The marijuana industry includes companies directly related to the research, development, and distribution of cannabis products, as well as companies that indirectly support these operations. Traditional stock market indices like the Nasdaq have continued to include more companies from the marijuana industry as a growing number of U.S. states and countries around the world legalize marijuana in one or more forms. Now, companies like Aphria Inc. (APHA) and OrganiGram Holdings Inc. (OGI) are being traded on the Nasdaq and other U.S. exchanges rather than the over-the-counter market. Many companies in this young industry are losing money as they invest heavily to focus on rapidly expanding revenue. Many of these companies have still experienced revenue growth in spite of the COVID-19 pandemic.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have dramatically underperformed the broader market, with a total return of -48.3% compared to the Russell 1000's total return of 16.2% over the past 12 months. These market performance numbers and the statistics in the tables below are as of September 28.
Here are the top 3 marijuana stocks on the Nasdaq with the best value, the fastest sales growth, and the best performance.
Best Value Marijuana Stocks on the NASDAQ
These are the marijuana stocks on the Nasdaq with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business's value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you're paying for the stock for each dollar of sales generated.
|Best Value Marijuana Stocks on the NASDAQ|
|Price ($)||Market Cap ($B)||12-Month Trailing P/S Ratio|
|Village Farms International Inc. (VFF)||4.68||0.3||1.7|
|Tilray Inc. (TLRY)||4.82||0.6||2.6|
|Aphria Inc. (APHA)||4.31||1.2||2.8|
- Village Farms International Inc.: Village Farms International is a Canada-based agricultural producer. In addition to growing standard vegetables like tomatoes, bell peppers, and cucumbers, the company also produces cannabis. On August 12, Village Farms International reported Q2 results. On September 8, Village Farms announced the purchase of about 36.9 million common shares of Pure Sunfarms, representing approximately 41.3% common shares. Upon completion, Village Farms will own 100% of Pure Sunfarms. The total purchase price is CA$79.9 million (USD$61.0 million).
- Tilray Inc.: Tilray is a Canadian pharmaceutical company focused on the development of cannabis-based medicines, drugs, drops, and oil products. For Q2 2020, Tilray reported a YOY revenue increase of 10% as net losses increased YOY due to facilities closures and an inventory valuation adjustment.
- Aphria Inc.: Aphria is a Canada-based company engaged in the production and sale of medical and recreational cannabis.
Fastest Growing Marijuana Stocks on the NASDAQ
These are the marijuana stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales show that a company’s business is growing and can return larger profits to its shareholders when it achieves, or returns to, profitability.
|Fastest Growing Marijuana Stocks on the NASDAQ|
|Price ($)||Market Cap ($B)||Revenue Growth (%)|
|GrowGeneration Inc. (GRWG)||14.68||.7||123.0|
|GW Pharmaceuticals PLC (GWPH)||99.50||3.1||68.4|
|Cronos Group Inc. (CRON)||4.96||1.7||29.1|
- GrowGeneration Corp.: GrowGeneration Corp. engages in the retail of hydroponic and organic specialty gardening products. It offers lighting fixtures, nutrients, seeds and growing media systems, trays, fans, filters, humidifiers and dehumidifiers, timers, instruments, water pumps, irrigation supplies, and hand tools. On August 13, the company announced record revenue of $43.5 million for Q2 2020, and raised its revenue guidance to $170-175 million for fiscal 2020.
- GW Pharmaceuticals PLC: GW Pharmaceuticals is a U.K.-based biopharmaceutical company that engages in the research and development of cannabinoid medicines for the treatment of cancer pain, Multiple Sclerosis, and neuropathic pain. On August 6, the company reported strong YOY revenue growth in Q2 2020, which was overshadowed by a net loss of $8.8 million. CEO Justin Gover said sales of the company's Epidiolex cannabidiol in the U.S. were particularly strong despite the COVID-19 pandemic.
- Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company that produces and distributes medical cannabis products as well as cannabis oils. On September 9, the company announced changes in their leadership to imp growth. The company's board appointed Kurt Schmidt as President and Chief Executive Officer. Schmidt previously was an executive at major packaged food companies including Kraft Foods.
Best Performing Marijuana Stocks on the NASDAQ
These are the marijuana stocks on the Nasdaq that had that had the best returns or smallest declines in total return over the past 12 months out of the companies we looked at.
|Best Performing Marijuana Stocks on the NASDAQ|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|GrowGeneration Corp. (GRWG)||14.68||0.7||235.2|
|NIC Inc. (EGOV)||20.07||1.3||-0.1|
|GW Pharmaceuticals PLC (GWPH)||99.50||3.1||-14.5|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||-48.3|
- GrowGeneration Corp.: See above for company description.
- NIC Inc.: NIC, Inc. is a digital government services, which through its subsidiaries, engages in the provision of digital government solutions and secure payment processing. It operates through outsourced portals and other software and services segments and through some its offerings provides tailored solutions for municipalities to manage and regulate cannabis and hemp.
- GW Pharmaceuticals PLC: See above for company description.
Nasdaq. "Aphria Inc. Common Shares." Accessed Aug. 26, 2020.
Nasdaq. "Organigram Holdings Inc. Common Shares." Accessed Aug. 26, 2020.
YCharts. "YCharts." Accessed Aug. 26, 2020.
Village Farms. "Village Farms International to Acquire All Pure Sunfarms' Shares it Does Not Currently Own." Accessed Sep. 30, 2020.
Tilray Inc. "Tilray, Inc. Reports 2020 Second Quarter Results." Accessed Aug. 26, 2020.
GrowGeneration. "GrowGeneration Reports Record Financial Results Q2 2020." Accessed Sep. 30, 2020.
GW Pharmaceuticals PLC. "GW Pharmaceuticals plc Reports Second Quarter 2020 Financial Results and Operational Progress." Accessed Sep. 30, 2020.
Cronos Group, "Cronos Group Announces Expanded Leadership Structure to Drive Next Phase of Growth." Accessed Sep. 29, 2020.