12 Best Marijuana Stocks to Invest In
In this article, we will be looking at the 12 best marijuana stocks to invest in. To skip our detailed analysis of the marijuana sector, you can go directly to see the 5 Best Marijuana Stocks to Invest In.
The state of New York legalized the use of recreational cannabis, alongside expanding its medicinal use and decriminalizing the possession of smaller amounts of the drug on March 31st, 2021. Apart from New York, 18 other states, 2 territories, and the District of Columbia in the US have also legalized the use of marijuana to a certain extent, with Alaska and Arizona being among the 18 legalizers. With the White House turning Democrat, the government's approach towards the marijuana sector is expected to turn friendly, leading to not only a social and political change in attitude but a financial one as well, as analysts and investors begin shifting their attention to marijuana stocks.
According to data from New Frontier, the legalized marijuana market was due to double to $41.5 billion by 2025. The Bloomberg Intelligence's Global Cannabis Competitive Peers Index gained 33% after the recent pro-marijuana policies, right after the 45% increase in the fourth quarter of 2020. Tilray, Inc. (NASDAQ: TLRY) was the winner on the index in the first quarter of 2021, having gained over 170% and benefiting from retail investors snapping up its shares. Such trends are positive news for the cannabis industry in the US, with Green Acre Capital, a private cannabis investment fund, having commented this March that the cannabis market in the US would become an opportunity worth over $95 billion in the long run.
Canada and the US are both top contenders in the cannabis business, with both countries' companies having a certain edge. Canadian rivals in the industry such as Tilray, Inc. (NASDAQ: TLRY) and Canopy Growth Corporation (NASDAQ: CGC) among others reported sales growth of 52% by the end of 2020, compared to 2019 numbers. However, the Wall Street Journal reports that US companies are likelier to outshine their Canadian counterparts in the coming quarters, in light of the rapid legalization of marijuana and a bigger market for the drug existing in the country. Analysts, investors, and other major stakeholders in the industry seem optimistic about its growth as well. The CEO and co-founder of IM Cannabis Corp. commented that post-pandemic during the Democratic governance in the US, more positive attitudes towards further legalization of cannabis can be expected, while analyst firm Cowen also estimated that New York alone can expect to gain about $300 million in annualized tax revenue from recreational cannabis use. Finally, Curaleaf Holdings, Inc. (OTC: CURLF), a large American corporation operating in the cannabis sector, reported this year that over $200 million was invested in the company in fresh capital just this January.
The above serves to prove that the cannabis sector is set to become a highly lucrative investment opportunity, with companies like Altria Group, Inc. (NYSE: MO), Curaleaf Holdings, Inc. (OTC: CURLF), and Tilray, Inc. (NASDAQ: TLRY) set to reap the benefits of this development. Thus, we have compiled a list of the best marijuana stocks to invest in.
The pandemic has made it harder to pinpoint the best stocks to invest in for long-term gains, as the entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 28th, 2021, our monthly newsletter’s stock picks returned 206.8%, vs. 91.0% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let's look at the 12 best marijuana stocks to invest in. The stocks on our list were selected on the basis of hedge fund sentiment, analysts' ratings, growth potential based on core business strengths, and fundamentals.
Best Marijuana Stocks to Invest In
12. ETFMG Alternative Harvest ETF (NYSE: MJ)
Number of Hedge Fund Holders: N/A
ETFMG Alternative Harvest ETF (NYSE: MJ) is an exchange-traded fund managed by ETF Managers Group LLC. The fund focuses its investments in public equity markets and stocks in healthcare, pharmaceuticals, legal cultivation of cannabis, biotechnology, and other sectors. It ranks 12th on our list of the best marijuana stocks to invest in.
This May, it was announced that ETFMG Alternative Harvest ETF's (NYSE: MJ) managing company has launched yet another ETF, in light of the older ETF's successes. ETFMG Alternative Harvest ETF (NYSE: MJ) has $1.85 billion in assets under management, and the fund's price returns in the past year have been up 59.91%, versus the S&P 500's 38.62%, while its total returns in the same time period have increased by 64.16%, versus the S&P 500's total returns of 10.4%. ETFMG Alternative Harvest ETF (NYSE: MJ) has gained 38.49% in the past 6 months and year to date.
