If you’re looking for cannabis stock bargains, you may need a healthy dose of patience. Canadian portfolio manager Larry Berman of ETF Capital Management appeared on BNN Bloomberg in early March to discuss cannabis stocks. Unfortunately, he believes they’re going nowhere fast. 

Cantech Letter reported that, according to Berman, “The explosive moves that we saw in the marijuana names as [U.S. President Joe] Biden was taking over the White House and there was a lot of speculation about legalizing and banking reform in the U.S., that just hasn’t come.”

Let’s face it, Berman’s right. The cannabis industry remains stuck in the mud, unable to get any momentum on either side of the border. In early March, Oklahoma citizens voted to reject the legalization of adult-use cannabis. It’s not a panacea right now.

The portfolio manager does believe cannabis stocks ultimately will go on a run, but not likely until closer to the next presidential election in November 2024. Until then, Berman suggests investors nibble on the cannabis stocks they like in preparation for an eventual rally. 

If you’re nibbling, here are three cannabis stock bargains to sock away for a future run.

Innovative Industrial Properties (IIPR)

Innovative Industrial Properties (NYSE:IIPR) stock has lost more than 25% year to date and nearly 60% over the past year. As one of the leading owners of industrial real estate leased to state-licensed cannabis operators, it’s knee-deep in the marijuana business. It owned 110 properties at the end of December, providing 7 million square feet of rentable square with an additional 1.6 million square feet under development. 

Innovative Industrial Properties is a very specialized real estate investment trust (REIT). It requires a good deal of scientific and regulatory knowledge to operate these kinds of properties across 19 states. That’s a good thing, as it provides a moat of sorts.

However, given the nature of the industry, it exposes itself to increased scrutiny from regulators, investors, etc. In April 2022, IIPR faced the wrath of short-seller Blue Orca Capital. It argued at the time that the REIT’s portfolio of properties had degraded in value.

Recently, a federal lawsuit was filed in Maryland by a shareholder who accused management of breaching their fiduciary duty regarding its Kings Garden sale-leaseback transaction in 2019. The suit claims management should have known that Kings Garden was a Ponzi scheme. Not surprisingly, the two situations are related. While this could certainly be a nuisance suit, it’s something to keep an eye on.

In 2022, IIPR generated $276.4 million in revenue, 35% higher than a year earlier, with adjusted funds from operations (AFFO) of $233.7 million, 34% higher than in 2021. In the fourth quarter, it paid out 85% of its AFFO in dividends. For all of 2022, it paid out $7.10 in dividends, 24% higher than a year earlier.

Earlier this month, the REIT declared a first-quarter dividend of $1.80 per share, with an ex-dividend date of March 30. IIPR currently yields 9.1% and trades at 9 times its 2022 AFFO.

Trulieve Cannabis (TCNNF)

The second name on my list of cannabis stock bargains is Trulieve Cannabis (OTCMKTS:TCNNF), a Florida-based multi-state operator. It has more than 7,600 employees across its vertically integrated business. As of the end of 2022, Trulieve had 181 dispensaries and 21 cultivation and processing facilities in 11 states, with the highest concentrations in Florida, Arizona and Pennsylvania. 

The company’s 2022 revenue of $1.2 billion was 32% higher than a year earlier. In addition, while Trulieve generated an adjusted net loss of $30 million last year, its non-GAAP adjusted EBITDA was $400 million. This was $15 million higher than a year earlier and accounted for 32% of its sales.

“Trulieve has grown to surpass $1.2 billion in revenue in less than seven years, a notable milestone and a testament to the agility of our team,” said Chief Executive Officer (CEO) Kim Rivers. “Our success is the culmination of thoughtful intention, superb execution, and best in class capabilities for rapid growth.”

Based on an enterprise value of $2.08 billion, Trulieve is valued at 5.2 times adjusted EBITDA.   

Scotts Miracle-Gro (SMG)

If you exclude Scotts Miracle-Gro’s (NYSE:SMG) Hawthorne Gardening business from its financial statements, the company’s doing just fine. But, unfortunately, the firm’s big bet on cannabis — Hawthorne provides nutrients, lighting and other products required to grow crops indoors and hydroponically — is taking longer to materialize than hoped, and that’s been a major strain on the stock. SMG is down 72% from its April 2021 high above $250. However, shares have rebounded in 2023, up nearly 47%. 

In February, the company reported its latest quarterly results. Management has implemented Project Springboard to find annual savings of $185 million while increasing its ability to take advantage of opportunities, including getting Hawthorne back to profitability. 

As I said, the company’s U.S. consumer business, which accounts for 70% of Scotts Miracle-Gro’s overall revenue, continues to perform well. For example, in fiscal Q1 2023, revenue for the segment grew 8% year over year, while profits increased 193%. Yet due to Hawthorne, the company’s overall sales fell 7% in the first quarter, with an adjusted net loss of $56.4 million, up from a $48.6 million loss a year earlier. 

“While Hawthorne continues to manage through a challenging market, we are committed to returning the business to profitability by the end of this fiscal year,” CEO Jim Hagedorn said.

SMG stock trades at 1.04 times sales compared to a five-year average price-to-sales (P/S) multiple of 1.8. 

Long term, you won’t go wrong with garden care products. And positive developments with Hawthorne or in the cannabis industry could provide an upside catalyst for shares.     

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.