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., Cronos Group Inc., and Tilray Inc. Many big marijuana companies have continued to post sizable net losses as they focus on investing in equipment to speed up revenue growth.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have dramatically underperformed the broader market. MJ has provided a total return of -56.1% over the past 12 months, well below the Russell 1000's total return of 6.4%. These market performance numbers and all statistics in the tables below are as of April 19, 2022.
Below we look at the top five marijuana stocks with the best value, the fastest growth, and the best performance.
These are the marijuana stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in the 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 P/S ratio shows how much you're paying for the stock for each dollar of sales generated.
|Best Value Marijuana Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/S Ratio|
|Hydrofarm Holdings Group Inc. (HYFM)||12.15||0.5||1.1|
|GrowGeneration Corp. (GRWG)||7.66||0.5||1.1|
|Village Farms International Inc. (VFF)||4.52||0.4||1.4|
|Ayr Wellness Inc. (AYR.A.CX)||CA$12.62||CA$0.8||1.6|
|Cresco Labs Inc. (CL.CX)||CA$6.98||CA$2.0||1.8|
- Hydrofarm Holdings Group Inc.: Hydrofarm Holdings Group is a holding company that, through its subsidiaries, makes and distributes hydroponic products to customers throughout the U.S., Canada, and Europe. The company offers hundreds of brands. It has a total of nine distribution centers, offering a product line of more than 5,000 items.
- GrowGeneration Corp.: GrowGeneration is a distributor of agricultural products and one of the largest hydroponics suppliers in the country, operating retail hydroponic and organic specialty gardening retail outlets. Though GrowGeneration is not a pure-play cannabis company, many of its products are used in cannabis cultivation. It sells thousands of products, including plant nutrients, farming soils, advanced lighting technology, and hydroponic and aquaponic equipment. It owns and operates 63 retail and distribution centers.
- Village Farms International Inc.: Village Farms International is a Canada-based vertically integrated greenhouse produce company. The company produces cannabis in addition to growing, producing, and distributing fresh produce to national grocers in North America. The company's brands include: Village Farms Fresh, a vertically integrated greenhouse grower; Pure Sunfarms, a cannabis producer; ROSE LifeScience, a cannabis producer and distributor; Balanced Health Botanicals, a CBD brand with an e-commerce platform; Village Fields Hemp, a hemp grower; and VF Clean Energy, a subsidiary that converts landfill gas to clean energy.
- Ayr Wellness Inc.: Ayr Wellness is a cannabis company involved in the cultivation, manufacturing, and dispensing of cannabis and cannabis-derived products. The company's product portfolio includes flowers, seltzers and tinctures, edibles and vape products under brands including Kynd, Origyn, Stix Preroll Co., Levia, Road Tripper, Entourage, Haze, Wicked, Secret Orchard, and Cannapunch. Ayr Wellness also trades over the counter (OTC) in the U.S. under the ticker AYRWF. The company announced in mid-February that it has completed its acquisition of Cultivauna LLC, owner of Levia-branded cannabis infused seltzers and water-soluble tinctures, for $20 million in upfront consideration. Under the terms of the transaction, which was first announced in September 2021, an earnout payment of up to an additional $40 million will be paid in shares depending on whether certain revenue targets in 2022 and 2023 are achieved.
- Cresco Labs Inc.: Cresco Labs grows, manufactures, distributes, and packages cannabis products. The company operates in 10 states, including production facilities and dispensaries. Its brands include Cresco, Reserve, Remedi, High Supply, Wonder Wellness Co., Mindy's, Good News, Sunnyside, and FloraCal Farms. Cresco Labs' stock also trades OTC in the U.S. under the ticker CRLBF. The company announced in late March that it has agreed to acquire Columbia Care Inc., a cultivator and manufacturer of cannabis products and related services, for approximately $2.0 billion. The transaction is expected to close in the fourth quarter of 2022.
These are the marijuana stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
|Fastest Growing Marijuana Stocks|
|Price ($)||Market Cap ($B)||Revenue Growth (%)|
|Ayr Wellness Inc. (AYR.A.CX)||CA$12.62||CA$0.8||126.3|
|OrganiGram Holdings Inc. (OGI)||1.60||0.5||118.0|
|Verano Holdings Corp. (VRNO.CX)||CA$10.70||CA$2.2||106.0|
|Jushi Holdings Inc. (JUSH.CX)||CA$3.60||CA$0.7||104.9|
|Trulieve Cannabis Corp. (TRUL.CX)||CA$22.96||CA$4.2||75.3|
- Ayr Wellness Inc.: See above for company description.
- OrganiGram Holdings Inc.: OrganiGram Holdings is a Canada-based producer of medical and recreational cannabis focused on producing high-quality, indoor-grown cannabis. It is the parent company of Organigram Inc., a producer of cannabis products, and The Edibles and Infusions Corp., a cannabis-infused, soft-chew and confectionary manufacturer. Its brands include The Edison Cannabis Co., Indi, Bag o' Buds, SHRED, and Trailblazer. OrganiGram's stock also trades in Canada on the TSX under the ticker OGI.TO. On April 12, the company reported results for Q2 of its 2022 fiscal year (FY), the three-month period ended Feb. 28, 2022. The company said its net loss narrowed dramatically to $4.0 million from $66.4 million as net revenue more than doubled. OrganiGram Holdings said it grew its market share among Canadian licensed producers to 8.2% in February, and remained the top market share spot in dried flower.
