Top 5 Outperformers in the PRISM Emerging MedCannabis Index
One of the most surprising developments from the COVID-19 pandemic has been how well cannabis has performed. According to Marijuana Business Daily, legal-market cannabis sales in the United States are close to $15 billion in 2020. This represents a 40% year-over-year increase in sales for the emerging industry.
Out of thirty-three states that allowed some form of legal cannabis at the beginning of the pandemic, over twenty of those states deemed the cannabis industry as essential. While storefronts were largely closed, curbside pickup and delivery options continued to flourish.
While cannabis remains illegal on the federal level, the U.S. House of Representatives passed a landmark decriminalization bill in early December 2020. Although the legislation is not expected to pass a vote in the Senate, it could represent a turning point for the industry.
Cannabis stocks have performed well in 2020, as the PRISM Emerging MedCannabis Index is up nearly 95% year-to-date. Here are the top five performing components of the index in 2020:
- GrowGeneration Corp. (NASDAQ: GRWG) – 905% YTD
GrowGeneration Corp. is engaged as a retailer focusing on hydroponic and organic gardening solutions. As of March 2020, the company maintains twenty-seven retail locations and commercial hydroponic & gardening centers.
Part of GrowGeneration’s surge has been its close relationship to the cannabis market, without “touching the plant.” This essentially means that the company does not cultivate, produce, or sell any form of cannabis products. However, its hydroponic equipment can be used to produce cannabis.
- Trulieve Cannabis Corp. (OTCQX: TCNNF) – 177%
Trulieve Cannabis is engaged as a vertically-integrated, “seed-to-sale” company, which also happens to the first and largest medical cannabis company within Florida. The company also has operations across California, Massachusetts, and Connecticut.
Multi-state operators, or MSOs, have overtaken their Canadian counterparts in 2020, as investors see stronger growth within the U.S. cannabis market. Trulieve continues to be one of the top MSOs and best-run pure-play cannabis companies.
- Green Thumb Industries, Inc. (OTCQX: GTBIF) – 156%
Green Thumb Industries is engaged as a cannabis consumer packaged goods company, which maintains a vertically-integrated business model. The Chicago-based MSO currently has thirteen manufacturing facilities, 96 licensed retail locations, and an operational footprint across twelve U.S. states.
Like Trulieve, Green Thumb has experienced growth in 2020, as its U.S.-focus pays off. The company’s midwestern focus gives them an advantage in several key states, such as Illinois, Colorado, and more.
- Innovative Industrial Properties, Inc. (NYSE: IIPR) – 149%
Innovative Industrial Properties is structured as a real estate investment trust (REIT), which focuses on recreational and medical cannabis facilities. As of mid-December 2020, the REIT expanded its portfolio to 66 properties comprising of 5.4 million square feet, across seventeen states.
The REIT follows a somewhat similar strategy as GrowGeneration due to its close relationship to the cannabis industry, without touching the plant. This gives Innovative Industrial Properties a buffer zone to avoid complex licensing and regulations, while still benefitting from industry growth.
- Village Farms International, Inc. (NASDAQ: VFF) – 82%
Village Farms is engaged as one of the largest greenhouse growers across North America. The company primarily has focused on produce production, such as tomatoes, cucumbers, and peppers. However, in recent years the company has expanded into the cannabis and hemp CBD markets.
The company’s Canadian cannabis operations, Pure Sunfarms, is considered to be one of the largest, low-cost greenhouse cannabis producers in the world. Within the United States, Village Farms is mostly focusing on CBD products