The cannabis industry is booming with a $2 billion market in Colorado alone. With so much money on the line, it’s no wonder that many companies are looking to get involved. But there are risks involved in investing in the cannabis industry, so investors need to be aware of the factors they should consider before making their decision.
The the $7 trillion windfall stock gumshoe is a hidden stock that has the potential to be worth $2 billion.
Despite the economic catastrophe caused by COVID-19, legal cannabis was one of the few businesses that grew in 2020.
Denver is a flourishing city with one of the strongest economies in the country. According to a recent study from the City of Denver, cannabis sales in 2020 will reach a new high of $715 million, up 21% from previous highs in 2019. The city of Denver received $70 million in tax income as a result, providing a bonanza for local lawmakers.
The booming market in Denver is part of a broader trend. Cannabis sales in Colorado have been on the rise for years, and are expected to reach a record high of more than $2 billion in 2020.
As more shops open and more customers get access to the market, Colorado cannabis sales should continue to rise for many years.
Those looking to profit from this trend may be perplexed. Despite the magnitude of the Colorado cannabis industry, Cresco Labs (CRLBF), Curaleaf Holdings (CURLF), and Green Thumb Industries (GTBIF), the three biggest U.S. cannabis businesses, have practically no presence in the state.
Stocks to Buy in Colorado’s Performing Market
I’m going to disclose a little-known cannabis stock that is an early market leader for investors who want to play the trend in Colorado.
- This firm is one of the state’s biggest cannabis businesses.
- In the past year, the team’s income increased by 476 percent.
- In comparison to the company’s peers, the stock is significantly cheap.
Schwazze (OTC: SHWZ) (previously known as Medicine Man Technologies, Inc.) is profiting off Colorado’s marijuana boom. Schwazze is one of the biggest companies in this high-growth sector, with a market value of $85 million and headquarters in Denver. In the Denver and Southern Colorado areas, the business presently controls 19 retail dispensaries. In Colorado, Schwazze also has a cultivation and production plant.
Schwazze’s remarkable sales increase in the past 12 months was seen in recent second-quarter statistics.
- Revenues of $30.7 million increased by 467 percent in Q2 2020 and 58.9% in Q1 2021.
- Compared to a Net Loss of ($6.6) million or ($0.16) Diluted Net Loss per share in Q2 2020 and a Net Loss of ($3.6) million or ($0.09) Diluted Net Loss per share in Q1 2021, Net Income was $4.4 million or $0.08 Diluted Earnings per share in Q1 2021.
Schwazze should have plenty of gas left in the tank in the future. The business is continuing to spend millions of dollars in Colorado to grow its presence. Here’s additional information on two of the company’s most recent purchases.
Southern Colorado Growers: On June 1, 2021, the Company announced that it has entered into an agreement to purchase the assets of Southern Colorado Growers in Huerfano County, Colorado (transaction closed July 22, 2021). The purchase comprises 36 acres of land with outdoor production potential, as well as cultivation infrastructure and equipment for indoor, greenhouse, and hoop house cultivation. This acquisition increased Schwazze’s presence in Colorado, marks the company’s first big foray into cultivation, and will supply high-end, premium cannabis directly to its Star Buds dispensaries, as well as substantial biomass output for its PurpleBee extraction and manufacturing facilities.
The Company announced the signing of final papers to purchase the assets of BG3 Investments, LLC dba Drift, which comprises of two marijuana retail shops in Boulder, Colorado, increasing the total number of Schwazze Colorado dispensaries to nineteen.
In the year 2021, Schwazze forecasts strong revenue growth. This year, the firm aims to make between $110 and $125 million in sales.
Schwazze is cheap in comparison to its rivals, despite its strong sales growth. Based on the 2021 forecast, Schwazze has a price-to-sales ratio of slightly under one. Curaleaf Holdings, on the other hand, has a p/s ratio of 7. Curaleaf is a strong stock, but Schwazze shares are a superior buy.
Schwazze’s stock is down 50% from its 52-week high.
In 2021, Schwazze’s stock has moved in pace with the larger cannabis industry.
In January, Schwazze’s stock was on fire, reaching a new all-time high. However, over the last eight months, shares have been on a declining trajectory. Currently, shares are down nearly 50% from their 52-week high. Take a look at the graph below for 2021.
A Bigger Picture
The legal cannabis industry in Colorado is growing, with sales expected to reach $2 billion by 2020.
Schwazze is a great place for investors to get in on this booming local market. This business is a Colorado industry leader with high sales projections for this year. In addition, the stock is cheap in comparison to its bigger rivals.
Cresco Labs, Curaleaf Holdings, and Green Thumb Industries are among the companies in which author Michael Vodicka holds stock.
Author Bio & Cannabis Stock Trading
Michael Vodicka is a stock analyst with over 20 years of trading and investment expertise. His work has been published in some of the industry’s most prestigious journals. Since 2013, he has been investing and guiding investors in the cannabis industry.
Members of Cannabis Stock Trades benefit from Mr. Vodicka’s knowledge and advice.
Join Cannabis Stock Trades for unique research, trade alerts, and a model portfolio from Mr. Vodicka.
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