Looking to round out your portfolio with cool stock options? Consider these currently undervalued cannabis stocks. Cannabis stocks give investors the chance to invest in something disruptive and revolutionary.
And though it’s now fully legal in 24 U.S. states, cannabis is still restricted at the federal level. The Justice Department moved to reclassify cannabis as a less dangerous drug this year. That might sound like a small decision, but it is, in fact, historic, given the pushback efforts to legalize cannabis have encountered over the decades.
Though significant, that step still doesn’t come close to having marijuana federally approved. But it moves the needle big-time for cannabis lovers and businesses.
Also, it injects fresh energy into the conversation on decriminalizing marijuana, which bodes well for companies and investors in the niche. Here are the three most undervalued cannabis stocks to buy this July.
Green Thumb Industries (GTBIF)
Green Thumb Industries (OTCMKTS:GTBIF) shares have been trading sideways the whole of 2024, but that shouldn’t so nearly dampen investor sentiment.
From glowing analyst ratings (14 Buy against one Overweight recommendation) to strong financials for the last quarter, Green Thumb Industries’ short-term and long-term prospects look ultra promising, and it’s one the most undervalued cannabis stocks at the moment.
The Chicago-headquartered firm posted revenues of $276 million for its last quarter, an 11.0% increase from the previous year. Retail revenue specifically saw a 7.9% rise compared to Q1 2023.
Green Thumb said this growth was fueled by higher sales in retail and consumer packaged goods across 15 newly opened RISE Dispensaries and the introduction of adult-use sales in Maryland.
Other indications of its healthy financial status include adjusted EBITDA of $91 million or 33% of revenue — a 19% bump from the previous year and a 12% increase in cash flow compared to Q1 of 2023.
Trulieve (TCNNF)
Trulieve (OTCMKTS:TCNNF) is a vertically integrated (meaning it controls all the stages of its supply chain) U.S. cannabis company. It has a brand portfolio that includes smaller premium brands such as Avenue, Cultivar Collection and Muse. Others include mid-tier brands Modern Flower, Alchemy, Momenta and Sweet Talk, and value brands Co2lors, Loveli, Roll One and Trekkers.
Going by its recent market performance and fundamentals, Trulieve is one of the most promising undervalued cannabis stocks right now. At the current going price of $9.90, shares are up nearly 90% from the turn of the year when they traded at the ballpark of $5 apiece.
Trulieve is not doing too shabby either on the financial front. It recorded a 4% sequential increase of 4% year-on-year (YOY) in revenue for the last quarter. And its planned expansion into three more dispensaries at Cocoa Beach, Palm Bay and Pinellas Park, Florida, will add to its bottom line.
It’s also exciting to note analysts overwhelmingly recommend Trulieve shares, which should further illustrate their potential to soar in value.
Tilray Brands (TLRY)
Tilray Brands (NASDAQ:TLRY) cultivates, processes and distributes medical cannabis products across several continents including Canada, the United States, Europe, Australia, New Zealand and Latin America.
The company began as a purely cannabis-focused business but has since fashioned itself as an overall lifestyle company. It now operates across four segments: cannabis, hemp-based foods, beverage alcohol and wellness.
The company’s diversification plus a raft of acquisitions is a pragmatic response to the economic realities of the cannabis business. Real profitability remains elusive — thanks to the federal restrictions on the product.
That diversification has helped it stay afloat and even post impressive revenues. For example, Tilray’s revenue for the quarter ending February 29 was $188.3 million, which was a 30% jump YOY.
Furthermore, the company plans to seal more deals in the coming months and years. CEO Irwin Simon told MarketWatch he’d be looking to “do more acquisitions in 2024.”
Investors will also be enthused to know Wall Street analysts see an upside potential in Tilray. Shares have an average rating of Hold, with three Buy recommendations, 12 Hold ratings and no Underweight or Sell ratings.
Tilray is one of the best-undervalued cannabis stocks at the moment.
On the date of publication, Hope Mutie did not have (either directly or indirectly) any positions in the stocks mentioned in this article. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com’s Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.