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 continue to include more companies from the marijuana industry as a growing number of regions around the world legalize marijuana. The number of U.S. states that permit marijuana use in some form increased to 35 after voters in several states approved marijuana legalization initiatives on their ballots in the recent U.S. presidential election. Some of the Nasdaq-listed marijuana companies include Aphria Inc. (APHA) and OrganiGram Holdings Inc. (OGI).  Many companies in this emerging industry are posting losses as they invest heavily to focus on rapidly expanding revenue. And many companies have been able to maintain revenue growth in spite of the COVID-19 pandemic.

On November 3, 2020, voters in New Jersey, Arizona, and Montana approved ballot measures to legalize recreational marijuana, and Mississippi has voted to legalize medical marijuana use. South Dakota, approved ballot measures to approve both.

Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have dramatically underperformed the broader market. MJ has provided a total return of -6.9% over the past 12 months, well below the Russell 1000's total return of 19.7%, as of December 21, 2020. All statistics in the tables below are as of December 22.

Here are the top 3 marijuana stocks on the Nasdaq with the best value, the fastest growth, and the most momentum.

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 young companies that have not reached profitability, this can provide an idea of how much business you’re getting for each dollar invested.

Best Value Marijuana Stocks on the NASDAQ

 

Price ($) Market Cap ($B) 12-Month Trailing P/S Ratio
Village Farms International Inc. (VFF) 9.78 0.6 3.5
OrganiGram Holdings Inc. (OGI) 1.34 0.3 3.7
NIC Inc. (EGOV) 25.90 1.7 4.3

Source: YCharts

  • 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 now also produces cannabis. In December, the company reported that its Pure Sunfarms subsidiary had entered into a partnership with White Rabbit, a Canada-based craft cannabis food formulation and development company, to develop a new line of cannabis-infused edible products. Pure Sunfarms will also launch new high-THC vape products. Both developments constitute an expansion of the company's cannabis offerings.
  • OrganiGram Holdings Inc.: Canada-based OrganiGram Holdings is a holding company that, through its subsidiary, acts as a licensed producer of medical marijuana.
  • NIC Inc.: NIC is a provider of digital government services. It aids state and local government in providing various Internet-related services to business and citizens across the U.S. One of its technology platforms is designed to help governments regulate the marijuana industry. The company reported a 24.9% year-over-year (YOY) increase in revenue and a 72.9% YOY surge in net income for Q3. A portion of these gains was attributable to pandemic unemployment services as well as TourHealth, NIC's rapid COVID-19 testing solution.

Fastest Growing Marijuana Stocks on the NASDAQ

These are the marijuana stocks on the Nasdaq with the highest YOY sales growth for the most recent quarter. Rising sales show that a company’s business is growing. This is often used to measure growth of young companies that have not yet reached profitability.

Fastest Growing Marijuana Stocks on the NASDAQ

 

Price ($) Market Cap ($B) Revenue Growth (%)
GrowGeneration Corp. (GRWG) 40.67 2.2 152.6
Cronos Group Inc. (CRON) 7.47 2.7 96.3
Canopy Growth Corp. (CGC) 25.54 9.5 75.0

Source: YCharts

  • GrowGeneration Corp.: GrowGeneration is a distributor of agricultural products. The company operates retail hydroponic and organic specialty gardening retail outlets. It offers plant nutrition, farming soils, crops, advanced lighting technology, hydroponic and aquaponic equipment, and more. For Q3 2020, the company reported a 74.0% YOY increase in same-store sales and a 153% gain in revenue.
  • Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company that produces and distributes medical cannabis products as well as cannabis oils. The company reported an 88.7% YOY decrease in net income for Q3 2020, despite posting strong revenue growth.
  • Canopy Growth Corp.: Canopy Growth is a Canada-based, multi-brand producer of recreational and medical marijuana. On December 21, Canopy Growth announced an agreement by which it will divest its ownership interest in Canopy Rivers Inc., a strategic investment vehicle for the company. As part of the deal, Canopy Growth will also increase its interest in TerrAscend Corp. from approximately 13% to 21%.

Marijuana Stocks on the NASDAQ with the Most Momentum

These are the marijuana stocks on the Nasdaq that had the highest total return over the last 12 months.

Marijuana Stocks on the NASDAQ with the Most Momentum

 

Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
GrowGeneration Corp. (GRWG) 40.67 2.2 854.7
Village Farms International Inc. (VFF) 9.78 0.6 64.1
Amyris Inc. (AMRS) 4.85 1.2 45.2
Russell 1000 N/A N/A 19.7
ETFMG Alternative Harvest ETF (MJ) N/A N/A -6.9

Source: YCharts

  • GrowGeneration Corp.: See above for company description.
  • Village Farms International Inc.: See above for company description.
  • Amyris Inc.: Amyris is an industrial biotechnology company that produces high-performance products for the health and wellness, clean beauty, and flavor and fragrance markets. The company uses cannabis in some of its consumer products.

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