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 Tilray Inc. (TLRY). Many big marijuana companies have continued to post sizable net losses as they focus on investing in equipment to speed up revenue growth, which remains strong despite the economic disruption spurred by the pandemic.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have dramatically outperformed the broader market. MJ has provided a total return of 53.7% over the past 12 months, more than double the Russell 1000's total return of 21.1%, as of February 23, 2021. All statistics in the tables below are as of February 23.
Here are the top 5 marijuana stocks with the best value, the fastest growth, and the most momentum.
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.
Best Value Marijuana Stocks
Value investing is a factor-based investing strategy in which you pick stocks that you believe are trading for less than what they are intrinsically worth, usually by measuring the ratio of the stock's price to one or more fundamental business metrics. A widely accepted value metric is the price-to-sales ratio (P/S Ratio). This metric is used instead of price-to-earnings ratio (P/E Ratio) when companies are starting out and not consistently profitable yet. Value investors believe that if a business is cheap compared to its intrinsic value, in this case as measured by its P/S ratio, the stock price may rise faster than others as the price comes back in line with the worth of the company. These are the stocks with the lowest 12-month trailing price-to-sales (P/S) ratio.
|Best Value Marijuana Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/S Ratio|
|Gibraltar Industries Inc. ( ROCK)||95.11||3.1||2.8|
|Village Farms International Inc. ( VFF.TO)||CA$19.75||CA$1.5||5.3|
|Vireo Health International Inc. (VREO.CX)||CA$3.92||CA$0.4||5.9|
|Harvest Health & Recreation Inc. (HARV.CX)||CA$5.04||CA$1.9||6.2|
|Charlottes Web Holdings Inc. ( CWEB.TO)||CA$6.59||CA$0.9||6.2|
- Gibraltar Industries Inc.: Gibraltar Industries is a manufacturer and provider of products and services for the renewable energy, conservation, residential, industrial, and infrastructure markets. Its portfolio of businesses include: Growing and Processing, which provides agricultural research and cultivation of organic foods, cannabis, and other botanical products; Renewable Energy, which provides services to the solar energy industry; Home Improvement, which sells products and services aimed at protecting and maximizing commercial and residential spaces; and Infrastructure, which provides materials for the construction of highways, airports, and high-speed trains. Gibraltar announced in early January that it had acquired TerraSmart LLC for $220 million and Sunfig for $3.75 million, further expanding its solar energy portfolio. TerraSmart is a provider of solar racking technology and Sunfig sells software that optimizes solar energy investments.
- 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 also produces cannabis. The company distributes fresh produce from over nine million square feet of Controlled Environment Agriculture (CEA) greenhouses in Canada and the U.S., as well as from partner greenhouses in Canada and Mexico.
- Vireo Health International Inc.: Vireo Health International cultivates and manufactures pharmaceutical-grade cannabis extracts and other cannabis products. Its products are sold through both Vireo-owned and third-party dispensaries in several U.S. states. Its cannabis products include oils, capsules, and vaporizers.
- Harvest Health & Recreation Inc.: Harvest Health & Recreation is a vertically integrated cannabis company operating across several U.S. states. Its brands include: Roll One, maker of high-quality medical marijuana; Modern Flower, maker of quality medical marijuana for contemporary lifestyles; EvoLab, high-tech producer of science-focused cannabis products; and Co2lors, maker of all natural THC fruit-flavored medical marijuana vape pens and cartridges. The company recently announced that it sold its medical marijuana dispensaries in North Dakota to a local operator for an undisclosed amount.
- Charlottes Web Holdings Inc.: Charlottes Web is the leading vertically integrated producer and distributor of innovative hemp-based cannabidiol (CBD) wellness products by market share. It produces premium, full-spectrum phytocannabinoid health and wellness products, which include oils, capsules, gummies, topicals, isolates, and various pet products. Charlottes Web announced in early December that it had signed an exclusive distribution agreement in Israel with Israel-based InterCure Ltd. (INCR), which owns Canndoc Ltd., Israel's largest and most established medical cannabis producer. As of the date of the report, the sale of CBD was close to being legalized in Israel.
Fastest Growing Marijuana Stocks
Growth investing is a factor-based investing strategy in which you invest in businesses that you believe will grow significantly faster than the market as a whole. There are different growth metrics, but one of the most widely used is growth in revenue, also called sales. Sales growth is often used as a metric instead of profit growth for companies that are just starting out, and are not yet consistently profitable. Growth investors believe that if a company consistently grows revenue faster than the market as a whole, its stock price will rise as investors seek to get a share of future profits. These are the stocks with the highest YOY revenue growth for the most recent quarter.
|Fastest Growing Marijuana Stocks|
|Price ($)||Market Cap ($B)||Revenue Growth (%)|
|Jushi Holdings Inc. (JUSH.CX)||CA$9.92||CA$1.1||600.0|
|Cresco Labs Inc. (CL.CX)||CA$19.70||CA$4.3||326.9|
|Curaleaf Holdings Inc. (CURA.CX)||CA$20.99||CA$14.3||197.5|
|Innovative Industrial Properties Inc. ( IIPR)||208.50||5.0||197.1|
|Green Thumb Industries Inc. (GTII.CX)||CA$43.85||CA$9.3||133.0|
- Jushi Holdings Inc.: Jushi Holdings is a holding company focused on building a portfolio of branded cannabis and hemp-based assets. The company is engaged in retail, distribution, cultivation, and processing operations. Its brands include: The Bank, focused on plant genetics and cultivation; The Lab, specializing in vape products and concentrates; Nira, maker of hemp-based CBD products that are physician formulated; Nira+, producer of medicinal THC products; and Tasteology, a provider of THC-infused products. Jushi announced in late January that it had acquired the remaining 20% of the equity interests in Agape Total Health Care Inc., a Pennsylvania dispensary permit holder. The company now owns 100% of the equity interests in Agape.
