An in-depth look at the leading CBD stocks in the U.S stock market this year. Here’s what you need to know. Find out which companies are dominating the industry and how to invest in them. Here are the top 10 CBD oil stocks to buy right now. These are the marijuana stocks with the best value, fastest growth, and best performance for September 2022.
Investing in CBD Stocks
Sometimes the best time to invest in a relatively new market is after the initial euphoria evaporates. That could very well be the case with investing in CBD stocks.
CBD is short for cannabidiol, which is a chemical found in the cannabis plant. CBD doesn’t produce a high but has been found to have therapeutic benefits.
The U.S. legalized hemp-derived CBD at the federal level with the 2018 Farm Bill. The mere anticipation of the passage of this legislation stoked investors’ interest in the stocks of companies involved in the CBD industry.
Although federal legalization served as a key milestone, the U.S. Food and Drug Administration (FDA) still hasn’t finalized regulations for CBD food supplements. As a result, the CBD opportunity in the U.S. hasn’t delivered on investors’ lofty ambitions — at least not yet. However, the pressure is mounting for CBD regulations to be eased. Even the U.S. Congress has gotten involved with bill proposals to change the federal regulation of CBD products.
The CBD market could expand in the not-too-distant future with the finalization of regulations. Now could be a great time for investors to check out CBD stocks. Here are five CBD stocks to consider in 2022.
|Canopy Growth (NASDAQ:CGC)||$3 billion||Canadian cannabis producer with U.S. CBD operations.|
|Charlotte’s Web Holdings (OTC:CWBHF)||$172 million||Leading CBD products company.|
|Cresco Labs (OTC:CRLBF)||$2.1 billion||U.S. cannabis operator that markets CBD products.|
|Jazz Pharmaceuticals (NASDAQ:JAZZ)||$8.5 billion||Pharmaceutical company with the first FDA-approved CBD drug.|
|The Valens Company (NASDAQ:VLNCF)||$166 million||Canadian company that provides extraction services used to produce CBD and cannabis derivative products.|
For a while, Canopy Growth ranked as the biggest marijuana stock in the world based on market cap. It remains one of the largest companies in the cannabis industry with top-tier positions in the Canadian medical and recreational marijuana markets and the German medical cannabis market.
Canopy Growth can’t enter the U.S. cannabis market and maintain its listing on a major U.S. stock exchange as long as marijuana is illegal at the federal level. However, the company is already a player in the U.S. hemp-derived CBD market.
In 2019, Canopy Growth teamed up with businesswoman and TV celebrity Martha Stewart to develop CBD products for the U.S. market. The company now has a line of CBD brands with Stewart. It also has other CBD products that include Whisl, the No. 1 CBD-only vape in the U.S. market.
Canopy Growth isn’t profitable yet. However, it does have a large cash stockpile, thanks in large part to investments by beverage giant Constellation Brands (NYSE:STZ), the company’s biggest shareholder.
The CBD opportunity is only a secondary reason to consider this stock. The primary potential catalyst for Canopy Growth is the prospect that U.S. federal cannabis laws will be changed and allow the company to enter the lucrative U.S. cannabis market.
Charlotte’s Web Holdings
If you’re looking for a pure-play CBD stock, Charlotte’s Web could be right up your alley. The company pioneered the hemp CBD industry in 2011, and it still ranks No. 1 based on market share.
Charlotte’s Web markets a wide range of CBD products. From bath and beauty to ingestibles and topicals, the company covers all the bases when it comes to CBD. It even sells CBD products for pets.
The company’s CBD products are available at more than 14,000 retail outlets. About 8,000 healthcare practitioners also distribute Charlotte’s Web’s products, and the company has a strong online presence. More than half of its total revenue stems from direct-to-consumer e-commerce sales.
Charlotte’s Web isn’t resting on its laurels. It plans to launch CBD beverages in the second half of 2022. Market researcher Brightfield Group projects that the CBD beverage market will reach $1.3 billion in 2026, up from $245 million in 2021.
However, Charlotte’s Web’s stock performance over the past couple of years has been disappointing. But the company now has a new CEO with former Bacardi executive Jacques Tortoroli taking the helm in December 2021. The potential for the finalization of regulations regarding CBD dietary supplements could be just what the stock needs to mount a major comeback.
Cresco Labs is a U.S.-based cannabis operator that markets recreational and medical cannabis products in 10 states, all of which rank among the 20 most-populated in the U.S. (and with seven in the top 10).