Like Altria Group, Inc. (NYSE: MO), Curaleaf Holdings, Inc. (OTC: CURLF), and Tilray, Inc. (NASDAQ: TLRY), ETFMG Alternative Harvest ETF (NYSE: MJ) is a good stock to invest in.
11. Curaleaf Holdings, Inc. (OTC: CURLF)
Number of Hedge Fund Holders: N/A
Curaleaf Holdings, Inc. (OTC: CURLF) is an integrated medical and wellness cannabis operating working in the US. The company has two segments: Cannabis Operations and Non-Cannabis Operations. It ranks 11th on our list of the best marijuana stocks to invest in.
This June, Curaleaf Holdings, Inc. (OTC: CURLF) announced a new strategic partnership between its Select brand and Rolling Stone to create industry-leading products for the cannabis market. In the first quarter of 2021, Curaleaf Holdings, Inc. (OTC: CURLF) had an EPS of -$0.02, beating estimates by $0.01, while its revenue was $260.32 million, up 169.77% year over year and beating estimates by $6.31 million. The company has a gross profit margin of 58.61% and its stock has gained 9.35% in the past 6 months and year to date.
10. Cresco Labs Inc. (OTC: CRLBF)
Number of Hedge Fund Holders: N/A
Cresco Labs Inc. (OTC: CRLBF) cultivates and manufactures retail and medical cannabis products in the US for sale. The company provides cannabis in flowers, vape pends, live resins, disposable pens, and other forms, and ranks 10th on our list of the best marijuana stocks to invest in.
In the first quarter of 2021, Cresco Labs Inc. (OTC: CRLBF) had a revenue of $178.44 million, up 168.81% year over year and beating estimates by $7.46 million. The stock has gained 9.51% in the past 6 months and year to date and Cresco Labs Inc. (OTC: CRLBF) has a gross profit margin of 65.68%.
Like Altria Group, Inc. (NYSE: MO), Curaleaf Holdings, Inc. (OTC: CURLF), and Tilray, Inc. (NASDAQ: TLRY), Cresco Labs Inc. (OTC: CRLBF) is a good stock to invest in.
9. Sundial Growers Inc. (NASDAQ: SNDL)
Number of Hedge Fund Holders: 7
Sundial Growers Inc. (NASDAQ: SNDL) is a company producing cannabis products for the Canadian adult-use market. It produces inhalable products, like flower, pre-rolls, and vapes. The company ranks 9th on our list of the best marijuana stocks to invest in.
Sundial Growers Inc. (NASDAQ: SNDL) has regained compliance with NASDAQ and will continue to be listed on the exchange, and this June, the stock was up 28%, faring much better than rival companies. The company was leading healthcare gainers in June as well. In the first quarter of 2021, Sundial Growers Inc. (NASDAQ: SNDL) had an EPS of $0.0, beating estimates by $0.01, while its revenue was $8.18 million, missing estimates by $2.81 million. The stock has gained 72.55% in the past 6 months and year to date.
By the end of the first quarter of 2021, 7 hedge funds out of the 866 tracked by Insider Monkey held stakes in Sundial Growers Inc. (NASDAQ: SNDL) worth roughly $18.8 million. This is compared to 2 hedge fund holders in the previous quarter with stakes worth roughly $2.72 million. Like Altria Group, Inc. (NYSE: MO), Curaleaf Holdings, Inc. (OTC: CURLF), and Tilray, Inc. (NASDAQ: TLRY), Sundial Growers Inc. (NASDAQ: SNDL) is a good stock to invest in.
8. Village Farms International, Inc. (NASDAQ: VFF)
Number of Hedge Fund Holders: 8
Village Farms International, Inc. (NASDAQ: VFF) is a producer and distributor of greenhouse-grown tomatoes, bell peppers, and cucumbers in North America. The company also produces and supplies cannabis products under its Cannabis and Hemp Business segment. It ranks 8th on our list of the best marijuana stocks to invest in.