- Cresco Labs Inc.: Cresco Labs is a consumer-packaged cannabis products company involved in growing, manufacturing, and distribution. The company operates in nine states, owns production facilities and dispensaries, and holds 29 retail licenses. Its brands include Cresco, Reserve, Remedi, Mindy's, Good News, High Supply, Wonder Wellness Co., and FloraCal Farms. Cresco Labs announced in mid-February that it had acquired four dispensaries in Ohio from Verdant Creations. The company now owns five Ohio dispensaries, the maximum allowed by the state.
- Curaleaf Holdings Inc.: Curaleaf Holdings, a holding company, engages in the production and distribution of cannabis products through its subsidiaries. The company has a presence in 23 states, and owns and operates dozens of dispensaries, cultivation sites, and processing sites. Its brands include Curaleaf, Curaleaf Hemp, Select Cannabis, and UKU Cannabis.
- Innovative Industrial Properties Inc.: Innovative Industrial Properties is a real estate investment trust (REIT) that engages in the acquisition, disposition, development, and management of industrial facilities leased to tenants in the medical cannabis industry. The company's portfolio consists of specialized industrial and greenhouse buildings leased to state-licensed medical-use cannabis cultivators across the U.S.
- Green Thumb Industries Inc.: Green Thumb Industries is both a retailer and producer of consumer-packaged cannabis products. It manufactures and distributes a variety of branded cannabis products through its portfolio of brands, including Beboe, Dogwalkers, Dr. Solomon's, incredibles, Rythm, and The Feel Collection. The company also owns and operates retail cannabis stores called Rise. Green Thumb employs more than 2,300 people, has 13 manufacturing facilities, and has licenses for 97 retail locations. It has operations in 12 U.S. markets. Green Thumb recently announced that its Form S-1 registration statement was declared effective by the U.S. Securities and Exchange Commission (SEC), permitting the company's first U.S. initial public offering (IPO). Shortly after becoming effective, the company accepted an offer from a single institutional investor to purchase approximately 3.1 million registered subordinate voting shares for a total of $100 million. The IPO was self-underwritten since marijuana is still illegal at the federal level in the U.S. and many banks are not yet willing to underwrite IPOs for cannabis companies. Green Thumb said it would use the money from the IPO to expand its business.
Marijuana Stocks with the Most Momentum
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks which have outperformed the market will often continue to do so, because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock's outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the stocks that had the highest total return over the last 12 months.
|Marijuana Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|TerrAscend Corp. (TER.CX)||CA$18.87||CA$2.8||539.7|
|Jushi Holdings Inc. (JUSH.CX)||CA$9.92||CA$1.1||466.6|
|4Front Ventures Corp. (FFNT.CX)||CA$2.32||CA$1.2||354.9|
|Amyris Inc. ( AMRS)||14.65||3.7||343.9|
|Aphria Inc. ( APHA.TO)||CA$22.70||CA$7.2||315.8|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||53.7|
- TerrAscend Corp.: TerrAscend is a Canada-based integrated cannabis company offering a range of products, brands, and services for the global medical- and adult-use cannabis markets. Its portfolio of businesses include: The Apothecarium, a cannabis dispensary; Arise Bioscience Inc., a manufacturer and distributor of hemp-derived products; Ilera Healthcare, a medical marijuana cultivator, processor, and dispenser; Valhalla Confections, a manufacturer of cannabis-infused edibles; and more.
- Jushi Holdings Inc.: See above for company description.
- 4Front Ventures Corp.: 4Front Ventures owns and operates cannabis cultivation and production facilities. It cultivates marijuana, produces cannabis flower, edibles, and oil-based products, and distributes its products via medical dispensaries or adult-use stores. The company owns and operates production and retail facilities across five U.S. states. Its businesses include: BrightLeaf Development, which oversees cultivation, production, and manufacturing; Mission Dispensaries, a network of branded medical dispensaries and adult-use stores; and Pure Ratios, a maker of therapeutic cannabis products.
- Amyris Inc.: Amyris produces and distributes products that serve markets for specialty and performance chemicals, flavors and fragrances, cosmetics ingredients, pharmaceuticals, and nutraceuticals. Amyris recently announced positive pre-clinical results for its RNA COVID-19 vaccine platform. The company announced in October 2020 that it had entered into a collaboration agreement and exclusive license with the Infectious Disease Research Institute to advance a novel RNA vaccine platform and develop a COVID-19 vaccine.
- Aphria Inc.: Aphria is a Canada-based licensed producer of medical cannabis products. Its medical cannabis is 100% greenhouse grown, allowing its plants to benefit from natural sunlight. The company's products include oils, softgels, oral sprays, and cartridges. Its oils are produced using CO2 extraction methods to preserve purity and ensure safety. Aphria announced in mid-December that it had entered an agreement with Tilray to combine their businesses. The combined company will operate under the Tilray name and would be worth approximately $3.9 billion, based on the companies' respective share prices on December 15, 2020. The merger agreement is expected to close during the second quarter of 2021.
The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.
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