Cannabis Green Shoots
Good News as We Head into the New Year
This has been a tough year for many publicly traded cannabis stocks and the industry has fallen dramatically out of favor with investors. Here are five things to cheer up investors for the new year ahead:
California Flower Prices Are Rebounding Higher After Hitting Record Lows
In September and early October, prices of California flower, especially greenhouse flower, hit record lows and fell more than expected with outdoor crops (Croptober) hitting the market and a surplus of supply. While seasonal weakness is to be expected, the price decline was a bit extreme. Well, the good news is that prices are rebounding higher and resuming normal seasonal trends. This bodes well for Glass House Brands (OTC: GLASF) as the company continues expanding and it bodes well for other competitive markets such as Oregon and Michigan, as California normally leads in terms of where pricing is headed.
Vireo M&A Transaction Shows Capital is Available for Recaps
Vireo (OTC: VREOF) announced that it is merging with four other private companies and is being recapitalized by its lender Chicago Atlantic, and the stock soared. I wrote about still being Vireo bullish. New capital and restructurings are a big positive for the cannabis industry which has been starved for capital.
Low Dose Hemp Beverages Soar in Popularity and Sales
Low dose hemp beverages are taking flight in popularity and sales are soaring. Mindset Capital is invested in ten hemp beverage companies and not only are they seeing growth, but some companies are also growing by 300-500% in terms of sales year over year. I wrote about hemp beverages enabling massive total addressable expansion and I also wrote about our largest investment, Uncle Arnie’s.
Private Markets Are Rich with Opportunity
While many publicly traded companies are struggling to grow and are suffering from poor capital allocation choices and problematic balance sheets, some private cannabis companies are in a completely different situation and offer compelling investment opportunities and are now expanding while others are contracting. I wrote about Mammoth Distribution as just one example of the kind of company that gets us excited.
Grown Rogue Breaks Out
Grown Rogue (OTC: GRUSF) has bucked the sea of red in cannabis, with its stock price up over 100% again this year. Grown Rogue is Mindset Capital’s largest investment, and we are the largest shareholder in the company.
Why is Grown Rogue outperforming most other publicly traded cannabis companies? The reason is solid growth and the understanding that their growth is reproducible. Grown Rogue’s craft cannabis cultivation model has been proven in Oregon and Michigan and now the company has launched in New Jersey and will launch in Illinois in the second half of 2025. The company should grow cash flow by triple digits next year and is on the hunt to expand into additional states in 2026 and beyond.
I’m excited for 2025 and there is a lot to be excited about if you follow where the growth is: nimble, fast growers like Grown Rogue, competitively advantaged growers like Glass House, hemp beverage companies like Uncle Arnie’s, recapitalized companies like Vireo and private companies such as Mammoth.
Happy New Year!