In seeking the best stocks in healthcare or cannabis under $20, I look for companies that have consistent revenue growth and a business where there's still plenty of untapped potential, considering long-term trends.

Two that stand out in these categories now are biotech company Exelixis (EXEL -1.01%) and cannabis maker Green Thumb Industries (GTBIF 1.52%). Both are profitable and growing revenue -- and their shares trade for price-to-earnings ratios below that of most competitors.

Exelixis keeps its focus on oncology

Exelixis' shares are down about 12% this year, but considering the S&P 500 index is down 18%, that's not so concerning and helps make the company's shares more reasonable to buy now.

The company specializes in oncology gene therapies. It has increased revenue the past seven years and is on pace to do so again this year. It is in a market that is expected to grow exponentially. According to a report by Fortune Business Insights, the global market for gene therapies to treat cancer is projected to reach $35.67 billion by 2027, with a compound annual growth rate of 33.6%.

In the third quarter, the results of which the company reported on Nov. 1, Exelixis earned revenue of $411.7 million, up 25.3% year over year. The gains were led by $366 million from its Cabozantinib franchise. The therapy, which has been approved to treat medullary thyroid cancer, renal cell carcinoma, and hepatocellular carcinoma, saw gains of 39% over the same period last year.

The company also reported net income of $73.2 million, or $0.23 in earnings per share (EPS), compared to net income of $38.2 million and $0.12 per share in the third quarter of 2021.

Exelixis also upgraded guidance for yearly revenue, raising the range from between $1.525 billion and $1.625 billion to between $1.575 billion and $1.6 billion.

The healthcare company has a chance to expand on its pipeline, possibly as soon as next year. Exelixis and Sairopa, a clinical stage biotech based in the Netherlands, recently began a clinical development and option agreement for ADU-1805, a monoclonal antibody designed to help the immune system's ability to attack tumors.

The deal includes an upfront payment to Sairopa of $40 million, with an additional $70 million in near-term milestones. In return, Exelixis would get the license to develop and commercialize ADU-1805 and other anti-SIRP alpha antibodies. Exelixis said it plans to file an Investigational New Drug Application for ADU-1805 with the Food and Drug Administration in the first quarter of 2023.

The company trades for only slightly more than 17 times earnings and considering its pace of revenue growth, the stock appears to be a bargain right now.

Green Thumb is gassing up to grow

Green Thumb Industries is cannabis maker and distributor with 77 stores across 14 states: California, Connecticut, Florida, Illinois, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, and Virginia.

The shares are down more than 45% this year as the market has soured on cannabis stocks in general. In most cases, there's a good reason for that as profits have stagnated or disappeared for many multi-state operators (MSOs). However, Green Thumb has managed to find its way through the headwinds that have slowed other cannabis companies.

The potential for growth in cannabis sales is obvious. Since California became the first state to approve medical marijuana sales in 1996 and Colorado became the first state to allow recreational marijuana sales 10 years ago, 37 states have approved medical marijuana sales and 19 states have legalized adult-use sales.

Six states had cannabis and drug policy reform initiatives on the ballot Nov. 8. The MSOs benefiting the most from that growth are the ones with healthy financials and Green Thumb is in that category. If federal cannabis restrictions were lifted, Green Thumb would be able to be listed on major stock exchanges in the U.S., which would make it even more popular with investors.

The third quarter was the company's ninth consecutive profitable quarter, based on net income. The company said it had revenue of $261 million, up 12% year over year and 3% sequentially. It reported $9.8 million of net income, or $0.04 in EPS, down from $21.5 million and $0.08 in the same period a year ago. 

Green Thumb made a splash last month when it announced a deal to lease space next to Circle K convenience stores in Florida. The agreement, pending regulatory approval, would launch next year with 10 of Green Thumb's RISE Express medical dispensaries next to Circle K stores in select locations. Circle K has 600 stores in Florida, so the deal could have huge implications for both companies' growth. 

Shares of Green Thumb currently trade for 33 times earnings, but considering that the only two other U.S. MSOs with more revenue -- Curaleaf Holdings and Trulieve Cannabis -- were not profitable in their last quarter, Green Thumb may well be underpriced.