Some of the best cannabis companies are ones that don't get all the attention. Organigram Holdings (OGI 0.89%), AFC Gamma (AFCG 3.20%), and NewLake Capital Partners (NLCP 0.11%) are easily overlooked. All three are relatively small companies with market value of less than $400 million in and have had significant share declines this year, but their finances tell stories of strength.

Cannabis companies have struggled this year, but these three are priced attractively with low valuations, track records of revenue growth, and plenty of potential.

Organigram showing consistent growth

It's been a difficult year for Canadian cannabis companies, mostly because of declining prices and an oversupply of cannabis. Organigram, with a market cap of about $300 million, wasn't immune, and its shares are down more than 46% so far this year.

However, Organigram has quietly shown steady revenue growth, and with its shares trading at a forward price-to-sales ratio of only 2.5, now is a good time to buy the stock.

The company posted fiscal 2022 net revenue for the year ended Aug. 31 of $145.8 million Canadian ($106.7 million), up 84% year over year, which the company attributes to increases in international and recreational cannabis sales. It also posted positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$3.5 million, compared to an adjusted EBITDA loss of CA$27.6 million in 2021. The company has had three consecutive quarters of positive adjusted EBITDA.

It is still operating at a net loss but appears closer to profitability. In the fourth quarter, it reported a net loss of CA$6.1 million, compared to a net loss of CA$26.1 in the fourth quarter of 2021. With CA$98.6 million in cash and less than CA$300,000 in debt, it can afford to grow.

In the fourth quarter, it had record revenue of CA$45.5 million, up 83% year over year and a rise of 19% sequentially. It also improved its adjusted gross margin to CA$10.4 million, or 23%. In the same period a year ago, its adjusted gross margin was CA$3 million, or 12%.

AFC Gamma: Overshadowed but outperforming

AFC Gamma has a market cap of about $340 million and was founded just a little over two years ago. It's also a different breed in that it is a real estate investment trust (REIT) that doesn't own property. Instead, it provides loans to cannabis companies, using the companies' real estate as collateral. Its income is derived from the interest payments on its loans.

Essentially, AFC Gamma provides a service that traditional banks would do, except that cannabis is still illegal at the federal level in the U.S. The Drug Enforcement Administration lists it as a Schedule 1 substance, putting it on the same level as heroin. With all the struggles cannabis companies have faced lately and talk of the SAFE Banking Act, which would open up competition for AFC Gamma, the company's shares are down more than 27% so far this year.

However, it's important to remember that the SAFE Banking Act doesn't appear to be going anywhere. And even if it did, there would still be cannabis companies banks won't lend to.

The share slump has done one other thing to help investors -- drive the yield on AFC Gamma's dividend to a very attractive 13% -- and now the stock trades at just under 8 times earnings. Since going public in March 2021, the company has raised its dividend five times, the most recent being a bump in the second quarter to $0.56 per share, an increase of 30% year over year and 1.8% sequentially. A yield that high would normally spell trouble. AFC Gamma's payout ratio of 94.9% of distributable earnings is certainly high, but it is sustainable as long as the company continues to grow earnings.

In the third quarter, the company reported net income of $11.5 million, up 45% year over year, and earnings per share (EPS) of $0.57, compared to EPS of $0.43 in the same quarter a year ago. All 13 of AFC Gamma's loans across 17 states are up to date, and the company has a BBB+ investment-grade rating, according to Egan-Jones.

NewLake Capital Partners is worth a second look

Finally, with a market cap of about $365 million, NewLake Capital Partners is often overlooked because it is much smaller than Innovative Industrial Properties, a cannabis REIT that went public in 2021.

NewLake doesn't have a long track record yet. However, it does have a dividend that yields 8.7%, and its stock is trading at only 18 times earnings.

The stock has fallen more than 40% so far this year, but the company's financials leave plenty of room for optimism. In the third quarter, the company reported revenue of $12.1 million, up 15% sequentially and 50% year over year. Adjusted funds from operations (AFFO) -- a more dependable metric for REITs than net income -- was $10.6 million in the quarter, up 21.4% sequentially and 75.3% year over year.

The company has shown a strong commitment to a quarterly dividend in a short time by raising it six consecutive quarters, including a third-quarter increase of 5.7% to $0.37. Even with the increases, the company's AFFO payout ratio is only 78.7%, considered safe for a REIT and leaving room for more dividend increases.