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Why TerrAscend Corp. (TSNDF) Is Among the Best Pot Stocks To Invest In According to Analysts?
We recently compiled a list of the 10 Best Pot Stocks To Invest In According to Analysts. In this article, we are going to take a look at where TerrAscend Corp. (OTCQX:TSNDF) stands against other pot stocks to buy according to analysts.
The global marijuana market is growing and the market for legal cannabis is expected to rise at a CAGR of 25.7% and reach $102.2 billion by 2030, according to Grand View Research. Despite regulatory limitations, the cannabis industry is getting attention from investors, suppliers, and researchers. If we want to know how hedge funds feel about pot stocks, we recently covered 11 Best Cannabis Stocks To Invest In according to hedge fund sentiment.
The US Cannabis Market
A total of 38 states and the District of Columbia have legalized marijuana for medicinal use. In addition, 24 states and the District of Columbia allow cannabis for adults’ recreational use. As the push for legalization continues to grow, more people are accepting the idea of legalizing marijuana across the US.
The American legal cannabis industry experienced notable growth in 2023 as legal sales across the US were $28.8 billion, up by 10.3% year-over-year. Consequently, the legal cannabis market added 22,952 new jobs in 2023, reflecting a better business atmosphere, especially in the cannabis industry. In 2024, the legal cannabis industry supported over 440,445 jobs, an increase of 5.4% from 2023, as per the 2024 Vangst Jobs Report. The major driver for the cannabis industry remains the rising demand for its use for medical purposes. In the coming years, new markets are expected to fuel growth in the cannabis industry. One such example is Nebraska’s vote in favour of legalizing medical marijuana last month.
In November, Florida voters rejected a ballot measure to legalize recreational marijuana, which was a major setback for the legal cannabis industry in the US. Amendment 3 fell short of the required 60% threshold for legalization, despite historic funding levels and an endorsement from President-elect Donald Trump.
Florida remains home to the country’s largest medical marijuana market, adding around $2 billion in annual revenue. Amendment 3 could have boosted the cannabis market to a projected $6 billion by 2026. Florida voters will have to wait for two more years until cannabis legalization gets back on the ballot.
Florida has disappointed cannabis investors and consumers and it has had an impact on cannabis stocks. One of the first cannabis ETFs, Amplify Alternative Harvest ETF, has plunged over 45% since November 4, as of December 23.
A cannabis-growing operation in a large, industrial greenhouse.
Our Methodology
To collect data for the 10 best pot stocks to invest in according to analysts, we scanned the lists of cannabis stocks and ETFs on the internet. We shortlisted the pot companies and ranked the 10 best pot stocks to invest in according to analysts’ upside (at least 25%), as of December 23, 2o24.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Next on our list is TerrAscend Corp. (OTCQX:TSNDF), a Canadian cannabis company that has vertically integrated licensed operations in the US and retail operations in Canada. TerrAscend’s products include flowers, concentrates, topicals, tinctures, and edibles. The company offers a variety of cannabis products and owns or licenses several brands including Gage Cannabis, Cookies, Lemonnade, Ilera Healthcare, State Flower, Wana, and The Apothecarium, among others.
TerrAscend Corp. (OTCQX:TSNDF) continues to hold a solid market share in the US, including the leading market share position in New Jersey. Despite the losses, the company is improving its cash flow. During Q3 2024, the company posted a ninth consecutive quarter of positive cash flow from continuing operations and a fifth straight quarter of positive free cash flow, driven by an increase in sales. The net loss during the quarter was attributed to several one-time non-cash accounting items totaling $13 million, which include a reversal of bad debt expense in Q2 2024.
The company is focused on an aggressive M&A policy to support growth. The company announced the signing of a definitive agreement to acquire the assets of Ratio Cannabis LLC in Ohio. The company’s expansion into the sixth state has opened the gates for it to establish operations in the Midwest. Ratio Cannabis is a high-performing dispensary in Ohio, with no competition within a 20-mile radius, which is expected to add to the company’s revenue. This also expands TerrAscend’s retail footprint to 38 dispensaries across all six states.
Overall, TSNDF ranks 2nd on our list of Best Pot Stocks To Invest In According to Analysts. While we acknowledge the potential of TSNDF to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSNDF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
