Recreational marijuana use: It’s now legal in 11 states and you can find medical marijuana legally in 33. The marijuana industry continues to grow faster than well, weed. Industry watchers predict that the industry will soar to $77 billion by 2022.
Cresco Labs (CRLBF:OTC US) leads the pack as one of the largest multi-state, vertically integrated cannabis companies in the nation. The company cultivates and manufactures its own product and also packages, ships and distributes it nationwide. The young marijuana industry’s taken root and growing at a rapid pace so Cresco Labs stock may add a tangible boost to your portfolio.
Pros and Cons to Buying Cresco Labs Stock
The booming industry currently employs 5 times as many Americans as the coal industry and pays a salary that’s 10% higher than the U.S. median. Investors also poured $10 billion into the industry. Here’s a look at the pros and cons of investing in Cresco Labs.
Pros
Promising Growth
In August 2019, Cresco Labs’ revenue rose by 253% — from $8.5 million to $29.9 million in sales. The marijuana company’s operation gross profits came in at $14.4 million, about 48.1% of Cresco’s revenue. That’s up from its 44.6% of revenue in the first quarter. The company’s CEO, Charles Bachtell, said the gains reflect cultivation, processing and packaging techniques.
Expanding Operations
Cresco Labs established itself throughout North America as a multistate operator. It wants to require Origin House to give the company distribution options in California. It’s also considering expansion to New York, Massachusetts and Florida.
Cons to Buying Cresco Labs Stock
Big Marketplace
Cresco Labs isn’t alone in marijuana growing and manufacturing. There are other companies to keep an eagle eye on. Marijuana growers like Canopy Growth, Aurora Cannabis (NYSE:ACB), Tilray (NASDAQ:TLRY) and Aphria (NYSE:APHA) are established titans. Biotechs like GW Pharmaceuticals, Cara Therapeutics (NASDAQ:CARA) and Insys Therapeutics (NASDAQ:INSY) remain major players. ETFs like Horizons Marijuana Life Sciences ETF (NASDAQOTH:HMLSF) and ETFMG Alternative Harvest ETF (NYSEMKT:MJ) aren’t going anywhere, either.
Not the Fastest Growing
Cresco Labs’ skyrocketing stock prices and increased revenue turned heads in 2019, but others soared faster. The Valens Company (OTCMKTS: VLNCF), which specializes in processing and formulating cannabis, reported a 112,844% rise in revenue between 2018 and 2019. Another fast grower (with a 3,659% rise) is GW Pharmaceuticals (NASDAQ: GWPH), a U.K.-based company focused on the development of marijuana-based medicine for pain treatment and other illnesses.
Bad 2019
Last year wasn’t a highlight for marijuana companies or investors. In fact, many marijuana stocks plummeted in 2019. Investors crave more options and more players in 2020 but the industry may look like a stormy sea instead of a calm bay for a while. As a result, Cresco Labs could remain a risky investment.
Is Cresco Labs Worth Buying?
Lawmakers’ decisions mean that the future of the marijuana industry is both unclear and ripe with potential. Cresco Labs wants to attract investors, but should it be your first choice?
Cresco Labs reported a 2nd quarter net loss of $3.9 million in 2019. Its revenue quickly rose to $29.9 million from $8.5 million in just over a year. Its 3rd quarter revenue was estimated to be $56.4 million. It’s clear that Cresco Labs continues to grow, but many experts seem to have eyes on Cresco Lab’s competitors. They’re growing faster and making more money and are cheaper to invest in.
Cresco Labs’ future state expansion means it could be a good investment for new cannabis industry investors.
History of Cresco Labs Stock Price
Like many of its competitors in 2019, Cresco Labs saw a major dip in stock price throughout the year. The manufacturer saw an impressive high — $17.75 on April 26 — but ended its year just under $9. Going into 2020, Cresco Labs stayed at a steady price — $5.80 to $6.90 throughout the month of January.
How to Invest in Cresco Labs
Cresco Labs does not offer a direct purchasing option. You’ll need to purchase through a registered stockbroker. You can also purchase stock through an online stock brokerage service if you’re a self-directed investor. You choose what and when to buy and sell without the help of a stockbroker service. If you’re new to the industry, you might want to hire a financial advisor or go through an online broker’s advisory service.
Analyze these factors as you narrow down your search for an online broker:
- Available research tools
- Trading tools and charts
- Large variety of securities or funds
- Affordable fees and minimum investments
- Banking services, like automatic investing
- 5-star customer reviews
- Brokerage fees
Also take a look at our list of recommended online brokers in the following table:
Here’s what to do after you’ve found a stock broker you prefer:
- Open a trading account on the company’s official website.
- Provide some basic personal information. Some brokers may ask you for proof of funds.
- Deposit funds into your new account. Don’t deposit any funds you can’t afford to lose. Investing in stocks is always a risk and a return isn’t guaranteed.
- Look for Cresco Labs under the ticker symbol CRLBF.
- Choose how many shares you’d like to purchase.
Is Investing in Cresco Labs Right for Me?
As Cresco Labs attempts to make its mark on a saturated industry, it’s a company you’ll want to keep your eye on. It’s on a mission to “normalize, professionalize and revolutionize cannabis.”
Cresco Labs’ 30 licenses in 7 states offer an assortment of products for various needs under multiple brands. Cresco’s growth can be partly attributed to its own cultivation, manufacturing and packaging. If you have an interest in high-end marijuana strands, alternate pharmaceuticals and fancy edibles, Cresco Labs might be a brand that excites you enough to invest.