The company isn’t just a cannabis producer and retailer. Cresco also is the No. 1 U.S. wholesaler of branded cannabis products containing CBD, including its Wonder gummies.
Cresco has achieved tremendous success in recent years. The company’s revenue has grown significantly, both organically and through acquisitions. It’s consistently profitable. Cresco’s solid balance sheet should also enable it to continue expanding into new markets.
Probably the biggest knock against Cresco is that the company can’t list its shares on a major U.S. stock exchange as long as marijuana remains illegal at the federal level. However, this limitation also is a key factor behind the stock’s attractive valuation compared to Canadian pot stocks.
You might be surprised to find a pharmaceutical stock listed among the top CBD stocks to consider. But Jazz Pharmaceuticals has a direct and important connection with CBD. In 2018, the company’s Epidiolex became the first CBD product made from the cannabis plant to win FDA approval.
Jazz actually didn’t own Epidiolex at that time. It acquired GW Pharmaceuticals, which developed the CBD drug to treat epileptic seizures, for $6.7 billion in 2021 .
Epidiolex is still a long way from generating annual sales of $1 billion or more, as some analysts projected after it was first approved in the U.S. However, sales continue to pick up as the drug launches in additional European countries.
Jazz also has other growth drivers in its lineup. Sleep disorder drug Xywav is gaining momentum. Sales are soaring for another sleep disorder drug, Sunosi, as well as blood cancer drug Rylaze and lung cancer drug Zepzelca.
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The Valens Company
One of the important steps in investing in marijuana stocks is to understand the different types of companies. Ancillary businesses that support the industry can sometimes have even more attractive prospects than pure plays. The Valens Company is a good example.
Valens is the largest third-party extraction company serving the Canadian cannabis industry. It uses different methods to extract cannabinoids (including CBD) from cannabis. Valens also markets its own cannabis products, which is part of its strategy to transition into a leading cannabis consumer packaged goods company.
The company’s Green Roads already ranks among the top 10 CBD brands in the U.S. Green Roads products are available in about 7,000 retail locations. Valens hopes to also achieve success in Canada if over-the-counter CBD sales are permitted in the country.
Like most Canadian cannabis-related stocks, Valens hasn’t made investors happy over the past year. However, its shares trade at a more attractive valuation than most U.S. and Canadian cannabis stocks.
Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Constellation Brands, Cresco Labs Inc., and The Valens Company Inc. The Motley Fool recommends Charlotte’s Web and Charlotte’s Web Holdings. The Motley Fool has a disclosure policy.
Best CBD Stocks to Buy: Top Ten Picks
With the growing popularity of medical marijuana across North America, many investors consider investing in stock-exchange listed companies. Investing in CBD stocks is a good idea if you’re looking for an investment with high course potential. Many different companies produce CBD products, and they all have their strengths and weaknesses. As someone who has done extensive research on the best cbd stocks to invest in, I will list my top 10 favorite companies for 2022 listed on NYSE and Nasdaq.
Keep in mind, CDB stocks are currently not in investors focus, and many of them are at longer-term lows right now. It needs to become an attractive investment field with more media dominance again before investments become worthwhile again.
Transparency: We may get compensated when you click on links in this article.
We’ve added current analyst estimates and company fundamentals to each company in the list using the fundamental analysis platform Stock Rover. You can use the free 14-day Stock Rover trial to check the most recent statistics, peers and stock analysis.
What are CBD Oil Stocks
CBD oil stocks refer to companies that produce and distribute CBD products. Companies like these are usually best suited for long-term investments because they have high potential growth over the next decade or more.
What is CDB Oil
CBD oil is a type of natural herb that has been used for many different purposes, including medical and recreational. CBD oils are typically extracted from hemp plants, making them legal in the United States under federal law.
What Brokers to Use to Buy CDB Oil Stocks
The best brokers to buy CDB oil stocks with are either TD Ameritrade or E*TRADE. They’re both straightforward to use and have many great tools that will make investing easier for beginners.
The Best CDB Stocks to Buy
Table of Contents
1. Jazz Pharmaceuticals (JAZZ)
The Ireland-domiciled biopharma company Jazz Pharmaceuticals focuses on treatments for indications in neuroscience, sleeping disorders and hematology-oncology. Jazz Pharmaceuticals still has a negative EPS of -5.46 with a market cap of $10.5 billion. In December 2021, the stock hit a mid-term low at $117.64 and then started a rally to nearly $170 in April 2022.
