A Blossoming Regulatory Environment Supports These Stocks
With Canada’s cannabis market maturing and the U.S. well on the way toward nationwide legalization, the future for cannabis looks bright. While many of the larger players may seem overpriced after recent activity within the market there are still values to be had. Today’s lineup up of cannabis penny stocks includes not one but three stocks on track to grow in 2021 or that are already growing and producing profits.
Vivo Cannabis Is On Track To Grow
Vivo Cannabis (OTCMKTS: VVCIF) is among Canada’s smallest integrated operators and yet one with successful international operations as well. The company reported its first significant sales in Australia in its Q4 2020 results and there are other green shoots as well. Among them are a partner who just received approval to manufacture a medical product using Vivo Cannabis cannabis, the release of new Legalization 2.0 products including a brick hash, and the certification of an EU facility that will soon begin shipping product as well.
The only negative in the report is the company’s revenue which fell on a YOY basis but there is a mitigating factor. Much of the difference is attributed to the timing of inventory orders in relation to pre-stocking for the launch of Canada’s Legalization 2.0 products. The rest is due to COVID-related consumer shifts that should abate with the economic reopening. What we like about this stock is that, while it is focusing on growth, the company is also streamlining operations to boost profitability. In our view, this company will either succeed on its own or become a takeover target for another operation.
Delta 9 Is Growing Now
Delta 9 (OTCMKTS: VRNDF) is another Canadian operator we think is on track to give investors big returns. The company is a vertically integrated cannabis company whose revenue grew 8% sequentially and 33% YOY in the Q4 period and the company is projecting growth to continue. Another big difference is that Delta 9 is also profitable now. Unlike most other cannabis companies even the big four Delta 9 has been producing positive gross margins and EBITDA for several quarters and profitability is accelerating. The gross margin grew to 31% in the 4th quarter and produced $4.4 million in earnings or up 132% from last year.
"Our focus on disciplined, profitable growth has paid dividends for Delta 9 as we are reporting record Adjusted EBITDA and record year over year and sequential revenue results”, said John Arbuthnot, CEO. “Delta 9 Cannabis continues to execute its vertically integrated strategy as it continues to accelerate revenue growth and implement prudent control costs. We are incredibly proud of our 300 plus employees for helping make this a record year for Delta 9.”
Supreme Cannabis Is The Premium Choice
Supreme Cannabis (OTCMKTS: SPRWF) stands out not only for its growth but for its strategy as well. The 54.3% YOY revenue growth produced in the fiscal 2nd quarter is impressive enough but when combined with the company’s strategy of premium branding is even more so. Sales of premium brands have taken the biggest hit during the pandemic but provide the highest margins. The fact Supreme Cannabis is able to produce growth in this category is proof that smaller brands can compete and gain market share against the bigger operators. And Supreme Cannabis is able to do it with increasing profitability having grown EBITDA to over $3 million from just $0.3 million in the previous period.
Featured Article: How to Invest in Marijuana Stocks7 Outdoor Recreation Stocks For Growth And Dividends
If American’s liked outdoor activities before, they love them even more now. The COVID-19 pandemic has done many things, and one of them is reinvigorating American’s love of the outdoors. Data from across the industry shows a sustained uptick in revenue that has the entire complex moving higher.
The RV Industry Association, for example, reports shipments of RVs are up greater than 30% in 2020 and are expected to grow another 20% or more in 2021. If data from the two of the industry’s largest manufacturers are any indication, that forecast is very conservative.
And the gains aren’t limited to RVs. Everything that has anything to do with outdoor recreation is booming. Sales at Dicks Sporting Goods, an iconic brand for retail and the outdoors, has seen a sustained 20% increase in revenue since the 2nd quarter shutdowns. If anything, revenue in this sector is being held back by rapidly declining inventory and tight shipping conditions.
The stocks we are about to show all have something in common; the outdoors. Within the group, you will find everything from RVs to Radios and everything in between an outdoor enthusiast could need or want. Some pay dividends and some don’t, but all will deliver solid returns to investors in 2021.
View the "7 Outdoor Recreation Stocks For Growth And Dividends"
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