Many medicinal usages of cannabis have been discovered in recent years. The substance is an alternative to modern medicine and may help treat various diseases, disorders, and conditions. It is most commonly used as a pain treatment or to reduce inflammation.
A record-shattering ‘green rush’ over the past two years in the country has led to solid growth in the cannabis market. The cannabis research firm BDSA has estimated that the United States will experience $30 billion in legal cannabis sales by 2022. Moreover, the Republican-led States Reform Act might offer Congress a legit chance of decriminalizing the substance at the federal level and allow cannabis companies to access commercial banking services.
The growing cannabis market and the legalization of the substance in several states have helped the cannabis stocks Innovative Industrial Properties, Inc. (IIPR), Greenwave Technology Solutions, Inc. (MSRT), and Digipath, Inc. (DIGP) to deliver solid returns last year.
Innovative Industrial Properties, Inc. (IIPR)
IIPR is a self-advised corporation that acquires, owns, and manages specialized properties leased to state-licensed operators for their medical-use cannabis facilities.
On December 14, IIPR announced the closing of a portfolio of 27 properties over the United States. The properties are 100% leased for regulated cannabis dispensing and cultivation. The acquisition is expected to add to IIPR’s portfolio and expand the long-term relationship with established operators. In October, the company had declared the closing of industrial property acquisition in Desert Hot Springs, California, and entered into a long-term lease contract with Gold Flora LLC. This should expand IIPR’s operative capacity.
For the fiscal third quarter ended September 30, IIPR’s total revenues increased 56.9% year-over-year to $53.86 million. Net income and net income per share attributable to common stockholders came in at $29.76 million and $1.20, up 57.6% and 39.5% from the prior-year quarter, respectively.
The consensus EPS estimate of $1.24 for the last fiscal quarter of 2021 (ended December 2021) indicates a 36.3% year-over-year increase. Likewise, the consensus revenue estimate for the same quarter of $57.51 million reflects an improvement of 55% from the prior-year quarter. Moreover, IIPR has an impressive surprise earnings history, as it has topped consensus EPS estimates in three out of the trailing four quarters.
The stock has gained 43.6% over 2021 and 12.9% over the past six months to close yesterday’s trading session at $224.74.
Greenwave Technology Solutions, Inc. (MSRT)
MSRT, formerly known as MassRoots, Inc., engages in the provision of a social media network for the cannabis community. The company offers a rewards program called WeedPass, enabling customers to earn tickets for movies and sports events from shopping at participating dispensaries.
On December 8, MSRT announced its plans of opening its 12th metal recycling facility in Fairmont, North Carolina, on or about January 12, 2022. The new facility is expected to expand the company’s footprint in the region.
On December 1, the company declared the closing of its $37.7 million private placement with existing shareholders, institutions, accredited investors, and its chairman. MSRT intends to use the proceeds to redeem its Series X and Series Y preferred shares and accelerate revenue growth.
For the nine months ended September 30, MSRT’s cash balance stood at $1.08 thousand, registering an increase of 66.5% from the same period prior year. Net cash provided by financing activities came in at $0.39 million for the period. Net income stood at $10.86 million, up substantially from its negative year-ago value.
MSRT has gained 683.3% over 2021 to close yesterday’s trading session at $0.0458. It has gained 1.2% intra-day.
Digipath, Inc. (DIGP)
DIGP operates as a cannabis and hemp lab testing services provider to Nevada licensed medical marijuana enterprises. The company offers testing services, cannabis education and training services, and cannabis news coverage to the cannabis industry.
On December 7, EVIO, Inc., an analytical testing provider for cannabis, hemp, and pharmaceutical industries, announced that it intends to sell its ownership of C3 Labs, LLC dba Steep Hill CA to DIGP. This should enhance DIGP’s operational capability. The lab acquisition is also expected to make the company a multi-state operator (MSO) of cannabis and hemp testing labs.
For the fiscal year ended September 30, DIGP’s cash balance stood at $295.93 thousand, registering an improvement of 257.6% year-over-year. Revenues and gross profit for the year came in at $2.50 million and $715.17 thousand, respectively.
DIGP’s shares have gained 26.2% over 2021 and 2.9% intra-day to close yesterday’s trading session at $0.0350.
IIPR shares were trading at $228.00 per share on Thursday afternoon, up $3.26 (+1.45%). Year-to-date, IIPR has declined -13.28%, versus a -1.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
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