Which cannabis stocks have the best margins? The results may surprise you which are the most profitable cannabis stocks. While there are some obvious top rankings, there are some less-than-usual suspects. Make sure to find your favorite stock in the list of cannabis stocks with the best margins. This will help you learn the best cannabis stocks to buy now. I have ranked the TOP 10 Most profitable cannabis stocks in order based upon EBTIDA profitability versus total shares outstanding. The reason is simple: Not many cannabis companies are net profitable yet. So, EBIDTA would be the next step.
While it is very likely you have heard of the #1 Most Profitable cannabis companies stock, I wonder if you’ve ever heard of #2? These cannabis stocks are the ones you need to keep track of. This is what will separate you from the herd as you look for the next great opportunity.
EBITDA profitability is a useful indicator for companies. For cannabis stocks, this is a very important milestone. Getting to this level means all of the pieces are starting to click together. And, net profitability for most is just around the corner. I have over 350 different cannabis stocks I follow and scrutinize for investment. This is why it is important to check out what are the Best Cannabis Stocks. You can find that in my Top Picks.
By comparing all of these cannabis companies to each other, I can get a better sense of whether a company is better positioned than another. The companies that successfully get to EBITDA profitability first potentially could outpace other companies in the race to cannabis dominance.
Look here to learn about how to invest in stocks – stock market for beginners, looking at profit margins.
Best Margins – Cannabis Stocks
What to Look For With Most Profitable Cannabis Stocks To Buy
What is important to keep in mind is that a lot of the Canadian Cannabis companies started at the very same time. Therefore, if one Canadian Cannabis Licensed Producer (LP) company outpaces another to get to EBITDA profitability, or Net Profitability, then this tells us information. Perhaps the most profitable companies took different paths.
And, with product matrixes they may have taken on different approaches to building up infrastructure. So, if a company does get to this level first versus another company, this could prove vital to the long-term success of one company versus the other.
EBITDA, (Earnings Before Interest, Taxes, Depreciation, and Amortization) by definition, is a metric that shows a company’s profits before certain deductions. Keeping tabs on this number will show how close a company is to becoming Net Income and Free Cash Flow positive. Comparing two companies with the same starting points. But, very different debt levels show how one company may be more profitable than another in the future. This may also show how the debt load will affect the profitability of a company.
Which Are The Best Cannabis Stocks To Buy?
If you are looking to figure out which are the best cannabis stocks to buy, looking at profitability is a good start. But, there are different levels of profitability for a company and, cannabis stocks are still some ways away from net earnings positive.
Because of this, I broke this listing down with EBITDA versus total shares. Effectively, it is another version of EPS just with the “E” standing for EBITDA. Comparing on a per-share basis takes away the heavyweights that may have earned a large amount of earnings overall but are relatively small on a scale with regard to per-share. Also, we invest on a per-share basis and are focused on earnings per share.
Looking through the listing above you can see which cannabis stocks are actually winning the race of Most Profitable Cannabis Stocks. I have about 125 companies on the list. Only 17 are EBITDA positive with another 42 at $0.00. The companies at $0.00 are companies you should keep an eye on when you are looking for companies to target for possible acquisition.
I would use this listing to see what kind of growth rate each respective cannabis company is printing. Consistency is important. If a company is printing consistently solid and increasing EBITDA profits it may be that they are on the verge of also printing positive Earnings Per Share, and this may be the nudge to get a lot of these stocks moving higher.
Cannabis Stocks to Watch
This listing is broken down by the latest quarter’s results. Not only should you be keeping an eye on the leaders but you should also be keeping a sharp eye on those that are just about to break above. Also, simply because anyone particular stock did not make the very top of the list maybe because of just one quarter’s results. This could be an opportunity for someone astute looking for overlooked data points. Do your due diligence.
One thing you definitely want to watch out for is cannabis federal legalization. This may occur soon and all cannabis stocks will go up.
12 thoughts on “Cannabis Stocks With The Best Margins”
How about a follow-up video on Auxly now that they a couple more Earnings behind them and updated their profile? It was the first video of yours that I watched.
I am working through all of the various companies and hope to have all of them redone by year’s end. So, yes, this will happen.
I don’t see coverage on Acreage. Is it left out because they don’t make your list or they are tied into CGC and your looking at then as one?
The problem with Acreage is that they do not report financial data on a regular enough basis. I draw two lines: Pure play adult-use & Reports financial data with frequency.
What happened to High Tide.
What a garbage stock no matter how good it performs it stays in the shit house. What a DISAPPOINTMENT.
You’ve just described every single stock in the cannabis industry. The likes of Canopy Growth, where thousands rushed in to invest in cannabis are getting burned. Canopy, Cronos, Hexo, MedMen… et. al. These were high profile. And, they always get media coverage since they are so much more accessible (as some are Nasdaq-traded). High Tide is merely getting hit due to what is referred to in the markets as “guilt by association”. From that, these better-performing stocks are getting crushed despite them being profitable. Nonetheless, take a long-term approach to this and the upside is far greater if you look down the road some 5 years, or so.
Soon, even Canopy will turn a profit. Then, that will draw in tons of investors, and companies such as High Tide will launch. Be patient. The rewards will be huge. Be confident in your own analysis looking at the value that is there and knowing that eventually, others will be rushing in to catch up to where you are with what you’ve already invested in.
DH: I posted a couple of news article on KAYS. The company sold a warehouse for a profit and this income would have inflated their miscellaneous income. I wrote the company and asked if this was a one-off or if they have an ongoing stream of income from Royalities. I will update this information upon receipt.
Thanks for this. Someone else said it was a licensing deal. As I continue to speak of them, I always mention that I have not dug in just yet. I wanted to highlight this. They are not too far off from EBTIDA, but still some time to go.
Thanks for great content , please keep up the good work.
Greetings. I noticed that Nextleaf Solutions isn’t on your list. Might turn a profit (yes an actual profit) this year. Talking “my book” of course. Still, one to watch. Cheers.
Hey JJ… Nextleaf Solutions has a Forum area. And, I have just tasked my assistant to do the financial data so I can create a posting. We are adding about 40 stocks to the big listings so, you will see Nextleaf Solutions showing up fairly soon.