Investing In The Best Cannabis Stocks In 2021
Are you looking for the best marijuana stocks to invest in for the summer? At the present time, many top cannabis stocks to buy are showing some upside to close out June. After months of declines in the cannabis sector, June appears to be producing gains for top pot stocks. One area of the cannabis market that has performed well for investors is ancillary marijuana stocks.
Ancillary cannabis companies are those companies that support the cannabis industry without touching the actual marijuana plant. Since 2020 these companies have seen significant growth and have become a major attraction for many different types of investors. As it stands, There are several reasons why this area of the market has attracted new investors.
Because these companies do not actually touch marijuana, they are able to trade on the major stock exchanges. In addition, most ancillary marijuana stocks have shown more market stability when compared to vertically integrated cannabis stocks. Another attractive factor some of these cannabis stocks have is a dividend for shareholders. With more stability and an incentive for the long hold, these top marijuana stocks could also be the best for long-term investing in cannabis.
Ancillary Marijuana Stocks And Long Term Investments
At the present time, ancillary marijuana stocks have also held their value better than other marijuana stocks. One example of an ancillary cannabis stock that performed extremely well in 2020 is GrowGeneration Corp. (NASDAQ:GRWG). In 2020 GRWG stock gained over 880% and continued to gain in the first quarter of 2021 hitting a new high in February.
In general, many ancillary cannabis stocks have also seen similar market trends since 2020. Now after a few months of declines, they could be primed for some upward momentum. For investors finding the best positions for your investment requires due diligence on the part of the trader.
Generally speaking, researching a company’s financials and studying how the stock performs in the market can help you achieve the best position for your investments. Currently, many analysts are predicting the future upside for the cannabis sector from these levels. With this in mind, we can take a closer look at some of the best marijuana stocks to buy before July.
Top Marijuana Stocks To Add To Your 2021 Watchlist
Innovative Industrial Properties, Inc.
Currently, one of the few real estate investment trust focusing on the US licensed cannabis industry is Innovative Industrial Properties, Inc. IIP owns 72 properties across 19 states nationwide. In 2021 IIP closed several acquisitions including properties in Pennsylvania and Massachusetts expanding its lease portfolio. After they purchase the property IIP will enter into a long-term triple net lease with the cannabis company using the property.
In the first quarter of 2021 IIP saw total revenue of an estimated $42.9 million an increase of 103% year over year. Currently IIPR stock is outpacing the stock market showing upward momentum in this month. On June 15th IIP declared its second-quarter 2021 dividend for shareholders. The company announced a dividend of $1.40 per share which represents an increase of 6% over the first quarter dividend. At the present time, the dividend equates to an annualized dividend of $5.60 per share and is the 11th dividend increase since 2014.
IIPR stock is trading at $194 on June 29th up 6.86% year to date. In February IIPR stock reached a high of $222.08 and has given investors a 3-year total return of 513.33%. According to analysts at CNN Business IIPR stock has a 12-month average price target of $219.00 per share. This would represent an upside of 12.90% from current trading levels. For this reason, IIPR stock could be one of the best marijuana stocks to buy for the long term.
Hydrofarm Holdings Group, Inc.
Hydrofarm Holdings Group, Inc. distributes and manufactures hydroponics equipment and supplies for controlled environment agriculture. In 2020 Hydrofarm became a publicly-traded company entering the market as a traditional IPO that was met with significant gains from its introduction to the market. Primarily, the company manufactures and sells high-intensity grow lights, climate control solutions, and has a large portfolio of branded products for gardening that many cannabis producers prefer.
Recently, the company announced it completed the acquisition of a premium nutrient maker Heavy 16. In addition, the company entered into an agreement to acquire Aurora Innovations and its organic nutrients. As far as financials, in its first-quarter 2021 earnings, Hydrofarms saw net sales increase 66.5% to $111.4 million compared to $66.9 million from the year prior. At the present time, the company saw gross profits increase 100.8% to $23.2 million or 20.8% of net sales. Hydrofarm revised its full-year 2021 outlook with net sales growth of 30%-40% and adjusted EBITDA of $36-$42 million.
Currently, HYFM stock is trading at $60.20 up 13.28% year to date. In February HYFM stock reached a high of $95.48 and has gained 6.02% in the past five trading days. According to analysts at Tip Ranks HYFM stock has a 12-month average price target of $71.67 per share. This would represent an increase of 19.29% from its current trading price. With this in mind, HYFM stock could be a top cannabis stock to add to your long-term portfolio in 2021.