The U.S. cannabis industry has grown from what it used to be in the 1970s. Today, 30 American states have legalized the medical and recreational use of cannabis. These include Michigan, Arizona, and Montana. But at the federal level, marijuana is still considered illegal – it is in the same category as heroin and ecstasy.
Truly, the absence of federal regulation has limited the potential growth of the cannabis market. However, it has not eliminated investors’ interest in the industry’s stocks. Since there are many marijuana-focused companies on the market, we highlight the best cannabis stocks to consider in 2024.
Shortlist of Key Players in the Cannabis Stock Market
Below, we highlight the cannabis companies that made our list of the best cannabis stocks, including some of the best marijuana stocks under $10. Our ranking methodology strongly considers their market capitalization, financial performance, and reputation.
- Curaleaf Holdings (CURLF)
- Cresco Labs Inc. (CRLBF)
- Trulieve Cannabis Corp. (TCNNF)
- Tilray Brands Inc. (TLRY)
- TerrAscend Corp. (TSNDF)
- Verano Holdings Corp. (VRNOF)
- Green Thumb Industries Inc. (GTBIF)
- Canopy Growth Corporation (CGC)
- Aurora Cannabis Inc. (ACB)
- Leafly Holdings, Inc. (LFLY)
Cannabis Stocks Overview
Curaleaf Holdings (CURLF)
Curaleaf Holdings was founded in 2010, it first operated under the name PalliaTech. It is the world’s largest marijuana-focused company. The main office is in Massachusetts. However, people can get its products and services in 14 states. These states include Arizona, Maryland, Utah, and New York.
Curaleaf has a market cap of $2.55 billion. This makes it one of the fastest-growing cannabis companies worldwide. Boris Jordan and The Sputnik Group invested a significant amount in the company five years before its name changed to Curaleaf Holdings in 2018.
Curaleaf is an active player in the cultivation, production, and sale of cannabis products. Yet, its stock has been falling over the past year. The stock price has gone down by nearly 38% in one year. Its year-to-date (YTD) growth is -12.34%.
On November 9, 2023, the company will share its financial records for the last quarter. Curaleaf also wants to list its subordinate voting shares on the Toronto Stock Exchange (TSX). These announcements have not helped its stock price.
Despite these issues, Curaleaf could be a good option for long-term investors. The stock is at $3.3 per share, making it one of the best marijuan stocks under $10. It is quite affordable. With an increasing acceptance and demand for its marijuana products and services, it could bring profitable returns in the future years.
Cresco Labs Inc. (CRLBF)
Next on the list of our top-rated cannabis companies is Cresco Labs. Established in 2013, Cresco Labs Inc. is a reputable marijuana company with a decade-long track record. As the name implies, the company focuses on the medical use of marijuana and has grown into a multi-million-dollar brand with a market cap of $510.9 million.
Cresco Labs has its headquarters in Chicago, Illinois, but the business operates in 9 US states, including Arizona, Nevada, Michigan, and New York. The company is an employer to thousands of people working to help achieve its goal of normalizing and professionalizing the cannabis industry.
Interestingly, the company opened five new stores lately as part of its continued expansion plans. Also, Cresco Labs reportedly unlocked $32 million in non-dilutive capital after closing the sale of their remaining Arizona Asset. However, Cresco Labs isn’t profitable at the time of writing.
With a – 55.34% decline over the past year, Crecco’s stocks call for attention before investing.
Market experts believe the continuous fall in the company’s stock price is due to the broader bearish marijuana stock market and the mutual termination of the merger with Columbia Care. However, with the company’s low price-to-sales ratio at 0.8, it’s exciting to see what lies ahead if the company boosts its revenue over the coming years.
Trulieve Cannabis Corp. (TCNNF)
With a market cap of over $840 million, Trulieve is another top marijuana brand with one of the best weed stocks on the market. But another reason Trulieve is popular in the cannabis industry is its long-standing history.
