In the last three months, cannabis stocks have generally fainted. The Advisorshares Pure Cannabis ETF has fallen by more than 6% during this period, and many individual cannabis companies have lost significantly more. CHF) and Hydrofarm Holdings (NASDAQ: HYFM), as well as Scott’s Miracle-Gro (NYSE: SMG) among them, have fallen 18% or more in the last three months and are seen as positive financial trends that could provide bargain shares right now. Shares in Columbia Care have fallen more than 26% in the past month.
Columbia Care is an overlooked MSO.
The company is also in the process of purchasing Medicine Man Technologies, based in Denver, in addition to its four outlets, making it the most significant cannabis operator in Colorado, a state with the second-highest total marijuana sales in the United States with 26 stores. Columbia Care is one of the largest international pharmacies with 96 operating and development licenses in 18 U.S. states. Jurisdictions and the E.U. The company also has 31 growing and manufacturing facilities in the U.K., including five in Colorado.
In its second quarterly report, released last week, the company reported revenue of $109.7 million, an increase of 23.2% from a year earlier. The companies that generated the most revenue were California, Colorado, Massachusetts, Ohio and Pennsylvania, Florida, with a 48% increase in sales due to the increased flower production and new product launches. The company also recorded record adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $16.4 million in 2020, an increase of $21.1 million, or 58%, over the same period in 2020.
Hawthorne leads the way for Scotts Miracle-Gro.
Shares in Scott’s Miracle-Gro have risen more than 31% in the last three months and have had a solid third quarter. Through its subsidiary, Hawthorne Gardening Company, the company is a leading supplier of lighting, dietary supplements, nutrients, and hydroponic equipment needed to grow marijuana. Its growth has helped boost Scotland’s gross and total revenues.
Scott’s sales were 8% ahead of Hawthorne year-on-year in the third quarter, rising to 4.8%. Scotts also bought Hydrologic Purification Systems, which makes products and accessories for water filtration and purification, for $6.5 million. The company is now part of the Hawthorne segment and expects to generate annual revenue of $20 million, the company said. The main concern is that the rest of the company cannot keep pace with Hawthorness’s growth. After nine months, revenues totaled 4.91 billion dollars, an increase of 29% year-on-year, and net profit was 604 million dollars, 46% more than in the same period of 2020.
Sit back and watch Hydrofarm Holdings grow.
The share of hydro farms has increased by more than 18% in the last three months. Given the increased need for devices to grow cannabis at home, more and more states relax marijuana laws.
The company specializes in environmental control with agricultural equipment for all types of plants, but its products are beneficial for the cultivation of cannabis. It sells high-intensity luminaires, climate control solutions, and growing media such as particular soil nutrients. In December, the company went public and posted four consecutive quarters of organic revenue growth of 60% or more.
In its second-quarter report last week, the company reported quarterly revenue of a record $132.8 million, an increase of 47% over a year earlier. The company reported an adjusted EBITDA of $16.2 million, a decrease of $7.1 million year-over-year. It reported a net profit of $2.3 million, an increase of 21% over the same period in 2020.
In addition, the company said it expects annual revenue to be 45% to 50% higher in 2021 than in 2020. As the company sells wholesale, it does not face direct competition from Scott’s retail sector. But it has aggressively bought up competitors, spending $83 million this month to buy plant nutrient and crop products, manufacturers. Last month, the company bought three companies: an Oregon-based manufacturer and hydroponic products; Aurora Innovations; Aurora International; and Gotham Properties.
Fifteen states and Washington D.C. have legalized recreational marijuana in recent years, with full legalization coming to Canada in October 2018. As the number of cannabis retailers continues to grow, there will be upheaval, and large multi-state operators such as Columbia Care will be the beneficiaries if this happens. HydroFarms would be a solid choice given its growth, but as the smallest of the three companies, I am waiting for one to see the impact of its recent acquisition.
Given a groundbreaking deal between the Ontario government and this powerful company, you need to listen to this story today if you consider investing in pot stocks. Jim Halley owns shares in Innovative Industrial Properties. The company owns shares and recommends Innovative, Scott’s Miracle-Gro, and Trulieve Cannabis Corp. The Toronto-based company has a disclosure policy.