2. Constellation Brands (STZ)
Cannabis investing ideas also lead to this company with a currently neutral to positive market sentiment. Constellation Brands currently has projected quarterly revenue of 83 million and estimated earnings per share of $1.55.
Constellation Brands is a global leader in beer, wine and spirits with a wide variety of popular brands like Corona Extra and Ballast Point.
Constellation Brands made an investment into Canopy Growth Corporation (WEED) for $191 million worth a few years ago due to the potential growth that cannabis holds. Constellation Brands acquired a 40% ownership stake in Canopy Growth and became the third-largest investor in the cannabis industry. The investments were the right decision, and the stock price went up significantly since.
After forming a mid-term low at $104.28 in March 2020, the price per share increased to a new all-time high in April 2022 at $261.52.
3. AbbVie (ABBV)
AbbVie is a company with a market cap of $200 billion and is a science-led global healthcare company formed in 2013 by the acquisition of Abbott. AbbVie’s product portfolio includes more than 125 products, including pharmaceutical and over-the-counter medications and CBD oil. The stock had a great run from the $60 level in 2000 and market a all-time high in April 2022 at $175.91.
4. Altria (MO)
Altria is a significant producer of tobacco products and has invested in cannabis companies in the past. They have made investments from over $200 million to an equity stake in Cronos Group Inc. a few years back, which is one of the largest Canadian cannabis producers. Not only do they own these stocks, but they also sell cigarettes as well, and the growth potential is enormous. The stock formed a mid-term low at $30.95 in March 2020, and is now trading at $55.23.
5. Corbus Pharmaceuticals Holdings, Inc. (CRBP)
Corbus Pharmaceuticals Holdings, Inc. is a clinical-stage pharmaceutical company focused on developing and commercializing novel therapeutics to treat rare, chronic inflammatory diseases that are often difficult to treat with existing therapies. CRBP is still Nasdaq listed but might get OTC listed when it remains trading below $1. Right now, the stock is trading at $0.35.
6. Tilray Inc (TLRY)
Tilray is a Canadian company that produces and sells cannabis products, both medical marijuana. They’re best known for being the first company to legally export cannabis from North America for medical purposes through Europe (Greece). The latest news is that they have entered the world of cannabis recreation. The company is focused on research and development, which has allowed them to offer new products like their High CBD Oil Drops for anxiety relief or insomnia issues. They’re also well-known in Canada because all medical marijuana patients are registered with Tilray’s online system called CanvasRx. Many day traders trade Tilray shares due to its high volatile price action during market hours. The price per share is at $5.3 right now.
7. HEXO Corp. Common Shares (HEXO)
HEXO Corp. is a Canadian cannabis company focused on distributing world-class products within the adult-use and medical markets. HEXO Corp. is one of the leading exporters in Canada’s burgeoning cannabis industry to countries around the world where marijuana is legalized for medicinal or recreational purposes. Like CRBP, the stock is trading below $1 for a while (at $0.41 right now) and might get delisted from Nasdaq.
8. Cronos Group Inc. (CRON)
Cronos Group Inc. is a company focused on medical marijuana and recreational cannabis for adult use. They’re best known for producing, selling, and marketing products in Canada, Germany, Israel, Italy and Australia. Cronos Group announced that they were partnering with Ginkgo Bioworks to engineer yeast that produces cannabinoids genetically. The good thing with Cronos is that they have a lot of room to grow based on solid company fundamentals. Right now, the stock is trading at $3.08.
9. Aurora Cannabis (ACB)
Aurora Cannabis is a Canadian company that is a producer and seller of medical cannabis products. They’re best known for being the first marijuana company to be listed on an American stock exchange. Recently Aurora Cannabis announced that they were entering the European market by acquiring a German company. The stock is currently trading at $3.1. They recently had a formal bid accepted and are set to acquire CanniMed Therapeutics, which has experts speculating that the company could be worth $600 million. Aurora is one of those stocks best to buy because it’s still undervalued due to its marijuana production being in Canada. Still, they have made their intentions known for expansion into Europe unfolding additional potential.
10. ETFMG Alternative Harvest ETF (MJ)
You have already read about the top favorite CBD stocks to buy. Investors can also participate in CBD oil stock growth by buying the exchange-traded fund. The ETFMG Alternative Harvest ETF is a fund that invests in companies operating in the global cannabis industry. The ETFMG Alternative Harvest ETF is an umbrella term as it includes a variety of sectors. The ETF is currently trading at an 5-year low at $8.45.
