits are accompanied by safe returns. To fuel its future growth, the company features its platform, Weedmaps. It encourages public engagement initiatives such as the annual public voting competition, “Best of Weedmaps.”
This competition invites users to vote for products, brands, and retailers based on customer service and quality criteria. The multi-media program boosts brand awareness for WM Technology and the industry as a whole.
If you accept some risk, you can get your hands on WM Technology for a cheap buy-in and witness the growth before this stock.
Grow Generation (GRWG)
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Grow Generation (NASDAQ:GRWG) operates hydroponic gardening retail stores nationwide and distributes hydroponic gardening products to cannabis growers. The company boasts 63 stores in 18 states and a massive e-commerce platform available for cultivators around the U.S.
Also, Grow Generation’s 2023 full-year report showcased revenue of $225.9 million, which beat the 2023 estimates. Despite the oversupply of cannabis in America last year, the company saw operating cash of $1.4 million.
In addition, Grow Generation reduced operating and administrative expenses by $13.6 million by optimizing internal costs and efficiencies. For long-term investors, it is exciting to see a company’s determination to lower costs, improve profits, and potentially pay dividends.
The improvement and expansion don’t stop there, though. Towards the end of February this year, Grow Generation entered a strategic partnership with dehumidification technology company Quest Climate.
The deal will allow Grow Generation to feature Quest Climate’s technology in its distribution offering and provide the latest to growers nationwide. The company’s growth prospects make it a fantastic buy for investors looking to capitalize on the booming demand for cannabis.
Innovative Industrial Properties (IIPR)
Source: Vitalii Vodolazskyi / Shutterstock
Instead of directly supplying products or offering retail sales of Cannabis, Innovative Industrial Properties (NYSE:IIPR) utilizes its sales-leaseback business model to buy properties belonging to medical cannabis suppliers and lease the property back to them.
Innovative Industrial Properties operates as a Real Estate Investment Trust (REIT). So, it offers large portions of its income as investor returns. Investors can be reasonably confident of receiving those returns thanks to the impressive growth that Innovative Industrial Properties showed last year.
IIPR’s revenue increased 12% from 2022 and offered shareholders dividends of $7.22 per share in 2023. The company’s dividends have increased yearly since its beginning in 2016.
With exciting growth and a solid business model to provide needed cash to the cannabis industry and receive hefty profits from leases, Innovative Industrial Properties is a cannabis stock you don’t want to miss out on.
On the date of publication, Joel Lim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Lim is a finance freelance writer who writes content for several companies like LTSE and Realtor, along with financial publications, including Mises Institute and Foundation for Economic Education.
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