The rampant growth of the cannabis industry has sparked investor interest in CBD oil stocks. Consider investing in these stocks to grow your portfolio organically. Looking to invest in a market with long-term potential? CBD is a great opportunity, as it hasn’t yet reached its full potential in the U.S. As more consumers begin to use CBD and the regulatory market shifts, the CBD market will likely continue growing. Globe NewsWire has estimated that the U.S. CBD market will expand The FDA’s approval of CBD can change the trajectory of these stocks quickly. If regulators get out of the way, these companies could soar.
Best CBD Oil Stocks
Altria comprises Philip Morris USA, U.S. Smokeless Tobacco, John Middleton, Helix Innovations, and Philip Morris Capital, although the company plans to wind down Philip Morris Capital by the end of 2022. It holds a 10% interest in the world’s largest brewer, Anheuser-Busch InBev. Through its tobacco subsidiaries, Altria holds the leading position in cigarettes and smokeless tobacco in the United States and the number-two spot in machine-made cigars. The company’s Marlboro brand is the leading cigarette brand in the U.S. with a 43% share in 2020. Altria holds strategic investments in JUUL Labs (35% economic interest) and Cronos (42%). They are considered a leader in the cannabis and tobacco industry.
|Day Range 41.41 – 42.18||52 Wk Range 41 – 57.05||Open / Close 42.17 / –||Float / Outstanding – / 1.8B|
|Vol / Avg. 5.9M / 10.1M||Mkt Cap 74.8B||P/E 43.85||50d Avg. Price 44.09|
|Div / Yield 3.76/8.75%||Payout Ratio 367.35||Total Float –||EPS –|
Jazz Pharmaceuticals ( XNAS: JAZZ )
Jazz Pharmaceuticals is an Ireland-domiciled biopharmaceutical firm focused primarily on treatments for sleeping disorders and indications in neuroscience and hematology-oncology. Jazz’s product portfolio includes its lead drug, Xyrem, for narcolepsy, Sunosi for improving wakefulness in patients with excessive daytime sleepiness, Defitelio for severe veno-occlusive disease after stem cell transplant, Vyxeos for acute myeloid leukemia, and Zepzelca for small cell lung cancer.
|Day Range 149.75 – 152.49||52 Wk Range 126.14 – 169.98||Open / Close 151.63 / –||Float / Outstanding – / 62.7M|
|Vol / Avg. 186.2K / 490.4K||Mkt Cap 9.5B||P/E –||50d Avg. Price 155.9|
|Div / Yield –||Payout Ratio –||Total Float –||EPS –|
Village Farms Intl ( XNAS: VFF )
As one of the largest and longest-operating greenhouse growers in North America, Village Farms International produces and distributes premium cannabis to national growers in the U.S. and Canada.
The cannabis stock has a market cap of $288 million and trades over 1 million shares per day. It has an EPS of $0.04 and a P/E ratio of 128. Village Farms International generated total revenue of $144 million in 2019, making it one of the best stocks under $10.
Village Farm International recently reported its revenue in Q1 2020 and declared that it has had a profitable business for the 5th consecutive quarter. The cannabis company has also announced that it has expanded its credit facility with its existing lender by $59 million.
|Day Range 2.45 – 2.52||52 Wk Range 2.44 – 7.22||Open / Close 2.47 / –||Float / Outstanding – / 88.6M|
|Vol / Avg. 205.9K / 682.4K||Mkt Cap 222.3M||P/E –||50d Avg. Price 2.83|
|Div / Yield –||Payout Ratio –||Total Float –||EPS –|
GrowGeneration ( XNAS: GRWG )
GrowGeneration Corp. is a premier supplier of cannabis and cannabis-growing equipment. These products include organic nutrients, drip systems, water pumps, air pumps, LED lights and commercial light systems. It is the largest hydroponic supplier in the U.S., with 31 retail and distribution centers.
The cannabis stock has a market cap of $849 million and has an EPS of $0.02. It has an annual dividend yield of $0.02 per share. GrowGeneration has high liquidity and trades more than 1.7 million shares per day. It generated revenue of $79 million in 2019.
|Day Range 4.25 – 4.54||52 Wk Range 3.42 – 14.1||Open / Close 4.46 / –||Float / Outstanding – / 60.8M|
|Vol / Avg. 498.7K / 1.4M||Mkt Cap 261.4M||P/E –||50d Avg. Price 4.82|
|Div / Yield –||Payout Ratio –||Total Float –||EPS –|
AbbVie ( XNYS: ABBV )
AbbVie is a pharmaceutical company with a strong exposure to immunology and oncology. The company’s top drug, Humira, represents close to half of the company’s current profits. The company was spun off from Abbott in early 2013. The recent acquisition of Allergan adds several new drugs in aesthetics and women’s health.
|Day Range 138.8 – 140.44||52 Wk Range 128.26 – 175.91||Open / Close 139.25 / –||Float / Outstanding – / 1.8B|
|Vol / Avg. 1.9M / 5.5M||Mkt Cap 245.9B||P/E 19.59||50d Avg. Price 143.77|
|Div / Yield 5.64/4.07%||Payout Ratio 76.66||Total Float –||EPS –|
After the legalization of marijuana in the U.S., many companies are actively engaged in the research, development and distribution of cannabis. Cannabidiol (CBD) is the non-psychoactive substance present within cannabis and its products such as CBD oil has had a major impact on the health and wellness industry.