Introduction to Marijuana Stocks
Marijuana stocks are made up to become a thriving and profitable industry. With the legalization of cannabis in Canada and previously in the United States, stocks are bound to arise.
Cannabis companies are not only for those in North America but all over the world, from Europe to Africa. Cannabis stocks are an opportunity that investors can’t afford to miss out on now! One of the best next best things in speculative investing is CBD oil stocks and similar companies. With marijuana becoming more mainstream, there will be a rise of people looking to invest in this sector.
Marijuana Stocks With the Most Momentum
Momentum investing is when you invest in stocks that have gone up faster than the market. If a stock has risen more than the market, momentum investors think it will continue to do so because of factors that caused it to go up. Investors want to buy stocks with high returns and count on a trend continuation in the subsequent months for the stock. The concept is to analyze data of potential Marijuana stocks to buy via Nasdaq, NYSE or even OTC. While investments in ETFs are often compound profits over the years by contribution to the ETFs, specific investing in Marijuana momentum stocks aim for short-term growth with higher risk and higher potential. Keeping an eye on company financials, earnings, cannabis use, and news is important too.
The Role of the Farm Bill
The farm bill was passed to legalize the production and sale of hemp. This is a major step in the right direction for marijuana stocks and will help make it more mainstream and provide employment opportunities with its legalization. The best thing about investing in cannabis companies is that you can get an ownership stake through stock buybacks or dividends.
How to Gain Access to the Global Cannabis Stock Market
An online broker allows you to invest in marijuana stocks from around the world. It is a great way to diversify your portfolio, find new opportunities, and provide liquidity for international investments. By doing this, you can also invest in companies involved with CBD oil processing and production.
Conclusion About the Best CBD Stocks to Buy
Marijuana stocks are a great way to diversify your portfolio and find new opportunities. Investing in them provides liquidity for international investments and owning an ownership stake through stock buybacks or dividends.
Cbd stocks are a wise investment choice that is forecasted to grow exponentially in the future. The product development recently has resulted in a massive uptick in the interest of CBD stocks, and as such, it is crucial to stay up-to-date with this market.
The best CBD stocks have shown strong revenue growth over the past five years and are positioned for rapid future growth due to their product development. The earnings per share are solid for many companies in the marijuana industry, and more and more brands enter the profitable cannabis market.
It is essential to diversify your portfolio, so it is wise to invest in a range of stocks. Marijuana-focused companies with solid fundamentals, which will allow investors the best returns for their investment at a reasonable stock price, are a good starting point.
About the author: Alexander is the founder of daytradingz.com and has 20 years of experience in the financial markets. He aims to make trading and investing easy to understand for everybody, and has been quoted on Benzinga, Business Insider and GOBankingRates.
Top Marijuana Stocks for September 2022
CL.CX, SNDL, and VRNO.CX are top for value, growth, and performance
Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
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 investments needed to speed up revenue growth. 37 U.S. states now permit the use of marijuana in some form.
Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have vastly underperformed the broader market. MJ has provided a total return of -63.6% over the past 12 months, well below the Russell 1000 Index’s total return of -8.2%. These market performance numbers and all statistics in the tables below are as of Aug. 24, 2022.
Here are the top five marijuana stocks with the best value, the fastest growth, and the best performance.
Best Value Marijuana Stocks
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|
|Cresco Labs Inc. (CL.CX)||CA$4.92||CA$1.5||1.3|
|Jushi Holdings Inc. (JUSH.CX)||CA$2.29||CA$0.4||1.6|
|Aurora Cannabis Inc. (ACB)||1.57||0.5||1.8|
|TerrAscend Corp. (TER.CX)||CA$2.32||CA$0.6||1.9|
|Trulieve Cannabis Corp. (TRUL.CX)||CA$17.47||CA$3.2||2.1|
- Cresco Labs Inc.: Cresco Labs is a cannabis products company involved in growing, manufacturing, and distribution. The company operates in 10 states, including more than 70 total production facilities and dispensaries. Its brands include Cresco, 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. On July 15, Cresco reported that Columbia Care Inc., a cultivator and maker of cannabis products, had obtained the final order from the Supreme Court of British Columbia approving its business combination with Cresco Labs. Per the agreement, Cresco will acquire all outstanding shares of Columbia Care. The combination is expected to close in Q4 2022. At the time of the announcement, it was estimated that Cresco Labs is paying $2 billion for Columbia Care.
