Cannabis edibles are projected to be one of the fastest growing cannabis sub sectors in the next four years. However, you have to know which stocks to buy and which ones to avoid to be successful. Today I am going to reveal two little-known cannabis stocks that are cashing in on the explosive trend in edibles.
According to leading cannabis market research firm Arcview Market Research, the cannabis edibles industry will see explosive growth in the next four years.
Cannabis edibles sales in the US and Canada hit $1.5 billion in 2018. Arcview is predicting annual sales will climb to $2.2 billion in 2019, $2.8 billion in 2020, $3.5 billion in 2021 and $4.1 billion in 2022.
This 173% sales growth in four years would make edibles one of the fastest growing cannabis sub sectors. It’s also on par with growth in the technology sector in the 1990’s when young companies such as companies such as Apple, Microsoft and Amazon were becoming household names. Investing in these companies early in the game minted thousands of new millionaires.
Now this same cycle is unfolding in the cannabis industry – and cannabis edibles are leading the charge.
However, in order to be successful investing in cannabis edibles you have to know which stocks are legit and which ones to avoid.
Today I am going to reveal three early industry leaders in cannabis edibles that have enormous growth potential.
These little-known companies are:
- Early edibles industry leaders.
- Multi-state operators in the US.
- Expanding into international markets.
- Undervalued compared to the broader cannabis sector.
Dixie Brands (CSE: DIXI, OTC: DXBRF) has developed one of the best cannabis edibles portfolios in the industry with more than 100 products across 15 different product categories. Headquartered in Denver, Colorado with a market value of $85 million, Dixie’s edibles products are currently sold in 442 stores in high-growth cannabis states such as California, Colorado, Nevada and Michigan.
*Image from Dixie Brands Website
Dixie’s killer product portfolio and multi-state presence is already delivering big-time revenue growth. According to the Dixie earnings report full-year 2018 revenue jumped 73% from 2017.
Moving forward I am expecting even better revenue growth. Dixie recently launched its edible products in Michigan, one of the fastest growing cannabis markets in the US. DIxie is also expanding into international markets, recently partnering with Khiron Life Sciences Corp (CSE: KHRN, OTC: KHRNF), one of the largest cannabis companies in Columbia, to sell Dixie’s full portfolio of edible products in South America.
Shares of Dixie began trading on the Canadian Securities Exchange in early December of 2018 under the ticker symbol DIXI. Shares also trade in the US under the ticker symbol DXBRF. Since going public Dixie shares are only up 13%. That tells me this edibles stock is still flying below the radar – for now.
*Chart from Canadian Securities Exchange
Plus Products (CSE: PLUS, OTC: PRPLF) has been crowned with an impressive title – the #1 cannabis edibles brand in California, the largest and most competitive edibles market in the world. Headquartered in Los Angeles with a market cap of $84 million, here’s a clip from the press release on Plus’s leadership in the California edibles market.
“According to BDS Analytics, during Q4, PLUS also had 3 of the best-selling branded products in all product categories including flower, vaporizers, edibles and topicals. PLUS “Uplift” and PLUS “Restore” remained the #1 and #2 best-selling SKUs. PLUS “CBD Relief” was the #5 best-selling SKU, and the top CBD-only SKU according to BDS analytics.”
*Image from Plus Products press release.
Looking forward I am expecting to see plenty of revenue growth from Plus. The company is well capitalized and it is currently deploying millions of dollars to:
- Develop new products
- Expand into new markets
- Initiate strategic relationships
In December of 2018 Plus completed its acquisition of Good Co-Op, Inc. an Oakland, California based baked goods edibles leader at a valuation just over $2 million. The addition of baked good adds another segment of products to the Plus portfolio to compliment its candies and gummies.
According to the Plus earnings release its unaudited cash balance increased to $22.4 million at year end 2018, up from $0.2 million at the end of 2017 and $11.1 million as of September 30, 2018, before shares went public.
In early April Plus launched “Mango CBD Relief,” a new CBD product created to capitalize on the high-growth CBD market.
In late April Plus launched a new line of cannabis mints, including its first release Classic Mint.
These new product releases showcase Plus’s ambition to continue expanding its product portfolio and I expect that to drive big revenue growth in the next few years.
Shares of Plus Products began trading on the Canadian Securities Exchange in late November 2018 under the ticker symbol PLUS. Shares also trade in the US under the ticker symbol PRPLF. Since going public shares have been volatile but are still up a market-beating 35%.
*Image from Canadian Securities Exchange
The Big Picture on Cannabis Edibles and 2 Early Industry Leaders
As you can see the North American cannabis edibles market is heating up and expected to see enormous growth in the next four years. Dixie Brands and Plus Products are two early industry leaders that are in positioned to ride the explosive wave of growth. Shares are offered on Canadian and US stock exchanges, making it cheap and easy for regular investors to get in.
Disclaimer: This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading. Michael Vodicka owns shares of Plus Products.
