At 2.10% of the total market cap, the cannabis ETF’s are worth a lot less than they once were. The ETF’s in particular, have been stuck in a holding position for the past few months waiting for a move in the stocks. With the recent run up in both Cronos and Aurora, it’s a good time to revisit the idea that these stocks are undervalued.
When you’re a $2.10 stock, it’s important to have a good portfolio. This is why I’ve been watching Giggle and Sneeze. The only problem is it’s been a rough ride for investors—when it hit a low of $1.20, I was hoping it would bounce back. So, I’ve been watching it for a while, and it’s in a pretty tight range. I’m still watching it, but I think it’s time to sell out.
Last week, Pot and Cannabis stocks had a big fall. Many analysts blamed the fall on a bullish conference call from GW Pharmaceuticals (NASDAQ:GWPH). GWPH’s conference call was a big disappointment for investors, who hoped the CEO would announce a new cannabis medication. Instead, the call focused on GWPH’s new analysis on its lead candidate for a cannabis-based treatment for Alzheimer’s disease.. Read more about cbd stocks to watch and let us know what you think.
Cheap cannabis stocks with great growth potential?
At first glance, Goodness Growth Holdings Inc. (CNSX:GDNS, OTCMKTS:GDNSF) seems to be a new name for pan equity investors. But in fact, the company has been around for a long time. Until recently, the company was called Vireo Health International Inc. Vireo Health began working with marijuana by obtaining one of two vertically integrated marijuana licenses in Minnesota in 2014. Today it is a company that grows cannabis in organic greenhouses in several states, produces pharmaceutical cannabis extracts and sells its products to its own pharmacies and to third-party pharmacies. The eighth. In June, Vireo Health announced it would change its name to Goodness Growth Holdings Inc. The 9th. In June, the Company’s shares traded under the new symbol GDNS on the Canadian Stock Exchange and GDNSF in the United States. Our transformation into Goodness Growth reflects the evolution of our company from a primarily early-stage medicinal market operator to one of the strongest organic growth generators in the U.S. recreational and medicinal cannabis market, said President and CEO Kyle Kingsley. (Source: Vireo Health announces name change to Goodness Growth Holdings at Investor Day 2021, Goodness Growth Holdings Inc, June 8, 2021) He added: Vireo is and will remain a leading medical brand, but this holding model reflects a much broader vision for our future and clearly differentiates our plant assets from our scientific incubator and [intellectual property], Resurgent Biosciences. (Source: Ibid).
GDNSF shares are particularly interesting right now because of the company’s Horizon strategy, a growth plan through 2022. During this period, Goodness Growth Holdings Inc. is expected to experience higher revenue growth due to changing regulations in most of its markets. The company also plans to open six to 10 more Green Goods outlets. It is important to remember that Goodness Growth’s business is already growing at a decent pace. Last year, the company’s total revenue was $49.2 million, up 64% from the year before. (Source: Vireo Health announces fourth quarter and full year 2020 financial results, Goodness Growth Holdings Inc, March 25, 2021). Considering what the economy went through in 2020 as a result of the COVID-19 pandemic, Goodness Growth’s results are very impressive. The company has also become more profitable. In 2020, the company generated gross profit of $17.1 million, or 34.8% of revenue. In 2019, gross profit was $7.3 million, or 24.5% of revenue. Goodness Growth Holdings Inc. opened four new Green Goods dispensaries last year, bringing the total number of active dispensaries to 15 by the end of 2020. And the growth momentum continued in 2021. According to the company’s most recent earnings report, Goodness Growth had revenue of $13.2 million in the first quarter of 2021, up 8.8% year-over-year. Without the company’s former subsidiaries in Pennsylvania, year-over-year revenue growth would have been 30%. (Source: Vireo Health announces first quarter 2021 financial results, Goodness Growth Holdings Inc, May 14, 2021). The company’s gross profit also continued to improve, reaching $5.6 million, or 42.6% of revenue, in the first quarter of 2021. Last year, the company’s gross profit was $3.3 million, or 27.0% of revenue. The company is also expanding its presence. In the first quarter of 2021, Goodness Growth closed a previously announced deal to purchase four cannabis licenses in Nevada. At the same time, the company completed construction of a 110,000 square foot growing facility in Massey, Maryland, and received regulatory approval. The total number of clinics operated by the company is currently 16, and the number is likely to increase. Although Goodness Growth Holdings Inc. is not a large cannabis company, it has a lot of cash, which is commensurate with its size. As of 31. In March, the Company had approximately $40.0 million of cash and cash equivalents on its balance sheet. Remember the Horizon strategy I mentioned earlier? This should push Goodness Growth’s business, and probably its share price, to new heights. According to the growth plan, the company’s total revenue is expected to be between $140 million and $180 million by 2022. With revenue of $49.2 million by 2020, Goodness Growth’s Horizon strategy aims to grow revenue from 185% to 266% over two years. In addition, management expects the Company to have positive cash flow beginning in the first half of 2022.
Goodness Growth Holdings Inc (OTCMKTS:GDNSF) Shares chart
Graph courtesy of StockCharts.com
Looking at the Goodness Growth stock chart above, we can see that the stock has lost much of its previous gains in recent months. GDNSF shares have lost more than 40% since peaking in early March. If Goodness Growth Holdings Inc’s growth plan proves successful, investors who invest in the stock during the current weakness could be well rewarded.
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