The U.S. cannabis market has witnessed substantial growth, driven by increasing legalization at the state level for both medical and recreational use. This burgeoning sector encompasses a wide range of businesses, including cultivation, distribution, retail, and ancillary services such as technology, packaging, and legal support. As more states move toward legalization, the market is expected to expand further, making it an area of interest for investors looking to tap into new growth opportunities.
Investing in cannabis stocks offers the potential for high returns as the industry continues to evolve and mature. However, the sector is also fraught with regulatory uncertainties and legal complexities due to the federal prohibition of marijuana. This creates a volatile investment environment where stock prices can be highly sensitive to regulatory news and market sentiment. Furthermore, the competitive landscape is rapidly changing, with new entrants and mergers and acquisitions reshaping the market dynamics.
For those considering cannabis stocks, due diligence is crucial. Investors should assess companies based on their financial health, market position, and the regulatory environment of the states in which they operate. While the cannabis market holds promise due to its growth potential and expanding consumer acceptance, the inherent risks associated with legal and regulatory challenges must be carefully weighed. Keeping this on top of mind, here are two marijuana stocks for your 2024 stock market watchlist.
Cannabis Stocks To Buy [Or Avoid] Now
- Curaleaf Holdings Inc (OTCMKTS: CURLF)
- Trulieve Cannabis Corp (OTCMKTS: TCNNF)
Curaleaf Holdings (CURLF Stock)
Starting us off, Curaleaf Holdings Inc (CURLF) is an international provider of consumer products in cannabis. Curaleaf operates an integrated network of medical and wellness cannabis facilities throughout the United States. Their operations include cultivation, processing, and dispensing cannabis products.
This month, Curaleaf announced its financial results for the fourth quarter and the full year ended December 31, 2023. The company reported fourth-quarter 2023 revenue of $345 million, marking a 4% increase from the previous quarter. The adjusted EBITDA for the same period was $83 million, which is 24% of the revenue and represents a 490 basis point improvement compared to the previous year. Additionally, Curaleaf reported a full-year 2023 cash flow from continuing operations of $91 million.
Year-to-date, shares of CURLF stock have surged by 37.16%. Meanwhile, Curaleaf stock closed Wednesday’s trading session up 8.91% at $5.50 a share.
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Trulieve Cannabis (TCNNF Stock)
Next, Trulieve Cannabis Corp (TCNNF) is a vertically integrated “seed to sale” company. Trulieve primarily focuses on the production and distribution of medical cannabis products to patients through its extensive network of dispensaries across several states.
At the end of last month, Trulieve announced its fourth quarter and full-year 2023 results, showcasing strong year-end momentum and significant cash generation. The company reported its highest quarterly revenue and gross margin for the year, with a record cash flow from operations of $202 million and free cash flow of $161 million for 2023. Trulieve anticipates a cash flow from operations of at least $225 million for 2024. The fourth quarter saw a revenue increase of 4% sequentially, largely from retail sales, and achieved a gross profit of $154 million with a GAAP gross margin of 54%.
In 2024 so far, shares of Trulieve stock have jumped by 135.85% YTD. Moreover, on Wednesday, TCNNF stock closed higher by 5.73% at $12.17 a share.
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