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Cannabis Investor
Profit from the Best Cannabis Stocks

Cabot Cannabis Investor Issue: December 27, 2023

Our cannabis trades continue to perform very well, beating the market by more than tenfold since the last update, depending on the index position considered.

The AdvisorShares Pure U.S. Cannabis (MSOS), is up 10.5%, and the AdvisorShares MSOS 2X Daily (MSOX) is up 18.7% since I last suggested getting long cannabis on December 13. I suggested both as proxies for the sector, at the time.

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Our cannabis trades continue to perform very well, beating the market by more than tenfold since the last update, depending on the index position considered.

The AdvisorShares Pure U.S. Cannabis (MSOS), is up 10.5%, and the AdvisorShares MSOS 2X Daily (MSOX) is up 18.7% since I last suggested getting long cannabis on December 13. I suggested both as proxies for the sector, at the time.

The gains compare to a 1.42% advance for the S&P 500 and 5.75% for the Russell 2000. So, we outperformed the market by two to thirteen times, depending on the cannabis ETF and the index comparison.

The Cannabis Plus Insider Portfolio is up 37.2% since I launched it on March 29 this year. Here we have outperformed the market by more than twofold. The 37.2% advance compares to gains of 16.2% for the Russell 2000 index, and 18.5% for the S&P 500 over the same time.

Our main cannabis stock portfolio beats the New Cannabis Ventures Global Cannabis Stock Index by seven percentage points, year to date.

2024 Predictions

As we turn the page on a new year, here’s my fearless prediction for investors: 2024 will be the year the cannabis sector finally grows up and attracts institutional investors (again).

Here are five major 2024 developments that will make this happen.

1) The U.S. moves cannabis to Schedule III from Schedule I under the Controlled Substances Act. The change puts a strong bid under cannabis stocks because of the positive implications for companies in the space. While falling short of technically legalizing cannabis at the federal level, the change increases cash flow dramatically by wiping out the impact of an Internal Revenue Service (IRS) rule that bars companies from deducting most expenses. Known as Rule 280E, the provision means cannabis companies pay around a 70% tax rate.

The federal government does get around to putting excise taxes on cannabis, which vary depending on potency as with alcohol. But the net change still boosts cash flow dramatically at cannabis companies. The next step in this process, called “rescheduling,” is Drug Enforcement Agency publication of a proposed rule. This could happen as soon as April. “April 20 is a good date to do it,” quips Curaleaf (CURLF) board chair Boris Jordan. That’s a reference to “420” which is slang for cannabis, but he is serious about the possible April timeline for this catalyst.

2) Cannabis sector sales growth picks up to 10% to 15% as more state markets develop. Ohio, which just legalized recreational use, sorts out its regulations and rec-use sales advance sharply all year, reflecting trends in states like New Jersey, Connecticut and Maryland after legalization of rec use. The New York market finally opens up as cannabis companies win licenses following their successful challenge of rules which had effectively excluded them in favor of social justice applicants. New York legal market growth is bolstered by a state-wide crackdown on illegal stores.

Floridians get to vote on a rec-use legalization referendum in the 2024 elections and they approved it by a narrow margin. Rec use comes online in 2025 in Florida, but the 2024 vote supports cannabis stocks right away because the state will be such a large market, given its population size and tourist traffic. Pennsylvania, now surrounded by states that allow legal rec-use sales, succumbs to pressure to do the same. It makes significant progress towards legalization, even if it doesn’t cross the finish line in 2024.

3) The liberalization of European cannabis laws continues, setting the stage for the development of a market similar in size to the U.S. market. Germany leads the way, by taking cannabis off its narcotics list. This allows doctors to recommend medical cannabis to many more patients. Germany develops into a large market in its own right, given its population of 83 million. Sales in Germany grow by as much as fivefold. But the change sets the tone for liberalization in other European countries, as Poland and other nations join the U.K. and Germany in relaxing the rules on cannabis sales.

