Over the past 15+ months, marijuana stocks have been on a generally precipitous downward trend. After years (pardon the pun) of flying high, growing pains have finally caught up with the industry. In our North, regulatory supply issues have created bottlenecks in some provinces and shortages in others. Meanwhile, high tax rates on legal cannabis in the United States have allowed cheaper black market pot to thrive.
But make no mistake, this is a growing industry that should generate particularly impressive sales figures in the United States.
Marijuana sales in the United States are about to soar
Last month, Marijuana Trade Daily released their 2020″Marijuana Trade Factbook“, which includes cannabis sales projections between 2020 and 2024 for the United States. After generating up to $13 billion in total weed sales in 2019, the report projects between 15.5 and 18.9 billion in legal sales in 2020, and $30.2 billion to $37 billion in total sales by 2024. In other words, pot sales in the United States could potentially triple in just five years.
The vast majority of this growth will likely come from the recreational market. Although medical sales are expected to more than double to a range of $9.5 billion to $11.7 billion by 2024, it is cannabis sales for adult use that will steal the show. After generating up to $8.1 billion in sales in the United States in 2019, recreational weed is expected to bring in up to $25.3 billion in 2024.
It’s perhaps unsurprising, then, that not a single Canadian broth is expected to generate sales of $1 billion (in US dollars) by 2024. Comparatively, estimates of set of facts calling on four U.S. cannabis stocks to tip the scales at more than $1 billion in annual sales by 2024.
Curaleaf Holdings: estimated sales of $2.54 billion for 2024
No cannabis stock is expected to generate more robust sales through 2024 than Curafeuille Holdings (OTC: CURLF)which could well exceed 2.5 billion dollars, if the predictions of Wall Street analysts are correct.
Currently, Curaleaf has more operational dispensaries (57) than any other US multistate operator (MSO), and it is expected to continue to grow its retail store count organically and through acquisitions. . On the acquisitions front, Curaleaf completed the purchase of popular Select brand of cannabis products earlier this year and is expected to close its takeover of privately held MSO Grassroots soon. Once the deal is finalized, the combined entity will have 89 operational dispensaries and may open up to 135 stores in 23 states.
In addition to being a dispensary leader, Curaleaf is focused on opening outlets in the markets that matter. Curaleaf is one of the biggest players in Arizona, which could very well vote to legalize recreational marijuana in November. It also has a significant presence in Florida, where medical marijuana is legal, which is expected to generate the third-most sales of any state by 2024.
Cresco Labs: estimated sales of $1.76 billion for 2024
According to Wall Street, Curaleaf’s closest competitor on the sales front will come from Cresco Laboratories (OTC: CRLBF). Like Curaleaf, Cresco plans to use organic expansion and acquisitions to grow its business.
The most transformative acquisition came in January, when Cresco Labs closed its equity deal to buy Origin House. While this deal added grow space, the real treasure of buying Origin House was gaining access to its California cannabis distribution license. There are only a handful of companies in the Golden State licensed to transport marijuana, and Cresco is now one of them. Even better, it can now place its exclusive products in nearly 600 dispensaries across the state. And, in case I didn’t mention it, California is by far the biggest legal weed market in the US (and the world).
In terms of organic growth, Cresco Labs currently has 18 operational dispensaries, with a particular focus on the Illinois market, where the company recently opened its eighth location. Illinois is the first state to accept consumption and selling adult-use weed entirely at the legislative level, and it opened for recreational sales on January 1, 2020. By 2024, the Land of Lincoln is expected to generate over $1 billion in annual pot sales.
Green Thumb Industries: estimated sales of $1.54 billion for 2024
Maybe my favorite American MSO is also on the list: Green Thumb Industries (OTC: GTBIF). Wall Street will be looking for Green Thumb to top $1.5 billion in sales by 2024, which will be a significant jump from the estimated $455 million in annual sales for 2020.
When it comes to operational dispensaries and licensing, Green Thumb is a major player. It currently has 48 operational dispensaries, but holds licenses to open up to 96 in a dozen states. Like Curaleaf, Green Thumb has been very methodical about which markets it chooses to open new sites. Green Thumb is likely to maximize its storefront presence in Illinois, and it has entered the Nevada tourist market. Within four years, Nevada is expected to lead the nation in per capita cannabis spending.
A big key to Green Thumb’s success is that the majority of its revenue comes from by-products (i.e. products made from non-dried flowers, like edibles and vapes). Not only are derivatives a higher margin product, but they generally have higher prices, which will make it easier for Green Thumb to increase sales.
Trulieve Cannabis: estimated sales of $1.06 billion for 2024
Finally, MSO Trulieve Cannabis (OTC: TCNNF) is expected to cross the bar with just over $1 billion in total sales by 2024.
What makes Trulieve so interesting is that nearly all of the company’s operational dispensaries are located in one state, Florida. Trulieve announced last week that it was opening its 52nd dispensary in the Sunshine State. Comparatively, there are only two dispensaries open outside of Florida. This laser focus on the Florida market enabled effective branding and kept the company’s marketing expenses relatively low. In fact, among pure pot stocks, none are currently more profitable on a nominal basis than Trulieve Cannabis.
At some point, Trulieve will reach a level of saturation in its home market that will force the company to execute its plan in another market. Chances are this new target will be Connecticut or Massachusetts, although the company does have a dispensary open in California. Trulieve Cannabis’ success in moving beyond Florida will ultimately decide whether it reaches $1 billion in annual sales.
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