The company was established in 1940, making it one of the oldest marijuana-focused businesses on the market. The medical cannabis company cultivates, manufactures, and retails marijuana products. However, retail is its primary source of revenue.
For instance, the company released its financial reports showing revenue of $282 million in the second quarter of 2023, with 96% of the amount from retail sales. In other words, the company’s long years of existence indicate its sound financial health, powered by its retailing strides.
In recent developments, Trulieve recently opened its first marijuana dispensary in the city of Columbus, OH, and added new retail locations in Sanford and Pooler to reach 186 retail dispensaries in the U.S. However, the company’s stock prices are in the red zone despite the latest developments.
Over the past year, Trulieve stocks have lost over 58%.
In other words, the recent developments look likely to result in long-term gains for investors after a significant turnaround in the cannabis industry and as the company continues to expand and attract more investors.
Tilray Brands Inc. (TLRY)
Tilray Brands needs no introduction among cannabis stock investors. The renowned cannabis-focused was established in 2013 and has its headquarters in New York. Tilray Brands focuses on the cultivation, development, and research of medicinal cannabis and extends its services to consumer packaged goods.
With a market cap of over $1.4 billion, it’s easy to see why Tilray Brands stocks have attracted investors over the years. However, like other cannabis companies on this list, Tilray Brands’ shares have been struggling in the market, evident by its 38.77% decline over the past year.
However, the recent upturn in the price of Tilray Brands stocks suggests the asset can be on its way to green days.
At a time when other stocks are struggling to hold value, market analysts suggest the sudden rise in the value of Tilray Brands stocks is due to the company’s diversification into the US craft beer industry. The change in business model resulted in a net revenue of $177 million, up 15% year-on-year in the company’s first-quarter earning reports.
As the cannabis business struggles and the business continues to look for alternative revenue generation models outside the legally uncertain marijuana world, Tilray Brands is likely to attract more investors – and have its stock price continue increasing.
TerrAscend Corp. (TSNDF)
TerrAscend Corp. was established in 2017, so it’s still a relatively new company in the cannabis industry. Nonetheless, the reputable company has one of the best value cannabis stocks for investors in the US and beyond for many reasons.
First, the marijuana company is a major player that combines the cultivation and sale of cannabis for medical and recreational uses. Additionally, TerrAscend is a vertically integrated cannabis company with retail operations in Canada and 5 US states. These include New Jersey, California, Maryland, Michigan, and Pennsylvania.
In terms of valuation, TerraAscend Corp has a market cap of $610.59 million, which is impressive considering the company’s period of existence in the cannabis industry. At the same time, its financial records for the second quarter of 2023 are positive, with a net revenue of $72.1 million, a 12.7% increase year-on-year.
Looking at the TerrAscend Corp. stock in the market, things are relatively good. The stock price has been up by 16.34% over the past year.
The price surge came after TerrAscend announced it had raised its guidance for 2023, representing a 28% year-on-year growth in net revenue and 62% in adjusted EBITDA.
Verano Holdings Corp. (VRNOF)
When thinking of the companies with the best cannabis stocks, Verano Holdings is another notable company that comes to mind. The marijuana-focused company was established in 2014 with a focus on licensed cannabis cultivation, processing, and distribution for retail and wholesale pharmaceutical consumption.
Today, Verano Holdings is one of the largest multi-state cannabis providers in the US. Its headquarters is in Chicago, IL, but the company has 14 state-of-the-art facilities in 13 states. These include Arizona, Illinois, Florida, and Pennsylvania.
At the time of writing, Verano has a market cap of $1.58 billion, ranking among the largest marijuana companies in terms of valuation. Another reason Verano Holdings makes our list is its financial record. According to its financial results, Verano had a revenue of $234 million in the second quarter of 2023 – a 5% year-on-year increase compared to the 3% growth from the first quarter.