This May, the stock received positive responses after its announcement that the Toronto Stock Exchange (TSE) accepted its NCIB notice. The company will be able to purchase about 4.06 million of its own shares through this move. In the first quarter of 2021, Village Farms International, Inc. (NASDAQ: VFF) had an EPS of -$0.06, missing estimates by -$0.04. Its revenue was $52.62 million, up 63.3% year over year and beating estimates by $1.13 million, and it has a gross profit margin of 8.1%. Village Farms International, Inc. (NASDAQ: VFF) has gained 5.11% in the past 6 months and year to date.
By the end of the first quarter of 2021, 8 hedge funds out of the 866 tracked by Insider Monkey held stakes in Village Farms International, Inc. (NASDAQ: VFF). The total value of their stakes was roughly $35.5 million. This is compared to 6 hedge fund managers in the previous quarter, with a total stake value of about $29.8 million. Like Altria Group, Inc. (NYSE: MO), Curaleaf Holdings, Inc. (OTC: CURLF), and Tilray, Inc. (NASDAQ: TLRY), Village Farms International, Inc. (NASDAQ: VFF) is a good stock to invest in.
7. HEXO Corp. (NYSE: HEXO)
Number of Hedge Fund Holders: 6
HEXO Corp. (NYSE: HEXO) is a producer and seller of cannabis in Canada. The company offers dried cannabis under the Time of Day and H2 lines, Elixir, a cannabis oil sublingual mist product line, and Decarb, a fine-milled cannabis powder product. It ranks 7th on our list of the best marijuana stocks to invest in.
On June 28th, HEXO Corp. (NYSE: HEXO) completed its purchase of its first US production facility in Colorado, a move that solidified the cannabis producer's presence in the US. In the fiscal third quarter of 2021, HEXO Corp. (NYSE: HEXO) had an EPS of -$0.17, missing estimates by -$0.13. The company's revenue was $18.66 million, up 14.86% year over year, but missing estimates by -$9.7 million, and it has a gross profit margin of 9.72%. The stock has gained 30.23% in the past 6 months and 33.79% year to date.
By the end of the first quarter of 2021, 6 hedge funds out of the 866 tracked by Insider Monkey held stakes in HEXO Corp. (NYSE: HEXO) worth roughly $8.02 million. This is compared to 4 hedge fund holders in the previous quarter with stakes worth about $5.36 million. Like Altria Group, Inc. (NYSE: MO), Curaleaf Holdings, Inc. (OTC: CURLF), and Tilray, Inc. (NASDAQ: TLRY), HEXO Corp. (NYSE: HEXO) is a good stock to invest in.
6. Canopy Growth Corporation (NASDAQ: CGC)
Number of Hedge Fund Holders: 12
Canopy Growth Corporation (NASDAQ: CGC) is a company working in the production and distribution of cannabis and hemp-based products for recreational and medical reasons in Canada, the US, and Germany. The company ranks 6th on our list of the best marijuana stocks to invest in.
This June, Canopy Growth Corporation (NASDAQ: CGC) acquired the Supreme Cannabis Company (OTC: SPRWF) for $435 million and has also sold a GMP medicinal cannabis cultivation facility in Denmark. The stock has also been upgraded from Neutral to Buy with a $44.55 price target with a 27% upside by MKM, in light of the Canadian economy reopening. In the fiscal fourth quarter of 2021, Canopy Growth Corporation (NASDAQ: CGC) had an EPS of -$1.33, missing estimates by -$1.14. The company's revenue was $138.65 million, up 65.91% year over year, and beat estimates by $14.51 million. It has a gross profit margin of 17% and the stock has gained 46.81% in the past year.
By the end of the first quarter of 2021, 12 hedge funds out of the 866 tracked by Insider Monkey held stakes in Canopy Growth Corporation (NASDAQ: CGC) worth roughly $157 million. This is compared to 19 hedge fund holders in the previous quarter with stakes worth roughly $133 million. Like Altria Group, Inc. (NYSE: MO), Curaleaf Holdings, Inc. (OTC: CURLF), and Tilray, Inc. (NASDAQ: TLRY), Canopy Growth Corporation (NASDAQ: CGC) is a good stock to invest in.
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Disclosure: None. 12 Best Marijuana Stocks to Invest In is originally published on Insider Monkey.