Let me start by saying that I’m sitting on this blog post until I have more information to report. I didn’t make it, but I found a great post that I think you’ll enjoy.
In this day and age, cannabis stocks have become one of the hot commodities on Wall Street. In the past year, the sector has been a popular one for retail investors, with companies like Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY) seeing double-digit growth rates. But while these companies have been riding high, some have been struggling to stay afloat. Here’s a beaten-down cannabis stock that could be on its way to a stunning comeback.
Over the past two months, it has become clear that the cannabis sector is watching the right hands. Patients are finally starting to enter the market in the United States, the government is providing more compliant cultivators with options, and the industry as a whole is making the transition from recreational to medicinal. One cannabis stock in particular is in the spotlight for its long-term potential.. Read more about is tilray a good stock to buy right now and let us know what you think.
Points to Remember
The stock of Planet 13 is down more than 30% from its high earlier this year.
The cannabis industry is growing, and much more development is expected in the near future.
While Planet 13 has the potential to pay off handsomely, there are a few important dangers to be aware of.
You may have expected 2021 to be a lot better year for Planet 13 Holdings (OTC:PLNH.F) than 2020. After all, the cannabis business spent most of last year dealing with the closure of its Las Vegas SuperStore. However, although Planet 13’s stock soared by 186 percent in 2020, it has remained essentially unchanged in 2021.
The enthusiasm from the previous year continued into February. Planet 13’s stock has dropped more than 30% from its previous high since then. However, that decrease may not continue much longer. Here’s why this beaten-down marijuana stock may be on the verge of exploding higher.
The economy is flourishing.
“It is obvious that Vegas is back,” stated Planet 13 co-CEO Larry Scheffler in the company’s first-quarter results release. Planet 13’s company is growing, proving the validity of the assertion.
In the first quarter, the business made $23.8 million in sales. That total represented a roughly 42 percent rise year over year and an 18 percent increase quarter over quarter.
Planet 13 had a profit of $0.4 million in the first quarter. Although this may not seem like much, the business lost $1.4 million in the first quarter of 2020, compared to $2.9 million the previous quarter.
Since the conclusion of the first quarter, things have improved much further. On April 20, which is known among cannabis supporters as “420 day,” Planet 13 reported single-day sales records. In May and July, the business recorded $11.9 million in revenue, which was an all-time high.
Getting ready to soar higher
When Planet 13 reports its second-quarter earnings on Aug. 26, it seems probable that the business will post its greatest quarterly results ever. Those figures may act as a strong stimulus for the stock. Planet 13 should have an even better future.
On July 1, the business launched its second SuperStore, this time in Santa Ana, California. In its first month of business, the shop made approximately $800,000 in sales. “Sales have increased week over week as we start to gain momentum as one of the top dispensaries in Orange County,” Planet 13 co-CEO Bob Groesbeck said.
Planet 13 Illinois, which just obtained a license to operate a cannabis shop in the Chicago region, has a 49 percent interest in Planet 13. As a tourist destination with a big population, Chicago is one of the company’s main target markets.
The Las Vegas SuperStore should be expanding its offerings shortly. In Nevada, licensed dispensaries may now open consumption lounges adjacent to their stores. Planet 13 has already set aside room for a consumption lounge and intends to begin building as soon as feasible.
Two major dangers
Planet 13 is a “high-risk, high-reward” investment, according to my Foolish colleague Prosper Junior Bakiny. That is an accurate description. There are two major dangers to the stock that investors should be aware of.
Planet 13 is still concerned about the COVID-19 epidemic. There’s still a chance that some of the limitations put in place last year may be reinstated. Even if that scenario does not play out, visitors may reduce their trip and consumers may remain at home more, both of which may hurt Planet 13’s sales.
Planet 13 has an even larger long-term risk of failing to duplicate its Las Vegas success in other cities. It’s too early to tell how well the company’s California SuperStore will function when it reaches its full potential.
However, I believe that Planet 13 stock will provide significant returns in proportion to its relatively high risk. I don’t believe the pandemic’s future consequences will be as disastrous for the business as they were in 2020. I further believe that, in this instance, what occurs in Vegas will not remain in Vegas, as Planet 13 extends its SuperStore idea into other markets.
After a long, hard fight, the U.S. House of Representatives recently passed the most far-reaching medical-pot reform in history. The bill, however, is far from a sure thing, and it could still face a long future in the Senate.. Read more about curaleaf stock and let us know what you think.
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