Cannabis stocks that have been on a tear in recent months have been able to catch the attention of investors with a powerful message: they are the new growth stocks. The cannabis industry was worth $8 billion in 2013, and is now worth just over $21 billion and expected to grow that to $50 billion by 2020.
In the last 12 months, the price of Hemp has risen from $1,000 per pound to $5,000.00 per pound. Now, many of you may think that it is all due to the recent new laws and regulations, but that is only part of the story. The other major factor is the increased demand for CBD. CBD is the cannabinoid that is believed to have the most medicinal value and is the one that is associated with the legal status.If a stock is up 568% in 12 months, it’s usually a good time to take profits. However, the cannabis industry has just created an exception.
GrowGeneration Corp. (NASDAQ: GRWG) is the largest retailer of specialty hydroponic products and growing supplies in the United States. GrowGen currently has 55 stores, including 20 in California, eight in Colorado, seven in Michigan, five in Maine and Oklahoma, and two each in Nevada, Washington, Oregon, Arizona, Rhode Island, Florida and Massachusetts. GrowGen also operates an online shop for growers.
With the cannabis industry booming in the United States, Growgen has benefited from this trend. Now it’s hard to find another company offering this kind of revenue growth – Growgen’s first quarter results were impressive. Here are some highlights from the press release.
- First quarter revenue increased 173% to $90 million.
- Same-store sales increased 51% year-over-year in the quarter.
- Record earnings of $0.10 per share for the quarter.
Impressive growth of GrowGen shares
Growgen’s impressive sales growth has led to a rise in its share price. The stock is up 568% in the past 12 months.
GrowGeneration Corp. 12-month chart (NASDAQ:GRWG)
Due to its incredible growth, Growgen has just announced that it will be included in the Russell 2000. The Russell 2000 is a popular and closely watched index of 2,000 small-cap stocks. More details from the press release can be found here.
DENVER, 28. June 2021. /PRNewswire/ -GrowGeneration Corp. (NASDAQ: GRWG), (GrowGen or the Company), the country’s largest chain of specialty hydroponic and organic garden centers, was added to the Russell 2000®U.S. Small-Cap Index today after opening its U.S. market on the 28th. The month of June comes into force as part of the reconstitution of the Russell 2021 Index. Membership in the Russell 2000® Index, which is maintained for one year, is based on membership in the Russell 3000®Index with a broad market. The shares were also automatically included in the respective growth and value indices.
Inclusion in the Russell 2000 is a big win for Growgen. Institutional fund managers use the Russell 2000 Index as a benchmark, which should help attract more capital to Growgen shares.
Inclusion in Russell gives Growgen additional credibility as one of the largest and most successful small-cap companies in the United States. This should also attract the attention of millions of individual investors.
Here’s what Growgen CEO Darren Lampert had to say.
Darren Lampert, CEO of GrowGeneration Corp. said: Inclusion in the Russell 2000 is a significant milestone for the company and reflects the continued growth of our business. GrowGen continues to focus on expanding the number of its hydroponic garden centers while increasing sales and net income. We believe that a listing on the Russell 2000 will enhance long-term shareholder value by increasing awareness, liquidity and attractiveness to institutional investors.
Big Picture by Growgen and Russell 2000
Growgen is the largest retailer of specialty hydroponic products in the United States. The company is benefiting from the rapid growth of the cannabis industry in the United States.
First quarter revenue growth was impressive, and the stock is up 568% in 12 months. For the future, we expect even more success after the company’s inclusion in the Russell 2000 index. This gives the company greater visibility and should help raise more capital for the stock over the next 12 months.
About the author and cannabis stock trading
Michael Wodicka is an equity analyst with over 20 years of trading and investment experience. His research has received attention in some of the industry’s most respected publications. He has been investing and managing investors in the cannabis sector since 2013.
Mr. Vodicka offers his experience and advice to Cannabis Stock Trades members.
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