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5 U.S. Cannabis Stocks on Track for >$10mm Annual Revenue
As the U.S. cannabis industry has evolved over the past few years, so has the market for publicly-traded cannabis stocks. In 2014, very few publicly-traded companies were reporting substantial revenue. Now, dozens are on track to report annual revenue of at least $1mm. Most of these are ancillary, but there are some publicly-traded companies that also cultivate, process or dispense cannabis as well that are generating revenue.
As companies have begun to report revenue, investors can now judge cannabis stocks on this metric.
CV Sciences (OTC: CVSI), which was formerly CannaVest, is a leading producer of CBD from industrial hemp, which is the source of its revenue, and is also developing a chewing gum with CBD and nicotine for eventual submission to the FDA. Q1 sales of $3.76mm grew about 57% from a year ago as the company produced an operating loss of $3.65mm but generated positive operating cash flow of $26K. The company reported 89mm shares outstanding at May 3, and the adjusted share-count is the same, as all options and warrants are out-of-the-money. Investors should be aware that the company has convertible debt, which isn’t factored into my adjusted share-count. CVSI reported equity of $11.7mm, including $6.65mm of goodwill and intangibles.
GrowGeneration (OTC: GRWG) operates hydroponics stores serving cultivators in California, Colorado, Nevada and Washington. The company reported Q1 sales of $2.58mm, up more than 67% from a year ago and up 18% on a same-store basis. The operating loss was $282K as the company used $978K to fund operations, including a $943K build in inventory. The company reported 13.49mm shares outstanding as of May 15, and the adjusted share-count takes account options and warrants as well as shares sold at $2 after the quarter ended. GRWG reported equity of $5.4mm, including $0.5mm of goodwill and intangibles.
Kush Bottles (OTC: KSHB) is a compliant packaging solutions provider operating in many markets. The company reported FY17-Q2 sales of $2.97mm, up 65% from a year ago (and YTD sales of $5.44mm, up 55%). The operating income was $3619, with the company using $38K to fund its operations. The company reported 50.19mm shares as of April 11, but the adjusted share-count factors in options as well as an acquisition reported after the quarter. KSHB reported equity of $7.85mm, including goodwill of $2.38mm.