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Cannabis Investor
Profit from the Best Cannabis Stocks

Cabot Cannabis Investor Issue: January 29, 2025

As has been the case for the past decade, the fate of cannabis stocks lies largely in the hands of politicians.

Cannabis companies have been getting solid support from state-level politicians. Forty states now allow sales of medical cannabis.

Sure, they are permitting too many stores, and that is putting downward pressure on pricing. At some point, the market sorts that out. Prices will fall to a point where it is no longer that enticing to bring on new supply, yet companies will have gotten lean enough to produce profits. We are not there yet. But we will get there.

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As has been the case for the past decade, the fate of cannabis stocks lies largely in the hands of politicians.

Cannabis companies have been getting solid support from state-level politicians. Forty states now allow sales of medical cannabis.

Sure, they are permitting too many stores, and that is putting downward pressure on pricing. At some point, the market sorts that out. Prices will fall to a point where it is no longer that enticing to bring on new supply, yet companies will have gotten lean enough to produce profits. We are not there yet. But we will get there.

At the federal level, it has been a rockier ride. Cannabis investors got their hopes up under the Biden administration when the government seemed to be aggressively advancing rescheduling, which would instantly make cannabis companies more profitable by opening the range of allowed deductions against federal taxes.

The Biden administration ultimately let the cannabis sector down. Now, it’s up to President Donald Trump. He promised in his campaign to achieve rescheduling and implement SAFER banking reform that allows banks to work with cannabis companies. He even implicitly favored legalization by supporting a Florida referendum that would have achieved this.

I’ll continue to take Trump at his word and invest under the assumption that he will get around to his promised cannabis reforms. The challenge is, he has a busy agenda and cannabis reform is not at the top of his list of goals. But sooner or later, his Department of Justice will get around to rescheduling. That will be a big catalyst for cannabis stocks.

Near term, the hearing process inside the Drug Enforcement Administration (DEA) has been stalled over legal disputes about DEA behavior and its role as an advocate for rescheduling, given its apparent opposition to reform. This delay is not a bad thing. It pushes back action on rescheduling until Trump can get his people in place at the DEA and in DOJ leadership.

What to Do Now

Meanwhile, cannabis investors are left wondering when reform will happen. It is not possible to predict this with any accuracy. So, patience is required. But there are tactical steps you can take to make the wait easier. The main one is to “get paid to wait” by emphasizing in your portfolio cannabis sector companies that pay rich yields but will still post capital appreciation if reform progresses.

We have two of these in our Cabot Cannabis Insider portfolio. They are: Advanced Flower Capital (AFCG) and Chicago Atlantic Real Estate Finance (REFI). They pay yields of 16.28% and 12.36%, respectively. In dividend investing, yields like that are often considered “too high” and taken as a sign they cannot last. At least as of the most recent updates, it does not appear these dividends will be cut. Both companies affirmed their dividend payouts in mid-December.

Otherwise, continue to hold or average down in our portfolio names. The best time to buy stocks is when they are widely hated, but plausible catalysts lie on the horizon. That is clearly the case with cannabis stocks now. But this is also the hardest time to buy stocks. That resistance may also be a signal to buy. As a general rule, some of your best stock purchase decisions will be the ones that are the hardest to make.

Consider taking both trading positions and multiyear positions in portfolio names now, or averaging down. I am personally averaging down in the current weakness.

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.

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 institutional investors will not ignore cannabis stocks 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 catalogue evidence of this cultural momentum. That is the purpose of this section of Cabot Cannabis Investor.

Federal-Level News

* Rescheduling cannabis under the Controlled Substances Act appears to be on hold until the Trump administration appoints a new attorney general to lead the Department of Justice (DOJ), and a new head of the Drug Enforcement Administration (DEA).

This delay is a positive for cannabis investors given that President Trump favors rescheduling and the DEA opposes the reform.

DEA hearings, which had been scheduled for January-March, got suspended indefinitely when administrative law judge (ALJ) John Mulrooney canceled them following legal challenges from attorneys representing reform advocates Village Farms and Hemp for Victory and cannabis companies.

