With second-quarter reports coming fast and furious, there’s a lot of news this week—but no big surprises, so no changes today.
Most of our stocks continue to build bases, so I remain patient, waiting for a renewed advance by the sector. The standout stock in our portfolio is Innovative Industrial Properties (IIPR), which broke out to a new high last week after a great report (see below).
The second strongest stock is Green Thumb (GTBIF), and Columbia Care (CCHWF), Cresco Labs (CRLBF) and GrowGeneration (GRWG) have solid bases.
Turning to the news:
Canopy Growth (CGC) last week reported revenue of $136 million, up 23% from the prior year but below analysts’ expectations. Canopy still has the #1 market share in Canadian recreational cannabis, and the #3 brand in the U.S. CBD market with its Martha Stewart brand. Plus it has the backing of Constellation Brands (STZ), and it has an avenue into the U.S. marijuana market (when it’s legal) through its stake in TerrAscend (TRSSF).
But the stock is still soft, mainly because CGC was once the most popular and most highly valued cannabis brand in the world, and it’s still in its cooling off phase, as investors shift assets to faster-growing companies—most of them in the U.S. I’m still holding a small stake for the long term.
Columbia Care (CCHWF), which is due to report second-quarter results tomorrow, yesterday announced the opening of its dispensary in downtown Boston, which adds to its dispensaries in Lowell and Greenfield. The three Massachusetts dispensaries feature several of the company’s brands, including Seed & Strain, Triple Seven, Amber, PRESS, and Plant Sugar.
Curaleaf (CURLF) on Monday released its second-quarter results. Revenue was $312 million, the highest of any cannabis company to date and up 166% from the prior year, and the loss per share was just a penny, showing that the company could easily turn a profit if it stopped investing. But investing is what makes these companies bigger, and that’s what’s important now, not earnings.
Green Thumb (GTBIF) yesterday announced the opening of Rise Warminster, the 16th Rise location in Pennsylvania and 62nd store nationwide. Green Thumb has 16 manufacturing facilities, licenses for 111 retail locations and operations across 14 U.S. markets, and as mentioned earlier, it’s the strongest of the “real” cannabis stocks. Green Thumb is expected to release its second-quarter report after the market close today.
Innovative Industrial Properties (IIPR) last week released its second-quarter results. Revenues were $48.9 million, up 101% from the prior year, while funds from operations (FFO) were $1.64, up 38% from the year before. As mentioned earlier, IIPR is the strongest stock in the portfolio today; it broke out to a record high last week. Ironically, it’s also generally regarded as the “safest” stock in the portfolio, given that its revenue flows are predictable, and it pays a 2.4% dividend. So it’s safe to say that the stock’s strength is due less to its growth potential and more to its combination of safety and yield—and the fact that institutions can buy this and not most of my other recommendations. The portfolio owns an 8% position (we bought more two weeks ago), and that seems enough, because I’d really like to overweight the “real” cannabis stocks when the sector gets going again—but if you don’t own it, and a REIT would fit your portfolio (be sure to research the tax implications), feel free to buy here.
Jushi (JUSHF) last week announced a series of upcoming launches of branded cannabis products in Virginia, beginning with the debut of its brand, The Lab, in the form of .5g and .3g vaporizable cartridges. Following that, the company will launch the brand, Tasteology, beginning with its chewables line (flavors include Blueberry Calm, Balanced Peach and Mango-Pineapple Boost). And later this fall, pending approval in Virginia, Jushi will launch in that state The Bank, the company’s award-winning flower brand known for its superior plant genetics; Sèche fine grind, fine flower and singles pre-rolls to patients; and Nira + Medicinals. The Lab, Sèche and The Bank products are currently available at dispensaries across Nevada and Pennsylvania, including Pennsylvania’s BEYOND / HELLO locations.
Trulieve (TCNNF) last week announced the launch of a comprehensive brand portfolio that includes four distinct brands designed to meet the needs of all consumers, “from the canna-curious to the canna-connoisseur.”
There’s Muse, to “awaken creativity, giving you permission to let go and inspiring you to unlock what is within.”
There’s Momenta, “committed to doing the best by your body each and every day, all to empower your personal progress.”
There’s Sweet Talk, a line of edibles that’s “the treat that’s sure to leave a big smile on your face.”
And there’s Cultivar Collection by Trulieve, “a premium group of small-batch, top-shelf cannabis—each unique strain carefully bred to deliver undeniably rich flavor and potent terpenes.”
Trulieve is due to announce second-quarter results tomorrow before the market open.
Finally, as next week brings the 9th Annual Smarter Investing, Greater Profits Online Conference, August 17-19, it’s highly unlikely you’ll see an update from me unless there’s some big action.