4) Noticing the bump up in trading volume and liquidity at cannabis companies that list on the Toronto Stock Exchange (TSE), more companies do the same. TSE listing doesn’t bring instant stock gains. But besides helping companies by boosting liquidity, the additional upgrades help the sector by permitting major banks to provide stock custody services for companies that list. This opens the door for institutional investors to revisit the space. We see more road shows to bring professional investors up to speed. The uplistings also attract interest in the space by putting cannabis stocks in broad indices. To date, Curaleaf and TerrAscend (TSNDF; TSND.TO) have listed on the TSE.

5) North American cannabis prices reverse their declines and stabilize, supporting sales growth at cannabis companies. Declining cannabis prices and the rising cost of money put more producers out of business. This reduces supply, which further firms up prices. In Canada, the supply-demand rebalance is augmented by a crackdown on fraudulent THC concentration claims by rogue actors, and pressure on licensed producers to pay back taxes, including by withholding license renewals.

What to Do Now

I suggest continuing to stay long and adding on any weakness of 2% to 4% or more, in any of our portfolio names.

Portfolio names are: Ayr Wellness (AYRWF), Cresco Labs (CRLBF), Curaleaf (CURLF), Cronos (CRON), AdvisorShares Pure U.S. Cannabis (MSOS), AdvisorShares MSOS 2X Daily (MSOX), ETFMG Alternative Harvest (MJ), Green Thumb (GTBIF), Organigram (OGI), Tilray Brands (TLRY), Trulieve (TCNNF) and Verano (VRNOF). For simplicity, consider getting exposure via MSOS or the leveraged version MSOX.

Given the sector strength December 26, it might make sense to preserve some buying power for pullbacks. In a volatile sector like this, I prefer to add on weakness rather than strength.

Cannabis News from Around the World

Part of my core thesis for being bullish on cannabis stocks is that there continues to be tremendous cultural momentum toward cannabis reform around the world. I’m convinced cannabis stocks will not remain ignored forever.

We see evidence of this powerful cultural momentum in the changes in laws to legalize cannabis, big tobacco investments in the space, robust cannabis sales growth in states that legalize, increased cultural acceptance in the form of relaxed drug testing standards in sports leagues and the workplace, and poll results that show a growing majority of people support legalization regardless of age and party affiliation.

These trends tell us cannabis stocks are a strong contrarian buy that will turn very profitable for patient investors with a medium-term horizon. The sector is so volatile, it is easy to get shaken out of names by heightened emotional reaction to drawdowns. So, it is important to catalog evidence of this cultural momentum. That is the purpose of this section of Cabot Cannabis Investor.

* President Joe Biden on December 22 expanded his cannabis pardon initiative to people arrested for possession on federal property.

The news put a bid under cannabis stocks, driving them higher. That’s because Biden referred to the country’s “failed approach” to cannabis, in announcing the news. His comments reminded skittish cannabis investors that he is serious about major reforms like rescheduling under the Controlled Substances Act.

“Criminal records for marijuana use and possession have imposed needless barriers to employment, housing, and educational opportunities,” Biden said in a statement. “Too many lives have been upended because of our failed approach to marijuana. It’s time that we right these wrongs.”

“Just as no one should be in a federal prison solely due to the use or possession of marijuana, no one should be in a local jail or state prison for that reason, either,” the president continued. “That’s why I continue to urge governors to do the same with regard to state offenses and applaud those who have since taken action.”

On rescheduling, recall that the Department of Justice is now considering a recommendation from the Department of Health and Human Services to reschedule cannabis to Schedule III from Schedule I, based on a Biden initiative to achieve reform. The next step in this process should be a proposed rule on rescheduling from the Drug Enforcement Agency possibly by April, says one industry insider.

* A majority of sports doctors think cannabis should be removed from the World Anti-Doping Agency’s (WADA) list of prohibited substances. The study found that 59% of 333 doctors surveyed support the change. A majority of the doctors also support legalizing cannabis for recreational and medical use.

The results are part of an ongoing shift in attitudes in the sports world toward greater acceptance of cannabis use among athletes. The study is called Physician Perceptions of Cannabidiol (CBD) and Cannabis in Sports Medicine and Performance.

