If you’re looking to invest in a better future marijuana stocks may be a good choice. While the sale of marijuana is still in its beginning stages its a great chance to get lower price stocks with the opportunity for large growth in companies as marijuana becomes more acceptable and less controlled.
Village Farms recently began trading on a major exchange, but it’s been earning a living with greenhouse-grown agricultural commodities longer than any company in North America. Tomatoes and cucumbers are extremely low-margin products, and none of the revenue they generate reaches the bottom line unless the company selling them manages costs more carefully than its peers.
Emerald Health (OTC:EMHTF) and Village Farms formed a joint venture a couple of years ago called Pure Sunfarms to sell greenhouse-grown cannabis in Canada. In the three months ended June, Pure Sunfarms sold around 8,000 kilograms of cannabis, which was 122% more than the joint venture recorded during the first three months of the year.
Village’s production skills have transferred to growing marijuana even better than expected. Pure Sunfarms reported an all-in cost of just $0.49 per gram, which is lower than any of its Canadian peers. In April, the venture’s 1.03-million-square-foot facility became the largest site in Canada to reach full production mode, and the addition of a nearby sister site should double production capacity and lower that all-in cost a bit further.
Village Farms doesn’t have a whole lot of cash handy, but the company probably won’t need to break any piggy banks soon. Profits from Pure Sunfarms already more than offset recent losses related to Village Farms’ produce operation.
Vertically integrated dispensary operator Planet 13 Holdings (OTC:PLNHF) is easily one of the most exciting cannabis stocks as we enter the fourth quarter. Whereas most pot stocks have struggled with transparency, as well as standing out in an increasingly crowded field, Planet 13 manages to check off both boxes.
The operator of the largest retail dispensary in the world, just west of the Las Vegas Strip, Planet 13 publishes data monthly on foot traffic, average check size, and paying customers. Since opening its SuperStore last November, average daily foot traffic has more than doubled (through August), with the average ticket increasing by more than $11. Planet 13 is also responsible for about 10% of the state of Nevada’s total weed sales. This is impressive considering that Nevada might be the most lucrative market in the United States, by some accounts.
Planet 13 also offers something unique: a 112,000-square-foot SuperStore. Soon it’ll also offer a 40,000-square-foot location in Santa Ana, California, just minutes from Disneyland. Planet 13’s dispensaries are must-see experiences for cannabis enthusiasts, with unparalleled product diversity, plenty of interwoven technology, and lots of product immersion.
There’s simply nothing like Planet 13 in the marijuana space. With the company possibly on track for full-year profits in 2020, it looks to be worth considering as a buy.