Heading into what may well go down as the most contentious and divisive election in US history, there’s one thing it would appear most Americans seem to agree on: cannabis should be legal.
In New Jersey, Mississippi, Montana, South Dakota, and Arizona, legalization measures will be on the ballot, and all are expected to pass according to polling data and expert analyst predictions. That follows the big boom in new legalizations we have seen in recent votes in 2016 and 2018. Red states and blue states all seem to be green states.
That could set up a run in cannabis stocks across the board over the coming 10 days, and one stock that looks particularly interesting in this context is a small-cap cultivator in Northern California called Cannabis Strategic Ventures (OTCMKTS:NUGS).
The company has been showing dramatic growth so far this year, with a series of consecutive month-over-month top and bottom-line leaps and a course of progress that appears destined to sharply exceed (maybe 2x or 3x) the company’s ambitious revenue guidance for 2020 issued late last year.
To add to that potential energy building up, Cannabis Strategic Ventures (OTCMKTS:NUGS) recently put out September monthly performance data, which featured a strong continued pace of growth in sales of cannabis products during the month.
According to the company’s release, which went out last week, NUGS booked over $2.3 million in total sales from cannabis products during September. That compares to $1.8 million in total sales from cannabis products in August. This represents a sequential monthly growth rate of approximately 28%, reaffirming the overall growth trend that has defined its performance so far in 2020.
That should also seal the deal on a coming very strong calendar Q3 performance update and 10Q which is destined to show record data across the board as well as extremely strong Q/Q growth.
“We continue to see growing market positioning and overall performance despite variable market conditions for cannabis producers over the past two months,” commented Simon Yu, CEO of Cannabis Strategic Ventures. “It’s remarkable to look back and recall that our target for 2020 for the topline was around $5 million in annual sales. We have already more than doubled that, and we look forward to a very strong run into year-end.”
We might also suggest that this strong September data highlights a resurgence in growth for Cannabis Strategic Ventures (OTCMKTS:NUGS) following a slight wiggle in August, which could presage a surge into year end, creating a lot of excitement in terms of performance relative to that guidance.
As further noted in the release, demand slowed in August due to macro forces. But September’s strong performance represents a resurgence that continues to point toward the robust growth trend ahead for NUGS driven by effective positioning, strong product quality, and a growing end-market footprint.
As we move toward election day, investors are going to hunting for cannabis names capable of riding the green wave vote now anticipated by analysts. NUGS may be an interesting opportunity in that context given its extremely cheap valuation, with shares currently trading around or perhaps under 1x forward sales in a space typically trading at 3-5x forward sales.
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