* Cannabis is now a “formidable competitor” to alcohol and it is going to keep gaining share as more states legalize, say researchers at the brokerage TD Cowen. The report says legal cannabis sales should hit $37 billion a year in 2027 as more state markets come online.

The brokerage says cannabis sales will come in at $29 billion in 2023. That’s 11% of alcohol sales, up from 4% five years ago. In Canada, cannabis sales are 20% of alcohol sales. Cannabis will gain 18 million users over the next five years (defined as people who report use in the past month) and alcohol will lose two million users, predicts the TD Cowen report, called “Cannabis Beats Booze.” A Gallup survey found Americans think cannabis is less harmful than alcohol, cigarettes and tobacco vapes. Cannabis sales surpass alcohol sales in Michigan, Illinois, Colorado, Arizona and Washington.

* Maine looks set to post record recreational-use cannabis sales in 2023. The state recently announced sales of $197.5 million through the end of November, nearly $40 million more than sales for all of 2022. Maine launched legal rec-use sales in 2020.

Company News

This section offers a roundup of developments at portfolio companies since the last Cabot Cannabis Investor update was published. One of the key trends to note is that our companies continue to open stores in states that recently legalized recreational use, or are about to make this change.

AYR Cannabis (AYRWF)

AYR Cannabis opened two new dispensaries in Florida, in Leesburg and Fort Myers. The openings take AYR’s dispensary count to 64 in Florida and 91 nationwide.

AYR has been opening dispensaries aggressively in Florida ahead of potential recreational-use legalization. It opened a dozen stores there in 2023. Floridians may get to vote on legalizing recreational use in the 2024 elections.

Green Thumb (GTBIF)

Green Thumb opened another RISE dispensary in Florida, in Port Orange. This is the company’s 14th location in Florida and 90th nationwide. The cannabis company is positioning ahead of potential recreational-use legalization in Florida over the next two years.

Organigram (OGI)

Organigram posted fourth-quarter sales growth of 1% to $46 million compared to the year before. Gross margins slipped to 17%, and losses widened to $33 million from $6.1 million. The increase in reported losses was caused by write-downs on equipment and goodwill, and increased costs.

But the news was not all bad. Thanks to growth in its pre-roll business, Organigram was the second-largest Canadian licensed producer at the end of the quarter. It has the #1 position in milled flower, gummies, and hash, and the #3 position in dried flower.

The company continued to take steps to boost international sales, which carry higher margins. It inked a U.K. supply agreement with 4C Labs to distribute medical cannabis. In Germany, it signed a supply agreement with Sanity Group to distribute medical cannabis. The company already supplies Israel and Australia.

Organigram upped investments in Greentank, which makes vaping products the company says are more user-friendly, and Phylos which supplies hybrid seeds and high-THCV strains. The hybrid seeds bring down costs by producing more robust plants. THCV strains (as opposed to THC-only strains) reportedly suppress appetite and increase focus and energy. The company also finished the expansion of its Lac-Supérieur production facility.

In a show of support for the cannabis sector by a major tobacco company, Organigram got a $124.6 million infusion from its partner British American Tobacco (BAT). The BAT investment creates an investment fund called “Jupiter” meant to support Organigram’s international growth. About $83 million will go towards this effort, and $41.5 million will be used for general corporate purposes. BAT already had a large stake in Organigram. It invested $221 million in the company in 2021.

Not counting the BAT cash infusion, the company ended the quarter with $51.8 million in cash and negligible debt.

Organigram guided for revenue gains in 2024, but it offered no detail on the amount of the advance.

Canna Plus Portfolio News

This portfolio consists of cannabis-related companies that do not touch the plant, where insiders have been buying shares.

Chicago Atlantic Real Estate Finance (REFI)

Chicago Atlantic Real Estate Finance on December 18 affirmed its quarterly cash dividend of $0.47 per share for the fourth quarter of 2023. The regular quarterly dividend, which equates to an annualized dividend of $1.88 per common share, is payable on January 12, 2024, to shareholders of record as of December 29, 2023. That equates to a 15% yield, for anyone who bought at my original suggestion price of $12.40 per share.

