The thrill has gone from cannabis stocks, as the past few years have failed to deliver the lush industry profits envisioned when legalization began to waft across the continent.
What’s created a buzz is the Biden administration’s proposal to move the drug to a less severe category of federally illegal drugs, and the vote of a U.S. Senate committee to advance a bill that would ease some banking restrictions for state-licensed cannabis operators. We used FactSet to screen the stocks of cannabis retailers that trade at an enterprise value of at least half a billion dollars, when adding their debt to their stock market capitalization, then subtracting their cash.
Setting aside noncash expenses, however, a number of the companies are at least producing cash from their operations. Three even generated some free cash flow—including capital expenditures — over the past four reported quarters: Green Thumb Industries , Verano Holdings , and Cresco Labs .