Despite an exceptionally challenging year in 2020, one industry that found itself ablaze was cannabis. With the industry maturing and offering sustainable double-digit sales growth, investors' appetites for fast-growing marijuana stocks returned in a big way.
After perusing the field of publicly traded pot stocks with at least a $200 million market cap, I've identified eight marijuana stocks that shared one common theme: they all ended the year higher by a triple-digit percentage. Ladies and gentlemen, I give you the top eight marijuana stocks in 2020.
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1. GrowGeneration: Up 881%
Hydroponic and organic gardening store-chain GrowGeneration (GRWG 0.51%) wasn't just the best-performing pot stock in 2020. Its 881% gain was one of the highest returns throughout the entire universe of publicly traded companies on the major U.S. exchanges.
GrowGeneration has been kicking bud and taking names, with high double-digit organic growth and acquisitions powering sales higher. Each of the past seven quarters has featured year-over-year revenue growth ranging between 123% on the low end to as much as 199%. The company currently has 36 open locations in 11 states but has plans to push its operating store count to 50 in 15 states by the end of this year.
2. TerrAscend: Up 359%
Up-and-coming multistate operator (MSO) TerrAscend (TRSSF -4.22%) more than quadrupled in 2020 on the heels of substantive sales growth and tempered increases in selling, general, and administrative costs. Initial forecasts from the company peg 2021 full-year sales at $360 million Canadian to CA$380 million, which is up from an estimated CA$196 million in 2020 sales. TerrAscend is also expected to generate between CA$140 million and CA$160 million in positive earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2021.
Though TerrAscend has a presence in Pennsylvania and the recently recreationally legalized New Jersey, it's the Golden State of California that's driving results. It has a handful of dispensaries open in the high-income San Francisco Bay area, and can place its products into dozens of dispensaries throughout the region.
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3. Jushi Holdings: Up 325%
Small-cap MSO Jushi Holdings (JUSHF -0.98%) was smoking hot last year. Jushi registered a 325% gain after turning the corner to positive EBITDA and forecasting full-year sales for the current year of between $205 million and $255 million. Should Jushi hit the upper end of its forecast, it'll potentially triple its year-over-year sales.
Jushi is a bit different from most MSOs in that it's primarily targeting limited-license states -- i.e., states that limit the number of total dispensary licenses issued or assign licenses to specific jurisdictions. The vast majority of Jushi's sales are expected to come from the limited-license states of Pennsylvania, Virginia, and Illinois. With minimal competition, the company shouldn't have any issue building up brand awareness and eventually pushing into the profit column.
4. Planet 13 Holdings: Up 186%
The unique Planet 13 Holdings (PLNH 4.90%) also had a memorable year. The company with one operating dispensary -- albeit a location that spans 112,000 square feet just west of the Las Vegas Strip in Nevada -- ended 2020 higher by 186%.
Prior to the coronavirus pandemic, Planet 13 was predominantly reliant on tourism to its cannabis SuperStore. Since then, it's built up quite the local following and expanded curbside pickup and delivery. In the third quarter, sales actually surged 36% above pre-coronavirus levels.
The excitement will continue for Planet 13 this year as it prepares to open its second location, a 40,000-square-foot store about 10 minutes north of Disneyland in Santa Ana, California.
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5. Trulieve Cannabis: Up 167%
The most nominally profitable pot stock had a very good year, too. MSO Trulieve Cannabis (TCNNF 1.66%) galloped higher by 167% in 2020 after generating $353.1 million in net sales through the first nine months, $260.4 million in gross profit prior to fair-value adjustments, and roughly $150 million in operating income without any fair-value adjustments or one-time benefits. No cannabis stock is even close to achieving such operating profitability.
The Trulieve secret is the company's focus on a single state. Although it has a presence in around a half-dozen legalized states, 70 of its 75 operating dispensaries are located in medical marijuana-legal Florida. Concentrating on one state has allowed the company to effectively build up its brand without breaking the bank on marketing expenses. Today, Trulieve Cannabis controls about half of the Sunshine State's medical marijuana market share.
6. Green Thumb Industries: Up 151%
If you haven't caught onto the theme yet, it was a big year for U.S. MSOs. Green Thumb Industries (GTBIF -0.48%) kept that trend alive with a 151% return in 2020. Though Green Thumb's sales growth is turning heads, it's the company's rapidly rising adjusted EBITDA that's really raising eyebrows. Around two-thirds of the company's sales are derived from higher-margin derivatives (edibles, vapes, concentrates, topicals, and infused beverages), which is playing a big role in its push toward recurring profitability.
The states Green Thumb has chosen to pile into are also responsible for its rapid ascent. Green Thumb has acquired its way into the limited-license state of Illinois, tourist-heavy Nevada, and New Jersey. All of these markets offer billion-dollar annual sales potential by 2024.
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7. Columbia Care: Up 143%
Put on your surprised face, because another U.S. MSO catapulted higher by triple digits last year. Columbia Care (CCHWF -0.48%), which had for years relied on its medical-cannabis dispensaries, is taking full advantage of increased recreational market demand in a handful of states. The company has 76 operating dispensaries in 18 states, making it one of the United States' biggest MSOs by total retail locations.
Similar to Green Thumb, acquisitions have played a key role in expanding its nationwide footprint. In September, it completed one of its most exciting deals to date by acquiring the largest vertically integrated cannabis operator in Colorado, The Green Solution. Colorado trails only California in annual weed sales.
8. Innovative Industrial Properties: Up 141%
Last but certainly not least is cannabis-focused real estate investment trust Innovative Industrial Properties (IIPR 1.09%). It was another year of aggressive acquisitions for the company. IIP ended 2020 with 66 properties owned in 17 states and has a weighted-average lease length on these cultivation and processing sites of 16.6 years.
Helping to push Innovative Industrial Properties higher by 141% is its sale-leaseback program. Since marijuana is illegal at the federal level, access to capital for MSOs has been dicey. IIP steps in and acquires cultivation and processing sites for cash, then immediately leases the property back to the seller. This nets MSOs much-needed cash while landing IIP a long-term tenant.
