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Why Top Marijuana Stocks Like Green Thumb Industries and HEXO Shot Higher on Thursday

By Eric Volkman – Aug 13, 2020 at 7:59PM

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It was a rising-tide-raises-most-boats kind of day for the cannabis sector.

What happened

Numerous marijuana stocks beat the market and rose in price on Thursday. This seems to have sprouted from the latest results published by Green Thumb Industries (GTBIF 0.54%) and GrowGeneration (GRWG 5.46%).

GrowGeneration's stock shot nearly 43% higher on the day. HEXO (HEXO -2.45%), Green Thumb, and Charlotte's Web Holdings (CWBHF -1.13%) notched more modest, but still encouraging, rises. 

Gloved hand making the OK sign in front of a marijuana plant.

Image source: Getty Images.

So what

GrowGeneration's second quarter represented its 10th consecutive quarter of record revenue. Meanwhile, the $43.5 million it reaped was more than double the Q2 2019 tally. Generally accepted accounting principles (GAAP) net income also recorded an all-time high at $2.6 million, again over twice the year-ago result.

Green Thumb's record was in July sales, which bounced 22% higher month over month. The company's overall Q2 top line rose almost 17% quarter over quarter and nearly 168% year over year to almost $120 million. Net loss narrowed to $12.9 million from Q2's $20.9 million.

As for HEXO, it floated a new at-the-market stock issue of over 33.9 million new shares. This brought in gross proceeds of nearly 34.5 million Canadian dollars ($26 million). Although equity issues are dilutive, they are considered by many marijuana stock investors to be preferable to debt in this ever cash-strapped industry.

Now what

It's unusual enough when there is one item of good news in the marijuana sector; Thursday brought several. But this industry still has many challenges in front of it, so any optimism should be tempered by the gritty reality of the current situation.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Green Thumb Industries and GrowGeneration. The Motley Fool recommends Charlotte's Web and HEXO. The Motley Fool has a disclosure policy.

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