The Motley Fool

Pot Investors: 3 Cannabis Stocks Poised to Explode in 2021!

Image source: Getty Images

This year could very well be a breakout one for pot stocks. U.S.-based cannabis stocks have already gained significant momentum, as investors are eyeing major reforms south of the border.

We’ll take a look at three cannabis stocks that should crush the markets in 2021.

Cresco Labs

The first cannabis stock on the list is Cresco Labs (CNSX:CL). Cresco shares have already gained a staggering 346% in the last 12 months and are up 33% in 2021. In the Q3 of 2020, Cresco’s sales were up 323% year over year and soared 63% on a sequential basis to US$153.3 million.

The company’s EBITDA also rose 182% to US$46.4 million indicating a margin of over 30%. Cresco attributed the impressive top-line growth to bigger harvests at the company’s cultivation centers in California, Illinois, and Pennsylvania. Further, Cresco’s retail sales soared to US$62.8 million due to the opening of two stores in Illinois as well as an increase in same-store sales in Q3.

Earlier this year, Cresco announced it will acquire Bluma Wellness for US$213 million in an all-stock transaction. This will allow Cresco to enter the highly lucrative medical marijuana market of Florida.

Green Thumb Industries: A cannabis heavyweight

Next on our list is Green Thumb Industries (CNSX:GTII), which was the first cannabis company in the U.S. that reported over $100 million in sales in a quarter during Q1 of 2020. In the September quarter, Green Thumb reported sales of US$157.1 million, indicating year-over-year growth of 131%.

This stellar growth in the top line also allowed the company to post a net income of US$9.6 million, compared to a net loss of US$14 million in the prior-year period. Green Thumb’s EBITDA was up 50% year over year at US$53.2 million.

During a recent investor event, Green Thumb disclosed that it expects to end 2020 with US$500 million in sales compared to US$216 million in 2019. In 2021, the cannabis giant has forecast sales to exceed US$800 million.

Green Thumb stock is up 631.5% in the last year. It is on track to be the first cannabis company to report US$1 billion in annual sales as well, especially if marijuana legalization in the U.S. gains pace.

Planet 13 Holdings

Planet 13 Holdings (CNSX:PLTH) operates the largest pot dispensary in the world. This cannabis company is betting on the fact that people are prioritizing experiences over products and aims to build a brand around this principle.

Planet 13 is headquartered in Las Vegas — a state that has legalized medical and recreational marijuana sales. The company’s superstore is located very close to the hugely popular Las Vegas strip. This store serves as a tourist attraction for cannabis enthusiasts as well as for non-aficionados.

In Q3 of 2020, Planet 13 reported sales of $22.8 million indicating a year-over-year rise of 36.5%. These figures are exemplary considering the superstore was operating at just 50% of footfall capacity amid the pandemic. Planet 13 also turned a small profit of $200,000 compared to a net loss of $1.7 million in Q3 of 2019.

The state of Nevada is expected to grow cannabis sales at an annual rate of 17% through 2025, giving Planet 13 enough opportunities to accelerate top-line growth. Currently, the company accounts for 9% of total cannabis sales in Nevada. It now aims to open similar superstores in other major cities including New York and San Francisco, making Planet 13 a stock to watch out for in 2021 and beyond.

Are you a fan of cannabis stocks?

Should you invest $1,000 in Aurora Cannabis right now?

Before you consider Aurora Cannabis, you may want to hear this.

Motley Fool Canadian Chief Investment Advisor, Iain Butler, and his Stock Advisor Canada team just revealed what they believe are the 10 best stocks for investors to buy right now... and Aurora Cannabis wasn't one of them.

The online investing service they've run since 2013, Motley Fool Stock Advisor Canada, has beaten the stock market by over 3X. And right now, they think there are 10 stocks that are better buys.

Learn More Today!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.