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Trulieve Cannabis (TCNNF)

Trulieve dispensary in Tallahassee, Florida, Sept. 1, 2020.
Trulieve

California might be Bieber’s favorite weed spot, but investors should put Florida on the map, too.

Case in point: Trulieve Cannabis entered Florida by winning the first medical marijuana application in the state in 2015. Today, the company has 90 stores, over 600,000 patients and around 2 million square feet of cultivation in the Sunshine State.

In fact, Trulieve is by far the No. 1 player in Florida’s cannabis market, with an estimated share of 46%.

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 the first six months of 2021, revenue surged another 89% year-over-year, to $408.9 million.

The stock has nearly tripled since the beginning of 2020. But in recent months, it has cooled.

In fact, Trulieve has pulled back more than 40% from its March peak. But given the growth momentum in its business, now could be a good time to add some Trulieve shares to your portfolio, even if you are starting with only $10.

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Green Thumb Industries (GTBIF)

STUTTGART, GERMANY - Aug 14, 2021: Mobile phone with webpage of American cannabis company Green Thumb Industries Inc  on screen in front of logo  Focus on top-left of phone display
Wirestock Creators / Shutterstock

Green Thumb is a vertically integrated cannabis company headquartered in Chicago. It has 16 manufacturing facilities, six consumer product brands, more than 60 operating stores, and licenses for 111 retail locations.

Just like Trulieve, Green Thumb delivered huge returns to early investors, but the stock hasn’t been able to continue its upward momentum: Though it has gained 91% year-over-year, it has fallen about 4% over the last six months.

Business, however, has only been going up.

Revenue totaled $221.9 million for the quarter that ended in June, up 85.4% year-over-year and 14.1% sequentially.

But the best part has been the bottom line. Green Thumb turned a profit of $22.1 million for the quarter, compared to a loss of $12.9 million in the year-ago period.

Curaleaf Holdings (CURLF)

Curaleaf dispensary in Daytona Beach, Florida.
Curaleaf

With a market cap of around $8 billion, Curaleaf is a bigger company than both Trulieve and Green Thumb.

It has a huge presence in the U.S. cannabis industry, with 30 processing facilities, approximately 2 million square feet of cultivation capacity, 111 retail locations and around 2,000 wholesale partner accounts.

Operational in 23 states already, Curaleaf has exposure to a population of 192 million.

During the second quarter, revenue increased 166% year-over-year to $312 million. For the full year, the company is projected to bring in $1.2 billion to $1.3 billion.

With a revenue run rate trending at about $100 million a month, Curaleaf is a name pot investors should not ignore.

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Big risk, big returns?

Cannabis Stocks Exploding High Quality
ShutterstockProfessional / Shutterstock

Since Trulieve, Green Thumb and Curaleaf are over-the-counter stocks (for U.S. investors, that is, because the companies are listed in Canada), they might seem more risky than NYSE- or Nasdaq-listed marijuana companies like Canopy Growth or Cronos.

Canopy Growth was the first cannabis producer to list on the NYSE (it has since moved to Nasdaq), while Cronos made headlines when tobacco giant Altria made a $1.8 billion investment in the company.

Most recently, investors are warming up to Tilray, a Nasdaq-listed pot company that enjoyed a nice little pop on Thursday thanks to a solid earnings report.

But the reality is, even the best-known players in the sector can experience massive swings in their share prices — in either direction.

Just check the long-term stock chart of any pot company and you’ll see what I mean.

Cannabis is a nascent industry, so pot stocks have the potential to turn small amounts of money into something substantial. But don’t risk more than what you can afford to lose.

And if you tend to be more risk-averse, there are better ways to build a fortune — and with little more than “spare change” from your everyday purchases.

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About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

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