The board also declared a special cash dividend of $0.29 per share for 2023. It is payable on January 12, 2024, to shareholders of record as of December 29, 2023. That equates to a 17.5% trailing yield, for anyone who bought at my original $12.40 suggestion price. The company is a cannabis sector real estate lender.

AFC Gamma (AFCG)

AFC Gamma on December 15 affirmed its quarterly dividend of $0.48 for the fourth quarter. It is payable on January 12, 2024, to shareholders of record on December 31, 2023. This works out to a 13.9% dividend yield for anyone who bought at my original suggested price of $13.77 per share. AFC Gamma is a cannabis sector lender.

Cerevel Therapeutics (CERE)

This biotech company is getting bought out for $45 a share in an all-cash offer from AbbVie (ABBV). This produces 105% gains for anyone who bought at my August 2023 suggested entry price of $21.91.

Cerevel Therapeutics trades below the buyout price because of the risk that regulators may challenge this merger. I do not believe that will happen, but it is possible. Back on December 13, I suggested continuing to hold Cerevel for more gains as the perceived antitrust risk recedes. Since then, Cerevel is up 3.4% to trade at $42.31 compared to $41.05 on December 13. I suggest continuing to hold for further gains as the antitrust discount continues to recede.

Cerevel has cannabis sector exposure because its lead product candidate is a therapy for schizophrenia, which is induced in certain people via cannabis use, according to several studies.

Sector Performance

Our main cannabis portfolio continues to vastly outperform the New Cannabis Ventures Global Cannabis Stock Index, now by 7 percentage points. Year to date as of the close December 26th, our portfolio was down 7.54% vs. a 14.52% decline in the index. We achieved this outperformance in the sector drawdown despite continuing to have leverage in the portfolio, which amplifies upside and downside against the unlevered index.

Our portfolio is leveraged because of the large position in AdvisorShares MSOS 2X Daily (MSOX). It is a top-five position. This makes the portfolio swing around a lot. I think the volatility is worth it, in exchange for the opportunity to capture more upside over the next year as we see progress on rescheduling cannabis, progress towards approval of recreational use in more large states like Pennsylvania and Florida, and possible rescheduling of cannabis at the federal level.

Once a few of these pieces of the puzzle are firmly in place, I will roll back leverage by trimming MSOX in favor of cannabis stocks or the AdvisorShares Pure U.S. Cannabis (MSOS) ETF. If you are a highly active trader, it would make sense to deleverage into rallies in the same manner along the way and then hope for a pullback to re-lever.

The Cannabis Plus Insider Portfolio is up 37.2% since I launched it on March 29 this year, beating the market by two times. That compares to gains of 16.2% for the Russell 2000 index and 18.5% for the S&P 500. It is well positioned to outperform because our cannabis investment companies Chicago Atlantic Real Estate Finance (REFI) and AFC Gamma (AFCG) pay attractive yields of 11.26% and 15.15%, and the dividends were recently confirmed even though they look suspiciously high. Portfolio prices are as of the close, December 26.


StockSharesCurrent ValuePortfolio WeightingPrice 12/26/23
Ayr Wellness (AYRWF)1,692$3,3342.50%$1.97
Cresco Labs (CRLBF)9,180$13,67810.20%$1.49
Curaleaf (CURLF)5,698$23,81817.70%$4.18
Cronos (CRON)1,683$3,4502.60%$2.05
AdvisorShares Pure U.S. Cannabis (MSOS)1,558$11,2028.30%$7.19
AdvisorShares MSOS 2X Daily (MSOX)4,844$17,77713.20%$3.67
ETFMG Alternative Harvest (MJ)1,496$5,0273.70%$3.36
Green Thumb Ind. (GTBIF)3,355$39,65629.50%$11.82
Organigram (OGI)4,834$6,4294.80%$1.33
Tilray Brands (TLRY)2,071$4,7633.50%$2.30
Trulieve (TCNNF)695$3,7512.80%$5.40
Verano (VRNOF)351$1,4991.10%$4.27

