The coronavirus pandemic has come as a major shock for most industries across the board. The marijuana sector has not been an exception in this regard, and as a matter of fact, many cheap marijuana stocks recorded steep declines even before the crisis had hit a few weeks back. That being said, it is also important to keep in mind that the marijuana sector as a whole may grow in the long-term, and many of the cheap marijuana stocks on the market could eventually generate handsome returns for investors. It could be worthwhile for investors to keep a close eye on these stocks.
While it is true that many of the cheap marijuana stocks are expected to eventually generate gains for investors, it is also necessary to consider the growth path of the sector. When it comes to a relatively nascent sector like marijuana, there are bound to be growing pains, and many of these stocks are going to go through turbulent periods. Not all these stocks are going to be long-term winners, and investors will need to be diligent with their research to pick the right ones. Here is a look at three promising cheap marijuana stocks.
One marijuana company that managed to adjust to the new realities of the coronavirus pandemic is Trulieve. The company primarily operates in Florida through its 46 medical marijuana dispensaries, and it has done brisk business during these lockdowns. Home deliveries have soared by 500% in the past few weeks, and curbside pickups have also shown a significant rise.
Trulieve has cornered 50% of the market in Florida, but there is room for more growth in the state. The stock had a bit of a stutter in recent months thanks to a short-seller report from Grizzly that suggested that Trulieve runs a fraudulent operation. Trulieve stock tanked on the news, but the company sued Grizzly later on. The case has not proceeded due to the coronavirus crisis.
Trulieve generated revenue of $252.8 million in 2019 and a net income of $178 million. The company also ended the year with $91.8 million in cash. These numbers clearly indicate that Trulieve is in a much stronger financial position when compared to many other companies in the sector. The cash balance will likely help the company navigate this tricky period.
3 Cheap Marijuana Stocks: Acreage Holdings (OTCQX:ACRGF)
Investors looking to invest in cheap marijuana stocks could consider taking a closer look at Acreage stock, which has caused a stir this week. The company announced that it is going to delay announcing its financial results for the most recently completed quarter. The original deadline was May 15.
Acreage stated that the coronavirus pandemic and the steps taken to tackle it have caused a major disruption to its operations. The company revealed that the lockdowns and social distancing rules have made it difficult for its financial reporting team to access the account books and other records. This is a direct consequence of the work-from-home orders, according to Acreage.
The company announced that it aims to release the financial results on June 25 after the closure of markets, and a conference call is also going to be hosted on the same day. In the SEC filings, the company also pointed out that it has furloughed some employees and that retail operations in North Dakota and Maryland have been halted temporarily. Investors took the news in stride, and ACRGF stock jumped 10% this week.
Due to the onset of the coronavirus pandemic, there has been a massive surge in demand for hand sanitizers, resulting in many companies pivoting (at least temporarily) into that business. One of those companies is Neptune Wellness Solutions, which is primarily a marijuana company under ordinary circumstances.
Thus far, the move from Neptune has proven to be a success, and its stock surged further on Thursday after a major announcement from the company with regards to its hand sanitizer initiative. Neptune announced yesterday that it is aiming to boost its weekly production of hand sanitizers to 1 million units so as to meet the demand for the product.
The announcement proved to be a major trigger for NEPT stock, which surged by 30% on Thursday. In fact, NEPT stock has soared 90% so far in April.