- Verano Holdings Corp.: Verano Holdings is a vertically integrated, multistate cannabis operator. The company produces a wide range of medical and adult-use cannabis products, which it sells through its portfolio of brands, including: Verano, Avexia, Encore, and MÜV. It owns and operates 15 cultivation facilities and 113 retail locations in a number of states throughout the U.S. (the number of cultivation facilities and retail locations includes those operated and owned by two pending acquisitions). The company's stock also trades OTC in the U.S. under the ticker VRNOF. Verano announced in early February that it has agreed to acquire Goodness Growth Holdings Inc., a holding company whose subsidiaries include Vireo Health, a multistate cannabis company, and Resurgent Biosciences Inc., a science and intellectual property incubator. The deal gives Verano Holdings access to the New York, New Mexico, and Minnesota markets. The all-share transaction is valued at approximately $413 million. Verano Holdings did not say when the transaction is expected to be completed.
- Jushi Holdings Inc.: Jushi Holdings is a holding company focused on 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, a maker of hemp-based CBD products that are physician formulated; Nira+, a producer of medicinal THC products; Sèche, which offers various branded ground and flower cannabis products; and Tasteology, a provider of THC-infused products. Jushi also trades OTC in the U.S. under the ticker JUSHF. The company announced in early April that it has closed its acquisition of NuLeaf Inc. for $53.6 million. NuLeaf owns three medical retail dispensaries, a cultivation facility, and a processing facility in Nevada.
- Trulieve Cannabis Corp.: Trulieve Cannabis is a vertically integrated cannabis company and multi-state operator. The company operates across 11 states, with leading market positions in Arizona, Florida, and Pennsylvania. It operates a variety of cannabis brands, including the Cultivar Collection, Muse, Blue River, Trulieve Core, Sweet Talk, and Momenta. Trulieve also trades OTC in the U.S. under the ticker TCNNF. The company announced in mid-February that it has completed its acquisition of a 64,000 square foot cultivation facility in Phoenix for upfront consideration of $13.8 million. The transaction includes potential milestone payments that are subject to earnout and escrow requirements.
Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market has as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock's outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the marijuana stocks that had the smallest declines in total return over the past 12 months out of the companies we looked at.
|Marijuana Stocks with the Best Performance|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Innovative Industrial Properties Inc. (IIPR)||164.32||4.2||-6.5|
|Green Thumb Industries Inc. (GTII.CX)||CA$21.00||CA$4.9||-38.1|
|OrganiGram Holdings Inc. (OGI)||1.60||0.5||-38.5|
|Sundial Growers Inc. (SNDL)||0.56||1.1||-40.8|
|4Front Ventures Corp. (FFNT.CX)||CA$0.90||CA$0.6||-42.3|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||-56.1|
- Innovative Industrial Properties Inc.: Innovative Industrial Properties (IIP) is a real estate investment trust (REIT) that engages in the acquisition, disposition, development, and management of industrial facilities leased to tenants in the regulated cannabis industry. The company's portfolio consists of specialized industrial and greenhouse buildings leased to state-licensed cannabis operators across the U.S. IIP announced in mid-April that it has acquired a Maryland property consisting of approximately 84,000 square feet of industrial and greenhouse space for $25.0 million. With the closing of the transaction, the company also entered into a long-term, triple-net lease agreement for the property with a subsidiary of Maryland Cultivation and Processing LLC. The subsidiary plans to continue operating the property as a regulated cannabis cultivation facility.
- Green Thumb Industries Inc.: Green Thumb Industries is a consumer-packaged cannabis products company and retailer. It manufactures and distributes a variety of branded cannabis products through its portfolio of brands, including Beboe, Dogwalkers, Dr. Solomon's, Good Green, incredibles and RYTHM. The company also owns and operates retail cannabis stores called Rise. Green Thumb has 17 manufacturing facilities and scores of retail locations, with operations across 15 U.S. markets. The company's stock also trades OTC in the U.S. under the ticker GTBIF.
- OrganiGram Holdings Inc.: See above for company description.
- Sundial Growers Inc.: Sundial Growers is a Canada-based diversified cannabis company engaged in the cultivation, manufacturing and processing, and retailing of various cannabis products. The company focuses on inhalables for the Canadian adult-use market. Its branded products are available in flower, vape, pre-roll, and other forms. The company's brands include Sundial, Top Leaf, Palmetto, and Grasslands. Sundial Growers announced in late March that it has completed its acquisition of Alcanna Inc. for CA$320 million ($256 million). Alcanna is one of the largest retailers of alcohol in North America and it also has a majority ownership of Nova Cannabis, which operates 78 cannabis retail stores in Canada.
- 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. It produces more than 32 tons of cannabis per year and owns over 20 brands offering more than 1,800 unique product lines. 4Front's stock also trades OTC in the U.S. under the ticker FFNTF. The company announced in late March that it has agreed to acquire Island Cannabis Co., a producer of pre-rolls, flower, and concentrate products. Financial terms of the transaction were not disclosed.
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. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in 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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