Cannabis investors who have heard the siren call of how much growth is expected in the industry may be getting a little frustrated this year, with the industry's stocks down, in general. The ETFMG Alternative Harvest ETF is down more than 47% so far this year, and the AdvisorShares Pure Cannabis ETF is down more than 58%. MATT

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While we're waiting for the broader legal cannabis industry to get its feet under it, why not take advantage of those reduced share prices by investing in solid cannabis-related companies with positive cash flows and double-digit-percentage revenue growth -- companies such as Jazz Pharmaceuticals (JAZZ 2.98%), Jushi Holdings (JUSHF 8.99%), and Innovative Industrial Properties (IIPR -0.37%).­­

Jazz Pharmaceuticals has had consistent revenue growth

Jazz Pharmaceuticals focuses on neuroscience and oncology therapies. Its stock is up by about 19% so far this year. The company's connection to cannabis came by acquisition: Its $7.2 billion purchase of GW Pharmaceuticals in May 2021 brought with it cannabidiol-based Epidiolex, a drug used to treat seizures caused by a variety of epileptic conditions, including Lennox-Gastaut syndrome, Dravet syndrome and tuberous sclerosis complex. Jazz is in the midst of an effort to expand that label. It has started a phase 3 trial of Epidiolex as a treatment for seizures connected with epilepsy with myoclonic-atonic seizures.

Epidiolex was the first cannabis-derived therapy approved by the Food and Drug Administration. The GW deal also brought in Sativex (nabiximols), a cannabis-based drug sold in Europe as a treatment for spasticity due to multiple sclerosis.

One thing I like about Jazz is that it has grown its annual revenues for 16 consecutive years, and it's on pace to continue that streak this year. The company reported revenue of $932.9 million in the second quarter, up 24% year over year, and through the first half, its revenue rose 28% to $1.7 billion. Now that it has adjusted to its acquisition of GW Pharma, it is back in the black as well. In the second quarter, it said it had net income of $34.7 million or $0.55 in earnings per share (EPS) compared to a loss of $363.3 million and an EPS loss of $6.11 in 2021's second quarter.

The company has been able to keep growing through its own growing product line, including 11 new approvals and launches of therapies since 2015, plus its willingness to acquire therapies, as it did via its purchase of GW Pharma. Management's plan is for the company to be generating $5 billion in annual revenue by 2025 and to launch at least five new products by the end of the decade.

The rising stars among its therapies are Xywav (used to treat daytime sleepiness) and Epidiolex. The former produced $421 million in revenue through the first half of 2022, up 111% over the same period last year. Epidiolex's revenue through six months was $333 million, up 204% year over year. The company issued guidance for yearly revenue between $3.5 billion and $3.7 billion, compared to $3.094 billion in 2021, and annual EPS between $1.45 and $3.95, up from an EPS loss of $5.52 in 2021.

Jushi Holdings may be turning the corner

With a market cap of just $327.3 million, Jushi Holdings isn't the largest multistate operator in the cannabis space, and its shares are down more than 49% this year. Look past those negative numbers, though, and you'll see big-time growth. The company has focused on more-profitable limited-license states and has 33 retail locations, including 18 in Pennsylvania. It plans to grow its retail footprint in Illinois from four dispensaries to 10 by the end of 2023.

In the second quarter, it reported revenue of $72.8 million, up 52.4% year over year and 17.6% sequentially. It also booked an adjusted gross profit of $27.8 million, up 19.1% over the same period in 2021 and up 12.3% sequentially. It reported net income of $12.1 million in the quarter, up from a loss of $19.7 million in the first quarter.

The company credited its revenue boost in large part to its $53.6 million acquisition of NuLeaf, which it completed in April. That deal gave the company four retail locations in Nevada. The other reasons for stronger revenue were increased sales in Massachusetts, Illinois, Virginia, and California. Jushi also has a strong online presence: 60% of its sales are made via its online platform, which helps the company's profit margin.

Innovative Industrial Properties is a steal at this price

Innovative Industrial Properties (IIP) is a real estate investment trust (REIT) that specializes in lease-backs to cannabis companies. Due to federal laws regarding marijuana, it's difficult for cannabis companies to get financing through standard bank loans, so Innovative buys their properties, then leases them back to the sellers under long-term triple-net leases, which put most maintenance costs on the lessee.

Innovative Industrial Properties' shares are down a whopping 63% so far this year. Investors were concerned when one of its tenants, Kings Garden, defaulted on $2.2 million in rent on the six properties it leases from the REIT. However, the stock's slide has been overdone. In its last quarterly report, IIP said it has received 99% of its lease payments through the first six months of 2022. The drop in the stock price was certainly painful to shareholders, but it should be ameliorated somewhat by the dividend, which has a current yield of 7.2%.

Through the first six months of 2022, IIP's adjusted funds from operation (AFFO) were $113.9 million, up 39.8% year over year, while its AFFO per share was $4.19 compared to $3.11 in the same period last year. The company raised its dividend by 25% this year to $1.75 per share quarterly, and there's still room for management to boost it further because its AFFO payout ratio is 82%, within the safety range for a REIT.

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Since Innovative Industrial Properties began distributing dividends in 2017, it has raised its payout by 1,066%. Those who invested in the stock five years ago have seen a total return of 542.3% over that period.