A team led by Shane Pennington at Porter Wright Morris & Arthur challenged the DEAs role as advocate for change in the hearings, given the DEA’s apparent opposition to rescheduling. The attorneys also want to learn more about DEA communications with prohibitionist groups and how the DEA selected witnesses. The witness list seems stacked against reform advocates, they say.

Cannabis investors grumbled about the delays, but pushback in the timing of rescheduling proceedings is probably a good thing. The biggest reason is that it’s better to have Trump appointees overseeing the process, given that the president supports rescheduling. It would also be positive to have the DEA removed as the rescheduling advocate in the process, given its apparent opposition to the reform. Having them in the driver’s seat for reform never made a lot of sense.

“Had we not intervened, the hearing would have gone ahead with DEA openly tipping the scales against rescheduling and setting the stage for an acting career official to formally reject the move to Schedule III,” Village Farms CEO Michael DeGiglio and Hemp for Victory board chair Robert Head wrote in a statement. “Instead, the matter will likely be handled in the near future by the incoming Justice Department and yet-to-be-named DEA Administrator under President-elect Donald Trump, who publicly endorsed rescheduling on the campaign trail.”

As for what the Trump DOJ attorney general and DEA head appointees will actually do, I would not give up hope. Trump seems to be the rare politician who strives to keep his word, and that would mean progress on rescheduling and favorable banking reform.

At least one industry CEO remains optimistic on the prospects for progress.

“You are seeing action,” Cresco Labs (CRLBF) CEO Charlie Bachtell said in a recent interview with the cannabis podcast AlphaNooner. “At the inaugural celebration they even had a desk on stage and he was signing executive orders that day in that arena. So, objectively looking at it, this seems like an administration that is going to take action on issues that Trump brought up along the campaign trail,” said Bachtell. “Fortunately for us, cannabis has been part of that narrative. There were three very public statements where he laid out his evolved position on our subject matter. What I took from it is that a common-sense approach is needed for cannabis and the industry is ready.”

* Cannabis lobbyists are pooling their resources and joining forces to speak with a single voice in favor of cannabis reform. This is a net positive for cannabis investors.

The U.S. Cannabis Council (USCC) and the National Cannabis Roundtable (NCR) recently united to create a new lobbying group called the U.S. Cannabis Roundtable (USCR). The group says it will hire a former advisor to President-elect Donald Trump to help advocate for reform.

* A staffer for Rep. Dave Joyce (R-OH) recently told Marijuana Moment the congressman will offer an update on the timing of the reintroduction of the Secure and Fair Enforcement (SAFE) Banking Act within a few weeks. Though prospects seem dim given that Republicans control Congress, President Donald Trump backed cannabis banking reform during his campaign. Joyce is a co-chair of the Congressional Cannabis Caucus. The Government Accountability Office (GAO) recently said it is consulting cannabis companies to learn more about their access to banking, also a positive sign of potential progress on banking reform.

* Congressional Cannabis Caucus Co-Chair Rep. Dina Titus (D-NV) this week asked the House Ways & Means Committee to overturn an Internal Revenue Service rule that bars cannabis companies from deducting operating expenses. The IRS rule is known as 280E means cannabis companies pay a 70% federal tax rate.

“Like gaming, cannabis has now spread to many states, and it’s a legitimate source of jobs and tax revenue,” Titus said. “Section 280E drastically increases prices for consumers and harms businesses that are legitimate in these states, thereby sending people to the illegitimate market where prices are lower.” Titus and Rep. Ilhan Omar (D-MN) are the new leaders of the Congressional Cannabis Caucus.

Nationwide, cannabis companies employ about 500,000 people and pay about $4.5 billion a year to state and local governments.

* The U.S. Court of Appeals for the Fifth Circuit reaffirmed earlier this month that the ban on gun ownership by people who occasionally use cannabis is unconstitutional. The court made the decision in a case called U.S. v. Daniels.

* Former Rep. Matt Gaetz (R-FL) criticized his party’s prohibitionist stance on cannabis during an interview on Bill Maher’s “Club Random” show. He listed cannabis as one of the issues Republicans are “most wrong” about. Vivek Ramaswamy and Robert F. Kennedy Jr. have also supported cannabis reform on the Maher show.

