Cannabis Investors: 2 Stocks That Could Dominate Retail

It’s getting close to the one-year mark since cannabis has been legalized, and a lot has changed since then. The excitement in the industry has definitely cooled with many stocks struggling over the past few months. However, that doesn’t mean that good returns can’t still be made.

With supply issues improving and more pot shops up and running, the next big opportunity could be in cannabis retail stocks. Fire & Flower Holdings (TSX:FAF) has dozens of locations spanning five provinces where it sells cannabis products. The company has been adding licences and locations to its portfolio and could become one of the bigger retail brands in the industry.

Earlier this month, the company announced that convenience store operator Alimentation Couche-Tard was making a strategic investment in Fire & Flower and could result in the convenience store giant taking a controlling interest. It’s a move that should give investors some added confidence in knowing that Fire & Flower will be able to tap into the experience of a big-name retailer to help it navigate a rapidly growing cannabis retail market.

When it comes to cannabis, investors are looking for any safety or assurances that they can get, and partnering with Couche-Tard certainly gives Fire & Flower a big advantage and better odds of success in the industry. In its most recent quarterly results, the cannabis company generated $10 million in sales, and it’s likely just the beginning in terms of what it can achieve, especially as it continues to scale its business.

Curaleaf Holdings (CNSX:CURA) is an option for investors that are looking on the other side of the border, in the burgeoning U.S. market that continues to get bigger and bigger with every state that goes to legalize cannabis. With 11 that have legalized already and likely more to come, we could be seeing a lot more opportunities in the near future, especially for a large multi-state operator like Curaleaf.

The company is continuing to grow its brand by adding more stores and acquiring companies in a strategic effort to expand across the country and establish itself as the industry leader. With sales of US$28 million in its most recent quarterly results, the company has achieved significant growth in just the past year, with revenues being nearly five times what they were before.

However, when counting its acquisitions, Curaleaf’s pro-forma revenue for the quarter would have come in at US$75 million, helping to put into perspective just how much bigger the company will be when its existing deals will be completed, assuming, of course, that no issues come up along the way.

Bottom line

While it may be dangerous to invest in some pot stocks today, Curaleaf and Fire & Flower present some intriguing opportunities for investors. As the companies continue building their retail positions in their respective countries, we could see their share values rise over the course of the coming years.

Both are positioned well for success and the best is likely still to come.

One tiny small-cap stock to bet on ahead of Cannabis 2.0 on October 17th…

The first wave of cannabis legalization minted millionaires out of everyday investors, and it might be about to happen again.

Because when edibles are legalized in Canada on October 17th, experts project a new $2.7 BILLION market will be born.

Our last legalization stock pick is already up 1,211%, and now we’re recommending one tiny small-cap stock before Cannabis 2.0.

This could be our next +1,000% winner in the cannabis space.

Hurry, the second wave of cannabis legalization is about to hit and this stock could skyrocket.

Click here to learn more!

More reading

Fool contributor David Jagielski has no position in any of the stocks mentioned. Couche-Tard is a recommendation of Stock Advisor Canada.

Source: The Fool
Cannabis Investors: 2 Stocks That Could Dominate Retail
The Fool

The Motley Fool
Contributor at mjcanada.ca
The Motley Fool is dedicated to helping the world invest — better. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, mutual funds, and premium investing services.

In all we do, we take a different approach.

We believe – and have proven over decades – that the individual investor can beat the market.

We believe that anyone can do it, even if they don’t have a lot of time or money to devote to investing.

We believe in a long-term outlook, helping people build wealth over time.

We believe that the person best positioned to take care of your financial future is you.

And we work tirelessly on behalf of our hundreds of thousands of members who are enjoying the opportunities that come with having enough money to do the things that matter to them.

While we are headquartered in Alexandria, Va., The Motley Fool advocates for the individual investor around the globe with offices in the UK, Australia, Canada, Singapore, and Germany.

Related News