Best Marijuana Stocks to Invest $1,000 in Right Now

Do you want to invest in the cannabis industry? The first thing you should know is that the legalization of cannabis is not inevitable in the United States, despite any news you may have heard about rescheduling or new bills in Congress. This is important because many investors are looking forTilray Brands (NASDAQ: TLRY)respond in singingCanopy Growth (NASDAQ resonance code: CGC)The Company believes that it has a strong interest in investing in stocks that will benefit from the legalization of cannabis carpet and will be a reliable way to invest in the long-term growth of the industry.

But in reality, this puts you at great risk - because while you're waiting for a date that may never come (carmelization), or at least not soon, these companies are trying to generate any growth that doesn't come from acquisitions. They are also burning through cash.

If you really want to invest in the marijuana industry and have $1,000 to hold marijuana stocks for the long term, then I have a better option: the company isCresco Labs (OTC code: CRLBF)The

Cresco Labs, commercial only, no speculation.

Cresco Labs is notably different from Tilray and Canopy Growth. Its chief executive officer, Charles Bachtell, is low-key and doesn't need to hype the company's accomplishments or growth opportunities. Unlike Tilray's Irwin Simon and Canopy's David Klein, who often talk about their growth prospects on investment programs, you probably haven't seen or heard of Bachtell.

Investors in Cresco Labs may be disappointed by this and by the fact that the company hasn't marketed its stock more aggressively, but it also means that the company's valuation is less likely to fluctuate significantly. Granted, Cresco Labs has underperformed in recent years, falling about 80% since 2021, but that has more to do with the industry as a whole than its own performance. Tilray or Canopy Growth haven't fared much better. The former is down about 78%, while the latter is down a whopping 97% over the same period.

Cresco Labs isn't the flashiest cannabis company, nor is it the biggest, and that's exactly what it was designed to be. The company is selective in choosing strategic locations, as exemplified by the dispensary opening in 2021 in a high-traffic area near Chicago's Wrigley Field. It's strategic moves like these that lead me to believe that the company is not just growing for the sake of growing, but that it's well thought out and not overly aggressive compared to other marijuana companies. The company recently opened its 72nd location in the U.S., which is in line with competitorsCuraleaf Holdingsrespond in singingTrulieve CannabisThis is a far cry from the 100-odd outlets in the United States.

The company is cash flow positive and was profitable in the last quarter.

Cresco Labs' commitment to expanding its operations in a sustainable manner is already paying off. In its recently released fourth quarter financial results, Cresco Labs realized a profit of $4.9 million. This is not the adjusted EBITDA that many cannabis companies often focus on. This is true unadjusted earnings in accordance with Generally Accepted Accounting Principles (GAAP).

The company incurred very few impairment charges. With a gross profit margin of $51% and operating expenses of only $37% of revenues, the company is still profitable enough to have a surplus even after deducting a total of $14.3 million in interest expense and nearly $8 million in taxes. Many cannabis investors may have overlooked this impressive performance for the simple reason that while Cresco's operations are more sustainable, it doesn't get as much attention as Tilray or Canopy Growth.

Last quarter, the Cresco lab used just $3.3 million in cash in its day-to-day operating activities. But for the year as a whole, it generated $58.6 million in revenue, more than triple the $18.7 million in cash it accumulated a year ago.

Don't Fall for the Hype-Buy Marijuana Stocks with a Solid Business

The default choice for many investors when selecting marijuana stocks is Tilray Brands or Canopy Growth, and this can be a costly mistake. These businesses face some serious risks and a great deal of uncertainty, as the investment theories for these stocks tend to rely heavily on the prospect of the legalization of U.S. carpet.

It would be wiser to invest in Cresco Labs, a company that has proven itself to be profitable without burning through a lot of cash. For long-term investors, Cresco Labs is an ideal choice for a $1,000 investment today. With a price-to-sales ratio of less than 1, investors could be getting a great deal.

Should you invest $1,000 in Cresco Labs now?

Before buying shares of Cresco Labs, consider the following:

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David Jagielski owns shares of Cresco Labs.The Motley Fool owns and recommends Cresco Labs and Trulieve Cannabis.The Motley Fool recommends Tilray Brands.The Motley Fool has a disclosure policy.

Best Marijuana Stocks to Invest $1,000 in Now was originally published by The Motley Fool.