Cannabis Plus Insider Portfolio

CompanyTickerDate AddedPrice Bought12.26.23 PriceTotal Return*Current YieldCurrent Status
Chicago Atlantic Real EstateREFI3.29.23$12.40$16.9036.29%11.26%Buy
AFC GammaAFCG7.26.23$13.77$11.32-17.79%15.15%Buy
Cerevel TherapeuticsCERE8.9.23$21.91$42.3193.11%0%Buy

Company Profiles

Ayr Wellness (AYRWF) This is a vertically integrated multistate operator based in Miami. It has over 85 dispensaries. It operates in Florida, Illinois, Massachusetts, Pennsylvania, New Jersey, Nevada, Ohio, and Connecticut. Ayr has 18 grow and production sites, around a dozen national brands, and a proprietary library of over 160 cannabis strains.

Ayr recently built out its brand development strength with the appointment of David Goubert as president and CEO. Goubert previously served as president and chief customer officer at Neiman Marcus Group, and he was at LVMH for 20 years before that.

Ayr is currently launching brands from its national portfolio in New Jersey, including Ayr’s Lost in Translation flower, Kynd flower, Road Tripper flower, STIX pre-rolls, Entourage vapes, Secret Orchard vapes, and Wicked soft lozenges.

Ayr reports $73 million in cash and $633 million in net debt. This debt overhang is one reason why Ayr trades at .3 times sales. The company says it will be cash flow positive for the year in 2023. The company is founder-run, which can be a plus in investing. BUY


Cresco Labs (CRLBF) Chicago-based Cresco has the #1 market share position in Illinois, Pennsylvania and Massachusetts. The company has the top-selling branded portfolio of cannabis products in the industry. It has the top of branded flower and branded concentrates, and the third-best portfolio of branded vapes.

Cresco offers exposure to many attractive U.S. markets with an emphasis on Illinois. It is also in Pennsylvania, Ohio, New York, Massachusetts, Michigan, Florida, Missouri, and Maryland. Most of those are states that recently expanded into recreational use sales, or are expected to over the next two years.

The company is founder-run, which can be a plus in investing. Cresco Labs has a price to sales ratio of .67. BUY


Cronos Group (CRON) Cronos is mainly a foreign operator with exposure to Canada and Israel. It’s in turnaround mode, and often insiders buying their own turnaround is a good combination.

Cronos has respectable brand strength in Canada. It sells gummies, infused pre-rolls and vapes under the Spinach, Blue-Raspberry Watermelon and Tropical Diesel brands. Spinach products command 15.3% market share in the Canadian edibles category, and 19.8% share in gummies, according to Hifyre.

In Israel, Cronos sells dried flower, pre-rolls and cannabis oils in the medical market. In the U.S., Cronos sells hemp-derived supplements and cosmetic products under the brands. The company has a partnership with Cansativa Group which allows Cronos to sell its i Peace Naturals brand in Germany, where the cannabis market should grow dramatically over the next several years because of liberalization of restrictions on sales. Cronos has a 10% stake in Cronos Australia, a publicly traded company.

Cronos has $840 million in cash, or about $2.21 per share, against minimal debt of $3.2 million. Some of that cash could be deployed in acquisitions, possibly to expand in the U.S. adult-use market.

There’s been some big insider buying at Cronos Group and I think it makes sense to follow the insider into this name. Director Jason Adler has purchased large amounts in the $1.71 to $3.10 range. Cronos trades at .66 times book value. BUY


Curaleaf (CURLF) Massachusetts-based Curaleaf was the industry leader last year. It operates 152 dispensaries and 22 grow sites in 19 states and its European operations. It has one of the strongest brand portfolios in the U.S. led by Select, the number one selling vape brand in its markets. Here are three factors that support growth.

1. Curaleaf is an R&D powerhouse. A team of scientists is currently developing about 180 products.

2. Curaleaf is an industry consolidator. The company’s executive chairman has a lot of experience rolling up fragmented and distressed industries. M&A is supported by a healthy balance sheet and good access to capital. Given how much the cannabis group has fallen in the past year, there are probably a lot of good bargains out there.

