The Hottest Cannabis IPO No One Is Talking About

January 29, 2021

There’s a new player in the cannabis industry.

And if it follows the same path as its predecessor, you could be looking at quadruple-digit gains.

Let me back up and show you just how big of an opportunity this is.

Way back in May of last year, I wrote that it wasn’t necessarily going to be the largest cannabis companies to profit as the industry continues to grow.

Instead, it was going to be the niche players with alternative products to the likes of Canopy Growth Corp. (NYSE: CGC) and Aurora Cannabis Inc. (NYSE: ACB).

In fact, I highlighted one of my favorite ways to play the industry in GrowGeneration Corp. (NASDAQ: GRWG).

That prediction came true in a big way:

Shares of GRWG jumped more than 1,000% since I first discussed it.

I don’t bring this up to (only) brag. I do so because we have something very similar coming together right now.

The Still-Hidden Opportunity in Alt Cannabis Market

GrowGen didn’t skyrocket throughout 2020 because of any Reddit revolt or short squeeze like we’re seeing elsewhere today.

It was able to grow 10-fold because of what it sells.

The company is a retailer that sells hydroponics, fertilizers and all kinds of other products needed for private gardening. Mainly, its business revolves around those interested in growing their own marijuana.

That, as you can imagine, has been a very lucrative business as more states open up their grow laws.

Still, despite this enormous growth, the company is only listed at $2.5 billion.

The opportunities in this alternative field are still huge.

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And yesterday, a new player just stepped up to get in on the action.

The Hottest and Mostly-Ignored Pot IPO in Years

Yesterday morning, Agrify Corp. (NASDAQ: AGFY) began trading on the Nasdaq, raising $54 million in the process.

That might not sound like a lot. But the company is still very small, with a market cap of just $140 million.

That’s just one of the main reasons no one is talking about it… yet.

The other is that it competed with the IPO of SAP spinoff Qaultrics International Inc. (NASDAQ: XM), which started trading after raising $1.5 billion.

But this media slight just means there’s a second chance at GrowGen-sized profit potent for you.

You see, Agrify makes the kinds of products that fueled GrowGen’s enormous growth last year. It’s in the hydroponics and grow equipment business.

In fact, it does even more than that. The company has developed software and specialty equipment for both small and multi-state growers that help increase yield.

That’s been one of the primary problems in the Canadian cannabis industry. Because of temperatures up north, cannabis is mainly grown indoors. The problem is that these huge companies haven’t been able to significantly boost their yields enough to make a profit.

There’s huge demand for the very products this tiny new player makes. But as a U.S.-based company, it can also take advantage of increasing legalization and therefore demand right at home.

The best part is legalization is only an added benefit. Just like GrowGen, Agrify doesn’t produce cannabis. It doesn’t transport it, market it or sell it.

That means it doesn’t have to deal with the same level of scrutiny and banking problems actual cannabis companies do.

Is this another 10-bagger?

It is definitely too early to tell. The company has only been trading for a day. But it did start trading slightly above its IPO price, suggesting some early support. And it now has a good amount of cash to continue developing its products and software.

This could be the closest thing we see to GrowGeneration in 2021.

I’d keep an eye on it if I were you.

To your prosperity and health,

Joshua M. Belanger

Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%

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