Green Thumb Industries
Green Thumb Industries (OTC:GTBIF) benefited from tremendous growth in its home state of Illinois throughout much of 2020. Illinois’ legal adult-use recreational marijuana market opened for business at the beginning of the year.
The company owns retail cannabis stores in 12 states across the U.S. and operates 13 manufacturing facilities. Green Thumb holds licenses for 96 retail cannabis locations but has opened only around half that many stores. That, along with the opportunity to expand into additional states, gives the company a significant growth runway.
Trulieve Cannabis
Trulieve Cannabis (OTC:TCNNF) focuses primarily on the Florida medical cannabis market. And it dominates in the Sunshine State with roughly 50% of total sales.
The cannabis grower and retailer has been consistently profitable since 2017, an achievement few other marijuana companies can claim. Its sales and earnings continue to soar. Trulieve’s next big growth opportunity is in Massachusetts, where it expects to enter the state’s recreational marijuana market in 2021.
Innovative Industrial Properties
There’s one big downside to marijuana being illegal at the federal level in the U.S.: Cannabis companies can’t easily secure capital from banks or financial institutions. However, that creates a big opportunity for Innovative Industrial Properties (IIP) (NYSE:IIPR), which buys properties from U.S. medical cannabis operators and then leases the properties back to them. This gives the cannabis operator much-needed cash. And being in the landlord business gives IIP a steady revenue stream.
The COVID-19 pandemic disrupted IIP’s business a little, though, with three tenants receiving temporary rent deferrals due to coronavirus-related financial headwinds. But the company has still been able to deliver phenomenal growth during the pandemic. It’s highly profitable. Also, because the company is organized as a real estate investment trust (REIT), IIP must return at least 90% of its taxable income to shareholders in the form of dividends.
GrowGeneration
The booming U.S. cannabis industry has created a fast-growing market for supplies for hydroponics (growing plants without soil in liquid nutrient solutions) and organic gardening. GrowGeneration (NASDAQ:GRWG) is the largest specialty retail chain focused on this market.
While much of GrowGeneration’s business is catering to cannabis growers, the company also sells to other types of gardeners. GrowGeneration has seen a surge in customers who have jumped into organic gardening at home due to the COVID-19 pandemic.
Scotts Miracle-Gro
Scotts Miracle-Gro (NYSE:SMG) is another company benefiting from the same trends that have boosted GrowGeneration’s sales. The company’s Hawthorne Gardening subsidiary ranks as a leading supplier of hydroponic gardening products to the cannabis industry.
Although Hawthorne is the primary growth driver for Scotts, the company still makes more than 70% of its revenue from sales of its consumer lawn and garden products. This business has also benefited from the COVID-19 pandemic.
GW Pharmaceuticals
In 2018, GW Pharmaceuticals’ (NASDAQ:GWPH) Epidiolex became the first drug made from a cannabis plant to be approved by the U.S. Food and Drug Administration. Sales of Epidiolex routinely surpassed expectations in its initial approved indications, treating Dravet syndrome and Lennox-Gastaut syndrome, both of which are rare forms of childhood epilepsy. The cannabis-focused biotech saw new patient starts for Epidiolex slow a little with the COVID-19 pandemic, but it continued to deliver strong revenue growth.
In August, GW won FDA approval for Epidiolex in treating tuberous sclerosis complex (TSC), a rare disease whereby benign tumors grow in vital body organs. This opens up a significant new market to the company, as around 50,000 people in the U.S. and roughly 1 million people worldwide have the disease.
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