However, Verano’s $13 million net loss is a concern for the company and its investors alike. However, Verano’s stock has had a decent run this year, evident by its 37.7% year-to-date growth.
Still, the share’s 19.23% decline year-on-year indicates its struggles in the stock market.
Green Thumb Industries Inc. (GTBIF)
Established in 2014, Green Thumb is a leading cannabis production and distribution brand. The marijuana enterprise has its headquarters in Chicago, Illinois. However, it offers multi-state services across 15 U.S. states, including Colorado, California, Rhode Island, and Virginia. Altogether, the provider has about 84 cannabis outlets under the brand name, Rise.
Green Thumb cultivates and distributes marijuana for medicinal and recreational use, making it attractive to investors looking for companies with the fastest-growing cannabis stocks. The company’s large market share is also evident in its $2.23 billion market cap.
Besides its high market valuation, investors choose Green Thumb stock because of the cannabis provider’s solid revenue generation records. According to its financial reports for the second quarter of the year, Green Thumb had a revenue of $252 million, increasing its year-on-year returns by 2%.
However, the firm’s year-on-year performance for its stock hasn’t reflected its impressive financial records. For context, the stock is down by over 18% in the past year, trading at $9.20.
But the ongoing bearish trend in the asset’s price within the past month suggests turnaround may not be imminent. .
Canopy Growth Corporation (CGC)
Canopy Growth Corporation was established in 2009 and began trading on the New York Stock Exchange (NYSE) in 2018. At the time, the provider was the first cannabis enterprise on the NYSE. In other words, Canopy had the largest share of the entire marijuana stock exchange by market capitalization before other brands went public.
Today, Canopy’s market cap is not what it used to be, as it currently stands at $480.35 million. However, the provider still holds its pioneer status and its stock ranks among the best on the market.
Additionally, Canopy has its headquarters in Canada, making its operations fully legal in the country. However, the company has announced its plan to expand its operations into the US cannabis market, which will boost its growth.
Looking at the company’s financials, the results for the second quarter of 2023 are yet to be released. However, Canopy disclosed that its net revenue for the first quarter of the year was flat compared to the last quarter of 2022. Similarly, its one-year stock growth stays at -78.62% at the time of writing.
However, there was an earlier announcement that the company had received a European Union GMP certification, which would allow it to continue providing certified medical marijuana to the European markets and other parts of the world. The news may impact the asset’s price in the near future.
Aurora Cannabis Inc. (ACB)
Aurora Cannabis Inc. is the penultimate provider on our list of the best cannabis stock companies in 2023. The reputable enterprise was founded in 2006. With over 15 years of experience in the cannabis industry, it’s no surprise that the provider makes our well-researched list.
The Aurora headquarters is in Canada, but with a minimum of five sales licenses and a solid presence in 25+ countries, the company has a solid market base. It’s among the most renowned pioneers of producing cannabis for medicinal use, but it also serves the adult consumer market.
At the time of writing, Aurora has a market cap of $202.1 million, which is lower than most of the competitor providers in this article. Nonetheless, Aurora remains a globally recognized brand with stocks for interested investors.
Currently, the company’s stocks trade at $0.47, which is relatively affordable compared to others. However, the share’s performance in the past year is far from impressive. The price has dropped by over 62% in one year, so investors who purchased ACB one year ago have their pot stocks hurt.
However, analysts believe the stock may increase in price soon because of the company’s announcement of a patent litigation settlement, which will ensure people respect its cannabis-related patent rights.
Leafly Holdings, Inc. (LFLY)
Finally, we’ve come to the end of our list of the companies with the best cannabis stocks to buy now. However, while Leafly Holdings is the last marijuana brand on this list, it isn’t the least favorable or yield-earning stock.
Leafly Holdings was founded in 2010, and its headquarters is in Seattle, Washington. However, Leafly started trading on the stock market in 2022 after its initial public offering (IPO). Today, the business focuses on the cultivation and production of marijuana for recreational use.