Take a look at these CBD oil stocks that are generating millions of dollars in revenue this year.
Overview: CBD Oil Stocks
Since ancient times, cannabis has been used as a form of medicine and as a means to induce euphoria. Indian sages have also mentioned the medicinal use of marijuana in Vedic hymns of antiquity.
However, President Richard Nixon banned the cultivation and sale of marijuana in the U.S. as part of his “war on drugs” campaign in 1970. It wasn’t until the Compassionate Use Act of 1996 was passed that California became the first state to legalize marijuana to treat people with severe or chronic diseases. As of 2022, 37 states in the U.S. have legalized the medical use of marijuana and 18 states have legalized the recreational use of marijuana.
According to a recent report by the New Frontier Data, the legal sale of cannabis could reach $30 billion by 2025. Due to such high potential to earn profits, alcohol companies have started to invest big in CBD oil companies.
Constellation Brands Inc. (NYSE: STZ) has invested billions in Canopy Growth Corp. (NYSE: CGC). Molson Coors (NYSE: TAP) invested billions in Hexo (TSX: HEXO). Budweiser (NYSE: BUD) entered a joint venture to develop non-alcoholic CBD drinks with Tilray Inc. (NASDAQ: TLRY).
You can still catch up with the market trend and gain some good earnings by investing in CBD oil stocks today.
Best Online Brokers for CBD Oil Stock
Online brokers let you browse and trade thousands of stocks listed on major stock exchanges. These platforms are bundled with tons of educational resources and tools to let you manage your stock portfolio on the go. Many of these online brokers also allow you to trade stocks commission-free.
Top CBD Stocks You Should Invest in Today
Looking to invest in a market with long-term potential? CBD is a great opportunity, as it hasn’t yet reached its full potential in the U.S. As more consumers begin to use CBD and the regulatory market shifts, the CBD market will likely continue growing.
Globe NewsWire has estimated that the U.S. CBD market will expand to $13.39 Billion by 2024, an annual growth rate of over 40%. We’ve detailed four CBD stocks below that show great potential.
Right now, CBD oil cannot be added to dietary supplements, which are regulated by the FDA. However, a bill was just introduced to Congress to legalize CBD in dietary supplements! This bill has bipartisan support, so the chances of it passing are higher.
This is great news for the CBD market! This means that, over time, higher quality CBD products will become more readily available for CBD users, as less reputable companies are weeded out by FDA rules. Right now, many companies do not follow the FDA’s quality control procedures to minimize risks to consumers.
You’ll see both Canadian and U.S. companies on this list, as Canadian marijuana companies have been relegated to selling only hemp in the U.S., which means that publicly traded companies have focused on hemp sales.
How to Choose a CBD Stock
When choosing a CBD company to invest in, look at their financial filings, required for any publicly traded company.
Key CBD Company Financials
Earnings Per Share (EPS)
This is the CBD company’s net earnings or losses per share. Look at trends of EPS of the overall CBD industry at the time to see how the company compares to competitors.
Price to Earnings (P/E) Ratio
The P/E ratio can show you if a company’s stock is undervalued or overvalued. You generally are looking for a stock with a lower P/E ratio, as this indicates the stock is likely undervalued. A higher P/E ratio could indicate either expected upcoming growth or that the stock is overpriced.
Yearly Revenue Growth
If you look at a CBD company’s yearly revenue, you can get a sense of the direction in which the company is headed. CBD companies are pouring money into technology, equipment, and research. Expect to see continued growth in successful companies over the next few years.
Other CBD Stock Factors
Choose Pure Versus Synthetic CBD
We recommend investing in companies that use pure CBD, instead of the synthetic version. The impact of synthetic CBD on the body is still being studied and, until more data is available, we recommend investing in companies that use the natural version.
Companies that offer transparency to consumers are more likely to benefit from the possible upcoming regulatory changes. Look for companies that explain their hemp sourcing and CBD processing practices.
Look at Industry Trends
Over the past quarter many different CBD companies lost revenue, so keep that in mind when looking at a company. Look ahead at what each company is planning; this is also a good way to determine where to invest in the CBD space.
