Marijuana stocks have faced tough market conditions in 2019, with poor earnings despite strong revenue growth. However, for investors who have confidence in the market (there’s good reason for it), the bargain-priced stocks of today could work out to be incredibly profitable in the long term.
iAnthus Capital Holdings Inc. (OTC: ITHUF) is a Canadian marijuana company that has been growing its revenue and expanding its assets. In the third quarter of this year, the company generated sales of $22.3 million, a 16% year over year increase. A net loss of $15.3 million from the same quarter reflects the growing nature of the business where it is necessary to spend to get ahead.
The company provides financing services to marijuana dispensaries, cultivators, and processors. It has recently expanded with four dispensaries in Florida, and secured $100 million of investment from Gotham Green Partners, a private equity firm focused on the marijuana market.
Even with current operating losses, iAnthus Capital Holdings is in a strong position to capitalize on growth in its industry. 11 states have now legalized the production and sale of recreational marijuana, while 33 allow for medicinal use. In Canada, marijuana has been fully legalized for recreational use since 2018.
The strong investment confidence behind iAnthus as well as its growing network of dispensaries and other assets make it an interesting pick at today’s price. A moderate investment within a well-diversified alternative portfolio makes a lot of sense as we overcome the slump in marijuana stocks. The average analyst BUY rating and target price of $5.32 hints at a significant upside in the mid-term.
- 1 Year Price Growth: -73.80%
- YTD Price Growth: -71.06%
- 3 Month Price Growth: -51.84%
All information is based on current and historical market data, as well as publicly available financial data. As with any financial decision, your own research is important. Stock market outcomes can never be 100% accurately predicted. Familiarity with historical data, individual industries, and individual stocks is key to developing a robust portfolio. Note that stock prices can fluctuate rapidly during trading sessions.