Even though cannabis stocks have cooled off from their huge rally to start the year, a lot of the bullish narratives about the industry are still in play. With Republican lawmakers pushing for federal legalization in congress and over two-thirds of all states offering medical cannabis at this time, it’s safe to say that the green rush is in full swing. Combine that with news that major corporations like Amazon (NASDAQ:AMZN) are actively supporting legislation to legalize marijuana at the federal level and you have the potential for some big moves in cannabis stocks in the coming months.
There are several cannabis stocks that are already elevating off of their recent lows, which means it might not be a bad idea to start adding shares. Many of these companies have reported strong earnings and could be starting to separate themselves as industry leaders. Let’s take a look at 3 cannabis stocks that could elevate your portfolio.
1. Green Thumb Industries
If you are looking for a company that already has a nice foothold on the cannabis consumer packaged segment in the U.S., Green Thumb Industries Inc (OTC:GTBIF) is an interesting option. Keep in mind that over the long term, companies that can create unique brands and products that customers love tend to have staying power. Green Thumb fits the bill, as the company manufactures and distributes a portfolio of branded cannabis products that are available in retail locations in twelve different states. The company also owns a rapidly growing national retail cannabis dispensary franchise called Rise.
Green Thumb has delivered strong earnings growth lately, including revenue that increased by 89.5% year-over-year to $194.4 million in Q1. What’s also impressive here is the fact that Q1 marked the 3rd consecutive quarter of positive GAAP net income for the company. Green Thumb also recently announced that it has acquired Dharma Pharmaceuticals, which is the holder of one of five vertical licenses in Virginia, that will allow the company to strategically expand into one of the newest legal states in the country.
2. Advisorshares Pure US Cannabis ETF
One of the difficulties that many investors face at this time is figuring out which cannabis companies in the United States are the real deal. There are plenty of stocks to choose from in the sector, but many of them are quite volatile, trade on smaller exchanges, and might not end up being worthy of your capital over the long term. That’s the beauty of the AdvisorShares Pure US Cannabis ETF (NYSE:MSOS), which is the first exchange-traded fund that purely diversifies among American cannabis companies.
We know that the U.S. represents a massive market for cannabis, and if federal legalization does eventually occur, the industry will elevate to entirely new heights. Instead of trying to figure out which companies are going to be long-term winners, you can gain exposure to a basket of U.S. cannabis securities and reduce your overall risk. This ETF contains several promising holdings like Curaleaf (OTC:CURLF), Green Thumb Industries, Cresco Labs (OTC:CRLBF), and Trulieve Cannabis (OTC:TCNNF), and offers a diversified way to play the green rush that is occurring in the United States.
3. Tilray
This is one of the most widely-known cannabis stocks in the market, especially after a truly unbelievable rally back in 2018 that saw the price reach a high of $300 per share. While a lot has changed for the company and the stock price since then, Tilray (NASDAQ:TLRY) is still one of the more intriguing cannabis stocks to consider adding right now. It’s a company that is engaged in the research, cultivation, processing, and distribution of medical cannabis, which is attractive since more states are open to legalizing cannabis for medical use versus recreational use.
Tilray also recently completed its merger with the Canada-based medicinal and recreational cannabis company Aphria (NASDAQ:APHA) that created the largest cannabis company by revenue. This move could pay off in a big way for Tilray, especially because it should result in strong cost synergies every year. The stock recently got an upgrade from analysts at Cantor Fitzgerald and has rallied over 18% in June thus far, which is why investors should keep an eye on it for continued upside momentum.