Cannabis stocks are on the rise, with Canadian cannabis company Canopy Growth (NYSE:CGC) increasing in value by over 1,000% since its IPO. Here are three reasons to watch this top pot stock.
The top marijanas penny stocks 2020 is a top pot stock that has been on the rise. It is one of the few cannabis stocks to have an increasing share price, and it’s also one of the few cannabis stocks with a positive earnings report. Read more in detail here: top marijuanas penny stocks 2020.
This marijuana stock has the potential to be exceptional.
Compared to the earlier this year’s purchasing frenzy in marijuana stocks, the present market does not seem to be as excited about the industry.
That’s why now may be a good time to look at some high-quality marijuana stocks. After all, Warren Buffett famously remarked, “Be afraid when others are greedy, and greedy when others are frightened.”
So let’s take a look at Trulieve Cannabis Corp., one of the most reliable marijuana stocks on the market (CNSX:TRUL, OTCMKTS:TCNNF).
Sunshine State’s No. 1 Player
The company’s dominant position in Florida is the first reason to examine TCNNF shares.
Trulieve won Florida’s first medical marijuana application in 2015, established its first dispensary in 2016, and was granted the authority to grandfather in 14 shops beyond the state’s limit in 2017. (Source: Trulieve Cannabis Corp, “Investor Presentation: June 2021,” last viewed August 24, 2021.)
Through a reverse acquisition, the business became public on the Canadian Securities Exchange in 2018. During same year, it also made a number of purchases.
Trulieve was the first business in Florida to offer smokable marijuana flower in 2019. It went on to become the first business in the state to sell edibles.
Trulieve Cannabis Corp now operates more than 80 dispensaries in Florida, with a client base of more than 567,000 people. According to the business, it has a 48 percent share of the Florida medicinal cannabis industry.
Trulieve holds permits in California, Massachusetts, Connecticut, Pennsylvania, West Virginia, and Georgia, in addition to being the most dominating participant in Florida’s marijuana industry.
Both the top and bottom lines are growing.
The business has been expanding quickly, which is the second reason to buy Trulieve stock.
The company’s sales grew by 106 percent year over year to $521.5 million in 2020. (Source: Trulieve Cannabis Corp, “Trulieve Reports Fourth Quarter and Full-Year 2020 Results and Announces Full-Year 2021 Guidance,” March 23, 2021.)
Its adjusted profits before interest, taxes, depreciation, and amortization (EBITDA) almost quadrupled in 2020, from $126.4 million in 2019.
This upward trend has maintained in 2021. Trulieve earned $408.9 million in total income in the first six months of this year, an increase of 89 percent year over year. (Source: Trulieve Cannabis Corp, “Trulieve Reports Record Second Quarter 2021 Earnings and Expansion into New Markets,” August 12, 2021.)
Its adjusted EBITDA for the quarter was $185.7 million, up 69 percent over the previous year.
Trulieve Cannabis Corp is profitable, which is unusual for a marijuana business. Trulieve was profitable for the third year in a row in 2020.
And, with a net income of $71.0 million in the first half of 2021, which was 67 percent higher than the same time the previous year, the business is on pace to produce another year of significant bottom-line growth.
The stock of Trulieve seems to be oversold.
Pot stocks, as previously said, aren’t exactly popular commodities right now.
In January, February, and March, the share price of Trulieve Cannabis Corp hit new highs, but it was unable to maintain that pace.
TCNNF stock is now trading at approximately 50% of where it was during its March high, indicating that the retreat was severe.
Trulieve stock is oversold, according to its relative strength index (RSI), as a result of this sell-off.
In order to assess the momentum in a company, the RSI is computed using the closing prices of a recent trading session and comparing the size of recent gains to recent losses. It has a range of 0 to 100. When the RSI reaches 70, a stock is deemed overbought, and when it reaches 30, it is considered oversold.
The 14-day RSI of TCNNF stock has dropped to 25.7, as seen at the top of the chart below, indicating that it is very oversold. We may witness a rebound in Trulieve stock in the near future, given that RSI is an oscillator that swings between two extremes.
Chart of Trulieve Cannabis Corp (OTCMKTS:TCNNF)
StockCharts.com provided the chart.
As I always say, pot stocks are some of the most volatile tickers in the market, so beware of the risks before you make any decision about Trulieve Cannabis Corp. In the marijuana sector, share prices don’t move like those of companies like Procter & Gamble Co (NYSE:PG) or Coca-Cola Co (NYSE:KO).
TCNNF stock, on the other hand, may be one of the greatest bets in the industry for investors who understand the underlying dangers associated with marijuana companies.
The canopy growth is a top pot stock that has 3 reasons to watch it.
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