The cannabis industry is indeed one of the most exciting industries to be involved in, but it is important to have a clear exit strategy. Markets are volatile, not only because of the unpredictability of the cannabis industry but also of the volatility of the Federal Government. As a result, you need to have a plan to exit if the current market conditions change.
In the past few months, Canada has been ramping up its efforts to legalize recreational cannabis. While the process won’t fully come to fruition until next year, there are already a few retail stores set up in major cities across the country. This week alone, Quebec announced a store location in Montreal, Manitoba said it will open a second store in Winnipeg, and Ontario said it will have 12 retail locations open by the end of 2019. Meanwhile, a new study from BMO Capital Markets says it sees a strong future for the industry as a whole.
As the marijuana industry moves to legitimize itself and grow in size, we take a look at a stock that seems to be on the right track. GreenRock Botanicals, a company which focuses on the extraction of high-quality Cannabidiol (CBD) from industrial hemp, has been on a roller coaster ride of a ride in 2018. Following a massive explosion followed by a reverse stock split, the stock is now up over 118% from when it opened in January.
In 2021, the cannabis industry has been stuck in a vicious bear market.
The Advisor Shares US Cannabis ETF (MSOS) is down 13% year to date and 40% off its 52-week high.
While the cannabis industry as a whole has suffered, one fast-growing cannabis business has been on the rise. In fact, this stock is up 122 percent in 2021, making it one of the year’s top performers in the cannabis industry.
The following factors have contributed to these remarkable gains:
- In only 12 months, revenues increased by 203 percent.
- In ten years, a new deal for up to $280 million will be signed.
- Sales of backlog totaled $101 million, up 25% in only 12 weeks.
Agrify Corp (NASDAQ: AGFY) is a speculative bet on the cannabis business in the United States.
Agrify, based in Burlington, Massachusetts, offers high-tech indoor growing equipment to some of the country’s biggest cannabis businesses. One of its most popular items, stackable grow units, is seen here.
Agrify claims that its high-tech grow units, which have integrated software, can produce cannabis more effectively. Agrify says that its products can do the following:
- improve yields
- maximize your growing space
- to make more money
Agrify’s competitive edge is backed up by significant sales growth. The company’s recent second-quarter statistics revealed a significant increase in sales over the same time previous year.
The highlights of the news release are shown below.
Highlights from the second quarter of 2021
- In Q2 2021, revenue rose by 203 percent to $11.8 million, up from $3.9 million in Q2 2020. Revenue rose by 69 percent from $7 million in Q1 2021 to $11 million in Q2 2021.
- In Q2 2021, new bookings were $30.7 million, the company’s greatest quarterly bookings total to date.
- At the conclusion of Q1 2021, the total backlog had risen to $101.1 million from $82.2 million.
Agrigy has a well-developed sales pipeline.
Agrify should continue to expand at a rapid pace in the future. The business recently announced two significant sales agreements that are expected to propel sales growth in the coming years. More information may be found in the news release.
- Signed a definitive agreement with Bud & Mary’s Cultivation, Inc. to install up to 1,200 of Agrify’s Vertical Farming Units (“VFUs”) at its 50,000-square-foot facility
- The collaboration is projected to produce an annual income of $28 million, with up to $280 million expected in the following ten years.
- THC will collaborate with Agrify on the construction of its 22,000 square foot facility (the “Facility”), which will include the installation of 159 Agrify Vertical Farming Units (“VFUs”), as well as integrated catwalks, grow racks, and pest control technologies.
- Over the course of the 10-year arrangement, the agreement is anticipated to produce up to $45.3 million in income.
Agrify increased its full-year sales forecast after excellent quarterly performance and announcement of new agreements. The business now anticipates full-year revenue of $48-$50 million in 2021, up from its prior forecast of $48-$50 million.
In 2021, Agrify is crushing it.
In early February, Agrify stock started trading on the NASDAQ market in the United States. For the first four months, stocks were down. Agrify, on the other hand, bottomed out in July and started soaring upward. In 2021, the stock had risen by as much as 180 percent. Agrify is still up 118 percent in 2021, despite a recent setback.
Agrify Corp’s 12-Month Chart (NASDAQ: AGFY)
Agrify in the Big Picture
In 2021, Agrify was the best-performing cannabis company, with shares up 118 percent. These gains are the result of strong sales growth. In the most recent second-quarter results, Agrify’s sales increased by 203 percent over the previous year.
Agrify is poised to continue expanding in the future because to its exposure to the high-growth cannabis sector in the United States, and we anticipate this to be positive for the stock.
About the Author & Cannabis Stock Trades
Michael Vodicka is a stock analyst with over 20 years of trading and investment expertise. His work has been published in some of the industry’s most prestigious journals. Since 2013, he has been investing and guiding investors in the cannabis industry.
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It’s been a wild ride for the cannabis sector over the past year. The U.S. market is set to open for adult-use sales in less than a month, and the Canadian market is set to open on Oct. 17. Many analysts expect this will further propel the sector, with growers and infused product companies benefiting from increased demand. While some cannabis stocks have benefited from the sector’s growth, there are still some that are set to benefit even more.. Read more about tilray stock and let us know what you think.
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