With a market cap of just $17.74 million, Leafly is a low-market stock option for investors. In other words, the stock is more volatile than others because of its low trading volume. However, Leafly shares may be a gem for investors with a high appetite for risk looking for instant returns.
Going by Leafly’s financial results for the second quarter of 2023, the company reported a total revenue of $10.7 million but had a net loss of $1.4 million. Not only are the books in the red zone, but the stocks also are. For instance, there has been a loss of 51.4% in stock prices over the previous year.
In other words, existing investors still have to wait a long time to recover their losses, while new investors must be willing to hold their shares for the future.
Unique Challenges and Risks of Buying Cannabis Stocks
Though investing in marijuana stocks can be profitable, cannabis investments are highly risky due to many reasons. Here are some challenges and risks investors should know before buying cannabis stocks.
Speculative Market
First, the industry is a budding one which is yet to find its feet fully, so market projections and stock price predictions are highly speculative. As such, investors are at risk, as their assets’ prices can rise and fall from time to time.
The fear of the unknown results in struggles for cannabis companies with shares because investors are generally wary of the industry.
Legal Challenges
Though the production, distribution, and consumption are legal in Canada, one significant challenge of trading marijuana products and stocks in the US is unclear legality. The US categorizes marijuana as an illegal substance at the federal level, resulting in the industry’s reduced growth.
At its core, the cannabis industry holds massive growth potential, but only some US states like Arizona, Massachusetts, Colorado, and New York legalize the product for medical and recreational use.
As a result, institutional investors, banks, and other institutions steer clear of cannabis-related businesses. However, there’s a general belief that the US government will develop a clear legal framework for the use and distribution of cannabis in the near future.
Potential Scams
As with other investments, the cannabis industry faces the risk of fraud. Since it’s a rapidly growing market, fraudsters can take advantage of unsuspecting investors through various scams. For instance, scammers can hype a cannabis provider on social media to attract investors and execute a rug pull.
A good example is JuicyFields, one of the world’s biggest cannabis scams that suddenly collapsed after gathering funds from investors.
Struggling Canadian Stocks
Another challenge facing the global cannabis industry is the industry’s situation in Canada. Despite offering a legal ground for cannabis businesses to thrive, most Canadian marijuana companies are struggling due to demand fluctuations.
Currently, companies are struggling with overproduction because of the sudden decline in the demand for marijuana products. At the same time, the Canadian marijuana market is faced with macroeconomic issues like inflation and high interest rates, so cannabis stocks on the TSX have depreciated in value over time.
Many companies are still recording financial losses, so their stocks remain high-risk investments.
Factors to Consider When Choosing Cannabis Stocks
We’ve highlighted the 10 best cannabis stocks to buy in this review. These stocks trade on major stock exchanges, including the NYSE, NASDAQ, and TSX. In other words, the stocks are from reputable cannabis companies regulated by government agencies like the Securities and Exchange Commission (SEC).
Besides their major stock exchange listings, here are other key factors to determine the best marijuana stocks to buy.
Market Capitalization
Buy shares of companies with a market cap of at least $100 million. Investments in large-cap stock companies are considered less risky and return higher dividends than mid-cap or small-cap enterprises.
Similarly, large-cap corporations are more likely to stand the test of time and not collapse due to market challenges.
Financial Record
Another thing to look out for before investing in a cannabis enterprise is its financial records. Companies with poor financial health are not investment-worthy. At the same time, you want to ensure the enterprise you’re interested in is growing financially before buying their shares.
So, check out for year-to-date performance and other key financial indicators to determine the cannabis stocks with the best performance.
Market Analysis
Check out analysts’ opinions and recommendations online to find opportunities with solid “buy” ratings online. Such stocks are expected to explode and offer investors high returns.
Operations Model
Finally, research and understand the company’s business operations model to determine whether it’s a pure-play or a well-established enterprise. A pure-play cannabis provider is a publicly-traded business generating revenue from the cannabis industry only.