- 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 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. Jushi announced in late August that its fourth medical cannabis dispensary in Virginia would open on Aug. 31. This is the company’s 35th retail outlet nationwide.
- Aurora Cannabis Inc.: Aurora Cannabis is a Canada-based company specializing in the production, distribution, and sale of medical cannabis products. Its brands include Aurora, Aurora Drift, Daily Special, MedReleaf, Whistler, and more. The company’s growth strategy targets medical cannabis markets across the globe as well as the U.S. hemp-derived CBD market and the Canadian recreational market. On Aug. 25, Aurora announced that it had acquired a controlling interest in Bevo AgTech Inc., a vegetable and ornamental plant company, through a subsidiary. Bevo operates 63 acres of greenhouses in Canada. Total consideration at the time of closing was roughly $45 million, with an additional payment of up to $12 million payable for up to three years following the acquisition depending on Bevo’s achieving various financial milestones.
- TerrAscend Corp.: TerrAscend is a Canada-based vertically integrated cannabis company with operations in Canada and the U.S. The company’s brands and business lines include Gage Cannabis, The Apothecarium, Ilera Healthcare, Kind Tree, Prism, State Flower, and Valhalla Confections. TerrAscend also trades OTC in U.S. markets under the ticker TRSSF. On Aug. 24, TerrAscend announced the closing of its acquisition of Michigan-based dispensary operator KISA Enterprises MI, LLC and related real estate assets. TerrAscend paid total consideration of $28.5 million for KISA. The acquisition includes six dispensary licenses.
- Trulieve Cannabis Corp.: Trulieve is a vertically integrated cannabis company with operations in eight states. The company’s brands include Cultivar Collection, Muse, Sweet Talk, and Momenta. Trulieve shares trade OTC under the ticker TCNNF. On Aug. 10, Trulieve reported earnings for Q2 2022. The company posted a net loss of $22.5 million compared with net income for the prior-year quarter as well as a 49% increase in revenue year over year (YOY). Net income was negatively impacted by charges associated with the acquisition of Harvest as well as other factors.
Fastest Growing Marijuana Stocks
These are the marijuana stocks with the highest YOY sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means and find growing companies that have not yet reached profitability. In addition, accounting factors that may not reflect the overall strength of the business can significantly influence earnings per share (EPS). However, sales growth can also be potentially misleading about the strength of a business because growing sales for money-losing businesses can be harmful if the companies have no plan to reach profitability.
|Fastest Growing Marijuana Stocks|
|Price ($)||Market Cap ($B)||Revenue Growth (%)|
|SNDL Inc. (SNDL)||2.78||0.7||2,250|
|OrganiGram Holdings Inc. (OGI)||1.09||0.3||82.8|
|Trulieve Cannabis Corp. (TRUL.CX)||CA$17.47||CA$3.2||54.6|
|Jushi Holdings Inc. (JUSH.CX)||CA$2.29||CA$0.4||48.6|
|Cronos Group Inc. (CRON)||3.10||1.2||47.6|
- SNDL Inc.: SNDL is a Canada-based cannabis producer. The company operates cultivation and processing facilities, retail stores, and also sells alcoholic beverages. Its cannabis brands include Sundial, Top Leaf, Palmetto, and Grasslands. At its annual and special shareholder meeting in late July, the company officially changed its name from Sundial Growers Inc. to SNDL Inc. It also implemented a share consolidation under which 10 pre-consolidation common shares were consolidated into one post-consolidation common share, effective July 25. The company announced on Aug. 22 that it would acquire cannabis product manufacturer The Valens Company Inc. (VLNS) for total consideration of about $138 million. The deal is expected to close in Jan. 2023.
- OrganiGram Holdings Inc.: Organigram Holdings is a Canada-based producer of medical and recreational cannabis. Its subsidiaries include Organigram Inc., Laurentian Organic Inc., and The Edibles and Infusions Corp., and its brands include Edison Cannabis Co., SHRED, and monjour, among others.
- Trulieve Cannabis Corp.: See above for company description.
- Jushi Holdings Inc.: See above for company description. Note that Jushi Holdings reported Q2 2022 earnings results for Q2 2022 on Aug. 29, 2022. Jushi’s ranking in the table above is based on its Q1 2022 earnings report.
