The marijuana industry is made up of companies that either support or are engaged in the research, development, distribution, and sale of medical and recreational marijuana. Cannabis has begun to gain wider acceptance and has been legalized in a growing number of nations, states, and other jurisdictions for recreational, medicinal and other uses. Some of the biggest companies in the marijuana industry include Canopy Growth Corp. (CGC), Cronos Group Inc. (CRON), and GW Pharmaceuticals PLC (GWPH).
Many companies in the young industry are losing money as they invest heavily in equipment and growth. As a result, many investors focus on revenue growth rather than earnings.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have dramatically underperformed the broader market over the past 12 months. Marijuana stocks have a total return of -54.4% compared to the S&P 500's total return of 9.9%. These market performance numbers and the statistics in the tables below are as of May 28.
Here are the top 3 marijuana stocks with the best value, the fastest revenue growth, and the most momentum.
Best Value Marijuana Stocks
These are the marijuana stocks 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|
|Market Cap ($M)||12-Month Trailing P/S Ratio|
|Village Farms International Inc. (VFF.TO)||CA$7.68||CA$432.0||2.1|
|Amyris Inc. (AMRS)||3.36||547.9||2.4|
|Aphria Inc. (APHA.TO)||CA$5.71||CA$1,528||2.8|
- Village Farms International Inc.: Village Farms International is a Canada-based agricultural producer. In addition to growing standard vegetables like tomatoes, bell peppers, and cucumbers, the company now also produces cannabis. The company reported a 35% decline in net income and 1% growth in sales in Q1 2020, which ended March 31, 2020. Village Farms cited the COVID-19 pandemic as an ongoing risk to its business.
- Amyris Inc.: Amyris is an industrial biotechnology company that produces high performance products for the health and wellness, clean beauty, and flavor and fragrance markets. The company uses cannabis in some of its products. Amyris posted revenue growth of 103% for Q1 2020, which ended March 31, 2020. President and CEO John Melo said that the company's sales remain strong and that COVID-19 would have only a limited impact on the company's performance.
- Aphria Inc.: Aphria is a Canada-based company engaged in the production and sale of medical and recreational cannabis.
Fastest Growing Marijuana Stocks
These are the marijuana stocks with the highest year over year (YOY) revenue growth for the most recent quarter. Rising revenue shows that a company’s business is growing. This is often used to measure growth of young companies that have not yet reached profitability.
|Fastest Growing Marijuana Stocks|
|Price ($)||Market Cap ($M)||Revenue Growth (%)|
|Harvest Health & Recreation Inc. (HARV.CX)||CA$2.12||CA$613.0||285,900|
|The Valens Co. (VLNS.TO)||CA$2.58||CA$329.5||1,340|
|Green Thumb Industries Inc. (GTII.CX)||CA$13.56||CA$2,817||270.9|
- Harvest Health & Recreation Inc.: Harvest Health & Recreation is a Canada-based cannabis company that specializes in cultivation, dispensaries, and production facilities for medicinal and recreational marijuana. The company announced at the end of March that it had completed its acquisition of Franklin Labs LLC, a subsidiary of CannaPharmacy and which includes a cultivation and manufacturing/processing facility located in Pennsylvania.
- The Valens Co.: The Valens Company, formerly Valens GroWorks Corp., is a Canada-based cannabis company specializing in processing and formulation. The company recently announced that it had entered into a five-year distribution agreement with Cannvalate Pty Ltd., the largest cannabis distributor in Australia.
- Green Thumb Industries Inc.: Green Thumb Industries operates as a pharmaceutical company that manufactures and distributes medical marijuana and cannabis products.
Marijuana Stocks with the Most Momentum
These are the marijuana stocks that had the highest total return over the last 12 months. While one of the three stocks has a negative total return, its has fallen the least compared to its peers.
|Marijuana Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Trulieve Cannabis Corp. (TRUL.CX)||CA$18.06||CA$2.0||8.1|
|Innovative Industrial Properties Inc. (IIPR)||84.25||1.4||0.4|
|Cara Therapeutics Inc. (CARA)||16.07||0.8||-11.0|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||-54.4|
- Trulieve Cannabis Corp.: Trulieve Cannabis is a holding company that, through its subsidiaries, engages in the cultivation, possession, sale, and distribution of medical cannabis. The company announced at the end of April the appointment of Alex D'Amico to the role of Chief Financial Officer (CFO), effective 1 June 2020.
- Innovative Industrial Properties Inc.: Innovative Industrial Properties is a real estate company that engages in the acquisition, ownership and management of industrial properties. The company's real estate investments consist primarily of properties used for the cultivation and production of medical-use cannabis.
- Cara Therapeutics Inc.: Cara Therapeutics is a clinical-stage biopharmaceutical company engaged in the research, development, and commercialization of pharmaceutical products. The company offers novel drugs used to treat human diseases associated with pain and inflammation. Cara Therapeutics reported revenue growth of 85% for Q1 2020, which ended March 31, 2020.
YCharts. "Financial Data," Accessed May 28, 2020.
Village Farms International Inc. "Village Farms International Reports First Quarter 2020 Financial Results - Pure Sunfarms Achieves Fifth Consecutive Profitable Quarter on 179% Sequential Growth in Retail Branded Sales Volume," Accessed May 28, 2020.
Amyris Inc. "Amyris, Inc. Reports First Quarter 2020 Results," Accessed May 28, 2020.
Harvest Health & Recreation Inc. "HARVEST ACQUIRES FRANKLIN LABS, LLC ADDING SUPPLY AND ENHANCING MARGINS IN PENNSYLVANIA," Accessed May 28, 2020.
The Valens Co. "THE VALENS COMPANY ENTERS AUSTRALIA’S RAPIDLY EXPANDING CANNABIS MARKET WITH FIVE YEAR DISTRIBUTION AGREEMENT WITH COUNTRY’S LARGEST DISTRIBUTOR," Accessed May 28, 2020.
Trulieve Cannabis Corp. "Trulieve Announces the Appointment of Alex D'Amico as Chief Financial Officer," Accessed May 28, 2020.
Cara Therapeutics Inc. "Cara Therapeutics Reports First Quarter 2020 Financial Results," Accessed May 28, 2020.