State-Level News

* Gov. Josh Shapiro (D) recently reiterated he wants Pennsylvania to legalize recreational cannabis use so that his state stops giving up tax revenue to Maryland, Ohio, New York and New Jersey. Pennsylvania residents cross state lines to buy in those states. “Pennsylvanians are buying cannabis, but now what’s happening is they’re paying taxes in other states,” Shapiro said. “We need to change that. We need to be more competitive.” Shapiro has been a long-standing supporter of legalization in Pennsylvania. Polls show a majority of voters in the state favor the change.

* Hawaiian lawmakers are taking another shot at legalizing recreational-use cannabis. In late January, House Judiciary and Hawaiian Affairs Chair David Tarnas (D) and Senate Health and Human Services Committee Chair Joy San Buenaventura (D) filed a bill that would allow adults to purchase rec-use cannabis. Hawaii’s Senate approved a similar measure last year, but it failed to get approval in the House of Representatives. Medical use is already legal.

* Virginia lawmakers on January 28 approved a bill that would legalize retail cannabis sales. Possession is already legal. The bill was approved by the Senate Finance and Appropriations Committee and the General Laws Committee in the House. It now goes to the House Appropriations Committee. The bill would allow adults to purchase cannabis from state-licensed stores. Gov. Glenn Youngkin (R) would likely veto the bill, if it gets that far, as he has in the past.

* Smart & Safe Florida is back at it. The group has filed to put another recreational cannabis use referendum on the Florida ballot in 2026. Among other things, if approved, the referendum would allow “adults 21 and older to possess, purchase, or use marijuana for non-medical consumption. Establishes possession limits. Prohibits marketing and packaging attractive to children. Prohibits smoking and vaping in public.”

A Smart & Safe Florida referendum that would have legalized recreational cannabis, called Amendment 3, failed last year. In a major setback for cannabis investors, the referendum got 56% of the vote, below the 60% needed for approval.

* DoorDash now delivers hemp-derived THC and CBD products like gummies and beverages in states that permit sales of these products. DoorDash delivers cannabis products that comply with the federal definition of hemp, legalized under the 2018 Farm Bill. They cannot contain more than 0.3 percent THC by dry weight. Hemp is legal at the federal level.

* In another sign the sector is bottoming, the Amplify U.S. Alternative Harvest (MJUS) exchange-traded fund shut down this week. Cash will be returned to shareholders shortly.

Medical News

* Cannabis use among teens declines in states that legalize recreational use, according to a report by the Marijuana Policy Project (MPP). The study found that teen use declined in 19 out of 21 states that legalized recreational use, by as much as 35%. “Legalization does not increase youth cannabis use,” says Karen O’Keefe, director of state policies at MPP. “In fact, evidence suggests the opposite. By transitioning cannabis sales from the illicit market to a regulated system with age-restricted access, we’ve seen a decrease in youth cannabis use.” The report compiled various state surveys to reach its conclusions.

* For help getting better quality shut-eye, cannabis is more popular than prescription sleep medication. About 16% of Americans say they use cannabis to help get better sleep, compared to 12% who say they use prescription sleep medication. Another 10% said they use CBD for help betting sleep.

Men were more likely than women to say they used cannabis to help with sleep (18% vs. 15%), and parents were also more likely than non-parents to use cannabis for sleep (21% vs. 14%). The poll also found that relaxation and sleep are the most common reasons people use edibles (25% and 21%). The data come from a Harris Poll conducted for Green Thumb Industries (GTBIF).

* People appear to use benzodiazepines like Valium, Xanax and Ativan less frequently in states where medical and recreational cannabis are legal, according to a study by Ashley Bradford, Georgia Institute of Technology. Fewer prescriptions for benzodiazepines are filled in these states, says the study, published in the journal JAMA Network Open. Benzodiazepines can be dangerous and addictive. “Substituting marijuana has the potential to result in fewer negative side effects nationwide, but it’s not yet clear if marijuana will be equally effective at treating anxiety,” says Bradford.

