No Reefer Madness Here: 5 Cannabis-Focused Stocks For The 420 Trader
Investors looking to take their portfolios one toke over the line may wish to consider taking a look – preferably sober and without the narcotizing stimulation from the celebrated wacky weed – at the following quintet of cannabis industry-focused stocks.
ETFMG Alternative Harvest ETF (NYSE:MJ)
Founded in 2014 and headquartered in Summit New Jersey, this is the largest cannabis-focused exchange-traded fund on the market and the first and only U.S.-listed ETF to target the global cannabis industry directly, via the Prime Alternative Harvest Index.
The top holding in this ETF’s portfolio is the 10.35% share of Britain’s GW Pharmaceuticals plc (NASDAQ:GWPH), followed by a 9.88% share of Canada’s Aphria Inc. (NASDAQ:APHA) and a 7.01% share of Tilray Inc. (NASDAQ:TLRY).
On Dec. 4, 2020, this ETF reached the mark of $1 billion assets under management.
MJ trades around at $20.18, which is between its 52-week high of $34.58 and its 52-week low of $10.12
Founded in 2015 and headquartered in Charlotte, North Carolina, this company offers a line of consumer hemp-based cannabidiol (CBD) products, including gummies, tinctures, vape oils, topicals, bath bombs and pet products for the U.S. market.
Although the regulation of CBD products in the U.S. is fragmented, cbdMD has sought to make its brand known through high-profile advertising on with the popular Joe Rogan Podcast and partnerships with Bellator MMA, Life Time Fitness and Barstool Sports.
For its 2021 first-quarter earnings, cbdMD reported a record $12.3 million in net sales, up 22% from one year earlier, and a quarterly gross profit of $8.8 million, up from $6.4 million one year earlier.
cbdMD trades around $3.34, between its 52-week high of $6.83 and its 52-week low of $0.78.
Molson Coors (NYSE:TAP)
This company can trace its lineage back to 1786, when John Molson built Canada’s largest brewery in Montreal. The company became Chicago headquartered when Molson with the Adolph Coors Co.
Molson Coors is a relative newcomer to the cannabis sector, where it gained entry last year by teaming with HEXO Corp. (NYSE:HEXO) to create Truss Beverages, a standalone entity specializing in the sale of non-alcoholic CBD-infused beverages in Canada. In January, the companies entered the U.S. market with the Verywell line of sparkling ready-to-drink CBD beverages, which was released for exclusive sale in Colorado.
Molson Coors closed 2020 with $2.2 billion in sales, down from 2019’s sales of $2.4 billion. The company attributed its weaker 2020 performance to “on-premise restrictions, particularly in Europe, and North America packaging material constraints contributed to lower brand and financial volumes.”
Molson Coors trades at $52.65, just under its 52-week high of $56.10 and distant from its 52-week low of $32.11.
Village Farms International Inc. (NASDAQ:VFF)
Founded in 1989, this Canadian-headquartered company is a greenhouse grower of large-scale agriculture crops that include bell peppers, cucumbers and tomatoes. VFF became involved in the cannabis business in joint partnership with Emerald Health Therapeutics, with each company owning half of a venture called Pure Sunfarms, a Canadian firm that runs one of the world’s largest cannabis growing operations.
After a public disagreement between the companies last fall regarding the ownership of their venture, VFF acquired Emerald Heath Therapeutics’ share in Pure Sunfarms for $61.
In the U.S., VFF’s focus is the hemp-derived CBD market. It's the majority owner of a joint venture called Village Fields Hemp USA LLC, which is focused in outdoor hemp cultivation and CBD extraction, with operations at a 5.7 million-square-foot production area in Texas.
VFF closed 2020 with $170.1 million in sales, up from $144.6 million in 2019. The company’s net income in 2020 was $11.6 million, up from $2.3 million in the previous year.
The stock trades around $10.62, somewhere between its 52-week high of $20.32 and its 52-week low of $2.83.
See Also: Benzinga Cannabis Hour
Zynerba Pharmaceuticals (NASDAQ:ZYNE)
Founded in 2007 and based in Devon, Pennsylvania, this specialty pharmaceutical company is seeking to develop the CBD gel Zygel for transdermal cannabinoid therapies in neuropsychiatric disorders including Fragile X syndrome (FXS), Autism Spectrum Disorder and 22q deletion syndrome.
The company is conducting clinical trials on Zygel in the U.S. and Australia. Chairman and CEO Armando Anido said the company expects “to make significant progress in 2021.” However, the company has not pinpointed an expected timeline on when Zygel might be available commercially.
For 2020, Zynerba’s research and development expenses totaled $35.7, including stock-based compensation of $2.2 million. General and administrative expenses were $16.4 million, including stock-based compensation expense of $3 million. The company closed the year with a $51.3 million net loss, with basic and diluted net loss per share of $1.90.
Nonetheless, the company is not running on empty. In its most recent earnings report, Zynerba stated its it has sufficient cash and cash equivalents to fund operations and capital requirements into the first half of 2024.
“We believe that Zygel has the potential to meaningfully relieve the behavioral symptoms of the most impacted individuals with Fragile X syndrome,” said Anido. chairman and CEO of Zynerba. “We are thankful for our ongoing constructive dialogue with the FDA on our path forward to new drug application submission.”
Zynerba trades around $3.76, some distance from its 52-week high of $9.00 and closer to its 52-week low of $3.12.
(Illustration by M. Maggs / Pixabay.
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