2 of the Cheapest Cannabis Stocks You'll Find Today

Finding a good business in the cannabis industry that is consistently profitable is no easy task. Finding one that is also cheap is even more difficult. But there are a couple of gems out there that can provide investors with some great bang for their buck while also providing them with incredible long-term growth opportunities.

You will be hard-pressed to find better-valued pot stocks right now than MariMed (MRMD -1.38%) and Trulieve Cannabis (TCNNF -1.75%). Both companies are profitable (on an adjusted EBITDA basis), and they have excellent growth potential.

Image source: Getty Images.

1. MariMed

At around $230 million in market cap, MariMed isn't one of the larger cannabis companies in the industry. But there are loads of potential here as the company is coming off a stellar fourth-quarter earnings. On March 23, MariMed released its year-end results, and its revenue of $20.4 million nearly quadrupled from the $4.2 million it recorded in the prior-year period. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was a positive $7.7 million versus a loss of $16 million a year earlier. And for the full year, cannabis sales totaled $50.9 million, while adjusted EBITDA was $16.3 million.

Given its market cap, MariMed is trading at a very attractive 14 times adjusted EBITDA. To put that into context, this is how it compares with some of the bigger names in the industry:

Source: Company filings.

Investors aren't paying much of a premium at all for MariMed. One of the benefits of investing in a smaller business like this is that because the company isn't as popular and well known as a big name like Curaleaf Holdings, there is less fanfare around it, which makes it less likely for its value to be inflated. There is good value here; in 2021, MariMed anticipates another strong performance with revenue doubling to $100 million. It is expanding its presence in multiple states, including Maryland, Delaware, and Massachusetts.

In the past year, shares of MariMed are up more than 360% while the Horizons Marijuana Life Sciences ETF has risen by a more modest 68%. But the great news is that it's still not too late to buy MariMed as its valuation remains attractive, and it could be one of the more underrated buys in the sector right now. 

2. Trulieve

Trulieve is a far larger player than MariMed, having generated a whopping $521.5 million in revenue last year. Its market cap of $4.6 billion also puts it alongside the industry leaders. But despite its high valuation, you may be surprised to learn that Trulieve is still an attractive value buy. Its adjusted EBITDA in 2020 was $251 million -- nearly half of its total revenue. With such strong margins, it's no surprise that it belongs on this list as it trades at only 18 times its adjusted EBITDA.

I've long been a fan of Trulieve's model because it goes against the grain. Rather than aggressively pursuing every possible opportunity out there, it has built up its operations in Florida, dominated the market, and then started making a push into other states. But although it technically has a presence in six states, 81 of its 86 dispensaries are still in its home state of Florida. However, it's hard to argue with that approach given that at $1.3 billion in sales last year, Florida is one of the top three markets in the entire country, even though the state hasn't legalized recreational marijuana.

Trulieve has shown discipline in its expansion efforts, so it is no surprise that its operations reflect that as well, with expenses under control and the company generating impressive numbers while also growing its revenue. Trulieve may not be a market leader in terms of revenue (Curaleaf's $626.6 million in revenue last year puts it well ahead), but it is definitely one of the best-run cannabis businesses in the industry. If you are looking for a multistate operator to put in your portfolio, Trulieve is one stock you won't want to overlook.