Best CBD Stocks
Canopy Growth (CGC)
Canopy Growth is a Canadian-based mainstream cannabis company that expanded into the CBD market in 2019 by partnering with Martha Stewart. The company has more overall sales than any other cannabis company in the world.
CGC is currently trading at just over $28 per share. The company achieved an impressive 76% revenue growth in 2020. Canopy Growth’s revenue decreased in the past quarter, but due to the recent launch of cosmetics, food, and animal care products, along with celebrity support, Canopy Growth is a good option for an already established brand.
Charlotte’s Web (CWEB)
Charlotte’s Web is a well-known CBD company that focuses on improving lives naturally with high quality CBD products. The company is transparent and offers certificates of analysis on their products. They also offer a wide variety of products.
Charlotte’s Web is currently trading at just over $5 per share. With their growing family of brands, Charlotte’s Web has achieved 28% historical annual growth since 2017. Growth is expected to accelerate, with analysts expecting Charlotte’s Web to grow faster than the rest of the CBD industry.
Pure Harvest Corporate Group Inc. (PHCG)
Based out of Denver, Pure Harvest Corporate Group has different companies that operate in both the traditional cannabis as well as CBD industries. PHCG is a great option if you are looking for a diversified CBD stock. The stock focuses on aggressive acquisition of companies in states with attractive markets for cannabis.
The company expanded into the CBD space by acquiring Prolific Nutrition and changing the name to Pure Harvest Hemp. Pure Harvest Hemp will focus on selling wellness consumer products online.
PHCG is currently trading at $0.67 per share. Although the stock has fluctuated over the past several years, the recent acquisition of Prolific Nutrition and additional investors shows promise for Pure Harvest Corporate Group.
Cronos Group Inc. (CRON)
Cronos Group is based out of Toronto and has a diverse portfolio of companies in the cannabis industry. If you are interested in CBD-infused cosmetic products, Cronos Group recently expanded into three hemp-derived CBD brands, including a skin care brand called Happy Dance—partnering with Kristen Bell.
Since many millennials are adopting CBD into their daily self-care routines, we see a bright future for the CBD side of Cronos Group Inc. holdings. CRON is currently trading at $8.50 per share. The stock has also shown strong year-over-year revenue growth.
If you are looking to not only invest in, but also to try CBD, Joy Organics prides itself in providing premium grade CBD products to our customers. You can rest assured you are only getting safe, high quality CBD, so you know exactly what you are putting into your body.
This North Carolina-based CBD company is one of the largest companies in the industry, with an array of products including tinctures, softgels, and award-winning gummies.
Their 2020 end-of-year reporting showed a 22% increase in net sales year over year—a steady incline in a highly competitive industry.
They’ve made a name for themselves through their vast product line, accessible prices, and athlete partnerships. While their stock prices climbed and fell consistently in their first two years in business, there combination of industry expertise, 2020 growth, and the upcoming industry regulations make this a reliable choice for those hoping to capitalize on this industry’s upcoming boom.
With increasing consumer acceptance of CBD, and the upcoming bill to regulate CBD as a dietary supplement, now is a great time to invest in CBD stocks!
Hannah Smith is Joy Organics Director of Communications. She is driven by her passion for providing clear and accessible wellness and CBD education. In 2015, she received her BA in Media, Culture and the Arts from The King’s College in New York City and before Joy Organics, worked as writer and photographer in the Middle East and North Africa. Her work has been featured on Forbes, Vice, Vox, Denver Post, and the Coloradoan.
Top Three CBD Stocks to Watch Closely in 2022
There’s a lot of overlap between CBD stocks and pot stocks. Which, of course, makes perfect sense. The cannabis plant has scores of active chemical compounds in it. One of them is delta-9-tetrahydrocannabinol (THC). This is the compound that gets stoners… stoned.
The other big one is cannabidiol (CBD). This compound has no psychoactive properties. But there are a whole lot of potential health benefits. Now, marijuana producers have no need to weed out the CBD. However, companies focusing on CBD do have to keep out the THC if they want to sell their products over the counter. But it’s not terribly difficult if the CBD is derived from industrial hemp. Which, unlike marijuana, is not a controlled substance.
To complicate matters even further, the Food & Drug Administration (FDA) hasn’t compiled a lot of information on CBD. So, it lingers in a state of near-limbo… due, if nothing else, to its close proximity to THC. It’s not quite legal. But based on how easy it is to find CBD products at the local pharmacy, grocery store and coffee shop; it’s obviously not illegal either. However, its legal status can depend on which state you live in.
