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 of these companies have managed to maintain revenue growth in spite of the COVID-19 pandemic.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have significantly outperformed the broader market. MJ has provided a total return of 90.5% over the past 12 months, above the Russell 1000's total return of 57.7%. These performance figures and all statistics in the tables below are as of March 27.
Here are the top 3 marijuana stocks on the Nasdaq with the best value, the fastest growth, and the most momentum.
On March 31, 2021, New York passed a law legalizing recreational cannabis, expanding medical use, and decriminalizing possession of small amounts of marijuana, among other measures. Not all of these provisions will go into effect immediately and there is not yet a timeline by which all these measures will be fully implemented.
These are the marijuana stocks on the Nasdaq with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Marijuana Stocks on the NASDAQ|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|NIC Inc. ( EGOV)||33.89||2.3||33.6|
|Village Farms International Inc. ( VFF)||13.10||1.0||66.2|
|Cara Therapeutics Inc. ( CARA)||20.13||1.0||111.8|
- NIC Inc.: NIC aids state and local governments in providing various Internet-related services to business and citizens across the U.S. One of its technology platforms helps governments regulate the marijuana industry.
- Village Farms International Inc.: Village Farms International is a Canada-based agricultural producer. In addition to growing vegetables like tomatoes, bell peppers, and cucumbers, the company now also produces cannabis. For Q4 2020, the company reported net income of $7.0 million versus a net loss of $7.2 million for Q4 2019. During the same period, Village Farms posted year-over-year (YOY) sales growth of 43.3%. The performance was fueled in part by Pure Sunfarms, the company's cannabis subsidiary, which transitioned its focus to retail branded products during 2020.
- Cara Therapeutics Inc.: Cara Therapeutics develops therapies for the treatment of pain and inflammation. A portion of the company's novel drug treatments utilize medical cannabis. In early March, Cara Therapeutics announced that the U.S. Food and Drug Administration had accepted and granted priority review for its new drug application for Korsuva as a treatment for pruritus, a skin condition causing severe itchiness, in hemodialysis patients.
These are the top marijuana stocks on the Nasdaq as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Marijuana Stocks on the NASDAQ|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Cara Therapeutics Inc. (CARA)||20.13||1.0||N/A||2,380|
|GrowGeneration Corp. ( GRWG)||44.00||2.4||100.0||152.6|
|Cronos Group Inc. ( CRON)||9.29||3.3||N/A||133.3|
- Cara Therapeutics Inc.: See company description above. Cara Therapeutics EPS growth is not included in the table above because it went from negative EPS to positive EPS YOY for the most recent quarterly period. The company reported net income of $78.9 million for Q4 2020 versus net loss of $28.6 million for Q4 2019.
- GrowGeneration Corp.: GrowGeneration 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. While GrowGeneration is not a pure-play cannabis company, many of its products are used in cannabis cultivation. On March 24, GrowGeneration announced the appointment of Jeffrey Lasher as chief financial officer, effective April 15, 2021. Lasher replaces Monty Lamirato, who is retiring.
- Cronos Group Inc.: Cronos Group is a Canada-based diversified cannabis company that produces and distributes medical cannabis products and cannabis oils. Cronos Group's EPS growth is not included in the table above because the company went from positive EPS in Q4 2019 to negative EPS in Q4 2020. The company reported a net loss of $111.7 million for Q4 2020 after posting net income of $61.6 million for Q4 2019.
These are the marijuana stocks on the Nasdaq that had the highest total return over the last 12 months.
|Marijuana Stocks on the NASDAQ with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|GrowGeneration Corp. (GRWG)||44.00||2.4||900.0|
|Amyris Inc. ( AMRS)||19.46||5.1||788.6|
|Aphria Inc. ( APHA)||17.33||5.5||422.0|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||90.5|
- GrowGeneration Corp.: See above for company description.
- Amyris Inc.: Amyris is a biotechnology company that makes products for health and wellness, clean beauty, and flavor and fragrance markets. The company uses cannabis in some of its consumer products. Amyris reported a net loss of $109.3 million for Q4 2020 versus a net loss of $78.9 million in Q4 2019. The company reported record sales revenue in Q4, rising 96.7% YOY.
- Aphria Inc.: Canada-based Aphria is a producer, supplier, and retailer of medical marijuana products.
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