Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Cannabis Stocks: Follow The Money But Don’t Chase Price

By (Thomas Hughes )Stock MarketsFeb 12, 2021 05:46AM ET
Cannabis Stocks: Follow The Money But Don’t Chase Price
By (Thomas Hughes )   |  Feb 12, 2021 05:46AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

With the cannabis market back in the spotlight we thought it might be a good idea to highlight some of the lesser-known and perhaps underloved names in the sector. Who knows, maybe we’ll turn up a great investment but in the meantime, in light of the recent run-up in prices, there are some stocks that offer a value relative to their larger cousins. Names like Canopy Growth (NASDAQ:CGC) and Aurora Cannabis (NYSE:ACB) have seen their shares rise 300% or more since the market confirmed its bottom while others have posted much smaller gains.

Planet 13 Is A Destination Location

Planet 13 (OTC:PLNHF) began its uptrend long before the broader cannabis market. Located and headquartered in Las Vegas, Nevada, it may be the most exciting thing in U.S. cannabis right now. The company is a vertically integrated producer of medical and adult-use cannabis with a vision that reminds me of the Ray Kroc story. Ray Kroc is quoted as telling a class his business was not hamburgers, it was real estate, he just made money selling hamburgers. In the case of Planet 13, the company makes most of its money from cannabis sales but the vision is much larger.

The company is a destination-location and tourist attraction for all things cannabis. You don’t have to want to smoke weed to enjoy a trip to the Superstore. Not only is there a larger and growing display floor tended by expert “bud-tenders” but the company is building out a dining operation, crowd-facing production facilities, and museum-quality displays intended to educate the public on cannabis and its history. To put the power of the company’s business model into perspective, the company has been growing revenue via traffic and sales at a high-double-rate despite the pandemic. And the company is expanding.

Bob Groesbeck, Co-CEO said:

"We are excited to leverage our knowledge and experience from Nevada to California, with the opening of our new dispensary in Santa Ana in 2021 - the world's second-largest dispensary. Planet 13 is well-capitalized, and we look forward to executing on future expansion into other major growth markets."

PLNHF Stock Chart
PLNHF Stock Chart

The Green Organic Dutchman, A Boutique Brand

The Green Organic Dutchman (OTC:TGODF) is a smaller boutique label operating in Ontario, the single-largest cannabis market within Canada. We like it because the company is well-positioned as one not hampered by over-capacity and over-production like many of the larger operators are. Even after a year+ of repositioning and shoring up balance sheets the larger operators are still carrying dead weight. This situation sets The Green Organic Dutchman up for more sustainable growth and a safer road to profitability as it gains market share, deepens exposure in other provinces, and ramps production.

The company is forecasting accelerating growth for the current quarter with revenue up 90% sequentially and 235% from last year. Revenue is expected to triple over the next 2 to 3 years and bring positive cash flow by the middle of next year if not sooner. The recent departure of CEO and Chairman Brian Athaide should go a long way toward making it sooner rather than later.

TGODF Stock Chart
TGODF Stock Chart

Hexo Corporation, Playing With The Big Boys

Hexo Corporation (NYSE:HEXO) is one of Canada’s larger operators but by no means the largest. The company’s consensus revenue forecast for 2021 is only a quarter of Canopy Growth Corporation revenue, the largest cannabis company by sales, and less than half of what #2 Aurora is expected to bring in. But the company has big plans that should produce solid growth in the years to come and positive cash flow is already on tap.

Hexo Corporation is another Ontario-based producer and that is notable for two reasons. Not only is Ontario Canada’s most populous province and largest cannabis market it is also the one with the most trouble with its infrastructure. A number of missteps led to a short supply of operational dispensaries that is only now getting under control. That means the company should be able to sustain robust growth in its home territory even as it deepens its penetration into others.

HEXO Stock Chart
HEXO Stock Chart

Original Post

Cannabis Stocks: Follow The Money But Don’t Chase Price

Related Articles

Cannabis Stocks: Follow The Money But Don’t Chase Price

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email