Here’s how that works…
In 2018, President Trump signed the Agriculture Improvement Act. This is better known as the 2018 Farm Bill. In that act, there was a section that removed hemp from the Controlled Substances Act. Thanks to that bill, CBD – which can be extracted from hemp – was deemed legal on the federal level. The bill targeted the agricultural aspect, though. Compounds extracted from hemp – à la CBD – aren’t privy to the same complete green light as hemp itself. So CBD operates in a mixed jurisdictional realm.
Warning: More Politics & Science Ahead
The federal government won’t arrest folks for growing hemp anymore. Extracting CBD or possessing it isn’t a federal crime anymore either. Well, if there’s less than 0.3% THC content. But not all states see eye to eye with the feds. Some states still want to see more evidence of the benefits and lack of drawbacks. And in some states, CBD remains blacklisted.
But here’s a big feather in the cap of CBD. The Food & Drug Administration has approved a CBD product to treat Lennox-Gastaut syndrome. It’s also been approved to treat Dravet syndrome. To paraphrase, it’s been proven to help those suffering from certain types of epilepsy.
When Greenwich Biosciences received approval for its epilepsy drug, Epidiolex, it was initially considered a controlled substance. Simply because it was derived from marijuana. But when the company requested it be removed from the controlled substances list, the Drug Enforcement Agency (DEA) agreed. This was a big deal because it was the first time the DEA removed any type of cannabis compound from Schedule 1. And this could eventually prove to be a tipping point.
Regardless of what the FDA says, studies have shown that CBD can help to treat insomnia and anxiety. And it can even act as an antidepressant. It has also helped those dealing with chemotherapy and can treat acne. Nonetheless, not everyone remains sold on the prospect of CBD. And at least part of the problem is bad actors.
The FDA had to warn folks to stop claiming CBD could cure the coronavirus. Also, it probably can’t fix “dryness and frizz” in hair or prevent it from turning gray. That’s the kind of claim the FDA is looking out for. And more importantly, we know at this point that it can do some positive things. And here are three companies proving it…
Three CBD Stocks Worth Investing In
- GW Pharmaceuticals (Nasdaq: GWPH)
- Charlotte’s Web Holdings (OTC: CWBHF)
- CV Sciences (OTC: CVSI)
We’ll start with the big one. GW has essentially built its future and reputation on prescription CBD products. It’s the parent company of Greenwich Biosciences – the maker of Epidiolex. It has also received approval of its Sativex therapy in several countries. It’s a multiple sclerosis treatment that is a cannabis-extracted spray containing CBD. It’s used to treat multiple sclerosis.
Even right now, as some of its therapies remain in limbo, GW stock is pricey. But it’s proven to be insulted from the price swings of the marijuana market. The company also has an impressive pipeline of therapies in the works. And approval of them could send this CBD stock skyrocketing.
Charlotte’s Web Holdings
Charlotte’s Web Holdings can be viewed as the indicator of the CBD industry. If CBD sales are on the rise, this CBD stock will be one of the first to indicate it.
The company recently acquired the topical treatment manufacturer Abacus Health Products with the intention of expanding its product line. The plans have already paid off, with net revenue up 1% in 2021. And increasing product lines should only further help the company’s bottom line. This Colorado-based company has deals with major retailers, including Kroger (NYSE: KR), The Vitamin Shoppe and CVS (NYSE: CVS). Once the FDA clears up the regulatory uncertainty surrounding CBD food products, you can expect this stock to soar.
This company has two distinct segments: consumer products and drug development. The consumer products one is straightforward. It focuses on manufacturing, marketing and selling CBD products. On the other hand, the pharmaceutical division is constantly trying to push the needle and develop novel CBD-based therapeutics. But the company already has the top-selling hemp-derived CBD oil on the market.
CV Sciences’ PlusCBD Oil was the first supplement to receive “generally recognized as safe” (GRAS) status. And the company continues to grow its product line. The company is currently developing synthetic CBD-based medicine and is pursuing FDA approval for drugs. But again, once regulations around CBD are relaxed, this CBD stock is expected to see a major bounce.
The Bottom Line on CBD Stocks
Bills have been introduced to amend the Federal Food, Drug and Cosmetic Act and its regulations of hemp-derived CBD. The best guess as to why they haven’t moved forward is that Congress got distracted by the pandemic. But they should be picked up again. If the FDA finally gets out of the way, these CBD stocks are going to be major beneficiaries.
Unfortunately, for now the prospects of this budding industry are still tied up in politics. And the FDA’s approval (or lack thereof) can change the trajectory of these stocks quickly.
About Matthew Makowski
Matthew Makowski is a senior research analyst and writer at Investment U. He has been studying and writing about the markets for 20 years. Equally comfortable identifying value stocks as he is discounts in the crypto markets, Matthew began mining Bitcoin in 2011 and has since honed his focus on the cryptocurrency markets as a whole. He is a graduate of Rutgers University and lives in Colorado with his dogs Dorito and Pretzel.