Portfolio Company News

Green Thumb Industries (GTBIF)

Green Thumb has launched a partnership with a Chicago music venue called the Salt Shed. Green Thumb’s RISE dispensary will sell cannabis products in a storefront in the music venue called RISE at Salt Shed. It will offer hemp-derived THC Delta 9 products sold under Green Thumb brands like incredibles and Beboe, as well as branded merchandise and accessories.

Tilray Brands (TLRY)

Tilray Brands continues to rapidly expand its European cannabis business, and it remains the top Canadian cannabis company. The company recently reported 8.9% year-over-year fourth-quarter sales growth to $210.9 million. Gross profit margins rose to 29% from 34%, producing $61 million in gross profits. The company reported a $2 million loss after backing out one-off expenses.

International cannabis sales advanced 25%. Beverage sales grew 36% thanks in part to acquisitions. The company’s wellness segment sales (hemp-based products) grew 13%.

Despite the international cannabis sales strength, cannabis net revenue slipped slightly to $66 million compared to $67 million in the prior year quarter. Cannabis gross margin increased to 35% in the second quarter compared to 31% in the prior-year quarter.

The 25% advance in international cannabis sales came from growth and new product launches in Germany, Poland, the U.K. and Italy. In Germany, medical cannabis flower sales grew 55% and medical cannabis extracts sales advanced 24%. Tilray has a German cultivation facility called FRx.

“We believe Germany’s new cannabis regulations will drive positive change in drug policy across Europe,” said CEO Irwin Simon in the earnings call. “Tilray aims to expand its global brand to Europe’s 700-plus million people, leveraging our infrastructure, product portfolio and commitment to medical cannabis and our experienced team to enter new markets with significant revenue potential.”

The company reaffirmed its fiscal year 2025 net revenue guidance of $950 million to $1 billion.

Tilray remained the leader in the Canadian cannabis market by sales. In the second quarter, Tilray regained the #1 position in flower in Canada. Tilray maintains the largest branded hemp business in North America, and it is a top-five craft beer business in the United States.

Trulieve Cannabis (TCNNF)

Trulieve Cannabis continues to aggressively open stores. In January, it’s opening stores in Maricopa, AZ; Zanesville, OH; and Palm Coast, FL.

Cannabis Plus Insider Portfolio News

No updates.

Sector Performance

Our Cabot Cannabis Plus Insider Portfolio is doing very well. But our plant-touching Cabot Cannabis Investor portfolio is trailing.

Because our plant-touching cannabis portfolio is leveraged, it lags in severe sector downturns. That is the case now. Our Cabot Cannabis Investor portfolio cannabis portfolio was down 12% this year as of the January 28 close. The decline was worse than the 7.56% loss for the New Cannabis Ventures Global Cannabis Stock Index.

Our plant-touching portfolio is leveraged because of the large position in AdvisorShares MSOS 2X Daily (MSOX). It is a top-five position. The leverage hurts us when the sector is weak. Likewise, it helps capture more upside as we see progress on rescheduling cannabis, and progress towards approval of recreational use in more large states like Pennsylvania.

When we get a significant sector rally, 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.

Our Cabot Cannabis Plus Insider Portfolio is faring much better. This one invests in cannabis-related names that do not touch the plant, where insiders are buying. It is up 50.1% since I launched it on March 29, 2023, through January 28, compared to a 29.2% gain for the Russell 2000 index and a 19% loss for the New Cannabis Ventures Global Cannabis Stock Index over the same time.

The portfolio is well positioned to outperform because investments in AFC Gamma (AFCG) and Chicago Atlantic Real Estate Finance (REFI) pay attractive yields of 16.28% and 12.36%. The dividends were recently confirmed even though they look suspiciously high. We will also see capital appreciation in these names if sector catalysts hit.