Such a business may be heavily affected when there are challenges in the marijuana space. However, a well-grounded enterprise can generate revenue through other channels and navigate challenging times better.
In other words, investing in cannabis businesses with diversified income channels may be better.
Diversifying Your Portfolio With Cannabis Stocks
Since investing in marijuana stocks is highly risky, the best way to manage your investments and hedge against volatility is by curating a diversified pot stock basket. Spreading your capital across different stocks instead of individual assets will help you balance risk and reward.
For instance, instead of investing in only Tilray Brands stock, you can combine it with stocks from Curaleaf and Aurora. That way, a loss on one stock will not result in you losing all your initial investment.
However, a good approach to keeping a diversified investment portfolio is to ensure you don’t dedicate more than 10% of your total investment to an individual stock.
Alternative Investment Options in the Cannabis Industry
As stated earlier, keeping a diversified investment portfolio is a viable alternative to investing in individual stocks. The best way to curate a diversified investment basket is by investing in cannabis exchange-traded funds (ETFs). The investment option combines a basket of different individual marijuana stocks in one place, making diversification easy.
Though individual stocks are usually more rewarding than combined stocks, there are different perks and downsides to buying cannabis ETFs. We highlight some of them below.
Pros
- Higher liquidity from combined assets
- Lower fees due to low bid-ask spreads
- Flexible trading opportunity
- Lower risks compared to individual stocks.
Cons
- Lower return on investment (ROI)
- Limitation to stocks from high-cap companies.
Final Thoughts
The global cannabis market has generally had a challenging year, represented by massive falls in stock prices. Many stocks have had negative returns year-on-year, resulting in losses in the short term. However, long-term investors can take advantage of the low stock prices to enter the market and wait for potential significant gains.
We’ve reviewed the best cannabis stocks to invest in in this article. Don’t forget that these investments are high-risk, so it’s crucial to do your own research. As the marijuana industry continues to mature, it’s only a matter of time before the market rebounds – and legalization at the federal level in the U.S. will likely result in a more rapid growth of the cannabis industry.
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Why You Can Trust The Marijuana Index
The information provided on Marijuana Index is solely for educational purposes. The selections presented here are the product of meticulous analysis by an experienced financial analyst. However, it’s crucial to remember that these choices may not universally fit every portfolio.
Before making any investment decisions, we strongly encourage you to conduct thorough research. This ensures that any potential investment aligns with your unique financial goals and risk tolerance.
As of the date this article was written, the author does not hold any positions in the stocks or ETFs mentioned.
We do not provide personalized financial advice, advisory services, or brokerage recommendations. Nor do we advocate for the purchase or sale of specific stocks or securities. Please be aware that performance information might have changed since publication, and past performance should not be seen as an indicator of future results.
Investing in cannabis stocks carries its own set of risks, reflective of the evolving legal landscapes and market volatility inherent in this industry. As an investor, it’s essential to be aware of these risks and consider them carefully in your decision-making process.
To understand more about our commitment, we encourage you to learn more about us. If you have more questions for our cannabis specialist editors, do not hesitate to contact us. You can also send us a tweet at @Marijuana_index. Stay updated with the latest cannabis news by subscribing to our Newsletter.
Tobi Opeyemi - Financial Writer
Tobi, a journalist and crypto writer since 2017, is renowned for his educational content in the digital currency realm. His journey includes a significant tenure with Stockbossup, an investment platform committed to enlightening the black community on financial matters. Before this, Tobi honed his skills as a copywriter at Turboxbt, a platform specializing in cryptocurrency trading. Notably, Tobi's insights are featured on Investopedia, where he contributes articles on a range of topics. He is also celebrated as one of the top web3 creators on LinkedIn, known for content that consistently drives engagement and sparks conversations in the industry. With a background in Pharmacy, he brings a unique perspective to his writing, especially in the Cannabis sector.
