Marijuana stocks might have slogged through some awful growing pains in 2019, but there's little doubt that a big-dollar opportunity awaits over the long run. After the industry generated $10.9 billion in worldwide sales in 2018, Wall Street projects that global yearly sales could grow by 400% to 1,800% by 2030.
What's important to understand from an investment perspective is that while Canada was the first industrialized country in the modern era to green-light recreational pot, the United States is the industry's crown jewel. Even with peak sales estimates all over the place, the consensus is that the U.S. will be responsible for anywhere from 33% to perhaps more than 50% of global weed sales by 2030. That makes it a market of high interest for marijuana stock investors.
While there are numerous ways for pot stocks to generate sales in the U.S., the most effective way to really ramp up revenue is to be a vertically integrated multistate operator (MSO). In layman's terms, we're talking about a company that's capable of controlling the seed-to-sale process within a recreationally legal or medical marijuana-legal state.
But in order to ramp up sales quickly, MSOs have to be effective at opening dispensaries and not just sitting on retail licenses. Right now, three U.S. pot stocks have stood out from their peers in terms of their ability to open and operate retail marijuana stores.
Curaleaf Holdings: 53 open dispensaries
Among MSOs, few cannabis stocks have created more envy than Curaleaf Holdings (OTC:CURLF), which currently has 53 operational dispensaries, 15 grow sites, and 24 processing sites spanning 14 states. Though Curaleaf has managed to open a number of its locations organically, it's been no stranger to acquisitions.
Just over two weeks ago, Curaleaf closed its acquisition of the Select brand of cannabis products, and it looks to be closing in on the completion of an all-stock deal to acquire privately held MSO Grassroots. When the Grassroots deal closes, Curaleaf will gain access to an additional 60 retail licenses, as well as add roughly 20 operational dispensaries to its portfolio. It'll also have access to a number of new states. On a pro-forma basis, the company anticipates having 131 retail licenses, which is potentially No. 1 among MSOs, and a presence in 19 states.
Assuming the Grassroots deal closes during the first quarter, and taking into account the revenue spike Curaleaf will benefit from now that the Select deal has closed, there's a genuine opportunity for Curaleaf to reach $1 billion in annual sales in either 2020 or 2021.
Trulieve Cannabis: 47 open dispensaries
If Curaleaf is the envy of most MSOs on the expansion front, then Trulieve Cannabis (OTC:TCNNF) is the envy of MSOs on the profit front. Trulieve Cannabis' third-quarter results featured $70.7 million in sales and more than $23 million in operating income without the aid of one-time benefits or fair-value adjustments. Not bad for a relatively no-name MSO!
Whereas most vertically integrated MSOs have attempted to expand their footprint to as many states as possible, Trulieve has, instead, dug its proverbial feet into the ground in its home market of Florida and seemingly opened as many dispensaries as it could organically. This past Saturday, Feb. 15, Trulieve opened its 45th dispensary in the Sunshine State, bringing its national total to 47. It also has one dispensary each in Palm Springs, California, and Bristol, Connecticut, at the moment.
By focusing on the medical marijuana-legal Florida market, Trulieve has been able to keep its expenses close to the vest while at the same time effectively building up its brand. Even while facing tough competition that includes Curaleaf and MedMen Enterprises, Trulieve Cannabis has secured the lion's share of medical pot revenue in the Sunshine State.
Green Thumb Industries: 41 open dispensaries
Third and finally, there's Green Thumb Industries (OTC:GTBIF), which opened its seventh Illinois dispensary on Jan. 31, its 41st in the country. In total, Green Thumb, which goes by the shorter acronym GTI, has 13 manufacturing facilities and the ability to open as many as 96 retail stores across 12 states.
Similar to Curaleaf, GTI has been leaning on a combination of organic expansion and acquisitions to drive its operational dispensary count. It's certainly expected to push toward the current state-imposed limit of 10 retail locations in Illinois, which opened its doors to adult-use weed sales on Jan. 1, 2020. With relatively low licensing limits in Illinois, even 10 operational dispensaries in the right cities could lead to substantial sales growth for GTI.
On the acquisition front, Green Thumb made a splash through its purchase of Integral Associates, which closed last year. Integral ran the Essence-branded dispensaries in Nevada, including the only dispensary authorized on the Las Vegas Strip. According to the State of the Legal Cannabis Markets report by Arcview Market Research and BDS Analytics, Nevada is forecast to lead the country in marijuana spending per capita by 2024, which is a testament to the state's strong tourism industry. That should make GTI's investments in Nevada quite lucrative.