After last year’s weak winter, marijuana producers have started posting post-legalization earnings, and so far the results have been fairly encouraging. Although most of them are still running operating losses, revenue growth is higher than it’s ever been, and positive net income is becoming a more common sight on these companies’ quarterly reports.
Canopy Growth is the king of the cannabis castle by revenue and market cap. In Q3, it grew revenue by 280% year over year and posted its first high net income figure ever. Operating income was still negative, but the loss was down from Q2. Investors seem to be optimistic about Canopy’s prospects, as they’ve sent the stock soaring 61% so far this year (as of this writing).
CannTrust is another marijuana stock that has done well this year and has long been one of the best in its class in terms of profitability. As of this writing, it has risen 37% year to date thanks to its strong growth.
On the con side, the company lost money in 2018 thanks to its increased investments in expansion. This ends CannTrust’s run as one of the few operationally profitable cannabis companies, but if the investments pay off, it may be worth it to investors in the end.
Organigram Holdings is one of the smaller marijuana stocks out there, but it’s rapidly growing, up 58% year to date in the markets. In its most recent quarter, the company grew earnings by 693% year over year, making it one of the fastest-growing marijuana producers in the world.
The company is relatively profitable, having produced diluted EPS of $0.12 in its most recent quarter, which gave it a P/E ratio of 54 — not bad for a company growing at 600%. The company has also posted positive operating income in some quarters, a milestone the larger weed stocks have yet to hit.
Andrew Button has no position in any of the stocks mentioned.” data-reactid=”42″>Fool contributor Andrew Button has no position in any of the stocks mentioned.
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