3. Curaleaf will benefit from progress on legalization in Germany and Europe. It has a majority stake in Germany’s Four 20 Pharma, a licensed producer and distributor of medical cannabis that has more than 15%-20% market share in Germany. Curaleaf International is the largest vertically integrated cannabis company in Europe. It has a lot of room to expand production, and it boasts import and distribution in the U.K., Germany, Italy, Switzerland, and Portugal. Recreational use legalization in Germany is advancing, and it could open the floodgates to further legalization throughout Europe. Curaleaf has a 50% market share in the U.K.

The company is founder-run, which can be a plus in investing. Curaleaf has a price/sales ratio of 1.93. BUY


AdvisorShares Pure U.S. Cannabis ETF (MSOS) This exchange-traded fund (ETF) has large exposure to most of our portfolio names so it may seem redundant. However, I want to put it on your radar as a liquid trading vehicle for getting in and out of the group without having to make a lot of individual stock sales, and as a way to get exposure to many of our names with one purchase. It also gives us diversification beyond our names, to positions like Jushi Holdings (JUSHF) and Innovative Industrial Properties (IIPR), among others. Consider accumulating this ETF on weakness of 2% or more. BUY


AdvisorShares MSOS 2x Daily ETF (MSOX) This is the leveraged version of the ETF MSOS. It theoretically goes up (and down) by twice as much as MSOS, though the relationship does not always hold exactly. Consider accumulating on weakness of 2%-4% or more. BUY


ETFMG Alternative Harvest (MJ) This ETF has outsized foreign exposure, which means it could benefit more than other marijuana exchange-traded funds if we see progress on legalization in Germany and Europe. That could happen in the form of draft legislation and decriminalization of recreational use in 2023. “Legalization in Germany could be a tipping point for global expansion,” according to cannabis experts at ETFMG. This would put additional pressure on other European Union members to move forward with legalization. It could also encourage reform of the 1961 U.N. Single Convention on Narcotics which prohibits the cultivation and sale of recreational cannabis. “Such a result would be momentous and would open the doors to a global market,” says ETFMG. Owning this ETF broadens our industry exposure to names outside our portfolio, like Canopy Growth (CGC; WEED.TO), SNDL (SNDL), and GrowGeneration (GRWG), among others. BUY


Green Thumb (GTBIF) Chicago-based Green Thumb is our portfolio’s largest position. Green Thumb was the third-largest cannabis company in the U.S. last year, with operations in 15 markets. It has been the most profitable multistate operator of all the big ones – a sign of good management.

Green Thumb branded cannabis products include &Shine, Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredibles and RYTHM. The company operates a chain of national retail cannabis stores called RISE. It has 84 retail stores and 18 manufacturing facilities in 15 U.S. markets.

Green Thumb is expanding its medical footprint in Florida through a lease agreement with the convenience store chain Circle K. This could be a big deal, since the Circle K chain has 600 locations in Florida. Ongoing market developments in Illinois and New Jersey could be strong catalysts for Green Thumb Industries.

Founder Ben Kovler is chairman and CEO. Research shows that founder-run companies often outperform. Kovler has a 26% stake in the business and holds nearly 59% of voting power. Green Thumb trades at a price to sales ratio of 2.42. BUY


Organigram (OGI) Organigram holds the #2 position among Canadian licensed producers. It also sells high-margin flower in Israel and Australia. It signed a deal in May to supply a German medical cannabis operator called Sanity Group. Germany should see robust growth over the next few years as it loosens rules on medical cannabis use. The CEO has alluded to “creative ways” to get into the U.S. cannabis market but does not offer details.

OGI expects to generate positive free cash flows by the end of calendar 2023. OGI also guided for higher revenue this year. It expects improved profit margins because of increased international sales which produce higher profits, and increased sales of higher-margin finished products like those in its Holy Mountain lineup.

The company has the #1 market share position in hash globally driven by popular products like Tremblant, Holy Mountain and SHRED. It has the #1 market share position in gummies.

