Will This Under-the-Radar Pot Stock Enter the Big League?
To North American investors, the most well-known pot stocks come from either the U.S. or Canada. After all, Canada legalized recreational cannabis nationwide in October 2018, while the evolving regulatory environment in the U.S. has led to plenty of booming cannabis operators.
But there are millions and millions of pot users outside of the U.S. and Canada, which is why I’d like to talk about a little-known marijuana company called InterCure Ltd (TSE:INCR.U, OTCMKTS:IRCLF).
InterCure stock is based in Israel. The company’s wholly owned subsidiary Canndoc is the largest licensed cannabis producer in the country and one of the first to offer Good Manufacturing Practices (GMP)-certified and pharmaceutical-grade medical cannabis products.
Given the size of Israel’s population, the country might not have gotten the attention of most pot investors, but it actually has a booming cannabis market. The country legalized medical cannabis in 2008, expanded the medical use of marijuana, approved the exportation of medical pot in 2019, and has an increasing number of marijuana consumers.
Consider this: in the first quarter of 2019, Israel had 32,000 medical cannabis patients. The number jumped to 59,000 in the first quarter of 2020 and then to 77,000 at the end of the year. (Source: “Dominating the Cannabis Industry in Israel,” InterCure Ltd, January 26, 2021.)
And that’s just a start, as Israel is expected to have 120,000 medical cannabis patients this year and 250,000 by 2025. It’s projected that the medical pot market in Israel will grow from $214.0 million in 2020 to $562.0 million in 2024.
As it turns out, InterCure Ltd is currently the most profitable cannabis company in Israel.
Of course, compared to pot stocks based in the U.S. and Canada, IRCLF stock is an under-the-radar ticker. At the time of this writing, InterCure stock is listed on the Tel Aviv Stock Exchange under the ticker “INCR” and on the Toronto Stock Exchange under the ticker “INCR.U.”
At the moment, American investors can find the stock over the counter under the ticker “IRCLF.”
But that’s about to change very soon, as InterCure has applied to list its common shares on the Nasdaq Capital Market under the trading symbol “INCR.” Pending the satisfaction of certain conditions, the company expects InterCure stock to begin trading on the Nasdaq during the last week of July. (Source: “InterCure Provides an Update on its NASDAQ Listing,” InterCure Ltd, July 10, 2021.)
InterCure has been delivering some very impressive financials.
In 2020, the company generated a record NIS65 million ($20.2 million) of total revenue, marking a huge increase from the $3.0 million it earned in 2019. (Source: “Subversive Acquisition LP Highlights InterCure’s Accelerated Growth as the Leading Israeli Cannabis Company,” InterCure Ltd, March 31, 2021.)
Notably, in 2020, InterCure signed agreements with multiple well-known pot companies, including Tilray Inc (NASDAQ:TLRY), Aphria Inc (now part of Tilray), and OrganiGram Holdings Inc (NASDAQ:OGI).
In the first quarter of 2021, InterCure generated NIS33.1 million ($10.3 million) of revenue. That was eight times greater than what it earned in the first quarter of 2020, and up by more than 22% sequentially. (Source: “InterCure Announces Another Record-Breaking First Quarter Financial Results,” InterCure Ltd, May 17, 2021.)
InterCure also generated NIS7.7 million ($2.4 million) of cash flow from operations in the first quarter of 2021. This marked the third consecutive quarter that the pot stock delivered positive operating cash flow.
Management expects the current trends in the company’s business to continue throughout 2021.
To sum up, InterCure Ltd is a fast-growing Israeli pot company that’s yet to attract many U.S. investors. If the company successfully lists its shares on the Nasdaq, it will broaden its exposure, reaching a much larger investor base.
Savvy investors might want to start paying attention to IRCLF stock now.