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Portfolio

StockSharesCurrent ValuePortfolio Weighting1/28/25
Ayr Wellness (AYRWF)1,692$7281.10%$0.43
Cresco Labs (CRLBF)9,180$8,26212.80%$0.90
Curaleaf (CURLF)5,698$7,12311.00%$1.25
Cronos (CRON)1,683$3,1814.90%$1.89
AdvisorShares Plus US Cannabis (MSOS)1,058$3,5975.60%$3.40
AdvisorShares MSOS 2X Daily (MSOX)304$2,1583.30%$7.10
ETFMG Alternative Harvest (MJ)1,496$3,1124.80%$2.08
Green Thumb Ind. (GTBIF)3,355$23,18335.80%$6.91
Organigram (OGI)4,834$7,39611.40%$1.53
Tilray Brands (TLRY)2,071$2,2573.50%$1.09
Trulieve (TCNNF)695$3,3415.20%$4.81
Verano (VRNOF)351$4110.60%$1.17
Cash$00.00%
Total$64,749

Canna Plus Insider Portfolio

CompanyTickerDate AddedPrice Bought1.28.25 PriceTotal Return*Current YieldCurrent Status
Chicago Atlantic Real EstateREFI3.29.23$10.40$15.2146.25%12.36%Buy
AFC GammaAFCG7.26.23$7.74$8.205.94%16.28%Buy
Sunrise Realty TrustSUNS7.9.24$8.31$11.8742.84%14%Hold
Cerevel TherapeuticsCERE8.9.23$21.91$45.00105.39%0%Bought out
Average:50.10%

Company Profiles

Ayr Wellness (AYRWF) This is a vertically integrated multistate operator based in Miami. It has over 90 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. Like many names in our portfolio, Ayr is strategically positioned in states that look poised to approve recreational-use sales. It has over 60 stores in Florida, for example.

Ayr has 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 recently reported $71 million in cash and $607 million in net debt. This debt overhang is one reason why Ayr trades at 0.15 times sales. The company is founder-run, which can be a plus in investing. BUY

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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 0.55. BUY

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Cronos Group (CRON) Cronos is mainly a foreign operator with exposure to Canada, Germany, Australia and Israel.

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. The company has a partnership with Cansativa Group which allows Cronos to sell its 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 $855 million in cash, or about $2.24 per share, against minimal debt of $2.26 million. Some of that cash could be deployed in acquisitions, possibly to expand in the U.S. adult-use market.

Cronos trades at 0.75 times book value. BUY

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Curaleaf (CURLF) Massachusetts-based Curaleaf was the industry leader last year. It operates 145 dispensaries and several grow sites in 17 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. Like many of the names in our portfolio, Curaleaf is well positioned to benefit from the opening up of rec-use sales in New York, Ohio, Florida, Pennsylvania near term.

3. Curaleaf will benefit from progress on liberalization of cannabis laws in Germany and elsewhere in 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 1.07. BUY

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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 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

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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. Note that leveraged ETFs suffer from some persistent valuation decay because of the cost of the leverage. BUY

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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

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Green Thumb (GTBIF) Chicago-based Green Thumb is our portfolio’s largest position. 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. Green Thumb has 91 dispensaries across fourteen states. Green Thumb continued to strategically position itself in markets that look poised to expand to recreational uses sales, like Florida and Pennsylvania.

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 1.93. BUY

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Organigram (OGI) Organigram holds the #2 position among Canadian licensed producers. It also sells high-margin flower in Israel, Australia and Germany. 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.

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, an endorsement of its potential. The two companies collaborate to develop cannabis products. The price to sales ratio is 1.1. BUY

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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.

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 1.38. BUY

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Trulieve (TCNNF) Trulieve has long been the biggest medicinal marijuana vendor in Florida, where it has 50% market share. It has over 190 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. It is diversifying its presence into Pennsylvania, Maryland, Georgia, Ohio and Massachusetts, among other states.

The company reports $320 million in cash against $795 million in debt. “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 .98. BUY

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Verano (VRNOF) Chicago-based Verano is one of the top five publicly traded multi-state operators in the U.S. by sales. Verano has nearly 140 dispensaries and 14 production facilities in 13 states. 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 may soon legalize recreational like Florida and Pennsylvania. The company’s strategy has been to position with medical dispensaries in states most likely to soon go recreational.

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 reports cash of $194 million against debt of $541 million.

Verano is founder-run, which can be a plus in investing. Verano has a price to sales ratio of .54. BUY

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The next Cabot Cannabis Investor Issue will be published on February 26, 2025.


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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.