British American Tobacco (BTI) is a big investor in Organigram, owning 19.4% of the company, an endorsement of its potential. The two companies collaborate to develop cannabis products. The price to sales ratio is .86. BUY


Tilray Brands (TLRY) Tilray is a cannabis and consumer packaged goods company with one of the biggest global footprints in the industry. CEO Irwin Simon founded The Hain Celestial Group, a natural food company, which is in the business of brand development. This is a key factor for cannabis companies, too. So, the Hain Celestial experience may bode well for shareholders.

Tilray is a big recreational and medicinal cannabis supplier in Canada. It is ranked #1 there by sales for cannabis flower, oils, concentrates, and THC beverages; #2 in pre-rolls, #4 in vape, and among the top 10 in all other categories. It also offers medical cannabis in 20 countries on five continents through its subsidiaries and agreements with pharma distributors. It has operations in Canada, the United States, Europe, Australia and Latin America. It sells craft beer and CBD products in the United States.

Tilray seems like a good play on expected legalization of recreational use in Europe over the next few years, because it has been making significant investments there. It has a medicinal marijuana distribution network in Germany. It has production facilities in Portugal and Germany, the largest medical cannabis market in Europe. Once Germany legalizes, other countries will follow suit, probably using Germany’s regulatory framework as a blueprint on how to proceed.

Tilray sells hemp food products through its Fresh Hemp Foods division, and it has a craft alcohol business called SW Brewing, the tenth-largest craft brewery in the United States. The price to sales ratio is 1.76. BUY


Trulieve (TCNNF) Trulieve has long been the biggest medicinal marijuana vendor in Florida, where it has 50% market share. It has over 185 dispensaries and two-thirds are in Florida. Cannabis activists are trying to get recreational use on the Florida ballot in November 2024. A win would be huge for Trulieve. Approval could make Florida the largest legal U.S. cannabis market with 22 million residents and 138 million tourists a year.

Meanwhile, Trulieve has been expanding across the country via acquisitions. It is diversifying its presence into Pennsylvania, Maryland, Georgia, Ohio and Massachusetts, among other states.

The company reports $192 million in cash against $903 million in debt. The company projects operating cash flow of $100 million this year. “U.S. cannabis has significant white space ahead, with many states yet to implement medical or adult-use programs, and the growing appetite for substantive federal reform,” says CEO Kim Rivers. It has a price to sales ratio of .71. BUY


Verano (VRNOF) Chicago-based Verano is one of the top five publicly traded multi-state operators in the U.S. by sales. The company has over 130 stores and fourteen cultivation and processing plants in thirteen markets. One of the most attractive qualities of this company is that it has a big presence in high-growth markets like New Jersey, Illinois, Florida and Connecticut, and states that are about to legalize recreational use like Maryland, and states that may soon legalize recreational like Florida, Ohio and Pennsylvania. The company’s strategy has been to position with medical dispensaries in states most likely to soon go recreational.

Verano also has consistent operating cash flow at a time when financial strength is important due to pricing pressure in the sector.

The company’s portfolio of brands includes Encore, Avexia, MÜV and its signature Verano line of product. To capitalize on the consumer’s trading down to value brands, Verano moved up the rollout of a new budget line called Savvy last year. It operates dispensary concepts called Zen Leaf and MÜV. It also has a licensing agreement with Mike Tyson’s Tyson 2.0 cannabis company.

The company has been dialing back capital spending and cutting overhead to bolster its balance sheet. But it has some of the strongest operating cash flow in the business. The company reports cash of $129 million against debt of $517 million.

Verano is founder-run, which can be a plus in investing. Verano has a price to sales ratio of 1.6. BUY


The next Cabot Cannabis Investor Issue will be published on January 31, 2024.

Michael Brush is an award-winning Manhattan-based financial writer who writes a stock market column for MarketWatch. He is editor of Brush Up on Stocks, an investment newsletter. Brush previously covered the stock market, business and economics for the New York Times, the Economist Group, MSN Money, and Money magazine.