- Cronos Group Inc.: Cronos Group is a Canada-based cannabis company. Its brand portfolio includes Spinach, Happy Dance, and PEACE+. Cronos reported Q2 2022 earnings results on Aug. 9. Its net loss narrowed significantly YOY as consolidated net revenue rose. Revenue was driven in particular by Israel net revenue, which more than tripled YOY.
Marijuana Stocks With the Best Performance
These are the marijuana stocks that had the smallest declines in total return over the past 12 months out of the companies we looked at.
|Marijuana Stocks With the Best Performance|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Verano Holdings Corp. (VRNO.CX)||CA$8.40||CA$2.7||-44.2|
|4Front Ventures Corp. (FFNT.CX)||CA$0.69||CA$0.4||-47.5|
|Trulieve Cannabis Corp. (TRUL.CX)||CA$17.47||CA$3.2||-49.3|
|Cronos Group Inc. (CRON)||3.10||1.2||-53.0|
|Green Thumb Industries Inc. (GTII.CX)||CA$16.23||CA$3.8||-57.1|
|ETFMG Alternative Harvest ETF (MJ)||N/A||N/A||-63.6|
- Verano Holdings Corp.: Verano Holdings is a vertically integrated, multi-state cannabis operator. The company produces a wide range of medical and adult-use cannabis products. It owns and operates 13 cultivation and manufacturing facilities and owns over 100 dispensaries in a number of states throughout the U.S. The company’s stock also trades OTC in the U.S. under the ticker VRNOF. On Aug. 19, Verano announced the opening of its 111th dispensary nationwide and its fourth location in Clarksburg, W.Va.
- 4Front Ventures Corp.: 4Front Ventures is a cannabis operator and retailer. It owns, operates, or manages cultivation and manufacturing properties in five states and employs over 600. Its stores attracted more than 1 million unique customers in 2021. 4Front also trades OTC under the symbol FFNTF. On Aug. 15, 4Front reported Q2 2022 earnings results. Its net loss widened slightly YOY as total revenues climbed. The company its operations in Massachusetts and California posted strong performance during the quarter.
- Trulieve Cannabis Corp.: See above for company description.
- Cronos Group Inc.: See above for company description.
- Green Thumb Industries Inc.: Green Thumb Industries is a cannabis retailer and consumer packaged products company. It markets products under brand names including Beboe, Dogwalkers, Doctor Solomon’s, Good Green, incredibles, and RYTHM. It has 77 open retail locations across 15 U.S. markets. Green Thumb stock also trades OTC under the ticker GTBIF.
Trends to Watch in Marijuana Stocks
Marijuana stocks have given investors a wild ride over the past few years, staging eye-watering rallies and substantial declines. Those who invest in this emerging sector should monitor these key trends as they will likely guide price direction in months and years ahead.
Financing: Most U.S. financial institutions avoid offering to fund cannabis companies as marijuana is still federally illegal, meaning lenders that provide loans could face possible prosecution. However, the Secure and Fair Enforcement Banking Act (SAFE)—which passed through the House in 2021—aims to address this by preventing the federal government from penalizing banks that offer financial services to the cannabis industry. Although the legislation has failed to gain support in the Senate, investors should monitor any amendments to the bill that could increase the chances of it gaining congressional approval.
Increasing Merger and Acquisition Activity: As of last year’s fourth quarter, $8.5 billion worth of merger and acquisition (M&A) transactions had closed in the sector, significantly higher than the $3 billion worth of deals in 2020 and $3.6 billion in 2019. Increasing dealmaking in the cannabis space indicates that institutional investors have growing confidence in the industry’s future.
Potential U.S. Legalization: While several cannabis legalization bills grace the halls of Congress, bipartisan support remains difficult to achieve, creating a large amount of uncertainty for industry participants. However, several leading Canadian operators, such as Cronos and Tilray, are banking on the U.S. cannabis market, with both companies entering into acquisition deals subject to its decriminalization south of the border.
Advantages of Marijuana Stocks
Despite the underwhelming performance of marijuana stocks over the past year amid an uncertain regulatory environment, the sector offers risk-taking investors significant growth potential. According to industry analysis firm MJBizDaily, U.S. cannabis sales will surpass $33 billion in 2022 before reaching $52 billion by the end of 2026. Moreover, the global cannabis market is expected to reach nearly $200 billion by 2028, up from $28 billion in 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. 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.